v3.26.1
Segment Information
3 Months Ended
Mar. 31, 2026
Segment Information  
Segment Information

11.      Segment Information

Prior to January 1, 2026, the Company aggregated individual properties into retail, flex and STNL operating segments.  Effective on January 1, 2026, following the Company’s strategic repositioning and increased focus on DST sponsorship activities, the CODM began evaluating the Company’s real estate portfolio on a combined basis as a single, “Investment Properties” segment. Prior-period segment information has been recast to conform to the current presentation.  Additionally, as of January 1, 2026, the Company established a second operating segment for its DST sponsorship activities.  These two segments align with how the CODM evaluates performance and allocates resources.  During the periods presented, there have been no material intersegment transactions.

The Company's CODM consists of the President and Chief Executive Officer, and the Chief Financial Officer, who are responsible for assessing performance and allocating resources. The CODM primarily evaluates the Company's overall performance and operating segment performance based on net operating income adjusted for interest expense and considers additional metrics such as adjusted funds from operations (“AFFO”).  The CODM receives financial information monthly.

Pursuant to ASU 2023-07, the Company has identified and disclosed (i) operating expenses (investment property operating expenses and DST Program operating expenses) and (ii) interest expense as significant expense categories by segment.  These expense categories are regularly provided to the CODM and included in the reported measure of segment profit or loss.  The CODM does not evaluate investment property operating expenses at a more detailed level because many property operating expenses are non-controllable and are not considered to be a useful measure of operating performance.  

Certain expenses are not allocated to individual segments, including share-based compensation, corporate legal, accounting and other professional fees, and corporate general and administrative expenses.  These expenses are reviewed at the corporate level and are not included in segment-level profitability measures.  In addition, depreciation and amortization are not allocated among segments and are not used by the CODM to assess performance or allocate resources.  Asset information by segment is not reported as the CODM does not use this measure to assess segment performance or to make resource allocation decisions.  

Net operating income (“NOI”) is a non-GAAP financial measure and is not considered a measure of operating results or cash flows from operations under GAAP.  For the Company’s investment properties, NOI reflects occupancy levels, rental rate increases or decreases, and the recoverability of operating expenses. NOI, as the Company calculates it, may not be directly comparable to similarly titled, but differently calculated, measures for other real estate companies.  NOI is calculated by deducting operating expenses from operating revenues.   For the Company’s DST Program, NOI reflects the underlying profitability of the business.  

NOI adjusted for interest expense is the primary performance measure reviewed by management to assess the operating performance of investment properties and is calculated by deducting operating expenses and interest expense from operating revenues. Operating revenues include rental income, tenant reimbursements, and other property income; and operating expenses include all investment property operating costs. Interest expense includes mortgage interest expense, only, and excludes non-mortgage interest expense and non-cash interest expense such as amortization of loan issuance costs.  The NOI adjusted for interest expense performance metric consists of only revenues and expenses directly related to real estate rental operations.

NOI for the Company’s DST sponsorship program is calculated by deducting DST Program operating expenses from DST Program operating revenues.  Operating revenues include acquisition fees (which are generally recorded when the DST entity is de-consolidated from the Company upon the sale of a majority of the DST entity beneficial interests), asset management fees, and disposition fees; and DST Program operating expenses include salaries and benefits, marketing, travel, office, and other expenses related to the DST Program.  

The following table presents property operating revenues, operating expenses and interest expense by operating segment:

For the three months ended March 31,  (unaudited)

  ​ ​ ​

Investment Properties

  ​ ​ ​

DST Program

  ​ ​ ​

Total

  ​ ​ ​

2026

  ​ ​ ​

2025

  ​ ​ ​

2026

  ​ ​ ​

2025

  ​ ​ ​

2026

  ​ ​ ​

2025

Revenues

  ​ ​ ​

$

2,159,265

$

2,321,640

$

$

$

2,159,265

$

2,321,640

Operating expenses

 

641,264

 

659,354

222,896

 

864,160

 

659,354

Property related interest expense (1)

444,814

 

531,600

 

444,814

 

531,600

Adjusted net operating income

$

1,073,187

$

1,130,686

$

(222,896)

$

$

850,291

$

1,130,686

Reconciliation to net loss from operations (2)

Less: Bad debt expense

1,321

1,321

Less: Share-based compensation expenses

224,220

397,182

Less: Legal, accounting and other professional fees

415,779

426,569

Less: Corporate general and administrative expenses

348,189

353,341

Less: Loss on impairment

61,803

Less: Depreciation and amortization

488,770

965,211

Less: Non-mortgage interest expense (3)

102

12,236

Less: Amortization of loan issuance costs (3)

11,179

29,180

Plus: Gain on disposal of investment properties

(12,850,227)

Less: Loss on redemption of mandatorily redeemable preferred stock

9,375

Less: Loss on extinguishment of debt

372,340

Net income (loss) from operations

$

11,839,939

$

(1,125,532)

(1)Includes mortgage interest expense and amortization of issuance costs related to mortgages payable.  For a reconciliation to interest expense as reported on the Company’s condensed consolidated statement of operations, see Note 5, above.  
(2)Certain expenses that are not allocated to individual segments which are either reviewed at the corporate level or which are not included in segment-level profitability measures used by the CODM are added to or subtracted from net operating income measure used by the CODM to reconcile this measure to net (loss) income from operations on the Company’s condensed consolidated statement of operations for the three months ended March 31, 2026 and 2025.  
(3)Non-mortgage interest expense includes dividends paid and amortization of issuance costs and discounts on the Company’s Mandatorily Redeemable Preferred Stock which are recorded as interest expense (see Note 4, above), and other interest expense, all of which are not allocated to individual segments.  For a reconciliation to interest expense as reported on the Company’s condensed consolidated statement of operations, see Note 5, above.

The following table presents assets by operating segment:

Investment Properties

  ​ ​ ​

DST Program

  ​ ​ ​

Total

March 31, 

March 31, 

March 31, 

2026

December 31, 

2026

December 31, 

2026

December 31, 

  ​ ​ ​

(unaudited)

  ​ ​ ​

2025

(unaudited)

  ​ ​ ​

2025

(unaudited)

  ​ ​ ​

2025

Segment assets

$

45,661,557

$

75,389,464

$

$

$

45,661,557

$

75,389,464

Reconciliation to total assets on condensed consolidated balance sheet

Plus: Other assets

$

19,966,704

351,664

Plus: Assets held by operating partnership

401,889

1,916,185

Plus: Assets held by parent company

2,893,637

82,298

Total assets recorded

$

68,923,787

$

77,739,611