Leases

6 Months Ended

Jun. 30, 2011

Leases

Leases

5. LEASES:

Original lease terms for the majority of the Properties are generally five to twenty years from their inception. The leases generally provide for minimum rents and additional rents based upon percentages of gross sales in excess of specified breakpoints. The lessee is responsible for occupancy costs such as maintenance, insurance, real estate taxes, and utilities. Accordingly, these amounts are not reflected in the statements of income except in circumstances where, in Management's opinion, the Partnership will be required to pay such costs to preserve its assets (i.e., payment of past-due real estate taxes). Management has determined that the leases are properly classified as operating leases; therefore, rental income is reported when earned on a straight-line basis and the cost of the property, excluding the cost of the land, is depreciated over its estimated useful life.

As of June 30, 2011, the aggregate minimum operating lease rents, including the aggregate total of the first and second quarter 2011 revenues of $544,848, to be received under the current operating leases for the Partnership's properties are as follows:

Year ending December 31,
2011	$	1,062,096
2012		1,005,830
2013		892,500
2014		856,500
2015		826,500
Thereafter		4,213,425
	$	8,856,851

Operating percentage rents included in operating rental income for the three month periods ended June 30, 2011 and 2010 were approximately $32,000 and $20,000, respectively. Operating percentage rents included in operating rental income for the six month periods ended June 30, 2011 and 2010 were approximately $50,000 and $32,000, respectively.

The percentage rents for 2011 and 2010 related primarily to the Denny's, Phoenix, AZ property and tenants who had reached their sales breakpoints for 2011. The 2011 to 2010 variance is due to Denny's higher reported sales in 2011 and its modification to its lease, as well as an increase in reported 2011 sales for tenants who had reached their sales breakpoint. As of June 30, 2011, rents and other receivables included approximately $24,000 of unbilled percentage rents. Operating percentage rents included in rental income from operations in 2010 were approximately $439,000. At December 31, 2010, rents and other receivables included $404,000 of unbilled percentage rents. As of June 30, 2011, all of the 2010 percentage rents had been billed and collected.

As of June 30, 2011, Wendcharles and Wendgusta operating base rents have accounted for approximately 21% and 50%, respectively, of the total 2011 operating base rents to-date. As of December 31, 2010, Wendcharles and Wendgusta operating base rents accounted for approximately 20% and 49%, respectively, of the total 2010 operating base rents.