6. INTEREST RATE SWAP CONTRACT

9 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Text Block]

 6. INTEREST RATE SWAP CONTRACT

The Company is exposed to interest rate risk through its borrowing activities.  In order to minimize the effect of changes in interest rates, the Company has entered into an interest rate swap contract under which the Company agrees to pay an amount equal to a specified rate of 7.57% times a notional principal amount approximating the outstanding loan balance, and to receive in return an amount equal to 2.45% plus the one-month LIBOR Rate times the same notional amount.  The Company designated this interest rate swap contract as a cash flow hedge.

As of September 30, 2012 the fair value of this hedge was an unrealized loss of approximately $2,066,000, as compared to an unrealized loss of $1,975,000 as of December 31, 2011 which resulted in an unrealized loss of $91,000 (or $45,500, net of non-controlling interest) for the nine months ended September 30, 2012.  This amount has been recorded as other comprehensive income and will be reclassified to interest expense over the life of the contract.

The following tables present the required disclosures in accordance with ASC Topic 815-10:

Fair Values of Derivative Instruments:

	Liability Derivative
	September 30, 2012
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Interest rate swap contract	Liabilities	$	2,066,000	Liabilities	$	1,975,000
Total derivatives designated as hedging instruments under ASC Topic 815		$	2,066,000		$	1,975,000

The Effect of Derivative Instruments on the Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2012 and 2011:

The Effect of Derivative Instruments on the Statements of Comprehensive Income

Recognized in OCI on Derivative
(Effective Portion)
	For the three			For the three Months			For the nine Months			For the nine Months
	Months ended			ended			ended			ended
	September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
Interest rate swap contracts	$	(3,500	)	$	(298,000	)	$	(45,500	)	$	(257,000	)
Total	$	(3,500	)	$	(298,000	)	$	(45,500	)	$	(257,000	)