Portfolio Performance - As of March 31, 2025, approximately 65% of the portfolio's annualized base rent (ABR) was derived from tenants with an investment grade credit rating of "BBB-" or better[140] - The portfolio is 93% leased and occupied, indicating strong demand for the properties[140] - Approximately 92% of the leases in the current portfolio provide for increases in contractual base rent during future years[140] - The average effective annual rental per square foot is $15.24[140] - The largest tenants, including the General Service Administration and Dollar General, contributed approximately 36% of the portfolio's ABR[140] Financial Performance - Total revenue for the three months ended March 31, 2025, was $2,381,595, a decrease of 2.1% compared to $2,433,173 for the same period in 2024[149] - Total operating expenses increased by 6.2% to $3,857,376 for the three months ended March 31, 2025, compared to $3,633,825 in 2024[150] - Net loss for the three months ended March 31, 2025, was $1,797,460, an improvement from a net loss of $1,879,096 in 2024[151] - Net loss attributable to common shareholders decreased to $2,731,859 for the three months ended March 31, 2025, from $2,920,220 in 2024[153] - Funds From Operations (FFO) for the three months ended March 31, 2025, was $(211,486), compared to $(1,033,041) for the same period in 2024, indicating improved operational performance[189] - Core Adjusted Funds From Operations (Core AFFO) for the three months ended March 31, 2025, was $(39,589), a significant improvement from $241,218 in the same period of 2024[189] Cash and Debt Management - As of March 31, 2025, the company had total cash of $665,057 and outstanding mortgage loans with a principal balance of $66,184,027[154] - A loan agreement was entered into on August 10, 2023, for $21.0 million to finance the acquisition of the Modiv Portfolio, with a fixed interest rate of 7.47%[157] - The company has a loan of $5.5 million due on October 14, 2026, with a fixed interest rate of 9%[162] - As of March 31, 2025, the total outstanding mortgage loans payable amounted to $66,184,027, with a debt service coverage ratio (DSCR) requirement of 1.25 for several loans[166] - Minimum required principal payments on debt for 2025 total $1,138,148, with significant payments of $21,846,023 due in 2028 and $13,311,313 in 2029[170] Equity and Financing Activities - From inception through March 31, 2025, the company has distributed $5,024,622 to common stockholders[142] - The company closed a public offering generating net proceeds of $13.8 million in September 2021[155] - The company executed a purchase and sale agreement to sell a property for $7.2 million, expected to close in June 2025[169] - The company entered into new agreements for Norfolk properties, raising $3,000,000 in temporary equity as of March 31, 2025[170] - The preferred equity interest from the LC2 Investment has a cumulative distribution preference of 15.5% per year, with a current preferred return of 5% per annum[171] Tax and Regulatory Compliance - The company has elected to be taxed as a REIT for federal income tax purposes since the taxable year ending December 31, 2021[135] - The company was in compliance with all covenants except for one project level DSCR covenant, which was below the required 1.25 threshold due to a six-month vacancy[169] - The company does not have any material off-balance sheet arrangements that could materially affect its financial condition[181] Going Concern and Financial Flexibility - The company has substantial doubt about its ability to continue as a going concern due to recurring losses and projected cash needs[164] - The company aims to maintain financial flexibility through retained cash flows, long-term debt, and preferred stock to finance growth, targeting a lower-leveraged portfolio in the long term[177] - The redemption value of the preferred interest is $14,100,000 plus accrued but unpaid preferred interest of $3,403,728 as of March 31, 2025[175] Interest and Debt Costs - Interest expense increased by $161,526 year-over-year, driven by debt financing related to property acquisitions[158] - Debt issuance costs amortized during Q1 2025 were approximately $42,533, compared to $47,780 in Q1 2024[168] - The preferred return increased from 15.5% to 18%, with accrued preferred return rising from 10.5% to 13%[174]
Generation me Properties(GIPR) - 2025 Q1 - Quarterly Report