SECURITIES AVAILABLE FOR SALE

12 Months Ended

Dec. 31, 2011

Investments, Debt and Equity Securities [Abstract]

SECURITIES AVAILABLE FOR SALE

NOTE 4 – SECURITIES AVAILABLE FOR SALE

The Company’s securities available for sale consist primarily of common and preferred stock of other REITs. The Company does not own more than 10% of the outstanding shares of any of these securities, nor does it have controlling financial interest.

As of December 31, 2011 and 2010, the Company’s securities are all classified as available-for-sale. See Note 14 for Fair Value Measurements.

The following is a listing of securities available for sale at December 31, 2011:

			Interest	Number of				Market
		Series	Rate	Shares		Cost		Value
Equity Securities:
	Preferred Stock:
	American Land Lease, Inc. (2)	A	7.750%	46,200	$	397,547	$	1,004,850
	Ashford Hospitality Trust	E	9.000%	24,000		600,063		584,400
	Ashford Hospitality Trust	A	8.550%	10,000		251,205		242,700
	CapLease Inc.	A	8.125%	14,000		293,473		336,420
	CBL & Associates Properties	D	7.375%	3,000		68,126		71,040
	CBL & Associates Properties	C	7.750%	15,000		359,011		373,350
	Cogdell Spencer	A	8.500%	30,200		752,642		764,060
	Commonwealth REIT	D	6.500%	55,000		630,698		1,115,950
	Cousins Properties	B	7.500%	3,500		82,146		84,630
	Developers Diversified Realty Corporation	I	7.500%	4,000		43,755		98,120
	Digital Realty Trust Inc.	E	7.000%	4,000		100,000		102,400
	Dupont Fabros Technology, Inc.	A	7.875%	26,412		657,703		663,205
	Entertainment Properties REIT	D	7.375%	1,000		24,636		24,940
	Equity Lifestyle Properties, Inc.	A	8.034%	22,500		562,390		569,475
	iStar Financial Inc.	I	7.500%	10,500		190,597		145,740
	iStar Financial Inc.	D	8.000%	1,500		30,756		22,785
	iStar Financial Inc.	E	7.875%	11,000		203,221		159,060
	Kite Realty Group Trust	A	8.250%	63,000		1,552,348		1,459,080
	LaSalle Hotel Properties	H	7.500%	32,000		784,172		783,360
	LaSalle Hotel Properties	D	7.500%	3,797		95,034		91,318
	Lexington Realty Trust	B	8.050%	25,000		502,222		623,750
	Lexington Realty Trust	C	6.500%	6,000		247,860		251,940
	Lexington Realty Trust	D	7.550%	1,500		36,329		36,442
	MPG Office Trust, Inc. (3)	A	7.625%	12,000		13,560		149,880
	Parkway Properties, Inc.	D	8.000%	13,400		331,241		310,344
	STAG Industrial, Inc.	A	9.000%	9,000		224,885		225,450
	Vornado Realty Trust	D	7.875%	4,000		96,111		109,920
	Total Preferred Stock					9,131,731		10,404,609
	Common Stock:
	Commonwealth REIT			140,000		2,942,699		2,329,600
	Getty Realty Corp.			105,700		2,370,708		1,474,515
	Gladstone Commercial Corporation			60,000		1,041,990		1,053,000
	Monmouth Real Estate Investment Corporation (1)			1,726,254		14,111,176		15,795,213
	Nobility Homes, Inc.			20,000		158,200		104,000
	Omega Healthcare REIT Investors			45,000		746,936		870,750
	One Liberty Properties, Inc.			30,000		446,025		495,000
	Pennsylvania Real Estate Investment Trust			455,000		4,542,158		4,750,200
	ProLogis			22,320		537,572		638,129
	Stag Industrial Inc.			337,500		3,945,136		3,871,125
	Sun Communities, Inc.			30,900		519,228		1,128,777
	Urstadt Biddle Properties Incorporated			21,200		343,350		383,296
	Total Common Stock					31,705,178		32,893,605
	Total Securities Available for Sale				$	40,836,909	$	43,298,214

(1) Related entity – See Note 8.

(2) Issuer suspended dividends during 2009, but has since resumed dividend payments.

(3) Issuer suspended dividends during 2009.

The following is a listing of securities available for sale at December 31, 2010:

			Interest	Number of				Market
		Series	Rate	Shares		Cost		Value
Equity Securities:
	Preferred Stock:
	American Land Lease, Inc. (2)	A	7.750%	44,600	$	363,490	$	869,700
	CapLease Inc.	A	8.125%	14,000		293,473		344,400
	CommonWealth REIT	D	6.500%	78,000		1,034,367		1,708,972
	Developers Diversified Realty Corporation	I	7.500%	4,000		43,755		95,280
	FelCor Lodging Trust Incorporated (2)	A	7.800%	35,200		328,023		878,240
	FelCor Lodging Trust Incorporated (2)	C	8.000%	29,000		239,373		719,490
	iStar Financial Inc.	E	7.875%	21,000		80,640		371,070
	Lexington Realty Trust	B	8.050%	19,000		354,419		479,750
	MPG Office Trust, Inc. (3)	A	7.625%	12,000		13,560		190,200
	Parkway Properties, Inc.	D	8.000%	10,900		268,073		279,149
	Vornado Realty Trust	D	7.875%	4,000		96,112		106,680
	Total Preferred Stock					3,115,285		6,042,931
	Common Stock:
	AMB Property Corporation			10,000		235,811		317,100
	Getty Realty Corp.			15,000		370,015		469,200
	CommonWealth REIT			35,000		715,484		892,850
	Monmouth Real Estate Investment Corporation (1)			1,608,407		13,336,308		13,671,456
	Nobility Homes, Inc.			20,000		158,200		162,200
	Pennsylvania Real Estate Investment Trust			240,000		2,038,600		3,487,200
	ProLogis			50,000		542,609		722,000
	Sun Communities, Inc.			84,000		1,638,045		2,798,040
	Urstadt Biddle Properties Incorporated			10,000		156,739		194,500
	Total Common Stock					19,191,811		22,714,546
	Total Securities Available for Sale				$	22,307,096	$	28,757,477

(1) Related entity – See Note 8.

(2) Issuer suspended dividends during 2009, but has since resumed dividend payments.

(3) Issuer suspended dividends during 2009.

On July 31, 2007, Monmouth Real Estate Investment Corporation (MREIC) and Monmouth Capital Corporation (MCC), both related entities to the Company, completed a strategic combination whereby a wholly-owned subsidiary of MREIC merged with and into MCC, and MCC survived as a wholly-owned subsidiary of MREIC. Each outstanding share of MCC’s common stock was converted into and exchanged for 0.655 shares of MREIC’s common stock.  At the time of the merger, the Company had 107,403 shares of MCC common stock which was converted and exchanged for 70,349 shares of MREIC’s common stock. Additionally, the Company’s $1,000,000 investment in MCC’s outstanding 8% Convertible Subordinated Debentures due 2013 (2013 debenture) was convertible into MREIC common stock at an adjusted conversion price of $9.16 per share, and the Company’s $5,000,000 investment in MCC’s outstanding 8% Convertible Subordinated Debentures due 2015 (2015 debenture) was convertible into MREIC common stock at an adjusted conversion price of $11.45 per share. The 2013 debenture was repurchased by MREIC on October 10, 2009, at par. The 2015 debenture was repurchased by MREIC on December 13, 2010, at par.

On September 13, 2007, the Company purchased 1,000,000 shares of MREIC common stock from Palisade Concentrated Equity Partnership, L.P.(Palisade), an unrelated entity. The total consideration for the purchase was $8,500,000. On November 23, 2007, the Company purchased an additional 325,704 shares of MREIC common stock from Palisade for a total consideration of $2,768,484. The Company has also purchased additional shares of MREIC common stock through MREIC’s Dividend Reinvestment and Stock Purchase Plan. The Company now owns a total of 1,726,254 shares of MREIC common stock, representing 4.4% of the total shares outstanding at December 31, 2011.

As of December 31, 2011, the Company had 13 securities that were temporarily impaired. The Company considers many factors in determining whether a security is other than temporarily impaired, including the nature of the security and the cause, severity and duration of the impairment. The following is a summary of temporarily impaired securities at December 31, 2011:

	Less Than 12 Months		12 Months or Longer
	Fair	Unrealized	Fair	Unrealized
	Value	Loss	Value	Loss
Preferred Stock	$3,798,787	($239,849)	$ -0-	$ -0-
Common Stock	7,779,240	(1,637,504)	-0-	-0-
Total	$11,578,027	($1,877,353)	$ -0-	$ -0-

The following is a summary of the range of the losses:

Number of Individual Securities	Fair Value	Unrealized Loss	Range of Loss
7	$7,342,327	($216,872)	Less than or equal to 10%
4	2,657,185	(710,087)	Less than or equal to 30%
2	1,578,515	(950,394)	Less than or equal to 40%
13	$11,578,027	($1,877,353)

The Company has determined that these securities are temporarily impaired as of December 31, 2011. The Company normally holds REIT securities long term and has the ability and intent to hold securities to recovery. The Company had total net unrealized gains on its securities portfolio of $2,461,305 as of December 31, 2011.

The Company has an investment in one REIT security which is at a loss of approximately $900,000 or 38% as of December 31, 2011. The Company has determined that this security was temporarily impaired as of December 31, 2011. Management is continuing to monitor this security for other than temporary impairment under its policy. If the fair value of this security continues to decline or the security is downgraded, then the Company may have to record an impairment loss related to this security in future periods.

During the years ended December 31, 2011, 2010 and 2009, the Company received proceeds of $5,263,695, $17,254,660 and $4,139,001, on sales or redemptions of securities available for sale, respectively. The Company recorded the following Gain (Loss) on Securities Transactions, net:

	2011	2010	2009
Gross realized gains	$2,692,649	$3,970,927	$  706,833
Gross realized losses	-0-	(39,047)	(602,181)
Impairment loss	-0-	-0-	(1,908,798)
Total Gain (Loss) on Securities Transactions, net	$2,692,649	$3,931,880	($1,804,146)

During 2009, the Company recognized a loss of $1,804,146, primarily due to write-downs to the carrying value of securities available for sale which were considered other than temporarily impaired. As of December 31, 2010, the securities portfolio had unrealized net gains of $6,450,381. As of December 31, 2011, the securities portfolio had unrealized net gains of $2,461,305.

Dividend income for the years ended December 31, 2011, 2010 and 2009 amounted to $2,512,057, $1,762,609 and $1,952,862, respectively. Interest income for the years ended December 31, 2011, 2010 and 2009 amounted to $1,991,180, $2,817,059 and $2,632,055, respectively.

The Company had margin loan balances of $13,662,267 and $5,185,212 at December 31, 2011 and 2010, respectively, which were collateralized by the Company’s securities portfolio. Additionally, at December 31, 2010, the Company also had a $2,500,000 loan with Two River Community Bank collateralized by 875,000 shares of Monmouth Real Estate Investment Corporation common stock (See Note 5).