Segment Information

9 Months Ended

Sep. 30, 2024

Segment Information

Segment Information

10.      Segment Information

The Company establishes operating segments at the property level and aggregates individual properties into reportable segments based on product types in which the Company has investments. For the three and nine months ended September 30, 2024 and 2023, respectively, the Company had the following reportable segments:  retail center properties, flex center properties and STNL properties. During the periods presented, there have been no material intersegment transactions.

Although the Company’s flex center properties have tenants that are similar to tenants in its retail center properties, the Company considers its flex center properties as a separate reportable segment. Flex properties are considered by the real estate industry as a distinct subset of the industrial market segment. Flex properties contain a mix of industrial/warehouse and office spaces. 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.  Further, although the Company’s STNL properties have tenants that are similar to tenants in its retail center properties, the Company considers its STNL properties as a separate reportable segment.  STNL properties are also considered by the real estate industry as a separate asset class.  

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.  NOI is the primary performance measure reviewed by management to assess operating performance of properties and is calculated by deducting operating expenses, including bad debt expense (recovery), from operating revenues. Operating revenues include rental income, tenant reimbursements, and other property income; and operating expenses include operating expenses. The NOI performance metric consists of only revenues and expenses directly related to real estate rental operations. NOI reflects property acquisitions and dispositions, occupancy levels, rental rate increases or decreases, and the recoverability of operating expenses. NOI, as the Company calculates it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs.

Asset information and capital expenditures by segment are not reported because the Company does not use these measures to assess performance. Depreciation and amortization expense, along with other expense items, are not allocated among segments.  

The following table presents property operating revenues, expenses and NOI by product type:

	For the three months ended September 30,
	Retail center properties				Flex center properties					STNL properties			Total
	2024		2023		2024		2023		2024		2023		2024		2023
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenues	$	1,565,896	$	1,874,188	$	676,754	$	658,246	$	94,275	$	56,306	$	2,336,925	$	2,588,740
Operating expenses		374,016		459,132		162,800		180,164		8,188		7,696		545,004		646,992
Bad debt expense		15,423		2,083		—		3,586		—		—		15,423		5,669
Net operating income	$	1,176,457	$	1,412,973	$	513,954	$	474,496	$	86,087	$	48,610	$	1,776,498	$	1,936,079

	For the nine months ended September 30,
	Retail center properties				Flex center properties					STNL properties			Total
	2024		2023		2024		2023		2024		2023		2024		2023
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenues	$	4,955,305	$	5,557,045	$	2,008,056	$	1,839,675	$	246,359	$	168,897	$	7,209,720	$	7,565,617
Operating expenses		1,193,838		1,489,602		491,586		535,065		23,697		23,174		1,709,121		2,047,841
Bad debt expense		29,087		18,578		8,556		31,290		—		—		37,643		49,868
Net operating income	$	3,732,380	$	4,048,865	$	1,507,914	$	1,273,320	$	222,662	$	145,723	$	5,462,956	$	5,467,908