Investment Properties and Properties Held for Sale

9 Months Ended

Sep. 30, 2017

Real Estate [Abstract]

Investment Properties and Properties Held for Sale

2. INVESTMENT PROPERTIES AND PROPERTIES HELD FOR SALE:

The total cost of the Properties includes the original purchase price plus acquisition fees and other capitalized costs paid to an affiliate of the former general partners of the Partnership.

As of September 30, 2017, the Partnership owned eleven Properties that contained fully constructed fast-food/casual dining restaurant restaurants. The following are operated by tenants at the Properties: eight separate Wendy’s restaurants, an Applebee’s restaurant, and a KFC restaurant. . As of November 6, 2016, the Property in Martinez, GA was vacant, and as of December 15, 2016, this Property was held for sale. The Properties are located in a total of four states.

Effective September 1, 2017, the tenant for the Property operated as an Applebee’s restaurant signed a ten year lease renewal for that Property. The prior lease expiration date for that Property was October 31, 2018 and, following the lease renewal, the new lease expiration date is August 31, 2027. The lease for that Property now provides for a monthly rent of $11,500 and a percentage rent of 6% over $2,300,000 in annual sales. The lease now also includes a single option to extend the lease for an additional five years, which can be exercised by the tenant with 90 days written notice. The lease terms provide that if the extension option is exercised, monthly rent during that period will be $13,915 and the percentage rent breakpoint of 6% will be for over $2,500,000 in annual sales.

Discontinued Operations

During the three-month periods ended September 30, 2017 and 2016, the Partnership recognized (loss) or income from discontinued operations of $(3,728) and $17,606, respectively. During the nine-month periods ended September 30, 2017 and 2016, the Partnership recognized (loss) income from discontinued operations of $(12,917) and $50,317, respectively. The income from discontinued operations for the three and nine months ended September 30, 2016 was attributable to the Martinez, GA Property, which was leased during the quarter ended September 30, 2016. During the fourth quarter of 2016 the lease for the Martinez, GA Property was terminated, and as of December 15, 2016 the Property was held for sale.

The components of property held for sale in the balance sheets as of September 30, 2017 and December 31, 2016 are outlined below:

	September 30, 2017		December 31, 2016
Balance Sheet:
Land	$	266,175	$	266,175
Buildings, net		50,976		50,976
Properties held for sale	$	317,151	$	317,151

The components of discontinued operations included in the condensed statement of income (loss) for the three and nine month periods ended September 30, 2017 and 2016 are outlined below:

	Three Months Ended					Nine Months Ended
	September 30,			September 30,		September 30,			September 30,
	2017			2016		2017			2016
Revenues
Base Rent	$	-		$	21,030	$	-		$	63,090
Total Revenues	$	-		$	21,030	$	-		$	63,090
Expenses
Insurance	$	519		$	-	$	1,555		$	-
Property tax expense		1,500			-		4,500			-
Maintenance expense		1,709			-		5,212			-
Property Appraisal					-		1,650			2,500
Depreciation		-			2,804		-			8,411
Amortization		-			620		-			1,862
Total Expenses	$	3,728		$	3,424	$	12,917		$	12,773
Net (Loss) Income from Discontinued Operations	$	(3,728	)	$	17,606	$	(12,917	)	$	50,317