Presidio Property Trust: Dakota Center Loan Settled by Sale

TL;DR

SQFT selling Dakota Center property to settle loan that matured July 6, 2024.

AI Summary

Presidio Property Trust, Inc. (NASDAQ: SQFT) filed its Q3 2024 10-Q report on November 19, 2024, for the period ending September 30, 2024. The company reported minimal earnings per share of $0.01 for the quarter. A significant event mentioned is the maturity of a non-recourse loan on the Dakota Center property on July 6, 2024, with management agreeing in October 2024 to sell the property to settle the loan.

Why It Matters

The settlement of the Dakota Center property loan through a sale indicates a move to resolve a maturing debt obligation, which could impact the company's asset base and financial structure.

Risk Assessment

Risk Level: medium — The company is dealing with a maturing loan and has agreed to sell a property to settle it, which introduces execution risk and potential impact on asset value.

Key Numbers

• $0.01 — EPS (Earnings per share for the quarter ending September 30, 2024.)
• July 6, 2024 — Loan Maturity Date (The non-recourse loan on the Dakota Center property matured on this date.)
• October 2024 — Property Sale Agreement (Management agreed to sell the Dakota Center property to settle the loan in this month.)

Key Players & Entities

• Presidio Property Trust, Inc. (company) — Filer of the 10-Q
• NASDAQ: SQFT (company) — Stock ticker for Presidio Property Trust, Inc.
• 20240930 (date) — End of the reporting period for the 10-Q
• 20241119 (date) — Filing date of the 10-Q
• $0.01 (dollar_amount) — Earnings per share for Q3 2024
• Dakota Center (location) — Property with a maturing loan
• July 6, 2024 (date) — Maturity date of the Dakota Center property loan
• October 2024 (date) — Month management agreed to sell the Dakota Center property

FAQ

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

• sqft20240930c_10q.htm (10-Q) — 1998KB
• ex_719889.htm (EX-31.1) — 12KB
• ex_719890.htm (EX-31.2) — 12KB
• ex_719891.htm (EX-32.1) — 7KB
• 0001437749-24-035719.txt ( ) — 9844KB
• sqft-20240930.xsd (EX-101.SCH) — 82KB
• sqft-20240930_cal.xml (EX-101.CAL) — 50KB
• sqft-20240930_def.xml (EX-101.DEF) — 662KB
• sqft-20240930_lab.xml (EX-101.LAB) — 473KB
• sqft-20240930_pre.xml (EX-101.PRE) — 679KB
• sqft20240930c_10q_htm.xml (XML) — 1623KB

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION: 5

FINANCIAL STATEMENTS

Item 1. FINANCIAL STATEMENTS: 5 Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023 5 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited) 6 Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited) 7 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (unaudited) 9

Notes to Consolidated Financial Statements (unaudited)

Notes to 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 31

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 41

Controls and Procedures

Item 4. Controls and Procedures 41

OTHER INFORMATION

Part II. OTHER INFORMATION 42

Legal Proceedings

Item 1. Legal Proceedings 42

Risk Factors

Item 1A. Risk Factors 42

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 42

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 43

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 43

Other Information

Item 5. Other Information 43

Exhibits

Item 6. Exhibits 44

Signatures

Signatures 45 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 Consolidated Balance Sheets September 30, December 31, 2024 2023 (Unaudited) ASSETS Real estate assets and lease intangibles: Land $ 17,525,059 $ 21,660,644 Buildings and improvements 116,284,225 133,829,416 Tenant improvements 18,493,786 17,820,948 Lease intangibles 3,475,531 4,110,139 Real estate assets and lease intangibles held for investment, cost 155,778,601 177,421,147 Accumulated depreciation and amortization ( 37,710,504 ) ( 38,725,356 ) Real estate assets and lease intangibles held for investment, net 118,068,097 138,695,791 Real estate assets held for sale, net 13,347,113 5,459,993 Real estate assets, net 131,415,210 144,155,784 Other assets: Cash, cash equivalents and restricted cash 7,199,448 6,510,428 Deferred leasing costs, net 1,582,820 1,657,055 Goodwill 1,574,000 1,574,000 Investment in Conduit Pharmaceuticals marketable securities (see Notes 2 & 9) 481,219 18,318,521 Deferred tax asset 346,762 346,762 Other assets, net (see Note 6) 3,245,771 3,400,088 Total other assets 14,430,020 31,806,854 TOTAL ASSETS $ 145,845,230 $ 175,962,638 LIABILITIES AND EQUITY Liabilities: Mortgage notes payable, net $ 91,758,522 $ 103,685,444 Mortgage notes payable related to properties held for sale, net 10,560,697 4,027,829 Mortgage notes payable, total net 102,319,219 107,713,273 Accounts payable and accrued liabilities 3,497,588 4,770,845 Accrued real estate taxes 1,656,919 1,953,087 Dividends payable 195,310 174,011 Lease liability, net 70,122 16,086 Below-market leases, net 9,535 13,266 Total liabilities 107,748,693 114,640,568 Commitments and contingencies (see Note 10) Equity: Series D Preferred Stock, $ 0.01 par value per share; 1,000,000 shares authorized; 1,000,000 shares issued and outstanding (liquidation preference $ 25.00 per share) as of September 30, 2024 and 890,946 shares is

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) September 30, 2024 1. ORGANIZATION Organization. Presidio Property Trust, Inc. ("we", "our", "us" or the "Company") is an internally-managed real estate investment trust ("REIT"), with holdings in office, industrial, retail and model home properties. We were incorporated in the State of California on September 28, 1999, and in August 2010, we reincorporated as a Maryland corporation. In October 2017, we changed our name from "NetREIT, Inc.," to "Presidio Property Trust, Inc." Through Presidio Property Trust, Inc., its subsidiaries, and its partnerships, we own 12 commercial properties in fee interest, two of which we own as a partial interest in various affiliates, in which we serve as general partner, member and/or manager, and a special purpose acquisition company (until deconsolidation in September 2023) as noted below. The Company or one of its affiliates operates the following partnerships during the periods covered by these consolidated financial statements: The Company is the sole general partner and limited partner in two limited partnerships (NetREIT Palm Self-Storage LP and NetREIT Casa Grande LP), both of which, at September 30, 2024 , had ownership interests in an entity that owns income producing real estate. The Company refers to these entities collectively as the "NetREIT Partnerships". The Company is the general and limited partner in six limited partnerships that purchase model homes and lease them back to homebuilders as commercial tenants (Dubose Model Home Investors #202, LP, Dubose Model Home Investors #203, LP, Dubose Model Home Investors #204, LP, Dubose Model Home Investors #205, LP, Dubose Model Home Investors #206, LP, and Dubose Model Home Investors #207, LP). The Company refers to these entities collectively as the "Model Home Partnerships". The Company has determined that the limited partnerships in which it owns less than 100% should be included in the Company's consolida

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