Real Estate Investments

6 Months Ended

Mar. 31, 2016

Real Estate [Abstract]

Real Estate Investments

NOTE 3 – REAL ESTATE INVESTMENTS

Acquisitions

On November 13, 2015, the Company purchased a newly constructed 330,717 square foot industrial building located in Concord, NC, which is in the Charlotte Metropolitan Statistical Area (MSA). The building is 100% net-leased to FedEx Ground Package System, Inc. through July 2025. The purchase price was $31,975,897. The Company obtained a 15 year self-amortizing mortgage of $20,780,000 at a fixed interest rate of 3.87%. Annual rental revenue over the remaining term of the lease averages approximately $2,078,000. In connection with the acquisition, the Company completed its evaluation of the acquired lease. As a result of its evaluation, the Company has not allocated any amount to an Intangible Asset.

On December 2, 2015, the Company purchased a newly constructed 175,315 square foot industrial building located in Covington, LA, which is in the New Orleans MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. through June 2025. The purchase price was $18,410,000. The Company obtained a 15 year self-amortizing mortgage of $12,890,000 at a fixed interest rate of 4.08%. Annual rental revenue over the remaining term of the lease averages approximately $1,257,000. In connection with the acquisition, the Company completed its evaluation of the acquired lease. As a result of its evaluation, the Company has not allocated any amount to an Intangible Asset.

On March 8, 2016, the Company purchased a newly constructed 125,860 square foot industrial building located in Imperial, PA, which is in the Pittsburgh MSA. The building is 100% net-leased to General Electric Company (GE) through December 2025. The purchase price was $20,032,864. The Company obtained a 14 year self-amortizing mortgage of $13,000,000 at a fixed interest rate of 3.63%. Annual rental revenue over the remaining term of the lease averages approximately $1,310,000. In connection with the acquisition, the Company completed its evaluation of the acquired lease. As a result of its evaluation, the Company allocated $82,864 to an Intangible Asset associated with the lease in-place.

FedEx Ground Package System, Inc.’s ultimate parent, FedEx Corporation (FDX) and GE are publicly-owned companies and financial information related to these entities is available at the SEC’s website, www.sec.gov.

Pro forma information

The following unaudited pro forma condensed financial information has been prepared utilizing the historical financial statements of the Company and the effect of additional revenue and expenses from the properties acquired during the third quarter of fiscal 2016 to date (see Note 10) and properties acquired during fiscal 2016 and 2015, assuming that the acquisitions had occurred as of October 1, 2014, after giving effect to certain adjustments including (a) Rental Revenue adjustments resulting from the straight-lining of scheduled rent increases, (b) Interest Expense resulting from the assumed increase in Mortgage Notes Payable and Loans Payable related to the new acquisitions, and (c) Depreciation Expense related to the new acquisitions. The unaudited pro forma condensed financial information is not indicative of the results of operations that would have been achieved had the acquisitions reflected herein been consummated on the dates indicated or that will be achieved in the future.

	Three Months Ended				Six Months Ended
	3/31/2016		3/31/2015		3/31/2016		3/31/2015
Rental Revenues	$	23,675,900	$	22,426,100	$	47,223,000	$	44,584,600
Net Income Attributable to Common Shareholders	$	5,210,400	$	3,809,000	$	10,303,700	$	7,677,400
Basic and Diluted Net Income per Share Attributable to Common Shareholders	$	0.08	$	0.07	$	0.16	$	0.13

Tenant Concentration

The Company has a concentration of FDX and FDX subsidiary-leased properties, consisting of forty-nine separate stand-alone leases covering approximately 6,508,000 square feet as of March 31, 2016 and forty-six separate stand-alone leases covering approximately 5,611,000 square feet as of March 31, 2015. The percentage of FDX leased square footage to the total of the Company’s rental space was 45% (7% to FDX and 38% to FDX subsidiaries) as of March 31, 2016 and 43% (7% to FDX and 36% to FDX subsidiaries) as of March 31, 2015. No other tenant accounted for 5% or more of the Company’s total rental space as of March 31, 2016 and 2015.

Annualized Rental and Reimbursement Revenue from FDX and its subsidiaries is estimated to be approximately 55% (7% to FDX and 48% to FDX subsidiaries) of total Rental and Reimbursement Revenue for fiscal 2016 and was 55% (9% to FDX and 46% to FDX subsidiaries) for fiscal 2015. No other tenant accounted for 5% or more of the Company’s total Rental and Reimbursement revenue for the six months ended March 31, 2016 and 2015.