UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 20172018

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ___________

Commission File Number:001-33177

MONMOUTH REAL ESTATE INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code(732) 577-9996

 (Former(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (sec. (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes[Yes [  ] No [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [  ] No [X]

Number of shares outstanding of the issuer’s common stock, $0.01 par value per share, as of August 1, 2017: 74,338,1012018: 80,455,217

MONMOUTH REAL ESTATE INVESTMENT CORPORATION

AND SUBSIDIARIES

FOR THE QUARTER ENDED JUNE 30, 20172018

C O N T E N T SCONTENTS

PART I:

FINANCIAL INFORMATION

ITEM 1. Financial Statements (Unaudited)

MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 20172018 AND SEPTEMBER 30, 20162017

See Accompanying Notes to the Consolidated Financial Statements

MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS – CONTINUED

AS OF JUNE 30, 20172018 AND SEPTEMBER 30, 20162017

See Accompanying Notes to the Consolidated Financial Statements

MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 20172018 AND 20162017

See Accompanying Notes to Consolidated Financial Statements

MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - CONTINUED

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 20172018 AND 2016 - CONTINUED2017

See Accompanying Notes to Consolidated Financial Statements

MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 20172018 AND 20162017

See Accompanying Notes to Consolidated Financial Statements

MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE NINE MONTHS ENDED JUNE 30, 20172018 AND 20162017

See Accompanying Notes to Consolidated Financial Statements

MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 20172018

NOTE 1 – ORGANIZATION AND ACCOUNTING POLICIES

Monmouth Real Estate Investment Corporation, a Maryland corporation, together with its consolidated subsidiaries (MREIC,(we, our, us, the Company or we)MREIC), operates as a real estate investment trust (REIT) deriving its income primarily from real estate rental operations. We were founded in 1968 and are one of the oldest public equity REITs in the world. As of June 30, 2017, the Company2018, we owned 105109 properties with total square footage of approximately 17,917,000,20,535,000, which was 99.8%99.6% occupied, as compared to 99108 properties with total square footage of approximately 16,010,000,18,790,000, which was 99.6%99.3% occupied as of September 30, 2016.2017. These properties are located in 30 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 CompanyAs of the quarter ended June 30, 2018, our weighted average lease maturity was approximately 7.8 years and our annualized average base rent per occupied square foot was $5.89. As of June 30, 2018, the weighted average building age, based on the square footage of our buildings, was 8.8 years. We also ownsown a portfolio of REIT investment securities, which the Companywe generally limitslimit to no more than approximately 10% of itsour undepreciated assets (which is the Company’sour total assets, excluding accumulated depreciation). Total assets excluding accumulated depreciation were $1,821,914,393 as of June 30, 2018. We held $167,594,279 in marketable REIT securities as of June 30, 2018, representing 9.2% of our undepreciated assets.

The Company hasWe have elected to be taxed as a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the Code), and intendswe intend to maintain itsour qualification as a REIT in the future. As a qualified REIT, with limited exceptions, the Companywe will not be taxed under Federal and certain state income tax laws at the corporate level on taxable income that it distributeswe distribute to itsour shareholders. For special tax provisions applicable to REITs, refer to Sections 856-860 of the Code. The Company isWe are subject to franchise taxes in several of the states in which we own properties.

In December 2017, the Company owns property.Tax Cuts and Jobs Act of 2017 (the Act), Code Section 199A, was added to the Code and became effective for tax years beginning after December 31, 2017 and before January 1, 2026. Under the Act, subject to certain income limitations, individual taxpayers may deduct 20% of the aggregate amount of qualified REIT dividends they receive from their taxable income. Qualified REIT dividends do not include any portion of a dividend received from a REIT that is classified as a capital gain dividend.

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 theour 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 nine months ended June 30, 20172018 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017.2018. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Company’sour annual report on Form 10-K for the fiscal year ended September 30, 2016.2017.

Use of Estimates

In preparing the financial statements in accordance with U.S. GAAP, management iswe are 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.

Reclassification

Certain prior period amounts in the accompanying Consolidated Financial Statements have been reclassified to conform to the current period’s presentation.

Lease Termination Income

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.us.

Two leases that were set to expire during fiscal 2018 were leased to Kellogg Sales Company (Kellogg) at our 65,067 square foot facility located in Kansas City, MO through July 31, 2018 and at our 50,400 square foot facility located in Orangeburg, NY through February 28, 2018. Kellogg informed us that they would not be renewing these leases. On December 18, 2017, we sold our property, located in Kansas City, MO for $4,900,000, with net sale proceeds of approximately $4,602,000 and on December 22, 2017, we sold our property, located in Orangeburg, NY for $6,170,000, with net sale proceeds of approximately $5,898,000. The sale of these two properties resulted in a realized gain of approximately $5,388,000, representing a 105% gain over the depreciated U.S. GAAP basis and a realized net gain of approximately $1,804,000, representing a 21% net gain over our historic undepreciated cost basis. In conjunction with the sale of these two properties, we simultaneously entered into a lease termination agreement for each property whereby we received a termination fee from Kellogg totaling approximately $210,000 which represents a weighted average of 80% of the then remaining rent due under each respective lease.

Of the Company’s 105Only four of our 109 properties only fourhave leases that contain an early termination provision. The Company’sThese four properties contain approximately 184,000 total rentable square feet, representing less than 1% of our total rentable square feet. Our leases with early termination provisions are theour 26,340 square foot location in Ridgeland (Jackson), MS, the 38,333our 36,270 square foot location in Urbandale (Des Moines), IA, our 38,833 square foot location in Rockford, IL, theand our 83,000 square foot location in Roanoke, VA and the 102,135 square foot location in O’Fallon (St. Louis), MO.VA. Each lease termination provision contains certain requirements that must be met in order to exercise each termination provision. These requirements include;include: the date termination can be exercised, the time frame that notice must be given by the tenant to the Companyus and the termination fee that would be required to be paid by the tenant to the Company.us. The total potential termination fee to be paid to the Companyus from the four tenants with leases withthat have a termination provisionsprovision amounts to approximately $1,709,000.$1,681,000.

Stock Compensation Plan

The Company’s original Stock Option and Stock Award Plan (the 2007 Plan) was initially adopted in 2007 upon approval by the Company’s shareholders on July 26, 2007. The 2007 Plan was amended and restated and approved by the Company’s shareholders on May 6, 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. On March 13, 2017, upon recommendation of the Compensation Committee of the Board, the Board approved the Amended and Restated 2007 Incentive Award Plan (the Plan), conditioned upon shareholder approval. At the Company’s Annual Meeting held on May 18, 2017, the Company’s common shareholders approved the Plan and the Company subsequently filed a Registration Statement covering the offering and issuance of awards under the Plan with the Securities and Exchange Commission on July 11, 2017. The Plan constitutes an amendment and restatement of the 2007 Plan, extends the term of the 2007 Plan for an additional ten years, adds 1,600,000 shares of common stock to the share reserve, expands the types of awards available for grant under the Plan and makes other improvements to the 2007 Plan.

The Company accountsWe account for awards of stock options and restricted stock in accordance with ASC 718-10, “Compensation-Stock Compensation”. 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’sour 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 $174,709$96,969 and $99,760$174,709 for the three months ended June 30, 20172018 and 2016,2017, respectively and amounted to $441,054$339,139 and $306,688$441,054 for the nine months ended June 30, 2018 and 2017, and 2016, respectively.

During the nine months ended June 30, 20172018 and 2016,2017, the following stock options, which vest one year after grant date, were granted under the Company’s 2007our Stock Option Plan:

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:

The weighted-average fair value of options granted during the nine months ended June 30, 2018 and 2017 was $1.84 and 2016 was $1.49 and $0.74 per option, respectively.

During the nine months ended June 30, 2018 and 2017, 12,500 and 2016, no-0- shares of restricted stock were granted and during the nine months ended June 30, 2016, one participant forfeited 3,232 shares of restricted stock under the 2007 Plan.granted. During the nine months ended June 30, 2016, five2018, three participants exercised options awarded under the 2007 Plan to purchase an aggregate of 180,00040,000 shares of common stock at a weighted average exercise price of $7.84$14.24 per share for total proceeds of $1,412,050.$569,600. During the nine months ended June 30, 2017, no options were exercised. As of June 30, 2017,2018, a total of 1,764,8781,672,782 shares were available for grant as stock options, as restricted stock, or other equity based awards, plus any shares subject to outstanding options that expire or are forfeited without being exercised, andexercised. As of June 30, 2018, there were outstanding options to purchase 735,000 shares. The695,000 shares with an aggregate intrinsic value of options outstanding as of June 30, 2017 was $2,719,550.$3,110,600.

Recent Accounting Pronouncements

In January 2017,February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (ASU 2017-01). ASU 2017-01 provides revised guidance to determine when an acquisition meets the definition of a business or should be accounted for as an asset acquisition, likely resulting in more acquisitions being accounted for as asset acquisitions as opposed to business combinations. Transaction costs are capitalized for asset acquisitions while they are expensed as incurred for business combinations. ASU 2017-01 requires that, when substantially all of the fair value of an acquisition is concentrated in a single identifiable asset or a group of similar identifiable assets, the asset or group of similar identifiable assets does not meet the definition of a business. ASU 2017-01 also revises the definition of a business to include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create an output. ASU 2017-01 will be effective, on a prospective basis, for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted. We adopted ASU 2017-01 prospectively as of April 1, 2017, as permitted under the standard. As a result of the implementation of this update, our property acquisitions, which under previous guidance were accounted for as business combinations, are now accounted for as acquisitions of assets. In an acquisition of assets, certain acquisition costs are capitalized as opposed to expensed under accounting for business combinations. For the period April 1, 2017 through June 30, 2017, the Company acquired five properties, for each of which it was concluded that substantially all of the fair value of the assets acquired with each property acquisition was concentrated in a single identifiable asset and did not meet the definition of a business combination under ASU 2017-01. Therefore, acquisition transaction costs associated with these property acquisitions were capitalized to real estate investments as part of the purchase price.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments”. 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.

In March 2016, the FASB issued ASU 2016-09 “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting”, which relates to the accounting for employee share-based payments. 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.

In February 2016, the FASB issued ASU 2016-02, “Leases”. 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 evaluatingWe are continuing to evaluate the potential impact this standard may have on theour consolidated financial statements and the timing of adoption. The most significant changes related to lessor accounting under ASU 2016-02 include bifurcating revenue into lease and non-lease components and the new standard’s narrow definition of initial direct costs for leases. Since our revenue is primarily derived from leasing activities from long-term net leases and since we currently do not capitalize indirect costs for leases, we believe that we will continue to account for our leases and related leasing costs in substantially the same manner as we currently do once the adoption of the ASU 2016-02 becomes effective.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. 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’sour fiscal year beginning October 1, 2018. The CompanyWe anticipate that the most significant change for us, once ASU 2016-01 is adopted, will be the accounting for our investments in marketable securities classified as available for sale, which are currently in the process of evaluating the impact of the adoption on its consolidated financial statementscarried at fair value with unrealized holding gains and has not determined the effects of this update on the Company’s financial position, results of operations or cash flowslosses being excluded from earnings and disclosures at this time.

In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Topic 835): Simplifying the Presentation of Debt Issuance Costs”. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheetreported as a direct deduction fromseparate component of Shareholders’ Equity until realized and the carrying amount of the debt liability. In August 2015, the FASB issuedchange in net unrealized holding gains and losses being reflected as comprehensive income (loss). Under ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (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 adopted2016-01, 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 arrangementsmarketable securities will continue to be included as an asset onmeasured at fair value, however the accompanying Consolidated Balance Sheets. The effects of this standard were applied retrospectively to all prior periods presented. The effect of the changechanges in accounting principle was the reduction in the amount of $6,272,143 of the Fixed Rate Mortgage Notes Payable liabilitynet unrealized holding gains and a corresponding reduction of the Financing Costs asset as of September 30, 2016 and a reclassification of Amortization of Financing Costs of $240,463 and $713,501 for the three and nine months ended June 30, 2016, respectively to Interest Expense,losses will be recognized through net of Amortization of Financing Costs in our Consolidated Statement of Income.income.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers”. The FASB issued further guidance in ASU 2016-12, Revenue“Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,Expedients”, that provides clarifying guidance in certain narrow areas and adds some practical expedients. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The effective date of ASU 2014-09 was extended by one year by ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”. The new standard is effective for the first interim period within annual reporting periods beginning after December 15, 2017. Therefore, the Company expectswe expect to adopt the standard effective October 1, 2018. The standard permits the use of either the retrospective or cumulative effect transition method, and the Company iswe are evaluating which transition method itwe will elect. The Company isWe are also in the process of evaluating the effect that ASU 2014-09 will have on itsour consolidated financial statements and related disclosures. The Company doesOur revenue is primarily derived from leasing activities and historically our property dispositions have been cash sales with no contingencies and no future involvement in the property. Since this standard applies to all contracts with customers except those that are within the scope of other guidance, such as leases, we do not expect the adoption of this standard to have a significant impact on itsour consolidated financial statements and related disclosures.

Management doesWe do 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.

Segment Reporting & Financial Information

The Company’sOur primary business is the ownership and management of real estate properties. The Company seeks toWe invest in well-located, modern, single-tenant,single tenant, industrial buildings leased primarily to investment gradeinvestment-grade tenants or their subsidiaries on long-term net leases. The Company reviewsWe review operating and financial information for each property on an individual basis and, therefore, each property represents an individual operating segment. The Company evaluatesWe evaluate financial performance using Net Operating Income (NOI) from property operations. NOI is defineda non-GAAP financial measure, which we define as recurring Rental and Reimbursement Revenue, less Real Estate Taxes and Operating Expenses, such as insurance, utilities and repairs and maintenance. The Company hasWe have 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 gradeinvestment-grade tenants or their subsidiaries.

NOTE 2 – NET INCOME PER SHARE

Basic Net Income per Common 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.

In addition, common stock equivalents of 171,719158,211 and 125,108171,719 shares are included in the diluted weighted-averageweighted average shares outstanding for the three months ended June 30, 20172018 and 2016,2017, respectively, and common stock equivalents of 157,858177,783 and 89,250157,858 shares are included in the diluted weighted-averageweighted average shares outstanding for the nine months ended June 30, 20172018 and 2016,2017, respectively. For the diluted weighted-averageweighted average shares outstanding for the three months ended June 30, 2018 and 2017, and 2016, 65,000 and -0- options to purchase shares of common stock were antidilutive. For the diluted weighted-averageweighted average shares outstanding for the nine months ended June 30, 20172018 and 2016, 65,000 and2017, 65,000 options to purchase shares of common stock respectively, were antidilutive.

NOTE 3 – REAL ESTATE INVESTMENTS

Acquisitions accounted for as business combinations

On October 17, 2016, the CompanyNovember 2, 2017, we purchased a newly constructed 338,584121,683 square foot industrial building, situated on 16.2 acres, located in Hamburg, NY, which is in the Buffalo Metropolitan Statistical Area (MSA).Charleston, SC. The building is 100% net-leased to FedEx Ground Package System, Inc.Corporation (FDX), for 15 years through March 2031.August 2032. The purchase price was $35,100,000. The Company$21,872,170. We obtained a 15 year fully-amortizing mortgage loan of $23,500,000$14,200,000 at a fixed interest rate of 4.03%4.23%. 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.$1,315,000.

On DecemberNovember 30, 2016, the Company2017, we purchased a newly constructed 213,672300,000 square foot industrial building, situated on 123 acres, located in Ft. Myers, FL.Oklahoma City, OK. The building is 100% net-leased to FedEx Ground Package System,Amazon.com Services, Inc. for 10 years through September 2026.October 2027. The lease is guaranteed by Amazon.com, Inc. The purchase price was $21,001,538. The Company$30,250,000. We obtained a 1510 year fully-amortizing mortgage loan, amortizing over 18 years, of $14,500,000$19,600,000 at a fixed interest rate of 3.97%3.64%. 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.

Acquisitions accounted for as asset acquisitions$1,884,000.

On April 5, 2017, the CompanyJanuary 22, 2018, we purchased a newly constructed 343,483831,764 square foot industrial building, situated on 62.4 acres, located in Walker, MI, which is in the Grand Rapids MSA.Savannah, GA. The building is 100% net-leased to FedEx Ground Package System,Shaw Industries, Inc. for 1510 years through January 2032.September 2027. The purchase price was $32,120,000. The Company$57,483,636. We obtained a 1514 year fully-amortizing mortgage loan of $20,875,000$33,300,000 at a fixed interest rate of 3.86%3.53%. Annual rental revenue over the remaining term of the lease averages approximately $2,102,000.$3,551,000.

On June 23, 2017, the CompanyApril 6, 2018, we purchased a newly constructed 351,874399,440 square foot industrial building, situated on 27.5 acres, located in Mesquite, TX, which is in the Dallas MSA.Daytona Beach, FL. The building is 100% net-leased to FedEx Ground Package System,B. Braun Medical Inc. for 1510 years through March 2032.April 2028. The purchase price was $50,621,072. The Company$30,750,540. We obtained a 15 year fully-amortizing mortgage loan of $32,900,000$19,500,000 at a fixed interest rate of 3.60%4.25%. Annual rental revenue over the remaining term of the lease averages approximately $3,194,000.$2,130,000.

On June 27, 2017, the Company28, 2018, we purchased a newly constructed 315,560362,942 square foot industrial building, situated on 31.3 acres, located in Aiken, SC, which is in the Augusta, GA MSA.Mobile, AL. The building is 100% net-leased to Autoneum North America,Amazon.com Services, Inc. for 1511 years through April 2032.November 2028. The lease is guaranteed by Amazon.com, Inc. The purchase price was $21,933,000. The Company$33,688,276. We obtained a 1514 year fully-amortizing mortgage loan of $15,350,000$19,000,000 at a fixed interest rate of 4.20%4.14%. Annual rental revenue over the remaining term of the lease averages approximately $1,700,000.$2,020,000.

On June 28, 2017,FDX, Amazon.com, Inc. and Shaw Industries, Inc.’s ultimate parent, Berkshire Hathaway, Inc. are publicly-owned companies and financial information related to these entities is available at the Company purchased a newly-constructed 237,756 square foot industrial building locatedSEC’s website,www.sec.gov. The references in Homestead, FL, which is inthis report to the Miami MSA. The building is 100% net leasedSEC’s website are not intended to FedEx Ground Package System, Inc. for 15 years through March 2032. The purchase price was $38,347,933. The Company obtained a 15 year fully-amortizing mortgage loan of $24,800,000 at a fixed interest rate of 3.60%. Annual rental revenue overand do not include, or incorporate by reference into this report, the remaining term ofinformation on the lease averages approximately $2,282,000.www.sec.gov website.

On June 29, 2017, the Company purchased a newly constructed 110,361 square foot industrial building located in Oklahoma City, OK. The building is 100% net-leased to Bunzl Distribution Oklahoma, Inc. for seven years through August 2024. The purchase price was $9,000,000. The Company obtained a 12 year fully-amortizing mortgage loan of $6,000,000 at a fixed interest rate of 4.125%. Annual rental revenue over the remaining term of the lease averages approximately $721,000.

The CompanyWe evaluated the property acquisitions which took place subsequentduring the nine months ended June 30, 2018, to March 31, 2017, under the new framework for determiningdetermine whether an integrated set of assets and activities meets the definition of a business, pursuant to ASU 2017-01, which the Company early-adopted effective April 1, 2017.2017-01. Acquisitions that do not meet the definition of a business are accounted for as asset acquisitions (see Note 1).acquisitions. Accordingly, the Companywe accounted for the five properties purchased during fiscal 2018 in Walker (Grand Rapids), MI; Mesquite (Dallas), TX; Aiken (Augusta, GA),Charleston, SC; Homestead (Miami),Oklahoma City, OK; Savannah, GA; Daytona Beach, FL and Oklahoma City, OKMobile, AL as asset acquisitions and allocated the total cash consideration, including transaction costs of approximately $875,000, to the individual assets acquired on a relative fair value basis. There were no liabilities assumed in these acquisitions. The financial information set forth below summarizes the Company’s preliminaryour purchase price allocation for these five properties acquired during the threenine months ended June 30, 20172018 that are accounted for as asset acquisitions:

The following table summarizes the operating results included in the Company’sour consolidated statements of income for the three and nine months ended June 30, 20172018 for the five properties acquired during the nine months ended June 30, 2017:2018:

Expansions

On OctoberNovember 1, 2016,2017, a 50,625 square footparking lot expansion of the buildingfor a property leased to FedEx Ground Package System, Inc., a subsidiary of FDX, located in Edinburg, TXIndianapolis, IN was completed for a total project cost of approximately $4,762,000,$1,683,000, resulting in a new 10 year lease which extended the prior lease expiration date from September 2021 through September 2026.April 2024 to October 2027. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $499,000$184,000 from approximately $598,000,$1,533,000, or $5.27$4.67 per square foot, to approximately $1,097,000,$1,717,000, or $6.68$5.24 per square foot.

Dispositions

DispositionTwo leases that were set to expire during fiscal 2018 were leased to Kellogg Sales Company (Kellogg) at our 65,067 square foot facility located in Kansas City, MO through July 31, 2018 and at our 50,400 square foot facility located in Orangeburg, NY through February 28, 2018. Kellogg informed us that they would not be renewing these leases. On December 18, 2017, we sold our property, located in Kansas City, MO for $4,900,000, with net sale proceeds of approximately $4,602,000 and, on December 22, 2017, we sold our property, located in Orangeburg, NY for $6,170,000, with net sale proceeds of approximately $5,898,000. In conjunction with the sale of these two properties, we simultaneously entered into a lease termination agreement for each property whereby we received a termination fee from Kellogg totaling approximately $210,000 which represents a weighted average of 80% of the then remaining rent due under each respective lease.

On October 27,June 1, 2018, we sold a 68,370 square foot building located in Colorado Springs, CO for $5,800,000, with net sale proceeds of approximately $5,465,000. Prior to the sale of this property, it was leased to FedEx Ground Package System, Inc. through September 2018. The tenant informed us that they would not be renewing this lease because they have moved their operations from our former 68,370 square foot facility to our newly constructed 225,362 square foot facility, which is also located in Colorado Springs, CO. On June 9, 2016, the Companywe purchased this newly constructed 225,362 square foot industrial building, which is leased to FedEx Ground Package System, Inc. for 10 years through January 2026.

On June 5, 2018, we sold its onlyan 87,500 square foot vacant building consistinglocated in Ft. Myers, FL for $6,400,000, with net sale proceeds of approximately $6,119,000. Prior to this property becoming vacant, it was leased to FedEx Ground Package System, Inc. through June 2017. FedEx Ground Package System, Inc. vacated this property because they moved their operations from our former 87,500 square foot facility to our newly constructed 213,672 square foot facility, which is also located in Ft. Myers, FL. We purchased this newly constructed facility on December 30, 2016 and it is leased to FedEx Ground Package System, Inc. for 10 years through August 2027.

These four properties sold during fiscal 2018, resulted in a U.S. GAAP net realized gain of approximately $7,485,000, representing a 51% gain over the depreciated U.S. GAAP basis and a net realized gain over our historic undepreciated cost basis of approximately $1,160,000, representing a 6% net gain over our historic undepreciated cost basis.

During the prior year, in October 2016, we sold our 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.

Since the sale of this propertythese five properties does not represent a strategic shift that has (or will have) a major effect on the Company’sour operations and financial results, the operations generated from this propertythese properties are not included in Discontinued Operations.

The following table summarizes the operations of this property prior to its sale on October 27, 2016 which isthat are included in the accompanying Consolidated Statements of Income for the three and nine months ended June 30, 2018 and 2017 and 2016:for the five properties sold during the periods presented, prior to their sales.

Pro forma information

The following unaudited pro forma condensed financial information has been prepared utilizing theour historical financial statements of the Company and the effect of additional revenue and expenses generated from property acquired and expanded during fiscal 20172018 to date, and during fiscal 2016,2017, assuming that the acquisitions and completed expansions had occurred as of October 1, 2015,2016, 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. As further described in Note 6,In addition, the net proceeds raised from the issuance of theour 6.125% Series C Cumulative Redeemable Preferred Stock less the redemptions of the Company’sour 7.625% Series A Cumulative Redeemable Preferred Stock redeemed on October 14, 2016 and the Company’sour 7.875% Series B Cumulative Redeemable Preferred Stock redeemed on June 7, 2017 were used to help fund property acquisitions and, therefore, the pro forma preferred dividend expense has been adjusted to account for its effect on Net Income Attributable to Common Shareholders as if all the preferred stock issuances and redemptions had occurred on October 1, 2015.2016. In addition, Net Income Attributable to Common Shareholders excludes the operating expenses incurredoperations of the five properties sold during fiscal 20172018 and 2016 for the vacant property, located in White Bear Lake, MN, that was sold on October 27, 2016.2017. 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, 2015.2016. 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.

Tenant Concentration

The Company hasWe have a concentration of FedEx Corporation (FDX)FDX and FDX subsidiary-leased properties, consisting of 58 separate stand-alone leases covering approximately 9,444,000 square feet as of June 30, 2018 and 58 separate stand-alone leases covering approximately 9,124,000 square feet as of June 30, 2017 and 51 separate stand-alone leases covering approximately 6,944,000 square feet as2017. As of June 30, 2016. The2018, the 58 separate stand-alone leases that are leased to FDX and FDX subsidiaries have a weighted average lease maturity of 8.48.6 years. The percentage of FDX and its subsidiaries leased square footage to the total of the Company’sour rental space was 46% (7% to FDX and 39% to FDX subsidiaries) as of June 30, 2018 and 51% (8% to FDX and 43% to FDX subsidiaries) as of June 30, 2017 and 46% (6% to FDX and 40% to FDX subsidiaries) as of June 30, 2016.2017. As of June 30, 2017, the only tenants that leased 5% or more of the Company’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’s rental space. As of June 30, 2016,2018, no other tenant other than FDX and its subsidiaries, accounted for 5% or more of the Company’sour total rental space.

Annualized Rental and Reimbursement Revenue from FDX and its subsidiaries is estimated to be approximately 56% (7% to FDX and 49% to FDX subsidiaries) of total Rental and Reimbursement Revenue for fiscal 2018 and was 60% (7% 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 2016.2017. No other tenant accounted for 5% or more of the Company’sour total Rental and Reimbursement Revenue for the nine months ended June 30, 20172018 and 2016.2017.

FDX is a publicly-owned company and financial information related to this entity is available at the SEC’s website,www.sec.gov. FDX is rated “BBB” by S&P Global Ratings (www.standardandpoors.com) and is rated “Baa2” by Moody’s (www.moodys.com), which are both considered “Investment Grade” ratings. The references in this report to the SEC’s website, S&P Global Ratings’ website and Moody’s website are not intended to and do not include, or incorporate by reference into this report, the information of FDX, S&P Global Ratings or Moody’s on such websites.

In addition to real estate property holdings, the Companywe held $100,495,810$167,594,279 in marketable REIT securities at June 30, 2017,2018, representing 6.6%9.2% of the Company’sour undepreciated assets (which is the Company’sour 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’sour diversification. The securities portfolio provides the Companyus with additional liquidity, diversification and income and serves as a proxy for real estate when more favorable risk adjusted returns are not available.

NOTE 4 – SECURITIES AVAILABLE FOR SALE AT FAIR VALUE

The Company’sOur Securities Available for Sale at Fair Value consists primarily of marketable common and preferred stock of other REITs with a fair value of $100,495,810$167,594,279 as of June 30, 2017. The Company2018. We generally limits itslimit our investment in marketable securities to no more than approximately 10% of itsour undepreciated assets (which is the Company’sour total assets excluding accumulated depreciation). Total assets excluding accumulated depreciation were $1,821,914,393 as of June 30, 2018. We held $167,594,279 in marketable REIT securities as of June 30, 2018, representing 9.2% of our undepreciated assets. The REIT securities portfolio provides the Companyus with additional liquidity, diversification and income and serves as a proxy for real estate when more favorable risk adjusted returns are not available.

During the nine months ended June 30, 2017, the Company2018, we sold or redeemed securities with a cost basis of $8,399,268$2,508,562 and recognized a Gain on Sale of Securities Transactions of $2,293,944.$111,387. In addition, the Companywe recognized dividend income on itsour investment in securities of $4,622,836$3,625,002 and $9,373,467 for the three and nine months ended June 30, 2017. The Company2018. We also made purchases of $39,467,317$61,277,604 in Securities Available for Sale at Fair Value. Of this amount, the Companywe made total purchases of 125,71945,815 common shares of UMH Properties, Inc. (UMH), a related REIT, for a total cost of $1,725,457,$617,443, or a weightedan average cost of $13.72$13.48 per share, of which 112,719 shares were purchased through UMH’s Dividend Reinvestment and Stock Purchase Plan. The CompanyWe owned a total of 1,115,0461,174,131 UMH common shares as of June 30, 20172018 at a total cost of $11,031,142$11,849,294 and a fair value of $19,011,526. The Company owns 200,000 shares of UMH’s 8.25% Series A Cumulative Redeemable Preferred Stock at a total cost of $5,000,000 with a fair value of $5,200,000 and the Company owns$18,022,907. We own 100,000 shares of UMH’s 8.00% Series B Cumulative Redeemable Preferred Stock at a total cost of $2,500,000 with a fair value of $2,750,000.$2,645,000. The unrealized gain on the Company’sour investment in UMH’s common and preferred stock as of June 30, 20172018 was $8,430,384.$6,318,613.

As of June 30, 2017, the Company2018, we had total net unrealized holding gainslosses on itsour securities portfolio of $8,765,134. The Company considers$8,368,968. We consider 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 CompanyWe normally holdshold REIT securities long-term and hashave the ability and intent to hold these securities to recovery. The following is a summary of the securities that the Company haswe have determined to be temporarily impaired as of June 30, 2017:2018:

The following is a summary of the range of losses:

NOTE 5 – DEBT

For the three months ended June 30, 20172018 and 2016,2017, amortization of financing costs included in interest expense was $283,573$314,527 and $240,463,$283,573, respectively. For the nine months ended June 30, 20172018 and 2016,2017, amortization of financing costs included in interest expense was $949,470$910,977 and $713,501,$949,470, respectively.

As of June 30, 2018, we owned 109 properties, of which 60 carried Fixed Rate Mortgage Notes Payable with outstanding principal balances totaling $665,118,463. The following is a summary of our Fixed Rate Mortgage Notes Payable as of June 30, 20172018 and September 30, 2016:2017:

(1)Weighted average interest rate excludes amortization of debt issuance costs.

As of June 30, 2017,2018, interest payable on these mortgages were at fixed rates ranging from 3.45% to 7.60%, with a weighted average interest rate of 4.21%4.11%. This compares to a weighted average interest rate of 4.48%4.18% as of September 30, 20162017 and 4.61%4.21% as of June 30, 2016.2017. As of June 30, 2017,2018, the weighted average loan maturity of the Fixed Rate Mortgage Notes Payable was 11.5 years. This compares to a weighted average loan maturity of the Fixed Rate Mortgage Notes Payable of 10.511.6 years as of September 30, 20162017 and 9.811.5 years as of June 30, 2016.2017.

In connection with the sevenfive properties acquired during the nine months ended June 30, 2017,2018, which are located in Hamburg (Buffalo), NY; Ft. Myers, FL; Walker (Grand Rapids), MI; Mesquite (Dallas), TX; Aiken (Augusta, GA), SC; Homestead (Miami),Charleston, SC, Oklahoma City, OK, Savannah, GA, Daytona Beach, FL and Oklahoma City, OKMobile, AL (as described in Note 3), the Companywe obtained six,two 15 year fully-amortizing mortgage loans, two 14 year fully-amortizing mortgage loans and one 1210 year fully-amortizing loan.loan amortizing over 18 years. The sevenfive mortgage loans originally totaled $137,925,000$105,600,000 with an original weighted average mortgage loan maturity of 14.913.6 years and a weighted average interest rate of 3.84%3.89%.

During the nine months ended June 30, 2017, the Company2018, we fully repaid 15the mortgage loans associated with 14for four of itsour properties located in Jacksonville, FL; El Paso, TX; LebanonColorado Springs, CO, Richfield (Cleveland), OH, Tampa, FL and West Chester Twp. (Cincinnati), OH; Halfmoon (Albany), NY; Bedford Heights (Cleveland), OH; Hanahan (Charleston), SC; Elgin (Chicago), IL; Kansas City, MO; Chattanooga, TN; Roanoke, VA; Orion, MI; Edwardsville, KS; Punta Gorda, FL and Cheektowaga (Buffalo), NY,OH, totaling approximately $35,266,000.

During the nine months ended June 30, 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%.$8,649,000.

As of June 30, 2017,2018, Loans Payable represented the amount drawn down on the Company’sour $200,000,000 unsecured line of credit facility (the Facility) in the amount of $110,000,000 and the amount drawn down on the Company’sour margin lineloan of credit on its marketable securities in the amount of $12,094,940.

$47,792,824.

The Facility matures in September 2020 with a one year extension at the Company’sour option (subject to various conditions as specified in the loan agreement). During the nine months ended June 30, 2017, the Company2018, we had netno additional draws of $34,000,000 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’sour unencumbered, wholly-owned industrial properties. Effective, March 22, 2018, the capitalization rate applied to our NOI generated by our unencumbered, wholly-owned industrial properties was lowered from 7.0% to 6.5%, thus increasing the value of the borrowing base properties under the terms of the agreement. Borrowings under the Facility, will, at the Company’sour election, either i) bear interest at LIBOR plus 140 basis points to 220 basis points, depending on the Company’sour leverage ratio, or ii) bear interest at BMO’s prime lending rate plus 40 basis points to 120 basis points, depending on the Company’sour leverage ratio. The Company’sOur borrowings as of June 30, 2017,2018, based on the Company’sour leverage ratio, as of June 30, 2017, bear interest at LIBOR plus 150170 basis points, which was atrepresented an interest rate of 2.54% as of June 30, 2017.3.79%. In addition, the Company haswe have 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.

The CompanyWe also investsinvest in equity securities of other REITs which provides the Companyus with additional liquidity, diversification and income and serves as a proxy for real estate when more favorable risk adjusted returns are not available. The Company fromFrom time to time, we may purchase these securities on margin when the interest and dividend yields exceed the cost of funds. In general, the Companywe may borrow up to 50% of the value of the marketable securities, which was $100,495,810$167,594,279 as of June 30, 2017.2018. As of June 30, 2017,2018, we had $47,792,824 drawn against the Company had borrowingsmargin at an interest rate of $12,094,940 under its margin line, bearing interest at 2.05%2.00%.

NOTE 6 – SHAREHOLDERS’ EQUITY

The Company’sOur authorized stock as of June 30, 20172018 consisted of 192,039,750 shares of common stock, of which 73,824,16180,137,070 shares were issued and outstanding, 12,400,000 authorized shares of 6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share (6.125% Series C Preferred Stock), of which 8,400,00011,099,461 shares 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.

Common Stock

On October 1, 2015, the Company’s2, 2017, our Board of Directors approved a 6.7%6.25% increase in the Company’sour quarterly common stock dividend, raising it to $0.17 per share from $0.16 per share, from $0.15 per share. Thisrepresenting our second dividend increase in three years. These two dividend raises represent a total increase of 13%. The increased dividend represents an annualized dividend rate of $0.64$0.68 per share. The Company hasWe have maintained or increased itsour cash dividend for 2526 consecutive years.

The CompanyWe raised $66,340,821$67,895,831 (including dividend reinvestments of $7,229,654)$9,467,085) from the issuance of 4,903,1894,451,289 shares of common stock under itsour DRIP during the nine months ended June 30, 2017.2018. During the nine months ended June 30, 2017, the Company2018, we paid $34,311,041$39,842,168 in total cash dividends, or $0.16$0.17 per share, to common shareholders, of which $7,229,654$9,467,085 was reinvested in the DRIP.

On July 3, 2017, the Company2, 2018, our Board of Directors declared a dividend of $0.16$0.17 per share to be paid September 15, 201717, 2018 to common shareholders of record as of the close of business on August 15, 2017.2018.

On January 17, 2017,16, 2018, the Board of Directors reaffirmed itsour Share Repurchase Program that authorizes the Companyus to purchase up to $10,000,000 in the aggregate of the Company’sour common stock. The CompanyWe may repurchase itsour shares from time to time if, in the opinion of the Board of Directors, such acquisition is advantageous to the Company.us. No shares were repurchased during the nine months ended June 30, 20172018 and, as of June 30, 2017, the Company does2018, we do not own any of itsour own shares.

7.625% Series A Cumulative Redeemable Preferred Stock

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.

7.875% Series B Cumulative Redeemable Preferred Stock

On May 5, 2017, the Company announced that it intended to redeem all 2,300,000 issued and outstanding shares of its 7.875% Series B Cumulative Redeemable Preferred Stock, $0.01 par value per share (7.875% Series B Preferred Stock). The Company redeemed all of the outstanding shares of the 7.875% Series B Preferred Stock on June 7, 2017, at a redemption price of $25.00 per share, totaling $57,500,000, plus accumulated and unpaid dividends for the period from June 1, 2017 to, but not including, the redemption date, in an amount equal to $0.0328125, totaling $75,469, for a total cash payment of $25.0328125 per share, totaling $57,575,469. The Company recognized a preferred share redemption charge of approximately $2,467,000 related to the original issuance costs. During the nine months ended June 30, 2017, the Company paid $3,471,566 in Preferred Dividends, or $1.509375 per share, on its then outstanding 7.875% Series B Preferred Stock.

6.125% Series C Cumulative Redeemable Preferred Stock

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 $71,003,000. The Company used the net proceeds from this offering to redeem all of the outstanding shares of its 7.875% Series B Preferred Stock, as discussed above. The remaining proceeds were used to purchase properties in the ordinary course of 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 shares of the 6.125% Series C Preferred Stock issued and outstanding. As of June 30, 2017, 8,400,000 shares of the 6.125% Series C Preferred Stock were issued and outstanding.

During the nine months ended June 30, 2017, the Company2018, we paid $7,074,383$12,548,850 in Preferred Dividends, or $1.0973965$1.1484375 per share, on itsour outstanding 6.125% Series C Preferred Stock for the period September 13, 20161, 2017 through May 31, 2017.2018. As of June 30, 2018, we have accrued Preferred Dividends of $1,416,337 covering the period June 1, 2018 to June 30, 2018. Dividends on the 6.125% Series C Preferred Stock are cumulative and payable quarterly at an annual rate of $1.53125 per share. The 6.125% Series C Preferred Stock has no maturity date and will remain outstanding indefinitely unless redeemed or otherwise repurchased. Except in limited circumstances relating to the Company’sour qualification as a REIT, or in connection with a change of control, the 6.125% 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 6.125% Series C Preferred Stock will be redeemable in whole, or in part, at the Company’sour 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 July 3, 2017, the Company2, 2018, our Board of Directors declared a dividend of $0.3828125 per share to be paid September 15, 201717, 2018 to the 6.125% Series C Preferred shareholders of record as of the close of business on August 15, 2017.2018.

On June 29, 2017, the Companywe entered into an At-The-Market Preferred Equity Program (ATM Preferred(Preferred Stock ATM Program) with B. Riley FBR, Capital Markets & Co.Inc. in which the Companywe may, from time to time, offer and sell additional shares of itsour 6.125% Series C Preferred Stock, with a liquidation preference of $25.00 per share, having an aggregate sales price of up to $100,000,000. The CompanyWe began selling shares through the ATM Preferred Stock ATM Program on July 3, 2017. Therefore, as ofDuring the nine months ended June 30, 2017, no2018, we sold 1,260,016 shares were sold under the ATMour Preferred Stock Program. Subsequent to the quarter end, through July 25, 2017, the Company sold 627,867 shares under its ATM Preferred Stock Program at a weighted average price of $25.44$25.08 per share, and realized net proceeds, after offering expenses, of approximately $15,628,000.$30,992,000.

As of June 30, 2018, 11,099,461 shares of the 6.125% Series C Preferred Stock were issued and outstanding.

Subsequent to the June 30, 2018 quarter end, through July 18, 2018, we sold 143,338 shares under our Preferred Stock ATM Program at a weighted average price of $24.00 per share, and realized net proceeds, after offering expenses, of approximately $3,386,000.

NOTE 7 - FAIR VALUE MEASUREMENTS

The Company measuresWe measure certain financial assets and liabilities at fair value on a recurring basis, including Securities Available for Sale at Fair Value. The Company’sOur financial assets consist mainly of marketable REIT securities. The fair value of these financial assets was determined using the following inputs at June 30, 20172018 and September 30, 2016:2017:

In addition to the Company’sour investments in Securities Available for Sale at Fair Value, the Company iswe are 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’sour entire holdingsholding of a financial instrument.instruments. For a portion of the Company’sour other financial instruments, no quoted market value exists. Therefore, estimates of fair value are necessarily based on a number of significant assumptions, (manymany of which involve events outside the control of management).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.

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 Companyus for issuance of debt with similar terms and remaining maturities. These fair value measurements fall within level 2 of the fair value hierarchy. At June 30, 2017,2018, the Fixed Rate Mortgage Notes Payable fair value (estimated based upon expected cash outflows discounted at current market rates) amounted to approximately $571,364,000$663,810,000 and the carrying value amounted to $561,736,464. When the Company acquires a property and is accounted for as a business combination, 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.$665,118,463.

NOTE 8 - SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for interest during the nine months ended June 30, 20172018 and 20162017 was approximately $17,975,000$23,016,000 and $15,994,000,$17,975,000, respectively.

During the nine months ended June 30, 2018 and 2017, and 2016, the Companywe had dividend reinvestments of $7,229,654$9,467,085 and $6,326,691,$7,229,654, respectively, which required no cash transfers.

NOTE 9 – CONTINGENCIES AND COMMITMENTS

From time to time, the Companywe may be subject to claims and litigation in the ordinary course of business. Management doesWe do not believe that any such claim or litigation will have a material adverse effect on the Consolidated Balance Sheets or results of operations.

In addition to the property purchased subsequent to the quarter end, as described below in Note 10, theThe Company has entered into agreements to purchase four new build-to-suit, industrial buildings that have recently been completed or are currently being developed in Florida, OhioGeorgia, New Jersey and South Carolina, totalingconsisting of approximately 1,039,0001,105,000 square feet, with net-leased terms ranging from 10 to 15 years, resulting inwith a weighted average lease maturityterm of 10.613.9 years. The aggregate purchase price for the fourthese properties is approximately $88,676,000. Two of the four purchase commitments consisting of approximately 420,300 square feet, or 40%, are leased to investment grade tenants. Approximately 121,800 square feet, or 12%, is leased to FDX. Subject to satisfactory due diligence, we anticipate closing these four transactions during the remainder of fiscal 2017 and the first half of fiscal 2018. In connection with the$221,369,000. These four properties the Company has entered into commitments to obtain three mortgage loans totaling approximately $38,300,000 at fixed rates ranging from 4.17% to 4.45%, with a weighted average interest rate of 4.28%. All three of these mortgage loans are 15 year, fully-amortizing loans.