UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period ___________________ to ____________________
Commission File Number 0-4258
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-1897375
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3499 Route 9 North, Suite 3-C, Freehold, NJ 07728
(Address of Principal Executive Offices ) (Zip Code)
Registrant's telephone number, including area code: (732) 577-9997
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock Class A $.01 par value
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 12 preceding 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 if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment of this Form 10-K X .
The aggregate market value of voting stock held by non-affiliates
of the Registrant was $40,212,511 (based on 8,144,306 shares of common
stock at the closing price of $4 15/16 per share) as of December 7,
2000.
There were 8,903,303 shares of common stock outstanding as of
December 7, 2000.
Documents Incorporated by Reference: Exhibits incorporated by
reference are listed in Part IV, Item 14 (a) (3).
<PAGE>
PART I
ITEM 1 - BUSINESS
Monmouth Real Estate Investment Corporation (the Company) is a
corporation operating as a qualified real estate investment trust
under Sections 856-858 of the Internal Revenue Code.
Currently, the Company derives its income primarily from real
estate rental operations. The Company has approximately 1,733,000
square feet of property, of which approximately 501,000 square feet,
or 29%, is leased to Federal Express Corporation and 246,000 square
feet, or 14%, is leased to Keebler Company. During 2000, 1999 and
1998 rental and occupancy charges from properties leased to these
companies approximated 52%, 49% and 39%, respectively, of total
rental and occupancy charges.
At September 30, 2000, the Company had investments in twenty-two
properties. (See Item 2 for detailed description of the properties.)
These properties are located in New Jersey, New York, Pennsylvania,
North Carolina, Mississippi, Massachusetts, Kansas, Iowa, Missouri,
Illinois, Michigan, Nebraska, Florida, Virginia and Ohio. All
properties are managed by a management company. All properties are
leased on a net basis except Monaca, Pennsylvania.
The Company does not have an advisory contract. Its properties
are managed by Cronheim Management Services. Effective August 1,
1998, the Company entered into a new management contract with Cronheim
Management Services. Under this contract, Cronheim Management
Services receives 3% of gross rental income on certain properties for
management fees. Cronheim Management Services provides sub-agents as
regional managers for the Company's properties and compensates them
out of this management fee. Cronheim Management Services received
$199,432, $161,146, and $41,466 in 2000, 1999 and 1998,
respectively, for the management of various properties.
The David Cronheim Company received $14,347, $136,229, and
$45,786 in lease brokerage commissions in 2000, 1999 and 1998,
respectively.
The Company competes with other investors in real estate for
attractive investment opportunities. These investors include other
"equity" real estate investment trusts, limited partnerships,
syndications and private investors, among others.
Page 2
<PAGE>
ITEM 1 - BUSINESS (CONT'D)
The Company has a flexible investment policy concentrating
its investments in the area of net-leased industrial properties. The
Company's strategy is to obtain a favorable yield spread between the
yield from the net-leased industrial properties and mortgage interest
costs. The Company continues to purchase net-leased industrial
properties, since management believes that there is a potential for
long-term capital appreciation through investing in well-located
industrial properties. There is the risk that, on expiration of
current leases, the properties can become vacant or re-leased at lower
rents. The results obtained by the Company by re-leasing the
properties will depend on the market for industrial properties at that
time.
The Company continues to invest in both debt and equity
securities of other real estate investment trusts (REITs). Based on
current market conditions, management believes that the price of those
REIT shares are at a discount from the value of the underlying
properties. The Company from time to time may purchase these
securities on margin when the interest and dividend yields exceed the
cost of the funds. Such securities are subject to risk arising from
adverse changes in market rates and prices, primarily interest rate
risk relating to debt securities and equity price risk relating to
equity securities.
In fiscal 2000, the Company paid approximately $4,000,000 for a
net-leased industrial property. In fiscal 2001, the Company
anticipates acquisitions of approximately $30,000,000. The funds for
these acquisitions may come from the Company's available line of
credit, other bank borrowings and proceeds from the Dividend
Reinvestment and Stock Purchase Plan. To the extent that funds or
appropriate properties are not available, fewer acquisitions will be
made.
The Company seeks to invest in well-located, modern buildings
leased to credit worthy tenants on long-term leases. In management's
opinion, newly built facilities leased to the Federal Express
Corporation (FDX) or FDX subsidiaries meet this criteria. The Company
is considering two properties for purchase leased to FDX or FDX
subsidiaries. This could result in an additional concentration of
properties leased to FDX and FDX subsidiaries. This is a risk factor
that shareholders should consider. FDX is a publicly-owned
corporation and information on its financial business operations is
readily available to the Company's shareholders. Because of the
contingent nature of contracts to purchase real property, the Company
announces acquisitions only on closing.
Under New Jersey Environmental Laws, inspections of the
properties are made and certificates of compliance are obtained upon
the sale of property or upon a change of tenancy. Therefore, there is
no assurance that, in connection with compliance with state
environmental regulations, substantial capital expenditures would not
be incurred at the time the Company desired to sell its properties or
at the time of a change of tenancy. Management is not aware of any
material environmental problems affecting the Company's properties.
Page 3
<PAGE>
ITEM 2 - DETAILED DESCRIPTION OF PROPERTIES
The Company operates as a real estate investment trust. Its
portfolio is primarily in equity holdings, some of which have been
long-term holdings carried on the financial statements of the Company
at depreciated cost. It is believed that their current market values
exceed both the original cost and the depreciated cost. The following
is a brief description of the Company's equity holdings at September
30, 2000. (See Item 14, Schedule III for additional information on
Real Estate and Accumulated Depreciation and Item 14, Note 7 of the
Notes to the Financial Statements for a discussion of encumbrances on
these equity holdings).
SOMERSET, NEW JERSEY
The Company owns a two-thirds undivided interest in this
Somerset, New Jersey shopping center. The remaining one-third
interest is owned by D & E Realty, an unrelated entity. All assets,
liabilities, income and expense are allocated to the owners based upon
their respective ownership percentages. The total rentable space in
this shopping center is approximately 42,800 square feet. In
addition, 21,365 square feet of land was leased to Taco Bell, Inc. on
which a freestanding restaurant was completed during 1993. This
shopping center was 97% occupied at September 30, 2000. The main
store lease expires on September 30, 2005. The Company's portion of
the annual gross rental income on this facility was approximately
$314,000.
RAMSEY, NEW JERSEY
Ramsey Industrial Park, located on E. Crescent Avenue in Ramsey,
New Jersey is a 42,719 square foot building net-leased to Bogen Photo,
Inc. This lease expires on September 30, 2001. The current annual
gross rental income is approximately $224,000. This lease has been
extended to September 30, 2006 at an annual rent of $279,000.
MONACA, PENNSYLVANIA
The Moor Industrial Park is located in Monaca, Pennsylvania. It
consists of approximately 292,000 feet of rentable space located on 23
acres. The leases are all short term at relatively low rents compared
to the Company's other properties. The current annual gross rental
income is approximately $465,000. At September 30, 2000, this
property was 74% occupied. This property has 1,200 feet of
undeveloped river frontage.
ORANGEBURG, NEW YORK
This 50,400 square foot warehouse facility, located in
Orangeburg, New York, is net-leased to the Keebler Company. The
average annual rental income over the term of the lease, which expires
on December 31, 2000, is approximately $433,000. This lease has been
extended to December 31, 2003 at an annualized rent of $323,000 per
annum.
Page 4
<PAGE>
ITEM 2 - DETAILED DESCRIPTION OF PROPERTIES (CONT'D)
SOUTH BRUNSWICK, NEW JERSEY
This 144,520 square foot warehouse facility, located in South
Brunswick, New Jersey, is net-leased to McMaster Carr Supply Co. This
lease expires on December 31, 2000. The average annual rental income
over the term of the lease is $614,000. McMaster Carr Supply Co. has
exercised a one year renewal option at a rent of $650,000 per annum.
GREENSBORO, NORTH CAROLINA
This 40,560 square foot distribution center, located in
Greensboro, North Carolina is net-leased to the Keebler Company.
This lease expires February 14, 2003. The average annual rental
income over the term of the lease is approximately $233,000.
JACKSON, MISSISSIPPI
This 26,340 square foot warehouse facility, located in Jackson,
Mississippi, is net-leased to the Keebler Company. The average
annual rental income over the term of the lease is approximately
$169,000. This lease expires September 30, 2003. The Keebler Company
is in the process of sub-leasing this facility.
FRANKLIN, MASSACHUSETTS
This 84,376 square foot warehouse facility, located in Franklin,
Massachusetts, is net-leased to the Keebler Company. The average
annual rental income over the term of the lease is approximately
$516,000. This lease expires on January 31, 2004.
WICHITA, KANSAS
This 44,136 square foot warehouse facility, located in Wichita,
Kansas, is net-leased to the Keebler Company. The average annual
rental income over the term of the lease is approximately $195,000.
This lease expires May 30, 2005. The Keebler Company has sub-leased
this facility.
URBANDALE, IOWA
This 36,150 square foot warehouse facility, located in Urbandale,
Iowa, is net-leased to the Glazers Distributors of Iowa, Inc. The
average annual rental income over the term of the lease is
approximately $127,000. This lease expires June 30, 2003.
Page 5
<PAGE>
ITEM 2 - DETAILED DESCRIPTION OF PROPERTIES (CONT'D)
RICHLAND, MISSISSIPPI
This 36,000 square foot warehouse facility, located in Richland,
Mississippi, is 100% net-leased to the Federal Express Corporation for
an average annual rental income of approximately $140,000 over the
term of the lease. This lease expires on March 31, 2004.
O'FALLON MISSOURI
This 102,135 square foot warehouse facility, located in
O'Fallon, Missouri, is 100% net-leased to PPG Industries, Inc. The
average annual rental income over the term of the lease is
approximately $353,000. This lease expires June 30, 2001.
VIRGINIA BEACH, VIRGINIA
This 67,926 square foot warehouse facility, located in
Virginia Beach, Virginia, is 100% net- leased to the Raytheon Service
Company. The annual rental income is approximately $307,000. This
lease expires February 28, 2001. Raytheon Service Company has sub-
leased this facility.
FAYETTEVILLE, NORTH CAROLINA
This 148,000 square foot warehouse facility, located in
Fayetteville, North Carolina, is 100% net-leased to the Belk
Enterprises, Inc. The average annual rental income over the term of
the lease is approximately $473,000. This lease expires June 4, 2006.
SCHAUMBURG, ILLINOIS
This 73,500 square foot warehouse facility, located in
Schaumburg, Illinois, is 100% net-leased to the Federal Express
Corporation. The average annual rental income over the term of the
lease is approximately $463,000. This lease expires April 1, 2007.
TETERBORO, NEW JERSEY
The Company is a partner in a limited liability company,
Hollister `97, LLC, representing a 25% ownership interest. The sole
business of this LLC is the ownership and operation of the Hollister
Corporate Park in Teterboro, New Jersey. Under the agreement, the
Company is to receive a cumulative preferred 11% annual return on its
investment.
BURR RIDGE, ILLINOIS
This 12,477 square foot warehouse facility, located in Burr
Ridge, Illinois, is 100% net-leased to the Sherwin-Williams Company.
The average annual rental income over the term of the lease is
$151,000. This lease expires on October 31, 2009.
Page 6
<PAGE>
ITEM 2 - DETAILED DESCRIPTION OF PROPERTIES (CONT'D)
ROMULUS, MICHIGAN
This 72,000 square foot warehouse facility, located in Romulus,
Michigan, is 100% net-leased to the Federal Express Corporation. The
average annual rental over the term of the lease is approximately
$396,000. This lease expires on November 30, 2007.
LIBERTY, MISSOURI
This 98,200 square foot warehouse facility, located in Liberty,
Missouri, is 100% net- leased to the Johnson Controls, Inc. The
average annual rental income over the term of the lease is
approximately $705,000. This lease expires on December 18, 2007.
Johnson Controls, Inc. has sub-leased this facility.
OMAHA, NEBRASKA
This 88,140 square foot warehouse facility, located in Omaha,
Nebraska, is 100% net-leased to the Federal Express Corporation. The
average annual rental income over the term of the lease is
approximately $516,000. This lease expires October 31, 2008.
CHARLOTTESVILLE, VIRGINIA
This 49,900 square foot warehouse facility, located in
Charlottesville, Virginia, is 100% net-leased to the Federal Express
Corporation. The average annual rental income over the term of the
lease is approximately $363,000. This lease expires October 31, 2008.
JACKSONVILLE, FLORIDA
This 95,883 square foot warehouse facility, located in
Jacksonville, Florida, is 100% net-leased to the Federal Express
Corporation. The average annual rental income over the term of the
lease is approximately $526,000. This lease expires May 31, 2008.
UNION CITY, OHIO
This 85,508 square foot warehouse facility, located in Union
City, Ohio, was purchased in fiscal 2000. This warehouse facility is
100% net-leased to RPS Ground, a subsidiary of the Federal Express
Corporation. The average annual rental income over the term of the
lease is approximately $393,000. This lease expires August 1, 2009.
Page 7
<PAGE>
ITEM 3 - LEGAL PROCEEDINGS
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during the fourth quarter of 2000.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The shares of Class A common stock of Monmouth Real Estate
Investment Corporation are traded on the National Association of
Securities Dealers Automated Quotation (NASDAQ symbol MNRTA). The per
share range of high and low market prices and distributions paid to
shareholders during each quarter of the last two years were as
follows:
2000 1999
Market Price Market Price
Fiscal High Low Distrib. Fiscal High Low Distrib.
Qtr. Qtr.
First 5.375 4.625 $.145 First 6.125 5.000 $ .1375
Second 5.188 4.500 .145 Second 5.500 5.125 .1400
Third 5.375 4.563 .145 Third 5.875 5.250 .1450
Fourth 5.375 4.813 .145 Fourth 5.625 5.250 .1450
____ _____
$ .58 $ .5675
=== ====
The over-the-counter market quotations reflect the inter-dealer
prices, without retail mark-up, mark-down or commission, and may not
necessarily represent actual transactions.
On September 30, 2000, the closing price was $5.00.
As of September 30, 2000, there were approximately 1,071
shareholders of record who held shares of Class A common stock of the
Company.
It is the Company's intention to continue distributing quarterly
dividends. On September 20, 2000 the Company declared a dividend of
$.145 per share to be paid on December 15, 2000 to shareholders of
record November 15, 2000.
Page 8
<PAGE>
<TABLE>
<CAPTION>
ITEM 6 - SELECTED FINANCIAL DATA
The following table sets forth selected financial and other
information for the Company as of and for each of the years in the
five year period ended September 30, 2000. This table should be read
in conjunction with all of the financial statements and notes thereto
included elsewhere herein.
September 30,
2000 1999 1998 1997 1996
INCOME STATEMENT DATA:
<S> <C> <C> <C> <C> <C>
Total Income $10,397,973 $ 8,751,219 $ 6,963,825 $ 5,798,699 $ 4,607,434
Total Expenses 6,897,207 6,214,993 4,493,595 3,965,002 3,233,584
Gains on Sales of
Assets-Investment
Property 88,631 1,260,534 29,692 47,457 22,249
Net Income 3,589,397 3,796,760 2,499,922 1,881,154 1,396,099
Net Income Per
Share - Basic
and Diluted .44 .57 .50 .46 .39
BALANCE SHEET
DATA:
Total Assets $86,003,905 $79,424,958 $55,582,845 $44,942,723 $32,538,076
Long-Term
Obligations 33,780,968 33,182,307 24,436,941 20,498,016 14,197,529
Shareholders'
Equity 41,013,926 36,276,677 27,404,822 19,889,288 16,109,382
OTHER
INFORMATION:
Average Number
Of Shares
Outstanding 8,078,877 6,627,344 4,997,775 4,047,759 3,584,364
Funds from
Operations* $ 5,292,384 $ 4,220,279 $ 3,647,345 $ 2,821,902 $ 2,226,079
Cash Dividends
Per Share .58 .5675 .53 .51 .50
*Defined as net income, excluding gains (or losses) from sales of
depreciable assets plus depreciation, plus adjustments for
unconsolidated partnerships ($84,601 for 1999). Includes gain on
sale of land of $88,631 in 2000. Funds from Operations do not
replace net income determined in accordance with generally accepted
accounting principles (GAAP) as a measure of performance or net cash
flows as a measure of liquidity. Funds from Operations is not a GAAP
measure of operating performance and should be considered as a
supplemental measure of operating performance used by real estate
investment trusts.
</TABLE>
Page 9
<PAGE>
<TABLE>
<CAPTION>
ITEM 6 - SELECTED FINANCIAL DATA (CONT'D)
SUMMARY OF OPERATIONS BY PROPERTY
FOR THE YEARS ENDED SEPTEMBER 30,
2000 1999 1998
Net Rental Income
<S> <C> <C> <C>
Somerset, New Jersey $ 247,795 $ 257,143 $ 262,871
Ramsey, New Jersey 157,488 165,994 180,278
Monaca, Pennsylvania 187,031 190,435 191,100
Monsey, New York -0- 115,534 154,411
Orangeburg, New York 220,767 203,916 198,855
South Brunswick, New Jersey 412,634 404,304 712,373
Greensboro, North Carolina 192,358 182,442 93,498
Jackson, Mississippi 72,937 70,372 71,881
Franklin, Massachusetts 278,733 259,637 254,003
Wichita, Kansas 31,117 23,714 27,198
Urbandale, Iowa 88,628 110,817 106,012
Richland, Mississippi 58,738 51,872 52,418
O'Fallon, Missouri 101,646 85,811 82,100
Virginia Beach, Virginia 110,359 107,227 99,402
Fayetteville, North Carolina 89,158 93,972 84,451
Schaumburg, Illinois 80,094 64,422 72,551
Burr Ridge, Illinois 41,756 9,448 32,872
Romulus, Michigan 93,874 90,261 9,276
Liberty, Missouri 206,755 120,806 11,766
Omaha, Nebraska 113,526 121,793 -0-
Charlottesville, Virginia 94,450 77,251 -0-
Jacksonville, Florida 114,921 (18,300) -0-
Union City, Ohio 41,177 -0- -0-
_________ _________ _________
Net Rental Income 3,035,942 2,788,871 2,697,316
Net Investment and Other Income 1,253,695 465,602 472,898
_________ _________ _________
TOTAL 4,289,637 3,254,473 3,170,214
General & Administrative Expenses (788,871) (718,247) (699,984)
_________ _________ _________
Income Before Gains 3,500,766 2,536,226 2,470,230
Gain on Sale of Assets-Investment
Property 88,631 1,260,534 29,692
_________ _________ _________
NET INCOME $ 3,589,397 $ 3,796,760 $ 2,499,922
========= ========= =========
</TABLE>
Page 10
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Monmouth Real Estate Investment Corporation (the Company)
operates as a real estate investment trust deriving its income
primarily from real estate rental operations. At September 30, 2000,
the Company's shareholders' equity increased to $41,013,926 as
compared to $36,276,677 in 1999.
The Company's ability to generate cash adequate to meet its needs
is dependent primarily on income from its real estate investments, the
sale of real estate investments and securities, refinancing of
mortgage debt, leveraging of real estate investments, availability of
bank borrowings, proceeds from the Dividend Reinvestment and Stock
Purchase Plan, and access to the capital markets. Purchases of new
properties, payments of expenses related to real estate operations,
capital improvements programs, debt service, management and
professional fees, and dividend requirements place demands on the
Company's liquidity.
The Company intends to operate its existing properties from the
cash flows generated by the properties. However, the Company's
expenses are affected by various factors, including inflation.
Increases in operating expenses raise the breakeven point for a
property and, to the extent that they cannot be passed on through
higher rents, reduce the amount of available cash flow which can
adversely affect the market value of the property.
The Company's focus is on equity investments. During the past
eight years, the Company purchased nineteen net-leased warehouse
facilities at an aggregate cost of approximately $70,000,000.
The Company financed these purchases primarily through mortgages
on its acquisitions. The Company also has a secured $6,345,000 line
of credit of which approximately $3,237,000 was available at September
30, 2000. Interest is at Prime and is due monthly. This credit line
expires on November 29, 2002.
The Company expects to make additional real estate investments
from time to time. In 2001, the Company plans to acquire
approximately $30,000,000 of net-leased industrial properties. The
funds for these acquisitions may come from the Company's available
line of credit, other bank borrowings and proceeds from the Dividend
Reinvestment and Stock Purchase Plan. To the extent that funds or
appropriate properties are not available, fewer acquisitions will be
made.
The Company also invests in debt and equity securities of other
REITs. The Company from time to time may purchase these securities on
margin. During fiscal 2000, the Company increased its securities
portfolio by approximately $4,500,000. Although the securities
portfolio at September 30, 2000 has experienced an approximate 3%
decline in value from cost, management believes that this is temporary
in nature.
Page 11
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONT'D)
Funds generated are expected to be sufficient to meet debt
service requirements and capital expenditures of the Company.
Cash provided from operating activities amounted to $4,583,749 in
2000 as compared to $4,493,792 in 1999 and $3,431,422 in 1998.
At September 30, 2000, the Company had total liabilities of
$44,989,979 and total assets of $86,003,905. The Company believes
that it has the ability to meet its obligations and to generate funds
for new investments.
The Company has a Dividend Reinvestment and Stock Purchase Plan.
During 2000, a total of $5,734,589 in additional capital was raised.
The success of the Plan has resulted in a substantial improvement in
the Company's liquidity and capital resources in 2000. It is
anticipated, although no assurances can be given, that a comparable
level of participation will continue in the Plan in fiscal 2001.
Therefore, the Company anticipates that the Plan will result in
further increased liquidity and capital resources in fiscal 2001.
Results of Operations
The Company's activities primarily generate rental income. Net
income for the fiscal year ended September 30, 2000 was $3,589,397 as
compared to $3,796,760 in 1999 and $2,499,922 in 1998. Net rental
income for the fiscal year ended September 30, 2000 was $3,035,942 as
compared to $2,788,871 in 1999 and $2,697,316 in 1998. The following
is a discussion of the results of operations by location for 2000 as
compared to 1999 and 1999 as compared to 1998:
Somerset, New Jersey
During 2000, net rental income decreased primarily as a result of
an increase in management fees. During 1999, net rental income
remained relatively stable as compared to 1998.
Ramsey, New Jersey
Net rental income decreased during 2000 as compared to 1999 and
1999 as compared to 1998 primarily as a result of an increase in
professional fees.
Monaca, Pennsylvania
Net rental income remained relatively stable for 2000, 1999 and
1998.
Monsey, New York
Due to the sale of the property in March, 1999, net rental income
decreased for 2000 and 1999 as compared to 1998.
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<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONT'D)
Orangeburg, New York
Net rental income increased in 2000 as compared to 1999 due to
lower interest costs on related borrowings outstanding. Net
rental income remained relatively stable in 1999 as compared to
1998.
South Brunswick, New Jersey
Net rental income remained relatively stable in 2000 as compared
to 1999. Net rental income decreased during 1999 as compared to
1998 due primarily to a lease extension by Amway Corporation from
July 1, 1997 to December 31, 1997 at a monthly rental of $162,585
which was triple the normal rent. The new monthly rental is
$51,184.
Greensboro, North Carolina
Net rental income increased in 2000 as compared to 1999 due to an
increase in tenant reimbursements. Net rental income increased
in 1999 as compared to 1998 due to a decrease in interest
expense as a result of the payoff of the mortgage on this
property during 1998.
Jackson, Mississippi
Net rental income remained relatively stable during 2000, 1999
and 1998.
Franklin, Massachusetts
Net rental income increased during 2000 as compared to 1999
primarily due to an increase in tenant reimbursement. Net
rental income remained relatively stable during 1999 and 1998.
Wichita, Kansas
Net rental income remained relatively stable during 2000, 1999
and 1998.
Urbandale, Iowa
Net rental income decreased during 2000 as compared to 1999
primarily due to a decrease in rent from a new lease. Net rental
income remained relatively stable during 1999 and 1998.
Richland, Mississippi
Net rental income remained relatively stable during 2000, 1999
and 1998.
O'Fallon, Missouri
Net rental income increased in 2000 as compared to 1999 primarily
due to lower interest costs on related borrowings outstanding.
Net rental income remained relatively stable during 1999 and
1998.
Virginia Beach, Virginia
Net rental income remained relatively stable in 2000 as compared
to 1999. Net rental income increased during 1999 as compared to
1998 as a result of an increase in tenant reimbursements.
Page 13
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONT'D)
Fayetteville, North Carolina
Net rental income remained relatively stable in 2000 as compared
to 1999. Net rental income increased during 1999 as compared to
1998 due to an increase in tenant reimbursements.
Schaumburg, Illinois
Net rental income increased in 2000 as compared to 1999 due to an
increase in tenant reimbursements. Net rental income decreased
in 1999 as compared to 1998 due to an increase in management
fees.
Burr Ridge, Illinois
Net rental income increased in 2000 as compared to 1999 due
primarily to an increase in tenant reimbursements. Net rental
income decreased in 1999 as compared to 1998 due to an increase
in depreciation expense over 1998's half year convention.
Romulus, Michigan
Net rental income remained relatively stable in 2000 as compared
to 1999. Net rental income increased in 1999 as compared to 1998
due to a full year's income and expenses.
Liberty, Missouri
Net rental income increased in 2000 as compared to 1999 due to
accelerated depreciation expense recognized in 1999. Net rental
income increased in 1999 as compared to 1998 due to a full year's
income and expenses.
Omaha, Nebraska
Net rental income remained relatively stable during 2000 as
compared to 1999. This warehouse facility was acquired in
December, 1998.
Charlottesville, Virginia
Net rental income increased during 2000 as compared to 1999 due
to a full year's income and expenses. This warehouse facility
was acquired in April, 1999.
Jacksonville, Florida
Net rental income increased during 2000 as compared to 1999 due
to a full year's income and expenses. The excess of expenses
over income for 1999 was due to the half year convention for
depreciation expense.
Union City, Ohio
This warehouse facility was acquired in February, 2000. It is
net-leased to RPS Ground, a subsidiary of the Federal Express
Corporation. Average monthly rental over the term of the lease is
$32,755.
Page 14
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONT'D)
The Company also generated net investment and other income from
its investments in securities available for sale, mortgages
receivable and Hollister `97, LLC. Net interest and other income
increased during 2000 as compared to 1999 primarily due to the
increase in securities available for sale and to a gain of $110,960 on
the sale of securities available for sale. Net interest and other
income decreased in 1999 as compared to 1998 due to the gain on sale
of securities available for sale in 1998 partially offset by an
increase in dividend income as a result of the purchases of additional
securities. These securities have a dividend yield in excess of 10%.
General and administrative expenses increased during 2000 as
compared to 1999 primarily as a result of increased personnel costs.
During 1999, general and administrative expenses remained relatively
stable as compared to 1998.
Funds from operations (FFO), defined as net income, excluding
gains (or losses) from sales of depreciable assets, plus depreciation,
plus adjustments for unconsolidated partnerships ($-0-, $84,601, and
$-0- for 2000, 1999 and 1998, respectively), increased from
$3,647,345 for the year ended September 30, 1998 to $4,220,279 for the
year ended September 30, 1999 to $5,292,384 for the year ended
September 30, 2000. FFO does not replace net income (determined in
accordance with generally accepted accounting principles) as a measure
of performance or net cash flows as a measure of liquidity. FFO
should be considered as a supplemental measure of operating
performance used by real estate investment trusts.
During 1999, the Company realized a gain of approximately
$1,240,000 on the sale of the Monsey, New York property. The Company
also recognized a deferred gain from the Howell Township installment
sale of approximately $88,631, $20,000 and $30,000 for 2000, 1999 and
1998, respectively. The gain increased in 2000 as the note was paid
in full by the purchaser of the property.
IMPACT OF YEAR 2000
The Company has experienced no significant impact of its
operations or its ability to accurately process financial information
due to a Year 2000 related issue. In addition, the Company has no
information that indicates a significant tenant, vendor or service
provider may be unable to meet their rental obligations, sell goods or
provide services to the Company because of Year 2000 issues. The
Company will continue to monitor its operations for year 2000 related
issues.
ITEM 7a - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See Item 1 - Business
Page 15
<PAGE>
<TABLE>
<CAPTION>
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data listed in Part
VI, Item 14 are incorporated herein by reference and filed as part of
this report.
The following is the Unaudited Selected Quarterly Financial Data:
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
THREE MONTHS ENDED
FISCAL 2000 12/31/99 3/31/00 6/30/00 9/30/00
<S> <C> <C> <C> <C>
Total Income $2,688,990 $2,553,413 $2,568,216 $2,587,354
Total Expenses 1,838,720 1,631,334 1,685,280 1,741,873
Gains on Sales of
Assets-Investment
Property 88,631 -0- -0- -0-
Net Income 938,901 922,079 882,936 845,481
Net Income
Per Share .12 .12 .11 .09
FISCAL 1999 12/31/98 3/31/99 6/30/99 9/30/99
Total Income $1,918,858 $2,256,483 $2,261,316 $2,314,562
Total Expenses 1,362,097 1,705,508 1,591,439 1,555,949
Gains on Sales of
Assets-Investment
Property 6,000 1,246,325 6,000 2,209
Net Income 562,761 1,797,300 675,877 760,822
Net Income .10 .28 .09 .10
Per Share
</TABLE>
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None
Page 16
<PAGE>
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Present Position with
the Company; Business
Experience During Past Shares Percent
Nominee; Age Five Years; Other Director Owned (1) Of Stock
Directorships Since
Ernest V. Treasurer (1968 to 1968 11,649 0.13%
Bencivenga present) and Director.
(82) Financial Consultant
(1976 to present);
Treasurer and Director
(1961 to present) and
Secretary (1967 to
present) of Monmouth
Capital Corporation;
Director (1969 to
present) and Secretary/
Treasurer (1984 to
present) of United
Mobile Homes, Inc.
Anna T. Chew Controller (1991 to 1993 14,391(2) 0.17%
(42) present) and Director.
Certified Public
Accountant; Controller
(1991 to present) and
Director (1994 to
present) of Monmouth
Capital Corporation;
Vice President and
Chief Financial Officer
(1995 to present) and
Director (1994 to
present) of United
Mobile Homes, Inc.
Daniel D. Director. Attorney at 1989 23,297 0.27%
Cronheim Law (1982 to present);
(45) Executive Vice
President (1989 to
present) and General
Counsel (1983 to
present) of David
Cronheim Company.
Boniface Director. Chairman of 1968 10,788 0.12%
DeBlasio the Board (1968 to
(79) present) and Director
(1961 to present) of
Monmouth Capital
Corporation.
Matthew I. Director. Attorney at 2000 262 0%
Hirsch Law (1993 to present);
(41) Adjunct Professor of
Law (1993 to present),
Widener University
School of Law .
Page 17
<PAGE>
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (CONT'D)
Present Position with
the Company; Business
Experience During Past Shares Percent
Nominee; Age Five Years; Other Director Owned (1) Of Stock
Directorships Since
Charles P. Director. Investor; 1974 37,536(3) 0.43%
Kaempffer Director (1970 to
(63) present) of Monmouth
Capital Corporation;
Director (1969 to
present) of United
Mobile Homes, Inc.;
Vice Chairman and
Director (1996 to
present) of Community
Bank of New Jersey.
Eugene W. President (1968 to 1968 435,274(4) 5.00%
Landy present) and Director.
(67) Attorney at Law;
President and Director
(1961 to present) of
Monmouth Capital
Corporation; Chairman
of the Board (1995 to
present), President
(1969 to 1995) and
Director (1969 to
present) of United
Mobile Homes, Inc.
Samuel A. Director. Attorney at 1989 149,369(5) 1.72%
Landy Law (1987 to present);
(40) President (1995 to
present), Vice
President (1991 to
1995) and Director
(1992 to present) of
United Mobile Homes,
Inc.; Director (1994 to
present) of Monmouth
Capital Corporation.
Robert G. Director. Investor; 1968 76,431(6) 0.88%
Sampson Director (1963 to
(75) present) of Monmouth
Capital Corporation;
Director (1969 to
present) of United
Mobile Homes, Inc.;
General Partner (1983
to present) of Sampco,
Ltd., an investment
group.
Page 18
<PAGE>
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (CONT'D)
(1) Beneficial ownership, as defined herein, includes Class A Common
Stock as to which a person has or shares voting and/or investment
power.
(2) Held jointly with Ms. Chew's husband; includes 5,934 shares held
in Ms. Chew's 401 (k) Plan.
(3) Includes (a) 14,558 shares owned by Mr. Kaempffer's wife; and (b)
1,080 shares in joint name with Mrs. Kaempffer.
(4) Includes (a) 90,372 shares owned by Mr. Landy's wife; (b) 150,373
shares held in the Landy & Landy, P.C. Profit Sharing Plan, of
which Mr. Landy is a Trustee with power to vote; and (c) 117,340
shares held in the Landy & Landy, P.C. Pension Plan, of which Mr.
Landy is a Trustee with power to vote. Excludes 37,285 shares
held by Mr. Landy's adult children, in which he disclaims any
beneficial interest.
(5) Includes (a) 3,975 shares owned by Mr. Landy's wife, and (b)
47,997 shares held in custodial accounts for Mr. Landy's minor
children under the Uniform Gift to Minors' Act in which he
disclaims any beneficial interest, but has power to vote and (c)
1,000 shares held in the Samuel Landy Family Limited
Partnership and (d) 18,052 shares held in Mr. Landy's 401 (k)
Plan.
(6) Includes (a) 40,000 held in a Family Trust, and 13,272 shares
held by Sampco, Ltd. in which he has a beneficial interest.
The Directors as a class own 758,997 shares, which is 8.72% of
the outstanding shares.
Page 19
<PAGE>
ITEM 11 - EXECUTIVE COMPENSATION
Summary Compensation Table
The following Summary Compensation Table shows compensation paid
or accrued by the Company for services rendered during 2000, 1999 and
1998 to the Chief Executive Officer. There were no other executive
officers whose aggregate cash compensation exceeded $100,000:
Annual Compensation
Name and Principal Position Year Salary Bonus Other
Eugene W. Landy 2000 $130,000 $80,000 $ 72,000(1)
Chief Executive Officer 1999 110,000 None 79,700
1998 27,500 55,000 165,700
(1) Represents Director's fees of $5,500 paid to Mr. Landy, legal
fees of $32,500 paid to the firm of Landy & Landy, and $34,000 accrual
for pension and other benefits in accordance with Mr. Landy's
employment contract.
Stock Option Plan
There were no stock options granted to the executive officer
named in the Summary Compensation Table, during the year ended
September 30, 2000.
The following table sets forth for the executive officer named in
the Summary Compensation Table, information regarding stock options
outstanding at September 30, 2000:
Number of Value of
Unexercised Unexercised
Options Options
at Year-End at Year-End
Shares Value Exercisable/ Exercisable/
Exercised Realized Unexercisable Unexercisable
Eugene W. Landy -0- N/A 150,000 / -0- $-0- / $-0-
Employment Agreement
On December 9, 1994, the Company and Eugene W. Landy entered into
an Employment Agreement under which Mr. Landy receives an annual base
compensation (management fee) of $130,000 (as amended) plus bonuses
and customary fringe benefits, including health insurance and five
weeks vacation. Additionally, there will be bonuses voted by the
Board of Directors. The Employment Agreement is terminable by either
party at any time, subject to certain notice requirements.
Page 20
<PAGE>
ITEM 11 - EXECUTIVE COMPENSATION (CONT'D)
On severance of employment for any reason, Mr. Landy will receive
severance of $300,000, payable $100,000 on severance and $100,000 on
the first and second anniversaries of severance. In the event of
disability, Mr. Landy's compensation shall continue for a period of
three years, payable monthly. On retirement, Mr. Landy shall receive
a pension of $40,000 a year for ten years, payable in monthly
installments. In the event of death, Mr. Landy's designated
beneficiary shall receive $300,000, $150,000 thirty days after death
and the balance one year after death. The Employment agreement
terminates December 31, 2000. Thereafter, the term of the Employment
Agreement shall be automatically renewed and extended for successive
one-year periods.
Other Information
The Directors received a fee of $800 for each Board Meeting
attended. Effective April 1, 2000, this fee was increased to $1,000
for each Board Meeting attended and an additional fixed annual fee of
$3,800 payable quarterly. Directors appointed to house committees
receive $150 for each meeting attended. Those specific committees are
Compensation Committee, Audit Committee and Stock Option Committee.
Except for specific agreements, the Company has no retirement
plan in effect for Officers, Directors or employees and, at present,
has no intention of instituting such a plan.
Cronheim Management Services received the sum of $199,432 in 2000
for management fees. Effective August 1, 1998, the Company entered
into a new management contract with Cronheim Management Services.
Under this contract, Cronheim Management Services receives 3% of
gross rental income on certain properties for management fees.
Cronheim Management Services provides sub-agents as regional managers
for the Company's properties and compensates them out of this
management fee. Management believes that the aforesaid fees are no
more than what the Company would pay for comparable services
elsewhere.
Report of Board of Directors on Executive Compensation
Overview and Philosophy
The Company has a Compensation Committee consisting of two
independent outside Directors. This Committee is responsible for
making recommendations to the Board of Directors concerning
compensation. The Compensation Committee takes into consideration
three major factors in setting compensation.
The first consideration is the overall performance of the
Company. The Board believes that the financial interests of the
executive officers should be aligned with the success of the Company
and the financial interests of its shareholders. Increases in funds
from operations, the enhancement of the Company's equity portfolio,
and the success of the Dividend Reinvestment and Stock Purchase Plan
all contribute to increases in stock prices, thereby maximizing
shareholders' return.
Page 21
<PAGE>
ITEM 11 - EXECUTIVE COMPENSATION (CONT'D)
Overview and Philosophy (Cont'd)
The second consideration is the individual achievements made by
each officer. The Company is a small real estate investment trust
(REIT). The Board of Directors is aware of the contributions made by
each officer and makes an evaluation of individual performance based
on their own familiarity with the officer.
The final criteria in setting compensation is comparable wages in
the industry. In this regard, the REIT industry maintains excellent
statistics.
Evaluation
The Company's funds from operations continue to increase. The
Committee reviewed the growth of the Company and progress made by
Eugene W. Landy, Chief Executive Officer. Mr. Landy is under an
employment agreement with the Company. His base compensation under
this contract was increased in 2000 to $130,000 per year. In fiscal
2000, Mr. Landy was also paid a total bonus of $80,000 for his
performance for the past two years.
Comparative Stock Performance
The following line graph compares the total return of the
Company's common stock for the last five fiscal years to the NAREIT
All REIT Total Return Index, published by the National Association of
Real Estate Investment Trusts (NAREIT), and the S&P 500 Index for the
same period. The total return reflects stock price appreciation and
dividend reinvestment for all three comparative indices. The
information herein has been obtained from sources believed to be
reliable, but neither its accuracy nor its completeness is guaranteed.
Monmouth
Real Estate
Investment
Year Corporation NAREIT S&P 500
1995 100 100 100
1996 114 120 120
1997 146 167 169
1998 149 143 184
1999 142 130 236
2000 146 156 267
Page 22
<PAGE>
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
On September 30, 2000, no person owned of record or was known by
the Company to own beneficially five or more percent of the shares of
the Company except as follows:
Amount and Nature
Title of Name and Address of Beneficial Percent
Class of Beneficial Owner Ownership of Class
Class A Eugene W. Landy 435,274 5.00%
Common 20 Tuxedo Road
Stock Rumson, NJ 07760
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Certain relationships and related party transactions are
incorporated herein by reference to Item 14 (a) (1) (vi) Note 10 of
the Notes to the Financial Statements - Related Party Transactions.
Page 23
<PAGE>
PART IV
<PAGE>
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
PAGE(S)
(a) (1) The following Financial Statements are filed as
part of this report:
(i) Independent Auditors' Report 26
(ii) Balance Sheets as of September 30, 2000 and 1999 27
(iii) Statements of Income for the years ended
September 30, 2000, 1999 and 1998 28
(iv) Statements of Shareholders' Equity for the years
ended September 30, 2000, 1999 and 1998 29
(v) Statements of Cash Flows for the years ended
September 30, 2000, 1999 and 1998 30
(vi) Notes to the Financial Statements 31 - 46
(a) (2) The following Financial Statement Schedule is filed
as part of this report:
(i) Schedule III - Real Estate and Accumulated
Depreciation as of September 30, 2000 47-49
All other schedules are omitted for the reason that they are not
required, are not applicable, or the required information is set forth
in the financial statements or notes hereto.
Page 24
<PAGE>
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a) (3) Exhibits
(3) Articles of Incorporation and By-Laws
(i) Reference is hereby made to the Certificate of Incorporation
of Monmouth Real Estate Investment Corporation filed with the
Securities and Exchange Commission on April, 13, 1999 on Form S-4
(Registration No. 33-34103).
(ii) Reference is hereby made to the By-laws of Monmouth Real
Estate Investment Corporation filed with the Securities and Exchange
Commission on April 3, 1990 on Form S-4 (Registration No. 33-34103).
(10) Material Contracts
(i) Employment Agreement with Mr. Eugene W. Landy dated December
9, 1994 is incorporated by reference to that filed with the Company's
Form 10-K filed with the Securities and Exchange Commission on
December 28, 1994.
(ii) Employment Agreement with Mr. Ernest V. Bencivenga dated
November 9, 1993 is incorporated by reference to that filed with the
Company's Form 10-K filed with the Securities and Exchange Commission
on December 28, 1994.
(28) Additional Exhibits
Reference is hereby made to the Agreement and Plan of Merger
dated April 23, 1990 by and between Monmouth Real Estate Investment
Trust and Monmouth Real Estate Investment Corporation filed with the
Securities and Exchange Commission on April 3, 1990 on Form S-4
(Registration No. 33-34103).
Report on Form 8-K
On July 11, 2000, the Company filed a report on Form 8-K to
announce the appointment of Matthew I. Hirsch to the Board of
Directors. The total number of Directors was increased to nine.
Page 25
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders
Monmouth Real Estate Investment Corporation:
We have audited the financial statements of Monmouth Real Estate
Investment Corporation as listed in the accompanying index. In
connection with our audits of the financial statements, we also have
audited the financial statement schedule as listed in the accompanying
index. These financial statements and financial statement schedule
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
and financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Monmouth
Real Estate Investment Corporation as of September 30, 2000 and 1999,
and the results of its operations and its cash flows for each of the
years in the three-year period ended September 30, 2000 in conformity
with accounting principles generally accepted in the United States of
America. Also in our opinion, the related financial statement
schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
/s/ KPMG LLP
Short Hills, New Jersey
November 22, 2000
Page 26
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
BALANCE SHEETS
AS OF SEPTEMBER 30,
ASSETS 2000 1999
<S> <C> <C>
Real Estate Investments:
Land $ 11,745,814 $ 11,050,814
Buildings, Improvements and Equipment, net
of Accumulated Depreciation of $9,102,373
and $7,406,901, respectively 54,147,879 52,421,455
Mortgage Loans Receivable -0- 125,135
__________ __________
Total Real Estate Investments 65,893,693 63,597,404
Cash and Cash Equivalents 514,090 1,242,457
Securities Available for Sale at Fair Value 16,838,802 12,324,709
Interest and Other Receivables 716,744 558,348
Prepaid Expenses 54,808 64,001
Lease Costs - Net of Accumulated Amortization 79,367 120,803
Investments in Hollister '97, LLC 925,399 925,399
Other Assets 981,002 591,837
__________ __________
TOTAL ASSETS $ 86,003,905 $ 79,424,958
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage Notes Payable $ 36,104,743 $ 35,237,759
Loans Payable 8,022,495 6,947,038
Deferred Gains - Installment Sales -0- 88,631
Other Liabilities 862,741 874,853
__________ __________
Total Liabilities 44,989,979 43,148,281
__________ __________
Shareholders' Equity:
Common Stock - Class A - $.01 Par Value,
16,000,000 Shares Authorized; 8,707,960 and
7,509,649 Shares Issued and Outstanding in
2000 and 1999, respectively 87,080 75,096
Common Stock - Class B - $.01 Par Value,
100,000 Shares Authorized; No Shares Issued
or Outstanding -0- -0-
Additional Paid-in Capital 41,530,173 36,924,039
Accumulated Other Comprehensive Loss (603,327) (722,458)
Undistributed Income -0- -0-
__________ __________
Total Shareholders' Equity 41,013,926 36,276,677
__________ __________
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 86,003,905 $ 79,424,958
========== ==========
</TABLE>
See Accompanying Notes to the Financial Statements
Page 27
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
STATEMENTS OF INCOME
FOR THE YEAR ENDED SEPTEMBER 30,
2000 1999 1998
<S> <C> <C> <C>
INCOME:
Rental and Occupancy Charges $ 8,559,004 $ 7,982,324 $ 6,397,840
Investment and Other Income 1,838,969 768,895 565,985
__________ __________ __________
TOTAL INCOME 10,397,973 8,751,219 6,963,825
__________ __________ __________
EXPENSES:
Interest Expense 3,334,861 2,607,520 1,802,590
Management Fees 199,432 161,146 41,466
Real Estate Taxes 463,770 696,637 330,372
Professional Fees 486,568 383,269 437,847
Operating Expenses 401,593 428,699 425,289
Office and General Expense 255,896 309,170 249,016
Director Fees 52,100 29,100 29,900
Depreciation 1,702,987 1,599,452 1,177,115
__________ __________ __________
TOTAL EXPENSES 6,897,207 6,214,993 4,493,595
__________ __________ __________
Income Before Gains 3,500,766 2,536,226 2,470,230
Gains on Sale of Assets -
Investment Property 88,631 1,260,534 29,692
__________ __________ __________
NET INCOME $ 3,589,397 $ 3,796,760 $ 2,499,922
========== ========== ==========
PER SHARE INFORMATION:
Income Before Gains $ .43 $ .38 $ .49
Gains on Sale of Assets -
Investment Property .01 .19 .01
__________ __________ __________
NET INCOME - BASIC AND DILUTED $ .44 $ .57 $ .50
========== ========== ==========
</TABLE>
See Accompanying Notes to the Financial Statements
Page 28
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED SEPTEMBER 30,
Additional
Common Stock Paid-In
Number Amount Capital
<S> <C> <C> <C>
Balance September 30, 1997 4,421,847 $ 44,218 $ 19,450,137
Shares Issued in
connection with the
Dividend Reinvestment and
Stock Purchase Plan 1,281,697 12,817 8,093,663
Distributions -0- -0- (168,089)
Net Income -0- -0- -0-
Unrealized Net Holding
Losses on Securities
Available for Sale Net
of Reclassification
Adjustment -0- -0- -0-
__________ __________ __________
Balance September 30, 1998 5,703,544 57,035 27,375,711
Shares Issued in
connection with the
Dividend Reinvestment and
Stock Purchase Plan 1,806,105 18,061 9,560,306
Distributions -0- -0- (11,978)
Net Income -0- -0- -0-
Unrealized Net Holding
Losses on Securities
Available for Sale -0- -0- -0-
__________ __________ __________
Balance September 30, 1999 7,509,649 75,096 36,924,039
Shares Issued in
connection with the
Dividend Reinvestment and
Stock Purchase Plan 1,198,311 11,984 5,722,605
Distributions -0- -0- (1,116,471)
Net Income -0- -0- -0-
Unrealized Net Holding
Losses on Securities
Available for Sale Net
of Reclassification
Adjustment -0- -0- -0-
__________ __________ __________
Balance September 30, 2000 8,707,960 $ 87,080 $ 41,530,173
========== ========== ==========
</TABLE>
See Accompanying Notes to the Financial Statements
Page 29A
<PAGE>
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive
Undistributed Income Comprehensive
Income (Loss) Income
<S> <C> <C> <C>
Balance September 30, 1997 $ -0- $ 394,933
Shares Issued in
connection with the
Dividend Reinvestment and
Stock Purchase Plan -0- -0-
Distributions (2,499,922) -0-
Net Income 2,499,922 -0- $ 2,499,922
Unrealized Net Holding
Losses on Securities
Available for Sale Net
of Reclassification
Adjustment -0- (422,857) (422,857)
__________ __________ __________
Balance September 30, 1998 -0- (27,924) $ 2,077,065
==========
Shares Issued in
connection with the
Dividend Reinvestment and
Stock Purchase Plan -0- -0-
Distributions (3,796,760) -0-
Net Income 3,796,760 -0- $ 3,796,760
Unrealized Net Holding
Losses on Securities
Available for Sale -0- (694,534) (694,534)
__________ __________ __________
Balance September 30, 1999 -0- (722,458) $ 3,102,226
==========
Shares Issued in
connection with the
Dividend Reinvestment and
Stock Purchase Plan -0- -0-
Distributions (3,589,397) -0-
Net Income 3,589,397 -0- $ 3,589,397
Unrealized Net Holding
Losses on Securities
Available for Sale Net
of Reclassification
Adjustment -0- 119,131 119,131
__________ __________ __________
Balance September 30, 2000 $ -0- $ (603,327) $ 3,708,528
========== ========== ==========
</TABLE>
See Accompanying Notes to the Financial Statements
Page 29B
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30,
2000 1999 1998
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Income $ 3,589,397 $ 3,796,760 $ 2,499,922
Noncash Items Included in
Net Income:
Depreciation 1,702,987 1,599,452 1,177,115
Amortization 143,155 106,082 77,402
Gains on Sales of Assets-
Investment Property (88,631) (1,260,534) (29,692)
Gains on Sales of
Securities (110,960) -0- (222,276)
Changes In:
Interest & Other
Receivables (158,396) 39,375 (55,546)
Prepaid Expenses 9,193 66,910 (5,413)
Other Assets and
Lease Costs (490,884) 54,913 (148,954)
Other Liabilities (12,112) 90,834 138,864
__________ __________ __________
NET CASH PROVIDED FROM
OPERATING ACTIVITIES 4,583,749 4,493,792 3,431,422
__________ __________ __________
CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to Land, Buildings
and Improvements (4,124,411) (13,212,959) (13,047,608)
Distribution from Hollister
'97, LLC -0- 84,601 -0-
Collections on Installment
Sales 125,135 28,528 41,920
Purchase of Securities
Available for Sale (5,690,807) (10,968,743) (798,581)
Proceeds from Sale of
Securities Available
for Sale 1,406,805 -0- 1,797,647
__________ __________ __________
NET CASH USED IN INVESTING
ACTIVITIES (8,283,278) (24,068,573) (12,006,622)
__________ __________ __________
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from Mortgages 3,000,000 10,968,470 8,700,000
Proceeds from Loans 6,508,288 13,616,656 10,686,871
Principal Payments of
Mortgages (2,133,016) (1,680,493) (3,829,456)
Principal Payments of Loans (5,432,831) (8,005,000) (12,541,999)
Proceeds from Issuance of
Class A Common Stock 4,127,898 8,190,962 6,989,925
Dividends Paid (3,099,177) (2,421,333) (1,551,456)
__________ __________ __________
NET CASH PROVIDED FROM
FINANCING ACTIVITIES 2,971,162 20,669,262 8,453,885
__________ __________ __________
Net Increase (Decrease) in
Cash and Cash Equivalents (728,367) 1,094,481 (121,315)
Cash and Cash Equivalents at
Beginning of Year 1,242,457 147,976 269,291
__________ __________ __________
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 514,090 $ 1,242,457 $ 147,976
========== ========== ==========
</TABLE>
See Accompanying Notes to the Financial Statements
Page 30
<PAGE>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of the Business
Monmouth Real Estate Investment Corporation (the Company)
operates as a real estate investment trust deriving its income
primarily from real estate rental operations. As of September 30,
2000 and 1999, rental properties consist of twenty-two and twenty-one
commercial holdings, respectively, These properties are located in
New Jersey, New York, Pennsylvania, North Carolina, Mississippi,
Massachusetts, Kansas, Iowa, Missouri, Illinois, Michigan, Nebraska,
Florida, Virginia and Ohio.
Use of Estimates
In preparing the financial statements, 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. Actual results could differ from these
estimates.
Buildings, Improvements and Equipment
Buildings, improvements and equipment are stated at the lower of
depreciated cost or net realizable value. Depreciation is computed
based on the straight-line method over the estimated useful lives of
the assets utilizing a half-year convention in the year of purchase.
These lives range from 5 to 40 years. The Company accounts for its
undivided interest in the Somerset property based upon its pro rata
share of assets, liabilities, revenues and expenses. If there is an
event or change in circumstances that indicates that the basis of an
investment property may not be recoverable, management assesses the
possible impairment of value through evaluation of the estimated
future cash flows of the property, on an undiscounted basis, as
compared to the property's current carrying value. A property's
carrying value would be adjusted to fair value, if necessary, to
reflect an impairment in the value of the property.
Cash Equivalents
Cash equivalents consist of money market funds.
Investment in Hollister `97, LLC
The Company's 25% investment in Hollister `97, LLC is accounted
for under the equity method. Under the equity method, the initial
investment is recorded at cost. The carrying amount of the investment
is increased or decreased to reflect the Company's share of income or
loss and is also reduced to reflect any dividends received. An
unrelated New Jersey limited partnership owns the remaining 75%.
Page 31
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
Securities Available for Sale
The Company classifies its securities among three categories:
Held-to-maturity, trading and available-for-sale.
The Company's securities at September 30, 2000 and 1999 are all
classified as available-for-sale and are carried at fair value. Gains
or losses on the sale of securities are based on identifiable cost and
are accounted for on a trade date basis. Unrealized holding gains and
losses are excluded from earnings and reported as a separate component
of Shareholders' Equity until realized.
A decline in the market value of any security below cost that is
deemed to be other than temporary results in a reduction in the
carrying amount to fair value. Any impairment would be charged to
earnings and a new cost basis for the security established.
Revenue Recognition
Rental income from tenants with leases having scheduled rental
increases are recognized on a straight-line basis over the term of the
lease.
Gains and Deferred Gains on Installment Sales
Gains on the sale of real estate investments are recognized by
the full accrual method when the criteria for the method are met.
Generally, the criteria are met when the profit on a given sale is
determinable, and the seller is not obliged to perform significant
activities after the sale to earn the profit. Alternatively, when the
foregoing criteria are not met, the Company recognizes gains by the
installment method. At September 30, 1999, there was one deferred
gain related to the 1986 sale of property located in Howell Township
in the amount of $88,631. As of September 30, 2000, this gain was
fully realized.
Net Income Per Share
Basic net income per share is calculated by dividing net income
by the weighted-average number of common shares outstanding during the
period (8,078,877, 6,627,344 and 4,997,775 in 2000, 1999 and 1998,
respectively). Diluted net income per share is calculated by dividing
net income 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
(8,078,877, 6,627,344 and 5,032,950 in 2000, 1999 and 1998,
respectively). Options in the amount of 35,175 are included in the
diluted weighted average shares outstanding for 1998. Options in the
amount of 320,000 were not included for 2000 and 1999, respectively,
since they were anti-dilutive.
Page 32
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
Stock Option Plan
The Company's stock option plan is accounted for under the
intrinsic value based method as prescribed by Accounting Principles
Board (APB) Opinion No. 25, "Accounting for Stock Issued to
Employees". As such, compensation expense would be recorded on the
date of grant only if the current market price on the underlying stock
exceeds the exercise price. Included in Note 8 to these Financial
Statements are the pro forma disclosures required by Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," which assumes the fair value based method of accounting
had been adopted.
Income Tax
The Company has elected to be taxed as a Real Estate Investment
Trust (REIT) under Sections 856-858 of the Internal Revenue Code. The
Company will not be taxed on the portion of its income which is
distributed to shareholders, provided it distributes at least 95% of
its taxable income, has at least 75% of its assets in real estate
investments and meets certain other requirements for qualification as
a REIT.
Comprehensive Income
Comprehensive income is divided into net income and other
comprehensive income. Other comprehensive income includes items that
are otherwise recorded directly in equity, such as unrealized gains or
losses on securities available for sale.
NOTE 2 - MORTGAGE LOANS RECEIVABLE
The following is a summary of the mortgage loans receivable at
September 30, 2000 and 1999:
Rate Maturity 2000 1999
Bonim Associates, Inc.
Howell Township Property 9% 1999 $ -0- $125,135
During the fiscal year ended September 30, 2000, this mortgage
loan receivable was repaid and the associated deferred gain of $88,631
was realized.
Page 33
<PAGE>
<TABLE>
<CAPTION>
NOTE 3 - REAL ESTATE INVESTMENTS
The following is a summary of the cost and accumulated
depreciation of the Company's land, buildings, improvements and
equipment at September 30, 2000 and 1999:
Buildings,
Improvements Accumulated
September 30, 2000 Land and Equipment Depreciation
<S> <C> <C> <C> <C>
NEW JERSEY:
Ramsey Industrial Building $ 52,639 $ 1,175,214 $ 615,515
Somerset(1) Shopping Center 55,182 1,118,418 806,245
South Brunswick Industrial Building 1,128,000 4,133,461 1,005,431
PENNSYLVANIA:
Monaca Industrial Park 330,773 1,842,687 1,092,522
NEW YORK:
Orangeburg Industrial Building 694,720 2,977,372 744,435
NORTH CAROLINA:
Fayetteville Industrial Building 172,000 4,467,885 400,949
Greensboro Industrial Building 327,100 1,853,700 439,104
MISSISSIPPI:
Jackson Industrial Building 218,000 1,234,586 283,869
Richland Industrial Building 211,000 1,195,000 199,159
MASSACHUSETTS:
Franklin Industrial Building 566,000 4,148,000 691,306
KANSAS:
Wichita Industrial Building 268,000 1,518,000 253,008
IOWA:
Urbandale Industrial Building 310,000 1,758,000 292,988
MISSOURI:
Liberty Industrial Building 723,000 6,510,546 417,282
O'Fallon Industrial Building 264,000 3,302,000 465,520
VIRGINIA:
Charlottesville Industrial Building 1,170,000 2,845,000 109,422
Virginia Beach Industrial Building 384,600 2,150,000 248,067
ILLINOIS:
Burr Ridge Industrial Building 270,000 1,236,599 79,222
Schaumburg Industrial Building 1,039,800 3,694,321 331,527
MICHIGAN:
Romulus Industrial Building 531,000 3,653,883 234,145
FLORIDA:
Jacksonville Industrial Building 1,165,000 4,668,080 179,533
NEBRASKA:
Omaha Industrial Building 1,170,000 4,425,500 170,205
OHIO:
Union City Industrial Building 695,000 3,342,000 42,919
--------- ---------- ----------
Total at September 30, 2000 $ 11,745,814 $ 63,250,252 $ 9,102,373
========= ========== ==========
(1) This represents the Company's 2/3 undivided interest in the property.
</TABLE>
Page 34
<PAGE>
<TABLE>
<CAPTION>
NOTE 3 - REAL ESTATE INVESTMENTS (CONT'D)
Buildings,
Improvements,
and Accumulated
September 30, 1999 Land Equipment Depreciation
<S> <C> <C> <C> <C>
NEW JERSEY:
Ramsey Industrial Building $ 52,639 $ 1,175,214 $ 584,395
Somerset(1) Shopping Center 55,182 1,065,995 765,462
Eatontown Admin. Office -0- 7,515 7,515
South Brunswick Industrial Building 1,128,000 4,120,487 863,990
PENNSYLVANIA:
Monaca Industrial Park 330,773 1,820,673 1,007,423
NEW YORK:
Orangeburg Industrial Building 694,720 2,977,372 649,903
NORTH CAROLINA:
Fayetteville Industrial Building 172,000 4,467,885 286,392
Greensboro Industrial Building 327,100 1,853,700 380,220
MISSISSIPPI:
Jackson Industrial Building 218,000 1,234,586 244,146
Richland Industrial Building 211,000 1,195,000 168,519
MASSACHUSETTS:
Franklin Industrial Building 566,000 4,148,000 584,951
KANSAS:
Wichita Industrial Building 268,000 1,518,000 214,087
IOWA:
Urbandale Industrial Building 310,000 1,758,000 247,913
MISSOURI:
Liberty Industrial Building 723,000 6,510,546 250,352
O'Fallon Industrial Building 264,000 3,302,000 380,857
VIRGINIA:
Charlottesville Industrial Building 1,170,000 2,845,000 36,474
Virginia Beach Industrial Building 384,600 2,150,000 192,941
ILLINOIS:
Burr Ridge Industrial Building 270,000 1,236,599 47,516
Schaumburg Industrial Building 1,039,800 3,694,321 236,805
MICHIGAN:
Romulus Industrial Building 531,000 3,653,883 140,460
FLORIDA:
Jacksonville Industrial Building 1,165,000 4,668,080 59,845
NEBRASKA:
Omaha Industrial Building 1,170,000 4,425,500 56,735
__________ __________ __________
Total at September 30, 1999 $ 11,050,814 $ 59,828,356 $ 7,406,901
========== ========== ==========
(1) This represents the Company's 2/3 undivided interest in the property.
</TABLE>
Page 35
<PAGE>
NOTE 4 - ACQUISITIONS
Fiscal 2000
On February 18, 2000, the Company purchased an 85,508 square foot
warehouse facility in Union City, Ohio. This warehouse facility is
100% net-leased to RPS Ground, a subsidiary of Federal Express
Corporation. The total purchase price, including closing costs, was
approximately $4,037,000. The Company paid approximately $150,000 in
cash, used approximately $890,000 of its credit line with Summit Bank
and obtained a mortgage for $3,000,000. This mortgage payable is at
an interest rate of 8.25% and is due March 1, 2015.
Fiscal 1999
On December 11, 1998, the Company purchased an 88,140 square foot
warehouse facility in Omaha, Nebraska. This warehouse facility is
100% net-leased to Federal Express Corporation. The total price,
including closing costs, was approximately $5,596,000. The Company
paid approximately $600,000 in cash, used approximately $900,000 of
its revolving credit line with Summit Bank, and obtained a mortgage of
$4,100,000. This mortgage payable is at an interest rate of 7.15%
and is due January 1, 2014.
On March 16, 1999, the Company sold the warehouse facility
located at 40 Robert Pitt Drive, Monsey, New York. The net proceeds
from this sale amounted to $2,265,632 and resulted in a gain of
$1,240,325. These funds were placed into an escrow account. This
sale was part of a tax free exchange for the warehouse facility
purchased on April 6, 1999.
On April 6, 1999, MREIC purchased a 49,900 square foot warehouse
facility in Albemarle County, Virginia. This warehouse is 100% net-
leased to Federal Express Corporation. The total purchase price,
including closing costs was approximately $4,015,000. MREIC used
$1,360,000 of its credit line with Summit Bank. On June 1, 1999, the
Company secured a $2,750,000 mortgage at an interest rate of 6.90%
which is due July 1, 2014.
On July 28, 1999, the Company purchased a 95,883 square foot
warehouse facility in Jacksonville, Florida. This warehouse facility
is 100% net-leased to Federal Express Corporation. The total purchase
price, including closing costs, was approximately $5,833,000. The
Company paid approximately $200,000 in cash, used approximately
$1,600,000 of its revolving line of credit with Summit Bank and
assumed a mortgage of approximately $4,100,000. This mortgage payable
is at an interest rate of 6.92% and is due December 1, 2016.
Page 36
<PAGE>
NOTE 5 - SIGNIFICANT CONCENTRATIONS OF CREDIT RISK
The Company has approximately 1,733,000 square feet of property,
of which approximately 501,000 square feet or 29% is leased to Federal
Express Corporation and subsidiaries and approximately 246,000 square
feet, or 14%, is leased to Keebler Company. Rental and occupancy
charges from Federal Express Corporation and subsidiaries totaled
approximately $2,891,000, $2,070,000 and $716,000 for the years ended
September 30, 2000, 1999 and 1998, respectively. Rental and
occupancy
charges from Keebler Company totaled approximately $1,578,000,
$1,800,000 and $1,800,000 for the years ended September 30, 2000,
1999 and 1998. During 2000, 1999 and 1998, rental income and occupancy
charges from properties leased to these companies approximated 52%,
49% and 39% of total rental and occupancy charges, respectively.
NOTE 6 - SECURITIES AVAILABLE FOR SALE
During the fiscal years ended September 30, 2000, 1999 and 1998,
gross gains on sales of securities amounted to $110,960, $-0- and
$222,276, respectively, which have been included in Investment and
Other Income.
Dividend income for the years ended September 30, 2000, 1999 and
1998 amounted to $1,594,646, $651,657 and $224,632, respectively.
Interest income for the years ended September 30, 2000, 1999 and 1998
amounted to $133,230, $115,270 and $111,770, respectively.
Page 37
<PAGE>
<TABLE>
<CAPTION>
NOTE 6 - SECURITIES AVAILABLE FOR SALE (CONT'D)
The following is a summary of Securities Available for Sale at
September 30, 2000 and 1999:
2000
Shares/
$ Amount Cost Market
<S> <C> <C> <C>
Debt Securities:
Center Trust Inc. Subordinated R/PR
CVRO JJ 7.5 01/15/2001 DTD 12/27/93 250,000 $ 237,708 $ 243,750
Sizeler Property Investors Convertible
Subordinated SBJ to SPL RDMPT
RO JJ 8.000 07/15/2003 DTD 5/13/93
Callable 07/15/1999 at 100.00 869,000 809,238 777,755
__________ __________
TOTAL DEBT SECURITIES 1,046,946 1,021,505
__________ __________
Equity Securities:
Preferred Stock:
Alexandria Real Estate 9.50% SrA Perp 1,000 19,870 23,625
Apartment Inv. 8.75% Class D Cum 1,000 18,120 21,125
Apartment Inv.& Mgmt Ser H% 1,000 20,582 22,375
Associated Estates Realty Corp
DEP SHS REPSTG 1/10 SH 9.75%
CL A CUM Redeem 29,200 531,585 569,400
Avalonbay Communities 8%Cum SrD 2,000 34,428 44,000
Bradley Real Estate Inc. 8.40%
Convertible Until 12/31/2049 -0- -0- -0-
Camden Pro Tr 2.25SerA 1,000 22,120 24,938
Cresent R/E 6.75% SrA Convertible 2,000 28,783 32,626
Crown American Realty Trust 11% Series 24,000 1,104,215 924,000
Developers Diversfied Realty 9.44%
CRP Dep Shrs Repstg 1/10 3,000 59,822 68,625
Equity Inns 9.50% SRA CUM 10,400 176,543 172,255
Equity Office Trust SrC Cum 8.625% 1,600 33,117 39,400
Equity Office 8.98% SrA Cum 1,000 21,995 24,688
Equity Residential Ppts SrC CUM 9.125% 3,000 63,923 74,064
Felcor Lodging 1.95% 1,000 15,350 19,000
Felcor Lodging 9% SrB 5,500 97,694 108,625
First Ind. realty 8.75% SrB Cum 6,000 117,714 137,250
First Union Real Estate Equity &
Mortgage Investments-Conv. 8.40% Ser A 18,000 381,810 382,500
First Washington Realty Trust Inc.
Part Conv. Ser A 9.75% 5,000 129,438 161,250
Glenborough R/E 7.75% SrA Conv 2,000 29,803 34,000
G&L Realty 10.25% SrA Cum 1,000 16,620 14,938
Gleimcher Realty 9.25% SrB Cum 3,000 52,360 56,625
Healthcare Pro 8.70 % SrB 4,000 72,667 83,252
Healthcare Pro 7.875% SrA 5,700 102,572 111,863
Highwoods Pro 8% SrD Dep Shrs 1,000 17,245 20,313
Hospitality Ppts 9.50% SrA Cum 7,000 129,983 160,125
Instar 8% SrC 6,000 85,638 96,378
Instar 9.20% SrC 2,500 44,288 44,845
Instar 9.375% Sr B 7,000 124,921 133,875
Jameson Inns 1.70% SrA 5,000 52,750 58,750
JDN Realty 9.375 SrsA Cum 13,100 260,608 274,288
Kimco Realty 8.375% Cls C Cum 2,000 38,240 47,000
Kimco Realty 7.75% Dep Shrs SrA 1,000 18,620 21,250
Kranzco Realty Trust 9.50% Series D
Cumulative Redeemable Shs 19,500 360,338 335,166
</TABLE>
Page 38
<PAGE>
<TABLE>
<CAPTION>
NOTE 6 - SECURITIES AVAILABLE FOR SALE (CONT'D)
1999
Shares/
$ Amount Cost Market
<S> <C> <C> <C>
Debt Securities:
Center Trust Inc. Subordinated R/PR
CVRO JJ 7.5 01/15/2001 DTD 12/27/93 450,000 $ 425,010 $ 428,625
Sizeler Property Investors Convertible
Subordinated SBJ to SPL RDMPT
RO JJ 8.000 07/15/2003 DTD 5/13/93
Callable 07/15/1999 at 100.00 869,000 809,238 808,170
_________ _________
TOTAL DEBT SECURITIES 1,234,248 1,236,795
_________ _________
Equity Securities:
Preferred Stock:
Alexandria Real Estate 9.50% SrA Perp -0- -0- -0-
Apartment Inv. 8.75% Class D Cum -0- -0- -0-
Apartment Inv.& Mgmt Ser H% -0- -0- -0-
Associated Estates Realty Corp
DEP SHS REPSTG 1/10 SH 9.75%
CL A CUM Redeem 6,000 135,004 121,878
Avalonbay Communities 8%Cum SrD -0- -0- -0-
Bradley Real Estate Inc. 8.40%
Convertible Until 12/31/2049 21,000 500,626 479,073
Camden Pro Tr 2.25SerA -0- -0- -0-
Cresent R/E 6.75% SrA Convertible -0- -0- -0-
Crown American Realty Trust 11% Series 19,000 907,958 783,750
Developers Diversfied Realty 9.44% -0- -0- -0-
CRP Dep Shrs Repstg 1/10
Equity Inns 9.50% SRA CUM -0- -0- -0-
Equity Office Trust SrC Cum 8.625% -0- -0- -0-
Equity Office 8.98% SrA Cum -0- -0- -0-
Equity Residential Ppts SrC CUM 9.125% -0- -0- -0-
Felcor Lodging 1.95% -0- -0- -0-
Felcor Lodging 9% SrB -0- -0- -0-
First Ind. realty 8.75% SrB Cum -0- -0- -0-
First Union Real Estate Equity &
Mortgage Investments-Conv. 8.40% Ser A 18,000 381,810 400,500
First Washington Realty Trust Inc.
Part Conv. Ser A 9.75% 5,000 129,438 137,500
Glenborough R/E 7.75% SrA Conv -0- -0- -0-
G&L Realty 10.25% SrA Cum -0- -0- -0-
Gleimcher Realty 9.25% SrB Cum -0- -0- -0-
Healthcare Pro 8.70 % SrB -0- -0- -0-
Healthcare Pro 7.875% SrA -0- -0- -0-
Highwoods Pro 8% SrD Dep Shrs -0- -0- -0-
Hospitality Ppts 9.50% SrA Cum -0- -0- -0-
Instar 8% SrC -0- -0- -0-
Instar 9.20% SrC -0- -0- -0-
Instar 9.375% Sr B -0- -0- -0-
Jameson Inns 1.70% SrA -0- -0- -0-
JDN Realty 9.375 SrsA Cum -0- -0- -0-
Kimco Realty 8.375% Cls C Cum -0- -0- -0-
Kimco Realty 7.75% Dep Shrs SrA -0- -0- -0-
Kranzco Realty Trust 9.50% Series D
Cumulative Redeemable Shs 8,000 162,819 148,000
</TABLE>
Page 38A
<PAGE>
<TABLE>
<CAPTION>
NOTE 6 - SECURITIES AVAILABLE FOR SALE (CONT'D)
2000
Shares/
$ Amount Cost Market
<S> <C> <C> <C>
Mid America 8.875% Sr B 1,000 16,620 19,188
Mid American SrA 9.50% 7,000 139,515 145,691
New Plan Excel 8.625 SrB Dep Shrs 2,000 39,959 45,000
New Plan Excel 8.50% A 1,000 20,745 20,875
Prime Group 9% D 3,000 50,618 54,750
Prime Retail Inc. SrA 10.50% 1,000 15,433 6,938
Prime Retail Inc. Conv. Series B 8.50% 8,000 122,658 28,450
Reckson Assoc. 7.625% Sr A Cum 1,000 18,707 23,375
Sovran Self Sor. 9.85% SrB 2,000 39,115 43,000
Thornburg Mtg. 9.68% SrA 2,000 40,740 41,750
United Dominion Realty Trust 9.25%
SR A Cumulative Redeemable 18,000 405,751 445,500
United Dominion 8.60% SrB Cum 5,200 93,640 120,578
Vornado 8.5% SrC Cum 7,000 139,291 157,500
__________ __________
5,426,554 5,495,009
__________ __________
Common Stock:
Associated Estates Realty 90,000 1,018,467 725,670
American Health Properties Inc -0- -0- -0-
American Industrial Properties REIT New -0- -0- -0-
Banyan Strategic Realty Trust
Shares Beneficial Interest 29,000 140,714 172,202
Boddie Noell Properties Inc 50,775 543,615 431,588
Center Trust Inc. 18,500 203,424 111,000
Crown American Realty Trust
Shares Beneficial Interest 87,300 608,833 529,300
East Group Properties Inc 7,000 132,023 155,750
First Industrial Realty Trust Com 15,000 382,086 461,250
First Washington Realty Trust Com 20,000 432,552 507,500
HRPT Properties 44,000 300,577 308,000
Healthcare Properties 7,800 177,550 231,075
Humphrey Hospitalities 1,000 7,064 7,813
IRT Property Company 26,500 256,864 231,875
LaSalle Hotel Properties 2,000 24,952 30,250
Mid Atlantic Realty Trust
Shares Beneficial Interest 21,000 228,381 248,073
New Plan Excell Rlty Inc Com 27,000 448,315 369,576
Pacific Gulf Properties Inc 5,000 101,506 133,750
Pennsylvania Real Estate Investment
Trust Share Beneficial Interest 56,000 1,089,900 976,528
RFS Hotel Investors Inc 21,000 261,199 265,125
Sizeler Properties Investors Inc 100,500 851,984 766,313
United Dominion Realty Trust Inc 153,000 1,665,045 1,663,947
United Mobile Homes Inc 142,200 1,418,778 1,324,309
Urstadt Biddle Properties Inc 25,000 198,342 173,597
Weingarten Realty Inv.
Shares Beneficial Interest 3,000 120,375 122,250
Western Properties Trust
Shares Beneficial Interest 30,500 356,083 375,547
__________ __________
TOTAL COMMON STOCK 10,968,629 10,322,288
__________ __________
TOTAL EQUITY SECURITIES 16,395,183 15,817,297
__________ __________
TOTAL SECURITIES AVAILABLE FOR SALE $ 17,442,129 $ 16,838,802
========== ==========
</TABLE>
Page 39
<PAGE>
<TABLE>
<CAPTION>
1999
Shares/
$ Amount Cost Market
<S> <C> <C> <C>
Mid America 8.875% Sr B -0- -0- -0-
Mid American SrA 9.50% -0- -0- -0-
New Plan Excel 8.625 SrB Dep Shrs -0- -0- -0-
New Plan Excel 8.50% A -0- -0- -0-
Prime Group 9% D -0- -0- -0-
Prime Retail Inc. SrA 10.50% -0- -0- -0-
Prime Retail Inc. Conv. Series B 8.50% 6,000 101,368 83,628
Reckson Assoc. 7.625% Sr A Cum -0- -0- -0-
Sovran Self Sor. 9.85% SrB -0- -0- -0-
Thornburg Mtg. 9.68% SrA -0- -0- -0-
United Dominion Realty Trust 9.25%
SR A Cumulative Redeemable 10,000 245,348 220,630
United Dominion 8.60% SrB Cum -0- -0- -0-
Vornado 8.5% SrC Cum -0- -0- -0-
_________ _________
2,564,371 2,374,959
_________ _________
Common Stock:
Associated Estates Realty 90,000 1,018,456 826,920
American Health Properties Inc 10,000 177,550 201,250
American Industrial Properties REIT New 22,100 244,916 294,217
Banyan Strategic Realty Trust
Shares Beneficial Interest 25,000 120,711 129,700
Boddie Noell Properties Inc 45,000 492,761 450,000
Center Trust Inc. 18,500 203,424 205,813
Crown American Realty Trust
Shares Beneficial Interest 79,300 563,894 510,533
East Group Properties Inc 7,000 132,023 126,875
First Industrial Realty Trust Com 15,000 382,086 371,250
First Washington Realty Trust Com 20,000 432,552 420,000
HRPT Properties -0- -0- -0-
Healthcare Properties -0- -0- -0-
Humphrey Hospitalities -0- -0- -0-
IRT Property Company 25,500 248,782 229,500
LaSalle Hotel Properties -0- -0- -0-
Mid Atlantic Realty Trust
Shares Beneficial Interest 20,000 218,799 208,760
New Plan Excell Rlty Inc Com 5,000 94,152 90,625
Pacific Gulf Properties Inc 5,000 101,506 99,690
Pennsylvania Real Estate Investment
Trust Share Beneficial Interest 37,000 762,519 698,375
RFS Hotel Investors Inc 20,000 250,430 230,000
Sizeler Properties Investors Inc 70,500 616,071 612,504
United Dominion Realty Trust Inc 108,000 1,169,313 1,208,304
United Mobile Homes Inc 132,200 1,343,803 1,181,604
Urstadt Biddle Properties Inc 25,000 198,342 173,222
Weingarten Realty Inv.
Shares Beneficial Interest 3,000 120,375 112,125
Western Properties Trust
Shares Beneficial Interest 30,500 356,083 331,688
_________ _________
TOTAL COMMON STOCK 9,248,548 8,712,955
_________ _________
TOTAL EQUITY SECURITIES 11,812,919 11,087,914
_________ _________
TOTAL SECURITIES AVAILABLE FOR SALE $13,047,167 $12,324,709
========= =========
</TABLE>
Page 39A
<PAGE>
<TABLE>
<CAPTION>
NOTE 7 - MORTGAGE NOTES AND LOANS PAYABLE
The following is a summary of the mortgage notes payable at
September 30, 2000 and 1999:
Fixed Fiscal Balance Balance
Property Rate Maturity 9/30/00 9/30/99
<S> <C> <C> <C> <C>
Orangeburg, New York 7% 2004 $1,241,206 $1,494,955
Jackson, Mississippi 8.5% 2008 539,347 585,868
Franklin,
Massachusetts 7% 2004 1,413,066 1,701,949
Wichita, Kansas 10.25% 2016 1,170,596 1,199,087
Urbandale, Iowa 7% 2004 661,209 810,726
Richland, Mississippi 7.5% 2004 506,529 592,110
O'Fallon, Missouri 8.5% 2007 1,689,773 1,856,710
Virginia Beach, VA 8.5% 2021 1,409,010 1,433,063
Fayetteville, NC 7.8% 2006 3,141,482 3,238,398
Schaumburg, IL 8.48% 2012 3,066,563 3,212,812
Burr Ridge, IL 8% 2014 1,023,685 1,057,253
Romulus, MI 7.56% 2013 2,553,263 2,668,102
Liberty, MO 7.065% 2013 4,373,211 4,585,896
Omaha, NE 7.15% 2014 3,815,288 3,982,316
Charlottesville,VA 6.90% 2014 2,613,305 2,723,593
Jacksonville, FL 6.92% 2017 3,947,802 4,094,921
Union City, OH 8.25% 2015 2,939,408 -0-
__________ __________
Total Mortgage Notes Payable $36,104,743 $35,237,759
========== ==========
</TABLE>
Page 40
<PAGE>
NOTE 7 - MORTGAGE NOTES AND LOANS PAYABLE (CONT'D)
Principal on the foregoing debt is scheduled to be paid as follows:
Year Ending September 30, 2001 2,323,775
2002 2,503,694
2003 2,697,668
2004 3,035,914
2005 2,164,244
Thereafter 23,379,448
_________
$36,104,743
=========
Line of Credit
The Company had an $8,000,000 line of credit with Summit at an
interest rate of prime. This line of credit was reduced to $6,345,000
during 1999 due to the sale of the warehouse facility in Monsey, New
York and is now secured by a second mortgage on the South Brunswick
Industrial Building. This line of credit expires on November 29,
2002. As of September 30, 2000, approximately $3,237,000 is
available.
Margin Loans
During fiscal 2000, the Company purchased securities on margin.
The margin loans are at 8% and 8.375% and are due on demand. At
September 30, 2000, the margin loans amounted to approximately
$4,914,000 and are collateralized by the Company's securities
portfolio. The Company must maintain a coverage ratio of
approximately 50%.
NOTE 8 - STOCK OPTION PLAN
On April 24, 1997, the shareholders approved and ratified the
Company's 1997 Stock Option Plan authorizing the grant to officers,
directors and key employees options to purchase up to 750,000 shares
of common stock. Options may be granted any time up to December 31,
2006. No option shall be available for exercise beyond ten years.
All options are exercisable after one year from the date of grant.
The option price shall not be below the fair market value at date of
grant. Canceled or expired options are added back to the "pool" of
shares available under the Plan.
The Company elected to follow APB Opinion No. 25 in accounting
for its stock option plan, and accordingly, no compensation cost has
been recognized. Had compensation cost been determined consistent
with SFAS No. 123, the Company's net income and earnings per share
would have been reduced to the pro forma amounts as follows:
2000 1999 1998
Net Income As reported $3,589,397 $3,796,760 $2,499,922
Pro forma 3,589,397 3,787,777 2,378,034
Net Income
Per share As reported-
Basic and Basic and
Diluted Diluted $.44 $.57 $.50
Pro forma -
Basic and
Diluted .44 .57 .48
.44 .57 .47
Page 41
<PAGE>
NOTE 8 - STOCK OPTION PLAN (CONT'D)
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 1998; dividend yield
of 9%; expected volatility of 25%; risk-free interest rate of 6.0%
and, expected lives of five years.
A summary of the status of the Company's stock option plan as of
September 30, 2000, 1999 and 1998 is as follows:
2000 1999 1998
_________________ _________________ _________________
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Outstanding at
beginning of year 320,000 $6.34 320,000 $6.34 300,000 $6.28
Granted -0- -0- -0- -0- 20,000 7.25
Exercised -0- -0- -0- -0- -0- -0-
Outstanding at _______ _______ _______
end of year 320,000 6.34 320,000 6.34 320,000 6.34
======= ======= =======
Options exercisable
at end of year 320,000 300,000 -0-
======= ======= =======
Weighted-average
fair value of
options granted
during the year -0- -0- .77
The following is a summary of stock options outstanding as of
September 30, 2000:
Date of Number of Number of Option Expiration
Grant Grants Shares Price Date
04/30/97 10 135,000 $5.9375 04/30/02
04/30/97 2 165,000 6.5625 04/30/02
04/30/98 2 20,000 7.2500 04/30/03
As of September 30, 2000, there were 430,000 shares available for
grant under this plan.
NOTE 9 - INCOME FROM LEASES
The Company derives income primarily from operating leases on its
commercial properties. In general, these leases are written for
periods up to ten years with various provisions for renewal. These
leases generally contain clauses for reimbursement (or direct payment)
of real estate taxes, maintenance, insurance and certain other
operating expenses of the properties. Minimum rents due under
noncancellable leases at September 30, 2000 are scheduled as follows:
2001 - $7,689,000; 2002 - $6,619,000; 2003 - $6,311,000; 2004 -
$5,141,000; 2005 - $4,699,000; thereafter - $10,292,000.
Page 42
<PAGE>
NOTE 10 - RELATED PARTY TRANSACTIONS
Eugene W. Landy received $5,500, 3,200 and $3,200 for the years
ended September 30, 2000, 1999 and 1998 as Director. The firm of
Eugene W. Landy received $32,500, $17,500, and $103,500 during the
years ended 2000, 1999 and 1998, respectively, as management and legal
fees. An accrual of $34,000, $59,000 and $59,000 was made during the
years ended September 30, 2000, 1999 and 1998, respectively, for
pension and other benefits in accordance with Mr. Landy's employment
agreement. Additionally, the Board of Directors has granted to Mr.
Landy a loan of $100,000 at an interest rate of 10% due May 23, 2001.
Principal and accrued interest is payable at maturity. In fiscal
2000, Mr. Landy was also paid a total bonus of $80,000 for his
performance for the past two years.
On December 9, 1994, the Company and Eugene W. Landy entered into
an Employment Agreement under which, on severance of employment for
any reason, Mr. Landy will receive severance of $300,000 payable
$100,000 on severance and $100,000 on the first and second
anniversaries of severance. In the event of disability, Mr. Landy's
compensation shall continue for a period of three years, payable
monthly. On retirement, Mr. Landy shall receive a pension of $40,000
a year for ten years, payable in monthly installments. In the event
of death, Mr. Landy's designated beneficiary shall receive $300,000,
$150,000 thirty days after death, and the balance one year after
death. The Employment Agreement terminates December 31, 2000.
Thereafter, the term of the Employment Agreement shall be
automatically renewed and extended for successive one-year periods.
The Employment Agreement is terminable by either party at any time,
subject to certain notice requirements.
Cronheim Management Services received the sum of $199,432,
$161,146 and $41,466 for management fees during the years ended 2000,
1999 and 1998, respectively. Effective August 1, 1998, the Company
entered into a new management contract with Cronheim Management
Services. Under this contract, Cronheim Management Services receives
3% of gross rental income on certain properties for management fees.
The David Cronheim Company received $14,347, $136,229 and $45,786
in lease brokerage commissions in 2000, 1999 and 1998, respectively.
Daniel Cronheim received $5,650, $2,400 and $3,200 for Director and
Committee fees in 2000, 1999 and 1998, respectively.
NOTE 11 - TAXES
Income Tax
The Company has elected to be taxed as a Real Estate Investment
Trust under the applicable provisions of the Internal Revenue Code and
the comparable New Jersey Statutes. Under such provisions, the
Company will not be taxed on that portion of its taxable income
distributed currently to shareholders, provided that at least 95% of
its taxable income is distributed. As the Company has and intends to
continue to distribute all of its income currently, no provision has
been made for income taxes.
Federal Excise Tax
The Company does not have an excise tax liability for the
calendar years 2000, 1999 and 1998, since it intends to or has
distributed all of its annual income.
Page 43
<PAGE>
NOTE 12 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Company implemented a dividend reinvestment and stock
purchase plan (the "Plan") effective December 15, 1987. Under the
terms of the Plan and subsequent offerings, shareholders who
participate may reinvest all or part of their dividends in additional
shares of the Company at approximately 95% of market price. According
to the terms of the Plan, shareholders may also purchase additional
shares, at approximately 95% of market price by making optional cash
payments monthly.
Amounts received, including dividend reinvestment of $1,606,691,
$1,387,405 in 2000 and 1999, respectively, and shares issued in
connection with the Plan for the years ended September 30, 2000 and
1999 were as follows:
2000 1999
Amounts Received* $5,734,589 $9,578,367
Shares Issued 1,198,311 1,806,105
*These amounts are net of the 5% discount under the Plan. The total
discount amounted to $197,720 and $284,751 during the fiscal years
ended September 30, 2000 and 1999 respectively.
NOTE 13 - DISTRIBUTIONS
The following cash distributions were paid to shareholders during
the years ended September 30, 2000 and 1999:
2000 1999
Quarter Ended Amount Per Share Amount Per Share
December 31 $1,111,424 $.145 $ 823,275 $.1375
March 31 1,160,858 .145 904,454 .14
June 30 1,189,703 .145 1,012,376 .145
September 30 1,243,883 .145 1,068,633 .145
_________ ____ _________ _____
$4,705,868 $.58 3,808,738 $.5675
========= ==== ========= =====
The above amounts do not include discounts under the Dividend
Reinvestment and Stock Purchase Plan.
On September 20, 2000, the Company declared a dividend of $0.145
per share to be paid on December 15, 2000 to shareholders of record
November 15, 2000.
Page 44
<PAGE>
NOTE 14 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company is required to disclose certain information about
fair values of financial instruments, as defined in Statement of
Financial Accounting Standards No. 107, "Disclosures About Fair Value
of Financial Instruments."
Limitations
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's entire holdings of a particular financial
instrument. For a portion of the Company's 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. Use of different
assumptions or methodologies is likely to result in significantly
different fair value estimates.
The fair value of cash and cash equivalents and mortgage loans
receivable approximates their current carrying amounts since all such
items are short-term in nature. The fair value of securities
available for sale is based upon quoted market values. The fair value
of mortgage notes payable and loans payable approximate their current
carrying amounts since such amounts payable are at approximately a
weighted- average current market rate of interest.
NOTE 15 - CASH FLOW AND COMPREHENSIVE INCOME INFORMATION
Cash paid during the years ended September 30, 2000, 1999 and
1998, for interest is $3,334,861, $2,607,520 and $1,802,590,
respectively.
During 2000, 1999 and 1998, the Company had $1,606,691,
$1,387,405 and $1,116,555, respectively, of dividends which were
reinvested that required no cash transfers.
During 1999, proceeds from the sale of investment property
totaling $2,265,632 were directly paid into an escrow account and
required no cash transfers by the Company. These proceeds were used
to purchase investment property.
In 2000, 1999 and 1998, equity securities available for sale are
shown at fair value. The resultant portfolio decrease of $603,327,
$722,458 and $27,924, respectively, relating to unrealized net holding
losses is shown as a separate component of shareholders' equity.
Page 45
<PAGE>
NOTE 15 - CASH FLOW AND COMPREHENSIVE INCOME INFORMATION (CONT'D)
The following are the reclassification adjustments related to
securities available for sale included in Other Comprehensive Income
(Loss):
2000 1999 1998
Unrealized holding gains
(losses) arising during the year $230,091 $(694,534) $(200,581)
Less: reclassification adjustment
for gains realized in income (110,960) -0- (222,276)
_______ _________ _________
Net unrealized gains (losses) $119,131 $(695,534) $(422,857)
======= ========= =========
NOTE 16 - SUBSEQUENT EVENTS
On November 14, 2000, the Company purchased a 112,779 square foot
warehouse facility in Richmond, Virginia. This warehouse facility is
100% net-leased to the Federal Express Corporation. The total
purchase price, including closing costs, was approximately $7,600,000.
The Company paid approximately $150,000 in cash, used approximately
$1,800,000 of its credit line with Summit Bank and obtained a mortgage
for $5,650,000. This mortgage payable is at a variable interest rate
of LIBOR plus 180 basis points and is due December 1, 2015. The
Company may convert this loan to a fixed rate subject to certain
conditions.
Page 46
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
REAL ESTATE AND ACCUMULATED DEPRECIATION
SCHEDULE III
SEPTEMBER 30, 2000
Column A Column B Column C Column D
________ ________ _____________________ ________
Buildings, Capitalization
Improvements Subsequent to
Description Encumbrances Land & Equipment Acquisition
___________ ____________ __________ ___________ _________
<S> <C> <C> <C> <C>
Shopping Center:
Somerset, NJ $ -0- $ 55,182 $ 637,097 $ 481,321
Industrial Buildings:
Ramsey, NJ -0- 52,639 291,500 883,714
Monaca, PA -0- 330,773 878,081 964,606
Orangeburg, NY 1,241,206 694,720 2,977,372 -0-
South Brunswick, NJ -0- 1,128,000 4,087,400 46,061
Greensboro, NC -0- 327,100 1,853,700 -0-
Jackson, MS 539,347 218,000 1,233,500 1,086
Franklin , Mass 1,413,066 566,000 4,148,000 -0-
Witchita, Ks 1,170,596 268,000 1,518,000 -0-
Urbandale,IO 661,209 310,000 1,758,000 -0-
Richland,MS 506,529 211,000 1,195,000 -0-
O'Fallon, MO 1,689,773 264,000 3,302,000 -0-
Virginia Beach, VA 1,409,010 384,600 2,150,000 -0-
Fayetteville, NC 3,141,482 172,000 4,467,885 -0-
Schaumburg, IL 3,066,563 1,039,800 3,694,321 -0-
Burr Ridge, IL 1,023,685 270,000 1,236,599 -0-
Romulus, MI 2,553,263 531,000 3,653,883 -0-
Liberty, MO 4,373,211 723,000 6,510,546 -0-
Omaha, NE 3,815,288 1,170,000 4,425,500 -0-
Charlottesville, VA 2,613,305 1,170,000 2,845,000 -0-
Jacksonville, FL 3,947,802 1,165,000 4,668,080 -0-
Union City, OH 2,939,408 695,000 3,342,000 -0-
__________ __________ __________ _________
$ 36,104,743 $ 11,745,814 $ 60,873,464 $ 2,376,788
========== ========== ========== =========
</TABLE>
Page 47
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
REAL ESTATE AND ACCUMULATED DEPRECIATION (CONT'D)
SCHEDULE III
SEPTEMBER 30, 2000
Column A Column E (1) (2)
________ _______________________________________
Gross Amount at Which Carried
September 30, 2000
Description Land Bldg & Imp Total
___________ ________ __________ __________
<S> <C> <C> <C>
Shopping Center:
Somerset, NJ $ 55,182 $ 1,118,418 $ 1,173,600
Industrial Buildings:
Ramsey, NJ 52,639 1,175,214 1,227,853
Monaca, PA 330,773 1,842,687 2,173,460
Orangeburg, NY 694,720 2,977,372 3,672,092
South Brunswick, NJ 1,128,000 4,133,461 5,261,461
Greensboro, NC 327,100 1,853,700 2,180,800
Jackson, MS 218,000 1,234,586 1,452,586
Franklin , Mass 566,000 4,148,000 4,714,000
Witchita, Ks 268,000 1,518,000 1,786,000
Urbandale,IO 310,000 1,758,000 2,068,000
Richland,MS 211,000 1,195,000 1,406,000
O'Fallon, MO 264,000 3,302,000 3,566,000
Virginia Beach, VA 384,600 2,150,000 2,534,600
Fayetteville, NC 172,000 4,467,885 4,639,885
Schaumburg, IL 1,039,800 3,694,321 4,734,121
Burr Ridge, IL 270,000 1,236,599 1,506,599
Romulus, MI 531,000 3,653,883 4,184,883
Liberty, MO 723,000 6,510,546 7,233,546
Omaha, NE 1,170,000 4,425,500 5,595,500
Charlottesville, VA 1,170,000 2,845,000 4,015,000
Jacksonville, FL 1,165,000 4,668,080 5,833,080
Union City, OH 695,000 3,342,000 4,037,000
__________ __________ __________
$ 11,745,814 $ 63,250,252 $ 74,996,066
========== ========== ==========
</TABLE>
Page 47A
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
REAL ESTATE AND ACCUMULATED DEPRECIATION (CONT'D)
SCHEDULE III
SEPTEMBER 30, 2000
Column A Column F Column G Column H Column I
________ ________ ________ ________ ________
Accumulated Date of
Deprecia- Construc- Date Depreciable
Description tion tion Acquired Life
___________ _________ ________ ________ __________
<S> <C> <C> <C> <C>
Shopping Center:
Somerset, NJ $ 806,245 1970 1970 10-33
Industrial Buildings:
Ramsey, NJ 615,515 1969 1969 7-40
Monaca, PA 1,092,522 1977 1977* 5-31.5
Orangeburg, NY 744,435 1990 1993 31.5
South Brunswick, NJ 1,005,431 1974 1993 31.5
Greensboro, NC 439,104 1988 1993 31.5
Jackson, MS 283,869 1988 1993 39
Franklin , Mass 691,306 1991 1994 39
Witchita, Ks 253,008 1975 1994 39
Urbandale,IO 292,988 1985 1994 39
Richland,MS 199,159 1986 1994 39
O'Fallon, MO 465,520 1989 1994 39
Virginia Beach, VA 248,067 1976 1996 39
Fayetteville, NC 400,949 1996 1997 39
Schaumburg, IL 331,527 1997 1997 39
Burr Ridge, IL 79,222 1997 1997 39
Romulus, MI 234,145 1998 1998 39
Liberty, MO 417,282 1997 1998 39
Omaha, NE 170,205 1999 1999 39
Charlottesville, VA 109,422 1998 1999 39
Jacksonville, FL 179,533 1998 1999 39
Union City, OH 42,919 1999 2000 39
_________
$ 9,102,373
=========
</TABLE>
Page 47B
<PAGE>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION (CONT'D)
(1) Reconciliation
REAL ESTATE INVESTMENTS
9/30/00 9/30/99 9/30/98
Balance-Beginning of Year $70,871,655 $57,270,562 $44,222,954
Additions:
Acquisitions 4,037,000 15,443,582 12,914,250
Improvements 87,411 35,009 133,358
__________ __________ __________
Total Additions 4,124,411 15,478,591 13,047,608
Sales -0- (1,877,498) -0-
__________ __________ __________
Balance-End of Year (1) $74,996,066 $70,871,655 $57,270,562
========== ========== ==========
ACCUMULATED DEPRECIATION
9/30/00 9/30/99 9/30/98
Balance-Beginning of Year $7,399,386 $6,656,634 $5,481,022
Depreciation 1,702,987 1,594,945 1,175,612
Sales -0- (852,193) -0-
_________ _________ _________
Balance-End of Year $9,102,373 $7,399,386 $6,656,634
========= ========= =========
Page 48
<PAGE>
<TABLE>
<CAPTION>
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
NOTES TO SCHEDULE III
SEPTEMBER 30,
(1) Reconciliation
2000 1999 1999
<S> <C> <C> <C>
Balance - Beginning of Year $70,871,655 $57,270,562 $44,222,954
__________ __________ __________
Additions:
Ramsey, New Jersey -0- -0- 45,000
Somerset, New Jersey 52,423 -0- -0-
Monaca, Pennsylvania 22,014 23,147 40,204
Monsey, New York -0- -0- 15,067
Orangeburg, New York -0- -0- -0-
South Brunswick, New Jersey 12,974 -0- 33,087
Greensboro, North Carolina -0- -0- -0-
Jackson, Mississippi -0- 1,086 -0-
Franklin, Massachusetts -0- -0- -0-
Wichita, Kansas -0- -0- -0-
Urbandale, Iowa -0- -0- -0-
Richland, Mississippi -0- -0- -0-
O'Fallon, Missouri -0- -0- -0-
Virginia Beach, Virginia -0- -0- -0-
Fayetteville, -0- -0- -0-
North Carolina
Schaumburg, Illinois -0- -0- -0-
Burr Ridge, Illinois -0- 3,349 1,503,250
Romulus, Michigan -0- 3,883 4,181,000
Liberty, Missouri -0- 3,546 7,230,000
Omaha, Nebraska -0- 5,595,500 -0-
Charlottesville, Virginia -0- 4,015,000 -0-
Jacksonville, Florida -0- 5,833,080 -0-
Union City, Ohio 4,037,000 -0- -0-
__________ __________ __________
Total Additions 4,124,411 15,478,591 13,047,608
__________ __________ __________
Sales:
Monsey, New York -0- (1,877,498) -0-
__________ __________ __________
Balance - End of Year $74,996,066 $70,871,655 $57,270,562
========== ========== ==========
(2) The aggregate cost for Federal tax purposes approximates historical cost.
</TABLE>
Page 49
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: December 22, 2000 By: /s/Eugene W. Landy
Eugene W. Landy, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Date: December 22, 2000 By: /s/Eugene W. Landy
Eugene W. Landy, President
and Director
Date: December 22, 2000 By: /s/Ernest V. Bencivenga
Ernest V. Bencivenga, Treasurer and
Director
Date: December 22, 2000 By: /s/Anna T. Chew
Anna T. Chew, Controller and
Director
Date: December 22, 2000 By: /s/Daniel D. Cronheim
Daniel D. Cronheim, Director
Date: December 22, 2000 By: /s/Matthew I. Hirsch
Matthew I. Hirsch, Director
Date: December 22, 2000 By: /s/Charles P. Kaempffer
Charles P. Kaempffer, Director
Date: December 22, 2000 By: /s/Samuel A. Landy
Samuel A. Landy, Director
Date: December 22, 2000 By: /s/Robert G. Sampson
Robert G. Sampson, Director
Page 50
