Table of Contents

 

	Page
Consolidated Balance Sheets	3
Consolidated Statements of Income	4
Net Income, FFO, Core FFO, AFFO, EBITDAre, Adjusted EBITDA	5
NOI Reconciliations	6
Financial Highlights	7
Same Property Statistics	8
Consolidated Statements of Cash Flows	10
Capital Structure and Leverage Ratios	11
Debt Maturity	13
Securities Portfolio Historic Performance	14
Property Table by Tenant	16
Property Table by State	17
Lease Expirations	18
Recent Acquisitions	19
Property Table	20
Definitions	23
Press Release Dated November 28, 2018	24

 

The statement of operations and supplemental statement of operations provided in this supplemental information package present funds from operations (FFO), core funds from operations (Core FFO), adjusted funds from operations (AFFO), net operating income (NOI), 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 23 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-K.

 

 

Consolidated Balance Sheets

 

		As of				As of
		September 30, 2018				September 30, 2017
ASSETS
Real Estate Investments:
Land		$	224,719,083			$	187,224,819
Buildings and Improvements			1,494,859,336				1,244,691,715
Total Real Estate Investments			1,719,578,419				1,431,916,534
Accumulated Depreciation			(207,065,634	)			(171,086,083	)
Real Estate Investments			1,512,512,785				1,260,830,451
Real Estate Held for Sale			-0-				14,631,633
Cash and Cash Equivalents			9,324,585				10,226,046
Securities Available for Sale at Fair Value			154,920,545				123,764,770
Tenant and Other Receivables			1,249,434				1,753,054
Deferred Rent Receivable			9,656,179				8,049,275
Prepaid Expenses			6,189,796				5,434,874
Intangible Assets, net of Accumulated Amortization of $13,699,519 and $13,404,318, respectively			14,589,756				10,010,165
Capitalized Lease Costs, net of Accumulated Amortization of $3,271,481 and $3,393,187, respectively			5,231,845				4,180,907
Financing Costs, net of Accumulated Amortization of $995,135 and $619,555, respectively			500,129				875,709
Other Assets			4,202,832				3,280,871
TOTAL ASSETS		$	1,718,377,886			$	1,443,037,755
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs		$	711,545,649			$	591,364,371
Loans Payable			186,608,676				120,091,417
Accounts Payable and Accrued Expenses			5,891,172				4,450,753
Other Liabilities			16,426,622				14,265,518
Total Liabilities			920,472,119				730,172,059
COMMITMENTS AND CONTINGENCIES
Shareholders’ Equity:
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 16,400,000 and 12,400,000 Shares Authorized as of September 30, 2018 and 2017, respectively; 11,488,001 and 9,839,445 Shares Issued and Outstanding as of September 30, 2018 and 2017, respectively			287,200,025				245,986,125
Common Stock, $0.01 Par Value Per Share: 188,039,750 and 192,039,750 Shares Authorized as of September 30, 2018 and 2017, respectively; 81,503,134 and 75,630,521 Shares Issued and Outstanding as of September 30, 2018 and 2017, respectively			815,031				756,305
Excess Stock, $0.01 Par Value Per Share: 200,000,000 Shares Authorized as of September 30, 2018 and 2017; No Shares Issued or Outstanding as of September 30, 2018 and 2017			-0-				-0-
Additional Paid-In Capital			534,635,290				459,552,701
Accumulated Other Comprehensive Income (Loss)			(24,744,579	)			6,570,565
Undistributed Income			-0-				-0-
Total Shareholders’ Equity			797,905,767				712,865,696
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY		$	1,718,377,886			$	1,443,037,755

 

 

Consolidated Statements of Income

 

		For The								For The
		Three Months Ended								Twelve Months Ended
		9/30/2018				9/30/2017				9/30/2018				9/30/2017
INCOME:
Rental Revenue		$	30,305,505			$	26,367,855			$	115,864,119			$	97,659,778
Reimbursement Revenue			6,295,189				4,789,059				23,297,730				18,725,527
Lease Termination Income			-0-				-0-				210,261				-0-
TOTAL INCOME			36,600,694				31,156,914				139,372,110				116,385,305
EXPENSES:
Real Estate Taxes			5,003,666				3,857,976				18,596,239				15,266,634
Operating Expenses			1,422,724				1,251,936				5,793,878				4,887,922
General & Administrative Expenses			2,723,788				2,501,693				8,776,579				7,809,546
Acquisition Costs			-0-				-0-				-0-				178,526
Depreciation			9,671,314				8,185,168				36,175,923				29,634,998
Amortization of Capitalized Lease Costs and Intangible Assets			650,484				497,375				2,391,104				1,824,751
TOTAL EXPENSES			19,471,976				16,294,148				71,733,723				59,602,377
OTHER INCOME (EXPENSE):
Dividend and Interest Income			3,740,054				2,299,911				13,120,465				6,930,564
Gain on Sale of Securities Transactions			-0-				17,770				111,387				2,311,714
Interest Expense, including Amortization of Financing Costs			(8,709,149	)			(6,918,257	)			(32,349,705	)			(25,754,121	)
TOTAL OTHER INCOME (EXPENSE)			(4,969,095	)			(4,600,576	)			(19,117,853	)			(16,511,843	)
INCOME FROM CONTINUING OPERATIONS			12,159,623				10,262,190				48,520,534				40,271,085
Gain on Sale of Real Estate Investments			-0-				-0-				7,485,266				-0-
NET INCOME			12,159,623				10,262,190				56,005,800				40,271,085
Less: Preferred Dividends			4,377,262				3,536,103				17,190,456				14,861,686
Less: Redemption of Preferred Stock			-0-				-0-				-0-				2,467,165
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS		$	7,782,361			$	6,726,087			$	38,815,344			$	22,942,234

 

 

Net Income, FFO, Core FFO, AFFO, EBITDAre, Adjusted EBITDA

(unaudited)

 

		For The								For The
		Three Months Ended								Twelve Months Ended
FFO, Core FFO, AFFO		9/30/2018				9/30/2017				9/30/2018				9/30/2017
Net Income Attributable to Common Shareholders		$	7,782,361			$	6,726,087			$	38,815,344			$	22,942,234
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)			9,631,809				8,145,660				36,017,959				29,478,322
Plus: Amortization of Intangible Assets			455,418				300,574				1,613,368				1,071,719
Plus: Amortization of Capitalized Lease Costs			220,743				222,293				880,444				855,000
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments			-0-				-0-				(7,485,266	)			95,336
FFO Attributable to Common Shareholders			18,090,331				15,394,614				69,841,849				54,442,611
Plus: Acquisition Costs			-0-				-0-				-0-				178,526
Plus: Redemption of Preferred Stock			-0-				-0-				-0-				2,467,165
Core FFO Attributable to Common Shareholders			18,090,331				15,394,614				69,841,849				57,088,302
Plus: Stock Compensation Expense			94,756				183,652				433,895				624,706
Plus: Depreciation of Corporate Office Capitalized Costs			39,505				39,508				157,964				156,676
Plus: Amortization of Financing Costs			310,006				284,789				1,220,983				1,234,259
Less: Lease Termination Income			-0-				-0-				(210,261	)			-0-
Less: Gain on Sale of Securities Transactions			-0-				(17,770	)			(111,387	)			(2,311,714	)
Less: Effect of non-cash U.S. GAAP Straight-line Rent Adjustment			(615,441	)			(103,135	)			(1,972,588	)			(1,027,927	)
Less: Recurring Capital Expenditures			(211,335	)			(311,875	)			(985,424	)			(883,864	)
AFFO Attributable to Common Shareholders		$	17,707,822			$	15,469,783			$	68,375,031			$	54,880,438

 

		For The								For The
		Three Months Ended								Twelve Months Ended
EBITDAre, Adjusted EBITDA		9/30/2018				9/30/2017				9/30/2018				9/30/2017
Net Income Attributable to Common Shareholders		$	7,782,361			$	6,726,087			$	38,815,344			$	22,942,234
Plus: Preferred Dividends			4,377,262				3,536,103				17,190,456				14,861,686
Plus: Redemption of Preferred Stock			-0-				-0-				-0-				2,467,165
Plus: Interest Expense, including Amortization of Financing Costs			8,709,149				6,918,257				32,349,705				25,754,121
Plus: Depreciation and Amortization			10,321,798				8,682,543				38,567,027				31,459,749
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments			-0-				-0-				(7,485,266	)			95,336
EBITDAre			31,190,570				25,862,990				119,437,266				97,580,291
Plus: Acquisition Costs			-0-				-0-				-0-				178,526
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue			25,677				25,492				102,708				101,968
Less: Gain on Sale of Securities Transactions			-0-				(17,770	)			(111,387	)			(2,311,714	)
Adjusted EBITDA		$	31,216,247			$	25,870,712			$	119,428,587			$	95,549,071

 

 

NOI Reconciliations

(unaudited)

 

		For The								For The
		Three Months Ended								Twelve Months Ended
Net Operating Income		9/30/2018				9/30/2017				9/30/2018				9/30/2017
Net Income Attributable to Common Shareholders		$	7,782,361			$	6,726,087			$	38,815,344			$	22,942,234
Plus: Redemption of Preferred Stock			-0-				-0-				-0-				2,467,165
Plus: Preferred Dividends			4,377,262				3,536,103				17,190,456				14,861,686
Plus: General & Administrative Expenses			2,723,788				2,501,693				8,776,579				7,809,546
Plus: Acquisition Costs			-0-				-0-				-0-				178,526
Plus: Depreciation			9,671,314				8,185,168				36,175,923				29,634,998
Plus: Amortization of Capitalized Lease Costs and Intangible Assets			650,484				497,375				2,391,104				1,824,751
Plus: Interest Expense, including Amortization of Financing Costs			8,709,149				6,918,257				32,349,705				25,754,121
Less: Dividend and Interest Income			(3,740,054	)			(2,299,911	)			(13,120,465	)			(6,930,564	)
Less: Gain on Sale of Securities Transactions			-0-				(17,770	)			(111,387	)			(2,311,714	)
Less: Gain on Sale of Real Estate Investments			-0-				-0-				(7,485,266	)			-0-
Less: Lease Termination Income			-0-				-0-				(210,261	)			-0-
Net Operating Income – NOI		$	30,174,304			$	26,047,002			$	114,771,732			$	96,230,749

 

		For The								For The
		Three Months Ended								Twelve Months Ended
Components of Net Operating Income Consists of:		9/30/2018				9/30/2017				9/30/2018				9/30/2017
Revenues:
Rental Revenue		$	30,305,505			$	26,367,855			$	115,864,119			$	97,659,778
Reimbursement Revenue			6,295,189				4,789,059				23,297,730				18,725,527
Total Rental and Reimbursement Revenue			36,600,694				31,156,914				139,161,849				116,385,305
Expenses:
Real Estate Taxes			5,003,666				3,857,976				18,596,239				15,266,634
Operating Expenses			1,422,724				1,251,936				5,793,878				4,887,922
Total Real Estate Taxes and Operating Expenses			6,426,390				5,109,912				24,390,117				20,154,556
Net Operating Income – NOI		$	30,174,304			$	26,047,002			$	114,771,732			$	96,230,749

 

 
Financial Highlights

(unaudited)

 

		For The								For The
		Three Months Ended								Twelve Months Ended
		9/30/2018				9/30/2017				9/30/2018				9/30/2017
Weighted Average Common Shares Outstanding
Basic			80,691,790				74,634,201				78,619,440				72,114,078
Diluted			80,888,874				74,800,497				78,802,208				72,249,691
Net Income Attributable to Common Shareholders		$	7,782,361			$	6,726,087			$	38,815,344			$	22,942,234
Basic		$	0.10			$	0.09			$	0.49			$	0.32
Diluted			0.10				0.09				0.49				0.32
Net Operating Income – NOI		$	30,174,304			$	26,047,002			$	114,771,732			$	96,230,749
Basic		$	0.37			$	0.35			$	1.46			$	1.33
Diluted			0.37				0.35				1.46				1.33
Funds From Operations – FFO		$	18,090,331			$	15,394,614			$	69,841,849			$	54,442,611
Basic		$	0.22			$	0.21			$	0.89			$	0.75
Diluted			0.22				0.21				0.89				0.75
Core Funds From Operations - Core FFO		$	18,090,331			$	15,394,614			$	69,841,849			$	57,088,302
Basic		$	0.22			$	0.21			$	0.89			$	0.79
Diluted			0.22				0.21				0.89				0.79
Core FFO Excluding Gain on Sale of Securities Transactions and Excluding Lease Termination Income		$	18,090,331			$	15,376,844			$	69,520,201			$	54,776,588
Basic		$	0.22			$	0.21			$	0.88			$	0.76
Diluted			0.22				0.21				0.88			$	0.76
Adjusted Funds From Operations – AFFO		$	17,707,822			$	15,469,783			$	68,375,031			$	54,880,438
Basic		$	0.22			$	0.21			$	0.87			$	0.76
Diluted			0.22				0.21				0.87			$	0.76
Dividends Declared per Common Share		$	0.17			$	0.16			$	0.68			$	0.64
Dividend/AFFO Payout Ratio			77.3	%			76.2	%			78.2	%			84.2	%

 

 

Same Property Statistics

(unaudited)

 

		For The
		Three Months Ended
		9/30/2018								9/30/2017				Change				Change %
Total Square Feet / Total Properties			21,173,581 / 111								18,790,021 / 108				2,383,560				12.7	%
Occupancy Percentage at End of Period			99.6	%							99.3	%			30 bps				0.3	%
Same Property Square Feet / Number of Same Properties							16,927,532 / 98
Same Property Occupancy Percentage at End of Period			99.5	%							99.8	%			(30) bps				(0.3	)%
Same Property Net Operating Income (NOI) (GAAP)		$	24,320,081							$	24,127,404			$	192,677				0.8	%
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(314,253	)							(203,251	)			(111,002	)
Same Property Cash NOI		$	24,005,828							$	23,924,153			$	81,675				0.3	%

 

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

 

The 0.8% increase, amounting to $192,677 in Same Property NOI, consists of $178,175 attributable to increased Same Property NOI from occupied properties and by an increase in Same Property NOI from vacant properties of $14,502.

 

The 0.3% increase, amounting to $81,675 in Same Property Cash NOI, consists of $70,247 attributable to increased Same Property Cash NOI from occupied properties and by an increase in Same Property Cash NOI from vacant properties of $11,428.

 

Reconciliation of Same Property NOI to Total NOI

 

		For The Three Months Ended
		9/30/2018				9/30/2017				Change				Change %
Same Property NOI (GAAP)		$	24,320,081			$	24,127,404			$	192,677				0.8	%
NOI of properties purchased subsequent to June 30, 2017 (seven properties for fiscal 2018 and three properties for fiscal 2017)			4,723,444				568,075
NOI of properties expanded subsequent to June 30, 2017 (two properties for fiscal 2018 and one property for fiscal 2017)			1,130,109				1,066,594
NOI of properties sold subsequent to June 30, 2017 (four properties for fiscal 2018)			670				284,929
Total NOI		$	30,174,304			$	26,047,002			$	4,127,302				15.8	%

 

 

Same Property Statistics

(unaudited)

 

		For The
		Twelve Months Ended
		9/30/2018								9/30/2017				Change				Change %
Total Square Feet / Total Properties			21,173,581 / 111								18,790,021 / 108				2,383,560				12.7	%
Occupancy Percentage at End of Period			99.6	%							99.3	%			30 bps				0.3	%
Same Property Square Feet / Number of Same Properties							15,065,707 / 91
Same Property Occupancy Percentage at End of Period			99.5	%							99.8	%			(30 bps	)			(0.3	)%
Same Property Net Operating Income (NOI) (GAAP)		$	83,566,781							$	83,733,452			$	(166,671	)			(0.2	)%
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(967,710	)							(1,100,629	)			132,919
Same Property Cash NOI		$	82,599,071							$	82,632,823			$	(33,752	)			0.0	%

 

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

 

The 0.2% decrease, amounting to $166,671 in Same Property NOI, consists of $44,171 attributable to decreased Same Property NOI from occupied properties and by a decrease in Same Property NOI from vacant properties of $122,500 attributable to a 30 bps decline in Same Property Occupancy Percentage.

 

The $33,752 decrease in Same Property Cash NOI, consists of $132,509 attributable to increased Same Property Cash NOI from occupied properties offset by a decrease in Same Property Cash NOI from vacant properties of $166,261 attributable to a 30 bps decline in Same Property Occupancy Percentage.

 

Reconciliation of Same Property NOI to Total NOI

 

		For The Twelve Months Ended
		9/30/2018				9/30/2017				Change				Change %
Same Property NOI (GAAP)		$	83,566,781			$	83,733,452			$	(166,671	)			(0.2	)%
NOI of properties purchased subsequent to September 30, 2016 (seven properties for fiscal 2018 and ten properties for fiscal 2017)			26,438,218				7,063,623
NOI of properties expanded subsequent to September 30, 2016 (two properties for fiscal 2018 and one property for fiscal 2017)			4,159,745				3,998,426
NOI of properties sold subsequent to September 30, 2016 (four properties for fiscal 2018 and one property for fiscal 2017)			606,988				1,435,248
Total NOI		$	114,771,732			$	96,230,749			$	18,540,983				19.3	%

 

 

Consolidated Statements of Cash Flows

 

		For The
		Twelve Months Ended
		9/30/2018				9/30/2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income		$	56,005,800			$	40,271,085
Noncash Items Included in Net Income:
Depreciation & Amortization			39,788,010				32,694,009
Stock Compensation Expense			433,895				624,706
Deferred Straight Line Rent			(1,972,588	)			(1,027,927	)
Gain on Sale of Securities Transactions			(111,387	)			(2,311,714	)
(Gain) Loss on Sale of Real Estate Investments			(7,485,266	)			95,336
Changes in:
Tenant & Other Receivables			1,396,729				357,823
Prepaid Expenses			(754,922	)			(603,887	)
Other Assets & Capitalized Lease Costs			(2,036,854	)			15,353
Accounts Payable, Accrued Expenses & Other Liabilities			265,745				3,753,082
NET CASH PROVIDED BY OPERATING ACTIVITIES			85,529,162				73,867,866
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Real Estate & Intangible Assets			(283,402,845	)			(286,951,980	)
Capital Improvements			(9,084,163	)			(4,974,988	)
Proceeds from Sale of Real Estate Investments			22,083,340				4,125,819
Return of Deposits on Real Estate			450,000				3,400,000
Deposits Paid on Acquisitions of Real Estate			(200,000	)			(450,000	)
Proceeds from Sale of Securities Available for Sale			2,620,166				17,274,946
Purchase of Securities Available for Sale			(64,979,698	)			(71,494,810	)
NET CASH USED IN INVESTING ACTIVITIES			(332,513,200	)			(339,071,013	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Fixed Rate Mortgage Notes Payable			175,160,000				188,809,000
Principal Payments on Fixed Rate Mortgage Notes Payable			(54,354,212	)			(73,594,586	)
Net Draws on Loans Payable			66,517,259				39,300,733
Financing Costs Paid on Debt			(1,469,914	)			(2,190,098	)
Redemption of 7.625% Series A Preferred Stock			-0-				(53,493,750	)
Redemption of 7.875% Series B Preferred Stock			-0-				(57,500,000	)
Proceeds from Underwritten Public Offering of 6.125% Series C Preferred Stock, net of offering costs			-0-				71,003,093
Proceeds from At-The-Market Preferred Equity Program, net of offering costs			40,093,650				35,733,885
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments			77,100,433				81,805,937
Proceeds from the Exercise of Stock Options			569,600				469,300
Preferred Dividends Paid			(16,876,532	)			(14,500,474	)
Common Dividends Paid, net of Reinvestments			(40,657,707	)			(36,163,355	)
NET CASH PROVIDED BY FINANCING ACTIVITIES			246,082,577				179,679,685
NET DECREASE IN CASH AND CASH EQUIVALENTS			(901,461	)			(85,523,462	)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR			10,226,046				95,749,508
CASH AND CASH EQUIVALENTS - END OF YEAR		$	9,324,585			$	10,226,046

 

 

Capital Structure and Leverage Ratios

(unaudited)

 

		As of				As of
		9/30/2018				9/30/2017
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs		$	711,545,649			$	591,364,371
Loans Payable			186,608,676				120,091,417
Total Debt			898,154,325				711,455,788
6.125% Series C Cumulative Redeemable Preferred Stock			287,200,025				245,986,125
Common Stock, Paid-In-Capital & Other			510,705,742				466,879,571
Total Shareholders’ Equity			797,905,767				712,865,696
Total Book Capitalization			1,696,060,092				1,424,321,484
Accumulated Depreciation			207,065,634				177,372,518
Total Undepreciated Book Capitalization		$	1,903,125,726			$	1,601,694,002
Shares Outstanding			81,503,134				75,630,521
Market Price Per Share		$	16.72			$	16.19
Equity Market Capitalization		$	1,362,732,400			$	1,224,458,135
Total Debt			898,154,325				711,455,788
Total Preferred Stock			287,200,025				245,986,125
Total Market Capitalization		$	2,548,086,750			$	2,181,900,048
Total Debt		$	898,154,325			$	711,455,788
less: Cash and Cash Equivalents			9,324,585				10,226,046
Net Debt		$	888,829,740			$	701,229,742
less: Securities Available for Sale at Fair Value (Securities)			154,920,545				123,764,770
Net Debt Less Securities		$	733,909,195			$	577,464,972
Net Debt / Total Undepreciated Book Capitalization			46.7	%			43.8	%
Net Debt / Total Market Capitalization			34.9	%			32.1	%
Net Debt Plus Preferred Stock / Total Market Capitalization			46.2	%			43.4	%
Net Debt Less Securities / Total Undepreciated Book Capitalization			38.6	%			36.1	%
Net Debt Less Securities / Total Market Capitalization			28.8	%			26.5	%
Net Debt Less Securities Plus Preferred Stock / Total Market Capitalization			40.1	%			37.7	%
Weighted Average Interest Rate on Fixed Rate Debt			4.07	%			4.18	%
Weighted Average Term on Fixed Rate Debt			11.7 yrs.				11.6 yrs.
Weighted Average Lease Term			8.1 yrs.				7.9 yrs.

 

 

Capital Structure and Leverage Ratios

(unaudited)

 

		For The Three Months Ended								For The Twelve Months Ended
		9/30/2018				9/30/2017				9/30/2018				9/30/2017
Net Income		$	12,159,623			$	10,262,190			$	56,005,800			$	40,271,085
Plus: Interest Expense, including Amortization of Financing Costs			8,709,149				6,918,257				32,349,705				25,754,121
Plus: Depreciation and Amortization			10,321,798				8,682,543				38,567,027				31,459,749
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments			-0-				-0-				(7,485,266	)			95,336
EBITDAre			31,190,570				25,862,990				119,437,266				97,580,291
Plus: Acquisition Costs			-0-				-0-				-0-				178,526
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue			25,677				25,492				102,708				101,968
Less: Gain on Sale of Securities Transactions			-0-				(17,770	)			(111,387	)			(2,311,714	)
Adjusted EBITDA		$	31,216,247			$	25,870,712			$	119,428,587			$	95,549,071
Interest Expense, including Amortization of Financing Costs		$	8,709,149			$	6,918,257			$	32,349,705			$	25,754,121
Preferred Dividends			4,377,262				3,536,103				17,190,456				14,861,686
Total Fixed Charges		$	13,086,411			$	10,454,360			$	49,540,161			$	40,615,807
Interest Coverage			3.6 x				3.7 x				3.7 x				3.7 x
Fixed Charge Coverage			2.4 x				2.5 x				2.4 x				2.4 x
Net Debt		$	888,829,740			$	701,229,742			$	888,829,740			$	701,229,742
Net Debt Less Securities			733,909,195				577,464,972				733,909,195				577,464,972
Total Preferred Stock			287,200,025				245,986,125				287,200,025				245,986,125
Annualized Adjusted EBITDA			124,864,988				103,482,848				119,428,587				95,549,071
Net Debt / Adjusted EBITDA			7.1 x				6.8 x				7.4 x				7.3 x
Net Debt Less Securities / Adjusted EBITDA			5.9 x				5.6 x				6.1 x				6.0 x
Net Debt + Preferred Stock / Adjusted EBITDA			9.4 x				9.2 x				9.8 x				9.9 x
Net Debt Less Securities + Preferred Stock / Adjusted EBITDA			8.2 x				8.0 x				8.5 x				8.6 x

 

 

Debt Maturity 

(Unaudited)

 

 

								Loans									% of
Fiscal Year Ended				Mortgages				Payable					Total				Total
2019				$	60,151,223			$	26,608,676		(B)		$	86,759,899				9.6	%
2020					48,605,542				160,000,000		(C)			208,605,542				23.0	%
2021					50,098,257				-0-					50,098,257				5.5	%
2022					72,031,353				-0-					72,031,353				7.9	%
2023					50,522,349				-0-					50,522,349				5.6	%
Thereafter					438,359,631				-0-					438,359,631				48.4	%
Total as of 9/30/2018		(A)		$	719,768,355			$	186,608,676				$	906,377,031				100.0	%
Weighted Average Interest Rate					4.07	%			3.74	%				4.00	%
Weighted Average Term					11.7 yrs.				1.7 yrs.					9.6 yrs.

 

	(A)	Mortgages does not include unamortized debt issuance costs of $8,222,706.
	(B)	Represents margin debt which is due upon demand. Subsequent to fiscal yearend, margin debt was paid off.
	(C)	Represents the amount drawn down on a line of credit that has a one year extension option, which is not reflected above. Subsequent to fiscal yearend, $50,000,000 was paid down, which reduced our amount outstanding to $110,000,000.

 

 

Securities Portfolio Historic Performance (Fiscal Year)

(unaudited)

 

 

Fiscal Year			Securities Portfolio Cost (A)				Securities Available for Sale (A)				Dividend Income				Net Realized Gain on Sale of Securities				Change in Unrealized Gain/ (Loss)(B)				Total Return				Total Return %
2010			$	24,027,834			$	27,824,665			$	2,387,757			$	2,609,149			$	6,319,226			$	11,316,132				47.10	%
2011				32,401,668				42,517,725				2,981,534				5,238,203				(7,747,894	)			471,843				1.46	%
2012				41,896,896				44,265,059				3,144,837				6,044,065				3,015,774				12,204,676				29.13	%
2013				56,301,236				61,685,173				3,861,374				7,133,252				(3,394,669	)			7,599,957				13.50	%
2014				43,462,472				45,451,740				3,863,136				2,166,766				(1,867,912	)			4,161,990				9.58	%
2015				59,190,047				59,311,403				3,707,498				805,513				(5,562,959	)			(1,049,948	)			(1.77	)%
2016				59,982,840				54,541,237				5,607,403				4,398,599				18,383,870				28,389,872				47.33	%
2017				60,662,627				73,604,894				6,919,973				2,311,714				(6,371,702	)			2,859,985				4.71	%
2018				117,194,205				123,764,770				13,099,316				111,387				(31,315,144	)			(18,104,441	)			(15.45	)%
Total											$	45,572,828			$	30,818,648			$	(28,541,410	)		$	47,850,066				Avg. 15.07	%

 

	(A)	Fiscal Year beginning balance
	(B)	Fiscal Year end balance

 

 

Securities Portfolio Historic Performance (Fiscal Year)

(unaudited)

 

 

FISCAL YEAR			MREIC REIT Portfolio (%)				MSCI REIT Index (RMS)(%)				S&P 500 Index (%)				MREIC vs. MSCI REIT Index (RMS) Outperformance in BPS ∆				MREIC vs. S&P 500 Index Outperformance in BPS ∆
2010				47.10				30.54				10.16				1656				3694
2011				1.46				1.26				1.14				20				32
2012				29.13				32.44				30.20				(331	)			(107	)
2013				13.50				6.63				21.59				687				(809	)
2014				9.58				13.26				19.73				(368	)			(1015	)
2015				(1.77	)			9.47				(0.61	)			(1124	)			(116	)
2016				47.33				19.83				15.43				2750				3190
2017				4.71				0.54				18.61				417				(1390	)
2018				(15.45	)			4.78				15.22				(2023	)			(3067	)
Average				15.07				13.19				14.61				187				46

 

Source: SNL Financial

 

 

Property Table by Tenant

(unaudited)

 

				Property				Square				Occupied Square				% of Occupied				Annual				% of Total Ann.				Rent Per sf				Undepreciated					Mortgage
Tenant				Count				Footage				Footage				sf				Rent				Rent				Occup.				Cost					Balance
FedEx Ground Package System, Inc.					44				8,538,404				8,538,404				40.3	%		$	65,499,000				51.7	%		$	7.67			$	914,674,060				$	413,130,189
FedEx Corporation					16				1,544,996				1,544,996				7.3	%			8,100,000				6.3	%			5.24				109,379,980					18,744,507
Total FedEx					60				10,083,400				10,083,400				47.6	%			73,599,000				58.0	%			7.30				1,024,054,040					431,874,696
Milwaukee Electric Tool Corporation					1				861,889				861,889				4.2	%			3,032,000				2.4	%			3.52				36,914,917					21,722,567
Shaw Industries, Inc.					1				831,764				831,764				3.9	%			3,551,000				2.8	%			4.27				56,025,945					32,215,696
ULTA, Inc.					1				671,354				671,354				3.3	%			2,702,000				2.1	%			4.02				37,512,071					20,159,025
Amazon.com Services, Inc. (Amazon.com, Inc.)					2				662,942				662,942				3.1	%			3,904,000				3.1	%			5.89				62,931,258					37,845,988
Jim Beam Brands Company (Beam Suntory)					1				599,840				599,840				2.8	%			2,051,000				1.6	%			3.42				28,000,000					16,639,132
International Paper Company					2				578,472				578,472				2.7	%			2,592,000				2.0	%			4.48				36,175,715					20,662,730
TreeHouse Private Brands, Inc.					1				558,600				558,600				2.6	%			2,206,000				1.7	%			3.95				26,807,852					15,305,669
B. Braun Medical Inc.					1				399,440				399,440				1.9	%			2,130,000				1.7	%			5.33				29,973,199					19,187,819
CBOCS Distribution, Inc. (Cracker Barrel)					1				381,240				381,240				1.8	%			1,447,000				1.1	%			3.80				14,215,126					7,217,469
Best Buy Warehousing Logistics, Inc.					1				368,060				368,060				1.7	%			1,676,000				1.3	%			4.55				19,600,000					9,300,481
Coca-Cola					2				323,358				323,358				1.5	%			1,693,000				1.3	%			5.24				20,504,069					4,580,073
Autoneum North America, Inc.					1				315,560				315,560				1.5	%			1,703,000				1.3	%			5.40				21,040,395					14,471,117
Science Applications International Corporation					1				302,400				302,400				1.4	%			1,491,000				1.2	%			4.93				13,410,102					-0-
United Technologies Corporation					3				283,150				283,150				1.3	%			1,929,000				1.5	%			6.81				27,687,512					6,455,552
Bunzl USA Holdings, Inc.					2				268,778				268,778				1.3	%			1,474,000				1.2	%			5.48				18,708,688					12,170,963
Woodstream Corporation		(A)			1				256,000				256,000				1.2	%			914,000				0.7	%			3.57				8,935,160					-0-
Anda Pharmaceuticals, Inc.					1				234,660				234,660				1.1	%			1,205,000				1.0	%			5.14				14,550,000					7,564,186
UGN, Inc.					1				232,200				232,200				1.1	%			1,070,000				0.8	%			4.61				17,524,760					7,126,384
Mickey Thompson Performance Tires and Wheels (Cooper Tire)					1				219,765				219,765				1.0	%			1,501,000				1.2	%			6.83				18,934,065					12,130,343
Rinnai America Corporation					1				218,120				218,120				1.0	%			831,000				0.7	%			3.81				14,933,683					-0-
Anheuser-Busch, Inc.					1				184,800				184,800				0.9	%			821,000				0.6	%			4.44				12,697,848					-0-
Carlisle Tire & Wheel Company					1				179,280				179,280				0.8	%			739,000				0.6	%			4.12				7,232,986					-0-
NF&M International, Inc.		(B)			1				174,802				174,802				0.8	%			835,000				0.7	%			4.78				5,408,790					-0-
Home Depot USA, Inc.					1				171,200				171,200				0.8	%			997,000				0.8	%			5.82				11,303,317					-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				0.6	%			838,000				0.7	%			6.09				11,304,000					6,525,135
Altec Industries, Inc.		(A)			1				126,880				126,880				0.6	%			371,000				0.3	%			2.92				4,428,488					-0-
General Electric Company					1				125,860				125,860				0.6	%			1,321,000				1.0	%			10.50				19,950,000					11,199,661
The American Bottling Company (Keurig Dr Pepper)					2				110,080				110,080				0.5	%			743,000				0.6	%			6.75				10,498,031					1,685,288
Style Crest, Inc.					1				106,507				106,507				0.5	%			387,000				0.3	%			3.63				7,246,325					-0-
Pittsburgh Glass Works, LLC					1				102,135				102,135				0.5	%			442,000				0.3	%			4.33				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				0.4	%			754,000				0.6	%			8.26				8,163,278					2,148,201
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				7,463,672					-0-
Sherwin-Williams Company					2				78,887				78,887				0.4	%			643,000				0.5	%			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				0.2	%			4.34				5,677,982					-0-
Various Tenants at Retail Shopping Center					1				64,220				64,220				0.3	%			807,000				0.6	%			12.57				3,111,777					-0-
SOFIVE, Inc.					1				60,400				60,400				0.3	%			558,000				0.4	%			9.24				4,942,402					1,580,180
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				0.2	%			464,000				0.4	%			9.07				4,452,425					-0-
Foundation Building Materials, LLC					1				36,270				36,270				0.2	%			172,000				0.2	%			4.74				2,523,644					-0-
Graybar Electric Company					1				26,340				26,340				0.2	%			109,000				0.2	%			4.14				1,885,254					-0-
Tenant Total as of 9/30/18					111				21,092,725				21,092,725				99.6	%		$	126,792,000				100.0	%		$	6.01			$	1,717,065,477		(C)			$719,768,355
Vacant		(B)			1				80,856				-0-				0.0	%			-0-				0.0	%			-0-				2,501,877					-0-
Total as of 9/30/18					111				21,173,581				21,092,725				99.6	%		$	126,792,000				100.0	%		$	6.01			$	1,719,567,354				$	719,768,355
Acquisitions Subsequent to 9/30/18
FedEx Ground Package System, Inc.					1				347,145				347,145				1.6	%			5,328,000				4.0	%			15.35
Pro Forma Total with Acquisitons Subsequent to 9/30/18					112				21,520,726				21,439,870				99.6	%		$	132,120,000				100.0	%		$	6.16

 

(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 $8,222,706.

 

 

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				2,211,583				2,211,583				10.4	%		$	15,711,000				12.4	%		$	7.10			$	226,738,000				$	100,873,289
Texas			10				1,781,967				1,781,967				8.4	%			13,825,000				10.9	%			7.76				182,253,655					78,083,742
Ohio			9				1,550,706				1,550,706				7.3	%			8,908,000				7.0	%			5.74				114,243,557					40,030,595
Georgia			5				1,513,176				1,513,176				7.1	%			8,805,000				6.9	%			5.82				138,527,838					72,254,485
Kentucky			3				1,295,940				1,295,940				6.1	%			5,095,000				4.0	%			3.93				66,111,852					38,469,936
South Carolina			6				1,273,676				1,273,676				6.0	%			9,478,000				7.5	%			7.44				127,234,979					59,204,763
Mississippi			4				1,158,889				1,158,889				5.8	%			4,466,000				3.5	%			3.85				55,250,862					29,286,753
Indiana			2				999,176				999,176				4.8	%			4,417,000				3.5	%			4.42				63,016,154					30,596,176
Illinois			9				958,045				958,045				4.5	%			6,117,000				4.8	%			6.38				82,688,099					8,563,797
North Carolina			4				939,706				939,706				4.4	%			5,663,000				4.5	%			6.03				85,785,896					42,676,806
Tennessee			3				891,777				891,777				4.2	%			3,150,000				2.5	%			3.47				33,968,652					12,278,845
Michigan			4				833,054				833,054				3.9	%			5,574,000				4.4	%			6.69				73,039,812					25,763,057
Kansas			4				813,043				813,043				3.8	%			4,619,000				3.6	%			5.68				60,943,937					30,006,574
Missouri			4				739,330				739,330				3.5	%			2,828,000				2.2	%			3.83				34,987,692					6,633,001
Oklahoma			4				614,941				614,941				2.9	%			3,916,000				3.1	%			6.37				54,939,874					29,652,940
New York			3				518,565				518,565				2.4	%			3,886,000				3.1	%			7.49				51,336,423					21,328,714
Pennsylvania			3				504,040				423,184				2.4	%			2,807,000				2.2	%			6.63				36,883,632					14,452,942
Alabama			2				451,595				451,595				2.1	%			2,625,000				2.1	%			5.81				39,714,135					19,203,298
Virginia			5				407,265				407,265				1.9	%			2,449,000				1.9	%			6.01				34,680,077					4,395,246
Colorado			2				295,227				295,227				1.4	%			2,437,000				1.9	%			8.25				35,674,117					17,065,759
Arizona			1				283,358				283,358				1.3	%			1,361,000				1.1	%			4.80				16,824,226					3,719,709
Wisconsin			2				238,666				238,666				1.1	%			1,295,000				1.0	%			5.43				16,336,361					2,640,432
Washington			1				210,445				210,445				1.0	%			1,962,000				1.5	%			9.32				30,228,547					17,757,364
Louisiana			1				175,315				175,315				0.8	%			1,262,000				1.0	%			7.20				18,410,000					11,133,990
Maryland			1				148,881				148,881				0.7	%			1,452,000				1.1	%			9.75				14,512,355					-0-
New Jersey			2				124,620				124,620				0.6	%			1,365,000				1.1	%			10.95				8,054,179					1,580,180
Nebraska			1				89,115				89,115				0.4	%			446,000				0.4	%			5.00				5,944,691					-0-
Minnesota			1				60,398				60,398				0.3	%			372,000				0.3	%			6.16				5,220,000					2,115,962
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				0.2	%			4.74				2,523,644					-0-
Total as of 9/30/18			111				21,173,581				21,092,725				100.0	%		$	126,792,000				100.0	%		$	6.01			$	1,719,567,354		(A)		$	719,768,355
Acquisitions Subsequent to 9/30/18
New Jersey			1				347,145				347,145				1.6	%			5,328,000				4.0	%			15.35
Pro Forma Total with Acquisitons Subsequent to 9/30/18			112				21,520,726				21,439,870				100.0	%		$	132,120,000				100.0	%		$	6.16

 

(A)

Does not include unamortized debt issuance costs of $8,222,706.

 

 

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
2019					6				681,395				3.2	%		$	3,914,000				3.1	%			5.74				0.6			$	46,037,022				$	465,749
2020					4				383,449				1.8	%			2,129,000				1.7	%			5.55				1.7				27,452,849					-0-
2021		(A)			10				1,206,723				5.7	%			5,467,000				4.3	%			4.53				2.7				69,377,107					7,832,154
2022					7				1,138,320				5.4	%			6,419,000				5.1	%			5.64				3.5				75,991,657					25,307,371
2023		(A)			13				1,668,804				7.9	%			9,481,000				7.5	%			5.68				4.7				116,932,264					21,594,265
2024					12				1,584,634				7.5	%			10,094,000				8.0	%			6.37				5.7				122,194,406					34,459,394
2025		(A)			9				2,404,478				11.4	%			12,271,000				9.7	%			5.10				6.6				159,917,562					74,976,653
2026					7				982,226				4.6	%			7,922,000				6.3	%			8.07				7.6				105,330,525					40,305,777
2027					11				2,304,616				10.9	%			12,629,000				10.0	%			5.48				8.9				178,945,464					72,819,938
2028					11				2,571,915				12.1	%			13,826,000				10.9	%			5.38				9.5				181,975,883					71,085,896
2029					5				1,171,338				5.5	%			5,454,000				4.3	%			4.66				10.5				76,019,210					32,457,568
2030					4				1,044,832				4.9	%			7,403,000				5.8	%			7.09				11.5				113,789,841					61,881,366
2031					3				963,269				4.5	%			7,122,000				5.6	%			7.39				12.6				104,367,000					64,988,499
2032					6				1,724,838				8.3	%			13,134,000				10.4	%			7.61				13.6				202,011,552					126,728,056
2033					2				639,068				3.0	%			6,514,000				5.0	%			10.19				14.6				106,803,506					69,560,000
2034					1				558,600				2.6	%			2,206,000				1.7	%			3.95				15.1				26,807,852					15,305,669
Various tenants at retail shopping center					1				64,220				0.3	%			807,000				0.6	%			12.57				-0-				3,111,777					-0-
Vacant		(A)			1				80,856				0.4	%			-0-				0.0	%			-0-				-0-				2,501,877					-0-
Total as of 9/30/18					111				21,173,581				100.0	%		$	126,792,000				100.0	%		$	6.01				8.1			$	1,719,567,354		(B)		$	719,768,355
Acquisitions Subsequent to 9/30/18
2032					1				347,145				1.6	%			5,328,000				4.0	%			15.35				13.8
Pro Forma Total with Acquisitons Subsequent to 9/30/18					112				21,520,726				100.0	%		$	132,120,000				100.0	%		$	6.16				8.2

 

	(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 174,802 square feet of a 255,658 square foot Industrial Park.  The remaining 80,856 square feet is included in Vacant.  Each of these properties 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)	Does not include unamortized debt issuance costs of $8,222,706.

 

 

Recent Acquisitions During Fiscal 2018

(unaudited)

 

									Date of		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		11/2/2017			121,683			$	1,315,000			$	10.81			8/31/2032		$	21,872,170			$	14,200,000
2			Amazon.com Services, Inc. (Amazon.com, Inc.)		Oklahoma City		OK		11/30/2017			300,000				1,884,000				6.28			10/31/2027			30,250,000				19,600,000
3			Shaw Industries, Inc.		Savannah		GA		1/22/2018			831,764				3,551,000				4.27			9/30/2027			57,483,636				33,300,000
4			B. Braun Medical Inc.		Daytona Beach		FL		4/6/2018			399,440				2,130,000				5.33			4/1/2028			30,750,540				19,500,000
5			Amazon.com Services, Inc. (Amazon.com, Inc.)		Mobile		AL		6/28/2018			362,942				2,020,000				5.57			11/30/2028			33,688,276				19,000,000
6			FedEx Ground Package System, Inc.		Charleston		SC		8/15/2018			265,318				2,713,000				10.23			6/30/2033			47,174,296				29,860,000
7			FedEx Ground Package System, Inc.		Braselton (Atlanta)		GA		9/6/2018			373,750				3,801,000				10.17			2/28/2033			61,113,264				39,700,000
			Total as of 9/30/18									2,654,897			$	17,414,000			$	6.56					$	282,332,182			$	175,160,000
			Acquisitons Subsequent to 9/30/18
1			FedEx Ground Package System, Inc.		Trenton		NJ		10/19/2018			347,145				5,328,000				15.35			6/30/2032			85,248,352				55,000,000

 

 

Property Table

(unaudited)

 

									Fiscal Year							Square				Annual				Rent Per sf				Lease Exp. 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				9.8			$	36,914,917			$	21,722,567
2		Shaw Industries, Inc.		Savannah		GA			2018				100.0	%			831,764				3,551,000				4.27				9.0				56,025,945				32,215,696
3		ULTA, Inc.		Greenwood (Indianapolis)		IN			2015				100.0	%			671,354				2,702,000				4.02				6.8				37,512,071				20,159,025
4		Jim Beam Brands Company (Beam Suntory)		Frankfort (Lexington)		KY			2015				100.0	%			599,840				2,051,000				3.42				6.3				28,000,000				16,639,132
5		TreeHouse Private Brands, Inc.		Buckner (Louisville)		KY			2014				100.0	%			558,600				2,206,000				3.95				15.1				26,807,852				15,305,669
6		FedEx Corporation		Memphis		TN			2010				100.0	%			449,900				1,384,000				3.08				10.7				14,614,986				5,061,376
7		B. Braun Medical Inc.		Daytona Beach		FL			2018				100.0	%			399,440				2,130,000				5.33				9.5				29,973,199				19,187,819
8		Woodstream Corporation		St. Joseph		MO			2001				100.0	%			256,000				914,000				3.57				3.0				8,935,160				-0-
		Altec Industries, Inc.		St. Joseph		MO			2001				100.0	%			126,880				371,000				2.92				4.4				4,428,488				-0-
9		CBOCS Distribution, Inc. (Cracker Barrel)		Lebanon (Nashville)		TN			2011				100.0	%			381,240				1,447,000				3.80				5.8				14,215,126				7,217,469
10		FedEx Ground Package System, Inc.		Braselton (Atlanta)		GA			2018				100.0	%			373,750				3,801,000				10.17				14.4				60,227,126				39,700,000
11		Best Buy Warehousing Logistics, Inc.		Streetsboro (Cleveland)		OH			2012				100.0	%			368,060				1,676,000				4.55				3.3				19,600,000				9,300,481
12		Amazon.com Services, Inc. (Amazon.com, Inc.)		Mobile		AL			2018				100.0	%			362,942				2,020,000				5.57				10.2				33,052,316				18,832,395
13		FedEx Ground Package System, Inc.		Concord (Charlotte)		NC			2017				100.0	%			354,482				2,537,000				7.16				13.7				40,043,145				24,863,355
14		FedEx Ground Package System, Inc.		Mesquite (Dallas)		TX			2017				100.0	%			351,874				3,195,000				9.08				13.5				49,880,493				30,928,224
15		FedEx Ground Package System, Inc.		Walker (Grand Rapids)		MI			2017				100.0	%			343,483				2,102,000				6.12				13.3				31,654,987				19,468,554
16		FedEx Ground Package System, Inc.		Hamburg (Buffalo)		NY			2017				100.0	%			338,584				2,313,000				6.83				12.5				34,850,000				21,328,714
17		FedEx Ground Package System, Inc.		Concord (Charlotte)		NC			2016				100.0	%			330,717				2,237,000				6.76				6.8				33,044,797				17,813,451
18		FedEx Ground Package System, Inc.		Indianapolis		IN			2014				100.0	%			327,822				1,715,000				5.23				9.1				25,504,083				10,437,151
19		Autoneum North America, Inc.		Aiken (Augusta, GA)		SC			2017				100.0	%			315,560				1,703,000				5.40				13.6				21,040,395				14,471,117
20		FedEx Ground Package System, Inc.		Olathe (Kansas City)		KS			2016				100.0	%			313,763				2,200,000				7.01				12.7				31,737,000				19,956,867
21		FedEx Ground Package System, Inc.		Davenport (Orlando)		FL			2016				100.0	%			310,922				2,609,000				8.39				12.6				37,780,000				23,702,918
22		FedEx Ground Package System, Inc.		Ft. Worth (Dallas)		TX			2015				100.0	%			304,608				2,373,000				7.79				11.6				35,300,832				20,753,864
23		Science Applications International Corporation		Hanahan (Charleston)		SC			2005				100.0	%			302,400				1,491,000				4.93				0.6				13,410,102				-0-
24		Amazon.com Services, Inc. (Amazon.com, Inc.)		Oklahoma City		OK			2018				100.0	%			300,000				1,884,000				6.28				9.1				29,878,942				19,013,593
25		International Paper Company		Kenton		OH			2017				100.0	%			298,472				1,244,000				4.17				8.9				17,881,607				11,473,387
26		FedEx Ground Package System, Inc.		Jacksonville		FL			2015				100.0	%			297,579				1,998,000				6.71				11.3				30,735,702				16,243,754
27		Western Container Corp. (Coca-Cola)		Tolleson (Phoenix)		AZ			2003				100.0	%			283,358				1,361,000				4.80				8.6				16,824,226				3,719,709
28		International Paper Company		Edwardsville (Kansas City)		KS			2014				100.0	%			280,000				1,348,000				4.81				4.9				18,294,108				9,189,343
29		FedEx Ground Package System, Inc.		Charleston		SC			2018				100.0	%			265,318				2,713,000				10.23				14.8				46,576,380				29,860,000
30		NF&M International, Inc.		Monaca (Pittsburgh)		PA			1988				68.4	%			255,658				835,000				4.78				6.3				7,910,666				-0-
31		FedEx Ground Package System, Inc.		Orion		MI			2007				100.0	%			245,633				1,908,000				7.77				4.8				22,890,124				-0-
32		FedEx Ground Package System, Inc.		Homestead (Miami)		FL			2017				100.0	%			237,756				2,282,000				9.60				13.5				37,873,120				23,313,676
33		Anda Pharmaceuticals, Inc.		Olive Branch (Memphis, TN)		MS			2012				100.0	%			234,660				1,205,000				5.14				3.8				14,550,000				7,564,186
34		UGN, Inc.		Monroe (Cincinnati)		OH			2015				100.0	%			232,200				1,070,000				4.61				11.4				17,524,760				7,126,384
35		FedEx Ground Package System, Inc.		Colorado Springs		CO			2016				100.0	%			225,362				1,832,000				8.13				7.3				29,320,066				16,651,710
36		Mickey Thompson Performance Tires and Wheels (Cooper Tire)		Stow		OH			2017				100.0	%			219,765				1,501,000				6.83				8.9				18,934,065				12,130,343
37		Rinnai America Corporation		Griffin (Atlanta)		GA			2006				100.0	%			218,120				831,000				3.81				2.3				14,933,683				-0-
38		FedEx Ground Package System, Inc.		Ft. Myers		FL			2017				100.0	%			213,672				1,418,000				6.64				8.9				21,663,635				13,280,803
39		FedEx Ground Package System, Inc.		Burlington (Seattle/Everett)		WA			2016				100.0	%			210,445				1,962,000				9.32				11.9				30,228,547				17,757,364
40		FedEx Ground Package System, Inc.		Sauget (St. Louis, MO)		IL			2015				100.0	%			198,773				1,036,000				5.21				10.7				15,204,950				8,563,797
41		Anheuser-Busch, Inc.		Granite City (St. Louis, MO)		IL			2001				100.0	%			184,800				821,000				4.44				3.2				12,697,848				-0-
42		Carrier Enterprise, LLC (United Technologies)		Carrollton (Dallas)		TX			2010				100.0	%			184,317				1,241,000				6.73				5.3				17,819,203				6,455,552
43		FedEx Ground Package System, Inc.		Spring (Houston)		TX			2014				100.0	%			181,176				1,581,000				8.73				6.0				19,294,396				7,924,865
44		Carlisle Tire & Wheel Company		Edwardsville (Kansas City)		KS			2003				100.0	%			179,280				739,000				4.12				4.8				7,232,986				-0-
45		FedEx Ground Package System, Inc.		Ft. Mill (Charlotte, NC)		SC			2010				100.0	%			176,939				1,581,000				8.94				9.9				17,074,037				724,766
46		FedEx Ground Package System, Inc.		Covington (New Orleans)		LA			2016				100.0	%			175,315				1,262,000				7.20				6.8				18,410,000				11,133,990
47		FedEx Ground Package System, Inc.		Livonia (Detroit)		MI			2013				100.0	%			172,005				1,194,000				6.94				3.5				13,762,030				6,294,503
48		Home Depot USA, Inc.		Montgomery (Chicago)		IL			2004				100.0	%			171,200				997,000				5.82				1.8				11,303,317				-0-
49		FedEx Ground Package System, Inc.		Tampa		FL			2004				100.0	%			170,779				1,624,000				9.51				7.8				19,701,575				5,144,319
50		FedEx Ground Package System, Inc.		Edinburg		TX			2011				100.0	%			164,207				1,097,000				6.68				8.0				12,039,014				-0-

 

 

Property Table

(unaudited)

 

									Fiscal Year							Square				Annual				Rent Per sf				Lease Exp. Term in				Undepreciated				Mortgage
No		Tenant		City (MSA)		State			Acquisition			Occup.				Footage				Rent				Occup.				Years				Cost				Balance
51		FedEx Ground Package System, Inc.		Lindale (Tyler)		TX			2015				100.0	%			163,378			$	725,000			$	4.44				5.8			$	9,965,550			$	5,638,258
52		Bunzl Distribution Midcentral, Inc.		Kansas City		MO			2015				100.0	%			158,417				752,000				4.75				3.0				9,980,250				6,633,001
53		FedEx Ground Package System, Inc.		Oklahoma City		OK			2012				100.0	%			158,340				1,048,000				6.62				6.8				12,584,462				3,416,097
54		FedEx Ground Package System, Inc.		Waco		TX			2012				100.0	%			150,710				1,078,000				7.15				6.9				12,551,368				4,234,777
55		FedEx Ground Package System, Inc.		Beltsville (Washington, DC)		MD			2001				100.0	%			148,881				1,452,000				9.75				9.8				14,512,355				-0-
56		Victory Packaging, L.P.		Fayetteville		NC			1997				100.0	%			148,000				502,000				3.39				2.4				5,451,629				-0-
57		FedEx Ground Package System, Inc.		El Paso		TX			2006				100.0	%			144,149				1,345,000				9.33				5.0				12,431,192				-0-
58		FedEx Ground Package System, Inc.		Cocoa		FL			2008				100.0	%			144,138				1,112,000				7.71				6.0				14,127,449				-0-
59		FedEx Ground Package System, Inc.		Cudahy (Milwaukee)		WI			2001				100.0	%			139,564				827,000				5.93				8.8				9,766,361				-0-
60		Challenger Lifts, Inc. (Snap-On Inc.)		Louisville		KY			2016				100.0	%			137,500				838,000				6.09				7.7				11,304,000				6,525,135
61		FedEx Ground Package System, Inc.		Richfield (Cleveland)		OH			2006				100.0	%			131,152				1,493,000				11.38				6.0				16,447,178				-0-
62		General Electric Company		Imperial (Pittsburgh)		PA			2016				100.0	%			125,860				1,321,000				10.50				7.3				19,950,000				11,199,661
63		FedEx Ground Package System, Inc.		Wheeling (Chicago)		IL			2003				100.0	%			123,000				1,272,000				10.34				8.7				18,982,474				-0-
64		FedEx Ground Package System, Inc.		Altoona		PA			2014				100.0	%			122,522				651,000				5.31				4.9				9,022,966				3,253,281
65		FedEx Corporation		Charleston		SC			2018				100.0	%			121,683				1,315,000				10.81				13.9				21,519,412				13,683,131
66		FedEx Corporation		Mechanicsville (Richmond)		VA			2001				100.0	%			112,799				541,000				4.80				4.6				7,792,395				-0-
67		FedEx Corporation		Orlando		FL			2008				100.0	%			110,638				666,000				6.02				9.2				8,774,524				-0-
68		Bunzl Distribution Oklahoma, Inc.		Oklahoma City		OK			2017				100.0	%			110,361				722,000				6.54				5.9				8,728,439				5,537,962
69		Style Crest, Inc.		Winston-Salem		NC			2002				100.0	%			106,507				387,000				3.63				2.5				7,246,325				-0-
70		FedEx Ground Package System, Inc.		Cheektowaga (Buffalo)		NY			2002				100.0	%			104,981				966,000				9.20				0.9				10,960,823				-0-
71		FedEx Ground Package System, Inc.		West Chester Twp. (Cincinnati)		OH			1999				100.0	%			103,818				543,000				5.23				4.9				5,733,686				-0-
72		FedEx Ground Package System, Inc.		Roanoke		VA			2013				100.0	%			103,402				755,000				7.30				4.6				10,200,000				4,395,246
73		Pittsburgh Glass Works, LLC		O’ Fallon (St. Louis)		MO			1994				100.0	%			102,135				442,000				4.33				2.8				4,245,913				-0-
74		FedEx Ground Package System, Inc.		Green Bay		WI			2013				100.0	%			99,102				468,000				4.72				4.7				6,570,000				2,640,432
75		Holland 1916 Inc.		Liberty (Kansas City)		MO			1998				100.0	%			95,898				349,000				3.64				0.7				7,397,881				-0-
76		FedEx Corporation		Jacksonville		FL			1999				100.0	%			95,883				533,000				5.56				10.7				6,396,958				-0-
77		FedEx Corporation		Tampa		FL			2006				100.0	%			95,662				603,000				6.30				9.2				7,857,120				-0-
78		FedEx Ground Package System, Inc.		Hanahan (Charleston)		SC			2005				100.0	%			91,776				675,000				7.35				0.2				7,614,653				465,749
79		National Oilwell Varco, Inc.		Houston		TX			2010				100.0	%			91,295				754,000				8.26				4.0				8,163,278				2,148,201
80		FedEx Corporation		Omaha		NE			1999				100.0	%			89,115				446,000				5.00				5.1				5,944,691				-0-
81		Joseph T. Ryerson and Son, Inc.		Elgin (Chicago)		IL			2002				100.0	%			89,052				506,000				5.68				1.3				6,977,442				-0-
82		FedEx Ground Package System, Inc.		Huntsville		AL			2005				100.0	%			88,653				605,000				6.82				7.8				6,661,819				370,903
83		CHEP USA, Inc.		Roanoke		VA			2007				100.0	%			83,000				500,000				6.02				6.4				7,463,672				-0-
84		FedEx Corporation		Bedford Heights (Cleveland)		OH			2007				100.0	%			82,269				436,000				5.30				9.9				6,919,836				-0-
85		RGH Enterprises, Inc. (Cardinal Health)		Halfmoon (Albany)		NY			2012				100.0	%			75,000				607,000				8.09				3.2				5,525,600				-0-
86		FedEx Corporation		Schaumburg (Chicago)		IL			1997				100.0	%			73,500				478,000				6.50				8.5				5,177,940				-0-
87		FedEx Corporation		Romulus (Detroit)		MI			1998				100.0	%			71,933				370,000				5.14				2.7				4,732,671				-0-
88		FedEx Ground Package System, Inc.		Denver		CO			2005				100.0	%			69,865				605,000				8.66				7.1				6,354,051				414,050
89		Tampa Bay Grand Prix		Tampa		FL			2005				100.0	%			68,385				297,000				4.34				2.0				5,677,982				-0-
90		Sherwin-Williams Company		Rockford		IL			2011				100.0	%			66,387				481,000				7.25				5.3				5,551,227				-0-
91		Various Tenants at Retail Shopping Center		Somerset		NJ			1970				100.0	%			64,220				807,000				12.57				na				3,111,777				-0-
92		The American Bottling Company (Keurig Dr Pepper)		Cincinnati		OH			2015				100.0	%			63,840				481,000				7.53				11.0				6,750,000				-0-
93		FedEx Corporation		Chattanooga		TN			2007				100.0	%			60,637				319,000				5.26				4.1				5,138,540				-0-
94		SOFIVE, Inc.		Carlstadt (New York, NY)		NJ			2001				100.0	%			60,400				558,000				9.24				6.3				4,942,402				1,580,180
95		FedEx Ground Package System, Inc.		Stewartville (Rochester)		MN			2013				100.0	%			60,398				372,000				6.16				4.7				5,220,000				2,115,962
96		Carrier Enterprise, LLC (United Technologies)		Richmond		VA			2004				100.0	%			60,000				324,000				5.40				0.2				4,768,309				-0-
97		FedEx Ground Package System, Inc.		Augusta		GA			2005				100.0	%			59,358				501,000				8.44				2.8				5,363,305				338,789
98		Kellogg Sales Company		Newington (Hartford)		CT			2001				100.0	%			54,812				329,000				6.00				1.4				3,494,108				-0-
99		Siemens Real Estate		Lebanon (Cincinnati)		OH			2012				100.0	%			51,130				464,000				9.07				5.6				4,452,425				-0-
100		FedEx Corporation		Charlottesville		VA			1999				100.0	%			48,064				329,000				6.85				8.9				4,455,701				-0-

 

 

Property Table

(unaudited)

 

									Fiscal Year							Square				Annual				Rent Per sf				Lease Exp. Term in				Undepreciated				Mortgage
No		Tenant		City (MSA)		State			Acquisition			Occup.				Footage				Rent				Occup.				Years				Cost				Balance
101		FedEx Ground Package System, Inc.		Corpus Christi		TX			2012				100.0	%			46,253			$	436,000			$	9.43				2.9			$	4,808,329			$	-0-
102		The American Bottling Company (Keurig Dr Pepper)		Tulsa		OK			2014				100.0	%			46,240				262,000				5.67				5.4				3,748,031				1,685,288
103		Heartland Coca-Cola Bottling Company, LLC (Coca-Cola)		Topeka		KS			2009				100.0	%			40,000				332,000				8.30				3.0				3,679,843				860,364
104		Collins Aerospace Systems (United Technologies)		Rockford		IL			2015				100.0	%			38,833				364,000				9.37				8.8				5,100,000				-0-
105		Foundation Building Materials, LLC		Urbandale (Des Moines)		IA			1994				100.0	%			36,270				172,000				4.74				9.3				2,523,644				-0-
106		FedEx Corporation		Richland (Jackson)		MS			1994				100.0	%			36,000				120,000				3.33				5.5				1,900,691				-0-
107		FedEx Corporation		Punta Gorda		FL			2007				100.0	%			34,624				284,000				8.20				8.8				4,133,510				-0-
108		FedEx Corporation		Lakeland		FL			2006				100.0	%			32,105				155,000				4.83				9.2				2,043,226				-0-
109		FedEx Corporation		Augusta		GA			2006				100.0	%			30,184				121,000				4.01				4.2				1,977,779				-0-
110		Graybar Electric Company		Ridgeland (Jackson)		MS			1993				100.0	%			26,340				109,000				4.14				0.8				1,885,254				-0-
111		Sherwin-Williams Company		Burr Ridge (Chicago)		IL			1997				100.0	%			12,500				162,000				12.96				3.1				1,692,901				-0-
		Total as of 9/30/18											99.6	%			21,173,581			$	126,792,000			$	6.01				8.1			$	1,719,567,354		(A)	$	719,768,355
		Acquisitons Subsequent to 9/30/18
112		FedEx Ground Package System, Inc.		Trenton		NJ			2019				100.0	%			347,145				5,328,000				15.35				13.8
		Pro Forma Total with Acquisitons Subsequent to 9/30/18											99.6	%			21,520,726			$	132,120,000			$	6.16				8.2

 

(A) Does not include unamortized debt issuance costs of $8,222,706.

 

 

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 we believe 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, we consider 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 it also adjusts to exclude for the effects of acquisition costs and costs associated with the redemption of preferred stock. 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 our 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, we calculate 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 sale of 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 and costs associated with the redemption of preferred stock.
	●	AFFO is calculated as Core FFO, excluding lease termination income, net gain or loss on sale of securities transactions, stock based compensation expense, depreciation of corporate office tenant improvements, amortization of deferred financing costs, non-recurring other expense, non-cash U.S. GAAP straight-line rent adjustments and less recurring capital expenditures. Recurring capital expenditures are defined as all capital expenditures that are recurring in nature, 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 redemption of preferred stock, 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, gain on sale of real estate investments, and lease termination income. 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 operating 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, costs associated with the redemption of preferred stock, interest expense, including amortization of financing costs, depreciation and amortization, and plus losses (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 (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 us, may not be comparable to similarly titled, but variously calculated, measures of other REITs.

 

 

FOR IMMEDIATE RELEASE	November 28, 2018
	Contact: Susan Jordan
	732-577-9996

 

MONMOUTH REAL ESTATE REPORTS RESULTS FOR

THE FISCAL YEAR ENDED AND THE FOURTH QUARTER ENDED SEPTEMBER 30, 2018

 

FREEHOLD, NJ, November 28, 2018........ Monmouth Real Estate Investment Corporation (NYSE:MNR) reported Net Income Attributable to Common Shareholders of $38,815,000 or $0.49 per diluted share for the fiscal year ended September 30, 2018 as compared to $22,942,000 or $0.32 per diluted share for the fiscal year ended September 30, 2017, representing an increase in Net Income Attributable to Common Shareholders per share of 53.1%. The increase in Net Income Attributable to Common Shareholders was mostly attributable to the $18,541,000 increase in Net Operating Income (NOI). Funds From Operations (FFO) were $69,842,000 or $0.89 per diluted share for the fiscal year ended September 30, 2018 as compared to $54,443,000 or $0.75 per diluted share for the fiscal year ended September 30, 2017, representing an increase in FFO per share of 18.7%. Core Funds from Operations (Core FFO) were $69,842,000 or $0.89 per diluted share for the fiscal year ended September 30, 2018 as compared to $57,088,000 or $0.79 per diluted share for the fiscal year ended September 30, 2017, representing an increase in Core FFO per share of 12.7%. Adjusted Funds from Operations (AFFO), for the fiscal year ended September 30, 2018 were $68,375,000 or $0.87 per diluted share versus $54,880,000 or $0.76 per diluted share for the fiscal year ended September 30, 2017, representing an increase in AFFO per share of 14.5%.

 

Net Income Attributable to Common Shareholders for the three months ended September 30, 2018 was $7,782,000 or $0.10 per diluted share as compared to $6,726,000 or $0.09 per diluted share for the three months ended September 30, 2017, representing an increase in Net Income Attributable to Common Shareholders per share of 11.1%. FFO and Core FFO were $18,090,000 or $0.22 per diluted share for the three months ended September 30, 2018 as compared to $15,395,000 or $0.21 per diluted share for the three months ended September 30, 2017, representing an increase in FFO per share and Core FFO per share of 4.8%. AFFO for the three months ended September 30, 2018 was $17,708,000 or $0.22 per diluted share versus $15,470,000 or $0.21 per diluted share for the three months ended September 30, 2017, representing an increase in AFFO per share of 4.8%.

 

A summary of significant financial information for the three and twelve months ended September 30, 2018 and 2017 is as follows:

 

		Three Months Ended September 30,
		2018				2017
Rental Revenue		$	30,306,000			$	26,368,000
Reimbursement Revenue		$	6,295,000			$	4,789,000
Net Operating Income (NOI) (1)		$	30,174,000			$	26,047,000
Total Expenses		$	19,472,000			$	16,294,000
Dividend and Interest Income		$	3,740,000			$	2,300,000
Gain on Sale of Securities Transactions		$	-0-			$	18,000
Net Income		$	12,160,000			$	10,262,000
Net Income Attributable to Common Shareholders		$	7,782,000			$	6,726,000
Net Income Attributable to Common Shareholders Per Diluted Common Share		$	0.10			$	0.09
FFO (1)		$	18,090,000			$	15,395,000
FFO per Diluted Common Share (1)		$	0.22			$	0.21
Core FFO (1)		$	18,090,000			$	15,395,000
Core FFO per Diluted Common Share (1)		$	0.22			$	0.21
AFFO (1)		$	17,708,000			$	15,470,000
AFFO per Diluted Common Share (1)		$	0.22			$	0.21
Dividends Declared per Common Share		$	0.17			$	0.16
Weighted Avg. Diluted Common Shares Outstanding			80,889,000				74,800,000

 

		Twelve Months Ended September 30,
		2018				2017
Rental Revenue		$	115,864,000			$	97,660,000
Reimbursement Revenue		$	23,298,000			$	18,726,000
Lease Termination Income		$	210,000			$	-0-
Net Operating Income (NOI) (1)		$	114,772,000			$	96,231,000
Total Expenses		$	71,734,000			$	59,602,000
Dividend and Interest Income		$	13,120,000			$	6,931,000
Gain on Sale of Securities Transactions		$	111,000			$	2,312,000
Gain on Sale of Real Estate Investments		$	7,485,000			$	-0-
Net Income		$	56,006,000			$	40,271,000
Net Income Attributable to Common Shareholders		$	38,815,000			$	22,942,000
Net Income Attributable to Common Shareholders Per Diluted Common Share		$	0.49			$	0.32
FFO (1)		$	69,842,000			$	54,443,000
FFO per Diluted Common Share (1)		$	0.89			$	0.75
Core FFO (1)		$	69,842,000			$	57,088,000
Core FFO per Diluted Common Share (1)		$	0.89			$	0.79
AFFO (1)		$	68,375,000			$	54,880,000
AFFO per Diluted Common Share (1)		$	0.87			$	0.76
Dividends Declared per Common Share		$	0.68			$	0.64
Weighted Avg. Diluted Common Shares Outstanding			78,802,000				72,250,000

 

 

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

 

		September 30, 2018				September 30, 2017
Net Real Estate Investments		$	1,512,513,000			$	1,260,830,000
Securities Available for Sale at Fair Value		$	154,921,000			$	123,765,000
Total Assets		$	1,718,378,000			$	1,443,038,000
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs		$	711,546,000			$	591,364,000
Loans Payable		$	186,609,000			$	120,091,000
Total Shareholders’ Equity		$	797,906,000			$	712,866,000

 

Michael P. Landy, President and CEO, commented on the results for the fiscal year 2018,

 

“Fiscal 2018 was a very productive year for Monmouth. We executed exceptionally well and our achievements were many. During the year, we accomplished the following:

 

Solid Financial Results

 

	●	Generated 53% per share growth in Net Income Attributable to Common Shareholders
	●	Increased our per share FFO to $0.89, representing an 18.7% increase over the prior year
	●	Increased our per share AFFO to $0.87, representing a 14.5% increase over the prior year
	●	Increased our Gross Revenue by 23.5% to $152.3 million
	●	Increased our Net Operating Income by 19.3% to $114.8 million
	●	Increased our common stock dividend by 6.3% on October 2, 2017, representing our second dividend increase in three years

 

Strong Growth Record and Solid Pipeline

 

	●	Acquired 2.7 million square feet of high-quality industrial space for $282.3 million, generating $17.4 million in rental revenue, comprising seven brand new Class A, built-to-suit properties, all leased long-term, of which 85% is leased to investment-grade tenants
	●	Completed two expansions totaling $3.5 million, generating $367,000 in additional rental revenue, and resulting in 10-year lease extensions for both properties
	●	Increased our gross leasable area (GLA) by 12.7% year-over-year, to 21.2 million square feet
	●	Entered into commitments to acquire three new build-to-suit properties containing approximately 745,000 total square feet for a total cost of $154.0 million, of which one 347,145 square foot property was acquired for $85.2 million subsequent to fiscal yearend

 

Strong Portfolio Performance

 

	●	Renewed 11 of the 16 leases scheduled to expire in fiscal 2018, including one short term renewal
	●	Renewed 10 leases comprising 972,000 square feet for a weighted-average lease term of 6.8 years and resulting in an increase in the weighted-average lease rate of 4.1% on a U.S. GAAP straight-line basis and a 2.8% increase on a cash basis
	●	Sold four properties generating a realized gain of $7.5 million on a GAAP basis, and a $1.2 million gain over our original undepreciated cost
	●	Increased our sector-leading occupancy rate by 30 basis points to 99.6% as of the current fiscal yearend, up from 99.3% as of the prior fiscal yearend, representing our third consecutive year with above 99% occupancy
	●	Extended our weighted average lease maturity to 8.1 years as of the current fiscal yearend from 7.9 years as of the prior fiscal yearend

 

Compelling Returns and Strengthened Capitalization

 

	●	Achieved an 8% total shareholder return for fiscal 2018, versus a 4% total return for the MSCI US REIT Index during the same period
	●	Achieved $2.5 billion in total market capitalization as of September 30, 2018, representing a 17% increase over the prior year
	●	Raised $90.0 million in equity through our Dividend Reinvestment and Stock Purchase Plan
	●	Raised $40.1 million in net proceeds through our 6.125% Series C Perpetual Preferred Stock ATM Program
	●	Extended the weighted-average debt maturity on our fixed-rate debt to 11.7 years
	●	Reduced the weighted-average interest rate on our fixed-rate debt to 4.1% from 4.2%
	●	Reduced our General and Administrative expenses as a percentage of gross revenue by 8% to 5.8% for fiscal year 2018, and as a percentage of undepreciated assets by 4% to 46 basis points.”

 

 

Mr. Landy stated, “On behalf of the hard-working team at Monmouth, I am happy to report these excellent results. The above metrics reflect a strong Company that has continued to enhance its position over the year. Our business model of investing in well-located, modern industrial buildings, leased primarily to investment-grade tenants, has provided our shareholders with reliable returns throughout the business cycle. The high-quality of our portfolio is evidenced by our sector-leading 99.6% occupancy rate.”

 

“During fiscal 2018, we grew our gross leasable area (GLA) by 13% through the acquisition of seven brand-new Class A, built-to-suit properties for an aggregate cost of $282.3 million. We also completed two property expansions which resulted in 10-year lease extensions for both properties. Approximately 80% of our total rental revenue is generated from investment-grade tenants with the remaining 20% secured by very strong unrated companies. Our property portfolio has a weighted-average building age of 8.7 years, and a weighted-average lease maturity of 8.1 years. We have assembled a modern industrial portfolio that contains large amounts of excess land to accommodate future growth. These are highly-automated industrial assets that are mission-critical to our tenants’ operations.”

 

“During the fiscal year, we raised $90 million in equity capital through our Dividend Reinvestment and Stock Purchase Plan. Of this amount, a total of $12.9 million in dividends was reinvested, representing a 24% participation rate. We also sold 1.65 million shares of our 6.125% Series C preferred stock through our ATM program generating net proceeds of $40.1 million. Subsequent to fiscal yearend, in October, we completed our first common stock offering since 2014, with the sale of 9.2 million shares that generated net proceeds of $132.3 million. Looking ahead, Monmouth is very well capitalized to continue to execute our qualitative growth strategy.”

 

“Subsequent to fiscal yearend, we also acquired a newly constructed built-to-suit property containing 347,000 square feet for $85.2 million. This brings our current portfolio to a total of 112 properties containing 21.5 million square feet, geographically diversified across 30 states. Our acquisition pipeline now comprises two brand new build-to-suit, industrial buildings that are currently being developed in Georgia and North Carolina. These two pipeline transactions total approximately 398,000 square feet for an aggregate purchase price of $68.7 million, and are scheduled to close during the first quarter of fiscal 2019 and the first half of fiscal 2020.”

 

“At the turn of the century, we anticipated that with the widespread growth of ecommerce, our property type would gain market share from the retail sector. Today, demand for industrial assets has never been stronger. We are now in our fourth consecutive year with an occupancy rate above 99%. Fiscal 2019 is poised to be another successful year at Monmouth. We look forward to reporting on our progress throughout the year.”

 

Monmouth Real Estate Investment Corporation will host its Fourth Quarter and FY 2018 Financial Results Webcast and Conference Call on Thursday, November 29, 2018 at 10:00 a.m. Eastern Time. Senior management will discuss the results, current market conditions and future outlook.

 

Our Fourth Quarter and FY 2018 financial results being released herein will be available on our website at www.mreic.reit in the Investor Relations section, under Filings and Reports.

 

To participate in the Webcast, select the 4Q2018 and Fiscal Yearend Webcast and Earnings Call “Link to Webcast” on the homepage of our 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 1-877-510-5852 (domestically) or 1-412-902-4138 (internationally).

 

The replay of the conference call will be available at 12:00 p.m. Eastern Time on Thursday, November 29, 2018. It will be available until February 1, 2019, and can be accessed by dialing toll free 1-877-344-7529 (domestically) and 1-412-317-0088 (internationally) and entering the passcode 10123229. A transcript of the call and the webcast replay will be available at our 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 world. We specialize 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 112 properties containing a total of approximately 21.5 million rentable square feet, geographically diversified across 30 states. In addition, we own 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 our current expectations and involve various risks and uncertainties. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we 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 our annual report on Form 10-K and described from time to time in our other filings with the SEC. We undertake 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 and costs associated with the redemption of preferred stock. We define AFFO as Core FFO, excluding lease termination income, net gain or loss on sale of securities transactions, stock based compensation expense, depreciation of corporate office tenant improvements, amortization of deferred financing costs, non-recurring other expense, non-cash U.S. GAAP straight-line rent adjustments and less recurring capital expenditures. We define recurring capital expenditures as all capital expenditures that are recurring in nature, 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 taxes 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 our 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 us, may not be comparable to similarly titled measures reported by other REITs.

 

The following is a reconciliation of our U.S. GAAP Net Income to our FFO, Core FFO and AFFO for the three and twelve months ended September 30, 2018 and 2017:

 

		Three Months Ended								Twelve Months Ended
		9/30/2018				9/30/2017				9/30/2018				9/30/2017
Net Income Attributable to Common Shareholders		$	7,782,000			$	6,726,000			$	38,815,000			$	22,942,000
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)			9,632,000				8,146,000				36,018,000				29,479,000
Plus: Amortization of Intangible Assets			455,000				301,000				1,614,000				1,072,000
Plus: Amortization of Capitalized Lease Costs			221,000				222,000				880,000				855,000
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments			-0-				-0-				(7,485,000	)			95,000
FFO Attributable to Common Shareholders			18,090,000				15,395,000				69,842,000				54,443,000
Plus: Acquisition Costs			-0-				-0-				-0-				178,000
Plus: Redemption of Preferred Stock			-0-				-0-				-0-				2,467,000
Core FFO Attributable to Common Shareholders			18,090,000				15,395,000				69,842,000				57,088,000
Plus: Stock Compensation Expense			95,000				184,000				434,000				625,000
Plus: Depreciation of Corporate Office Capitalized Costs			39,000				39,000				158,000				157,000
Plus: Amortization of Financing Costs			310,000				285,000				1,220,000				1,234,000
Less: Lease Termination Income			-0-				-0-				(210,000	)			-0-
Less: Gain on Sale of Securities Transactions			-0-				(18,000	)			(111,000	)			(2,312,000	)
Less: Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment			(615,000	)			(103,000	)			(1,973,000	)			(1,028,000	)
Less: Recurring Capital Expenditures			(211,000	)			(312,000	)			(985,000	)			(884,000	)
AFFO Attributable to Common Shareholders		$	17,708,000			$	15,470,000			$	68,375,000			$	54,880,000

 

The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the twelve months ended September 30, 2018 and 2017:

 

		Twelve Months Ended
		9/30/2018				9/30/2017
Operating Activities		$	85,529,000			$	73,868,000
Investing Activities			(332,513,000	)			(339,071,000	)
Financing Activities			246,083,000				179,680,000

 

# # # # #