SQFT 10-Q
Presidio Property Trust, Inc. (SQFT)
| Table of Contents |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________________
FORM
___________________________________________________________
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the period from _____ to _____
(Commission File No.)
___________________________________________________________
PRESIDIO PROPERTY TRUST, INC.
(Exact name of registrant as specified in its charter)
___________________________________________________________
| | | |
| (State or other jurisdiction | (I.R.S. employer |
(Address of principal executive offices)
(
(Registrant's telephone number, including area code)
| Title of each class of registered securities | Trading Symbol(s) | Name of each exchange on which registered | ||
| The | ||||
| $0.01 par value per share | ||||
| The | ||||
| $0.01 par value per share | ||||
| The | ||||
| Purchase Shares of Common Stock | ||||
________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
| | ☒ | Smaller reporting company | | |||||||||||
| 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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
At August 13, 2026, registrant had issued and outstanding
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; |
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significant competition may decrease or prevent increases in our properties' occupancy and rental rates and may reduce the value of our properties; |
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a decrease in demand for commercial space and model homes and/or an increase in operating costs; |
| • |
failure by any major tenant (or a substantial number of tenants) to make rental payments to us because of a deterioration of its financial condition, an early termination of its lease, a non-renewal of its lease, or a renewal of its lease on terms less favorable to us; |
| • |
challenging economic conditions facing us and our tenants may have a material adverse effect on our financial condition and results of operations; |
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our failure to generate sufficient cash to pay dividends and to service or retire our debt obligations in a timely manner; |
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our inability to borrow or raise sufficient capital to maintain or expand our real estate investment portfolio; |
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adverse changes in the real estate financing markets, including potential increases in interest rates and/or borrowing costs; |
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potential losses, including from adverse weather conditions, natural disasters and title claims, may not be covered by insurance; |
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inability to complete acquisitions or dispositions and, even if these transactions are completed, failure to successfully operate acquired properties or sell properties without incurring significant defeasance costs; |
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our reliance on third-party property managers to manage a substantial number of our properties and brokers and/or agents to lease our properties; |
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decrease in supply and/or demand for single family homes, inability to acquire additional model homes and increased competition to buy such properties; |
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failure to continue to qualify as a REIT; |
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adverse results of any legal proceedings; |
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changes in laws, rules and regulations affecting our business including related to taxation, tariffs, real estate and zoning laws, and increases in real property tax rates; |
| • | the possibility that if any of the banking institutions in which we deposit funds ultimately fails, we may lose any amounts of our deposits over federally insured levels which could reduce the amount of cash we have available to distribute or invest and could result in a decline in our value; |
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the possibility that we may not comply with the continued listing requirements of the Nasdaq Capital Market ("Nasdaq"), which may result in our common stock being delisted, which could affect our common stock's market price and liquidity and reduce our ability to raise capital; |
|
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actions of activist stockholders may cause us to incur substantial costs, divert management's attention and resources, and have an adverse effect on our business; |
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| • | the potential adverse effects of a resurgence of the COVID-19 pandemic or of new epidemics, pandemics or public health crises and ensuing economic turmoil on our financial condition, results of operations, cash flows and performance, particularly our ability to collect rent, on the financial condition, results of operations, cash flows and performance of our tenants, and on the global economy and financial markets, adverse economic conditions in the real estate market and overall financial market fluctuations; and | |
| • |
the other risks and uncertainties discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in this Quarterly Report on Form 10-Q, any subsequent filings with the SEC, and in the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 27, 2026. |
PART I — FINANCIAL INFORMATION
ITEM 1. Financial Statements
Presidio Property Trust, Inc. and Subsidiaries
Consolidated Balance Sheets
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Real estate assets and lease intangibles: | ||||||||
| Land | $ | $ | ||||||
| Buildings and improvements | ||||||||
| Tenant improvements | ||||||||
| Lease intangibles | ||||||||
| Real estate assets and lease intangibles held for investment, cost | ||||||||
| Accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Real estate assets and lease intangibles held for investment, net | ||||||||
| Real estate assets held for sale, net | ||||||||
| Real estate assets, net | ||||||||
| Other assets: | ||||||||
| Cash, cash equivalents and restricted cash | ||||||||
| Deferred leasing costs, net | ||||||||
| Goodwill | ||||||||
| Investment in Conduit Pharmaceuticals marketable securities (see Notes 2 & 9) | ||||||||
| Deferred tax asset | ||||||||
| Other assets, net (see Note 6) | ||||||||
| Total other assets | ||||||||
| TOTAL ASSETS (1) | $ | $ | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Liabilities: | ||||||||
| Mortgage notes payable, net | $ | $ | ||||||
| Mortgage notes payable related to real estate assets held for sale, net | ||||||||
| Mortgage notes payable, total net | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Accrued real estate taxes | ||||||||
| Dividends payable | ||||||||
| Lease liability, net | ||||||||
| Below-market leases, net | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (see Note 10) | ||||||||
| Equity: | ||||||||
| Series D Preferred Stock, $ par value per share; shares authorized; shares issued and outstanding (liquidation preference $ per share) as of June 30, 2026 and as of December 31, 2025 | ||||||||
| Series A Common Stock, $ par value per share, shares authorized: ; shares and shares were issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Dividends and accumulated losses | ( | ) | ( | ) | ||||
| Total stockholders' equity before noncontrolling interest | ||||||||
| Noncontrolling interest | ||||||||
| Total equity | ||||||||
| TOTAL LIABILITIES AND EQUITY | $ | $ | ||||||
(1) As of June 30, 2026 and December 31, 2025, includes approximately $7.2 million and $8.6 million, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities.
See Notes to Consolidated Financial Statements
Presidio Property Trust, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues: | ||||||||||||||||
| Rental income | $ | $ | $ | $ | ||||||||||||
| Fees and other income | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Costs and expenses: | ||||||||||||||||
| Rental operating costs | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Impairment of goodwill and real estate assets | ||||||||||||||||
| Total costs and expenses | ||||||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense - mortgage notes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net gain (loss) in Conduit Pharmaceuticals marketable securities (see Note 9) | ( | ) | ( | ) | ||||||||||||
| Interest and other income, net | ||||||||||||||||
| Gain on sales of real estate, net | ( | ) | ||||||||||||||
| Gain on disposition of assets and liabilities, net | ||||||||||||||||
| Income tax (expense) benefit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense), net | ( | ) | ( | ) | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less: (Income) loss attributable to noncontrolling interests | ( | ) | ( | ) | ( | ) | ||||||||||
| Net loss attributable to Presidio Property Trust, Inc. stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Less: Series D Preferred Stock declared dividends | ( | ) | ( | ) | ||||||||||||
| Less: Series D Preferred Stock undeclared dividends in arrears | ( | ) | ( | ) | ||||||||||||
| Net loss attributable to Presidio Property Trust, Inc. common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share attributable to Presidio Property Trust, Inc. common stockholders: | ||||||||||||||||
| Basic & Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of common shares outstanding - basic & dilutive | ||||||||||||||||
See Notes to Consolidated Financial Statements
Presidio Property Trust, Inc. and Subsidiaries
Consolidated Statements of Changes in Equity
For the six months ended June 30, 2026 and 2025
(Unaudited)
| Additional | Dividends and | Total | Non- | |||||||||||||||||||||||||||||||||
| Series D Preferred Stock | Common Stock | Paid-in | Accumulated | Stockholders’ | controlling | Total | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Losses | Equity | Interests | Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||||||||||
| Distributions | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Restricted stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| Net (loss) income | — | — | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Distributions | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Restricted stock-based compensation | — | — | ||||||||||||||||||||||||||||||||||
| Vesting of Restricted Series A Common Stock | — | ( | ) | |||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
Presidio Property Trust, Inc. and Subsidiaries
Consolidated Statements of Changes in Equity
For the six months ended June 30, 2026 and 2025
(Unaudited) (Continued)
| Additional |
Dividends and |
Total |
Non- |
|||||||||||||||||||||||||||||||||
| Series D Preferred Stock |
Common Stock |
Paid-in |
Accumulated |
Stockholders’ |
controlling |
Total |
||||||||||||||||||||||||||||||
| Shares |
Amount |
Shares |
Amount |
Capital |
Losses |
Equity |
Interests |
Equity |
||||||||||||||||||||||||||||
| Balance, December 31, 2024 |
( |
) | ||||||||||||||||||||||||||||||||||
| Net (loss) income |
— | — | ||||||||||||||||||||||||||||||||||
| Dividends to Series D preferred stockholders |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Distributions |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Restricted stock-based compensation |
— | — | — | — | — | |||||||||||||||||||||||||||||||
| Repurchase of Series D preferred stock, at cost |
( |
) | ( |
) | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||
| Balance, March 31, 2025 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
| Net (loss) income |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Dividends to Series D preferred stockholders |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Distributions |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Restricted stock-based compensation |
— | — | ||||||||||||||||||||||||||||||||||
| Repurchase of Series A Common Stock, at cost |
— | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||
| Repurchase of Series D preferred stock, at cost |
( |
) | ( |
) | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||
| Repurchase of Series A Common Stock, Tender Offer |
— | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||
| Par Value adjustment post 1 for 10 reverse split from $0.10 to $0.01 |
— | ( |
) | |||||||||||||||||||||||||||||||||
| Vesting of Restricted Series A Common Stock |
— | ( |
) | |||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||
See Notes to Consolidated Financial Statements
Presidio Property Trust, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock compensation | ||||||||
| Bad debt expense | ||||||||
| Gain on sale of real estate assets, net | ( | ) | ( | ) | ||||
| Gain on disposition of assets and liabilities, net | ( | ) | ||||||
| Net (gain) loss in Conduit Pharmaceuticals fair value marketable securities | ( | ) | ||||||
| Impairment of goodwill and real estate assets | ||||||||
| Amortization of financing costs | ||||||||
| Amortization of below-market leases | ( | ) | ( | ) | ||||
| Straight-line rent adjustment | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Other assets | ( | ) | ||||||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Deferred leasing costs | ( | ) | ||||||
| Accrued real estate taxes | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ||||||
| Cash flows from investing activities: | ||||||||
| Real estate acquisitions | ( | ) | ||||||
| Additions to buildings and tenant improvements | ( | ) | ( | ) | ||||
| Proceeds from sale of marketable securities | ||||||||
| Proceeds from sales of real estate, net | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from mortgage notes payable, net of issuance costs | ||||||||
| Payment of debt issuance costs | ( | ) | ||||||
| Repayment of mortgage notes payable | ( | ) | ( | ) | ||||
| Payment of deferred offering costs | ( | ) | ||||||
| Distributions to noncontrolling interests | ( | ) | ( | ) | ||||
| Repurchase of Series A Common Stock, at cost | ( | ) | ||||||
| Repurchase of Series D Preferred Stock, at cost | ( | ) | ||||||
| Dividends paid to Series D Preferred Stockholders | ( | ) | ( | ) | ||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net decrease in cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Cash, cash equivalents and restricted cash - beginning of period | ||||||||
| Cash, cash equivalents and restricted cash - end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest paid-mortgage notes payable | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Non-cash investing activities: | ||||||||
| Paid building and tenant improvements from prior year | $ | ( | ) | $ | ( | ) | ||
| Paid deferred offering costs from prior year | $ | $ | ||||||
| Non-cash financing activities: | ||||||||
| Unpaid building and tenant improvements | $ | $ | ||||||
| Dividends payable - Series D Preferred Stock | $ | $ | ||||||
See Notes to Consolidated Financial Statements
Presidio Property Trust, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
June 30, 2026
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 commercial properties in fee interest, 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 limited partnerships (NetREIT Palm Self-Storage LP and NetREIT Casa Grande LP), both of which, as of June 30, 2026, 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 limited partnerships that purchase model homes and lease them back to homebuilders as commercial tenants (Dubose Model Home Investors #205, LP, and Dubose Model Home Investors #207, LP). The Company refers to these entities collectively as the "Model Home Partnerships". As of June 30, 2026, Dubose Model Home Investors #202, LP, Dubose Model Home Investors #203, LP, Dubose Model Home Investors #204, LP, and Dubose Model Home Investors #206, LP had no remaining assets. |
The Company has determined that the limited partnerships, in which it owns less than 100%, should be included in the Company's consolidated financial statements as the Company directs their activities and has control of such limited partnerships.
We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), for federal income tax purposes. To maintain our qualification as a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders and meet the various other requirements imposed by the Code relating to such matters as operating results, asset holdings, distribution levels, and diversity of stock ownership. Provided we maintain our qualification for taxation as a REIT, we are generally not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. If we fail to maintain our qualification as a REIT in any taxable year and are unable to avail ourselves of certain savings provisions set forth in the Code, all our taxable income would be subject to federal income tax at regular corporate rates, including any applicable alternative minimum tax. We are subject to certain state and local income taxes.
We, together with one of our entities, have elected to treat certain subsidiaries as a taxable REIT subsidiary (a "TRS") for federal income tax purposes. Certain activities that we undertake must be conducted by a TRS, such as non-customary services for our commercial tenants, and holding assets that we cannot hold directly. A TRS is subject to federal and state income taxes. The Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. Neither the Company nor its subsidiaries have been assessed any significant interest or penalties for tax positions by any tax jurisdictions.
Effective on May 19, 2025, the Company amended its charter by filing Articles of Amendment with the State Department of Assessments and Taxation of Maryland in order to effect a 1-for-
On August 7, 2026, the Company filed a Registration Statement on Form S-4 and a Tender Offer Statement on Schedule TO with the Securities and Exchange Commission (the "SEC") with respect to a proposed offer (the "Exchange Offer") to exchange each validly tendered and accepted outstanding share of the Company's Series D Preferred Stock (the "Series D Preferred Stock") for five and one-half (
Liquidity. The Company's anticipated future sources of liquidity may include existing cash and cash equivalents, cash flows from operations, refinancing of existing mortgages, future real estate sales, new borrowings, and the sale of equity or debt securities. Future capital needs include paying down existing borrowings, maintaining our existing properties, funding tenant improvements on our commercial buildings, paying lease commissions (to the extent they are not covered by lender-held reserve deposits), and the payment of dividends to our stockholders. The Company is also seeking investments that are likely to produce income and achieve long-term gains in order to pay dividends to our stockholders. To ensure that we can effectively execute these objectives, we routinely review our liquidity requirements and continually evaluate all potential sources of liquidity. If necessary, the Company may seek other short-term liquidity alternatives, such as bridge loans, refinancing property loans or a bank line of credit depending on the credit environment. See Note 11 Stockholders' Equity for additional information on sale of securities.
Short-term liquidity needs include paying our current operating costs, satisfying the debt service requirements of existing mortgages, completing tenant improvements on our commercial buildings, paying leasing commissions, distributions to noncontrolling interests, and funding dividends, if any, to stockholders. Future principal payments due on mortgage notes payable, during the last two quarters of 2026 and in the year ending December 31, 2027 total approximately $
As the Company continues its operations, it may re-finance or seek additional financing. However, there can be no assurance that any such re-financing or additional financing will be available to the Company on acceptable terms, if at all. If events or circumstances occur such that the Company does not obtain additional funding, it will most likely be required to reduce its plans and/or certain discretionary spending, which could have a material adverse effect on the Company's ability to achieve its intended business objectives. Management believes that the combination of working capital on hand and the ability to refinance commercial and model home mortgages will fund operations through at least the next twelve months from the date of the issuance of these unaudited interim financial statements.
Segments. The Company acquires and operates income producing properties in business segments including Office/Industrial Properties, Model Home Properties and Retail Properties. See Note 13. “Segments”.
Concentration. Concentration of credit risk with respect to tenant receivables is limited due to the large number of tenants comprising the Company’s rental revenue. We have commercial properties located in Colorado, in North Dakota, in Southern California, in Texas and in Maryland. Our model home properties are concentrated in Texas with a few model homes in Alabama, Tennessee and Arizona. We had of our homebuilders account for approximately
2. SIGNIFICANT ACCOUNTING POLICIES
There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in the 2025 year end Annual Report. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2025, included in the Company’s 2025 year end Annual Report.
Basis of Presentation. The accompanying consolidated financial statements have been prepared by the Company's management in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and the instructions to Form 10-Q and Article 8 of Regulation S-X. Certain information and footnote disclosures required for annual consolidated financial statements have been excluded pursuant to rules and regulations of the SEC. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of our financial position as of June 30, 2026 and December 31, 2025, as well as results of our operations, and cash flows as of, and for the six months ended June 30, 2026 and 2025, respectively. However, the results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2026, due to real estate market fluctuations, available mortgage lending rates and other unknown factors. These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the 2025 year end Annual Report. The consolidated balance sheet as of December 31, 2025 has been derived from the audited consolidated financial statements included in the 2025 year end Annual Report.
Principles of Consolidation. The accompanying consolidated financial statements include the accounts of Presidio Property Trust, Inc. and its subsidiaries, NetREIT Advisors, LLC and Dubose Advisors LLC (collectively, the “Advisors”). The consolidated financial statements also include the results of the NetREIT Partnerships and the Model Home Partnerships. As used herein, references to the “Company” include references to Presidio Property Trust, Inc., its subsidiaries, and the partnerships. All significant intercompany balances and transactions have been eliminated in consolidation.
The Company classifies the noncontrolling interests in the NetREIT Partnerships as part of consolidated net (loss) income in 2026 and 2025 and has included the accumulated amount of noncontrolling interests as part of equity since inception in February 2010. If a change in ownership of a consolidated subsidiary results in loss of control and deconsolidation, any retained ownership interest will be remeasured, with the gain or loss reported in the consolidated statements of operations. Management has evaluated the noncontrolling interests and determined that they do not contain any redemption features.
Use of Estimates. The consolidated financial statements were prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates include private warrants, the allocation of purchase price paid for property acquisitions between the components of land, building and intangible assets acquired including their useful lives, valuation of long-lived assets, and the allowance for doubtful accounts, which is based on an evaluation of the tenants’ ability to pay. Actual results could differ from those estimates.
Real Estate Assets and Lease Intangibles. Land, buildings and improvements are recorded at cost, including tenant improvements and lease acquisition costs (including leasing commissions, space planning fees, and legal fees). The Company capitalizes any expenditure that replaces, improves, or otherwise extends the economic life of an asset, while ordinary repairs and maintenance are expensed as incurred. The Company allocates the purchase price of acquired properties between the acquired tangible assets and liabilities (consisting of land, buildings, tenant improvements, and long-term debt) and identified intangible assets and liabilities (including the value of above-market and below-market leases, the value of in-place leases, unamortized lease origination costs and tenant relationships), in each case based on their respective fair values.
The Company allocates the purchase price to tangible assets of an acquired property based on the estimated fair values of those tangible assets, assuming the property was vacant. Estimates of fair value for land, building and building improvements are based on many factors, including, but not limited to, comparisons to other properties sold in the same geographic area and independent third-party valuations. In estimating the fair values of the tangible assets, intangible assets, and liabilities acquired, the Company also considers information obtained about each property as a result of its pre‑acquisition due diligence, marketing and leasing activities.
The value allocated to acquired lease intangibles is based on management’s evaluation of the specific characteristics of each tenant’s lease. Characteristics considered by management in allocating these values include, but are not limited, to the nature and extent of the existing business relationships with the tenant, growth prospects for developing new business with the tenant, the remaining term of the lease, the tenant’s credit quality, and other factors.
The value attributable to the above-market or below-market component of an acquired in-place lease is determined based upon the present value (using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of rents that would be paid using fair market rates over the remaining term of the lease. The amounts allocated to above or below-market leases are amortized on a straight-line basis as an increase or reduction of rental income over the remaining non-cancelable term of the respective leases. Amortization of above and below-market rents resulted in a net increase in rental income of approximately $
The value of in-place leases and unamortized lease origination costs are amortized to expenses over the remaining term of the respective leases, which range from less than a year to years. The amount allocated to acquired in-place leases is determined based on management’s assessment of lost revenue and costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased. The amount allocated to unamortized lease origination costs is determined by what the Company would have paid to a third-party to secure a new tenant reduced by the expired term of the respective lease. The amount allocated to tenant relationships is the benefit resulting from the likelihood of a tenant renewing its lease. Amortization expense related to these assets was approximately $
Deferred Leasing Costs. Costs incurred in connection with successful property leases are capitalized as deferred leasing costs and amortized to leasing commission expense on a straight-line basis over the terms of the related leases which generally range from to years. Deferred leasing costs consist of third-party leasing commissions. Management re-evaluates the remaining useful lives of leasing costs as the creditworthiness of the tenants and economic and market conditions change. If management determines the estimated remaining life of the respective lease has changed, the amortization period is adjusted. At June 30, 2026 and December 31, 2025, the Company had net deferred leasing costs of approximately $
Cash, Cash Equivalents and Restricted Cash. At June 30, 2026 and December 31, 2025, we had approximately $
Real Estate Held for Sale and Discontinued Operations. We generally reclassify assets to "held for sale" when the disposition has been approved, it is available for immediate sale in its present condition, we are actively seeking a buyer, and the disposition is considered probable within one year. Additionally, real estate sold during the current period is classified as “real estate assets held for sale” for all prior periods presented in the accompanying consolidated financial statements. Mortgage notes payable related to the real estate sold during the current period are classified as “mortgage notes payable related to properties held for sale” for all prior periods presented in the accompanying consolidated financial statements. Additionally, we record the operating results related to real estate that has been disposed of as discontinued operations for all periods presented if the operations have been eliminated and represent a strategic shift and we will not have any significant continuing involvement in the operations of the property following the sale. As of June 30, 2026, six model homes and Shea Center II were classified as "held for sale."
Deferred Offering Costs. Deferred offering costs represent legal, accounting and other direct costs related to our offerings. As of June 30, 2026 and December 31, 2025 we had deferred offering costs of approximately $
Impairments of Real Estate Assets. We regularly review for impairment on a property-by-property basis. Impairment is recognized on a property held for use when the expected undiscounted cash flows for a property are less than the carrying amount at which time the property is written-down to fair value. Impairment is recognized on a property held for sale when the fair value less costs to sell is less than the carrying amount. The calculation of both discounted and undiscounted cash flows requires management to make estimates of future cash flows that are determined based on a number of inputs and assumptions such as the intended hold period, market rental rates, leasing assumptions, capitalization rates and discount rates. Actual results could be significantly different from the estimates. Although our strategy is to hold our properties over the long-term, if our strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized to reduce the property to fair value and such loss could be material.
Fair Value Measurements. Certain assets and liabilities are required to be carried at fair value, or if long-lived assets are deemed to be impaired, to be adjusted to reflect this condition. The guidance requires disclosure of fair values calculated under each level of inputs within the following hierarchy:
| • | Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; |
| • | Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and |
| • | Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. |
In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require us to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third-party may rely more on models with inputs based on information available only to that independent third-party. When we determine the market for a financial instrument owned by us to be illiquid or when market transactions for similar instruments do not appear orderly, we use several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establish a fair value by assigning weights to the various valuation sources.
When determining the fair value of real estate assets, goodwill and other liabilities the Company refers to the guidance in ASC 820. The term “Fair Value” is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (ASC 820-10-20). In particular, ASC 820 prescribes that the measurement of the Fair Value of an asset or liability should be based on assumptions that market participants would use when pricing the asset or liability. Accordingly, the Company’s determination of the Fair Value measurements detailed above is based on the price that would be received to sell an asset or transfer a liability at the measurement date, assuming a transaction takes place at that date (i.e., an exit price).
As of June 30, 2026, we did hold any marketable securities, excluding our investments in common stock warrants of Conduit Pharmaceuticals, Inc. (“Conduit”). As of December 31, 2025, we did hold any marketable securities (excluding our investments in Conduit's common stock and common stock warrants). There were financial liabilities measured at fair value as of June 30, 2026 and December 31, 2025.
As of June 30, 2026 and December 31, 2025, the Private CDT Warrants fair value, using Level 3 inputs, was zero for both periods, and is included in the total Investment in Conduit Pharmaceuticals marketable securities on the consolidated balance sheets. Our investments in Conduit's public common stock warrants (CDTTW) presented on the consolidated balance sheets were measured at fair value using Level 1 market prices, taking into account the adoption of ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, and totaled approximately $
The following table presents as of June 30, 2026 and December 31, 2025 the Company's assets subject to measurement at fair value on a nonrecurring basis:
| Fair Value Measurements as of June 30, 2026 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: | ||||||||||||||||
| Certain Real Estate assets | $ | $ | ||||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
| Fair Value Measurements as of December 31, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: | ||||||||||||||||
| Goodwill for NTR Property Management | $ | $ | $ | $ | ||||||||||||
| Certain Real Estate assets | ||||||||||||||||
| Total Assets | $ | $ | $ | $ | ||||||||||||
Earnings per share (“EPS”). The EPS on common stock has been computed pursuant to the guidance in FASB ASC Topic 260, Earnings Per Share. The guidance requires the classification of the Company’s unvested restricted stock, which contains rights to receive non-forfeitable dividends, as participating securities requiring the two-class method of computing net income per share of common stock. In accordance with the two-class method, earnings per share have been computed by dividing the net income less net income attributable to unvested restricted shares by the weighted average number of shares of common stock outstanding less unvested restricted shares. Diluted earnings per share is computed by dividing net income by the weighted average shares of common stock and potentially dilutive securities outstanding in accordance with the treasury stock method.
Dilutive common stock equivalents include the dilutive effect of in-the-money stock equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common stock equivalents if their effect would be anti-dilutive. In periods in which a net loss has been incurred, all potentially dilutive common stock shares are considered anti-dilutive and thus are excluded from the calculation. Securities that are excluded from the calculation of weighted average dilutive common stock, because their inclusion would have been antidilutive, are:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Common Stock Warrants | ||||||||||||||||
| Placement Agent Warrants | ||||||||||||||||
| Series A Warrants | ||||||||||||||||
| Unvested Common Stock Grants | ||||||||||||||||
| Total potentially dilutive shares | ||||||||||||||||
Variable Interest Entity. We determine whether an entity is a Variable Interest Entity ("VIE") and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. Our determination of whether an entity in which we hold a direct or indirect variable interest is a VIE is based on several factors, including whether we participated in the design of the entity and whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. We make judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary.
We analyze any investments in VIEs to determine if we are the primary beneficiary. In evaluating whether we are the primary beneficiary, we evaluate our direct and indirect economic interests in the entity. A reporting entity is determined to be the primary beneficiary if it holds a controlling financial interest in the VIE. Determining which reporting entity, if any, has a controlling financial interest in a VIE is primarily a qualitative approach focused on identifying which reporting entity has both: (i) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment.
We consider a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance, including, but not limited to, the ability to direct operating decisions and activities. In addition, we consider the rights of other investors to participate in those decisions. We determine whether we are the primary beneficiary of a VIE at the time we become involved with a variable interest entity and reconsider that conclusion continually. We consolidate any VIE of which we are the primary beneficiary.
Reclassifications. Certain prior year balance sheet, statement of operations and statement of cash flows accounts have been reclassified to conform with the current year presentation. The reclassifications did not affect net income in the prior year's consolidated statement of operations.
Subsequent Events. We evaluate subsequent events up until the date the consolidated financial statements are issued.
Recently Issued and Adopted Accounting Pronouncements.
In March 2024, the SEC issued final climate-disclosure rules to enhance and standardize climate‐related disclosures by public companies. With regards to financial statements, the rules requires disclosure of (i) capitalized costs, expenditures expensed, charges, and losses incurred as a result of severe weather events and other natural conditions, subject to applicable one percent and de minimis disclosure thresholds; (ii) capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates (RECs) if used as a material component of a company's plans to achieve its disclosed climate-related targets or goals; and (iii) if the estimates and assumptions the company uses to produce the financial statements were materially impacted by risks and uncertainties associated with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans, a qualitative description of how the development of such estimates and assumptions was impacted. The rules are effective for annual periods beginning January 1, 2025 and are to be applied prospectively. On April 4, 2024, the SEC voluntarily stayed the rules pending judicial review as a result of litigation. On March 27, 2025, the SEC voted to end its defense of the rules requiring disclosure of climate-related risks and greenhouse gas emissions. However, the Eighth Circuit may still rule on the legal challenges to the rules, and if so could decide to uphold the rules in whole or in part or remand them to the SEC for further consideration.
In November 2024, the FASB issued Accounting Standards Update ASU 2024-03, Income Statement—Reporting Comprehensive, Income—Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses (“ASU 2024-03”). This ASU is to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development). The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. In January 2025, this was updated by ASU 2025-01—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The amendment in this Update amends the effective date of Update 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of Update 2024-03 is permitted. We have not yet adopted ASU 2024-03 and are currently evaluating the impact on our financial statement disclosures.
In December 2025, the FASB issued Accounting Standards Update 2025-11 - Interim Reporting (Topic 270), which focuses on improving interim reporting guidance by clarifying requirements and enhancing navigability for entities preparing interim financial statements under GAAP. This aims to improve the guidance in Topic 270, Interim Reporting, by enhancing the clarity and navigability of the required interim disclosures. This introduces the Disclosure Principle, requiring entities to disclose events that have a material impact on the entity since the end of the last annual reporting period. Additionally, ASU 2025-11 creates a comprehensive list of required interim disclosures, consolidating them into Topic 270 rather than having them dispersed across various Codification Topics. For public entities, the update is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. For all other entities, it is effective for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted for all entities. While we are currently evaluating the impact of this pronouncement, we do not expect it will have a material impact on our consolidated financial statements.
3. RECENT REAL ESTATE TRANSACTIONS
Acquisitions during the six months ended June 30, 2026:
| • | The Company acquired model homes or commercial properties. |
Acquisitions during the six months ended June 30, 2025:
| • | The Company acquired |
Dispositions during the six months ended June 30, 2026:
| • | On January 14, 2026, the Company sold commercial property, Dakota Center, to a single buyer for approximately $ | |
| • | The Company sold |
Dispositions during the six months ended June 30, 2025:
| • | The Company sold | |
| • | On February 6, 2025 the Company sold commercial properties, Union Town Center and Research Parkway, to a single buyer for approximately $ |
4. REAL ESTATE ASSETS
The Company owns a diverse portfolio of real estate assets. The primary types of properties the Company invests in are office, industrial, retail, and triple-net leased model home properties. We have commercial properties located in Colorado, in North Dakota, in Southern California, in Texas and in Maryland. Our model home properties are located in states. As of June 30, 2026, the Company owned or had an equity interest in:
| • | Seven Office buildings and an industrial property (“Office/Industrial Properties”); | |
| • | One retail building (“Retail Property”); and | |
| • | |
A summary of the properties owned by the Company, including their lease intangibles, as of June 30, 2026 and December 31, 2025 is as follows:
| Date | Real estate assets and lease intangibles, net | ||||||||||||
| Property Name | Acquired | Location | June 30, 2026 | December 31, 2025 | |||||||||
| Genesis Plaza (1) | August 2010 | | $ | $ | |||||||||
| Dakota Center (2) | May 2011 | | |||||||||||
| Grand Pacific Center | March 2014 | | |||||||||||
| Arapahoe Center | December 2014 | | |||||||||||
| West Fargo Industrial | August 2015 | | |||||||||||
| 300 N.P. | August 2015 | | |||||||||||
| One Park Center | August 2015 | | |||||||||||
| Shea Center II (3) | December 2015 | | |||||||||||
| Mandolin (4) | August 2021 | | |||||||||||
| Baltimore | December 2021 | | |||||||||||
| Commercial properties | |||||||||||||
| Model Home properties (5) | 2019 - 2025 | | |||||||||||
| Total real estate assets and lease intangibles, net | $ | $ | |||||||||||
| (1) | Genesis Plaza is owned by two tenants-in-common, NetREIT Genesis and NetREIT Genesis II, each of which own |
| (2) | The non-recourse loan on the Dakota Center property matured on July 6, 2024. During December 2024, the lender agreed to the broker the Company would use to sell the property to settle the non-recourse debt. During July 2025, the lender approved a purchase offer from a third party for $ |
| (3) | During January 2026, the Company received notice that the Company's failure to repay in full by January 5, 2026 the indebtedness related to the loan agreement governing Shea Center II had triggered a default event. On February 13, 2026, the Company received notification that the Shea Center II property governed by the non-recourse loan agreement was moved into receivership and the lender has started the foreclosure process. The foreclosure sale and public auction was scheduled for July 1, 2026. The lender holds approximately $ |
| (4) | A portion of the proceeds from the sale of Highland Court were used in like-kind exchange transactions pursued under Section 1031 of the Code for the acquisition of our Mandolin property. 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 |
| (5) | Includes Model Homes listed as held for sale as of June 30, 2026 and December 31, 2025. During the three and six months ended June 30, 2026, we recorded an impairment charge for model homes totaling approximately $ |
For the six months ended June 30, 2026 and 2025, depreciation expense totaled approximately $
The following table summarizes the net value of other intangible assets acquired and the accumulated amortization for each class of intangible asset:
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Lease Intangibles | Accumulated Amortization | Lease Intangibles, net | Lease Intangibles | Accumulated Amortization | Lease Intangibles, net | |||||||||||||||||||
| In-place leases | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Leasing costs | ( | ) | ( | ) | ||||||||||||||||||||
| $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||
At June 30, 2026 and December 31, 2025, there were gross lease intangible assets and accumulated amortization related to the lease intangible assets included in real estate assets held for sale as of June 30, 2026. The following table below summarizes the net value of other intangible assets acquired and the accumulated amortization for each class of intangible asset related to Shea Center II.
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Lease | Accumulated | Lease | Lease | Accumulated | Lease | |||||||||||||||||||
| In-place leases | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||
| Leasing costs | ( | ) | ||||||||||||||||||||||
| $ | 2,067,196 | $ | (2,067,196 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||||
The net value of acquired intangible liabilities was approximately $
Future aggregate approximate amortization expense for the Company's lease intangible assets is as follows:
| Years ending December 31: | ||||
| 2026 | $ | |||
| 2027 | ||||
| Total | $ |
6. OTHER ASSETS
Other assets consist of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Deferred rent receivable | $ | $ | ||||||
| Prepaid expenses, deposits and other | ||||||||
| Accounts receivable, net | ||||||||
| Notes receivable | ||||||||
| Deferred offering costs | ||||||||
|
| ||||||||
| Total other assets | $ | $ | ||||||
7. MORTGAGE NOTES PAYABLE
Mortgage notes payable consist of the following:
| Principal as of | |||||||||||||||||
| June 30, | December 31, | Loan | Interest | ||||||||||||||
| Mortgage note property | 2026 | 2025 | Type | Rate (1) | Maturity | ||||||||||||
| Dakota Center (2) | $ | $ | Fixed | % | 7/6/2024 | ||||||||||||
| Arapahoe Service Center | Fixed | % | 12/5/2029 | ||||||||||||||
| One Park Centre | Fixed | % | 9/1/2030 | ||||||||||||||
| Genesis Plaza | Fixed | % | 9/1/2029 | ||||||||||||||
| Shea Center II (3) | Fixed | % | 1/5/2026 | ||||||||||||||
| West Fargo Industrial | Fixed | % | 7/6/2029 | ||||||||||||||
| Grand Pacific Center | Fixed | % | 5/10/2033 | ||||||||||||||
| Baltimore | Fixed | % | 4/6/2032 | ||||||||||||||
| Mandolin | Fixed | % | 4/20/2029 | ||||||||||||||
| Subtotal, Presidio Property Trust, Inc. Properties | $ | $ | |||||||||||||||
| Model Home mortgage notes (4) | Fixed | 2026 - 2030 | |||||||||||||||
| Mortgage Notes Payable | $ | $ | |||||||||||||||
| Unamortized loan costs | ( | ) | ( | ) | |||||||||||||
| Mortgage Notes Payable, net | $ | $ | |||||||||||||||
| (1) | Interest rates as of June 30, 2026.
|
| (2) | The non-recourse loan on the Dakota Center property matured on July 6, 2024. During December 2024, the lender agreed to the broker the Company would use to sell the property to settle the non-recourse debt. During July 2025, the lender approved a purchase offer from a third party for $
|
| (3) | During January 2026, the Company received notice that the Company's failure to repay in full by January 5, 2026 the indebtedness related to the loan agreement governing Shea Center II had triggered a default event. On February 13, 2026, the Company received notification that the Shea Center II property governed by the non-recourse loan agreement was moved into receivership and the lender has started the foreclosure process. The foreclosure sale took place on July 1, 2026, with the property going to Argentic Services Company LP, who acquired the property by placing a minimum credit bid valued at $
|
| (4) | As of June 30, 2026, there were
|
The loan agreement between NetREIT Model, Homes, Inc. (“NRMH”) and its Lender has a covenant for a Fixed Charge Coverage Ratio (“FCCR”) as defined for NRMH as of any date that equals (a) the sum of (i) EBITDA for the period ended as of such date minus (ii) distributions for the period ended as of such date divided by (b) the sum of (i) principal payments paid for the period ended as of such date plus (ii) interest expense for period ended as of such date. The FCCR is to be no less than
As of April 24, 2026, the Company amended its agreement with Origin Bank (the lender) through its partnership with Dubose Model Home Investors #207, LP. The terms of the new amendment decrease the floor interest rate by
Scheduled principal payments of mortgage notes payable were as follows as of June 30, 2026:
| Commercial | Model | |||||||||||
| Properties | Homes | Total Principal | ||||||||||
| Years ending December 31: | Notes Payable | Notes Payable | Payments | |||||||||
| 2026 (1) | $ | $ | $ | |||||||||
| 2027 | ||||||||||||
| 2028 | ||||||||||||
| 2029 | ||||||||||||
| 2030 | ||||||||||||
| Thereafter | ||||||||||||
| Total | $ | $ | $ | |||||||||
(1) The Shea Center II non-recourse loan totaling $
8. NOTES PAYABLE
On April 22, 2020, the Company received an Economic Injury Disaster Loan of $
9. INVESTMENT IN CONDUIT PHARMACEUTICALS
Sponsorship of Special Purpose Acquisition Company. As of December 31, 2024, the Company, through our wholly-owned subsidiary Murphy Canyon Acquisition Sponsor, LLC (the "Sponsor"), owned
As of June 30, 2026, we held
10. COMMITMENTS AND CONTINGENCIES
Environmental matters. The Company monitors its properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist, the Company is not currently aware of any environmental liability with respect to the properties that would have a material effect on the Company's financial condition, results of operations and cash flow. Further, the Company is not aware of any environmental liability or any unasserted claim or assessment with respect to an environmental liability that the Company believes would require additional disclosure or recording of a loss contingency.
Financial Markets. The Company monitors concerns over economic recession, interest rate increases, policy priorities of the U.S. presidential administration, trade wars, labor shortages, and inflation, any of which may contribute to increased volatility and diminished expectations for the economy and markets. Additionally, the economic and geopolitical ramifications of the military conflicts in the Middle East and Ukraine, including sanctions, retaliatory sanctions, nationalism, supply chain disruptions and other consequences, could impact commercial real estate fundamentals and result in lower occupancy, lower rental rates, and declining values in our real estate portfolio and in the collateral securing our loan investments. We have not currently experienced a direct material impact to our Company or operations; however, we will continue to monitor the financial markets for events that could impact our commercial real estate properties.
On June 20, 2024, the Company entered into an underwriting agreement with The Benchmark Company, LLC pursuant to which the Company issued and sold in an underwritten public offering
Dividends:
Holders of shares of the Series D Preferred Stock are entitled to receive cumulative cash dividends at a rate of
Voting Rights:
Holders of shares of the Series D Preferred Stock will generally have no voting rights. However, if the Company does not pay dividends on the Series D Preferred Stock for eighteen or more monthly dividend periods (whether or not consecutive), the holders of the Series D Preferred Stock (voting separately as a class with the holders of all other classes or series of the Company's preferred stock it may issue upon which like voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Series D Preferred Stock in the election referred to below) will be entitled to vote for the election of additional directors to serve on the Company's Board of Directors until the Company pays, or declares and sets apart funds for the payment of, all dividends that it owes on the Series D Preferred Stock, subject to certain limitations.
In addition, the affirmative vote of the holders of at least -thirds of the outstanding shares of Series D Preferred Stock (voting together as a class with all other series of parity preferred stock the Company may issue upon which like voting rights have been conferred and are exercisable) is required at any time for the Company to (i) authorize or issue any class or series of its stock ranking senior to the Series D Preferred Stock with respect to the payment of dividends or the distribution of assets on liquidation, dissolution or winding up or (ii) to amend any provision of the Company charter so as to materially and adversely affect any rights of the Series D Preferred Stock or to take certain other actions.
Liquidation Preference:
In the event of the Company's voluntary or involuntary liquidation, dissolution or winding up, the holders of shares of Series D Preferred Stock will be entitled to be paid out of the assets the Company has legally available for distribution to its stockholders, subject to the preferential rights of the holders of any class or series of its stock the Company may issue ranking senior to the Series D Preferred Stock with respect to the distribution of assets upon liquidation, dissolution or winding up, a liquidation preference of $25.00 per share, plus any accumulated and unpaid dividends to, but not including, the date of payment, before any distribution of assets is made to holders of the Company's common stock or any other class or series of the Company's stock it may issue that ranks junior to the Series D Preferred Stock as to liquidation rights.
In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, the Company's available assets are insufficient to pay the amount of the liquidating distributions on all outstanding shares of Series D Preferred Stock and the corresponding amounts payable on all shares of other classes or series of the Company's stock that it issues ranking on parity with the Series D Preferred Stock in the distribution of assets, then the holders of the Series D Preferred Stock and all other such classes or series of stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.
Redemption:
Commencing on or after June 15, 2026, the Company may redeem, at its option, the Series D Preferred Stock, in whole or in part, at a cash redemption price equal to $
In accordance with the terms of the Series D Preferred Stock, the Series D monthly dividend had been approved by the Board of Directors through December 31, 2025 in the amount of $
Common Stock. As of June 30, 2026, Mr. Heilbron beneficially owned approximately
The Company is authorized to issue up to
Effective on May 19, 2025, the Company amended its charter by filing Articles of Amendment with the State Department of Assessments and Taxation of Maryland in order to effect a 1-for-
On July 14, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “Purchaser”) for the purpose of raising approximately $
The closing of the sales of the Securities pursuant to the Purchase Agreement occurred on July 15, 2025. The net proceeds to the Company after deducting the Placement Agent’s fees and the Company’s offering expenses were approximately $
In addition, in connection with the Purchase Agreement, the Company and the Purchaser entered into an Amendment to Series A Common Stock Purchase Warrants (the “Amendment”). The Amendment amends certain warrants to purchase
The Company evaluated the accounting guidance in ASC 480 and ASC 815 regarding the classification of the Pre-Funded Warrant, Common Stock Warrants, and Placement Agent Warrants as equity or a liability and ultimately determined that it should be classified as permanent equity. As of December 31, 2025, of the Common Stock Warrants and Placement Agent Warrants have been exercised.
Genesis Plaza is owned by two tenants-in-common, NetREIT Genesis and NetREIT Genesis II, each of which own
Stock Repurchase Program. While we will continue to pursue value creating investments, the Board of Directors believes there is significant embedded value in our assets that is yet to be realized by the market. Therefore, returning capital to stockholders through a repurchase program is an attractive use of capital currently. In December 2024, the Board of Directors authorized a stock repurchase program of up to $
Cash Dividends on Common Stock and Preferred Stock. For the six months ended June 30, 2026, the Company did declare a cash dividend on shares of Series A Common Stock. As of January 28, 2026, the Board of Directors has suspended the Company’s monthly dividend on its Series D Preferred Stock commencing with the January 2026 monthly dividend that would have been paid on February 15, 2026. In accordance with the terms of the Series D Preferred Stock, the unpaid monthly dividends will continue to accrue at $
Series D Preferred Stock
| Month | 2026 | 2025 | ||||||
| Distributions Declared | Distributions Declared | |||||||
| January | $ | $ | ||||||
| February | ||||||||
| March | ||||||||
| April | ||||||||
| May | ||||||||
| June | ||||||||
| Total | $ | $ | ||||||
Partnership Interests. Through the Company, its subsidiaries, and its partnerships, we own
12. SHARE-BASED INCENTIVE PLAN
The Company maintains a restricted stock incentive plan for the purpose of attracting and retaining officers, employees, and non-employee Board members. Share awards generally vest in equal annual installments over a -to--year period from date of issuance. Non-vested shares have voting rights and are eligible for any dividends paid on shares of common stock. The Company recognized compensation cost for these fixed awards over the service vesting period, which represents the requisite service period, using the straight-line method. Prior to our IPO, the value of non-vested shares was calculated based on the offering price of the shares in the most recent private placement offering of $
During our Annual Meeting of Stockholders, held on June 2, 2026, the Company's 2017 Incentive Award Plan was amended to increase the available shares for issuance from
| Outstanding shares: | Common Shares | Weighted-Average Grant Date Fair Value | ||||||
| Balance at December 31, 2025 | $ | |||||||
| Granted | $ | |||||||
| Forfeited | ( | ) | $ | |||||
| Vested | ( | ) | $ | |||||
| Balance at June 30, 2026 | $ | |||||||
The non-vested restricted shares outstanding as of June 30, 2026, will vest over the next to years. As of June 30, 2026, there were approximately
13. SEGMENTS
The Company’s reportable segments consist of types of real estate properties for which the Company’s chief operating decision maker (CODM), which is our Chief Executive Officer, has the final decision when allocating capital and personnel to the various segments, internally evaluate operating performance and financial results: Office/Industrial Properties, Model Home Properties and Retail Properties. The Company also has certain corporate-level activities including accounting, finance, legal administration, and management information systems which are considered separate operating segments. There is no material inter-segment activity.
The CODM evaluates the performance of our segments based upon an internal net operating income (“NOI”), which is a non-GAAP supplemental financial measure on a quarterly basis as disclosed in the 10-Qs and 10-Ks. We believe that NOI is a widely accepted measure of comparative operating performance in the real estate community. However, our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount. The Company defines NOI for its segments as operating revenues (rental income, tenant reimbursements, parking income, and other operating income, net of provision for bad debt) less rental operating costs (property operating expenses, real estate taxes, insurance, utilities, repairs and maintenance, and asset management fees) excluding 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 & expenses, depreciation & amortization, real estate acquisition fees & expenses, non-cash impairments and corporate general & administrative expenses. Quarterly, the Company reviews and tests for non-cash impairments, as required by GAAP, on all our properties (i.e., Office/Industrial Properties, Retail Properties, and Model Home Properties); however, the CODM does not consider those non-cash impairments when evaluating the segment’s cash operations and NOI.
The CODM uses NOI to evaluate and assess each segments' performance and in deciding how to allocate resources. For Model Home performance, the CODM also includes the gain or loss on sale of real estate assets net of any impairments, because we believe that is a major component in the operating success of the segment and part of the business model for Model Homes. The gain on sale of model homes resulted in cash flows to the Company that the CODM can decide on how to allocate to future operations.
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 six months ended June 30, 2026 and 2025, respectively. 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, 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 three and six months ended June 30, 2026, and June 30, 2025:
| For the Three Months Ended June 30, 2026 | ||||||||||||||||||||
| Retail | Office/Industrial | Model Homes | Corporate and Other | Total | ||||||||||||||||
| Rental revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Recovery revenue | ||||||||||||||||||||
| Other operating revenue | ||||||||||||||||||||
| Total revenues | ||||||||||||||||||||
| Rental operating costs | ( | ) | ||||||||||||||||||
| Net Operating Income (NOI) | ||||||||||||||||||||
| Gain on Sale - Model Homes | ( | ) | ( | ) | ||||||||||||||||
| Impairment of Model Homes | ( | ) | ( | ) | ||||||||||||||||
| Adjusted NOI | $ | $ | $ | $ | $ | |||||||||||||||
| For the Three Months Ended June 30, 2025 | ||||||||||||||||||||
| Retail | Office/Industrial | Model Homes | Corporate and Other | Total | ||||||||||||||||
| Rental revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Recovery revenue | ||||||||||||||||||||
| Other operating revenue | ||||||||||||||||||||
| Total revenues | ||||||||||||||||||||
| Rental operating costs | ( | ) | ||||||||||||||||||
| Net Operating Income (NOI) | ||||||||||||||||||||
| Gain on Sale - Model Home | ||||||||||||||||||||
| Impairment of Model Homes | ( | ) | ( | ) | ||||||||||||||||
| Adjusted NOI | $ | $ | $ | $ | $ | |||||||||||||||
| For the Six Months Ended June 30, 2026 | ||||||||||||||||||||
| Retail | Office/Industrial | Model Homes | Corporate and Other | Total | ||||||||||||||||
| Rental revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Recovery revenue | ||||||||||||||||||||
| Other operating revenue | ||||||||||||||||||||
| Total revenues | ||||||||||||||||||||
| Rental operating costs | ( | ) | ||||||||||||||||||
| Net Operating Income (NOI) | ||||||||||||||||||||
| Gain on Sale - Model Homes | ||||||||||||||||||||
| Impairment of Model Homes | ( | ) | ( | ) | ||||||||||||||||
| Adjusted NOI | $ | $ | $ | $ | $ | |||||||||||||||
| For the Six Months Ended June 30, 2025 | ||||||||||||||||||||
| Retail | Office/Industrial | Model Homes | Corporate and Other | Total | ||||||||||||||||
| Rental revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Recovery revenue | ||||||||||||||||||||
| Other operating revenue | ( | ) | ||||||||||||||||||
| Total revenues | ||||||||||||||||||||
| Rental operating costs | ( | ) | ||||||||||||||||||
| Net Operating Income (NOI) | ||||||||||||||||||||
| Gain on Sale - Model Home | ||||||||||||||||||||
| Impairment of Model Homes | — | — | ( | ) | — | ( | ) | |||||||||||||
| Adjusted NOI | $ | $ | $ | $ | $ | |||||||||||||||
Since a significant portion of the total operating expense for Retail and Office/Industrial are recouped as part of recovery revenue, the CODM looks at NOI as a whole when reviewing the segments. For the Model Home segment, the properties are leased on a triple net basis and the tenants are responsible for a significant portion of the operating expenses. Therefore, the CODM focuses on Model Home revenue, any impairments and the gain on sale of model homes.
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 for the three and six months ended June 30, 2026, and June 30, 2025, respectively. 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 Three Months Ended June 30, 2026 | ||||||||||||||||||||
| Retail | Office/Industrial | Model Homes | Corporate and Other | Total | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Rental income | $ | $ | $ | $ | $ | |||||||||||||||
| Fees and other income | ||||||||||||||||||||
| Total revenue | ||||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Rental operating costs | ( | ) | ||||||||||||||||||
| General and administrative | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Impairment of goodwill and real estate assets | ||||||||||||||||||||
| Total costs and expenses | ||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense - mortgage notes | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest and other income, net | ||||||||||||||||||||
| Net loss in Conduit Pharmaceuticals marketable securities (see footnote 9) | ||||||||||||||||||||
| Gain on sales of real estate, net | ( | ) | ( | ) | ||||||||||||||||
| Gain on disposition of assets and liabilities, net | ||||||||||||||||||||
| Income tax (expense) benefit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Less: Income attributable to noncontrolling interests | ( | ) | ||||||||||||||||||
| Net income (loss) attributable to Presidio Property Trust, Inc. stockholders | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||
| For the Three Months Ended June 30, 2025 | ||||||||||||||||||||
| Retail | Office/Industrial | Model Homes | Corporate and Other | Total | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Rental income | $ | $ | $ | $ | $ | |||||||||||||||
| Fees and other income | ||||||||||||||||||||
| Total revenue | ||||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Rental operating costs | ( | ) | ||||||||||||||||||
| General and administrative | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Impairment of goodwill and real estate assets | ||||||||||||||||||||
| Total costs and expenses | ||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense - mortgage notes | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest and other income, net | ||||||||||||||||||||
| Net gain in Conduit Pharmaceuticals marketable securities (see footnote 9) | ( | ) | ( | ) | ||||||||||||||||
| Gain on sales of real estate, net | ||||||||||||||||||||
| Income tax (expense) benefit | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Less: Income attributable to noncontrolling interests | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net income (loss) attributable to Presidio Property Trust, Inc. stockholders | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||||
| For the Six Months Ended June 30, 2026 | ||||||||||||||||||||
| Retail | Office/Industrial | Model Homes | Corporate and Other | Total | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Rental income | $ | $ | $ | $ | $ | |||||||||||||||
| Fees and other income | ||||||||||||||||||||
| Total revenue | ||||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Rental operating costs | ( | ) | ||||||||||||||||||
| General and administrative | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Impairment of goodwill and real estate assets | ||||||||||||||||||||
| Total costs and expenses | ||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense - mortgage notes | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest and other income, net | ||||||||||||||||||||
| Net loss in Conduit Pharmaceuticals marketable securities (see footnote 9) | ||||||||||||||||||||
| Gain on sales of real estate, net | ||||||||||||||||||||
| Gain on disposition of assets and liabilities, net | ||||||||||||||||||||
| Income tax (expense) benefit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Less: Income attributable to noncontrolling interests | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net income (loss) attributable to Presidio Property Trust, Inc. stockholders | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||
| For the Six Months Ended June 30, 2025 | ||||||||||||||||||||
| Retail | Office/Industrial | Model Homes | Corporate and Other | Total | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Rental income | $ | $ | $ | $ | $ | |||||||||||||||
| Fees and other income | ( | ) | ||||||||||||||||||
| Total revenue | ||||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Rental operating costs | ( | ) | ||||||||||||||||||
| General and administrative | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Impairment of goodwill and real estate assets | ||||||||||||||||||||
| Total costs and expenses | ||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense - mortgage notes | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest and other income, net | ||||||||||||||||||||
| Net gain in Conduit Pharmaceuticals marketable securities (see footnote 9) | ( | ) | ( | ) | ||||||||||||||||
| Gain on sales of real estate, net | ||||||||||||||||||||
| Income tax (expense) benefit | ( | ) | ( | ) | ||||||||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Less: Income attributable to noncontrolling interests | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net income (loss) attributable to Presidio Property Trust, Inc. stockholders | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||||
| Assets by Reportable Segment: | June 30, 2026 | December 31, 2025 | ||||||
| Office/Industrial Properties: | ||||||||
| Land, buildings and improvements, net (1) | $ | $ | ||||||
| Total assets (2) | $ | $ | ||||||
| Model Home Properties: | ||||||||
| Land, buildings and improvements, net (1) | $ | $ | ||||||
| Total assets (2) | $ | $ | ||||||
| Retail Properties: | ||||||||
| Land, buildings and improvements, net (1) | $ | $ | ||||||
| Total assets (2) | $ | $ | ||||||
| Reconciliation to Total Assets: | ||||||||
| Total assets for reportable segments | $ | $ | ||||||
| Corporate and other assets: | ||||||||
| Cash, cash equivalents and restricted cash | ||||||||
| Other assets, net | ||||||||
| Total Assets | $ | $ | ||||||
| (1) | Includes lease intangibles. |
| (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. |
| For the Six Months Ended June 30, | ||||||||
| Capital Expenditures by Reportable Segment | 2026 | 2025 | ||||||
| Office/Industrial Properties: | ||||||||
| Capital expenditures and tenant improvements, office | $ | $ | ||||||
| Model Home Properties: | ||||||||
| Acquisition of operating properties, model home | ||||||||
| Totals: | ||||||||
| Acquisition of operating properties, net | ||||||||
| Capital expenditures and tenant improvements | ||||||||
| Total real estate investments | $ | $ | ||||||
14. INCOME TAX PROVISION
We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2000. As a REIT, U.S. federal income tax law generally requires us to distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. We are also subject to U.S. federal, state and local income taxes on our domestic taxable REIT subsidiaries ("TRS") based on the tax jurisdictions in which they operate.
During the six months ended June 30, 2026 and 2025, we recorded a current income tax provision of $
We have calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the projected full fiscal year to the TRS pretax income or loss excluding unusual or infrequently occurring discrete items for the reporting period, and have accounted for the REIT's minimum state income taxes as a discrete item in the reporting period.
In December 2023, the FASB issued ASU 2023-09 "Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 intends to improve the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. The Company adopted the disclosures on a prospective basis which did not create a material impact to our consolidated financial statements.
15. RELATED PARTY
During the three and six months ended June 30, 2026 and three and six months ended June 30, 2025, the Company leased portions of its corporate headquarters to Puppy Toes, Inc., a company owned by the Chief Executive Officer and his wife, and to Centurion Counsel, Inc., which is owned by Puppy Toes, Inc. Rent billed to these entities from the Company totaled $
For the three and six months ended June 30, 2026, the Company paid a family member of a director $
We also recognized payments made to Mr. Heilbron, CEO of Presidio Property Trust, for his investment in DMH#207, LP. These payments were a combination of pro rata distributions and capital returns from DMH#207 LP. For the three and six months ended June 30, 2026, the payments were $
16. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date the financial statements were issued. Based upon this review, except as disclosed below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements other than those disclosed below.
The foreclosure sale for Shea Center II took place on July 1, 2026, with the property awarded to Argentic Services Company LP, who acquired the property by placing a minimum credit bid valued at $
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto appearing in Item 1 of this report and the more detailed information contained in our 2025 year end Annual Report.
We may refer to the three months ended June 30, 2026 and June 30, 2025, as the "2026 Quarter" and the "2025 Quarter," respectively.
Forward-Looking Statements
This Form 10-Q contains forward-looking statements which involve risks and uncertainties. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" and/or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and also of which do not relate solely to historical matters. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Moreover, investors are cautioned to interpret many of the risks identified in the risk factors discussed in this 10-Q and our 2025 year end Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 27, 2026. Additional factors which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements include, but are not limited to, the risks associated with the ownership of real estate in general and our real estate assets in particular; the economic health of the metro regions where we conduct business; the risk of failure to enter into/and or complete contemplated acquisitions and dispositions, within the price ranges anticipated and on the terms and timing anticipated; changes in the composition of our portfolio; fluctuations in interest rates; reductions in or actual or threatened changes to the timing of federal government spending; the risks related to the use of third-party providers and joint venture partners; the ability to control our operating expenses; the economic health of our tenants; the supply of competing properties; shifts away from brick and mortar stores to e-commerce; the availability and terms of financing and capital and the general volatility of securities markets; compliance with applicable laws, including those concerning the environment and access by persons with disabilities; terrorist attacks or actions and/or risks relating to information technology and cybersecurity attacks, loss of confidential information and other related business disruptions; weather conditions, natural disasters and pandemics; ability to maintain key personnel; failure to qualify and maintain our qualification as a REIT and the risks of changes in laws affecting REITs; and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2025 year end Annual Report. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We undertake no obligation to update our forward-looking statements or risk factors to reflect new information, future events, or otherwise.
OVERVIEW
The Company operates as an internally managed, diversified REIT, with primary holdings in office, industrial, retail, and triple-net leased model home properties. In October 2017, we changed our name from "NetREIT, Inc." to "Presidio Property Trust, Inc." The Company acquires, owns, and manages a geographically diversified portfolio of real estate assets, including office, industrial, retail and model home residential properties leased to homebuilders located in the United States. As of June 30, 2026, the Company owned or had an equity interest in:
| • |
Seven Office buildings and an industrial property ("Office/Industrial Properties"), which total approximately 638,620 rentable square feet; |
| • |
One retail building (“Retail Property”) with approximately 10,500 rentable square feet; and |
| • |
71 Model home residential properties ("Model Homes" or "Model Home Properties"), totaling approximately 211,432 square feet, leased back on a triple-net basis to homebuilders that are owned by four affiliated limited partnerships and one wholly-owned corporation, all of which we control. |
We own three commercial properties located in Colorado, three in North Dakota, one in Southern California, one in Texas and one in Maryland. Our model home properties are located in four states. While geographical clustering of real estate enables us to reduce our operating costs through economies of scale by servicing several properties with less staff, it makes us susceptible to changing market conditions in these discrete geographic areas. We do not develop properties but acquire properties that are stabilized or that we anticipate will be stabilized within two or three years of acquisition. We consider a property to be stabilized once it has achieved an 80% occupancy rate for a full year as of January 1 of such year or has been operating for three years.
Most of our office and retail properties are leased to a variety of tenants ranging from small businesses to large public companies, many of which are not investment grade. We have, in the past, entered into, and intend in the future to enter into, purchase agreements for real estate having net leases that require the tenant to pay all of the operating expenses or pay increases in operating expenses over specific base years. Most of our office leases are for terms of three to five years with annual rental increases. Our model homes are typically leased back for two to three years to the home builder on a triple-net lease. Under a triple-net lease, the tenant is required to pay all operating, maintenance and insurance costs and real estate taxes with respect to the leased property.
We seek to diversify our portfolio by commercial real estate segments, including office, industrial, retail and model home properties to reduce the adverse effect of a single under-performing segment and/or tenant. We further mitigate risk at the tenant level through our credit review process, which varies by tenant class. For example, our commercial and industrial tenants tend to be corporations or individually owned businesses. In these cases, we typically obtain financial records, including financial statements and tax returns (depending on the circumstance), and run credit reports for any prospective tenant to support our decision to enter into a rental arrangement. We also typically obtain security deposits from these commercial tenants. Our Model Home commercial tenants are well-known homebuilders with established credit histories. These tenants are subjected to financial review and analysis prior to us entering into a sales-leaseback transaction.
In June 2024, the Board of Directors established the Strategic Planning and Cyber Committee (the "Strategic Committee"). The purpose of the Strategic Committee is to: assist the Board in carrying out its responsibilities of oversight over the Company's business strategy, make recommendations to the Board on the Company's strategic direction and objectives and serve as a liaison between the Board and management, and assist the Board in fulfilling its responsibilities of oversight with regard to the Company's identification, assessment, and management of the Company's cybersecurity risks. There can be no assurance that the work of the Strategic Committee will result in any transaction being pursued or consummated. In addition, there is no formal timetable for the Strategic Committee's exploration of potential strategic alternatives, and the Company does not intend to disclose any developments with respect to the Strategic Committee's activities unless and until the Company determines that further disclosure is appropriate or required by law or regulation.
For additional information regarding our Common Stock activity, see Footnote 11. Stockholders' Equity in the Notes to the Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Quarterly Report.
SIGNIFICANT TRANSACTIONS IN 2026 AND 2025
| • |
The Company acquired no model homes or commercial properties. |
| • |
The Company acquired 22 model homes for approximately $9.4 million. The purchase price was paid through cash payments of approximately $2.8 million and mortgage notes of approximately $6.6 million. |
Dispositions during the six months ended June 30, 2026:
| • | On January 14, 2026, the Company sold one commercial property, Dakota Center, to a single buyer for approximately $4.7 million, net of selling costs, and recognized a net gain on the disposition of the assets and liabilities of approximately $3.4 million. | |
| • | The Company sold nine model homes for approximately $4.0 million, net of sales costs, and recognized a gain of approximately $0.2 million. |
Dispositions during the six months ended June 30, 2025:
| • | The Company sold 13 model homes for approximately $5.9 million, net of sales costs, and recognized a gain of approximately $0.6 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. |
There have been no material changes to our critical accounting policies as previously disclosed in our 2025 year-end Annual Report.
MANAGEMENT EVALUATION OF RESULTS OF OPERATIONS
Management’s evaluation of operating results includes an assessment of our ability to generate the cash flow necessary to pay operating expenses, general and administrative expenses, debt service and to fund distributions to our stockholders. As a result, management’s assessment of operating results gives less emphasis to the effects of unrealized gains and losses and other non-cash charges, such as depreciation and amortization and impairment charges, which may cause fluctuations in net income for comparable periods but have no impact on cash flows. Management’s evaluation of our potential for generating cash flow includes assessments of our recently acquired properties, our non-stabilized properties, long-term sustainability of our real estate portfolio, our future operating cash flow from anticipated acquisitions, and the proceeds from the sales of our real estate assets.
In addition, management evaluates the results of the operations of our portfolio and individual properties with a primary focus on increasing and enhancing the value, quality and quantity of properties in our real estate holdings. Management focuses its efforts on improving underperforming assets through re-leasing efforts, including negotiation of lease renewals and rental rates. Properties are regularly evaluated for potential added value appreciation and cashflow and, if lacking such potential, are sold with the equity reinvested in new acquisitions or otherwise allocated in a manner we believe is accretive to our stockholders. Our ability to increase assets under management is affected by our ability to raise borrowings and/or capital, coupled with our ability to identify appropriate investments.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED June 30, 2026 and 2025
Revenues. Total revenues were approximately $3.8 million for the three months ended June 30, 2026, compared to approximately $4.4 million for the same period in 2025. As of June 30, 2026, we had approximately $95.0 million in net real estate assets including 71 model homes, compared to approximately $114.6 million in net real estate assets, including 87 model homes at June 30, 2025. The average number of model homes held during the three months ended June 30, 2026 and 2025 was approximately 73 and 85, respectively. Additionally, the change in revenue is directly related to the decrease in commercial real estate rental income during the current period from the sale of Dakota Center.
Rental Operating Costs. Rental operating costs totaled approximately $1.3 million for the three months ended June 30, 2026, compared to approximately $1.5 million for the same period in 2025. Rental operating costs as a percentage of total revenue was approximately 33.0% and 33.4% for the three months ended June 30, 2026 and 2025, respectively.
General and Administrative Expenses. G&A expenses for the three months ended June 30, 2026 and 2025 totaled approximately $1.3 million and $1.2 million, respectively. G&A expenses as a percentage of total revenue was 35.2% and 27.9% for the three months ended June 30, 2026 and 2025, respectively. G&A expenses for the three months ended June 30, 2026 were slightly up compared to the same period ending in 2025 due to costs associated with downsizing our staff; however, the Company is still actively looking to reduce G&A expenses during the year. There has been a reduction of employee headcount during the first and second quarters of 2026 with more expected this year. Starting in April 2026, the Chief Executive Officer has agreed to a voluntary 5% reduction in his annual salary. Additionally, the size of the Board of Directors was reduced by one director starting in June 2026, which will provide additional G&A savings.
Depreciation and Amortization. Depreciation and amortization expense was approximately $0.9 million and $1.2 million for the three months ended June 30, 2026 and 2025, respectively. The decrease in depreciation and amortization expense is directly related to the decrease in commercial real estate rental income during the current period, from the sale of Dakota Center and Shea Center listed as held for sale.
Asset Impairments. We review the carrying value of each of our real estate properties regularly to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the three months ended June 30, 2026 and 2025, we recognized non-cash impairment charges of approximately $3.0 million and $4.3 million, respectively. Approximately $2.6 million and $0.9 million of the impairment charges for the three months ended June 30, 2026 and 2025, was related to the Shea Center II. Additionally, during the three months ended June 30, 2025, we recorded an impairment charge on the Dakota Center property for approximately $3.3 million.
Interest Expense - mortgage notes. Interest expense, including amortization of deferred finance charges, was approximately $1.2 million for the three months ended June 30, 2026, compared to approximately $1.5 million for the same period in 2025. The weighted average interest rate on our outstanding debt was 6.28% and 5.44% as of June 30, 2026 and 2025, respectively. Mortgage notes payable totaled approximately $80.9 million and $92.9 million as of June 30, 2026 and 2025, respectively. Management expects future interest expenses to continue to decrease going forward for the year ending 2026 with the loss of the Shea Center II property on July 1, 2026 and related mortgage.
Gain (Loss) on Sale of Real Estate Assets, net. The change in gain or loss on the sale of real estate assets is dependent on the mix of properties sold and the market conditions at the time of the sale. See "Significant Transactions in 2026 and 2025" above for further detail.
Income allocated to non-controlling interests. Income allocated to non-controlling interests for the three months ended June 30, 2026 and 2025 totaled approximately $40,230 of expense and $0.2 million of income, respectively. This was directly related to the gain on sales of model homes held by our affiliated limited partnerships.
Loss on Conduit remeasurement. As of June 30, 2026, we held 709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $11,628. Conduit's public common stock warrants (CDTTW) and Private CDT Warrants presented on the consolidated balance sheets were measured at fair value using Level 1 and Level 3 market prices, taking into account the adoption of ASU 2022-03 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.
RESULTS OF OPERATIONS FOR THE six MONTHS ENDED June 30, 2026 and 2025
Revenues. Total revenues were approximately $7.6 million for the six months ended June 30, 2026, compared to approximately $8.5 million for the same period in 2025. As of June 30, 2026, we had approximately $95.0 million in net real estate assets including 71 model homes, compared to approximately $114.6 million in net real estate assets, including 87 model homes at June 30, 2025. The average number of model homes held during the six months ended June 30, 2026 and 2025 was approximately 75 and 83, 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 Dakota Center in January 2026, as well as the sale of two commercial properties on February 7, 2025.
| % of Gross Revenue for the six months ended June 30, |
||||||||
| Segment |
2026 |
2025 |
||||||
| Office/Industrial |
74.5 | % | 72.3 | % | ||||
| Model Home |
22.9 | % | 22.7 | % | ||||
| Retail |
2.5 | % | 4.2 | % | ||||
| Other Non-Segment & Consolidating Items |
0.1 | % | 0.8 | % | ||||
| % of Total Real Estate Assets as of |
||||||||
| Segment |
June 30, 2026 |
December 31, 2025 |
||||||
| Office/Industrial |
61.4 | % | 62.1 | % | ||||
| Model Home |
33.9 | % | 33.8 | % | ||||
| Retail |
4.7 | % | 4.1 | % | ||||
Rental Operating Costs. Rental operating costs totaled approximately $2.8 million for the six months ended June 30, 2026, compared to approximately $3.1 million for the same period in 2025. Rental operating costs as a percentage of total revenue was approximately 36.9% and 36.2% for the six months ended June 30, 2026 and 2025, respectively.
General and Administrative Expenses. G&A expenses for the six months ended June 30, 2026 and 2025 totaled approximately $3.0 million and $2.9 million, respectively. G&A expenses as a percentage of total revenue was 39.7% and 33.9% for the six months ended June 30, 2026 and 2025, respectively. G&A expenses for the six months ended June 30, 2026 were up compared to the same period ending in 2025; however, the Company is actively looking to reduce G&A expenses during the year. There has been a reduction of employee headcount during the first and second quarter of 2026 with more expected this year. Starting in April 2026, the Chief Executive Officer has agreed to a voluntary 5% reduction in his annual salary. Additionally, the Board of Directors have approved the reduction of the size of the Board of Directors by one Director starting in June 2026, which will provide additional G&A savings.
Depreciation and Amortization. Depreciation and amortization expense was approximately $1.9 million and $2.5 million for the six months ended June 30, 2026 and 2025, respectively. The decrease in depreciation and amortization expense is directly related to the decrease in commercial real estate rental income during the current period, from the sale of Dakota Center and the placement of Shea Center into receivership and listed as held for sale.
Asset Impairments. We review the carrying value of each of our real estate properties regularly to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the six months ended June 30, 2026 and 2025, we recognized non-cash impairment charges of approximately $3.5 million and $4.3 million, respectively. Approximately $3.1 million and $0.9 million of the impairment charge for the six months ended June 30, 2026 and 2025, was related to the Shea Center II.
Interest Expense - mortgage notes. Interest expense, including amortization of deferred finance charges, was approximately $3.2 million for the six months ended June 30, 2026, compared to approximately $3.0 million for the same period in 2025. The weighted average interest rate on our outstanding debt was 6.28% and 5.44% as of June 30, 2026 and 2025, respectively. Mortgage notes payable totaled approximately $80.9 million and $94.4 million as of June 30, 2026 and 2025, respectively. While mortgage interest expenses increased over the six months ended June 30, 2026 and 2025, approximately $0.2 million of the interest expense attributed to the six months ended June 30, 2026 was related to one-time charge for the default interest on the loan for Dakota Center. Management expects future interest expenses to continue to decrease going forward for the year ending 2026. Additionally, during the six months ended June 30, 2026, we recorded defaulted interest expense of approximately $0.1 million related to the Shea Center II loan.
Gain (Loss) on Sale of Real Estate Assets, net. The change in gain or loss on the sale of real estate assets is dependent on the mix of properties sold and the market conditions at the time of the sale. See "Significant Transactions in 2026 and 2025" above for further detail.
Income allocated to non-controlling interests. Income allocated to non-controlling interests for the six months ended June 30, 2026 and 2025 totaled approximately $0.1 million and $0.3 million, respectively. This was directly related to the gain on sales of model homes held by our affiliated limited partnerships.
Loss on Conduit remeasurement. As of June 30, 2026, we held 709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $11,628. Conduit's public common stock warrants (CDTTW) and Private CDT Warrants presented on the consolidated balance sheets were measured at fair value using Level 1 and Level 3 market prices, taking into account the adoption of ASU 2022-03 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. During the six months ended June 30, 2026, we recorded a gain on Conduit's marketable securities connected to the CDT warrants of $7,728, compared to a loss of approximately $184,459 during the six months ended June 30, 2025.
The following table shows a list of our commercial properties owned by the Company grouped by state and geographic region as of June 30, 2026:
| State |
No. of Properties |
Aggregate Square Feet |
Approximate % of Square Feet |
Current Base Annual Rent |
Approximate % of Aggregate Annual Rent |
|||||||||||||||
| California |
1 | 57,807 | 8.9 | % | $ | 1,364,820 | 14.2 | % | ||||||||||||
| Colorado |
3 | 269,502 | 41.5 | % | 4,423,943 | 45.9 | % | |||||||||||||
| Maryland |
1 | 31,752 | 4.9 | % | 753,721 | 7.8 | % | |||||||||||||
| North Dakota |
3 | 279,559 | 43.1 | % | 2,735,635 | 28.4 | % | |||||||||||||
| Texas |
1 | 10,500 | 1.6 | % | 356,537 | 3.7 | % | |||||||||||||
| Total |
9 | 649,120 | 100.0 | % | $ | 9,634,656 | 100.0 | % | ||||||||||||
The following table shows a list of our Model Home properties by state and geographic region as of June 30, 2026:
| State |
No. of Properties |
Aggregate Square Feet |
Approximate % of Square Feet |
Current Base Annual Rent |
Approximate of Aggregate % Annual Rent |
|||||||||||||||
| Alabama |
10 | 23,835 | 11.3 | % | $ | 347,064 | 11.2 | % | ||||||||||||
| Arizona |
1 | 3,474 | 1.5 | % | $ | 74,280 | 2.3 | % | ||||||||||||
| Tennessee |
2 | 5,534 | 2.6 | % | $ | 89,304 | 2.9 | % | ||||||||||||
| Texas |
58 | 178,589 | 84.5 | % | $ | 2,591,172 | 83.5 | % | ||||||||||||
| Total |
71 | 211,432 | 99.9 | % | $ | 3,101,820 | 99.9 | % | ||||||||||||
LIQUIDITY AND CAPITAL RESOURCES
Overview
Our anticipated future sources of liquidity may include existing cash and cash equivalents, cash flows from operations, refinancing of existing mortgages, future real estate sales, new borrowings from our model home lines of credit, and the sale of our equity or issuance of debt securities or bonds. Our cash and restricted cash at June 30, 2026 was approximately $5.9 million. Our future capital needs include paying down existing borrowings, maintaining our existing properties, funding tenant improvements, paying lease commissions (to the extent they are not covered by lender-held reserve deposits), and the payment of dividends to our stockholders. We also are actively seeking model home investments that are likely to produce income and achieve long-term gains in order to pay dividends to our stockholders. To ensure that we can effectively execute these objectives, we routinely review our liquidity requirements and continually evaluate all potential sources of liquidity.
Our short-term liquidity needs include paying our current operating costs, satisfying the debt service requirements of our existing mortgages, completing tenant improvements, paying leasing commissions, and funding dividends to stockholders. Future principal payments due on mortgage notes payable, during the last three months of 2026 and in the year ending December 31, 2026 total approximately $19.3 million and $2.6 million, respectively, of which $2.7 million in 2025 and $2.2 million in 2026 are related to model home properties. The non-recourse loan for Shea Center matured on January 5, 2026. On January 14, 2026, the Dakota Center property sold to an unrelated third-party for approximately $4.7 million, net of selling costs. The lender received approximately $4.3 million from the sale of the property, which was applied to settle the net loan balance of approximately $8.9 million. The Company was not responsible for the remaining balance on this non-recourse loan, and the transaction resulted in a net gain of approximately $3.4 million. No other commercial property loans mature during 2026.
On February 13, 2026, in connection with an ex parte motion brought by the Lender, the Borrower entered into a stipulation with the Lender to appoint Trigild IVL (the “Receiver”) as receiver over the Property and for the entry of an Order for Appointment of Receiver (the “Order”). Pursuant to the Order, the Borrower, and certain defendant parties, which included the Company (the “Borrower Parties”) were enjoined and restrained from collecting any rents or fees from or incident to the Property and from interfering with the Property. The Borrower Parties agreed to turn over to the Receiver all sums in existence as of the date of entry of the Order that are related or pertain to, or are derived from, the Property. In addition, the Receiver was given possession of the Property and has full power and authority to operate, manage, and preserve the Property. In the case of our non-recourse loan for Shea Center II, our obligation will be settled through the foreclosure process with the lender. On July 1, 2026, the foreclosure for Shea Center II took place with the property going to Argentic Services Company LP, who acquired the property by placing a minimum credit bid valued at $12.0 million, and no cash consideration was exchanged.
While we will continue to pursue value creating investments, the Board of Directors believes there is significant embedded value in our assets that is yet to be realized by the market. In December 2024, the Board of Directors authorized a stock repurchase program of up to $6.0 million of outstanding shares of our Series A Common Stock and up to $4.0 million of our Series D Preferred Stock, which the Board of Directors did not renew in December 2025. During the year ended December 31, 2025, we repurchased 16,080 shares of our Series A Common Stock, with an average price of $4.79 per share, including a commission of $0.025 per share, for a total cost of $77,092 for the Series A Common Stock. This does not include the shares repurchased in the fixed price self-tender offer (the "Tender Offer") during April-May 2025. During the year ended December 31, 2025, the Company repurchased 23,346 shares of our Series D Preferred Stock at an average price of approximately $14.76 per share, including a commission of $0.035 per share, for a total cost of $344,503 for the Series D Preferred Stock. Any repurchased shares are treated as authorized and unissued in accordance with Maryland law and shown as a reduction of stockholders’ equity at cost. There were no repurchases of Series A Common Stock or Series D Preferred Stock during six months ended June 30, 2026 as there were no repurchase plans in place.
There can be no assurance that the Company will refinance loans, take out additional financing or that capital will be available to the Company on acceptable terms, if at all. If events or circumstances occur such that the Company does not obtain additional funding, it will most likely be required to reduce its plans, reduce certain discretionary spending or even sell properties, which could have a material adverse effect on the Company’s ability to achieve its intended business objectives. We believe that cash on hand, cash flow from our existing portfolio, distributions from joint ventures in Model Home Partnerships and property sales during 2025 and 2026 will be sufficient to fund our operating costs, planned capital expenditures and required dividends for at least the next twelve months. If our cash flow from operating activities is not sufficient to fund our short-term liquidity needs, we plan to fund a portion of these needs from additional borrowings of secured or unsecured indebtedness, from real estate sales, issuance of debt instruments, additional investors, or we may reduce or suspend the rate of dividends to our stockholders.
Our long-term liquidity needs include the capital necessary to grow and maintain our portfolio of investments. We believe that the potential financing capital available to us in the future is sufficient to fund our long-term liquidity needs. We are continually reviewing our existing portfolio to determine which properties have met our short- and long-term goals and while seeking to reinvest the proceeds in properties with better potential to increase performance. We expect to obtain additional cash in connection with refinancing of maturing mortgages and assumption of existing debt collateralized by some or all of our real property in the future to meet our long-term liquidity needs. If we are unable to arrange a line of credit, borrow on properties, privately place securities or sell securities to the public, we may not be able to acquire additional properties to meet our long-term objectives.
For the six months ended June 30, 2026, the Company did not declare a cash dividend on shares of Series A Common Stock. For the six months ended June 30, 2026, the Company did not declare and did not pay dividends on shares of Series D Preferred Stock. As of January 28, 2026, the Board of Directors has suspended the Company’s monthly dividend on its Series D Preferred Stock commencing with the January 2026 monthly dividend that would have been paid on February 15, 2026. Since the Company’s Board of Directors did not declare a dividend during the six months ended June 30, 2026, an accrual was not recorded on the balance sheet. However, undeclared preferred stock dividends are reflected in earnings per share as discussed in ASC 260-10-45-11. In accordance with the terms of the Series D Preferred Stock, preferred stock dividends that are not declared accumulate and are added to the liquidation preference as of the scheduled payment date for the respective series of the preferred stock. No interest, or sum of money in lieu of interest, is payable in respect of any dividend payments on the Series D Preferred Stock that are in arrears. As of June 30, 2026 and December 31, 2025, the cumulative preferred dividends in arrears on the Series D preferred stock was $1.1 million and $0, respectively.
The Board and the Company intend to reassess, on a quarterly basis, when accrued dividends on the Series D Preferred Stock may be paid and when the monthly dividend payments can be reinstated. Under the guidance of ASC 260-10-45-11, if the Company's Board of Directors does not declare a dividend in a given period, an accrual is not recorded on the balance sheet, however; undeclared preferred stock dividends are reflected in earnings per share. Preferred stock dividends that are not declared accumulate and are added to the liquidation preference as of the scheduled payment date for the respective series of the preferred stock. Cash permitting, the Company intends to continue to pay dividends on a monthly basis to holders of our Series D Preferred Stock going forward, but there can be no guarantee the Board of Directors will approve any future dividends. The Company has not decided when it will resume dividends to our common stockholders on a quarterly basis.
Series D Preferred Stock:
| Month |
2026 |
2025 |
||||||
| Distributions Declared |
Distributions Declared |
|||||||
| January |
$ | — | $ | 0.19531 | ||||
| February |
— | 0.19531 | ||||||
| March |
— | 0.19531 | ||||||
| April |
— | 0.19531 | ||||||
| May |
— | 0.19531 | ||||||
| June |
— | 0.19531 | ||||||
| Total |
$ | — | $ | 1.17186 | ||||
Cash Equivalents and Restricted Cash
At June 30, 2026 and December 31, 2025, we had approximately $5.9 million and $7.4 million in cash equivalents, respectively, including $4.4 million and $5.7 million of restricted cash, respectively. Our cash equivalents and restricted cash consist of invested cash, cash in our operating accounts, short-term bonds and cash held in bank accounts at third-party institutions. During 2026 and 2025, we did not experience any loss or lack of access to our cash or cash equivalents. Including any cash committed to current capital expenditures on our properties, the Company may spend approximately $1.6 million on capital expenditures, net of any construction financing (some of which is held in deposits reserve accounts by our lenders) during the rest of the year. We intend to use the remainder of our existing cash and cash equivalents for asset/property acquisitions, reduction of principal debt, general corporate purposes, common stock repurchases (if market conditions are met), or dividends to our stockholders.
On July 14, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “Purchaser”) for the purpose of raising approximately $2.05 million in gross proceeds for the Company. Pursuant to the terms of the Purchase Agreement, the Company agreed to sell in a registered direct offering (the “Offering”), (i) 140,000 shares (the “Public Shares”) of its Series A Common Stock and (ii) pre-funded warrants to purchase up to 30,830 shares (the “Pre-Funded Warrant Shares”) of Series A Common Stock (the “Pre-Funded Warrants”). Each Public Share and accompanying Pre-Funded Warrant were sold together at a combined offering price of $12.00. The Pre-Funded Warrants were immediately exercisable at a nominal exercise price of $0.0001 and were exercised on July 14, 2025 in full.
The closing of the sales of the Securities pursuant to the Purchase Agreement occurred on July 15, 2025. The net proceeds to the Company after deducting the Placement Agent’s fees and the Company’s offering expenses were approximately $1.7 million. The Company has used and intends to use the net proceeds from the offering for working capital and for other general corporate purposes including to potentially acquire additional properties.
In addition, in connection with the Purchase Agreement, the Company and the Purchaser entered into an Amendment to Series A Common Stock Purchase Warrants (the “Amendment”). The Amendment amends certain warrants to purchase 200,000 shares of Series A Common Stock purchased by the Purchaser on July 14, 2021 to (i) reduce the exercise price to $12.00 per share from $55 per share and (ii) extend the termination date to July 16, 2030 from July 16, 2026. Pursuant to the Stock Purchase Agreement, the Company filed a resale registration statement to register the shares of Series A Common Stock underlying such warrants, which registration statement went effective on August 22, 2025.
As of June 30, 2026, the Company had fixed-rate mortgage notes payable related to model homes in the aggregate principal amount of $22.5 million, collateralized by a total of 71 Model Homes. These loans generally have a term at issuance of three to five years. As of June 30, 2026, the average loan balance per home outstanding and the weighted-average interest rate on these mortgage loans are approximately $316,844 and 7.18%, respectively. Our debt to estimated market value on all our model home properties is approximately 62.4%. We have been able to refinance maturing mortgages to extend maturity dates and we have not experienced any notable difficulties financing our acquisitions. The Company anticipates that any new mortgages used to acquire commercial properties or model homes in the near future will be at rates higher than our currently weighted average interest rate.
Cash Flow for the six months ended June 30, 2026, and June 30, 2025
Operating Activities: Net cash used in operating activities for the six months ended June 30, 2026, totaled approximately $24,839, as compared to cash used in operating activities of $1.0 million for the six months ended June 30, 2025. The change in net cash used in operating activities is primarily due to the sale of Dakota Center, combined with other changes in net income, which fluctuates due to new leases, leasing renewals, tenant move outs and model home sales and acquisitions, as well as changes in non-cash addbacks or subtractions such as straight-line rent, are the primary drivers of the increase in cash used in operating activities.
Investing Activities: Net cash provided by investing activities for the six months ended June 30, 2026, was approximately $8.3 million compared to approximately $11.4 million used in investing activities during the same period in 2025. The change from each period was primarily related to the sale of our commercial and model home properties, totaling approximately $8.7 million during the six months ended June 30, 2026, compared to approximately $21.5 million during the six months ended June 30, 2025. Cash used in real estate acquisition and capital improvement totaled approximately $0.5 million, for the six months ended June 30, 2026 compared to $10.2 million for the same period in 2025.
We currently project that we could spend up to $1.6 million (some of which is held in deposits reserve accounts by our lenders) on capital improvements, tenant improvements and leasing costs for properties within our portfolio during the next 12 months. Capital expenditures may fluctuate in any given period subject to the nature, extent, and timing of improvements required to the properties. We may spend more on capital expenditures in the future due to rising construction costs. Tenant improvements and leasing costs may also fluctuate in any given year depending upon factors such as the property, the term of the lease, the type of lease, the involvement of external leasing agents and overall market conditions.
Financing Activities: Net cash used in financing activities during the six months ended June 30, 2026, was $9.8 million compared to $11.1 million provided by financing activities for the same period in 2025 and was primarily due to the following activities for the six months ended June 30, 2026:
| • | Repayment of mortgage notes payable totaled approximately $9.3 million for the six months ended June 30, 2026, compared to $14.0 million during the same period in 2025. | |
| • | Distributions to noncontrolling interest of approximately $0.3 million for the six months ended June 30, 2026, compared to $0.4 million during the same period in 2025. | |
| • | During the six months ended June 30, 2025, we received approximately $6.6 million in mortgage notes proceeds. None were received during the six months ended June 30, 2026. | |
| • | Dividend payments to Series D Preferred Stockholders during the six months ended June 30, 2025, totaled approximately $1.1 million, compared to approximately $0.2 million during six months ended June 30, 2026. | |
| • | Additionally, during the six months ended June 30, 2025, we repurchased approximately $1.5 million worth of Series A Common Stock. No such purchases were made during the six months ended June 30, 2026. |
Off-Balance Sheet Arrangements
On July 12, 2021, the Company entered into a securities purchase agreement with a single U.S. institutional investor for the purchase and sale of 100,000 shares of its Series A Common Stock, Common Stock Warrants to purchase up to 200,000 shares of Series A Common Stock and Pre-Funded Warrants to purchase up to 200,000 shares of Series A Common Stock. Each share of Common Stock and accompanying Common Stock Warrants were sold together at a combined offering price of $50.00, and each share of Common Stock and accompanying Pre-Funded Warrant were sold together at a combined offering price of $49.90. The Pre-Funded Warrants were exercised in full during August 2021 at a nominal exercise price of $0.10 per share. The Common Stock Warrants had an exercise price of $55.00 per share, exercisable upon issuance and will expire five years from the date of issuance. In July 2025 the exercise price was adjusted to $12.00 per share and the term of the warrants extended to July 16, 2030.
In connection with Series A Common Stock offering in July 2021, we agreed to issue the Placement Agent Warrants to purchase up to 8,000 shares of Series A Common Stock, representing 4.0% of the Series A Common Stock and shares of Series A Common Stock issuable upon exercise of the Pre-Funded Warrants. The Placement Agent Warrants were issued in August 2021, post exercise of the Pre-Funded Warrants with an exercise price of $62.50 and will expire five years from the date of issuance.
Common Stock Warrants:
If all the potential Common Stock Warrants outstanding at June 30, 2026, were exercised at the price of $12 per share, gross proceeds to us would be approximately $2.4 million and we would as a result issue an additional 200,000 shares of common stock.
Placement Agent Warrants:
If all the potential Placement Agent Warrants outstanding at June 30, 2026, were exercised at the price of $62.50 per share, gross proceeds to us would be approximately $0.5 million and we would as a result issue an additional 8,000 shares of common stock.
January 14, 2022, was the record date with respect to the distribution of five-year listed warrants (the “Series A Warrants”). The Series A Warrants and the shares of common stock issuable upon the exercise of the Series A Warrants were registered on a registration statement that was filed with the SEC and was declared effective January 21, 2022. The Series A Warrants commenced trading on the Nasdaq Capital Market under the symbol “SQFTW” on January 24, 2022 and were distributed on that date to persons who held shares of common stock and existing outstanding warrants as of the January 14, 2022 record date, or who acquired shares of common stock in the market following the record date, and who continued to hold such shares at the close of trading on January 21, 2022. The Series A Warrants give the holder the right to purchase one share of common stock at $70.00 per share, for a period of five years. Should warrant holders not exercise the Series A Warrants during that holding period, the Series A Warrants will automatically convert to 1/100 of a common share at expiration, rounded down to the nearest number of whole shares.
Series A Warrants:
If all the potential Series A Warrants outstanding at June 30, 2026, were exercised at the price of $70.00 per share, gross proceeds to us would be approximately $101.2 million and we would as a result issue an additional 1,445,007 shares of common stock.
Inflation
Leases generally provide for limited increases in rent as a result of fixed increases, increases in the consumer price index (typically subject to ceilings), or increases in the clients’ sales volumes. We expect that inflation will cause these lease provisions to result in rent increases over time. During times when inflation is greater than increases in rent, as provided for in the leases, rent increases may not keep up with the rate of inflation.
However, our use of net lease agreements tends to reduce our exposure to rising property expenses due to inflation because the client is responsible for property expenses. Inflation and increased costs may have an adverse impact on our clients if increases in their operating expenses exceed increases in revenue.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide disclosure pursuant to this item.
ITEM 4. CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-14(c). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
None.
If we are unable to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock could be delisted, which could affect our common stock's market price and liquidity and reduce our ability to raise capital.
We are required to meet certain qualitative and financial tests to maintain the listing of our securities on Nasdaq. As of the date of this report, we are in compliance with all of Nasdaq's continued listing requirements. There can be no assurance that we will be able to maintain compliance with the minimum bid price requirement, the market value of listed securities requirement, or will otherwise be in compliance with other Nasdaq listing criteria.
On July 22, 2026, the SEC's Division of Trading and Markets, acting under delegated authority, approved new Nasdaq Rules 5450(a)(3) and 5550(a)(6), which would require all Nasdaq-listed companies, including those listed on the Nasdaq Capital Market, to maintain a minimum Market Value of Listed Securities ("MVLS") of at least $5,000,000. Under amended Nasdaq Rule 5810(c)(1), if a company's MVLS remains below $5,000,000 for 30 consecutive business days, Nasdaq would issue an immediate Staff Delisting Determination, and the company's securities would become immediately subject to suspension and delisting. Unlike most other continued listing deficiencies, Nasdaq would not provide any compliance period, cure period, or opportunity to submit a compliance plan before issuing the Staff Delisting Determination. In addition, under the rule as approved, a timely request for a hearing before a Nasdaq Hearings Panel would not stay the suspension of trading, meaning a company's securities would generally trade in the over-the-counter market while any appeal is pending. Although the Hearings Panel would have limited discretion to grant an exception period of up to 180 days, any such relief would require the company to demonstrate compliance with Nasdaq's more stringent initial listing standards, rather than merely regaining compliance with continued listing standards, which represents a materially higher bar.
However, on July 29, 2026, the SEC's approval order was automatically stayed after Cemtrex, Inc. and the Small Public Company Coalition filed notices of their intent to petition the full Commission for review of the delegated action. Under Rule 431(e) of the SEC's Rules of Practice, the filing of such notices automatically stays an action taken under delegated authority. As a result, the new $5,000,000 MVLS continued listing requirement is not presently effective, and Nasdaq-listed companies remain subject to the continued listing rules that were in effect prior to the July 22 approval order. The Commission must decide whether to review the Division's approval and, if it does, whether to affirm, modify, reverse, set aside, or remand the matter for further proceedings. There is no prescribed timeline for the Commission to reach a decision, and if the petitioners subsequently seek judicial review, the rule could remain stayed for a significant additional period.
Separately, pursuant to amendments to Nasdaq Listing Rule 5810(c)(3)(A) that became effective in January 2026, Nasdaq may immediately issue a Staff Delisting Determination, without providing any compliance period, if a company's listed security has a closing bid price of $0.10 or less for ten consecutive business days, regardless of whether the company is currently within a compliance period for the minimum bid price requirement.
If the new $5,000,000 MVLS requirement becomes effective, either through Commission affirmance or the lifting of the current stay, and we are unable to maintain an MVLS of at least $5,000,000, we could face immediate suspension and delisting proceedings with no compliance period and no automatic stay of suspension during any appeal. Even if the new MVLS requirement does not become effective, we remain subject to Nasdaq's existing continued listing requirements, including the minimum bid price requirement, and we can provide no assurance that we will maintain compliance with those requirements. If we are unable to maintain compliance with the continued listing requirements of Nasdaq, our securities could be delisted, making it more difficult to buy or sell our securities and to obtain accurate quotations, and the price of our securities could suffer a material decline. Delisting could also impair our ability to raise capital.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Stock Repurchase Program. While we will continue to pursue value creating investments, the Board of Directors believes there is significant embedded value in our assets that is yet to be realized by the market. Therefore, returning capital to stockholders through a repurchase program is an attractive use of capital currently. In December 2024, the Board of Directors authorized a stock repurchase program of up to $6.0 million of outstanding shares of our Series A Common Stock and up to $4.0 million of our Series D Preferred Stock, which the Board of Directors did not renew in December 2025. During the year ended December 31, 2025, we repurchased 16,080 shares of our Series A Common Stock, with an average price of $4.79 per share, including a commission of $0.025 per share, for a total cost of $77,092 for the Series A Common Stock. This does not include the shares repurchased in the fixed price self-tender offer (the "Tender Offer") during April-May 2025. During the year ended December 31, 2025, the Company repurchased 23,346 shares of our Series D Preferred Stock at an average price of approximately $14.76 per share, including a commission of $0.035 per share, for a total cost of $344,503 for the Series D Preferred Stock. Any repurchased shares are treated as authorized and unissued in accordance with Maryland law and shown as a reduction of stockholders’ equity at cost. There were no repurchases of Series A Common Stock or Series D Preferred Stock during six months ended June 30, 2026 as there were no repurchase plans in place.
Item 3. Defaults Upon Senior Securities.
During January 2026, the Company received notice that the Company's failure to repay in full by January 5, 2026 the indebtedness related to the loan agreement governing Shea Center II had triggered a default event. On February 13, 2026, the Company received notification that the Shea Center II property governed by the non-recourse loan agreement was moved into receivership and the lender has started the foreclosure process. The foreclosure sale and public auction is scheduled for July 1, 2026. The lender held approximately $2.4 million in restricted cash, some of which was utilized by the receiver to operate the property. Additionally, during the three March 31, 2026, Shea Center II was listed as held for sale, related to the foreclosure sale and impaired approximately $2.6 million. On July 1, 2026, the foreclosure for Shea Center II took place with the property going to Argentic Services Company LP, who acquired the property by placing a minimum credit bid valued at $12.0 million, and no cash consideration was exchanged. Given the non-recourse nature of the loan and the outstanding principal balance of approximately $15.4 million dollars, roughly $3.4 million of the outstanding debt was forgiven as a result of the non-cash transaction.
As of January 28, 2026, the Board of Directors has suspended the Company’s monthly dividend on its Series D Preferred Stock commencing with the January 2026 monthly dividend that would have been paid on February 15, 2026. Since the Company’s Board of Directors did not declare a dividend during the six months ended June 30, 2026, an accrual was not recorded on the balance sheet. However, undeclared preferred stock dividends are reflected in earnings per share as discussed in ASC 260-10-45-11. In accordance with the terms of the Series D Preferred Stock, Preferred stock dividends that are not declared accumulate and are added to the liquidation preference as of the scheduled payment date for the respective series of the preferred stock. No interest, or sum of money in lieu of interest, is payable in respect of any dividend payments on the Series D Preferred Stock that are in arrears. As of June 30, 2026 and December 31, 2025, the cumulative preferred dividends in arrears on the Series D preferred stock was approximately $1.1 million and $0, respectively.
The Board and the Company intend to reassess, on a quarterly basis, when accrued dividends on the Series D Preferred Stock may be paid and when the monthly dividend payments can be reinstated. The Company has not decided when it will resume dividends to our common stockholders on a quarterly basis. As of the date of filing this quarterly report, $0.8 million in dividends are in arrears.
On August 7, 2026, the Company filed a Registration Statement on Form S-4 and a Tender Offer Statement on Schedule TO with the SEC with respect to a proposed offer (the "Exchange Offer") to exchange each validly tendered and accepted outstanding share of the Company's Series D Preferred Stock for five and one-half (5.5) newly issued shares of the Company's Common Stock (the "Exchange Ratio"), upon the terms and subject to the conditions described in the preliminary prospectus/offer to exchange included in such filings. As of the date of this Quarterly Report on Form 10-Q, the Registration Statement on Form S-4 has not been declared effective by the SEC, and the Exchange Offer has not yet commenced. The Exchange Offer will not commence until the Registration Statement is declared effective by the SEC, and there can be no assurance that the Registration Statement will be declared effective or that the Exchange Offer will be commenced or consummated on the terms described herein or at all. The commencement date and expiration date of the Exchange Offer have not yet been determined and will depend on, among other things, the timing of the SEC's review of the Registration Statement and Schedule TO. If the Exchange Offer is commenced and consummated, holders of Series D Preferred Stock who validly tender their shares on or prior to the expiration date and time of the Exchange Offer, and do not validly withdraw such shares, will receive the Exchange Ratio of shares of Common Stock for each share of Series D Preferred Stock accepted by the Company for exchange.
Item 4. Mine Safety Disclosures
None.
During the six months ended June 30, 2026, director or officer of the Company adopted or terminated a “Rule
| Exhibit |
Description |
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| 31.1 |
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| 31.2 |
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| 32.1 |
| 101.INS |
Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: August 13, 2026 | Presidio Property Trust, Inc. |
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| By: |
/s/ Jack K. Heilbron |
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| Name: |
Jack K. Heilbron |
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| Title: |
Chief Executive Officer |
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| By: |
/s/ Ed Bentzen | |
| Name: |
Ed Bentzen | |
| Title: |
Chief Financial Officer |
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