EX-99.1 2 ex99-1.htm EX-99.1

 

Exhibit 99.1

 

 

Presidio Property Trust, Inc. Announces Earnings for

 

the Year Ended December 31, 2025

 

San Diego, California, March 27, 2026 – Presidio Property Trust, Inc. (Nasdaq: SQFT, SQFTP, SQFTW) (the “Company”), an internally managed, diversified real estate investment trust (“REIT”), today reported earnings for its year ended December 31, 2025.

 

“The Model Home Segment continued to perform well throughout the year. We remain focused on purchasing models within the Sunbelt states, which we believe have continued upside potential. Our acquisitions in 2025 executed that plan. Despite challenges in the general resale market, our model sales performed well. Our resale portfolio remains an attractive option for homebuyers given its unique combination of upgrades and features, compared to typical construction,” said Steve Hightower, President of the Model Home Division.

 

“Our tenant retention and renewal activity during 2025 was very strong, resulting in 88% of expiring space renewing, including 84% of our expiring office leases. This demonstrates underlying strength in strategically located assets within the office sector.” said Gary Katz, the Company’s Chief Investment Officer.

 

The Year Ended December 31, 2025, Financial Results

 

Net loss attributable to the Company’s common stockholders for the year ended December 31, 2025 was approximately $10.5 million, or $8.59 per basic and diluted share, compared to a net loss of approximately $27.9 million, or ($22.50) per basic and diluted share for the year ended December 31, 2024. The change in net income attributable to the Company’s common stockholders was a result of:

 

  Total revenue was approximately $16.8 million for the year ended December 31, 2025 compared to approximately $18.9 million for the same period in 2024, a decrease of approximately $2.1 million or 11.2%. As of December 31, 2025, we had approximately $108.6 million in net real estate assets including 80 model homes, compared to approximately $127.6 million in net real estate assets including 78 model homes on December 31, 2024. The average number of model homes held during the years ended December 31, 2025 and 2024 was 79 and 94, respectively. The change in revenue is directly related to the decrease in commercial real estate rental income during the current period, from the sale of our two commercial properties on February 6, 2025.
  Rental operating costs were approximately $6.2 million for the year ended December 31, 2025 compared to approximately $6.3 million for the same period in 2024, a decrease of approximately $0.1 million or 1.6%. Rental operating costs as a percentage of total revenue were 36.6% and 33.1% for the years ended December 31, 2025 and 2024, respectively, as office property expenses continue to increase, specifically insurance costs. As of December 31, 2025 our model home assets made up 33.8% of our total real estate assets, which is up from 29.3% as of December 31, 2024, and our gross revenue from model home assets represented approximately 23.5%of our total revenue. This percentage is expected to increase in 2026 as the percentage of our model home real estate assets has increased, with the sale of Dakota Center in 2026 and the status of Shea Center II; however, if we purchase additional properties during 2026, our rental operating costs could increase. As for our commercial properties, we expect operating costs to decrease by $2.5 million as a result of the Dakota Center sale and the loss of Shea Center II.

 

 

 

 

  General and administrative (“G&A”) expenses were approximately $5.7 million for the year ended December 31, 2025, compared to approximately $7.5 million for the same period in 2024, representing a decrease of approximately $1.8 million or 24.2%. As a percentage of total revenue, our general and administrative costs were approximately 33.9% and 39.8% for the years ended December 31, 2025 and 2024, respectively. G&A expenses comparatively decreased in 2025, largely due to the one-time nature of the 2024 annual meeting and settlement with Zuma Capital and certain individuals and entities affiliated or associated with Zuma Capital Management, LLC (“Zuma Capital”). The comparative decline was also due to additional consulting fees, higher proxy solicitation fees, and legal fees in 2024, all of which decreased by an aggregate of approximately $0.6 million in 2025 as compared to 2024. Additionally, employee, ex-officer and board costs, including stock compensation and bonus accruals increased during the year ended December 31, 2024 by approximately $0.5 million.
  During the year ended December 31, 2025, the Company sold 20 model homes for approximately $9.8 million, net of closing costs, and the Company recognized a gain of approximately $1.0 million. Additionally, on February 7, 2025, the Company sold two commercial properties, Union Town Center and Research Parkway, to a single buyer for approximately $15.9 million, net of selling costs, and recognized $4.5 million net of closing costs. For the period ended December 31, 2024, the Company sold 51 model homes for approximately $24.8 million and the Company recognized a gain of approximately $3.4 million.
  During the year ended December 31, 2025, we recognized a non-cash impairment charge of approximately $6.4 million on our real estate assets. Of the $6.4 million impairment for the year, approximately$6.0 million was related to our commercial properties Shea Cener II and Dakota Center, approximately $0.3 million was related to model homes, and approximately $0.1 million was related to goodwill impairment. The impairment on Shea Center II was primarily related to suboptimal occupancy levels and the near term conditions of the Denver market conditions, while the new impairment charges for the model homes reflect the estimated and actual sales prices for these specific model homes.
  Interest expense, including amortization of deferred finance charges, was approximately $6.1 million for the year ended December 31, 2025. This value is unchanged from the $6.1 million in interest expense incurred for December 31, 2024. As of December 31, 2025 we carried total debt of $92.1 million which reflects a decrease of 9.8% from the year ended December 31, 2024. Simultaneously, the weighted average of our interest expenses increased from 5.63% as of December 31, 2024 to 6.16% for the year ended December 31, 2025. We expect these costs to decrease for 2026, as approximately $1.3 million of our current interest expenses were driven by Shea Center II and Dakota Center.

 

FFO (non-GAAP) totaled approximately $(3.8 million) and $(3.4 million) for the years ended December 31, 2025 and 2024, respectively. A reconciliation of FFO to net loss, the most directly comparable GAAP financial measure, is attached to this press release. 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.

 

We believe Core FFO (non-GAAP) provides a useful metric in comparing operations between reporting periods and in assessing the sustainability of our ongoing operating performance. Core FFO decreased by about $1.3 million, from approximately $(1.4 million) for the year ended December 31, 2024, to approximately $(2.7 million) for the year ended December 31, 2025. A reconciliation of Core FFO to net income, the most directly comparable GAAP financial measure, is attached to this press release.

 

Acquisitions and Dispositions for the year ended December 31, 2025:

 

Acquisitions during the year ended December 31, 2025:

 

We acquired 22 Model Home Properties and leased them back to the homebuilders under triple net leases during the year ended December 31, 2025. The purchase price for these properties was approximately $9.4 million. The purchase price consisted of cash payments of approximately $2.8 million and mortgage notes of approximately $6.6 million.

 

Dispositions during the year ended December 31, 2025:

 

20 model homes for approximately $9.8 million, net of sales costs, and the Company recognized a gain of approximately $1.0 million.

 

 

 

 

On February 6, 2025, the Company sold two commercial properties, Union Town Center and Research Parkway, to a single buyer for approximately $15.9 million, net of selling costs, and recognized a net gain of approximately $4.5 million net of closing costs.

 

Segment Income during the year ended December 31, 2025:

 

The following tables compare the Company’s segment activity and NOI and adjusted NOI for Model Home income to its results of operations and financial position as of and for the year ended December 31, 2025. The line items listed in the below NOI tables include the significant expense considered by the CODM for cash allocations on future investments. The Other Non-Segment & Consolidating Items represent corporate activity, the investment in Conduit Pharmaceutical, and other eliminating items for consolidation. The information for Corporate and Other are presented to reconcile back to the consolidated statement of operations, but is not considered a reportable segment. This includes the loss on Conduit marketable securities.

 

The following tables compare the Company’s segment activity to its results of operations and financial position as of and for the year ended December 31, 2025:

 

   For the Year Ended December 31, 2025 
   Retail   Office/Industrial   Model Homes   Corporate and Other   Total 
                     
Rental revenue  $487,161   $9,585,303   $3,952,162   $   $14,024,626 
Recovery revenue   56,439    2,389,853            2,446,292 
Other operating revenue   400    257,414    5,776    80,200    343,790 
Total revenues   544,000    12,232,570    3,957,938    80,200    16,814,708 
                          
Rental operating costs   115,047    6,423,862    212,817    (593,674)   6,158,052 
Net Operating Income (NOI)   428,953    5,808,708    3,745,121    673,874    10,656,656 
                          
Gain on Sale - Model Homes           950,434        950,434 
Impairment of Model Homes           (339,609)       (339,609)
                          
Adjusted NOI  $428,953   $5,808,708   $4,355,946   $673,874   $11,267,481 

 

The CODM reviews on a regular basis the GAAP performance of each segment, including the significant segment expenses reported for GAAP shown in the table below. Our significant segment expenses include consolidated expense categories presented in our consolidated statements of operations, as well as rental operating costs. This information is provided to the CODM and factors into the CODM’s decision making for company-wide strategy. The following tables compare the Company’s segment activity and to its results of GAAP operations and financial position as of and for the year ended December 31, 2025. The information for Corporate and Other are presented to reconcile back to the consolidated statement of operations, but is not considered a reportable segment as noted above.

 

   For the Year Ended December 31, 2025 
   Retail   Office/Industrial   Model Homes   Corporate and Other   Total 
Revenues:                         
Rental income  $543,600   $11,975,156   $3,952,162   $   $16,470,918 
Fees and other income   400    257,414    5,776    80,200    343,790 
Total revenue   544,000    12,232,570    3,957,938    80,200    16,814,708 
Costs and expenses:                         
Rental operating costs   115,047    6,423,862    212,817    (593,674)   6,158,052 
General and administrative       19,195    813,705    4,871,930    5,704,830 
Depreciation and amortization   100,472    3,910,547    846,818    4,430    4,862,267 
Impairment of goodwill and real estate assets       6,031,828    339,609    72,000    6,443,437 
Total costs and expenses   215,519    16,385,432    2,212,949    4,354,686    23,168,586 
Other income (expense):                         
Interest expense - mortgage notes   (276,961)   (3,757,328)   (2,010,791)   (5,357)   (6,050,437)
Interest and other income, net           (13,735)   34,616    20,881 
Net loss in Conduit Pharmaceuticals marketable securities (see footnote 9)               (188,287)   (188,287)
Gain on sales of real estate, net   4,494,358        950,434        5,444,792 
Income tax (expense) benefit       (9,600)   (60,875)   (392,695)   (463,170)
Total other income, net   4,217,397    (3,766,928)   (1,134,967)   (551,723)   (1,236,221)
Net income (loss)   4,545,878    (7,919,790)   610,022    (4,826,209)   (7,590,099)
Less: Income attributable to noncontrolling interests       (47,710)   (637,876)       (685,586)
Net income (loss) attributable to Presidio Property Trust, Inc. stockholders  $4,545,878   $(7,967,500)  $(27,854)  $(4,826,209)  $(8,275,685)

 

 

 

 

Dividends paid during the years ended December 31, 2025 and 2024:

 

The following is a summary of distributions declared per share of our Series D Preferred Stock for the years ended December 31, 2025 and 2024.

 

Series D Preferred Stock

 

Month  2025   2024 
   Distributions Declared   Distributions Declared 
January  $0.19531   $0.19531 
February   0.19531    0.19531 
March   0.19531    0.19531 
April   0.19531    0.19531 
May   0.19531    0.19531 
June   0.19531    0.19531 
July   0.19531    0.19531 
August   0.19531    0.19531 
September   0.19531    0.19531 
October   0.19531    0.19531 
November   0.19531    0.19531 
December   0.19531    0.19531 
Total  $2.34372   $2.34372 

 

Subsequent Real Estate Activity:

 

As of January 14, 2026, the Company sold Dakota Center for $5,125,000. The remaining loan balance was released as a part of the discounted payoff agreement with the lender. During February and March 2026, we sold five model homes in Texas for approximately $2.5 million and recorded a gain of approximately $0.1 million on sales. These sales included the final home for DMH#204 LP.

 

About Presidio Property Trust

 

Presidio is an internally managed, diversified REIT with holdings in model home properties which are triple-net leased to homebuilders, office, industrial, and retail properties. Presidio’s model homes are leased to homebuilders located primarily in the sun belt states. Presidio’s office, industrial, and retail properties are located primarily in Colorado, with properties also located in Maryland, North Dakota, Texas, and Southern California. For more information on Presidio, please visit Presidio’s website at https://www.PresidioPT.com.

 

 

 

 

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 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.

 

Cautionary Note Regarding Forward-Looking Statements

 

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. Forward-looking statements also include statements relating to the closing of the business combination with Conduit within a certain timeframe or at all. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. Except as required by law, 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 documents filed with the SEC, copies of which are available on the SEC’s website, www.sec.gov.

 

Investor Relations Contact:

 

Presidio Property Trust, Inc.

Lowell Hartkorn, Investor Relations

LHartkorn@presidiopt.com
Telephone: (760) 471-8536 x1244

 

 

 

 

Presidio Property Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

 

   December 31,   December 31, 
   2025   2024 
         
ASSETS          
Real estate assets and lease intangibles:          
Land  $16,390,250   $15,983,323 
Buildings and improvements   101,878,107    102,862,977 
Tenant improvements   17,645,103    16,488,066 
Lease intangibles   3,467,798    3,776,654 
Real estate assets and lease intangibles held for investment, cost   139,381,258    139,111,020 
Accumulated depreciation and amortization   (37,536,809)   (33,700,262)
Real estate assets and lease intangibles held for investment, net   101,844,449    105,410,758 
Real estate assets held for sale, net   6,805,255    22,185,742 
Real estate assets, net   108,649,704    127,596,500 
Other assets:          
Cash, cash equivalents and restricted cash   7,422,359    8,036,496 
Deferred leasing costs, net   1,340,853    1,666,135 
Goodwill   1,317,000    1,389,000 
Investment in Conduit Pharmaceuticals marketable securities (see Notes 2 & 9)   3,900    206,177 
Deferred tax asset   223,388    298,645 
Other assets, net (see Note 6)   3,095,670    3,376,697 
Total other assets   13,403,170    14,973,150 
TOTAL ASSETS (1)  $122,052,874   $142,569,650 
LIABILITIES AND EQUITY          
Liabilities:          
Mortgage notes payable, net  $81,936,586   $80,977,448 
Mortgage notes payable related to properties held for sale, net   10,137,781    21,116,646 
Mortgage notes payable, total net   92,074,367    102,094,094 
Accounts payable and accrued liabilities   3,302,187    3,290,170 
Accrued real estate taxes   1,785,029    1,972,477 
Dividends payable   190,220    194,784 
Lease liability, net   40,108    64,345 
Below-market leases, net   3,316    8,625 
Total liabilities   97,395,227    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; 973,736 shares issued and outstanding (liquidation preference $25.00 per share) as of December 31, 2025 and 997,082 shares issued and outstanding as of December 31, 2024   9,737    9,971 
Series A Common Stock, $0.01 par value per share, shares authorized: 100,000,000; 1,313,832 shares and 1,283,432 shares were issued and outstanding at December 31, 2025 and December 31, 2024, respectively   13,142    128,343 
Additional paid-in capital   186,762,388    185,770,842 
Dividends and accumulated losses   (169,945,302)   (159,374,010)
Total stockholders’ equity before noncontrolling interest   16,839,965    26,535,146 
Noncontrolling interest   7,817,682    8,410,009 
Total equity   24,657,647    34,945,155 
TOTAL LIABILITIES AND EQUITY  $122,052,874   $142,569,650 

 

 

 

 

Presidio Property Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

 

   For the Year Ended December 31, 
   2025   2024 
Revenues:          
Rental income  $16,470,918   $18,523,813 
Fees and other income   343,790    401,462 
Total revenue   16,814,708    18,925,275 
Costs and expenses:          
Rental operating costs   6,158,052    6,256,077 
General and administrative   5,704,830    7,526,675 
Depreciation and amortization   4,862,267    5,515,518 
Impairment of goodwill and real estate assets   6,443,437    1,969,311 
Total costs and expenses   23,168,586    21,267,581 
Other income (expense):          
Interest expense - mortgage notes   (6,050,437)   (6,050,196)
Interest and other income, net   20,881    (151,356)
Gain on sales of real estate, net   5,444,792    3,426,572 
Net loss in Conduit Pharmaceuticals marketable securities (see footnote 9)   (188,287)   (17,925,723)
Income tax (expense) benefit   (463,170)   (60,855)
Total loss, net   (1,236,221)   (20,761,558)
Net loss:   (7,590,099)   (23,103,864)
Less: Income attributable to noncontrolling interests   (685,586)   (2,524,665)
Net loss attributable to Presidio Property Trust, Inc. stockholders  $(8,275,685)  $(25,628,529)
Less: Preferred Stock Series D dividends   (2,295,607)   (2,236,696)
Net loss attributable to Presidio Property Trust, Inc. common stockholders  $(10,571,292)  $(27,865,225)
           
Net loss per share attributable to Presidio Property Trust, Inc. common stockholders:          
Basic & Diluted  $(8.65)  $(22.50)
           
Weighted average number of common shares outstanding - basic & dilutive   1,221,413    1,238,659 

 

 

 

 

FFO AND CORE FFO RECONCILIATION

 

  

For the three months

Ended December 31,

  

For the Year

Ended December 31,

 
   2025   2024   2025   2024 
Net loss attributable to Presidio Property Trust, Inc. common stockholders  $(4,544,421)  $(3,064,694)  $(10,571,292)  $(27,865,225)
Adjustments:                    
Income attributable to noncontrolling interests   339,483    196,279    685,586    2,524,665 
Depreciation and amortization   1,170,832    1,357,248    4,862,267    5,515,518 
Amortization of above and below market leases, net   (1,244)   (910)   (4,752)   (4,641)
Impairment of real estate assets   2,016,192    1,075,372    6,443,437    1,969,311 
Net change in marketable securities   3,615    104,287    188,287    17,926,283 
Gain on sale of real estate assets, net   (366,490)   (235,423)   (5,444,792)   (3,426,572)
FFO  $(1,382,033)  $(567,841)  $(3,841,259)  $(3,360,661)
Restricted stock compensation   306,762    147,031    1,138,585    1,379,080 
Cost associated with Zuma Capital Management               565,534 
Core FFO  $(1,075,271)  $(420,810)  $(2,702,674)  $(1,416,047)
                     
Weighted average number of common shares outstanding - basic and diluted   1,234,884    1,234,727    1,221,413    1,238,659 
                     
Core FFO / Wgt Avg Share  $(0.87)  $(0.34)  $(2.21)  $(1.14)
                     
Quarterly Dividends / Share  $   $   $   $