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Note 4 - Real Estate Assets

12 Months Ended

Dec. 31, 2023

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 five commercial properties located in Colorado, four in North Dakota, one in Southern California, one in Texas and one in Maryland. Our model home properties are located in three states. As of December 31, 2023, the Company owned or had an equity interest in:

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Eight office buildings and one industrial building (“Office/Industrial Properties”) which total approximately rentable 758,175 square feet;

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Three retail shopping centers (“Retail Properties”) which total approximately 65,242 rentable square feet;

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

A summary of the properties owned by the Company as of December 31, 2023 and 2022 is as follows:

	*Date*		*Real estate assets, net*
Property Name	*Acquired*	*Location*	*December 31, 2023*		*December 31, 2022*
Genesis Plaza (1)	August 2010	San Diego, CA	$	7,542,725	$	7,995,980
Dakota Center	May 2011	Fargo, ND		9,201,883		8,569,537
Grand Pacific Center (2)	March 2014	Bismarck, ND		8,274,454		5,228,006
Arapahoe Center	December 2014	Centennial, CO		9,341,991		8,664,604
Union Town Center	December 2014	Colorado Springs, CO		8,918,742		9,039,039
West Fargo Industrial	August 2015	Fargo, ND		6,819,765		6,893,292
300 N.P.	August 2015	Fargo, ND		2,774,176		2,899,694
Research Parkway	August 2015	Colorado Springs, CO		2,266,173		2,319,588
One Park Center (3)	August 2015	Westminster, CO		5,700,000		7,991,809
Shea Center II (4)	December 2015	Highlands Ranch, CO		19,367,289		19,501,998
Mandolin (5)	August 2021	Houston, TX		4,692,274		4,783,985
Baltimore	December 2021	Baltimore, MD		8,466,165		8,690,874
Presidio Property Trust, Inc. properties				93,365,637		92,578,406
Model Home properties (6)	2017 - 2023	AZ, FL, IL, TX, WI		50,790,147		37,933,824
Total real estate assets and lease intangibles, net			$	144,155,784	$	130,512,230

(1)	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.
(2)	Grand Pacific Center, Bismarck, ND, was removed from held for sale after signing a major lease with KLJ Engineering on December 7, 2022 for approximately 33,296 usable square feet, a term of 122 months, and starting annualized rent of $532,736. KLJ Engineering moved into the building during December 2023, with rent commencing on February 28, 2024.
(3)	During the year ended December 31, 2023, we recorded a $2.0 million impairment charge for One Park Center that reflects management’s revised estimate of the fair market value based on sales comparable of like property in the same geographical area as well as an evaluation of future cash flows or an executed purchase sale agreement.
(4)	On December 31, 2022, the lease for our largest tenant, Halliburton, expired. Halliburton was located in our Shea Center II property in Colorado, and made up approximately 536,080 of our annual base rent. Halliburton did not renew the lease and we placed approximately $1.1 million in a reserve account with our lender to cover future mortgage payments, if necessary, none of which has been used as of December 31, 2023. Our management team is working to fill the 45,535 square foot space and has leased approximately 20% of the space to a tenant during 2023 and has reviewed various proposals for the remaining 80%. As of December 31, 2023, none of the third party proposals have fit into our long-term plans. We will continue to work on filling the space during 2024.
(5)	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 61.3% of NetREIT Palm Self-Storage LP.
(6)	Includes Model Homes listed as held for sale as of December 31, 2023. During the year ended December 31, 2023 we recorded a $0.4 million impairment charge for eight model homes that reflects the estimated sales prices for these specific model homes in 2024 as a result of an abnormally short hold period, less than two years, on model homes purchased in 2022, where the builder changed their product type in these neighborhoods after we had purchased the homes.