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Note 4 - Real Estate Assets | 3 Months Ended
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Mar. 31, 2024
Notes to Financial Statements |
Real Estate Assets [Text Block] | 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 five states. As of March 31, 2024, the Company owned or had an equity interest in:
| • | Eight office buildings and one industrial property (“Office/Industrial Properties”) which total approximately 758,175 rentable square feet;
| • | Three retail shopping centers (“Retail Properties”) which total approximately 65,242 rentable square feet; and
| • | 88 model home residential properties (“Model Homes” or “Model Home Properties”), totaling approximately 268,644 square feet, leased back on a triple-net basis to homebuilders, that are owned by five affiliated limited partnerships and one wholly-owned corporation, all of which we control.
A summary of the properties owned by the Company as of March 31, 2024 and December 31, 2023 is as follows:
|  | Date |  |  |  | Real estate assets, net |
Property Name |  | Acquired |  | Location |  | March 31, 2024 |  |  | December 31, 2023 |
Genesis Plaza (1) |  | August 2010 |  | San Diego, CA |  | $ | 7,404,287 |  |  | $ | 7,542,725 |
Dakota Center |  | May 2011 |  | Fargo, ND |  |  | 9,145,199 |  |  |  | 9,201,883 |
Grand Pacific Center (2) |  | March 2014 |  | Bismarck, ND |  |  | 8,653,056 |  |  |  | 8,274,454 |
Arapahoe Center |  | December 2014 |  | Centennial, CO |  |  | 9,540,740 |  |  |  | 9,341,991 |
Union Town Center |  | December 2014 |  | Colorado Springs, CO |  |  | 8,997,720 |  |  |  | 8,918,742 |
West Fargo Industrial |  | August 2015 |  | Fargo, ND |  |  | 6,758,522 |  |  |  | 6,819,765 |
300 N.P. |  | August 2015 |  | Fargo, ND |  |  | 2,761,756 |  |  |  | 2,774,176 |
Research Parkway |  | August 2015 |  | Colorado Springs, CO |  |  | 2,250,946 |  |  |  | 2,266,173 |
One Park Center (3) |  | August 2015 |  | Westminster, CO |  |  | 5,680,342 |  |  |  | 5,700,000 |
Shea Center II (4) |  | December 2015 |  | Highlands Ranch, CO |  |  | 19,176,601 |  |  |  | 19,367,289 |
Mandolin (5) |  | August 2021 |  | Houston, TX |  |  | 4,669,346 |  |  |  | 4,692,274 |
Baltimore |  | December 2021 |  | Baltimore, MD |  |  | 8,409,988 |  |  |  | 8,466,165 |
Presidio Property Trust, Inc. properties |  |  |  |  |  |  |  | 93,448,503 |  |  |  | 93,365,637 |
Model Home properties (6) |  | 2017 - 2024 |  | AZ, FL, IL, TX, WI |  |  | 41,813,015 |  |  |  | 50,790,147 |
Total real estate assets and lease intangibles, net |  |  |  |  |  |  | $ | 135,261,518 |  |  | $ | 144,155,784 |
(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 March 31, 2024, management is pursuing a third party tenant who fits into our long-term plans, however, there is no guarantee we will be successful in signing this new tenant.
(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 March 31, 2024 and December 31, 2023. During the three months ended March 31, 2024 we recorded a $0.1 million impairment charge for four model homes, three of which already had an impairment as of December 31, 2023, that reflects the estimated sales prices for these specific model homes in April and May 2024. The short hold period, less than two years, and the builder changing their model style after we purchased the homes, contributed to the lower than expected sales price.

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