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Securities Available for Sale
 6 Months Ended
Jun. 30, 2014
Securities Available For Sale [Abstract]  
SECURITIES AVAILABLE FOR SALE

NOTE 4 – SECURITIES AVAILABLE FOR SALE

 

The Company owns a portfolio of securities of other REITs. During the six months ended June 30, 2014, the Company sold securities with a cost of $5,872,983 and recognized a Gain on Sale of $1,215,457. The Company also made purchases of $5,018,926 in Securities Available for Sale. Of this amount, the Company made total purchases of 62,956 common shares of Monmouth Real Estate Investment Corporation (MREIC), a related REIT, through MREIC’s Dividend Reinvestment and Stock Purchase Plan for a total cost of $567,211 or weighted average cost of $9.01 per share. The Company owned a total of 1,938,102 MREIC common shares as of June 30, 2014 at a total cost of $16,058,687 and a fair value of $19,458,547.

 

As of June 30, 2014, the Company had total net unrealized gains of $5,538,642 in its REIT securities portfolio. The Company held two securities that had unrealized losses as of June 30, 2014. 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 June 30, 2014:

 

   Less Than 12 Months    12 Months or Longer
   Fair    Unrealized    Fair    Unrealized
  Value   Loss   Value   Loss
Preferred Stock $    241,000   $       (9,000)   $    -0-   $    -0-
Common Stock 1,611,000   (213,903)   $    -0-   $    -0-
     Total $    1,852,000   $  (222,903)   $    -0-   $    -0-

 

The following is a summary of the range of the losses on these temporarily impaired securities:

 

Number of

Individual Securities

  

 

Fair Value

  

 

Unrealized Loss

 

Range of Loss
1   $   241,000   $      (9,000) 4%
1   1,611,000   (213,903) 12%
2   $   1,852,000   $ (222,903)  

 

The Company has determined that these securities are temporarily impaired as of June 30, 2014. The Company normally holds REIT securities long term and has the ability and intent to hold securities to recovery.