XML 24 R14.htm IDEA: XBRL DOCUMENT

Note 7 - Mortgage Notes Payable

12 Months Ended

Dec. 31, 2023

Mortgage Notes Payable Disclosure [Text Block]

7. MORTGAGE NOTES PAYABLE

Mortgage notes payable consist of the following:

	*Principal as of*
	*December 31,*			*December 31,*			*Loan*	*Interest*
Mortgage note property	*2023*			*2022*			*Type*	*Rate (1)*			*Maturity*
Dakota Center (2)		9,197,346			9,442,976		Fixed		4.74	%	7/6/2024
Research Parkway		1,588,742			1,648,237		Fixed		3.94	%	1/5/2025
Arapahoe Service Center		7,426,088			7,602,273		Fixed		4.34	%	1/5/2025
Union Town Center		7,870,468			8,025,300		Fixed		4.28	%	1/5/2025
One Park Centre		6,043,882			6,163,177		Fixed		4.77	%	9/5/2025
Genesis Plaza		5,937,251			6,055,682		Fixed		4.71	%	9/6/2025
Shea Center II		16,951,095			17,229,573		Fixed		4.92	%	1/5/2026
West Fargo Industrial (3)		3,922,829			4,030,297		Fixed		6.70	%	8/5/2029
Grand Pacific Center (4)		5,470,305			3,496,330		Fixed		6.35	%	5/5/2033
Baltimore		5,670,000			5,670,000		Fixed		4.67	%	4/6/2032
Mandolin		3,573,201			3,635,362		Fixed		4.35	%		4/20/2029
Subtotal, Presidio Property Trust, Inc. Properties	$	73,651,207		$	72,999,207
Model Home mortgage notes (5)		34,815,699			24,752,448		Fixed					2023 - 2028
Mortgage Notes Payable	$	108,466,906		$	97,751,655
Unamortized loan costs		(753,633	)		(852,956	)
Mortgage Notes Payable, net	$	107,713,273		$	96,898,699

(1)	Interest rates as of December 31, 2023.
(2)	The loan on Dakota Center matures in July 2024 and Management has reached out to the lender seeking an extension and additional provision to change the terms of the loan and maturity date. We have also inquired with other lenders to refinance the property. If we are unsuccessful in refinancing the property or changing the terms of the original loan, Management would consider selling the property and paying the loan in full or surrendering the property to the current lender.
(3)	On August 5, 2023, the lender increased the interest rate to 6.70%. The loan agreement states that the lender may, upon not less than sixty (60) days prior, give written notice to the Company to increase the interest rate effective on August 5, 2023, and August 5, 2026, to the rate then being quoted by the lender for new three-year commercial mortgage loans of similar size and quality with like terms and security (provided that in no event shall the new rate be less than the initial rate).
(4)	On May 5, 2023, the Company, through its subsidiary, refinanced the mortgage loan on our Grand Pacific Center property and entered into a construction loan related to the tenant improvement associated with the KLJ Engineering LLC lease to occupy 33,296 square feet of the building. The refinanced loan is for approximately $3.8 million, a term of 10 years, with an interest rate of 6.35%, for the first 60 months. The interest rate is subject to reset in year five. The construction loan is for approximately $2.7 million, a term of 10 years, and will begin amortizing in year three, with an interest rate of 6.35%, for the first 60 months. The interest rate is subject to reset in year five. As of December 31, 2023, we had drawn down approximately $1.7 million on the construction loan.
(5)	As of December 31, 2023, there were 15 model homes included as real estate assets held for sale. Our model homes have stand-alone mortgage notes at interest rates ranging from 2.68% to 7.12% per annum as of December 31, 2023.
(6)	These mortgage loans mature within the next twelve months and management is reviewing various options for the loan maturity, including but not limited to refinancing, restructuring and or selling these properties. As we get closer to the loan maturity date the Company will finalize our plans.

The loan agreement between NetREIT Model, Homes, Inc. (“NRMH”) and their Lender has a covenant for a Fixed Charge Coverage Ratio, (“FCCR”) as defined for NRMH as of any date (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 (ii) Principal Payments Paid for the period ended as of such date plus (iii) Interest Expense for period ended as of such date. The FCCR is to be no less than 1.10 to 1.00, tested at the end of each fiscal quarter. As of December 31, 2023, NRMH was in compliance with this covenant. The Company and stand along subsidiaries have other various quarterly and annual reporting requirements to the individual property lenders and is in compliance with all material conditions and covenants on those mortgage notes payable as of December 31, 2023.

Scheduled principal payments of mortgage notes payable were as follows as of December 31, 2023:

	*Presidio Property*		*Model*
	*Trust, Inc.*		*Homes*		*Total Principal*
Years ending December 31:	*Notes Payable*		*Notes Payable*		*Payments*
2024	$	10,403,266	$	13,088,440	$	23,491,706
2025		28,772,504		10,404,945		39,177,449
2026		16,648,942		300,081		16,949,023
2027		294,780		300,081		594,861
2028		310,560		8,330,316		8,640,876
Thereafter		17,221,155		2,391,836		19,612,991
Total	$	73,651,207	$	34,815,699	$	108,466,906