What changed in this filing

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Item 2. Properties

2024-04-16 compared with 2023-03-28 · 30 added, 39 removed, 114 unchanged (38% of the section changed)

PROPERTIES  

General Information

We invest in a diverse multi-tenant portfolio of real estate assets primarily consisting of office/industrial, retail, and model home properties located primarily in the western United States.

As of December 31, 2022, we owned or had an equity interest in nine office/industrial buildings totaling approximately 756,265 rentable square feet and three retail centers totaling approximately 65,242 rentable square feet.

In addition, through our Model Home subsidiary and our investments in five limited partnerships and one corporation, we own a total of 92 Model Home properties located in three states.

As of December 31, 2023, we owned or had an equity interest in nine office/industrial buildings totaling approximately 758,175 rentable square feet and three retail centers totaling approximately 65,242 rentable square feet.

In addition, through our Model Home subsidiary and our investments in six limited partnerships and one corporation, we own a total of 110 Model Home properties located in five states.

We directly manage the operations and leasing of our properties.

Substantially all of our revenues consist of base rents received under leases that generally have terms that range from one to five years. 

Th e majority of our ex isting leases as of December 31, 2022 contain contractual rent increases that provide for increases in the base rental payments.

Substantially all of our revenues consist of base rents received under leases that generally have terms that range from one to five years.

Th e majority of our ex isting leases as of December 31, 2023 contain contractual rent increases that provide for increases in the base rental payments.

Our tenants consist of local, regional and national businesses.

Our properties generally attract a mix of diversified tenants creating lower risk in periods of economic fluctuations.

Our largest tenant represented approximately 8.57% of total revenues for the year ended December 31, 2022.

Our largest tenant represented approximately 6.43% of total revenues for the year ended December 31, 2023.

Geographic Diversification Table

6 unchanged sentences

Approximate % of Aggregate Annual Rent

In February 2023, the Annual Base Rent for Colorado dropped to approximately $4.9 million due to the loss of Halliburton Energy Services, Inc.

which was located in our Shea Center II property.

North Dakota (1)

In December 2023, JLK Engineering moved into a North Dakota property under a 10-year lease, with rent commencing on February 28, 2024.

Model Home Properties:

29 unchanged sentences

Total Retail Properties

Prior to January 1, 2009, “Purchase Price”

includes our acquisition related costs and expenses for the purchase of the property.

After January 1, 2009, acquisition related costs and expenses were expensed when incurred.

Genesis Plaza is owned by two tenants-in-common, each of which own 57% and 43%, respectively, and we beneficially own an aggregate of 76.4%, based on our ownership percentages of each tenant-in-common.

Prior to January 1, 2009, “Purchase Price” includes our acquisition related costs and expenses for the purchase of the property.

After January 1, 2009, acquisition related costs and exp enses were expensed when incurred.

Grand Pacific Center, Bismarck, ND, was removed from held for sale after signing a major lease with KLJ Engineering on December 7, 2022 for approximately 33,296 usable square feet, a term of 122 months, and starting annualized rent of $532,736.

KLJ Engineering moved into the building during December 2023, with rent commencing on February 28, 2024.

Mandolin is owned by NetREIT Palm Self-Storage LP, through its wholly owned subsidiary NetREIT Highland LLC, and the Company is the sole general partner and owns 61.3% of NetREIT Palm Self-Storage LP.

The loss of Hallibur ton Energy Services, Inc.

from our Shea Center II property in Colorado, has dropped the occupancy to approximately 66% in February 2023.

Top Ten Tenants Physical Occupancy Table

The following table sets forth certain information with respect to our top 10 tenants at our Office/Industrial and Retail Properties.

As of December 31, 2022 Tenant

As of March, 2023 Tenant

Number of Leases

1 unchanged sentence

% of Total Annualized Base Rent

Halliburton Energy Services, Inc.

Johns Hopkins University

John Hopkins University

KLJ Engineering LLC

Finastra USA Corporation

MasTec North America, Inc.

Wells Fargo Bank, N.A.

Nova Financial & Investment Corporation

Wells Fargo Bank, NA

Republic Indemnity of America

Nova Financial & Investment Corporation

Meissner Jacquet Real Estate Management Group, Inc.

Fredrikson & Byron P.A.

On December 31, 2022, the lease for our largest tenant, Halliburton Energy Services, Inc., expired. 

Hallibur ton Energy Services, Inc.

was located in our Shea Center II property in Colorado, and made up approximately 8.57% of our annual base rent. 

We placed approximately $1.1 million in a reserve account with our lender to cover future mortgage payments, if necessary. 

Our management team is working to fill the 45,535 square foot space as quickly as possible, and has already leased approximately 20% of the space to a tenant during January 2023.

Grand Pacific Center, Bismarck, ND, signed a major lease with KLJ Engineering on December 7, 2022 for approximately 33,296 usable square feet, a term of 122 months, and starting annualized rent of $532,736.

KLJ Engineering moved into the building during December 2023, with rent commencing on February 28, 2024.

Lease Expirations Tables

6 unchanged sentences

Percent of Total

On December 31, 2022, three of our leases expired and were not renewed. 

One of them was Halliburton Energy Services, Inc., located in our Shea Center II property in Colorado, and made up approximately 8.57% of our annual base rent. 

We placed approximately $1.1 million in a reserve account with our lender to cover future mortgage payments, if necessary. 

Our management team is working to fill the 45,535 square foot space as quickly as possible, and has already leased approximately 20% of the space to a tenant during January 2023.

One lease at our Dakota Center property in Fargo, ND expired on December 31, 2023 and was not renewed.

This tenant made up less than 2% of our total portfolio rent, but accounted for approximately 20% of our Dakota Center rent.

Management is looking into various options to replace the loss of this tenant.

Model Home Properties:

4 unchanged sentences

Percent of Total

These leases are subject to extensions by the home builder depending on sales of the total development.  All model homes are sold at the end of the lease period.

These leases are subject to extensions by the home builder depending on sales of the total development.

All model homes are sold at the end of the lease period.

Physical Occupancy Table for Last 5 Years

The following table presents the percentage occupancy for each of our properties, excluding our Model Home Properties, as of December 31 for each of the last five years.

The following table presents the percentage occupancy for each of our properties, excluding our Model Home Properties, as of December 31st for each of the last five years.

Percentage Occupancy as of the Year Ended December 31,

15 unchanged sentences

Research Parkway

Property was sold during the year ended December 31, 2021.

Property was sold prior in previous periods.

A portion of the proceeds from the sale of Highland Court were used in like-kind exchange transactions pursued under Section 1031 of the Code for the acquisition of our Mandolin property.

Property was sold during the year ended December 31, 2022.

The loss of Hallibur ton Energy Services, Inc.

from our Shea Center II property in Colorado, has dropped the occupancy to approximately 66% in February 2023.

Annualized Base Rent Per Square Foot for Last 5 Years

21 unchanged sentences

Annualized Base Rent is based upon actual rents due as of December 31, 2023.

Property was sold during the year ended December 31, 2021.

Property was sold during the year ended December 31, 2022.

Property was sold during prior periods.

Annualized base rent at Genesis Plaza and Shea Center II does not include space rent by the Company, which totals 9,224 square feet at Genesis Plaza and 2,972 square feet at Shea Center II.

KLJ Engineering moved into the building during December 2023, with rent commencing on February 28, 2024.

A portion of the proceeds from the sale of Highland Court were used in like-kind exchange transactions pursued under Section 1031 of the Code for the acquisition of our Mandolin property.

The Annualized Base Rent for Shea Center II, includes Hallibur ton Energy Services, Inc.

which totals $944,851 for the year ended December 31, 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 2. Properties