0000067625 2016-10-01 2017-03-31 0000067625 2017-05-01 0000067625 2016-09-30 0000067625 us-gaap:SeriesBPreferredStockMember 2017-03-31 0000067625 us-gaap:SeriesBPreferredStockMember 2016-09-30 0000067625 2017-03-31 0000067625 MNR:OFallonMember 2017-03-31 0000067625 MNR:RoanokeMember 2017-03-31 0000067625 MNR:RidgelandMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:PreferredStockMember 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:MortgageBackedSecuritiesMember 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:PreferredStockMember 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:MortgageBackedSecuritiesMember 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:CommonStockMember 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:PreferredStockMember 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:MortgageBackedSecuritiesMember 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:CommonStockMember 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:PreferredStockMember 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2016-09-30 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommonStockMember 2016-09-30 0000067625 2016-03-31 0000067625 us-gaap:SeriesCPreferredStockMember 2017-03-31 0000067625 us-gaap:SeriesCPreferredStockMember 2016-09-30 0000067625 us-gaap:StockOptionMember 2016-10-01 2017-03-31 0000067625 us-gaap:StockOptionMember 2017-03-31 0000067625 2015-10-01 2016-03-31 0000067625 2016-01-01 2016-03-31 0000067625 2015-09-30 0000067625 us-gaap:CommonStockMember MNR:TwoThousandAndSevenPlanMember us-gaap:MaximumMember 2017-03-31 0000067625 us-gaap:RestrictedStockUnitsRSUMember MNR:TwoThousandAndSevenPlanMember us-gaap:MaximumMember 2017-03-31 0000067625 MNR:TwoThousandAndSevenPlanMember 2017-03-31 0000067625 MNR:TwoThousandAndSevenPlanMember 2015-10-01 2016-03-31 0000067625 us-gaap:IndustrialPropertyMember MNR:FedexGroundPackageSystemInc.Member 2016-10-17 0000067625 us-gaap:IndustrialPropertyMember MNR:FedexGroundPackageSystemInc.Member 2016-10-16 2016-10-17 0000067625 us-gaap:IndustrialPropertyMember MNR:FedexGroundPackageSystemInc.Member 2016-12-30 0000067625 us-gaap:IndustrialPropertyMember MNR:FedexGroundPackageSystemInc.Member 2016-12-29 2016-12-30 0000067625 MNR:FedexGroundPackageSystemInc.Member 2016-10-03 0000067625 MNR:FedexGroundPackageSystemInc.Member 2016-10-02 2016-10-03 0000067625 us-gaap:IndustrialPropertyMember MNR:WhiteBearLakeMNMember 2016-10-27 0000067625 us-gaap:IndustrialPropertyMember MNR:WhiteBearLakeMNMember 2016-10-26 2016-10-27 0000067625 MNR:FedexAndFedexSubsidiariesMember 2016-10-01 2017-03-31 0000067625 MNR:FedexCorporationMember 2016-10-01 2017-03-31 0000067625 MNR:FedexCorporationSubsidiariesMember 2016-10-01 2017-03-31 0000067625 MNR:FedexAndFedexSubsidiariesMember 2015-10-01 2016-03-31 0000067625 MNR:FedexCorporationMember 2015-10-01 2016-03-31 0000067625 MNR:FedexCorporationSubsidiariesMember 2015-10-01 2016-03-31 0000067625 MNR:FedexAndFedexSubsidiariesMember MNR:RentalAndReimbursementRevenueMember MNR:FiscalTwoThousandSeventeenMember 2016-10-01 2017-03-31 0000067625 MNR:FedexCorporationMember MNR:RentalAndReimbursementRevenueMember MNR:FiscalTwoThousandSeventeenMember 2016-10-01 2017-03-31 0000067625 MNR:FedexCorporationSubsidiariesMember MNR:RentalAndReimbursementRevenueMember MNR:FiscalTwoThousandSeventeenMember 2016-10-01 2017-03-31 0000067625 MNR:FedexAndFedexSubsidiariesMember MNR:RentalAndReimbursementRevenueMember 2016-10-01 2017-03-31 0000067625 MNR:WhiteBearLakeMNMember 2016-10-01 2017-03-31 0000067625 MNR:WhiteBearLakeMNMember 2015-10-01 2016-03-31 0000067625 MNR:UMHPropertiesIncMember us-gaap:CommonStockMember 2017-03-31 0000067625 MNR:UMHPropertiesIncMember MNR:SeriesACumulativeRedeemablePreferredStockMember 2017-03-31 0000067625 MNR:UMHPropertiesIncMember MNR:SeriesACumulativeRedeemablePreferredStockMember 2016-10-01 2017-03-31 0000067625 MNR:UMHPropertiesIncMember MNR:SeriesBCumulativeRedeemablePreferredStockMember 2017-03-31 0000067625 us-gaap:MaximumMember 2016-10-01 2017-03-31 0000067625 us-gaap:MinimumMember 2016-10-01 2017-03-31 0000067625 MNR:TwoMortgagesLoansMember 2016-10-01 2017-03-31 0000067625 MNR:ThreeMortgagesLoansMember MNR:FirstMayThousandAndSeventeenMember 2016-10-01 2017-03-31 0000067625 MNR:TermLoansMember 2016-10-01 2017-03-31 0000067625 MNR:TermLoanOneMember 2016-10-01 2017-03-31 0000067625 MNR:TermLoanTwoMember 2016-10-01 2017-03-31 0000067625 us-gaap:LineOfCreditMember 2016-10-01 2017-03-31 0000067625 MNR:DividendReinvestmentAndStockPurchasePlanMember 2016-10-01 2017-03-31 0000067625 us-gaap:CommonStockMember 2017-03-31 0000067625 us-gaap:CommonStockMember 2016-10-01 2017-03-31 0000067625 us-gaap:MaximumMember 2017-01-17 0000067625 MNR:SeriesACumulativeRedeemablePreferredStockMember 2016-09-14 0000067625 MNR:SeriesACumulativeRedeemablePreferredStockMember 2016-10-14 0000067625 MNR:SeriesACumulativeRedeemablePreferredStockMember 2016-10-13 2016-10-14 0000067625 MNR:SeriesBCumulativeRedeemablePreferredStockMember 2017-03-31 0000067625 MNR:SeriesBCumulativeRedeemablePreferredStockMember 2016-10-01 2017-03-31 0000067625 MNR:SeriesCCumulativeRedeemablePreferredStockMember 2017-03-31 0000067625 MNR:SeriesCCumulativeRedeemablePreferredStockMember 2016-10-01 2017-03-31 0000067625 MNR:MortgageNotesPayableFairValueMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:PreferredStockMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:PreferredStockMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:PreferredStockMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:PreferredStockMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommonStockMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:CommonStockMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:CommonStockMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:CommonStockMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:MortgageBackedSecuritiesMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:MortgageBackedSecuritiesMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:MortgageBackedSecuritiesMember 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2017-03-31 0000067625 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2017-03-31 0000067625 MNR:PropertyPurchaseAgreementMember us-gaap:IndustrialPropertyMember 2017-03-31 0000067625 MNR:PropertyPurchaseAgreementMember us-gaap:IndustrialPropertyMember us-gaap:MinimumMember 2016-10-01 2017-03-31 0000067625 MNR:PropertyPurchaseAgreementMember us-gaap:IndustrialPropertyMember us-gaap:MaximumMember 2016-10-01 2017-03-31 0000067625 MNR:PropertyPurchaseAgreementMember us-gaap:IndustrialPropertyMember 2016-10-01 2017-03-31 0000067625 MNR:PropertyPurchaseAgreementMember us-gaap:IndustrialPropertyMember MNR:InvestmentGradeTenantsOrSubsidiariesMember 2017-03-31 0000067625 MNR:PropertyPurchaseAgreementMember us-gaap:IndustrialPropertyMember MNR:FdxAndSubsidiariesMember 2017-03-31 0000067625 us-gaap:IndustrialPropertyMember 2017-03-31 0000067625 us-gaap:IndustrialPropertyMember 2016-10-01 2017-03-31 0000067625 us-gaap:SubsequentEventMember MNR:CommonShareholdersMember 2017-04-04 0000067625 us-gaap:SubsequentEventMember MNR:CommonShareholdersMember 2017-04-03 2017-04-04 0000067625 us-gaap:SubsequentEventMember MNR:SeriesBPreferredStockholdersMember 2017-04-04 0000067625 us-gaap:SubsequentEventMember MNR:SeriesBPreferredStockholdersMember 2017-04-03 2017-04-04 0000067625 us-gaap:SubsequentEventMember MNR:SeriesCPreferredStockholdersMember 2017-04-04 0000067625 us-gaap:SubsequentEventMember MNR:SeriesCPreferredStockholdersMember 2017-04-03 2017-04-04 0000067625 MNR:TwoThousandAndSevenPlanMember us-gaap:MaximumMember 2016-10-01 2017-03-31 0000067625 MNR:UMHPropertiesIncMember MNR:SeriesBCumulativeRedeemablePreferredStockMember 2016-10-01 2017-03-31 0000067625 MNR:UMHPropertiesIncMember MNR:CommonAndPreferredStockMember 2017-03-31 0000067625 2015-10-01 2016-09-30 0000067625 us-gaap:LineOfCreditMember 2017-03-31 0000067625 us-gaap:CommonStockMember 2016-10-01 2017-03-31 0000067625 MNR:TwoThousandAndSevenPlanMember us-gaap:RestrictedStockMember 2015-10-01 2016-03-31 0000067625 MNR:TwoThousandAndSevenPlanMember us-gaap:RestrictedStockMember 2016-10-01 2017-03-31 0000067625 us-gaap:CommonStockMember 2015-10-01 2015-10-02 0000067625 us-gaap:CommonStockMember us-gaap:MaximumMember 2015-10-01 2015-10-02 0000067625 us-gaap:CommonStockMember us-gaap:MinimumMember 2015-10-01 2015-10-02 0000067625 us-gaap:AccountingStandardsUpdate201503Member 2015-10-01 2016-03-31 0000067625 us-gaap:AccountingStandardsUpdate201503Member 2016-09-30 0000067625 MNR:FedexAndFedexSubsidiariesMember MNR:RentalAndReimbursementRevenueMember MNR:FiscalTwoThousandSeventeenMember 2015-10-01 2016-03-31 0000067625 MNR:FedexCorporationMember MNR:RentalAndReimbursementRevenueMember MNR:FiscalTwoThousandSeventeenMember 2015-10-01 2016-03-31 0000067625 MNR:FedexCorporationSubsidiariesMember MNR:RentalAndReimbursementRevenueMember MNR:FiscalTwoThousandSeventeenMember 2015-10-01 2016-03-31 0000067625 MNR:MilwaukeeElectricToolMember 2017-03-31 0000067625 2017-01-01 2017-03-31 0000067625 MNR:RockfordILMember 2017-03-31 0000067625 us-gaap:CommonStockMember MNR:AmendedAndRestatedIncentiveAwardPlanMember 2016-10-01 2017-03-31 0000067625 us-gaap:CommonStockMember MNR:AmendedAndRestatedIncentiveAwardPlanMember 2017-03-31 0000067625 MNR:TwoThousandAndSevenPlanMember 2016-10-01 2017-03-31 0000067625 us-gaap:AccountingStandardsUpdate201503Member 2016-01-01 2016-03-31 0000067625 MNR:StockOptionOneMember 2016-10-01 2017-03-31 0000067625 MNR:StockOptionOneMember 2017-03-31 0000067625 MNR:StockOptionTwoMember 2016-10-01 2017-03-31 0000067625 MNR:StockOptionTwoMember 2017-03-31 0000067625 MNR:WhiteBearLakeMNMember 2017-01-01 2017-03-31 0000067625 MNR:WhiteBearLakeMNMember 2016-01-01 2016-03-31 0000067625 us-gaap:PreferredStockMember 2017-03-31 0000067625 us-gaap:PreferredStockMember 2016-10-01 2017-03-31 0000067625 MNR:SecuritiesOneMember 2016-10-01 2017-03-31 0000067625 MNR:SecuritiesOneMember 2017-03-31 0000067625 MNR:SecuritiesTwoMember 2016-10-01 2017-03-31 0000067625 MNR:SecuritiesTwoMember 2017-03-31 0000067625 MNR:SeriesCCumulativeRedeemablePreferredStockMember 2017-03-08 2017-03-09 0000067625 MNR:SeriesCCumulativeRedeemablePreferredStockMember 2017-03-09 0000067625 us-gaap:SubsequentEventMember us-gaap:IndustrialPropertyMember MNR:FedexGroundPackageSystemIncMember 2017-04-05 0000067625 MNR:MilwaukeeElectricToolMember 2017-01-01 2017-03-31 0000067625 MNR:NineMortgagesLoansMember 2016-10-01 2017-03-31 0000067625 us-gaap:SubsequentEventMember us-gaap:IndustrialPropertyMember MNR:FedexGroundPackageSystemIncMember 2017-04-03 2017-04-05 0000067625 us-gaap:SubsequentEventMember MNR:ThreeMortgagesLoansMember 2017-04-29 2017-05-01 0000067625 MNR:AmendedAndRestatedIncentiveAwardPlanMember 2017-03-31 0000067625 MNR:TwoThousandAndSevenPlanMember us-gaap:MaximumMember 2017-03-31 0000067625 us-gaap:IndustrialPropertyMember us-gaap:MinimumMember 2016-10-01 2017-03-31 0000067625 us-gaap:IndustrialPropertyMember us-gaap:MaximumMember 2016-10-01 2017-03-31 iso4217:USD xbrli:shares xbrli:pure iso4217:USD xbrli:shares MNR:Properties utr:sqft MNR:Employee utr:acre MNR:RealEstateProperties MNR:securities MONMOUTH REAL ESTATE INVESTMENT CORP 10-Q 2017-03-31 false --09-30 246678 431765 2300000 2300000 8850000 5400000 194600000 193289750 68920972 72107640 68920972 72107640 MNR 73604894 99405410 13769073 0 0 0 0 0 0 0 0 73604894 5550 59830271 13769073 5550 59830271 16776822 5178000 2678130 13606625 13606625 0 0 85793857 85793857 0 0 4928 4928 0 0 99405410 0 0 80790684 26000000 1171313495 1224207318 0.07875 0.07875 0.06125 0.06125 0.07625 0.07625 0.06125 200000000 200000000 37812970 28200304 42349721 53992290 2264065 3858754 22613315 148830169 161947883 1005938180 1056125003 165375315 168082315 1022483326 1062259435 4830987 7966014 6917431 7478688 1444824 977700 1245923 1063498 4165268 3932981 5816153 5758872 7227571 8425238 1223485885 1220219735 9868572 14518225 3998771 2798104 477476010 477598305 484047676 625627787 520914634 57500000 57500000 210000000 135000000 689210 705367 0 0 391726621 418713736 12942267 12370289 6300352 0 0 597858098 699305101 1223485885 1220219735 3238516 3512238 12332599 12841419 0.01 0.01 0.01 0.01 0.01 2300000 2300000 8400000 5400000 2139750 8400000 5400000 2300000 2300000 8400000 5400000 2139750 8400000 5400000 0.01 0.01 0.01 0.01 0.01 0.01 1412050 Q2 95749508 22951899 9934618 12073909 54489802 45226200 22966838 27308191 7598116 6550413 3355970 3697361 46891686 38675787 19610868 23610830 875553 972971 486360 427756 14131572 11381494 5786062 7139077 178526 410597 265012 0 3521001 3557409 2221445 2078538 2582733 2334723 1103358 1288265 5758843 5047813 2675677 2851862 27048228 23705007 12537914 13785498 -9163042 -7450591 -3296977 -5098082 806108 887342 878962 0 2731333 2564321 1379668 1439182 18278532 14070602 7131947 8424611 7279796 4303516 2151758 3582036 10998736 9767086 4980189 4842575 0.16 0.15 0.08 0.07 0.26 0.22 0.11 0.12 0.26 0.22 0.11 0.12 0.16 0.15 0.08 0.07 70607766 63828310 64736469 71406875 70456222 63757087 64657058 71243381 234130 8389308 6599166 2175171 806108 887342 878962 0 17706554 21572568 12852151 10599782 10426758 17269052 10700393 7017746 30845775 28428170 861044 8514594 -839704 -2327353 3135027 2840928 -452335 1135834 806108 887342 266345 206928 101968 166190 15673022 12827503 -79130314 -86278535 29305625 13132910 3739239 7416459 1575000 850000 1000000 900000 1013209 10193323 56101538 70418761 0 1412050 660702 615329 37700474 14235258 38000000 46670000 38000000 -54790684 14875497 -24513070 55711074 18076564 16292674 6621359 4303516 -72797609 -2139291 53493750 0 2467000 -0.1 -0.07 -0.03 -0.05 -0.1 -0.07 -0.03 -0.05 -95336 0 4125819 0 99 100 16010000 16554000 102135 83000 26340 38333 280000 65000 65000 65000 0.49 0.06 0.43 0.45 0.07 0.38 2031-03-31 2026-09-30 2028-07-31 2032-01-31 49290400 48591100 24047500 24136300 11351100 12585600 6214100 4960700 2933131 143534000 0.0444 0.0617 0.1884 0.2020 0.0226 0.0209 P8Y P8Y 0 0 7.84 100686 0.16 0.984375 0.3828125 0.16 0.4921875 0.3828125 2017-05-15 2017-05-15 2017-05-15 2017-05-15 2017-05-15 2017-05-15 25.00 25.00 25.00 1.96875 1.53125 10000000 4536751 4174782 4536751 2017-04-04 2017-04-04 2017-04-04 2017-04-04 2017-04-04 2017-04-04 2017-06-15 2017-06-15 2017-06-15 2017-06-15 2017-06-15 2017-06-15 493348000 12108000 10430000 338584 213672 1998000 343483 7 Years 15 Years 13.3 Years 8 5 8 8 0.0360 0.0445 0.0389 <p style="margin: 0pt"></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The fair value of these financial assets was determined using the following inputs at March 31, 2017 and September 30, 2016:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="14" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value Measurements at Reporting Date Using</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Total</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Quoted Prices in Active Markets for Identical Assets</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Level 1)</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Significant Other Observable Inputs</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Level 2)</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Significant Unobservable Inputs</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Level 3)</b></p></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-decoration: underline; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>As of March 31, 2017:</u></b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 40%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Equity Securities &#8211; Preferred Stock</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">13,606,625</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">13,606,625</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Equity Securities &#8211; Common Stock</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">85,793,857</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">85,793,857</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Mortgage Backed Securities</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4,928</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4,928</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Total Securities Available for Sale at Fair Value</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">99,405,410</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">99,405,410</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-decoration: underline; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>As of September 30, 2016:</u></b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Equity Securities &#8211; Preferred Stock</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">13,769,073</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">13,769,073</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Equity Securities &#8211; Common Stock</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">59,830,271</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">59,830,271</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Mortgage Backed Securities</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">5,550</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">5,550</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Total Securities Available for Sale at Fair Value</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">73,604,894</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">73,604,894</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="margin: 0pt"></p> 35100000 21001538 32120000 164878 164878 1764878 100000 P15Y P10Y P10Y P15Y 219158000 1.00 1.00 0.68 0.53 1.00 Large Accelerated Filer P12Y P15Y 498540 2017 0.23299 12700483 10902254 5555607 6537264 180000 P15Y P15Y P15Y 23500000 14500000 20875000 0.0403 0.0397 0.0386 2309000 1365000 2102000 250000 201538 499000 8187000 6508000 Only tenants that leased 5% or more of the Company’s total square footage No other tenant accounted for 5% or more of the Company’s total rental space No other tenant accounted for 5% or more of the Company's total Rental and Reimbursement Revenue. 0.59 0.06 0.53 0.56 0.07 0.49 99405410 0.072 0.16 0.18 0.09 0.07 0.10 113686 1526915 1103013 13.43 10832600 5000000 2500000 200000 100000 0.0825 0.0800 665897 473038 238671 384984 0.0760 0.0345 0.0450 0.0490 0.0450 P10Y8M12D P9Y3M18D P10Y6M 0.0448 0.0437 12014000 21174000 12014000 26000000 9424697 9623592 -3152554 -3174221 6272143 6449371 3186668 53493750 25.23299 -53493750 0 1500000 50625 4762000 Prior lease expiration date from September 2021 through September 2026. 5.27 598000 1097000 6.68 59425 4.78 4126000 -743700 -717560 -26140 prime plus 0.75% 300000000 100000000 2020-09-30 200000000 483748153 484047676 0000067625 1353000 1054000 95336 0 0 0 -26707 -109996 0 -40914 0 0 0 0 -8006 -49038 0 -25020 -9846 -20341 0 -4571 -8855 -40617 0 -11323 0.0437 0.0460 0.0401 0.0448 1.49 0.74 0.16 0.15 0.64 0 0 1600000 0.714584 4768266 2284633 2483633 -122043 -109996 0 -40914 0 0 0 0 0.996 1.00 862000 71017493 0 71017000 Company’s one hundred properties, only four leases contain an early termination provision. The Company’s leases with early termination provisions are the 26,340 square foot location in Ridgeland (Jackson), MS, the 38,333 square foot location in Rockford, IL, the 83,000 square foot location in Roanoke, VA and the 102,135 square foot location in O’Fallon (St. Louis), MO. 1709000 2017-03-26 2017-03-26 735000 2196300 473038 238671 2017-01-04 2016-12-09 2016-01-05 1 10 1 65000 215000 65000 15.04 14.24 10.37 2025-01-04 2024-12-09 2024-01-05 151544 71223 79411 163494 P7Y9M18D 22880700 22161000 719700 0 0 0 0 0 0 3 1 2 22880700 5943000 16937700 -743700 -79460 -664240 0.01 0.04 Availability under the Facility is limited to 60% of the value of the borrowing base properties. The value of the borrowing base properties is determined by applying a 7.0% capitalization rate to the NOI generated by the Company’s unencumbered, wholly-owned industrial properties. Borrowings under the Facility, will, at the Company’s election, either i) bear interest at LIBOR plus 140 basis points to 220 basis points, depending on the Company’s leverage ratio, or ii) bear interest at BMO’s prime lending rate plus 40 basis points to 120 basis points, depending on the Company’s leverage ratio. The Company’s borrowings as of March 31, 2017, based on the Company's leverage ratio as of March 31, 2017, bear interest at LIBOR plus 170 basis points, which was at an interest rate of 2.68% as of March 31, 2017. 25.00 73500000 P14Y10M24D <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>NOTE 1 &#8211; ORGANIZATION AND ACCOUNTING POLICIES</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Monmouth Real Estate Investment Corporation, a Maryland corporation, together with its consolidated subsidiaries (MREIC, the Company, or we), operates as a real estate investment trust (REIT) deriving its income primarily from real estate rental operations. As of March 31, 2017, the Company owned one hundred properties with total square footage of approximately 16,554,000, which was 100% occupied, as compared to ninety-nine properties with total square footage of approximately 16,010,000, which was 99.6% occupied as of September 30, 2016. These properties are located in thirty states: Alabama, Arizona, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington and Wisconsin. The Company also owns a portfolio of REIT investment securities, which the Company generally limits to no more than approximately 10% of its undepreciated assets (which is the Company&#8217;s total assets excluding accumulated depreciation).</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company has elected to be taxed as a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the Code), and intends to maintain its qualification as a REIT in the future. As a qualified REIT, with limited exceptions, the Company will not be taxed under Federal and certain state income tax laws at the corporate level on taxable income that it distributes to its shareholders. For special tax provisions applicable to REITs, refer to Sections 856-860 of the Code. The Company is subject to franchise taxes in several of the states in which the Company owns property.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The interim Consolidated Financial Statements furnished herein have been prepared in accordance with Accounting Principles Generally Accepted in the United States of America (U.S. GAAP) applicable to interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Company&#8217;s annual report on Form 10-K for the fiscal year ended September 30, 2016.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Use of Estimates</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In preparing the financial statements in accordance with U.S. GAAP, management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods and related disclosure of contingent assets and liabilities. Actual results could differ from these estimates and assumptions.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Reclassification</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Certain prior period amounts in the accompanying Consolidated Financial Statements have been reclassified to conform to the current period&#8217;s presentation.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Lease Termination Income</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Lease Termination Income is recognized in operating revenues when there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and the termination consideration is probable of collection. Lease termination amounts are paid by tenants who want to terminate their lease obligations before the end of the contractual term of the lease by agreement with the Company.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Of the Company&#8217;s one hundred properties, only four leases contain an early termination provision. The Company&#8217;s leases with early termination provisions are the 26,340 square foot location in Ridgeland (Jackson), MS, the 38,333 square foot location in Rockford, IL, the 83,000 square foot location in Roanoke, VA and the 102,135 square foot location in O&#8217;Fallon (St. Louis), MO. Each lease termination provision contains certain requirements that must be met in order to exercise each termination provision. These requirements include; date termination can be exercised, the time frame that notice must be given by the tenant to the Company and the termination fee that would be required to be paid by the tenant to the Company. The total potential termination fee of the four leases with a termination provision amounts to approximately $1,709,000.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Stock Compensation Plan</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s Stock Option and Stock Award Plan, adopted in 2007 and amended and restated in 2010 (the 2007 Plan), authorized the grant to officers and key employees of options to purchase up to 1,500,000 shares of common stock, $0.01 par value per share (common stock), including up to 100,000 shares of restricted stock awarded to any one participant in any one fiscal year. The 2007 Plan expired on March 26, 2017. On March 13, 2017, upon recommendation of the Compensation Committee of the Board, the Board approved the Amended and Restated 2007 Incentive Award Plan, or the &#8220;Plan&#8221;, conditioned upon shareholder approval. At the Company&#8217;s Annual Meeting on May 18, 2017, the Company&#8217;s common shareholders will be asked to consider and vote on a proposal to approve the Plan. The Plan constitutes an amendment and restatement of the 2007 Plan, which was initially approved by the Company&#8217;s shareholders on July 26, 2007, and was subsequently amended and restated and approved by the Company&#8217;s shareholders on May 6, 2010. 164,878 shares of common stock remained available for grant under the 2007 Plan and, if approved by the Company&#8217;s shareholders, the Plan will provide an additional 1,600,000 shares, for a total of 1,764,878 shares of common stock available for future grant of stock options, restricted stock, or other equity based awards, plus any shares subject to outstanding options that expire or are forfeited without being exercised.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company accounts for awards of stock options and restricted stock in accordance with ASC 718-10, &#8220;Compensation-Stock Compensation&#8221;. ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). The compensation cost for stock option grants is determined using option pricing models, intended to estimate the fair value of the awards at the grant date less estimated forfeitures. The compensation expense for restricted stock is recognized based on the fair value of the restricted stock awards less estimated forfeitures. The fair value of restricted stock awards is equal to the fair value of the Company&#8217;s stock on the grant date. The amortization of compensation costs for stock option grants and restricted stock are included in General and Administrative Expenses in the accompanying Consolidated Statements of Income and amounted to $166,190 and $101,968 for the three months ended March 31, 2017 and 2016, respectively and amounted to $266,345 and $206,928 for the six months ended March 31, 2017 and 2016, respectively.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2017 and 2016, the following stock options, which vest one year after grant date, were granted under the Company&#8217;s 2007 Plan:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Date of</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Grant</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Employees</b></p></td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Option</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Price</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Expiration</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Date</b></p></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 22%; padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/4/17</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 18%; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 16%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">65,000</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 18%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">15.04</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 18%; padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/4/25</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">12/9/16</font></td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">215,000</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">14.24</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">12/9/24</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/5/16</font></td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">65,000</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10.37</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/5/24</font></td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the fiscal year indicated:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fiscal 2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fiscal 2016</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 62%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Dividend yield</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 16%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.44</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 16%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6.17</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Expected volatility</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">18.84</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">20.20</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.26</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.09</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Expected lives (years)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">8</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">8</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Estimated forfeitures</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The weighted-average fair value of options granted during the six months ended March 31, 2017 and 2016 was $1.49 and $0.74 per option, respectively.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2017 and 2016, no shares of restricted stock were granted under the Company&#8217;s 2007 Plan. During the six months ended March 31, 2016, five participants exercised options to purchase an aggregate of 180,000 shares of common stock at a weighted average exercise price of $7.84 per share for total proceeds of $1,412,050. During the six months ended March 31, 2017, no options were exercised. As of March 31, 2017, a total of 164,878 shares were available to grant as stock options or as restricted stock and there were outstanding options to purchase 735,000 shares under the 2007 Plan. The 2007 Plan expired on March 26, 2017. The aggregate intrinsic value of options outstanding as of March 31, 2017 was $2,196,300.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Recent Accounting Pronouncements</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In January 2017, the Financial Accounting Standards Board (&#8220;FASB&#8221;) issued Accounting Standards Update (&#8220;ASU&#8221;) 2017-01, &#8220;Business Combinations (Topic 805): Clarifying the Definition of a Business&#8221;. ASU 2017-01 seeks to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, intangible assets and consolidation. The adoption of ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments should be applied prospectively on or after the effective dates. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In August 2016, the FASB issued ASU 2016-15, &#8220;Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments&#8221;. ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In March 2016, the FASB issued ASU 2016-09 &#8220;Compensation &#8211; Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which relates to the accounting for employee share-based payments&#8221;. ASU 2016-09 addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In February 2016, the FASB issued ASU 2016-02, &#8220;Leases&#8221;. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. ASU 2016-02 will be effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In January 2016, the FASB issued ASU 2016-01, &#8220;Financial Instruments &#8211; Overall: Recognition and Measurement of Financial Assets and Financial Liabilities&#8221;. ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes become effective for the Company&#8217;s fiscal year beginning October 1, 2018. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements and has not determined the effects of this update on the Company&#8217;s financial position, results of operations or cash flows and disclosures at this time.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In April 2015, the FASB issued ASU 2015-03, &#8220;Interest - Imputation of Interest (Topic 835): Simplifying the Presentation of Debt Issuance Costs&#8221;. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. In August 2015, the FASB issued ASU 2015-15, &#8220;Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements&#8221; (Subtopic 835-30), which clarified that debt issuance costs related to line-of-credit arrangements may be presented as an asset and amortized over the term of the line-of-credit arrangement regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted these standards effective October 1, 2016. As a result, debt issuance costs related to debt liabilities that are not line-of-credit arrangements are included as a direct deduction from the related debt liability and those related to line-of-credit arrangements continue to be included as an asset on the accompanying Consolidated Balance Sheets. The effects of this standard were applied retrospectively to all prior periods presented. The effect of the change in accounting principle was the reduction in the amount of $6,272,143 of the Fixed Rate Mortgage Notes Payable liability and a corresponding reduction of the Financing Costs asset as of September 30, 2016 and a reclassification of Amortization of Financing Costs of $238,671 and $473,038 for the three and six months ended March 31, 2016, respectively to Interest Expense, net of Amortization of Financing Costs in our Consolidated Statement of Income.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying Consolidated Financial Statements.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Segment Reporting &#38; Financial Information</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s primary business is the ownership and management of real estate properties. The Company seeks to invest in well-located, modern, single-tenant, industrial buildings leased primarily to investment grade tenants or their subsidiaries on long-term net leases. The Company reviews operating and financial information for each property on an individual basis and, therefore, each property represents an individual operating segment. The Company evaluates financial performance using Net Operating Income (&#8220;NOI&#8221;) from property operations. NOI is defined as recurring Rental and Reimbursement Revenue, less Real Estate Taxes and Operating Expenses, such as insurance, utilities and repairs and maintenance. The Company has aggregated the properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities, including the fact that they are operated as industrial properties subject to long-term net leases primarily to investment grade tenants or their subsidiaries.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>NOTE 2 &#8211; NET INCOME PER SHARE</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Basic Net Income per Share is calculated by dividing Net Income Attributable to Common Shareholders by the weighted-average number of common shares outstanding during the period. Diluted Net Income per Common Share is calculated by dividing Net Income Attributable to Common Shareholders by the weighted-average number of common shares outstanding plus the weighted-average number of net shares that would be issued upon exercise of stock options pursuant to the treasury stock method.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In addition, common stock equivalents of 163,494 and 79,411 shares are included in the diluted weighted average shares outstanding for the three months ended March 31, 2017 and 2016, respectively, and common stock equivalents of 151,544 and 71,223 shares are included in the diluted weighted average shares outstanding for the six months ended March 31, 2017 and 2016, respectively. For the diluted weighted average shares outstanding for the three months ended March 31, 2017 and 2016, 65,000 options to purchase shares of common stock were antidilutive. For the diluted weighted average shares outstanding for the six months ended March 31, 2017 and 2016, 280,000 and 65,000 options to purchase shares of common stock, respectively, were antidilutive.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>NOTE 3 &#8211; REAL ESTATE INVESTMENTS</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>&#160;</i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i><u>Acquisitions</u></i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 17, 2016, the Company purchased a newly constructed 338,584 square foot industrial building located in Hamburg, NY, which is in the Buffalo Metropolitan Statistical Area (MSA). The building is 100% net-leased to FedEx Ground Package System, Inc. for fifteen years through March 2031. The purchase price was $35,100,000. The Company obtained a 15 year fully-amortizing mortgage loan of $23,500,000 at a fixed interest rate of 4.03%. Annual rental revenue over the remaining term of the lease averages approximately $2,309,000. In connection with the acquisition, the Company completed its evaluation of the acquired lease. As a result of its evaluation, the Company allocated $250,000 to an Intangible Asset associated with the lease in-place.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 30, 2016, the Company purchased a newly constructed 213,672 square foot industrial building located in Ft. Myers, FL. The building is 100% net-leased to FedEx Ground Package System, Inc. for ten years through September 2026. The purchase price was $21,001,538. The Company obtained a 15 year fully-amortizing mortgage loan of $14,500,000 at a fixed interest rate of 3.97%. Annual rental revenue over the remaining term of the lease averages approximately $1,365,000. In connection with the acquisition, the Company completed its evaluation of the acquired lease. As a result of its evaluation, the Company allocated $201,538 to an Intangible Asset associated with the lease in-place.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">FedEx Ground Package System, Inc.&#8217;s ultimate parent, FedEx Corporation (FDX) is a publicly-owned company and financial information related to this entity is available at the SEC&#8217;s website, <u>www.sec.gov</u>. FDX is rated &#8220;BBB&#8221; by S&#38;P Global Ratings (www.standardandpoors.com) and is rated &#8220;Baa2&#8221; by Moody&#8217;s (www.moodys.com), which are both considered &#8220;Investment Grade&#8221; ratings. The references in this report to the SEC&#8217;s website, S&#38;P Global Rating&#8217;s website and Moody&#8217;s website are not intended to and do not include or incorporate by reference into this report the information of FDX on such websites.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Expansions</u></i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 1, 2016, a 50,625 square foot expansion of the building leased to FedEx Ground Package System, Inc. located in Edinburg, TX was completed for a cost of approximately $4,762,000, resulting in a new 10 year lease, which extended the prior lease expiration date from September 2021 through September 2026. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $499,000 from approximately $598,000, or $5.27 per square foot, to approximately $1,097,000, or $6.68 per square foot.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>&#160;</i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Disposition</u></i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 27, 2016, the Company sold its only vacant building consisting of a 59,425 square foot industrial building situated on 4.78 acres located in White Bear Lake, MN for net proceeds of approximately $4,126,000.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Since the sale of this property does not represent a strategic shift that has (or will have) a major effect on the Company&#8217;s operations and financial results, the operations generated from this property are not included in Discontinued Operations.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following table summarizes the operations of the Company&#8217;s 59,425 square foot industrial building located in White Bear Lake, MN prior to its sale on October 27, 2016 which is included in the accompanying Consolidated Statements of Income for the three and six months ended March 31, 2017 and 2016:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three Months Ended</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Six Months Ended</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2016</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2016</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 40%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Rental and Reimbursement Revenue</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Real Estate Taxes</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(11,323</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(8,855</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(40,617</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Operating Expenses</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(4,571</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(9,846</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(20,341</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Depreciation &#38; Amortization</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(25,020</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(8,006</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(49,038</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Interest Expense</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Loss from Operations</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(40,914</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(26,707</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(109,996</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Loss on Sale of Real Estate Investment</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(95,336</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Net Loss</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(40,914</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(122,043</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(109,996</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>&#160;</i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i><u>Pro forma information</u></i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following unaudited pro forma condensed financial information has been prepared utilizing the historical financial statements of the Company and the effect of additional revenue and expenses generated from property acquired and expanded during fiscal 2017 and 2016, assuming that the acquisitions and completed expansions had occurred as of October 1, 2015, after giving effect to certain adjustments including (a) Rental Revenue adjustments resulting from the straight-lining of scheduled rent increases, (b) Interest Expense resulting from the assumed increase in Fixed Rate Mortgage Notes Payable and Loans Payable related to the new acquisitions, and (c) Depreciation Expense related to the new acquisitions. In addition, Net Income Attributable to Common Shareholders excludes the operating expenses incurred during fiscal 2017 and 2016 for the one vacant property, located in White Bear Lake, MN, that was sold during the six months ended March 31, 2017 on October 27, 2016. Furthermore, the proceeds raised from the Dividend Reinvestment and Stock Purchase Plan (the DRIP) were used to fund property acquisitions and expansions and therefore, the weighted average shares outstanding used in calculating the Basic and Diluted Net Income per Share Attributable to Common Shareholders has been adjusted to account for the increase in shares raised through the DRIP, as if all the shares raised had occurred on October 1, 2015. The unaudited pro forma condensed financial information is not indicative of the results of operations that would have been achieved had the acquisitions and expansions reflected herein been consummated on the dates indicated or that will be achieved in the future.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three Months Ended</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Six Months Ended</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2016</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2016</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 40%; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Rental Revenues</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">24,136,300</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">24,047,500</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">49,290,400</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">48,591,100</font></td> <td style="width: 1%; line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Net Income Attributable to Common Shareholders</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4,960,700</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6,214,100</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">11,351,100</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">12,585,600</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Basic and Diluted Net Income per Share Attributable to Common Shareholders</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.07</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.09</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.16</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.18</font></td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>&#160;</i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i><u>Tenant Concentration</u></i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company has a concentration of FDX and FDX subsidiary-leased properties, consisting of fifty-five separate stand-alone leases covering approximately 8,187,000 square feet as of March 31, 2017 and forty-nine separate stand-alone leases covering approximately 6,508,000 square feet as of March 31, 2016. The fifty-five separate stand-alone leases that are leased to FDX and FDX subsidiaries have a weighted average lease maturity of 7.8 years. The percentage of FDX and its subsidiaries leased square footage to the total of the Company&#8217;s rental space was 49% (6% to FDX and 43% to FDX subsidiaries) as of March 31, 2017 and 45% (7% to FDX and 38% to FDX subsidiaries) as of March 31, 2016. As of March 31, 2017, the only tenants that leased 5% or more of the Company&#8217;s total square footage were FDX and its subsidiaries and Milwaukee Electric Tool Corporation, which leases one property through July 2028 consisting of approximately 862,000 square feet, which was approximately 5% of the Company&#8217;s rental space. As of March 31, 2016, no other tenant, other than FDX and its subsidiaries, accounted for 5% or more of the Company&#8217;s total rental space.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Annualized Rental and Reimbursement Revenue from FDX and its subsidiaries is estimated to be approximately 59% (6% to FDX and 53% to FDX subsidiaries) of total Rental and Reimbursement Revenue for fiscal 2017 and was 56% (7% to FDX and 49% to FDX subsidiaries) of total Rental and Reimbursement Revenue for fiscal 2016. No other tenant accounted for 5% or more of the Company&#8217;s total Rental and Reimbursement Revenue for the six months ended March 31, 2017 and 2016.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In addition to real estate property holdings, the Company held $99,405,410 in marketable REIT securities at March 31, 2017, representing 7.2% of the Company&#8217;s undepreciated assets (which is the Company&#8217;s total assets excluding accumulated depreciation). These liquid real estate holdings are not included in calculating the tenant concentration ratios above and therefore further enhance the Company&#8217;s diversification. The securities portfolio provides the Company with additional liquidity, diversification, income and serves as a proxy for real estate when more favorable risk adjusted returns are not available.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>NOTE 4 &#8211; SECURITIES AVAILABLE FOR SALE AT FAIR VALUE</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s Securities Available for Sale at Fair Value consists primarily of marketable common and preferred stock of other REITs with a fair value of $99,405,410 as of March 31, 2017. The Company generally limits its investment in marketable securities to no more than approximately 10% of its undepreciated assets (which is the Company&#8217;s total assets excluding accumulated depreciation). The REIT securities portfolio provides the Company with additional liquidity, diversification, income and serves as a proxy for real estate when more favorable risk adjusted returns are not available.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2017, the Company sold or redeemed securities with a cost basis of $2,933,131 and recognized a Gain on Sale of Securities Transactions of $806,108. The Company also made purchases of $29,305,625 in Securities Available for Sale at Fair Value. Of this amount, the Company made total purchases of 113,686 common shares of UMH Properties, Inc. (UMH), a related REIT, for a total cost of $1,526,915, or a weighted average cost of $13.43 per share, of which 100,686 shares were purchased through UMH&#8217;s Dividend Reinvestment and Stock Purchase Plan. The Company owned a total of 1,103,013 UMH common shares as of March 31, 2017 at a total cost of $10,832,600 and a fair value of $16,776,822. The Company owns 200,000 shares of UMH&#8217;s 8.25% Series A Cumulative Redeemable Preferred Stock at a total cost of $5,000,000 with a fair value of $5,178,000 and the Company owns 100,000 shares of UMH&#8217;s 8.00% Series B Cumulative Redeemable Preferred Stock at a total cost of $2,500,000 with a fair value of $2,678,130. The unrealized gain on the Company&#8217;s investment in UMH&#8217;s common and preferred stock as of March 31, 2017 was $6,300,352.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of March 31, 2017, the Company had total net unrealized holding gains on its securities portfolio of $12,370,289. The Company considers many factors in determining whether a security is other than temporarily impaired, including the nature of the security and the cause, severity and duration of the impairment. The Company normally holds REIT securities long-term and has the ability and intent to hold these securities to recovery. The following is a summary of the securities that the Company has determined to be temporarily impaired as of March 31, 2017:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Less than 12 Months</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>12 Months or Longer</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unrealized</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unrealized</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Description of Securities</b></font></td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Losses</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Losses</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 40%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Preferred stock</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">719,700</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(26,140</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Common stock</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">22,161,000</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(717,560</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">22,880,700</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(743,700</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">The following is a summary of the range of losses:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Individual</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Securities</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Unrealized</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Losses</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Range of Loss</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 1%; text-align: center; line-height: 115%">&#160;</td> <td style="width: 22%; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 22%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">5,943,000</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 23%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(79,460</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 22%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">16,937,700</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(664,240</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 2.25pt double; text-align: center; line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">22,880,700</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(743,700</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>NOTE 5 &#8211; DEBT</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">For the three months ended March 31, 2017 and 2016, amortization of financing costs included in interest expense was $384,984 and $238,671, respectively. For the six months ended March 31, 2017 and 2016, amortization of financing costs included in interest expense was $665,897 and $473,038, respectively.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following is a summary of our Fixed Rate Mortgage Notes Payable as of March 31, 2017 and September 30, 2016:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>9/30/2016</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted Average Interest Rate (1)</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted Average Interest Rate (1)</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 44%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Fixed Rate Mortgage Notes Payable</font></td> <td style="width: 2%; line-height: 115%">&#160;</td> <td style="width: 1%; border-bottom: black 1.5pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">484,047,676</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 2%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 10%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.37</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td> <td style="width: 2%; line-height: 115%">&#160;</td> <td style="width: 1%; border-bottom: black 1.5pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">483,748,153</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 2%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 10%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.48</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Debt Issuance Costs</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9,623,592</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9,424,697</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated Amortization of Debt Issuance Costs</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(3,174,221</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(3,152,554</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Unamortized Debt Issuance Costs</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6,449,371</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6,272,143</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">477,598,305</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">477,476,010</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">(1) Weighted average interest rate excludes amortization of debt issuance costs.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of March 31, 2017, interest payable on these mortgages were at fixed rates ranging from 3.45% to 7.60%, with a weighted average interest rate of 4.37%. This compares to a weighted average interest rate of 4.48% as of September 30, 2016 and 4.60% as of March 31, 2016. As of March 31, 2017, the weighted average loan maturity of the Fixed Rate Mortgage Notes Payable was 10.7 years. This compares to a weighted average loan maturity of the Fixed Rate Mortgage Notes Payable of 10.5 years as of September 30, 2016 and 9.3 years as of March 31, 2016.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In connection with the two properties acquired during the six months ended March 31, 2017, which are located in Hamburg (Buffalo), NY and Ft. Myers, FL (as described in Note 3), the Company obtained two, fifteen year, fully-amortizing mortgage loans. The two mortgage loans originally totaled $38,000,000 and have a weighted average interest rate of 4.01%.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2017, the Company fully repaid nine mortgage loans associated with eight of its properties located in Jacksonville, FL; El Paso, TX; Lebanon, OH; Halfmoon, NY; Bedford Heights, OH; Hanahan, SC; Elgin, IL and Kansas City, MO, totaling approximately $21,174,000.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Subsequent to the quarter end, on May 1, 2017, the Company fully repaid three mortgage loans associated with three properties located in Chattanooga, TN; Roanoke, VA and Orion, MI, totaling approximately $12,014,000.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2017, the Company fully repaid its two term loans totaling $4,768,266. One loan totaling $2,284,633 had an interest rate of 4.90% and one loan totaling $2,483,633 had a variable annual interest rate of prime plus 0.75% with a floor of 4.50%. The interest rate on the date this loan was fully repaid was 4.50%.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of March 31, 2017, Loans Payable represented the amount drawn down on the Company&#8217;s $200,000,000 unsecured line of credit facility (the &#8220;Facility&#8221;), maturing in September 2020 with a one year extension at the Company&#8217;s option (subject to various conditions as specified in the loan agreement). During the six months ended March 31, 2017, the Company repaid $50,000,000 under the Facility and the Company did not make any additional draws under Facility. As of March 31, 2017, $26,000,000 was drawn down under the Facility. Availability under the Facility is limited to 60% of the value of the borrowing base properties. The value of the borrowing base properties is determined by applying a 7.0% capitalization rate to the NOI generated by the Company&#8217;s unencumbered, wholly-owned industrial properties. Borrowings under the Facility, will, at the Company&#8217;s election, either i) bear interest at LIBOR plus 140 basis points to 220 basis points, depending on the Company&#8217;s leverage ratio, or ii) bear interest at BMO&#8217;s prime lending rate plus 40 basis points to 120 basis points, depending on the Company&#8217;s leverage ratio. The Company&#8217;s borrowings as of March 31, 2017, based on the Company&#8217;s leverage ratio as of March 31, 2017, bear interest at LIBOR plus 170 basis points, which was at an interest rate of 2.68% as of March 31, 2017. In addition, the Company has a $100,000,000 accordion feature, bringing the total potential availability under the Facility (subject to various conditions as specified in the loan agreement) up to $300,000,000.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>NOTE 6 &#8211; SHAREHOLDERS&#8217; EQUITY</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>&#160;</i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s authorized stock as of March 31, 2017 consisted of 193,289,750 shares of common stock, of which 72,107,640 shares were issued and outstanding, 2,300,000 shares of 7.875% Series B Cumulative Redeemable Preferred Stock, $0.01 par value per share (Series B Preferred Stock), of which all were authorized, issued and outstanding, 8,850,000 authorized shares of 6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share (Series C Preferred Stock), of which 8,400,000 were issued and outstanding, and 200,000,000 authorized shares of Excess Stock, $0.01 par value per share, of which none were issued or outstanding.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>&#160;</i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Common Stock</u></i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 1, 2015, the Company&#8217;s Board of Directors approved a 6.7% increase in the Company&#8217;s quarterly common stock dividend, raising it to $0.16 per share from $0.15 per share. This represents an annualized dividend rate of $0.64 per share. The Company has maintained or increased its cash dividend for twenty-five consecutive years.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company raised $42,349,721 (including dividend reinvestments of $4,536,751) from the issuance of 3,186,668 shares of common stock under its Dividend Reinvestment and Stock Purchase Plan (DRIP) during the six months ended March 31, 2017. During the six months ended March 31, 2017, the Company paid $22,613,315 in total cash dividends, or $0.16 per share, to common shareholders, of which $4,536,751 was reinvested in the DRIP.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 4, 2017, the Company declared a dividend of $0.16 per share to be paid June 15, 2017 to common shareholders of record as of the close of business on May 15, 2017.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 17, 2017, the Board of Directors reaffirmed its Share Repurchase Program that authorizes the Company to purchase up to $10,000,000 in the aggregate of the Company&#8217;s common stock. The Company may repurchase its shares from time to time if, in the opinion of the Board of Directors, such acquisition is advantageous to the Company. No shares were repurchased during the six months ended March 31, 2017 and, as of March 31, 2017, the Company does not own any of its own shares.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>&#160;</i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i><u>7.625% Series A Cumulative Redeemable Preferred Stock</u></i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On September 14, 2016, the Company announced that it intended to redeem all 2,139,750 issued and outstanding shares of its 7.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (7.625% Series A Preferred Stock). The Company redeemed all of the outstanding shares of the 7.625% Series A Preferred Stock on October 14, 2016, at a redemption price of $25.00 per share, totaling $53,493,750, plus all dividends accrued and unpaid to and including the redemption date, in an amount equal to $0.23299 per share, totaling $498,540, for a total cash payment of $25.23299 per share, totaling $53,992,290.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>&#160;</i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>7.875% Series B Cumulative Redeemable Preferred Stock</u></i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><i>&#160;</i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2017, the Company paid $2,264,065 in Preferred Dividends, or $0.984375 per share, on its outstanding Series B Preferred Stock. Dividends on the Series B Preferred Stock are cumulative and payable quarterly at an annual rate of $1.96875 per share. The Series B Preferred Stock has no maturity and will remain outstanding indefinitely unless redeemed or otherwise repurchased. Except in limited circumstances relating to the Company&#8217;s qualification as a REIT, the Series B Preferred Stock is not redeemable prior to June 7, 2017. On and after June 7, 2017, at any time and, from time to time, the Series B Preferred Stock will be redeemable in whole, or in part, at the Company&#8217;s option, at a cash redemption price of $25.00 per share, plus all accrued and unpaid dividends (whether or not declared) to, but not including, the date of redemption. As discussed below, the Company intends to use the proceeds from the issuance of the 3,000,000 additional shares of its 6.125% Series C Preferred Stock to redeem all of the 2,300,000 outstanding shares of its 7.875% Series B Preferred Stock. Once the 7.875% Series B Preferred Stock is called for redemption (which cannot occur less than 30 days nor more than 60 days prior to the redemption date), the Company will recognize a preferred share redemption charge of approximately $2,467,000 related to the original issuance costs. On April 4, 2017, the Company declared a dividend of $0.4921875 per share to be paid June 15, 2017 to Series B preferred shareholders of record as of the close of business on May 15, 2017.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>&#160;</i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>6.125% Series C Cumulative Redeemable Preferred Stock</u></i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>&#160;</i></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On March 9, 2017, the Company issued an additional 3,000,000 shares of its 6.125% Series C Preferred Stock, liquidation preference of $25.00 per share, at a public offering price of $24.50 per share, for gross proceeds of $73,500,000 before deducting the underwriting discount and offering expenses. Net proceeds from the offering, after deducting underwriting discounts and other offering expenses were approximately $71,017,000. As discussed above, the Company intends to use the net proceeds from this offering to redeem all of the outstanding shares of its 7.875% Series B Preferred Stock, which are not redeemable prior to June 7, 2017. The remaining proceeds were used to reduce the amount outstanding under the Company&#8217;s revolving credit facility and will be used to purchase properties and fund expansions of existing properties in the ordinary course of its business and for general corporate purposes. Prior to the issuance of the additional 3,000,000 shares of the 6.125% Series C Preferred Stock on March 9, 2017, the Company had 5,400,000 of Series C Preferred Stock shares issued and outstanding. As of March 31, 2017, 8,400,000 shares of the 6.125% Series C Preferred Stock were issued and outstanding.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2017, the Company paid $3,858,754 in Preferred Dividends, or $0.714584 per share, on its outstanding Series C Preferred Stock for the period September 13, 2016 through February 28, 2017. Dividends on the Series C Preferred Stock are cumulative and payable quarterly at an annual rate of $1.53125 per share. The Series C Preferred Stock has no maturity and will remain outstanding indefinitely unless redeemed or otherwise repurchased. Except in limited circumstances relating to the Company&#8217;s qualification as a REIT, the Series C Preferred Stock is not redeemable prior to September 15, 2021. On and after September 15, 2021, at any time and, from time to time, the Series C Preferred Stock will be redeemable in whole, or in part, at the Company&#8217;s option, at a cash redemption price of $25.00 per share, plus all accrued and unpaid dividends (whether or not declared) to, but not including, the date of redemption. On April 4, 2017, the Company declared a dividend of $0.3828125 per share to be paid June 15, 2017 to Series C preferred shareholders of record as of the close of business on May 15, 2017.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>NOTE 7 - FAIR VALUE MEASUREMENTS</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company measures certain financial assets and liabilities at fair value on a recurring basis, including Securities Available for Sale at Fair Value. The Company&#8217;s financial assets consist mainly of marketable REIT securities. The fair value of these financial assets was determined using the following inputs at March 31, 2017 and September 30, 2016:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: justify; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="14" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value Measurements at Reporting Date Using</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Total</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Quoted Prices in Active Markets for Identical Assets</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Level 1)</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Significant Other Observable Inputs</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Level 2)</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Significant Unobservable Inputs</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>(Level 3)</b></p></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-decoration: underline; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>As of March 31, 2017:</u></b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 40%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Equity Securities &#8211; Preferred Stock</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">13,606,625</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">13,606,625</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Equity Securities &#8211; Common Stock</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">85,793,857</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">85,793,857</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Mortgage Backed Securities</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4,928</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4,928</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Total Securities Available for Sale at Fair Value</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">99,405,410</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">99,405,410</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-decoration: underline; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>As of September 30, 2016:</u></b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Equity Securities &#8211; Preferred Stock</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">13,769,073</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">13,769,073</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Equity Securities &#8211; Common Stock</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">59,830,271</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">59,830,271</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Mortgage Backed Securities</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">5,550</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">5,550</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Total Securities Available for Sale at Fair Value</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">73,604,894</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">73,604,894</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In addition to the Company&#8217;s investments in Securities Available for Sale at Fair Value, the Company is required to disclose certain information about fair values of its other financial instruments. Estimates of fair value are made at a specific point in time based upon, where available, relevant market prices and information about the financial instrument. Such estimates do not include any premium or discount that could result from offering for sale at one time the Company&#8217;s entire holdings of a particular financial instrument. For a portion of the Company&#8217;s other financial instruments, no quoted market value exists. Therefore, estimates of fair value are necessarily based on a number of significant assumptions (many of which involve events outside the control of management). Such assumptions include assessments of current economic conditions, perceived risks associated with these financial instruments and their counterparties; future expected loss experience and other factors. Given the uncertainties surrounding these assumptions, the reported fair values represent estimates only, and therefore cannot be compared to the historical accounting model. The use of different assumptions or methodologies is likely to result in significantly different fair value estimates.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The fair value of Cash and Cash Equivalents approximates their current carrying amounts since all such items are short term in nature. The fair value of variable rate Loans Payable approximates their current carrying amounts, since such amounts payable are at approximately a weighted-average current market rate of interest. The estimated fair value of Fixed Rate Mortgage Notes Payable is based on discounting the future cash flows at a yearend risk adjusted borrowing rate currently available to the Company for issuance of debt with similar terms and remaining maturities. These fair value measurements fall within level 2 of the fair value hierarchy. At March 31, 2017, the Fixed Rate Mortgage Notes Payable fair value (estimated based upon expected cash outflows discounted at current market rates) amounted to approximately $493,348,000 and the carrying value amounted to $484,047,676. When the Company acquires a property, it is required to fair value all of the assets and liabilities, including intangible assets and liabilities, relating to the properties acquired lease (See Note 3). Those fair value measurements are estimated based on independent third party appraisals and fall within level 3 of the fair value hierarchy.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>NOTE 8 - SUPPLEMENTAL CASH FLOW INFORMATION</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Cash paid for interest during the six months ended March 31, 2017 and 2016 was approximately $12,108,000 and $10,430,000, respectively.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2017 and 2016, the Company had dividend reinvestments of $4,536,751 and $4,174,782, respectively, which required no cash transfers.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>NOTE 9 &#8211; CONTINGENCIES AND COMMITMENTS</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">From time to time, the Company may be subject to claims and litigation in the ordinary course of business. Management does not believe that any such claim or litigation will have a material adverse effect on the Consolidated Balance Sheets or results of operations.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In addition to the property purchased subsequent to the quarter end, as described below in Note 10, the Company has entered into agreements to purchase eight new build-to-suit, industrial buildings that are currently being developed in Florida, North Carolina, Ohio, Oklahoma, South Carolina and Texas, totaling approximately 1,998,000 square feet with net-leased terms ranging from seven to fifteen years, resulting in a weighted average lease maturity of 13.3 years. The aggregate purchase price for the eight properties is approximately $219,158,000. Five of the eight purchase commitments consisting of approximately 1,353,000 square feet, or 68%, are leased to investment grade tenants or their subsidiaries. Approximately 1,054,000 square feet, or 53%, are leased to FDX and its subsidiaries. Subject to satisfactory due diligence, we anticipate closing these eight transactions during the remainder of fiscal 2017 and the first half of fiscal 2018. In connection with the eight properties, the Company has entered into commitments to obtain eight mortgage loans totaling approximately $143,534,000 at fixed rates ranging from 3.60% to 4.45%, with a weighted average interest rate of 3.89%. Seven of these mortgage loans are 15 year, fully-amortizing loans and one of these mortgage loans is a 12 year, fully-amortizing loan, resulting in a weighted average loan term of 14.9 years.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>NOTE 10 &#8211; SUBSEQUENT EVENTS</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Material subsequent events have been evaluated and are disclosed herein.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 4, 2017, the Company declared a common dividend of $0.16 per share to be paid June 15, 2017 to common shareholders of record as of the close of business on May 15, 2017.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 4, 2017, the Company declared a dividend of $0.4921875 per share to be paid June 15, 2017 to Series B preferred shareholders of record as of the close of business on May 15, 2017.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 4, 2017, the Company declared a dividend of $0.3828125 per share to be paid June 15, 2017 to Series C preferred shareholders of record as of the close of business on May 15, 2017.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 5, 2017, the Company purchased a newly constructed 343,483 square foot industrial building located in Walker, MI, which is located in the Grand Rapids MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for fifteen years through January 2032. The purchase price was $32,120,000. The Company obtained a 15 year fully-amortizing mortgage loan of $20,875,000 at a fixed interest rate of 3.86%. Annual rental revenue over the remaining term of the lease averages approximately $2,102,000.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Subsequent to the quarter end, on May 1, 2017, the Company fully repaid three mortgage loans associated with three properties located in Chattanooga, TN; Roanoke, VA and Orion, MI, totaling approximately $12,014,000.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Use of Estimates</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In preparing the financial statements in accordance with U.S. GAAP, management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods and related disclosure of contingent assets and liabilities. Actual results could differ from these estimates and assumptions.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Reclassification</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Certain prior period amounts in the accompanying Consolidated Financial Statements have been reclassified to conform to the current period&#8217;s presentation.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Lease Termination Income</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Lease Termination Income is recognized in operating revenues when there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and the termination consideration is probable of collection. Lease termination amounts are paid by tenants who want to terminate their lease obligations before the end of the contractual term of the lease by agreement with the Company.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Of the Company&#8217;s one hundred properties, only four leases contain an early termination provision. The Company&#8217;s leases with early termination provisions are the 26,340 square foot location in Ridgeland (Jackson), MS, the 38,333 square foot location in Rockford, IL, the 83,000 square foot location in Roanoke, VA and the 102,135 square foot location in O&#8217;Fallon (St. Louis), MO. Each lease termination provision contains certain requirements that must be met in order to exercise each termination provision. These requirements include; date termination can be exercised, the time frame that notice must be given by the tenant to the Company and the termination fee that would be required to be paid by the tenant to the Company. The total potential termination fee of the four leases with a termination provision amounts to approximately $1,709,000.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Stock Compensation Plan</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s Stock Option and Stock Award Plan, adopted in 2007 and amended and restated in 2010 (the 2007 Plan), authorized the grant to officers and key employees of options to purchase up to 1,500,000 shares of common stock, $0.01 par value per share (common stock), including up to 100,000 shares of restricted stock awarded to any one participant in any one fiscal year. The 2007 Plan expired on March 26, 2017. On March 13, 2017, upon recommendation of the Compensation Committee of the Board, the Board approved the Amended and Restated 2007 Incentive Award Plan, or the &#8220;Plan&#8221;, conditioned upon shareholder approval. At the Company&#8217;s Annual Meeting on May 18, 2017, the Company&#8217;s common shareholders will be asked to consider and vote on a proposal to approve the Plan. The Plan constitutes an amendment and restatement of the 2007 Plan, which was initially approved by the Company&#8217;s shareholders on July 26, 2007, and was subsequently amended and restated and approved by the Company&#8217;s shareholders on May 6, 2010. 164,878 shares of common stock remained available for grant under the 2007 Plan and, if approved by the Company&#8217;s shareholders, the Plan will provide an additional 1,600,000 shares, for a total of 1,764,878 shares of common stock available for future grant of stock options, restricted stock, or other equity based awards, plus any shares subject to outstanding options that expire or are forfeited without being exercised.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company accounts for awards of stock options and restricted stock in accordance with ASC 718-10, &#8220;Compensation-Stock Compensation&#8221;. ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). The compensation cost for stock option grants is determined using option pricing models, intended to estimate the fair value of the awards at the grant date less estimated forfeitures. The compensation expense for restricted stock is recognized based on the fair value of the restricted stock awards less estimated forfeitures. The fair value of restricted stock awards is equal to the fair value of the Company&#8217;s stock on the grant date. The amortization of compensation costs for stock option grants and restricted stock are included in General and Administrative Expenses in the accompanying Consolidated Statements of Income and amounted to $166,190 and $101,968 for the three months ended March 31, 2017 and 2016, respectively and amounted to $266,345 and $206,928 for the six months ended March 31, 2017 and 2016, respectively.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2017 and 2016, the following stock options, which vest one year after grant date, were granted under the Company&#8217;s 2007 Plan:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Date of</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Grant</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Employees</b></p></td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Option</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Price</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Expiration</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Date</b></p></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 22%; padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/4/17</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 18%; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 16%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">65,000</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 18%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">15.04</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 18%; padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/4/25</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">12/9/16</font></td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">215,000</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">14.24</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">12/9/24</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/5/16</font></td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">65,000</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10.37</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/5/24</font></td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the fiscal year indicated:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fiscal 2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fiscal 2016</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 62%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Dividend yield</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 16%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.44</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 16%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6.17</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Expected volatility</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">18.84</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">20.20</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.26</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.09</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Expected lives (years)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">8</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">8</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Estimated forfeitures</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The weighted-average fair value of options granted during the six months ended March 31, 2017 and 2016 was $1.49 and $0.74 per option, respectively.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2017 and 2016, no shares of restricted stock were granted under the Company&#8217;s 2007 Plan. During the six months ended March 31, 2016, five participants exercised options to purchase an aggregate of 180,000 shares of common stock at a weighted average exercise price of $7.84 per share for total proceeds of $1,412,050. During the six months ended March 31, 2017, no options were exercised. As of March 31, 2017, a total of 164,878 shares were available to grant as stock options or as restricted stock and there were outstanding options to purchase 735,000 shares under the 2007 Plan. The 2007 Plan expired on March 26, 2017. The aggregate intrinsic value of options outstanding as of March 31, 2017 was $2,196,300.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Recent Accounting Pronouncements</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In January 2017, the Financial Accounting Standards Board (&#8220;FASB&#8221;) issued Accounting Standards Update (&#8220;ASU&#8221;) 2017-01, &#8220;Business Combinations (Topic 805): Clarifying the Definition of a Business&#8221;. ASU 2017-01 seeks to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, intangible assets and consolidation. The adoption of ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments should be applied prospectively on or after the effective dates. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In August 2016, the FASB issued ASU 2016-15, &#8220;Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments&#8221;. ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In March 2016, the FASB issued ASU 2016-09 &#8220;Compensation &#8211; Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which relates to the accounting for employee share-based payments&#8221;. ASU 2016-09 addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In February 2016, the FASB issued ASU 2016-02, &#8220;Leases&#8221;. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. ASU 2016-02 will be effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In January 2016, the FASB issued ASU 2016-01, &#8220;Financial Instruments &#8211; Overall: Recognition and Measurement of Financial Assets and Financial Liabilities&#8221;. ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes become effective for the Company&#8217;s fiscal year beginning October 1, 2018. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements and has not determined the effects of this update on the Company&#8217;s financial position, results of operations or cash flows and disclosures at this time.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In April 2015, the FASB issued ASU 2015-03, &#8220;Interest - Imputation of Interest (Topic 835): Simplifying the Presentation of Debt Issuance Costs&#8221;. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. In August 2015, the FASB issued ASU 2015-15, &#8220;Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements&#8221; (Subtopic 835-30), which clarified that debt issuance costs related to line-of-credit arrangements may be presented as an asset and amortized over the term of the line-of-credit arrangement regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted these standards effective October 1, 2016. As a result, debt issuance costs related to debt liabilities that are not line-of-credit arrangements are included as a direct deduction from the related debt liability and those related to line-of-credit arrangements continue to be included as an asset on the accompanying Consolidated Balance Sheets. The effects of this standard were applied retrospectively to all prior periods presented. The effect of the change in accounting principle was the reduction in the amount of $6,272,143 of the Fixed Rate Mortgage Notes Payable liability and a corresponding reduction of the Financing Costs asset as of September 30, 2016 and a reclassification of Amortization of Financing Costs of $238,671 and $473,038 for the three and six months ended March 31, 2016, respectively to Interest Expense, net of Amortization of Financing Costs in our Consolidated Statement of Income.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying Consolidated Financial Statements.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Segment Reporting &#38; Financial Information</u></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s primary business is the ownership and management of real estate properties. The Company seeks to invest in well-located, modern, single-tenant, industrial buildings leased primarily to investment grade tenants or their subsidiaries on long-term net leases. The Company reviews operating and financial information for each property on an individual basis and, therefore, each property represents an individual operating segment. The Company evaluates financial performance using Net Operating Income (&#8220;NOI&#8221;) from property operations. NOI is defined as recurring Rental and Reimbursement Revenue, less Real Estate Taxes and Operating Expenses, such as insurance, utilities and repairs and maintenance. The Company has aggregated the properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities, including the fact that they are operated as industrial properties subject to long-term net leases primarily to investment grade tenants or their subsidiaries.</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the six months ended March 31, 2017 and 2016, the following stock options, which vest one year after grant date, were granted under the Company&#8217;s 2007 Plan:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Date of</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Grant</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Employees</b></p></td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Option</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Price</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Expiration</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Date</b></p></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: center; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 22%; padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/4/17</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 18%; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 16%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">65,000</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 18%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">15.04</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 18%; padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/4/25</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">12/9/16</font></td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">215,000</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">14.24</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">12/9/24</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/5/16</font></td> <td style="line-height: 115%">&#160;</td> <td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">65,000</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10.37</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="padding-left: 5.4pt; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">01/5/24</font></td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the fiscal year indicated:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fiscal 2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fiscal 2016</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 62%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Dividend yield</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 16%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.44</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 16%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6.17</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Expected volatility</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">18.84</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">20.20</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.26</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.09</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Expected lives (years)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">8</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">8</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Estimated forfeitures</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Consolidated Statements of Income for the three and six months ended March 31, 2017 and 2016:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three Months Ended</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Six Months Ended</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2016</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2016</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 40%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Rental and Reimbursement Revenue</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Real Estate Taxes</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(11,323</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(8,855</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(40,617</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Operating Expenses</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(4,571</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(9,846</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(20,341</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Depreciation &#38; Amortization</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(25,020</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(8,006</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(49,038</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Interest Expense</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Loss from Operations</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(40,914</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(26,707</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(109,996</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Loss on Sale of Real Estate Investment</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(95,336</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Net Loss</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(40,914</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(122,043</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(109,996</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> </table> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three Months Ended</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Six Months Ended</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2016</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2016</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 40%; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Rental Revenues</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">24,136,300</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">24,047,500</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">49,290,400</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">48,591,100</font></td> <td style="width: 1%; line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Net Income Attributable to Common Shareholders</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4,960,700</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6,214,100</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">11,351,100</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">12,585,600</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Basic and Diluted Net Income per Share Attributable to Common Shareholders</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.07</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.09</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.16</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.18</font></td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following is a summary of the securities that the Company has determined to be temporarily impaired as of March 31, 2017:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Less than 12 Months</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>12 Months or Longer</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unrealized</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unrealized</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Description of Securities</b></font></td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Losses</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Losses</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 40%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Preferred stock</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">719,700</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(26,140</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="width: 1%; line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Common stock</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">22,161,000</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(717,560</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">22,880,700</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(743,700</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">-0-</font></td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">The following is a summary of the range of losses:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Individual</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Securities</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid"> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Unrealized</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Losses</b></p></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Range of Loss</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 1%; text-align: center; line-height: 115%">&#160;</td> <td style="width: 22%; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 22%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">5,943,000</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 23%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(79,460</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 22%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">16,937,700</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(664,240</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="border-bottom: black 2.25pt double; text-align: center; line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">22,880,700</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(743,700</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following is a summary of our Fixed Rate Mortgage Notes Payable as of March 31, 2017 and September 30, 2016:</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&#160;</p> <table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>3/31/2017</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>9/30/2016</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted Average Interest Rate (1)</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount</b></font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted Average Interest Rate (1)</b></font></td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 44%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Fixed Rate Mortgage Notes Payable</font></td> <td style="width: 2%; line-height: 115%">&#160;</td> <td style="width: 1%; border-bottom: black 1.5pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">484,047,676</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 2%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 10%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.37</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td> <td style="width: 2%; line-height: 115%">&#160;</td> <td style="width: 1%; border-bottom: black 1.5pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">483,748,153</font></td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 2%; line-height: 115%">&#160;</td> <td style="width: 1%; line-height: 115%">&#160;</td> <td style="width: 10%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.48</font></td> <td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Debt Issuance Costs</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9,623,592</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9,424,697</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated Amortization of Debt Issuance Costs</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(3,174,221</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(3,152,554</font></td> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Unamortized Debt Issuance Costs</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6,449,371</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 1.5pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 1.5pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6,272,143</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs</font></td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">477,598,305</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">477,476,010</font></td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td> <td style="text-align: right; line-height: 115%">&#160;</td> <td style="line-height: 115%">&#160;</td></tr> </table> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">(1) Weighted average interest rate excludes amortization of debt issuance costs.</p> 50000000 Board of Directors approved a 6.7% increase in the Company’s quarterly common stock dividend, raising it to $0.16 per share from $0.15 per share. 0.067 2300000 72561602 0.07875 0.06125 3000000 3000000 0.4921875 The Company also owns a portfolio of REIT investment securities which the Company generally limits to no more than approximately 10% of its undepreciated assets., (which is the Company’s total assets excluding accumulated depreciation). 24.50 6272143 Weighted average interest rate excludes amortization of debt issuance costs.