Real Estate Investments

12 Months Ended

Dec. 31, 2023

(4) Real Estate Investments –

The Partnership leases its properties to tenants under net leases, classified as operating leases. Under a net lease, the tenant is responsible for real estate taxes, insurance, maintenance, repairs and operating expenses for the property. For some leases, the Partnership is responsible for repairs to the structural components of the building, the roof, and the parking lot. At the time the properties were acquired, the remaining primary lease terms varied from 8 to 20 years, except for the DaVita facility in Hempstead, Texas, which had a remaining primary term of 7.75 years. The leases provide the tenants with two to five five-year renewal options subject to the same terms and conditions as the primary term, except for the Talecris Plasma Facility in Dallas, Texas which has one ten-year renewal option. The lease for the Advance Auto Parts store in Indianapolis, Indiana was extended to end on April 30, 2025.

The Partnership's properties are commercial, single-tenant buildings. The Advance Auto Parts store in Indianapolis, Indiana was constructed in 2005 and acquired in 2006. The St. Vincent Medical Clinic in Lonoke, Arkansas was constructed in 2010 and acquired in 2013. The Talecris Plasma Facility in Dallas, Texas was constructed in 2008 and acquired in 2020. The DaVita facility in Hempstead, Texas was constructed in 2015 and acquired in 2022. There have been no costs capitalized as improvements subsequent to the acquisitions.

The cost of the properties not held for sale and related accumulated depreciation at December 31, 2023 are as follows:


Property	Land		Buildings		Total		Accumulated Depreciation

Advance Auto Parts, Indianapolis, IN	$	537,914	$	706,259	$	1,244,173	$	481,440
DaVita, Hempstead, TX		629,728		2,069,828		2,699,556		103,491
St. Vincent Medical Clinic, Lonoke, AR		161,250		872,273		1,033,523		378,871
Talecris Plasma Facility, Dallas, TX		585,423		1,707,998		2,293,421		233,427
	$	1,914,315	$	5,356,358	$	7,270,673	$	1,197,229

For the years ended December 31, 2023 and 2022, the Partnership recognized depreciation expense of $215,304 and $169,896, respectively.

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


		2023				2022
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
In-Place Lease Intangibles (weighted average life of 51 and 62 months, respectively)	$	738,140	$	344,362	$	738,140	$	259,466

Above-Market Lease Intangibles (weighted average life of 23 and 34 months, respectively)		677,719		515,245		677,719		449,858
Acquired Intangible Lease Assets	$	1,415,859	$	859,607	$	1,415,859	$	709,324

For the years ended December 31, 2023 and 2022, the value of in-place lease intangibles amortized to expense was $84,896 and $61,298 and the decrease to rental income for above-market leases was $65,387 and $64,776, respectively.

For lease intangibles not held for sale at December 31, 2023, the estimated amortization for the next five years is as follows:


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

2024	$	70,506	$	30,875
2025		70,506		30,875
2026		70,506		30,875
2027		70,506		30,875
2028		58,777		23,927
	$	340,801	$	147,427

In February 2022, the Partnership entered into an agreement to sell its 33% interest in the Best Buy store in Lake Geneva, Wisconsin to an unrelated third party. On March 29, 2022, the sale closed with the Partnership receiving net proceeds of $1,438,654, which resulted in a net gain of $319,006. At the time of sale, the cost and related accumulated depreciation was $2,022,246 and $902,598, respectively.

In June 2022, the Partnership entered into an agreement to sell its 28% interest in the Staples store in Clermont, Florida to an unrelated third party. On June 30, 2022, the sale closed with the Partnership receiving net proceeds of $762,093, which resulted in a net gain of $205,662. At the time of sale, the cost and related accumulated depreciation was $900,295 and $343,864, respectively.

In September 2022, the Partnership purchased a 100% interest in the DaVita property in Hempstead, Texas for $3,051,009. The Partnership allocated $351,453 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles of $273,715 and above-market lease intangibles of $77,738. The property is leased to Bollinger Dialysis, LLC under a lease agreement with a remaining primary term of approximately 7.75 years (as of date of purchase) and annual rent of $182,209.

For properties owned as of December 31, 2023, the minimum future rent payments required by the leases are as follows:

2024	$	471,000
2025		431,745
2026		419,962
2027		426,548
2028		354,161
Thereafter		300,645
	$	2,404,061

There were no contingent rents recognized in 2023 and 2022.