Marketable Securities

3 Months Ended

Mar. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

NOTE 3 – MARKETABLE SECURITIES

The Company’s marketable securities consists primarily of marketable common and preferred stock of other REITs with a fair value of $113,343,772 as of March 31, 2018. 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.

The following is a summary of Dividend and Other Investment Income (Loss), net, as of March 31, 2018 and 2017:

	Three Months Ended
	3/31/2018			3/31/2017
Dividend Income	$	2,425,140		$	1,851,240
Gain on Sales of Marketable Securities, net		20,107			31,891
Changes in Fair Value of Marketable Securities		(25,898,819	)		-0-
Total Dividend and Other Investment Income (Loss), net	$	(23,453,572	)	$	1,883,131

On January 1, 2018, the Company adopted ASU 2016-01, which requires changes in the fair value of our marketable securities to be recorded in current period earnings. Previously, changes in the fair value of marketable securities were recognized in “Accumulated Other Comprehensive Income” on our Consolidated Balance Sheets. As a result, on January 1, 2018 the Company recorded an increase to beginning retained earnings of $11,519,582 to recognize the unrealized gains previously recorded in “Accumulated Other Comprehensive Income” on our Consolidated Balance Sheets. Subsequent changes in the fair value of the Company’s marketable securities will be recorded to “Dividend and Other Investment Income (Loss), net” on our Consolidated Statements of Income (Loss).

During the three months ended March 31, 2018, the Company sold marketable securities with a cost basis of $248,568 and recognized a Gain on Sale of $20,107. The Company also made purchases of $6,526,883 in marketable securities. Of this amount, the Company made total purchases of 27,345 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 $386,654 or weighted average cost of $14.14 per share. The Company owned a total of 2,363,275 MREIC common shares as of March 31, 2018 at a total cost of $21,085,216 and a fair value of $35,543,654.

As of March 31, 2018, the Company had total net unrealized losses of $14,379,237 in its REIT securities portfolio. For the three months ended March 31, 2018, the Company recorded a $25,898,819 decrease in the fair value of these marketable securities. The Company held twenty-one securities that had unrealized losses as of March 31, 2018. The Company normally holds REIT securities long-term and has the ability and intent to hold these securities to recovery.