Marketable Securities

6 Months Ended

Jun. 30, 2018

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

NOTE 4 – MARKETABLE SECURITIES

The Company’s marketable securities consists primarily of marketable common and preferred stock of other REITs with a fair value of $138,063,017 as of June 30, 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 Other Investment Income (Loss), net, for the three and six months ended June 30, 2018 and 2017:

	Three Months Ended				Six Months Ended
	6/30/18		6/30/17		6/30/18			6/30/17
Gain on Sales of Marketable Securities, net	$	-0-	$	1,019,877	$	20,107		$	1,051,768
Changes in Fair Value of Marketable Securities		16,623,670		-0-		(9,275,149	)		-0-
Total Other Investment Income (Loss), net	$	16,623,670	$	1,019,877	$	(9,255,042	)	$	1,051,768

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 “Other Investment Income (Loss), net” on our Consolidated Statements of Income (Loss).

During the six months ended June 30, 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 $14,622,458 in marketable securities. Of this amount, the Company made total purchases of 54,036 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 $777,956 or weighted average cost of $14.40 per share. The Company owned a total of 2,389,967 MREIC common shares as of June 30, 2018 at a total cost of $21,476,520 and a fair value of $39,506,150.

As of June 30, 2018, the Company had total net unrealized gains of $2,244,433 in its REIT securities portfolio. For the three and six months ended June 30, 2018, the Company recorded a $16,623,670 increase and a $9,275,149 decrease, respectively, in the fair value of these marketable securities. The Company held sixteen securities that had unrealized losses as of June 30, 2018. The Company normally holds REIT securities long-term and has the ability and intent to hold these securities to recovery.