INVESTMENT IN UNCONSOLIDATED ENTITY

The Company’s investment in unconsolidated entity as of June 30, 2020 and December 31, 2019 is as follows:



	June 30, 2020		December 31, 2019
The TIC Interest	$	10,200,810	$	10,388,588

As discussed in Note 3, REIT I merged with and into the Company on December 31, 2019. The Company’s income (loss) from investments in unconsolidated entities for the three and six months ended June 30, 2020 and 2019, is as follows:



	Three Months Ended June 30,					Six Months Ended June 30,
	2020		2019			2020		2019
The TIC Interest	$	125,658	$	71,703		$	146,411	$	152,063
REIT I	—		(15,748		)	—		(22,075		)
	$	125,658	$	55,955		$	146,411	$	129,988

TIC Interest

During 2017, the Company, through a wholly-owned subsidiary of the Operating Partnership, acquired an approximate 72.7% interest in an office property in San Clara, California. The remaining approximate 27.3% of undivided interest in the Santa Clara property is held by Hagg Lane II, LLC (an approximate 23.4% interest) and Hagg Lane III, LLC (an approximate 3.9% interest). The manager of Hagg Lane II, LLC and Hagg Lane III, LLC became a member of the Company's board of directors in December 2019. The Santa Clara property does not qualify as a variable interest entity and consolidation is not required as the Company’s TIC Interest does not control the property. Therefore, the Company accounts for the TIC Interest using the equity method. The Company receives approximately 72.7% of the cash flow distributions and recognizes approximately 72.7% of the results of operations. During the three months ended June 30, 2020 and 2019, the Company received $169,158 and $109,719 in cash distributions, respectively, and during the six months ended June 30, 2020 and 2019, the Company received $334,189 and $273,618 in cash distributions, respectively.

The following is summarized financial information for the Santa Clara property as of June 30, 2020 and December 31, 2019 and for the three and six months ended June 30, 2020 and 2019:



	June 30, 2020		December 31, 2019
Assets:
Real estate investments, net	$	30,406,177	$	30,858,240
Cash and cash equivalents	254,083		275,760
Other assets	237,428		228,770
Total assets	$	30,897,688	$	31,362,770
Liabilities:
Mortgage notes payable	$	13,619,257	$	13,746,635
Below-market lease, net	2,880,167		2,953,360
Other liabilities	62,333		68,587
Total liabilities	16,561,757		16,768,582
Total equity	14,335,931		14,594,188
Total liabilities and equity	$	30,897,688	$	31,362,770



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Total revenues	$	751,653	$	693,571	$	1,349,573	$	1,359,992
Expenses:
Interest expense	140,906		143,367		282,609		285,886
Depreciation and amortization	250,680		248,136		499,898		496,272
Other expenses	187,246		203,452		365,703		368,697
Total expenses	578,832		594,955		1,148,210		1,150,855
Net income	$	172,821	$	98,616	$	201,363	$	209,137

REIT I

Prior to the Merger on December 31, 2019, the Company had an approximate 4.8% ownership interest in REIT I. The Company recorded its share of loss of REIT I based on REIT I’s results of operations for the three and six months ended June 30, 2019. During the three and six months ended June 30, 2019, the Company received $75,746 and $145,112, respectively, in cash distributions related to its interest in REIT I. The following is REIT I's summarized results of operations for the three and six months ended June 30, 2019:



	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Total revenues	$	3,277,710		$	6,566,354
Expenses:
Depreciation and amortization	1,444,354			2,886,414
Interest expense	982,223			1,845,396
Other expenses	1,175,029			2,403,892
Total expenses	3,601,606			7,135,702
Other income:
Other income (1)	—			113,773
Net loss	$	(323,896	)	$	(455,575	)


(1)	The gain on disposal of real estate investment property of $113,773 during the six months ended June 30, 2019 was due to the higher mortgage loan balance and related interest payable for the Antioch, California Chase property compared to its net book value when it was relinquished in a foreclosure sale on March 13, 2019.