Securities Available For Sale

6 Months Ended

Jun. 30, 2017

Investments, Debt and Equity Securities [Abstract]

Securities Available For Sale

NOTE 4 – SECURITIES AVAILABLE FOR SALE

The Company’s Securities Available for Sale at Fair Value consists primarily of marketable common and preferred stock of other REITs with a fair value of $109,079,105 as of June 30, 2017. The Company generally limits its investment in marketable securities to no more than approximately 20% of its undepreciated assets. The REIT securities portfolio provides the Company with additional liquidity and additional income and serves as a proxy for real estate when more favorable risk adjusted returns are not available.

During the six months ended June 30, 2017, the Company sold securities with a cost basis of $7,470,315 and recognized a Gain on Sale of $1,051,768. The Company also made purchases of $13,699,545 in Securities Available for Sale. Of this amount, the Company made total purchases of 51,975 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 $718,774 or weighted average cost of $13.83 per share. The Company owned a total of 2,289,563 MREIC common shares as of June 30, 2017 at a total cost of $19,950,185 and a fair value of $34,457,920.

As of June 30, 2017, the Company had total net unrealized gains of $10,811,874 in its REIT securities portfolio. The Company held nine securities that had unrealized losses as of June 30, 2017. 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 Company normally holds REIT securities long-term and has the ability and intent to hold these securities to recovery.

The following is a summary of the securities that the Company has determined to be temporarily impaired as of June 30, 2017:

	Less Than 12 Months					12 Months or Longer
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Preferred Stock	$	2,003,826	$	(33,588	)	$	-0-	$	-0-
Common Stock		58,822,150		(4,995,522	)		-0-		-0-
Total	$	60,825,976	$	(5,029,110	)	$	-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
6	$	40,241,456	$	(951,105	)		0-5	%
2		9,204,020		(618,756	)		6-10	%
1		11,380,500		(3,459,249	)		23	%
9	$	60,825,976	$	(5,029,110	)