EX-99.2 4 ex99-2.htm

 

Exhibit 99.2

 

 

 

SUPPLEMENTAL FINANCIAL INFORMATION

 

As of December 31, 2022

 

 

 

 

FORWARD-LOOKING STATEMENTS

 

This presentation contains “forward-looking statements” within the meaning of the federal securities laws that involve risks and uncertainties, many of which are beyond our control. Our actual results could differ materially and adversely from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in the Quarterly Report on Form 10-Q. Forward-looking statements relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, financial condition, liquidity, capital resources, cash flows, dividends, results of operations and other financial and operating information. When used in this presentation, the words “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “should,” “project,” “plan,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

 

The forward-looking statements contained in this presentation are based on historical performance and management’s current plans, estimates and expectations in light of information currently available to it and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to the factors, risks and uncertainties described in the Annual Report on Form 10-K, as filed March 30, 2022 (“Annual Report”) and the Company’s Quarterly Report on Form 10-Q filed with the SEC on the date hereof (“Quarterly Report”), changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors described in the “Risk Factors” section of the Annual Report and the Quarterly Report, many of which are beyond our control. Should one or more of these risks or uncertainties materialize or should any of our assumptions prove to be incorrect, our actual results may vary in material respects from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Any forward-looking statement made by us in this presentation speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.

 

 

 

 

COMPANY OVERVIEW

 

  Corporate Information
Headquarters San Diego, CA
Founded 1999
Key Geographies CA, CO, MD, ND & TX
Employees 18
   
         
● Presidio Property Trust, Inc. (“Presidio” or the “Company”) was founded in 1999 as NetREIT       
         
● Presidio is an internally managed real estate company focused on commercial real estate opportunities in often overlooked and regionally dominant markets   Portfolio Summary (Number / Square Footage)
Office 8 properties / 606,166 sq. ft.
Retail 3 properties / 65,242 sq. ft.
Industrial 1 property / 150,099 sq. ft.
Model Homes (1) 5 funds / 92 homes
         
● The Company acquires, owns, and manages office and industrial real estate assets in markets with strong demographic and economic drivers with attractive going-in cap rates      
         
● Presidio’s commercial portfolio currently includes 12 commercial properties with a book value of approximately $93 million      
         
●

In addition to its commercial real estate holdings, Presidio generates fees and rental income from affiliated entities, which manage and/or own a portfolio of model homes (1)

 

  

Portfolio Value & Debt

Book Value $130.5 million (2)
Existing Secured Debt $97.8 million
   
(1) The Company holds partial ownership interests in several entities which own model home properties
(2) Includes book value of model homes

 

   

 

 

 

 

COMMERCIAL PORTFOLIO

 

($ in000’s) Property Location  Sq., Ft.   Date Acquired   Year Property Constructed   Purchase Price (1)   Occupancy   Percent Ownership   Mortgage On property 
Office/Industrial Properties:                                   
Genesis Plaza, San Diego, CA (2)   57,807    08/10    1989    10,000    96.2%   76.4%   6,056 
Dakota Center, Fargo, ND   119,434    05/11    1982    9,575    71.8%   100.0%   9,443 
Grand Pacific Center, Bismarck, ND   93,153    03/14    1976    5,339    56.4%   100.0%   3,496 
Arapahoe Center, Colorado Springs, CO   79,023    12/14    2000    11,850    100.0%   100.0%   7,602 
West Fargo Industrial, West Fargo, ND   150,099    08/15    1998/2005    7,900    94.3%   100.0%   4,030 
300 N.P., West Fargo, ND   34,517    08/15    1922    3,850    75.5%   100.0%   0 
One Park Centre, Westminster CO   69,174    08/15    1983    9,150    84.9%   100.0%   6,163 
Shea Center II, Highlands Ranch, CO   121,306    12/15    2000    25,961    95.4%   100.0%   17,230 
Baltimore, Baltimore, MD   31,752    12/21    2006    8,892    100.0%   100.0%   5,670 
Total Office/Industrial Properties   756,265             $92,517    85.5%       $59,690 
                                    
Retail Properties:                                   
Union Town Center, Colorado Springs, CO   44,042    12/14    2003    11,212    72.9%   100.0%   8,025 
Research Parkway, Colorado Springs, CO   10,700    08/15    2003    2,850    88.8%   100.0%   1,648 
Mandolin, Houston, TX (3)   10,500    08/21    2021    4,892    100.0%   61.3%   3,635 
Total Retail Properties   65,242             $18,954    79.9%       $13,309 
                                    
    821,507             $111,471    85.1        $72,999 

 

(1) Prior to January 1, 2009, “Purchase Price” includes our acquisition related costs and expenses for the purchase of the property. After January 1, 2009, acquisition related costs and expenses were expensed when incurred until ASU 2017-01 was adopted by the Company in 2017. Since then, acquisition related costs for real estate acquisitions that do not meet the definition of a business, are capitalized.
   
(2) Genesis Plaza is owned by two tenants-in-common, each of which own 57% and 43%, respectively, and we beneficially own an aggregate of 76.4%, based on our ownership percentages of each tenant-in-common.
   
(3)

Owned by NetREIT Highland LLC, which was formed in 2012. NetREIT Highland LLC is wholly owned by NetREIT Palm Self Storage LP (a joint venture where Presidio Property trust owns 61.3%).

 

 

 

  

MODEL HOMES PORTFOLIO

 

Region  No. of
Properties		   Aggregate
Square
Feet		   Approximate %
of
Aggregate
Square Feet		   Current
Annual
Base Rent		   Approximate %
of
Aggregate
Annual Rent		   Purchase
Price		   Current
Mortgage
Balance		 
Southwest   88    268,749    96.4%  $2,824,404    94.7%  $37,547,849   $23,829,627 
Midwest   2    6,153    2.2%   80,844    2.7%   898,250    291,353 
Southeast   2    3,978    1.4%   78,492    2.6%   902,100    631,470 
Total   92    278,880    100.0%  $2,983,740    100.0%  $39,348,199   $24,752,449 

 

 

 

 

CONSOLIDATED BALANCE SHEET

 

   December 31,   December 31, 
   2022   2021 
   (Unaudited)     
ASSETS          
Real estate assets and lease intangibles:          
Land  $19,189,386   $21,136,379 
Buildings and improvements   125,979,374    119,224,375 
Tenant improvements   13,861,839    12,752,518 
Lease intangibles   4,110,139    4,110,139 
Real estate assets and lease intangibles held for investment, cost   163,140,738    157,223,411 
Accumulated depreciation and amortization   (34,644,511)   (30,589,969)
Real estate assets and lease intangibles held for investment, net   128,496,227    126,633,442 
Real estate assets held for sale, net   2,016,003    11,431,494 
Real estate assets, net   130,512,230    138,064,936 
Cash, cash equivalents and restricted cash   16,516,725    14,702,089 
Deferred leasing costs, net   1,516,835    1,348,234 
Goodwill   2,423,000    2,423,000 
Other assets, net   3,511,681    4,658,504 
Investments held in Trust (see Notes 2 & 9)   136,871,183    — 
TOTAL ASSETS  $291,351,654   $161,196,763 
LIABILITIES AND EQUITY          
Liabilities:          
Mortgage notes payable, net  $95,899,176   $87,324,319 
Mortgage notes payable related to properties held for sale, net   999,523    1,535,513 
Mortgage notes payable, total net   96,898,699    88,859,832 
Accounts payable and accrued liabilities   9,075,289    4,585,036 
Accrued real estate taxes   1,879,875    1,940,913 
Dividends payable preferred stock   178,511    179,685 
Lease liability, net   46,833    75,547 
Below-market leases, net   18,240    73,130 
Total liabilities   108,097,447    95,714,143 
Commitments and contingencies (Note 2 & 9)          
SPAC Class A common stock subject to possible redemption; 13,225,000 shares (at $10.20 per share), net of issuance cost of approximately $6,400,000   130,411,135    — 
Equity:          
Series D Preferred Stock, par value per share; 1,000,000 shares authorized; 920,000 shares issued and outstanding (liquidation preference $25.00 per share) as of June 30, 2022 and December 31, 2021, respectively   9,140    9,200 
Series A Common Stock, $0.01 par value per share, shares authorized: 100,000,000; 11,793,757 shares and 11,599,720 shares were issued and outstanding at June 30, 2022 and December 31, 2021, respectively   118,079    115,997 
Additional paid-in capital   182,044,157    186,492,012 
Dividends and accumulated losses   (138,465,345)   (130,947,434)
Total stockholders’ equity before noncontrolling interest   43,829,626    55,669,775 
Noncontrolling interest   9,013,446    9,812,845 
Total equity   52,843,072    65,482,620 
TOTAL LIABILITIES AND EQUITY  $291,351,654   $161,196,763 

 

 

 

 

CONSOLIDATED STATEMENT OF OPERATIONS

 

  

(Unaudited)

For the Three Months Ended December 31,

   For the Twelve Months Ended December 31, 
   2022   2021   2022   2021 
Revenues:                
Rental income  $4,319,029   $4,204,024   $17,203,310   $18,420,258 
Fees and other income   159,275    135,569    560,971    810,851 
Total revenue   4,478,304    4,339,593    17,764,281    19,231,109 
Costs and expenses:                    
Rental operating costs   1,475,615    1,443,933    5,841,396    6,183,189 
General and administrative   1,856,981    1,864,214    6,163,816    6,225,510 
Depreciation and amortization   1,491,433    1,293,479    5,465,015    5,397,498 
Impairment of real estate assets   —    308,000    —    608,000 
Total costs and expenses   4,824,029    4,909,626    17,470,227    18,414,197 
Other income (expense):                    
Interest expense-mortgage notes   (1,226,794)   (999,772)   (4,712,487)   (4,542,712)
Interest expense - note payable   —    —    —    (279,373)
Interest and other (expense), net   1,282,604    63,912    2,039,922    (3,416)
Gain on sales of real estate, net   1,022,385    427,193    5,079,912    2,487,528 
Gain on extinguishment of government debt   —    —    —    10,000 
Income tax expense   (396,353)   519,127    (1,215,873)   47,620 
Total other income (expense), net   681,842    10,460    1,191,528    (2,280,353)
Net income (loss)   336,117    (559,573)   1,485,528    (1,463,441)
Less: Income attributable to noncontrolling interests   (579,841)   (402,533)   (3,612,647)   (2,162,140)
Net income (loss) attributable to Presidio Property Trust, Inc. stockholders  $(243,724)  $(962,106)  $(2,127,119)  $(3,625,581)
Less: Preferred Stock Series D dividends   (536,343)   (539,056)   (2,152,740)   (1,173,948)
Less: Series A Warrant dividend   —    —    (2,456,512)   — 
Net income (loss) attributable to Presidio Property Trust, Inc. common stockholders  $(780,067)  $(1,501,162)  $(6,859,966)  $(4,799,530)
                     
Net income (loss) per share attributable to Presidio Property Trust, Inc. common stockholders:                    
Basic & Diluted  $(0.07)  $(0.13)  $(0.57)  $(0.46)
                     
Weighted average number of common shares outstanding - basic & diluted   11,659,691    11,486,177    11,753,041    10,340,975 

 

 

 

 

 
CONSOLIDATED STATEMENT OF CASH FLOWS

 

   For the Twelve Months Ended December 31, 
   2022   2021 
Cash flows from operating activities:          
Net income (loss)  $1,485,528   $(1,463,442)
Adjustments to reconcile net income (loss) to net cash used in operating activities:          
Depreciation and amortization   5,465,015    5,397,498 
Stock compensation   1,204,106    1,614,228 
Bad debt expense   73,055    164,623 
Gain on sale of real estate assets, net   (5,079,912)   (2,487,528)
Gain on extinguishment of government debt   —    (10,000)
Net change in fair value marketable securities   (42,664)   (39,429)
Net change in fair value SPAC Trust Account   (1,976,183)   — 
Impairment of real estate assets   —    608,000 
Amortization of financing costs   240,090    479,853 
Amortization of above-market leases   —    42,064 
Amortization of below-market leases   (54,890)   (60,203)
Straight-line rent adjustment   (252,759)   (231,577)
Changes in operating assets and liabilities:          
Other assets   1,050,221    190,354 
Accounts payable and accrued liabilities   (1,131,752)   (1,221,725)
Accrued real estate taxes   (61,038)   (607,773)
Net cash provided operating activities   928,817    2,374,943 
Cash flows from investing activities:          
Real estate acquisitions   (15,673,575)   (22,224,826)
Additions to buildings and tenant improvements   (2,107,505)   (1,597,186)
Investment in marketable securities   (1,762,095)   (3,819,882)
Proceeds from sale of marketable securities   2,363,063    2,380,476 
Investment of SPAC IPO proceeds into Trust Account   (134,895,000)   — 
Additions to deferred leasing costs   (70,889)   (117,062)
Proceeds from sales of real estate, net   25,768,334    49,583,445 
Net cash (used in) provided by investing activities   (126,377,667)   24,204,965 
Cash flows from financing activities:          
Proceeds from mortgage notes payable, net of issuance costs   20,288,093    11,703,440 
Repayment of mortgage notes payable   (11,958,568)   (43,069,312)
Repayment of note payable   —    (7,675,598)
Payment of deferred offering costs   (3,201,266)   (572,458)
Distributions to noncontrolling interests, net   (4,412,046)   (7,588,197)
Proceeds from initial public offering of SPAC   134,024,416    — 
SPAC offering non-controlling interest adjustment   (1,774,416)   — 
Issuance of Series A Common Stock, net of offering costs   —    8,871,879 
Issuance of Series D Preferred Stock, net of offering costs   —    20,489,803 
Repurchase of Series A Common Stock, at cost   (313,389)   (110,631)
Repurchase of Series D Preferred Stock, at cost   (122,141)   — 
Dividends paid to Series D Preferred Stockholders   (2,152,741)   (994,263)
Dividends paid to Series A Common Stockholders   (3,114,456)   (4,473,399)
Net cash provided by (used in) financing activities   127,263,486    (23,418,736)
Net increase in cash equivalents and restricted cash   1,814,636    3,161,172 
Cash, cash equivalents and restricted cash - beginning of period   14,702,089    11,540,917 
Cash, cash equivalents and restricted cash - end of period  $16,516,725   $14,702,089 
Supplemental disclosure of cash flow information:          
Interest paid-mortgage notes payable  $4,110,288   $4,320,174 
Interest paid-notes payable  $—   $103,861 
Non-cash financing activities:          
Potentially convertible common stock for SPAC   134,895,000    — 
Dividends payable – Preferred Stock   178,511    179,685 
Deferred offering cost SPAC   4,628,750    — 
Unpaid deferred financing costs  $—   $15,449 

 

 

 

 

 

 

 

EBITDAre RECONCILIATION

 

   For the Three Months Ended   For the Twelve Months Ended 
   12/31/2022   12/31/2021   12/31/2022   12/31/2021 
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders  $(780,067)  $(1,501,162)  $(6,736,371)  $(4,799,529)
Adjustments:                    
Interest Expense   1,226,794    999,772    4,712,487    4,822,085 
Depreciation and Amortization   1,477,710    1,279,757    5,410,126    5,379,359 
Asset Impairments   —    308,000    —    608,000 
Net Loss on Sales of RE   (1,022,385)   (427,193)   (5,079,912)   (2,487,528)
Gain Extinguishment of Government Debt   —    —    —    (10,000)
Income Taxes   396,353    (519,127)   1,215,873    (47,620)
                     
EBITDAre  $1,298,405   $140,047   $(477,797)  $3,464,767 

 

 

 

 

FFO AND CORE FFO RECONCILIATION

 

(Unaudited)

 

   For the Three Months Ended   For the Twelve Months Ended 
   12/31/2022   12/31/2021   12/31/2022   12/31/2021 
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders  $(780,067)  $(1,501,162)  $(6,736,371)  $(4,799,529)
Adjustments:                    
Income attributable to noncontrolling interests   579,841    402,533    3,612,647    2,162,140 
Depreciation and amortization   1,491,433    1,293,479    5,465,015    5,397,498 
Amortization of above and below market leases, net   (13,722)   (13,722)   (54,889)   (18,139)
Impairment of real estate assets   —    308,000    —    608,000 
Loss (gain) on sale of real estate assets, net   (1,022,385)   (427,193)   (5,079,912)   (2,487,528)
FFO  $255,100   $61,935   $(2,793,510)  $862,442 
Restricted stock compensation   342,270    746,325    1,204,106    1,614,228 
Series A Warrant Dividend   —    —    2,456,512    — 
Core FFO  $579,369   $808,260   $867,108   $2,476,670 
                     
Weighted average number of common shares outstanding - basic and diluted   11,659,691    11,486,177    11,753,041    10,340,975 
                     
Core FFO / Wgt Avg Share  $0.05   $0.07   $0.07   $0.24 

 

 

 

 

SEGMENT DATA  

 

 

 

 

 

 

DEFINITIONS – NON-GAAP MEASUREMENTS ex_245804img016.jpg

 

EBITDAre - EBITDAre is defined by NAREIT as earnings before interest, taxes, depreciation, and amortization, gain or loss on disposal of depreciated assets, and impairment write-offs.

 

Funds from Operations (“FFO”) – The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO, a non-GAAP measure, as net income or loss (computed in accordance with GAAP), excluding gains (or losses) from sales of property, hedge ineffectiveness, acquisition costs of newly acquired properties that are not capitalized and lease acquisition costs that are not capitalized plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.

 

However, because FFO excludes depreciation and amortization as well as the changes in the value of the Company’s properties that result from use or market conditions, each of which have real economic effects and could materially impact the Company’s results from operations, the utility of FFO as a measure of the Company’s performance is limited. In addition, other REITs may not calculate FFO in accordance with the NAREIT definition as the Company does, and, accordingly, the Company’s FFO may not be comparable to other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the Company’s performance.

 

Core Funds from Operations (“Core FFO”) – We calculate Core FFO, a non-GAAP measure, by using FFO as defined by NAREIT and adjusting for certain other non-core items. We also exclude from our Core FFO calculation acquisition costs, loss on early extinguishment of debt, changes in the fair value of the earn-out, changes in fair value of contingent consideration, non-cash warrant dividends and the amortization of stock-based compensation.

 

We believe Core FFO provides a useful metric in comparing operations between reporting periods and in assessing the sustainability of our ongoing operating performance. Other equity REITs may calculate Core FFO differently or not at all, and, accordingly, the Company’s Core FFO may not be comparable to such other REITs’ Core FFO.