Security West Building

Security Land and Development Company Limited Partnership

On November 18, 1994, Regency Affiliates, Inc. acquired a limited partnership interest in Security Land and Development Company Limited Partnership. The Partnership (“Security West”) owns the 34.3-acre Security West complex at 1500 Woodlawn Drive, Woodlawn, Md., consisting of a two-story office building and a connected six-story office tower occupied by the United States Social Security Administration Office of Disability and International Operations. The buildings have net rentable area of approximately 717,000 square feet. The construction of the Security West buildings was completed in 1972 and the buildings have been occupied by the Social Security Administration since 1972 under prior leases between the U.S. Government and the Partnership. On December 17, 2018, Security West signed a new ten-year lease with the GSA. The new lease became effective November 1, 2018 and expires on October 31, 2028. At any time on or after November 1, 2021, the GSA may partially terminate the lease and vacate up to 266,353 square feet by providing 12 months written notice. On or after November 1, 2023, the GSA may terminate the entire lease upon 24 months written notice.

Storage Depot-Harrisburg, Pennsylvania

On April 18, 2016, Regency announced that it had completed the acquisition of a portfolio of five standalone self-storage facilities in the Harrisburg, Pennsylvania vicinity, for a total purchase price of $35,000,000. The purchase price for the facilities and related transaction expenses were financed in part with the proceeds of a $25,250,000 non-recourse debt financing with a ten year term, 4.95% fixed interest rate and 30 year amortization commencing after a four year interest only period. The balance of the purchase price and transaction expenses, and initial working capital, were financed by an approximate $11,231,000 capital contribution from Regency to the joint-venture purchaser. The facilities together comprise approximately 330,000 square feet of net rentable space consisting of in excess of 2,500 climate and non-climate controlled storage units. Revenues from the facilities are derived primarily from monthly rentals by individuals and additional revenues are earned from rentals to businesses, parking rentals, truck rentals, billboards and other administrative fees. The projected cash return to Regency is expected to be accretive to the Regency’s cash flow per common share and the cash flow from this investment is expected to largely be sheltered from income taxation for the foreseeable future.