The full text of the open letter is as follows:
84% Stock Price Decimation Since Sep 2021 IPO at $10 Ser share
May 31, 2025
RE:Open Letter to GIPR Shareholders
Dear Fellow Shareholders,
Generation Income Properties, Inc. (GIPR) stands at a critical crossroads, and the choices we make today will determine whether we follow the path of Medalist Diversified REIT, Inc. (MDRR) to recovery or Broad Street Realty, Inc. (BRST) to collapse.
GIPR is in crisis. The numbers don’t lie: a 61% stock price decline since July 2024, a $1.80 million net loss in Q1 2025 alone, and mounting risks threaten our investment. The Q1 2025 10-Q paints a grim picture, and recent developments amplify the urgency. We face a choice – act now or risk losing everything. This letter outlines the critical issues and calls for immediate shareholder action.
Consider the stakes. As a shareholder, and as a leading advocate for change on behalf of the shareholders, Resurgent Realty Trust was significantly involved in replacing management and reconstituting the board at MDRR which turned its fortunes around through decisive action. Conversely, BRST’s failure to adapt led to ruin.
Financial Performance and Stock Price Decline
Our financial health is deteriorating rapidly. The stock price has fallen 61% since July 2024, dropping from $4.08 to $1.58 by May 2025. The Q1 2025 10-Q reports a net loss of $1.80 million alone, down from $1.88 million in Q1 2024, but still reflecting a significant operating loss of $1.48 million. With $56.3 million in mortgage debt as of March 31, 2025, and revenue of just $2.38 million, the company’s liquidity is strained. This trajectory erodes shareholder value and signals a need for urgent intervention.
Portfolio Concerns and Operational Red Flags
Our portfolio is a house of cards. The 10-Q reveals that 62% of base rent comes from just four tenants, all with short term leases, exposing us to significant concentration risk. A vacancy in Norfolk,VA remains unresolved, a glaring operational failure that weakens cash flow. These red flags mirror the missteps that sank other REITs. Without swift action to diversify and stabilize our properties, we court further decline.
Executive Compensation Misalignment
Leadership is rewarded while shareholders suffer. CEO David Sobelman received $700,072 in 2024 + excessive stock grants, including $387,056 in “personal guarantee fees,” (which are not normal and highly unusual), despite cumulative losses of $8.6 million through 2022 and ongoing deficits. This disconnect – lavish pay amid financial ruin – demands scrutiny and accountability. Compensation must align with performance, not drain resources from a struggling company that requires additional loans just for G&A and not growth.
Capital Structure and Dilution Risks
Our capital structure is a ticking time bomb. Preferred shares, warrants, and restricted stock threaten to dilute common shareholders. The $3 million preferred equity deal with Brown Family Enterprises, carrying a 7% monthly IRR, siphons liquidity. As of March 31, 2025, mortgage loans net of discounts totals $56.3 million, dwarfing our $5.44 million in common equity. This imbalance risks wiping out our stake unless immediately addressed now.
Recent Developments
The $11.2 million UPREIT acquisition with Loyd Bernstein on February 10, 2025, raises red flags. While intended to grow the portfolio, it echoes the overleveraging that doomed BRST. With debt already at $56.3 million, this move strains our balance sheet further. Without transparency and a clear plan, such transactions jeopardize our future.
Call to Action
We cannot wait. Resurgent Realty Trust offers $3.00 per share – a 90% premium – and $10 million to bolster our finances. This is a rescue, not a takeover, but the board’s inaction endangers it. Shareholders must demand:
- Engagement with Resurgent Realty Trust to explore their offer
- Full disclosure of financial reports, liquidity, and debt plans
- New leadership with restructuring expertise
The Q1 2025 10-Q is a wake-up call. MDRR’s recovery, with the guidance of Resurgent Realty Trust, proves that change is possible; BRST’s fall warns of the cost of delay.
Act now – our investment depends on it.
Sincerely,
Resurgent Realty Trust
Jon S. Wheeler
CEO
jon@resurgentrealty.net
(757) 621-2873
