Presidio Property Trust Files 10-Q for Q1 2024

TL;DR

<b>Presidio Property Trust filed its Q1 2024 10-Q, highlighting asset values, impairment charges, and upcoming loan maturities.</b>

AI Summary

Presidio Property Trust, Inc. (SQFTW) filed a Quarterly Report (10-Q) with the SEC on May 14, 2024. Presidio Property Trust, Inc. reported $1.0 million in total assets for Q1 2024. The company recorded a $0.1 million impairment charge for four model homes during Q1 2024. Interest rate on a loan increased to 6.70% as of March 31, 2024. The lease for the largest tenant, Halliburton, expired on December 31, 2022, impacting $1.1 million in annual base rent. The loan on Dakota Center matures in July 2024, and management is seeking an extension.

Why It Matters

For investors and stakeholders tracking Presidio Property Trust, Inc., this filing contains several important signals. The company is facing challenges with leasing out a significant vacant space previously occupied by its largest tenant, Halliburton, which could impact future revenue. Upcoming loan maturities, such as the Dakota Center loan in July 2024, require proactive management engagement to secure extensions and favorable terms.

Risk Assessment

Risk Level: medium — Presidio Property Trust, Inc. shows moderate risk based on this filing. The company faces medium risk due to the expiration of its largest tenant's lease, the need to secure extensions for maturing loans, and potential impacts from interest rate changes on its debt.

Analyst Insight

Presidio Property Trust should focus on securing new tenants for the vacant space and proactively negotiating loan extensions to mitigate financial risks.

Key Numbers

• 1,000,000 — Total Assets (As of March 31, 2024)
• 0.01 — EPS (Q1 2024)
• 0.01 — EPS (Q1 2023)
• 0.1 — Impairment Charge (For model homes in Q1 2024)
• 6.70% — Interest Rate (As of March 31, 2024)
• 1.1 — Annual Base Rent (Impacted by Halliburton lease expiration)
• 45,535 — Square Feet (Vacant space from Halliburton lease)
• July 2024 — Loan Maturity (Dakota Center)

Key Players & Entities

• Presidio Property Trust, Inc. (company) — Filer name
• Halliburton (company) — Largest tenant
• 6.70% (dollar_amount) — Interest rate
• July 2024 (date) — Dakota Center loan maturity
• December 31, 2022 (date) — Halliburton lease expiration
• $1.1 million (dollar_amount) — Annual base rent impacted by Halliburton's lease expiration
• March 31, 2024 (date) — Reporting period end date
• $0.1 million (dollar_amount) — Impairment charge for model homes

FAQ

Risk Factors

• Tenant Concentration Risk [high — financial]: The expiration of the lease for the largest tenant, Halliburton, which accounted for approximately $1.1 million in annual base rent, poses a significant risk to revenue.
• Loan Maturity and Refinancing Risk [medium — financial]: The Dakota Center loan matures in July 2024, and the company is seeking an extension, indicating potential refinancing challenges or increased costs.
• Interest Rate Risk [medium — financial]: An increase in interest rates to 6.70% on a loan could increase the company's borrowing costs.
• Model Home Impairment [low — operational]: A $0.1 million impairment charge was recorded for four model homes due to lower-than-expected sales prices, influenced by short hold periods and changing builder styles.

Key Financial Figures

• $0.01 — ock , SQFT The Nasdaq Stock Market LLC $0.01 par value per share 9.375% Series D C

Filing Documents

• sqft20240331c_10q.htm (10-Q) — 1321KB
• ex_656214.htm (EX-31.1) — 12KB
• ex_656215.htm (EX-31.2) — 12KB
• ex_656216.htm (EX-32.1) — 7KB
• 0001437749-24-016619.txt (&nbsp;) — 7827KB
• sqft-20240331.xsd (EX-101.SCH) — 71KB
• sqft-20240331_cal.xml (EX-101.CAL) — 48KB
• sqft-20240331_def.xml (EX-101.DEF) — 576KB
• sqft-20240331_lab.xml (EX-101.LAB) — 419KB
• sqft-20240331_pre.xml (EX-101.PRE) — 593KB
• sqft20240331c_10q_htm.xml (XML) — 1218KB

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION: 5

FINANCIAL STATEMENTS

Item 1. FINANCIAL STATEMENTS: 5 Condensed Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023 5 Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (unaudited) 6 Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2024 and 2023 (unaudited) 7 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (unaudited) 9 Notes to Condensed Consolidated Financial Statements (unaudited) 10

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 30

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 38

Controls and Procedures

Item 4. Controls and Procedures 38

OTHER INFORMATION

Part II. OTHER INFORMATION 39

Legal Proceedings

Item 1. Legal Proceedings 39

Risk Factors

Item 1A. Risk Factors 39

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 39

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 39

Other Information

Item 5. Other Information 39

Exhibits

Item 6. Exhibits 40

Signatures

Signatures 41 2 Table of Contents CAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS This report 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 this report and in our other filings with the Securities and Exchange Commission (the "SEC"). 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, results of operations and other financial and operating information. Forward-looking statements included in this report include, but are not limited to, statements regarding purchases and sales of properties, plans for financing and refinancing our properties, the adequacy of our capital resources, changes to the markets in which we operate, our business plans and strategies, and our payment of dividends. When used in this report, 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. Important factors that may cause actual results to differ from projections include, but are not limited to: inherent risks associated with real estate investments and with the real estate industry; significant competition may decrease or prevent increases in our properties' occupancy and rental rates and may reduce the value of our properties; a decrease in demand for commercial space and/or an increase in operating costs; failure by any major tenant (or a substantial number o

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements

ITEM 1. Financial Statements Presidio Property Trust, Inc. and Subsidiaries Condensed Consolidated Balance Sheets March 31, December 31, 2024 2023 (Unaudited) ASSETS Real estate assets and lease intangibles: Land $ 19,716,839 $ 21,660,644 Buildings and improvements 126,800,920 133,829,416 Tenant improvements 18,695,226 17,820,948 Lease intangibles 3,776,654 4,110,139 Real estate assets and lease intangibles held for investment, cost 168,989,639 177,421,147 Accumulated depreciation and amortization ( 38,983,073 ) ( 38,725,356 ) Real estate assets and lease intangibles held for investment, net 130,006,566 138,695,791 Real estate assets held for sale, net 5,254,952 5,459,993 Real estate assets, net 135,261,518 144,155,784 Other assets: Cash, cash equivalents and restricted cash 7,159,432 6,510,428 Deferred leasing costs, net 1,563,551 1,657,055 Goodwill 1,574,000 1,574,000 Investment in Conduit Pharmaceuticals marketable securities (see Notes 2 & 9) 14,457,288 18,318,521 Deferred tax asset 346,762 346,762 Other assets, net (see Note 6) 3,115,782 3,400,088 Total other assets 28,216,815 31,806,854 TOTAL ASSETS $ 163,478,333 $ 175,962,638 LIABILITIES AND EQUITY Liabilities: Mortgage notes payable, net $ 98,599,984 $ 103,685,444 Mortgage notes payable related to properties held for sale, net 3,692,713 4,027,829 Mortgage notes payable, total net 102,292,697 107,713,273 Accounts payable and accrued liabilities 4,076,683 4,792,034 Accrued real estate taxes 1,252,289 1,953,087 Dividends payable 174,011 174,011 Lease liability, net 8,090 16,086 Below-market leases, net 12,022 13,266 Total liabilities 107,815,792 114,661,757 Equity: Series D Preferred Stock, $ 0.01 par value per share; 1,000,000 shares authorized; 890,946 shares issued and outstanding (liquidation preference $ 25.00 per share) as of March 31, 2024 and 890,946 shares issued and outstanding as of December 31, 2023

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View this 10-Q filing on SEC EDGAR