Real Estate Investments

9 Months Ended

Sep. 30, 2016

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

(3)  Real Estate Investments –

On January 8, 2016, the Partnership purchased a Dollar Tree store in Indianapolis, Indiana for $1,739,074.  The Partnership allocated $241,360 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles. The Partnership incurred $47,902 of acquisition expenses related to the purchase that were expensed.  The property is leased to Dollar Tree Stores, Inc. under a Lease Agreement with a remaining primary term of 9.7 years (as of the date of purchase) and annual rent of $117,387.

For the nine months ended September 30, 2016 and 2015, the value of in-place lease intangibles amortized to expense was $49,001 and $32,355 and the decrease to rental income for above-market leases was $21,522 and $21,522, respectively.  For lease intangibles not held for sale as of September 30, 2016, the weighted average remaining life is 94 months for in-place lease intangibles and 69 months for above-market leases.  The estimated amortization expense is $68,108 and the estimated decrease to rental income is $28,696 for each of the next five succeeding years.

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 January 31, 2011, the lease term expired and the tenant returned possession of the property to the owners.  The owners listed the property for lease or sale with a real estate broker in the Albuquerque area.  While the property was vacant, the Partnership was responsible for its 40.1354% share of real estate taxes and other costs associated with maintaining the property.

In August 2015, the Partnership and the other co-owners of the property entered into an agreement to sell the HomeTown Buffet restaurant in Albuquerque, New Mexico to an unrelated third party.  On November 10, 2015, the sale closed with the Partnership receiving net proceeds of $296,779, which resulted in a net gain of $38,658.  At the time of sale, the cost and related accumulated depreciation was $470,329 and $212,208, respectively.  

In December 2014, the Partnership and three of the other co-owners of the HomeTown Buffet restaurant (the “Plaintiffs”) commenced legal action against a fourth coowner (“Defendant”) for breach of contract related to a prior attempt to sell the property.  The Plaintiffs are suing to recover damages and attorney’s fees.  In July 2015, the judge ruled that the Defendant had breached the contract. On March 24, 2016, the judge heard the Plaintiffs’ motion for summary judgment as to damages.  The judge ruled that the Plaintiffs are entitled to attorney’s fees, but declined to award damages until additional proof of damages can be provided.  The Partnership’s share of the legal and other costs incurred related to the legal action ($89,295 through December 31, 2015) were expensed in 2015.  In the first nine months of 2016, the Partnership incurred additional costs of $11,202 that were expensed.  The Plaintiffs will attempt to collect the judgment from the Defendant.  Unless the Defendant voluntarily pays the judgment, which is unlikely, the timing and ability to collect the judgment are uncertain at this time.  As a result, the Partnership did not accrue a receivable for the judgment amount.