XML 20 R10.htm IDEA: XBRL DOCUMENT

Note 4 - Real Estate Assets

6 Months Ended

Jun. 30, 2025

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 three 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 four states. As of June 30, 2025, 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 (unaudited);

	•	One retail building (“Retail Property”) with approximately 10,500 rentable square feet (unaudited); and

	•	87 model home residential properties (“Model Homes” or “Model Home Properties”), totaling approximately 260,227 square feet (unaudited), leased back on a triple-net basis to homebuilders, that are owned by four affiliated limited partnerships and one wholly-owned corporation, all of which we control. As of June 30, 2025, all of the model homes in Dubose Model Home Investors #202, LP and Dubose Model Home Investors #206, LP had been sold.

A summary of the properties owned by the Company, including their lease intangibles, as of June 30, 2025 and December 31, 2024 is as follows:

	*Date*		*Real estate assets and lease intangibles, net*
Property Name	*Acquired*	*Location*	*June 30, 2025*		*December 31, 2024*
Genesis Plaza (1)	August 2010	San Diego, CA	$	7,274,090	$	7,363,571
Dakota Center (2)	May 2011	Fargo, ND		4,838,139		8,154,951
Grand Pacific Center	March 2014	Bismarck, ND		8,332,564		8,413,926
Arapahoe Center	December 2014	Centennial, CO		9,058,658		9,298,534
Union Town Center (3)	December 2014	Colorado Springs, CO		—		8,922,943
West Fargo Industrial	August 2015	Fargo, ND		6,469,043		6,599,953
300 N.P.	August 2015	Fargo, ND		1,990,914		1,963,000
Research Parkway (3)	August 2015	Colorado Springs, CO		—		2,220,284
One Park Center (4)	August 2015	Westminster, CO		5,482,703		5,580,950
Shea Center II (5)	December 2015	Highlands Ranch, CO		17,595,866		18,820,370
Mandolin (6)	August 2021	Houston, TX		4,554,707		4,600,562
Baltimore	December 2021	Baltimore, MD		8,129,102		8,241,456
Commercial properties				73,725,786		90,180,500
Model Home properties (7)	2019 - 2025	AZ, TN, TX, AL		40,850,511		37,416,000
Total real estate assets and lease intangibles, net			$	114,576,297	$	127,596,500

(1)	Genesis Plaza is owned by two tenants-in-common, NetREIT Genesis and NetREIT Genessis II, each of which own 57% and 43%, respectively, and we beneficially own an aggregate of 92.0%, based on our ownership of each entity. We have 100% ownership of NetREIT Genesis and 81.5% ownership of NetREIT Genesis II, and we have control of both entities. During July 2024, the Company completed a minority ownership conversion option as result of a death in a noncontrolling trust within NetREIT Genesis II. The Company issued the trust 78,215 shares of SQFT Series A Common Stock in exchange for their 36.4% ownership in NetREIT Genesis II, as per the original exchange agreement.
(2)	The non-recourse loan on the Dakota Center property matured on July 6, 2024. During December 2024, the lender agreed to the broker the Company would use to sell the property to settle the non-recourse debt. As of June 30, 2025, the property was included in the real estate assets held for sale, net on the consolidated balance sheet. During July 2025, the lender approved a purchase offer from a third party for $5,125,000. In connection with the pending sale, we have impaired the property’s book value and recorded an impairment charge of approximately $3.3 million as of June 30, 2025. The sale is expected to take place during the third quarter 2025.
(3)	During February 2025, Union Town Center and Research Parkway were sold to a single buyer for a combined $16.95 million and recorded a net gain of approximately $4.2 million, net of closing costs.
(4)	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 properties in the same geographical area as well as an evaluation of future cash flows or an executed purchase sale agreement. No additional impairment was deemed necessary during the six months ended June 30, 2025.
(5)	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 June 30, 2025. Our management team is working to fill the 45,535 square foot space and has leased approximately 54% of the space to other tenants and has reviewed various proposals for the remaining 46%. As of June 30, 2025, management is pursuing third party tenants who fit into our long-term plans, however, there is no guarantee we will be successful in signing new tenants. During the three months ended June 30, 2025, we have reassessed the value of the property and recorded an impairment charge of approximately $0.9 million.
(6)	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.
(7)	Includes Model Homes listed as held for sale as of June 30, 2025 and December 31, 2024. During the three and six months ended June 30, 2025, we recorded an impairment charge for model homes totaling $0.1 million, which reflects the estimated sales prices for these specific model homes. 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.

For the three and six months ended June 30, 2025, depreciation expense totaled approximately $1.1 million and $2.2 million, respectively. For the three and six months ended June 30, 2024, depreciation expense totaled approximately $1.2 million and $2.4 million, respectively.