MORTGAGE NOTES, LOANS PAYABLE AND CONVERTIBLE SUBORDINATED DEBENTURES

12 Months Ended

Sep. 30, 2011

Mortgage Notes Loans Payable and Convertible Subordinated Debentures [Abstract]

MORTGAGE NOTES, LOANS PAYABLE AND CONVERTIBLE SUBORDINATED DEBENTURES

NOTE 8- MORTGAGE NOTES, LOANS PAYABLE AND CONVERTIBLE SUBORDINATED DEBENTURES

Mortgage Notes Payable:

During the first quarter of fiscal 2011, the Company assumed two mortgages totaling $10,577,988 in connection with the acquisitions of properties in Lebanon, TN and Rockford, IL. In addition, the Company obtained a $4,800,000 mortgage in connection with the acquisition of the industrial property Edinburg, TX. These acquisitions are described in Note No. 3. During fiscal 2011, the Company also refinanced the mortgages on the Romulus, MI and Carlstadt, NJ properties.

The following is a summary of mortgage notes payable at September 30, 2011 and 2010:

Property	Fixed Rate	Maturity Date	Balance 9/30/11	Balance 9/30/10
Quakertown, PA	5.00%	03/04/11	-0-	2,437,500
White Bear Lake, MN	7.04%	01/01/12	1,630,739	1,874,187
Winston Salem, NC	7.10%	02/01/12	3,288,535	3,496,982
Schaumburg, IL	8.48%	07/01/12	299,156	669,648
Montgomery, IL	6.50%	11/01/12	5,326,758	5,508,809
Tolleson, AZ	5.80%	12/01/12	5,978,903	6,682,378
Ft. Myers, FL	6.33%	12/01/12	2,257,494	2,392,393
Liberty, MO	7.065%	03/01/13	712,603	1,174,449
Fayetteville, NC	6.63%	06/01/13	3,465,837	3,534,119
Augusta, GA (FDX)	6.63%	06/01/13	1,098,279	1,119,967
Lakeland, FL	6.63%	06/01/13	1,344,600	1,375,000
Romulus, MI	7.56%	07/01/13	-0-	774,038
Rockford, IL	5.50%	12/10/13	1,890,480	-0-
Burr Ridge, IL	8.00%	01/01/14	206,735	279,567
Omaha, NE	7.15%	01/01/14	925,151	1,291,038
Charlottesville, VA	6.90%	07/01/14	736,435	971,514
Memphis,TN	6.25%	10/15/14	9,457,396	9,731,034
Tampa, FL (Kellogg)	5.71%	03/01/15	2,682,850	2,811,162
Richmond, VA (FDX)	6.12%	12/01/15	2,111,792	2,543,582
St. Joseph, MO	8.12%	03/01/16	3,783,483	4,468,055
Wheeling, IL	5.68%	03/01/16	5,189,090	5,564,064
Beltsville, MD	7.53%	05/01/16	2,585,054		3,040,296
Beltsville, MD	6.65%	05/01/16	5,654,938		5,815,142
Cudahy, WI	8.15%	05/01/16	1,875,565		2,200,025
Newington, CT	8.10%	05/01/16	1,071,641		1,261,380
Griffin, GA	6.37%	10/01/16	8,541,196		8,871,154
Granite City, IL	7.11%	11/01/16	4,390,459		5,083,024
Jacksonville, FL	6.92%	12/01/16	1,497,065		1,724,551
Jacksonville, FL	6.00%	12/01/16	1,300,000		1,300,000
Monroe, NC	7.11%	12/01/16	1,922,395		2,214,178
El Paso, TX	5.40%	01/05/17	4,815,903		5,084,847
Chattanooga, TN	5.96%	05/01/17	2,546,752		2,712,769
Elgin, IL	6.97%	05/01/17	2,514,037		2,863,756
Hanahan, SC (Norton)	7.36%	05/01/17	7,035,392		7,268,255

Property	Fixed Rate	Maturity Date	Balance 9/30/11	Balance 9/30/10
Roanoke, VA	5.96%	05/30/17	3,851,152	4,073,232
Kansas City, MO	6.11%	07/01/17	2,864,711	2,968,112
Edwardsville, KS	7.375%	07/01/17	2,554,478	2,898,618
Orion, MI	6.57%	08/01/17	10,849,953	11,221,324
Cheektowaga, NY	6.78%	10/01/17	1,622,078	1,834,042
Punta Gorda, FL	6.29%	10/01/17	2,516,855	2,605,395
Cocoa, FL	6.29%	12/01/17	6,374,577	6,595,167
Richfield, OH	5.22%	01/01/18	4,596,248	4,855,143
Bedford Heights, OH	5.96%	01/05/18	3,462,791	3,594,886
West Chester Twp, OH	6.80%	06/01/18	3,082,771	3,250,388
Tampa, FL (FDX)	5.65%	04/01/18	4,925,374	5,101,276
Orlando, FL	6.56%	10/01/18	5,334,238	5,499,752
Tampa, FL (FDX Gr)	6.00%	03/01/19	9,617,549	10,124,312
Lebanon, TN	7.60%	07/31/19	8,510,325	-0-
Ft Mill, SC	7.00%	10/10/19	4,258,137	4,642,008
Denver, CO	6.07%	11/01/19	2,350,869	2,569,648
Hanahan, SC (FDX Gr)	5.54%	01/21/20	2,300,422	2,509,252
Augusta, GA (FDX Gr)	5.54%	01/27/20	1,673,335	1,825,238
Huntsville, AL	5.50%	03/01/20	1,661,348	1,810,614
Colorado Springs, CO	5.41%	01/01/21	2,567,159	2,773,111
Romulus, MI	5.50% (1)	07/01/21	2,959,392	-0-
Topeka, KS	6.50%	08/10/21	2,354,047	2,519,764
Carlstadt, NJ	7.75%	08/15/21	-0-	1,824,115
Edinburg, TX	5.85% (2)	09/30/21	4,800,000
Houston,TX	6.875%	09/10/22	4,882,197	5,172,685
Carrollton,TX	6.75%	02/01/25	10,945,805	11,431,445
Carlstadt, NJ	5.25%	05/15/26	2,561,646	-0-
Carlstadt, NJ	5.95%	05/17/27	-0-	739,471
Total Mortgage Notes Payable			$211,614,170	$210,577,861

(1) Interest rate is fixed at 5.5% for the first 5 years. On July 1, 2016, the interest rate resets to the Federal Home Loan Bank of New York rate plus 275 basis points with a floor of 5.5%.

(2) Interest rate is fixed at 5.85% for the first 5 years. On November 1, 2016, the interest rate resets to the Federal Home Loan Bank of New York rate plus 275 basis points with a floor of 5.5%.

Principal on the foregoing debt is scheduled to be paid as follows:

Year Ending September 30,	2012	$20,104,107
	2013	32,888,138
	2014	16,152,651
	2015	25,173,526
	2016	27,734,698
	Thereafter	89,561,050
		$211,614,170

Loans Payable:

Capital One, N.A.

The Company has a line of credit agreement with Capital One, N.A. for $20,000,000. This $20,000,000 line is unsecured and can be used for working capital purposes or acquisitions. The line’s rate is variable at LIBOR plus 200 basis points on the first $15,000,000 and LIBOR plus 250 basis points on the remaining $5,000,000. The line matures March 31, 2013. The balance outstanding as of September 30, 2011 and 2010 was $11,000,000 and $5,000,000, respectively. The interest rate was 2.23% and 2.25% as of September 30, 2011 and 2010, respectively. The Company must keep not less than $1,000,000 in average net collected balances at Capital One, N.A. and meet certain loan covenants as contained in the loan agreement, including a 65% loan to value ratio on certain negatively pledged properties. The Company was in compliance with these covenants as of September 30, 2011.

Margin Loans

The Company uses margin loans for purchasing securities, for temporarily funding of acquisitions, and for working capital purposes. The interest rate charged on the margin loan is the bank’s margin rate and was 2.0% as of September 30, 2011 and 2010, respectively and is due on demand. At September 30, 2011 and 2010, the margin loans totaled $5,860,950 and $4,273,913, respectively and are collateralized by the Company’s securities portfolio. The Company must maintain a coverage ratio of approximately 50%.

Convertible Subordinated Debentures

Debentures – due 2013:

Monmouth Capital has $3,770,000 of 8% Convertible Subordinated Debentures outstanding, due October 23, 2013 (the 2013 Debentures). Interest is paid semi-annually in arrears on April 30 and October 31 of each year. The 2013 Debentures are convertible into common stock of the Company at any time prior to redemption or maturity, at the conversion price of $9.16 per share (equivalent to a rate of 109.17 shares of common stock for each $1,000 principal amount), subject to adjustment under certain conditions. The Company may redeem the 2013 Debentures, at its option, in whole or in part, at any time after October 23, 2009 at par. The Company will pay accrued and unpaid interest to, but excluding, the date fixed for redemption.    No sinking fund is provided for the 2013 Debentures.

Debentures – due 2015:

Monmouth Capital has $5,145,000 of 8% Convertible Subordinated Debentures outstanding, due March 30, 2015 (the 2015 Debentures).  Interest is paid semi-annually in arrears on April 30 and October 31 of each year, commencing October 31, 2005.  The 2015 Debentures are convertible into common stock of the Company at any time prior to redemption or maturity, at the conversion price of $11.45 per share (equivalent to a rate of 87.336 shares of common stock for each $1,000 principal amount), subject to adjustment under certain conditions. The Company may redeem the 2015 Debentures, at its option, in whole or in part, at any time on and after March 30, 2011 at par. The Company will pay accrued and unpaid interest to, but excluding, the date fixed for redemption.  No sinking fund is provided for the 2015 Debentures.