Presidio Property Trust Narrows Losses Amid Asset Sales

TL;DR

**SQFTW is cleaning up its balance sheet with asset sales, but the core rental business is still struggling.**

AI Summary

Presidio Property Trust, Inc. (SQFTW) reported a net loss attributable to common stockholders of $1.86 million for the three months ended September 30, 2025, a significant improvement from the $6.65 million loss in the prior-year period. For the nine months ended September 30, 2025, the net loss was $6.03 million, substantially better than the $24.80 million loss in the same period of 2024. Total revenue decreased to $4.20 million for the three months ended September 30, 2025, from $4.72 million in 2024, and to $12.70 million for the nine months, down from $14.10 million. This revenue decline was primarily due to reduced rental income. The company saw a substantial decrease in net loss from Conduit Pharmaceuticals marketable securities, from $3.93 million in Q3 2024 to $212 in Q3 2025, and from $17.82 million to $184,672 for the nine-month periods. Real estate assets held for sale decreased from $22.19 million at December 31, 2024, to $7.44 million at September 30, 2025, indicating significant dispositions. The company also repurchased $1.59 million of Series A Common Stock and $327,787 of Series D Preferred Stock during the nine months ended September 30, 2025.

Why It Matters

Presidio Property Trust's ability to significantly reduce its net loss, despite a dip in rental income, suggests a strategic shift towards asset optimization and cost control. The substantial decrease in losses from Conduit Pharmaceuticals marketable securities removes a major drag on earnings, which is crucial for investor confidence. However, the ongoing decline in total revenue, driven by lower rental income, highlights challenges in its core real estate operations and competitive pressures. Investors should monitor whether asset sales are generating sufficient capital for reinvestment or merely covering operational shortfalls, impacting long-term growth and dividend sustainability.

Risk Assessment

Risk Level: medium — The company reported a net loss of $1.29 million for Q3 2025 and $3.96 million for the nine months ended September 30, 2025, indicating ongoing unprofitability. Total assets decreased from $142.57 million at December 31, 2024, to $127.81 million at September 30, 2025, a 10.3% reduction, partly due to asset sales, which could limit future revenue generation if not strategically reinvested. The decline in rental income from $4.64 million to $4.11 million for the three months ended September 30, 2025, suggests challenges in core operations.

Analyst Insight

Investors should closely evaluate the company's strategy for reinvesting proceeds from asset sales and improving core rental income. Given the ongoing net losses and declining total assets, a 'wait and see' approach is advisable until there's clear evidence of sustainable profitability and revenue growth in its core real estate portfolio.

Financial Highlights

debt To Equity

3.35

revenue

$4.20M

operating Margin

N/A

total Assets

$127.81M

total Debt

$93.72M

net Income

-$1.86M

eps

N/A

gross Margin

N/A

cash Position

$8.00M

revenue Growth

-11.02%

Revenue Breakdown

Key Numbers

• $1.86M — Net Loss Attributable to Common Stockholders (Q3 2025) (Improved from $6.65M loss in Q3 2024)
• $6.03M — Net Loss Attributable to Common Stockholders (9M 2025) (Improved from $24.80M loss in 9M 2024)
• $4.20M — Total Revenue (Q3 2025) (Decreased from $4.72M in Q3 2024)
• $12.70M — Total Revenue (9M 2025) (Decreased from $14.10M in 9M 2024)
• $212 — Net loss in Conduit Pharmaceuticals marketable securities (Q3 2025) (Significantly reduced from $3.93M in Q3 2024)
• $184,672 — Net loss in Conduit Pharmaceuticals marketable securities (9M 2025) (Significantly reduced from $17.82M in 9M 2024)
• $7.44M — Real estate assets held for sale, net (Sept 30, 2025) (Decreased from $22.19M at Dec 31, 2024, indicating asset dispositions)
• $1.59M — Repurchase of Series A Common Stock (9M 2025) (Part of financing activities)
• $327,787 — Repurchase of Series D Preferred Stock (9M 2025) (Part of financing activities)
• $127.81M — Total Assets (Sept 30, 2025) (Decreased from $142.57M at Dec 31, 2024)

Key Players & Entities

• Presidio Property Trust, Inc. (company) — registrant
• Conduit Pharmaceuticals (company) — investment in marketable securities
• Nasdaq Stock Market LLC (regulator) — exchange where securities are registered
• $1.86 million (dollar_amount) — net loss attributable to common stockholders for Q3 2025
• $6.65 million (dollar_amount) — net loss attributable to common stockholders for Q3 2024
• $6.03 million (dollar_amount) — net loss attributable to common stockholders for nine months ended September 30, 2025
• $24.80 million (dollar_amount) — net loss attributable to common stockholders for nine months ended September 30, 2024
• $4.20 million (dollar_amount) — total revenue for Q3 2025
• $4.72 million (dollar_amount) — total revenue for Q3 2024

FAQ

Risk Factors

• Marketable Securities Valuation [medium — financial]: The company experienced a significant reduction in net loss from Conduit Pharmaceuticals marketable securities, from $3.93 million in Q3 2024 to $212 in Q3 2025. For the nine-month period, the loss decreased from $17.82 million to $184,672. This volatility highlights the risk associated with the valuation and performance of these specific investments.
• Real Estate Asset Dispositions [medium — operational]: Real estate assets held for sale decreased substantially from $22.19 million at December 31, 2024, to $7.44 million at September 30, 2025. This indicates a strategic shift involving significant asset sales, which could impact future revenue streams and operational focus.
• Revenue Decline [medium — financial]: Total revenue for the three months ended September 30, 2025, was $4.20 million, down from $4.72 million in the prior year period. The nine-month revenue also declined to $12.70 million from $14.10 million. This trend, driven by reduced rental income, poses a risk to profitability and cash flow generation.
• Net Loss Attributable to Common Stockholders [medium — financial]: Despite an improvement, the company reported a net loss attributable to common stockholders of $1.86 million for Q3 2025 and $6.03 million for the nine months ended September 30, 2025. Continued losses, even if reduced, impact shareholder value and the ability to reinvest in the business.
• Leverage on Real Estate Assets [medium — financial]: The company carries significant mortgage notes payable, totaling $93.72 million as of September 30, 2025. A substantial portion of this ($10.44 million) is related to properties held for sale, indicating potential financial pressure or strategic deleveraging efforts.

Industry Context

Presidio Property Trust, Inc. operates as a REIT with a diversified portfolio including office, industrial, retail, and model home properties. The real estate sector is sensitive to economic cycles, interest rate changes, and tenant demand. Trends such as remote work impacting office demand and e-commerce influencing retail space continue to shape the industry.

Regulatory Implications

As a REIT, Presidio must comply with strict IRS regulations regarding income distribution (at least 90% of REIT taxable income) and asset holdings to maintain its tax-advantaged status. Failure to comply can result in corporate-level income tax, significantly impacting profitability.

What Investors Should Do

1. Monitor the impact of ongoing real estate asset dispositions on future revenue and profitability. The significant reduction in 'real estate assets held for sale' from $22.19M to $7.44M suggests a strategic shift that needs to be understood.
2. Analyze the drivers behind the reduced net loss from Conduit Pharmaceuticals marketable securities. While positive, the volatility in this segment warrants close observation.
3. Evaluate the company's strategy for managing its debt load, particularly the $93.72M in mortgage notes payable, in light of the revenue decline.
4. Assess the long-term implications of the revenue decline, primarily attributed to reduced rental income, on the company's ability to generate sustainable cash flows and cover operating expenses.

Key Dates

• 2025-09-30: End of Q3 2025 — Reporting period for the 10-Q, showing reduced net losses and revenue decline, with significant asset dispositions.
• 2025-12-31: End of Fiscal Year 2024 — Reference point for asset values, particularly real estate assets held for sale ($22.19M).

Glossary

REIT

Real Estate Investment Trust. A company that owns, operates, or finances income-producing real estate. (Presidio Property Trust, Inc. is structured as a REIT, which has specific tax and operational requirements.)

Conduit Pharmaceuticals marketable securities

Investments in securities issued by Conduit Pharmaceuticals that are readily tradable in the market. (Significant reduction in losses from these securities in the current period compared to the prior year, impacting the overall net loss.)

Real estate assets held for sale

Properties that management has committed to selling and are actively marketed at a price reasonable in relation to their current fair value. (A substantial decrease in these assets indicates active portfolio management and potential capital realization.)

Series A Common Stock / Series D Preferred Stock

Different classes of stock issued by the company, with varying rights and preferences. (The company repurchased shares of these classes, impacting equity structure and potentially reducing future dividend obligations.)

Variable Interest Entities (VIEs)

Entities for which the total equity is not sufficient to permit an entity to finance its activities without additional financial support from other parties, or where the equity investors do not have the characteristics of a voting interest. (The company consolidates VIEs, meaning their assets and liabilities are included in the company's financial statements, impacting total assets and liabilities.)

Year-Over-Year Comparison

Compared to the prior year, Presidio Property Trust, Inc. has shown a significant reduction in net losses, with Q3 losses down from $6.65M to $1.86M and nine-month losses from $24.80M to $6.03M. However, total revenue has declined, with Q3 revenue falling from $4.72M to $4.20M and nine-month revenue from $14.10M to $12.70M, primarily due to lower rental income. The company has also made substantial progress in divesting real estate assets held for sale, reducing their value from $22.19M to $7.44M.

Key Financial Figures

• $0.01 — ock , SQFT The Nasdaq Stock Market LLC $0.01 par value per share 9.375% Series D C
• $9.9 million — cember 31, 2024, includes approximately $9.9 million and $11.4 million, respectively, of ass
• $11.4 m — includes approximately $9.9 million and $11.4 million, respectively, of assets related
• $0.10 — stment post 1 for 10 reverse split from $0.10 to $0.01 — — 505 ( 96,206 ) 9

Filing Documents

• sqft20250930_10q.htm (10-Q) — 2262KB
• ex_854240.htm (EX-31.1) — 13KB
• ex_854241.htm (EX-31.2) — 12KB
• ex_854242.htm (EX-32.1) — 7KB
• 0001437749-25-034461.txt ( ) — 11503KB
• sqft-20250930.xsd (EX-101.SCH) — 79KB
• sqft-20250930_cal.xml (EX-101.CAL) — 57KB
• sqft-20250930_def.xml (EX-101.DEF) — 635KB
• sqft-20250930_lab.xml (EX-101.LAB) — 450KB
• sqft-20250930_pre.xml (EX-101.PRE) — 657KB
• sqft20250930_10q_htm.xml (XML) — 2477KB

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION: 5

FINANCIAL STATEMENTS

Item 1. FINANCIAL STATEMENTS: 5 Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 5 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 6 Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 7 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (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 36

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 46

Controls and Procedures

Item 4. Controls and Procedures 46

OTHER INFORMATION

Part II. OTHER INFORMATION 47

Legal Proceedings

Item 1. Legal Proceedings 47

Risk Factors

Item 1A. Risk Factors 47

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 47

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 49

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 49

Other Information

Item 5. Other Information 49

Exhibits

Item 6. Exhibits 50

Signatures

Signatures 51 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 model homes and/or an increase in operating costs; failure by any major tenant (or a subs

— 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, 2025 2024 (unaudited) ASSETS Real estate assets and lease intangibles: Land $ 16,625,237 $ 15,983,323 Buildings and improvements 105,024,265 102,862,977 Tenant improvements 17,338,795 16,488,066 Lease intangibles 3,475,531 3,776,654 Real estate assets and lease intangibles held for investment, cost 142,463,828 139,111,020 Accumulated depreciation and amortization ( 36,622,641 ) ( 33,700,262 ) Real estate assets and lease intangibles held for investment, net 105,841,187 105,410,758 Real estate assets held for sale, net 7,440,774 22,185,742 Real estate assets, net 113,281,961 127,596,500 Other assets: Cash, cash equivalents and restricted cash 8,002,915 8,036,496 Deferred leasing costs, net 1,378,568 1,666,135 Goodwill 1,389,000 1,389,000 Investment in Conduit Pharmaceuticals marketable securities (see Notes 2 & 9) 7,515 206,177 Deferred tax asset 298,645 298,645 Other assets, net (see Note 6) 3,450,281 3,376,697 Total other assets 14,526,924 14,973,150 TOTAL ASSETS (1) $ 127,808,885 $ 142,569,650 LIABILITIES AND EQUITY Liabilities: Mortgage notes payable, net $ 83,277,135 $ 80,977,448 Mortgage notes payable related to properties held for sale, net 10,442,278 21,116,646 Mortgage notes payable, total net 93,719,413 102,094,094 Accounts payable and accrued liabilities 3,043,157 3,290,170 Accrued real estate taxes 1,457,629 1,972,477 Dividends payable 190,393 194,784 Lease liability, net 46,373 64,345 Below-market leases, net 4,560 8,625 Total liabilities 98,461,525 107,624,495 Commitments and contingencies (see Note 10) Equity: Series D Preferred Stock, $ 0.01 par value per share; 1,000,000 shares authorized; 974,823 shares issued and outstanding (liquidation preference $ 25.00 per share) as of September 30, 2025 and 997,082 shares issued a

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) September 30, 2025 1. ORGANIZATION AND BASIS OF PRESENTATION 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 10 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, as of September 30, 2025 , 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". As of September 30, 2025 , Dubose Model Home Investors #202, LP and Dubose Model Home Investors #206, LP ha

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