On January 2, 2019, the Company, through the Operating Partnership, made a preferred equity investment, together with a subsidiary of CFI. The Company’s initial investment of $4,779,353 was made through the Pennsylvania SPE, in which, as of January 2, 2019, the Company owned 40.5% of the membership interests and CFI owned 59.5% of the membership interests.

The Pennsylvania SPE entered into a joint venture agreement (the “Pennsylvania JV”) with a subsidiary of USRA Net Lease III Capital Corp (“USRA”). The Company and CFI, by and through the Pennsylvania SPE, invested $11,805,000 of capital in the Pennsylvania JV. The Pennsylvania JV is the sole member of an entity that purchased the PA Property for a purchase price of $117,050,000. The acquisition of the PA Property was also financed by a mortgage loan in the amount of $76,732,500 (the “PA Mortgage Loan”) provided by Goldman Sachs Mortgage Company (the “PA Mortgage Lender”). In connection with entering into the Pennsylvania JV, CF Real Estate Holdings, LLC, an affiliate of CFI (“CFREH”), entered into a Back-Up Indemnification Agreement (the “CFREH Indemnification Agreement”) with USRA, whereby CFREH agreed to indemnify USRA and certain of its affiliates from certain claims that may be asserted by the PA Mortgage Lender to the extent that such claims are caused by CFREH, the Pennsylvania SPE, or any of their affiliates.

The PA Property is 100% leased to New Albertsons L.P., which is a subsidiary of Albertsons Companies Inc. (“Albertsons”), which serves as the guarantor of the lease (the “PA Property Lease”). The PA Property Lease is a net lease whereby the tenant is responsible for operating expenses, real estate taxes, utilities, repairs, maintenance and capital expenditures, in addition to its obligation to pay base rent.

Subsequent to January 2, 2019, the Company purchased additional membership interests in the Pennsylvania SPE from CFI totaling $7,025,647, bringing the Company’s total investment in the Pennsylvania SPE to $11,805,000. As of June 30, 2020, the Company’s interest in the Pennsylvania SPE was 100%. Accordingly, on December 24, 2019, the Company entered into a Back-Up Indemnification Agreement, whereby the Company assumed all of the past, present and future obligations and liabilities of CFREH under the CFREH Indemnification Agreement, and CFREH was released of such obligations. As of the date hereof, there are no outstanding claims or obligations under the CFREH Indemnification Agreement.

Based on the Company’s consolidation analysis, which was performed in accordance with ASC Topic 810, Consolidation as described in the “Variable Interest Entities” section of Note 2 — Summary of Significant Accounting Policies, management has determined that the Company is the primary beneficiary of the Pennsylvania SPE. Accordingly, on June 5, 2019, the Company has consolidated the Pennsylvania SPE, and has no longer accounted for its investment in the Pennsylvania SPE under the equity method of accounting.

On January 2, 2019, the Company, through the Operating Partnership, made a mezzanine loan investment, together with CFI. The Company’s initial investment of $5,099,190 was made through the Illinois SPE, in which, as of January 2, 2019, the Company owned 40.5% of the membership interests and CFI owned 59.5% of the membership interests.

The Illinois SPE, originated a fixed rate, subordinate mezzanine loan in the amount of $12,595,000 to Chicago Grocery Mezz B, LLC, which is owned and controlled by USRA, for the acquisition of the IL Property for a contract purchase price of $124,950,000.

The IL Property is 100% leased to New Albertsons L.P., which is a subsidiary of Albertsons, which serves as the guarantor of the lease (the “IL Property Lease”). The IL Property Lease is a net lease whereby the tenant is responsible for operating expenses, real estate taxes, utilities, repairs, maintenance and capital expenditures, in addition to its obligation to pay base rent.

Subsequent to January 2, 2019, the Company purchased additional membership interests in the Illinois SPE from CFI totaling $7,495,810, bringing the Company’s total investment in the Illinois SPE to $12,595,000. As of June 30, 2020, the Company’s interest in the Illinois SPE was 100%. Subject to the limitations in the Company’s charter, the purchase price for any membership interests purchased from CFI was equal to CFI’s purchase price in exchange for such membership interests.

Based on the Company’s consolidation analysis, which was performed in accordance with ASC Topic 810, Consolidation as described in the “Variable Interest Entities” section of Note 2 — Summary of Significant Accounting Policies, management has determined that the Company is the primary beneficiary of the Illinois SPE. Accordingly, on October 29, 2019, the Company has consolidated the Illinois SPE, and has no longer accounted for its investment in the Illinois SPE under the equity method of accounting.

The results of operations for the Company’s investments in real estate-related assets for the three and six months ended June 30, 2020 and June 30, 2019 are summarized below:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
DST Properties⁽²⁾	2020			2019			2020			2019
Revenues	$	580,937		$	580,938		$	1,161,874		$	1,161,875
Operating expenses		(318,409	)		(280,885	)		(636,766	)		(491,295	)
Other expenses, net		(261,171	)		(261,170	)		(522,342	)		(519,471	)
Net income (loss)	$	1,357		$	38,883		$	2,766		$	151,109

Net income (loss) attributable to the Company⁽¹⁾	$	—		$	40,971		$	—		$	137,147

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
CO Property⁽³⁾	2020			2019			2020			2019
Revenues	$	840,711		$	840,711		$	1,681,422		$	1,681,422
Operating expenses		(363,807	)		(364,034	)		(727,527	)		(727,391	)
Other expenses, net		(342,502	)		(337,967	)		(684,388	)		(688,936	)
Net income (loss)	$	134,402		$	138,710		$	269,507		$	265,095

Net income (loss) attributable to the Company⁽¹⁾	$	—		$	(11,177	)	$	—		$	(11,177	)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
Pennsylvania SPE⁽⁴⁾	2020			2019			2020			2019
Revenues	$	234,545		$	231,264		$	469,091		$	457,444
Operating expenses		(105	)		(267	)		(225	)		(267	)
Other expenses, net		222			2,268			1,251			2,268
Net income (loss)	$	234,662		$	233,265		$	470,117		$	459,445

Net income (loss) attributable to the Company⁽¹⁾	$	—		$	117,003		$	—		$	253,441

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
Illinois SPE⁽⁵⁾	2020			2019			2020			2019
Revenues	$	250,241		$	246,739		$	500,483		$	488,056
Operating expenses		(105	)		(272	)		(225	)		(272	)
Other expenses, net		237			2,447			1,330			2,447
Net income (loss)	$	250,373		$	248,914		$	501,588		$	490,231

Net income (loss) attributable to the Company⁽¹⁾	$	—		$	176,107		$	—		$	321,811

Note:

(1) Represents the Company’s allocable share of net income based on the Company’s ownership interest in the underlying investment in real estate-related assets and is included within Income from investments in real-estate related assets on the Company’s unaudited consolidated statements of operations.

(2) Effective May 9, 2019, the Company has consolidated the DST, and has no longer accounted for its investment in the DST under the equity method of accounting. See Note 3 – Investment in Real Estate for additional information.

(3) On April 30, 2019, the Company purchased CFI’s remaining interest in the CO Property SPE in the amount of $190,057. The difference between the purchase price paid by the Company to acquire the remaining interests and the value of the Non-controlling interest in subsidiaries per the Company’s balance sheet has been accounted for in Income from investments in real estate-related assets on the Company’s consolidated statements of operations.

(4) Effective June 5, 2019, the Company has consolidated the Pennsylvania SPE, and has no longer accounted for its investment in the Pennsylvania SPE under the equity method of accounting.

(5) Effective October 29, 2019, the Company has consolidated the Illinois SPE, and has no longer accounted for its investment in the Pennsylvania SPE under the equity method of accounting.