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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 13, 2023
Medalist Diversified REIT, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Maryland |
|
001-38719 |
|
47-5201540 |
(State or other jurisdiction of incorporation |
|
(Commission File Number) |
|
(I.R.S. Employer |
P.O. Box 8436
Richmond, VA, 23226
(Address of principal executive offices)
(804) 338-7708
(Registrant’s telephone number, including area code)
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
|
Name of each Exchange on |
|
Trading |
Common Stock, $0.01 par value |
|
Nasdaq Capital Market |
|
MDRR |
8.0% Series A Cumulative Redeemable Preferred Stock, $0.01 par value |
|
Nasdaq Capital Market |
|
MDRRP |
Item 2.02Results of Operations and Financial Condition
The information set forth in Item 7.01 with respect to the Financial Supplement is incorporated by reference into this Item 2.02.
Item 7.01Regulation FD Disclosure
On November 13, 2023, Medalist Diversified REIT, Inc., a Maryland corporation (the “Company”) released its financial supplement for the three and nine months ended September 30, 2023 (the “Financial Supplement”). A copy of the Financial Supplement is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference and is also available on the “Investors” section of the Company’s website at www.medalistreit.com. In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any registration statement or other document filed under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01Financial Statements and Exhibits
(d) Exhibits
Exhibit Number |
|
Description of Exhibit |
99.1 |
|
|
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL Document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
MEDALIST DIVERSIFIED REIT, INC. |
|
|
|
|
Dated: November 13, 2023 |
By: |
/s/ C. Brent Winn, Jr. |
|
|
C. Brent Winn, Jr. |
|
|
Chief Financial Officer |
Exhibit 99.1
Financial Supplement
Table of Contents
Definitions
Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022
Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) for the three and nine months ended September 30, 2023 and 2022
NOI Reconciliations for the three and nine months ended September 30, 2023 and 2022
Same Property NOI Reconciliation for the three and nine months ended September 30, 2023 and 2022
EBITDA Reconciliations for the three and nine months ended September 30, 2023 and 2022
Same Property Revenues
Same Property Statistics – Retail and Flex Properties
Weighted Average Lease Term
Mortgage Loan Data
Weighted Average Mortgage Payable Maturity
Definitions
Weighted Average Mortgage Payable Interest Rate Investors and analysts following the real estate industry utilize certain financial measures as supplemental performance measures, including net operating income ("NOI"), Same Property NOI, earnings before interest, taxes, depreciation and amortization for real estate ("EBITDA"), Funds from operations (“FFO”) and Adjusted FFO (“AFFO”).
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, EBITDA, and FFO and AFFO, given their wide use by and relevance to investors and analysts, appropriate supplemental performance measures. NOI provides a measure of rental operations, and does not include depreciation and amortization, interest expense and non-property specific expenses such as corporate-wide interest expense and general and administrative expenses. As used herein, we calculate the following non-U.S. GAAP measures as follows:
• NOI from property operations is calculated as net loss, as defined by U.S. GAAP, plus preferred dividends, legal, accounting and other professional fees, corporate general and administrative expenses, depreciation, amortization of intangible assets and liabilities, net amortization of above and below market leases, interest expense, including amortization of financing costs, share based compensation expense, loss on impairment, impairment of assets held for sale, loss (gain) on disposition of investment properties, loss on extinguishment of debt, other income and other expenses. 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. NOI presented in this financial supplement includes an adjustment to the Company’s net loss for amortization of above and below market leases and, as a result, varies from NOI presented in the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023 and 2022.
• Same Property NOI is calculated as the NOI of all properties owned during the entire periods presented with the exclusion of any properties acquired or sold during the periods presented.
• EBITDA is net income, as defined by U.S. GAAP, plus preferred dividends, interest expense, including amortization of financing costs, depreciation and amortization, net amortization of acquired above and below market lease revenue, loss on impairment, impairment of assets held for sale, loss (gain) on disposition of investment properties, and loss on extinguishment of debt.
NOI, Same Property NOI, Same Property Revenues, and 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, capital expenditures and payment of dividends and distributions. NOI, Same Property NOI, and EBITDA should not be considered as substitutes for net income applicable to common stockholders (calculated in accordance with U.S. GAAP) as a measure of results of operations or cash flows (calculated in accordance with U.S. GAAP) as a measure of liquidity. NOI, Same Property NOI, and Adjusted EBITDA, as currently calculated by us, may not be comparable to similarly titled, but variously calculated, measures of other REITs.
FFO and AFFO, non-GAAP measures, are an alternative measure of operating performance, specifically as it relates to results of operations and liquidity. FFO is computed in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) in its March 1995 White Paper (as amended in November 1999, April 2002 and December 2018). As defined by NAREIT, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and losses on extinguishment of debt, plus real estate related depreciation and amortization (excluding amortization of loan origination costs and above and below market leases). In addition to FFO, AFFO, excludes non-cash items such as amortization of loans and above and below market leases, unbilled rent arising from applying straight line rent revenue recognition and share-based compensation expenses. Additionally, the impact of capital expenditures, including tenant improvement and leasing commissions, net of reimbursements of such expenditures by property escrow funds, is included in the calculation of AFFO.
Medalist Diversified REIT, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
|
|
|
September 30, 2023 |
|
|
December 31, 2022 |
|
|
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(Unaudited) |
|
|
|
||
ASSETS |
|
|
|
|
|
|
|
Investment properties, net |
|
$ |
74,875,809 |
|
$ |
76,514,952 |
|
Cash |
|
|
3,015,859 |
|
|
3,922,136 |
|
Restricted cash |
|
|
1,734,297 |
|
|
1,740,717 |
|
Rent and other receivables, net of allowance of $0 and $47,109, as of September 30, 2023 and December 31, 2022, respectively |
|
|
94,782 |
|
|
402,434 |
|
Unbilled rent |
|
|
1,097,570 |
|
|
1,022,153 |
|
Intangible assets, net |
|
|
2,956,080 |
|
|
3,748,706 |
|
Other assets |
|
|
647,268 |
|
|
564,306 |
|
Total Assets |
|
$ |
84,421,665 |
|
$ |
87,915,404 |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
1,956,415 |
|
$ |
1,198,072 |
|
Intangible liabilities, net |
|
|
1,946,772 |
|
|
2,234,113 |
|
Line of credit, short term, net |
|
|
1,000,000 |
|
|
— |
|
Mortgages payable, net |
|
|
60,616,944 |
|
|
61,340,259 |
|
Mandatorily redeemable preferred stock, net |
|
|
4,630,824 |
|
|
4,450,521 |
|
Total Liabilities |
|
$ |
70,150,955 |
|
$ |
69,222,965 |
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
Common stock, 2,218,810 and 2,219,803 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively |
|
$ |
22,188 |
|
$ |
22,198 |
|
Additional paid-in capital |
|
|
51,514,209 |
|
|
51,519,198 |
|
Offering costs |
|
|
(3,350,946) |
|
|
(3,350,946) |
|
Accumulated deficit |
|
|
(35,341,200) |
|
|
(30,939,020) |
|
Total Stockholders' Equity |
|
|
12,844,251 |
|
|
17,251,430 |
|
Noncontrolling interests - Hanover Square Property |
|
|
109,944 |
|
|
127,426 |
|
Noncontrolling interests - Parkway Property |
|
|
480,766 |
|
|
470,685 |
|
Noncontrolling interests - Operating Partnership |
|
|
835,749 |
|
|
842,898 |
|
Total Equity |
|
$ |
14,270,710 |
|
$ |
18,692,439 |
|
Total Liabilities and Equity |
|
$ |
84,421,665 |
|
$ |
87,915,404 |
|
See notes to condensed consolidated financial statements
Medalist Diversified REIT, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail center property revenues |
|
$ |
1,930,494 |
|
$ |
1,850,797 |
|
$ |
5,725,942 |
|
$ |
4,999,089 |
|
Flex center property revenues |
|
|
658,246 |
|
|
610,967 |
|
|
1,839,675 |
|
|
1,834,200 |
|
Hotel property room revenues |
|
|
— |
|
|
376,560 |
|
|
— |
|
|
1,494,836 |
|
Hotel property other revenues |
|
|
— |
|
|
2,749 |
|
|
— |
|
|
12,813 |
|
Total Revenue |
|
$ |
2,588,740 |
|
$ |
2,841,073 |
|
$ |
7,565,617 |
|
$ |
8,340,938 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail center property operating expenses |
|
$ |
466,828 |
|
$ |
491,889 |
|
$ |
1,512,776 |
|
$ |
1,384,061 |
|
Flex center property operating expenses |
|
|
180,164 |
|
|
189,720 |
|
|
535,065 |
|
|
511,771 |
|
Hotel property operating expenses |
|
|
— |
|
|
589,311 |
|
|
— |
|
|
1,302,114 |
|
Bad debt expense |
|
|
5,669 |
|
|
— |
|
|
49,868 |
|
|
12,946 |
|
Share based compensation expenses |
|
|
— |
|
|
— |
|
|
— |
|
|
233,100 |
|
Legal, accounting and other professional fees |
|
|
237,562 |
|
|
284,463 |
|
|
1,228,262 |
|
|
1,112,878 |
|
Corporate general and administrative expenses |
|
|
162,649 |
|
|
99,323 |
|
|
364,868 |
|
|
335,538 |
|
Management restructuring expenses |
|
|
1,452,904 |
|
|
— |
|
|
1,846,329 |
|
|
— |
|
Loss on impairment |
|
|
— |
|
|
— |
|
|
50,859 |
|
|
36,670 |
|
Impairment of assets held for sale |
|
|
— |
|
|
— |
|
|
— |
|
|
175,671 |
|
Other expense |
|
|
— |
|
|
227,164 |
|
|
— |
|
|
227,164 |
|
Depreciation and amortization |
|
|
1,149,664 |
|
|
1,231,513 |
|
|
3,459,262 |
|
|
3,509,165 |
|
Total Operating Expenses |
|
|
3,655,440 |
|
|
3,113,383 |
|
|
9,047,289 |
|
|
8,841,078 |
|
Loss on disposal of investment property |
|
|
— |
|
|
(389,471) |
|
|
— |
|
|
(389,471) |
|
Loss on extinguishment of debt |
|
|
— |
|
|
(219,532) |
|
|
— |
|
|
(389,207) |
|
Operating loss |
|
|
(1,066,700) |
|
|
(881,313) |
|
|
(1,481,672) |
|
|
(1,278,818) |
|
Interest expense |
|
|
900,182 |
|
|
989,255 |
|
|
2,612,642 |
|
|
2,704,835 |
|
Net Loss from Operations |
|
|
(1,966,882) |
|
|
(1,870,568) |
|
|
(4,094,314) |
|
|
(3,983,653) |
|
Other income |
|
|
20,522 |
|
|
126,434 |
|
|
52,249 |
|
|
251,197 |
|
Net Loss |
|
|
(1,946,360) |
|
|
(1,744,134) |
|
|
(4,042,065) |
|
|
(3,732,456) |
|
Less: Net (loss) income attributable to Hanover Square Property noncontrolling interests |
|
|
(225) |
|
|
8,468 |
|
|
(1,482) |
|
|
15,421 |
|
Less: Net income attributable to Parkway Property noncontrolling interests |
|
|
2,199 |
|
|
16,782 |
|
|
10,081 |
|
|
31,027 |
|
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests |
|
|
493 |
|
|
(14,926) |
|
|
(2,878) |
|
|
(20,275) |
|
Net Loss Attributable to Medalist Common Shareholders |
|
$ |
(1,948,827) |
|
$ |
(1,754,458) |
|
$ |
(4,047,786) |
|
$ |
(3,758,629) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share from operations - basic and diluted |
|
$ |
(0.88) |
|
$ |
(0.80) |
|
$ |
(1.82) |
|
$ |
(1.77) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares - basic and diluted |
|
|
2,218,810 |
|
|
2,179,993 |
|
|
2,219,262 |
|
|
2,121,540 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per common share |
|
$ |
— |
|
$ |
0.16 |
|
$ |
0.16 |
|
$ |
0.48 |
|
See notes to condensed consolidated financial statements
Medalist Diversified REIT, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Nine months ended September 30, |
||||
|
|
2023 |
|
2022 |
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(4,042,065) |
|
$ |
(3,732,456) |
|
|
|
|
|
|
|
Adjustments to reconcile consolidated net loss to net cash flows from operating activities |
|
|
|
|
|
|
Depreciation |
|
|
2,768,969 |
|
|
2,471,365 |
Amortization |
|
|
690,293 |
|
|
1,037,800 |
Loan cost amortization |
|
|
80,967 |
|
|
80,607 |
Mandatorily redeemable preferred stock issuance cost and discount amortization |
|
|
180,303 |
|
|
165,338 |
Above (below) market lease amortization, net |
|
|
(211,904) |
|
|
(146,068) |
Bad debt expense |
|
|
49,868 |
|
|
12,946 |
Share-based compensation |
|
|
— |
|
|
233,100 |
Impairment of assets held for sale |
|
|
— |
|
|
175,671 |
Loss on impairment |
|
|
50,859 |
|
|
36,670 |
Loss on extinguishment of debt |
|
|
— |
|
|
389,207 |
Loss on disposal of investment property |
|
|
— |
|
|
389,471 |
|
|
|
|
|
|
|
Changes in assets and liabilities |
|
|
|
|
|
|
Rent and other receivables, net |
|
|
257,784 |
|
|
211,376 |
Unbilled rent |
|
|
(84,852) |
|
|
(112,767) |
Other assets |
|
|
(82,962) |
|
|
(147,130) |
Accounts payable and accrued liabilities |
|
|
758,343 |
|
|
608,351 |
Net cash flows from operating activities |
|
|
415,603 |
|
|
1,673,481 |
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment property acquisitions |
|
|
— |
|
|
(10,279,714) |
Capital expenditures |
|
|
(1,144,354) |
|
|
(651,653) |
Cash received from disposal of investment properties |
|
|
— |
|
|
2,011,462 |
Net cash flows from investing activities |
|
|
(1,144,354) |
|
|
(8,919,905) |
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and distributions paid |
|
|
(374,665) |
|
|
(1,116,660) |
Cash paid for lender fees associated with Clemson Best Western sale |
|
|
— |
|
|
(84,900) |
Proceeds from line of credit, short term |
|
|
1,000,000 |
|
|
— |
Proceeds from mortgages payable, net |
|
|
— |
|
|
18,477,304 |
Repayment of mortgages payable |
|
|
(804,282) |
|
|
(11,692,557) |
Proceeds from sales of common stock, net of capitalized offering costs |
|
|
— |
|
|
1,538,887 |
Repurchases of common stock, including costs and fees |
|
|
— |
|
|
(286,543) |
Retire fractional shares resulting from reverse stock split |
|
|
(4,999) |
|
|
— |
Net cash flows from financing activities |
|
|
(183,946) |
|
|
6,835,531 |
|
|
|
|
|
|
|
DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
(912,697) |
|
|
(410,893) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period |
|
|
5,662,853 |
|
|
7,383,977 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period |
|
$ |
4,750,156 |
|
$ |
6,973,084 |
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, end of period, shown in condensed consolidated balance sheets |
|
|
3,015,859 |
|
|
4,863,963 |
RESTRICTED CASH including assets restricted for capital and operating reserves and tenant deposits, end of period, shown in condensed consolidated balance sheets |
|
|
1,734,297 |
|
|
2,109,121 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period shown in the condensed consolidated statements of cash flows |
|
$ |
4,750,156 |
|
$ |
6,973,084 |
|
|
|
|
|
|
|
Supplemental Disclosures and Non-Cash Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash transactions: |
|
|
|
|
|
|
Interest paid |
|
$ |
2,148,248 |
|
$ |
2,508,654 |
|
|
|
|
|
|
|
Non-cash transactions: |
|
|
|
|
|
|
Release of restricted cash related to sale of Clemson Best Western Property |
|
$ |
— |
|
$ |
1,455,777 |
Capital expenditures accrued |
|
$ |
— |
|
$ |
269,246 |
See notes to condensed consolidated financial statements
Medalist Diversified REIT
Funds from Operations and Adjusted Funds from Operations
For the three and nine months ended September 30, 2023 and 2022
(Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
Funds from operations |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,946,360) |
|
$ |
(1,744,134) |
|
$ |
(4,042,065) |
|
$ |
(3,732,456) |
Depreciation of tangible real property assets |
|
|
680,938 |
|
|
671,167 |
|
|
2,036,048 |
|
|
1,890,428 |
Depreciation of tenant improvements |
|
|
211,706 |
|
|
209,112 |
|
|
624,762 |
|
|
509,558 |
Amortization of leasing commissions |
|
|
40,733 |
|
|
26,942 |
|
|
108,159 |
|
|
71,379 |
Amortization of intangible assets |
|
|
216,287 |
|
|
324,292 |
|
|
690,293 |
|
|
1,037,800 |
Loss on disposal of investment property |
|
|
— |
|
|
389,471 |
|
|
— |
|
|
389,471 |
Loss on impairment |
|
|
- |
|
|
— |
|
|
50,859 |
|
|
36,670 |
Impairment of assets held for sale |
|
|
— |
|
|
— |
|
|
— |
|
|
175,671 |
Loss on extinguishment of debt |
|
|
— |
|
|
219,532 |
|
|
— |
|
|
389,207 |
Funds from operations |
|
$ |
(796,696) |
|
$ |
96,382 |
|
$ |
(531,944) |
|
$ |
767,728 |
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
Adjusted funds from operations |
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations |
|
$ |
(796,696) |
|
$ |
96,382 |
|
$ |
(531,944) |
|
$ |
767,728 |
Amortization of above market leases |
|
|
23,717 |
|
|
33,862 |
|
|
75,437 |
|
|
159,388 |
Amortization of below market leases |
|
|
(88,586) |
|
|
(115,679) |
|
|
(287,341) |
|
|
(305,456) |
Straight line rent |
|
|
(10,393) |
|
|
(54,392) |
|
|
(84,852) |
|
|
(112,842) |
Capital expenditures |
|
|
(313,395) |
|
|
(158,949) |
|
|
(1,144,354) |
|
|
(651,653) |
Increase in fair value of interest rate cap |
|
|
(12,337) |
|
|
(126,127) |
|
|
(24,674) |
|
|
(246,063) |
Amortization of loan issuance costs |
|
|
26,989 |
|
|
26,990 |
|
|
80,967 |
|
|
80,607 |
Amortization of preferred stock discount and offering costs |
|
|
61,408 |
|
|
56,311 |
|
|
180,303 |
|
|
165,338 |
Share-based compensation |
|
|
— |
|
|
— |
|
|
— |
|
|
233,100 |
Bad debt expense |
|
|
5,669 |
|
|
— |
|
|
49,868 |
|
|
12,946 |
Adjusted Funds from operations (AFFO) |
|
$ |
(1,103,624) |
|
$ |
(241,602) |
|
$ |
(1,686,590) |
|
$ |
103,093 |
NOI Reconciliation
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
||||
Net Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(1,946,360) |
|
$ |
(1,744,134) |
|
$ |
(4,042,065) |
|
$ |
(3,732,456) |
Plus: Preferred dividends, including amortization of capitalized issuance costs |
|
|
161,408 |
|
|
156,311 |
|
|
480,303 |
|
|
465,338 |
Plus: Legal, accounting and other professional fees |
|
|
237,562 |
|
|
284,463 |
|
|
1,228,262 |
|
|
1,112,878 |
Plus: Corporate general and administrative expenses |
|
|
162,649 |
|
|
99,323 |
|
|
364,868 |
|
|
335,538 |
Plus: Depreciation expense |
|
|
933,377 |
|
|
907,221 |
|
|
2,768,969 |
|
|
2,471,365 |
Plus: Amortization of intangible assets |
|
|
216,287 |
|
|
324,292 |
|
|
690,293 |
|
|
1,037,800 |
Less: Net amortization of above and below market leases |
|
|
(64,869) |
|
|
(81,817) |
|
|
(211,904) |
|
|
(146,068) |
Plus: Interest expense, including amortization of capitalized loan issuance costs |
|
|
738,774 |
|
|
832,944 |
|
|
2,132,339 |
|
|
2,239,497 |
Plus: Share based compensation expense |
|
|
— |
|
|
— |
|
|
— |
|
|
233,100 |
Plus: Loss on impairment |
|
|
— |
|
|
— |
|
|
50,859 |
|
|
36,670 |
Plus: Impairment of assets held for sale |
|
|
— |
|
|
— |
|
|
— |
|
|
175,671 |
Plus: Loss on extinguishment of debt |
|
|
— |
|
|
219,532 |
|
|
— |
|
|
389,207 |
Less: Other loss |
|
|
(20,522) |
|
|
(126,434) |
|
|
(52,249) |
|
|
(251,197) |
Plus: Other expense |
|
|
— |
|
|
227,164 |
|
|
— |
|
|
227,164 |
Plus: Management restructuring expense |
|
|
1,452,904 |
|
|
— |
|
|
1,846,329 |
|
|
— |
Plus: Loss on disposal of investment property |
|
|
— |
|
|
389,471 |
|
|
— |
|
|
389,471 |
Net Operating Income - NOI |
|
$ |
1,871,210 |
|
$ |
1,488,336 |
|
$ |
5,256,004 |
|
$ |
4,983,978 |
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
||||
Components of Net Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Retail and flex property rental revenues (1) |
|
$ |
2,092,289 |
|
$ |
2,036,487 |
|
$ |
6,146,567 |
|
$ |
5,658,183 |
Retail and flex property tenant reimbursement revenues |
|
|
431,582 |
|
|
343,460 |
|
|
1,207,146 |
|
|
1,029,038 |
Hotel property revenues |
|
|
— |
|
|
379,309 |
|
|
— |
|
|
1,507,649 |
Total revenues |
|
|
2,523,871 |
|
|
2,759,256 |
|
|
7,353,713 |
|
|
8,194,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Retail and flex property operating expenses |
|
|
646,992 |
|
|
681,609 |
|
|
2,047,841 |
|
|
1,895,832 |
Hotel property operating expenses |
|
|
— |
|
|
589,311 |
|
|
— |
|
|
1,302,114 |
Bad debt expense |
|
|
5,669 |
|
|
- |
|
|
49,868 |
|
|
12,946 |
Total operating expenses |
|
|
652,661 |
|
|
1,270,920 |
|
|
2,097,709 |
|
|
3,210,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Income - NOI |
|
$ |
1,871,210 |
|
$ |
1,488,336 |
|
$ |
5,256,004 |
|
$ |
4,983,978 |
| (1) | Excludes amortization of above and below market leases. |
Same Property NOI Reconciliation
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
||||
All Properties |
|
|
|
|
|
|
|
|
|
|
|
|
Same property NOI |
|
$ |
1,696,031 |
|
$ |
1,527,325 |
|
$ |
4,791,334 |
|
$ |
4,573,186 |
NOI of acquired properties (1) |
|
|
175,179 |
|
|
171,013 |
|
|
464,670 |
|
|
205,257 |
NOI of disposed properties (2) |
|
|
— |
|
|
(210,002) |
|
|
— |
|
|
205,535 |
Total NOI (3) |
|
$ |
1,871,210 |
|
$ |
1,488,336 |
|
$ |
5,256,004 |
|
$ |
4,983,978 |
| (1) | Salisbury Marketplace |
| (2) | Clemson Hotel |
| (3) | Excludes net amortization of above and below market leases. |
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
||||
Retail Properties |
|
|
|
|
|
|
|
|
|
|
|
|
Same retail property NOI |
|
$ |
1,232,324 |
|
$ |
1,129,797 |
|
$ |
3,554,564 |
|
$ |
3,326,388 |
NOI of acquired retail properties (1) |
|
|
175,179 |
|
|
171,013 |
|
|
464,670 |
|
|
205,257 |
Total retail property NOI (2) |
|
$ |
1,407,503 |
|
$ |
1,300,810 |
|
$ |
4,019,234 |
|
$ |
3,531,645 |
| (1) | Salisbury Marketplace |
| (2) | Excludes net amortization of above and below market leases. |
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
||||
Flex Properties |
|
|
|
|
|
|
|
|
|
|
|
|
Same flex property NOI |
|
$ |
463,707 |
|
$ |
397,528 |
|
$ |
1,236,770 |
|
$ |
1,246,798 |
Total flex property NOI (1) |
|
$ |
463,707 |
|
$ |
397,528 |
|
$ |
1,236,770 |
|
$ |
1,246,798 |
| (1) | Excludes net amortization of above and below market leases. |
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
||||
Hotel Properties |
|
|
|
|
|
|
|
|
|
|
|
|
NOI of disposed hotel properties (1) |
|
$ |
— |
|
$ |
(210,002) |
|
$ |
— |
|
$ |
205,535 |
Total hotel property NOI |
|
$ |
— |
|
$ |
(210,002) |
|
$ |
— |
|
$ |
205,535 |
| (1) | Clemson Hotel |
EBITDA Reconciliation
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
||||
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(1,946,360) |
|
$ |
(1,744,134) |
|
$ |
(4,042,065) |
|
$ |
(3,732,456) |
Plus: Preferred dividends, including amortization of capitalized issuance costs |
|
|
161,408 |
|
|
156,311 |
|
|
480,303 |
|
|
465,338 |
Plus: Interest expense, including amortization of capitalized loan issuance costs |
|
|
738,774 |
|
|
832,944 |
|
|
2,132,339 |
|
|
2,239,497 |
Plus: Depreciation expense |
|
|
933,377 |
|
|
907,221 |
|
|
2,768,969 |
|
|
2,471,365 |
Plus: Amortization of intangible assets |
|
|
216,287 |
|
|
324,292 |
|
|
690,293 |
|
|
1,037,800 |
Less: Net amortization of above and below market leases |
|
|
(64,869) |
|
|
(81,817) |
|
|
(211,904) |
|
|
(146,068) |
Plus: Realized loss on disposal of investment properties |
|
|
— |
|
|
389,471 |
|
|
— |
|
|
389,471 |
Plus: Loss on impairment |
|
|
— |
|
|
— |
|
|
50,859 |
|
|
36,670 |
Plus: Impairment of assets held for sale |
|
|
— |
|
|
— |
|
|
— |
|
|
175,671 |
Plus: Loss on extinguishment of debt |
|
|
— |
|
|
219,532 |
|
|
— |
|
|
389,207 |
EBITDA |
|
$ |
38,617 |
|
$ |
1,003,820 |
|
$ |
1,868,794 |
|
$ |
3,326,495 |
Same Property Revenues
|
|
Nine Months Ended |
|
|
||||||||
|
|
September 30, |
|
|
||||||||
|
|
2023 |
|
2022 |
|
|
|
|
||||
|
|
(Unaudited) |
|
(Unaudited) |
|
Change ($) |
|
Change (%) |
||||
All Properties |
|
|
|
|
|
|
|
|
|
|
|
|
Same property revenues |
|
$ |
6,835,063 |
|
$ |
6,543,398 |
|
$ |
291,665 |
|
|
4.5% |
Revenues of acquired properties (1) |
|
|
730,554 |
|
|
289,891 |
|
|
440,663 |
|
|
|
Revenues of disposed properties (2) |
|
|
— |
|
|
1,507,649 |
|
|
(1,507,649) |
|
|
|
Total revenues (3) |
|
$ |
7,565,617 |
|
$ |
8,340,938 |
|
$ |
(775,321) |
|
|
(9.3)% |
| (1) | Salisbury Marketplace |
| (2) | Clemson Hotel |
| (3) | Includes net amortization of above and below market leases. |
|
|
Nine Months Ended |
|
|
||||||||
|
|
September 30, |
|
|
||||||||
|
|
2023 |
|
2022 |
|
|
|
|
||||
|
|
(Unaudited) |
|
(Unaudited) |
|
Change ($) |
|
Change (%) |
||||
Retail Properties |
|
|
|
|
|
|
|
|
|
|
|
|
Same retail property revenues |
|
$ |
4,995,388 |
|
$ |
4,709,198 |
|
$ |
286,190 |
|
|
6.1% |
Revenues of acquired retail properties (1) |
|
|
730,554 |
|
|
289,891 |
|
|
440,663 |
|
|
|
Total retail property revenues (2) |
|
$ |
5,725,942 |
|
$ |
4,999,089 |
|
$ |
726,853 |
|
|
14.5% |
| (1) | Salisbury Marketplace |
| (2) | Includes net amortization of above and below market leases. |
|
|
Nine Months Ended |
|
|
||||||||
|
|
September 30, |
|
|
||||||||
|
|
2023 |
|
2022 |
|
|
|
|
||||
|
|
(Unaudited) |
|
(Unaudited) |
|
Change ($) |
|
Change (%) |
||||
Flex Properties |
|
|
|
|
|
|
|
|
|
|
|
|
Same flex property revenues |
|
$ |
1,839,675 |
|
$ |
1,834,200 |
|
$ |
5,475 |
|
|
0.3% |
Total flex property revenues (1) |
|
$ |
1,839,675 |
|
$ |
1,834,200 |
|
$ |
5,475 |
|
|
0.3% |
| (1) | Includes net amortization of above and below market leases. |
|
|
Nine Months Ended |
|
|
||||||||
|
|
September 30, |
|
|
||||||||
|
|
2023 |
|
2022 |
|
|
|
|
||||
|
|
(Unaudited) |
|
(Unaudited) |
|
Change ($) |
|
Change (%) |
||||
Hotel Property |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues of disposed hotel properties (1) |
|
$ |
— |
|
$ |
1,507,649 |
|
$ |
(1,507,649) |
|
$ |
(100.0)% |
Total hotel property revenues |
|
$ |
— |
|
$ |
1,507,649 |
|
$ |
(1,507,649) |
|
|
(100.0)% |
| (1) | Clemson Hotel |
Property Statistics – Retail and Flex Properties
Total Retail and Flex Properties
|
|
Number of Properties |
|
Total Square Feet |
|
Percent Leased |
||||||||||||
|
|
As of September 30, |
|
As of September 30, |
|
As of September 30, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||
Retail |
|
|
5 |
|
|
5 |
|
|
633,013 |
|
|
633,013 |
|
|
96.9% |
|
|
94.8% |
Flex |
|
|
3 |
|
|
3 |
|
|
218,269 |
|
|
218,269 |
|
|
99.2% |
|
|
94.6% |
Total |
|
|
8 |
|
|
8 |
|
|
851,282 |
|
|
851,282 |
|
|
97.5% |
|
|
96.5% |
Weighted Average Lease Term
Retail Properties |
|
|
|
Ashley Plaza |
|
|
6.33 |
Franklin Square |
|
|
3.97 |
Hanover Square |
|
|
4.03 |
Lancer Center |
|
|
5.12 |
Salisbury Marketplace |
|
|
6.05 |
Retail Property Average |
|
|
5.18 |
|
|
|
|
Flex Properties |
|
|
|
Brookfield |
|
|
3.06 |
Greenbrier Business Center |
|
|
2.25 |
Parkway |
|
|
2.30 |
Flex Property Average |
|
|
2.50 |
|
|
|
|
Retail and Flex Property Average |
|
|
4.50 |
Mortgage Loan Data
Weighted Average Mortgage Maturity (Years) |
|
|
5.73 |
|
|
|
|
Weighted Average Mortgage Payable Interest Rate |
|
|
4.5% |