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Monmouth Real Estate Investment Corp. Reports Operating Results (10-Q)

February 08, 2013 | About:
10qk

10qk

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Monmouth Real Estate Investment Corp. (MNRTA) filed Quarterly Report for the period ended 2012-12-31.

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Highlight of Business Operations:

The Companys revenue primarily consists of rental and reimbursement revenue from the ownership of industrial rental property. Income from property operations defined as rental and reimbursement revenue less real estate taxes and operating expenses increased $989,316 or 10% for the three months ended December 31, 2012 as compared to the three months ended December 31, 2011. The increase was due to the additional income related to seven industrial properties purchased during fiscal 2012 (of which five were purchased subsequent to December 31, 2011) and two properties purchased during the three months ended December 31, 2012. In addition, the Companys revenue also includes lease termination income, which amounted to $690,730 for the three months ended December 31, 2012 and $-0- for three months ended December 31, 2011. This income represents the payments from former tenants at our St. Joseph, MO and Monroe, NC properties terminating their lease obligations before the end of the contractual term of the leases.

The Company has a concentration of FedEx Corporation (FDX) and FDX subsidiary-leased properties. The percentage of FDX leased square footage to the total of the Companys rental space was 41% (11% to FDX and 30% to FDX subsidiaries) as of December 31, 2012. As of quarter end, no other tenants leased more than 5% of our total square footage with the exception of Milwaukee Electric Tool Corporation which leased 7%. The only tenant that accounted for more than 5% of our total rental and reimbursement revenue for the three months ended December 31, 2012 was FDX and its subsidiaries. Annualized rental and reimbursement revenue from FDX and its subsidiaries is estimated to be approximately 52% (12% to FDX and 40% to FDX subsidiaries) of total rental and reimbursement revenue for fiscal 2013. This concentration is a risk shareholders should consider.

Rental revenue increased $651,628 or 6% for the three months ended December 31, 2012 as compared to the three months ended December 31, 2011. The increase in the three months ended December 31, 2012 was due primarily to the increased rental income earned from acquisitions of seven properties during fiscal 2012 (of which five were purchased subsequent to December 31, 2011) and two properties purchased during the three months ended December 31, 2012.

The Company seeks to invest in well-located, modern buildings, leased primarily to investment grade tenants on long-term leases. In managements opinion, newly built facilities leased to FedEx Corporation (FDX) and its subsidiaries meet these criteria. The Company has a concentration of FDX and FDX subsidiary-leased properties. The percentage of FDX leased square footage to the total of the Companys rental space was 41% (11% to FDX and 30% to FDX subsidiaries) as of December 31, 2012. As of December 31, 2012, no other tenants leased more than 5% of our total square footage with the exception of Milwaukee Electric Tool Corporation which leased 7%. The only tenant that accounted for more than 5% of our total rental and reimbursement revenue for the three months ended December 31, 2012 was FDX and its subsidiaries. Annualized rental and reimbursement revenue from FDX and its subsidiaries is estimated to be approximately 52% (12% to FDX and 40% to FDX subsidiaries) of total rental and reimbursement revenue for fiscal 2013.

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