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Presidio Property Trust, Inc. (SQFT) SEC Filing 10-Q Quarterly Report for the period ending Wednesday, June 30, 2021

Presidio Property Trust, Inc.

CIK: 1080657 Ticker: SQFT

Exhibit 99.1

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Presidio Property Trust, Inc.

Announces Earnings for the First Quarter Ended March 31, 2021

 

San Diego, California, May 11, 2021 – Presidio Property Trust, Inc. (Nasdaq: SQFT) (the “Company”), an internally‑managed, diversified REIT, with holdings in office, industrial, retail, and model home properties, today reported financial results for its first quarter ended March 31, 2021. All first quarter financial measures referenced herein are unaudited.

 

“We are pleased to report our first quarter earnings, continuing the strong rent collections that we saw throughout 2020,” said Jack Heilbron, the Company’s President and Chief Executive Officer. “The diversified nature of our portfolio, with especially strong office and model home collections, resulted in a company-wide collections rate of 96% of budget in the first quarter of 2021.”

 

“Fifteen office leases were inked in the first quarter of 2021, with 5 new tenants and 10 existing tenant renewals,” noted Gary Katz, the Company’s Senior Vice President of Asset Management. “As many local COVID-related restrictions have been relaxed, we believe that the optimism of an economic recovery will translate into more tenant renewals, and prospective tenants signing new leases.”

 

 

First Quarter Highlights

 

 

Core FFO for the quarter was approximately $936,000, or $0.098 per fully diluted share

   

 

 

Collected 96% of first quarter contractual base rent

   

 

 

Executed a total of 15 new and renewal offices leases during the quarter, for monthly rental revenue of approximately $1.4 million

 

First Quarter Ended March 31, 2021 Financial Results

 

Net loss attributable to the Company’s common stockholders for the three months ended March 31, 2021 was approximately $2.7 million, or $0.28 per basic and diluted share, compared to a net loss of $1.1 million, or $0.12 per basic and diluted share for the three months ended March 31, 2020. The increase in net loss attributable to the Company’s common stockholders was a result of:

 

 

A decrease in revenues of approximately $1.3 million due to the sale of four properties since the first quarter of 2020;

   

 

 

An increase in loss on sale of real estate – During the three months ended March 31, 2021, the company recorded a loss of approximately $1.2 million on the sale of real estate, compared to an approximately $10,000 loss in the first quarter of 2020; partially offset by,

   

 

 

A corresponding decrease in rental operating costs of approximately $0.5 million due to the sale of four properties compared to the first quarter of 2020.

 

FFO (non-GAAP) for the first quarter ended March 31, 2021 increased by approximately $156,000 to $935,725 from $779,689 for the three months ended March 31, 2020. A reconciliation of FFO to net loss, the most directly comparable GAAP financial measure, is attached to this press release. However, because FFO excludes depreciation and amortization as well as the changes in the value of the Company’s properties that result from use or market conditions, each of which have real economic effects and could materially impact the Company’s results from operations, the utility of FFO as a measure of the Company’s performance is limited.

 

First Quarter Ended March 31, 2021 Acquisitions and Dispositions

 

 

Waterman Plaza was sold on January 28, 2021 for approximately $3.5 million and the Company recognized a loss of approximately $0.2 million.

   

 

 

Garden Gateway was sold on February 19, 2021 for approximately $11.2 million and the Company recognized a loss of approximately $1.4 million.

   

 

 

During the three months ended March 31, 2021, the Company disposed of 12 model homes for approximately $4.9 million and recognized a gain of approximately $0.4 million.

 

During the three months ended March 31, 2021, the Company did not acquire any properties or model homes.

 

 

Dividends

 

On February 23, 2021, the board of directors of the Company declared a quarterly dividend of $0.101 per share of [Class A] common stock for the first quarter of 2021, payable on March 16, 2021 to stockholders of record as of March 9, 2021.

 

 

About Presidio Property Trust, Inc.

 

The Company is an internally managed, diversified REIT, with holdings in model home properties which are triple-net leased to homebuilders, office, industrial, and retail 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 throughout the United States. As of March 31, 2021, the Company owned or had an equity interest in:

 

 

106 Model Homes leased back on a triple-net basis to homebuilders that are owned by six affiliated limited partnerships and one wholly-owned corporation (“Model Home Properties”).

   

 

 

Nine office buildings and one industrial property (“Office/Industrial Properties”), which total approximately 867,744 rentable square feet; and

   

 

 

Three retail shopping centers (“Retail Properties”), which total approximately 110,552 rentable square feet.

 

The Company’s model homes are leased on a triple-net basis to homebuilders located primarily in Texas and Florida. Our office, industrial and retail properties are located primarily in Colorado, with four properties located in North Dakota and two in Southern California. While geographical clustering of real estate enables us to reduce our operating costs through economies of scale by servicing a number of properties with less staff, it makes us susceptible to changing market conditions in these discrete geographic areas, including those that have developed as a result of COVID-19. 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 expense (NNN leases) and/or pay increases in operating expenses over specific base years. Most of our office leases are for terms of 3 to 5 years with annual rental increases. Our model homes are typically leased back for 2 to 3 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 to reduce the adverse effect of a single under-performing segment, geographic market and/or tenant. We further supplement this 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 individual 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 generally reputable homebuilders with established credit histories. These tenants are subjected to financial review and analysis prior to us entering into a sales-leaseback transaction. For more information on Presidio, please visit the Company website at http://www.presidiopt.com.

 

 

The following information was filed by Presidio Property Trust, Inc. (SQFT) on Tuesday, May 11, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets (Current Period Unaudited)
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals)
Condensed Consolidated Statements Of Cash Flows (Unaudited)
Condensed Consolidated Statements Of Changes In Equity (Unaudited)
Condensed Consolidated Statements Of Operations (Unaudited)
Note 1 - Organization
Note 1 - Organization (Details Textual)
Note 10 - Stockholders' Equity
Note 10 - Stockholders' Equity (Details Textual)
Note 11 - Share-Based Incentive Plan
Note 11 - Share-Based Incentive Plan (Details Textual)
Note 11 - Share-Based Incentive Plan (Tables)
Note 11 - Share-Based Incentive Plan - Summary Of Activity For Restricted Stock (Details)
Note 12 - Segments
Note 12 - Segments (Details Textual)
Note 12 - Segments (Tables)
Note 12 - Segments - Assets By Reportable Segment (Details)
Note 12 - Segments - Capital Expenditures By Reportable Segment (Details)
Note 12 - Segments - Operating Income By Segment (Details)
Note 13 - Subsequent Events
Note 13 - Subsequent Events (Details Textual)
Note 2 - Significant Accounting Policies
Note 2 - Significant Accounting Policies (Details Textual)
Note 3 - Recent Real Estate Transactions
Note 3 - Recent Real Estate Transactions (Details Textual)
Note 4 - Real Estate Assets
Note 4 - Real Estate Assets (Details Textual)
Note 4 - Real Estate Assets (Tables)
Note 4 - Real Estate Assets - Summary Of Properties Owned (Details)
Note 5 - Lease Intangibles
Note 5 - Lease Intangibles (Details Textual)
Note 5 - Lease Intangibles (Tables)
Note 5 - Lease Intangibles - Amortization Expense (Details)
Note 5 - Lease Intangibles - Net Value Of Other Intangibles (Details)
Note 6 - Other Assets
Note 6 - Other Assets (Tables)
Note 6 - Other Assets - Other Assets (Details)
Note 7 - Mortgage Notes Payable
Note 7 - Mortgage Notes Payable (Details Textual)
Note 7 - Mortgage Notes Payable (Tables)
Note 7 - Mortgage Notes Payable - Mortgage Notes Payable (Details)
Note 7 - Mortgage Notes Payable - Scheduled Principal Payments Of Mortgage Notes Payable (Details)
Note 8 - Notes Payable
Note 8 - Notes Payable (Details Textual)
Note 9 - Commitments And Contingencies
Significant Accounting Policies (Policies)

Material Contracts, Statements, Certifications & more

Presidio Property Trust, Inc. provided additional information to their SEC Filing as exhibits

Ticker: SQFT
CIK: 1080657
Form Type: 10-Q Quarterly Report
Accession Number: 0001437749-21-019318
Submitted to the SEC: Tue Aug 10 2021 4:26:28 PM EST
Accepted by the SEC: Tue Aug 10 2021
Period: Wednesday, June 30, 2021
Industry: Real Estate Investment Trusts

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