Table of Contents

 

	Page
Consolidated Balance Sheets	3
Consolidated Statements of Income	4
Net Income, FFO, Core FFO, AFFO, EBITDAre, Adjusted EBITDA and NOI Reconciliations	5
Financial Highlights	6
Same Property Statistics	7
Consolidated Statements of Cash Flows	9
Capital Structure and Leverage Ratios	10
Debt Maturity	12
Property Table by Tenant	13
Property Table by State	14
Lease Expirations	15
Recent Acquisitions	16
Property Table	17
Definitions	19
Press Release Dated May 8, 2018	20

 

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, EBITDAre and Adjusted EBITDA, which are REIT industry financial measures that are not calculated in accordance with accounting principles generally accepted in the United States. Please see page 19 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.

 

 

Consolidated Balance Sheets

 

		As of				As of
		March 31, 2018				September 30, 2017
		(unaudited)
ASSETS
Real Estate Investments:
Land		$	197,974,389			$	187,224,819
Buildings and Improvements			1,342,261,913				1,244,691,715
Total Real Estate Investments			1,540,236,302				1,431,916,534
Accumulated Depreciation			(188,310,757	)			(171,060,478	)
Real Estate Investments			1,351,925,545				1,260,856,056
Real Estate Held for Sale			9,486,257				14,606,028
Cash and Cash Equivalents			12,470,188				10,226,046
Securities Available for Sale at Fair Value			144,630,426				123,764,770
Tenant and Other Receivables			1,743,865				1,753,054
Deferred Rent Receivable			8,772,807				8,049,275
Prepaid Expenses			9,339,758				5,434,874
Intangible Assets, net of Accumulated Amortization of  $13,267,014 and $13,404,318, respectively			11,934,269				10,010,165
Capitalized Lease Costs, net of Accumulated Amortization of   $3,331,272 and $3,393,187, respectively			4,271,380				4,180,907
Financing Costs, net of Accumulated Amortization of   $807,345 and $619,555, respectively			687,919				875,709
Other Assets			4,629,158				3,280,871
TOTAL ASSETS		$	1,559,891,572			$	1,443,037,755
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs		$	632,051,233			$	591,364,371
Loans Payable			154,341,511				120,091,417
Accounts Payable and Accrued Expenses			2,497,405				4,450,753
Other Liabilities			20,643,642				14,265,518
Total Liabilities			809,533,791				730,172,059
COMMITMENTS AND CONTINGENCIES
Shareholders’ Equity:
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 12,400,000 Shares Authorized as of March 31, 2018 and September 30, 2017; 11,095,376 and 9,839,445 Shares Issued and Outstanding as of March 31, 2018 and September 30, 2017, respectively			277,384,400				245,986,125
Common Stock, $0.01 Par Value Per Share: 192,039,750 Shares Authorized as of March 31, 2018 and September 30, 2017; 78,846,177 and 75,630,521 Shares Issued and Outstanding  as of March 31, 2018 and September 30, 2017, respectively			788,462				756,305
Excess Stock, $0.01 Par Value Per Share: 200,000,000 Shares Authorized as of March 31, 2018 and September 30, 2017; No Shares Issued or Outstanding as of March 31, 2018 and September 30, 2017			-0-				-0-
Additional Paid-In Capital			503,309,572				459,552,701
Accumulated Other Comprehensive Income (Loss)			(31,124,653	)			6,570,565
Undistributed Income			-0-				-0-
Total Shareholders’ Equity			750,357,781				712,865,696
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY		$	1,559,891,572			$	1,443,037,755

 

 

Consolidated Statements of Income

(unaudited)

 

		For The								For The
		Three Months Ended								Six Months Ended
		3/31/2018				3/31/2017				3/31/2018				3/31/2017
INCOME:
Rental Revenue		$	28,609,985			$	23,610,830			$	56,302,467			$	46,891,686
Reimbursement Revenue			5,011,523				3,697,361				10,060,863				7,598,116
Lease Termination Income			-0-				-0-				210,261				-0-
TOTAL INCOME			33,621,508				27,308,191				66,573,591				54,489,802
EXPENSES:
Real Estate Taxes			3,779,648				2,851,862				7,642,311				5,758,843
Operating Expenses			1,476,295				1,288,265				2,912,536				2,582,733
General & Administrative Expenses			2,218,037				2,078,538				4,165,069				3,521,001
Acquisition Costs			-0-				-0-				-0-				178,526
Depreciation			8,858,062				7,139,077				17,342,046				14,131,572
Amortization of Capitalized Lease Costs and Intangible Assets			588,622				427,756				1,126,693				875,553
TOTAL EXPENSES			16,920,664				13,785,498				33,188,655				27,048,228
OTHER INCOME (EXPENSE):
Dividend and Interest Income			2,888,210				1,439,182				5,752,427				2,731,333
Gain on Sale of Securities Transactions			11,234				-0-				111,387				806,108
Interest Expense, including Amortization of Financing Costs			(7,955,285	)			(6,537,264	)			(15,361,232	)			(12,700,483	)
TOTAL OTHER INCOME (EXPENSE)			(5,055,841	)			(5,098,082	)			(9,497,418	)			(9,163,042	)
INCOME FROM CONTINUING OPERATIONS, BEFORE GAIN ON SALE OF REAL ESTATE INVESTMENTS			11,645,003				8,424,611				23,887,518				18,278,532
Gain on Sale of Real Estate Investments			-0-				-0-				5,387,886				-0-
NET INCOME			11,645,003				8,424,611				29,275,404				18,278,532
Less: Preferred Dividends			4,248,219				3,582,036				8,565,165				7,279,796
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS		$	7,396,784			$	4,842,575			$	20,710,239			$	10,998,736

 

 

Net Income, FFO, Core FFO, AFFO, EBITDAre, Adjusted EBITDA and NOI Reconciliations

(unaudited)

 

		For The								For The
		Three Months Ended								Six Months Ended
FFO, Core FFO, AFFO		3/31/2018				3/31/2017				3/31/2018				3/31/2017
Net Income Attributable to Common Shareholders		$	7,396,784			$	4,842,575			$	20,710,239			$	10,998,736
Plus: Depreciation Expense (Excluding Corporate Office Capitalized Costs)			8,818,574				7,099,906				17,263,081				14,053,686
Plus: Amortization of Intangible Assets			397,116				240,973				740,862				508,820
Plus: Amortization of Capitalized Lease Costs			217,183				212,275				437,185				417,717
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments			-0-				-0-				(5,387,886	)			95,336
FFO Attributable to Common Shareholders			16,829,657				12,395,729				33,763,481				26,074,295
Plus: Acquisition Costs			-0-				-0-				-0-				178,526
Core FFO Attributable to Common Shareholders			16,829,657				12,395,729				33,763,481				26,252,821
Plus: Depreciation of Corporate Office Capitalized Costs			39,488				39,171				78,965				77,886
Plus: Stock Compensation Expense			111,406				166,190				242,169				266,345
Plus: Amortization of Financing Costs			302,556				384,984				596,450				665,897
Less: Gain on Sale of Securities Transactions			(11,234	)			-0-				(111,387	)			(806,108	)
Less: Lease Termination Income			-0-				-0-				(210,261	)			-0-
Less: Recurring Capital Expenditures			(64,474	)			(188,390	)			(283,720	)			(376,802	)
Less: Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(360,458	)			(286,617	)			(756,486	)			(629,856	)
AFFO Attributable to Common Shareholders		$	16,846,941			$	12,511,067			$	33,319,211			$	25,450,183

 

		Three Months Ended								Six Months Ended
EBITDAre, Adjusted EBITDA		3/31/2018				3/31/2017				3/31/2018				3/31/2017
Net Income Attributable to Common Shareholders		$	7,396,784			$	4,842,575			$	20,710,239			$	10,998,736
Plus: Preferred Dividends			4,248,219				3,582,036				8,565,165				7,279,796
Plus: Interest Expense, including Amortization of Financing Costs			7,955,285				6,537,264				15,361,232				12,700,483
Plus: Depreciation and Amortization			9,446,684				7,566,833				18,468,739				15,007,125
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments			-0-				-0-				(5,387,886	)			95,336
EBITDAre			29,046,972				22,528,708				57,717,489				46,081,476
Plus: Acquisition Costs			-0-				-0-				-0-				178,526
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue			25,677				25,492				51,354				50,984
Less: Gain on Sale of Securities Transactions			(11,234	)			-0-				(111,387	)			(806,108	)
Adjusted EBITDA		$	29,061,415			$	22,554,200			$	57,657,456			$	45,504,878

 

		Three Months Ended								Six Months Ended
Net Operating Income		3/31/2018				3/31/2017				3/31/2018				3/31/2017
Net Income Attributable to Common Shareholders		$	7,396,784			$	4,842,575			$	20,710,239			$	10,998,736
Plus: Preferred Dividends			4,248,219				3,582,036				8,565,165				7,279,796
Plus: General & Administrative Expenses			2,218,037				2,078,538				4,165,069				3,521,001
Plus: Acquisition Costs			-0-				-0-				-0-				178,526
Plus: Depreciation			8,858,062				7,139,077				17,342,046				14,131,572
Plus: Amortization of Capitalized Lease Costs and Intangible Assets			588,622				427,756				1,126,693				875,553
Plus: Interest Expense, including Amortization of Financing Costs			7,955,285				6,537,264				15,361,232				12,700,483
Less: Dividend and Interest Income			(2,888,210	)			(1,439,182	)			(5,752,427	)			(2,731,333	)
Less: Gain on Sale of Securities Transactions			(11,234	)			-0-				(111,387	)			(806,108	)
Less: Gain on Sale of Real Estate Investments			-0-				-0-				(5,387,886	)			-0-
Less: Lease Termination Income			-0-				-0-				(210,261	)			-0-
Net Operating Income – NOI		$	28,365,565			$	23,168,064			$	55,808,483			$	46,148,226

 

		Three Months Ended								Six Months Ended
Components of Net Operating Income Consists of:		3/31/2018				3/31/2017				3/31/2018				3/31/2017
Revenues:
Rental Revenue		$	28,609,985			$	23,610,830			$	56,302,467			$	46,891,686
Reimbursement Revenue			5,011,523				3,697,361				10,060,863				7,598,116
Total Rental and Reimbursement Revenue			33,621,508				27,308,191				66,363,330				54,489,802
Expenses:
Real Estate Taxes			3,779,648				2,851,862				7,642,311				5,758,843
Operating Expenses			1,476,295				1,288,265				2,912,536				2,582,733
Total Real Estate Taxes and Operating Expenses			5,255,943				4,140,127				10,554,847				8,341,576
Net Operating Income – NOI		$	28,365,565			$	23,168,064			$	55,808,483			$	46,148,226

 

 

Financial Highlights

(unaudited)

 

		For The								For The
		Three Months Ended								Six Months Ended
		3/31/2018				3/31/2017				3/31/2018				3/31/2017
Weighted Average Common Shares Outstanding
Basic			77,992,007				71,243,381				77,174,821				70,456,222
Diluted			78,155,938				71,406,875				77,362,197				70,607,766
Net Income Attributable to Common Shareholders		$	7,396,784			$	4,842,575			$	20,710,239			$	10,998,736
Basic		$	0.10			$	0.07			$	0.27			$	0.16
Diluted			0.10				0.07				0.27				0.16
Net Operating Income – NOI		$	28,365,565			$	23,168,064			$	55,808,483			$	46,148,226
Basic		$	0.36			$	0.33			$	0.72			$	0.65
Diluted			0.36				0.32				0.72				0.65
Funds From Operations – FFO		$	16,829,657			$	12,395,729			$	33,763,481			$	26,074,295
Basic		$	0.22			$	0.17			$	0.44			$	0.37
Diluted			0.22				0.17				0.44				0.37
Core Funds From Operations - Core FFO		$	16,829,657			$	12,395,729			$	33,763,481			$	26,252,821
Basic		$	0.22			$	0.17			$	0.44			$	0.37
Diluted			0.22				0.17				0.44				0.37
Core FFO Excluding Gain on Sale of Securities Transactions and Excluding Lease Termination Income		$	16,818,423			$	12,395,729			$	33,441,883			$	25,446,713
Basic		$	0.22			$	0.17			$	0.43			$	0.36
Diluted			0.22				0.17				0.43			$	0.36
Adjusted Funds From Operations – AFFO		$	16,846,941			$	12,511,067			$	33,319,211			$	25,450,183
Basic		$	0.22			$	0.18			$	0.43			$	0.36
Diluted			0.22				0.18				0.43			$	0.36
Dividends Declared per Common Share		$	0.17			$	0.16			$	0.34			$	0.32
Dividend/AFFO Payout Ratio			77.3	%

 

 

Same Property Statistics

(unaudited)

 

		For The
		Three Months Ended
		3/31/2018								3/31/2017				Change				Change %
Total Square Feet / Total Properties			19,928,001 / 109								16,553,910 / 100				3,374,091			20.4	%
Occupancy Percentage at End of Period			99.2	%							100.0	%			(80) bps			(0.8	)%
Same Property Square Feet / Number of Same Properties							15,901,307 / 96
Same Property Occupancy Percentage at End of Period			98.9	%							100.0	%			(110) bps			(1.1	)%
Same Property Net Operating Income (NOI) (GAAP)		$	22,335,043							$	22,284,650			$	50,393			0.2	%
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(274,433	)							(286,619	)			12,186
Same Property Cash NOI (Cash)		$	22,060,610							$	21,998,031			$	62,579			0.3	%

 

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

 

The 0.2% increase, amounting to $50,393 in Same Property NOI, consists of $172,909 attributable to increased Same Property NOI from occupied properties offset by a 110 bps decline in Same Property Occupancy Percentage amounting to $122,516.

 

The 0.3% increase, amounting to $62,579 in Same Property Cash NOI, consists of $185,095 attributable to increased Same Property Cash NOI from occupied properties offset by a 110 bps decline in Same Property Occupancy Percentage amounting to $122,516.

 

Reconciliation of Same Property NOI to Total NOI

 

		For The
		Three Months Ended
		3/31/2018				3/31/2017				Change				Change %
Same Property NOI (GAAP)		$	22,335,043			$	22,284,650			$	50,393				0.2	%
NOI of properties purchased subsequent to December 31, 2016 (three properties for fiscal 2018 and eight properties for fiscal 2017)			5,266,454				-0-
NOI of properties expanded subsequent to December 31, 2016 (two properties for fiscal 2018 and 2017)			764,068				724,134
NOI of properties sold subsequent to December 31, 2016 (two properties sold during the first quarter of fiscal 2018)			-0-				159,280
Total NOI		$	28,365,565			$	23,168,064			$	5,197,501				22.4	%

 

 

Same Property Statistics

(unaudited)

 

		For The
		Six Months Ended
		3/31/2018								3/31/2017				Change				Change %
Total Square Feet / Total Properties			19,928,001 /  109								16,553,910 /  100				3,374,091			20.4	%
Occupancy Percentage at End of Period			99.2	%							100.0	%			(80) bps			(0.8	)%
Same Property Square Feet / Number of Same Properties							15,562,723 / 95
Same Property Occupancy Percentage at End of Period			98.9	%							100.0	%			(110) bps			(1.1	)%
Same Property Net Operating Income (NOI) (GAAP)		$	43,418,000							$	43,660,113			$	(242,113	)		(0.6	)%
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(498,470	)							(583,942	)			85,472
Same Property Cash NOI (Cash)		$	42,919,530							$	43,076,171			$	(156,641	)		(0.4	)%

 

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

 

The 0.6% decrease, amounting to $242,113 in Same Property NOI, consists of $38,673 attributable to increased Same Property NOI from occupied properties offset by a 110 bps decline in Same Property Occupancy Percentage amounting to $280,786.

 

The 0.4% decrease, amounting to $156,641 in Same Property Cash NOI, consists of $161,760 attributable to increased Same Property Cash NOI from occupied properties offset by a 110 bps decline in Same Property Occupancy Percentage amounting to $318,401.

 

Reconciliation of Same Property NOI to Total NOI

 

		For The
		Six Months Ended
		3/31/2018				3/31/2017				Change				Change %
Same Property NOI (GAAP)		$	43,418,000			$	43,660,113			$	(242,113	)			(0.6	)%
NOI of properties purchased subsequent to September 30, 2016 (three properties for fiscal 2018 and ten properties for fiscal 2017)			11,333,712				1,523,467
NOI of properties expanded subsequent to September 30, 2016 (one property for fiscal 2018 and 2017)			841,918				759,254
NOI of properties sold subsequent to September 30, 2016 (two properties sold during fiscal 2018 and one during fiscal 2017)			214,853				205,392
Total NOI		$	55,808,483			$	46,148,226			$	9,660,257				20.9	%

 

 

Consolidated Statements of Cash Flows

(unaudited)

 

		For The
		Six Months Ended
		3/31/18				3/31/17
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income		$	29,275,404			$	18,278,532
Noncash Items Included in Net Income:
Depreciation & Amortization			19,065,189				15,673,022
Deferred Straight Line Rent			(756,486	)			(629,856	)
Stock Compensation Expense			242,170				266,345
Gain on Sale of Securities Transactions			(111,387	)			(806,108	)
(Gain) / Loss on Sale of Real Estate Investments			(5,387,886	)			95,336
Changes in:
Tenant & Other Receivables			850,945				1,082,191
Prepaid Expenses			(3,904,884	)			(3,135,027	)
Other Assets & Capitalized Lease Costs			20,263				(839,704	)
Accounts Payable, Accrued Expenses & Other Liabilities			3,545,246				861,044
NET CASH PROVIDED BY OPERATING ACTIVITIES			42,838,574				30,845,775
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Real Estate & Intangible Assets			(110,045,832	)			(56,101,538	)
Capital Improvements			(2,310,665	)			(1,013,209	)
Proceeds from Sale of Real Estate Investments			10,499,704				4,125,819
Return of Deposits on Real Estate			450,000				1,000,000
Deposits Paid on Acquisitions of Real Estate			(1,200,000	)			(1,575,000	)
Proceeds from Sale of Securities Available for Sale			2,619,433				3,739,239
Purchase of Securities Available for Sale			(61,068,920	)			(29,305,625	)
NET CASH USED IN INVESTING ACTIVITIES			(161,056,280	)			(79,130,314	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Draws (Repayments) on Loans Payable			34,250,094				(54,790,684	)
Proceeds from Fixed Rate Mortgage Notes Payable			67,100,000				38,000,000
Principal Payments on Fixed Rate Mortgage Notes Payable			(26,225,677	)			(37,700,474	)
Financing Costs Paid on Debt			(596,121	)			(660,702	)
Proceeds from the Exercise of Stock Options			569,600				-0-
Redemption of 7.625% Series A Preferred Stock			-0-				(53,493,750	)
Proceeds from Underwritten Public Offering of Preferred Stock, net of offering costs			-0-				71,017,493
Proceeds from At-The-Market Preferred Equity Program, net of offering costs			30,941,972				-0-
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments			42,996,991				37,812,970
Preferred Dividends Paid			(8,301,342	)			(6,621,359	)
Common Dividends Paid, net of Reinvestments			(20,273,669	)			(18,076,564	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			120,461,848				(24,513,070	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			2,244,142				(72,797,609	)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD			10,226,046				95,749,508
CASH AND CASH EQUIVALENTS - END OF PERIOD		$	12,470,188			$	22,951,899

 

 

Capital Structure and Leverage Ratios

(unaudited)

 

		As of				As of				As of
		3/31/2018				3/31/2017				9/30/2017
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs		$	632,051,233			$	477,598,305			$	591,364,371
Loans Payable			154,341,511				26,000,000				120,091,417
Total Debt			786,392,744				503,598,305				711,455,788
7.875% Series B Cumulative Redeemable Preferred Stock			-0-				57,500,000				-0-
6.125% Series C Cumulative Redeemable Preferred Stock			277,384,400				210,000,000				245,986,125
Total Preferred Stock			277,384,400				267,500,000				245,986,125
Common Stock, Paid-In-Capital & Other			472,973,381				431,805,101				466,879,571
Total Shareholders’ Equity			750,357,781				699,305,101				712,865,696
Total Book Capitalization			1,536,750,525				1,202,903,406				1,424,321,484
Accumulated Depreciation			191,051,270				161,947,883				177,372,518
Total Undepreciated Book Capitalization		$	1,727,801,795			$	1,364,851,289			$	1,601,694,002
Shares Outstanding			78,846,177				72,107,640				75,630,521
Market Price Per Share		$	15.04			$	14.27			$	16.19
Equity Market Capitalization		$	1,185,846,502			$	1,028,976,023			$	1,224,458,135
Total Debt			786,392,744				503,598,305				711,455,788
Total Preferred Stock			277,384,400				267,500,000				245,986,125
Total Market Capitalization		$	2,249,623,646			$	1,800,074,328			$	2,181,900,048
Total Debt		$	786,392,744			$	503,598,305			$	711,455,788
less: Cash and Cash Equivalents			12,470,188				22,951,899				10,226,046
Net Debt		$	773,922,556			$	480,646,406			$	701,229,742
less: Securities Available for Sale at Fair Value (Securities)			144,630,426				99,405,410				123,764,770
Net Debt Less Securities		$	629,292,130			$	381,240,996			$	577,464,972
Net Debt / Total Undepreciated Book Capitalization			44.8	%			35.2	%			43.8	%
Net Debt / Total Market Capitalization			34.4	%			26.7	%			32.1	%
Net Debt Plus Preferred Stock / Total Market Capitalization			46.7	%			41.6	%			43.4	%
Net Debt Less Securities / Total Undepreciated Book Capitalization			36.4	%			27.9	%			36.1	%
Net Debt Less Securities / Total Market Capitalization			28.0	%			21.2	%			26.5	%
Net Debt Less Securities Plus Preferred Stock / Total Market Capitalization			40.3	%			36.0	%			37.7	%
Weighted Average Interest Rate on Fixed Rate Debt			4.11	%			4.37	%			4.18	%
Weighted Average Term on Fixed Rate Debt			11.5 yrs.				10.7 yrs.				11.6 yrs
Weighted Average Lease Term			7.8 yrs.				7.4 yrs.				7.9 yrs

 

 

Capital Structure and Leverage Ratios continued

(unaudited)

 

																		Fiscal Year
		Three Months Ended								Six Months Ended								Ended
		3/31/2018				3/31/2017				3/31/2018				3/31/2017				9/30/2017
Net Income		$	11,645,003			$	8,424,611			$	29,275,404			$	18,278,532			$	40,271,085
plus: Interest Expense, including Amortization of Financing Costs			7,955,285				6,537,264				15,361,232				12,700,483				25,754,121
plus: Depreciation & Amortization			9,446,684				7,566,833				18,468,739				15,007,125				31,459,749
less: (Gain) / plus: Loss on Sale of Real Estate Investments			-0-				-0-				(5,387,886	)			95,336				95,336
EBITDAre			29,046,972				22,528,708				57,717,489				46,081,476				97,580,291
plus: Acquisition Costs			-0-				-0-				-0-				178,526				178,526
plus: Net Amortization of Acquired Above and Below Market Lease Revenue			25,677				25,492				51,354				50,984				101,968
less: Gain on Sale of Securities Transactions			(11,234	)			-0-				(111,387	)			(806,108	)			(2,311,714	)
Adjusted EBITDA		$	29,061,415			$	22,554,200			$	57,657,456			$	45,504,878			$	95,549,071
Interest Expense, including Amortization of Financing Costs		$	7,955,285			$	6,537,264			$	15,361,232			$	12,700,483			$	25,754,121
Preferred Dividends			4,248,219				3,582,036				8,565,165				7,279,796				14,861,686
Total Fixed Charges		$	12,203,504			$	10,119,300			$	23,926,397			$	19,980,279			$	40,615,807
Interest Coverage			3.7 x				3.5 x				3.8 x				3.6 x				3.7 x
Fixed Charge Coverage			2.4 x				2.2 x				2.4 x				2.3 x				2.4 x
Net Debt		$	773,922,556			$	480,646,406			$	773,922,556			$	480,646,406			$	701,229,742
Net Debt Less Securities			629,292,130				381,240,996				629,292,130				381,240,996				577,464,972
Total Preferred Stock			277,384,400				267,500,000				277,384,400				267,500,000				245,986,125
Annualized Adjusted EBITDA			116,245,660				90,216,800				115,314,912				91,009,756				95,549,071
Net Debt / Adjusted EBITDA			6.7 x				5.3 x				6.7 x				5.3 x				7.3 x
Net Debt Less Securities / Adjusted EBITDA			5.4 x				4.2 x				5.5 x				4.2 x				6.0 x
Net Debt + Preferred Stock / Adjusted EBITDA			9.0 x				8.3 x				9.1 x				8.2 x				9.9 x
Net Debt Less Securities + Preferred Stock / Adjusted EBITDA			7.8 x				7.2 x				7.9 x				7.1 x				8.6 x

 

 

 

								Loans								% of
Fiscal Year Ended				Mortgages				Payable				Total				Total
2018				$	23,077,134			$	44,341,511	(B)		$	67,418,645				8.5	%
2019					59,035,637				-0-				59,035,637				7.4	%
2020					43,285,121				110,000,000	(C)			153,285,121				19.3	%
2021					44,295,790				-0-				44,295,790				5.6	%
2022					65,782,393				-0-				65,782,393				8.3	%
Thereafter					404,360,815				-0-				404,360,815				50.9	%
Total as of 3/31/2018		(A)		$	639,836,890			$	154,341,511			$	794,178,401				100.0	%
Weighted Average Interest Rate					4.11	%			3.13	%			3.92	%
Weighted Average Term					11.5 yrs.				1.8 yrs.				9.6 yrs.

 

	(A)	Mortgages does not include unamortized debt issuance costs of $7,785,657.
	(B)	Represents margin debt which is due upon demand and bears and interest rate of 2.00%.
	(C)	Represents the amount drawn down on a line of credit that has a one year extension option, which is not reflected above.

 

 

Property Table by Tenant

(unaudited)

 

				Property				Square				Occupied Square				% of Occupied				Annual				% of Total				Rent Per sf				Undepreciated				Mortgage
Tenant				Count				Footage				Footage				sf				Rent				Ann. Rent				Occup.				Cost				Balance
FedEx Ground Package System, Inc.					43				7,967,706				7,967,706				40.0	%		$	59,396,000				50.9	%		$	7.45			$	811,701,200			$	358,280,093
FedEx Corporation					16				1,544,996				1,544,996				7.8	%			8,000,000				6.9	%			5.18				108,575,992				23,477,029
Total FedEx					59				9,512,702				9,512,702				47.8	%			67,396,000				57.8	%			7.08				920,277,192				381,757,122
Milwaukee Electric Tool Corporation					1				861,889				861,889				4.3	%			3,032,000				2.6	%			3.52				36,914,917				22,600,414
Shaw Industries, Inc.					1				831,764				831,764				4.2	%			3,551,000				3.0	%			4.27				56,025,945				33,146,461
ULTA, Inc.					1				671,354				671,354				3.4	%			2,702,000				2.3	%			4.02				37,512,071				20,828,554
Jim Beam Brands Company					1				599,840				599,840				3.0	%			2,051,000				1.8	%			3.42				28,000,000				17,105,559
International Paper Company					2				578,472				578,472				2.9	%			2,592,000				2.2	%			4.48				36,175,718				21,326,799
TreeHouse Private Brands, Inc.					1				558,600				558,600				2.8	%			2,206,000				1.9	%			3.95				26,807,852				15,663,877
CBOCS Distribution, Inc. (Cracker Barrel)					1				381,240				381,240				1.9	%			1,447,000				1.2	%			3.80				14,215,126				7,334,231
Best Buy Warehousing Logistics, Inc.					1				368,060				368,060				1.8	%			1,676,000				1.4	%			4.55				19,600,000				9,598,178
Coca-Cola					2				323,358				323,358				1.6	%			1,693,000				1.4	%			5.24				20,504,069				5,118,586
Autoneum North America, Inc.					1				315,560				315,560				1.6	%			1,703,000				1.5	%			5.40				21,040,395				14,853,051
Science Applications International Corporation					1				302,400				302,400				1.5	%			1,491,000				1.3	%			4.93				13,390,441				-0-
Amazon.com Services, Inc.					1				300,000				300,000				1.5	%			1,884,000				1.6	%			6.28				29,878,942				19,406,304
United Technologies Corporation					3				283,150				283,150				1.4	%			2,264,000				1.9	%			8.00				27,687,512				6,851,064
Bunzl USA Holdings, Inc.					2				268,778				268,778				1.3	%			1,474,000				1.3	%			5.48				18,379,665				12,454,764
Woodstream Corporation		(A)			1				256,000				256,000				1.3	%			914,000				0.8	%			3.57				8,912,151				-0-
NF&M International, Inc.		(B)			1				174,802				174,802				0.9	%			835,000				0.7	%			4.78				5,399,580				-0-
Anda Pharmaceuticals, Inc.					1				234,660				234,660				1.2	%			1,205,000				1.0	%			5.14				14,550,000				7,871,470
UGN, Inc.					1				232,200				232,200				1.2	%			1,070,000				0.9	%			4.61				13,017,525				7,369,500
Mickey Thompson Performance Tires and Wheels (Cooper Tire)					1				219,765				219,765				1.1	%			1,501,000				1.3	%			6.83				18,934,065				12,443,758
Rinnai America Corporation					1				218,120				218,120				1.1	%			831,000				0.7	%			3.81				14,885,306				-0-
Anheuser-Busch, Inc.					1				184,800				184,800				0.9	%			821,000				0.7	%			4.44				12,697,848				-0-
Carlisle Tire & Wheel Company					1				179,280				179,280				0.9	%			739,000				0.6	%			4.12				7,232,986				-0-
Home Depot USA, Inc.					1				171,200				171,200				0.9	%			997,000				0.9	%			5.82				11,298,367				-0-
Victory Packaging, L.P.					1				148,000				148,000				0.7	%			502,000				0.4	%			3.39				5,451,629				-0-
Challenger Lifts, Inc. (Snap-On Inc.)					1				137,500				137,500				0.7	%			838,000				0.7	%			6.09				11,304,000				6,721,455
Altec Industries, Inc.		(A)			1				126,880				126,880				0.6	%			371,000				0.3	%			2.92				4,417,086				-0-
General Electric Company					1				125,860				125,860				0.6	%			1,321,000				1.1	%			10.50				19,950,000				11,585,192
The American Bottling Company (Dr Pepper Snapple)					2				110,080				110,080				0.6	%			743,000				0.6	%			6.75				10,498,031				1,749,659
Style Crest, Inc.					1				106,507				106,507				0.5	%			387,000				0.3	%			3.63				7,238,613				-0-
Pittsburgh Glass Works, LLC					1				102,135				102,135				0.5	%			427,000				0.4	%			4.18				4,245,913				-0-
Holland 1916 Inc.					1				95,898				95,898				0.5	%			349,000				0.3	%			3.64				7,397,881				-0-
National Oilwell Varco, Inc.					1				91,295				91,295				0.5	%			754,000				0.6	%			8.26				8,163,278				2,388,059
Joseph T. Ryerson and Son, Inc.					1				89,052				89,052				0.4	%			506,000				0.4	%			5.68				6,977,442				-0-
CHEP USA, Inc.					1				83,000				83,000				0.4	%			500,000				0.4	%			6.02				7,405,447				-0-
Sherwin-Williams Company					2				78,887				78,887				0.4	%			643,000				0.6	%			8.15				7,244,128				-0-
RGH Enterprises, Inc. (Cardinal Health)					1				75,000				75,000				0.4	%			607,000				0.5	%			8.09				5,525,600				-0-
Tampa Bay Grand Prix					1				68,385				68,385				0.3	%			297,000				0.3	%			4.34				5,677,982				-0-
Various Tenants at Retail Shopping Center					1				64,220				64,220				0.3	%			807,000				0.7	%			12.57				3,072,882				-0-
SOFIVE, Inc.					1				60,400				60,400				0.3	%			558,000				0.5	%			9.24				4,910,208				1,662,833
Kellogg Sales Company					1				54,812				54,812				0.3	%			329,000				0.3	%			6.00				3,494,108				-0-
Siemens Real Estate					1				51,130				51,130				0.3	%			485,000				0.4	%			9.49				4,452,425				-0-
Foundation Building Materials, LLC					1				36,270				36,270				0.2	%			172,000				0.2	%			4.74				2,284,460				-0-
Graybar Electric Company					1				26,340				26,340				0.2	%			109,000				0.2	%			4.14				1,883,306				-0-
Tenant Total as of 3/31/18					108				19,759,645				19,759,645				99.2	%		$	116,780,000				100.0	%		$	5.91			$	1,544,932,092		(C)	$	639,836,890
Vacant		(B)(D)			2				168,356				-0-				0.0	%			-0-				0.0	%			-0-				7,519,914				-0-
Total as of 3/31/18					109				19,928,001				19,759,645				99.2	%		$	116,780,000				100.0	%		$	5.91			$	1,552,452,006			$	639,836,890
Acquisitions Subsequent to 3/31/18
B. Braun Medical Inc.					1				399,440				399,440				2.0	%			2,128,000				1.8	%			5.33
Pro Forma Total with Acquisitions Subsequent to 3/31/18					110				20,327,441				20,159,085				99.2	%		$	118,908,000				100.0	%		$	5.90

	(A)	Woodstream Corporation and Altec Industries, Inc. are located at one property and therefore are counted as one property in the Property Count total.
	(B)	NF&M International is located in a 255,658 square foot Industrial Park in Monaca (Pittsburgh), PA, of which 80,856 square feet is vacant. This Industrial Park is counted as one property in the Property Count Total. Other than the 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 $7,785,657.
	(D)	Vacant includes an 87,500 square foot building located in Ft. Myers, FL that is under contract to sell.

 

 

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			13				1,899,643				1,812,143				9.5	%		$	13,566,000				11.6	%		$	7.49			$	201,293,289			$	88,327,015
Texas			10				1,781,967				1,781,967				8.9	%			14,160,000				12.1	%			7.95				182,228,913				80,908,879
Ohio			9				1,550,706				1,550,706				7.8	%			8,901,000				7.6	%			5.74				109,724,622				42,863,785
Kentucky			3				1,295,940				1,295,940				6.7	%			5,095,000				4.4	%			3.93				66,111,852				39,490,890
Mississippi			4				1,158,889				1,158,889				5.8	%			4,466,000				3.8	%			3.85				55,248,915				30,471,883
Georgia			4				1,139,426				1,139,426				5.7	%			5,004,000				4.3	%			4.39				78,252,331				33,598,628
South Carolina			5				1,008,358				1,008,358				5.1	%			6,599,000				5.6	%			6.54				78,946,002				30,545,425
Indiana			2				999,176				999,176				5.0	%			4,417,000				3.8	%			4.42				63,016,153				31,742,798
Illinois			9				958,045				958,045				4.8	%			6,117,000				5.2	%			6.38				82,238,327				8,857,638
North Carolina			4				939,706				939,706				4.7	%			5,663,000				4.8	%			6.03				85,778,185				43,906,470
Tennessee			3				891,777				891,777				4.5	%			3,093,000				2.6	%			3.47				33,846,631				12,810,864
Michigan			4				833,054				833,054				4.2	%			5,574,000				4.8	%			6.69				72,976,507				26,611,327
Kansas			4				813,043				813,043				4.1	%			4,619,000				4.0	%			5.68				60,943,937				31,093,963
Missouri			4				739,330				739,330				3.7	%			2,813,000				2.4	%			3.80				34,624,260				6,716,065
Oklahoma			4				614,941				614,941				3.1	%			3,916,000				3.4	%			6.37				54,939,875				30,565,275
New York			3				518,565				518,565				2.6	%			3,886,000				3.3	%			7.49				51,336,423				21,936,853
Pennsylvania			3				504,040				423,184				2.5	%			2,807,000				2.5	%			6.63				36,855,847				15,035,197
Virginia			5				407,265				407,265				2.0	%			2,449,000				2.1	%			6.01				34,515,756				4,633,482
Colorado			3				363,597				363,597				1.8	%			3,040,000				2.6	%			8.36				42,058,524				18,624,649
Arizona			1				283,358				283,358				1.4	%			1,361,000				1.2	%			4.80				16,824,226				4,126,383
Wisconsin			2				238,666				238,666				1.2	%			1,295,000				1.1	%			5.43				15,952,361				2,800,096
Washington			1				210,445				210,445				1.1	%			1,962,000				1.7	%			9.32				30,228,547				18,303,162
Louisiana			1				175,315				175,315				0.9	%			1,262,000				1.1	%			7.20				18,410,000				11,477,932
Maryland			1				148,881				148,881				0.7	%			1,426,000				1.2	%			9.58				14,512,355				-0-
New Jersey			2				124,620				124,620				0.6	%			1,365,000				1.2	%			10.95				7,983,090				1,662,833
Nebraska			1				89,115				89,115				0.4	%			446,000				0.4	%			5.00				5,944,691				-0-
Alabama			1				88,653				88,653				0.4	%			605,000				0.5	%			6.82				6,661,819				481,485
Minnesota			1				60,398				60,398				0.3	%			372,000				0.3	%			6.16				5,220,000				2,243,913
Connecticut			1				54,812				54,812				0.3	%			329,000				0.3	%			6.00				3,494,108				-0-
Iowa			1				36,270				36,270				0.2	%			172,000				0.1	%			4.74				2,284,460				-0-
Total as of 3/31/18			109				19,928,001				19,759,645				100.0	%		$	116,780,000				100.0	%		$	5.91			$	1,552,452,006		(A)	$	639,836,890
Acquisitions Subsequent to 3/31/18
Florida			1				399,440				399,440				2.0	%			2,128,000				1.8	%			5.33
Pro Forma Total with Acquisitions Subsequent to 3/31/18			110				20,327,441				20,159,085				100.0	%		$	118,908,000				100.0	%		$	5.90

 

(A)

Does not include unamortized debt issuance costs of $7,785,657.

 

 

Lease Expirations

(unaudited)

 

				Property				Square				% of Total				Annual				% of Total				Rent Per sf				Lease Exp.				Undepreciated				Mortgage
Fiscal Year				Count				Footage				sf				Rent				Ann. Rent				Occup.				Term in Years				Cost				Balance
2018					5				471,520				2.4	%		$	3,469,000				3.0	%		$	7.36				0.4			$	39,236,627			$	1,477,655
2019					10				1,462,625				7.3	%			7,820,000				6.7	%			5.35				1.1				89,285,355				12,949,313
2020					4				383,449				1.9	%			2,129,000				1.8	%			5.55				2.2				27,447,899				-0-
2021		(A)			9				1,104,588				5.5	%			5,025,000				4.3	%			4.55				3.2				64,639,520				8,160,434
2022					7				1,138,320				5.7	%			6,419,000				5.5	%			5.64				4.0				75,991,657				26,464,575
2023		(A)			13				1,668,804				8.4	%			9,481,000				8.1	%			5.68				5.2				116,772,651				24,380,070
2024					11				1,526,126				7.7	%			9,804,000				8.4	%			6.42				6.2				115,324,385				29,927,927
2025		(A)			9				2,404,478				12.1	%			12,271,000				10.5	%			5.10				7.1				162,315,550				77,503,148
2026					6				912,361				4.6	%			7,317,000				6.3	%			8.02				8.1				98,151,060				41,468,496
2027					11				2,304,616				11.6	%			12,629,000				10.8	%			5.48				9.4				178,017,929				75,134,944
2028					7				1,764,386				8.9	%			8,227,000				7.0	%			4.66				10.0				112,786,052				56,891,832
2029					2				262,613				1.3	%			1,517,000				1.3	%			5.78				11.3				21,954,950				8,857,638
2030					4				1,044,832				5.2	%			7,403,000				6.3	%			7.09				12.0				109,278,995				63,926,233
2031					3				963,269				4.8	%			7,122,000				6.1	%			7.39				13.1				104,367,000				66,872,054
2032					6				1,724,838				8.7	%			13,134,000				11.2	%			7.61				14.1				201,979,345				130,158,694
2034					1				558,600				2.8	%			2,206,000				1.9	%			3.95				15.6				26,807,852				15,663,877
Various tenants at retail shopping center					1				64,220				0.3	%			807,000				0.8	%			12.57				-0-				3,072,882				-0-
Vacant		(A)(B)			2				168,356				0.8	%			-0-				-0-				-0-				-0-				5,022,297				-0-
Total as of 3/31/18					109				19,928,001				100.0	%		$	116,780,000				100.0	%		$	5.91				7.8			$	1,552,452,006		(C)	$	639,836,890
Acquisitions Subsequent to 3/31/18
2028					1				399,440				2.0	%			2,128,000				1.8	%			5.33				10.0
Pro Forma Total with Acquisitions Subsequent to 3/31/18					110				20,327,441				100.0	%		$	118,908,000				100.0	%		$	5.90				7.8

 

	(A)	Included in 2021 is Woodstream Corporation and included in 2023 is Altec Industries which both occupy one property. Included in 2025 is NF&M International, which occupies 174,800 square feet of a 255,658 square foot Industrial Park. The remaining 80,856 square feet is included in Vacant. Each of these proeprites are are counted as one property in the Property Count Total. Other than these properties and the one retail property, all other properties are single-tenant.
	(B)	Vacant includes an 87,500 square foot building located in Ft. Myers, FL that is under contract to sell.
	(C)	Does not include unamortized debt issuance costs of $7,785,657.

 

 

Recent Acquisitions During Fiscal 2018

(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 Corporation		Charleston		SC		2018			121,683			$	1,315,000				10.81			8/31/2032		$	21,872,170			$	14,200,000
2		Amazon.com Services, Inc.		Oklahoma City		OK		2018			300,000				1,884,000				6.28			10/31/2027			30,250,000				19,600,000
3		Shaw Industries, Inc.		Savannah		GA		2018			831,764				3,551,000				4.27			9/30/2027			57,483,636				33,300,000
		Total as of 3/31/18									1,253,447			$	6,750,000			$	5.39					$	109,605,806			$	67,100,000

 

Acquisitions Subsequent to 3/31/18  

1		B. Braun Medical Inc.		Daytona Beach		FL		2018			399,440				2,128,000				5.33			4/1/2028			30,750,540				19,500,000
		Total Fiscal 2018									1,652,887			$	8,878,000			$	5.37					$	140,356,346			$	86,600,000

 

 

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			$	3,032,000			$	3.52				10.3			$	36,914,917			$	22,600,414
2		Shaw Industries, Inc.		Savannah		GA			2018				100.0	%			831,764				3,551,000				4.27				9.5				56,025,945				33,146,461
3		ULTA, Inc.		Greenwood (Indianapolis)		IN			2015				100.0	%			671,354				2,702,000				4.02				7.3				37,512,071				20,828,554
4		Jim Beam Brands Company		Frankfort (Lexington)		KY			2015				100.0	%			599,840				2,051,000				3.42				6.8				28,000,000				17,105,559
5		TreeHouse Private Brands, Inc.		Buckner (Louisville)		KY			2014				100.0	%			558,600				2,206,000				3.95				15.6				26,807,852				15,663,877
6		FedEx Corporation		Memphis		TN			2010				100.0	%			449,900				1,327,000				2.95				1.2				14,614,986				5,476,633
7		Woodstream Corporation		St. Joseph		MO			2001				100.0	%			256,000				914,000				3.57				3.5				8,912,151				-0-
		Altec Industries, Inc.		St. Joseph		MO			2001				100.0	%			126,880				371,000				2.92				4.9				4,417,086				-0-
8		CBOCS Distribution, Inc. (Cracker Barrel)		Lebanon (Nashville)		TN			2011				100.0	%			381,240				1,447,000				3.80				6.3				14,215,126				7,334,231
9		Best Buy Warehousing Logistics, Inc.		Streetsboro (Cleveland)		OH			2012				100.0	%			368,060				1,676,000				4.55				3.8				19,600,000				9,598,178
10		FedEx Ground Package System, Inc.		Concord (Charlotte)		NC			2017				100.0	%			354,482				2,537,000				7.16				14.2				40,043,145				25,529,941
11		FedEx Ground Package System, Inc.		Mesquite (Dallas)		TX			2017				100.0	%			351,874				3,195,000				9.08				14.0				49,880,493				31,783,406
12		FedEx Ground Package System, Inc.		Walker (Grand Rapids)		MI			2017				100.0	%			343,483				2,102,000				6.12				13.8				31,654,987				20,004,458
13		FedEx Ground Package System, Inc.		Hamburg (Buffalo)		NY			2017				100.0	%			338,584				2,313,000				6.83				13.0				34,850,000				21,936,853
14		FedEx Ground Package System, Inc.		Concord (Charlotte)		NC			2016				100.0	%			330,717				2,237,000				6.76				7.3				33,044,797				18,376,530
15		FedEx Ground Package System, Inc.		Indianapolis		IN			2014				100.0	%			327,822				1,715,000				5.23				9.6				25,504,083				10,914,244
16		Autoneum North America, Inc.		Aiken (Augusta, GA)		SC			2017				100.0	%			315,560				1,703,000				5.40				14.1				21,040,395				14,853,051
17		FedEx Ground Package System, Inc.		Olathe (Kansas City)		KS			2016				100.0	%			313,763				2,200,000				7.01				13.2				31,737,000				20,538,248
18		FedEx Ground Package System, Inc.		Davenport (Orlando)		FL			2016				100.0	%			310,922				2,609,000				8.39				13.1				37,780,000				24,396,953
19		FedEx Ground Package System, Inc.		Ft. Worth (Dallas)		TX			2015				100.0	%			304,608				2,373,000				7.79				12.1				35,300,832				21,441,119
20		Science Applications International Corporation		Hanahan (Charleston)		SC			2005				100.0	%			302,400				1,491,000				4.93				1.1				13,390,441				-0-
21		Amazon.com Services, Inc.		Oklahoma City		OK			2018				100.0	%			300,000				1,884,000				6.28				9.6				29,878,942				19,406,304
22		International Paper Company		Kenton		OH			2017				100.0	%			298,472				1,244,000				4.17				9.4				17,881,607				11,763,287
23		FedEx Ground Package System, Inc.		Jacksonville		FL			2015				100.0	%			297,579				1,998,000				6.71				11.8				30,732,090				16,812,452
24		Western Container Corp. (Coca-Cola)		Tolleson (Phoenix)		AZ			2003				100.0	%			283,358				1,361,000				4.80				9.1				16,824,226				4,126,383
25		International Paper Company		Edwardsville (Kansas City)		KS			2014				100.0	%			280,000				1,348,000				4.81				5.4				18,294,108				9,563,513
26		NF&M International, Inc.		Monaca (Pittsburgh)		PA			1988				68.4	%			255,658				835,000				4.78				6.8				7,897,197				-0-
27		FedEx Ground Package System, Inc.		Orion		MI			2007				100.0	%			245,633				1,908,000				7.77				5.3				22,885,635				-0-
28		FedEx Ground Package System, Inc.		Homestead (Miami)		FL			2017				100.0	%			237,756				2,282,000				9.60				14.0				37,873,120				23,958,312
29		Anda Pharmaceuticals, Inc.		Olive Branch (Memphis, TN)		MS			2012				100.0	%			234,660				1,205,000				5.14				4.3				14,550,000				7,871,470
30		UGN, Inc.		Monroe (Cincinnati)		OH			2015				100.0	%			232,200				1,070,000				4.61				11.9				13,017,528				7,369,500
31		FedEx Ground Package System, Inc.		Colorado Springs		CO			2016				100.0	%			225,362				1,832,000				8.13				7.8				28,500,000				17,146,993
32		Mickey Thompson Performance Tires and Wheels (Cooper Tire)		Stow		OH			2017				100.0	%			219,765				1,501,000				6.83				9.4				18,934,065				12,443,758
33		Rinnai America Corporation		Griffin (Atlanta)		GA			2006				100.0	%			218,120				831,000				3.81				2.8				14,885,306				-0-
34		FedEx Ground Package System, Inc.		Ft. Myers		FL			2017				100.0	%			213,672				1,418,000				6.64				9.4				21,663,635				13,655,055
35		FedEx Ground Package System, Inc.		Burlington (Seattle/Everett)		WA			2016				100.0	%			210,445				1,962,000				9.32				12.4				30,228,547				18,303,162
36		FedEx Ground Package System, Inc.		Sauget (St. Louis, MO)		IL			2015				100.0	%			198,773				1,036,000				5.21				11.2				15,204,950				8,857,638
37		Anheuser-Busch, Inc.		Granite City (St. Louis, MO)		IL			2001				100.0	%			184,800				821,000				4.44				3.7				12,697,848				-0-
38		Carrier Corporation (United Technologies)		Carrollton (Dallas)		TX			2010				100.0	%			184,317				1,576,000				8.55				0.8				17,819,203				6,851,064
39		FedEx Ground Package System, Inc.		Spring (Houston)		TX			2014				100.0	%			181,176				1,581,000				8.73				6.5				19,294,396				8,234,439
40		Carlisle Tire & Wheel Company		Edwardsville (Kansas City)		KS			2003				100.0	%			179,280				739,000				4.12				5.3				7,232,986				-0-
41		FedEx Ground Package System, Inc.		Ft. Mill (Charlotte, NC)		SC			2010				100.0	%			176,939				1,415,000				8.00				5.6				15,413,307				1,041,232
42		FedEx Ground Package System, Inc.		Covington (New Orleans)		LA			2016				100.0	%			175,315				1,262,000				7.20				7.3				18,410,000				11,477,932
43		FedEx Ground Package System, Inc.		Livonia (Detroit)		MI			2013				100.0	%			172,005				1,194,000				6.94				4.0				13,762,030				6,606,869
44		Home Depot USA, Inc.		Montgomery (Chicago)		IL			2004				100.0	%			171,200				997,000				5.82				2.3				11,298,367				-0-
45		FedEx Ground Package System, Inc.		Tampa		FL			2004				100.0	%			170,779				1,624,000				9.51				8.3				19,696,227				5,533,371
46		FedEx Ground Package System, Inc.		Edinburg		TX			2011				100.0	%			164,207				1,097,000				6.68				8.5				12,039,014				-0-
47		FedEx Ground Package System, Inc.		Lindale (Tyler)		TX			2015				100.0	%			163,378				725,000				4.44				6.3				9,965,550				5,829,666
48		Bunzl Distribution Midcentral, Inc.		Kansas City		MO			2015				100.0	%			158,417				752,000				4.75				3.5				9,651,226				6,716,065
49		FedEx Ground Package System, Inc.		Oklahoma City		OK			2012				100.0	%			158,340				1,048,000				6.62				7.3				12,584,462				3,670,613
50		FedEx Ground Package System, Inc.		Waco		TX			2012				100.0	%			150,710				1,078,000				7.15				7.4				12,551,368				4,381,125
51		FedEx Ground Package System, Inc.		Beltsville (Washington, DC)		MD			2001				100.0	%			148,881				1,426,000				9.58				0.3				14,512,355				-0-
52		Victory Packaging, L.P.		Fayetteville		NC			1997				100.0	%			148,000				502,000				3.39				2.9				5,451,629				-0-
53		FedEx Ground Package System, Inc.		El Paso		TX			2006				100.0	%			144,149				1,345,000				9.33				5.5				12,431,192				-0-
54		FedEx Ground Package System, Inc.		Cocoa		FL			2008				100.0	%			144,138				1,112,000				7.71				6.5				14,127,449				-0-
55		FedEx Ground Package System, Inc.		Cudahy (Milwaukee)		WI			2001				100.0	%			139,564				827,000				5.93				9.3				9,382,361				-0-
56		Challenger Lifts, Inc. (Snap-On Inc.)		Louisville		KY			2016				100.0	%			137,500				838,000				6.09				8.2				11,304,000				6,721,455
57		FedEx Ground Package System, Inc.		Richfield (Cleveland)		OH			2006				100.0	%			131,152				1,493,000				11.38				6.5				16,435,478				-0-
58		General Electric Company		Imperial (Pittsburgh)		PA			2016				100.0	%			125,860				1,321,000				10.50				7.8				19,950,000				11,585,192
59		FedEx Ground Package System, Inc.		Wheeling (Chicago)		IL			2003				100.0	%			123,000				1,272,000				10.34				9.2				18,537,652				-0-
60		FedEx Ground Package System, Inc.		Altoona		PA			2014				100.0	%			122,522				651,000				5.31				5.4				9,008,650				3,450,005
61		FedEx Corporation		Charleston		SC			2018				100.0	%			121,683				1,315,000				10.81				14.4				21,487,206				14,029,526
62		FedEx Corporation		Mechanicsville (Richmond)		VA			2001				100.0	%			112,799				541,000				4.80				5.1				7,785,011				-0-
63		FedEx Corporation		Orlando		FL			2008				100.0	%			110,638				666,000				6.02				9.7				8,554,432				3,970,870
64		Bunzl Distribution Oklahoma, Inc.		Oklahoma City		OK			2017				100.0	%			110,361				722,000				6.54				6.4				8,728,439				5,738,699
65		Style Crest, Inc.		Winston-Salem		NC			2002				100.0	%			106,507				387,000				3.63				3.0				7,238,613				-0-

 

 

Property Table

(unaudited)

 

																														Lease
										Fiscal Year								Square				A nnual				Rent  Per sf				Exp. Term in				Undepreciated				Mortgage
No		Tenant				City (MSA)		State		Acquisition				Occup.				Footage				Rent				Occup.				Years				Cost				Balance
66		FedEx Ground Package System, Inc.				Cheektowaga (Buffalo)		NY			2000				100.0	%			104,981			$	966,000			$	9.20				1.4			$	10,960,823				-0-
67		FedEx Ground Package System, Inc.				West Chester Twp. (Cincinnati)		OH			1999				100.0	%			103,818				543,000				5.23				5.4				5,733,686				1,689,063
68		FedEx Ground Package System, Inc.				Roanoke		VA			2013				100.0	%			103,402				755,000				7.30				5.1				10,200,000				4,633,482
69		Pittsburgh Glass Works, LLC				O' Fallon (St. Louis)		MO			1994				100.0	%			102,135				427,000				4.18				0.2				4,245,913				-0-
70		FedEx Ground Package System, Inc.				Green Bay		WI			2013				100.0	%			99,102				468,000				4.72				5.2				6,570,000				2,800,096
71		Holland 1916 Inc.				Liberty (Kansas City)		MO			1998				100.0	%			95,898				349,000				3.64				1.2				7,397,881				-0-
72		FedEx Corporation				Jacksonville		FL			1999				100.0	%			95,883				518,000				5.40				1.2				6,383,328				-0-
73		FedEx Corporation				Tampa		FL			2006				100.0	%			95,662				603,000				6.30				9.7				7,666,686				-0-
74		FedEx Ground Package System, Inc.				Hanahan (Charleston)		SC			2005				100.0	%			91,776				675,000				7.35				0.7				7,614,653				621,616
75		National Oilwell Varco, Inc.				Houston		TX			2010				100.0	%			91,295				754,000				8.26				4.5				8,163,278				2,388,059
76		FedEx Corporation				Omaha		NE			1999				100.0	%			89,115				446,000				5.00				5.6				5,944,691				-0-
77		Joseph T. Ryerson and Son, Inc.				Elgin (Chicago)		IL			2002				100.0	%			89,052				506,000				5.68				1.8				6,977,442				-0-
78		FedEx Ground Package System, Inc.				Huntsville		AL			2005				100.0	%			88,653				605,000				6.82				8.3				6,661,819				481,485
79		Vacant		(B)		Ft. Myers		FL			2003				0.0	%			87,500				-0-				na				-				5,022,297				-0-
80		CHEP USA, Inc.				Roanoke		VA			2007				100.0	%			83,000				500,000				6.02				6.9				7,405,447				-0-
81		FedEx Corporation				Bedford Heights (Cleveland)		OH			2007				100.0	%			82,269				408,000				4.96				0.4				6,919,836				-0-
82		RGH Enterprises, Inc. (Cardinal Health)				Halfmoon (Albany)		NY			2012				100.0	%			75,000				607,000				8.09				3.7				5,525,600				-0-
83		FedEx Corporation				Schaumburg (Chicago)		IL			1997				100.0	%			73,500				478,000				6.50				9.0				5,177,940				-0-
84		FedEx Corporation				Romulus (Detroit)		MI			1998				100.0	%			71,933				370,000				5.14				3.2				4,673,856				-0-
85		FedEx Ground Package System, Inc.				Denver		CO			2005				100.0	%			69,865				564,000				8.07				0.3				6,354,051				582,850
86		Tampa Bay Grand Prix				Tampa		FL			2005				100.0	%			68,385				297,000				4.34				2.5				5,677,982				-0-
87		FedEx Ground Package System, Inc.				Colorado Springs		CO			2006				100.0	%			68,370				644,000				9.42				0.5				7,204,472				894,806
88		Sherwin-Williams Company				Rockford		IL			2011				100.0	%			66,387				481,000				7.25				5.8				5,551,227				-0-
89		Various Tenants at Retail Shopping Center				Somerset		NJ			1970				100.0	%			64,220				807,000				12.57				na				3,072,882				-0-
90		The American Bottling Company (Dr Pepper Snapple)				Cincinnati		OH			2015				100.0	%			63,840				481,000				7.53				11.5				6,750,000				-0-
91		FedEx Corporation				Chattanooga		TN			2007				100.0	%			60,637				319,000				5.26				4.6				5,016,518				-0-
92		SOFIVE, Inc.				Carlstadt (New York, NY)		NJ			2001				100.0	%			60,400				558,000				9.24				6.8				4,910,208				1,662,833
93		FedEx Ground Package System, Inc.				Stewartville (Rochester)		MN			2013				100.0	%			60,398				372,000				6.16				5.2				5,220,000				2,243,913
94		Carrier Enterprise, LLC (United Technologies)				Richmond		VA			2004				100.0	%			60,000				324,000				5.40				0.7				4,768,309				-0-
95		FedEx Ground Package System, Inc.				Augusta		GA			2005				100.0	%			59,358				501,000				8.44				3.3				5,363,305				452,166
96		Kellogg Sales Company				Newington (Hartford)		CT			2001				100.0	%			54,812				329,000				6.00				1.9				3,494,108				-0-
97		Siemens Real Estate				Lebanon (Cincinnati)		OH			2012				100.0	%			51,130				485,000				9.49				1.1				4,452,425				-0-
98		FedEx Corporation				Charlottesville		VA			1999				100.0	%			48,064				329,000				6.85				9.4				4,356,988				-0-
99		FedEx Ground Package System, Inc.				Corpus Christi		TX			2012				100.0	%			46,253				436,000				9.43				3.4				4,783,588				-0-
100		The American Bottling Company (Dr Pepper Snapple)				Tulsa		OK			2014				100.0	%			46,240				262,000				5.67				5.9				3,748,031				1,749,659
101		Heartland Coca-Cola Bottling Company, LLC (Coca-Cola)				Topeka		KS			2009				100.0	%			40,000				332,000				8.30				3.5				3,679,843				992,202
102		Collins Aerospace Systems (United Technologies)				Rockford		IL			2015				100.0	%			38,833				364,000				9.37				9.3				5,100,000				-0-
103		Foundation Building Materials, LLC				Urbandale (Des Moines)		IA			1994				100.0	%			36,270				172,000				4.74				9.8				2,284,460				-0-
104		FedEx Corporation				Richland (Jackson)		MS			1994				100.0	%			36,000				120,000				3.33				6.0				1,900,691				-0-
105		FedEx Corporation				Punta Gorda		FL			2007				100.0	%			34,624				284,000				8.20				9.3				4,133,510				-0-
106		FedEx Corporation				Lakeland		FL			2006				100.0	%			32,105				155,000				4.83				9.7				1,982,532				-0-
107		FedEx Corporation				Augusta		GA			2006				100.0	%			30,184				121,000				4.01				4.7				1,977,779				-0-
108		Graybar Electric Company				Ridgeland (Jackson)		MS			1993				100.0	%			26,340				109,000				4.14				1.3				1,883,306				-0-
109		Sherwin-Williams Company				Burr Ridge (Chicago)		IL			1997				100.0	%			12,500				162,000				12.96				3.6				1,692,901				-0-
		Total as of 3/31/18													99.2	%			19,928,001			$	116,780,000			$	5.91				7.8			$	1,552,452,006		(A)	$	639,836,890
		Acquisitions Subsequent to 3/31/18
110		B. Braun Medical Inc.				Daytona Beach		FL			2018				100	%			399,440				2,128,000				5.33				10.0
		Pro Forma Total with Acquisitions Subsequent to 3/31/18													99.2	%			20,327,441			$	118,908,000			$	5.90				7.8

 

	(A)	Does not include unamortized debt issuance costs of $7,785,657.
	(B)	In contract to sell this vacant property.

 

 

 

 

Definitions

 

Investors and analysts following the real estate industry utilize funds from operations (“FFO”), core funds from operations (“Core FFO”), adjusted funds from operations (“AFFO”), net operating income (“NOI”), Same Property NOI, Same Property Cash NOI, and earnings before interest, taxes, depreciation and amortization for real estate, (“EBITDAre”) & (“Adjusted EBITDA”) 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, EBITDAre, Adjusted 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 to exclude 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 interest expense and general and administrative expenses. EBITDAre and Adjusted 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 supplemental tool to evaluate the Company’s performance. In addition, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre, Adjusted 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 the following non-U.S. GAAP measures as follows:

 

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. NAREIT created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance and is used by industry analysts and investors as a supplemental operating performance measure of a REIT.

 

Core FFO is calculated as FFO plus acquisition costs.

 

AFFO is calculated as Core FFO plus amortization of financing costs; stock compensation expense, deprecation of corporate office tenant improvements and non-recurring other expenses, less gain on sale of securities transactions; effects of non-cash U.S. GAAP straight-line rent adjustments and recurring capital expenditures. 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 from property operations is calculated as net income attributable to common shareholders, as defined by U.S. GAAP, plus preferred dividends, general & administrative expenses, acquisitions costs, depreciation, amortization of capitalized lease costs & intangible assets and interest expense, including amortization of financing costs, less dividend and interest income, gain on sale of securities transactions, and gain on sale of real estate investments. The components of NOI consist of recurring rental and reimbursement revenue, less real estate taxes and operating expenses, such as insurance, utilities, and repairs and maintenance and other expenses.

 

Same Property NOI is calculated as 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 calculated as 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.

 

EBITDAre, as defined by NAREIT, is net income attributable to common shareholders, as defined by U.S. GAAP, plus preferred dividends, interest expense, including amortization of financing costs, depreciation and amortization and plus losses and minus gains on sales of real estate investments.

 

Adjusted EBITDA is calculated as EBITDAre plus acquisition costs, net amortization of acquired above and below market lease revenue and plus losses and minus gains on sale of securities transactions.

 

FFO, Core FFO, AFFO, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre and Adjusted EBITDA, 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. FFO, Core FFO, AFFO, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre and Adjusted EBITDA 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. FFO, Core FFO, AFFO, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre and Adjusted EBITDA, as currently calculated by the Company, may not be comparable to similarly titled, but variously calculated, measures of other REITs.

 

 

FOR IMMEDIATE RELEASE

May 8, 2018

Contact: Susan Jordan

732-577-9996

 

MONMOUTH REAL ESTATE REPORTS RESULTS FOR

THE SECOND QUARTER ENDED MARCH 31, 2018

 

FREEHOLD, NJ, May 8, 2018........ Monmouth Real Estate Investment Corporation (NYSE:MNR) reported Net Income Attributable to Common Shareholders of $7,397,000 or $0.10 per diluted share for the three months ended March 31, 2018 as compared to $4,843,000 or $0.07 per diluted share for the three months ended March 31, 2017 representing an increase per share of 43%. Core Funds from Operations (Core FFO) were $16,830,000 or $0.22 per diluted share for the three months ended March 31, 2018 as compared to $12,396,000 or $0.17 per diluted share for the three months ended March 31, 2017 representing an increase in Core FFO per share of 29%. Adjusted Funds from Operations (AFFO), for the three months ended March 31, 2018 were $16,847,000 or $0.22 per diluted share versus $12,511,000 or $0.18 per diluted share for the three months ended March 31, 2017 representing an increase in AFFO per share of 22%.

 

A summary of significant financial information for the three and six months ended March 31, 2018 and 2017 is as follows:

 

		Three Months Ended March 31,
		2018				2017
Rental Revenue		$	28,610,000			$	23,611,000
Reimbursement Revenue		$	5,012,000			$	3,697,000
Net Operating Income (NOI) (1)		$	28,366,000			$	23,168,000
Total Expenses		$	16,921,000			$	13,785,000
Dividend and Interest Income		$	2,888,000			$	1,439,000
Gain on Sale of Securities Transactions		$	11,000			$	-0-
Net Income		$	11,645,000			$	8,425,000
Net Income Attributable to Common Shareholders		$	7,397,000			$	4,843,000
Net Income Attributable to Common Shareholders Per Diluted Common Share		$	0.10			$	0.07
Core FFO (1)		$	16,830,000			$	12,396,000
Core FFO per Diluted Common Share (1)		$	0.22			$	0.17
AFFO (1)		$	16,847,000			$	12,511,000
AFFO per Diluted Common Share (1)		$	0.22			$	0.18
Dividends Declared per Common Share		$	0.17			$	0.16
Weighted Avg. Diluted Common Shares Outstanding			78,156,000				71,407,000

 

		Six Months Ended March 31,
		2018				2017
Rental Revenue		$	56,302,000			$	46,892,000
Reimbursement Revenue		$	10,061,000			$	7,598,000
Lease Termination Income		$	210,000			$	-0-
Net Operating Income (NOI) (1)		$	55,808,000			$	46,148,000
Total Expenses		$	33,189,000			$	27,048,000
Dividend and Interest Income		$	5,752,000			$	2,731,000
Gain on Sale of Securities Transactions		$	111,000			$	806,000
Gain on Sale of Real Estate Investments		$	5,388,000			$	-0-
Net Income		$	29,275,000			$	18,279,000
Net Income Attributable to Common Shareholders		$	20,710,000			$	10,999,000
Net Income Attributable to Common Shareholders Per Diluted Common Share		$	0.27			$	0.16
Core FFO (1)		$	33,763,000			$	26,253,000
Core FFO per Diluted Common Share (1)		$	0.44			$	0.37
AFFO (1)		$	33,319,000			$	25,450,000
AFFO per Diluted Common Share (1)		$	0.43			$	0.36
Dividends Declared per Common Share		$	0.34			$	0.32
Weighted Avg. Diluted Common Shares Outstanding			77,362,000				70,608,000

 

A summary of significant balance sheet information as of March 31, 2018 and September 30, 2017 is as follows:

 

		March 31, 2018				September 30, 2017
Net Real Estate Investments		$	1,351,926,000			$	1,260,856,000
Securities Available for Sale at Fair Value		$	144,630,000			$	123,765,000
Total Assets		$	1,559,892,000			$	1,443,038,000
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs		$	632,051,000			$	591,364,000
Loans Payable		$	154,342,000			$	120,091,000
Total Shareholders’ Equity		$	750,358,000			$	712,866,000

 

 

Michael P. Landy, President and CEO, commented on the results for the second quarter of fiscal 2018,

 

“This was another strong quarter for Monmouth and we are pleased to report continued growth across multiple fronts. During the quarter we:

 

	●	Increased our per share AFFO to $0.22, representing a 22% increase over the prior year period
	●	Increased our Net Income Attributable to Common Shareholders to $0.10 per share, representing a 43% increase over the prior year period
	●	Increased our Net Operating Income (NOI) by 22% over the prior year period
	●	Acquired one brand new Class A property comprising 832,000 square feet, for a cost of $57.5 million
	●	Increased our gross leasable area (GLA) by 20% to 19.9 million square feet over the prior year period. Subsequent to quarter end, our GLA increased to 20.3 million square feet
	●	Increased our weighted average lease maturity by 5% from 7.4 years at the end of the prior year quarter to 7.8 years at the end of the current quarter
	●	Renewed six of the sixteen leases scheduled to expire in fiscal 2018. These six leases consist of 569,000 square feet and result in a 3.9% increase in GAAP rents and a 1.5% increase on a cash basis. These lease renewals have a weighted average lease term of 6.1 years
	●	Reduced our weighted average interest rate on our fixed rate debt by 26 bps to 4.11% as of the current quarter end from 4.37% as of the prior year quarter end
	●	Extended our weighted average debt maturity on our fixed rate debt by 8% to 11.5 years as of the current quarter end from 10.7 years as of the prior year quarter end, and
	●	Subsequent to the quarter end, acquired one brand new Class A property comprising 399,000 square feet, for a cost of $30.8 million.”

 

Mr. Landy further stated, “Monmouth has maintained or increased its common stock dividend for 26 consecutive years. We have increased our AFFO per share by 22% over the prior year quarter and by 19% year over year for the six month period. With a very conservative 77% AFFO dividend payout ratio this quarter, we remain confident about continuing to provide our shareholders with the high-quality, reliable income streams we have delivered for over a quarter century. This quarter represented our 9th consecutive quarter with an occupancy rate of 99% or greater. At quarter end, our weighted average lease maturity increased to 7.8 years, and our weighted average debt maturity increased to 11.5 years.”

 

“During the quarter, we acquired a brand new 832,000 square foot industrial building for $57.5 million, leased for 10 years to Shaw Industries, a division of Berkshire Hathaway. This property is strategically well located at the Port of Savannah. With over 400 million tons in shipments last year, the recently expanded Panama Canal has been surpassing all projections. In a similar manner to building our large ecommerce exposure, we have assembled a portfolio that is very well positioned to benefit from the remaking of the global supply chain. Subsequent to quarter end, we also acquired a brand new 399,000 square foot industrial building for $30.8 million, leased for 10 years to B. Braun Medical in Daytona Beach, Florida. Through the first half of fiscal 2018, we have acquired four buildings comprising 1.7 million square feet for a total purchase price of $140.4 million.”

 

“Thus far in fiscal 2018, we have renewed six of the sixteen leases that were set to expire. These six lease renewals total 569,000 square feet, representing 37% of the expiring square footage. These lease renewals resulted in a 3.9% rental increase on a GAAP basis and a 1.5% increase on a cash basis. These six lease renewals have a weighted average lease term of 6.1 years. Two of the remaining sixteen properties were sold, generating substantial gains during the previous quarter. One additional property is under contract for sale and another one has been re-tenanted. We expect to have more to report on the remaining six properties during the second half of fiscal 2018.”

 

“The rising interest rate environment has resulted in a pronounced sell-off in REIT securities. Our securities portfolio went from $4.1 million in unrealized losses at the end of last quarter to $31.1 million in unrealized losses at the end of this quarter. Because real estate is priced simultaneously in two markets, public and private, arbitrage opportunities can present themselves. The public REIT market now represents a substantial discount to private market valuations. We are confident that this discrepancy will be resolved over time. We increased our securities holdings from $123.8 million at the end of fiscal 2017 to $144.6 million at the end of the current quarter. At quarter end, our securities portfolio represented 8.3% of our undepreciated total assets. Our dividend and interest income increased by 101% over the prior year period, from $1.4 million in the second quarter of fiscal 2017 to $2.9 million in the second quarter of fiscal 2018.”

 

“Our acquisition pipeline grew over the quarter and currently contains two new Class A build-to-suit industrial buildings. One is a new 363,000 square foot industrial building leased to Amazon. The second property is a new 261,000 square foot industrial building leased to FedEx Ground that is being developed in Charleston, SC. The total purchase price for these two properties is approximately $80.9 million with a weighted average lease term of 12.3 years. We anticipate closing these transactions sometime during the remainder of fiscal 2018 and the first quarter of fiscal 2019. We look forward to reporting continued progress throughout the year.”

 

Monmouth Real Estate Investment Corporation will host its Second Quarter FY 2018 Financial Results Webcast and Conference Call on Wednesday, May 9, 2018 at 10:00 a.m. Eastern Time. Senior management will discuss the results, current market conditions and future outlook.

 

The Company’s Second Quarter FY 2018 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 2Q2018 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 Wednesday, May 9, 2018. It will be available until August 1, 2018, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10117592. 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 110 properties containing a total of approximately 20.3 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, 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.

 

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 and six months ended March 31, 2018 and 2017:

 

		Three Months Ended								Six Months Ended
		3/31/2018				3/31/2017				3/31/2018				3/31/2017
Net Income Attributable to Common Shareholders		$	7,397,000			$	4,843,000			$	20,710,000			$	10,999,000
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)			8,819,000				7,100,000				17,263,000				14,054,000
Plus: Amortization of Intangible Assets			397,000				241,000				741,000				509,000
Plus: Amortization of Capitalized Lease Costs			217,000				212,000				437,000				417,000
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments			-0-				-0-				(5,388,000	)			95,000
FFO Attributable to Common Shareholders			16,830,000				12,396,000				33,763,000				26,074,000
Plus: Acquisition Costs			-0-				-0-				-0-				179,000
Core FFO Attributable to Common Shareholders			16,830,000				12,396,000				33,763,000				26,253,000
Plus: Depreciation of Corporate Office Capitalized Costs			39,000				39,000				79,000				78,000
Plus: Stock Compensation Expense			111,000				166,000				242,000				266,000
Plus: Amortization of Financing Costs			302,000				385,000				596,000				666,000
Less: Gain on Sale of Securities Transactions			(11,000	)			-0-				(111,000	)			(806,000	)
Less: Lease Termination Income			-0-				-0-				(210,000	)			-0-
Less: Recurring Capital Expenditures			(64,000	)			(188,000	)			(284,000	)			(377,000	)
Less: Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(360,000	)			(287,000	)			(756,000	)			(630,000	)
AFFO Attributable to Common Shareholders		$	16,847,000			$	12,511,000			$	33,319,000			$	25,450,000

 

 

The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the six months ended March 31, 2018 and 2017:

 

		Six Months Ended
		3/31/2018				3/31/2017
Operating Activities		$	42,839,000			$	30,846,000
Investing Activities			(161,056,000	)			(79,130,000	)
Financing Activities			120,462,000				(24,513,000	)

 

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