EX-99.2 3 ex99-2.htm

 

Exhibit 99.2

 

 

 

SUPPLEMENTAL FINANCIAL INFORMATION

 

As of June 30, 2024

 

 

 

 

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 Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as amended to date (“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 12 commercial properties with a book value of approximately $92.6 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

 

($ in000’s) Property Location  Sq., Ft.   Date Acquired   Year Property Constructed   Purchase Price (1)   Occupancy   Percent Ownership   Mortgage On property 
Office/Industrial Properties:                                   
Genesis Plaza, San Diego, CA (2)   57,807    08/10   1989   $10,000    100.0%   76.4%  $5,876 
Dakota Center, Fargo, ND (3)   119,554    05/11   1982    9,575    46.1%   100.0%   9,091 
Grand Pacific Center, Bismarck, ND (4)   94,943    03/14   1976    5,350    89.7%   100.0%   6,341 
Arapahoe Center, Colorado Springs, CO   79,023    12/14   2000    11,850    100.0%   100.0%   7,336 
West Fargo Industrial, West Fargo, ND   150,099    08/15   1998/2005    7,900    100.0%   100.0%   5,750 
300 N.P., West Fargo, ND   34,517    08/15   1922    3,850    66.4%   100.0%    
One Park Centre, Westminster CO   69,174    08/15   1983    9,150    81.1%   100.0%   5,982 
Shea Center II, Highlands Ranch, CO   121,306    12/15   2000    25,325    69.0%   100.0%   16,808 
Baltimore, Baltimore, MD   31,752    12/21   2006    8,892    100.0%   100.0%   5,670 
Total Office/Industrial Properties   758,175             $91,892    82.0%       $62,854 
                                    
Retail Properties:                                   
Union Town Center, Colorado Springs, CO   44,042    12/14   2003    11,212    88.1%   100.0%   7,791 
Research Parkway, Colorado Springs, CO   10,700    08/15   2003    2,850    100.0%   100.0%   1,558 
Mandolin, Houston, TX (5)   10,500    08/21   2021    4,892    100.0%   61.3%   3,541 
Total Retail Properties   65,242             $18,954    90.1%       $12,890
                                    
    823,417              110,846    82.6%       $75,744

 

(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 expensed when incurred.
(2) Genesis Plaza is owned by two tenants-in-common, each of which own 57% and 43%, respectively, and we beneficially own an aggregate of 76.4%, based on our ownership percentages of each tenant-in-common.
(3)

The loan on the Dakota Center matured on July 6, 2024. Management has been in negotiations with the special servicer of the loan in modifying and/or extending the loan or possibly selling the building. As of August 12, 2024, the Company and the lender have not yet agreed to the final outcome. The lender is expected to visit the property at the end of August.

(4) Grand Pacific Center, Bismarck, ND, signed a major lease with KLJ Engineering on December 7, 2022 for approximately 33,296 usable square feet, a term of 122 months, and starting annualized rent of $532,736. KLJ Engineering moved into the building during December 2023, and rent commenced on February 28, 2024.
(5) 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.

 

 

 

 

MODEL HOMES PORTFOLIO

 

Geographic Region  No. of Properties   Aggregate Square Feet   Approximate % of Square Feet   Current Base Annual Rent   Approximate of Aggregate % Annual Rent 
Southeast   4    9,875    4.1%  $170,256    5.1%
Southwest   76    231,434    95.9%   3,181,860    94.9%
Total   80    241,309    100.0%  $3,352,116    100.0%

 

 
 

 

CONSOLIDATED BALANCE SHEET

 

Presidio Property Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

 

   June 30,   December 31, 
   2024   2023 
    (Unaudited)      
ASSETS          
Real estate assets and lease intangibles:          
Land  $19,409,817   $21,660,644 
Buildings and improvements   126,439,142    133,829,416 
Tenant improvements   18,823,656    17,820,948 
Lease intangibles   3,776,654    4,110,139 
Real estate assets and lease intangibles held for investment, cost   168,449,269    177,421,147 
Accumulated depreciation and amortization   (39,951,401)   (38,725,356)
Real estate assets and lease intangibles held for investment, net   128,497,868    138,695,791 
Real estate assets held for sale, net   2,394,363    5,459,993 
Real estate assets, net   130,892,231    144,155,784 
Other assets:          
Cash, cash equivalents and restricted cash   8,534,881    6,510,428 
Deferred leasing costs, net   1,565,169    1,657,055 
Goodwill   1,574,000    1,574,000 
Investment in Conduit Pharmaceuticals marketable securities (see Notes 2 & 9)   4,413,989    18,318,521 
Deferred tax asset   346,762    346,762 
Other assets, net (see Note 6)   3,211,251    3,400,088 
Total other assets   19,646,052    31,806,854 
TOTAL ASSETS  $150,538,283   $175,962,638 
LIABILITIES AND EQUITY          
Liabilities:          
Mortgage notes payable, net  $99,489,045   $103,685,444 
Mortgage notes payable related to properties held for sale, net   1,636,341    4,027,829 
Mortgage notes payable, total net   101,125,386    107,713,273 
Accounts payable and accrued liabilities   3,501,779    4,770,845 
Accrued real estate taxes   1,097,854    1,953,087 
Dividends payable   195,310    174,011 
Lease liability, net   -    16,086 
Below-market leases, net   10,779    13,266 
Total liabilities   105,931,108    114,640,568 
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 June 30, 2024 and 890,946 shares issued and outstanding as of December 31, 2023   10,000    8,909 
Series A Common Stock, $0.01 par value per share, 100,000,000 shares authorized; 12,418,693 shares and 12,265,061 shares were issued and outstanding at June 30, 2024 and December 31, 2023, respectively   124,187    122,651 
Additional paid-in capital   184,402,052    182,331,408 
Dividends and accumulated losses   (149,663,851)   (131,508,785)
Total stockholders’ equity before noncontrolling interest   34,872,388    50,954,183 
Noncontrolling interest   9,734,787    10,367,887 
Total equity   44,607,175    61,322,070 
TOTAL LIABILITIES AND EQUITY  $150,538,283   $175,962,638 

 

 
 

 

CONSOLIDATED STATEMENT OF OPERATIONS

 

Presidio Property Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

 

   For the Three Months Ended June 30,   For the Six Months Ended June 30, 
   2024   2023   2024   2023 
Revenues:                
Rental income  $4,262,942   $4,329,588   $8,682,049   $8,271,641 
Fees and other income   323,599    214,284    694,554    393,723 
Total revenue   4,586,541    4,543,872    9,376,603    8,665,364 
Costs and expenses:                    
Rental operating costs   1,492,495    1,399,159    3,056,072    2,974,149 
General and administrative   2,202,916    1,813,184    4,287,366    3,777,804 
Depreciation and amortization   1,351,370    1,368,829    2,702,388    2,702,403 
Impairment of real estate assets   101,245        196,793     
Total costs and expenses   5,148,026    4,581,172    10,242,619    9,454,356 
Other income (expense):                    
Interest expense - mortgage notes   (1,525,845)   (1,336,415)   (3,041,051)   (2,204,182)
Interest and other income, net   5,206    398,085    9,852    1,140,201 
Gain on sales of real estate, net   811,903    1,119,952    2,829,998    1,537,289 
Net change in Conduit Pharmaceuticals marketable securities (see footnote 9)   (10,027,433)       (13,888,667)    
Income tax expense   (81,021)   (349,074)   (160,586)   (497,527)
Total other (expense) income, net   (10,817,190)   (167,452)   (14,250,454)   (24,219)
Net loss   (11,378,675)   (204,752)   (15,116,470)   (813,211)
Less: Income attributable to noncontrolling interests   (469,365)   (1,094,852)   (1,973,233)   (1,481,933)
Net loss attributable to Presidio Property Trust, Inc. stockholders  $(11,848,040)  $(1,299,604)  $(17,089,703)  $(2,295,144)
Less: Preferred Stock Series D dividends   (543,331)   (532,285)   (1,065,363)   (1,067,733)
Net loss attributable to Presidio Property Trust, Inc. common stockholders  $(12,391,371)  $(1,831,889)  $(18,155,066)  $(3,362,877)
                     
Net loss per share attributable to Presidio Property Trust, Inc. common stockholders:                    
Basic & Diluted  $(1.00)  $(0.15)  $(1.47)  $(0.28)
                     
Weighted average number of common shares outstanding - basic & dilutive   12,428,794    11,839,359    12,360,992    11,837,020 

 

 
 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

Presidio Property Trust, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

 

   For the Six Months Ended June 30, 
   2024   2023 
Cash flows from operating activities:          
Net loss  $(15,116,470)  $(813,211)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   2,702,388    2,702,403 
Stock compensation   885,029    540,501 
Bad debt expense       32,729 
Gain on sale of real estate assets, net   (2,829,998)   (1,537,289)
Net change in Conduit Pharmaceuticals fair value marketable securities   13,888,667     
Net change in fair value marketable securities   560    (190,327)
Net change in fair value SPAC Trust Account       (939,522)
Impairment of real estate assets   196,793     
Amortization of financing costs   214,071    187,303 
Amortization of below-market leases   (2,487)   (2,487)
Straight-line rent adjustment   (95,603)   (240,007)
Changes in operating assets and liabilities:          
Other assets   588,867    (399,159)
Accounts payable and accrued liabilities   (1,440,070)   239,297 
Accounts payable and accrued liabilities for the SPAC       (281,723)
Accrued real estate taxes   (855,233)   (902,217)
Net cash used in operating activities   (1,863,486)   (1,603,709)
Cash flows from investing activities:          
Real estate acquisitions   (5,740,918)   (12,932,128)
Additions to buildings and tenant improvements   (1,213,936)   (1,001,836)
Investment in marketable securities       (1,826,458)
Proceeds from sale of marketable securities   60,467    1,951,095 
Investment of SPAC IPO proceeds into Trust Account       (389,942)
Withdrawals from Trust Account for SPAC taxes       792,480 
Withdrawals from Trust Account for Redemption of SPAC Shares       114,068,280 
Deferred leasing costs   3,872    3,872 
Proceeds from sales of real estate, net   20,058,923    4,590,187 
Net cash provided by investing activities   13,168,408    105,255,550 
Cash flows from financing activities:          
Proceeds from mortgage notes payable, net of issuance costs   10,663,089    12,848,849 
Repayment of mortgage notes payable   (17,110,515)   (6,417,278)
Payment of deferred offering costs   (349,589)    
Distributions to noncontrolling interests, net   (2,606,333)   (1,961,310)
Redemption of SPAC shares       (114,068,280)
Issuance of Series D Preferred Stock, net of offering costs   1,195,855     
Repurchase of Series A Common Stock, at cost   (7,613)    
Repurchase of Series D Preferred Stock, at cost       (211,872)
Dividends paid to Series D Preferred Stockholders   (1,065,363)   (1,067,733)
Dividends paid to Series A Common Stockholders       (590,151)
Net cash used in financing activities   (9,280,469)   (111,467,775)
Net change in cash, cash equivalents and restricted cash   2,024,453    (7,815,934)
Cash, cash equivalents and restricted cash - beginning of period   6,510,428    16,516,725 
Cash, cash equivalents and restricted cash - end of period  $8,534,881   $8,700,791 
Supplemental disclosure of cash flow information:          
Interest paid-mortgage notes payable  $2,810,393   $2,351,642 
Non-cash investing activities:          
Private warrants from Conduit Pharmaceuticals  $156,600   $ 
Non-cash financing activities:          
Accrued excise tax on January 24, 2023 SPAC redemptions  $   $1,140,683 
Dividends payable - Preferred Stock Series D  $195,310   $177,145 

 

 
 

 

EBITDAre RECONCILIATION

 

  

For the Three Months

Ended June 30,

  

For the Six

Months Ended June,

 
   2024   2023   2024   2023 
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders  $(12,391,371)  $(1,831,889)  $(18,155,066)  $(3,362,877)
Adjustments                    
Interest Expense   1,525,845    1,336,415    3,041,051    2,204,182 
Depreciation and Amortization   1,350,126    1,367,585    2,699,901    2,699,916 
Asset Impairment   101,245        196,793     
Net loss (gain) on sale of real estate   (811,903)   (1,119,952)   (2,829,998)   (1,537,289)
Net change in Conduit marketable securities   10,027,433        13,888,667     
Income Taxes   81,021    349,074    160,586    497,527 
                     
EBITDAre  $(117,604)  $101,233   $(998,067)  $501,459 

 

 
 

 

FFO AND CORE FFO RECONCILIATION

 

  

For the Three Months

Ended June 30,

  

For the Six

Months Ended June,

 
   2024   2023   2024   2023 
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders  $(12,391,371)  $(1,831,889)  $(18,155,066)  $(3,362,877)
Adjustments:                    
Income attributable to noncontrolling interests   469,365    1,094,852    1,973,233    1,481,933 
Depreciation and amortization   1,351,370    1,368,829    2,702,388    2,702,403 
Amortization of above and below market leases, net   (1,244)   (1,244)   (2,487)   (2,487)
Impairment of real estate assets   101,245        196,793     
Net change in Conduit marketable securities   10,027,433        13,888,667     
Loss (gain) on sale of real estate assets, net   (811,903)   (1,119,952)   (2,829,998)   (1,537,289)
FFO  $(1,255,105)  $(489,404)  $(2,226,471)  $(718,317)
Restricted stock compensation   343,107    260,845    885,029    540,501 
Cost associated with Zuma Capital Management   469,552        565,534     
Core FFO  $(442,445)  $(228,558)  $(775,908)  $(177,816)
                     
Weighted average number of common shares outstanding - basic and diluted   12,428,794    11,839,359    12,360,992    11,837,020 
                     
Core FFO / Wgt Avg Share  $(0.036)  $(0.019)  $(0.063)  $(0.015)
                     
Quarterly Dividends / Share  $   $0.022   $   $0.023 

 

 
 

 

SEGMENT DATA

 

 

   June 30,   December 31, 
Assets by Reportable Segment:  2024   2023 
Office/Industrial Properties:          
Land, buildings and improvements, net (1)  $76,768,551   $77,472,724 
Total assets (2)  $77,076,636   $78,140,372 
Model Home Properties:          
Land, buildings and improvements, net (1)  $38,253,777   $50,790,147 
Total assets (2)  $39,538,041   $51,456,292 
Retail Properties:          
Land, buildings and improvements, net (1)  $15,863,447   $15,877,190 
Total assets (2)  $16,541,354   $16,539,399 
Reconciliation to Total Assets:          
Total assets for reportable segments  $133,156,031   $146,136,063 
Other unallocated assets:          
Cash, cash equivalents and restricted cash   2,469,278    277,143 
Other assets, net   14,912,974    29,549,432 
Total Assets  $150,538,283   $175,962,638 

 

(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.