EX-99.2 3 ex99-2.htm

 

Exhibit 99.2

 

 

 

 

 

 

 

SUPPLEMENTAL FINANCIAL INFORMATION

 

As of March 31, 2023

 

 
 

 

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 28, 2023 (“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
  Employees 17
● 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 / 606,724 sq. ft.
  Retail 3 properties / 65,242 sq. ft.
  Industrial 1 property / 150,099 sq. ft.
  Model Homes (1) 5 funds / 98 homes
       
● Presidio’s commercial portfolio currently includes 12 commercial properties with a book value of approximately $93 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 $133.8 million (2)
  Existing Secured Debt $100.4 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    91.9%   76.4%   6,026 
Dakota Center, Fargo, ND   119,434   05/11  1982   9,575    58.1%   100.0%   9,381 
Grand Pacific Center, Bismarck, ND   93,711   03/14  1976   5,350    56.0%   100.0%   3,465 
Arapahoe Center, Colorado Springs, CO   79,023   12/14  2000   11,850    100.0%   100.0%   7,558 
West Fargo Industrial, West Fargo, ND   150,099   08/15  1998/2005   7,900    96.0%   100.0%   4,000 
300 N.P., West Fargo, ND   34,517   08/15  1922   3,850    64.4%   100.0%   0 
One Park Centre, Westminster CO   69,174   08/15  1983   9,150    84.9%   100.0%   6,133 
Shea Center II, Highlands Ranch, CO   121,306   12/15  2000   25,325    60.6%   100.0%   17,158 
Baltimore, Baltimore, MD   31,752   12/21  2006   8,892    100.0%   100.0%   5,670 
Total Office/Industrial Properties   756,823         $91,892    77.2%       $59,391 
                                
Retail Properties:                               
Union Town Center, Colorado Springs, CO   44,042   12/14  2003   11,212    82.3%   100.0%   7,986 
Research Parkway, Colorado Springs, CO   10,700   08/15  2003   2,850    88.8%   100.0%   1,634 
Mandolin, Houston, TX (3)   10,500   08/21  2021   4,892    100.0%   61.3%   3,620 
Total Retail Properties   65,242         $18,954    86.2%       $13,239 
                                
    822,065         $110,846    77.9%       $72,630 

 

(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)

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

 

Geographic Region  No. of
Properties		   Aggregate
Square Feet		   Approximate
%
of Square
Feet		   Current
Base
Annual
Rent		   Approximate
of Aggregate
% Annual
Rent		 
Midwest   4    12,307    4.2%  $182,748    5.5%
Southeast   4    9,875    3.3%   172,428    5.2%
Southwest   90    272,835    92.5%   2,971,380    89.3%
Total   98    295,017    100%  $3,326,556    100%

 

 
 

 

CONSOLIDATED BALANCE SHEET

 

   March 31,   December 31, 
   2023   2022 
    (Unaudited)      
ASSETS          
Real estate assets and lease intangibles:          
Land  $19,763,455   $19,189,386 
Buildings and improvements   129,597,365    125,979,374 
Tenant improvements   14,273,012    13,861,839 
Lease intangibles   4,110,139    4,110,139 
Real estate assets and lease intangibles held for investment, cost   167,743,971    163,140,738 
Accumulated depreciation and amortization   (35,757,830)   (34,644,511)
Real estate assets and lease intangibles held for investment, net   131,986,141    128,496,227 
Real estate assets held for sale, net   1,884,935    2,016,003 
Real estate assets, net   133,871,076    130,512,230 
Other assets:          
Cash, cash equivalents and restricted cash   11,891,930    16,516,725 
Deferred leasing costs, net   1,528,338    1,516,835 
Goodwill   2,423,000    2,423,000 
Other assets, net (see Note 6)   3,601,246    3,511,681 
Total other assets   19,444,514    23,968,241 
Investments held in Trust (see Notes 2 & 9)   23,658,838    136,871,183 
TOTAL ASSETS  $176,974,428   $291,351,654 
LIABILITIES AND EQUITY          
Liabilities:          
Mortgage notes payable, net  $98,240,332   $95,899,176 
Mortgage notes payable related to properties held for sale, net   1,309,228    999,523 
Mortgage notes payable, total net   99,549,560    96,898,699 
Accounts payable and accrued liabilities   3,353,449    4,028,564 
Accounts payable and accrued liabilities of SPAC (see Notes 2 & 9)   6,586,458    5,046,725 
Accrued real estate taxes   1,133,336    1,879,875 
Dividends payable preferred stock   178,435    178,511 
Lease liability, net   39,360    46,833 
Below-market leases, net   16,997    18,240 
Total liabilities   110,857,595    108,097,447 
Commitments and contingencies (Note 2 & 9):          
SPAC Class A common stock subject to possible redemption; 2,187,728 as of March 31, 2023 and 13,225,000 shares as of December 31, 2022 (at $10.45 per share), net of issuance cost of approximately $6,400,000   16,501,755    130,411,135 
Equity:          
Series D Preferred Stock, $0.01 par value per share; 1,000,000 shares authorized; 913,601 shares issued and outstanding (liquidation preference $25.00 per share) as of March 31, 2023 and 913,987 shares issued and outstanding as of December 31, 2022   9,136    9,140 
Series A Common Stock, $0.01 par value per share, shares authorized: 100,000,000; 11,835,264 shares and 11,807,893 shares were issued and outstanding at March 31, 2023 and December 31, 2022, respectively   118,353    118,079 
Additional paid-in capital   180,766,097    182,044,157 
Dividends and accumulated losses   (140,160,393)   (138,341,750)
Total stockholders’ equity before noncontrolling interest   40,733,193    43,829,626 
Noncontrolling interest   8,881,885    9,013,446 
Total equity   49,615,078    52,843,072 
TOTAL LIABILITIES AND EQUITY  $176,974,428   $291,351,654 

 

 
 

 

CONSOLIDATED STATEMENT OF OPERATIONS

 

   For the Three Months Ended
March 31,		 
   2023   2022 
Revenues:        
Rental income  $3,942,053   $4,452,318 
Fees and other income   179,438    120,823 
Total revenue   4,121,491    4,573,141 
Costs and expenses:          
Rental operating costs   1,574,990    1,583,473 
General and administrative   1,964,620    1,583,691 
Depreciation and amortization   1,333,574    1,339,225 
Total costs and expenses   4,873,184    4,506,389 
Other income (expense):          
Interest expense - mortgage notes   (867,767)   (1,017,713)
Interest and other income, net   742,117    73,605 
Gain on sales of real estate, net   417,337    1,522,785 
Income tax expense   (148,453)   (265,239)
Total other income (expense), net   143,234    313,438 
Net income (loss)   (608,459)   380,190 
Less: Income attributable to noncontrolling interests   (387,081)   (1,208,676)
Net loss attributable to Presidio Property Trust, Inc. stockholders  $(995,540)  $(828,486)
Less: Preferred Stock Series D dividends   (535,448)   (539,056)
Less: Series A Warrant dividend   —    (2,456,511)
Net loss attributable to Presidio Property Trust, Inc. common stockholders  $(1,530,988)  $(3,824,053)
           
Net loss per share attributable to Presidio Property Trust, Inc. common stockholders:          
Basic & Diluted  $(0.13)  $(0.32)
           
Weighted average number of common shares outstanding - basic & diluted   11,834,656    11,773,649 

 

 
 

 

 
CONSOLIDATED STATEMENT OF CASH FLOWS

 

   For the Three Months Ended
March 31,		 
   2023   2022 
Cash flows from operating activities:          
Net (loss) income  $(608,459)  $380,190 
Adjustments to reconcile net (loss) income to net cash used in operating activities:          
Depreciation and amortization   1,333,574    1,339,225 
Stock compensation   260,845    280,981 
Bad debt expense   54,493    13,416 
Gain on sale of real estate assets, net   (417,337)   (1,522,785)
Net change in fair value marketable securities   (72,738)   79,144 
Net change in fair value SPAC Trust Account   (664,232)   (10,182)
Amortization of financing costs   72,879    65,018 
Amortization of below-market leases   (1,243)   (13,723)
Straight-line rent adjustment   (157,194)   (19,660)
Changes in operating assets and liabilities:          
Other assets   219,199    295,357 
Accounts payable and accrued liabilities   (764,077)   (1,393,193)
Accounts payable and accrued liabilities for the SPAC   (137,300)   62,908 
Accrued real estate taxes   (746,539)   (534,956)
Net cash used in operating activities   (1,628,129)   (978,260)
Cash flows from investing activities:          
Real estate acquisitions   (5,039,455)   (2,427,890)
Additions to buildings and tenant improvements   (597,873)   (319,737)
Investment in marketable securities   (1,586,042)   (172,866)
Proceeds from sale of marketable securities   1,437,717    755,989 
Investment of SPAC IPO proceeds into Trust Account   (155,403)   (134,895,000)
Withdraw from Trust Account for SPAC taxes   200,050    — 
Withdraw from Trust Account for Redemption of SPAC Shares   113,831,930    — 
Deletions / (additions) to deferred leasing costs   1,936    (18,352)
Proceeds from sales of real estate, net   1,458,822    14,763,130 
Net cash provided by (used in) investing activities   109,551,682    (122,314,726)
Cash flows from financing activities:          
Proceeds from mortgage notes payable, net of issuance costs   3,518,981    7,365,855 
Repayment of mortgage notes payable   (886,707)   (3,275,234)
Payment of deferred offering costs   —    (3,159,411)
Distributions to noncontrolling interests, net   (518,642)   (258,410)
Proceeds from initial public offering of SPAC   —    132,250,000 
Redemption of SPAC shares   (113,831,930)   — 
Repurchase of Series D Preferred Stock, at cost   (6,947)   — 
Dividends paid to Series D Preferred Stockholders   (535,448)   (539,056)
Dividends paid to Series A Common Stockholders   (287,655)   (1,298,252)
Net cash (used in) provided by financing activities   (112,548,348)   131,085,492 
Net (decrease) increase in cash equivalents and restricted cash   (4,624,795)   7,792,506 
Cash, cash equivalents and restricted cash - beginning of period   16,516,725    14,702,089 
Cash, cash equivalents and restricted cash - end of period  $11,891,930   $22,494,595 
Supplemental disclosure of cash flow information:          
Interest paid-mortgage notes payable  $1,119,189   $951,727 
Non-cash financing activities:          
Deferred offering cost SPAC, underwriting commission payable  $4,628,750   $4,628,750 
Accrued excise tax on January 24, 2023 SPAC redemptions  $1,140,683   $— 
Dividends payable - Preferred Stock Series D  $178,435   $179,685 

 

 
 

 

EBITDAre RECONCILIATION

 

   For the Three Months Ended
March 31,		 
   2023   2022 
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders  $(1,530,988)  $(3,824,053)
Adjustments          
Interest Expense   867,767    1,017,713 
Depreciation and Amortization   1,332,330    1,325,503 
Asset Impairment   -    - 
Net loss (gain) on sale of real estate   (417,337)   (1,522,785)
Gain on PPP Loan Forgiveness   -      
Income Taxes   148,453    265,239 
           
EBITDAre  $400,225   $(2,738,383)

 

 
 

 

FFO AND CORE FFO RECONCILIATION

 

(Unaudited)

 

   For the Three Months Ended
March 31,		 
   2023   2022 
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders  $(1,530,988)  $(3,824,053)
Adjustments:          
Income attributable to noncontrolling interests   387,081    1,208,676 
Depreciation and amortization   1,333,574    1,339,225 
Amortization of above and below market leases, net   (1,244)   (13,722)
Impairment of real estate assets   -    - 
Loss (Gain) on sale of real estate assets   (417,337)   (1,522,785)
FFO  $(228,914)  $(2,812,659)
Stock Based Compensation   260,845    280,981 
Series A Warrant dividend   -    2,456,511 
Core FFO  $31,932   $(75,167)
           
Weighted average number of common shares outstanding - basic   11,834,656    11,773,649 
           
Core FFO / Wgt Avg Share  $0.00   $(0.01)
           
Quarterly Dividends / Share  $0.022   $0.105 

 

 
 

 

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.