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Loans Payable (Tables)
9 Months Ended
Sep. 30, 2024
Loans Payable  
Schedule of mortgages payables, net

The Company’s mortgages payables, net consists of the following:

September 30, 

Monthly

Interest

2024

December 31, 

Property

    

Payment

    

Rate

    

Maturity

    

(unaudited)

    

2023

Franklin Square (a)

 

Interest only

 

3.808

%  

December 2031

$

13,250,000

$

13,250,000

Ashley Plaza (b)

$

52,795

 

3.75

%  

September 2029

 

10,518,121

 

10,708,557

Brookfield Center (c)

$

22,876

3.90

%

November 2029

4,500,282

4,571,410

Parkway Center (d)

$

28,161

Variable

November 2031

4,828,899

4,870,403

Wells Fargo Mortgage Facility (e)

$

103,438

4.50

%

June 2027

17,617,641

17,939,276

Unamortized issuance costs, net

(495,574)

(566,873)

Total mortgages payable, net

 

  

 

  

$

50,219,369

$

50,772,773

(a)The mortgage loan for the Franklin Square Property bears interest at a fixed rate of 3.808% and is interest only until January 6, 2025, at which time the monthly payment will become $61,800, which includes interest and principal based on a thirty-year amortization schedule. The mortgage loan includes covenants for the Company to maintain a net worth of $13,250,000, excluding the assets and liabilities associated with the Franklin Square Property and for the Company to maintain liquid assets of no less than $1,000,000. As of September 30, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants. The Company has guaranteed the payment and performance of the obligations of the mortgage loan.
(b)The mortgage loan for the Ashley Plaza Property bears interest at a fixed rate of 3.75% and was interest only for the first twelve months of its term.  Beginning on October 1, 2020, the monthly payment became $52,795 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty-year amortization schedule. Effective on December 26, 2023, the Company assumed certain guaranty obligations under the Ashley Plaza Property mortgage loan related to the Guaranty Substitution (see below).  These obligations include covenants for the Company to maintain a net worth of $11,400,000, excluding the liabilities associated with the mortgage loan for the Ashley Plaza Property, and for the Company to maintain liquid assets of no less than $1,140,000. As of September 30, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants.
(c)The mortgage loan for the Brookfield Center Property bears interest at a fixed rate of 3.90% and was interest only for the first twelve months of the term.  Beginning on November 1, 2020, the monthly payment became $22,876 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty-year amortization schedule.  Effective on December 26, 2023, the Company assumed certain guaranty obligations under the Brookfield Center Property mortgage loan related to the Guaranty Substitution (see below).  These obligations include covenants for the Company to maintain a net worth of $4,850,000, excluding the liabilities associated with the mortgage loan for the Brookfield Center Property, and for the Company to maintain liquid assets of no less than $485,000. As of September 30, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants.
(d)The interest rate for the mortgage loan for the Parkway Property was originally based on ICE LIBOR plus 225 basis points, with a minimum rate of 2.25%.  After the discontinuation of LIBOR on June 30, 2023, the ICE LIBOR index was replaced by Term SOFR, with an adjusted margin of 236.44 basis points.  Under the terms of the mortgage, the interest rate payable each month shall not change by greater than 1% during any six-month period and 2% during any 12-month period.  As of September 30, 2024 and December 31, 2023 the rate in effect for the Parkway Property mortgage was 7.57% and 7.05%, respectively. The monthly payment, which varies based on the interest rate in effect each month, includes interest at the variable rate, and principal based on a thirty-year amortization schedule.  The mortgage loan for the Parkway Property includes a covenant to maintain a debt service coverage ratio of not less than 1.30 to 1.00 on an annual basis.  As of September 30, 2024 and December 31, 2023, the Company believes that it is compliant with this covenant.
(e)On June 13, 2022, the Company entered into a mortgage loan facility with Wells Fargo Bank, National Association (the “Wells Fargo Mortgage Facility”) in the principal amount of $18,609,500.  The proceeds of this mortgage were used to finance the acquisition of the Salisbury Marketplace Property and to refinance the mortgages payable on the Lancer Center Property and the Greenbrier Business Center Property.  On October 2, 2024, the Company and Wells Fargo Bank, National Association,
entered into an Amendment to the Wells Fargo Mortgage Facility that added, as cross collateral, the Citibank Property.  The Wells Fargo Mortgage Facility bears interest at a fixed rate of 4.50% for a five-year term.  The monthly payment, which includes interest at the fixed rate, and principal, based on a twenty-five-year amortization schedule, is $103,438.  The Company has provided an unconditional guaranty of the payment of and performance under the terms of the Wells Fargo Mortgage Facility.  The Wells Fargo Mortgage Facility credit agreement includes covenants to maintain a debt service coverage ratio of not less than 1.50 to 1.00 on an annual basis, a combined minimum debt yield of 9.5% on the Salisbury Marketplace Property, the Lancer Center Property, the Greenbrier Business Center Property, and the Citibank Property, and the maintenance of liquid assets of not less than $1,500,000.  As of September 30, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants.  
Schedule of interest expense, including amortization of capitalized issuance costs and payments received from the Company's interest rate protection transactions for the Hampton Inn Property and Clemson Best Western Property

For the three months ended September 30, 2024

(unaudited)

    

    

Amortization

    

Interest rate

    

    

Mortgage

of discounts and

protection

Other

Interest

capitalized

transaction

interest

Expense

issuance costs

payments

expense

Total

Franklin Square

$

128,943

    

$

7,093

    

$

    

$

    

$

136,036

Ashley Plaza

 

101,170

 

4,358

 

 

 

105,528

Brookfield Center

 

45,013

 

2,837

 

 

 

47,850

Parkway Center

92,553

2,757

(31,353)

63,957

Wells Fargo Mortgage Facility

203,344

6,721

210,065

Amortization and preferred stock dividends on mandatorily redeemable preferred stock

66,965

100,000

166,965

Other interest

521

521

Total interest expense

$

571,023

$

90,731

$

(31,353)

$

100,521

$

730,922

For the three months ended September 30, 2023

(unaudited)

    

    

Amortization

    

Interest rate

    

    

Mortgage

of discounts and

protection

Other

Interest

capitalized

transaction

interest

Expense

issuance costs

payments

expense

Total

Franklin Square

$

128,943

 

$

7,093

 

$

    

$

 

$

136,036

Hanover Square

 

166,532

 

3,223

 

 

 

169,755

Ashley Plaza

 

103,339

 

4,358

 

 

 

107,697

Brookfield Center

 

45,943

 

2,837

 

 

48,780

Parkway Center

74,047

 

2,757

 

(29,953)

 

46,851

Wells Fargo Mortgage Facility

208,298

 

6,721

 

14,636

 

229,655

Amortization and preferred stock dividends on mandatorily redeemable preferred stock

 

61,408

 

100,000

 

161,408

Total interest expense

$

727,102

$

88,397

$

(29,953)

$

114,636

$

900,182

 

For the nine months ended September 30, 2024

(unaudited)

 

    

Amortization

    

Interest rate

    

    

 

Mortgage

of discounts and

protection

Other

 

Interest

capitalized

transaction

interest

 

Expense

issuance costs

payments

expense

Total

Franklin Square

$

384,026

    

$

21,279

    

$

    

$

    

$

405,305

Hanover Square

 

129,248

 

 

 

 

129,248

Ashley Plaza

 

302,936

 

13,073

 

 

 

316,009

Brookfield Center

 

134,756

 

8,512

 

 

 

143,268

Parkway Center

266,249

8,270

(83,253)

191,266

Wells Fargo Mortgage Facility

609,303

20,165

629,468

Wells Fargo Line of Credit

15,144

15,144

Amortization and preferred stock dividends on mandatorily redeemable preferred stock

196,621

300,000

496,621

Other interest

4,701

4,701

Total interest expense

$

1,826,518

$

267,920

$

(83,253)

$

319,845

$

2,331,030

For the nine months ended September 30, 2023

(unaudited)

 

    

Amortization

    

Interest rate

    

    

 

Mortgage

of discounts and

protection

Other

 

Interest

capitalized

transaction

interest

 

Expense

issuance costs

payments

expense

Total

Franklin Square

$

382,625

$

21,279

$

    

$

$

403,904

Hanover Square

 

506,699

9,668

 

516,367

Ashley Plaza

 

308,208

13,073

 

321,281

Brookfield Center

 

137,001

8,512

145,513

Parkway Center

155,640

8,270

(74,950)

88,960

Wells Fargo Mortgage Facility

621,513

20,165

14,636

656,314

Amortization and preferred stock dividends on mandatorily redeemable preferred stock

180,303

300,000

480,303

Total interest expense

$

2,111,686

$

261,270

$

(74,950)

$

314,636

$

2,612,642

Schedule of interest accrued and accumulated amortization of capitalized issuance costs

As of September 30, 2024

(unaudited)

As of December 31, 2023

    

    

Accumulated

    

     

Accumulated

amortization of

amortization

Accrued

capitalized

Accrued

of capitalized

interest

issuance costs

interest

issuance costs

Franklin Square

$

42,046

$

80,387

$

43,448

$

59,108

Hanover Square

 

 

 

55,755

 

71,696

Ashley Plaza

 

 

88,612

 

34,580

 

75,539

Brookfield Center

 

 

56,756

 

 

48,244

Parkway Center

30,443

32,160

28,614

23,890

Wells Fargo Mortgage Facility

60,496

40,331

Amortization and accrued preferred stock dividends on mandatorily redeemable preferred stock

70,004

(1)

1,029,314

70,004

(1)

832,693

Total

$

142,493

$

1,347,725

$

232,401

$

1,151,501

(1)

Recorded as accrued interest under accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively.

Schedule of Company's mortgages payables, net, associated with assets held for sale

Balance

September 30, 

Monthly

Interest  

2024

December 31, 

Property

Payment

    

Rate

Maturity

    

(unaudited)

    

2023

Hanover Square (a)

$

78,098

 

6.94

%  

December 2027

$

$

9,640,725

Unamortized issuance costs, net

 

  

 

  

 

  

 

 

(51,837)

Total mortgages payable, net, associated with assets held for sale

 

  

$

$

9,588,888

(a)The mortgage loan for the Hanover Square Property bore interest at a fixed rate of 4.25% until January 1, 2023, when the interest rate adjusted to a fixed rate of 6.94%, which was determined by adding 3.00% to the daily average yield on United States Treasury securities adjusted to a constant maturity of five years, as made available by the Federal Reserve Board, with a minimum of 4.25%. As a result of the interest rate change, as of February 1, 2023, the fixed monthly payment of $56,882 increased to $78,098 which included interest at the fixed rate, and principal, based on a twenty-five-year amortization schedule.  On March 13, 2024, the Company sold the Hanover Square Shopping Center Property and repaid the mortgage loan for the Hanover Square Property.  
Schedule of principal repayments on indebtedness

Mortgages Payable

For the remaining three months ending December 31, 2024

    

$

208,232

2025

 

1,092,385

2026

 

1,140,558

2027

 

17,278,440

2028

 

721,795

Thereafter

 

30,273,533

Total principal payments and debt maturities

50,714,943

Less unamortized issuance costs

 

(495,574)

Net principal payments and debt maturities

$

50,219,369