(4) Real Estate Investments –

The Partnership leases its properties to tenants under net leases, classified as operating leases. Under a net lease, the tenant is responsible for real estate taxes, insurance, maintenance, repairs and operating expenses for the property. For some leases, the Partnership is responsible for repairs to the structural components of the building, the roof, and the parking lot. At the time the properties were acquired, the remaining primary lease terms varied from 10 to 18 years, except for the Tractor Supply Company store, which had a remaining primary term of 7.3 years. The leases provide the tenants with two to four five-year renewal options subject to the same terms and conditions as the primary term.

The Partnership's properties are commercial, single-tenant buildings. The KinderCare daycare center was constructed in 1998 and acquired in 2002. The Jared Jewelry store in Hanover, Maryland was constructed in 2001 and acquired in 2004. The Jared Jewelry store in Auburn Hills, Michigan was constructed in 1999 and acquired in 2005. The Best Buy store was constructed in 1990, renovated in 1997 and acquired in 2008. The Fresenius Medical Center was constructed and acquired in 2008. The Tractor Supply Company store was constructed in 2006 and acquired in 2014. The Gander Mountain store was constructed in 1994 and renovated and acquired in 2014. The Dollar Tree store was constructed in 2015 and acquired in 2016. There have been no costs capitalized as improvements subsequent to the acquisitions.

The cost of the properties not held for sale and related accumulated depreciation at December 31, 2016 are as follows:


Property	Land		Buildings		Total		Accumulated Depreciation

KinderCare, Andover, MN	$	179,755	$	1,084,452	$	1,264,207	$	630,790
Jared Jewelry, Hanover, MD		861,065		1,128,070		1,989,135		580,959
Jared Jewelry, Auburn Hills, MI		280,993		1,185,055		1,466,048		566,847
Best Buy, Eau Claire, WI		853,357		2,784,349		3,637,706		993,083
Fresenius Medical Center, Shreveport, LA		102,046		1,258,571		1,360,617		415,331
Tractor Supply, Canton, GA		700,000		1,407,183		2,107,183		145,409
Gander Mountain, Champaign, IL		507,000		1,279,291		1,786,291		127,930
Dollar Tree, Cincinnati, OH		355,000		1,250,270		1,605,270		45,843
	$	3,839,216	$	11,377,241	$	15,216,457	$	3,506,192

For the years ended December 31, 2016 and 2015, the Partnership recognized depreciation expense of $450,923 and $405,079, respectively.

On February 3, 2016, the Partnership purchased a Dollar Tree store in Cincinnati, Ohio for $1,809,915. The Partnership allocated $285,049 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles, and allocated $80,404 to Acquired Below-Market Lease Intangibles. The Partnership incurred $56,760 of acquisition expenses related to the purchase that were expensed. The property is leased to Dollar Tree Stores, Inc. under a Lease Agreement with a remaining primary term of 10 years (as of the date of purchase) and annual rent of $122,169.

The following schedule presents the cost and related accumulated amortization of acquired lease intangibles not held for sale at December 31:


		2016				2015
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
Acquired Intangible Lease Assets (in-place lease intangibles with a weighted average life of 114 and 128 months, respectively)	$	807,178	$	144,226	$	522,129	$	72,252

Acquired Below-Market Lease Intangibles (weighted average life of 83 and 69 months, respectively)	$	161,007	$	35,152	$	80,603	$	17,403

For the years ended December 31, 2016 and 2015, the value of in-place lease intangibles amortized to expense was $71,974 and $48,019 and the increase to rental income for below-market leases was $17,749 and $10,991, respectively. For lease intangibles not held for sale at December 31, 2016, the estimated amortization expense is $76,764 and the estimated increase to rental income is $19,100 for each of the next four succeeding years. For the year ended December 31, 2021, the estimated amortization expense is $70,426 and the estimated increase to rental income is $16,352.

On March 10, 2017, Gander Mountain Company filed for Chapter 11 reorganization and announced it was closing the store in Champaign, Illinois, following a liquidation sale of its onsite assets. The tenant has paid rent through March 2017 and will be required to continue to pay rent unless the lease is rejected in bankruptcy court. At this time, the Partnership has no detailed information with respect to how this bankruptcy proceeding may impact the property. The Partnership is working to take the appropriate steps to mitigate any negative impact this situation may have on the Partnership.

For properties owned as of December 31, 2016, the minimum future rent payments required by the leases are as follows:

2017	$	1,244,805
2018		860,624
2019		793,907
2020		672,285
2021		635,651
Thereafter		1,834,189
	$	6,041,461

There were no contingent rents recognized in 2016 and 2015.