INVESTMENT IN RESIDENTIAL REAL ESTATE PARTNERSHIP

12 Months Ended

Dec. 31, 2018

Investment In Real Estate Partnership [Abstract]

Investment In Real Estate Partnership [Text Block]

8. INVESTMENT IN RESIDENTIAL REAL ESTATE PARTNERSHIP

As previously reported on Form 8-K dated February 20, 2018, JY-TV Associates, LLC, a Florida limited liability company (“JY-TV”) (“Seller”) an entity one-third owned by HMG, completed the sale of its multi-family residential apartments located in Orlando, Florida pursuant to the previously reported Agreement of Sale (the “Agreement”) to Murano 240, LLC (as per an Assignment and Assumption of Agreement of Sale with Cardone Real Estate Acquisitions, LLC), a Delaware limited liability company, an unrelated entity (“Purchaser”). The final sales price was $50,150,000 and the sales proceeds were received in cash and payment of outstanding debt. The gain on the sale to HMG was approximately $5.5 million, net of the incentive fee.

For the year ended December 31, 2018 JY-TV reported net income of approximately $17.8 million, which includes approximately $18.2 million in gain on sale of property, depreciation and amortization expense of $447,000, interest expense of $159,000, write-off of certain prepaid and other assets upon the sale of property of approximately $100,000 and other net operating revenues. The Company’s portion of JY-TV’s net income is approximately $5.9 million ($137,000 of loss from operations and $6.1 million in gain on sale of property (before the $608,000 incentive fee). JY-TV made distributions totaling $21.75 million in February 2018. The Company’s portion of those distributions was $7.25 million. In June and December 2018 JY-TV made additional distributions of $1,125,000, of which the Company’s portion was $375,000. Final accounting has been completed and a final distribution from JY-TV of approximately $6,000 is expected in 2019.

For the year ended December 31, 2017 JY-TV reported a net loss of approximately $657,000, which includes depreciation and amortization expense of $1.1 million and interest expense of $1.5 million. The Company’s portion of that loss is approximately $224,000. In March 2017, JY-TV distributed $390,000 to its members. The Company’s portion of that distribution was $130,000. 

This investment is accounted for under the equity method.