Promissory Notes

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Promissory Notes

Note 10 – Promissory Notes

The Company had the following promissory notes outstanding as of March 31, 2022 and December 31, 2021, respectively:

			As of March 31,	As of December 31,
	Interest Rate	Maturity Date	2022	2021
Promissory note issued for $1,550,000 by a financial institution. Note was issued on January 7, 2022 and can be prepaid at any time without penalty. Secured by our Fresenius - Chicago, IL property.	Wall Street Journal Prime Rate with minimum of 3.25%	1/7/2024	1,550,000	—
Promissory note issued for $1,050,000 by a financial institution. Note was issued on January 14, 2022 and has a prepayment penalty of 2% of the principal amount if repaid within the first two years and no penalty if paid after the first 2 years. Secured by our Starbucks North Dale Mabry - Tampa, FL property.	3.65%	1/14/2027	1,050,000	—
Promissory note issued for $3,650,000 by a financial institution. Note was issued on March 9, 2022 and can be prepaid at any time without penalty. Secured by our Kohl's - Tucson, AZ property.	Wall Street Journal Prime Rate with minimum of 3.25%	3/9/2024	3,650,000	—
Promissory note issued for $1,286,664 by a financial institution, interest only payments due monthly through December 2023 of approximately $4,200 and then principal and interest payments due monthly through August 2028 of approximately$6,600. Note was originally issued on January 15, 2015 and modified on November 30, 2020 and can be prepaid at any time without penalty.  Secured by out Tampa Sherwin-Williams property.	3.72% fixed rate after using SWAP whereas the loan is LIBOR plus 2.75%	8/10/2028	1,286,664	1,286,664
Promissory note issued for $1,275,000 by a financial institution. Note was issued on February 4, 2021 and can be prepaid at any time without penalty. Secured by our GSA-Manteo, North Carolina property.	Wall Street Journal Prime Rate with minimum of 3.25%	2/4/2023	1,275,000	1,275,000
Promissory note issued for $850,000 by a financial institution, interest only payments due monthly through May 2023 of approximately $2,100 and then principal and interest payments due monthly through December 2024 of approximately$4,200. Note was issued on April 21, 2021 and can be prepaid at any time without penalty. Secured by our Irby - Plant City, FL property.	Wall Street Journal Prime Rate minus 0.5% with minimum of 3.0% for the first 24 months; thereafter, weekly average yield on U.S. Treasury Securities adjusted to a constant maturity of three years on April 21, 2023, plus 2.75% with a minimum of 3.25%	12/31/2024	850,000	850,000
Promissory note issued for $2,350,000 by a financial institution. Note was issued on December 28, 2021 and can be prepaid at any time without penalty. Secured by our Best Buy - Grand Junction, CO property.	Wall Street Journal Prime Rate with minimum of 3.25%	12/28/2023	2,350,000	2,350,000
Promissory note issued for $8,260,000 by a financial institution, interest and principal payments due monthly of approximately $41,500. Note was issued on September 30, 2019 and can be prepaid at any time without penalty. Secured by our GSA/Maersk - Norfolk, Virginia property. The interest rate was reduced in March 2021 from 4.25% to 3.5%.	3.50%	9/30/2024	7,748,388	7,805,524
Promissory note issued for $5,216,749 by a financial institution, interest and principal payments due monthly of approximately $27,400. Note was originally issued on October 23, 2017 and modified on September 30, 2019 and can be prepaid at any time without penalty. Secured by our PRA - Norfolk, Virginia property. The interest rate was reduced in March 2021 from 4.25% to 3.5%.	3.50%	10/23/2024	4,849,463	4,889,670
Promissory note issued for $11,287,500 by a financial institution, interest only payment is approximately $39,000 and starting April 6, 2021, interest and principal payments due monthly of approximately $55,000. Note was issued on February 11, 2020. Secured by our Washington, DC, Tampa, FL and Huntsville, AL properties. It cannot be prepaid without a penalty.	4.17%	3/6/2030	11,101,219	11,150,130
Less: debt issuance costs, net			(682,898)	(637,693)
			$35,027,836	$28,969,295

The Company amortized debt issuance costs during the three month periods ended March 31, 2022 and 2021 to interest expense of approximately $33,700 and $31,100, respectively. The Company paid debt issuance costs for the three months ended March 31, 2022

and 2021 of approximately $78,900 and $22,700, respectively.

As of March 31, 2022, we had three promissory note totaling approximately $7.6 million requiring Debt Service Coverage Ratios (also known as “DSCR”) of 1.50:1.00, one promissory note totaling $1.3 million requiring DSCR of 1.30:1.00, three promissory note totaling $23.7 million requiring DSCR of 1.25:1.00, one promissory note totaling $1.3 million requiring DSCR of 1.20:1.00, one promissory note totaling $0.9 million requiring DSCR of 1.15:1.00, and one promissory note totaling $1.1 million with no required DSCR. We were in compliance with all covenants as of March 31, 2022.

As of March 31, 2022, the Company’s President has personally guaranteed the repayment of the $11.1 million due under the DC/Tampa/Huntsville loan, the $1.3 million loan secured by our Tampa Sherwin Williams property, the $0.9 million loan secured by our Irby property, the $1.3 million loan secured by our GSA Manteo NC property, the $2.4 million loan secured by our Best Buy Grand Junction, CO property, the $1.6 million loan secured by our Fresenius Chicago, IL property, and the $3.7 million loan secured by our Kohl’s Tucson, AZ property. The aggregate guaranteed principal amount of these loans total approximately $22.1 million. The Company’s President has also provided a guaranty of the Borrower’s nonrecourse carveout liabilities and obligations in favor of the lender for the Norfolk, Virginia property loans (the “Bayport loans”), with an aggregate principal amount of approximately $12.6 million.

The Company modified the Bayport loans in March 2021 for no fees and reduced the associated interest rate from 4.25% to 3.5%. The Company determined that the debt modification was not substantial under ASC 470-50.

Minimum required principal payments on the Company’s debt as of March 31, 2022 are as follows:  

	As of March 31,
	2022
2022	$435,060
2023	4,240,446
2024	18,204,862
2025	278,109
2026	289,778
2027 and beyond	12,262,478
	$35,710,733