| BUSINESS SEGMENT DATA |
NOTE 21. BUSINESS SEGMENT DATA The Company operates in two primary business segments: income properties and commercial loans and investments. Our income property operations consist of lease income from income producing properties and our business plan is focused on investing in additional income-producing properties. Our income property operations accounted for 66% and 71% of our identifiable assets as of September 30, 2026 and December 31, 2025, respectively, and 65% and 82% of our consolidated revenues for the nine months ended September 30, 2026 and 2025, respectively. Our commercial loans and investment operations accounted for 31% and 25% of our identifiable assets as of September 30, 2026 and December 31, 2025, respectively, and 35% and 17% of our consolidated revenues for the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026, our portfolio of commercial loans and investments consisted of 16 commercial loan investments, of which one is a sales-type lease and four are related to properties acquired through sale-leaseback transactions whereby the tenants have future repurchase rights. The Company’s CODM evaluates segment performance based on total revenues less direct costs of revenues when making decisions about allocating capital to the segments. The Company’s reportable segments are strategic business units that offer different products. They are managed separately because each segment requires different management techniques, knowledge, and skill. Information about the Company’s operations in different segments for the three months ended September 30, 2026, is as follows (in thousands): | | | | | | | | | | Income Properties | | Commercial Loans and Investments | | Total | Revenues: | | | | | | | | | Lease Income | $ | 12,812 | | $ | — | | $ | 12,812 | Interest Income from Commercial Loans and Investments | | — | | | 7,611 | | | 7,611 | Total Revenues for Reportable Segments | | 12,812 | | | 7,611 | | | 20,423 | | | | | | | | | | Reconciliation to Consolidated Revenues | | | | | | | | | Other Revenues | | | | | | | | 37 | Total Consolidated Revenues | | | | | | | $ | 20,460 | | | | | | | | | | Operating Expenses: | | | | | | | | | Real Estate Expenses | | 2,095 | | | — | | | 2,095 | Total Revenues Less Direct Costs of Revenues | | 10,717 | | | 7,611 | | | 18,328 | Provision for Impairment and Adjustment to CECL Reserve | | — | | | (76) | | | (76) | Depreciation and Amortization | | 6,881 | | | — | | | 6,881 | Total Revenues Less Operating Expenses for Reportable Segments | | 3,836 | | | 7,687 | | | 11,523 | Gain on Disposition of Assets | | 272 | | | — | | | 272 | Net Income From Operations for Reportable Segments | | 4,108 | | | 7,687 | | | 11,795 | | | | | | | | | | Reconciliation to Consolidated Net Income | | | | | | | | | Other Revenues | | | | | | | | 37 | General and Administrative Expenses | | | | | | | | (2,009) | Investment and Other Income | | | | | | | | 17 | Interest Expense | | | | | | | | (4,828) | Consolidated Net Income | | | | | | | $ | 5,012 |
Information about the Company’s operations in different segments for the three months ended September 30, 2025 is as follows (in thousands): | | | | | | | | | | Income Properties | | Commercial Loans and Investments | | Total | Revenues: | | | | | | | | | Lease Income | $ | 12,122 | | $ | — | | $ | 12,122 | Interest Income from Commercial Loans and Investments | | — | | | 2,320 | | | 2,320 | Total Revenues for Reportable Segments | | 12,122 | | | 2,320 | | | 14,442 | | | | | | | | | | Reconciliation to Consolidated Revenues | | | | | | | | | Other Revenues | | | | | | | | 121 | Total Consolidated Revenues | | | | | | | $ | 14,563 | | | | | | | | | | Operating Expenses: | | | | | | | | | Real Estate Expenses | | 1,891 | | | — | | | 1,891 | Total Revenues Less Direct Costs of Revenues | | 10,231 | | | 2,320 | | | 12,551 | Provision for Impairment and Adjustment to CECL Reserve | | 1,975 | | | (60) | | | 1,915 | Depreciation and Amortization | | 6,597 | | | — | | | 6,597 | Total Revenues Less Operating Expenses for Reportable Segments | | 1,659 | | | 2,380 | | | 4,039 | Loss on Disposition of Assets | | (46) | | | — | | | (46) | Net Income From Operations for Reportable Segments | | 1,613 | | | 2,380 | | | 3,993 | | | | | | | | | | Reconciliation to Consolidated Net Loss | | | | | | | | | Other Revenues | | | | | | | | 121 | General and Administrative Expenses | | | | | | | | (1,695) | Investment and Other Income | | | | | | | | 68 | Interest Expense | | | | | | | | (3,910) | Consolidated Net Loss | | | | | | | $ | (1,423) |
Information about the Company’s operations in different segments for the nine months ended September 30, 2026, is as follows (in thousands): | | | | | | | | | | Income Properties | | Commercial Loans and Investments | | Total | Revenues: | | | | | | | | | Lease Income | $ | 38,051 | | $ | — | | $ | 38,051 | Interest Income from Commercial Loans and Investments | | — | | | 20,700 | | | 20,700 | Total Revenues for Reportable Segments | | 38,051 | | | 20,700 | | | 58,751 | | | | | | | | | | Reconciliation to Consolidated Revenues | | | | | | | | | Other Revenues | | | | | | | | 117 | Total Consolidated Revenues | | | | | | | $ | 58,868 | | | | | | | | | | Operating Expenses: | | | | | | | | | Real Estate Expenses | | 6,482 | | | — | | | 6,482 | Total Revenues Less Direct Costs of Revenues | | 31,569 | | | 20,700 | | | 52,269 | Provision for Impairment and Adjustment to CECL Reserve | | 161 | | | 648 | | | 809 | Depreciation and Amortization | | 20,901 | | | — | | | 20,901 | Total Revenues Less Operating Expenses for Reportable Segments | | 10,507 | | | 20,052 | | | 30,559 | Gain on Disposition of Assets | | 369 | | | — | | | 369 | Net Income From Operations for Reportable Segments | | 10,876 | | | 20,052 | | | 30,928 | | | | | | | | | | Reconciliation to Consolidated Net Income | | | | | | | | | Other Revenues | | | | | | | | 117 | General and Administrative Expenses | | | | | | | | (5,896) | Investment and Other Income | | | | | | | | 472 | Interest Expense | | | | | | | | (13,760) | Consolidated Net Income | | | | | | | $ | 11,861 |
Information about the Company’s operations in different segments for the nine months ended September 30, 2025, is as follows (in thousands): | | | | | | | | | | Income Properties | | Commercial Loans and Investments | | Total | Revenues: | | | | | | | | | Lease Income | $ | 35,970 | | $ | — | | $ | 35,970 | Interest Income from Commercial Loans and Investments | | — | | | 7,358 | | | 7,358 | Total Revenues for Reportable Segments | | 35,970 | | | 7,358 | | | 43,328 | | | | | | | | | | Reconciliation to Consolidated Revenues | | | | | | | | | Other Revenues | | | | | | | | 304 | Total Consolidated Revenues | | | | | | | $ | 43,632 | | | | | | | | | | Operating Expenses: | | | | | | | | | Real Estate Expenses | | 6,030 | | | — | | | 6,030 | Total Revenues Less Direct Costs of Revenues | | 29,940 | | | 7,358 | | | 37,298 | Provision for Impairment and Adjustment to CECL Reserve | | 6,615 | | | 134 | | | 6,749 | Depreciation and Amortization | | 20,609 | | | — | | | 20,609 | Total Revenues Less Operating Expenses for Reportable Segments | | 2,716 | | | 7,224 | | | 9,940 | Gain on Disposition of Assets | | 2,043 | | | — | | | 2,043 | Net Income From Operations for Reportable Segments | | 4,759 | | | 7,224 | | | 11,983 | | | | | | | | | | Reconciliation to Consolidated Net Loss | | | | | | | | | Other Revenues | | | | | | | | 304 | General and Administrative Expenses | | | | | | | | (5,108) | Investment and Other Income | | | | | | | | 160 | Interest Expense | | | | | | | | (11,822) | Consolidated Net Loss | | | | | | | $ | (4,483) |
Capital expenditures of each segment for the three and nine months ended September 30, 2026 and 2025 are as follows (in thousands): | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, 2026 | | September 30, 2025 | | September 30, 2026 | | September 30, 2025 | Capital Expenditures: | | | | | | | | | | | | Income Properties | $ | 35,697 | | $ | 27,175 | | $ | 56,548 | | $ | 67,514 | Commercial Loans and Investments | | 9,941 | | | 30,320 | | | 97,183 | | | 63,418 | Total Capital Expenditures | $ | 45,638 | | $ | 57,495 | | $ | 153,731 | | $ | 130,932 |
Identifiable assets of each segment as of September 30, 2026 and December 31, 2025 are as follows (in thousands): | | | | | | | | | As of | | | September 30, 2026 | | December 31, 2025 | Identifiable Assets: | | | | | | | Income Properties | | $ | 545,613 | | $ | 505,273 | Commercial Loans and Investments | | | 252,153 | | | 182,397 | Other Revenue | | | — | | | 47 | Corporate and Other | | | 23,340 | | | 28,157 | Total Assets | | $ | 821,106 | | $ | 715,874 |
Identifiable assets by segment are those assets that are used in the Company’s operations in each segment. Corporate and other assets consist primarily of cash and restricted cash as well as the interest rate swaps.
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