Overview

The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and notes thereto provided elsewhere herein and the Company's September 30, 2008 Annual Report on Form 10-K.

The Company is a REIT. The Company's primary business is the ownership and management of industrial buildings subject to long-term leases to investment-grade tenants. As of June 30, 2009, the Company owns fifty-seven industrial properties and one shopping center with total square footage of approximately 6,070,000. Total real estate investments were approximately $342,043,000 as of June 30, 2009. These properties are located in twenty-five states. As of June 30, 2009, the Company's weighted average lease expiration term was approximately 5 years and the percent of square footage occupied was 96%. The Company's average rent per occupied square foot for fiscal 2009 is approximately $5.63.

The Company has a concentration of Federal Express Corporation (FDX) and FDX subsidiary-leased properties. As of June 30, 2009, the percentage of FDX-leased square footage as a total of the Company's rental space was 46%. Annualized rental income and occupancy charges from FDX and FDX subsidiaries are estimated at approximately 57% of total rental and reimbursement revenue for fiscal 2009.
This is a risk shareholders should consider.

The Company's revenue primarily consists of rental and reimbursement revenue from the ownership of industrial rental property. Rental and reimbursement revenue increased $2,550,284 or 9% for the nine months ended June 30, 2009 as compared to the nine months ended June 30, 2008. The increase in rental and reimbursement revenue are due mainly to rent and reimbursements from the property acquisitions made during fiscal 2008 and from the increased rent from property expansions completed at

the end of fiscal 2008. Income from property operations defined as rental and reimbursement revenue less real estate taxes and operating expenses increased $1,728,577 or 8% for the nine months ended June 30, 2009 as compared to the nine months ended June 30, 2008. The income from the Company's property operations continues to meet management's expectations.

The Company also holds a portfolio of securities of other REITs with a fair value of $20,701,935 as of June 30, 2009 which earns dividend and interest income. During the three and nine months ended June 30, 2009, the Company recorded non-cash impairment losses of $106,602 and $6,000,678, respectively, related to REIT securities which management believed to be other than temporarily impaired. During the three months ended June 30, 2009, the Company's unrealized loss on securities decreased $5,284,072 from a loss of $8,269,016 at March 31, 2009 to a loss of $2,984,944 at June 30, 2009. The fair value of the securities portfolio continued to increase through July 2009. Historically, REIT share prices were not volatile. During the past two years, they have been highly volatile, with price swings of 5% or more recurring frequently. REIT securities have always represented less than 10% of the Company's total assets.
The dividends received from our securities investments, which are predominately REIT preferred issues, continue to meet our expectations. It is our intent to hold these securities long-term. The Company invests in REIT securities on margin from time to time when the Company can achieve an adequate yield spread.
The REIT securities portfolio provides the Company with liquidity and additional income until suitable acquisitions of real property are found.

See PART I, Item 1 - Business in the Company's September 30, 2008 Annual Report on Form 10-K for a more complete discussion of the economic and industry-wide factors relevant to the Company and the opportunities and challenges, and risks on which the Company is focused.

Changes in Results of Operations

As of June 30, 2009, the Company owned fifty-eight properties with total square footage of approximately 6,070,000 as compared to fifty-eight properties with square footage of approximately 5,891,000 as of June 30, 2008. As of June 30, 2009, the Company's weighted average lease expiration term was approximately 5 years. The Company's occupancy rate was 96% and 98% as of June 30, 2009 and 2008, respectively.

Rental and reimbursement revenue increased $737,203 or 8% for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008 and increased $2,550,284 or 9% for the nine months ended June 30, 2009 as compared to the nine months ended June 30, 2008. The increase is due mainly to the rent and accrued tenant reimbursement revenue related to the acquisition of the two industrial properties in 2008 (Cocoa and Orlando, Florida) and the increase in rent from the five FedEx Ground Package Systems, Inc. leased properties expanded during 2008 (Beltsville, Maryland, Augusta, Georgia, Hanahan, South Carolina, Denver, Colorado and Colorado Springs, Colorado.

Real estate taxes increased $407,441 or 32% for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008 and increased $1,098,849 or 28% for the nine months ended June 30, 2009 as compared to the six months ended June 30, 2008. The increase is due mainly to

the real estate taxes related to the acquisition of the two industrial properties in 2008 and increases in real estate taxes from the five properties expanded during 2008 which were detailed above.

Operating expenses increased $68,520 or 8% for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008 and decreased $277,142 or 9% for the nine months ended June 30, 2009 as compared to the nine months ended June 30, 2008. The increase for the three months is due mainly to an increase in repairs and maintenance which was partially offset by decreases in

Depreciation expense increased $83,269 or 4% for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008 and increased $550,829 or 9% for the nine months ended June 30, 2009 as compared to the nine months ended June 30, 2008. The increase is mainly due to the depreciation expense related to the two industrial properties acquired in 2008.

Interest and dividends increased $59,557 or 12% for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008 and increased $569,661 or 44% for the nine months ended June 30, 2009 as compared to the nine months ended June 30, 2008. The increase is due mainly to higher weighted average yields on the securities and a slightly higher average balance of securities for the nine months ended June 30, 2009 as compared to the nine months ended June 30, 2008. The weighted average yields were 11.11% and 9.97% as of June 30, 2009 and 2008, respectively and the average balance of securities was $16,657,000 and $16,056,000 for the nine months ended June 30, 2009 and 2008, respectively.

The following table summarizes the Company's gain (loss) on securities transactions for the three and nine months ended June 30, 2009 and 2008:

                                       Three Months Ended              Nine Months Ended
                                    6/30/09       6/30/08           6/30/09          6/30/08

(Loss) gain on sale of securities,       $-0-             $-0-        ($688,504)        $186,798
net
Gain (Loss) on open and settled           -0-          346,472               -0-       (742,307)
futures
   contracts
Impairment losses                   (106,602)        (578,697)       (6,000,678)     (3,104,774)
Loss on securities transactions,   ($106,602)       ($232,225)      ($6,689,182)    ($3,660,283)
net

During the three and nine months ended June 30, 2009 and 2008, the Company recorded losses due to writing down of the carrying value of securities which were considered other than temporarily impaired. The market for REIT securities is improving. During the three months ended June 30, 2009, the Company's unrealized loss on securities decreased $5,284,072 from a loss of $8,269,016 at March 31, 2009 to a loss of $2,984,944 at June 30, 2009. As of June 30, 2009, the Company considers these securities in an unrealized loss position to be temporarily impaired. The dividends received from our investments, which are predominantly REIT preferred issues, continue to meet our expectations. The fair value of the securities portfolio continued to increase through July 2009.
It is our intent to hold these securities long-term and anticipate realizing satisfactory returns. Historically, REIT share prices were not volatile.
During the past two years, they have been highly volatile with price swings of 5% or more recurring frequently. REIT securities have always represented less than 10% of the Company's total assets.

In fiscal 2008, the Company recorded losses from the Company's investment in futures contacts. The Company invested in futures contracts of ten-year treasury notes with the objective of reducing the risk of rolling over its fixed-rate mortgages at higher interest rates and reducing the exposure of the preferred equity and debt securities portfolio to interest rate fluctuations.
The Company terminated its program of investing in futures contracts in May 2008 and there were no open contracts as of June 30, 2009.

Interest expense increased $179,719 or 6% for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008 and increased $637,779 or 6% for the nine months ended June 30, 2009 as compared to the nine months ended June 30, 2008. The increase in interest expense is mainly due to the interest on the new mortgages on the properties in Tampa, Florida (FedEx), Union Township, Ohio, Fayetteville, North Carolina, Lakeland, Florida, Augusta, Georgia, Cocoa, Florida, Orlando, Florida and

Income (loss) from discontinued operations for the three and nine months ended June 30, 2009 includes the results of operations of the Quakertown, Pennsylvania property which was classified as held

for sale at June 30, 2009. Income (loss) from discontinued operations for the three and nine months ended June 30, 2008 reflects the results of operations of the Quakertown, Pennsylvania property as well as the industrial properties in Franklin, Massachusetts and Ramsey, New Jersey which were sold in June 2008 and July 2008, respectively.

The following table summarizes the components of discontinued operations:

                                    Three Months Ended        Nine Months Ended
                                   6/30/09     6/30/08      6/30/09      6/30/08

Rental and Reimbursement Revenue    $83,686     $282,425     $259,378     $935,466
Real Estate Taxes                  (11,040)     (36,925)     (33,119)    (108,229)
Operating Expenses                    (338)     (26,593)     (12,780)     (41,874)
Depreciation                            -0-     (22,241)     (23,118)    (122,552)
Amortization                        (7,042)     (22,095)    (359,911)     (64,845)
Interest expense                   (30,807)          -0-     (41,250)          -0-
Income (Loss) from Operations of     34,459      174,571    (210,800)      597,966
Disposed
  Property and Property Held for
Sale
Gain  on Sale of Investment             -0-    3,273,400          -0-    3,273,400
Property
Income (Loss) from Discontinued     $34,459   $3,447,971   ($210,800)   $3,871,366
Operations

Cash flows from discontinued operations for the nine months ended June 30, 2009 and 2008 are combined with the cash flows from operations within each of the three categories presented. Cash flows from discontinued operations are as follows:

                                                           Nine Months Ended
                                                        6/30/09       6/30/08

   Cash flows from Operations - Discontinued             $172,229       $785,363
   Operations
   Cash flows from Investing Activities -                     -0-      6,685,000
   Discontinued Operations
   Cash flows from Financing Activities -              ($172,229)   ($7,470,363)
   Discontinued Operations

The absence of cash flows from discontinued operations is not expected to materially affect future liquidity and capital resources.

Changes in Financial Condition

The Company generated net cash from operating activities of $15,034,896 and $12,723,834 for the nine months ended June 30, 2009 and 2008, respectively, which is an increase of 18%.

Securities available for sale decreased $303,728 from September 30, 2008 to June 30, 2009. The decrease is due mainly to the non-cash write-down in carrying value of securities deemed to be other than temporarily impaired of $6,000,678 and sales and redemptions of securities with a cost of $1,634,296. These decreases were offset by purchases of securities of $4,176,739 and an increase in the fair value of securities of $3,154,507.

Tenant and Other Receivables decreased $752,508 from September 30, 2008 to June 30, 2009. The decrease is due mainly to the collection of real estate tax and other reimbursements from the tenants.

Other assets increased $1,603,701 from September 30, 2008 to June 30, 2009. The increase is due mainly to construction in progress related to the expansion of the Cheektowaga, New York property leased

Mortgage notes payable increased $266,926 from September 30, 2008 to June 30, 2009. This increase is due to new mortgage proceeds of $8,437,500 from the financing of the Quakertown,

Pennsylvania property ($2,437,500) and the second mortgage on the Beltsville, Maryland property ($6,000,000). This increase was offset by principal repayments of $8,170,574 for the nine months ended June 30, 2009. The Company will pay a total of approximately $12,000,000 in mortgage principal repayments in fiscal 2009.

Loans payable increased $4,667,129 from September 30, 2008 to June 30, 2009.
The increase was due to the increased borrowing on the Company's $15,000,000 line of credit and margin loans. The draws were made to finance the property expansions completed at the end of fiscal 2008 and 2009 and other capital projects, the repurchase of $1,000,000 in debentures and for purchases of securities. As of June 30, 2009, the Company had a balance of $15,000,000 on its line of credit and $4,218,076 on its margin loans.

The Company raised $4,289,526 from the issuance of shares in the DRIP during the nine months ended June 30, 2009, which included dividend reinvestments of $3,204,286. Dividends paid on the common stock for the nine months ended June 30, 2009 were $11,162,648 of which $3,204,286 was reinvested. On August 5, 2009, the Company declared a dividend of $0.15 per common share to be paid September 15, 2009 to common shareholders of record as of August 17, 2009.

The Company uses a variety of sources to fund its cash needs in addition to cash generated through operations. The Company may sell marketable securities, borrow on its line of credit, refinance debt, or raise capital through the DRIP or capital markets.

Liquidity and Capital Resources

Net cash provided by operating activities was $15,034,896 and $12,723,834 for the nine months ended June 30, 2009 and 2008, respectively, an increase of 18%.
Dividends on common stock for the nine months ended June 30, 2009 and 2008 were $11,162,648 and $10,813,249 (of which $3,204,286 and $1,891,040, respectively, was reinvested).

As of June 30, 2009, the Company owned securities available for sale of $20,701,935 subject to margin loans of $4,218,076. These marketable securities provide the Company with additional liquidity. During the three months ended June 30, 2009, the securities portfolio's fair value increased $5,284,072. As of June 30, 2009, the Company had an unrealized loss on its portfolio of $2,984,944. The fair value of the securities portfolio continued to increase through July 2009. The dividends received from our investments, which are predominately REIT preferred issues, continue to meet our expectations. It is our intent to hold these securities long-term and anticipate realizing satisfactory returns.

As of June 30, 2009, the Company owned fifty-eight properties, of which forty-nine carried mortgage loans totaling $192,214,558. The unencumbered properties could be refinanced to raise additional funds, although covenants in the Company's line of credit limit the amount of unencumbered properties which can be mortgaged. The Company has fully drawn its $15,000,000 line of credit as of June 30, 2009. The Company's total debt plus preferred equity to total market capitalization as of June 30, 2009 was 64% as compared to 56% as of September 30, 2008. The Company has been raising capital through its DRIP, private placements and public offerings of common and preferred stock and investing in net leased industrial properties. The Company believes that funds generated from operations and the DRIP, together with the ability to finance and refinance its properties, will provide sufficient funds to adequately meet its obligations over the next year.

The Company seeks to invest in well-located, modern buildings leased to investment grade tenants on long-term leases. In management's opinion, newly built facilities leased to FDX and its subsidiaries meet these criteria. The Company has a concentration of FDX and FDX subsidiary leased properties. The

The Company intends to acquire additional net-leased industrial properties on long-term leases to investment grade tenants or expand its current properties when needed. The Company has historically financed purchases of real estate and expansions primarily through mortgages. To the extent that funds or appropriate properties are not available, fewer acquisitions or expansions will be made.

The Company does not have any off-balance sheet arrangements.

Funds From Operations

Funds from operations (FFO) is defined as net income, excluding gains or losses from sales of depreciable assets, plus real estate-related depreciation and amortization. FFO should be considered as a supplemental measure of operating performance used by REITs. FFO excludes historical cost depreciation as an expense and may facilitate the comparison of REITs which have different cost basis. The items excluded from FFO are significant components in understanding the Company's financial performance.

FFO (i) does not represent cash flow from operations as defined by generally accepted accounting principles; (ii) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) is not an alternative to cash flow as a measure of liquidity. FFO, as calculated by the Company, may not be comparable to similarly entitled measures reported by other REITs.

The Company's FFO for the three and nine months ended June 30, 2009 and 2008 is calculated as follows:

                                       Three Months Ended          Nine Months Ended
                                     6/30/09       6/30/08       6/30/09       6/30/08

Net Income (Loss)                   $1,889,052    $5,051,668    ($501,288)    $5,414,735
Preferred Dividend                   (630,304)     (630,304)   (1,890,911)   (1,891,040)
Gain on Sale of Investment Property        -0-   (3,273,400)           -0-   (3,273,400)
Depreciation Expense                 2,147,256     2,063,988     6,351,325     5,800,496
Depreciation Expense Related to            -0-        22,241        23,118       122,552
   Discontinued Operations
Amortization of In-Place Lease         279,421       292,059       859,387     1,285,880
   Intangible Assets
Amortization of In-Place Lease           7,042        22,095       359,911        64,845
   Intangible Assets Related to
   Discontinued Operations
FFO                                 $3,692,467    $3,548,347    $5,201,542    $7,524,068

The following are the cash flows provided (used) by operating, investing and financing activities for the nine months ended June 30, 2009 and 2008:

                                           Nine Months Ended
                                           2009           2008

                  Operating Activities $15,034,896    $12,723,834
                  Investing Activities (6,629,633)   (31,554,927)
                  Financing Activities (5,400,541)     12,700,881

Forward-Looking Statements

Statements contained in this Form 10-Q, including the documents that are incorporated by reference, that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange

Act of 1934, as amended (the "Exchange Act"). Also, when we use any of the words "anticipate," "assume," "believe," "estimate," "expect," "intend," or similar expressions, we are making forward-looking statements. These forward-looking statements are not guaranteed and are based on our current intentions and on our current expectations and assumptions. These statements, intentions, expectations and assumptions involve risks and uncertainties, some of which are beyond our control that could cause actual results or events to differ materially from those we anticipate or project, such as:

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the ability of our tenants to make payments under their respective leases, our reliance on certain major tenants and our ability to re-lease properties that are currently vacant or that become vacant;

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our ability to obtain suitable tenants for our properties;

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changes in real estate market conditions and general economic conditions;

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the inherent risks associated with owning real estate, including local real estate market conditions, governing laws and regulations and illiquidity of real estate investments;

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our ability to sell properties at an attractive price;

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our ability to repay debt financing obligations;

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our ability to refinance amounts outstanding under our credit facilities at maturity on terms favorable to us;

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the loss of any member of our management team;

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our ability to comply with certain debt covenants;

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our ability to integrate acquired properties and operations into existing operations;

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continued availability of proceeds from our debt or equity capital;

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the availability of other debt and equity financing alternatives;

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market conditions affecting our equity capital;

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changes in interest rates under our current credit facilities and under any additional variable rate debt arrangements that we may enter into in the future;

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our ability to implement successfully our selective acquisition strategy;

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our ability to maintain internal controls and processes to ensure all transactions are accounted for properly, all relevant disclosures and filings are timely made in accordance with all rules and regulations, and any potential fraud or embezzlement is thwarted or detected;

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changes in federal or state tax rules or regulations that could have adverse tax consequences; and

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our ability to qualify as a real estate investment trust for federal income tax purposes.