Real Estate Assets and Transactions - The company owns or has an equity interest in 758,175 rentable square feet of Office/Industrial Properties, 65,242 rentable square feet of Retail Properties, and 110 Model Home Properties as of December 31, 2023[460] - The company acquired 40 Model Home Properties for $21.9 million in 2023, consisting of $6.6 million in cash payments and $15.3 million in mortgage notes[474] - The company recognized a gain of approximately $5.4 million from the sale of 31 model homes for $17.5 million in 2023[475] - The company acquired 31 Model Home Properties for $15.6 million in 2022, consisting of $4.8 million in cash payments and $10.8 million in mortgage notes[467] - The company recognized a gain of approximately $3.2 million from the sale of 22 model homes for $11.7 million in 2022[468] - The company disposed of World Plaza for approximately $10.0 million in 2022, recognizing a loss of approximately $0.3 million[466] - No acquisitions or sales of retail, office, or industrial properties occurred during 2023, leading to expected decreases in gross revenues from these assets in 2024[510] - The company expects to see activity in sales of commercial real estate assets in the near future[510] - Model home assets made up 35% of total real estate assets as of December 31, 2023, up from 28% in 2022, contributing approximately 23% of total revenue[510] Capital Market Activities - The company sponsored a SPAC that raised $132,250,000 in capital investment and owned approximately 23.49% of the issued and outstanding stock upon the initial public offering[476] - The company owned approximately 6.3% of Conduit's common stock immediately following the business combination with Conduit Pharma[472] - The company loaned $1.0 million to Murphy Canyon in 2023, which was repaid in full on the date of the business combination with Conduit Pharma[478] - The company recorded a $40.3 million gain from deconsolidation of Murphy Canyon, including $34.1 million from remeasurement of retained investment and $6.2 million from deconsolidation of assets/liabilities[522] - If all Common Stock Warrants were exercised at $5.00 per share, the company would receive $10 million and issue 2,000,000 additional shares[538] - If all Series A Warrants were exercised at $7.00 per share, the company would receive $101.2 million and issue 14,450,069 additional shares[540] Cap Rates and Market Trends - REIT implied and private transaction-based cap rate spread was 170 bps, and REIT implied and private appraisal-based cap rate spread was 216 bps as of the third quarter of 2023[480] - Industrial sector cap rates peaked at 6.39% in September 2023, then declined to 6.24% in January 2024, with San Antonio recording the highest cap rate at 8.72% and Atlanta the lowest at 4.57%[484] - Retail sector cap rates fluctuated significantly, reaching a high of 6.48% in December 2023 before declining in January 2024, with Phoenix at 8.01% and Nashville at 4.30%[485] - Office sector cap rates decreased to an average of 6.03% in January 2024 from 6.27% in December 2023, with Indianapolis recording the highest cap rate at 9.62% and Columbus the lowest at 4.65%[486] Financial Performance and Expenses - Rental operating costs increased by approximately $121,522 or 2% to $6.0 million for the year ended December 31, 2023, compared to $5.8 million in 2022[510] - General and administrative expenses increased by $0.6 million or 10% to $6.8 million in 2023, representing 38.5% of total revenue compared to 34.7% in 2022[512] - Interest expense on mortgage notes increased by $0.3 million or 6% to $5.0 million in 2023 due to higher mortgage debt and increased weighted average interest rate from 4.57% to 5.18%[514] - Income allocated to non-controlling interests decreased from $3.6 million in 2022 to $3.0 million in 2023 due to fewer model home sales (19 in 2022 vs 13 in 2023)[515] - Model Home segment revenue increased from 16.3% of total revenue in 2022 to 23.4% in 2023, while Office/Industrial decreased from 71.2% to 65.9%[519] - The material impact on office property expenses in 2023 was an impairment charge[510] Debt and Cash Flow - Total mortgage debt increased from $97.8 million in 2022 to $108.5 million in 2023, with $23.5 million in principal payments due in 2024[525] - Cash and cash equivalents decreased from $16.5 million in 2022 to $6.5 million in 2023, including restricted cash of $4.4 million and $3.7 million respectively[530] - Net cash from investing activities was $120.3 million in 2023 compared to cash used of $126.4 million in 2022, primarily due to $137 million distributed from Murphy Canyon Trust Account[532] Investments and Marketable Securities - Marketable securities held at a third-party broker totaled approximately $45.149 million as of December 31, 2023, measured at fair value using Level 1 market prices[503] - Investments in Conduit's common stock and warrants totaled approximately $18.3 million as of December 31, 2023, with a cost basis of approximately $7.5 million[503]
Presidio Property Trust(SQFT) - 2023 Q4 - Annual Report