EX-99.2 4 ex99-2.htm EX-99.2

 

Exhibit 99.2

 

 

 

SUPPLEMENTAL FINANCIAL INFORMATION

As of March 31, 2025

 

 
 

 

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 31, 2025 (“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

 

 

 
   
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
   
Presidio’s commercial portfolio currently includes 10 commercial properties with a book value of approximately $78.5 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)

 

Corporate Information
Headquarters   San Diego, CA
Founded   1999
Key Geographies   CA, CO, MD, ND & TX
Employees   14

 

Portfolio Summary (Number / Square Footage)
Office   8 properties / 608,076 sqft.
Retail  

1 properties / 10.500 sqft.

Industrial   1 property / 150,099 sqft.
Model Homes (1)   84 homes / 248.412 sqft

 

Portfolio Value & Debt
Book Value  

$117.4 million (2)

Existing Secured Debt   $93.7 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

 

   Date      Real estate assets and lease intangibles, net 
Property Name  Acquired   Location  March 31, 2025   December 31, 2024 
Genesis Plaza (1)   August 2010   San Diego, CA  $7,273,346   $7,363,571 
Dakota Center (2)   May 2011   Fargo, ND   8,154,951    8,154,951 
Grand Pacific Center   March 2014   Bismarck, ND   8,380,905    8,413,926 
Arapahoe Center   December 2014   Centennial, CO   9,173,855    9,298,534 
Union Town Center (3)   December 2014   Colorado Springs, CO       8,922,943 
West Fargo Industrial   August 2015   Fargo, ND   6,531,693    6,599,953 
300 N.P.   August 2015   Fargo, ND   2,026,816    1,963,000 
Research Parkway (3)   August 2015   Colorado Springs, CO       2,220,284 
One Park Center (4)   August 2015   Westminster, CO   5,587,080    5,580,950 
Shea Center II (5)   December 2015   Highlands Ranch, CO   18,609,105    18,820,370 
Mandolin (6)   August 2021   Houston, TX   4,577,635    4,600,562 
Baltimore   December 2021   Baltimore, MD   8,185,279    8,241,456 
Commercial properties           78,500,665    90,180,500 
Model Home properties (7)   2019 - 2025   AZ, FL, TX, AL   38,865,350    37,416,000 
Total real estate assets and lease intangibles, net          $117,366,015   $127,596,500 

 

(1)

Genesis Plaza is owned by two tenants-in-common, NetREIT Genesis and NetREIT Genessis II, each of which own 57% and 43%, respectively, and we beneficially own an aggregate of 92.0%, based on our ownership of each entity. We have 100% ownership of NetREIT Genesis and 81.5% ownership of NetREIT Genesis II, and we have control of both entities. During July 2024, the Company completed a minority ownership conversion option as result of a death in a noncontrolling trust within NetREIT Genesis II. The Company issued the trust 78,215 shares of SQFT Series A Common Stock in exchange for their 36.4% ownership in NetREIT Genesis II, as per the original exchange agreement.

 

(2)

The non-recourse loan on the Dakota Center property matured on July 6, 2024. During October 2024, management has agreed with the lender to sell the property to settle the loan balance. Due to the uncertainties in the Fargo market, we have impaired the property’s book value and recorded an impairment charge of approximately $0.7 million as of September 30, 2024. During December 2024, the lender agreed to the broker the Company would use to sell the property to settle the non-recourse debt. As of March 31, 2025, the property was included in the real estate assets held for sale, net on the consolidated balance sheet. Any purchase offers will be subject to lender approval.

 

(3)

During February 2025, Union Town Center and Research Parkway were sold to a single buyer for a combined $16.95 million and recorded a net gain of approximately $4.2 million, net of closing costs. 

 

(4)

During the year ended December 31, 2023, we recorded a $2.0 million impairment charge for One Park Center that reflects management’s revised estimate of the fair market value based on sales comparable of like properties in the same geographical area as well as an evaluation of future cash flows or an executed purchase sale agreement. No additional impairment was deemed necessary during the three months ended March 31, 2025. 

 

(5)

On December 31, 2022, the lease for our largest tenant, Halliburton, expired. Halliburton was located in our Shea Center II property in Colorado, and made up approximately $536,080 of our annual base rent. Halliburton did not renew the lease and we placed approximately $1.1 million in a reserve account with our lender to cover future mortgage payments, if necessary, none of which has been used as of December 31, 2023. Our management team is working to fill the 45,535 square foot space and has leased approximately 54% of the space to other tenants and has reviewed various proposals for the remaining 46%. As of March 31, 2025, management is pursuing third party tenants who fit into our long-term plans, however, there is no guarantee we will be successful in signing new tenants.

 

(6)

A portion of the proceeds from the sale of Highland Court were used in like-kind exchange transactions pursued under Section 1031 of the Code for the acquisition of our Mandolin property. Mandolin is owned by NetREIT Palm Self-Storage LP, through its wholly owned subsidiary NetREIT Highland LLC, and the Company is the sole general partner and owns 61.3% of NetREIT Palm Self-Storage LP.

 

(7) Includes Model Homes listed as held for sale as of March 31, 2025 and December 31, 2024. During the three months ended March 31, 2025, we recorded an impairment charge for model homes totaling $26,943, which reflects the estimated sales prices for these specific model homes. The short hold period, less than two years, and the builder changing their model style after we purchased the homes, contributed to the lower than expected sales price.

 

 
 

 

MODEL HOMES PORTFOLIO

 

State 

No. of

Properties

 

Aggregate

Square

Feet

  

Approximate

% of Square

Feet

  

Current Base

Annual Rent

  

Approximate

% of

Aggregate

Annual Rent

 
Alabama  9   20,804    8.4%  $309,456    8.7%
Arizona  2   6,822    2.7    149,196    4.2 
Florida  2   5,337    2.2%   89,844    2.5%
Texas  71   215,449    86.7%  3,007,512    84.6%
Total  84   248,412    100.0%  $3,556,008    100.0%

 

 
 

 

CONSOLIDATED BALANCE SHEET

 

Presidio Property Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

 

   March 31,   December 31, 
   2025   2024 
    (unaudited)      
ASSETS          
Real estate assets and lease intangibles:          
Land  $16,036,702   $15,983,323 
Buildings and improvements   103,409,116    102,862,977 
Tenant improvements   16,488,963    16,488,066 
Lease intangibles   3,475,531    3,776,654 
Real estate assets and lease intangibles held for investment, cost   139,410,312    139,111,020 
Accumulated depreciation and amortization   (34,560,209)   (33,700,262)
Real estate assets and lease intangibles held for investment, net   104,850,103    105,410,758 
Real estate assets held for sale, net   12,515,912    22,185,742 
Real estate assets, net   117,366,015    127,596,500 
Other assets:          
Cash, cash equivalents and restricted cash   11,956,853    8,036,496 
Deferred leasing costs, net   1,431,607    1,666,135 
Goodwill   1,389,000    1,389,000 
Investment in Conduit Pharmaceuticals marketable securities (see Notes 2 & 9)   29,519    206,177 
Deferred tax asset   298,645    298,645 
Other assets, net (see Note 6)   2,953,277    3,376,697 
Total other assets   18,058,901    14,973,150 
TOTAL ASSETS (1)  $135,424,916   $142,569,650 
LIABILITIES AND EQUITY          
Liabilities:          
Mortgage notes payable, net  $81,525,487   $80,977,448 
Mortgage notes payable related to properties held for sale, net   12,217,060    21,116,646 
Mortgage notes payable, total net   93,742,547    102,094,094 
Accounts payable and accrued liabilities   3,794,229    3,290,170 
Accrued real estate taxes   1,070,006    1,972,477 
Dividends payable   192,232    194,784 
Lease liability, net   58,489    64,345 
Below-market leases, net   7,047    8,625 
Total liabilities   98,864,550    107,624,495 
           
Commitments and contingencies (see Note 10)          
Equity:          
Series D Preferred Stock, $0.01 par value per share; 1,000,000 shares authorized; 984,238 shares issued and outstanding (liquidation preference $25.00 per share) as of March 31, 2025 and 997,082 shares issued and outstanding as of December 31, 2024   9,842    9,971 
Series A Common Stock, $0.01 par value per share, shares authorized: 100,000,000; 12,834,317 shares and 12,834,317 shares were issued and outstanding at March 31, 2025 and December 31, 2024, respectively   128,343    128,343 
Additional paid-in capital   185,805,501    185,770,842 
Dividends and accumulated losses   (157,688,233)   (159,374,010)
Total stockholders’ equity before noncontrolling interest   28,255,453    26,535,146 
Noncontrolling interest   8,304,913    8,410,009 
Total equity   36,560,366    34,945,155 
TOTAL LIABILITIES AND EQUITY  $135,424,916   $142,569,650 

 

(1) As of March 31, 2025 and December 31, 2024, includes approximately $10.8 million and $11.4 million, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities.

 

 
 

 

CONSOLIDATED STATEMENT OF OPERATIONS

 

Presidio Property Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

 

   For the Three Months Ended March 31, 
   2025   2024 
Revenues:        
Rental income  $4,032,429   $4,639,726 
Fees and other income   92,755    150,335 
Total revenue   4,125,184    4,790,061 
Costs and expenses:          
Rental operating costs   1,612,642    1,563,577 
General and administrative   1,661,978    2,084,450 
Depreciation and amortization   1,244,104    1,351,018 
Impairment of goodwill and real estate assets   26,943    95,548 
Total costs and expenses   4,545,667    5,094,593 
Other income (expense):          
Interest expense - mortgage notes   (1,510,470)   (1,515,206)
Interest and other income, net   5,149    4,646 
Gain on sales of real estate, net   4,453,968    2,018,095 
Net loss in Conduit Pharmaceuticals marketable securities (see footnote 9)   (176,658)   (3,861,233)
Income tax (expense) benefit   25,409    (79,565)
Total other income (expense), net   2,797,398    (3,433,263)
Net (loss) income   2,376,915    (3,737,795)
Less: Income attributable to noncontrolling interests   (111,563)   (1,503,868)
Net income (loss) attributable to Presidio Property Trust, Inc. stockholders  $2,265,352   $(5,241,663)
Less: Preferred Stock Series D dividends   (579,575)   (522,032)
Net income (loss) attributable to Presidio Property Trust, Inc. common stockholders  $1,685,777   $(5,763,695)
           
Net income (loss) per share attributable to Presidio Property Trust, Inc. common stockholders:          
Basic & Diluted  $0.13   $(0.47)
           
Weighted average number of common shares outstanding - basic & dilutive   12,973,299    12,293,190 

 

 
 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

Presidio Property Trust, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

 

   For the Three Months Ended March 31, 
   2025   2024 
Cash flows from operating activities:          
Net income (loss)  $2,376,915    (3,737,795)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:          
Depreciation and amortization   1,244,104    1,351,018 
Stock compensation   229,502    541,921 
Gain on sale of real estate assets, net   (4,453,968)   (2,018,095)
Net loss in Conduit Pharmaceuticals fair value marketable securities   176,658    3,861,233 
Net loss (gain) in fair value marketable securities       560 
Impairment of goodwill and real estate assets   26,943    95,548 
Amortization of financing costs   68,923    90,080 
Amortization of below-market leases   (1,022)   (1,244)
Amortization of deferred leasing costs       1,936 
Straight-line rent adjustment   (84,822)   (91,806)
Changes in operating assets and liabilities:          
Other assets   234,327    347,695 
Accounts payable and accrued liabilities   966,006    (607,021)
Accrued real estate taxes   (902,471)   (700,798)
Net cash used in operating activities   (118,905)   (866,768)
Cash flows from investing activities:          
Real estate acquisitions   (4,270,192)   (2,238,497)
Additions to buildings and tenant improvements   (568,555)   (1,279,807)
Proceeds from sale of marketable securities       44,602 
Proceeds from sales of real estate, net   18,391,811    12,642,264 
Net cash provided by investing activities   13,553,064    9,168,562 
Cash flows from financing activities:          
Proceeds from mortgage notes payable, net of issuance costs   2,979,052    2,367,949 
Payment of debt issuance costs   (61,914)   (18,131)
Repayment of mortgage notes payable   (11,379,734)   (7,860,474)
Payment of deferred offering costs   (60,000)   (16,745)
Distributions to noncontrolling interests   (216,659)   (1,803,357)
Contributions from noncontrolling interests       200,000 
Repurchase of Series D Preferred Stock, at cost   (194,972)    
Dividends paid to Series D Preferred Stockholders   (579,575)   (522,032)
Net cash used in financing activities   (9,513,802)   (7,652,790)
Net (decrease) increase in cash equivalents and restricted cash   3,920,357    649,004 
Cash, cash equivalents and restricted cash - beginning of period   8,036,496    6,510,428 
Cash, cash equivalents and restricted cash - end of period  $11,956,853   $7,159,432 
Supplemental disclosure of cash flow information:          
Interest paid-mortgage notes payable  $1,335,280   $1,432,639 
Income taxes paid  $46,511   $ 
Non-cash financing activities:          
Paid building and tenant improvements from prior year  $(207,847)  $(295,567)
Unpaid building and tenant improvements  $   $48,207 
Dividends payable - Preferred Stock Series D  $192,232   $174,011 

 

 
 

 

EBITDAre RECONCILIATION

 

  

For the Three Months

Ended March 31,

 
   2025   2024 
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders  $1,685,777   $(5,763,695)
Adjustments          
Interest Expense   1,510,470    1,515,206 
Depreciation and Amortization   1,243,082    1,349,774 
Asset Impairment   26,943    95,548 
Net gain on sale of real estate   (4,453,968)   (2,018,095)
Net loss on marketable securities   176,658    3,861,793 
Income Taxes   (25,409)   79,565 
           
EBITDAre  $163,553   $(879,905)

 

 
 

 

FFO AND CORE FFO RECONCILIATION

 

  

For the Three Months

Ended March 31,

 
   2025   2024 
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders  $1,685,777   $(5,763,695)
Adjustments:          
Income attributable to noncontrolling interests   111,563    1,503,868 
Depreciation and amortization   1,244,104    1,351,018 
Amortization of above and below market leases, net   (1,022)   (1,244)
Impairment of real estate assets   26,943    95,548 
Loss on marketable securities   176,658    3,861,233 
Net gain on sale of real estate assets   (4,453,968)   (2,018,095)
FFO  $(1,209,945)  $(971,367)
Stock Based Compensation   229,502    541,921 
Core FFO  $(980,442)  $(429,445)
           
Weighted average number of common shares outstanding - basic and diluted   12,973,299    12,293,190 
           
Core FFO / Wgt Avg Share  $(0.076)  $(0.035)

 

 
 

 

SEGMENT DATA  

 

The following tables compare the Company’s segment activity and NOI and adjusted NOI for Model Home income to its results of operations and financial position as of and for the three months ended March 31, 2025 and 2024, respectively. The information for Corporate and Other are presented to reconcile back to the consolidated statement of operations, but is not considered a reportable segment.

 

   For the Three Months Ended March 31, 2025 
   Retail   Office/Industrial   Model Homes   Corporate and Other   Total 
                     
Rental revenue  $206,439   $2,467,551   $915,521   $   $3,589,511 
Recovery revenue   56,439    386,479            442,918 
Other operating revenue   400    62,362    (1,754)   31,747    92,755 
Total revenues   263,278    2,916,392    913,767    31,747    4,125,184 
                          
Rental operating costs   100,568    1,618,365    48,157    (154,448)   1,612,642 
Net Operating Income (NOI)   162,710    1,298,027    865,610    186,195    2,512,542 
                          
Gain on Sale - Model Homes           240,899        240,899 
Impairment of Model Homes           (26,943)       (26,943)
                          
Adjusted NOI  $162,710   $1,298,027   $1,079,566   $186,195   $2,726,498 

 

   For the Three Months Ended March 31, 2024 
                     
    Retail    Office/Industrial    Model Homes    Corporate and Other    Total 
                          
Rental revenue  $382,885   $2,364,141   $1,243,831   $   $3,990,857 
Recovery revenue   107,930    540,939            648,869 
Other operating revenue   62,574    56,440    25,120    6,201    150,335 
Total revenues   553,389    2,961,520    1,268,951    6,201    4,790,061 
                          
Rental operating costs   139,954    1,545,563    41,230    (163,170)   1,563,577 
Net Operating Income (NOI)   413,435    1,415,957    1,227,721    169,371    3,226,484 
                          
Gain on Sale - Model Home           2,018,095        2,018,095 
Impairment of Model Homes           (95,548)       (95,548)
                          
Adjusted NOI  $413,435   $1,415,957   $3,150,268   $169,371   $5,149,031 

 

 
 

 

   March 31,   December 31, 
Assets by Reportable Segment:  2025   2024 
Office/Industrial Properties:          
Land, buildings and improvements, net (1)  $73,912,734   $74,425,180 
Total assets (2)  $74,742,379   $76,292,662 
Model Home Properties:          
Land, buildings and improvements, net (1)  $38,865,349   $37,416,000 
Total assets (2)  $39,778,198   $38,166,964 
Retail Properties:          
Land, buildings and improvements, net (1)  $4,577,635   $15,743,789 
Total assets (2)  $4,772,995   $16,673,605 
Reconciliation to Total Assets:          
Total assets for reportable segments  $119,293,572   $131,133,231 
Corporate and other assets:          
Cash, cash equivalents and restricted cash   4,980,910    564,922 
Other assets, net   11,150,434    10,871,497 
Total Assets  $135,424,916   $142,569,650 

 

(1) Includes lease intangibles and the land purchase option related to property acquisitions.

 

(2) Includes land, buildings and improvements, cash, cash equivalents, and restricted cash, current receivables, deferred rent receivables and deferred leasing costs and other related intangible assets, all shown on a net basis.

 

 
 

 

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 by using FFO as defined by NAREIT and adjusting for certain other non-core items. We 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, other non-recuring expenses, 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.