Note 12 - Segments

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

12. SEGMENTS

The Company’s reportable segments consist of three types of real estate properties for which the Company’s decision-makers internally evaluate operating performance and financial results: Office/Industrial Properties, Model Home Properties and Retail Properties. The Company also has certain corporate-level activities including accounting, finance, legal administration, and management information systems which are not considered separate operating segments.  There is no material inter-segment activity.

The Company evaluates the performance of its segments based upon net operating income (“NOI”), which is a non-GAAP supplemental financial measure. The Company defines NOI for its segments as operating revenues (rental income, tenant reimbursements and other operating income) less property and related expenses (property operating expenses, real estate taxes, insurance, asset management fees, impairments and provision for bad debt). NOI excludes certain items that are not considered to be controllable in connection with the management of an asset such as non-property income and expenses, depreciation and amortization, real estate acquisition fees and expenses and corporate general and administrative expenses. The Company uses NOI to evaluate the operating performance of the Company’s real estate investments and to make decisions regarding allocation of resources.

The Company evaluates the performance of its segments based upon net operating income (“NOI”), which is a non-GAAP supplemental financial measure. The Company defines NOI for its segments as operating revenues (rental income, tenant reimbursements and other operating income) less property and related expenses (property operating expenses, real estate taxes, insurance, asset management fees, impairments and provision for bad debt) excluding interest expense. NOI excludes certain items that are not considered to be controllable in connection with the management of an asset such as non-property income and expenses, depreciation and amortization, real estate acquisition fees and expenses and corporate general and administrative expenses. The Company uses NOI to evaluate the operating performance of the Company’s real estate investments and to make decisions about resource allocations.

The following tables compare the Company’s segment activity to its results of operations and financial position as of and for the years ended December 31, 2022 and 2021, respectively.

	Year Ended December 31,
	2022			2021
Office/Industrial Properties:
Rental, fees and other income	$	12,702,986		$	13,161,268
Property and related expenses		(5,148,110	)		(5,769,843	)
Net operating income, as defined		7,554,876			7,391,425
Model Home Properties:
Rental, fees and other income		2,909,871			3,211,149
Property and related expenses		(102,660	)		(129,389	)
Net operating income, as defined		2,807,211			3,081,760
Retail Properties:
Rental, fees and other income		2,224,479			3,023,316
Property and related expenses		(663,681	)		(1,056,581	)
Net operating income, as defined		1,560,798			1,966,735
Reconciliation to net income (loss):
Total net operating income, as defined, for reportable segments		11,922,885			12,439,920
General and administrative expenses		(6,163,816	)		(6,225,510	)
Depreciation and amortization		(5,465,015	)		(5,397,498	)
Interest expense		(4,712,487	)		(4,822,085	)
Gain on extinguishment of government debt		—			10,000
Other income (expense), net		2,039,922			(3,417	)
Income tax expense		(1,215,873	)		47,620
Gain on sale of real estate		5,079,912			2,487,528
Net income (loss)	$	1,485,528		$	(1,463,442	)

	December 31,		December 31,
Assets by Reportable Segment:	2022		2021
Office/Industrial Properties:
Land, buildings and improvements, net (1)	$	76,400,983	$	78,240,086
Total assets (2)	$	79,057,998	$	76,453,436
Model Home Properties:
Land, buildings and improvements, net (1)	$	37,933,824	$	34,089,046
Total assets (2)	$	35,274,545	$	31,047,202
Retail Properties:
Land, buildings and improvements, net (1)	$	16,142,613	$	25,693,239
Total assets (2)	$	16,810,627	$	27,579,469
Reconciliation to Total Assets:
Total assets for reportable segments	$	131,143,170	$	135,080,107
Other unallocated assets:
Cash, cash equivalents and restricted cash		8,570,121		6,738,345
Other assets, net		151,638,363		19,378,311
Total Assets	$	291,351,654	$	161,196,763

(1) Includes lease intangibles and the land purchase option related to property acquisitions.

(2) Includes land, buildings and improvements, cash, cash equivalents, and restricted cash, current receivables, deferred rent receivables and deferred leasing costs and other related intangible assets, all shown on a net basis.

	For the Year Ended December 31,
Capital Expenditures by Reportable Segment	2022		2021
Office/Industrial Properties:
Acquisition of operating properties	$	—	$	8,891,810
Capital expenditures and tenant improvements		1,994,371		1,513,362
Model Home Properties:
Acquisition of operating properties		15,673,575		8,426,750
Retail Properties:
Acquisition of operating properties		—		4,906,266
Capital expenditures and tenant improvements		113,134		83,824
Totals:
Acquisition of operating properties, net		15,673,575		22,224,826
Capital expenditures and tenant improvements		2,107,505		1,597,186
Total real estate investments	$	17,781,080	$	23,822,012