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Medalist Diversified REIT, Inc.

Medalist Diversified REIT, Inc.MDRREarnings & Financial Report

Nasdaq · Real Estate · Real Estate Investment Trusts

Medalist Diversified REIT, Inc. is a publicly traded real estate investment trust focused on owning, operating, and acquiring income-generating multi-family residential properties. Its portfolio is concentrated in high-growth US Southeast and Mid-Atlantic markets, targeting stable long-term returns for shareholders via rental income and property appreciation.

What changed in Medalist Diversified REIT, Inc.'s 10-K — 2022 vs 2023

Top changes in Medalist Diversified REIT, Inc.'s 2023 10-K

501 paragraphs added · 549 removed · 364 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

204 edited+101 added−96 removed110 unchanged
During periods when the Operating Partnership’s noncontrolling interest changes, the noncontrolling ownership interest is calculated based on the weighted average Operating Partnership noncontrolling ownership interest during that period. The Operating Partnership’s net loss is allocated to the noncontrolling unit holders based on their ownership interest.
During periods when the Operating Partnership’s noncontrolling interest changes, the noncontrolling ownership interest is calculated based on the weighted average Operating Partnership noncontrolling ownership interest during that period. The Operating Partnership’s net loss is allocated to the noncontrolling Operating Partnership Unit holders based on their ownership interest.
ASU 2020-04 was issued to provide companies that are impacted by these changes with the opportunity to elect certain expedients and exceptions that are intended to ease the potential burden of accounting for or recognizing the effects of reference rate reform on financial reporting.
ASU 2020-04 was issued to provide companies impacted by these changes with the opportunity to elect certain expedients and exceptions that are intended to ease the potential burden of accounting for or recognizing the effects of reference rate reform on financial reporting.
Equity The Company has authority to issue 1,000,000,000 shares consisting of 750,000,000 shares of common stock, $0.01 par value per share ("Common Shares"), and 250,000,000 shares of preferred stock, $0.01 par value per share ("Preferred Shares"). Substantially all of the Company’s business is conducted through its Operating Partnership.
Equity The Company has authority to issue 1,000,000,000 shares consisting of 750,000,000 Common Shares, and 250,000,000 shares of preferred stock, $0.01 par value per share ("Preferred Shares"). Substantially all of the Company’s business is conducted through its Operating Partnership.
Limited partners in the Operating Partnership who have held their units for one year or longer have the right to redeem their common units for cash or, at the REIT’s option, Common Shares at a ratio of one common unit for one common share.
Limited partners in the Operating Partnership who have held their Operating Partnership Units for one year or longer have the right to redeem their common Operating Partnership Units for cash or, at the REIT’s option, Common Shares at a ratio of Operating Partnership Unit for one common share.
For purposes of calculating the asset management fee, the Company’s stockholders’ equity means: (a) the sum of (1) the net proceeds from (or equity value assigned to) all issuances of the Company’s equity and equity equivalent securities (including common stock, common stock equivalents, preferred stock and OP Units issued by the Company’s operating partnership) since inception (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), plus (2) the Company’s retained earnings at the end of the most recently completed calendar quarter (without taking into account any non-cash equity compensation expense incurred in current or prior periods), less (b) any amount that the Company has paid to repurchase its common stock issued in this or any subsequent offering.
For purposes of calculating the asset management fee, the Company’s stockholders’ equity means: (a) the sum of (1) the net proceeds from (or equity value assigned to) all issuances of the Company’s equity and equity equivalent securities (including common stock, common stock equivalents, preferred stock and Operating Partnership Units issued by the Company’s operating partnership) since inception (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), plus (2) the Company’s retained earnings at the end of the most recently completed calendar quarter (without taking into account any non-cash equity compensation expense incurred in current or prior periods), less (b) any amount that the Company has paid to repurchase its common stock issued in this or any subsequent offering.
On each January 1 during the term of the Equity Incentive Plan, the maximum number of shares of common stock that may be issued under the Equity Incentive Plan will increase by eight percent (8%) of any additional shares of common stock or interests in the Operating Partnership issued (i) after the completion date the Company’s initial registered public offering of common stock, in the case of the January 1, 2019 adjustment, or (ii) in the preceding calendar year, in the case of any adjustment subsequent to January 1, 2020.
On each January 1 during the term of the Equity Incentive Plan, the maximum number of Common Shares that may be issued under the Equity Incentive Plan will increase by eight percent (8%) of any additional Common Shares or interests in the Operating Partnership issued (i) after the completion date the Company’s initial registered public offering of Common Shares, in the case of the January 1, 2019 adjustment, or (ii) in the preceding calendar year, in the case of any adjustment subsequent to January 1, 2020.
The Company incurred $254,714 of acquisition and closing costs which were capitalized and added to the tangible assets acquired. ​ 77 Table of Contents ​ ​ ​ ​ ​ ​ ​ Salisbury ​ ​ ​ Marketplace ​ ​ Property Fair value of assets acquired: ​ ​ ​ Investment property (a) ​ $ 9,963,258 Lease intangibles and other assets (b) ​ ​ 1,045,189 Above market leases (b) ​ ​ 40,392 Below market leases (b) ​ ​ (769,125) Fair value of net assets acquired (c) ​ $ 10,279,714 ​ ​ ​ ​ Purchase consideration: ​ ​ ​ Consideration paid with cash (d) ​ $ 3,746,561 Consideration paid with new mortgage debt, net (e) ​ 6,533,153 Total consideration (f) ​ $ 10,279,714 a.
The Company incurred $254,714 of acquisition and closing costs which were capitalized and added to the tangible assets acquired. ​ 70 Table of Contents ​ ​ ​ ​ ​ ​ ​ Salisbury ​ ​ ​ Marketplace ​ ​ Property Fair value of assets acquired: ​ ​ ​ Investment property (a) ​ $ 9,963,258 Lease intangibles and other assets (b) ​ ​ 1,045,189 Above market leases (b) ​ ​ 40,392 Below market leases (b) ​ ​ (769,125) Fair value of net assets acquired (c) ​ $ 10,279,714 ​ ​ ​ ​ Purchase consideration: ​ ​ ​ Consideration paid with cash (d) ​ $ 3,746,561 Consideration paid with new mortgage debt, net (e) ​ 6,533,153 Total consideration (f) ​ $ 10,279,714 a.
The Company's credit loss in the event of failure of these financial institutions is represented by the difference between the FDIC limit and the total amounts on deposit. Management monitors the financial institutions credit worthiness in conjunction with balances on deposit to minimize risk.
The Company’s credit loss in the event of failure of these financial institutions’ is represented by the difference between the FDIC limit and the total amounts on deposit. Management monitors the financial institutions credit worthiness in conjunction with balances on deposit to minimize risk.
The mandatorily redeemable preferred stock is senior to the Company’s common stock and any class or series of capital stock expressly designated as ranking junior to the mandatorily redeemable preferred stock as to distribution rights and rights upon liquidation, dissolution or winding up (“Junior Stock”).
The mandatorily redeemable preferred stock is senior to the Company’s Common Shares and any class or series of capital stock expressly designated as ranking junior to the mandatorily redeemable preferred stock as to distribution rights and rights upon liquidation, dissolution or winding up (“Junior Stock”).
During the year ended December 31, 2022, a weighted average of 1.22 % of the Operating Partnership’s net loss of $1,651,829 , or $20,072 , was allocated to the noncontrolling unit holders.
During the year ended December 31, 2022, a weighted average of 1.22 % of the Operating Partnership’s net loss of $1,651,829 , or $20,072 , was allocated to the noncontrolling Operating Partnership Unit holders.
The Equity Incentive Plan permits the grant of stock options, stock appreciation rights, stock awards, performance units, incentive awards and other equity-based awards (including LTIP units of the Company’s Operating Partnership) to its employees or an affiliate (as defined in the Equity Incentive Plan) of the Company and for up to the greater of (i) 240,000 shares of common stock and (ii) eight percent (8)% of the number of fully diluted shares of the Company’s Common Shares (taking into account interests in the Operating Partnership that may become convertible into Common Shares).
The Equity Incentive Plan permits the grant of stock options, stock appreciation rights, stock awards, performance units, incentive awards and other equity-based awards (including LTIP units of the Company’s Operating Partnership) to its employees or an affiliate (as defined in the Equity Incentive Plan) of the Company and for up to the greater of (i) 30,000 Common Shares and (ii) eight percent (8)% of the number of fully diluted shares of the Company’s Common Shares (taking into account interests in the Operating Partnership that may become convertible into Common Shares).
As of December 31, 2022, the REIT, through the Operating Partnership, owned and operated eight properties, the Shops at Franklin Square, a 134,239 square foot retail property located in Gastonia, North Carolina (the “Franklin Square Property”), the Shops at Hanover Square North, a 73,440 square foot retail property located in Mechanicsville, Virginia (the “Hanover Square Property”), the Ashley Plaza Shopping Center, a 164,012 square foot retail property located in Goldsboro, North Carolina (the “Ashley Plaza Property”), Brookfield Center, a 64,880 square foot mixed-use industrial/office property located in Greenville, South Carolina (the “Brookfield Center Property”), the Lancer Center, a 181,590 square foot retail property located in Lancaster, South Carolina (the “Lancer Center Property”), the Greenbrier Business Center, an 89,280 square foot mixed-use industrial/office property located in Chesapeake, Virginia (the “Greenbrier Business Center Property "), the Parkway Property, a 64,109 square foot mixed-use industrial office property located in Virginia Beach, Virginia (the "Parkway Property") and the Salisbury Marketplace Shopping Center, a 79,732 square foot retail property located in Salisbury, North Carolina (the “Salisbury Marketplace Property”).
As of December 31, 2023, the REIT, through the Operating Partnership, owned and operated eight properties, including the Shops at Franklin Square, a 134,239 square foot retail property located in Gastonia, North Carolina (the “Franklin Square Property”), the Shops at Hanover Square North, a 73,440 square foot retail property located in Mechanicsville, Virginia (the “Hanover Square Property”), the Ashley Plaza Shopping Center, a 164,012 square foot retail property located in Goldsboro, North Carolina (the “Ashley Plaza Property”), Brookfield Center, a 64,880 square foot mixed-use industrial/office property located in Greenville, South Carolina (the “Brookfield Center Property”), the Lancer Center, a 181,590 square foot retail property located in Lancaster, South Carolina (the “Lancer Center Property”), the Greenbrier Business Center, an 89,280 square foot mixed-use industrial/office property located in Chesapeake, Virginia (the “Greenbrier Business Center Property”), the Parkway Property, a 64,109 square foot mixed-use industrial office property located in Virginia Beach, Virginia (the "Parkway Property”) and the Salisbury Marketplace Shopping Center, a 79,732 square foot retail property located in Salisbury, North Carolina (the “Salisbury Marketplace Property”).
The Company did not record any conditional asset retirement obligation liabilities during years ended December 31, 2022 and 2021, respectively. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash and cash equivalents. Cash equivalents are carried at cost, which approximates fair value.
The Company did not record any conditional asset retirement obligation liabilities during years ended December 31, 2023 and 2022, respectively. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash and cash equivalents. Cash equivalents are carried at cost, which approximates fair value.
The Wells Fargo Mortgage Facility credit agreement includes covenants to maintain a debt service coverage ratio of not less than 1.50 to 1.00 on an annual basis, a minimum debt yield of 9.5 % on the Salisbury Marketplace, Lancer Center and Greenbrier Business Center properties, and the maintenance of liquid assets of not less than $1,500,000 .
The Wells Fargo Mortgage Facility credit agreement includes covenants to maintain a debt service coverage ratio of not less than 1.50 to 1.00 on an annual basis, a minimum debt yield of 9.5% on the Salisbury Marketplace Property, the Lancer Center Property and the Greenbrier Business Center Property, and the maintenance of liquid assets of not less than $1,500,000 .
Standby Equity Purchase Agreement On November 17, 2021, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with a financing entity. Under this agreement, the Company will be able to sell up to $6,665,299 of its shares of common stock at the Company’s request any time during the 36 months following the execution of the SEPA.
Standby Equity Purchase Agreement On November 17, 2021, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with a financing entity. Under this agreement, the Company will be able to sell up to $6,665,299 of Common Shares at the Company’s request any time during the 36 months following the execution of the SEPA.
Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices.
Level 2 inputs are quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices.
The Company historically has not been and is not currently a “lessee” under any lease agreements, and thus did not have any arrangements requiring the recognition of lease assets or liabilities on its balance sheet. As a “lessor”, the Company has active lease agreements with over 100 tenants across its portfolio of investment properties.
The Company historically has not been and is not currently a “lessee” under any lease agreements, and thus did not have any arrangements requiring the recognition of lease assets or liabilities on its balance sheet. As a “lessor”, the Company has active lease agreements with over 125 tenants across its portfolio of investment properties.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was given one hundred and eighty (180) calendar days, or until January 9, 2023, to regain compliance with the Minimum Bid Price Requirement. ​ On January 10, 2023, the Company received a letter (the “Second Notification”) from Nasdaq notifying the Company that, while the Company had not regained compliance with the Minimum Bid Price Requirement, the Staff determined that the Company is eligible for an additional 180 calendar day period, or until July 10, 2023 (the “Second Compliance Period”), to regain compliance.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was given one hundred and eighty (180) calendar days, or until January 9, 2023, to regain compliance with the Minimum Bid Price Requirement. ​ On January 10, 2023, the Company received a letter (the “Second Notification”) from The Nasdaq Stock Market LLC notifying the Company that, while the Company had not regained compliance with the Minimum Bid Price Requirement, the Staff determined that the Company is eligible for an additional 180 calendar day period, or until July 10, 2023 (the “Second Compliance Period”), to regain compliance.
The shares would be purchased at 96.5% of the market price (as defined in the agreement) and would be subject to certain limitations, including that the financing entity could not purchase any shares that would result in it owning more than 4.99% of the Company’s common stock.
The shares would be purchased at 96.5% of the market price (as defined in the agreement) and would be subject to certain limitations, including that the financing entity could not purchase any shares that would result in it owning more than 4.99% of the Company’s outstanding Common Shares.
Warehouse space that is not air conditioned can be used flexibly by building office or showroom space that is air conditioned, depending on tenants’ needs. Net operating income ("NOI") is a non-GAAP financial measure and is not considered a measure of operating results or cash flows from operations under GAAP.
Warehouse space that is not air conditioned can be used flexibly by building office or showroom space that is air conditioned, depending on tenants’ needs. Net operating income (“NOI”) is a non-GAAP financial measure and is not considered a measure of operating results or cash flows from operations under GAAP.
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 2, 2020). 10.19 ​ Registration Rights Agreement, dated as of October 27, 2020, between Medalist Diversified REIT, Inc. and YA II PN, LTD.
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 2, 2020). 10.12 ​ Registration Rights Agreement, dated as of October 27, 2020, by and between Medalist Diversified REIT, Inc. and YA II PN, LTD.
The purchase price is allocated to the tangible and intangible assets identified in the evaluation. 65 Table of Contents The Company records depreciation on buildings and improvements utilizing the straight-line method over the estimated useful life of the asset, generally 4 to 42 years.
The purchase price is allocated to the tangible and intangible assets identified in the evaluation. 57 Table of Contents The Company records depreciation on buildings and improvements utilizing the straight-line method over the estimated useful life of the asset, generally 4 to 42 years.
The Company’s Parkway Property is financed by a mortgage loan with a corresponding interest rate protection agreement which both use USD LIBOR as the reference interest rate (see Note 5, below). The mortgage loan matures on November 1, 2031, and the interest rate protection agreement expires on December 1, 2026.
The Company’s Parkway Property is financed by a mortgage loan with a corresponding interest rate protection agreement which both used USD LIBOR as the reference interest rate (see Note 5, below). The mortgage loan matures on November 1, 2031, and the interest rate protection agreement expires on December 1, 2026.
The Company recorded this revenue as other income on the Company’s consolidated statements of operation for the year ended December 31, 2021. Upon early lease termination, any unrecovered intangibles and other assets are written off as a loss on impairment.
The Company recorded this revenue as other income on the Company’s consolidated statements of operation for the year ended December 31, 2023. Upon early lease termination, any unrecovered intangibles and other assets are written off as a loss on impairment.
The Company’s portfolio of properties is dependent upon regional and local economic conditions and is geographically concentrated in the Mid-Atlantic, specifically in South Carolina, North Carolina and Virginia, which represented 100% of the total annualized base revenues of the properties in its portfolio as of December 31, 2022.
The Company’s portfolio of properties is dependent upon regional and local economic conditions and is geographically concentrated in the Mid-Atlantic, specifically in South Carolina, North Carolina and Virginia, which represented 100% of the total annualized base revenues of the properties in its portfolio as of December 31, 2023.
Financial market regulators in certain jurisdictions throughout the world undertook reference rate reform initiatives to guide the transition and modification of debt agreements and other contracts that are based on LIBOR to the successor reference rate that will replace it.
Financial market regulators in certain jurisdictions throughout the world undertook reference rate reform initiatives to guide the transition and modification of debt agreements and other contracts that are based on LIBOR to the successor reference rate designated to replace it.
The third noncontrolling interest is in the Parkway Property in which the Company owns an 82% tenancy in common interest through its subsidiary and an outside party owns an 18% tenancy in common interest. The Parkway Property's net income (loss) is allocated to the noncontrolling ownership interest based on its 18% ownership.
The second noncontrolling interest is in the Parkway Property in which the Company owns an 82% tenancy in common interest through its subsidiary and an outside party owns an 18% tenancy in common interest. The Parkway Property's net income (loss) is allocated to the noncontrolling ownership interest based on its 18% ownership.
This amount is reported in accounts payable and accrued liabilities on the Company’s consolidated balance sheets. The mandatorily redeemable preferred stock was issued at $23.00 per share, a $2.00 per share discount. The total discount of $400,000 is being amortized over the five-year life of the shares using the effective interest method.
This amount is reported in accounts payable and accrued liabilities on the Company’s consolidated balance sheets. 72 Table of Contents The mandatorily redeemable preferred stock was issued at $23.00 per share, a $2.00 per share discount. The total discount of $400,000 is being amortized over the five-year life of the shares using the effective interest method.
The effective date of the grants was March 2, 2022. The Common Shares granted vest immediately and are unrestricted. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan.
The effective date of the grants was March 2, 2022. The Common Shares granted vested immediately and are unrestricted. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan.
The effective date of the grants was November 22, 2022. The Common Shares granted vest immediately and are unrestricted. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan.
The effective date of the grants was November 22, 2022. The Common Shares granted vested immediately and are unrestricted. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan.
A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. As of December 31, 2022 and 2021, the Company’s allowance for uncollectible rent totaled $47,109 and $13,010, respectively, which are comprised of amounts specifically identified based on management’s review of individual tenants’ outstanding receivables.
A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. As of December 31, 2023 and 2022, the Company’s allowance for uncollectible rent totaled $13,413 and $47,109, respectively, which are comprised of amounts specifically identified based on management’s review of individual tenants’ outstanding receivables.
The amendments in this update govern a number of areas including, but not limited to, accounting for leases, replacing the existing guidance in ASC No. 840, Leases .
The amendments in this update govern a number of areas including, but not limited to, accounting for leases, replacing the previous guidance in ASC No. 840, Leases .
In addition to those changes, ASU 73 Table of Contents 2020-06 adds several incremental financial statement disclosures with respect to a company’s convertible financial instruments and makes certain refinements with respect to calculating the effect of those instruments on a company’s diluted earnings per share.
In addition to those changes, ASU 2020-06 adds several incremental financial statement disclosures with respect to a company’s convertible financial instruments and makes certain refinements with respect to calculating the effect of those instruments on a company’s diluted earnings per share.
Upcoming Accounting Pronouncements Credit Losses on Financial Instruments ​ In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This update enhances the methodology of measuring expected credit losses to include the use of forward-looking information to better calculate credit loss estimates.
Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This update enhances the methodology of measuring expected credit losses to include the use of forward-looking information to better calculate credit loss estimates.
The mortgage loan agreement for the Hanover Square property includes covenants to (i) maintain a Debt Service Coverage Ratio (“DSCR”) in excess of 1.35 and (ii) maintain a loan-to-value of real estate ratio of 75 %. As of December 31, 2022 and 2021, respectively, the Company believes that it is compliant with these covenants.
The mortgage loan agreement for the Hanover Square property includes covenants to (i) maintain a Debt Service Coverage Ratio (“DSCR”) in excess of 1.35 and (ii) maintain a loan-to-value of real estate ratio of 75 %. As of December 31, 2022, the Company believes that it was compliant with these covenants.
The new mortgage includes covenants for the Company to maintain a net worth of $13,250,000 , excluding the assets and liabilities associated with the Franklin Square Property and for the Company to maintain liquid assets of no less than $1,000,000 . As of December 31, 2022 and 2021, the Company believes that it is compliant with these covenants.
The mortgage loan includes covenants for the Company to maintain a net worth of $ 13,250,000 , excluding the assets and liabilities associated with the Franklin Square Property and for the Company to maintain liquid assets of no less than $1,000,000 . As of December 31, 2023 and 2022, the Company believes that it is compliant with these covenants.
Environmental laws govern the presence, maintenance, and removal of hazardous materials in buildings, and if the Company does not comply with such laws, it could face fines for such noncompliance.
Environmental laws govern the presence, maintenance, and removal of hazardous materials in buildings, and if the Company does not comply with such laws, it could face fines 82 Table of Contents for such noncompliance.
As a REIT, certain tax laws limit the amount of “non-qualifying” income that Company can earn, including income derived directly from the operation of hotels. As a result, the Company leased its consolidated hotel properties to taxable REIT subsidiaries (“TRS”) for federal income tax purposes.
As a REIT, certain tax laws limit the amount of “non-qualifying” income that Company can earn, including income derived directly from the operation of hotels. As a result, the Company leased its consolidated hotel property to a taxable REIT subsidiary (“TRS”) for federal income tax purposes.
Management determined that no additional general reserve is considered necessary as of December 31, 2022 and 2021, respectively.
Management determined that no additional general reserve is considered necessary as of December 31, 2023 and 2022, respectively.
If both criteria are met, the combined component is accounted for in accordance with ASC No. 842 if the lease component is the predominant component of the combined component; otherwise, the combined component is accounted for in accordance with the revenue recognition standard.
If both criteria are met, the combined component is accounted for in accordance with ASC No. 842 if the lease component is the predominant component of the combined 65 Table of Contents component; otherwise, the combined component is accounted for in accordance with the revenue recognition standard.
Under the Agreement of Limited Partnership, distributions to unit holders are made at the discretion of the REIT. The REIT intends to make distributions in a manner that will result in limited partners of the Operating Partnership receiving distributions at the same rate per unit as dividends per share are paid to the REIT’s holders of Common Shares.
The REIT intends to make distributions in a manner that will result in limited partners of the Operating Partnership receiving distributions at the same rate per Operating Partnership Unit as dividends per share are paid to the REIT’s holders of Common Shares.
Elliott’s position, authority, duties or responsibilities with respect to services to the Company (or any successor); or (d) the Company (or any successor) commit a material breach of the Consulting Agreement and fail to cure such material breach within thirty (30) days after receiving written notice of such material breach; or (iii) the Consultant terminates, at the Company’s request, Mr.
Elliott’s position, authority, duties or responsibilities with respect to services to the Company (or any successor); or (d) the Company (or any successor) commits a material breach of the Consulting Agreement and fails to cure such material breach within thirty (30) days after receiving written notice of such material breach; or (iii) the Consultant terminates, at the Company’s (or any successor’s) request, Mr.
Attached as Exhibit 101 to this report are the following documents formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements. ​ 101 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ ​ ​ ​ MEDALIST DIVERSIFIED REIT, INC. ​ ​ ​ Date: March 10, 2023 By: /s/ Thomas E.
Attached as Exhibit 101 to this report are the following documents formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements. ​ 92 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ ​ ​ ​ MEDALIST DIVERSIFIED REIT, INC. ​ ​ ​ Date: March 6, 2024 By: /s/ Francis P.
The Company’s TRS subsidiaries entered into agreements with a third party to manage the operations of the hotel. The Company prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The Company’s TRS entered into an agreement with a third party to manage the operations of the hotel. The Company prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
As of December 31, 2022 and 2021, the Company reported $1,022,153 and $872,322, respectively, in unbilled rent. The Company’s leases generally require the tenant to reimburse the Company for a substantial portion of its expenses incurred in operating, maintaining, repairing, insuring and managing the shopping center and common areas (collectively defined as Common Area Maintenance or “CAM” expenses).
As of December 31, 2023 and 2022, the Company reported $1,109,782 and $1,022,153, respectively, in unbilled rent. The Company’s leases generally require the tenant to reimburse the Company for a substantial portion of its expenses incurred in operating, maintaining, repairing, insuring and managing the shopping center and common areas (collectively defined as Common Area Maintenance or “CAM” expenses).
The second noncontrolling interest is in the Hanover Square Property in which the Company owns an 84% tenancy in common interest through its subsidiary and an outside party owns a 16% tenancy in common interest. The Hanover Square Property’s net income (loss) is allocated to the noncontrolling ownership interest based on its 16% ownership.
The first noncontrolling interest is in the Hanover Square Property in which the Company owns an 84% tenancy in common interest through its subsidiary and an outside party owns a 16% tenancy in common interest. The Hanover Square Property’s net is allocated to the noncontrolling ownership interest based on its 16% ownership.
The Salisbury Marketplace Property, built in 1986, was 91.2% leased as of December 31, 2022, and is anchored by Food Lion, Citi Trends and Family Dollar. The purchase price for the Salisbury Marketplace Property was $10,025,000 paid through a combination of cash provided by the Company and the incurrence of new mortgage debt. The Company’s total investment was $10,279,714.
The Salisbury Marketplace Property, built in 1986, was 85.3% leased as of December 31, 2023, and is anchored by Food Lion, Citi Trends and Family Dollar. The purchase price for the Salisbury Marketplace Property was $10,025,000 paid through a combination of cash provided by the Company and the incurrence of new mortgage debt. The Company’s total investment was $10,279,714.
The proceeds of this mortgage were used to finance the acquisition of the Salisbury Marketplace Property and to refinance the mortgages payable on the Lancer Center Property and the Greenbrier Business Center Property (see notes (g) and (h), below). The Wells Fargo Mortgage Facility bears interest at a fixed rate of 4.50 % for a five-year term.
The proceeds of this mortgage were used to finance the acquisition of the Salisbury Marketplace Property and to refinance the mortgages payable on the Lancer Center Property and the Greenbrier Business Center Property. The Wells Fargo Mortgage Facility bears interest at a fixed rate of 4.50 % for a five-year term.
One half of the acquisition fees, or $251,955 was 93 Table of Contents paid in cash and one half of the acquisition fees was accrued in connection with the Deferral Agreement. The accrued portion of the acquisition fee is recorded under accounts payable and accrued liabilities on the Company’s consolidated balance sheets as of December 31, 2022 and 2021.
One half of the acquisition fees, or $251,955 was paid in cash and one half of the acquisition fees was accrued in connection with the Deferral Agreement. The accrued portion of the acquisition fee is recorded under accounts payable and accrued liabilities on the Company’s consolidated balance sheets as of December 31, 2023 and 2022.
Because the Common Shares vested immediately, the fair value of the grants, or $233,100, was recorded to share based compensation expense on the Company’s consolidated statements of operations on the effective date of the grant. The fair value of the grants was determined by the market price of the Company’s Common Shares on the effective date of the grant.
Because the Common Shares vested immediately, the fair value of the grants, or $233,100, was recorded to share based compensation expense on the Company’s consolidated statements of operations on the effective date of the grant.
Elliott remains employed by the Consultant and no Cause Event (as defined therein) has then occurred and the Consultant thereafter terminates, at the Company’s (or any successor’s) request, the employment of Mr. C.
Elliott remains employed by the Consultant and no Cause Event (as defined therein) has then occurred and the Consultant thereafter terminates, at the request of the Company (or any successor), the employment of Mr. C.
Noncontrolling Interests The ownership interests not held by the REIT are considered noncontrolling interests. There are four elements of noncontrolling interests in the capital structure of the Company. These noncontrolling interests have been reported in equity on the consolidated balance 71 Table of Contents sheets but separate from the Company’s equity.
Noncontrolling Interests The ownership interests not held by the REIT are considered noncontrolling interests. There are three elements of noncontrolling interests in the capital structure of the Company. These noncontrolling interests have been reported in equity on the consolidated balance sheets but separate from the Company’s equity.
(2) Excludes intangible assets and liabilities (see Note 2, above, for a discussion of the Company's accounting treatment of intangible assets), escrow deposits and property reserves. The Company’s depreciation expense on investment properties was $3,381,249 and $2,415,139 for the years ended December 31, 2022 and 2021, respectively .
(2) Excludes intangible assets and liabilities (see Note 2, above, for a discussion of the Company’s accounting treatment of intangible assets), escrow deposits and property reserves. The Company’s depreciation expense on investment properties was $3,683,815 and $3,381,249 for the years ended December 31, 2023 and 2022, respectively .
No incentive fees were earned or paid during the year ended December 31, 2022 or 2021. ​ Colin Elliott Effective as of March 1, 2020, the Company entered into a Consulting Agreement (the “Consulting Agreement”), with Gunston Consulting, LLC (the “Consultant”), pursuant to which the Consultant agreed to provide certain financial and accounting consulting services to the Company, and the Company agreed to pay the Consultant an annual fee and annual stock grants awarded by the Compensation Committee and agreed to reimburse the Consultant for certain expenses to be authorized by the Company.
No incentive fees were earned or paid during the year ended December 31, 2023 or 2022, or at any time during the term of the Management Agreement. ​ 84 Table of Contents Colin Elliott Effective as of March 1, 2020, the Company entered into a consulting agreement (the “Consulting Agreement”), with Gunston Consulting, LLC (the “Consultant”), pursuant to which the Consultant agreed to provide certain financial and accounting consulting services to the Company, and the Company agreed to pay the Consultant an annual fee and annual stock grants awarded by the Compensation Committee and agreed to reimburse the Consultant for certain expenses to be authorized by the Company.
Tenant security deposits are restricted cash balances held by the Company to offset potential damages, unpaid rent or other unmet conditions of its tenant leases. As of December 31, 2022 and 2021, the Company reported $267,854 and $222,265, respectively, in security deposits held as restricted cash.
Tenant security deposits are restricted cash balances held by the Company to offset potential damages, unpaid rent or other unmet conditions of its tenant leases. As of December 31, 2023 and 2022, the Company reported $260,898 and $267,854, respectively, in security deposits held as restricted cash.
If the Company fails to qualify as a REIT, it will be subject to tax at regular corporate rates for the years in which it fails to qualify.
If the 63 Table of Contents Company fails to qualify as a REIT, it will be subject to tax at regular corporate rates for the years in which it fails to qualify.
During the years ended December 31, 2022 and 2021, respectively, the Company recognized $311,116 and $113,493, in retail center and flex center property tenant reimbursement revenues resulting from differences between the final billed amounts and previously estimated recoveries.
During the years ended December 31, 2023 and 2022, respectively, the Company recognized $117,767 and $311,116, in retail center and flex center property tenant reimbursement revenues resulting from differences between the final billed amounts and previously estimated recoveries.
The REIT is the sole general partner of the Operating Partnership and owned a 98.81% and 98.69% interest in the Operating Partnership as of December 31, 2022 and 2021, respectively.
The REIT is the sole general partner of the Operating Partnership and owned a 98.81% interest in the Operating Partnership as of December 31, 2023 and 2022.
The London Interbank Offered Rate (LIBOR), which is widely used as a reference interest rate in debt agreements and other contracts, was effectively discontinued for new contracts as of December 31, 2021, and its publication for existing contracts is scheduled to be discontinued by June 30, 2023.
The London Interbank Offered Rate (LIBOR), which has been widely used as a reference interest rate in debt agreements and other contracts, was effectively discontinued for new contracts as of December 31, 2021, and its publication for existing contracts was discontinued as of June 30, 2023.
The noncontrolling interest ownership percentage will change as additional common or preferred shares are issued by the REIT, or additional Operating Partnerships units are issued or as units are exchanged for the Company’s $0.01 par value per share Common Stock.
The noncontrolling interest ownership percentage will change as additional common or preferred shares are issued by the REIT, or additional Operating Partnerships Units are issued or as Operating Partnership Units are exchanged for the Company’s $0.01 par value per share 64 Table of Contents Common Shares.
The Manager also receives an acquisition fee of 2.0% of the purchase price plus transaction costs, for each property acquired or investment made on the Company’s behalf at the closing of the acquisition of such property or investment, in consideration for the Manager’s assistance in effectuating such acquisition.
Prior to the termination of the Management Agreement, the Manager also received an acquisition fee of 2.0% of the purchase price plus transaction costs, for each property acquired or investment made on the Company’s behalf at the closing of the acquisition of such property or investment, in consideration for the Manager’s assistance in effectuating such acquisition.
No such impairment of assets held for sale was recorded during the year ended December 31, 2021. On September 29, 2022, the Company closed on the sale of the Clemson Best Western Hotel Property to an unaffiliated purchaser. See Note 3 for additional details.
On September 29, 2022, the Company closed on the sale of the Clemson Best Western Hotel Property to an unaffiliated purchaser. No such impairment of assets held for sale was recorded during the year ended December 31, 2023.
As of the years ended December 31, 2022 and 2021, respectively, 213,531 and 213,531 of the Operating Partnership’s 213,531 common units held by noncontrolling, limited partners were eligible to be converted, on a one-to-one basis, into Common Shares.
As of the years ended December 31, 2023 and 2022, respectively, all of the 26,691 Operating Partnership’s Units held by noncontrolling, limited partners were eligible to be converted, on a one-to-one basis, into Common Shares.
Amortization of the discount and deferred financing costs related to the mandatorily redeemable preferred stock totaling $222,881 and $204,383 were included in interest expense for the years ended December 31, 2022 and 2021, respectively, in the accompany ing consolidated statements of operations.
Amortization of the discount and deferred financing costs related to the mandatorily redeemable preferred stock totaling $243,054 and $222,881 was included in interest expense for the years ended December 31, 2023 and 2022, respectively, in the accompany ing consolidated statements of operations.
As of December 31, 2022 and 2021, respectively, there were 213,531 and 213,531 common units of the Operating Partnership held by noncontrolling, limited partners that were eligible for conversion to the Company’s Common Shares. 88 Table of Contents 2018 Equity Incentive Plan The Company’s 2018 Equity Incentive Plan (the “Equity Incentive Plan”) was adopted by the Board on July 27, 2018 and approved by the Company’s shareholders on August 23, 2018.
As of December 31, 2023 and 2022 there were 26,691 Operating Partnership Units held by noncontrolling, limited partners that were eligible for conversion to Common Shares. 2018 Equity Incentive Plan The Company’s 2018 Equity Incentive Plan (the “Equity Incentive Plan”) was adopted by the Board on July 27, 2018 and approved by the Company’s shareholders on August 23, 2018.
During the year ended December 31, 2022, 18% of the Parkway Property's net income of $105,972 or $19,076 was allocated to the noncontrolling ownership interest.
During the year ended December 31, 2023, 18% of the Parkway Property's net loss of $47,129 or $8,482 was allocated to the noncontrolling ownership interest. During the year ended December 31, 2022, 18% of the Parkway Property’s net income of $105,972 or $19,076, was allocated to the noncontrolling ownership interest.
Interest Rate Risk ​ The value of the Company’s real estate is subject to fluctuations based on changes in interest rates and fluctuations based on local and regional economic conditions and changes in the creditworthiness of lessees, all of which may affect the Company’s ability to refinance property-level mortgage debt when balloon payments are scheduled.
Interest Rate Risk ​ The value of the Company’s real estate is subject to fluctuations based on changes in interest rates which may affect the Company’s ability to refinance property-level mortgage debt when balloon payments are scheduled.
In 2017, 125,000 Operating Partnership units were issued to members of the selling LLC which owned the Hampton Inn Property who elected to participate in a 721 exchange, which allows the exchange of interests in real property for shares in a real estate investment trust.
In 2017, 15,625 Operating Partnership Units were issued to members of the selling limited liability company which owned the Hampton Inn Property who elected to participate in a 721 exchange, which allows the exchange of interests in real property for shares in a real estate investment trust.
Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. † 32.2 ​ Certification of Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. † 32.2 ​ Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. † 97.1 ​ Medalist Diversified REIT, Inc.
Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. † 101.INS ​ Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL † 100 Table of Contents 101.SCH ​ Inline XBRL Taxonomy Extension Schema Document † 101.CAL ​ Inline XBRL Taxonomy Extension Calculation Linkbase Document † 101.DEF ​ Inline XBRL Taxonomy Extension Definition Linkbase Document † 101.LAB ​ Inline XBRL Taxonomy Extension Labels Linkbase Document † 101.PRE ​ Inline XBRL Taxonomy Extension Presentation Linkbase Document † 104 ​ Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) † † Filed herewith. * Previously filed with the Amendment to the Registrant’s Registration Statement on Form S-11 filed by the Registrant with the Securities and Exchange Commission on October 5, 2018.
Clawback Policy, effective October 2, 2023. † 101.INS ​ Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL † 101.SCH ​ Inline XBRL Taxonomy Extension Schema Document † 101.CAL ​ Inline XBRL Taxonomy Extension Calculation Linkbase Document † 101.DEF ​ Inline XBRL Taxonomy Extension Definition Linkbase Document † 101.LAB ​ Inline XBRL Taxonomy Extension Labels Linkbase Document † 91 Table of Contents 101.PRE ​ Inline XBRL Taxonomy Extension Presentation Linkbase Document † 104 ​ Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) † † Filed herewith. * Previously filed with the Amendment to the Registrant’s Registration Statement on Form S-11 filed by the Registrant with the Securities and Exchange Commission on October 5, 2018.
Mandatorily Redeemable Preferred Stock On February 19, 2020, the Company issued and sold 200,000 shares of 8.0% Series A cumulative redeemable preferred stock at $23.00 per share, resulting in gross proceeds of $4,600,000 .
Represents the consideration paid for the fair value of the assets and liabilities acquired. ​ ​ ​ ​ 4. Mandatorily Redeemable Preferred Stock On February 19, 2020, the Company issued and sold 200,000 shares of 8.0% Series A cumulative redeemable preferred stock at $23.00 per share, resulting in gross proceeds of $4,600,000 .
Messier ​ ​ Thomas E. Messier ​ ​ Chief Executive Officer and Chairman of the Board ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. ​ Name Title Date /s/ Thomas E.
Kavanaugh ​ ​ Francis P. Kavanaugh ​ ​ President and Chief Executive Officer ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. ​ Name Title Date /s/ Francis P.
Both are recorded as a component of investment properties on the Company’s consolidated balance sheets. Depreciation expense on both categories of tenant improvements is recorded as a component of depreciation expense on the Company’s consolidated statement of operations. The Company generally records depreciation of capitalized tenant improvements on a straight-line basis over the terms of the related leases.
Depreciation expense on both categories of tenant improvements is recorded as a component of depreciation expense on the Company’s consolidated statement of operations. ​ 68 Table of Contents The Company generally records depreciation of capitalized tenant improvements on a straight-line basis over the terms of the related leases.
The Wells Fargo Line of Credit has a one-year, renewable term, is unconditionally guaranteed by the Company, and any outstanding balances are secured by the Lancer Center Property, the Greenbrier Business Center Property and the Salisbury Marketplace Property.
The Wells Fargo Line of Credit is secured by the Lancer Center Property, the Greenbrier Business Center Property and the Salisbury Marketplace Property, has a one-year term, is unconditionally guaranteed by the Company, and any outstanding balances are due on the June 9, 2024 maturity date.
Intangible Assets and Liabilities, net The Company determines, through the ASC 805 evaluation, the above and below market lease intangibles upon acquiring a property.
See Note 3 for additional details. ​ Intangible Assets and Liabilities, net The Company determines, through the ASC 805 evaluation, the above and below market lease intangibles upon acquiring a property.
The Fair Value of the Interest Rate Protection Transaction is valued by an independent, third-party consultant which uses observable inputs such as yield curves, volatilities and other current market data, all of which are considered Level 2 inputs. As of December 31, 2022 and 2021, the fair value of the interest Rate Protection Transaction was $258,279 and $37,350, respectively.
The fair value of the Interest Rate Protection Transaction is valued by an independent, third-party consultant which uses observable inputs such as yield curves, volatilities and other current market data, all of which are considered Level 2 inputs.
The TRS subsidiaries were subject to income tax and were not limited as to the amount of nonqualifying income they could generate, but the Company’s TRS subsidiaries were limited in terms of their value as a percentage of the total value of the Company’s assets.
The Company’s TRS was subject to income tax and was not limited as to the amount of nonqualifying income it could generate, but the Company’s TRS was limited in terms of its value as a percentage of the total value of the Company’s assets.
During the year ended December 31, 2022 , the Company's Clemson Best Western TRS entity generated a taxable loss, so no income tax expense was recorded. During the year ended December 31, 2021 , the Company's Clemson Best Western TRS entity generated taxable income.
During the year ended December 31, 2022 , the Company's Clemson Best Western TRS entity generated a taxable loss, so no income tax expense was recorded. During the year ended December 31, 2023 , the Company no longer owned the Clemson Best Western Hotel Property.
Currently, the Company does not have any conditional asset retirement obligations. However, any such obligations identified in the future would result in the Company recording a liability if the fair value of the obligation can be reasonably estimated.
However, any such obligations identified in the future would result in the Company recording a liability if the fair value of the obligation can be reasonably estimated.
These members of the selling LLC invested $1,175,000 in the Operating Partnership in exchange for 125,000 Operating Partnership units. Additionally, as discussed above, effective on January 1, 2020, 93,850 Operating Partnership units were issued in exchange for approximately 3.45% of the noncontrolling owner’s tenant in common interest in the Hampton Inn Property.
These members of the selling limited liability company invested $1,175,000 in the Operating Partnership in exchange for 15,625 Operating Partnership Units. Additionally, as discussed above, effective on January 1, 2020, 11,731 Operating Partnership Units were issued in exchange for approximately 3.45% of the noncontrolling owner’s tenant in common interest in the Hampton Inn Property.

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Item 2. Properties

Properties — owned and leased real estate

66 edited+6 added−4 removed35 unchanged
Brookfield Center Property On October 3, 2019, we purchased from Appian-Brookfield South 48, LLC, a South Carolina limited liability company and unaffiliated seller, Brookfield Center, a 64,880 square foot flex-industrial property located at 48 Brookfield Center Drive, Greenville, 12 Table of Contents South Carolina 29607, or the Brookfield Center Property, for $6,700,000.
Brookfield Center Property On October 3, 2019, we purchased from Appian-Brookfield South 48, LLC, a South Carolina limited liability company and 12 Table of Contents unaffiliated seller, Brookfield Center, a 64,880 square foot flex-industrial property located at 48 Brookfield Center Drive, Greenville, South Carolina 29607, or the Brookfield Center Property, for $6,700,000.
The average annual rent per square foot is based on rents from the prior owner for period from January, 2021 through May, 2021 and on rents from our ownership period from June, 2021 through December, 2021.
The average annual rent per square foot is based on rents from the prior owner for the period from January, 2021 through May, 2021 and on rents from our ownership period from June, 2021 through December, 2021.
Lancer Center Property On May 14, 2021, we purchased from BVC Lancer, LLC, a South Carolina limited liability company and unaffiliated seller, Lancer Center, a 181,590 square foot retail property located at 1256 SC-9 By Pass West, Lancaster, South Carolina, 29720, or the Lancer Center Property, for $10,100,000 exclusive of closing costs and a $200,000 credit to our company for major repairs.
Lancer Center Property On May 14, 2021, we purchased from BVC Lancer, LLC, a South Carolina limited liability company and unaffiliated seller, Lancer Center, a 181,590 square foot retail property located at 1256 SC-9 By Pass West, Lancaster, South Carolina, 29720, or the Lancer Center Property, for $10,100,000 exclusive of closing costs and a $200,000 credit to us for major repairs.
For the years ending December 31, 2018, 2019 and 2020, data is from the prior owner. For the year ended December 31, 2021, we owned Lancer Center for seven months.
For the years ending December 31, 2019 and 2020, data is from the prior owner. For the year ended December 31, 2021, we owned Lancer Center for seven months.
The property is a three-lot one-floor strip retail shopping center totaling approximately 73,441 square feet of net leasable area. The building is concrete slab with floor coverings consisting of a mixture of vinyl tile and carpeting. The exterior walls are masonry with brick veneer and EIFS at front and painted concrete block sides and rear.
The property is a three-lot one-floor strip retail shopping center totaling approximately 73,440 square feet of net leasable area. The building is concrete slab with floor coverings consisting of a mixture of vinyl tile and carpeting. The exterior walls are masonry with brick veneer and EIFS at front and painted concrete block sides and rear.
Salisbury Marketplace Property On June 13, 2022, we purchased from FCC Salisbury Marketplace, LC, a Virginia limited liability company and unaffiliated seller, a 79,732 square foot retail property located on 9.83 acres at 2106 Statesville Boulevard, Salisbury, North Carolina, or the Salisbury Marketplace Property, for $10,025,000 exclusive of closing costs.
Salisbury Marketplace Property On June 13, 2022, we purchased from FCC Salisbury Marketplace, LLC, a Virginia limited liability company and unaffiliated seller, a 79,732 square foot retail property located on 9.83 acres at 2106 Statesville Boulevard, Salisbury, North Carolina, or the Salisbury Marketplace Property, for $10,025,000 exclusive of closing costs.
The Initial Greenbrier Business Center Loan bore interest at a fixed rate of 4.0% and required monthly interest only payments during the first 12 months of its term. The Initial Greenbrier Business Center Loan would have matured on July 1, 2026.
The Initial Greenbrier Business Center Loan bore interest at a fixed rate of 4.00% and required monthly interest only payments during the first 12 months of its term. The Initial Greenbrier Business Center Loan would have matured on July 1, 2026.
The Original Franklin Square Loan required monthly interest only payments during its term and bore interest at a fixed rate of 4.7%. The original October, 2021 maturity date was extended until November, 2021.
The Original Franklin Square Loan required monthly interest only payments during its term and bore interest at a fixed rate of 4.70%. The original October, 2021 maturity date was extended until November, 2021.
The Brookfield Center Property was built in 2007, was 100% leased as of December 31, 2022, and is anchored by the Gravitopia Trampoline Park, S&ME, Inc., and Turning Point Greenville Church.
The Brookfield Center Property was built in 2007, was 100% leased as of December 31, 2023, and is anchored by the Gravitopia Trampoline Park, S&ME, Inc., and Turning Point Greenville Church.
The Greenbrier Business Center Property On August 27, 2021, we purchased from Medalist Fund II-B, LLC, a Virginia limited liability company, which was also managed by our company’s external manager, the Greenbrier Business Center Property, located at 1244 Executive Boulevard, Chesapeake, Virginia, 23320, for $7,250,000.
The Greenbrier Business Center Property On August 27, 2021, we purchased from Medalist Fund II-B, LLC, a Virginia limited liability company, which was also managed by the Manager, the Greenbrier Business Center Property, located at 1244 Executive Boulevard, Chesapeake, Virginia, 23320, for $7,250,000.
We acquired the Parkway Property with $2,138,795 in cash from us, $469,492 in cash from an unaffiliated tenant-in-common, and net mortgage loan proceeds of approximately $4,989,737, or the Parkway Property Loan. Our company purchased the Parkway Property as a tenant-in-common with PMI Parkway, LLC, an unaffiliated party.
We acquired the Parkway Property with $2,138,795 in cash from us, $469,492 in cash from an unaffiliated tenant-in-common, and net mortgage loan proceeds of approximately 16 Table of Contents $4,989,737, or the Parkway Property Loan. Our company purchased the Parkway Property as a tenant-in-common with PMI Parkway, LLC, an unaffiliated party.
The Hanover Square Property Loan requires monthly payments of principal, on a 25-year amortization schedule, and interest during the term. On May 8, 2020, our company entered into a refinancing transaction with the mortgage lender for the Hanover Square Property which increased the mortgage amount and reduced the interest rate.
The Hanover Square Property Loan requires monthly payments of principal, on a 25-year amortization schedule, and interest during the term. On May 8, 2020, we entered into a refinancing transaction with the mortgage lender for the Hanover Square Property which increased the mortgage amount and reduced the interest rate.
The Lancer Center Property was built in 1987, was 100% leased as of December 31, 2022, and is anchored by Badcock Furniture, KJ’s Market and Big Lots.
The Lancer Center Property was built in 1987, was 100% leased as of December 31, 2023, and is anchored by Badcock Furniture, KJ’s Market and Big Lots.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s 2022 projected rent. Parkway Property On November 1, 2021, we acquired an undivided 82% tenant-in-common interest in the Parkway Property from Continental Parkway, LLC, a Virginia limited liability company and unaffiliated seller.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2023 rent. Parkway Property On November 1, 2021, we acquired an undivided 82% tenant-in-common interest in the Parkway Property from Continental Parkway, LLC, a Virginia limited liability company and unaffiliated seller.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2022 rent.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2023 rent.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2022 rent.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2023 rent.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2022 rent.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2023 rent.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2022 rent.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2023 rent.
Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 2019 2018 Average Effective Annual Rent Per Square Foot (1) ​ $ 6.83 ​ $ 6.65 ​ $ 5.79 ​ $ 6.30 ​ $ 6.80 (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements or rent deferrals.
Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 2020 2019 Average Effective Annual Rent Per Square Foot (1) ​ $ 7.79 ​ $ 6.83 ​ $ 6.65 ​ $ 5.79 ​ $ 6.30 ​ (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements or rent deferrals.
As of December 31, 2022, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2022 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Ashley Furniture Retail 34,682 25.8 % $ 277,457 12/31/2025 12/31/2030 12/31/2035 Altitude Trampoline Park Entertainment 30,000 22.4 % 270,000 7/31/2029 7/31/2034 7/31/2039 7/31/2044 ​ Occupancy data for the five preceding years (as of December 31, unless otherwise noted) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 2019 2018 Occupancy Rate 93.2 % 81.2 % 82.3 % 92.4 % 92.5 % ​ Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 2020 2019 2018 Average Effective Annual Rent Per Square Foot (1) ​ $ 12.09 ​ $ 11.72 ​ $ 12.67 ​ $ 13.47 ​ $ 11.98 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements or rent deferrals.
As of December 31, 2023, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2023 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Ashley Furniture Retail 34,682 25.8 % $ 277,456 12/31/2025 12/31/2030 12/31/2035 Altitude Trampoline Park Entertainment 30,000 22.4 % 270,000 7/31/2029 7/31/2034 7/31/2039 7/31/2044 ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 2020 2019 Occupancy Rate 98.6 % 93.2 % 81.2 % 82.3 % 92.4 % ​ Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 2021 2020 2019 Average Effective Annual Rent Per Square Foot (1) ​ $ 13.27 ​ $ 12.09 ​ $ 11.72 ​ $ 12.67 ​ $ 13.47 (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements or rent deferrals.
On November 8, 2021, we refinanced the Original Franklin Square Loan with a new mortgage loan in the principal amount of $13,250,000 (the Franklin Square Loan) and cash of $2,292,273. 8 Table of Contents The Franklin Square Loan matures on December 6, 2031 and bears interest at a fixed rate of 3.808%.
On November 8, 2021, we refinanced the Original Franklin Square Loan with a new mortgage loan in the principal amount of $13,250,000 (the “Franklin Square Loan”) and cash of $2,292,273. The Franklin Square Loan matures on December 6, 2031 and bears interest at a fixed rate of 3.808%.
As of December 31, 2022, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2022 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Old Navy Retail 15,000 20.4 % $ 229,650 4/30/2024 4/30/2029 Marshall’s Retail 28,000 38.1 % $ 336,000 2/28/2027 2/28/2032 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2/28/2037 ​ 10 Table of Contents Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 2020 2019 2018 ​ Occupancy Rate 100.0 % 100.0 % 100.0 % 100.0 % 97.0 % ​ Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 2019 2018 Average Effective Annual Rent Per Square Foot (1) ​ $ 15.71 ​ $ 13.99 ​ $ 14.59 ​ $ 15.31 ​ $ 14.71 (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements.
As of December 31, 2023, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2023 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Old Navy Retail 15,000 20.4 % $ 229,650 4/30/2029 None Marshall’s Retail 28,000 38.1 % $ 336,000 2/28/2027 2/28/2032 2/28/2037 ​ ​ 10 Table of Contents Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 2021 2020 2019 ​ Occupancy Rate 96.7 % 100.0 % 100.0 % 100.0 % 100.0 % ​ Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 2020 2019 Average Effective Annual Rent Per Square Foot (1) ​ $ 16.03 ​ $ 15.71 ​ $ 13.99 ​ $ 14.59 ​ $ 15.31 ​ (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements.
Although we sold our interest in the Clemson Best Western Hotel Property on September 29, 2022, for the years ended December 31, 2022 and 2021, we continue to include hotel properties as a third reportable segment. ​ ​ ​ ​ ​ Name Type Description Franklin Square Property ​ Retail ​ 134,239 square foot retail property located at 3940 East Franklin Boulevard in Gastonia, North Carolina 28056, on 10.293 acres, built in 2006 and 2007, that is 93.2% leased as of December 31, 2022 and anchored by Ashley Furniture and Altitude. ​ ​ ​ ​ ​ Hanover Square Property ​ Retail ​ 73,441 square foot retail property located at 7230 Bell Creek Road in Mechanicsville, Virginia 23111, on 9.630 acres, built in 2007, that is 100% leased as of December 31, 2022 and anchored by Marshalls and Old Navy. ​ ​ ​ ​ ​ Ashley Plaza Property ​ Retail ​ 164,012 square foot retail property located at 201–221 North Berkeley Boulevard in Goldsboro, North Carolina 27534, built in 1977 and fully renovated in 2018, that is 100% leased as of December 31, 2022, and is anchored by Hobby Lobby, Harbor Freight, Ashley Home Store and Planet Fitness. ​ ​ ​ ​ ​ Brookfield Center Property ​ Flex ​ 64,880 square foot flex-industrial property located at 48 Brookfield Center Drive, Greenville, South Carolina 29607, built in 2007, that is 100% leased as of December 31, 2022, and is anchored by Gravitopia Trampoline Park, S&ME, Inc., and Turning Point Greenville Church. ​ ​ ​ ​ ​ Lancer Center Property ​ Retail ​ 181,590 square foot retail property located at 1256 Highway 9 Bypass West, Lancaster, South Carolina, 29270, built in 1987 and substantially renovated in 2013, that is 100% leased as of December 31, 2022, and is anchored by Badcock Furniture, KJ’s Market and Big Lots. ​ ​ ​ ​ ​ Greenbrier Business Center Property ​ Flex ​ 89,290 square foot flex-industrial property located at 1244 Executive Boulevard, Chesapeake, Virginia, 23320, built in 1987 that is 79.9% leased as of December 31, 2022 and is anchored by Bridge Church. ​ ​ ​ ​ ​ Parkway Property ​ Flex ​ 64,109 square foot, two building flex-industrial property located at 2697 International Parkway, Virginia Beach, Virginia 23452, built in 1984 that is 100% leased as of December 31, 2022 and is anchored by GBRS Group and First Onsite. ​ ​ ​ ​ ​ Salisbury Marketplace Property ​ Retail ​ 79,732 square foot retail property located at 2106 Statesville Boulevard, Salisbury, North Carolina 28147, built in 1987, that is 91.2% leased as of December 31, 2022 and is anchored by Food Lion, CitiTrends and Family Dollar. ​ Franklin Square Property On April 28, 2017, we purchased from Medalist Fund I, LLC, a Virginia limited liability company, which was also managed by our company’s external manager, the Franklin Square Property through a wholly owned subsidiary.
Although we sold our interest in the Clemson Best Western Hotel Property on September 29, 2022, for the year ended December 31, 2022, we continue to include hotel properties as a third reportable segment. ​ ​ ​ ​ ​ Name Type Description Franklin Square Property ​ Retail ​ 134,239 square foot retail property located at 3940 East Franklin Boulevard in Gastonia, North Carolina 28056, on 10.293 acres, built in 2006 and 2007, that is 98.6% leased as of December 31, 2023 and anchored by Ashley Furniture and Altitude. ​ ​ ​ ​ ​ Hanover Square Property ​ Retail ​ 73,440 square foot retail property located at 7230 Bell Creek Road in Mechanicsville, Virginia 23111, on 9.630 acres, built in 2007, that is 96.7% leased as of December 31, 2023 and anchored by Marshalls and Old Navy. ​ ​ ​ ​ ​ Ashley Plaza Property ​ Retail ​ 164,012 square foot retail property located at 201–221 North Berkeley Boulevard in Goldsboro, North Carolina 27534, built in 1977 and fully renovated in 2018, that is 98.0% leased as of December 31, 2023, and is anchored by Hobby Lobby, Harbor Freight, Ashley Home Store and Planet Fitness. ​ ​ ​ ​ ​ Brookfield Center Property ​ Flex ​ 64,880 square foot flex-industrial property located at 48 Brookfield Center Drive, Greenville, South Carolina 29607, built in 2007, that is 100% leased as of December 31, 2023, and is anchored by Gravitopia Trampoline Park, S&ME, Inc., and Turning Point Greenville Church. ​ ​ ​ ​ ​ Lancer Center Property ​ Retail ​ 181,590 square foot retail property located at 1256 Highway 9 Bypass West, Lancaster, South Carolina, 29270, built in 1987 and substantially renovated in 2013, that is 100% leased as of December 31, 2023, and is anchored by Badcock Furniture, KJ’s Market and Big Lots. ​ ​ ​ ​ ​ Greenbrier Business Center Property ​ Flex ​ 89,280 square foot flex-industrial property located at 1244 Executive Boulevard, Chesapeake, Virginia, 23320, built in 1987 that is 95.1% leased as of December 31, 2023 and is anchored by Bridge Church. ​ ​ ​ ​ ​ Parkway Property ​ Flex ​ 64,109 square foot, two building flex-industrial property located at 2697 International Parkway, Virginia Beach, Virginia 23452, built in 1984 that is 100% leased as of December 31, 2023 and is anchored by GBRS Group and First Onsite. ​ ​ ​ ​ ​ Salisbury Marketplace Property ​ Retail ​ 79,732 square foot retail property located at 2106 Statesville Boulevard, Salisbury, North Carolina 28147, built in 1987, that is 85.3% leased as of December 31, 2023 and is anchored by Food Lion, CitiTrends and Family Dollar. ​ Franklin Square Property On April 28, 2017, we purchased from Medalist Fund I, LLC, a Virginia limited liability company, which was also managed by the Manager, the Franklin Square Property through a wholly owned subsidiary.
Average effective rent per square foot for 2018 through 2021 are based on rents from the prior owner.
Average effective rent per square foot for 2019 through 2021 are based on rents from the prior owner.
As of December 31, 2022, we had the following reportable segments: (i) retail center properties, consisting of the Franklin Square Property, an undivided 84% tenant-in-common interest in the Hanover Square Property, the Ashley Plaza Property, the Lancer Center Property and the Salisbury Marketplace Property; and (ii) flex center properties, consisting of the Brookfield Center Property, Greenbrier Business Center Property and an undivided 82% tenant-in-common interest in the Parkway 7 Table of Contents Property.
As of December 31, 2023, we had the following reportable segments: (i) retail center properties, consisting of the Franklin Square Property, an undivided 84% tenant-in-common interest in the Hanover Square Property, the Ashley Plaza Property, the Lancer Center Property and the Salisbury Marketplace Property; and (ii) flex center properties, consisting of the Brookfield Center Property, the Greenbrier Business Center Property and an undivided 82% tenant-in-common interest in the Parkway Property.
The property is comprised of (i) an approximately 73,441 square foot retail center located on 8.766 acres of land at 7230 Bell Creek Road in Mechanicsville, Virginia 23111 and (ii) a contiguous, undeveloped parcel of land totaling 0.864 acres. We refer to both parcels herein as the Hanover Square Property.
The property is comprised of (i) an approximately 73,440 square foot retail center located on 8.766 acres of land at 7230 Bell Creek Road in Mechanicsville, Virginia 23111 (the “Hanover Square Shopping Center Property”) and (ii) a contiguous, undeveloped parcel of land totaling 0.864 acres (the “Hanover Square Outparcel”). We refer to both parcels herein as the Hanover Square Property.
Ashley Plaza Property On August 30, 2019, we purchased from RCG-Goldsboro, LLC, a Georgia limited liability company and unaffiliated seller, Ashley Plaza, a 164,012 square foot retail property located at 201–221 North Berkeley Boulevard in Goldsboro, North Carolina 27534, or the Ashley Plaza Property, for $15,200,000.
LLC’s undivided 16% interest in the Hanover Square Outparcel. Ashley Plaza Property On August 30, 2019, we purchased from RCG-Goldsboro, LLC, a Georgia limited liability company and unaffiliated seller, Ashley Plaza, a 164,012 square foot retail property located at 201–221 North Berkeley Boulevard in Goldsboro, North Carolina 27534, or the Ashley Plaza Property, for $15,200,000.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s 2022 rent.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2023 rent.
The monthly payment, which includes interest at the fixed rate, and principal, based on a twenty-five-year amortization schedule, is $103,438. Our company has provided an unconditional guaranty of the payment of and performance under the terms of the Wells Fargo Mortgage Facility.
The monthly payment, which includes interest at the fixed rate, and principal, based on a twenty-five-year amortization schedule, is $103,438. We have provided an unconditional guaranty of the payment of and performance under the terms of the Wells Fargo Mortgage Facility.
The Salisbury Marketplace Property was built in 1987, was 91.2% leased as of December 31, 2022, and is anchored by Food Lion, CitiTrends and Family Dollar. The purchase price and closing costs for the Lancer Center Property were financed with $3,746,561 in equity and net mortgage loan proceeds of $6,533,153 from the Wells Fargo Mortgage Facility (see below).
The Salisbury Marketplace Property was built in 1987, was 85.3% leased as of December 31, 2023, and is anchored by Food Lion, CitiTrends and Family Dollar. The purchase price and closing costs for the Salisbury Marketplace Property were financed with $3,746,561 in equity and net mortgage loan proceeds of $6,533,153 from the Wells Fargo Mortgage Facility (see below).
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2022 rent. Wells Fargo Mortgage Facility ​ On June 13, 2022, our company entered into a mortgage loan facility with Wells Fargo Bank in the principal amount of $18,609,500.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2023 rent. ​ 19 Table of Contents Wells Fargo Mortgage Facility ​ On June 13, 2022, we entered into a mortgage loan facility with Wells Fargo Bank in the principal amount of $18,609,500.
Our company purchased the Hanover Square Property as a tenant-in-common with PMI Hanover Square, LLC, an unaffiliated party. Our company acquired an 84% interest in the Hanover Square Property, and PMI Hanover Square, LLC owns the remaining 16% interest.
We purchased the Hanover Square Property as a tenant-in-common with PMI Hanover Sq. LLC, an unaffiliated party. We acquired an 84% interest in the Hanover Square Property, and PMI Hanover Sq. LLC owns the remaining 16% interest.
The Franklin Square Loan may not be prepaid prior to its maturity, but our company has the right to initiate a defeasance according to the terms of the loan agreement. Our company has agreed to guarantee all amounts due under the Franklin Square Loan.
The Franklin Square Loan may not be prepaid prior to its maturity, but our company has the right to initiate a defeasance according to the terms of the loan agreement. We have guaranteed all amounts due under the Franklin Square Loan.
The retail center forming a part of the Hanover Square Property was built in 2007 and, as of December 31, 2022, was 100% leased. We assumed the Hanover Square Property Loan as of the closing of the acquisition. The Hanover Square Property Loan matures on December 1, 2027.
The retail center forming a part of the Hanover Square Property was built in 2007 and, as of December 31, 2023, was 96.7% leased. We assumed the Hanover Square Property Loan as of the closing of the acquisition. The Hanover Square Property Loan matures on December 1, 2027.
The Ashley Plaza Property was built in 1977, fully renovated in 2018, was 100% leased as of December 31, 2022, and is anchored by Hobby Lobby, Harbor Freight, Ashley Home Store and Planet Fitness.
The Ashley Plaza Property was built in 1977, fully renovated in 2018, was 98.0% leased as of December 31, 2023, and is anchored by Hobby Lobby, Harbor Freight, Ashley Home Store and Planet Fitness.
Our company entered into an Interest Rate Protection Transaction to limit our exposure to increases in interest rates on the variable rate mortgage loan on the Parkway Property. Under this agreement, our company’s interest rate exposure is capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3%.
The Parkway Property Loan matures on October 31, 2031. ​ We entered into an Interest Rate Protection Transaction to limit our exposure to increases in interest rates on the variable rate mortgage loan on the Parkway Property. Under this agreement, our interest rate exposure is capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3%.
The floor is a reinforced concrete slab-on-grade. The building superstructure consists of concrete tilt-up panels with steel columns and steel stud infill walls. The roof is flat and consists of a single ply thermoplastic polyolefin (TPO) membrane. Parking is available for two hundred and seventy-three (273) automobiles on asphalt-paved parking areas, including 12 ADA accessible spaces.
The building superstructure consists of concrete tilt-up panels with steel columns and steel stud infill walls. The roof is flat and consists of a single ply thermoplastic polyolefin (TPO) membrane. Parking is available for 273 automobiles on asphalt-paved parking areas, including 12 ADA accessible spaces.
We entered into related party notes, short term, with the Manager by which the Manager provided an aggregate of $263,000 to fund a portion of our company’s acquisition of the Brookfield Center Property. The notes were due on demand and bore interest at a rate of 5% annually.
We entered into related party notes, short term, with the Manager by which the Manager provided an aggregate of $263,000 to fund a portion of our acquisition of the Brookfield Center Property. The notes were due on demand and bore interest at a rate of 5.00% annually. On February 20, 2020, we repaid these related party notes payable, short term.
The Franklin Square Property, built in 2006 and 2007, was 93.2% leased as of December 31, 2022, is anchored by Ashley Furniture, and Altitude Trampoline Park, and is located in Gastonia, North Carolina. The Original Franklin Square Loan was made on February 10, 2016 in the principal amount of $14,275,000 and assumed by us at acquisition.
The Franklin Square 8 Table of Contents Property, built in 2006 and 2007, was 98.6% leased as of December 31, 2023, is anchored by Ashley Furniture, and Altitude Trampoline Park, and is located in Gastonia, North Carolina. The Original Franklin Square Loan was made on February 10, 2016 in the principal amount of $14,275,000 and assumed by us at acquisition.
The Greenbrier Business Center was built in 1987, was 79.9% leased as of December 31, 2022 and is anchored by Bridge Church and Consolidated Electrical Distributors. The purchase price and closing costs were financed with $3,097,162 in equity and the assumption of a secured mortgage loan, net, of $4,481,600, or the Initial Greenbrier Business Center Loan.
The Greenbrier Business Center was built in 1987, was 95.1% leased as of December 31, 2023 and is anchored by Bridge Church. The purchase price and closing costs were financed with $3,097,162 in equity and the assumption of a secured mortgage loan, net, of $4,481,600, or the Initial Greenbrier Business Center Loan.
The parking area comprises 171 spaces. 15 Table of Contents As of December 31, 2022, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2022 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Bridge Church Religious 10,913 12.2 % $ 78,684 10/31/2025 None ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 2019 2018 Occupancy Rate 79.9 % 86.8 % 91.4 % 82.2 % 91.2 % (1) Occupancy rates for 2018 through 2020 are derived from data from the prior owner.
As of December 31, 2023, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2023 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Bridge Church Religious 10,913 12.2 % $ 79,077 10/31/2025 None ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 2020 2019 Occupancy Rate 95.1 % 79.9 % 86.8 % 91.4 % 82.2 % ​ (1) Occupancy rates for 2019 through 2020 are derived from data from the prior owner.
Average effective rent per square foot for 2018 through 2020 are based on rents from the prior owner.
Average effective rent per square foot for 2019 and 2020 are based on rents from the prior owner.
Our company acquired an 82% interest in the Parkway Property, and PMI Parkway, LLC owns the remaining 18% interest. The Parkway Property was built in 1984, was 100% leased as of December 31, 2022, and is anchored by First Onsite and GBRS Group. 16 Table of Contents The Parkway Property Loan matures on October 31, 2031.
Our company acquired an 82% interest in the Parkway Property, and PMI Parkway, LLC owns the remaining 18% interest. The Parkway Property was built in 1984, was 100% leased as of December 31, 2023, and is anchored by First Onsite and GBRS Group.
Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 ​ 2019 2018 Average Effective Annual Rent Per Square Foot (1) ​ $ 9.40 ​ $ 10.12 ​ $ 8.22 ​ $ 6.80 ​ $ 5.19 (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements or rent deferrals.
Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 ​ 2020 2019 Average Effective Annual Rent Per Square Foot (1) ​ $ 9.73 ​ $ 9.68 ​ $ 9.60 ​ $ 9.10 ​ $ 8.88 ​ (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements or rent deferrals.
The average annual rent per square foot is based on rents from the prior owner for period from January, 2019 through August, 2019 and on rents from our ownership period from September, 2019 through December, 2019.
For the year ended December 31, 2019, we owned Ashley Plaza for four months. The average annual rent per square foot is based on rents from the prior owner for period from January, 2019 through August, 2019 and on rents from our ownership period from September, 2019 through December, 2019.
The roof is a combination of (i) a flat, membrane with gravel ballast and (ii) a flat, unballasted EPDM membrane. Parking is available for estimated 276 spaces.
The roof is a combination of (i) a flat, membrane with gravel ballast and (ii) a flat, unballasted EPDM membrane.
On June 13, 2022, we repaid the Initial Greenbrier Business Center Loan using proceeds from the Wells Fargo Mortgage Facility (see below). The Greenbrier Business Center Property consists of three (3) one-story flex warehouse buildings totaling approximately 89,290 square feet of rentable area. The buildings are constructed on a deep foundation system consisting of piles or caissons and grade beams.
On June 13, 2022, we repaid the Initial Greenbrier Business Center Loan using proceeds from the Wells Fargo Mortgage Facility (see below). The Greenbrier Business Center Property consists of three (3) one-story flex warehouse buildings totaling approximately 89,280 square feet of rentable area.
As of December 31, 2022, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2022 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Badcock Furniture Retail 35,876 19.8 % $ 108,000 6/30/2029 6/30/2034 K.J’s Market Retail 34,100 18.8 % $ 140,640 12/31/2025 12/31/2030 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/2035 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/2040 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/2045 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/2050 Big Lots Retail 28,527 15.6 % $ 148,349 2/29/2024 2/28/2029 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2/28/2034 ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 2019 2018 Occupancy Rate (1) 100.0 % 100.0 % 97.2 % 99.0 % 90.6 % (1) Occupancy rates for 2018 through 2020 are derived from data from the prior owner. 14 Table of Contents Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 2019 2018 Average Effective Annual Rent Per Square Foot (1) ​ $ 5.61 ​ $ 5.52 ​ $ 5.55 ​ $ 5.61 ​ $ 5.02 (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements or rent deferrals.
As of December 31, 2023, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2023 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Badcock Furniture Retail 35,876 19.8 % $ 108,000 6/30/2029 6/30/2034 K.J.’s Market Retail 34,100 18.8 % $ 140,640 12/31/2025 12/31/2030 12/31/2035 12/31/2040 12/31/2045 12/31/2050 Big Lots Retail 28,527 15.6 % $ 148,349 2/28/2034 2/28/2039 2/28/2044 ​ 14 Table of Contents Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 2020 2019 Occupancy Rate (1) 100.0 % 100.0 % 100.0 % 97.2 % 99.0 % ​ (1) Occupancy rates for 2020 and 2019 are derived from data from the prior owner.
As of December 31, 2022, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2022 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Food Lion Retail 31,762 39.8 % $ 324,096 12/31/2032 12/31/2037 12/31/2042 12/31/2047 12/31/2052 12/31/2057 12/31/2062 CitiTrends Retail 12,500 15.7 % $ 113,850 9/30/2027 9/30/2032 Family Dollar Retail 8,470 10.6 % $ 87,115 12/31/2023 12/31/2028 ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 2019 2018 Occupancy Rate (1) ​ 91.2 % 89.3 % 85.3 % 83.8 % 80.6 % (1) Occupancy rates for 2018 through 2021 are derived from data from the prior owner. 18 Table of Contents Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 ​ 2019 2018 Average Effective Annual Rent Per Square Foot (1) ​ $ 9.68 ​ $ 9.60 ​ $ 9.10 ​ $ 8.88 ​ $ 8.32 (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements or rent deferrals.
Parking is available for estimated 276 spaces. 18 Table of Contents As of December 31, 2023, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2023 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Food Lion Retail 31,762 39.8 % $ 324,096 12/31/2032 12/31/2037 12/31/2042 12/31/2047 12/31/2052 12/31/2057 12/31/2062 CitiTrends Retail 12,500 15.7 % $ 113,850 9/30/2027 9/30/2032 Family Dollar Retail 8,470 10.6 % $ 87,115 12/31/2033 12/31/2038 12/31/2043 ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 2020 2019 Occupancy Rate (1) ​ 85.3 % 91.2 % 89.3 % 85.3 % 83.8 % ​ (1) Occupancy rates for 2019 through 2021 are derived from data from the prior owner.
On February 20, 2020, our company repaid these related party notes payable, short term. The Brookfield Center Property consists of a single-story building on a 7.88 acre parcel of land, and was built in 2007. The foundation consists of a concrete slab-on-grade with continuous perimeter reinforced concrete spread footings and interior isolated spread footings and column pads.
The Brookfield Center Property consists of a single-story building on a 7.88 acre parcel of land, and was built in 2007. The foundation consists of a concrete slab-on-grade with continuous perimeter reinforced concrete spread footings and interior isolated spread footings and column pads. The floor is a reinforced concrete slab-on-grade.
The ground floor consists of reinforced concrete slab. The exterior structural walls are constructed with structural steel framing consisting of columns, beams and open web steel joists. The rooves are flat and consist of PVC roofing membrane.
The buildings are constructed on a deep foundation system consisting of piles or caissons and grade 15 Table of Contents beams. The ground floor consists of reinforced concrete slab. The exterior structural walls are constructed with structural steel framing consisting of columns, beams and open web steel joists. The rooves are flat and consist of PVC roofing membrane.
Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 2019 2018 Average Effective Annual Rent Per Square Foot (1) ​ $ 8.24 ​ $ 8.11 ​ $ 7.98 ​ $ 7.74 ​ $ 4.60 (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements.
Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 2020 2019 Average Effective Annual Rent Per Square Foot (1) ​ $ 5.84 ​ $ 5.61 ​ $ 5.52 ​ $ 5.55 ​ $ 5.61 ​ (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements or rent deferrals.
Parking is available for five hundred and sixty-seven (567) automobiles on asphalt-paved parking areas. 11 Table of Contents As of December 31, 2022, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2022 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Ashley Home Store Retail 17,920 10.9 % $ 161,280 8/31/2028 8/31/2033 8/31/2038 8/31/2043 8/31/2048 Harbor Freight Tools Retail 21,416 13.1 % $ 159,840 2/28/2029 2/28/2034 2/28/2039 Hobby Lobby Retail 50,000 30.5 % $ 250,000 3/31/2029 3/31/2034 3/31/2039 3/31/2044 Planet Fitness Fitness 20,131 12.3 % $ 181,179 4/30/2030 4/30/2033 4/30/2038 ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 2019 2018 Occupancy Rate (1) 100.0 % 100.0 % 98.0 % 98.0 % 52.5 % (1) The occupancy rate for 2018 is derived from data from the prior owner.
As of December 31, 2023, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2023 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Ashley Home Store Retail 17,920 10.9 % $ 163,968 8/31/2028 8/31/2033 8/31/2038 8/31/2043 8/31/2048 Harbor Freight Tools Retail 21,416 13.1 % $ 159,840 2/28/2029 2/28/2034 2/28/2039 Hobby Lobby Retail 50,000 30.5 % $ 250,000 3/31/2029 3/31/2034 3/31/2039 3/31/2044 Planet Fitness Fitness 20,131 12.3 % $ 181,179 4/30/2030 4/30/2033 4/30/2038 ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 2020 2019 Occupancy Rate 98.0 % 100.0 % 100.0 % 98.0 % 98.0 % ​ Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 2020 2019 Average Effective Annual Rent Per Square Foot (1) ​ $ 8.50 ​ $ 8.24 ​ $ 8.11 ​ $ 7.98 ​ $ 7.74 ​ (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2024 2025 2026 2027 2028 2029 2030 2031 ​ 2032 ​ Leases Expiring ​ 3 ​ ​ 3 ​ ​ — ​ ​ 2 ​ ​ 3 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 8,400 ​ ​ 18,140 ​ ​ — ​ ​ 10,500 ​ ​ 30,400 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 6,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 161,613 ​ $ 300,280 ​ $ — ​ $ 187,901 ​ $ 406,857 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 193,011 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 14.0 % ​ 26.0 % ​ — % ​ 16.3 % ​ 35.3 % ​ — % ​ — % ​ — % ​ — % ​ 16.7 % (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 2028 2029 2030 2031 2032 ​ 2033 ​ Leases Expiring ​ 2 ​ ​ — ​ ​ 2 ​ ​ 3 ​ ​ 2 ​ ​ 1 ​ ​ — ​ ​ — ​ ​ 1 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 3,140 ​ ​ — ​ ​ 10,500 ​ ​ 30,400 ​ ​ 6,000 ​ ​ 15,000 ​ ​ — ​ ​ — ​ ​ 6,000 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 70,632 ​ $ — ​ $ 187,896 ​ $ 406,860 ​ $ 100,668 ​ $ 229,656 ​ $ — ​ $ — ​ $ 193,008 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 6.0 % ​ — % ​ 16.0 % ​ 34.6 % ​ 8.6 % ​ 19.5 % ​ — % ​ — % ​ 16.4 % ​ — % ​ (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 ​ Leases Expiring ​ ​ 1 ​ ​ 3 ​ ​ 3 ​ ​ 3 ​ ​ 1 ​ ​ — ​ ​ 1 ​ ​ — ​ ​ — ​ ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 8,470 ​ ​ 3,750 ​ ​ 4,750 ​ ​ 8,050 ​ ​ 12,500 ​ ​ — ​ ​ 1,200 ​ ​ — ​ ​ — ​ ​ 31,762 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 87,115 ​ $ 53,501 ​ $ 71,721 ​ $ 119,135 ​ $ 113,850 ​ $ — ​ $ 22,056 ​ $ — ​ $ — ​ $ 324,096 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 11.3 % ​ 6.9 % ​ 9.3 % ​ 15.4 % ​ 14.7 % ​ — % ​ 2.9 % ​ — % ​ — % ​ 42.0 % (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 ​ Leases Expiring ​ ​ 2 ​ ​ 2 ​ ​ 3 ​ ​ 1 ​ ​ — ​ ​ 2 ​ ​ — ​ ​ — ​ ​ 1 ​ ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 2,550 ​ ​ 2,250 ​ ​ 8,050 ​ ​ 12,500 ​ ​ — ​ ​ 2,400 ​ ​ — ​ ​ — ​ ​ 31,762 ​ ​ 8,470 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 38,789 ​ $ 21,579 ​ $ 118,347 ​ $ 113,850 ​ $ — ​ $ 37,982 ​ $ — ​ $ — ​ $ 324,096 ​ $ 93,382 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 5.0 % ​ 2.8 % ​ 15.3 % ​ 14.7 % ​ — % ​ 4.9 % ​ — % ​ — % ​ 41.8 % ​ 12.0 % ​ (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2024 2025 2026 2027 2028 2029 2030 2031 ​ 2032 Leases Expiring ​ 2 ​ ​ 1 ​ ​ 2 ​ ​ 1 ​ ​ 1 ​ ​ 3 ​ ​ 2 ​ ​ 1 ​ ​ — ​ ​ 2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 18,199 ​ ​ 1,575 ​ ​ 4,000 ​ ​ 3,000 ​ ​ 1,400 ​ ​ 32,565 ​ ​ 71,416 ​ ​ 20,131 ​ ​ — ​ ​ 8,656 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 104,160 ​ $ 29,925 ​ $ 57,600 ​ $ 105,000 ​ $ 40,575 ​ $ 373,737 ​ $ 430,332 ​ $ 181,179 ​ $ — ​ $ 143,344 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 7.7 % ​ 2.2 % ​ 4.3 % ​ 7.8 % ​ 3.0 % ​ 27.6 % ​ 31.8 % ​ 13.4 % ​ — % ​ 10.6 % (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 2028 2029 2030 2031 2032 ​ 2033 Leases Expiring ​ 2 ​ ​ 1 ​ ​ 1 ​ ​ 1 ​ ​ 3 ​ ​ 1 ​ ​ 1 ​ ​ — ​ ​ 2 ​ ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 4,645 ​ ​ 4,000 ​ ​ 3,000 ​ ​ 1,400 ​ ​ 36,045 ​ ​ 50,000 ​ ​ 20,131 ​ ​ — ​ ​ 8,656 ​ ​ 11,400 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 58,457 ​ $ 42,000 ​ $ 105,000 ​ $ 40,575 ​ $ 312,916 ​ $ 262,500 ​ $ 181,179 ​ $ — ​ $ 143,344 ​ $ 147,675 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 4.2 % ​ 3.0 % ​ 7.5 % ​ 2.9 % ​ 22.5 % ​ 18.8 % ​ 13.0 % ​ — % ​ 10.3 % ​ 10.6 % ​ ​ (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 2020 2019 2018 Average Effective Annual Rent Per Square Foot (1) ​ $ 9.30 ​ $ 8.38 ​ $ 8.33 ​ $ 6.52 ​ $ 7.86 (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements. ​ 13 Table of Contents Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2024 2025 2026 ​ 2027 2028 2029 2030 2031 2032 ​ Leases Expiring ​ 1 ​ ​ 1 ​ ​ 1 ​ ​ 2 ​ ​ 1 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 8,582 ​ ​ 4,046 ​ ​ 9,000 ​ ​ 39,206 ​ ​ 4,046 ​ ​ — ​ — ​ — ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 105,994 ​ $ 39,971 ​ $ 106,612 ​ $ 344,365 ​ $ 50,092 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 17.6 % ​ 6.6 % ​ 17.7 % ​ 57.0 % ​ 8.3 % ​ — % — % — % — % ​ — % (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
As of December 31, 2023, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2023 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Turning Point Greenville Church Religious 9,000 13.9 % $ 102,109 9/30/2025 None S&ME Engineering 8,582 13.2 % $ 97,161 10/31/2027 10/31/2030 Gravitopia Entertainment 35,160 54.2 % $ 283,588 4/30/2026 4/30/2031 ​ ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 2021 2020 2019 Occupancy Rate 100.0 % 100.0 % 100.0 % 93.8 % 93.8 % ​ ​ Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 2021 2020 2019 Average Effective Annual Rent Per Square Foot (1) ​ $ 9.41 ​ $ 9.30 ​ $ 8.38 ​ $ 8.33 ​ $ 6.52 ​ (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements. ​ ​ 13 Table of Contents Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 ​ 2028 2029 2030 2031 2032 2033 ​ Leases Expiring ​ — ​ ​ 1 ​ ​ 2 ​ ​ 2 ​ ​ — ​ ​ 1 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ — ​ ​ 9,000 ​ ​ 39,206 ​ ​ 12,628 ​ ​ — ​ ​ 4,046 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ — ​ $ 106,612 ​ $ 344,365 ​ $ 178,545 ​ $ — ​ $ 45,223 ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ — ​ ​ 17.5 % ​ 56.4 % ​ 29.3 % ​ — % ​ 7.4 % — % — % — % ​ — % ​ (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2024 2025 2026 2027 2028 2029 2030 2031 ​ 2032 ​ Leases Expiring ​ 1 ​ ​ 4 ​ ​ 6 ​ ​ 2 ​ ​ 3 ​ ​ — ​ ​ 1 ​ ​ — ​ ​ — ​ ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 4,235 ​ ​ 9,564 ​ ​ 48,997 ​ ​ 5,260 ​ ​ 9,061 ​ ​ — ​ ​ 30,000 ​ ​ — ​ ​ — ​ ​ 12,632 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 95,965 ​ $ 222,927 ​ $ 603,247 ​ $ 126,544 ​ $ 238,647 ​ $ — ​ $ 300,000 ​ $ — ​ $ — ​ $ 187,585 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 5.9 % ​ 13.7 % ​ 37.2 % ​ 7.8 % ​ 14.7 % ​ — % ​ 18.5 % ​ — % ​ — % ​ 11.6 % (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 2028 2029 2030 2031 2032 ​ 2033 ​ Leases Expiring ​ 3 ​ ​ 6 ​ ​ 2 ​ ​ 4 ​ ​ 1 ​ ​ 3 ​ ​ — ​ ​ — ​ ​ 1 ​ ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 8,119 ​ ​ 48,997 ​ ​ 5,260 ​ ​ 13,296 ​ ​ 4,823 ​ ​ 33,937 ​ ​ — ​ ​ — ​ ​ 12,632 ​ ​ 5,295 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 192,627 ​ $ 603,247 ​ $ 126,544 ​ $ 334,612 ​ $ 97,710 ​ $ 406,229 ​ $ — ​ $ — ​ $ 187,585 ​ $ 78,913 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 10.8 % ​ 33.9 % ​ 7.1 % ​ 18.8 % ​ 5.5 % ​ 22.8 % ​ — % ​ — % ​ 10.5 % ​ 4.4 % 9 Table of Contents (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
As of December 31, 2022, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2022 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options First Onsite Construction 7,760 12.1 % $ 73,720 7/31/2028 None GBRS Group Consulting 9,555 14.9 % $ 91,102 8/31/2025 8/31/2030 ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 2020 2019 2018 Occupancy Rate (1) ​ 100.0 % 100.0 % 100.0 % 76.6 % 62.9 % (1) Occupancy rates for 2018 through 2020 are derived from data from the prior owner.
As of December 31, 2023, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2023 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annualized Rent ​ Expiration ​ Options First Onsite Construction 7,760 12.1 % $ 73,720 7/31/2028 None GBRS Group Consulting 16,386 25.6 % $ 157,655 8/31/2025 8/31/2030 ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 2020 2019 Occupancy Rate (1) ​ 100.0 % 100.0 % 100.0 % 100.0 % 76.6 % ​ (1) Occupancy rates for 2019 and 2020 are derived from data from the prior owner. 17 Table of Contents Average effective annual rent per square foot for the five preceding years was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 2021 ​ 2020 2019 Average Effective Annual Rent Per Square Foot (1) ​ $ 8.31 ​ $ 9.40 ​ $ 10.12 ​ $ 8.22 ​ $ 6.80 ​ (1) Average effective rent per square foot represents the average annual rent for all occupied space for the respective periods after accounting for rent abatements and concessions but before accounting for tenant reimbursements or rent deferrals.
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2022 rent. 9 Table of Contents Hanover Square Property On May 8, 2018, we acquired an undivided 84% tenant-in-common interest in the Shops at the Hanover Square Property from COF North, LLC, a Virginia limited liability company and unaffiliated seller.
Hanover Square Property On May 8, 2018, we acquired an undivided 84% tenant-in-common interest in the Shops at the Hanover Square Property from COF North, LLC, a Virginia limited liability company and unaffiliated seller.
The roof is low-sloped with a portion covered by a single play TPO roof membrane and a portion covered by tar and gravel roofing.
The roof is low-sloped 11 Table of Contents with a portion covered by a single play TPO roof membrane and a portion covered by tar and gravel roofing. Parking is available for five hundred and sixty-seven (567) automobiles on asphalt-paved parking areas.
The Parkway Property Loan is secured by the Parkway Property. ​ In connection with our acquisition of the Parkway Property, we, through a subsidiary, entered into the Tenants in Common Agreement with PMI Parkway, LLC, or the Parkway TIC Agreement.
As of December 31, 2023, SOFR was 5.35% and as of December 31, 2022, USD 1-Month ICE LIBOR was 4.39%. ​ In connection with our acquisition of the Parkway Property, we, through a subsidiary, entered into the Tenants in Common Agreement with PMI Parkway, LLC, or the Parkway TIC Agreement.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2024 2025 2026 2027 2026 2029 2030 2031 2032 Leases Expiring ​ 3 ​ ​ 5 ​ ​ 6 ​ ​ 2 ​ ​ 1 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 14,724 ​ ​ 14,827 ​ ​ 32,711 ​ ​ 6,539 ​ ​ 2,500 ​ ​ — ​ ​ — ​ ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 131,923 ​ $ 140,315 ​ $ 272,880 ​ $ 68,135 ​ $ 30,400 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 21.6 % ​ 23.0 % ​ 44.7 % ​ 11.2 % ​ 5.0 % ​ — % ​ — % ​ — % — % — % (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Leases Expiring ​ 4 ​ ​ 6 ​ ​ 7 ​ ​ — ​ ​ 2 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 13,625 ​ ​ 33,974 ​ ​ 30,363 ​ ​ — ​ ​ 6,968 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 122,528 ​ $ 290,779 ​ $ 330,151 ​ $ — ​ $ 84,948 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 17.6 % ​ 41.8 % ​ 47.4 % ​ — % ​ 12.2 % ​ — % ​ — % ​ — % — % — % ​ (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Average effective rent per square foot for 2018 through 2020 are based on rents from the prior owner. 17 Table of Contents Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 ​ Leases Expiring ​ ​ 6 ​ ​ 8 ​ ​ 2 ​ ​ 3 ​ ​ — ​ ​ 2 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 13,065 ​ ​ 18,939 ​ ​ 11,043 ​ ​ 8,042 ​ ​ — ​ ​ 13,020 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 121,222 ​ $ 187,482 ​ $ 113,449 ​ $ 84,046 ​ $ — ​ $ 143,391 ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 20.1 % ​ 31.1 % ​ 18.8 % ​ 13.9 % ​ — % ​ 23.8 % ​ — % ​ — % ​ — % ​ — % (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 ​ Leases Expiring ​ ​ 10 ​ ​ 4 ​ ​ 4 ​ ​ — ​ ​ 2 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 19,790 ​ ​ 22,146 ​ ​ 9,153 ​ ​ — ​ ​ 13,020 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 207,153 ​ $ 118,543 ​ $ 95,322 ​ $ — ​ $ 143,391 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 38.9 % ​ 22.2 % ​ 17.9 % ​ — % ​ 26.9 % ​ — % ​ — % ​ — % ​ — % ​ — % ​ (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2024 2025 2026 2027 2028 2029 2030 2031 2022 Leases Expiring ​ 3 ​ ​ 4 ​ ​ 2 ​ ​ 5 ​ ​ 2 ​ ​ — ​ ​ 1 ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 12,580 ​ ​ 44,386 ​ ​ 4,600 ​ ​ 60,400 ​ ​ 3,200 ​ ​ — ​ ​ 32,960 ​ ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 98,750 ​ $ 277,675 ​ $ 75,906 ​ $ 324,420 ​ $ 57,823 ​ $ — ​ $ 108,000 ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 9.7 % ​ 27.3 % ​ 7.5 % ​ 31.8 % ​ 5.7 % ​ — % ​ 10.6 % ​ — % — % — % (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Lease expirations in the next 10 years are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Leases Expiring ​ 4 ​ ​ 3 ​ ​ 3 ​ ​ 2 ​ ​ 4 ​ ​ 2 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square Footage ​ 17,629 ​ ​ 38,700 ​ ​ 24,300 ​ ​ 3,200 ​ ​ 16,580 ​ ​ 37,876 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual Rent (1) ​ $ 145,240 ​ $ 216,546 ​ $ 164,679 ​ $ 52,594 ​ $ 178,976 ​ $ 128,872 ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Aggregate Annual Rent (2) ​ 13.7 % ​ 20.4 % ​ 15.5 % ​ 5.0 % ​ 16.9 % ​ 12.1 % ​ — % ​ — % — % — % ​ (1) Annual rent is determined by multiplying the monthly rent in effect at the time of the lease expiration by 12 months.
Average rent per square foot for the year ended December 31, 2018 is from the prior owner. For the year ended December 31, 2019, we owned Ashley Plaza for four months.
Average effective rent per square foot for 2019 and 2020 are based on rents from the prior owner.
Removed
For the year ended December 31, 2018, we owned the Hanover Square Property for eight months, the period on which the average annual rent per square foot is based.
Added
(2) The percentage of aggregate annual rent is determined by dividing (i) the annual rent (see note 1) related to expiring leases by (ii) the property’s total 2023 rent. On December 29, 2023, we and PMI Hanover Sq. LLC entered into a purchase and sale agreement to sell the Hanover Square Shopping Center to an unrelated third party for $13,000,000.
Removed
As of December 31, 2022, tenants occupying 10% or more of the rentable square footage included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ of Rentable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Square ​ Square ​ 2022 ​ Lease ​ Renewal Tenant ​ Business ​ Footage ​ Footage ​ Annual Rent ​ Expiration ​ Options Turning Point Greenville Church Religious 9,000 13.9 % $ 101,475 9/30/2025 None S&ME Engineering 8,582 13.2 % $ 105,994 11/30/2023 None Gravitopia Entertainment 35,160 54.2 % $ 279,856 4/30/2026 4/30/2031 ​ ​ Occupancy data for the five preceding years (as of December 31) was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 2020 2019 2018 Occupancy Rate (1) 100.0 % 100.0 % 93.8 % 93.8 % 93.8 % (1) The occupancy rate for 2018 is derived from data from the prior owner.
Added
The Hanover Square Outparcel is not included in this transaction. On February 7, 2024, the purchaser completed its due diligence and we and PMI Hanover Sq. LLC agreed to a $75,000 price reduction to reflect necessary repairs. On February 16, 2024, we entered into a purchase and sale agreement to purchase PMI Hanover Sq.
Removed
The Parkway Property Loan requires monthly payments of principal, on a 30-year amortization schedule, and interest during the term. The Parkway Property Loan bears interest at the greater of (i) 2.25% plus the ICE LIBOR rate, and (ii) 2.25%.
Added
The interest rate for the mortgage loan for the Parkway Property was originally based on the Intercontinental Exchange London Interbank Offered Rate (“ICE LIBOR”) plus 225 basis points, with a minimum rate of 2.25%.
Removed
USD 1-Month ICE LIBOR was 4.392% and 0.102% as of December 31, 2022 and 2021, respectively. The Parkway Property Loan may be prepaid, subject to certain conditions and payments.
Added
After the discontinuation of the London Interbank Offered Rate (“LIBOR”) on June 30, 2023, the ICE LIBOR index was replaced by Term SOFR, with an adjusted margin of 236.44 basis points. Under the terms of the mortgage, the interest rate payable each month may not change by greater than 1% during any six-month period and 2% during any 12-month period.
Added
As of December 31, 2023 and 2022 the rate in effect for the Parkway Property Loan was 7.05% and 4.3117%, respectively. The monthly payment, which varies based on the interest rate in effect each month, includes interest at the variable rate, and principal based on a thirty-year amortization schedule.
Added
Effective on July 1, 2023, the interest rate index under the Interest Rate Protection Transaction automatically converted to SOFR.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. ​ 19 Table of Contents PART II
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. ​ 20 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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From time to time, our Board may approve the repurchase of our shares of common stock or Series A Preferred Stock, par value $0.01 per share, through open market purchases or otherwise.
From time to time, our Board may approve the repurchase of our shares of common stock or Series A Preferred Stock, par value $0.01 per share, through open market purchases or otherwise. Recent Sales of Unregistered Securities None.
Issuer Repurchases of Equity Securities On December 21, 2021, our Board authorized a share repurchase program whereby we may repurchase up to 500,000 shares of our common stock for a maximum price of $4.80 per share.
Issuer Repurchases of Equity Securities On December 21, 2021, the Board authorized a share repurchase program (the “Common Stock Repurchase Program”) whereby we may repurchase up to 62,500 shares of our common stock for a maximum price of $38.40 per share.
On March 9, 2023, the closing sale price of our common stock on the Nasdaq Capital Market was $0.87. On December 31, 2022, we had approximately 12,335 holders of record of our common stock.
On March 5, 2024, the closing sale price of our common stock on the Nasdaq Capital Market was $5.55. On December 31, 2023, we had approximately 7,583 holders of record of our common stock.
As of December 31, 2022, our company had repurchased 268,070 shares of our common stock at a total cost of $278,277 and an average price of $1.038 per share. During the three months ended December 31, 2022, our company did not make any share repurchases. ​ ​ ​ ITEM 6. [RESERVED]
Following the approval of the increase, we may purchase up to 228,991 Common Shares in total under the program. During the three months ended December 31, 2023, we did not make any share repurchases. ​ ​ ​ ITEM 6. [RESERVED]
Removed
On July 11, 2022, we received a deficiency letter (the “Deficiency Letter”) from the Nasdaq Listing Qualifications Department (the “Staff”) of Nasdaq notifying us that, for the last thirty (30) consecutive business days, the closing bid price for our common stock had been below the minimum $1.00 per share required for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550 (a)(2) (the “Minimum Bid Price Requirement”).
Added
Under this authorization, we repurchased 33,509 shares of our common stock at a total cost of $278,277 and an average price of $8.30 per share. On October 18, 2023, the Board approved the repurchase of an additional 200,000 Common Shares for a maximum price of $6.00 per share under the Common Stock Repurchase Program.
Removed
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were given one hundred and eighty (180) calendar days, or until January 9, 2023, to regain compliance with the Minimum Bid Price Requirement.
Removed
On January 10, 2023, we received a letter (the “Second Notification”) from Nasdaq notifying us that, while we had not regained compliance with the Minimum Bid Price Requirement, the Staff determined that we are eligible for an additional 180 calendar day period, or until July 10, 2023 (the “Second Compliance Period”), to regain compliance.
Removed
The Staff’s determination was based on (i) our meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and (ii) our written notice to Nasdaq of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.
Removed
If at any time during the Second Compliance Period, the closing bid price of our common stock is at least $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide us with written confirmation of compliance.
Removed
If compliance with the Minimum Bid Price Requirement cannot be demonstrated by July 10, 2023, the Staff will provide written notification that our common stock will be delisted. At that time, we may appeal the Staff’s determination to a Hearings Panel.
Removed
Neither the Deficiency Letter or the Second Notification had any effect on the listing of our common stock, and our common stock continues to trade on The Nasdaq Capital Market under the symbol “MDRR”.
Removed
We intend to continue to monitor the closing bid price of our common stock and may, if appropriate, consider available options to regain compliance with the Minimum Bid Price Requirement, including initiating a reverse stock split.
Removed
However, there can be no assurance that we will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq Listing Rules. Recent Sales of Unregistered Securities During January 2020, our company’s operating partnership issued 93,580 OP Units in exchange for tenant in common interests in the Greensboro Hampton Inn.
Removed
These securities were issued pursuant to an exemption from registration pursuant to Section 4(a)(2) the Securities Act. During October 2020, our company issued a $1,500,000 convertible debenture. The proceeds were used as working capital and general corporate purposes.
Removed
The convertible debenture was issued pursuant to an exemption from registration pursuant to Section 4(a)(2) the Securities Act. 20 Table of Contents During December 2020, our company issued a $2,000,000 convertible debenture. The proceeds were used as working capital and general corporate purposes.
Removed
The convertible debenture was issued pursuant to an exemption from registration pursuant to Section 4(a)(2) the Securities Act. During January 2021, our company issued a $1,500,000 convertible debenture. The proceeds were used as working capital and general corporate purposes. The convertible debenture was issued pursuant to an exemption from registration pursuant to Section 4(a)(2) the Securities Act.

Item 7. Management's Discussion & Analysis

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

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Because the shares of common stock vested immediately, the fair value of the grants, or $250,000, was recorded to share based compensation expense on our consolidated statements of operations on the effective date of the grant.
Because the shares of our common stock vested immediately, the fair value of the grants, or $250,000, was recorded to share based compensation expense on our consolidated statements of operations on the effective date of the grant.
Our company accounted for this refinancing transaction under debt extinguishment accounting in accordance with ASC 470, and for year ended December 31, 2022, recorded a loss on extinguishment of debt of $113,282. The original mortgage loan for the Lancer Center Property bore interest at a fixed rate of 4.00%.
Our company accounted for this refinancing transaction under debt extinguishment accounting in accordance with ASC 470, and for the year ended December 31, 2022, recorded a loss on extinguishment of debt of $113,282. The original mortgage loan for the Lancer Center Property bore interest at a fixed rate of 4.00%.
For the periods during which our company owned its hotel properties, revenues were recognized as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel’s services. Revenues from our company’s occupancy agreement with Clemson University were recognized as earned, which is as rooms were occupied by the University.
For the periods during which our company owned its hotel properties, revenues were recognized as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel’s services. Revenues from our company’s occupancy agreement with Clemson University were recognized as earned, which is as rooms were occupied by Clemson.
(b) The mortgage loan for the Hanover Square Property bore interest at a fixed rate of 4.25% until January 1, 2023, when the interest rate adjusted to a fixed rate of 6.94%, which was determined by adding 3.00% to the daily average yield on United States Treasury securities adjusted to a constant maturity of five years, as made available by the Federal Reserve Board, with a minimum of 4.25%.
(a) The mortgage loan for the Hanover Square Property bore interest at a fixed rate of 4.25% until January 1, 2023, when the interest rate adjusted to a fixed rate of 6.94%, which was determined by adding 3.00% to the daily average yield on United States Treasury securities adjusted to a constant maturity of five years, as made available by the Federal Reserve Board, with a minimum of 4.25%.
In addition to liquidity required to fund these principal payments, we may also incur some level of capital expenditures for our existing properties that cannot be passed on to our tenants. Our company plans to pay these obligations through a combination of cash on hand, potential dispositions and operating cash.
In addition to liquidity required to fund these dividends and principal payments, we may also incur some level of capital expenditures for our existing properties that cannot be passed on to our tenants. Our company plans to pay these obligations through a combination of cash on hand, potential dispositions and operating cash.
As of December 31, 2022, our company believes that it is compliant with these covenants. Wells Fargo Line of Credit On June 13, 2022, our company, through its wholly owned subsidiaries, entered into a loan agreement with Wells Fargo Bank for a $1,500,000 line of credit (the “Wells Fargo Line of Credit”).
As of December 31, 2023, our company believes that it is compliant with these covenants. Wells Fargo Line of Credit On June 13, 2022, our company, through its wholly owned subsidiaries, entered into a loan agreement with Wells Fargo Bank for a $1,500,000 line of credit (the “Wells Fargo Line of Credit”).
Specifically, “To the extent there is an impairment write-down of depreciable real estate … related to a REIT’s main business, the write-down is excluded from FFO (i.e., adjusted from net income in calculating FFO).” Additionally, NAREIT’s December 2018 White Paper provides guidance on gains or losses on the sale of assets, stating “the REIT has the option to include or exclude such gains and losses in the calculation of FFO.” (7) Consistent with the treatment of impairment write-downs, our company includes an adjustment for its loss on extinguishment of debt.
Specifically, “To the extent there is an impairment write-down of depreciable real estate … related to a REIT’s main business, the write-down is excluded from FFO (i.e., adjusted from net income in calculating FFO).” Additionally, NAREIT’s December 2018 White Paper provides guidance on gains or losses on the sale of assets, stating “the REIT has the option to include or exclude such gains and losses in the calculation of FFO.” (6) Consistent with the treatment of impairment write-downs, our company includes an adjustment for its loss on extinguishment of debt.
The Wells Fargo Mortgage Facility credit agreement includes covenants to maintain a debt service coverage ratio of not less than 1.50 to 1.00 on an annual basis and a minimum debt yield of 9.5% on the Salisbury Marketplace, Lancer Center and Greenbrier Business Center properties, and to maintain liquid assets of not less than $1,500,000.
The Wells Fargo Mortgage Facility credit agreement includes covenants to maintain a debt service coverage ratio of not less than 1.50 to 1.00 on an annual basis and a minimum debt yield of 9.5% on the Salisbury Marketplace Property, the Lancer Center Property and the Greenbrier Business Center Property, and to maintain liquid assets of not less than $1,500,000.
Off-Balance Sheet Arrangements As of December 31, 2022 and 2021, we have no off-balance sheet arrangements. Summary of Critical Accounting Policies The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to use judgment in the application of accounting policies, including making estimates and assumptions.
Off-Balance Sheet Arrangements As of December 31, 2023 and 2022, we have no off-balance sheet arrangements. Summary of Critical Accounting Policies The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to use judgment in the application of accounting policies, including making estimates and assumptions.
Upon the adoption of ASC No. 842, our company has elected the practical expedient permitting lessors to elect by class of underlying asset to not separate non-lease components (for example, maintenance services, including common area maintenance) from associated lease components (the “non-separation practical expedient”) if both of the following criteria are met: (1) the timing and pattern of transfer of the lease and non-lease component(s) are the same and (2) the lease component would be classified as an operating lease if it were accounted for separately.
Upon the adoption of ASC No. 842, our company has elected the practical expedient permitting lessors to elect by class of underlying asset to not separate non-lease components (for example, maintenance services, including common area maintenance) from 28 Table of Contents associated lease components (the “non-separation practical expedient”) if both of the following criteria are met: (1) the timing and pattern of transfer of the lease and non-lease component(s) are the same and (2) the lease component would be classified as an operating lease if it were accounted for separately.
(10) NAREIT’s December 2018 White Paper provides guidance on non-cash revenues and expenses, stating, “To provide an opportunity for consistent analysis of operating results among REITs, NAREIT encourages those reporting FFO to make supplemental disclosure of all material non-cash revenues and expenses affecting their results for each period.
(9) NAREIT’s December 2018 White Paper provides guidance on non-cash revenues and expenses, stating, “To provide an opportunity for consistent analysis of operating results among REITs, NAREIT encourages those reporting FFO to make supplemental disclosure of all material non-cash revenues and expenses affecting their results for each period.
Our company historically has not been and is not currently a “lessee” under any lease agreements, and thus did not have any arrangements requiring the recognition of lease assets or liabilities on its balance sheet. As a “lessor”, our company has active lease agreements with over 100 tenants across our portfolio of investment properties.
Our company historically has not been and is not currently a “lessee” under any lease agreements, and thus did not have any arrangements requiring the recognition of lease assets or liabilities on its balance sheet. As a “lessor”, our company has active lease agreements with over 130 tenants across our portfolio of investment properties.
Our company was formed to acquire, reposition, renovate, lease and manage income-producing properties, with a primary focus on (i) commercial properties, including flex-industrial and retail properties, (ii) multi-family residential properties and (iii) limited-service hotel properties in secondary and tertiary markets in the southeastern part of the United States, with an expected concentration in Virginia, North Carolina, South Carolina, Georgia, Florida and Alabama.
Our company was formed to acquire, reposition, renovate, lease and manage income-producing properties, with a primary focus on (i) commercial properties, including flex-industrial and retail properties, (ii) multi-family residential properties and (iii) limited-service hotel properties in secondary and tertiary markets in the southeastern part of the United States, with an expected 21 Table of Contents concentration in Virginia, North Carolina, South Carolina, Georgia, Florida and Alabama.
Revenue Recognition Principal components of our total revenues for our retail center properties and flex center properties include base rents and tenant reimbursements. We accrue minimum (base) rent on a straight-line basis over the terms of the respective leases which results in 29 Table of Contents an unbilled rent asset or deferred rent liability being recorded on the balance sheet.
Revenue Recognition Principal components of our total revenues for our retail center properties and flex center properties include base rents and tenant reimbursements. We accrue minimum (base) rent on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet.
Our company assessed the criteria above with respect to our operating leases and determined that they qualify for the non-separation practical expedient. As a result, we have accounted for and presented the revenues from these leases, including tenant reimbursements, as a single line item on our consolidated statements of operations for year ended December 31, 2022.
Our company assessed the criteria above with respect to our operating leases and determined that they qualify for the non-separation practical expedient. As a result, we have accounted for and presented the revenues from these leases, including tenant reimbursements, as a single line item on our consolidated statements of operations for the years ended December 31, 2023 and 2022.
As of December 31, 2022, we owned 84% of the Hanover Square Property as a tenant in common with a noncontrolling owner which owned the remaining 16% interest and 82% of the Parkway Property as a tenant in common with a noncontrolling owner which owns the remaining 18% interest.
As of December 31, 2023, we owned 84% of the Hanover Square Property as a tenant in common with a noncontrolling owner which owned the remaining 16% interest and 82% of the Parkway Property as a tenant in common with a noncontrolling owner which owns the remaining 18% interest.
Our company accounted for this refinancing transaction under debt extinguishment accounting in accordance with ASC 470, and for year ended December 31, 2022, recorded a loss on 26 Table of Contents extinguishment of debt of $56,393. Our company assumed the original mortgage loan for the Greenbrier Business Center Property from the seller.
Our company accounted for this refinancing transaction under debt extinguishment accounting in accordance with ASC 470, and for year ended December 31, 2022, recorded a loss on extinguishment of debt of $56,393. Our company assumed the original mortgage loan for the Greenbrier Business Center Property from the seller.
(5) Adjustment to FFO resulting from non-cash expenses recognized as a result of decreases in the fair value of the interest rate caps for the Parkway Property and Clemson Best Western Property. 40 Table of Contents (6) Adjustment to FFO for amortization of non-cash expenses recognized as a result of amortizing loan issuance costs over the terms of the respective mortgages.
(5) Adjustment to FFO resulting from non-cash expenses recognized as a result of decreases in the fair value of the interest rate caps for the Parkway Property and Clemson Best Western Property. (6) Adjustment to FFO for amortization of non-cash expenses recognized as a result of amortizing loan issuance costs over the terms of the respective mortgages.
If any such events or changes in circumstances 30 Table of Contents are identified, we perform a formal impairment analysis. We measure any impairment of investment property when the estimated undiscounted operating income before depreciation and amortization, is less than the carrying value of the property.
If any such events or changes in circumstances are identified, we perform a formal impairment analysis. We measure any impairment of investment property when the estimated undiscounted operating income before depreciation and amortization, is less than the carrying value of the property.
The monthly payment was $34,667 which includes interest at the fixed rate and principal, based on a twenty-five-year amortization schedule. (h) On June 13, 2022, our company refinanced the mortgage loan for the Greenbrier Business Center Property, using proceeds from the Wells Fargo Mortgage Facility discussed above.
The monthly payment was $34,667 which includes interest at the fixed rate and principal, based on a twenty-five-year amortization schedule. Our company refinanced the mortgage loan for the Greenbrier Business Center Property using proceeds from the Wells Fargo Mortgage Facility discussed above.
The effective date of the grants was March 2, 2022. The shares of common stock granted vest immediately and are unrestricted. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan.
The effective date of the grants was March 2, 2022. The shares of our common stock granted vested immediately and are unrestricted. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan.
In applying applicable accounting guidance, management considered our company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our company’s obligations due over the next twelve months, as well as our company’s recurring business operating expenses.
In applying applicable accounting guidance, management considered our company’s current financial 29 Table of Contents condition and liquidity sources, including current funds available, forecasted future cash flows and our company’s obligations due over the next twelve months, as well as our company’s recurring business operating expenses.
The new mortgage includes covenants for our company to maintain a net worth of $13,250,000, 25 Table of Contents excluding the assets and liabilities associated with the Franklin Square Property and to maintain liquid assets of no less than $1,000,000. As of December 31, 2022 and 2021, respectively, our company believes that we are compliant with these covenants.
The mortgage includes covenants for our company to maintain a net worth of $13,250,000, excluding the assets and liabilities associated with the Franklin Square Property and to maintain liquid assets of no less than $1,000,000. As of December 31, 2023 and 2022, respectively, our company believes that we are compliant with these covenants.
The effective date of the grants was November 22, 2022. The shares of common stock granted vest immediately and are unrestricted. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan.
The effective date of the grants was November 22, 2022. The shares granted vested immediately and are unrestricted. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan.
Our company has elected to include non-cash revenues (debt forgiveness) and non-cash expenses (bad debt expense) in its calculation of AFFO. ​
Our company has elected to include non-cash expenses (bad debt expense) in its calculation of AFFO. ​
Our company’s stockholders are not involved in its day-to-day affairs. 21 Table of Contents As of December 31, 2022, our company owned and operated eight investment properties, the Shops at Franklin Square (the “Franklin Square Property”), a 134,239 square foot retail property located in Gastonia, North Carolina, the Hanover North Shopping Center (the “Hanover Square Property”), a 73,440 square foot retail property located in Mechanicsville, Virginia, the Ashley Plaza Shopping Center (the “Ashley Plaza Property”), a 164,012 square foot retail property located in Goldsboro, North Carolina, Brookfield Center (the “Brookfield Center Property”), a 64,880 square foot mixed-use industrial/office property located in Greenville, South Carolina, the Lancer Center, a 181,590 square foot retail property located in Lancaster, South Carolina (the “Lancer Center Property”), the Greenbrier Business Center (the “Greenbrier Business Center Property”), an 89,280 square foot mixed-use industrial/office property located in Chesapeake, Virginia, Parkway 3 & 4 (the “Parkway Property”), a 64,109 square foot mixed-use industrial office property located in Virginia Beach, Virginia, and the Salisbury Marketplace Shopping Center, a 79,732 square foot retail property located in Salisbury, North Carolina (the “Salisbury Marketplace Property”).
As of December 31, 2023, our company owned and operated eight investment properties, the Shops at Franklin Square (the “Franklin Square Property”), a 134,239 square foot retail property located in Gastonia, North Carolina, the Hanover North Shopping Center (the “Hanover Square Property”), a 73,440 square foot retail property located in Mechanicsville, Virginia, the Ashley Plaza Shopping Center (the “Ashley Plaza Property”), a 164,012 square foot retail property located in Goldsboro, North Carolina, Brookfield Center (the “Brookfield Center Property”), a 64,880 square foot mixed-use industrial/office property located in Greenville, South Carolina, the Lancer Center, a 181,590 square foot retail property located in Lancaster, South Carolina (the “Lancer Center Property”), the Greenbrier Business Center (the “Greenbrier Business Center Property”), an 89,280 square foot mixed-use industrial/office property located in Chesapeake, Virginia, Parkway 3 & 4 (the “Parkway Property”), a 64,109 square foot mixed-use industrial office property located in Virginia Beach, Virginia, and the Salisbury Marketplace Shopping Center, a 79,732 square foot retail property located in Salisbury, North Carolina (the “Salisbury Marketplace Property”).
The second component consists of changes in assets and liabilities. Increases in assets and decreases in liabilities result in cash used in operations. Decreases in assets and increases in liabilities result in cash provided by operations. During the year ended December 31, 2022, net changes in asset and liability accounts resulted in $436,414 in cash used operations.
The second component consists of changes in assets and liabilities. Increases in assets and decreases in liabilities result in cash used in operations. Decreases in assets and increases in liabilities result in cash provided by operations. During the year ended December 31, 2023, net changes in asset and liability accounts resulted in $125,128 in cash used operations.
Because the Common Shares vested immediately, the fair value of the grants, or $233,100, was recorded to share based compensation expense on our consolidated statements of operations on the effective date of the grant. The fair value of the grants was determined by the market price of our shares of common stock on the effective date of the grant.
Because the shares vested immediately, the fair value of the grants, or $233,100, was recorded to share based compensation expense on our consolidated statements of operations on the effective date of the grant.
Cash flows from operating activities has two components. The first component consists of net operating loss adjusted for non-cash operating activities. During the year ended December 31, 2022, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $1,631,040.
Cash flows from operating activities has two components. The first component consists of net operating loss adjusted for non-cash operating activities. During the year ended December 31, 2023, operating activities adjusted for non-cash items resulted in net cash provided by operating activities of $229,141.
After adjusting for noncontrolling interests, the net loss attributable to Medalist common shareholders for the year ended December 31, 2022 increased by $404,977 over the year ended December 31, 2021. ​ 38 Table of Contents Funds from Operations ​ We use funds from operations (“FFO”), a non-GAAP measure, as an alternative measure of our operating performance, specifically as it relates to results of operations and liquidity.
After adjusting for noncontrolling interests, the net loss attributable to Medalist common shareholders for the year ended December 31, 2023 decreased by $197,962 over the year ended December 31, 2022. ​ Funds from Operations ​ We use funds from operations (“FFO”), a non-GAAP measure, as an alternative measure of our operating performance, specifically as it relates to results of operations and liquidity.
(7) Adjustment to FFO for amortization of non-cash expenses recognized as a result of amortizing the preferred stock discount over its five-year term. (8) Adjustment to FFO for amortization of non-cash expenses recognized as a result of amortizing the preferred stock offering costs over its five-year term. (9) Adjustment to FFO resulting from non-cash expenses recorded for share-based compensation.
(7) Adjustment to FFO for amortization of non-cash expenses recognized as a result of amortizing the preferred stock discount over its five-year term. (8) Adjustment to FFO for amortization of non-cash expenses recognized as a result of amortizing the preferred stock offering costs over its five-year term.
Recent Trends and Activities Sale of the Clemson Best Western Property On September 29, 2022, our company sold its interest in the Clemson Best Western Property, a 148 room hotel on 5.92 acres in Clemson, South Carolina, to an unrelated purchaser for $10,015,000.
Kavanaugh was appointed CEO and President on a permanent basis. ​ Sale of the Clemson Best Western Property On September 29, 2022, our company sold its interest in the Clemson Best Western Property, a 148 room hotel on 5.92 acres in Clemson, South Carolina, to an unrelated purchaser for $10,015,000.
As of December 31, 2022, our company believes that we are compliant with these covenants. (g) On June 13, 2022, our company refinanced the mortgage loan for the Lancer Center Property, using proceeds from the Wells Fargo Mortgage Facility discussed above.
As of the years ended December 31, 2023 and 2022, respectively, our company believes that we are compliant with these covenants. Our company refinanced the mortgage loan for the Lancer Center Property, using proceeds from the Wells Fargo Mortgage Facility discussed above.
In addition, we believe that AFFO is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO. However, there can be no assurance that AFFO presented by us is comparable to the adjusted or modified FFO of other REITs.
In addition, we believe that AFFO is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO.
During the year ended December 31, 2022, cash used in investing activities consisted of $10,279,714 used for the acquisition of the Salisbury Marketplace Property, $1,019,304 in capitalized expenditures, including $274,662 in building improvements, $300,332 in capitalized leasing commissions, $253,887 in furniture, fixtures and equipment for the Clemson Best Western Hotel property, $177,373 in capitalized tenant improvements, and $13,050 in site improvements, offset by $1,979,837 in cash received from the disposal of investment properties.
During the year ended December 31, 2022, cash used in investing activities consisted of $10,279,714 used for the acquisition of the Salisbury Marketplace Property, $1,019,304 in capitalized expenditures, including $274,662 in building improvements, $300,332 in capitalized leasing commissions, $253,887 in furniture, fixtures and equipment for the Clemson Best Western Hotel property, $177,373 in capitalized tenant improvements, and $13,050 in site improvements, offset by $1,979,837 in cash received from the disposal of investment properties. ​ The non-cash investing activity for the year ended December 31, 2023, that did not affect our cash provided by investing activities, was the transfer of investment properties, net, to assets held for sale, net of $9,707,154.
During the year ended December 31, 2021, net changes in asset and liability accounts resulted in $207,899 in cash used operations.
During the year ended December 31, 2022, net changes in asset and liability accounts resulted in $436,414 in cash used operations.
Cash from operating activities, investing activities and financing activities for the year ended December 31, 2022 are as follows: Operating Activities During the year ended December 31, 2022 our cash provided by operating activities was $1,194,626 compared to cash provided by operating activities of $832,613 for the year ended December 31, 2021, an increase of cash provided by operating activities of $362,013.
Cash from operating activities, investing activities and financing activities for the year ended December 31, 2023 are as follows: Operating Activities During the year ended December 31, 2023 our cash provided by operating activities was $104,013 compared to cash provided by operating activities of $1,194,626 for the year ended December 31, 2022, a decrease in cash provided by operating activities of $1,090,613.
During the year ended December 31, 2022, financing activities generated $18,477,304 in net proceeds from mortgages payable and $1,538,887 in net proceeds, after issuance costs, from common stock issuances under our SEPA (see above), offset by cash used in financing activities, including dividends and distributions of $1,309,180, mortgage debt principal payments of $11,932,137 (including $10,962,483 of cash used to refinance the Lancer Center, Greenbrier Business Center and Parkway properties and $969,654 in normal, monthly principal payments for our company’s other mortgages), repurchases of our company’s common stock of $286,543, including costs and fees, and $84,900 in lender fees associated with the repayment of the Clemson Best Western Property mortgage payable at the closing of its sale on September 29, 2022. ​ During the year ended December 31, 2021, financing activities generated $10,801,411 in net proceeds, after issuance costs, from a common stock issuance, net proceeds, after loan issuance costs, from new mortgages payable associated with the Lancer Center and Parkway acquisitions and the Franklin Square Property mortgage refinancing of $24,377,886, and net proceeds, after issuance costs, from the closing of the third tranche of our convertible debentures of $1,305,000.
During the year ended December 31, 2022, financing activities generated $18,477,304 in net proceeds from mortgages payable and $1,538,887 in net proceeds, after issuance costs, from common stock issuances under our SEPA (see above), offset by cash used in financing activities, including dividends and distributions of $1,309,180, mortgage debt principal payments of $11,932,137 (including $10,962,483 of cash used to refinance the Lancer Center, Greenbrier Business Center and Parkway properties and $969,654 in normal, monthly principal payments for our company’s other mortgages), repurchases of our company’s common stock of $286,543, including costs and fees, and $84,900 in lender fees associated with the repayment of the Clemson Best Western Property mortgage payable at the closing of its sale on September 29, 2022. ​ Future Liquidity Needs Liquidity for general operating needs and our company’s investment properties is generally provided by the rental receipts from our retail properties and flex center properties, and revenues from our hotel properties, if any.
Although we sold our interest in the Clemson Best Western Hotel Property on September 29, 2022, we continue to include hotel properties as a third reportable segment for the years ended December 31, 2022 and 2021.
As of December 31, 2023, our reportable segments were retail center properties and flex center properties. Although we sold our interest in the Clemson Best Western Hotel Property on September 29, 2022, we include hotel properties as a third reportable segment for the year ended December 31, 2022.
After adjusting for noncontrolling interests, the net loss attributable to our common shareholders was $4,769,241. Net loss was $4,358,282 for the year ended December 31, 2021, before adjustments for net income (loss) attributable to noncontrolling interests.
After adjusting for noncontrolling interests, the net loss attributable to our common shareholders was $4,571,279. Net loss was $4,732,214 for the year ended December 31, 2022, before adjustments for net income (loss) attributable to noncontrolling interests.
The new mortgage loan bears interest at a fixed rate of 3.808% and is interest only until January 6, 2025, at which time the monthly payment will become $61,800, which includes interest and principal based on a thirty-year amortization schedule. Our company accounted for this refinancing transaction in accordance with debt extinguishment accounting in accordance with ASC 470.
The mortgage loan bears interest at a fixed rate of 3.808% and is interest only until January 6, 2025, at which time the monthly payment will become $61,800, which includes interest and principal based on a thirty-year amortization schedule.
The mortgage loan agreement for the Hanover Square property includes covenants to (i) maintain a Debt Service Coverage Ratio (“DSCR”) in excess of 1.35 and (ii) maintain a loan-to-value of real estate ratio of 75%. As of December 31, 2022 and 2021, respectively, our company believes that we are compliant with these covenants.
The mortgage loan agreement for the Hanover Square Property includes covenants to (i) maintain a Debt Service Coverage Ratio (“DSCR”) in excess of 1.35 and (ii) maintain a loan-to-value of real estate ratio of 75%.
After adjusting for noncontrolling interests, the net loss attributable to Medalist common shareholders was $4,364,264, for the year ended December 31, 2021. ​ Net loss for the year ended December 31, 2022 increased by $373,932 over the year ended December 31, 2021, before adjustments for net loss attributable to noncontrolling interests.
After adjusting for noncontrolling interests, the net loss attributable to Medalist common shareholders was $4,769,241, for the year ended December 31, 2022. ​ Net loss for the year ended December 31, 2023 decreased by $158,860 over the year ended December 31, 2022, before adjustments for net loss attributable to noncontrolling interests.
The net of (i) the $590,528 increase in cash provided by operations from the first category and (ii) the $228,515 increase in cash provided by operations from the second category results in a total increase of cash provided in operations of $362,013 for the year ended December 31, 2022.
The net of (i) the $229,141 increase in cash provided by operations from the first category and (ii) the $125,128 cash used by operations from the second category results in a total increase of cash provided in operations of $104,013 for the year ended December 31, 2023.
The primary, non-operating liquidity need of our company is $176,810 to pay the dividends and distributions to common shareholders and operating partnership unit holders, and $100,000 to pay the dividends to holders of our mandatorily redeemable preferred stock that were declared on January 10, 2023 and payable January 27, 2023 to holders of record on January 24, 2023, and $1,100,597 in principal payments due on its mortgages payable during the 12-month period from January 1, 2023 through December 31, 2023.
The primary, non-operating liquidity needs of our company are $5,000,000 to retire our mandatorily redeemable preferred stock in February, 2025, $1,000,000 to reduce the balance on our line of credit to $0, $22,994 to pay the dividends and distributions to common shareholders and Operating Partnership Unit holders, and $100,000 to pay the dividends to holders of our mandatorily redeemable preferred stock that were declared on January 10, 2023 and payable February 6, 2024 to holders of record on February 2, 2024, and $1,093,581 in principal payments due on its mortgages payable during the 12-month period from January 1, 2024 through December 31, 2024.
As of December 31, 2022, the Wells Fargo Line of Credit had an outstanding balance of $0. Outstanding balances on the Wells Fargo Line of Credit will bear interest at a floating rate of 2.25% above the daily secured overnight financing rate (“SOFR”).
As of December 31, 2023 and 2022, the Wells Fargo Line of Credit had an outstanding balance of $1,000,000 and $0, respectively. Outstanding balances on the Wells Fargo Line of Credit will bear interest at a floating rate of 2.25% above daily SOFR. As of December 31, 2023 and 2022, SOFR was 5.35% and 4.3%, respectively.
Other income for the year ended December 31, 2022 consisted of $220,881 in income related to the fair value change of the interest rate caps, interest income of $11,706 and miscellaneous income of $3,913.
Other income for the year ended December 31, 2022 consisted of $220,881 in income related to the fair value change of the interest rate cap, interest income of $11,706 and miscellaneous income of $3,913. ​ ​ 35 Table of Contents Other Expense ​ During the year ended December 31, 2023, other expense was $84,564, an increase of $84,564 from other expense of $0 for the year ended December 31, 2022.
Standby Equity Purchase Agreement On November 17, 2021, our company entered into a Standby Equity Purchase Agreement (the “SEPA”) with a financing entity. Under the SEPA, our company may sell up to $6,665,299 of our shares of common stock at our request any time during the 36 months following the execution of the SEPA.
Under the SEPA, our company may sell up to $6,665,299 of our shares of common stock at our request any time during the 36 months following the execution of the SEPA.
Under this agreement, our interest rate exposure is capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3%.
Under this agreement, our interest rate exposure is capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3%. Effective on July 1, 2023, the interest rate index under the Interest Rate Protection Transaction automatically converted to SOFR.
To meet these future liquidity needs, we have the following resources: · $3,922,136 in unrestricted cash as of December 31, 2022 · $1,740,717 held in lender reserves for the purposes of tenant improvements, leasing commissions, real estate taxes and insurance premiums · cash generated from operations during the year ended December 31, 2023, if any; and · Potential proceeds from issuances of common stock under our shelf registration or under the Standby Equity Purchase Agreement (see note 7 of the notes to the consolidated financial statements), although there is no guarantee that any such issuances will be successful in raising additional funds.
To meet these future liquidity needs, our company has the following resources: · $2,234,603 in unrestricted cash as of December 31, 2023; ● $1,575,002 held in lender reserves for the purposes of tenant improvements, leasing commissions, real estate taxes and insurance premiums; · Our company’s $1,500,000 line of credit with Wells Fargo Bank, which had a $1,000,000 outstanding balance as of December 31, 2023; ​ 31 Table of Contents · Cash generated from operations during the year ended December 31, 2024, if any; · Projected proceeds from the sale of the Hanover Square Shopping Center of approximately $2,600,000, which is expected to close during March, 2024; and ● Potential proceeds from issuances of Common Shares under our company’s shelf registration or under the Standby Equity Purchase Agreement (see note 7 of the notes to the consolidated financial statements), although there is no guarantee that any such issuances will be successful in raising additional funds.
While these types of investments are not intended to be a primary focus, we may make such investments in our Manager’s discretion. Our company is externally managed by the Manager. The Manager makes all investment decisions for our company.
While these types of investments are not intended to be a primary focus, we may make such investments in our discretion.
Payments to our company from the Interest Rate Protection Transaction are recorded as an offset to interest expense on our company’s consolidated statements of operations for the year ended December 31, 2022. No such payments were received during the year ended December 31, 2021 because the interest rate in effect did not exceed the interest rate cap.
Payments to our company from the Interest Rate Protection Transaction are recorded as an offset to interest expense on our company’s consolidated statements of operations for the years ended years ended December 31, 2023 and 2022, respectively.
Cash used in investing activities was offset by cash received from the disposal of investment properties of $2,144,529. ​ The non-cash investing activity during the year ended December 31, 2022 was $1,455,777 in restricted cash that was released upon the repayment of the Clemson Best Western Property mortgage payable.
The non-cash investing activity during the year ended December 31, 2022 was $1,455,777 in restricted cash that was released upon the repayment of the Clemson Best Western Property mortgage payable. ​ Financing Activities ​ During the year ended December 31, 2023, our cash used by financing activities was $474,144 compared to cash provided by financing activities of $6,403,431 during the year ended December 31, 2022, an increase in cash used by financing activities of $6,877,575.
As of December 31, 2022, our company has generated net proceeds of $1,538,887 from the issuance of 1,445,400 shares of our common stock at an average price of $1.065 per share under the SEPA. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance Date Shares Issued Price Per Share Total Proceeds March 3, 2022 ​ 90,600 ​ $ 1.088 ​ $ 98,574 March 14, 2022 276,190 ​ 1.050 ​ 290,000 March 17, 2022 278,810 ​ 1.076 ​ 300,000 March 21, 2022 474,068 ​ 1.055 ​ 500,000 April 1, 2022 325,732 ​ 1.075 ​ 350,313 Total 1,445,400 ​ $ 1.065 ​ $ 1,538,887 ​ Common Stock Repurchase Plan In December 2021, our Board approved a program to purchase up to 500,000 shares of our common stock in the open market, up to a maximum price of $4.80 per share (the “Common Stock Repurchase Plan”).
As of December 31, 2022, our company has generated net proceeds of $1,538,887 from the issuance of 180,675 shares of our common stock at an average price of $8.52 per share under the SEPA. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance Date Shares Issued Price Per Share Total Proceeds March 3, 2022 ​ 11,325 ​ $ 8.70 ​ $ 98,574 March 14, 2022 34,524 ​ 8.40 ​ 290,000 March 17, 2022 34,851 ​ 8.61 ​ 300,000 March 21, 2022 59,258 ​ 8.44 ​ 500,000 April 1, 2022 40,718 ​ 8.60 ​ 350,313 Total 180,676 ​ $ 8.52 ​ $ 1,538,887 ​ Common Stock Repurchase Plan In December 2021, the Board approved the purchase up to 62,500 shares of our Common Shares in the open market, up to a maximum price of $38.40 per share under the Common Stock Repurchase Plan.
Financing Activities Mortgages payable Our company financed its acquisitions of its investment properties through mortgages, as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Monthly ​ Interest ​ ​ ​ December 31, Property Payment Rate Maturity ​ 2022 2021 Franklin Square (a) ​ Interest only ​ 3.808 % December 2031 ​ $ 13,250,000 ​ $ 13,250,000 Hanover Square (b) ​ $ 56,882 ​ 4.25 % December 2027 ​ 9,877,867 ​ 10,134,667 Ashley Plaza (c) ​ $ 52,795 ​ 3.75 % September 2029 ​ 10,930,370 ​ 11,127,111 Brookfield Center (d) ​ $ 22,876 ​ 3.90 % November 2029 ​ 4,663,206 ​ 4,758,344 Parkway Center (e) ​ $ 19,720 ​ ​ Variable ​ October 2026 ​ ​ 4,992,427 ​ ​ 5,090,210 Wells Fargo Facility (f) ​ $ 103,438 ​ ​ 4.50 % June 2027 ​ ​ 18,351,981 ​ ​ — Lancer Center (g) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ 6,488,034 Greenbrier Business Center (h) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ ​ 4,495,000 Total mortgages payable ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 62,065,851 ​ $ 55,343,366 ​ Amounts presented do not reflect unamortized loan issuance costs.
The fair value of the grants was determined by the market price of our shares of our common stock on the effective date of the grant. 25 Table of Contents Financing Activities Mortgages payable Our company financed its acquisitions of its investment properties through mortgages, as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Monthly ​ Interest ​ ​ ​ December 31, Property Payment Rate Maturity ​ 2023 2022 Franklin Square (a) ​ Interest only ​ 3.808 % December 2031 ​ $ 13,250,000 ​ $ 13,250,000 Hanover Square (b) ​ $ 78,098 ​ 6.94 % December 2027 ​ — ​ 9,877,867 Ashley Plaza (c) ​ $ 52,795 ​ 3.75 % September 2029 ​ 10,708,557 ​ 10,930,370 Brookfield Center (d) ​ $ 22,876 ​ 3.90 % November 2029 ​ 4,571,410 ​ 4,663,206 Parkway Center (e) ​ $ 28,161 ​ ​ Variable ​ November 2031 ​ ​ 4,870,403 ​ ​ 4,992,427 Wells Fargo Facility (f) ​ $ 103,438 ​ ​ 4.50 % June 2027 ​ ​ 17,939,276 ​ ​ 18,351,981 Total mortgages payable ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 51,339,646 ​ $ 62,065,851 ​ Amounts presented do not reflect unamortized loan issuance costs.
Below is our company’s FFO, which is a non-GAAP measurement, for the years ended December 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ 2022 2021 Net income (loss) ​ $ (4,732,214) ​ ​ (4,358,282) Depreciation of tangible real property assets (1) ​ 2,561,843 ​ ​ 1,912,353 Depreciation of tenant improvements (2) ​ 718,704 ​ ​ 437,372 Amortization of leasing commissions (3) ​ 100,702 ​ ​ 65,414 Amortization of intangible assets (4) ​ 1,325,574 ​ ​ 1,093,565 Loss (gain) on sale of investment properties (5) ​ ​ 421,096 ​ ​ (124,641) Loss on impairment (6) ​ 36,670 ​ ​ - Impairment of assets held for sale (6) ​ 175,671 ​ ​ - Loss on extinguishment of debt (7) ​ ​ 389,207 ​ ​ - Funds from operations ​ $ 997,253 ​ $ (974,219) (1) Depreciation expense for buildings, site improvements and furniture and fixtures.
This allows our company to use FFO as a tool to measure the overall performance of its investment properties, as a whole, not just the portion of the investment properties controlled by our company’s shareholders. 36 Table of Contents Below is our company’s FFO, which is a non-GAAP measurement, for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ 2023 2022 Net loss ​ $ (4,573,354) ​ ​ (4,732,214) Depreciation of tangible real property assets (1) ​ 2,695,058 ​ ​ 2,561,843 Depreciation of tenant improvements (2) ​ 836,096 ​ ​ 718,704 Amortization of leasing commissions (3) ​ 152,661 ​ ​ 100,702 Amortization of intangible assets (4) ​ 890,348 ​ ​ 1,325,574 Loss on disposal of investment property (5) ​ ​ — ​ ​ 421,096 Loss on impairment (5) ​ 90,221 ​ ​ 36,670 Impairment of assets held for sale (5) ​ — ​ ​ 175,671 Loss on extinguishment of debt (6) ​ ​ — ​ ​ 389,207 Funds from operations ​ $ 91,030 ​ $ 997,253 (1) Depreciation expense for buildings, site improvements and furniture and fixtures.
On November 22, 2022, the Compensation Committee approved a grant of 76,434 shares of our common stock to two employees of our Manager who also serve as directors of our company, a grant of 114,651 shares of our common stock to our company’s three independent directors, a grant of 76,433 shares to the chief financial officer of our company, and a grant of 50,956 shares of our common stock to the vice president and senior accountant of our company under the Equity Incentive Plan.
The fair value of the grants was determined by the market price of our shares of our common stock on the effective date of the grant. ​ On November 22, 2022, the Compensation Committee approved a grant of 9,554 shares of our common stock to two employees of our Manager who also served as directors of our company, a grant of 14,331 shares of our common stock to our company’s three independent directors at the time, a grant of 9,555 shares of our common stock to the chief financial officer of our company, and a grant of 6,370 shares of our common stock to the vice president and senior accountant of our company under the Equity Incentive Plan.
(2) Includes $3,435 and $0 of bad debt expense for the years ended December 31, 2022 and 2021, respectively. (3) Includes $5,096 and $0 of bad debt expense for the years ended December 31, 2022 and 2021, respectively.
(2) Includes $44,704 and $8,531 of bad debt expense for the years ended December 31, 2023 and 2022, respectively.
Total AFFO for the years ended December 31, 2022 and 2021 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ 2022 2021 Funds from operations ​ $ 997,253 ​ $ (974,219) Amortization of above market leases (1) ​ 188,903 ​ 250,504 Amortization of below market leases (2) ​ (415,624) ​ (274,528) Straight line rent (3) ​ (149,831) ​ (198,594) Capital expenditures (4) ​ (1,019,304) ​ (536,685) (Increase) decrease in fair value of interest rate cap (5) ​ (220,881) ​ 27,281 Amortization of loan issuance costs (6) ​ 107,595 ​ 103,180 Amortization of preferred stock discount and offering costs (7) ​ 222,881 ​ 204,383 Amortization of convertible debenture discount, offering costs and beneficial conversion feature (8) ​ ​ — ​ ​ 1,718,487 Share-based compensation (9) ​ 483,100 ​ 149,981 Bad debt expense (10) ​ 46,932 ​ 39,024 Debt forgiveness (10) ​ ​ — ​ ​ (176,300) Adjusted funds from operations (AFFO) ​ $ 241,024 ​ $ 332,514 (1) Adjustment to FFO resulting from non-cash amortization of intangible assets.
However, there can be no assurance that AFFO presented by us is comparable to the adjusted or modified FFO of other REITs. 37 Table of Contents Total AFFO for the years ended December 31, 2023 and 2022 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ 2023 2022 Funds from operations ​ $ 91,030 ​ $ 997,253 Amortization of above market leases (1) ​ 93,696 ​ 188,903 Amortization of below market leases (2) ​ (368,803) ​ (415,624) Straight line rent (3) ​ (100,010) ​ (149,831) Capital expenditures (4) ​ (1,483,117) ​ (1,019,304) Decrease (increase) in fair value of interest rate cap (5) ​ 84,564 ​ (220,881) Amortization of loan issuance costs (6) ​ 106,882 ​ 107,595 Amortization of preferred stock discount and offering costs (7) ​ 243,054 ​ 222,881 Share-based compensation (8) ​ — ​ 483,100 Bad debt expense (9) ​ 63,282 ​ 46,932 Adjusted funds from operations (AFFO) ​ $ (1,269,422) ​ $ 241,024 (1) Adjustment to FFO resulting from non-cash amortization of intangible assets.
On March 2, 2022, the Compensation Committee approved a grant of 60,000 shares of our common stock to two employees of our Manager who also serve as directors of our company, a grant of 90,000 shares of our common stock to our company’s three independent directors, and a grant of 60,000 shares to the chief financial officer of our company under the Equity Incentive Plan.
The repurchase program does not obligate our company to acquire any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at our company’s discretion. ​ Common stock grants under the 2018 Equity Incentive Plan On March 2, 2022, the Compensation Committee approved a grant of 7,500 shares of our common stock to two employees of the Manager who also served as directors of our company, a grant of 11,250 shares of our common stock to our company’s three independent directors at the time, and a grant of 7,500 shares of our common stock to the chief financial officer of our company under the Equity Incentive Plan.
This increase of $228,515 in cash used in operations resulting from changes in assets and liabilities is a result of decreased changes in accounts payable and accrued liabilities of $196,536, increased changes in other assets of $143,930, decreased changes in unbilled rent of $48,763, offset by decreased changes in rent and other receivables, net, of $63,188.
This decrease of $311,286 in cash used in operations resulting from changes in assets and liabilities is a result of decreased changes in accounts payable and accrued liabilities of $6,162, increased changes in other assets of $225,544, decreased changes in unbilled rent of $49,821, offset by increased changes in rent and other receivables, net, of $29,759.
Results of Operations Year ended December 31, 2022 Revenues Total revenue was $11,091,325 for the year ended December 31, 2022, consisting of $7,053,757 in revenues from retail center properties, $1,507,649 from hotel properties and $2,529,919 from flex center properties.
Results of Operations Year ended December 31, 2023 Revenues Total revenue was $10,272,826 for the year ended December 31, 2023, consisting of $7,768,174 in revenues from retail center properties and $2,504,652 from flex center properties.
Decreased hotel operating expenses of $1,701,451 resulting from the sale of the Hampton Inn Property and decreased operating expenses of $65,699 resulting from the sale of the Clemson Best Western Property on September 29, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ ​ ​ December 31, ​ Increase / ​ 2022 2021 (Decrease) Hotel Properties ​ ​ ​ Hampton Inn Property ​ $ — ​ $ 1,701,451 ​ $ (1,701,451) Clemson Best Western Property ​ 1,335,801 ​ 1,401,500 ​ (65,699) ​ ​ $ 1,335,801 ​ $ 3,102,951 ​ $ (1,767,150) ​ Operating expenses from the flex center properties were $693,374 for the year ended December 31, 2022, an increase of $348,979 over flex center property operating expenses for the year ended December 31, 2021 due to increased operating expenses from the Greenbrier Business Center of $131,560 and Parkway Property of $210,612, resulting from owning both properties for the full year ended December 31, 2022, and slightly increased operating expenses from the Brookfield Center Property of $6,807. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ ​ ​ December 31, ​ Increase / ​ 2022 2021 (Decrease) Flex Center Properties ​ ​ ​ ​ ​ ​ ​ ​ ​ Brookfield Center Property (1) ​ $ 249,001 ​ $ 242,194 ​ $ 6,807 Greenbrier Business Center Property (2) ​ ​ 206,839 ​ ​ 75,279 ​ ​ 131,560 Parkway Center Property (3) ​ ​ 237,534 ​ ​ 26,922 ​ ​ 210,612 ​ ​ $ 693,374 ​ $ 344,395 ​ $ 348,979 ​ (1) Includes $0 and $678 of bad debt expense for the years ended December 31, 2022 and 2021, respectively.
Decreased hotel operating expenses of $1,335,801 resulting from the sale of the Clemson Best Western Property on September 29, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ ​ ​ December 31, ​ Increase / ​ ​ 2023 2022 ​ (Decrease) Hotel Property ​ ​ ​ Clemson Best Western Property ​ $ — ​ $ 1,335,801 ​ $ (1,335,801) ​ ​ $ — ​ $ 1,335,801 ​ $ (1,335,801) ​ Operating expenses from the flex center properties were $731,522 for the year ended December 31, 2023, an increase of $38,148 over flex center property operating expenses for the year ended December 31, 2022 due to increased operating expenses from the Greenbrier Business Center Property of $72,242,due to increased utilities expense and increased bad debt expense, offset by reduced operating expenses from the Parkway Property of $29,221 and the Brookfield Center Property of $4,873. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ ​ ​ December 31, ​ Increase / ​ ​ 2023 2022 ​ (Decrease) Flex Center Properties ​ ​ ​ ​ ​ ​ ​ ​ ​ Brookfield Center Property ​ $ 244,128 ​ $ 249,001 ​ $ (4,873) Greenbrier Business Center Property (1) ​ ​ 279,081 ​ ​ 206,839 ​ ​ 72,242 Parkway Center Property (2) ​ ​ 208,313 ​ ​ 237,534 ​ ​ (29,221) ​ ​ $ 731,522 ​ $ 693,374 ​ $ 38,148 ​ (1) Includes $38,584 and $3,435 of bad debt expense for the years ended December 31, 2023 and 2022, respectively.
On November 8, 2021, we closed on a new loan in the principal amount of $13,250,000 which bears interest at a fixed rate of 3.808%, has a ten-year term, and matures on December 6, 2031.
(a) The mortgage loan for the Franklin Square Property in the principal amount of $13,250,000 has a ten-year term and matures on December 6, 2031.
The shelf registration statement is intended to provide additional flexibility to finance future business opportunities through timely and cost-effective access to capital markets. Under the shelf registration statement, our company may, from time to time, issue common stock up to an aggregate amount of $150 million. The shelf registration statement was declared effective by the SEC on July 27, 2021.
Shelf Registration On June 21, 2021, our company filed a shelf registration statement on Form S-3 with the SEC. The shelf registration statement is intended to provide additional flexibility to finance future business opportunities through timely and cost-effective access to capital markets.
This decrease was a result of (i) decreased interest expense of $189,388 from the Franklin Square mortgage due to its refinancing in November 2021 at a lower interest rate and principal amount, (ii) decreased interest expense of $475,844 resulting from the sale of the Hampton Inn Property and $163,702 from the sale of the Clemson Best Western Property, (iii) decreased amortization and interest on convertible debentures of $1,760,973, (iv) slight decreases in interest expense for the Hanover Square mortgage of $12,645, the Ashley Plaza mortgage of $7,980, and the Brookfield Center mortgage of $3,417, and (v) decreased other interest of $5,117, offset by increased interest expense from the Wells Fargo Mortgage Facility, which refinanced the Lancer Center and Greenbrier Business Center mortgages payable, and financed the acquisition of the Salisbury Marketplace Property, acquisition of the Lancer Center Property, Parkway Property, Greenbrier Business Center Property and the Salisbury Marketplace Property (total increase in interest expense of $621,401 for the four properties, combined) and increased amortization of preferred stock issuance costs of $18,498.
This decrease was a result of decreased interest expense from the Ashley Plaza mortgage of $8,289, decreased interest expense of $427,244 from the sale of the Clemson Best Western Property, and decreased interest expense of $3,555 from the Brookfield Center mortgage, offset by increased interest expense for the Hanover Square mortgage of $268,416 due to the rate reset on January 1, 2023, increased interest expense from the Wells Fargo Mortgage Facility, which refinanced the Lancer Center and Greenbrier Business Center mortgages payable, and financed the acquisition of the Salisbury Marketplace (total increase in interest expense of $102,338 for the three properties, combined), increased interest expense of $33,973 for the Wells Fargo Line of Credit, and increased amortization of preferred stock issuance costs of $20,173.
Increased operating expenses from the acquisition of the Lancer Center Property of $227,061 and the Salisbury Marketplace Property of $128,013, and from two of our existing properties, Franklin Square, which increased by $53,040, and Ashley Plaza which increased by $5,336, were offset by reduced expenses from the Hanover Square Property of $20,258. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ ​ ​ December 31, ​ Increase / ​ 2022 2021 (Decrease) Retail Center Properties ​ ​ ​ Franklin Square Property (1) ​ $ 721,852 ​ $ 668,812 ​ $ 53,040 Hanover Square Property (2) ​ 310,990 ​ 331,248 ​ (20,258) Ashley Plaza Property (3) ​ ​ 334,460 ​ ​ 329,124 ​ ​ 5,336 Lancer Center Property (4) ​ 455,196 ​ 228,135 ​ 227,061 Salisbury Property (5) ​ 128,013 ​ — ​ 128,013 ​ ​ $ 1,950,511 ​ $ 1,557,319 ​ $ 393,192 (1) Includes bad debt expense of $211 and $7,526 for the years ended December 31, 2022 and 2021, respectively.
Increased operating expenses from the acquisition of the Salisbury Marketplace Property of $116,668, and from the Hanover Square Property of $7,860, were offset by reduced operating expenses form the Franklin Square Property of $76,117, the Ashley Plaza Property of $2,264 and the Lancer Center Property of $64,381. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ ​ ​ December 31, ​ Increase / ​ ​ 2023 2022 ​ (Decrease) Retail Center Properties ​ ​ ​ Franklin Square Property (1) ​ $ 645,735 ​ $ 721,852 ​ $ (76,117) Hanover Square Property ​ 318,850 ​ 310,990 ​ 7,860 Ashley Plaza Property (2) ​ ​ 332,196 ​ ​ 334,460 ​ ​ (2,264) Lancer Center Property (3) ​ 390,815 ​ 455,196 ​ (64,381) Salisbury Property (4) ​ 244,681 ​ 128,013 ​ 116,668 ​ ​ $ 1,932,277 ​ $ 1,950,511 ​ $ (18,234) (1) Includes bad debt expense of $0 and $211 for the years ended December 31, 2023 and 2022, respectively. ​ (2) Includes bad debt expense of $0 and $7,302 for the years ended December 31, 2023 and 2022, respectively. ​ (3) Includes bad debt expense of $2,208 and $14,771 for the years ended December 31, 2023 and 2022, respectively. ​ (4) Includes bad debt expense of $16,370 and $16,117 for the years ended December 31, 2023 and 2022, respectively. ​ Operating expenses for hotel properties were $0 for the year ended December 31, 2023, a decrease of $1,335,801 from operating expenses from hotel properties for the year ended December 31, 2022.
For the period from September 1, 2022 through December 31, 2022, the effective rate for the Parkway Property mortgage exceeded the 5.25% cap, and payments from the Interest Rate Protection Transaction resulted in a net interest expense based on the 5.25% cap rate.
For the period from September 1, 2022 through December 31, 2023, the applicable index (LIBOR or SOFR), exceeded the 3% cap, and payments from the Interest Rate Protection Transaction reduced our company’s net interest expense.
Total revenues for the year ended December 31, 2022 decreased by $381,224 over the year ended December 31, 2021, resulting from decreased hotel property revenues from (i) the sale of our company’s Hampton Inn Property in August 2021 and (ii) the termination of the Clemson University occupancy agreement for our Clemson Best Western Property, offset by increased revenues from our company’s acquisition of the Lancer Center, Parkway, Greenbrier Business Center and Salisbury Marketplace properties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ ​ ​ ​ December 31, ​ Increase / ​ ​ 2022 2021 (Decrease) Revenues ​ ​ ​ Retail center properties ​ $ 7,053,757 ​ $ 5,634,396 ​ $ 1,419,361 ​ Hotel properties ​ 1,507,649 ​ 4,635,331 ​ (3,127,682) ​ Flex center properties ​ 2,529,919 ​ 1,202,822 ​ 1,327,097 ​ Total Revenues ​ $ 11,091,325 ​ $ 11,472,549 ​ $ (381,224) ​ ​ 34 Table of Contents Revenues from retail center properties were $7,053,757 for the year ended December 31, 2022, an increase of $1,419,361 over retail center property revenues for the year ended December 31, 2021.
Total revenues for the year ended December 31, 2023 decreased by $818,499 over the year ended December 31, 2022, resulting from decreased hotel property revenues from the sale of the Clemson Best Western Property and decreased flex center properties, offset by increased retail center revenues from new leasing activity in our retail center properties and our company’s acquisition of the Salisbury Marketplace properties ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ ​ ​ ​ December 31, ​ Increase / ​ ​ ​ 2023 2022 ​ (Decrease) ​ Revenues ​ ​ ​ Retail center properties ​ $ 7,768,174 ​ $ 7,053,757 ​ $ 714,417 ​ Hotel property ​ — ​ 1,507,649 ​ (1,507,649) ​ Flex center properties ​ 2,504,652 ​ 2,529,919 ​ (25,267) ​ Total Revenues ​ $ 10,272,826 ​ $ 11,091,325 ​ $ (818,499) ​ ​ Revenues from retail center properties were $7,768,174 for the year ended December 31, 2023, an increase of $714,417 over retail center property revenues for the year ended December 31, 2022.
The Salisbury Marketplace Property, built in 1986, was 91.2% leased as of December 31, 2022, and is anchored by Food Lion, Citi Trends and Family Dollar. The purchase price for the Salisbury Marketplace Property was $10,025,000 paid through a combination of cash provided by our company and the incurrence of new mortgage debt.
Salisbury Marketplace Property Acquisition On June 13, 2022, our company, through a wholly owned subsidiary, completed its acquisition of the Salisbury Marketplace Property, a 79,732 square foot retail property located in Salisbury, North Carolina. The Salisbury Marketplace Property, built in 1986, was 91.2% leased as of December 31, 2023, and is anchored by Food Lion, Citi Trends and Family Dollar.
This decrease was a result of (i) increased depreciation and amortization expenses of $1,198,119 from owning three properties (Lancer Center, Parkway and Greenbrier Business Center) for the full year ended December 31, 2022, and the acquisition of the Salisbury Marketplace Property, (ii) increased impairment of assets held for sale of $175,671 related to the Clemson Best Western Property, (iii) increased loss on impairment of $36,670, (iv) increased loss on extinguishment of debt of $389,207, (vi) increased share based compensation expenses of $333,119, (vii) increased legal, accounting and other professional fees of $162,682, (viii) increased loss on disposition of investment properties of $545,737 and (ix) increased other expenses of $227,164, offset by increased investment property operating income of $643,755 and decreased corporate general and administrative expenses of $196,484. ​ 37 Table of Contents Interest Expense ​ Interest expense was $3,555,088 and $5,534,255 for the years ended December 31, 2022 and 2021, respectively, as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ ​ ​ December 31, ​ Increase/ ​ 2022 2021 (Decrease) Franklin Square ​ $ 539,940 ​ $ 729,328 ​ $ (189,388) Hanover Square ​ 439,188 ​ 451,833 ​ (12,645) Hampton Inn ​ — ​ 475,844 ​ (475,844) Ashley Plaza ​ 436,731 ​ 444,711 ​ (7,980) Clemson Best Western ​ 427,244 ​ 590,946 ​ (163,702) Brookfield Center ​ 197,620 ​ 201,037 ​ (3,417) Lancer Center ​ ​ 127,107 ​ ​ 183,997 ​ ​ (56,890) Greenbrier Business Center ​ ​ 82,564 ​ ​ 64,353 ​ ​ 18,211 Parkway Center ​ ​ 201,824 ​ ​ 21,733 ​ ​ 180,091 Wells Fargo Mortgage Facility ​ ​ 479,989 ​ ​ — ​ ​ 479,989 Amortization and preferred stock dividends on mandatorily redeemable preferred stock ​ 622,881 ​ 604,383 ​ 18,498 Amortization and interest on convertible debentures ​ — ​ 1,760,973 ​ (1,760,973) Other interest ​ — ​ 5,117 ​ (5,117) Total interest expense ​ $ 3,555,088 ​ $ 5,534,255 ​ $ (1,979,167) ​ Total interest expense for the year ended December 31, 2022 decreased by $1,979,167 over the year ended December 31, 2021.
This decrease was a result of increased investment property operating income of $497,388, decreased share based compensation expenses of $483,100, decreased legal, accounting and other professional fees of $236,940, decreased impairment of assets held for sale of $175,671 related to the Clemson Best Western Property, decreased other operating expenses of $227,164, decreased depreciation and amortization expenses of $132,660, decreased loss on disposition of investment properties of $421,096, and decreased loss on extinguishment of debt of $389,207, offset by increased bad debt expense of $16,350, increased corporate general and administrative expenses of $26,692, increased loss on impairment of $53,551, and increased management restructuring expenses of $2,066,521. ​ Interest Expense ​ Interest expense was $3,540,900 and $3,555,088 for the years ended December 31, 2023 and 2022, respectively, as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ ​ ​ December 31, ​ Increase / ​ ​ 2023 2022 ​ (Decrease) Franklin Square ​ $ 539,940 ​ $ 539,940 ​ $ — Hanover Square ​ 707,604 ​ 439,188 ​ 268,416 Ashley Plaza ​ 428,442 ​ 436,731 ​ (8,289) Clemson Best Western ​ — ​ 427,244 ​ (427,244) Brookfield Center ​ 194,065 ​ 197,620 ​ (3,555) Lancer Center ​ ​ — ​ ​ 127,107 ​ ​ (127,107) Greenbrier Business Center ​ ​ — ​ ​ 82,564 ​ ​ (82,564) Parkway Center ​ ​ 138,388 ​ ​ 201,824 ​ ​ (63,436) Wells Fargo Mortgage Facility ​ ​ 855,434 ​ ​ 479,989 ​ ​ 375,445 Wells Fargo Line of Credit ​ ​ 33,973 ​ ​ — ​ ​ 33,973 Amortization and preferred stock dividends on mandatorily redeemable preferred stock ​ 643,054 ​ 622,881 ​ 20,173 Total interest expense ​ $ 3,540,900 ​ $ 3,555,088 ​ $ (14,188) ​ Total interest expense for the year ended December 31, 2023 decreased by $14,188 over the year ended December 31, 2022.
We incurred $298,024 of acquisition and closing costs which were capitalized and added to the tangible assets acquired. Wells Fargo Mortgage Facility On June 13, 2022, our company, through its wholly-owned subsidiaries, entered into a mortgage loan facility with Wells Fargo Bank (the “Wells Fargo Mortgage Facility”) in the principal amount of $18,609,500.
Several conditions to closing on the purchase remain to be satisfied, and there can be no assurance that our company will complete the transaction on the general terms described above or at all. ​ 23 Table of Contents Wells Fargo Mortgage Facility On June 13, 2022, our company, through its wholly owned subsidiaries, entered into a mortgage loan facility with Wells Fargo Bank (the “Wells Fargo Mortgage Facility”) in the principal amount of $18,609,500.
The monthly payment, which varies based on the interest rate in effect each month, includes interest at the variable rate, and principal based on a thirty-year amortization schedule. On October 28, 2021, our company entered into an Interest Rate Protection Transaction to limit our exposure to increases in interest rates on the variable rate mortgage loan on the Parkway Property.
The monthly payment, which varies based on the interest rate in effect each month, includes interest at the variable rate, and principal based on a thirty-year amortization schedule. The mortgage loan for the Parkway Property includes a covenant to 26 Table of Contents maintain a debt service coverage ratio of not less than 1.30 to 1.00 on an annual basis.
The purchase price for the Lancer Center Property was $10,100,000, less a $200,000 credit to our company for major repairs, paid through a combination of cash provided by our company and the incurrence of new mortgage debt. Our company’s total investment, including $143,130 of loan issuance costs, was $10,205,385.
The purchase price for the Salisbury Marketplace Property was $10,025,000 paid through a combination of cash provided by our company and the incurrence of new mortgage debt. Our company’s total investment was $10,279,714 and we incurred $254,714 of acquisition and closing costs which were capitalized and added to the tangible assets acquired.
Due to the sale of the Clemson Best Western Hotel Property on September 29, 2022, our company’s mortgages payable, net, associated with assets held for sale was $0 as of December 31, 2022, on our consolidated balance sheets. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance ​ ​ Monthly ​ Interest ​ ​ ​ December 31, ​ December 31, Property Payment Rate Maturity 2022 2021 Clemson Best Western (a) ​ Interest only ​ Variable ​ October 2022 ​ ​ — ​ ​ 7,750,000 ​ Amounts presented do not reflect unamortized loan issuance costs.
Our company financed its acquisitions of its assets held for sale through mortgages, which as of December 31, 2023 are recorded as mortgages payable, net, associated with assets held for sale, on our consolidated balance sheets, as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Monthly ​ Interest ​ ​ ​ December 31, Property Payment Rate Maturity 2023 2022 Hanover Square (a) $ 78,098 ​ 6.94 % December 2027 ​ $ 9,640,725 ​ $ — Total mortgages payable associated with assets held for sale ​ ​ ​ ​ ​ ​ ​ $ 9,640,725 ​ $ — ​ Amounts presented do not reflect unamortized loan issuance costs.
(5) Includes bad debt expense of $16,117 and $0 for the years ended December 31, 2022 and 2021, respectively. 36 Table of Contents Operating expenses for hotel properties were $1,335,801 for the year ended December 31, 2022, a decrease of $1,767,150 from operating expenses from hotel properties for the year ended December 31, 2021.
(2) Includes $6,120 and $5,096 of bad debt expense for the years ended December 31, 2023 and 2022, respectively. 34 Table of Contents Operating Loss Operating loss for the year ended December 31, 2023 was $997,164, a decrease of $416,462 from the operating loss of $1,413,626 for the year ended December 31, 2022.
Other Income During the year ended December 31, 2022, other income was $236,500, a decrease of $124,969 from other income of $361,469 for the year ended December 31, 2021.
Other Income During the year ended December 31, 2023, other income was $49,274, a decrease of $187,226 from other income of $236,500 for the year ended December 31, 2022. Other income for the year ended December 31, 2023 consisted of interest income of $38,308 and lease termination fee income of $10,966.
As of December 31, 2022, we have repurchased a total of 268,070 shares of our common stock on the open market under the Common Stock Repurchase Plan at an average price of $1.038 per share. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase Date Shares Purchased Price Per Share Total Cost January 4, 2022 ​ 400 ​ $ 1.060 ​ $ 424 January 5, 2022 48,205 ​ 1.060 ​ 51,093 January 6, 2022 100,000 ​ 1.046 ​ 104,556 January 7, 2022 30,000 ​ 1.050 ​ 31,500 January 10, 2022 50,000 ​ 1.020 ​ 51,000 January 14, 2022 100 ​ 1.010 ​ 101 January 21, 2022 39,365 ​ 1.006 ​ 39,603 Total 268,070 ​ $ 1.038 ​ $ 278,277 ​ Common stock grants under the 2018 Equity Incentive Plan On March 16, 2021, the Compensation Committee approved a grant of 40,356 shares of our common stock to our company’s three independent directors, and a grant of 26,900 shares to the chief financial officer of our company under the Medalist Diversified REIT, Inc. 2018 Equity Incentive Plan (the “Equity Incentive Plan”).
As of December 31, 2022, we have repurchased a total 24 Table of Contents of 33,509 shares of our Common Shares in the open market under the Common Stock Repurchase Plan at an average price of $8.30 per share. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase Date Shares Purchased Price Per Share Total Cost January 4, 2022 ​ 50 ​ $ 8.48 ​ $ 424 January 5, 2022 6,026 ​ 8.48 ​ 51,093 January 6, 2022 12,500 ​ 8.36 ​ 104,556 January 7, 2022 3,750 ​ 8.40 ​ 31,500 January 10, 2022 6,250 ​ 8.16 ​ 51,000 January 14, 2022 12 ​ 8.08 ​ 101 January 21, 2022 4,921 ​ 8.05 ​ 39,603 Total 33,509 ​ $ 8.30 ​ $ 278,277 ​ On October 18, 2023, the Board approved the repurchase of an additional 200,000 Common Shares for a maximum price of $6.00 per share under the Common Stock Repurchase Program previously approved by the Board in December 2021.
Reporting Segments We establish operating segments at the property level and aggregate individual properties into reportable segments based on product types in which we have investments. As of December 31, 2022, our reportable segments were retail center properties, flex center properties, and hotel properties.
Since the termination of the Management Agreement, our company has been managed internally as directed by our company’s Board of Directors (the “Board”). Our company’s stockholders are not involved in its day-to-day affairs. Reporting Segments We establish operating segments at the property level and aggregate individual properties into reportable segments based on product types in which we have investments.
Internal liquidity to fund operating needs are expected to be provided primarily by the rental receipts from our retail properties and flex center property. During the year ended December 31, 2022, the COVID-19 pandemic continued to impact our financial and operational results that provide the liquidity for operating needs.
Internal liquidity to fund operating needs are expected to be provided primarily by the rental receipts from our retail and flex center properties. Cash Flows At December 31, 2023, our consolidated cash and restricted cash on hand totaled $3,809,605 compared to consolidated cash on hand of $5,662,853 at December 31, 2022.

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