8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 30, 2021 (March 30, 2021)

PRESIDIO PROPERTY TRUST, INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland	001-34049	33-0841255
__________	__________	__________
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

4995 Murphy Canyon Road, Suite 300

San Diego, California 92123

(Address of Principal Executive Offices, Including Zip Code)

____________________

(760) 471-8536

(Registrant’s Telephone Number, Including Area Code)

___________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Series A Common Stock, $0.01 par value per share	SQFT	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

                                                                                                                                                                                                                                                                                                         Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

Press Release

On March 30, 2021, Presidio Property Trust, Inc. (the "Company") issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2020 and made the press release available on its website, www.PresidioPT.com.  A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein. 

The Company also made available on its website a financial supplement containing financial data of the Company (“Supplemental Financial Information”) for the fourth quarter and year ended December 31, 2020 (“Q4-2020 and Y/E 2020”), and such Supplemental Financial Information is attached hereto as Exhibit 99.2 and is incorporated by reference herein.

The information in this Item 2.02 of this Current Report on Form 8-K (“Form 8-K”), including the information contained in the exhibits, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 7.01 Regulation FD Disclosure

The supplemental information furnished by the Company and posted to its website as described above under Item 2.02 is hereby incorporated by reference into this Item 7.01.

Item 9.01	Financial Statements and Exhibits.
(d)	Exhibits
99.1	Press Release dated March 30, 2021
99.2	Supplemental Financial Information for Q4-2020 and Y/E 2020
104	Cover Page Interactive Data File (embedded with the inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  March 30, 2021	PRESIDIO PROPERTY TRUST, INC.
	By:          /s/ Adam Sragovicz
	Adam Sragovicz
	Chief Financial Officer

EX-99.1

Exhibit 99.1

Presidio Property Trust, Inc.

Reports Results for the Fourth Quarter and Year Ended December 31, 2020

San Diego, California, March 30, 2021 – Presidio Property Trust, Inc. (Nasdaq: SQFT) (“Presidio” or the “Company”), an internally managed, diversified REIT, with holdings in office, industrial, retail, and model home properties, today reported financial results for its fourth quarter and year ended December 31, 2020.

"We are pleased to report our first full-year earnings as a publicly traded company," said Jack Heilbron, President and Chief Executive Officer. "We have a lot to be proud of in 2020, but we are especially pleased with our portfolio of diverse assets in a variety of geographies, as it validated the success of our strategy, even during the COVID-19 crisis. We collected 98% of billed rents in 2020," said Heilbron.

“In spite of many COVID-19 challenges, occupancy at our 15 same store properties increased 2.4% as of December 31, 2020, as compared to the same 15 stores at December 31, 2019,” noted Gary Katz, Senior Vice President of Asset Management. “Leasing activity remained robust throughout the year.  We inked new and renewal leases for over 280,000 square feet, a strong showing for our properties, in particular, and for the commercial real estate markets where they are located.”

2020 Highlights

• Core FFO for the year was $1,483,382, or approximately $0.16 per fully diluted share;

• Collections were 98% of the billed rent, including the effects of COVID-19-related tenant arrangements;

• Occupancy closed the year at 84.1%, a decrease of only 0.4% compared to 84.5% in 2019;

• Execution of over 283,000 square feet of 15 new and 47 renewal leases; and

• Paid a dividend of $0.10 per share on Series A Common Stock in the fourth quarter.

Year Ended December 31, 2020 Financial Results

Net loss attributable to the Company’s common stockholders for the year ended December 31, 2020 was approximately $7.7 million, or $0.85 per basic and diluted share, compared to a net loss of $610,000 or $0.07 per basic and diluted share for the year ended December 31, 2019. The increase in net loss attributable to the Company’s common stockholders was a result of a decrease in revenues of $4.3 million in 2020 compared to 2019 due to the sale of properties. Property sales reduced the Company’s leverage, lowering mortgage notes and notes payable by $27 million in 2020 compared to 2019.

Funds from Operations or FFO (non-GAAP) for 2020 was approximately $1,483,000 compared to approximately $2,374,000 for 2019. A reconciliation of FFO to net loss, the most directly comparable GAAP financial measure, is attached to this press release.

1

2020 Acquisitions and Dispositions

During 2020, the Company:

● Sold Centennial Tech Center on February 5, 2020 for approximately $15.0 million and the Company recognized a loss of approximately $0.9 million.

● Sold Union Terrace on March 13, 2020 for approximately $11.3 million and the Company recognized a gain of approximately $0.7 million.

● Sold one of four Executive Office Park buildings on December 2, 2020 for approximately $2.3 million and the Company recognized a loss of approximately $75,000.

● Sold 46 model homes for approximately $18.1 million and the Company recognized a gain of approximately $1.6 million.

● Acquired 28 model homes and leased them back to the homebuilders under triple net leases. The purchase price for the properties was $10.2 million. The properties were acquired utilizing cash payments of $3.1 million and mortgage notes of $7.1 million.

2

Subsequent Events

Dispositions

We sold the following properties subsequent to December 31, 2020:

•         Waterman Plaza was sold on January 28, 2021 for approximately $3.5 million.

•         Garden Gateway was sold on February 19, 2021 for approximately $11.2 million.

Notes Payable

As of December 31, 2020, the outstanding principal balance on the promissory note to the Polar Multi-Strategy Master Fund was approximately $7.7 million. During the first quarter of 2021, prior to its March 31, 2021 maturity, the Polar note was paid in full, from available cash on hand and proceeds of property sales.

Dividends

On February 23, 2021, our Board of Directors declared a dividend of $0.101 per share on Series A Common Stock, payable on March 16, 2021 to stockholders of record as of March 9, 2021.

Webcast

Presidio is scheduled to hold a webcast and conference call at 1:30 p.m., Pacific Time, on Tuesday, March 30, 2021 to discuss the Company’s financial results. To register, click on the Fourth Quarter 2020 Earnings Call link under the "Presentations" section of the "Investor" area of the Company's website at https://www.presidioPT.com.

3

About Presidio Property Trust, Inc.

Presidio is an internally managed, diversified REIT. We have interests in approximately 110 model home properties located in four states, with the majority located in Texas and Florida, which are leased back to homebuilders on a triple-net basis. Our commercial real estate portfolio consists of approximately 1 million square feet comprised of 13 properties: nine office properties, one industrial property and three retail properties. Our commercial portfolio is located in Southern California, Colorado, and North Dakota, and we are currently considering property acquisitions in a variety of additional markets across the United States. Our commercial property tenant base is diversified, which helps limit our exposure to any single industry in which our tenants operate. This geographical clustering of our real estate portfolio enables us to minimize operating costs and leverage efficiencies by managing a number of properties utilizing minimal overhead and staff. For more information on Presidio, please visit the Company’s website at https://www.PresidioPT.com.

4

Definitions   

Non-GAAP Financial Measures

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 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 and 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 equity 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 such 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 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 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.

Same Store Net Operating Income (“Same Store NOI”) – Same Store NOI is calculated as the NOI attributable to the properties continuously owned and operated for the entirety of the reporting periods presented. The Company’s definition of Same Store NOI excludes properties that were not stabilized during both of the applicable reporting periods. These exclusions may include, but are not limited to, acquisitions, dispositions and properties undergoing repositioning or significant renovations.

We believe Same Store NOI is an important measure of comparison because it allows for comparison of operating results of stabilized properties owned and operated for the entirety of both applicable periods and therefore eliminates variations caused by acquisitions, dispositions or repositioning during such periods. Other REITs may calculate Same Store NOI differently and our calculation should not be compared to that of other REITs.

5

Safe Harbor Disclosure

This press release contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and other federal securities laws. Forward looking statements are statements that are not historical, including statements regarding management’s intentions, beliefs, expectations, representations, plans or predictions of the future, and are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “will,” “should” and “could.” Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward looking statements. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors” section of the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2021, and in the Company’s other documents filed with the SEC, copies of which are available on the SEC’s website, www.sec.gov.

Contacts

Presidio Property Trust, Inc.

 Lowell Hartkorn, Investor Relations

+1-760-471-8536 x 1244

lhartkorn@presidiopt.com

TraDigital IR

Kevin McGrath
+1-646-418-7002
kevin@tradigitalir.com

MJ Clyburn
+1-917-327-6847
clyburn@tradigitalir.com

6

Presidio Property Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

	December 31,			December 31,
	2020			2019
ASSETS
Real estate assets and lease intangibles:
Land	$	18,827,000		$	19,844,739
Buildings and improvements		115,409,423			118,446,764
Tenant improvements		11,960,018			10,696,181
Lease intangibles		4,110,139			4,230,706
Real estate assets and lease intangibles held for investment, cost		150,306,580			153,218,390
Accumulated depreciation and amortization		(26,551,789	)		(22,482,219	)
Real estate assets and lease intangibles held for investment, net		123,754,791			130,736,171
Real estate assets held for sale, net		42,499,176			69,470,449
Real estate assets, net		166,253,967			200,206,620
Cash, cash equivalents and restricted cash		11,540,917			10,391,275
Deferred leasing costs, net		1,927,951			2,053,927
Goodwill		2,423,000			2,423,000
Other assets, net		3,422,781			5,709,586
TOTAL ASSETS	$	185,568,616		$	220,784,408
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	94,664,266		$	99,996,306
Mortgage notes payable related to properties held for sale, net		25,365,430			42,396,686
Mortgage notes payable, total net		120,029,696			142,392,992
Note payable, net		7,500,086			12,238,692
Accounts payable and accrued liabilities		5,126,199			5,673,815
Accrued real estate taxes		2,548,686			2,987,601
Lease liability, net		102,323			560,188
Below-market leases, net		139,045			309,932
Total liabilities		135,446,035			164,163,220
Commitments and contingencies (Note 10)
Equity:
Series A Common Stock, $0.01 par value, shares authorized: 100,000,000; 9,508,363 and 8,881,842 shares were both issued and outstanding at December 31, 2020 and December 31, 2019, respectively		95,038			88,818
Additional paid-in capital		156,463,146			152,129,120
Dividends and accumulated losses		(121,674,505	)		(113,037,144	)
Total stockholders' equity before noncontrolling interest		34,883,679			39,180,794
Noncontrolling interest		15,238,902			17,440,394
Total equity		50,122,581			56,621,188
TOTAL LIABILITIES AND EQUITY	$	185,568,616		$	220,784,408

7

Presidio Property Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

	For the Year Ended December 31,
	2020			2019
Revenues:
Rental income	$	23,444,119		$	27,467,410
Fees and other income		907,673			1,173,701
Total revenue		24,351,792			28,641,111
Costs and expenses:
Rental operating costs		8,818,283			10,410,574
General and administrative		5,751,754			5,268,315
Depreciation and amortization		6,274,321			7,364,688
Impairment of real estate assets		1,730,851			—
Total costs and expenses		22,575,209			23,043,577
Other income (expense):
Interest expense-Series B preferred stock		—			(2,226,101	)
Interest expense-mortgage notes		(6,097,834	)		(7,337,423	)
Interest expense - note payable		(2,715,233	)		(1,086,122	)
Interest and other income (expense), net		(20,636	)		141,306
Gain on sales of real estate, net		1,245,460			6,319,272
Gain on extinguishment of government debt		451,785			—
Deferred offering costs		(530,639	)		—
Acquisition costs		—			(24,269	)
Income tax expense		(370,884	)		(611,263	)
Total other income (expense), net		(8,037,981	)		(4,824,600	)
Net (loss) income		(6,261,398	)		772,934
Less: Loss attributable to noncontrolling interests		(1,412,507	)		(1,383,140	)
Net loss attributable to Presidio Property Trust, Inc. common stockholders	$	(7,673,905	)	$	(610,206	)
Basic and diluted loss per common share	$	(0.85	)	$	(0.07	)
Weighted average number of common shares outstanding - basic and diluted		9,023,914			8,862,958

8

Presidio Property Trust, Inc. and Subsidiaries

Reconciliation of Net Loss to FFO, Core FFO

(Unaudited)

	For the Year Ended December 31,
	2020		2019
Net loss attributable to Presidio Property Trust, Inc. common stockholders	$	(7,673,905)	$	(610,206)
Adjustments:
Income attributable to noncontrolling interests		1,412,507		1,383,140
Depreciation and amortization		6,274,321		7,364,688
Amortization of above and below market leases, net		(120,204)		(130,529)
Impairment of real estate assets		1,730,851		—
Loss (gain) on sale of real estate assets, net		(1,245,460)		(6,319,272)
FFO	$	378,110	$	1,687,821
Restricted stock compensation		1,105,272		686,133
Core FFO	$	1,483,382	$	2,373,954

9

Presidio Property Trust, Inc. and Subsidiaries

Same Store Net Operating Income - Commercial Properties

(Unaudited)

	For the Year Ended December 31,						Variance
	2020			2019			$			%
Rental revenues	$	19,627,351		$	19,961,964		$	(334,613	)	-1.7%
Rental operating costs	8,618,676			8,480,847			137,829			1.6%
Net operating income	$	11,008,675		$	11,481,117		$	(472,442	)	-4.1%
Operating Ratios:
Number of same properties	15			15
Same-property occupancy, end of period	83.2		%	80.8		%				2.4%
Same-properties operating costs as a percentage of total revenues	43.9		%	42.4		%				1.4%

10

EX-99.2

Exhibit 99.2

SUPPLEMENTAL FINANCIAL INFORMATION

As of December 31, 2020

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 30, 2021 (“Annual 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, 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 a self-managed real estate company focused on commercial real estate opportunities in often overlooked and regionally dominant markets
■	The Company acquires 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 15 commercial properties with a book value of approximately $123.7 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)

(1) The Company holds partial ownership interests in several entities which own model home properties (2) includes book value of model homes

COMMERCIAL PORTFOLIO

Property Location ($ in 000s)	Sq. Ft.		Date Acquired	Year Property Constructed		Purchase Price (1)		Occupancy			Percent Ownership			Mortgage Outstanding
Office/Industrial Properties:
Garden Gateway, Colorado Springs, CO (2)		115,052	03/07	1982/2006		$	15,126		76.4	%		100.0	%	$	5,862
Executive Office Park, Colorado Springs, CO (3)		49,864	07/08		2000		10,126		97.7	%		100.0	%		2,986
Genesis Plaza, San Diego, CA (4)(5)		57,807	08/10		1989		10,000		74.7	%		76.4	%		6,276
Dakota Center, Fargo, ND		119,434	05/11		1982		9,575		86.0	%		100.0	%		9,900
Grand Pacific Center, Bismarck, ND		93,058	04/14		1976		5,350		74.2	%		100.0	%		3,738
Arapahoe Service Center II, Centennial, CO		79,023	12/14		2000		11,850		100.0	%		100.0	%		7,932
West Fargo Industrial, West Fargo, ND		150,030	08/15	1998/2005			7,900		82.0	%		100.0	%		4,263
300 N.P., West Fargo, ND		34,517	08/15		1922		3,850		72.8	%		100.0	%		2,273
One Park Centre, Westminster, CO		69,174	08/15		1983		9,150		84.8	%		100.0	%		6,385
Highland Court, Centennial, CO (6)		93,536	08/15		1984		13,050		64.5	%		84.5	%		6,275
Shea Center II, Highlands Ranch, CO		121,301	12/15		2000		25,325		91.2	%		100.0	%		17,728
Total Office/Industrial Properties		998,016				$	121,302		82.3	%				$	73,618
Retail Properties:
World Plaza, San Bernardino, CA		55,810	09/07		1974		7,650		100.0	%		100.0	%		5,803
Waterman Plaza, San Bernardino, CA (7)		21,170	08/08		2008		7,164		85.9	%		100.0	%		3,208
Union Town Center, Colorado Springs, CO		44,042	12/14		2003		11,212		100.0	%		100.0	%		8,316
Research Parkway, Colorado Springs, CO		10,700	8/15		2003		2,850		100.0	%		100.0	%		1,760
Total Retail Properties		131,722				$	28,876		97.7	%				$	19,087
Total Commercial Properties		1,129,738				$	150,178		84.1	%				$	92,705

(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 recognized as expense when incurred.

(2) This property is classified as held for sale as of December 31, 2020 and was sold during February 2021 for $11.2 million.

(3) One of four buildings within this property was sold as of December 31, 2020.

(4) Approximately 9,224 square feet, or 16.0% of this property, is occupied by us as our corporate offices and related parties.

(5) This property is owned by two tenants-in-common, each of which owns 57% and 43%, respectively, and we beneficially own an aggregate interest of 76.4%.

(6) This property is owned by two tenants-in-common, of which we own approximately 60% and 52%, respectively, and we beneficially own an aggregate interest of 84.5%.

(7) This property is classified as held for sale as of December 31, 2020 and was sold during January 2021 for $3.5 million.

MODEL HOMES PORTFOLIO

Region	No. of Properties		Aggregate Square Feet		Approximate % of Aggregate Square Feet			Current Annual Base Rent		Approximate % of Aggregate Annual Rent			Purchase Price		Current Mortgage Balance
Southwest		97		290,702		84.7	%	$	2,822,928		81.1	%	$	36,677,542	$	23,580,196
Southeast		16		37,374		10.9	%		447,192		12.8	%		5,595,806		3,205,532
Midwest		2		6,602		1.9	%		99,276		2.9	%		1,103,000		711,265
East		1		2,395		0.7	%		30,636		0.9	%		331,200		-
Northeast		2		6,153		1.8	%		80,844		2.3	%		898,250		586,363
		118		343,226		100	%	$	3,480,876		100	%	$	44,605,798	$	28,083,356

CONSOLIDATED BALANCE SHEET

	December 31,			December 31,
	2020			2019
ASSETS
Real estate assets and lease intangibles:
Land	$	18,827,000		$	19,844,739
Buildings and improvements		115,409,423			118,446,764
Tenant improvements		11,960,018			10,696,181
Lease intangibles		4,110,139			4,230,706
Real estate assets and lease intangibles held for investment, cost		150,306,580			153,218,390
Accumulated depreciation and amortization		(26,551,789	)		(22,482,219	)
Real estate assets and lease intangibles held for investment, net		123,754,791			130,736,171
Real estate assets held for sale, net		42,499,176			69,470,449
Real estate assets, net		166,253,967			200,206,620
Cash, cash equivalents and restricted cash		11,540,917			10,391,275
Deferred leasing costs, net		1,927,951			2,053,927
Goodwill		2,423,000			2,423,000
Other assets, net		3,422,781			5,709,586
TOTAL ASSETS	$	185,568,616		$	220,784,408
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	94,664,266		$	99,996,306
Mortgage notes payable related to properties held for sale, net		25,365,430			42,396,686
Mortgage notes payable, total net		120,029,696			142,392,992
Note payable, net		7,500,086			12,238,692
Accounts payable and accrued liabilities		5,126,199			5,673,815
Accrued real estate taxes		2,548,686			2,987,601
Lease liability, net		102,323			560,188
Below-market leases, net		139,045			309,932
Total liabilities		135,446,035			164,163,220
Commitments and contingencies (Note 10)
Equity:
Series A Common Stock, $0.01 par value, shares authorized: 100,000,000; 9,508,363 and 8,881,842 shares were both issued and outstanding at December 31, 2020 and December 31, 2019, respectively		95,038			88,818
Additional paid-in capital		156,463,146			152,129,120
Dividends and accumulated losses		(121,674,505	)		(113,037,144	)
Total stockholders' equity before noncontrolling interest		34,883,679			39,180,794
Noncontrolling interest		15,238,902			17,440,394
Total equity		50,122,581			56,621,188
TOTAL LIABILITIES AND EQUITY	$	185,568,616		$	220,784,408

CONSOLIDATED STATEMENT OF OPERATIONS

	For the Year Ended December 31,
	2020			2019
Revenues:
Rental income	$	23,444,119		$	27,467,410
Fees and other income		907,673			1,173,701
Total revenue		24,351,792			28,641,111
Costs and expenses:
Rental operating costs		8,818,283			10,410,574
General and administrative		5,751,754			5,268,315
Depreciation and amortization		6,274,321			7,364,688
Impairment of real estate assets		1,730,851			—
Total costs and expenses		22,575,209			23,043,577
Other income (expense):
Interest expense-Series B preferred stock		—			(2,226,101	)
Interest expense-mortgage notes		(6,097,834	)		(7,337,423	)
Interest expense - note payable		(2,715,233	)		(1,086,122	)
Interest and other income (expense), net		(20,636	)		141,306
Gain on sales of real estate, net		1,245,460			6,319,272
Gain on extinguishment of government debt		451,785			—
Deferred offering costs		(530,639	)		—
Acquisition costs		—			(24,269	)
Income tax expense		(370,884	)		(611,263	)
Total other income (expense), net		(8,037,981	)		(4,824,600	)
Net (loss) income		(6,261,398	)		772,934
Less: Loss attributable to noncontrolling interests		(1,412,507	)		(1,383,140	)
Net loss attributable to Presidio Property Trust, Inc. common stockholders	$	(7,673,905	)	$	(610,206	)
Basic and diluted loss per common share	$	(0.85	)	$	(0.07	)
Weighted average number of common shares outstanding - basic and diluted		9,023,914			8,862,958

CONSOLIDATED STATEMENT OF CASH FLOWS

	For the Year Ended December 31,
	2020			2019
Cash flows from operating activities:
Net (loss) income	$	(6,261,398	)	$	772,934
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		6,274,321			7,364,688
Stock compensation		1,105,272			686,133
Bad debt expense (recoveries)		77,898			(32,544	)
Gain on sale of real estate assets, net		(1,245,460	)		(6,319,272	)
Impairment of real estate assets		1,730,851			—
Accretion of original issue discount		1,013,405			386,595
Amortization of financing costs		1,287,430			965,239
Amortization of above-market leases		50,682			55,466
Amortization of below-market leases		(170,887	)		(185,995	)
Straight-line rent adjustment		108,998			(63,895	)
Changes in operating assets and liabilities:
Other assets		1,957,641			1,035,806
Accounts payable and accrued liabilities		(1,796,421	)		(767,440	)
Accrued real estate taxes		(438,915	)		(106,779	)
Net cash provided by operating activities		3,693,417			3,790,936
Cash flows from investing activities:
Real estate acquisitions		(10,161,613	)		(13,037,562	)
Additions to buildings and tenant improvements		(2,834,373	)		(6,393,711	)
Additions to deferred leasing costs		(175,828	)		(661,401	)
Proceeds from sales of real estate, net		40,849,654			32,073,721
Net cash provided by investing activities		27,677,840			11,981,047
Cash flows from financing activities:
Proceeds from mortgage notes payable, net of issuance costs		14,152,838			15,494,715
Proceeds from government debt relief		451,785			—
Repayment of mortgage notes payable		(36,808,331	)		(23,176,581	)
Proceeds from note payable, net of issuance cost of $1.1 million		—			11,479,237
Repayment of note payable		(6,324,401	)		—
Payment of extension costs, note payable		(351,025	)		—
Redemption of mandatorily redeemable preferred stock		—			(16,900,000	)
Payment of deferred offering costs		(45,016	)		—
(Distributions) contributions to noncontrolling interests, net		(2,366,009	)		331,603
Issuance of stock for Initial Public Offering, net of underwriters fees		2,050,000			—
Repurchase of common stock		(18,000	)		(227,428	)
Dividends paid to stockholders		(963,456	)		(2,158,469	)
Net cash used in financing activities		(30,221,615	)		(15,156,923	)
Net increase in cash equivalents and restricted cash		1,149,642			615,060
Cash, cash equivalents and restricted cash - beginning of period		10,391,275			9,776,215
Cash, cash equivalents and restricted cash - end of period	$	11,540,917		$	10,391,275
Supplemental disclosure of cash flow information:
Interest paid-Series B preferred stock	$	—		$	1,859,672
Interest paid-mortgage notes payable	$	5,892,025		$	6,442,750
Interest paid-notes payable	$	778,414		$	713,262
Non-cash financing activities:
Issuance of stock for limited partnership interests	$	1,247,990		$	—
Unpaid deferred financing costs	$	83,659		$	—

EBITDA RECONCILIATION

	For the Years Ended December 31,
	2020			2019
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders	$	(7,673,905	)	$	(610,206	)
Adjustments:
Interest Expense		8,813,067			10,649,646
Depreciation and Amortization		6,274,321			7,364,688
Asset Impairments		1,730,851			-
Net Gain on Sales of RE		(1,245,460	)		(6,319,272	)
Gain Extinguishment of Government Debt		(451,785	)		-
Income Taxes		370,884			611,263
EBITDAre	$	7,817,973		$	11,696,119

FFO AND CORE FFO RECONCILIATION

	For the Years Ended December 31,
	2020			2019
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders	$	(7,673,905	)	$	(610,206	)
Adjustments:
Income attributable to noncontrolling interests		1,412,507			1,383,140
Depreciation and amortization		6,274,321			7,364,688
Amortization of above and below market leases, net		(120,204	)		(130,529	)
Impairment of real estate assets		1,730,851			-
Gain on sale of real estate assets		(1,245,460	)		(6,319,272	)
FFO	$	378,110		$	1,687,821
Stock Based Compensation		1,105,272			686,133
Core FFO	$	1,483,382		$	2,373,954

SAME STORE ANALYSIS

	For the Years Ended December 31,						Variance
	2020			2019			$			%
Rental revenues	$	19,627,351		$	19,961,964		$	(334,613	)		(1.7	)%
Rental operating costs		8,618,676			8,480,847			137,829			1.6	%
Net operating income	$	11,008,675		$	11,481,117		$	(472,442	)		(4.1	)%
Operating Ratios:
Number of same properties		15			15						-
Occupancy, end of period		83.2	%		80.8	%					2.4	%
Operating costs as a percentage of total revenues		43.9	%		42.5	%					1.4	%

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 and 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 equity 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 such 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 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.

Same Store Net Operating Income (“Same Store NOI”) – Same Store NOI, a non-GAAP measure, is calculated as the NOI attributable to the properties continuously owned and operated for the entirety of the reporting periods presented. The Company’s definition of Same Store NOI excludes properties that were not stabilized during both of the applicable reporting periods. These exclusions may include, but are not limited to, acquisitions, dispositions and properties undergoing repositioning or significant renovations.

The Company evaluates the performance of its same-store property operating results based upon net operating income from continuing operations, which is a non-GAAP supplemental financial measure. The Company defines NOI as operating revenues (rental income, tenant reimbursements and other operating income) less property and related expenses (property operating expenses, real estate taxes, insurance and provision for bad debt) less interest expense. NOI excludes certain items that are not considered to be controllable in connection with the management of an asset such as non-property income and expenses, depreciation and amortization, asset management fees and corporate general and administrative expenses. The Company believes that net income is the GAAP measure that is most directly comparable to NOI; however, NOI should not be considered as an alternative to net income as the primary indicator of operating performance as it excludes the items described above. 

We believe Same Store NOI, a non-GAAP measure, is an important measure of comparison because it allows for comparison of operating results of stabilized properties owned and operated for the entirety of both applicable periods and therefore eliminates variations caused by acquisitions, dispositions or repositioning during such periods. Other REITs may calculate Same Store NOI differently and our calculation should not be compared to that of other REITs.

XML

Document And Entity Information	Mar. 30, 2021
Document Information [Line Items]
Entity, Registrant Name	PRESIDIO PROPERTY TRUST, INC.
Document, Type	8-K
Document, Period End Date	Mar. 30, 2021
Entity, Incorporation, State or Country Code	MD
Entity, File Number	001-34049
Entity, Tax Identification Number	33-0841255
Entity, Address, Address Line One	4995 Murphy Canyon Road, Suite 300
Entity, Address, City or Town	San Diego
Entity, Address, State or Province	CA
Entity, Address, Postal Zip Code	92123
City Area Code	760
Local Phone Number	471-8536
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Series A Common Stock
Trading Symbol	SQFT
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0001080657