Contingencies and Commitments

9 Months Ended

Jun. 30, 2014

Contingencies and Commitments [Abstract]

CONTINGENCIES AND COMMITMENTS

NOTE 10 – CONTINGENCIES AND COMMITMENTS

From time to time, the Company may be subject to claims and litigation in the ordinary course of business. Management does not believe that any such claim or litigation will have a material adverse effect on the Consolidated Balance Sheet or results of operations.

The Company has entered into separate agreements to purchase eleven new build-to-suit, industrial buildings that are currently being developed in Florida, Illinois, Indiana, Kentucky, Louisiana, Missouri, North Carolina, Ohio and Texas totaling approximately 3,454,000 square feet with leases ranging from seven to fifteen years. Seven of the eleven buildings, representing approximately 1,795,000 square feet or 52%, will be leased to subsidiaries of FDX. The aggregate purchase price for the eleven properties will be approximately $255,665,000 which will generate approximately $17,581,000 in annualized rental revenue. As of June 30, 2014, the Company has made deposits totaling $3,050,000 on these acquisitions, which is included in Other Assets in the accompanying Consolidated Balance Sheets as of June 30, 2014. Subject to satisfactory due diligence, we anticipate closing on three of the acquisitions with a cost of approximately $48,789,000 during the remainder of fiscal 2014 and closing on the remaining eight acquisitions with a cost of approximately $206,876,000 during fiscal 2015. The Company may make additional acquisitions and the funds for these acquisitions may come from mortgages, draws on our unsecured line of credit, cash on hand, sale of marketable securities, other bank borrowings, proceeds from the DRIP, public offerings and private placements of additional common or preferred stock or other securities. To the extent that funds or appropriate properties are not available, fewer acquisitions will be made.

In connection with seven of the eleven purchase commitments discussed above, the Company has entered into commitments to obtain seven mortgages totaling $103,220,000 at fixed rates ranging from 3.83% to 5.25% for a weighted average interest rate of 4.25%. The Company has currently paid commitment and loan processing fees totaling $791,100 of which $736,700 will be refunded at each respective closing, which are expected to take place during the remainder of fiscal 2014 and during fiscal 2015.

In addition to the building expansion completed on July 10, 2014 in Cocoa, FL as described in Note 11, the Company has also entered into separate agreements to expand five existing buildings by approximately 235,800 square feet. Four of the five properties are leased to FedEx Ground Package System, Inc. Total expansion costs are expected to be approximately $18,705,000 or $79.33 per square foot. As of June 30, 2014, the Company has incurred expansion costs of approximately $5,581,000 toward these expansions and the total remaining expansion costs expected to be incurred during the remainder of fiscal 2014 and fiscal 2015 amount to approximately $13,124,000. Upon completion, the expansions will result in a new ten year lease extension for each property being expanded and will result in total increased annual rent of approximately $1,870,000.