PRESIDIO PROPERT(SQFTP) - 2024 Q4 - Annual Results

Supplemental Financial Information This section provides context on forward-looking statements, emphasizing that actual results may differ due to various risks and uncertainties detailed in SEC filings Forward-Looking Statements This section outlines the nature of forward-looking statements, cautioning that actual results may materially differ due to risks and uncertainties detailed in SEC filings - The presentation contains forward-looking statements subject to risks and uncertainties, which could cause actual results to differ materially[3][4] - Factors influencing actual results include those in the Quarterly Report on Form 10-Q and Annual Report on Form 10-K, as well as global, regional, or local political, economic, business, competitive, market, and regulatory factors[3][4] - The company cautions against undue reliance on forward-looking statements and undertakes no obligation to publicly update them, except as required by applicable securities laws[4] Company Overview Presidio Property Trust, Inc. is an internally managed real estate company with a diverse portfolio of commercial properties and model homes, holding a book value of $127.6 million Corporate Information Presidio Property Trust, Inc., founded in 1999 and headquartered in San Diego, CA, is an internally managed real estate company focusing on commercial properties in key US geographies Corporate Details | Category | Detail | | :--------- | :------- | | Headquarters | San Diego, CA | | Founded | 1999 | | Key Geographies | CA, CO, MD, ND & TX | | Employees | 15 | - Presidio Property Trust, Inc. was founded in 1999 as NetREIT and is an internally managed real estate company[10] Portfolio Summary The company's real estate portfolio comprises 12 commercial properties and 78 model homes, totaling over 1 million square feet across various property types Portfolio Composition | Property Type | Number of Properties | Square Footage | | :-------------- | :------------------- | :------------- | | Office | 8 | 608,076 sqft. | | Retail | 3 | 65,242 sqft. | | Industrial | 1 | 150,099 sqft. | | Model Homes | 78 | 236,955 sqft | - The commercial portfolio consists of 12 properties with a book value of approximately $90.2 million[10] - The company also generates fees and rental income from affiliated entities managing/owning a portfolio of model homes[10] Portfolio Value & Debt As of December 31, 2024, the company's portfolio had a book value of $127.6 million with existing secured debt of $102.8 million Portfolio Valuation and Debt Structure | Metric | Value | | :------------------ | :------------ | | Book Value | $127.6 million | | Existing Secured Debt | $102.8 million | Commercial Portfolio Details This section details the company's commercial real estate holdings, including office, industrial, and retail properties, along with specific notes on recent property-level events and transactions Office/Industrial Properties The office/industrial portfolio consists of 9 properties totaling 758,175 sqft with 81.0% average occupancy and $60.619 million in total mortgages Office/Industrial Property Overview | Property Location | Sq. Ft. | Occupancy | Ownership | Mortgage On Property ($000's) | | :-------------------------- | :-------- | :-------- | :-------- | :---------------------------- | | Genesis Plaza, San Diego, CA | 57,807 | 95.6% | 92.0% | 5,937 | | Dakota Center, Fargo, ND | 119,554 | 46.1% | 100.0% | 9,197 | | Grand Pacific Center, Bismarck, ND | 94,943 | 88.6% | 100.0% | 5,471 | | Arapahoe Center, Colorado Springs, CO | 79,023 | 100.0% | 100.0% | 7,426 | | West Fargo Industrial, West Fargo, ND | 150,099 | 97.2% | 100.0% | 3,923 | | 300 N.P., West Fargo, ND | 34,517 | 66.4% | 100.0% | - | | One Park Centre, Westminster CO | 69,174 | 85.7% | 100.0% | 6,044 | | Shea Center II, Highlands Ranch, CO | 121,306 | 64.4% | 100.0% | 16,951 | | Baltimore, Baltimore, MD | 31,752 | 100.0% | 100.0% | 5,670 | | Total Office/Industrial | 758,175 | 81.0% | | 60,619 | Retail Properties The retail portfolio comprises 3 properties totaling 65,242 sqft with 86.2% average occupancy and $13.032 million in total mortgages Retail Property Overview | Property Location | Sq. Ft. | Occupancy | Ownership | Mortgage On Property ($000's) | | :-------------------------- | :-------- | :-------- | :-------- | :---------------------------- | | Union Town Center, Colorado Springs, CO | 44,042 | 100.0% | 100.0% | 7,870 | | Research Parkway, Colorado Springs, CO | 10,700 | 88.8% | 100.0% | 1,589 | | Mandolin, Houston, TX | 10,500 | 100.0% | 61.3% | 3,573 | | Total Retail | 65,242 | 86.2% | | 13,032 | Property Specific Notes Key commercial properties experienced significant events in 2023-2024, including ownership changes, sales agreements, major lease signings, and active re-leasing efforts - Genesis Plaza: Completed a minority ownership conversion option in July 2024, issuing 78,215 shares of SQFT Series A Common Stock for a 36.4% ownership in NetREIT Genesis II[12] - Dakota Center: Non-recourse loan matured in July 2024; management agreed to sell the property to settle the loan balance, resulting in a $0.7 million impairment charge as of September 30, 2024. The property was held for sale as of December 31, 2024[12] - Grand Pacific Center: Removed from held-for-sale after signing a 122-month lease with KLJ Engineering for 33,296 sqft in December 2022, with rent commencing February 28, 2024[12] - Union Town Center and Research Parkway: Listed for sale as of September 30, 2024, and sold in February 2025 for a combined $16.95 million, resulting in a $4.3 million gain[12] - Shea Center II: Largest tenant, Halliburton, did not renew its lease expiring December 31, 2022. Management is working to fill the 45,535 sqft space, with approximately 54% leased as of February 2025[12] Model Homes Portfolio The model homes portfolio consists of 78 properties across Arizona, Florida, and Texas, totaling 236,955 square feet with an aggregate annual rent of $3.37 million Model Homes Portfolio Details | State | No. of Properties | Aggregate Square Feet | % of Square Feet | Current Base Annual Rent | Approximate % of Aggregate Annual Rent | | :------ | :---------------- | :-------------------- | :--------------- | :----------------------- | :------------------------------------- | | Arizona | 2 | 6,822 | 2.9% | $149,196 | 4.4% | | Florida | 3 | 8,199 | 3.4% | $136,812 | 4.1% | | Texas | 73 | 221,934 | 93.7% | $3,086,580 | 91.5% | | Total | 78 | 236,955 | 100.0% | $3,372,588 | 100.0% | Consolidated Financial Statements This section presents the company's balance sheets, statements of operations, and cash flows, highlighting significant changes in assets, liabilities, equity, and profitability for 2024 Consolidated Balance Sheets As of December 31, 2024, total assets decreased to $142.57 million and total equity declined to $34.95 million, primarily due to reduced real estate assets and marketable securities Consolidated Balance Sheet Summary | Metric | Dec 31, 2024 ($) | Dec 31, 2023 ($) | Change ($) | Change (%) | | :------------------------------------------------ | :--------------- | :--------------- | :--------- | :--------- | | ASSETS | | | | | | Real estate assets and lease intangibles held for investment, net | 105,410,758 | 138,695,791 | (33,285,033) | -24.0% | | Real estate assets held for sale, net | 22,185,742 | 5,459,993 | 16,725,749 | 306.3% | | Real estate assets, net | 127,596,500 | 144,155,784 | (16,559,284) | -11.5% | | Cash, cash equivalents and restricted cash | 8,036,496 | 6,510,428 | 1,526,068 | 23.4% | | Investment in Conduit Pharmaceuticals marketable securities | 206,177 | 18,318,521 | (18,112,344) | -98.9% | | TOTAL ASSETS | 142,569,650 | 175,962,638 | (33,392,988) | -19.0% | | LIABILITIES | | | | | | Mortgage notes payable, total net | 102,094,094 | 107,713,273 | (5,619,179) | -5.2% | | Accounts payable and accrued liabilities | 3,290,170 | 4,770,845 | (1,480,675) | -31.0% | | Total liabilities | 107,624,495 | 114,640,568 | (7,016,073) | -6.1% | | EQUITY | | | | | | Total stockholders' equity before noncontrolling interest | 26,535,146 | 50,954,183 | (24,419,037) | -47.9% | | Noncontrolling interest | 8,410,009 | 10,367,887 | (1,957,878) | -18.9% | | Total equity | 34,945,155 | 61,322,070 | (26,376,915) | -43.0% | Consolidated Statements of Operations For 2024, the company reported a net loss of $23.10 million, a significant decline from 2023's net income, driven by losses in marketable securities and the absence of a prior year SPAC gain Consolidated Statement of Operations Summary | Metric | 2024 ($) | 2023 ($) | Change ($) | Change (%) | | :------------------------------------------------------- | :--------- | :--------- | :--------- | :--------- | | Revenues: | | | | | | Total revenue | 18,925,275 | 17,635,614 | 1,289,661 | 7.3% | | Costs and expenses: | | | | | | Total costs and expenses | 21,267,581 | 21,426,186 | (158,605) | -0.7% | | Other income (expense): | | | | | | Interest expense - mortgage notes | (6,050,196) | (5,004,889) | (1,045,307) | 20.9% | | Net loss in Conduit Pharmaceuticals marketable securities | (17,925,723) | (23,359,774) | 5,434,051 | -23.3% | | Gain on deconsolidation of SPAC | — | 40,321,483 | (40,321,483) | -100.0% | | Net (loss) income | (23,103,864) | 13,177,526 | (36,281,390) | -275.3% | | Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders | (27,865,225) | 8,027,600 | (35,892,825) | -447.1% | | Net (loss) income per share attributable to Presidio Property Trust, Inc. common stockholders: Basic & Diluted | (2.25) | 0.68 | (2.93) | -430.9% | - Rental income increased by $1.13 million (6.5%) year-over-year, reaching $18.52 million in 2024[17] - Impairment of goodwill and real estate assets decreased from $3.25 million in 2023 to $1.97 million in 2024[17] Consolidated Statements of Cash Flows In 2024, the company experienced a net cash outflow from operating activities of $0.73 million, while investing activities generated $12.87 million and financing activities resulted in a $10.61 million outflow Consolidated Statement of Cash Flows Summary | Cash Flow Category | 2024 ($) | 2023 ($) | Change ($) | Change (%) | | :------------------------------------------ | :--------- | :--------- | :--------- | :--------- | | Net cash (used in) provided by operating activities | (728,060) | 1,448,573 | (2,176,633) | -150.3% | | Net cash provided by investing activities | 12,866,819 | 120,598,553 | (107,731,734) | -89.3% | | Net cash (used in) financing activities | (10,612,691) | (132,053,423) | 121,440,732 | -91.9% | | Net (decrease) increase in cash equivalents and restricted cash | 1,526,068 | (10,006,297) | 11,532,365 | -115.2% | | Cash, cash equivalents and restricted cash - end of period | 8,036,496 | 6,510,428 | 1,526,068 | 23.4% | - Proceeds from sales of real estate, net, increased significantly from $10.70 million in 2023 to $24.77 million in 2024[19] - Repayment of mortgage notes payable increased from $10.09 million in 2023 to $27.90 million in 2024[19] Non-GAAP Reconciliations This section provides reconciliations for non-GAAP financial measures, including EBITDAre, FFO, and Core FFO, to GAAP net income, offering alternative perspectives on operational performance EBITDAre Reconciliation Presidio Property Trust, Inc. reported a positive EBITDAre of $0.23 million for 2024, a significant improvement from a negative $0.25 million in 2023, despite a higher net loss attributable to common stockholders EBITDAre Reconciliation Table | Metric | 2024 ($) | 2023 ($) | | :------------------------------------------------------- | :--------- | :--------- | | Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders | (27,865,225) | 8,027,600 | | Interest Expense | 6,050,195 | 5,004,889 | | Depreciation and Amortization | 5,510,877 | 5,420,765 | | Asset Impairment | 1,969,311 | 3,247,097 | | Net loss (gain) on sale of real estate | (3,426,572) | (3,240,200) | | Net change in Conduit marketable securities | 17,926,283 | 21,945,354 | | Gain on deconsolidation of SPAC | — | (40,321,483) | | Income Taxes | 60,855 | (335,780) | | EBITDAre | 225,724 | (251,757) | FFO and Core FFO Reconciliation The company reported an FFO loss of $3.36 million and a Core FFO loss of $1.98 million in 2024, both worsening from 2023, resulting in a Core FFO per share of $(0.160) FFO and Core FFO Reconciliation Table | Metric | 2024 ($) | 2023 ($) | | :------------------------------------------------------- | :--------- | :--------- | | Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders | (27,865,225) | 8,027,600 | | Income attributable to noncontrolling interests | 2,524,665 | 3,031,081 | | Depreciation and amortization | 5,515,518 | 5,425,739 | | Impairment of real estate assets | 1,969,311 | 3,247,097 | | Loss on Conduit marketable securities | 17,926,283 | 21,945,354 | | Gain on deconsolidation of SPAC | - | (40,321,483) | | Loss (Gain) on sale of real estate assets | (3,426,572) | (3,240,200) | | FFO | (3,360,660) | (1,889,786) | | Stock Based Compensation | 1,379,080 | 989,515 | | Core FFO | (1,981,580) | (900,271) | | Weighted average number of common shares outstanding - basic and diluted | 12,386,594 | 11,847,814 | | Core FFO / Wgt Avg Share | (0.160) | (0.076) | | Quarterly Dividends / Share | — | 0.091 | Segment Data This section provides a detailed breakdown of the company's financial performance and asset allocation across its Retail, Office/Industrial, and Model Homes segments Segment Activity and NOI For 2024, the Model Homes segment generated the highest Adjusted NOI at $7.28 million, contributing to a total Adjusted NOI increase to $15.69 million from $14.48 million in 2023 Segment Activity and Net Operating Income | Metric | Retail 2024 ($) | Office/Industrial 2024 ($) | Model Homes 2024 ($) | Corporate and Other 2024 ($) | Total 2024 ($) | | :---------------------- | :-------------- | :------------------------- | :------------------- | :--------------------------- | :------------- | | Total revenues | 2,120,663 | 12,338,552 | 4,436,253 | 29,807 | 18,925,275 | | Rental operating costs | 608,667 | 6,136,564 | 171,621 | (660,775) | 6,256,077 | | Net Operating Income (NOI) | 1,511,996 | 6,201,988 | 4,264,632 | 690,582 | 12,669,198 | | Gain on Sale - Model Homes | — | — | 3,426,572 | — | 3,426,572 | | Impairment of Model Homes | — | — | (406,374) | — | (406,374) | | Adjusted NOI | 1,511,996 | 6,201,988 | 7,284,830 | 690,582 | 15,689,396 | | | | | | | | | Metric | Retail 2023 ($) | Office/Industrial 2023 ($) | Model Homes 2023 ($) | Corporate and Other 2023 ($) | Total 2023 ($) | | :---------------------- | :-------------- | :------------------------- | :------------------- | :--------------------------- | :------------- | | Total revenues | 1,884,330 | 11,574,955 | 4,132,129 | 44,200 | 17,635,614 | | Rental operating costs | 537,389 | 5,901,042 | 156,493 | (632,006) | 5,962,918 | | Net Operating Income (NOI) | 1,346,941 | 5,673,913 | 3,975,636 | 676,206 | 11,672,696 | | Gain on Sale - Model Home | — | — | 3,240,200 | — | 3,240,200 | | Impairment of Model Homes | — | — | (431,984) | — | (431,984) | | Adjusted NOI | 1,346,941 | 5,673,913 | 6,783,852 | 676,206 | 14,480,912 | Assets by Reportable Segment As of December 31, 2024, the Office/Industrial segment held the largest assets at $76.29 million, contributing to a total reportable segment asset decrease to $131.13 million Assets by Reportable Segment | Segment | Dec 31, 2024 ($) | Dec 31, 2023 ($) | Change ($) | Change (%) | | :-------------------------- | :--------------- | :--------------- | :--------- | :--------- | | Office/Industrial Properties: Total assets | 76,292,662 | 78,140,372 | (1,847,710) | -2.4% | | Model Home Properties: Total assets | 38,166,964 | 51,456,292 | (13,289,328) | -25.8% | | Retail Properties: Total assets | 16,673,605 | 16,539,399 | 134,206 | 0.8% | | Total assets for reportable segments | 131,133,231 | 146,136,063 | (15,002,832) | -10.3% | | Corporate and other assets: Total Assets | 11,436,419 | 29,826,575 | (18,390,156) | -61.7% | | Total Assets (Consolidated) | 142,569,650 | 175,962,638 | (33,392,988) | -19.0% | Definitions – Non-GAAP Measurements This section provides clear definitions for key non-GAAP financial measures, including EBITDAre, FFO, and Core FFO, explaining their calculation and purpose in financial reporting EBITDAre Definition EBITDAre, as defined by NAREIT, represents earnings before interest, taxes, depreciation, and amortization, adjusted for gains or losses on asset disposal and impairment write-offs - EBITDAre is defined by NAREIT as earnings before interest, taxes, depreciation, and amortization, gain or loss on disposal of depreciated assets, and impairment write-offs[29] Funds from Operations (FFO) Definition FFO is a non-GAAP measure that adjusts net income for property sales gains/losses, depreciation, amortization, and impairment charges, serving as a key metric for REIT performance - FFO is a non-GAAP measure defined as net income or loss (GAAP), excluding gains/losses from property sales, hedge ineffectiveness, certain acquisition/lease costs, plus depreciation and amortization, and impairment charges on properties or non-consolidated REITs[30] - FFO is considered a supplement to net income because it excludes depreciation, amortization, and changes in property value, which have real economic effects[31] - The company believes FFO is the most accurate measure of activity and the basis for distributions to equity holders[30] Core Funds from Operations (Core FFO) Definition Core FFO refines NAREIT's FFO by excluding specific non-core items like acquisition costs and stock-based compensation, aiming to provide a clearer view of ongoing operating performance - Core FFO is calculated by adjusting NAREIT's FFO for non-core items such as acquisition costs, loss on early debt extinguishment, changes in fair value of earn-outs/contingent consideration, non-cash warrant dividends, other non-recurring expenses, and amortization of stock-based compensation[32] - Core FFO is believed to provide a useful metric for comparing operations between reporting periods and assessing the sustainability of ongoing operating performance[33] - Other equity REITs may calculate Core FFO differently, so comparability is not guaranteed[33]