Investment in Real Estate, Net

6 Months Ended

Dec. 31, 2020

Real Estate [Abstract]

Investment in Real Estate, Net

NOTE 5 – INVESTMENT IN REAL ESTATE, NET

As of December 31, 2020, the Company’s only investment in real estate was land held for development located in Maui, Hawaii owned by Portsmouth. Investment in real estate consisted of the following:

As of	December 31, 2020		June 30, 2020
Land	$	-	$	2,430,000
Buildings, improvements and equipment		-		2,922,000
Accumulated depreciation		-		(1,573,000	)
		-		3,779,000
Land held for development		980,000		980,000
Investment in real estate, net	$	980,000	$	4,759,000

On August 28, 2020, Santa Fe sold its 27-unit apartment complex located in Santa Monica, California for $15,650,000 and realized a gain on the sale of approximately $12,043,000. Santa Fe will manage its federal and state income tax liability, and anticipates the utilization of its available net operating losses and capital loss carryforwards. Santa Fe received net proceeds of $12,163,000 after selling costs and repayment of InterGroup’s RLOC of $2,985,000 as InterGroup had drawn on its RLOC in July 2018 to pay off the previous Fannie Mae mortgage on the property. Furthermore, pursuant to the Contribution Agreement between Santa Fe and InterGroup, Santa Fe paid InterGroup $662,000 from the sale. Santa Fe will not seek a replacement property.

On November 23, 2020, Santa Fe sold its 2-unit apartment complex in West Los Angeles, California to InterGroup for $1,530,000 in exchange for a reduction of $1,196,000 of the Company’s obligation to InterGroup. Santa Fe acquired the property on February 1, 2002 for $785,000. Outstanding mortgage on the property for $334,000 was simultaneously transferred to InterGroup. Santa Fe realized a gain on the sale of approximately $901,000. The sales price of the property represents its current value as of the sale date as appraised by a licensed independent third-party appraiser. The fairness of the sale terms of the transaction were reviewed and approved by the independent directors of Santa Fe and InterGroup, and unanimously approved by the entire Board of Directors of both companies.