INVESTMENTS IN UNCONSOLIDATED ENTITIES

The Company’s investments in unconsolidated entities as of December 31, 2019 and 2018 are as follows:



	December 31,
	2019		2018
The TIC Interest	$	10,388,588	$	10,749,332
REIT I (1)	—		3,526,483
Total	$	10,388,588	$	14,275,815


(1)	REIT I was merged with the Company effective December 31, 2019 (see Note 3).

The Company’s income (loss) from investments in unconsolidated entities for the years ended December 31, 2019 and 2018 are as follows:



	Years Ended December 31,
	2019			2018
The TIC Interest	$	296,691		$	269,191
REIT I	(62,643		)	(43,167		)
Total	$	234,048		$	226,024

The TIC Interest

In 2017, the Company, through a wholly-owned subsidiary of the Operating Partnership, acquired the 72.7% TIC Interest. The remaining approximate 27.3% undivided interest in the Santa Clara property is held by Hagg Lane II, LLC (an approximate 23.4%) and the Hagg Lane III, LLC (an approximate 3.9%). The manager of Hagg Lane II, LLC and Hagg Lane III, LLC was a board member of the Former Sponsor and became a board member of the Company in December 2019. The Santa Clara property does not qualify as a variable interest entity and consolidation is not required as the Company's TIC Interest does not control the property. Therefore, the Company accounts for the TIC Interest using the equity method. The Company receives approximately 72.7% of the cash flow distributions and recognizes approximately 72.7% of the results of operations. During the years ended December 31, 2019 and 2018, the Company received $657,435 and $623,406 in cash distributions, respectively.

The following are summarized financial information for the Santa Clara property as of and for the years ended December 31, 2019 and 2018:



	December 31,
	2019		2018
Assets:
Real estate investments, net	$	30,858,240	$	31,668,300
Cash and cash equivalents	275,760		466,379
Other assets	228,770		117,075
Total assets	$	31,362,770	$	32,251,754

Liabilities:
Mortgage notes payable, net	$	13,746,635	$	13,994,844
Below-market lease, net	2,953,360		3,103,778
Other liabilities	68,587		61,188
Total liabilities	16,768,582		17,159,810
Total equity	14,594,188		15,091,944
Total liabilities and equity	$	31,362,770	$	32,251,754



	Years Ended December 31,
	2019		2018
Total revenue	$	2,705,126	$	2,678,110

Expenses:
Depreciation and amortization	993,564		991,621
Interest expense	574,086		584,059
Other expenses	731,044		730,448
Total expenses	2,298,694		2,306,128
Net income	$	406,432	$	371,982

REIT I

Prior to the merger of REIT I with and into Merger Sub on December 31, 2019, the Company had an approximate 4.80% ownership interest in REIT I as of December 31, 2018. The Company recorded its share of loss of REIT I based on REIT I’s results of operations for the years ended December 31, 2019 and 2018. During the years ended December 31, 2019 and 2018, the Company received $375,351 and $273,264 in cash distributions, respectively, related to its investment in REIT I. The following are summarized financial information for REIT I as of and for the years ended December 31, 2019 and 2018:



	December 31,
	2019		2018
Assets:
Real estate investments, net	$	—	$	125,075,537
Cash and cash equivalents and restricted cash	—		3,376,145
Other assets	—		3,070,475
Total assets	$	—	$	131,522,157
Liabilities:
Mortgage notes payable, net	$	—	$	61,446,068
Below-market lease, net	—		3,105,843
Other liabilities	—		3,359,618
Total liabilities	—		67,911,529
Redeemable common stock	—		163,572
Total shareholders' equity	—		63,447,056
Total liabilities, redeemable common stock and shareholders' equity	$	—	$	131,522,157



	Years Ended December 31,
	2019			2018
Total revenue	$	13,132,226		$	13,166,631

Expenses:
Depreciation and amortization	5,787,709			5,783,643
Interest expense	3,425,625			2,813,430
Other expenses	5,342,365			4,603,963
Impairment of real estate investment property	—			862,190
Total expenses	14,555,699			14,063,226
Other income:
Gain on sale of real estate investment property, net	(1,850,845		)	—
Loss on debt restructuring	1,964,618			—
Total other income	113,773			—
Net loss	$	(1,309,700	)	$	(896,595	)