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Note 7 - Mortgage Notes Payable

9 Months Ended

Sep. 30, 2025

Mortgage Notes Payable Disclosure [Text Block]

7. MORTGAGE NOTES PAYABLE

Mortgage notes payable consist of the following:

	*Principal as of*
	*September 30,*			*December 31,*			*Loan*	*Interest*
Mortgage note property	*2025*			*2024*			*Type*	*Rate (1)*			*Maturity*
Dakota Center (2)	$	8,739,687		$	9,091,395		Fixed		4.74	%	7/6/2024
Research Parkway (3)	-			1,526,860			N/A	N/A			N/A
Arapahoe Service Center		8,670,000			8,670,000		Fixed		6.75	%	12/5/2029
Union Town Center (3)	-			7,709,746			N/A	N/A			N/A
One Park Centre (4)		6,100,000			5,919,517		Fixed		6.83	%	9/1/1930
Genesis Plaza (4)		6,250,000			5,813,843		Fixed		7.07	%	9/1/2029
Shea Center II (6)		16,432,163			16,660,803		Fixed		4.92	%	1/5/2026
West Fargo Industrial (4)		5,750,000			5,750,000		Fixed		7.14	%	7/6/2029
Grand Pacific Center (5)		6,390,981			6,460,405		Fixed		6.35	%	5/10/2033
Baltimore		5,670,000			5,670,000		Fixed		4.67	%	4/6/2032
Mandolin		3,458,209			3,508,702		Fixed		4.35	%	4/20/2029
Subtotal, Presidio Property Trust, Inc. Properties	$	67,461,040		$	76,781,271
Model Home mortgage notes (7)		27,180,433			26,060,798		Fixed		5.94% - 8.00%		2025 - 2030
Mortgage Notes Payable	$	94,641,473		$	102,842,069
Unamortized loan costs		(922,060	)		(747,975	)
Mortgage Notes Payable, net	$	93,719,413		$	102,094,094

(1)	Interest rates as of September 30, 2025.
(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 September 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. The sale is expected to take place during the fourth quarter 2025 or in the first quarter of 2026. As of September 30, 2025, the note payable is included in the mortgage notes payable related to properties held for sale, net on the consolidated balance sheet. The loan is considered non-recourse and we will not be required to make up the difference if the property sells for less than the loan balance. See Note 4. Real Estate Assets above for further discussion on impairment of the property.
(3)	These properties were sold during February 2025 and their loan balances were paid in full.
(4)	On June 20, 2024, the Company, through its subsidiary, refinanced the mortgage loan on our West Fargo Industrial properties, and entered into a loan agreement for approximately $5.75 million, a term of five years, with an interest rate of 7.14%. On August 6, 2025, the Company refinanced the mortgage loan on our Genesis Plaza property, and entered into a loan agreement for $6.25 million, a term of four years, with an interest rate of 7.07%. On September 6, 2025, the Company refinanced the mortgage loan on our One Park Center property and entered into a loan agreement for $6.1 million, a term of five years, with an interest rate of 6.83%.
(5)	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 on June 10, 2028. 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 on June 10, 2028. As of December 31, 2024, we had fully drawn down the loan amount of approximately $2.7 million on the construction loan.
(6)	This mortgage loan matures 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 this property. We have begun exploring options for the Shea Center II loan which matures in January 2026, although there can be no guarantee we will be successful in refinancing the property.
(7)	As of September 30, 2025, there were five model homes included as real estate assets held for sale. Our model homes have stand-alone mortgage notes at interest rates ranging from 5.94% to 8.0% per annum as of September 30, 2025.

The loan agreement between NetREIT Model, Homes, Inc. (“NRMH”) and its Lender has a covenant for a Fixed Charge Coverage Ratio (“FCCR”) as defined for NRMH as of any date that equals (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 (i) principal payments paid for the period ended as of such date plus (ii) 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 September 30, 2025, NRMH was in compliance with this covenant. The Company and standalone subsidiaries have other various quarterly and annual reporting requirements to the individual property lenders and the Company is in compliance with all material conditions and covenants on those mortgage notes payable as of September 30, 2025, with the exception for Dakota Center's loan maturity.

Scheduled principal payments of mortgage notes payable were as follows as of September 30, 2025:

	*Commercial*		*Model*
	*Properties*		*Homes*		*Total Principal*
Years ending December 31:	*Notes Payable*		*Notes Payable*		*Payments*
2025	$	8,864,250	$	1,505,386	$	10,369,636
2026		16,768,970		4,300,306		21,069,276
2027		463,715		614,226		1,077,941
2028		454,843		8,708,526		9,163,369
2029		23,496,682		6,212,183		29,708,865
Thereafter		17,412,580		5,839,806		23,252,386
Total	$	67,461,040	$	27,180,433	$	94,641,473