Table of Contents

 

 

 

Table of Contents

 

		Page
Consolidated Balance Sheets		3
Consolidated Statements of Income		4
NOI, EBITDA, FFO, Core FFO and AFFO Reconciliations		5
Financial Highlights		6
Same Property Statistics		7
Consolidated Statements of Cash Flows		8
Capital Structure and Leverage Ratios		9
Debt Maturity		11
Property Table by Tenant		12
Property Table by State		13
Lease Expirations		14
Recent Acquisitions		15
Property Table		16
Definitions		18
Press Release Dated February 8, 2017		19

 

The statement of operations and supplemental statement of operations provided in this supplemental information package present funds from operations, core funds from operations, adjusted funds from operations, net operating income (NOI), Same Property NOI, Same Property cash NOI and EBITDA which are REIT industry financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America. Please see page 18 for a definition of these supplemental performance measures. Please see the supplemental statement of operations reconciliation for a reconciliation of certain captions in the supplemental statement of operations reported in this supplemental information package to the statement of operations as reported in the Company’s filings with the SEC on Form 10-Q.

 

 

Table of Contents

 

Consolidated Balance Sheets

 

		December 31, 2016				September 30, 2016
		(unaudited)
ASSETS
Real Estate Investments:
Land		$	168,082,315			$	165,375,315
Buildings and Improvements			1,055,810,320				1,005,938,180
Total Real Estate Investments			1,223,892,635				1,171,313,495
Accumulated Depreciation			(154,847,979	)			(148,830,169	)
Net Real Estate Investments			1,069,044,656				1,022,483,326
Cash and Cash Equivalents			30,722,606				95,749,508
Securities Available for Sale at Fair Value			74,321,496				73,604,894
Tenant and Other Receivables			2,289,863				1,444,824
Deferred Rent Receivable			7,226,370				6,917,431
Prepaid Expenses			7,476,019				4,830,987
Capitalized Lease Costs, net of Accumulated Amortization of $3,443,958 and $3,238,516, respectively			4,040,326				4,165,268
Intangible Assets, net of Accumulated Amortization of $12,600,446 and $12,332,599, respectively			5,999,845				5,816,153
Financing Costs, net of Accumulated Amortization of $339,167 and $246,678, respectively			1,156,096				1,245,923
Other Assets			7,402,948				7,227,571
TOTAL ASSETS		$	1,209,680,225			$	1,223,485,885
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs		$	505,574,117			$	477,476,010
Loans Payable			76,000,000				80,790,684
Accounts Payable and Accrued Expenses			2,781,619				3,998,771
Other Liabilities			14,186,980				9,868,572
Preferred Stock Called for Redemption			-0-				53,493,750
Total Liabilities			598,542,716				625,627,787
COMMITMENTS AND CONTINGENCIES
Shareholders’ Equity:
7.875% Series B Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 2,300,000 Shares Authorized, Issued and Outstanding as of December 31, 2016 and September 30, 2016			57,500,000				57,500,000
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 5,400,000 Shares Authorized, Issued and Outstanding as of December 31, 2016 and September 30, 2016			135,000,000				135,000,000
Common Stock - $0.01 Par Value Per Share: 196,739,750 and 194,600,000 Shares Authorized as of December 31, 2016 and September 30, 2016, respectively; 70,536,720 and 68,920,972 Shares Issued and Outstanding as of December 31, 2016 and September 30, 2016, respectively			705,367				689,210
Excess Stock – $0.01 Par Value Per Share: 200,000,000 Shares Authorized as of December 31, 2016 and September 30, 2016; No Shares Issued or Outstanding as of December 31, 2016 and September 30, 2016			-0-				-0-
Additional Paid-In Capital			407,737,024				391,726,621
Accumulated Other Comprehensive Income			10,195,118				12,942,267
Undistributed Income			-0-				-0-
Total Shareholders’ Equity			611,137,509				597,858,098
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY		$	1,209,680,225			$	1,223,485,885

 

 

Table of Contents

 

Consolidated Statements of Income

(unaudited)

 

		Three Months Ended
		12/31/2016				12/31/2015
INCOME:
Rental Revenue		$	23,280,856			$	19,064,919
Reimbursement Revenue			3,900,755				3,194,443
TOTAL INCOME			27,181,611				22,259,362
EXPENSES:
Real Estate Taxes			2,906,981				2,372,136
Operating Expenses			1,294,468				1,231,365
General & Administrative Expenses			1,442,463				1,335,964
Acquisition Costs			178,526				145,585
Depreciation			6,992,495				5,595,432
Amortization of Capitalized Lease Costs and Intangible Assets			447,797				486,611
TOTAL EXPENSES			13,262,730				11,167,093
OTHER INCOME (EXPENSE):
Dividend and Interest Income			1,292,151				1,184,653
Gain on Sale of Securities Transactions, net			806,108				8,380
Interest Expense, including Amortization of Financing Costs			(6,163,219	)			(5,346,647	)
TOTAL OTHER INCOME (EXPENSE)			(4,064,960	)			(4,153,614	)
NET INCOME			9,853,921				6,938,655
Less: Preferred Dividends			3,697,760				2,151,758
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS		$	6,156,161			$	4,786,897

  

 

Table of Contents

 

NOI, EBITDA, FFO, Core FFO and AFFO Reconciliations

(unaudited)

  

		Three Months Ended
		12/31/2016				12/31/2015
Revenues
Rental Revenue		$	23,280,856			$	19,064,919
Reimbursement Revenue			3,900,755				3,194,443
Total Rental and Reimbursement Revenue			27,181,611				22,259,362
Expenses
Real Estate Taxes			2,906,981				2,372,136
Operating Expenses			1,294,468				1,231,365
Total Expenses			4,201,449				3,603,501
Net Operating Income – NOI			22,980,162				18,655,861
Dividend and Interest Income			1,292,151				1,184,653
Net Amortization of Acquired Above and Below Market Lease Revenue			25,492				25,492
Loss on Sale of Real Estate Investment			95,336				-0-
General & Administrative Expenses			(1,442,463	)			(1,335,964	)
EBITDA			22,950,678				18,530,042
Gain on Sale of Securities Transactions, net			806,108				8,380
Interest Expense, including Amortization of Financing Costs			(6,163,219	)			(5,346,647	)
Preferred Dividends			(3,697,760	)			(2,151,758	)
Acquisition Costs			(178,526	)			(145,585	)
Depreciation of Corporate Office Tenant Improvements			(38,715	)			(27,971	)
Funds From Operations – FFO			13,678,566				10,866,461
Depreciation (excluding Corporate Office Tenant Improvements)			(6,953,780	)			(5,567,461	)
Amortization of Capitalized Lease Costs and Intangible Assets			(473,289	)			(512,103	)
Loss on Sale of Real Estate Investment			(95,336	)			-0-
Net Income Attributable to Common Shareholders			6,156,161				4,786,897
Funds From Operations – FFO			13,678,566				10,866,461
Acquisition Costs			178,526				145,585
Core Funds From Operations - Core FFO			13,857,092				11,012,046
Amortization of Financing Costs			280,913				234,367
Stock Compensation Expense			100,155				104,961
Depreciation of Corporate Office Tenant Improvements			38,715				27,971
Gain on Sale of Securities Transactions, net			(806,108	)			(8,380	)
Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(343,239	)			(309,665	)
Recurring Capital Expenditures			(188,412	)			(336,191	)
Adjusted Funds From Operations – AFFO			12,939,116				10,725,109
EBITDA			22,950,678				18,530,042
Stock Compensation Expense			100,155				104,961
Interest Expense, excluding Amortization of Financing Costs			(5,882,306	)			(5,112,280	)
Preferred Dividends			(3,697,760	)			(2,151,758	)
Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(343,239	)			(309,665	)
Recurring Capital Expenditures			(188,412	)			(336,191	)
Adjusted Funds From Operations - AFFO		$	12,939,116			$	10,725,109

 

 

Table of Contents

 

Financial Highlights

(unaudited)

 

		Three Months Ended
		12/31/2016				12/31/2015
Weighted Average Common Shares Outstanding
Basic			69,686,153				62,866,898
Diluted			69,829,793				62,948,800
Net Operating Income – NOI		$	22,980,162			$	18,655,861
Basic		$	0.33			$	0.30
Diluted			0.33				0.30
Net Income Attributable to Common Shareholders		$	6,156,161			$	4,786,897
Basic		$	0.09			$	0.08
Diluted			0.09				0.08
Funds From Operations – FFO		$	13,678,566			$	10,866,461
Basic		$	0.20			$	0.17
Diluted			0.20				0.17
Core Funds From Operations - Core FFO		$	13,857,092			$	11,012,046
Basic		$	0.20			$	0.18
Diluted			0.20				0.17
Core FFO Excluding Gains on Securities Transactions, net		$	13,050,984			$	11,003,666
Basic		$	0.19			$	0.18
Diluted			0.19				0.17
Adjusted Funds From Operations – AFFO		$	12,939,116			$	10,725,109
Basic		$	0.19			$	0.17
Diluted			0.19				0.17
Dividends Declared per Common Share		$	0.16			$	0.16

 

 

Table of Contents

 

Same Property Statistics

 

		Three Months Ended
		12/31/2016								12/31/2015				Change				Change %
Total Square Feet / Total Properties			16,553,910/100								14,424,995/93				2,128,915				14.8	%
Occupancy Percentage at Quarter End			100.0	%							98.8	%			120 bps				1.2	%
Same Property Square Feet / Number of Same Properties							12,886,242/86
Same Property Occupancy Percentage at Quarter End			100.0	%							99.1	%			90 bps				0.9	%
Same Property Net Operating Income (NOI) (GAAP)		$	17,368,879							$	16,966,989			$	401,890				2.4	%
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(186,632	)							(300,551	)			113,919
Same Property Cash NOI (Cash)		$	17,182,247							$	16,666,438			$	515,809				3.1	%

 

Same Property Statistics include all properties owned during the entire periods presented with the exclusion of properties expanded during these periods.

 

The 2.4% increase, amounting to $401,890 in Same Property NOI, consists of 17% or $69,066 derived from increased NOI from occupied properties and the remaining 83% or $332,824 attributable to increased NOI from leasing previously vacant properties.

 

The 3.1% increase, amounting to $515,809 in Same Property Cash NOI, consists of 28% or $144,113 derived from increased NOI from occupied properties and the remaining 72% or $371,696 attributable to increased NOI from leasing previously vacant properties.

 

Reconciliation of Same Property NOI to Total NOI

 

		Three Months Ended
		12/31/2016								12/31/2015				Change				Change %
Same Property NOI (GAAP)		$	17,368,879							$	16,966,989			$	401,890				2.4	%
NOI of properties purchased subsequent to October 1, 2015 (two properties for fiscal 2017 and eight properties for fiscal 2016)			4,135,151								642,443
NOI of properties expanded subsequent to October 1, 2015 (four properties for fiscal 2017 and 2016)			1,590,169								1,091,493
NOI of property sold subsequent to October 1, 2015 (one property sold during fiscal 2017)			(114,037	)							(45,064	)
Total NOI		$	22,980,162							$	18,655,861			$	4,324,301				23.2	%

 

 

Table of Contents

 

Consolidated Statements of Cash Flows

(unaudited)

 

		Three Months Ended
		12/31/2016				12/31/2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income		$	9,853,921			$	6,938,655
Noncash Items Included in Net Income:
Depreciation & Amortization			7,721,205				6,316,410
Stock Compensation Expense			100,155				104,961
Gain on Sale of Securities Transactions, net			(806,108	)			(8,380	)
Loss on Sale of Real Estate Investment			95,336				-0-
Changes in:
Tenant, Deferred Rent & Other Receivables			(598,700	)			(898,233	)
Prepaid Expenses			(2,645,032	)			(2,594,298	)
Other Assets and Capitalized Lease Costs			(428,282	)			(203,940	)
Accounts Payable, Accrued Expenses & Other Liabilities			860,211				1,981,853
NET CASH PROVIDED BY OPERATING ACTIVITIES			14,152,706				11,637,028
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Real Estate and Intangible Assets			(56,101,538	)			(50,385,897	)
Capital Improvements			(696,941	)			(860,167	)
Proceeds on Sale of Real Estate			4,125,819				-0-
Return of Deposits on Real Estate			1,000,000				900,000
Deposits Paid on Acquisitions of Real Estate			(820,000	)			(550,000	)
Proceeds from Sale of Securities Available for Sale			3,738,938				1,790,403
Purchase of Securities Available for Sale			(6,396,581	)			(6,491,654	)
NET CASH USED IN INVESTING ACTIVITIES			(55,150,303	)			(55,597,315	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (Repayments) Proceeds from Loans Payable			(4,790,684	)			14,938,116
Proceeds from Fixed Rate Mortgage Notes Payable			38,000,000				33,670,000
Principal Payments on Fixed Rate Mortgage Notes Payable			(9,456,016	)			(6,941,017	)
Financing Costs Paid on Debt			(636,963	)			(404,674	)
Proceeds from the Exercise of Stock Options			-0-				924,300
Redemption of Series A Preferred Stock			(53,493,750	)			-0-
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments			18,877,487				12,575,537
Preferred Dividends Paid			(3,422,136	)			(2,151,758	)
Common Dividends Paid, net of Reinvestments			(9,107,243	)			(7,797,202	)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES			(24,029,305	)			44,813,302
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			(65,026,902	)			853,015
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD			95,749,508				12,073,909
CASH AND CASH EQUIVALENTS - END OF PERIOD		$	30,722,606			$	12,926,924

 

 

Table of Contents

 

Capital Structure and Leverage Ratios

(unaudited)

 

		As of				As of				As of
		12/31/2016				12/31/2015				9/30/2016
Fixed Rate Mortgage Notes Payable, Net of Unamortized Debt Costs		$	505,574,117			$	395,406,853			$	477,476,010
Loans Payable			76,000,000				99,979,502				80,790,684
Preferred Stock Called for Redemption			-0-				-0-				53,493,750
Total Debt			581,574,117				495,386,355				611,760,444
7.625% Series A Cumul. Redeemable Preferred			-0-				53,493,750				-0-
7.875% Series B Cumul. Redeemable Preferred			57,500,000				57,500,000				57,500,000
6.125% Series C Cumul. Redeemable Preferred			135,000,000				-0-				135,000,000
Total Preferred Stock			192,500,000				110,993,750				192,500,000
Common Stock, Paid-In-Capital & Other			418,637,509				347,393,146				405,358,098
Total Shareholders’ Equity			611,137,509				458,386,896				597,858,098
Total Book Capitalization			1,192,711,626				953,773,251				1,209,618,542
Accumulated Depreciation			154,847,979				130,573,643				148,830,169
Total Undepreciated Book Capitalization		$	1,347,559,605			$	1,084,346,894			$	1,358,448,711
Shares Outstanding			70,536,720				63,790,755				68,920,972
Market Price Per Share		$	15.24			$	10.46			$	14.27
Equity Market Capitalization		$	1,074,979,613			$	667,251,297			$	983,502,270
Total Debt			581,574,117				495,386,355				611,760,444
Preferred			192,500,000				110,993,750				192,500,000
Total Market Capitalization		$	1,849,053,730			$	1,273,631,402			$	1,787,762,714
Total Debt		$	581,574,117			$	495,386,355			$	611,760,444
less: Cash and Cash Equivalents			30,722,606				12,926,924				95,749,508
Net Debt		$	550,851,511			$	482,459,431			$	516,010,936
less: Securities Available for Sale at Fair Value (Securities)			74,321,496				61,032,630				73,604,894
Net Debt Less Securities		$	476,530,015			$	421,426,801			$	442,406,042
Net Debt / Undepreciated Book Capitalization			40.9	%			44.5	%			38.0	%
Net Debt / Total Market Capitalization			29.8	%			37.9	%			28.9	%
Net Debt Plus Preferred / Total Market Capitalization			40.2	%			46.6	%			39.6	%
Net Debt Less Securities / Undepreciated Book Capitalization			35.4	%			38.9	%			32.6	%
Net Debt Less Securities / Total Market Capitalization			25.8	%			33.1	%			24.7	%
Net Debt Less Securities Plus Preferred / Total Market Capitalization			36.2	%			41.8	%			35.5	%
Weighted Average Interest Rate on Fixed Rate Debt			4.44	%			4.77	%			4.49	%

 

 

Table of Contents

 

Capital Structure and Leverage Ratios continued

(unaudited)

 

										Fiscal Year
		Three Months Ended								Ended
		12/31/2016				12/31/2015				9/30/2016
Net Income		$	9,853,921			$	6,938,655			$	32,494,507
plus: Depreciation & Amortization			7,440,292				6,082,043				26,087,680
plus: Interest Expense, including Amortization of Financing Costs			6,163,219				5,346,647				22,953,049
plus: Acquisition Costs			178,526				145,585				730,441
plus: Net Amortization of Acquired Above and Below Market Lease Revenue			25,492				25,492				101,967
plus: Loss on Sale of Real Estate Investment			95,336				-0-				-0-
less: Gain on Sale of Securities Transactions, net			(806,108	)			(8,380	)			(4,398,599	)
EBITDA		$	22,950,678			$	18,530,042			$	77,969,045
Interest Expense, including Amortization of Financing Costs		$	6,163,219			$	5,346,647			$	22,953,049
Preferred Dividends			3,697,760				2,151,758				9,020,470
Total Fixed Charges		$	9,860,979			$	7,498,405			$	31,973,519
Interest Coverage			3.7x				3.5x				3.4x
Fixed Charge Coverage			2.3x				2.5x				2.4x
Net Debt		$	550,851,511			$	482,459,431			$	516,010,936
Net Debt Less Securities			476,530,015				421,426,801				442,406,042
Preferred			192,500,000				110,993,750				192,500,000
Annualized EBITDA			91,802,712				74,120,168				77,969,045
Net Debt / EBITDA			6.0x				6.5x				6.6x
Net Debt Less Securities / EBITDA			5.2x				5.7x				5.7x
Net Debt + Preferred / EBITDA			8.1x				8.0x				9.1x
Net Debt Less Securities + Preferred / EBITDA			7.3x				7.2x				8.1x

 

 

Table of Contents

 

Debt Maturity

(unaudited)

 

 

 

						Loans								% of
Fiscal Year Ended		Mortgages				Payable				Total				Total
2017		$	50,254,026			$	-0-			$	50,254,026				8.5	%
2018			46,360,505				-0-				46,360,505				7.9	%
2019			50,046,005				-0-				50,046,005				8.5	%
2020			31,493,045				76,000,000				107,493,045				18.3	%
2021			32,048,340				-0-				32,048,340				5.4	%
Thereafter			302,090,216				-0-				302,090,216				51.4	%
Total as of 12/31/2016		$	512,292,137	(A)		$	76,000,000			$	588,292,137				100.0	%
Weighted Average Interest Rate			4.44	%			2.25	%			4.16	%
Weighted Average Term			10.69 yrs				3.80 yrs				9.80 yrs

 

(A)	Does not include unamortized debt issuance costs of $6,718,020.

 

 

Table of Contents

 

Property Table by Tenant

(unaudited)

 

				Property				Square				Occupied Square				% of Occupied				Annual				% of Total				Rent Per				Undepreciated				Mortgage
Tenant				Count				Footage				Footage				sf				Rent				Ann. Rent				sf Occup.				Cost				Balance
FedEx Ground Package System, Inc.					40				6,763,253				6,763,253				40.9	%		$	49,624,000				51.7	%		$	7.34			$	654,680,970			$	300,191,274
FedEx Corporation					14				973,413				973,413				5.9	%			5,372,000				5.6	%			5.52				72,141,280				14,215,928
FedEx Supply Chain Services, Inc.					1				449,900				449,900				2.7	%			1,327,000				1.4	%			2.95				14,620,887				6,474,875
Total FedEx					55				8,186,566				8,186,566				49.5	%			56,323,000				58.7	%			6.88				741,443,137				320,882,077
Milwaukee Electric Tool Corporation					1				861,889				861,889				5.2	%			3,010,000				3.1	%			3.49				36,914,917				24,724,274
ULTA, Inc.					1				671,354				671,354				4.1	%			2,677,000				2.8	%			3.99				37,500,391				22,446,303
Jim Beam Brands Company					1				599,840				599,840				3.6	%			2,032,000				2.1	%			3.39				28,000,000				18,165,278
TreeHouse Private Brands, Inc.					1				558,600				558,600				3.4	%			2,186,000				2.3	%			3.91				26,767,852				16,527,462
CBOCS Distribution, Inc.					1				381,240				381,240				2.3	%			1,433,000				1.5	%			3.76				14,215,126				7,607,499
Best Buy Warehousing Logistics, Inc.					1				368,060				368,060				2.2	%			1,660,000				1.7	%			4.51				19,600,000				10,310,322
The Coca-Cola Company (Western Container Corporation)					2				323,358				323,358				2.0	%			1,684,000				1.8	%			5.21				20,504,069				6,412,366
Science Applications International					1				302,400				302,400				1.8	%			1,476,000				1.5	%			4.88				13,340,592				5,518,107
International Paper Company					1				280,000				280,000				1.7	%			1,337,000				1.4	%			4.78				18,294,108				10,471,218
Woodstream Corporation		(B)			1				256,000				256,000				1.5	%			896,000				0.9	%			3.50				8,857,758				-0-
United Technologies Corporation					2				244,317				244,317				1.5	%			1,896,000				2.0	%			7.76				22,537,415				7,783,521
Anda Pharmaceuticals, Inc.					1				234,660				234,660				1.4	%			1,200,000				1.2	%			5.11				14,550,000				8,608,235
UGN, Inc.					1				232,200				232,200				1.4	%			1,060,000				1.1	%			4.57				12,937,000				7,957,643
Caterpillar Logistics Services, Inc.					1				218,120				218,120				1.3	%			1,169,000				1.2	%			5.36				14,868,857				-0-
Anheuser-Busch, Inc.					1				184,800				184,800				1.1	%			810,000				0.8	%			4.38				12,542,814				-0-
Carlisle Tire & Wheel Company					1				179,280				179,280				1.1	%			787,000				0.8	%			4.39				7,225,401				267,437
NF&M International Inc.		(A)			1				174,802				174,802				1.1	%			833,000				0.9	%			4.77				5,350,762				-0-
Home Depot USA, Inc.					1				171,200				171,200				1.0	%			988,000				1.0	%			5.77				11,298,367				-0-
Kellogg Sales Company					3				170,279				170,279				1.0	%			982,000				1.0	%			5.77				12,159,973				2,205,264
Bunzl Distribution Midcentral, Inc.					1				158,417				158,417				1.0	%			747,000				0.8	%			4.72				9,612,992				6,919,049
Victory Packaging, L.P.					1				148,000				148,000				0.9	%			496,000				0.5	%			3.35				5,441,876				-0-
Challenger Lifts, Inc. (Snap-On Inc.)					1				137,500				137,500				0.8	%			831,000				0.9	%			6.04				11,304,000				7,196,512
Altec Industries, Inc.		(B)			1				126,880				126,880				0.8	%			349,000				0.4	%			2.75				4,390,126				-0-
General Electric Company					1				125,860				125,860				0.8	%			1,315,000				1.4	%			10.45				19,950,000				12,519,001
The American Bottling Company (Dr Pepper Snapple)					2				110,080				110,080				0.7	%			739,000				0.8	%			6.71				10,498,034				1,904,294
Style Crest, Inc.					1				106,507				106,507				0.6	%			381,000				0.4	%			3.58				7,238,613				-0-
Pittsburgh Glass Works, LLC					1				102,135				102,135				0.6	%			427,000				0.4	%			4.18				4,245,913				-0-
Holland 1916 Inc.					1				95,898				95,898				0.6	%			345,000				0.4	%			3.60				7,397,881				3,018,740
National Oilwell Varco, Inc.					1				91,295				91,295				0.6	%			750,000				0.8	%			8.22				8,083,107				220,431
Joseph T. Ryerson and Son, Inc.					1				89,052				89,052				0.5	%			506,000				0.5	%			5.68				6,932,916				2,441,685
CHEP USA, Inc.					1				83,000				83,000				0.5	%			497,000				0.5	%			5.99				7,405,447				-0-
Datatel Resources Corporation		(A)			1				80,856				80,856				0.5	%			243,000				0.3	%			3.01				2,475,036				-0-
Sherwin-Williams Company					2				78,887				78,887				0.5	%			640,000				0.7	%			8.11				7,244,128				-0-
RGH Enterprises, Inc.					1				75,000				75,000				0.5	%			601,000				0.6	%			8.01				5,525,600				3,759,922
Tampa Bay Grand Prix					1				68,385				68,385				0.4	%			293,000				0.3	%			4.28				5,677,982				-0-
Various Tenants at Retail Shopping Center					1				64,220				64,220				0.4	%			826,000				0.9	%			12.86				3,072,880				-0-
SOFIVE, Inc.					1				60,400				60,400				0.3	%			548,000				0.6	%			9.07				4,903,589				1,860,244
Siemens Real Estate					1				51,130				51,130				0.2	%			479,000				0.5	%			9.37				4,452,425				2,565,253
B/E Aerospace, Inc.					1				38,833				38,833				0.2	%			362,000				0.3	%			9.32				5,100,000				-0-
Keystone Automotive Industries MN, Inc.					1				36,270				36,270				0.2	%			141,000				0.1	%			3.89				2,161,895				-0-
Graybar Electric Company					1				26,340				26,340				0.2	%			109,000				0.1	%			4.14				1,858,591				-0-
Tenant Total as of 12/31/16					100				16,553,910				16,553,910				100.0	%		$	96,064,000				100.0	%		$	5.80			$	1,223,881,570			$	512,292,137	(C)

 

(A)	NF&M International and Datatel Resources are located at one property and therefore are counted as one property in the Property Count total.
(B)	Woodstream Corporation and Altec Industries, Inc. are located at one property and therefore are counted as one property in the Property Count total.
	Other then these two properties indicated in footnotes (A) and (B) and the one retail property, all other properties are single-tenant.
(C)	Does not include unamortized debt issuance costs of $6,718,020.

 

 

Table of Contents

 

Property Table by State

(unaudited)

 

		Property				Square				Occupied Square				% of Total				Annual				% of Total				Rent Per				Undepreciated				Mortgage
State		Count				Footage				Footage				sf				Rent				Ann. Rent				sf Occup.				Cost				Balance
Florida			12				1,661,887				1,661,887				10.0	%		$	11,677,000				12.2	%			7.03			$	162,332,273			$	80,285,836
Texas			9				1,430,093				1,430,093				8.6	%			10,988,000				11.4	%			7.68				132,147,706				57,081,343
Kentucky			3				1,295,940				1,295,940				7.8	%			5,049,000				5.3	%			3.90				66,071,852				41,889,251
Mississippi			4				1,158,889				1,158,889				7.0	%			4,439,000				4.6	%			3.83				55,224,199				33,332,510
Ohio			7				1,032,469				1,032,469				6.2	%			6,116,000				6.4	%			5.92				72,767,470				28,475,189
Indiana			2				999,176				999,176				6.0	%			4,210,000				4.4	%			4.21				61,446,391				34,512,424
Illinois			9				958,045				958,045				5.8	%			6,208,000				6.5	%			6.48				82,018,856				9,785,051
Tennessee			3				891,777				891,777				5.4	%			3,071,000				3.2	%			3.44				33,852,531				15,575,476
Kansas			4				813,043				813,043				4.9	%			4,652,000				4.8	%			5.72				60,936,352				33,984,752
Missouri			5				804,397				804,397				4.9	%			3,089,000				3.2	%			3.84				39,305,146				9,124,313
North Carolina			3				585,224				585,224				3.5	%			3,112,000				3.2	%			5.32				45,725,286				19,737,541
South Carolina			3				571,115				571,115				3.5	%			3,566,000				3.7	%			6.24				36,368,552				8,296,779
New York			4				568,965				568,965				3.4	%			4,204,000				4.4	%			7.39				55,232,098				27,431,149
Pennsylvania			3				504,040				504,040				3.0	%			3,042,000				3.2	%			6.04				36,784,448				16,443,967
Michigan			3				489,571				489,571				3.0	%			3,472,000				3.6	%			7.09				41,315,172				15,803,959
Virginia			5				407,265				407,265				2.5	%			2,442,000				2.5	%			6.00				34,484,117				7,651,153
Colorado			3				363,597				363,597				2.2	%			3,040,000				3.2	%			8.36				42,058,524				20,586,631
Georgia			3				307,662				307,662				1.9	%			1,743,000				1.8	%			5.67				22,200,671				722,275
Arizona			1				283,358				283,358				1.7	%			1,352,000				1.4	%			4.77				16,824,226				5,108,670
Wisconsin			2				238,666				238,666				1.4	%			1,369,000				1.4	%			5.74				15,952,361				3,185,585
Washington			1				210,445				210,445				1.3	%			1,962,000				2.0	%			9.32				30,210,680				19,624,696
Oklahoma			2				204,580				204,580				1.2	%			1,308,000				1.4	%			6.39				16,328,294				6,187,540
Louisiana			1				175,315				175,315				1.1	%			1,260,000				1.3	%			7.19				18,410,000				12,307,758
Maryland			1				144,523				144,523				0.9	%			1,426,000				1.5	%			9.87				14,512,355				-0-
New Jersey			2				124,620				124,620				0.8	%			1,374,000				1.4	%			11.03				7,976,469				1,860,244
Nebraska			1				89,115				89,115				0.5	%			446,000				0.5	%			5.00				5,944,691				-0-
Alabama			1				88,653				88,653				0.5	%			605,000				0.6	%			6.82				6,605,131				745,022
Minnesota			1				60,398				60,398				0.4	%			372,000				0.4	%			6.16				5,220,000				2,553,023
Connecticut			1				54,812				54,812				0.3	%			329,000				0.3	%			6.00				3,463,824				-0-
Iowa			1				36,270				36,270				0.3	%			141,000				0.2	%			3.89				2,161,895				-0-
Total as of 12/31/16			100				16,553,910				16,553,910				100.0	%		$	96,064,000				100.0	%		$	5.80			$	1,223,881,570			$	512,292,137	(A)

 

(A)	Does not include unamortized debt issuance costs of $6,718,020.

 

 

Table of Contents

 

Lease Expirations

(unaudited)

 

				Property				Square				% of Total				Annual				% of Total				Rent Per sf				Lease Exp. Term in				Undepreciated				Mortgage
Fiscal Year				Count				Footage				sf				Rent				Ann. Rent				Occup.				Years				Cost				Balance
2017		(A)			8				820,684				5.0	%		$	4,993,000				5.2	%		$	6.08				0.6			$	60,011,739			$	5,799,786
2018		(A)			16				1,542,279				9.3	%			8,930,000				9.3	%			5.79				1.3				105,358,410				14,846,870
2019					9				1,370,849				8.3	%			7,116,000				7.4	%			5.19				2.3				81,427,352				22,608,242
2020					4				383,449				2.3	%			2,116,000				2.2	%			5.52				3.4				27,373,089				220,431
2021					7				735,317				4.4	%			3,892,000				4.1	%			5.29				4.5				47,444,344				8,222,745
2022					7				1,138,320				6.9	%			6,376,000				6.6	%			5.60				5.2				75,756,452				33,055,314
2023					10				1,302,007				7.9	%			8,035,000				8.4	%			6.17				6.5				100,077,917				38,969,066
2024					11				1,743,587				10.5	%			10,597,000				11.0	%			6.08				7.4				130,495,798				46,612,737
2025		(A)			9				2,404,478				14.5	%			12,208,000				12.7	%			5.08				8.4				159,741,406				85,974,227
2026					6				961,826				5.8	%			7,572,000				7.9	%			7.87				9.4				106,854,608				59,760,917
2027					3				395,691				2.4	%			2,194,000				2.3	%			5.54				10.3				27,082,254				5,108,670
2028					1				861,889				5.2	%			3,010,000				3.1	%			3.49				11.6				36,914,917				24,724,274
2029					2				262,613				1.6	%			1,515,000				1.6	%			5.77				12.5				21,954,950				9,564,621
2030					4				1,044,832				6.3	%			7,388,000				7.7	%			7.07				13.3				109,180,602				68,875,424
2031					3				963,269				5.8	%			7,110,000				7.4	%			7.38				14.3				104,367,000				71,421,351
2034					1				558,600				3.4	%			2,186,000				2.3	%			3.91				16.8				26,767,852				16,527,462
Various tenants at retail shopping center					1				64,220				0.4	%			826,000				0.8	%			12.86				-0-				3,072,880				-0-
Total as of 12/31/16					100				16,553,910				100.0	%		$	96,064,000				100.0	%		$	5.80				7.4			$	1,223,881,570			$	512,292,137	(B)

 

(A)	Included in 2018 is Datatel Resources and included in 2025 is NF&M International which both occupy one property. Included in 2017 is Woodstream Corporation and included in 2018 is Altec Industries which both occupy one property. Other then these two properties and the one retail property, all other properties are single-tenant.
(B)	Does not include unamortized debt issuance costs of $6,718,020.

 

 

Table of Contents

 

Recent Acquisitions During Fiscal 2017

(unaudited)

 

								Fiscal Year		Square				Annual				Rent Per				Lease		Purchase				Initial Mortgage
No		Tenant		City (MSA)		State		Acquisition		Footage				Rent				sf Occup.				Expiration		Price				Balance
1		FedEx Ground Package System, Inc.		Hamburg (Buffalo)		NY		2017			338,584			$	2,309,000			$	6.82			3/31/2031		$	35,100,000			$	23,500,000
2		FedEx Ground Package System, Inc.		Ft. Myers		FL		2017			213,672				1,365,000				6.39			9/30/2026			21,001,538				14,500,000
		Total as of 12/31/16									552,256			$	3,674,000			$	6.65					$	56,101,538			$	38,000,000

  

 

Table of Contents 

 

Property Table

(unaudited)

 

																								Rent				Lease Exp.
										Fiscal Year						Square				Annual				Per sf				Term in				Undepreciated				Mortgage
No		Tenant				City (MSA)		State		Acquisition		Occup.				Footage				Rent				Occup.				Years				Cost				Balance
1		Milwaukee Electric Tool Corporation				Olive Branch (Memphis, TN)		MS		2013			100.0	%			861,889			$	3,010,000			$	3.49				11.6			$	36,914,917			$	24,724,274
2		ULTA, Inc.				Greenwood (Indianapolis)		IN		2015			100.0	%			671,354				2,677,000				3.99				8.6				37,500,391			$	22,446,303
3		Jim Beam Brands Company				Frankfort		KY		2015			100.0	%			599,840				2,032,000				3.39				8.1				28,000,000				18,165,278
4		TreeHouse Private Brands, Inc.				Buckner (Louisville)		KY		2014			100.0	%			558,600				2,186,000				3.91				16.8				26,767,852				16,527,462
5		FedEx Supply Chain Services, Inc.				Memphis		TN		2010			100.0	%			449,900				1,327,000				2.95				2.4				14,620,887				6,474,875
6		Woodstream Corporation		(A)		St. Joseph		MO		2001			100.0	%			256,000				896,000				3.50				0.7				8,857,758				-0-
		Altec Industries, Inc.		(A)		St. Joseph		MO		2001			100.0	%			126,880				349,000				2.75				1.2				4,390,126				-0-
7		CBOCS Distribution, Inc.				Lebanon (Nashville)		TN		2011			100.0	%			381,240				1,433,000				3.76				7.5				14,215,126				7,607,499
8		Best Buy Warehousing Logistics, Inc.				Streetsboro (Cleveland)		OH		2012			100.0	%			368,060				1,660,000				4.51				5.1				19,600,000				10,310,322
9		Fedex Ground Package System, Inc.				Hamburg (Buffalo)		NY		2017			100.0	%			338,584				2,309,000				6.82				14.3				34,850,000				23,404,741
10		FedEx Ground Package System, Inc.				Concord (Charlotte)		NC		2016			100.0	%			330,717				2,235,000				6.76				8.6				33,044,797				19,737,541
11		FedEx Ground Package System, Inc.				Indianapolis		IN		2014			100.0	%			327,822				1,533,000				4.68				7.3				23,946,000				12,066,121
12		FedEx Ground Package System, Inc.				Olathe (Kansas City)		KS		2016			100.0	%			313,763				2,196,000				7.00				14.4				31,737,000				21,942,401
13		FedEx Ground Package System, Inc.				Davenport (Orlando)		FL		2016			100.0	%			310,922				2,605,000				8.38				14.3				37,780,000				26,074,210
14		FedEx Ground Package System, Inc.				Fort Worth (Dallas)		TX		2015			100.0	%			304,608				2,367,000				7.77				13.3				35,300,832				23,106,755
15		Science Applications International				Hanahan (Charleston)		SC		2005			100.0	%			302,400				1,476,000				4.88				2.3				13,340,592				5,518,107
16		FedEx Ground Package System, Inc.				Jacksonville		FL		2015			100.0	%			297,579				1,999,000				6.72				13.0				30,732,090				18,186,330
17		Western Container Corporation (The Coca-Cola Company)				Tolleson (Phoenix)		AZ		2003			100.0	%			283,358				1,352,000				4.77				10.3				16,824,226				5,108,670
18		International Paper Company				Edwardsville (Kansas City)		KS		2014			100.0	%			280,000				1,337,000				4.78				6.7				18,294,108				10,471,218
19		NF&M International		(B)		Monaca (Pittsburgh)		PA		1988			100.0	%			174,802				833,000				4.77				8.0				5,350,762				-0-
		Datatel Resources Corporation		(B)		Monaca (Pittsburgh)		PA		1988			100.0	%			80,856				243,000				3.01				0.9				2,475,036				-0-
20		FedEx Ground Package System, Inc.				Orion		MI		2007			100.0	%			245,633				1,908,000				7.77				6.5				22,885,636				8,445,863
21		Anda Pharmaceuticals, Inc.				Olive Branch (Memphis, TN)		MS		2012			100.0	%			234,660				1,200,000				5.11				5.6				14,550,000				8,608,235
22		UGN, Inc.				Monroe (Cincinnati)		OH		2015			100.0	%			232,200				1,060,000				4.57				13.2				12,937,000				7,957,643
23		FedEx Ground Package System, Inc.				Colorado Springs		CO		2016			100.0	%			225,362				1,832,000				8.13				9.1				28,500,000				18,343,826
24		Caterpillar Logistics Services, Inc.				Griffin (Atlanta)		GA		2006			100.0	%			218,120				1,169,000				5.36				0.9				14,868,857				-0-
25		Fedex Ground Package System, Inc.				Ft Myers		FL		2017			100.0	%			213,672				1,365,000				6.39				9.8				20,800,000				14,500,000
26		FedEx Ground Package System, Inc.				Burlington (Seattle/Everett)		WA		2016			100.0	%			210,445				1,962,000				9.32				13.7				30,210,680			$	19,624,696
27		FedEx Ground Package System, Inc.				Sauget (St. Louis, MO)		IL		2015			100.0	%			198,773				1,036,000				5.21				12.4				15,204,950				9,564,621
28		Anheuser-Busch, Inc.				Granite City (St. Louis, MO)		IL		2001			100.0	%			184,800				810,000				4.38				4.9				12,542,814				-0-
29		United Technologies Corporation				Carrollton (Dallas)		TX		2010			100.0	%			184,317				1,576,000				8.55				2.0				17,769,106				7,783,521
30		FedEx Ground Package System, Inc.				Spring (Houston)		TX		2014			100.0	%			181,176				1,581,000				8.73				7.8				19,283,798				8,981,798
31		Carlisle Tire & Wheel Company				Edwardsville (Kansas City)		KS		2003			100.0	%			179,280				787,000				4.39				1.4				7,225,401				267,437
32		FedEx Ground Package System, Inc.				Ft. Mill (Charlotte, NC)		SC		2010			100.0	%			176,939				1,415,000				8.00				6.8				15,413,307				1,785,724
33		FedEx Ground Package System, Inc.				Covington (New Orleans)		LA		2016			100.0	%			175,315				1,260,000				7.19				8.5				18,410,000				12,307,758
34		FedEx Ground Package System, Inc.				Livonia (Detroit)		MI		2013			100.0	%			172,005				1,194,000				6.94				5.2				13,762,030				7,358,095
35		Home Depot USA, Inc.				Montgomery (Chicago)		IL		2004			100.0	%			171,200				988,000				5.77				3.5				11,298,367				-0-
36		FedEx Ground Package System, Inc.				Tampa		FL		2004			100.0	%			170,779				1,624,000				9.51				9.6				19,695,477				6,456,556
37		FedEx Ground Package System, Inc.				Edinburg		TX		2011			100.0	%			164,207				1,097,000				6.68				4.8				12,039,014				-0-
38		FedEx Ground Package System, Inc.				Lindale (Tyler)		TX		2015			100.0	%			163,378				725,000				4.44				7.5				9,930,000				6,289,516
39		Bunzl Distribution Midcentral, Inc.				Kansas City		MO		2015			100.0	%			158,417				747,000				4.72				4.8				9,612,992				6,919,049
40		FedEx Ground Package System, Inc.				Oklahoma City		OK		2012			100.0	%			158,340				1,048,000				6.62				8.5				12,580,262				4,283,245
41		FedEx Ground Package System, Inc.				Waco		TX		2012			100.0	%			150,710				1,078,000				7.15				8.7				12,546,157				4,732,172
42		Victory Packaging, L.P.				Fayetteville		NC		1997			100.0	%			148,000				496,000				3.35				4.2				5,441,876				-0-
43		FedEx Ground Package System, Inc.				Beltsville (Washington, DC)		MD		2001			100.0	%			144,523				1,426,000				9.87				1.6				14,512,355				-0-
44		FedEx Ground Package System, Inc.				El Paso		TX		2006			100.0	%			144,149				1,345,000				9.33				6.8				12,431,193				3,168,841
45		FedEx Ground Package System, Inc.				Cocoa		FL		2008			100.0	%			144,138				1,112,000				7.71				7.8				14,127,449				4,985,801
46		FedEx Ground Package System, Inc.				Cudahy (Milwaukee)		WI		2001			100.0	%			139,564				901,000				6.46				0.5				9,382,361				-0-
47		Challenger Lifts, Inc (Snap-On Inc.)				Louisville		KY		2016			100.0	%			137,500				831,000				6.04				9.4				11,304,000				7,196,512
48		FedEx Ground Package System, Inc.				Richfield (Cleveland)		OH		2006			100.0	%			131,152				1,493,000				11.38				7.8				16,435,478				2,991,983
49		General Electric Company				Imperial (Pittsburgh)		PA		2016			100.0	%			125,860				1,315,000				10.45				9.0				19,950,000				12,519,001
50		FedEx Ground Package System, Inc.				Wheeling (Chicago)		IL		2003			100.0	%			123,000				1,386,000				11.27				0.4				18,537,652				-0-
51		FedEx Ground Package System, Inc.				Altoona		PA		2014			100.0	%			122,522				651,000				5.31				6.7				9,008,650				3,924,966
52		FedEx Corporation				Mechanicsville (Richmond)		VA		2001			100.0	%			112,799				541,000				4.80				6.3				7,761,861				-0-
53		FedEx Corporation				Orlando		FL		2008			100.0	%			110,638				666,000				6.02				0.9				8,554,432				4,283,153
54		Style Crest, Inc.				Winston-Salem		NC		2002			100.0	%			106,507				381,000				3.58				4.2				7,238,613				-0-
55		FedEx Ground Package System, Inc.				Cheektowaga (Buffalo)		NY		2000			100.0	%			104,981				966,000				9.20				2.7				10,960,822				266,487
56		FedEx Ground Package System, Inc.				West Chester Twp (Cincinnati)		OH		1999			100.0	%			103,818				537,000				5.17				6.7				5,728,690				2,010,101
57		FedEx Ground Package System, Inc.				Roanoke		VA		2013			100.0	%			103,402				755,000				7.30				6.3				10,200,000				5,209,468
58		Pittsburgh Glass Works, LLC				O’ Fallon (St. Louis)		MO		1994			100.0	%			102,135				427,000				4.18				1.5				4,245,913				-0-
59		FedEx Ground Package System, Inc.				Green Bay		WI		2013			100.0	%			99,102				468,000				4.72				6.4				6,570,000				3,185,585
60		Holland 1916 Inc.				Liberty (Kansas City)		MO		1998			100.0	%			95,898				345,000				3.60				2.5				7,397,881				-0-
61		FedEx Corporation				Jacksonville		FL		1999			100.0	%			95,883				518,000				5.40				2.4				6,258,738				-0-

 

 

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Property Table

(unaudited)

 

																						Rent				Lease Exp.
								Fiscal Year						Square				Annual				Per sf				Term in				Undepreciated				Mortgage
No		Tenant		City (MSA)		State		Acquisition		Occup.				Footage				Rent				Occup.				Years				Cost				Balance
62		FedEx Corporation		Tampa		FL		2006			100.0	%			95,662			$	603,000			$	6.30				0.7			$	7,592,861			$	3,840,355
63		FedEx Ground Package System, Inc.		Hanahan (Charleston)		SC		2005			100.0	%			91,776				675,000				7.35				1.6				7,614,653				992,947
64		National Oilwell Varco, Inc.		Houston		TX		2010			100.0	%			91,295				750,000				8.22				5.8				8,083,107				3,018,740
65		FedEx Corporation		Omaha		NE		1999			100.0	%			89,115				446,000				5.00				6.8				5,944,691				-0-
66		Joseph T. Ryerson and Son, Inc.		Elgin (Chicago)		IL		2002			100.0	%			89,052				506,000				5.68				3.1				6,932,916				220,431
67		FedEx Ground Package System, Inc.		Huntsville		AL		2005			100.0	%			88,653				605,000				6.82				9.6				6,605,131				745,022
68		FedEx Ground Package System, Inc.		Ft. Myers		FL		2003			100.0	%			87,500				433,000				4.95				0.5				5,017,447				-0-
69		CHEP USA, Inc.		Roanoke		VA		2007			100.0	%			83,000				497,000				5.99				8.2				7,405,447				2,441,685
70		FedEx Corporation		Bedford Heights (Cleveland)		OH		2007			100.0	%			82,269				408,000				4.96				1.7				6,863,879				2,639,887
71		RGH Enterprises, Inc.		Halfmoon (Albany)		NY		2012			100.0	%			75,000				601,000				8.01				4.9				5,525,600				3,759,922
72		FedEx Corporation		Schaumburg (Chicago)		IL		1997			100.0	%			73,500				480,000				6.53				10.3				5,158,028				-0-
73		FedEx Corporation		Romulus (Detroit)		MI		1998			100.0	%			71,933				370,000				5.14				4.4				4,667,506				-0-
74		FedEx Ground Package System, Inc.		Denver		CO		2005			100.0	%			69,865				564,000				8.07				1.6				6,354,051				983,156
75		Tampa Bay Grand Prix		Tampa		FL		2005			100.0	%			68,385				293,000				4.28				3.8				5,677,982				-0-
76		FedEx Ground Package System, Inc.		Colorado Springs		CO		2006			100.0	%			68,370				644,000				9.42				1.7				7,204,472				1,259,648
77		Sherwin-Williams Company		Rockford		IL		2011			100.0	%			66,387				479,000				7.22				7.0				5,551,227				-0-
78		Kellogg Sales Company		Kansas City		MO		2007			100.0	%			65,067				325,000				4.99				1.6				4,800,474				2,205,264
79		Various Tenants at Retail Shopping Center		Somerset		NJ		1970			100.0	%			64,220				826,000				12.86				na				3,072,880				-0-
80		The American Bottling Company (Dr Pepper Snapple)		Cincinnati		OH		2015			100.0	%			63,840				479,000				7.50				12.8				6,750,004				-0-
81		FedEx Corporation		Chattanooga		TN		2007			100.0	%			60,637				311,000				5.13				0.8				5,016,518				1,493,102
82		SOFIVE, Inc.		Carlstadt (New York, NY)		NJ		2001			100.0	%			60,400				548,000				9.07				8.1				4,903,589				1,860,244
83		FedEx Ground Package System, Inc.		Stewartville (Rochester)		MN		2013			100.0	%			60,398				372,000				6.16				6.4				5,220,000				2,553,023
84		United Technologies Corporation		Richmond		VA		2004			100.0	%			60,000				320,000				5.33				1.9				4,768,309				-0-
85		FedEx Ground Package System, Inc.		Augusta		GA		2005			100.0	%			59,358				453,000				7.63				1.5				5,354,035				722,275
86		Kellogg Sales Company		Newington (Hartford)		CT		2001			100.0	%			54,812				329,000				6.00				3.2				3,463,824				-0-
87		Siemens Real Estate		Lebanon (Cincinnati)		OH		2012			100.0	%			51,130				479,000				9.37				2.3				4,452,425				2,565,253
88		Kellogg Sales Company		Orangeburg (New York)		NY		1993			100.0	%			50,400				328,000				6.51				1.2				3,895,675				-0-
89		FedEx Corporation		Charlottesville		VA		1999			100.0	%			48,064				329,000				6.85				0.7				4,348,499				-0-
90		FedEx Ground Package System, Inc.		Corpus Christi		TX		2012			100.0	%			46,253				469,000				10.14				4.7				4,764,500				-0-
91		The American Bottling Company (Dr Pepper Snapple)		Tulsa		OK		2014			100.0	%			46,240				260,000				5.62				7.2				3,748,031				1,904,295
92		The Coca-Cola Company		Topeka		KS		2009			100.0	%			40,000				332,000				8.30				4.8				3,679,843				1,303,696
93		B/E Aerospace, Inc.		Rockford		IL		2015			100.0	%			38,833				362,000				9.32				10.5				5,100,000				-0-
94		Keystone Automotive Industries MN, Inc.		Urbandale (Des Moines)		IA		1994			100.0	%			36,270				141,000				3.89				0.2				2,161,895				-0-
95		FedEx Corporation		Richland (Jackson)		MS		1994			100.0	%			36,000				120,000				3.33				7.3				1,900,691				-0-
96		FedEx Corporation		Punta Gorda		FL		2007			100.0	%			34,624				304,000				8.78				0.5				4,113,265				1,959,432
97		FedEx Corporation		Lakeland		FL		2006			100.0	%			32,105				155,000				4.83				0.9				1,982,532				-0-
98		FedEx Corporation		Augusta		GA		2006			100.0	%			30,184				121,000				4.01				5.9				1,977,779				-0-
99		Graybar Electric Company		Ridgeland (Jackson)		MS		1993			100.0	%			26,340				109,000				4.14				2.6				1,858,591				-0-
100		Sherwin-Williams Company		Burr Ridge (Chicago)		IL		1997			100.0	%			12,500				161,000				12.88				4.8				1,692,901				-0-
		Total as of 12/31/16									100.0	%			16,553,910			$	96,064,000			$	5.80				7.4			$	1,223,881,570			$	512,292,137	(C)

 

(A)	Both tenants occupy one property.
(B)	Both tenants occupy one property.
	Other then these two properties indicated in footnotes (A) and (B) and the one retail property, all other properties are single-tenant.
(C)	Does not include unamortized debt issuance costs of $6,718,020.

 

 

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Definitions

 

Investors and analysts following the real estate industry utilize funds from operations (“FFO”), core funds from operations (“Core FFO”), net operating income (“NOI”), Same Property NOI, Same Property Cash NOI, earnings before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted funds from operations (“AFFO”), variously defined, as supplemental performance measures. While the Company believes net income available to common stockholders, as defined by accounting principles generally accepted in the United States of America (U.S. GAAP), is the most appropriate measure, it considers NOI, Same Property NOI, Same Property Cash NOI, EBITDA, FFO, Core FFO and AFFO, given their wide use by and relevance to investors and analysts, appropriate supplemental performance measures. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of U.S. GAAP depreciation and amortization of real estate assets. Core FFO reflects the same assumptions as FFO except that is also adjusts for the effects of acquisitions costs. NOI provides a measure of rental operations, and does not factor in depreciation and amortization and non-property specific expenses such as general and administrative expenses. EBITDA provides a tool to further evaluate the ability to incur and service debt and to fund dividends and other cash needs. AFFO provides a tool to further evaluate the ability to fund dividends. In addition, NOI, Same Property NOI, Same Property Cash NOI, EBITDA, FFO, Core FFO and AFFO are commonly used in various ratios, pricing multiples, yields and returns and valuation of calculations used to measure financial position, performance and value.

 

As used herein, the Company calculates FFO, as defined by The National Association of Real Estate Investment Trusts (NAREIT), to be equal to net income applicable to common shareholders, as defined by U.S. GAAP, excluding extraordinary items as defined by U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization. FFO includes gains and losses realized on securities investments.

 

NOI is calculated as recurring revenues of the Company, less property expenses such as real estate taxes, repairs and maintenance, property management, utilities, insurance and other expenses. NOI excludes realized gains (losses) on securities transactions.

 

Same Property NOI is the NOI of all properties owned during the entire periods presented with the exclusion of any properties expanded during the periods presented.

 

Same Property Cash NOI is the Same Property NOI adjusted to exclude the effect of non-cash U.S. GAAP straight-line rent adjustment for the properties included in the Same Property NOI calculation.

 

EBITDA is calculated as NOI, less general and administrative expenses, plus dividend and interest income and lease termination income and net effect of net amortization of acquired above or below market lease revenue.

 

Core FFO is calculated as FFO plus acquisition costs.

 

AFFO is calculated as EBITDA, minus lease termination income, minus U.S. GAAP interest expense, including amortization of financing costs, minus preferred stock dividends, minus recurring capital expenditures and the effect of non-cash U.S. GAAP straight-line rent adjustment, plus stock compensation expense, plus non-recurring other expense. AFFO excludes realized gains (losses) on securities transactions. Recurring capital expenditures are defined as all capital expenditures, excluding capital expenditures related to expansions at our current locations or capital expenditures that are incurred in conjunction with obtaining a new lease or a lease renewal.

 

NOI, Same Property NOI, Same Property Cash NOI, EBITDA, FFO, Core FFO and AFFO do not represent cash generated from operating activities in accordance with U.S. GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions. NOI, Same Property NOI, Same Property Cash NOI, EBITDA, FFO, Core FFO and AFFO should not be considered as substitutes for net income applicable to common shareholders (calculated in accordance with U.S. GAAP) as a measure of results of operations or cash flows (calculated in accordance with U.S. GAAP) as a measure of liquidity. NOI, Same Property NOI, Same Property Cash NOI, EBITDA, FFO, Core FFO and AFFO as currently calculated by the Company may not be comparable to similarly titled, but variously calculated, measures of other REITs.

 

 

Table of Contents

 

FOR IMMEDIATE RELEASE	February 8, 2017
	Contact: Susan Jordan
	732-577-9996

 

MONMOUTH REAL ESTATE REPORTS RESULTS FOR

THE FIRST QUARTER ENDED DECEMBER 31, 2016

 

FREEHOLD, NJ, February 8, 2017........ Monmouth Real Estate Investment Corporation (NYSE:MNR) reported Net Income Attributable to Common Shareholders of $6,156,000 or $0.09 per diluted share for the three months ended December 31, 2016 as compared to $4,787,000 or $0.08 per diluted share for the three months ended December 31, 2015 representing an increase per share of 13%. Core Funds from Operations (Core FFO) were $13,857,000 or $0.20 per diluted share for the three months ended December 31, 2016 as compared to $11,012,000 or $0.17 per diluted share for the three months ended December 31, 2015 representing an increase in Core FFO per share of 18%. Adjusted Funds from Operations (AFFO), for the three months ended December 31, 2016 were $12,939,000 or $0.19 per diluted share versus $10,725,000 or $0.17 per diluted share for the three months ended December 31, 2015 representing an increase in AFFO per share of 12%.

 

A summary of significant financial information for the three months ended December 31, 2016 and 2015 is as follows:

 

		Three Months Ended December 31,
		2016				2015
Rental Revenue		$	23,281,000			$	19,065,000
Reimbursement Revenue		$	3,901,000			$	3,194,000
Net Operating Income (NOI) (1)		$	22,980,000			$	18,656,000
Total Expenses		$	13,263,000			$	11,167,000
Dividend and Interest Income		$	1,292,000			$	1,185,000
Gain on Sale of Securities Transactions, net		$	806,000			$	8,000
Net Income		$	9,854,000			$	6,939,000
Net Income Attributable to Common Shareholders		$	6,156,000			$	4,787,000
Net Income Attributable to Common Shareholders Per Diluted Common Share		$	0.09			$	0.08
Core FFO (1)		$	13,857,000			$	11,012,000
Core FFO per Diluted Common Share (1)		$	0.20			$	0.17
AFFO (1)		$	12,939,000			$	10,725,000
AFFO per Diluted Common Share (1)		$	0.19			$	0.17
Dividends Declared per Common Share		$	0.16			$	0.16
Weighted Avg. Diluted Common Shares Outstanding			69,830,000				62,949,000

 

A summary of significant balance sheet information as of December 31, 2016 and September 30, 2016 is as follows:

 

		December 31, 2016				September 30, 2016
Net Real Estate Investments		$	1,069,045,000			$	1,022,483,000
Securities Available for Sale at Fair Value		$	74,321,000			$	73,605,000
Total Assets		$	1,209,680,000			$	1,223,486,000
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs		$	505,574,000			$	477,476,000
Loans Payable		$	76,000,000			$	80,791,000
Total Shareholders’ Equity		$	611,138,000			$	597,858,000

 

Michael P. Landy, President and CEO, commented on the results for the first quarter of fiscal 2017,

 

“This was another record quarter for Monmouth and represents an excellent start to fiscal 2017. We are pleased to report continued strength across multiple fronts. During the quarter we:

 

	●	Increased our occupancy rate to 100%, representing a 120 basis points increase over the prior year period and 40 basis points increase over the prior quarter
	●	Increased our per share AFFO to $0.19, representing a 12% increase over the prior year period and a 6% increase sequentially
	●	Increased our Net Operating Income (NOI) 23% over the prior year period
	●	Increased our Same Property NOI 2.4% on a GAAP basis and 3.1% on a cash basis over the prior year period
	●	Acquired two new Class A built-to-suit properties comprising 552,000 square feet, for an aggregate cost of $56.1 million
	●	Grew our acquisition pipeline to nine brand-new Class A build-to-suit properties, representing 2.34 million square feet, for a total purchase price of approximately $250.5 million

 

 

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	●	Increased our gross leasable area (GLA) 15% to 16.6 million square feet over the prior year period. Our GLA is expected to grow to 18.9 million square feet upon the completion of the above acquisitions
	●	Renewed five of thirteen leases scheduled to expire in Fiscal 2017, representing a weighted average lease term of 5.9 years. These five leases consist of 719,000 square feet and result in a 2.7% increase in GAAP rents. One lease was renewed on a short term basis and the remaining seven leases are currently under discussion
	●	Generated approximately $806,000 in net realized gains in addition to the $10.2 million in unrealized gains we held at quarter end on our REIT securities investments
	●	Redeemed all of our 7.625% Series A Preferred Stock for $54.0 million which was funded with a portion of the proceeds from our recent $135 million issue of 6.125% Series C Preferred Stock.”

 

Mr. Landy stated, “We have generated double-digit AFFO per-share growth in each of the prior three years, and with our first quarter AFFO per share up 12% from the prior year, fiscal 2017 is on track to continue this very favorable trend. Our property portfolio is 100% occupied, reflecting the mission-critical nature of our properties.”

 

“Looking forward, we have entered into agreements to acquire nine brand-new, Class A build-to-suit industrial properties, representing approximately 2.34 million square feet, for a total purchase price of approximately $250.5 million. These properties are expected to generate annualized rental revenue of approximately $16.5 million and will benefit from an average lease term of approximately 13.5 years. Six of the nine purchase commitments, consisting of approximately 1.7 million square feet, or 72%, are leased to investment-grade tenants or their subsidiaries. Subject to satisfactory due diligence, we anticipate closing these transactions upon completion of construction and occupancy over the next five quarters. The Company is very well capitalized to continue building upon the substantial growth that we have achieved to date.”

 

Monmouth Real Estate Investment Corporation will host its First Quarter FY 2017 Financial Results Webcast and Conference Call on Thursday, February 9, 2017 at 10:00 a.m. Eastern Time. Senior management will discuss the results, current market conditions and future outlook.

 

The Company’s First Quarter FY 2017 financial results being released herein will be available on the Company’s website at www.mreic.reit in the Investor Relations section, under Filings and Reports.

 

To participate in the Webcast, select the 1Q2017 Webcast and Earnings Call “Link to Webcast” on the homepage of the Company’s website at www.mreic.reit, in the Highlights section, which is located towards the bottom of the homepage. Interested parties can also participate via conference call by calling toll free 877-510-5852 (domestically) or 412-902-4138 (internationally).

 

The replay of the conference call will be available at 12:00 p.m. Eastern Time on Thursday, February 9, 2017. It will be available until May 1, 2017, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10097752. A transcript of the call and the webcast replay will be available at the Company’s website on the Investor Relations homepage, www.mreic.reit.

 

Monmouth Real Estate Investment Corporation, founded in 1968, is one of the oldest public equity REITs in the U.S. The Company specializes in single-tenant, net-leased industrial properties, subject to long-term leases, primarily to investment-grade tenants. Monmouth Real Estate is a fully-integrated and self-managed real estate company, whose property portfolio consists of 100 properties containing a total of approximately 16.6 million rentable square feet, geographically diversified across 30 states. In addition, the Company owns a portfolio of REIT securities.

 

Certain statements included in this press release which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are based on the Company’s current expectations and involve various risks and uncertainties. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can provide no assurance those expectations will be achieved. The risks and uncertainties that could cause actual results or events to differ materially from expectations are contained in the Company’s annual report on Form 10-K and described from time to time in the Company’s other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

 

Notes:

 

(1) Non-U.S. GAAP Information: FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as net income applicable to common shareholders, excluding gains or losses from sales of depreciable assets, plus real estate related depreciation and amortization. We define Core FFO as FFO plus acquisition costs. We define AFFO as Core FFO excluding lease termination income, gains or losses on securities transactions, stock based compensation expense, depreciation of corporate office tenant improvements, amortization of deferred financing costs, non-recurring other expense, the effect of non-cash U.S. GAAP straight-line rent adjustments and less recurring capital expenditures. We define recurring capital expenditures as all capital expenditures, excluding capital expenditures related to expansions at our current locations or capital expenditures that are incurred in conjunction with obtaining a new lease or a lease renewal. We define NOI as recurring rental and reimbursement revenues less real estate and other operating expenses. FFO, Core FFO and AFFO per diluted common share are defined as FFO, Core FFO and AFFO divided by weighted average diluted common shares outstanding. FFO, Core FFO and AFFO per diluted common share, as well as NOI, should be considered as supplemental measures of operating performance used by real estate investment trusts (REITs). FFO, Core FFO and AFFO per diluted common share exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have different cost basis. However, other REITs may use different methodologies to calculate FFO, Core FFO and AFFO and, accordingly, our FFO, Core FFO and AFFO may not be comparable to all other REITs. The items excluded from FFO, Core FFO and AFFO per diluted common share are significant components in understanding the Company’s financial performance.

 

FFO, Core FFO and AFFO per diluted common share (A) do not represent cash flow from operations as defined by accounting principles generally accepted in the United States of America; (B) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (C) are not alternatives to cash flow as a measure of liquidity. FFO, Core FFO and AFFO per diluted common share, as well as NOI, as calculated by the Company, may not be comparable to similarly titled measures reported by other REITs.

 

 

Table of Contents

 

The following is a reconciliation of the Company’s U.S. GAAP Net Income to the Company’s FFO, Core FFO and AFFO for the three months ended December 31, 2016 and 2015:

 

		Three Months Ended
		12/31/2016				12/31/2015
Net Income Attributable to Common Shareholders		$	6,156,000			$	4,787,000
Plus: Depreciation Expense (excluding Corporate Office Tenant Improvements)			6,954,000				5,567,000
Plus: Amortization of Intangible Assets			268,000				323,000
Plus: Amortization of Capitalized Lease Costs			206,000				189,000
Plus: Loss on Sale of Real Estate Investment			95,000				-0-
FFO Attributable to Common Shareholders			13,679,000				10,866,000
Plus: Acquisition Costs			178,000				146,000
Core FFO Attributable to Common Shareholders			13,857,000				11,012,000
Plus: Amortization of Financing Costs			281,000				234,000
Plus: Stock Compensation Expense			100,000				105,000
Plus: Depreciation of Corporate Office Tenant Improvements			39,000				28,000
Less: Gain on Sale of Securities Transactions, net			(806,000	)			(8,000	)
Less: Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(343,000	)			(310,000	)
Less: Recurring Capital Expenditures			(189,000	)			(336,000	)
AFFO Attributable to Common Shareholders		$	12,939,000			$	10,725,000

 

The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the three months ended December 31, 2016 and 2015:

 

		Three Months Ended
		12/31/2016				12/31/2015
Operating Activities		$	14,153,000			$	11,637,000
Investing Activities			(55,150,000	)			(55,597,000	)
Financing Activities			(24,029,000	)			44,813,000

 

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