Portfolio Performance - As of June 30, 2024, approximately 60% of the portfolio's annualized base rent (ABR) was derived from tenants with an investment grade credit rating of "BBB-" or better[107] - The portfolio is 89% leased and occupied, with an average effective annual rental per square foot of $14.75[107] - Approximately 92% of the leases in the current portfolio provide for increases in contractual base rent during future years[107] - The largest tenants, including the General Service Administration and Dollar General, contributed approximately 69% of the portfolio's ABR[107] - The company has a total of 539,827 rentable square feet across its properties, with an annualized cash base rental income of $7,906,932[107] - The average remaining term of leases in the portfolio is approximately 4.1 years[107] Financial Performance - Total revenue for the three months ended June 30, 2024, was $2,259,234, an increase of $930,356 (70% growth) compared to $1,328,878 for the same period in 2023[113] - Total revenue for the six months ended June 30, 2024, was $4,692,407, an increase of $2,026,490 (76% growth) compared to $2,665,917 for the same period in 2023[113] - Total operating expenses for the three months ended June 30, 2024, were $3,729,846, an increase of $1,743,131 (88% growth) compared to $1,986,715 for the same period in 2023[115] - Total operating expenses for the six months ended June 30, 2024, were $7,363,672, an increase of $3,341,163 (83% growth) compared to $4,022,509 for the same period in 2023[114] - Net loss for the three months ended June 30, 2024, was $1,461,488, compared to a net loss of $752,397 for the same period in 2023[117] - Net loss for the six months ended June 30, 2024, was $3,340,584, compared to a net loss of $1,942,750 for the same period in 2023[117] - Net income attributable to non-controlling interests for the three months ended June 30, 2024, was $800,234, compared to $129,065 for the same period in 2023[119] Cash and Debt Management - As of June 30, 2024, the company had total cash of $2,587,734 and outstanding mortgage loans with a principal balance of $57,504,073[121] - The company reported a debt issuance cost amortization of approximately $47,780 for the three months ended June 30, 2024, and $95,560 for the six months ended June 30, 2024[134] - The company was in compliance with all covenants except for one project-level DSCR covenant for 2510 Walmer Ave, which tested at 1.17:1 against a minimum requirement of 1.25:1[135] - Minimum required principal payments on debt for 2024 (6 months remaining) total $13,364,244, with significant payments due in 2028 amounting to $21,341,791[136] - The company reported a total debt service coverage ratio (DSCR) of 1.50 for most mortgage loans, indicating strong financial health[131] Dividend and Equity Management - The company announced a suspension of its regular dividend starting with the monthly dividends that would have been paid in July 2024[110] - The Preferred Interest is required to be redeemed by August 10, 2025, at a redemption value of $14,100,000 plus accrued preferred interest of $1,817,478 as of June 30, 2024[140] - The company has a preferred equity member, Brown Family Enterprises, LLC, with a redemption right valued at $3,000,000 as of June 30, 2024[136] - The company incurred a guaranty fee expense to the CEO of $96,360 for the three months ended June 30, 2024, compared to $55,652 for the same period in 2023[125] Strategic Initiatives - The company intends to maintain financial flexibility through retained cash flows, long-term debt, and preferred stock to finance growth, aiming for a lower-leveraged portfolio in the long term[142] - The Company plans to employ greater leverage on individual assets during the acquisition phase to quickly build a diversified portfolio[142] - The company completed the acquisition of a tenant-in-common interest in its Rockford, Illinois property for a purchase price of $1.3 million on September 7, 2023[137] - LC2 made an initial capital contribution of $12.0 million to GIP SPE and an additional $2.1 million upon completion of the acquisition, with a cumulative preferred return of 15.5% per year[137] - The company executed a new lease for 2510 Walmer Ave on March 28, 2024, restoring the property to full occupancy as of May 1, 2024[135] Going Concern - The company has substantial doubt about its ability to continue as a going concern for at least the next 12 months due to recurring losses and projected cash needs[129]
Generation me Properties(GIPR) - 2024 Q2 - Quarterly Report