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What changed in GENERATION INCOME PROPERTIES, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of GENERATION INCOME PROPERTIES, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+223 added−205 removedSource: 10-K (2025-03-28) vs 10-K (2024-04-08)

Top changes in GENERATION INCOME PROPERTIES, INC.'s 2024 10-K

223 paragraphs added · 205 removed · 169 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

31 edited+4 added−5 removed64 unchanged
Biggest changeWe assess target markets and properties using an extensive underwriting and evaluation process, including: • offering materials review; • property and tenant lease information; • in depth conversations with offering agent, local brokers and property management companies; • thorough credit underwriting of the tenant; • review of tenant’s historical performance in the specific market and their nationwide trend to determine potential longevity of the asset and tenant’s business model; • market real estate dynamics, including macroeconomic market data and market rents for potential rental rate changes after initial lease term; • evaluation of business trends for local real estate demand specifics and competing business locations; • review of asset level financial performance; 8 • pre-acquisition discussions with the asset manager to confirm property specific reserve amounts and potential future capital expenditures; • review of property’s physical condition and related systems; and • financial modeling to determine our preliminary baseline pricing. • Specific acquisition criteria may include, but is not limited to, the following: • premier locations and facilities with multiple alternative uses; • sustainable rents specific to a tenants’ location that may be at or below market rents; • investment grade or strong credit tenant; • properties not subject to long-term management contracts with management companies; • opportunities to expand the tenants’ building and/or implement value-added operational improvements; and • population density and strong demand growth characteristics supported by favorable demographic indicators.
Biggest changeWe assess target markets and properties using an extensive underwriting and evaluation process, including: • offering materials review; • property and tenant lease information; • in depth conversations with offering agent, local brokers and property management companies; • thorough credit underwriting of the tenant; • review of tenant’s historical performance in the specific market and their nationwide trend to determine potential longevity of the asset and tenant’s business model; • market real estate dynamics, including macroeconomic market data and market rents for potential rental rate changes after initial lease term; • evaluation of business trends for local real estate demand specifics and competing business locations; 8 • review of asset level financial performance; • pre-acquisition discussions with the asset manager to confirm property specific reserve amounts and potential future capital expenditures; • review of property’s physical condition and related systems; and • financial modeling to determine our preliminary baseline pricing.
The following chart shows the structure of the Company as of December 31, 2023: 6 (1) Until August 8, 2023 The Brown Family owned redeemable liability company interests in GIPNC 199 N Etheridge Road LLC. The Company has since purchased the Brown Family's interest and as of the reporting date owns 100% of the entity.
The following chart shows the structure of the Company as of December 31, 2024: 6 (1) Until August 8, 2023 The Brown Family owned redeemable liability company interests in GIPNC 199 N Etheridge Road LLC. The Company has since purchased the Brown Family's interest and as of the reporting date owns 100% of the entity.
There is no assurance that any currently available properties in our acquisition pipeline will remain available, or that we will pursue or complete potential acquisitions, at prices acceptable to us or at all. 10 Property and Asset Management Agreements We manage our properties in-house, except for our Norfolk, Virginia properties and our Maitland, Florida property.
There is no assurance that any currently available properties in our acquisition pipeline will remain available, or that we will pursue or complete potential acquisitions, at prices acceptable to us or at all. Property and Asset Management Agreements We manage our properties in-house, except for our Norfolk, Virginia properties and our Maitland, Florida property.
Additionally, we seek to ensure that many of our leases contain clauses that require a tenant to reimburse and indemnify us for any environmental contamination occurring at the property. We do not intend to purchase any properties that have known environmental deficiencies that cannot be remediated.
Additionally, we seek to ensure that many of our leases contain clauses that require a tenant to reimburse and indemnify us for any 11 environmental contamination occurring at the property. We do not intend to purchase any properties that have known environmental deficiencies that cannot be remediated.
We look for properties that are difficult or costly to replicate due to a specific location, special zoning, unique physical attributes, below market rents or a significant tenant investment in the facility, all of 7 which contribute to a higher probability of tenant renewals.
We look for properties that are difficult or costly to replicate due to a specific location, special zoning, unique physical attributes, below market rents or a significant tenant investment in the facility, all of which contribute to a higher probability of tenant renewals.
These laws typically impose cleanup responsibility and 11 liability without regard to fault, or whether or not the owner, operator or tenant knew of or caused the presence of the contamination.
These laws typically impose cleanup responsibility and liability without regard to fault, or whether or not the owner, operator or tenant knew of or caused the presence of the contamination.
We believe that we have a seasoned and experienced board of directors that will help us achieve our investment objectives. In combination, our directors have approximately 140 years of experience in the real estate industry. • Real Estate Industry Leadership and Networking . We are led by our Chairman, President and CEO, David Sobelman.
We believe that we have a seasoned and experienced board of directors that will help us achieve our investment objectives. In combination, our directors have approximately 115 years of experience in the real estate industry. • Real Estate Industry Leadership and Networking . We are led by our Chairman, President and CEO, David Sobelman.
We have been organized as a Maryland corporation and have operated in conformity with the requirements for qualification and taxation as a REIT under U.S. federal income tax laws since the beginning of our taxable year ended December 31, 2021.
We are organized as a Maryland corporation and have operated in conformity with the requirements for qualification and taxation as a REIT under U.S. federal income tax laws since the beginning of our taxable year ended December 31, 2021.
Further, the Company’s references to website URLs are intended to be inactive textual references only.
Further, the Company’s references to website URLs are intended to be inactive textual references only. 12
(6) Tenant has the right to terminate the lease as of March 31, 2032, March 31, 2037, March 31, 2042, March 31, 2047, March 31, 2052, and March 31, 2057. (7) Two tenants occupy this single property.
(5) Tenant has the right to terminate the lease as of March 31, 2032, March 31, 2037, March 31, 2042, March 31, 2047, March 31, 2052, and March 31, 2057. (6) Two tenants occupy this single property.
Over a long-term period, we intend to maintain lower levels of debt encumbering the Company, its assets and/or the portfolio as compared to our current leverage. Our Current Portfolio as of December 31, 2023 The following are characteristics of our properties as of December 31, 2023: • Creditworthy Tenants .
Over a long-term period, we intend to maintain lower levels of debt encumbering the Company, its assets and/or the portfolio as compared to our current leverage. 9 Our Current Portfolio as of December 31, 2024 The following are characteristics of our properties as of December 31, 2024: • Creditworthy Tenants .
Human Capital As of December 31, 2023 we had four full-time employees. We plan to use outside consultants, attorneys, and accountants, as necessary.
Human Capital As of December 31, 2024 we had four full-time employees. We plan to use outside consultants, attorneys, and accountants, as necessary.
BBB+ 3.2 1 x 5 Yes $ 353,061 $ 11.50 Medical-Retail Chicago, IL 10,947 Fresenius Medical Care Holdings, Inc.
BBB+ Y 2.2 1 x 5 Yes $ 353,061 $ 11.50 Medical-Retail Chicago, IL 10,947 Fresenius Medical Care Holdings, Inc.
For further information on our properties and our tenant base, see “Item 2–Properties.” The table below presents an overview of the properties in our portfolio as of December 31, 2023: Property Type Location Rentable Square Feet Tenant S&P Credit Rating (1) Remaining Term (Yrs) Options (Number x Yrs) Contractual Rent Escalations (5) ABR (2) ABR per Sq. Ft.
For further information on our properties and our tenant base, see “Item 2–Properties.” The table below presents an overview of the properties in our portfolio as of December 31, 2024: Property Type Location Rentable Square Feet Tenant S&P Credit Rating (1) IG Remaining Term (Yrs) Options (Number x Yrs) Contractual Rent Escalations (4) ABR (2) ABR per Sq. Ft.
Average effective annual rental per square foot is $16.02. Given the nature of our leases, our tenants either pay the real estate taxes or insurance directly or reimburse us for such costs. We believe all of our properties are adequately covered by insurance.
Average effective annual rental per square foot is $15.08. Given the nature of our leases, our tenants either pay the real estate taxes or insurance directly or reimburse us for such costs. We believe all of our properties are adequately covered by insurance.
Our portfolio is 96% leased and occupied. • Contractual Rent Growth . 84% of the leases in our current portfolio (based on annualized base rent as of December 31, 2023) provide for increases in contractual base rent during future years of the current term or during the lease extension periods. • Average Effective Annual Rental per Square Foot .
Our portfolio is 99% leased and occupied. • Contractual Rent Growth . 93% of the leases in our current portfolio (based on annualized base rent as of December 31, 2024) provide for increases in contractual base rent during future years of the current term or during the lease extension periods. • Average Effective Annual Rental per Square Foot .
Approximately 68% of our portfolio’s annualized rent as of December 31, 2023 was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency of “BBB-” 9 or better.
Approximately 60% of our portfolio’s annualized rent as of December 31, 2024 was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency of “BBB-” or better.
Under a net lease, the tenant typically bears the responsibility for most or all property related expenses such as real estate taxes, insurance, and maintenance costs. We believe this lease structure provides us with stable cash flows over the term of the lease and minimizes the ongoing capital expenditures.
Our properties are generally net leased to a single tenant. Under a net lease, the tenant typically bears the responsibility for most or all property related expenses such as real estate taxes, insurance, and maintenance costs. We believe this lease structure provides us with stable cash flows over the term of the lease and minimizes the ongoing capital expenditures.
BBB 1.6 3 x 5 Yes $ 103,607 $ 9.50 Office Maitland, FL 33,118 exp U.S. Services Inc.
BBB Y 5.6 2 x 5 Yes $ 103,607 $ 9.50 Office Maitland, FL 33,118 exp U.S. Services Inc.
Our largest tenants are the General Service Administration, Dollar General, and the City of San Antonio, who collectively contributed approximately 39% of our portfolio’s annualized base rent as of December 31, 2023. • 96% Occupied .
Our largest tenants are the General Service Administration, Dollar General, and the City of San Antonio, who collectively contributed approximately 40% of our portfolio’s annualized base rent as of December 31, 2024. • 99% Occupied .
As of December 31, 2023, as the general partner of the Operating Partnership, we owned 90.7% of the outstanding common units in the Operating Partnership and outside investors owned 9.3%. The Company formed a Maryland entity GIP REIT OP Limited LLC as a wholly owned subsidiary in 2018 that owned 0.002% of the Operating Partnership as of December 31, 2023.
As of December 31, 2024, as the general partner of the Operating Partnership, we owned 88.9% of the outstanding common units in the Operating Partnership and outside investors owned 11.1%. The Company formed a Maryland entity GIP REIT OP Limited LLC as a wholly owned subsidiary in 2018 that owned 0.001% of the Operating Partnership as of December 31, 2024.
BBB 2.8 2 x 5 Yes $ 228,902 $ 20.91 Retail Tampa, FL 2,642 Starbucks Corporation BBB+ 3.2 2 x 5 Yes $ 148,216 $ 56.10 Retail Tucson, AZ 88,408 Kohl's Corporation BB 6.1 7 x 5 Yes $ 823,962 $ 9.32 Retail San Antonio, TX 50,000 City of San Antonio (PreK) AAA 5.6 1 x 8 Yes $ 924,000 $ 18.48 Retail Bakersfield, CA 18,827 Dollar General Market BBB 4.6 3 x 5 Yes $ 361,075 $ 19.18 Retail Big Spring, TX 9,026 Dollar General BBB 6.5 3 x 5 Yes $ 86,040 $ 9.53 Retail Castalia, OH 9,026 Dollar General BBB 11.4 3 x 5 Yes $ 79,320 $ 8.79 Retail East Wilton, ME 9,100 Dollar General BBB 6.6 3 x 5 Yes $ 112,440 $ 12.36 Retail Lakeside, OH 9,026 Dollar General BBB 11.4 3 x 5 Yes $ 81,036 $ 8.98 Retail Litchfield, ME 9,026 Dollar General BBB 6.8 3 x 5 Yes $ 92,964 $ 10.30 Retail Mount Gilead, OH 9,026 Dollar General BBB 6.5 3 x 5 Yes $ 85,920 $ 9.52 Retail Thompsontown, PA 9,100 Dollar General BBB 6.8 3 x 5 Yes $ 86,004 $ 9.45 Retail Morrow, GA 10,906 Dollar Tree Stores, Inc.
BBB Y 8.8 2 x 5 Yes $ 233,480 $ 21.33 Retail Tampa, FL 2,642 Starbucks Corporation BBB+ Y 2.2 2 x 5 Yes $ 148,216 $ 56.10 Retail Tucson, AZ 88,408 Kohl's Corporation BB- N 5.1 7 x 5 Yes $ 864,630 $ 9.78 Retail San Antonio, TX 50,000 City of San Antonio (PreK) AAA Y 4.6 1 x 8 Yes $ 924,000 $ 18.48 Retail Bakersfield, CA 18,827 Dollar General Market BBB Y 3.6 3 x 5 Yes $ 361,075 $ 19.18 Retail Big Spring, TX 9,026 Dollar General BBB Y 5.5 3 x 5 Yes $ 86,041 $ 9.53 Retail Castalia, OH 9,026 Dollar General BBB Y 10.4 3 x 5 Yes $ 79,320 $ 8.79 Retail East Wilton, ME 9,100 Dollar General BBB Y 5.6 3 x 5 Yes $ 112,439 $ 12.36 Retail Lakeside, OH 9,026 Dollar General BBB Y 10.4 3 x 5 Yes $ 81,036 $ 8.98 Retail Litchfield, ME 9,026 Dollar General BBB Y 5.8 3 x 5 Yes $ 92,961 $ 10.30 Retail Mount Gilead, OH 9,026 Dollar General BBB Y 5.5 3 x 5 Yes $ 85,924 $ 9.52 Retail Thompsontown, PA 9,100 Dollar General BBB Y 5.8 3 x 5 Yes $ 85,998 $ 9.45 Retail Morrow, GA 10,906 Dollar Tree Stores, Inc.
Target Markets with Attractive Characteristics: We concentrate our investment activity in select target markets with the following characteristics: high quality infrastructure, diversified local economies with multiple economic drivers, strong demographics, pro-business local governments and high-quality local labor pools. We believe that these markets offer a higher probability of producing long term rent growth and capital appreciation.
Target Markets with Attractive Characteristics: We concentrate our investment activity in select target markets with the following characteristics: high quality infrastructure, diversified local economies with multiple economic drivers, strong demographics, pro-business local governments and high-quality local labor pools.
Target Strategic Net Leased Properties: We target properties that offer unique strategic advantages to a tenant or an industry and can therefore be acquired at attractive yields relative to the underlying risk.
We believe that these markets offer a higher probability of producing long term rent growth and capital appreciation. 7 Target Strategic Net Leased Properties: We target properties that offer unique strategic advantages to a tenant or an industry and can therefore be acquired at attractive yields relative to the underlying risk.
Not Rated 2.9 1 x 5 Yes $ 835,346 $ 25.22 Office Vacaville, CA 11,014 General Services Administration AA+ 2.6 N/A No $ 343,665 $ 31.20 Retail Santa Maria, CA 14,490 Walgreens (6) BBB 8.3 N/A No $ 369,000 $ 25.47 Retail Rockford, IL 15,288 La-Z-Boy Inc.
Not Rated Not Rated 1.9 1 x 5 Yes $ 864,583 $ 26.11 Office Vacaville, CA 11,014 General Services Administration AA+ Y 1.6 N/A No $ 257,050 $ 23.34 Retail Santa Maria, CA 14,490 Walgreens (5) BB- Y 7.3 N/A No $ 369,000 $ 25.47 Retail Rockford, IL 15,288 La-Z-Boy Inc.
(3) BB+ 3.7 1 x 5 Yes $ 765,136 $ 21.96 Retail Tampa, FL 3,500 Sherwin Williams Company BBB 4.6 5 x 5 Yes $ 126,788 $ 36.23 Office Manteo, NC 7,543 General Services Administration-FBI AA+ 5.1 1 x 5 Yes $ 161,346 $ 21.39 Office Plant City, FL 7,826 Irby Construction BBB- 1.0 2 x 5 Yes $ 170,865 $ 21.83 Retail Grand Junction, CO 30,701 Best Buy Co., Inc.
BB N 2.7 1 x 5 Yes $ 788,091 $ 22.62 Retail Tampa, FL 3,500 Sherwin Williams Company BBB Y 3.6 5 x 5 Yes $ 126,788 $ 36.23 Office Manteo, NC 7,543 General Services Administration-FBI AA+ Y 4.1 1 x 5 Yes $ 100,682 $ 13.35 Office Plant City, FL 7,826 Irby Construction BBB- Y - 2 x 5 Yes $ 176,674 $ 22.58 Retail Grand Junction, CO 30,701 Best Buy Co., Inc.
On May 31, 2022, the Company terminated the agreement with Colliers International Asset Services effective June 30, 2022. The Company engaged Bevara Building Services for facility management and property management services for the two Norfolk, Virginia properties from June 15, 2022 through July 2023.
The Company engaged Bevara Building Services for facility management and property management services for the two Norfolk, Virginia properties from June 15, 2022 through July 2023. Effective August 2023 Colliers International Asset Services resumed management services for our Norfolk, VA properties. The Company paid an aggregate of approximately $49,000 for property management services in fiscal year 2024.
We make regular cash distributions to our stockholders out of our cash available for distribution, typically on a monthly basis. Generally, our policy will be to pay distributions from cash flow from operations.
Historically, we have made regular cash distributions to our stockholders out of our cash available for distribution, typically on a monthly basis. On July 3, 2024, the Company announced that its Board of Directors determined to suspend the Company's regular dividend to common shareholders and unitholders. Generally, our policy will be to pay distributions from cash flow from operations.
Business Objectives and Investment Strategy We intend to continue to acquire and manage a diversified portfolio of high-quality net leased properties that generates predictable cash flows and capital appreciation over market cycles. Our properties are generally net leased to a single tenant.
(5) On August 29, 2024, the Company acquired a 30,465 square foot retail property in Ames, Iowa for $5.5 million occupied by Best Buy. Business Objectives and Investment Strategy We intend to continue to acquire and manage a diversified portfolio of high-quality net leased properties that generates predictable cash flows and capital appreciation over market cycles.
Retail Washington, D.C. 3,000 7-Eleven Corporation A 2.2 2 x 5 Yes $ 129,804 $ 43.27 Retail Tampa, FL 2,200 Starbucks Corporation BBB+ 4.2 4 x 5 Yes $ 200,750 $ 91.25 Industrial Huntsville, AL 59,091 Pratt & Whitney Automation, Inc.
Retail Washington, D.C. 3,000 7-Eleven Corporation A Y 1.2 2 x 5 Yes $ 129,804 $ 43.27 Retail Tampa, FL 2,200 Starbucks Corporation BBB+ Y 3.2 4 x 5 Yes $ 200,750 $ 91.25 Industrial Huntsville, AL 59,091 Auburn University (3) N/A Not Rated 2.6 N/A Yes $ 283,500 $ 4.80 Office Norfolk, VA 49,902 General Services Administration-Navy (6) AA+ Y 3.7 N/A Yes $ 640,742 $ 12.84 Office Norfolk, VA 22,247 Armed Services YMCA of the U.S.A.
(3) Tenant has the right to terminate the lease on August 31, 2024 subject to certain conditions. (4) Tenant has the right to terminate the lease on January 31, 2024 subject to certain conditions. As of the reporting date the tenant has vacated. (5) Includes rent escalations available from lease renewal options.
(2) Annualized cash base rental income in place as of December 31, 2024. Our leases do not include tenant concessions or abatements. (3) Prior tenant terminated the lease and vacated on January 31, 2024, space was relet to a new tenant in August 2024. 10 (4) Includes rent escalations available from lease renewal options.
Removed
(4) A- 0.1 N/A N/A $ 684,996 $ 11.59 Office Norfolk, VA 49,902 General Services Administration-Navy (7) AA+ 4.7 N/A Yes $ 926,923 $ 18.57 Office Norfolk, VA 22,247 VACANT (7) N/A - N/A N/A $ - $ - Office Norfolk, VA 34,847 PRA Holdings, Inc.
Added
Specific acquisition criteria may include, but is not limited to, the following: • premier locations and facilities with multiple alternative uses; • sustainable rents specific to a tenants’ location that may be at or below market rents; • investment grade or strong credit tenant; • properties not subject to long-term management contracts with management companies; • opportunities to expand the tenants’ building and/or implement value-added operational improvements; and • population density and strong demand growth characteristics supported by favorable demographic indicators.
Removed
Not Rated 3.8 4 x 5 Yes $ 366,600 $ 23.98 Tenants - All Properties 539,827 $ 8,647,766 $ 16.02 (1) Tenant, or tenant parent, rated entity. (2) Annualized cash base rental income in place as of December 31, 2023. Our leases do not include tenant concessions or abatements.
Added
(6) N/A N/A 9.3 2 x 5 Yes $ 274,380 $ 12.33 Office Norfolk, VA 34,847 PRA Holdings, Inc.
Removed
Effective August 2023 Colliers International Asset Services resumed management services for our Norfolk, VA properties for an aggregate of approximately $42,000 annually, as well as, for our Maitland, Florida property for approximately $24,000 annually. Distributions From inception through December 31, 2023, we have distributed $3,872,035 to common stockholders.
Added
Not Rated Not Rated 2.8 4 x 5 Yes $ 366,600 $ 23.98 Retail Ames, IA 30,259 Best Buy Co., Inc. BBB+ Y 5.2 2 x 5 Yes $ 405,471 $ 13.40 Tenants - All Properties 570,086 $ 8,595,903 $ 15.08 (1) Tenant, or tenant parent, rated entity.
Removed
In addition, on January 3, 2024, we announced that our Board of Directors authorized a distribution of $0.039 per share monthly cash distribution for shareholders of record of our common stock as of January 15, 2024, February 15, 2024 and March 15, 2024.
Added
Distributions From inception through December 31, 2024, we have distributed $5,031,548 to common stockholders. The Company suspended common stock dividend payments as of June 2024. Competition The net lease industry is highly competitive.
Removed
January and February distributions were paid on January 30, 2024, February 29, 2024 and March 29, 2024, respectively. Because we have not yet generated a cumulative profit, distributions have been made from proceeds from prior capital raises. Competition The net lease industry is highly competitive.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

66 edited+16 added−5 removed340 unchanged
Biggest changeThe bankruptcy of a current or future tenant or lease guarantor could delay our efforts to collect past due balances under the relevant lease, and could ultimately preclude full collection of these sums. Such an event also could cause a decrease or cessation of current rental payments, reducing our operating cash flows and the amount available for distributions to you.
Biggest changeSuch an event also could cause a decrease or cessation of current rental payments, reducing our operating cash flows and the amount available for distributions to you. In the event a current or future tenant or lease guarantor declares bankruptcy, the tenant or its director may not assume our lease or its guaranty.
Under the GIP SPE Operating Agreement, the following actions, among others, require the approval of LC2: • the adoption and approval of annual operating budgets for the operations and improvements of the Properties; acquiring additional real property or any interest therein; • selling, leasing, assigning, pledging, conveying, exchanging, encumbering or otherwise disposing of all or a material portion of the assets of GIP SPE or any of its Properties, subject to certain exceptions; • amending or waiving any provision of, or otherwise modifying the GIP SPE Operating Agreement; • amending, extending or materially modifying any existing lease relating to any of the Properties or entering into any new lease with respect to any of the Properties; • admitting, including by assignment of economic rights or permitting encumbrances of membership interests in GIP SPE, any member other than by means of a transfer permitted by the GIP SPE Operating Agreement; • merging or consolidating GIP SPE with or into another entity, reorganizing GIP SPE, or making a binding commitment to do any of the foregoing; • making an assignment for the benefit of creditors, filing a petition in bankruptcy, petitioning or applying to any tribunal for the appointment of a custodian, receiver or any trustee for GIP SPE, or a substantial part of any of its properties or assets, or commencing any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction; • voluntarily dissolving or liquidating GIP SPE; • causing GIP SPE to loan any of its funds; • except as specifically provided in the agreement, engaging in any Capital Transaction (as defined in the GIP SPE Operating Agreement), financing or any Approved Loan (as defined in the GIP SPE Operating Agreement), or executing or otherwise entering into any loan, guaranty, indemnity or similar agreement by GIP SPE or modifying in any material nature, extending, renewing, changing or prepaying in whole or in part any borrowing, financing, refinancing, indemnity or similar agreement, or making any commitments to borrow funds; • causing GIP SPE to make, revoke or modify any tax election; and • making any change to GIP SPE’s accounting practices or policies that could be material to either GIP SPE or its members.
Under the GIP SPE Operating Agreement, the following actions, among others, require the approval of LC2: • the adoption and approval of annual operating budgets for the operations and improvements of the Properties; acquiring additional real property or any interest therein; • selling, leasing, assigning, pledging, conveying, exchanging, encumbering or otherwise disposing of all or a material portion of the assets of GIP SPE or any of its Properties, subject to certain exceptions; • amending or waiving any provision of, or otherwise modifying the GIP SPE Operating Agreement; • amending, extending or materially modifying any existing lease relating to any of the Properties or entering into any new lease with respect to any of the Properties; • admitting, including by assignment of economic rights or permitting encumbrances of membership interests in GIP SPE, any member other than by means of a transfer permitted by the GIP SPE Operating Agreement; • merging or consolidating GIP SPE with or into another entity, reorganizing GIP SPE, or making a binding commitment to do any of the foregoing; • making an assignment for the benefit of creditors, filing a petition in bankruptcy, petitioning or applying to any tribunal for the appointment of a custodian, receiver or any trustee for GIP SPE, or a substantial part of any of its properties or assets, or commencing any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction; • voluntarily dissolving or liquidating GIP SPE; • causing GIP SPE to loan any of its funds; 14 • except as specifically provided in the agreement, engaging in any Capital Transaction (as defined in the GIP SPE Operating Agreement), financing or any Approved Loan (as defined in the GIP SPE Operating Agreement), or executing or otherwise entering into any loan, guaranty, indemnity or similar agreement by GIP SPE or modifying in any material nature, extending, renewing, changing or prepaying in whole or in part any borrowing, financing, refinancing, indemnity or similar agreement, or making any commitments to borrow funds; • causing GIP SPE to make, revoke or modify any tax election; and • making any change to GIP SPE’s accounting practices or policies that could be material to either GIP SPE or its members.
Our operating results are subject to risks generally incident to the ownership of real estate, including: • adverse changes in national and local economic and market conditions, including the credit markets; • changes in governmental laws and regulations, including with respect to taxes, real estate, and the environment, fiscal policies and zoning ordinances and the related costs of compliance with those laws and regulations, fiscal policies and ordinances; • takings by condemnation or eminent domain; • real estate conditions, such as an oversupply of or a reduction in demand for real estate space in the area; • the perceptions of tenants and prospective tenants of the convenience, attractiveness and safety of our properties; • competition from comparable properties; • the occupancy rate of our properties; • the ability to collect all rent from tenants on a timely basis; • the effects of any bankruptcies or insolvencies of major tenants; • the expense of re-leasing space; • changes in interest rates and in the availability, cost and terms of mortgage funding; • the impact of present or future environmental legislation and compliance with environmental laws; • acts of war or terrorism, including the consequences of terrorist attacks; • acts of God, including earthquakes, hurricanes, floods, health pandemics and other natural disasters, which may result in uninsured losses; • cost of compliance with the Americans with Disabilities Act; • changes in general economic or local conditions; 17 • changes in supply of or demand for similar or competing properties in an area; • the impact of permanent mortgage funds, which may render the sale of a property difficult or unattractive; and • periods of high interest rates and tight money supply.
Our operating results are subject to risks generally incident to the ownership of real estate, including: • adverse changes in national and local economic and market conditions, including the credit markets; • changes in governmental laws and regulations, including with respect to taxes, real estate, and the environment, fiscal policies and zoning ordinances and the related costs of compliance with those laws and regulations, fiscal policies and ordinances; • takings by condemnation or eminent domain; • real estate conditions, such as an oversupply of or a reduction in demand for real estate space in the area; • the perceptions of tenants and prospective tenants of the convenience, attractiveness and safety of our properties; • competition from comparable properties; • the occupancy rate of our properties; • the ability to collect all rent from tenants on a timely basis; • the effects of any bankruptcies or insolvencies of major tenants; • the expense of re-leasing space; • changes in interest rates and in the availability, cost and terms of mortgage funding; • the impact of present or future environmental legislation and compliance with environmental laws; • acts of war or terrorism, including the consequences of terrorist attacks; • acts of God, including earthquakes, hurricanes, floods, health pandemics and other natural disasters, which may result in uninsured losses; • cost of compliance with the Americans with Disabilities Act; • changes in general economic or local conditions; • changes in supply of or demand for similar or competing properties in an area; • the impact of permanent mortgage funds, which may render the sale of a property difficult or unattractive; and • periods of high interest rates and tight money supply.
If we or our subsidiaries were obligated to register as investment companies, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things: • limitations on capital structure; • restrictions on specified investments; • prohibitions on transactions with affiliates; and • compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses. • Under the relevant provisions of Section 3(a)(1) of the Investment Company Act, an investment company is any issuer that: 23 • is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities (the “primarily engaged test”); or • is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% test”).
If we or our subsidiaries were obligated to register as investment companies, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things: • limitations on capital structure; • restrictions on specified investments; • prohibitions on transactions with affiliates; and • compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses. • Under the relevant provisions of Section 3(a)(1) of the Investment Company Act, an investment company is any issuer that: • is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities (the “primarily engaged test”); or • is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% test”).
Upon such a disposition, subject to certain exceptions (such as a tax-deferred Section 1031 like-kind exchange), we are required to indemnify Greenwal and Riverside Crossing LLCs. and their indirect owners for their federal, state and local income tax liabilities attributable to the built-in gain that existed with respect to such contributed property as of the contribution date, plus in certain instances, an additional amount so that after the counterparty (or certain other parties) has paid any federal, state and local income taxes on the tax indemnity payments received, including any additional amounts, it has received an amount equal to the additional federal, state and local income taxes incurred.
Upon such a disposition, subject to certain exceptions (such as a tax-deferred Section 1031 like-kind exchange), we are required to indemnify Greenwal and Riverside Crossing LLCs. and their indirect owners for their federal, state and local income tax liabilities attributable to the built-in gain that existed with respect to such contributed property as of the contribution date, plus in certain instances, an additional amount so that after the counterparty (or certain other parties) has paid any federal, state and local income taxes on the tax indemnity payments received, including any additional 29 amounts, it has received an amount equal to the additional federal, state and local income taxes incurred.
Our operating results may be affected by the following market and economic challenges, which may result from a continued or exacerbated general economic slowdown experienced by the nation as a whole or by the local economics where our properties are located: • poor economic conditions may result in tenant defaults under leases; • re-leasing may require concessions or reduced rental rates under the new leases; and • increased insurance premiums may reduce funds available for distribution or, to the extent such increases are passed through to tenants, may lead to tenant defaults.
Our operating results may be affected by the following market and economic challenges, which may result from a continued or exacerbated general economic slowdown experienced by the nation as a whole or by the local economics where our properties are located: 20 • poor economic conditions may result in tenant defaults under leases; • re-leasing may require concessions or reduced rental rates under the new leases; and • increased insurance premiums may reduce funds available for distribution or, to the extent such increases are passed through to tenants, may lead to tenant defaults.
If we are unable to re-lease or renew leases for all or substantially all of the spaces at these investments, if the rental rates upon such renewal or re-leasing are significantly lower than expected, if our reserves for these purposes prove inadequate, or if we are required to make significant renovations or concessions to tenants as part of the renewal or re-leasing process, we will experience a reduction in net income and may be required to reduce or eliminate distributions to our stockholders.
If we are unable to re-lease or renew leases for all or substantially all of the spaces at these 23 investments, if the rental rates upon such renewal or re-leasing are significantly lower than expected, if our reserves for these purposes prove inadequate, or if we are required to make significant renovations or concessions to tenants as part of the renewal or re-leasing process, we will experience a reduction in net income and may be required to reduce or eliminate distributions to our stockholders.
Adverse conditions (including business layoffs or downsizing, the impact of disruptions in global trade agreements or the imposition of tariffs, industry slowdowns, changing demographics, protests, riots and other factors) in the areas where our investments are located and/or 20 concentrated, and local real estate conditions (such as oversupply of, or reduced demand for, office, industrial, retail or multifamily properties) may have an adverse effect on the value of our investments.
Adverse conditions (including business layoffs or downsizing, the impact of disruptions in global trade agreements or the imposition of tariffs, industry slowdowns, changing demographics, protests, riots and other factors) in the areas where our investments are located and/or concentrated, and local real estate conditions (such as oversupply of, or reduced demand for, office, industrial, retail or multifamily properties) may have an adverse effect on the value of our investments.
In addition, hedging instruments involve risk since they often are not traded on regulated exchanges, guaranteed by an exchange or its clearing house, or regulated by any U.S. or foreign governmental authorities. Consequently, in many cases, there are no requirements with respect to record keeping, financial responsibility or segregation of customer funds and positions.
In addition, hedging instruments involve risk since they often are not traded on regulated exchanges, guaranteed by an exchange or its clearing house, or regulated by any U.S. or foreign governmental authorities. Consequently, in many cases, there are no requirements with 26 respect to record keeping, financial responsibility or segregation of customer funds and positions.
The more favorable rates applicable to regular corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less 28 attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common stock if we qualify as a REIT.
The more favorable rates applicable to regular corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common stock if we qualify as a REIT.
Also, rising interest rates may affect the ability of our management to refinance an investment. Investments may be less desirable to prospective purchasers in a rising interest rate environment and their values may be adversely impacted by the reduction in cash flow due to increased interest payments. 26 We may use floating rate, interest-only or short-term loans to acquire assets.
Also, rising interest rates may affect the ability of our management to refinance an investment. Investments may be less desirable to prospective purchasers in a rising interest rate environment and their values may be adversely impacted by the reduction in cash flow due to increased interest payments. We may use floating rate, interest-only or short-term loans to acquire assets.
As a result of this election, our financial statements may not be comparable to those of companies that comply with public company effective dates for such new or revised accounting standards. Further, we cannot predict if investors will find our common stock less attractive because we will rely on these exemptions.
As a result of this election, our financial statements may not be comparable to those of companies that comply 31 with public company effective dates for such new or revised accounting standards. Further, we cannot predict if investors will find our common stock less attractive because we will rely on these exemptions.
The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims would materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution to you. 22 Inflation and changes in interest rates may materially and adversely affect us and our tenants.
The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims would materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution to you. Inflation and changes in interest rates may materially and adversely affect us and our tenants.
Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our 30 business and financial condition.
Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
Thus, the purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property as well as the loss of rental income from that property. Our real estate investments may include special use single-tenant properties that may be difficult to sell or re-lease upon lease terminations.
Thus, the purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property as well as the loss of rental income from that property. 19 Our real estate investments may include special use single-tenant properties that may be difficult to sell or re-lease upon lease terminations.
Thereafter, any business combination with the interested stockholder or an affiliate of the interested stockholder must be recommended by our Board and approved by the affirmative vote of at least 80% of the votes entitled to be cast by holders of our outstanding voting stock, and two-thirds of the votes entitled to be cast by holders of our voting stock other than shares held by the interested stockholder or its affiliate with whom the business combination is to be effected or held by an affiliate or associate of the interested stockholder.
Thereafter, any business combination with the interested stockholder or an affiliate of the interested stockholder must be recommended by our Board and approved by the affirmative vote of at least 80% of the votes entitled to be cast by holders of our 32 outstanding voting stock, and two-thirds of the votes entitled to be cast by holders of our voting stock other than shares held by the interested stockholder or its affiliate with whom the business combination is to be effected or held by an affiliate or associate of the interested stockholder.
Compliance with CC&Rs may adversely affect our operating costs and reduce the amount of funds that we have available to pay distributions. 21 Our operating results may be negatively affected by potential development and construction delays and resultant increased costs and risks. We may acquire and develop properties upon which we will construct improvements.
Compliance with CC&Rs may adversely affect our operating costs and reduce the amount of funds that we have available to pay distributions. Our operating results may be negatively affected by potential development and construction delays and resultant increased costs and risks. We may acquire and develop properties upon which we will construct improvements.
In accordance with our President and CEO's employment agreement, we are also required to pay a guaranty fee payable 25 to him for his personal guaranty and such payment will reduce the funds available for distribution to our stockholders because cash otherwise available for distribution will be required to pay principal and interest associated with these mortgage loans.
In accordance with our President and CEO's employment agreement, we are also required to pay a guaranty fee payable to him for his personal guaranty and such payment will reduce the funds available for distribution to our stockholders because cash otherwise available for distribution will be required to pay principal and interest associated with these mortgage loans.
If we pay higher prices for properties and other investments, our profitability may be reduced and you may experience a lower return on your investment. Our properties may face competition that could reduce the amount of rent paid to us, which would reduce the cash available for distributions and the amount of distributions.
If we pay higher prices for properties and other investments, our profitability may be reduced and you may experience a lower return on your investment. 22 Our properties may face competition that could reduce the amount of rent paid to us, which would reduce the cash available for distributions and the amount of distributions.
In addition, the noncomplying offeror person shall be responsible for all of the Company’s expenses in connection with that offeror’s 31 noncompliance. This provision of our charter may discourage a person from initiating a tender offer for our shares and prevent you from receiving a premium price for your shares in such a transaction.
In addition, the noncomplying offeror person shall be responsible for all of the Company’s expenses in connection with that offeror’s noncompliance. This provision of our charter may discourage a person from initiating a tender offer for our shares and prevent you from receiving a premium price for your shares in such a transaction.
Our CEO along with our Investment Committee has absolute discretion in implementing these policies and strategies, subject to the restrictions on investment objectives and policies set forth in our articles of incorporation. Because you cannot evaluate our investments, our securities 15 may entail more risk than other types of investments.
Our CEO along with our Investment Committee has absolute discretion in implementing these policies and strategies, subject to the restrictions on investment objectives and policies set forth in our articles of incorporation. Because you cannot evaluate our investments, our securities may entail more risk than other types of investments.
The failure to identify or consummate investments on satisfactory terms, or at all, may impede our growth and negatively affect our cash available for distribution to our stockholders. 13 If we cannot obtain additional capital, our ability to make acquisitions and lease properties will be limited.
The failure to identify or consummate investments on satisfactory terms, or at all, may impede our growth and negatively affect our cash available for distribution to our stockholders. If we cannot obtain additional capital, our ability to make acquisitions and lease properties will be limited.
Any of the risks above might subject us to liabilities and thus reduce our returns on our investment with that partner. 18 If a sale-leaseback transaction is re-characterized in a tenant’s bankruptcy proceeding, our financial condition could be adversely affected.
Any of the risks above might subject us to liabilities and thus reduce our returns on our investment with that partner. If a sale-leaseback transaction is re-characterized in a tenant’s bankruptcy proceeding, our financial condition could be adversely affected.
Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our Operating Partnership and its subsidiaries will be able to satisfy your claims as stockholders only after all our and our Operating Partnership's and its subsidiaries' liabilities and obligations have been paid in full.
Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our Operating Partnership and 15 its subsidiaries will be able to satisfy your claims as stockholders only after all our and our Operating Partnership's and its subsidiaries' liabilities and obligations have been paid in full.
We do not believe we will have any undistributed “C” corporation earnings and profits, but in the event we do accumulate any non-REIT 27 earnings and profits, we intend to distribute such non-REIT earnings and profits before the end of our first REIT taxable year to comply with this requirement.
We do not believe we will have any undistributed “C” corporation earnings and profits, but in the event we do accumulate any non-REIT earnings and profits, we intend to distribute such non-REIT earnings and profits before the end of our first REIT taxable year to comply with this requirement.
Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on business, financial condition, results of operations and prospects. Any adverse determination in litigation could also subject us to significant liabilities.
Litigation of this type could result 30 in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on business, financial condition, results of operations and prospects. Any adverse determination in litigation could also subject us to significant liabilities.
Although our Board has fiduciary duties to our stockholders and intends only to change our investment objectives when our Board determines that a change is in the best interests of our stockholders, a change in our investment objectives could reduce our payment of cash distributions to our stockholders or cause a decline in the value of our investments.
Although our Board has fiduciary duties to our stockholders and intends only to change our investment objectives when our Board determines that a change is in the best interests of our 13 stockholders, a change in our investment objectives could reduce our payment of cash distributions to our stockholders or cause a decline in the value of our investments.
The partnership agreement of our Operating Partnership provides that, for so long as we own a controlling interest in our Operating Partnership, any conflict that cannot be resolved in a manner not adverse to either our stockholders or the limited partners will be resolved in favor of our stockholders.
The 16 partnership agreement of our Operating Partnership provides that, for so long as we own a controlling interest in our Operating Partnership, any conflict that cannot be resolved in a manner not adverse to either our stockholders or the limited partners will be resolved in favor of our stockholders.
Current economic conditions are signaling that interest rates are likely to continue to rise throughout 2023 and potentially beyond in response to an inflationary environment. If there is a continued increase in interest rates, any debt servicing on investments could be significantly higher than currently anticipated, which would reduce the amount of cash available for distribution to the stockholders.
Current economic conditions are signaling that interest rates are likely to continue to rise throughout 2025 and potentially beyond in response to an inflationary environment. If there is a continued increase in interest rates, any debt servicing on investments could be significantly higher than currently anticipated, which would reduce the amount of cash available for distribution to the stockholders.
We cannot assure you that the market price of our common stock will not fluctuate 29 or decline significantly in the future.
We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future.
We are presently a comparatively small company with only twenty-six properties, resulting in a portfolio that lacks geographic and tenant diversity. While we intend to endeavor to grow and diversify our portfolio through additional property acquisitions, we may never reach a significant size to achieve true portfolio diversity.
We are presently a comparatively small company with only twenty-seven properties, resulting in a portfolio that lacks geographic and tenant diversity. While we intend to endeavor to grow and diversify our portfolio through additional property acquisitions, we may never reach a significant size to achieve true portfolio diversity.
GIP SPE’s Preferred Interest has a cumulative accruing distribution preference of 15.5% per year, compounded monthly, a portion of which, in the amount of 5% per annum, is deemed to be the “current preferred return,” and the remainder of which, in the amount of 10.5% per annum, is deemed to be the “accrued preferred return.” The GIP SPE Operating Agreement provides that operating distributions by GIP 14 SPE will be made first to LC2 to satisfy any accrued but unpaid current preferred return, with the balance being paid to the Operating Partnership, subject to certain exceptions.
Pertaining to the special partnership entity, GIP SPE’s Preferred Interest has a cumulative accruing distribution preference of 15.5% per year, compounded monthly, a portion of which, in the amount of 5% per annum, is deemed to be the “current preferred return,” and the remainder of which, in the amount of 10.5% per annum, is deemed to be the “accrued preferred return.” The GIP SPE Operating Agreement provides that operating distributions by GIP SPE will be made first to LC2 to satisfy any accrued but unpaid current preferred return, with the balance being paid to the Operating Partnership, subject to certain exceptions.
Because we only own twenty-six properties, the loss of any one tenant (or financial difficulties experienced by one of our tenants) could have a material adverse impact on our business and operations.
Because we only own twenty-seven properties, the loss of any one tenant (or financial difficulties experienced by one of our tenants) could have a material adverse impact on our business and operations.
We may experience concentration in one or more tenants if the future leases we have with those tenants represent a significant percentage of our operations. As of March 29, 2024, we have five tenants, that each account for more than 10% of our annualized rent: the General Service Administration, Dollar General, the City of San Antonio, exp U. S.
We may experience concentration in one or more tenants if the future leases we have with those tenants represent a significant percentage of our operations. As of March 19, 2025, we have five tenants, that each account for more than 10% of our annualized rent: the General Service Administration, Dollar General, the City of San Antonio, exp U. S.
In addition, because we intend to focus on single-tenant properties, we may never have a diverse group of tenants renting our properties, which will hinder our ability to achieve overall diversity in our portfolio. As of March 29, 2024, 40% of our total base rent is derived from our office properties and 60% from retail/medical-retail properties.
In addition, because we intend to focus on single-tenant properties, we may never have a diverse group of tenants renting our properties, which will hinder our ability to achieve overall diversity in our portfolio. As of March 19, 2025, 40% of our total base rent is derived from our office properties and 60% from retail/medical-retail properties.
Additionally, we currently do not have any variable rate debt but if we do in the future then increases in interest rates increase our interest costs, which reduces our cash flow and our ability to make distributions to you.
Interest we pay reduces cash available for distribution to stockholders. Additionally, we currently do not have any variable rate debt but if we do in the future then increases in interest rates increase our interest costs, which reduces our cash flow and our ability to make distributions to you.
It is uncertain whether such insurance policies will be available, or available at reasonable cost, which could inhibit our ability to finance or refinance our potential properties. In these instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We may not have adequate, or any, coverage for such losses.
It is uncertain whether such insurance policies will be available, or available at reasonable cost, which could inhibit our ability to finance or 21 refinance our potential properties. In these instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses.
This discussion of risk factors contains forward-looking statements. 12 This section should be read in conjunction with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K.
This section should be read in conjunction with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K.
As of December 31, 2023 we maintain that we are not closely held.
As of December 31, 2024 we maintain that we are not closely held.
Because of the following factors, as well as other factors affecting the Company’s results of operations and financial condition, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.
Because of the following factors, as well as other factors affecting the Company’s results of operations and financial condition, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods. This discussion of risk factors contains forward-looking statements.
We own twenty-three of our properties through preferred equity partnerships, which may lead to disagreements with our partners and adversely affect our interest in the partnerships. As of March 29, 2024, we own twenty-three properties through preferred equity partnerships and we may enter into more in the future.
We own twenty-four of our properties through preferred equity partnerships, which may lead to disagreements with our partners and adversely affect our interest in the partnerships. As of March 19, 2025, we own twenty-four properties through preferred equity partnerships and we may enter into more in the future.
(1 property), Florida (5 properties), Georgia (1 property), Illinois (2 properties), Maine (2 properties), North Carolina (1 property), Ohio (3 properties), Pennsylvania (1 property), Texas (2 properties) and Virginia (2 properties).
(1 property), Florida (6 properties), Georgia (1 property), Illinois (2 properties), Iowa (1 property), Maine (2 properties), North Carolina (2 property), Ohio (3 properties), Pennsylvania (1 property), Tennessee (1 property), Texas (2 properties) and Virginia (2 properties).
Real estate related taxes may increase and if these increases are not passed on to tenants, our income will be reduced. Some local real property tax assessors may seek to reassess some of our properties as a result of our acquisition of the property.
We may not have adequate, or any, coverage for such losses. Real estate related taxes may increase and if these increases are not passed on to tenants, our income will be reduced. Some local real property tax assessors may seek to reassess some of our properties as a result of our acquisition of the property.
Risks Associated with Debt Financing We have used and may continue to use mortgage and other debt financing to acquire properties or interests in properties and otherwise incur other indebtedness, which increases our expenses and could subject us to the risk of losing properties in foreclosure if our cash flow is insufficient to make loan payments.
In addition, our contracts would be unenforceable unless a court required enforcement and a court could appoint a receiver to take control of us and liquidate our business. 24 Risks Associated with Debt Financing We have used and may continue to use mortgage and other debt financing to acquire properties or interests in properties and otherwise incur other indebtedness, which increases our expenses and could subject us to the risk of losing properties in foreclosure if our cash flow is insufficient to make loan payments.
As of December 31, 2023, we had total cash (unrestricted and restricted) of $3,151,946, properties with a cost basis of $104,912,421 and outstanding debt of $56,817,310. There is no limit on the amount we may invest in any single property or other asset or on the amount we can borrow to purchase any individual property or other investment.
As of December 31, 2024, we had total cash (unrestricted and restricted) of $647,439, properties with a cost basis of $102,310,974 and outstanding debt of $59,443,250. There is no limit on the amount we may invest in any single property or other asset or on the amount we can borrow to purchase any individual property or other investment.
According to the governing loan documents, failing to meet DSCR coverage requirements is a technical default triggering the risk of forfeiture of the property, accelerating the repayment of the remaining outstanding balance of the loan at the lender's discretion. All other DSCR covenants tested compliant and the lender has indicated no intention of action.
According to the governing loan documents, failing to meet DSCR coverage requirements is a technical default triggering the risk of forfeiture of the property, accelerating the repayment of the remaining outstanding balance of the loan at the lender's discretion.
If a sale-leaseback transaction were so recharacterized, we might fail to satisfy the REIT qualification “asset tests” or the “income tests” and, consequently, lose our REIT status effective with the year of recharacterization. Alternatively, the amount of our REIT taxable income could be recalculated which might also cause us to fail to meet the distribution requirement for a taxable year.
If a sale-leaseback transaction were so recharacterized, we might fail to satisfy the REIT qualification “asset tests” or the “income tests” and, consequently, lose our REIT status effective with the year of recharacterization.
Lock-out provisions may prohibit us from reducing the outstanding indebtedness with respect to any properties, refinancing such indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness with respect to such properties.
These provisions would affect our ability to turn our investments into cash and thus affect cash available for distributions to you. Lock-out provisions may prohibit us from reducing the outstanding indebtedness with respect to any properties, refinancing such indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness with respect to such properties.
Our future results of operations and overall financial performance could be uncertain should a new virus strain of COVID-19, or future pandemics or other health crises occur.
Our future results of operations and overall financial performance could be uncertain should a new virus strain of COVID-19, or future pandemics or other health crises occur. Government budgetary pressures and priorities, and trends in government employment and office leasing may adversely impact our business.
We currently own twenty-six properties. As of March 29, 2024, we own twenty-six properties. We will need to raise funds to acquire additional properties to lease in order to grow and generate additional revenue.
We own thirty properties as of the report date. As of March 19, 2025, we own thirty properties. We will need to raise funds to acquire additional properties to lease in order to grow and generate additional revenue.
High debt levels will cause us to incur higher interest charges, resulting in higher debt service payments, and may be accompanied by restrictive covenants. Interest we pay reduces cash available for distribution to stockholders.
High levels of debt or increases in interest rates could increase the amount of our loan payments, which could reduce the cash available for distribution to stockholders. High debt levels will cause us to incur higher interest charges, resulting in higher debt service payments, and may be accompanied by restrictive covenants.
For example, net income from the sale of properties that are “dealer” properties sold by a REIT (a “prohibited transaction” under the Code) will be subject to a 100% tax. We may not be able to make sufficient distributions to avoid excise taxes applicable to REITs.
Even if we maintain our status as a REIT, we may be subject to federal income taxes or state taxes. For example, net income from the sale of properties that are “dealer” properties sold by a REIT (a “prohibited transaction” under the Code) will be subject to a 100% tax.
In such event, the value of the leased property to a potential purchaser may not increase over time, which may restrict our ability to sell that property, or if we are able to sell that property, may result in a sale price less than the price that we paid to purchase the property. 19 We may acquire or finance properties with lock-out provisions, which may prohibit us from selling a property, or may require us to maintain specified debt levels for a period of years on some properties.
In such event, the value of the leased property to a potential purchaser may not increase over time, which may restrict our ability to sell that property, or if we are able to sell that property, may result in a sale price less than the price that we paid to purchase the property.
In the event a current or future tenant or lease guarantor declares bankruptcy, the tenant or its director may not assume our lease or its guaranty. If a given lease or guaranty is not assumed, our operating cash flows and the amounts available for distributions to you may be adversely affected.
If a given lease or guaranty is not assumed, our operating cash flows and the amounts available for distributions to you may be adversely affected. The bankruptcy of a major tenant would have a harmful effect on our ability to pay distributions to you.
For example, one tenant in one of our Norfolk, Virginia properties and another tenant in our Alabama property did not renew their leases that terminated on January 31, 2023 and January 31, 2024, respectively. Consequently, if we do not timely find replacement tenants for each, it may materially adversely impact our business.
For example, one tenant in one of our Norfolk, Virginia properties and another tenant in our Alabama property did not renew their leases that terminated on January 31, 2023 and January 31, 2024, respectively. In May 2024 and August 2024, respectively, the Company relet both vacant spaces to tenants.
We may also decide to retain capital gains we earn from the sale or other disposition of our property and pay income tax directly on such gain. In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly.
We may not be able to make sufficient distributions to avoid excise taxes applicable to REITs. We may also decide to retain capital gains we earn from the sale or other disposition of our property and pay income tax directly on such gain.
The provisions of Delaware law that allow the fiduciary duties of a general partner to be modified by a partnership agreement have not been tested in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties. 16 Pandemics or other health crises, such as the COVID-19 pandemic, may adversely affect our tenants' financial condition, the profitability of our properties, and our access to the capital markets and could have a material adverse effect on our business, results of operations, cash flows and financial condition.
The provisions of Delaware law that allow the fiduciary duties of a general partner to be modified by a partnership agreement have not been tested in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties.
We continue to have significant debt obligations and our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern”.
We continue to have significant debt obligations and our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern”. 27 As a result of our recurring losses, our projected cash needs, and our current liquidity, substantial doubt exists about the Company’s ability to continue as a going concern one year after the date that these financial statements are issued.
In certain circumstances, we may be subject to federal and state income taxes as a REIT, which would reduce our cash available for distribution to you. Even if we maintain our status as a REIT, we may be subject to federal income taxes or state taxes.
Alternatively, the amount of our REIT taxable income could be recalculated which might also cause us to fail to meet the distribution requirement for a taxable year. 28 In certain circumstances, we may be subject to federal and state income taxes as a REIT, which would reduce our cash available for distribution to you.
We have experienced losses in the past, and we will likely experience similar losses in the near future. From inception of the Company through December 31, 2023, we had a cumulative net loss of approximately $ 14.8 million.
Consequently, in the event that we do not timely find replacement tenants for vacancies, material adverse impacts to our business may result. We have experienced losses in the past, and we will likely experience similar losses in the near future. From inception of the Company through December 31, 2024, we had a cumulative net loss of approximately $19 .7 million.
However, with rising interest rates, lenders are currently concerned about the outlook of the credit markets, market volatility, and the potential impact of new regulations.
However, with rising interest rates, lenders are currently concerned about the outlook of the credit markets, market volatility, and the potential impact of new regulations. Even though we have been successful in procuring equity financing and secured mortgages financing, we cannot be assured that we will be successful at doing so in the future.
If a lease is rejected by a tenant in bankruptcy, we would have a general unsecured claim for damages. This claim could be paid only in the event funds were available, and then only in the same percentage as that realized on other unsecured claims.
If a lease is rejected by a tenant in bankruptcy, we would have a general unsecured claim for damages.
Additionally, a new lease was executed for 2510 Walmer Ave. on March 28, 2024 and will restore the property to full occupancy upon commencement. Some of our mortgage loans may have “due on sale” provisions, which may impact the manner in which we acquire, sell and/or finance our properties.
Subsequent to the report date, the Company executed a PSA to sell the property for $7.2 million with the transaction expected to close in May 2025 as detailed in the Exhibit 10.68. Some of our mortgage loans may have “due on sale” provisions, which may impact the manner in which we acquire, sell and/or finance our properties.
The bankruptcy of a major tenant would have a harmful effect on our ability to pay distributions to you. A high concentration of our properties in a particular geographic area, or with tenants in a similar industry, magnify the effects of downturns in that geographic area or industry.
A high concentration of our properties in a particular geographic area, or with tenants in a similar industry, magnify the effects of downturns in that geographic area or industry. We plan to focus our acquisition efforts on markets where our tenants or potential tenants can be successful in their current and future operations.
We plan to focus our acquisition efforts on markets where our tenants or potential tenants can be successful in their current and future operations. As of March 29, 2024, we own twenty-six properties, which are located in Alabama (1 property), Arizona (1 property), California (3 properties), Colorado (1 property), Washington, D.C.
As of March 19, 2025, we own thirty properties, which are located in Alabama (1 property), Arizona (1 property), California (3 properties), Colorado (1 property), Washington, D.C.
As of December 31, 2023, we were in compliance with all covenants with the exception of one project level debt service coverage ratio ("DSCR") covenant for 2510 Walmer Ave. Our Bayport Credit Union loan covenant requires project level, property level and portfolio level DSCR minimum testing.
As of December 31, 2024, we were in compliance with all covenants with the exception of one property-level debt service coverage ratio 25 ("DSCR") covenant for PNC for 15091 SW Alabama 20, LLC. In January 2024, Pratt and Whitney Automation vacated the property at the end of their lease and the property remained vacant for six months, thereafter.
Removed
Lock-out provisions could materially restrict us from selling or otherwise disposing of or refinancing properties. These provisions would affect our ability to turn our investments into cash and thus affect cash available for distributions to you.
Added
Pandemics or other health crises, such as the COVID-19 pandemic, may adversely affect our tenants' financial condition, the profitability of our properties, and our access to the capital markets and could have a material adverse effect on our business, results of operations, cash flows and financial condition.
Removed
In addition, our contracts would be unenforceable unless a court required enforcement and a court could appoint a receiver to take control of us and liquidate our business.
Added
We believe that recent government budgetary and spending priorities have resulted in a decrease in government office use for employees. Furthermore, over the past several years, government tenants have reduced their space utilization per employee and consolidated government tenants into existing government owned properties.
Removed
Even though we have been successful in procuring equity financing and secured mortgages financing, we cannot be assured that we will be successful at doing so in the future. 24 High levels of debt or increases in interest rates could increase the amount of our loan payments, which could reduce the cash available for distribution to stockholders.
Added
Persistent remote and hybrid work practices have also reduced space utilization at many of our government properties. These factors have reduced the demand for government leased space, and may continue to do so. The Trump Administration’s initiative to dramatically cut government spending introduces additional uncertainty for our portfolio of properties leased to the United States Government.
Removed
At the project-level, 2510 Walmer Ave tested at a 1.17:1 DSCR, compared with the 1.25:1 project level minimum DSCR, driven by its vacancy since January 2023.
Added
The Department of Government Efficiency (“DOGE”) has begun to look at ways to increase government office utilization and shrink the federal government’s real estate portfolio.
Removed
We have significant debt obligations under our Bayport Credit Union commercial loan agreements, with $7.3 million and $4.6 million of secured nonrecourse principal due in September 2024 and October 2024, respectively .
Added
This could lead to the General Services Administration (“GSA”) exercising termination options under or otherwise seeking to terminate our leases with the United States Government or make it more likely the United States Government terminates the applicable lease at lease expiration.
Added
As of December 31, 2024, approximately 94,000 of our occupied square feet leased to the GSA were within periods during which the tenant has the right to terminate their space without a termination fee, or “non-firm terms.” The GSA recently announced a suspension of the execution of substantially all GSA funded obligations, including new leases and lease amendments.
Added
This action by the GSA has resulted in delays of the GSA authorizing us to proceed with landlord work at our property in Lincoln, Nebraska and that is a condition to lease commencement of our lease with the United States Government at this property, as well as delays in lease negotiations at certain other properties leased to the United States Government.
Added
We do not know how long the suspension will continue and cannot provide any assurance as to how ongoing developments with respect to DOGE and the Trump Administration’s efforts to reduce government spending may impact our portfolio of properties leased to the United States Government.
Added
Efforts to manage space utilization rates and reduce government spending may result in the government tenants exercising early termination rights under our leases, vacating our properties upon expiration of our leases in order to relocate, or renewing their leases for less space than they currently occupy.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe and our MSP identify, assess and manage material cybersecurity threats and risks to our Information Systems and Sensitive Data through the following, among others: • a multidisciplinary team, including a dedicated technology committee (the “Technology Committee”) comprising members from senior management, asset management and accounting and legal functions, in conjunction with our MSP and other third-party service vendors, to identify, assess and manage cybersecurity threats and risks; • various internal processes and procedures to monitor and evaluate threat environment and our risk profile using methods such as manual and automated tools, subscribing to reports and services that identify and analyze cybersecurity threats, conducting scans of the threat environment, evaluating our industry’s risk profile, utilizing internal and external audits and conducting threat and vulnerability assessments; 32 • various technical, physical and organizational processes and policies to manage and mitigate material cybersecurity risks, such as risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program, employee training and penetration testing; and • working with third-party vendors from time to time that assist us to identify, assess and manage cybersecurity risks, such as professional services firms and penetration testing firms.
Biggest changeWe and our MSP identify, assess and manage material cybersecurity threats and risks to our Information Systems and Sensitive Data through the following, among others: • a multidisciplinary team, including a dedicated technology committee (the “ Technology Committee ”) comprising members from senior management, asset management and accounting and legal functions , in conjunction with our MSP and other third-party service vendors, to identify, assess and manage cybersecurity threats and risks; • various internal processes and procedures to monitor and evaluate threat environment and our risk profile using methods such as manual and automated tools, subscribing to reports and services that identify and analyze cybersecurity threats , conducting scans of the threat environment, evaluating our industry’s risk profile, utilizing internal and external audits and conducting threat and vulnerability assessments; • various technical, physical and organizational processes and policies to manage and mitigate material cybersecurity risks, such as risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program, employee training and penetration testing; and • working with third-party vendors from time to time that assist us to identify, assess and manage cybersecurity risks, such as professional services firms and penetration testing firms. • The Governance Committee is responsible for cybersecurity oversight, we bring any threat to the committee as needed and they review our cybersecurity insurance, incidences, if any, and responses, if any, on an annual or as needed basis. • The Director of Operations, has provided oversight of technology efforts for the Company since 2021, and is responsible for notifying the Governance Committee upon receiving cybersecurity incidences immediately, via email.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeState # of Properties Square Feet % of Total Square Feet 2023 Annual Base Rent % of Total Annual Base Rent Illinois 2 26,235 5 % $ 595,502 7 % Ohio 3 27,078 5 % 246,276 3 % District of Columbia 1 3,000 1 % 129,804 2 % Maine 2 18,126 3 % 205,404 2 % Pennsylvania 1 9,100 2 % 86,004 1 % Alabama 1 59,091 11 % 684,996 8 % Florida 5 49,286 9 % 1,481,965 16 % North Carolina 1 7,543 1 % 161,346 2 % Virginia 2 106,996 20 % 1,692,059 20 % Texas 2 59,026 11 % 1,010,040 12 % Georgia 1 10,906 2 % 103,607 1 % Arizona 1 88,408 16 % 823,962 10 % Colorado 1 30,701 6 % 353,061 4 % California 3 44,331 8 % 1,073,740 12 % 26 539,827 100 % $ 8,647,766 100 % 33 Tenants as of December 31, 2023 Tenant # of Leases Square Feet % of Total Square Feet 2023 Annual Base Rent % of Total Annual Base Rent 7-Eleven Corporation 1 3,000 1 % $ 129,804 2 % Best Buy Co., Inc. 1 30,701 5 % 353,061 4 % Fresenius Medical Care Holdings, Inc. 1 10,947 2 % 228,902 3 % General Services Administration of the USA 3 68,459 13 % 1,431,934 17 % Kohl's Corporation 1 88,408 17 % 823,962 10 % La-Z-Boy Inc. 1 15,288 3 % 366,600 4 % PRA Group, Inc. 1 34,847 7 % 765,136 9 % Pratt & Whitney Automation, Inc. 1 59,091 11 % 684,996 8 % Irby Construction 1 7,826 2 % 170,865 2 % Sherwin Williams Company 1 3,500 1 % 126,788 1 % Starbucks Corporation 2 4,842 1 % 348,966 4 % San Antonio Early Childhood Education Municipal Development Corporation 1 50,000 10 % 924,000 11 % Dollar Tree 1 10,906 2 % 103,607 1 % Dollar General 8 82,157 16 % 984,799 11 % exp US Services, Inc. 1 33,118 6 % 835,346 10 % Walgreens 1 14,490 3 % 369,000 4 % 26 517,580 100 % $ 8,647,766 100 % Physical Occupancy Table for Last 2 Years Properties were 100% occupied at December 31, 2022, and 96% occupied as of December 31, 2023.
Biggest changeState # of Properties Square Feet % of Total Square Feet 2024 Annual Base Rent % of Total Annual Base Rent Illinois 2 26,235 5 % $ 600,080 7 % Ohio 3 27,078 5 % 246,280 3 % Iowa 1 30,259 5 % 405,471 5 % District of Columbia 1 3,000 129,804 2 % Maine 2 18,126 3 % 205,400 2 % Pennsylvania 1 9,100 2 % 85,998 1 % Alabama 1 59,091 10 % 283,501 3 % Florida 5 49,286 9 % 1,517,011 18 % North Carolina 1 7,543 1 % 100,682 1 % Virginia 2 106,996 19 % 1,703,212 20 % Texas 2 59,026 10 % 1,010,041 12 % Georgia 1 10,906 2 % 103,607 1 % Arizona 1 88,408 16 % 864,630 10 % Colorado 1 30,701 5 % 353,061 4 % California 3 44,331 8 % 987,125 11 % 27 570,086 100.0 % $ 8,595,903 100 % Tenants as of December 31, 2024 Tenant # of Leases Square Feet % of Total Square Feet 2024 Annual Base Rent % of Total Annual Base Rent 7-Eleven Corporation 1 3,000 $ 129,804 2 % Best Buy Co., Inc. 2 60,960 11 % 758,533 9 % Fresenius Medical Care Holdings, Inc. 1 10,947 2 % 233,480 3 % General Services Administration of the USA 3 68,459 12 % 998,474 12 % Kohl's Corporation 1 88,408 16 % 864,630 10 % La-Z-Boy Inc. 1 15,288 3 % 366,600 4 % PRA Group, Inc. 1 34,847 6 % 788,090 9 % Quanta Services 1 7,826 1 % 176,674 2 % Sherwin Williams Company 1 3,500 126,788 1 % Starbucks Corporation 2 4,842 348,966 4 % San Antonio Early Childhood Education Municipal Development Corporation 1 50,000 9 % 924,000 11 % Dolgen California, LLC 1 18,827 3 % 361,075 4 % Dolgencorp of Texas, Inc 1 9,026 2 % 86,041 1 % Dolgen Midwest, LLC 4 36,178 6 % 358,719 4 % Dolgencorp, LLC. 1 9,100 2 % 85,998 1 % Dollar Tree Stores, Inc. 1 10,906 2 % 103,607 1 % exp US Services, Inc. 1 33,118 6 % 864,583 10 % DG Retail, LLC 1 9,026 2 % 92,961 1 % Walgreens Co. 1 14,490 3 % 369,000 4 % Armed Services YMCA of the U.S.A. 1 22,247 4 % 274,380 3 % Auburn University 1 59,091 10 % 283,500 3 % 28 570,086 100 % $ 8,595,903 100 % Physical Occupancy Table for Last 2 Years Properties were 99% and 96% occupied as of December 31, 2024 and 2023, respectively. 34 SF Occupied as of December 31, SF Occupied as of December 31, Property Type Location Rentable Square Feet Tenant 2024 2023 Retail Washington, D.C. 3,000 7-Eleven Corporation 3,000 3,000 Retail Tampa, FL 2,200 Starbucks Corporation 2,200 2,200 Industrial Huntsville, AL 59,091 Pratt & Whitney Automation, Inc.
ITEM 2. PR OPERTIES The following are characteristics of our properties as of December 31, 2023: • Creditworthy Tenants . Approximately 68% of our portfolio’s annualized rent as of December 31, 2023 was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency of “BBB-” or better.
ITEM 2. PR OPERTIES The following are characteristics of our properties as of December 31, 2024: • Creditworthy Tenants . Approximately 60% of our portfolio’s annualized rent as of December 31, 2024 was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency of “BBB-” or better.
Our largest tenants are the General Service Administration, Dollar General, and the City of San Antonio, who collectively contributed approximately 39% of our portfolio’s annualized base rent as of December 31, 2023. • 96% Occupied . Our portfolio is 96% leased and occupied. • Contractual Rent Growth .
Our largest tenants are the General Service Administration, Dollar General, and the City of San Antonio, who collectively contributed approximately 39% of our portfolio’s annualized base rent as of December 31, 2024. • 99% Occupied . Our portfolio is 99% leased and occupied. • Contractual Rent Growth .
Approximately 84% of the leases in our current portfolio (based on annualized base rent as of December 31, 2023) provide for increases in contractual base rent during future years of the current term or during the lease extension periods. • Average Effective Annual Rental per Square Foot . Average effective annual rental per square foot is $16.02.
Approximately 93% of the leases in our current portfolio (based on annualized base rent as of December 31, 2024) provide for increases in contractual base rent during future years of the current term or during the lease extension periods. 33 • Average Effective Annual Rental per Square Foot . Average effective annual rental per square foot is $15.08.
SF Occupied as of December 31, Property Type Location Tenant 2023 2022 Retail Washington, D.C. 7-Eleven Corporation 3,000 3,000 Retail Tampa, FL Starbucks Corporation 2,200 2,200 Industrial Huntsville, AL Pratt & Whitney Automation, Inc. 59,091 59,091 Office Norfolk, VA General Services Administration-Navy (1) 49,902 49,902 Office Norfolk, VA VACANT (1) VACANT 22,247 Office Norfolk, VA PRA Holdings, Inc. 34,847 34,847 Retail Tampa, FL Sherwin Williams Company 3,500 3,500 Office Manteo, NC General Services Administration-FBI 7,543 7,543 Office Plant City, FL Irby Construction 7,826 7,826 Retail Grand Junction, CO Best Buy Co., Inc. 30,701 30,701 Medical-Retail Chicago, IL Fresenius Medical Care Holdings, Inc. 10,947 10,947 Retail Tampa, FL Starbucks Corporation 2,642 2,642 Retail Tucson, AZ Kohl's Corporation 88,408 88,408 Retail San Antonio, TX City of San Antonio (PreK) 50,000 N/A Retail Bakersfield, CA Dollar General Market 18,827 N/A Retail Big Spring, TX Dollar General 9,026 N/A Retail Castalia, OH Dollar General 9,026 N/A Retail East Wilton, ME Dollar General 9,100 N/A Retail Lakeside, OH Dollar General 9,026 N/A Retail Litchfield, ME Dollar General 9,026 N/A Retail Mount Gilead, OH Dollar General 9,026 N/A Retail Thompsontown, PA Dollar General 9,100 N/A Retail Morrow, GA Dollar Tree Stores, Inc. 10,906 N/A Office Maitland, FL exp U.S.
N/A 59,091 Auburn University (2) 27,000 N/A Office Norfolk, VA 49,902 General Services Administration-Navy (1) 49,902 49,902 Office Norfolk, VA 22,247 VACANT (1) VACANT VACANT Office Norfolk, VA 34,847 PRA Holdings, Inc. 34,847 34,847 Retail Tampa, FL 3,500 Sherwin Williams Company 3,500 3,500 Office Manteo, NC 7,543 General Services Administration-FBI 7,543 7,543 Office Plant City, FL 7,826 Irby Construction 7,826 7,826 Retail Grand Junction, CO 30,701 Best Buy Co., Inc. 30,701 30,701 Medical-Retail Chicago, IL 10,947 Fresenius Medical Care Holdings, Inc. 10,947 10,947 Retail Tampa, FL 2,642 Starbucks Corporation 2,642 2,642 Retail Tucson, AZ 88,408 Kohl's Corporation 88,408 88,408 Retail San Antonio, TX 50,000 City of San Antonio (PreK) 50,000 50,000 Retail Bakersfield, CA 18,827 Dollar General Market 18,827 18,827 Retail Big Spring, TX 9,026 Dollar General 9,026 9,026 Retail Castalia, OH 9,026 Dollar General 9,026 9,026 Retail East Wilton, ME 9,100 Dollar General 9,100 9,100 Retail Lakeside, OH 9,026 Dollar General 9,026 9,026 Retail Litchfield, ME 9,026 Dollar General 9,026 9,026 Retail Mount Gilead, OH 9,026 Dollar General 9,026 9,026 Retail Thompsontown, PA 9,100 Dollar General 9,100 9,100 Retail Morrow, GA 10,906 Dollar Tree Stores, Inc. 10,906 10,906 Office Maitland, FL 33,118 exp U.S.
Services Inc. 33,118 N/A Office Vacaville, CA General Services Administration 11,014 N/A Retail Santa Maria, CA Walgreens 14,490 N/A Retail Rockford, IL La-Z-Boy Inc. 15,288 N/A Tenants - All Properties 517,580 322,854 (1) Two tenants occupy this single property.
Services Inc. 33,118 33,118 Office Vacaville, CA 11,014 General Services Administration 11,014 11,014 Retail Santa Maria, CA 14,490 Walgreens 14,490 14,490 Retail Rockford, IL 15,288 La-Z-Boy Inc. 15,288 15,288 Retail Ames, IA 30,259 Best Buy Co., Inc. 30,259 N/A Tenants - All Properties 570,086 515,748 517,580 (1) Two tenants occupy this single property.
Added
(2) In Huntsville, AL, Pratt & Whitney Automation, Inc. vacated in January 2024 and Auburn University commenced tenancy in August 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we may be party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. We are not currently subject to any lawsuits, claims or other legal proceedings. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 34 PART II.
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we may be party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. We are not currently subject to any lawsuits, claims or other legal proceedings. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 35 PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeJanuary and February distributions were paid on January 30, 2024, February 29, 2024 and March 29, 2024, respectively. Because we have not yet generated a cumulative profit, distributions have been made from proceeds from prior capital raises. Recent Sales of Unregistered Securities None. ITEM 6. [R ESERVED] 35
Biggest changeBecause we have not yet generated a cumulative profit, distributions have been made from proceeds from prior capital raises. Recent Sales of Unregistered Securities None. ITEM 6. [R ESERVED] 36
On October 1, 2021, the units mandatorily separated into common stock and warrants and ceased trading. On October 4, 2021, the common stock and warrants included in the units commenced trading on The Nasdaq Capital Market under the symbols “GIPR” and “GIPRW,” respectively. As of March 29, 2024, we had 4,134 shareholders of record.
On October 1, 2021, the units mandatorily separated into common stock and warrants and ceased trading. On October 4, 2021, the common stock and warrants included in the units commenced trading on The Nasdaq Capital Market under the symbols “GIPR” and “GIPRW,” respectively. As of March 19, 2025, we had 4,233 shareholders of record.
From inception through December 31, 2023, we have distributed $3,872,035 to common stockholders. In addition, on January 3, 2024, we announced that our Board of Directors authorized a distribution of $0.039 per share monthly cash distribution for shareholders of record of our common stock as of January 15, 2024, February 15, 2024 and March 15, 2024.
From inception through December 31, 2024, we have distributed $5,031,548 to common stockholders. On January 3, 2024, we announced that our Board of Directors authorized a distribution of $0.039 per share monthly cash distribution for shareholders of record of our common stock as of January 15, 2024, February 15, 2024 and March 15, 2024.
Added
January and February distributions were paid on January 30, 2024, February 29, 2024 and March 29, 2024, respectively. On July 3, 2024, the Company announced that its Board of Directors determined to suspend the Company's regular dividend to common shareholders and unitholders.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

61 edited+32 added−26 removed46 unchanged
Biggest changeBecause we have not yet generated a cumulative profit, distributions have been made from proceeds from prior capital raises. • Series A Preferred Stock Redemption On January 29, 2024 the Company exchanged all shares of its Series A Redeemable Preferred Stock to 2,794,597 shares of our common stock according to the following allocation: • 2,623,153 shares out of the 2,794,597 shares of our common stock were distributed by Modiv OP and subsequently distributed by Modiv to the holders of its common stock; • the remaining 171,444 shares of our common stock issued to Modiv OP will be held by Modiv OP. 38 Recent Partnership Developments • Agreements with Brown Family Enterprises, LLC On February 8, 2023, the Operating Partnership entered into Amended and Restated Limited Liability Company Agreements for GIPVA 2510 Walmer Ave, LLC ("GIPVA 2510") and GIPVA 130 Corporate Blvd, LLC ("GIPVA 130"), in which the Operating Partnership, as the sole member of GIPVA 2510 and GIPVA 130, admitted a new preferred member, Brown Family Enterprises, LLC, through the issuance of preferred membership interests in the form of Class A Preferred Units of GIPVA 2510 and GIPVA 130.
Biggest changeRecent Partnership Developments • Agreements with Brown Family Enterprises, LLC On February 8, 2023, the Operating Partnership entered into new Amended and Restated Limited Liability Company Agreements for the Norfolk, Virginia properties, GIPVA 2510 Walmer Ave, LLC ("GIPVA 2510") and GIPVA 130 Corporate Blvd, LLC ("GIPVA 130"), in which the Operating Partnership, as the sole member of GIPVA 2510 and GIPVA 130, admitted a new preferred member, Brown Family Enterprises, LLC, through the issuance of preferred membership interests in the form of Class A Preferred Units of GIPVA 2510 and GIPVA 130.
GIPVA 2510 and GIPVA 130 (the “Virginia SPEs”) hold the Company’s Norfolk, Virginia properties.
GIPVA 2510 and GIPVA 130 (the “Virginia SPEs”) hold the Company’s Norfolk, Virginia properties.
Except for the increase in the amount of the Loan and Note and the extension of the maturity date thereof, no changes were made to the original note. On August 10, 2023, we entered into a $21.0 million loan agreement with Valley National Bank ("Valley") to finance the acquisition of the Modiv Portfolio.
Except for the increase in the amount of the Loan and Note and the extension of the maturity date thereof, no changes were made to the original note. 41 On August 10, 2023, we entered into a $21.0 million loan agreement with Valley National Bank ("Valley") to finance the acquisition of the Modiv Portfolio.
Our President and CEO has personally guaranteed the repayment of the $10.8 million due under the 7-11 - Washington, DC; Starbucks-South Tampa, FL; and Pratt & Whitney-Huntsville, AL loan as well as the $1.3 million loan secured by our Sherwin-Williams - Tampa, FL 40 mortgage loan.
Our President and CEO has personally guaranteed the repayment of the $10.8 million due under the 7-11 - Washington, DC; Starbucks-South Tampa, FL; and Pratt & Whitney-Huntsville, AL loan as well as the $1.3 million loan secured by our Sherwin-Williams - Tampa, FL mortgage loan.
Because of the redemption right, the non-controlling interest is presented as temporary equity at an aggregated redemption value of $3,000,000 as of December 31, 2023. • Agreement with LMB Owenton I, LLC On February 7, 2023, the Operating Partnership entered into a Unit Issuance Agreement and Amendment to Contribution and Subscription Agreement with LMB Owenton I LLC in which the Operating Partnership and LMB Owenton I LLC agreed to delay the Contributor’s right to require the redemption of the Contributor’s GIP LP Units in the Operating Partnership until after 36 months on January 14th, 2025 and for a reduced redemption price of $7.15 per GIP LP Unit.
Because of the redemption right, the non-controlling interest is presented as temporary equity at an aggregated redemption value of $3,000,000 as of December 31, 2024. 39 • Agreement with LMB Owenton I, LLC On February 7, 2023, the Operating Partnership entered into a Unit Issuance Agreement and Amendment to Contribution and Subscription Agreement with LMB Owenton I LLC in which the Operating Partnership and LMB Owenton I LLC agreed to delay the Contributor’s right to require the redemption of the Contributor’s GIP LP Units in the Operating Partnership until after 36 months on January 14th, 2025 and for a reduced redemption price of $7.15 per GIP LP Unit.
The fair value of the above- or below- market lease is estimated as the present value of the difference between the contractual amount to be paid pursuant to the in-place lease and the estimated current market lease rate expected over the remaining non-cancelable life of the lease.
The fair value of the above- or below- market lease is estimated as the present value 45 of the difference between the contractual amount to be paid pursuant to the in-place lease and the estimated current market lease rate expected over the remaining non-cancelable life of the lease.
Our results of operations for the twelve months ended December 31, 2023 and 2022 are not indicative of those expected in future periods, as we expect that rental income, interest expense, rental operating expense, general and administrative expense, and depreciation and amortization will significantly change in future periods as a result of growth through future acquisitions of real estate related investments.
Our results of operations for the twelve months ended December 31, 2024 and 2023 are not indicative of those expected in future periods, as we expect that rental income, interest expense, rental operating expense, general and administrative expense, and depreciation and amortization will significantly change in future periods as a result of growth through future acquisitions of real estate related investments.
The common stock and warrants included in the units (which were separated into one share of common stock and one warrant) currently trade on the Nasdaq Capital Market (“Nasdaq”) under the symbols “GIPR” and “GIPRW,” respectively. Our Investments The following are characteristics of our properties as of December 31, 2023: • Creditworthy Tenants .
The common stock and warrants included in the units (which were separated into one share of common stock and one warrant) currently trade on the Nasdaq Capital Market (“Nasdaq”) under the symbols “GIPR” and “GIPRW,” respectively. Our Investments The following are characteristics of our properties as of December 31, 2024: • Creditworthy Tenants .
Such agreement was made in consideration of the issuance to LMB Owenton I LLC of an additional 44,228 GIP LP Units in the Operating Partnership, resulting in Contributor owning an aggregate of 155,185 GIP LP Units in the Operating Partnership at redemption value of $1,109,570 as of December 31, 2023.
Such agreement was made in consideration of the issuance to LMB Owenton I LLC of an additional 44,228 GIP LP Units in the Operating Partnership, resulting in Contributor owning an aggregate of 155,185 GIP LP Units in the Operating Partnership at redemption value of $1,109,570 as of December 31, 2024.
(6) Tenant has the right to terminate the lease as of March 31, 2032, March 31, 2037, March 31, 2042, March 31, 2047, March 31, 2052, and March 31, 2057. (7) Two tenants occupy this single property.
(5) Tenant has the right to terminate the lease as of March 31, 2032, March 31, 2037, March 31, 2042, March 31, 2047, March 31, 2052, and March 31, 2057. (6) Two tenants occupy this single property.
We currently qualify as an emerging growth company, but will no longer qualify after the earliest of: • the last day of the fiscal year during which we have annual total gross revenues of $1.07 billion or more; • the last day of the fiscal year following the fifth anniversary of the first sale of our common equity securities in an offering registered under the Securities Act; • the date on which we issue more than $1 billion in non-convertible debt securities during a previous three-year period; or 45 • the date on which we become a large accelerated filer, which generally is a company with a public float of at least $700 million (Exchange Act Rule 12b-2).
We currently qualify as an emerging growth company, but will no longer qualify after the earliest of: • the last day of the fiscal year during which we have annual total gross revenues of $1.235 billion or more; • the last day of the fiscal year following the fifth anniversary of the first sale of our common equity securities in an offering registered under the Securities Act, which for us is September 2026; • the date on which we issue more than $1 billion in non-convertible debt securities during a previous three-year period; or • the date on which we become a large accelerated filer, which generally is a company with a public float of at least $700 million (Exchange Act Rule 12b-2).
BBB+ 3.2 1 x 5 Yes $ 353,061 $ 11.50 Medical-Retail Chicago, IL 10,947 Fresenius Medical Care Holdings, Inc.
BBB+ Y 2.2 1 x 5 Yes $ 353,061 $ 11.50 Medical-Retail Chicago, IL 10,947 Fresenius Medical Care Holdings, Inc.
Average effective annual rental per square foot is $16.02. Given the nature of our leases, our tenants either pay the real estate taxes directly or reimburse us for such costs. We believe all of our properties are adequately covered by insurance.
Average effective annual rental per square foot is $15.08. Given the nature of our leases, our tenants either pay the real estate taxes directly or reimburse us for such costs. We believe all of our properties are adequately covered by insurance.
Approximately 68% of our portfolio’s annualized rent as of December 31, 2023 was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency of “BBB-” or better.
Approximately 60% of our portfolio’s annualized rent as of December 31, 2024 was derived from tenants that have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency of “BBB-” or better.
Income on Investment in Tenancy in Common For the twelve months ended December 31, 2023 and 2022, our share of earnings on our investment in tenancy in common and accounted for under the equity method generated income of $32,773 and $37,298, respectively. On September 7, 2023, the Company purchased the remaining tenancy-in-common ("TIC") interest and assumed control of the property.
Income on Investment in Tenancy in Common For the twelve months ended December 31, 2024 and 2023, our share of earnings on our investment in tenancy in common and accounted for under the equity method generated income of $0 and $32,773, respectively. On September 7, 2023, the Company purchased the remaining tenancy-in-common ("TIC") interest and assumed control of the property.
Rockford, IL 2,100,000 3.85% (d) 3/31/2032 2,066,604 - 1.50 Best Buy Co., Inc. Grand Junction, CO 2,552,644 (c) 3.85% (d) 3/31/2032 2,512,050 2,552,644 1.50 Fresenius Medical Care Holdings, Inc.
Rockford, IL 2,100,000 3.85% (d) 3/31/2032 2,014,851 2,066,604 1.50 Best Buy Co., Inc. Grand Junction, CO 2,552,644 (c) 3.85% (d) 3/31/2032 2,449,141 2,512,050 1.50 Fresenius Medical Care Holdings, Inc.
Our largest tenants are the General Service Administration, Dollar General, and the City of San Antonio, who collectively contributed approximately 39% of our portfolio’s annualized base rent as of December 31, 2023. • 96% Occupied .
Our largest tenants are the General Service Administration, Dollar General, and the City of San Antonio, who collectively contributed approximately 39% of our portfolio’s annualized base rent as of December 31, 2024. • 99% Occupied .
Our portfolio is 96% leased and occupied. • Contractual Rent Growth . 84% of the leases in our current portfolio (based on annualized base rent as of December 31, 2023) provide for increases in contractual base rent during future years of the current term or during the lease extension periods. • Average Effective Annual Rental per Square Foot .
Our portfolio is 99% leased and occupied. • Contractual Rent Growth . 93% of the leases in our current portfolio (based on annualized base rent as of December 31, 2024) provide for increases in contractual base rent during future years of the current term or during the lease extension periods. • Average Effective Annual Rental per Square Foot .
The table below presents an overview of the properties in our portfolio as of December 31, 2023: 36 Property Type Location Rentable Square Feet Tenant S&P Credit Rating (1) Remaining Term (Yrs) Options (Number x Yrs) Contractual Rent Escalations (5) ABR (2) ABR per Sq. Ft.
The table below presents an overview of the properties in our portfolio as of December 31, 2024: 37 Property Type Location Rentable Square Feet Tenant S&P Credit Rating (1) IG Remaining Term (Yrs) Options (Number x Yrs) Contractual Rent Escalations (4) ABR (2) ABR per Sq. Ft.
To the extent we take advantage of the reduced disclosure requirements afforded by the JOBS Act, investors may be less likely to invest in us or may view our shares as a riskier investment than a similarly situated company that does not take advantage of these provisions.
To the extent we take advantage of the reduced disclosure requirements for EGCs, investors may be less likely to invest in us or may view our shares as a riskier investment than a similarly situated company that does not take advantage of these provisions. 47
BBB 1.6 3 x 5 Yes $ 103,607 $ 9.50 Office Maitland, FL 33,118 exp U.S. Services Inc.
BBB Y 5.6 2 x 5 Yes $ 103,607 $ 9.50 Office Maitland, FL 33,118 exp U.S. Services Inc.
Chicago, IL 1,727,108 (c) 3.85% (d) 3/31/2032 1,699,642 1,727,108 1.50 Starbucks Corporation Tampa, FL 1,298,047 (c) 3.85% (d) 3/31/2032 1,277,404 1,298,047 1.50 Kohl's Corporation Tucson, AZ 3,964,745 (c) 3.85% (d) 3/31/2032 3,901,694 3,964,745 1.50 City of San Antonio (PreK) San Antonio, TX 6,444,000 (e) 7.47% (b) 8/10/2028 6,416,362 - 1.50 Dollar General Market Bakersfield, CA 2,428,000 (e) 7.47% (b) 8/10/2028 2,417,587 - 1.50 Dollar General Big Spring, TX 635,000 (e) 7.47% (b) 8/10/2028 632,277 - 1.50 Dollar General Castalia, OH 556,000 (e) 7.47% (b) 8/10/2028 553,615 - 1.50 Dollar General East Wilton, ME 726,000 (e) 7.47% (b) 8/10/2028 722,886 - 1.50 Dollar General Lakeside, OH 567,000 (e) 7.47% (b) 8/10/2028 564,568 - 1.50 Dollar General Litchfield, ME 624,000 (e) 7.47% (b) 8/10/2028 621,324 - 1.50 Dollar General Mount Gilead, OH 533,000 (e) 7.47% (b) 8/10/2028 530,714 - 1.50 Dollar General Thompsontown, PA 556,000 (e) 7.47% (b) 8/10/2028 553,615 - 1.50 Dollar Tree Stores, Inc.
Chicago, IL 1,727,108 (c) 3.85% (d) 3/31/2032 1,657,079 1,699,642 1.50 Starbucks Corporation Tampa, FL 1,298,047 (c) 3.85% (d) 3/31/2032 1,245,414 1,277,404 1.50 Kohl's Corporation Tucson, AZ 3,964,745 (c) 3.85% (d) 3/31/2032 3,803,985 3,901,694 1.50 City of San Antonio (PreK) San Antonio, TX 6,444,000 (e) 7.47% (b) 8/10/2028 6,323,628 6,416,362 1.50 Dollar General Market Bakersfield, CA 2,428,000 (e) 7.47% (b) 8/10/2028 2,382,646 2,417,587 1.50 Dollar General Big Spring, TX 635,000 (e) 7.47% (b) 8/10/2028 623,138 632,277 1.50 Dollar General Castalia, OH 556,000 (e) 7.47% (b) 8/10/2028 545,614 553,615 1.50 Dollar General East Wilton, ME 726,000 (e) 7.47% (b) 8/10/2028 712,439 722,886 1.50 Dollar General Lakeside, OH 567,000 (e) 7.47% (b) 8/10/2028 556,409 564,568 1.50 Dollar General Litchfield, ME 624,000 (e) 7.47% (b) 8/10/2028 612,344 621,324 1.50 Dollar General Mount Gilead, OH 533,000 (e) 7.47% (b) 8/10/2028 523,044 530,714 1.50 Dollar General Thompsontown, PA 556,000 (e) 7.47% (b) 8/10/2028 545,614 553,615 1.50 Dollar Tree Stores, Inc.
Net Loss Attributable to Common Shareholders For the twelve months ended December 31, 2023 and 2022, we generated a net loss attributable to our common shareholders of $6,192,262 and $3,237,640, respectively. Liquidity and Capital Resources We require capital to fund our investment activities and operating expenses.
Net Loss Attributable to Common Shareholders For the twelve months ended December 31, 2024 and 2023, we generated a net loss attributable to our common shareholders of $8,444,487 and $6,192,262, respectively. Liquidity and Capital Resources We require capital to fund our investment activities and operating expenses.
Norfolk, VA 5,216,749 3.50% 10/23/2024 4,562,722 4,728,462 1.25 Sherwin Williams Company Tampa, FL 1,286,664 3.72% (b) 8/10/2028 1,286,664 1,286,664 1.20 General Services Administration-FBI Manteo, NC 928,728 (c) 3.85% (d) 3/31/2032 913,958 928,728 1.50 Irby Construction Plant City , FL 928,728 (c) 3.85% (d) 3/31/2032 913,958 928,728 1.50 La-Z-Boy Inc.
Norfolk, VA 5,216,749 (f) 6.15% 8/23/2029 4,410,949 4,562,722 1.25 Sherwin Williams Company Tampa, FL 1,286,664 3.72% (b) 8/10/2028 1,255,068 1,286,664 1.20 General Services Administration-FBI Manteo, NC 928,728 (c) 3.85% (d) 3/31/2032 891,071 913,958 1.50 Irby Construction Plant City , FL 928,728 (c) 3.85% (d) 3/31/2032 891,071 913,958 1.50 La-Z-Boy Inc.
The decision by companies to “opt out” of the extended transition period for complying with new or revised accounting standards is irrevocable. We are not electing to opt out of the JOBS Act extended accounting transition period. We intend to take advantage of the extended transition period provided under the JOBS Act for complying with new or revised accounting standards.
The decision by companies to “opt out” of the extended transition period for complying with new or revised accounting standards is irrevocable. We did not opt out of the JOBS Act extended accounting transition period.
Pursuant to the agreement, the Company is required to pay the preferred equity member a 7% IRR paid on a monthly basis and will share in 16% of the equity in each of the Virginia SPEs upon a capital transaction resulting in distributable proceeds.
Pursuant to the agreement, the Company is required to pay the preferred equity member a 7% IRR paid on a monthly basis and will share in 16% of the equity in each of the Virginia SPEs upon a capital transaction resulting in distributable proceeds. Brown Family Enterprises, LLC has the right to redeem the preferred equity at redemption value.
BBB 2.8 2 x 5 Yes $ 228,902 $ 20.91 Retail Tampa, FL 2,642 Starbucks Corporation BBB+ 3.2 2 x 5 Yes $ 148,216 $ 56.10 Retail Tucson, AZ 88,408 Kohl's Corporation BB 6.1 7 x 5 Yes $ 823,962 $ 9.32 Retail San Antonio, TX 50,000 City of San Antonio (PreK) AAA 5.6 1 x 8 Yes $ 924,000 $ 18.48 Retail Bakersfield, CA 18,827 Dollar General Market BBB 4.6 3 x 5 Yes $ 361,075 $ 19.18 Retail Big Spring, TX 9,026 Dollar General BBB 6.5 3 x 5 Yes $ 86,040 $ 9.53 Retail Castalia, OH 9,026 Dollar General BBB 11.4 3 x 5 Yes $ 79,320 $ 8.79 Retail East Wilton, ME 9,100 Dollar General BBB 6.6 3 x 5 Yes $ 112,440 $ 12.36 Retail Lakeside, OH 9,026 Dollar General BBB 11.4 3 x 5 Yes $ 81,036 $ 8.98 Retail Litchfield, ME 9,026 Dollar General BBB 6.8 3 x 5 Yes $ 92,964 $ 10.30 Retail Mount Gilead, OH 9,026 Dollar General BBB 6.5 3 x 5 Yes $ 85,920 $ 9.52 Retail Thompsontown, PA 9,100 Dollar General BBB 6.8 3 x 5 Yes $ 86,004 $ 9.45 Retail Morrow, GA 10,906 Dollar Tree Stores, Inc.
BBB Y 8.8 2 x 5 Yes $ 233,480 $ 21.33 Retail Tampa, FL 2,642 Starbucks Corporation BBB+ Y 2.2 2 x 5 Yes $ 148,216 $ 56.10 Retail Tucson, AZ 88,408 Kohl's Corporation BB- N 5.1 7 x 5 Yes $ 864,630 $ 9.78 Retail San Antonio, TX 50,000 City of San Antonio (PreK) AAA Y 4.6 1 x 8 Yes $ 924,000 $ 18.48 Retail Bakersfield, CA 18,827 Dollar General Market BBB Y 3.6 3 x 5 Yes $ 361,075 $ 19.18 Retail Big Spring, TX 9,026 Dollar General BBB Y 5.5 3 x 5 Yes $ 86,041 $ 9.53 Retail Castalia, OH 9,026 Dollar General BBB Y 10.4 3 x 5 Yes $ 79,320 $ 8.79 Retail East Wilton, ME 9,100 Dollar General BBB Y 5.6 3 x 5 Yes $ 112,439 $ 12.36 Retail Lakeside, OH 9,026 Dollar General BBB Y 10.4 3 x 5 Yes $ 81,036 $ 8.98 Retail Litchfield, ME 9,026 Dollar General BBB Y 5.8 3 x 5 Yes $ 92,961 $ 10.30 Retail Mount Gilead, OH 9,026 Dollar General BBB Y 5.5 3 x 5 Yes $ 85,924 $ 9.52 Retail Thompsontown, PA 9,100 Dollar General BBB Y 5.8 3 x 5 Yes $ 85,998 $ 9.45 Retail Morrow, GA 10,906 Dollar Tree Stores, Inc.
Our capital sources may include net proceeds from offerings of our equity securities, cash flow from operations and borrowings under credit facilities. As of December 31, 2023, we had total cash (unrestricted and restricted) of $3,151,946, properties with a cost basis of $104,912,421 and outstanding debt of $56,817,310.
Our capital sources may include net proceeds from offerings of our equity securities, cash flow from operations and borrowings under credit facilities. As of December 31, 2024, we had total cash (unrestricted and restricted) of $647,439, properties with a cost basis of $102,310,974 and outstanding debt of $56,817,310.
(d) Adjustment effective April 1, 2027 equal to 5-year Treasury plus 2.5% and subject to a floor of 3.85% (e) One loan in the amount of $21.0 million secured by 13 properties and allocated to each property based on each property's appraised value. Our mortgage debt requires us to maintain certain debt service coverage ratios as noted above.
(d) Adjustment effective April 1, 2027 equal to 5-year Treasury plus 2.5% and subject to a floor of 3.85% (e) One loan in the amount of $21.0 million secured by 13 properties and allocated to each property based on each property's appraised value.
Net Loss For the twelve months ended December 31, 2023 and 2022, we generated a net loss of $4,441,465 and 2,747,178, respectively.
Net Loss For the twelve months ended December 31, 2024 and 2023, we generated a net loss of $4,872,888 and 4,441,465, respectively.
The fair value of the in-place leases is estimated as the cost to replace the leases including loss of rent, commissions and legal fees. The in-place leases are amortized over the remaining term of the leases as amortization expense.
Intangible assets and liabilities consist of above-market or below-market lease value and the value of in-place leases, as applicable. The fair value of the in-place leases is estimated as the cost to replace the leases including loss of rent, commissions and legal fees. The in-place leases are amortized over the remaining term of the leases as amortization expense.
In conjunction with the LC2 Investment to purchase the remaining interest in the tenancy-in-common interest discussed above, we assumed the original $2.1 million loan on the property with a balance as of December 31, 2023 of $2,066,604 and recognized a discount of $383,767.
In conjunction with the LC2 Investment to purchase the remaining interest in the tenancy-in-common interest discussed above, we assumed the original $2.1 million loan on the property with a balance as of December 31, 2024 of $2,014,851.
As of December 31, 2023 and December 31, 2022, we had accounts payable, accrued expenses and insurance payable totaling $1,813,231 and $714,354, respectively.
As of December 31, 2024 and December 31, 2023, we had accounts payable, accrued expenses and insurance payable totaling $2,023,338 and $1,813,231, respectively.
Not Rated 2.9 1 x 5 Yes $ 835,346 $ 25.22 Office Vacaville, CA 11,014 General Services Administration AA+ 2.6 N/A No $ 343,665 $ 31.20 Retail Santa Maria, CA 14,490 Walgreens (6) BBB 8.3 N/A No $ 369,000 $ 25.47 Retail Rockford, IL 15,288 La-Z-Boy Inc.
Not Rated Not Rated 1.9 1 x 5 Yes $ 864,583 $ 26.11 Office Vacaville, CA 11,014 General Services Administration AA+ Y 1.6 N/A No $ 257,050 $ 23.34 Retail Santa Maria, CA 14,490 Walgreens (5) BB- Y 7.3 N/A No $ 369,000 $ 25.47 Retail Rockford, IL 15,288 La-Z-Boy Inc.
(3) BB+ 3.7 1 x 5 Yes $ 765,136 $ 21.96 Retail Tampa, FL 3,500 Sherwin Williams Company BBB 4.6 5 x 5 Yes $ 126,788 $ 36.23 Office Manteo, NC 7,543 General Services Administration-FBI AA+ 5.1 1 x 5 Yes $ 161,346 $ 21.39 Office Plant City, FL 7,826 Irby Construction BBB- 1.0 2 x 5 Yes $ 170,865 $ 21.83 Retail Grand Junction, CO 30,701 Best Buy Co., Inc.
BB N 2.7 1 x 5 Yes $ 788,091 $ 22.62 Retail Tampa, FL 3,500 Sherwin Williams Company BBB Y 3.6 5 x 5 Yes $ 126,788 $ 36.23 Office Manteo, NC 7,543 General Services Administration-FBI AA+ Y 4.1 1 x 5 Yes $ 100,682 $ 13.35 Office Plant City, FL 7,826 Irby Construction BBB- Y - 2 x 5 Yes $ 176,674 $ 22.58 Retail Grand Junction, CO 30,701 Best Buy Co., Inc.
Cash from Investing Activities Net cash used in investing was $33,314,974 and $13,281,248 for the twelve months ended December 31, 2023 and 2022, respectively. The change is primarily due to the acquisition of the Modiv portfolio in August 2023.
Cash from Investing Activities Net cash used in investing was $5,773,323 and $33,314,974 for the twelve months ended December 31, 2024 and 2023, respectively. The year over year change is primarily due to the acquisition of the 13 property Modiv portfolio in August 2023 compared with the single property acquisition of Best Buy Ames, IA in August 2024.
On April 1, 2022, we entered into two mortgage loan agreements with an aggregate balance of $13.5 million to refinance seven of our properties.
Below is a description of some of our more significant capital raise activities intended to improve our liquidity: On April 1, 2022, we entered into two mortgage loan agreements with an aggregate balance of $13.5 million to refinance seven of our properties.
We then adjust FFO for non-cash revenues and expenses such as amortization of deferred financing costs, above and below market lease intangible amortization, straight line rent adjustment where the Company is both the lessor and lessee, and non-cash stock compensation to calculate Core AFFO. 44 FFO is used by management, investors, and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions.
FFO is used by management, investors, and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions.
As such, we recorded an Other payable - related party in the amount of $2,912,300 upon execution of the Redemption Agreement entered into July 20, 2022 and have made installment payments to date of $1,102,460 with a remaining balance of $1,809,840 outstanding as of December 31, 2023.
As such, the Company recorded an Other payable - related party in the amount of $2,912,300 upon execution of the Redemption Agreement entered into July 20, 2022 and has paid the note in full as of December 31, 2024. Remaining balances of $0 and $1,809,840 were outstanding as of December 31, 2024 and 2023, respectively.
Minimum required principal payments on our outstanding debt for subsequent years ending December 31 are as follows: 42 Mortgage Loans Other Payable - Related Party Loan Payable - Related Party Total as of December 31, 2023 2024 12,780,776 1,809,840 - 14,590,616 2025 926,633 - - 926,633 2026 976,467 - 5,500,000 6,476,467 2027 1,033,322 - - 1,033,322 2028 21,341,791 - - 21,341,791 Thereafter 21,084,683 - - 21,084,683 $ 58,143,672 $ 1,809,840 $ 5,500,000 $ 65,453,512 On February 8, 2023, the Operating Partnership entered into new Amended and Restated Limited Liability Company Agreements for GIPVA 2510 and GIPVA 130 in which the Operating Partnership, as the sole member of GIPVA 2510 and GIPVA 130, admitted a new member, Brown Family Enterprises, LLC (the "Purchaser"), a preferred equity partner and therefore a related party, through the issuance to Purchaser of membership interests in the form of Class A Preferred Units of GIPVA 2510 and GIPVA 130.
Our mortgage debt requires us to maintain certain debt service coverage ratios as noted above. 43 Minimum required principal payments on our outstanding debt for subsequent years ending December 31 are as follows: Mortgage Loans Other Payable - Related Party Loan Payable - Related Party Total as of December 31, 2024 2025 $ 1,289,603 - - 1,289,603 2026 1,319,320 - 5,500,000 6,819,320 2027 1,422,520 - - 1,422,520 2028 21,757,611 - - 21,757,611 2029 13,220,019 - - 13,220,019 Thereafter 20,434,178 - - 20,434,178 $ 59,443,251 $ - $ 5,500,000 $ 64,943,251 On February 8, 2023, the Operating Partnership entered into new Amended and Restated Limited Liability Company Agreements for GIPVA 2510 and GIPVA 130 in which the Operating Partnership, as the sole member of GIPVA 2510 and GIPVA 130, admitted a new member, Brown Family Enterprises, LLC (the "Purchaser"), a preferred equity partner and therefore a related party, through the issuance to Purchaser of membership interests in the form of Class A Preferred Units of GIPVA 2510 and GIPVA 130.
Results of Operations for the Years Ended December 31, 2023 and 2022 Revenue For Twelve months ended December 31, 2023, total revenue from operations was $7,632,600 as compared to $5,432,462 for the twelve months ended December 31, 2022. Revenue increased by $2,200,138 for the twelve-months ended December 31, 2022 from the Modiv acquisition in August 2023.
Results of Operations for the Years Ended December 31, 2024 and 2023 Revenue For twelve months ended December 31, 2024, total revenue from operations was $9,762,636 as compared to $7,632,600 for the twelve months ended December 31, 2023.
These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements.
The judgments we make in selecting the estimation methods and significant assumptions, and their inherent estimation uncertainty, affect the reported amounts of assets and liabilities, and our disclosure of contingent assets and liabilities, as of the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods.
CRITICAL ACCOUNTING POLICIES As a company primarily involved in owning income generating real estate assets, management considers the following accounting policies critical as they reflect our more significant judgments and estimates used in the preparation of our financial statements and because they are important for understanding and evaluating our reported financial results.
CRITICAL ACCOUNTING ESTIMATES As a company primarily involved in owning income generating real estate assets, management considers the following accounting estimates to be critical as they involve our more significant judgments and a significant level of estimation uncertainty.
The following tables reconcile net income (net loss), which we believe is the most comparable GAAP measure, to FFO, Core FFO, AFFO and Core AFFO: Twelve Months Ended December 31, 2023 2022 Net loss $ (4,441,465 ) $ (2,747,178 ) Other expense 506,639 - Loss on derivative valuation, net 401,782 - Depreciation and amortization 3,538,569 2,110,975 Funds From Operations $ 5,525 $ (636,203 ) Amortization of debt issuance costs 146,745 118,930 Non-cash stock compensation 382,002 421,882 Write-off of deferred financing costs - 252,256 Adjustments to Funds From Operations 528,747 793,068 Core Funds From Operations $ 534,272 $ 156,865 Net loss $ (4,441,465 ) $ (2,747,178 ) Other expense 506,639 - Loss on derivative valuation, net 401,782 - Depreciation and amortization 3,538,569 2,110,975 Amortization of debt issuance costs 146,745 118,930 Above and below-market lease amortization, net (2,873 ) (102,775 ) Straight line rent, net 64,572 53,193 Adjustments to net loss $ 4,655,434 $ 2,180,323 Adjusted Funds From Operations $ 213,969 $ (566,855 ) Dead deal expense $ 109,569 $ 174,722 Loss on debt extinguishment - 144,029 Non-cash stock compensation 382,002 421,882 Write-off of deferred financing costs - 252,256 Adjustments to Adjusted Funds From Operations $ 491,571 $ 992,889 Core Adjusted Funds From Operations $ 705,540 $ 426,034 Jumpstart Our Business Startups Act (“JOBS Act”) In April 2012, the Jumpstart Our Business Startups Act (“JOBS Act”) was enacted into law.
Additionally, FFO does not reflect distributions paid to redeemable non-controlling interests. 46 The following tables reconcile net income (net loss), which we believe is the most comparable GAAP measure, to FFO, Core FFO, AFFO and Core AFFO: Twelve Months Ended December 31, 2024 2023 Net loss $ (4,872,888 ) $ (4,441,465 ) Other expense - 506,639 Loss (gain) on derivative valuation (372,573 ) 401,782 Depreciation and amortization 4,765,203 3,538,569 Loss on held for sale asset valuation 77,244 - Funds From Operations $ (403,014 ) $ 5,525 Amortization of debt issuance costs 202,621 146,745 Non-cash stock compensation 379,739 382,002 Adjustments to Funds From Operations 582,360 528,747 Core Funds From Operations $ 179,346 $ 534,272 Net loss $ (4,872,888 ) $ (4,441,465 ) Other expense - 506,639 Loss (gain) on derivative valuation (372,573 ) 401,782 Depreciation and amortization 4,765,203 3,538,569 Amortization of debt issuance costs 202,621 146,745 Above and below-market lease amortization, net 262,711 (2,873 ) Straight line rent, net (27,766 ) 64,572 Adjustments to net loss $ 4,830,196 $ 4,655,434 Adjusted Funds From Operations $ (42,692 ) $ 213,969 Dead deal expense $ 35,873 $ 109,569 Non-cash stock compensation 379,739 382,002 Adjustments to Adjusted Funds From Operations $ 415,612 $ 491,571 Core Adjusted Funds From Operations $ 372,920 $ 705,540 Jumpstart Our Business Startups Act (“JOBS Act”) In April 2012, the Jumpstart Our Business Startups Act (“JOBS Act”) was enacted into law.
Future Rental Payments The following table presents future minimum rental cash payments due to the Company over the next five calendar years and thereafter as of December 31: 43 As of December 31, 2023 2024 $ 8,048,449 2025 7,798,628 2026 7,458,648 2027 5,835,157 2028 4,376,385 Thereafter 8,669,905 $ 42,187,172 Off-Balance Sheet Arrangements We do not have any material off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
The change is primarily due to the financing scale for acquisition of the 13 property Modiv portfolio in August 2023 compared with the acquisition of a single property, Best Buy Ames, IA in August 2024. 44 Future Rental Payments The following table presents future minimum rental cash payments due to the Company over the next five calendar years and thereafter as of December 31: As of December 31, 2024 2025 $ 8,569,192 2026 8,368,784 2027 6,557,503 2028 4,897,628 2029 3,668,471 Thereafter 16,383,885 $ 48,445,463 Off-Balance Sheet Arrangements We do not have any material off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
The capitalized above or below market lease values are amortized as a decrease or increase to rental income over the remaining term of the lease inclusive of the renewal option periods that are considered probable at acquisition. Non-GAAP Financial Measures Our reported results are presented in accordance with U.S. generally accepted accounting principles (“GAAP”).
The capitalized above or below market lease values are amortized as a decrease or increase to rental income over the remaining term of the lease inclusive of the renewal option periods that are considered probable at acquisition. In an acquisition of multiple properties, we must also allocate the purchase price among the properties.
Cash from Financing Activities Net cash provided by financing activities was $32,701,579 and $5,826,284 for the twelve months ended December 31, 2023 and 2022, respectively. The change is primarily due to the acquisition of the Modiv portfolio in August 2023.
Cash from Financing Activities Net cash provided by financing activities was $2,246,453 and $32,701,579 for the twelve months ended December 31, 2024 and 2023, respectively.
Maitland, FL 2,950,000 (e) 7.47% (b) 8/10/2028 2,937,348 - 1.50 General Services Administration Vacaville, CA 1,293,000 (e) 7.47% (b) 8/10/2028 1,287,454 - 1.50 Walgreens Santa Maria, CA 3,041,000 (e) 7.47% (b) 8/10/2028 3,027,958 - 1.50 $ 60,550,913 $ 58,143,672 $ 35,951,259 Less Debt Discount, net (383,767 ) - Less Debt Issuance Costs, net $ (942,595 ) $ (717,381 ) 56,817,310 35,233,878 (a) Loan subject to prepayment penalty (b) Fixed via interest rate swap (c) One loan in the amount of $11.4 million secured by six properties and allocated to each property based on each property's appraised value.
Ames, IA 2,495,000 6.29% (b) 8/23/2029 2,495,000 n/a 1.50 63,045,913 59,443,251 58,143,672 Less Debt Discount, net (317,978 ) (383,767 ) Less Debt Issuance Costs, net (785,358 ) (942,595 ) 58,339,915 56,817,310 (a) Loan subject to prepayment penalty (b) Fixed via interest rate swap (c) One loan in the amount of $11.4 million secured by six properties and allocated to each property based on each property's appraised value.
Net Loss Attributable to Non-controlling Interests For the twelve months ended December 31, 2023 and 2022, net income attributable to non-controlling interest was $1,275,797 and $490,462, respectively. The increase is primarily attributable to LC2-NNN Pref, LLC's $14,100,000 preferred equity investment in conjunction with the Modiv acquisition in August 2023.
The increase is primarily attributable to LC2-NNN Pref, LLC's $14,100,000 preferred equity investment in conjunction with the Modiv acquisition in August 2023, including servicing current and deferred interests as detailed in Preferred Equity .
The JOBS Act provides, among other things, exemptions for emerging growth companies from certain financial disclosure and governance requirements for up to five years.
The JOBS Act provides, among other things, exemptions for emerging growth companies from certain financial disclosure and governance requirements for up to five years. In general, under the JOBS Act a company is an emerging growth company if its initial public offering (“IPO”) of common equity securities was effected after December 8, 2011 and meets certain qualification criteria.
Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. Investments in Real Estate . Acquisitions of real estate are recorded at cost. The Company assigns the purchase price of real estate to tangible and intangible assets and liabilities based on fair value.
With different estimation methods or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies in our business may utilize different estimates that may impact the comparability of our results of operations and financial condition to theirs. Impairment Assessment on Investments in Real Estate Acquisitions of real estate are recorded at cost.
Retail Washington, D.C. 3,000 7-Eleven Corporation A 2.2 2 x 5 Yes $ 129,804 $ 43.27 Retail Tampa, FL 2,200 Starbucks Corporation BBB+ 4.2 4 x 5 Yes $ 200,750 $ 91.25 Industrial Huntsville, AL 59,091 Pratt & Whitney Automation, Inc.
Retail Washington, D.C. 3,000 7-Eleven Corporation A Y 1.2 2 x 5 Yes $ 129,804 $ 43.27 Retail Tampa, FL 2,200 Starbucks Corporation BBB+ Y 3.2 4 x 5 Yes $ 200,750 $ 91.25 Industrial Huntsville, AL 59,091 Auburn University (3) N/A Not Rated 2.6 N/A Yes $ 283,500 $ 4.80 Office Norfolk, VA 49,902 General Services Administration-Navy (6) AA+ Y 3.7 N/A Yes $ 640,742 $ 12.84 Office Norfolk, VA 22,247 Armed Services YMCA of the U.S.A.
Cash from Operations Activities Net cash provided by operations was $12,345 and $583,884 during the twelve months ended December 31, 2023 and 2022, respectively. The change is primarily due to the year over year increases in Accounts receivable, Escrow deposits and other assets, and Prepaid expenses driven by the doubling of the property portfolio in August 2023.
Cash from Operations Activities Net cash provided by operations was $1,022,362 and $12,345 during the twelve months ended December 31, 2024 and 2023, respectively. The change is primarily due to operating the Modiv portfolio for twelve months compared with only five months during the periods ended December 31, 2024 and 2023, respectively.
Washington, D.C., Tampa, FL, and Huntsville, AL $ 11,287,500 (a) 4.17% 3/6/2030 $ 10,757,239 $ 10,957,829 1.25 General Services Administration-Navy & Vacant Unit Norfolk, VA 8,260,000 3.50% 9/30/2024 7,341,804 7,578,304 1.25 PRA Holdings, Inc.
Outstanding indebtedness consisted of the following as of December 31, 2024 and December 31, 2023: 42 Occupying Tenant Location Original Loan Amount Interest Rate Maturity Date 12/31/2024 12/31/2023 Debt Service Coverage Ratios ("DSCR") Required 7-Eleven Corporation, Starbucks Corporation & Auburn University Washington, D.C., Tampa, FL, and Huntsville, AL $ 11,287,500 (a) 4.17% 3/6/2030 $ 10,602,711 $ 10,757,239 1.25 General Services Administration-Navy & AYMCA Norfolk, VA 8,260,000 (f) 6.15% 8/30/2029 7,119,184 7,341,804 1.25 PRA Holdings, Inc.
As an emerging growth company, we are eligible to include audited financial statements required for only two fiscal years and limited executive compensation information.
As an emerging growth company, we are eligible to not obtain an auditor attestation on our internal control over financial reporting and to provide limited executive compensation information.
Additionally, during the twelve months ended December 31, 2023, we incurred a guaranty fee expense of $290,416 payable to our President and CEO of which $177,347 remained payable as of December 31, 2023. • Compensation costs remained flat, with the exception of a one-time payment of approximately $58,000 paid to the former CFO, who departed in November 2023.
Additionally, during the twelve months ended December 31, 2024, we incurred a guaranty fee expense of $387,056 payable to our President and CEO of which $206,219 remained payable as of December 31, 2024. 40 • Compensation costs decreased by $312,203, or approximately 23% as management optimized staffing levels and overhead to align with the Company's scale.
Our President and CEO also entered into a personal, full recourse guarantee with a $7,500,000 cap.
Our President and CEO also entered into a personal, full recourse guarantee with a $7,500,000 cap. We were in compliance with all covenants with the exception of one property-level debt service coverage ratio ("DSCR") covenant for 15091 SW Alabama 20, LLC.
Tangible assets consist of land, buildings, site improvements and tenant improvements. Intangible assets and liabilities consist of the value of in-place leases and above or below market leases assumed with the acquisition.
The Company assigns the purchase price of real estate to tangible and intangible assets and liabilities based on fair value. Tangible assets consist of land, buildings, site improvements and tenant improvements.
(3) Tenant has the right to terminate the lease on August 31, 2024 subject to certain conditions. (4) Tenant terminated the lease and vacated on January 31, 2024. (5) Includes rent escalations available from lease renewal options.
(2) Annualized cash base rental income in place as of December 31, 2024. Our leases do not include tenant concessions or abatements. (3) Prior tenant terminated the lease and vacated on January 31, 2024, space was relet to a new tenant in August 2024. (4) Includes rent escalations available from lease renewal options.
Morrow, GA 647,000 (e) 7.47% (b) 8/10/2028 644,225 - 1.50 exp U.S. Services Inc.
Morrow, GA 647,000 (e) 7.47% (b) 8/10/2028 634,914 644,225 1.50 exp U.S. Services Inc. Maitland, FL 2,950,000 (e) 7.47% (b) 8/10/2028 2,894,895 2,937,348 1.50 General Services Administration Vacaville, CA 1,293,000 (e) 7.47% (b) 8/10/2028 1,268,847 1,287,454 1.50 Walgreens Santa Maria, CA 3,041,000 (e) 7.47% (b) 8/10/2028 2,984,195 3,027,958 1.50 Best Buy Co., Inc.
Therefore, each acquisition has been recorded at the purchase price whereas assets and liabilities, inclusive of closing costs, are allocated to land, building, site improvements, tenant improvements and intangible assets and liabilities based upon their relative fair values at the date of acquisition.
The allocation of the purchase price is based on our assessment of estimated fair value of the land, building and improvements, and identified intangible assets and liabilities and is often based upon local market factors. Where applicable, any assumed mortgages are recorded at their estimated fair values.
Removed
(4) A- 0.1 N/A N/A $ 684,996 $ 11.59 Office Norfolk, VA 49,902 General Services Administration-Navy (7) AA+ 4.7 N/A Yes $ 926,923 $ 18.57 Office Norfolk, VA 22,247 VACANT (7) N/A - N/A N/A $ - $ - Office Norfolk, VA 34,847 PRA Holdings, Inc.
Added
(6) N/A N/A 9.3 2 x 5 Yes $ 274,380 $ 12.33 Office Norfolk, VA 34,847 PRA Holdings, Inc.
Removed
Not Rated 3.8 4 x 5 Yes $ 366,600 $ 23.98 Tenants - All Properties 539,827 $ 8,647,766 $ 16.02 (1) Tenant, or tenant parent, rated entity. (2) Annualized cash base rental income in place as of December 31, 2023. Our leases do not include tenant concessions or abatements.
Added
Not Rated Not Rated 2.8 4 x 5 Yes $ 366,600 $ 23.98 Retail Ames, IA 30,259 Best Buy Co., Inc. BBB+ Y 5.2 2 x 5 Yes $ 405,471 $ 13.40 Tenants - All Properties 570,086 $ 8,595,903 $ 15.08 (1) Tenant, or tenant parent, rated entity.
Removed
Recent Developments • Portfolio Acquisition On August 10, 2023, we and our Operating Partnership entered into an Agreement of Purchase and Sale with Modiv Inc., now known as Modiv Industrial, Inc., a Maryland corporation (“Modiv”) and certain of its indirect subsidiaries(together with Modiv, the “Seller”), pursuant to which we purchased a portfolio of 13 properties from the Seller (the “Portfolio Purchase”) for a purchase price of $42.0 million, excluding estimated transaction costs and expenses of $1.9 million consisting of $30.0 million in cash and 2,400,000 shares of a new series of preferred stock designated as Series A Redeemable Preferred Stock (the "Series A Preferred Stock"), par value $0.01 per share.
Added
Recent Developments • Acquisitions On August 29, 2024, we acquired a 30,465 square foot retail property in Ames, Iowa for $5.5 million occupied by Best Buy with a remaining lease of approximately 6 years at an annual base rent of $405,470.
Removed
We funded the cash portion of the purchase price and the transaction expenses with a combination of cash on hand, $21.0 million in new secured mortgage debt, and a $12.0 million preferred equity investment by LC2-NNN Pref, LLC, a Florida limited liability company and affiliate of Loci Capital Partners (“LC2”), as summarized below: We, through a newly formed subsidiary, entered into a loan agreement with Valley National Bank in the amount of $21.0 million, which is secured by the Portfolio Purchase and eight other properties held by subsidiaries of GIP VB SPE, LLC, a Delaware limited liability company (“GIP SPE”) that had outstanding loans with Valley National Bank.
Added
Future minimum rent reflected in the above table, accordingly. • Capital Activity and Distributions On January 29, 2024 the Company exchanged all shares of its Series A Redeemable Preferred Stock to 2,794,597 shares of our common stock according to the following allocation: • 2,623,153 shares out of the 2,794,597 shares of our common stock were distributed by Modiv OP and subsequently distributed by Modiv to the holders of its common stock; • the remaining 171,444 shares of our common stock issued to Modiv OP will be held by Modiv OP. 38 On July 3, 2024 we announced that our Board of Directors had voted to suspend the Company's dividend for shareholders of record of our common stock.
Removed
All of the mortgaged properties cross collateralize the loan, and the loan is guaranteed by the Operating Partnership and the subsidiaries of GIP Borrower that hold the properties that comprise the Portfolio Purchase.
Added
On July 24, 2024, the Operating Partnership of Generation Income Properties, Inc., entered into a Fifth Amendment to the Amended and Restated Limited Partnership Agreement of the Operating Partnership (the “LPA Amendment”), pursuant to which the Company, as the general partner of the Operating Partnership, issued partnership interests to LMB Owenton I LLC (“Contributor”) in the form of Series B-1 Preferred Units (the “Series B-1 Preferred Units”).
Removed
Payments of interest and principal in the amount of approximately $156,000 are due and payable monthly, with all remaining principal and accrued but unpaid interest due and payable on a maturity date of August 10, 2028. To secure a fixed interest rate on this new debt, we entered into an interest rate swap agreement fixing the interest rate to 7.47%.
Added
Also on July 24, 2024, the Operating Partnership and the Contributor entered into a Contribution and Exchange Agreement (the “Contribution Agreement”) pursuant to which the Contributor contributed 155,185 Common Units in exchange for 155,185 Series B-1 Preferred Units.
Removed
Our Chief Executive Officer, David Sobelman, entered into a guarantee 37 agreement for $7.5 million pursuant to which he guaranteed the payment obligations under the promissory notes if they become due as a result of certain “bad-boy” provisions, individually and on behalf of the Operating Partnership.
Added
If and when determined by the Company, as general partner of the Operating Partnership, in its sole discretion, holders of the Series B-1 Preferred Units will be paid cash distributions in the amount of $0.117 per Series B-1 Preferred Unit per quarter, subject to prior payment of any preferred return on senior preferred units of the Operating Partnership.
Removed
On August 10, 2023, we, through GIP SPE entered into an agreement (the “Amended and Restated LLC Agreement”) whereas LC2 purchased a preferred equity interest (the "Preferred Interest") in GIP SPE, providing proceeds of an initial capital contribution of $12.0 million, together with a commitment to make an additional $2.1 million contribution upon the acquisition of our tenant-in-common investment.
Added
The Contributor will have the right to cause the Operating Partnership to redeem the Series B-1 Preferred Units after two (2) years for either (i) cash in an amount equal to $7.15 per Series B-1 Preferred Unit or (ii) a number of shares of common stock of the Company equal to the number of Series B-1 Preferred Units being redeemed multiplied by 1.00, plus, in each case, an amount equal to all dividends accrued and unpaid thereon.
Removed
The Company completed the acquisition of such tenant-in-common interest on September 7, 2023, for a purchase price of $1.3 million and LC2 made the additional $2.1 million capital contribution on September 11, 2023.
Added
On July 25, 2024, the Operating Partnership entered into First Amendments to the Second Amended and Restated Limited Liability Company Agreements, dated as of February 8, 2023, for each of the Norfolk, Virginia properties, GIPVA 2510 Walmer Ave, LLC and GIPVA 130 Corporate Blvd, LLC to revise the redemption date of Brown Family Enterprises, LLC membership interests from February 8, 2025 to February 8, 2027. • Corporate and Administrative On July 19, 2024, we determined that MaloneBailey LLP (“MaloneBailey”) would no longer serve as the Company’s independent registered public accounting firm and would be dismissed effective as of July 19, 2024.
Removed
The Preferred Interest has a cumulative accruing distribution preference of 15.5% per year, compounded monthly (the “Preferred Return”), a portion of which in the amount of 5% per annum, compounded monthly, is deemed to be a "Current Preferred Return", and the remainder of which in the amount of 10.5% per annum (compounded monthly) is deemed to be the “Accrued Preferred Return.” We must redeem the Preferred Interest by August 10, 2025, with two options to extend for an additional 12 months upon payment of an extension fee and an increased preferred rate of return of 18%.

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