EX-99.2 3 ex99-2.htm

 

Exhibit 99.2

 

 

 

SUPPLEMENTAL FINANCIAL INFORMATION

 

As of September 2022

 

 

 

 

FORWARD-LOOKING STATEMENTS

 

This presentation contains “forward-looking statements” within the meaning of the federal securities laws that involve risks and uncertainties, many of which are beyond our control. Our actual results could differ materially and adversely from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in the Quarterly Report on Form 10-Q. Forward-looking statements relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, financial condition, liquidity, capital resources, cash flows, dividends, results of operations and other financial and operating information. When used in this presentation, the words “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “should,” “project,” “plan,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

 

The forward-looking statements contained in this presentation are based on historical performance and management’s current plans, estimates and expectations in light of information currently available to it and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to the factors, risks and uncertainties described in the Annual Report on Form 10-K, as filed March 30, 2022 (“Annual Report”) and the Company’s Quarterly Report on Form 10-Q filed with the SEC on the date hereof (“Quarterly Report”), changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors described in the “Risk Factors” section of the Annual Report and the Quarterly Report, many of which are beyond our control. Should one or more of these risks or uncertainties materialize or should any of our assumptions prove to be incorrect, our actual results may vary in material respects from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Any forward-looking statement made by us in this presentation speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.

 

 

 

 

COMPANY OVERVIEW

 

  Corporate Information
  Headquarters San Diego, CA
  Founded 1999
  Key Geographies CA, CO, MD, ND, TX & MD
  Employees 19
● Presidio Property Trust, Inc. (“Presidio” or the “Company”) was founded in 1999 as NetREIT      
         

●

 

 

●

  

Presidio is an internally managed real estate company focused on commercial real estate opportunities in often overlooked and regionally dominant markets

 

The Company acquires, owns, and manages office and industrial real estate assets in markets with strong demographic and economic drivers with attractive going-in cap rates

   Portfolio Summary (Number / Square Footage)
  Office 8 properties / 605,763 sq. ft.
  Retail 3 properties / 65,242 sq. ft.
  Industrial 1 property / 150,030 sq. ft.
  Model Homes (1) 5 funds / 82 homes
       
● Presidio’s commercial portfolio currently includes 12 commercial properties with a book value of approximately $94 million    
       
● In addition to its commercial real estate holdings, Presidio generates fees and rental income from affiliated entities, which manage and/or own a portfolio of model homes (1)   Portfolio Value & Debt
  Book Value $126.8 million (2)
  Existing Secured Debt $94.8 million
         
     

(1) The Company holds partial ownership interests in several entities which own model home properties

 

(2) Includes book value of model homes

 

 

 

 

 

COMMERCIAL PORTFOLIO

 

($ in000’s) Property Location  Sq., Ft.  Date Acquired  Year Property Constructed  Purchase Price (1)  Occupancy  Percent Ownership  Mortgage On property
Office/Industrial Properties:                               
Genesis Plaza, San Diego, CA (2)   57,807   08/10  1989   10,000    96.2%   76.4%   6,085 
Dakota Center, Fargo, ND   119,434   05/11  1982   9,575    71.8%   100.0%   9,503 
Grand Pacific Center, Bismarck, ND (3)   93,000   03/14  1976   5,350    56.5%   100.0%   3,528 
Arapahoe Center, Colorado Springs, CO   79,023   12/14  2000   11,850    100.0%   100.0%   7,645 
West Fargo Industrial, West Fargo, ND   150,099   08/15  1998/2005   7,900    96.7%   100.0%   4,060 
300 N.P., West Fargo, ND   34,517   08/15  1922   3,850    75.5%   100.0%   0 
One Park Centre, Westminster CO   69,174   08/15  1983   9,150    80.4%   100.0%   6,192 
Shea Center II, Highlands Ranch, CO   121,306   12/15  2000   25,325    90.9%   100.0%   17,298 
Baltimore, Baltimore, MD   31,752   12/21  2006   8,685    100.0%   100.0%   5,670 
Total Office/Industrial Properties   756,112         $91,685    84.9%       $59,981 
                                
Retail Properties:                               
Union Town Center, Colorado Springs, CO   44,042   12/14  2003   11,212    84.8%   100.0%   8,063 
Research Parkway, Colorado Springs, CO   10,700   08/15  2003   2,850    100.0%   100.0%   1,663 
Mandolin, Houston, TX (4)   10,500   08/21  2021   4,892    100.0%   61.3%   3,651 
Total Retail Properties   65,242         $18,954    89.7%       $13,377 
                                
    821,354         $110,639    885.3        $73,704 

 

(1) Prior to January 1, 2009, “Purchase Price” includes our acquisition related costs and expenses for the purchase of the property. After January 1, 2009, acquisition related costs and expenses were expensed when incurred until ASU 2017-01 was adopted by the Company in 2017. Since then, acquisition related costs for real estate acquisitions that do not meet the definition of a business, are capitalized.
   
(2) Genesis Plaza is owned by two tenants-in-common, each of which own 57% and 43%, respectively, and we beneficially own an aggregate of 76.4%, based on our ownership percentages of each tenant-in-common.
   

(3)

Property held for sale as of September 30, 2022.

   
(4) Owned by NetREIT Highland LLC, which was formed in 2012. NetREIT Highland LLC is wholly owned by NetREIT Palm Self Storage LP (a joint venture where Presidio Property trust owns 61.3%).

 

 

 

 

MODEL HOMES PORTFOLIO

 

Region  

No. of

Properties

  

Aggregate

Square

Feet

  

Approximate %

of

Aggregate

Square Feet

  

Current

Annual

Base Rent

  

Approximate %

of

Aggregate

Annual Rent

  

Purchase

Price

  

Current

Mortgage

Balance

 
Southwest    79    243,308    96.1%  $2,409,732    94.5%  $33,116,369   $20,792,387 
Northeast    2    6,153    2.4%   80,844    3.3%   898,250    294,245 
Midwest    1    3,663    1.5%   57,420    2.2%   638,000    384,724 
Total    82    253,124    100.0%  $2,547,996    100.0%  $34,652,619   $21,471,356 

 

 

 

 

CONSOLIDATED BALANCE SHEET

 

   September 30,   December 31, 
   2022   2021 
   (Unaudited)     
ASSETS          
Real estate assets and lease intangibles:          
Land  $18,223,947   $21,136,379 
Buildings and improvements   116,206,836    119,224,375 
Tenant improvements   12,911,091    12,752,518 
Lease intangibles   4,110,139    4,110,139 
Real estate assets and lease intangibles held for investment, cost   151,452,013    157,223,411 
Accumulated depreciation and amortization   (31,321,223)   (30,589,969 
Real estate assets and lease intangibles held for investment, net   120,130,790    126,633,442 
Real estate assets held for sale, net   6,656,116    11,431,494 
Real estate assets, net   126,786,906    138,064,936 
Cash, cash equivalents and restricted cash   18,569,075    14,702,089 
Deferred leasing costs, net   1,244,753    1,348,234 
Goodwill   2,423,000    2,423,000 
Other assets, net   3,892,377    4,658,504 
Investments held in Trust (see Notes 2 & 9)   135,706,687    — 
TOTAL ASSETS  $288,622,798   $161,196,763 
LIABILITIES AND EQUITY          
Liabilities:          
Mortgage notes payable, net  $89,115,802   $87,324,319 
Mortgage notes payable related to properties held for sale, net   5,025,578    1,535,513 
Mortgage notes payable, total net   94,141,380    88,859,832 
Accounts payable and accrued liabilities   9,386,609    4,585,036 
Accrued real estate taxes   1,493,634    1,940,913 
Dividends payable preferred stock   178,916    179,685 
Lease liability, net   54,218    75,547 
Below-market leases, net   31,963    73,130 
Total liabilities   105,286,720    95,714,143 
Commitments and contingencies (Note 2 & 9)          
SPAC Class A common stock subject to possible redemption; 13,225,000 shares (at $10.20 per share), net of issuance cost of approximately $6,400,000   129,246,639    — 
Equity:          
Series D Preferred Stock, par value per share; 1,000,000 shares authorized; 920,000 shares issued and outstanding (liquidation preference $25.00 per share) as of June 30, 2022 and December 31, 2021, respectively   9,161    9,200 
Series A Common Stock, $0.01 par value per share, shares authorized: 100,000,000; 11,793,757 shares and 11,599,720 shares were issued and outstanding at June 30, 2022 and December 31, 2021, respectively   116,556    115,997 
Additional paid-in capital   182,235,077    186,492,012 
Dividends and accumulated losses   (135,304,308)   (130,947,434)
Total stockholders’ equity before noncontrolling interest   45,056,486    55,669,775 
Noncontrolling interest   9,032,953    9,812,845 
Total equity   54,089,439    65,482,620 
TOTAL LIABILITIES AND EQUITY  $288,622,798   $161,196,763 

 

 

 

 

CONSOLIDATED STATEMENT OF OPERATIONS

 

   For the Three Months Ended September 30,   For the Nine Months Ended September 30, 
   2022   2021   2022   2021 
Revenues:                    
Rental income  $4,243,887   $4,185,212   $12,884,280   $14,216,234 
Fees and other income   148,088    190,967    401,697    675,283 
Total revenue   4,391,975    4,376,179    13,285,977    14,891,517 
Costs and expenses:                    
Rental operating costs   1,434,225    1,414,518    4,365,781    4,739,256 
General and administrative   1,509,139    1,479,261    4,306,835    4,361,297 
Depreciation and amortization   1,318,164    1,306,874    3,973,682    4,104,018 
Impairment of real estate assets   —    —    —    300,000 
Total costs and expenses   4,261,528    4,200,653    12,646,198    13,504,571 
Other income (expense):                    
Interest expense-mortgage notes   (1,382,120)   (1,030,883)   (3,485,693)   (3,542,940)
Interest expense - note payable   —    —    —    (279,373)
Interest and other (expense), net   590,586    (13,886)   757,318    (67,329)
Gain on sales of real estate, net   1,307,258    627,322    4,057,527    2,060,336 
Gain on extinguishment of government debt   —    —    —    10,000 
Income tax expense   (294,996)   (182,607)   (819,520)   (471,506)
Total other income (expense), net   220,728    (600,054)   509,632    (2,290,812)
Net income (loss)   351,175    (424,528)   1,149,411    (903,866)
Less: Income attributable to noncontrolling interests   (1,114,928)   (427,303)   (3,032,806)   (1,759,608)
Net income (loss) attributable to Presidio Property Trust, Inc. stockholders  $(763,753)  $(851,831)  $(1,883,395)  $(2,663,474)
Less: Preferred Stock Series D dividends   (538,286)   (539,056)   (1,616,397)   (634,892)
Less: Series A Warrant dividend   —    —    (2,456,512)   — 
Net income (loss) attributable to Presidio Property Trust, Inc. common stockholders  $(1,302,039)  $(1,390,887)  $(5,956,304)  $(3,298,366)
                     
Net income (loss) per share attributable to Presidio Property Trust, Inc. common stockholders:                    
Basic & Diluted  $(0.11)  $(0.13)  $(0.51)  $(0.33)
                     
Weighted average number of common shares outstanding - basic & diluted   11,780,090    10,833,847    11,784,500    9,955,046 

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

   For the Nine Months Ended September 30, 
   2022   2021 
Cash flows from operating activities:          
Net income (loss)  $1,149,411   $(903,866)
Adjustments to reconcile net income (loss) to net cash used in operating activities:          
Depreciation and amortization   3,973,582    4,104,018 
Stock compensation   861,837    867,903 
Bad debt expense   11,116    52 
Gain on sale of real estate assets, net   (4,057,527)   (2,060,336)
Gain on extinguishment of government debt   —    (10,000)
Net change in fair value marketable securities   70,183    37,673 
Net change in fair value SPAC Trust Account   (811,687)   — 
Impairment of real estate assets   —    300,000 
Amortization of financing costs   180,250    431,806 
Amortization of above-market leases   —    42,064 
Amortization of below-market leases   (41,167)   (46,481)
Straight-line rent adjustment   (148,181)   (215,655)
Changes in operating assets and liabilities:          
Other assets   585,984    633,354 
Accounts payable and accrued liabilities   561,780    (1,014,848)
Accrued real estate taxes   (447,279)   (1,040,680)
Net cash provided operating activities   1,888,302    1,125,004 
Cash flows from investing activities:          
Real estate acquisitions   (8,087,250)   (7,758,066)
Additions to buildings and tenant improvements   (1,939,712)   (1,122,051)
Investment in marketable securities   (1,243,672)   (2,682,192)
Proceeds from sale of marketable securities   1,787,695    1,032,297 
Investment of SPAC IPO proceeds into Trust Account   (134,895,000)   — 
Additions to deferred leasing costs   (53,377)   (97,932)
Proceeds from sales of real estate, net   20,603,179    47,906,909 
Net cash (used in) provided by investing activities   (123,828,137)   37,278,965 
Cash flows from financing activities:          
Proceeds from mortgage notes payable, net of issuance costs   14,992,425    8,003,807 
Repayment of mortgage notes payable   (9,586,079)   (41,862,782)
Repayment of note payable   —    (7,675,598)
Payment of deferred offering costs   (3,201,266)   (572,458)
Distributions to noncontrolling interests, net   (3,812,698)   (5,624,969)
Proceeds from initial public offering of SPAC   132,859,920    — 
SPAC offering non-controlling interest adjustment   (609,920)   — 
Issuance of Series A Common Stock, net of offering costs   —    8,871,879 
Issuance of Series D Preferred Stock, net of offering costs   —    20,489,803 
Repurchase of Series A Common Stock, at cost   (277,696)   (68,396)
Repurchase of Series D Preferred Stock, at cost   (84,386)   — 
Dividends paid to Series D Preferred Stockholders   (1,616,398)   (455,207)
Dividends paid to Series A Common Stockholders   (2,857,081)   (3,234,669)
Net cash provided by (used in) financing activities   125,806,821    (22,128,590)
Net increase in cash equivalents and restricted cash   3,866,986    16,275,379 
Cash, cash equivalents and restricted cash - beginning of period   14,702,089    11,540,917 
Cash, cash equivalents and restricted cash - end of period  $18,569,075   $27,816,296 
Supplemental disclosure of cash flow information:          
Interest paid-mortgage notes payable  $3,038,713   $3,407,689 
Interest paid-notes payable  $—   $103,861 
Non-cash financing activities:          
Dividends payable - Preferred Stock Series D  $178,916   $179,685 

 

 

 

 

EBITDAre RECONCILIATION

 

   For the Three Months Ended   For the Nine Months Ended 
   9/30/2022   9/30/2021   9/30/2022   9/30/2021 
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders  $(1,302,039)  $(1,390,887)  $(5,956,304)  $(3,298,366)
Adjustments:                    
Interest Expense   1,382,120    1,030,883    3,485,693    3,822,313 
Depreciation and Amortization   1,304,441    1,300,852    3,932,415    4,099,601 
Asset Impairments   —    —    —    300,000 
Net Loss on Sales of RE   (1,307,258)   (627,322)   (4,057,527)   (2,060,336)
Gain Extinguishment of Government Debt   —    —    —    (10,000)
Income Taxes   294,996    182,607    819,520    471,506 
                     
EBITDAre  $372,260   $496,133   $(1,776,203)  $3,324,718 

 

 

 

 

FFO AND CORE FFO RECONCILIATION

 

   For the Three Months Ended   For the Nine Months Ended 
   9/30/2022   9/30/2021   9/30/2022   9/30/2021 
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders  $(1,302,039)  $(1,390,887)  $(5,956,304)  $(3,298,366)
Adjustments:                    
Income attributable to noncontrolling interests   1,114,928    427,303    3,032,806    1,759,608 
Depreciation and amortization   1,318,164    1,306,874    3,973,582    4,104,018 
Amortization of above and below market leases, net   (13,722)   (6,022)   (41,167)   (4,417)
Impairment of real estate assets   —    —    —    300,000 
Loss (gain) on sale of real estate assets, net   (1,307,258)   (627,322)   (4,057,527)   (2,060,336)
FFO  $(189,927)  $(290,054)  $(3,048,610)  $800,507 
Restricted stock compensation   293,136    285,704    861,837    867,903 
Series A Warrant Dividend   —    —    2,456,512    — 
Core FFO  $103,209   $(4,350)  $269,738   $1,668,410 
                     
Weighted average number of common shares outstanding - basic and diluted   111,780,090    10,833,847    11,784,500    9,955,046 
                     
Core FFO / Wgt Avg Share  $0.01   $(0.00)  $0.02   $0.17 

 

 

 

 

SEGMENT DATA

 

 

 

 

 

 

 

 

DEFINITIONS – NON-GAAP MEASUREMENTS

 

EBITDAre - 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.

 

Funds from Operations (“FFO”) – The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO, a non-GAAP measure, as net income or loss (computed in accordance with GAAP), excluding gains (or losses) from sales of property, hedge ineffectiveness, acquisition costs of newly acquired properties that are not capitalized and lease acquisition costs that are not capitalized plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.

 

However, because FFO excludes depreciation and amortization as well as the changes in the value of the Company’s properties that result from use or market conditions, each of which have real economic effects and could materially impact the Company’s results from operations, the utility of FFO as a measure of the Company’s performance is limited. In addition, other REITs may not calculate FFO in accordance with the NAREIT definition as the Company does, and, accordingly, the Company’s FFO may not be comparable to other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the Company’s performance.

 

Core Funds from Operations (“Core FFO”) – We calculate Core FFO, a non-GAAP measure, by using FFO as defined by NAREIT and adjusting for certain other non-core items. We also exclude from our Core FFO calculation acquisition costs, loss on early extinguishment of debt, changes in the fair value of the earn-out, changes in fair value of contingent consideration, non-cash warrant dividends and the amortization of stock-based compensation.

 

We believe Core FFO provides a useful metric in comparing operations between reporting periods and in assessing the sustainability of our ongoing operating performance. Other equity REITs may calculate Core FFO differently or not at all, and, accordingly, the Company’s Core FFO may not be comparable to such other REITs’ Core FFO.