Income Properties

12 Months Ended

Dec. 31, 2013

Business Combinations [Abstract]

Income Properties

NOTE 2. INCOME PROPERTIES

During the year ended December 31, 2013, the Company acquired nine income properties at a total acquisition cost of approximately $39.5 million. Of the total acquisition cost, approximately $13.2 million was allocated to land, approximately $23.4 million was allocated to buildings and improvements, and approximately $2.9 million was allocated to intangible assets pertaining to the in-place lease value. The weighted average amortization period for the $2.9 million allocated to intangible assets is approximately 10.5 years. In connection with the acquisition of two of the nine income properties acquired during the year ended December 31, 2013, the Company expensed approximately $90,000 of acquisition costs, in accordance FASB ASC 805 “Business Combinations.” These acquisitions costs are included in income properties expense in the consolidated financial statements. The income properties acquired in 2013 include the following:

On January 3, 2013, the Company acquired four properties leased to Bank of America, N.A. in both Los Angeles County and Orange County, California, at an aggregate purchase price of approximately $8.0 million. As of the acquisition date, the remaining terms of the leases were 15.0 years.

On January 23, 2013, the Company acquired a 34,512 square-foot free-standing building, situated on 3.62 acres in Glendale, Arizona. The total purchase price was approximately $5.0 million. The property is under lease to an affiliate of Big Lots with a remaining term of 10 years, as of the acquisition date.

On January 31, 2013, the Company acquired a two-building 133,000 square-foot office complex leased to Hilton Resorts Corporation in Orlando, Florida. The total purchase price was approximately $14.6 million. Both buildings are under a long term lease, which provides for annual lease escalations with over eight years remaining in the term, as of the acquisition date.

On July 25, 2013, the Company acquired a 16,280 square-foot building leased to a subsidiary of Rite Aid Corp. in Renton Washington, a suburb of Seattle. The total purchase price was approximately $6.6 million. As of the acquisition date, the remaining term of the lease was 13 years, with lease escalations during the six five-year option periods.

On September 13, 2013, the Company acquired a 25,600 square-foot building leased to Big Lots in Germantown, Maryland. The total purchase price was approximately $5.0 million. As of the acquisition date, the remaining term of the lease was approximately 10.4 years, with three five-year option periods.

During the year ended December 31, 2012, the Company acquired eight income properties at a total acquisition cost of approximately $25.9 million. Of the total acquisition cost, approximately $14.7 million was allocated to land, approximately $9.7 million was allocated to buildings and improvements, and approximately $1.5 million was allocated to intangible assets pertaining to the in-place lease value.