(4) Real Estate Investments –

The Partnership leases its properties to tenants under net leases, classified as operating leases. Under a net lease, the tenant is responsible for real estate taxes, insurance, maintenance, repairs and operating expenses for the property. For some leases, the Partnership is responsible for repairs to the structural components of the building, the roof, and the parking lot. At the time the properties were acquired, the remaining primary lease terms varied from 10 to 18 years. The leases provide the tenants with two to six five-year renewal options subject to the same terms and conditions as the primary term. The lease for the Staples retail store was extended to end on October 31, 2023.

The Partnership's properties are commercial, single-tenant buildings. The Jared Jewelry store was constructed in 2001 and acquired in 2004. The Staples store was constructed in 2008 and acquired in 2009. The Family Dollar store was constructed and acquired in 2012. The Fresenius Medical Center was constructed in 2012 and acquired in 2014. The Dollar Tree store was constructed in 2015 and acquired in 2016. There have been no costs capitalized as improvements subsequent to the acquisitions.

The cost of the properties not held for sale and related accumulated depreciation at December 31, 2019 are as follows:


Property	Land		Buildings		Total		Accumulated Depreciation

Jared Jewelry, Hanover, MD	$	861,052	$	1,128,053	$	1,989,105	$	596,924
Staples, Vernon Hills, IL		882,000		2,832,638		3,714,638		1,003,219
Family Dollar, Mobile, AL		300,000		635,489		935,489		157,994
Fresenius Medical Center, Green, OH		400,000		1,717,051		2,117,051		290,949
Dollar Tree, Indianapolis, IN		410,000		1,087,714		1,497,714		143,514
Bassett Home Furn., Fredericksburg, VA		3,111,650		0		3,111,650		0
	$	5,964,702	$	7,400,945	$	13,365,647	$	2,192,600

For the years ended December 31, 2019 and 2018, the Partnership recognized depreciation expense of $246,696 and $250,372, respectively.

The following schedule presents the cost and related accumulated amortization of acquired lease intangibles not held for sale at December 31:


		2019				2018
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
In-Place Lease Intangibles (weighted average life of 82 and 67 months, respectively)	$	1,174,241	$	391,691	$	675,154	$	291,895

Above-Market Lease Intangibles (weighted average life of 30 and 42 months, respectively)		284,566		212,829		284,566		184,133
Acquired Intangible Lease Assets	$	1,458,807	$	604,520	$	959,720	$	476,028

Acquired Below-Market Lease Intangibles (weighted average life of 118 and 0 months, respectively)	$	444,840	$	28,244	$	0	$	0

For the years ended December 31, 2019 and 2018, the value of in-place lease intangibles amortized to expense was $99,796 and $68,108, the decrease to rental income for above-market leases was $28,696 and $28,696, and the increase to rental income for below-market leases was $28,244 and $0, respectively.

For lease intangibles not held for sale at December 31, 2019, the estimated amortization for the next five years is as follows:


	Amortization Expense for In-Place Lease Intangibles		Decrease to Rental Income for Above-Market Leases		Increase to Rental Income for Below-Market Leases

2020	$	115,640	$	28,696	$	42,368
2021		115,640		28,696		42,368
2022		106,023		14,345		42,368
2023		96,396		0		42,368
2024		96,396		0		42,368
	$	530,095	$	71,737	$	211,840

In March 2017, the Partnership entered into an agreement with the tenant of the KinderCare daycare center in Mayfield Heights, Ohio to extend the lease term five years to end on June 30, 2022. The annual rent was scheduled to remain the same throughout the remainder of the extended lease term. As part of the agreement, the Partnership paid a tenant improvement allowance of $43,350 that was capitalized. In addition, beginning on July 1, 2017, the tenant received free rent for three months that equaled $40,421. In the first quarter of 2017, the Partnership decided to sell the property. In October 2018, the Partnership entered into a second agreement with the tenant to extend the lease term 6.3 years to end on September 30, 2028. The annual rent remained the same with a 10% increase scheduled for October 1, 2023. In October 2018, as part of the agreement, the Partnership made a lease incentive payment to the tenant of $100,000 that was capitalized. The General Partner believes that the additional lease term increased the number of buyers interested in the property and increased the value of the property by more than the $100,000 paid to the tenant. At December 31, 2018, the property was classified as Real Estate Held for Sale with a carrying value of $999,271.

In December 2018, the Partnership entered into an agreement to sell the KinderCare daycare center to an unrelated third party. On January 25, 2019, the sale closed with the Partnership receiving net proceeds of $2,073,311, which resulted in a net gain of $1,074,040. At the time of sale, the cost and related accumulated depreciation was $1,550,408 and $551,137, respectively.

In January 2018, the Partnership decided to sell the Red Robin restaurant in Colorado Springs, Colorado. In August 2018, the Partnership entered into an agreement to sell the property to an unrelated third party. On October 30, 2018, the sale closed with the Partnership receiving net proceeds of $5,516,851, which resulted in a net gain of $4,344,394. At the time of sale, the cost and related accumulated depreciation was $2,229,190 and $1,056,733, respectively.

In August 2018, the Partnership entered into an agreement with the tenant of the Staples store in Vernon Hills, Illinois to extend the lease term five years to end on October 31, 2023. As part of the agreement, the annual rent decreased from $308,315 to $214,480 effective November 1, 2018.

On April 30, 2019, the Partnership purchased 2.36 acres of land in Fredericksburg, Virginia for $3,165,897. The Partnership allocated $499,087 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles, and allocated $444,840 to Acquired Below-Market Lease Intangibles. The land is leased to Bassett Direct NC, LLC, a subsidiary of Bassett Furniture Industries, Inc., under a lease agreement with a remaining primary term of 10.5 years (as of the date of purchase) and annual rent of $199,296. Bassett operates a Bassett Home Furnishings store on the site. Ownership of the building and improvements will transfer to the Partnership upon termination of the lease.

The Partnership owned a 40.1354% interest in a HomeTown Buffet restaurant in Albuquerque, New Mexico. The remaining interests in this property were owned by unrelated third parties, who owned the property with the Partnership as tenants-in-common. On November 10, 2015, the Partnership sold the property to an unrelated third party. In December 2014, the Partnership and three of the other co-owners of the property (the “Plaintiffs”) commenced legal action against a fourth coowner (“Defendant”) for breach of contract related to a prior attempt to sell the property. In 2017, the Plaintiffs signed a settlement agreement with the Defendant and collected damages related to the breach of contract. On July 7, 2017, the judge in the case issued a ruling that set the amount of legal fees that the Plaintiffs could recover from the Defendant. The Partnership’s share of this amount was $50,689. After appealing the judge’s decision several times, the Defendant finally paid the amount awarded by the judge in January 2019. At December 31, 2018, the Partnership accrued its share of this amount as Miscellaneous Income.

For properties owned as of December 31, 2019, the minimum future rent payments required by the leases are as follows:

2020	$	1,046,428
2021		1,055,148
2022		805,648
2023		694,109
2024		519,981
Thereafter		1,242,379
	$	5,363,693

There were no contingent rents recognized in 2019 and 2018.