Real Estate and Related Assets

3 Months Ended

Sep. 30, 2011

Real Estate

Real Estate Disclosure [Text Block]

NOTE 7 – Real Estate and Related Assets

Real estate assets together with real estate related intangible assets and liabilities as of September 30, 2011 consisted of:

	Cost			Useful Life		Accumulated  Depreciation / Amortization			Net Book Value
Land	$	1,280,000							$	1,280,000
Buildings		1,130,292			20	$	29,863			1,100,429
Improvements		529,387			7		39,957			489,430
Subtotal real estate assets		2,939,679					69,820			2,869,859
Real estate related intangible assets:
Leases in place value		1,624,052			7		122,582			1,501,470
Unamortized tenant improvement allowances		530,444			12		23,358			507,086
		2,154,496					145,940			2,008,556
	$	5,094,175				$	215,760		$	4,878,415
Below market lease value acquired	$	(769,175	)		12	$	(33,870	)	$	(735,305	)

Depreciation and amortization expense was $102,850 and $215,760 for the three and nine months ended September 30, 2011, respectively.  $16,145 and $33,870 in capitalized below market rents were amortized as an increase to rental income during the three and nine months ended September 30, 2011, respectively.

The Property is 100% leased to the General Services Administration (GSA) of the United States pursuant to a lease dated January 9, 2006.  The initial term of the GSA lease runs from January 18, 2008 until January 18, 2018 with an optional five year renewal period from January 2018 to January 2023.  The base rent during the initial term is $746,464 annually and includes a provision of $123,099 annually for the reimbursement of tenant improvement allowances.  The base rent during the renewal term is $623,365. Although the Company is responsible for Property operating expenses, the lease includes a provision for reimbursement of certain operating expenses that exceed a baseline.  This base is subject to annual adjustment based on the Cost of Living Index (COLI).