Presidio Property Trust (SQFT) 8-K Presidio Property Trust, Inc. Announces Earnings for Acquisitions and Dispositions for 2022

Exhibit 99.2

SUPPLEMENTAL FINANCIAL INFORMATION

As of December 31, 2022

FORWARD-LOOKING STATEMENTS

This presentation contains “forward-looking statements” within the meaning of the federal securities laws that involve risks and uncertainties, many of which are beyond our control. Our actual results could differ materially and adversely from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in the Quarterly Report on Form 10-Q. Forward-looking statements relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, financial condition, liquidity, capital resources, cash flows, dividends, results of operations and other financial and operating information. When used in this presentation, the words “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “should,” “project,” “plan,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

The forward-looking statements contained in this presentation are based on historical performance and management’s current plans, estimates and expectations in light of information currently available to it and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to the factors, risks and uncertainties described in the Annual Report on Form 10-K, as filed March 30, 2022 (“Annual Report”) and the Company’s Quarterly Report on Form 10-Q filed with the SEC on the date hereof (“Quarterly Report”), changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors described in the “Risk Factors” section of the Annual Report and the Quarterly Report, many of which are beyond our control. Should one or more of these risks or uncertainties materialize or should any of our assumptions prove to be incorrect, our actual results may vary in material respects from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Any forward-looking statement made by us in this presentation speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.

COMPANY OVERVIEW

		Corporate Information
		Headquarters	San Diego, CA
		Founded	1999
		Key Geographies	CA, CO, MD, ND & TX
		Employees	18
●	Presidio Property Trust, Inc. (“Presidio” or the “Company”) was founded in 1999 as NetREIT
●	Presidio is an internally managed real estate company focused on commercial real estate opportunities in often overlooked and regionally dominant markets	Portfolio Summary (Number / Square Footage)
		Office	8 properties / 606,166 sq. ft.
		Retail	3 properties / 65,242 sq. ft.
		Industrial	1 property / 150,099 sq. ft.
		Model Homes (1)	5 funds / 92 homes
●	The Company acquires, owns, and manages office and industrial real estate assets in markets with strong demographic and economic drivers with attractive going-in cap rates
●	Presidio’s commercial portfolio currently includes 12 commercial properties with a book value of approximately $93 million
●	In addition to its commercial real estate holdings, Presidio generates fees and rental income from affiliated entities, which manage and/or own a portfolio of model homes (1)	Portfolio Value & Debt
		Book Value	$130.5 million (2)
		Existing Secured Debt	$97.8 million
		(1) The Company holds partial ownership interests in several entities which own model home properties
		(2) Includes book value of model homes

 

COMMERCIAL PORTFOLIO

($ in000’s) Property Location	Sq., Ft.		Date Acquired		Year Property Constructed		Purchase Price (1)		Occupancy			Percent Ownership			Mortgage On property
Office/Industrial Properties:
Genesis Plaza, San Diego, CA (2)		57,807		08/10		1989		10,000		96.2	%		76.4	%		6,056
Dakota Center, Fargo, ND		119,434		05/11		1982		9,575		71.8	%		100.0	%		9,443
Grand Pacific Center, Bismarck, ND		93,153		03/14		1976		5,339		56.4	%		100.0	%		3,496
Arapahoe Center, Colorado Springs, CO		79,023		12/14		2000		11,850		100.0	%		100.0	%		7,602
West Fargo Industrial, West Fargo, ND		150,099		08/15		1998/2005		7,900		94.3	%		100.0	%		4,030
300 N.P., West Fargo, ND		34,517		08/15		1922		3,850		75.5	%		100.0	%		0
One Park Centre, Westminster CO		69,174		08/15		1983		9,150		84.9	%		100.0	%		6,163
Shea Center II, Highlands Ranch, CO		121,306		12/15		2000		25,961		95.4	%		100.0	%		17,230
Baltimore, Baltimore, MD		31,752		12/21		2006		8,892		100.0	%		100.0	%		5,670
Total Office/Industrial Properties		756,265					$	92,517		85.5	%				$	59,690
Retail Properties:
Union Town Center, Colorado Springs, CO		44,042		12/14		2003		11,212		72.9	%		100.0	%		8,025
Research Parkway, Colorado Springs, CO		10,700		08/15		2003		2,850		88.8	%		100.0	%		1,648
Mandolin, Houston, TX (3)		10,500		08/21		2021		4,892		100.0	%		61.3	%		3,635
Total Retail Properties		65,242					$	18,954		79.9	%				$	13,309
		821,507					$	111,471		85.1					$	72,999

(1)	Prior to January 1, 2009, “Purchase Price” includes our acquisition related costs and expenses for the purchase of the property. After January 1, 2009, acquisition related costs and expenses were expensed when incurred until ASU 2017-01 was adopted by the Company in 2017. Since then, acquisition related costs for real estate acquisitions that do not meet the definition of a business, are capitalized.
(2)	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.
(3)	Owned by NetREIT Highland LLC, which was formed in 2012. NetREIT Highland LLC is wholly owned by NetREIT Palm Self Storage LP (a joint venture where Presidio Property trust owns 61.3%).

MODEL HOMES PORTFOLIO

Region	No. of Properties		Aggregate Square Feet		Approximate % of Aggregate Square Feet			Current Annual Base Rent		Approximate % of Aggregate Annual Rent			Purchase Price		Current Mortgage Balance
Southwest		88		268,749		96.4	%	$	2,824,404		94.7	%	$	37,547,849	$	23,829,627
Midwest		2		6,153		2.2	%		80,844		2.7	%		898,250		291,353
Southeast		2		3,978		1.4	%		78,492		2.6	%		902,100		631,470
Total		92		278,880		100.0	%	$	2,983,740		100.0	%	$	39,348,199	$	24,752,449

CONSOLIDATED BALANCE SHEET

	December 31,			December 31,
	2022			2021
	(Unaudited)
ASSETS
Real estate assets and lease intangibles:
Land	$	19,189,386		$	21,136,379
Buildings and improvements		125,979,374			119,224,375
Tenant improvements		13,861,839			12,752,518
Lease intangibles		4,110,139			4,110,139
Real estate assets and lease intangibles held for investment, cost		163,140,738			157,223,411
Accumulated depreciation and amortization		(34,644,511	)		(30,589,969	)
Real estate assets and lease intangibles held for investment, net		128,496,227			126,633,442
Real estate assets held for sale, net		2,016,003			11,431,494
Real estate assets, net		130,512,230			138,064,936
Cash, cash equivalents and restricted cash		16,516,725			14,702,089
Deferred leasing costs, net		1,516,835			1,348,234
Goodwill		2,423,000			2,423,000
Other assets, net		3,511,681			4,658,504
Investments held in Trust (see Notes 2 & 9)		136,871,183			—
TOTAL ASSETS	$	291,351,654		$	161,196,763
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	95,899,176		$	87,324,319
Mortgage notes payable related to properties held for sale, net		999,523			1,535,513
Mortgage notes payable, total net		96,898,699			88,859,832
Accounts payable and accrued liabilities		9,075,289			4,585,036
Accrued real estate taxes		1,879,875			1,940,913
Dividends payable preferred stock		178,511			179,685
Lease liability, net		46,833			75,547
Below-market leases, net		18,240			73,130
Total liabilities		108,097,447			95,714,143
Commitments and contingencies (Note 2 & 9)
SPAC Class A common stock subject to possible redemption; 13,225,000 shares (at $10.20 per share), net of issuance cost of approximately $6,400,000		130,411,135			—
Equity:
Series D Preferred Stock, par value per share; 1,000,000 shares authorized; 920,000 shares issued and outstanding (liquidation preference $25.00 per share) as of June 30, 2022 and December 31, 2021, respectively		9,140			9,200
Series A Common Stock, $0.01 par value per share, shares authorized: 100,000,000; 11,793,757 shares and 11,599,720 shares were issued and outstanding at June 30, 2022 and December 31, 2021, respectively		118,079			115,997
Additional paid-in capital		182,044,157			186,492,012
Dividends and accumulated losses		(138,465,345	)		(130,947,434	)
Total stockholders’ equity before noncontrolling interest		43,829,626			55,669,775
Noncontrolling interest		9,013,446			9,812,845
Total equity		52,843,072			65,482,620
TOTAL LIABILITIES AND EQUITY	$	291,351,654		$	161,196,763

CONSOLIDATED STATEMENT OF OPERATIONS

	(Unaudited) For the Three Months Ended December 31,						For the Twelve Months Ended December 31,
	2022			2021			2022			2021
Revenues:
Rental income	$	4,319,029		$	4,204,024		$	17,203,310		$	18,420,258
Fees and other income		159,275			135,569			560,971			810,851
Total revenue		4,478,304			4,339,593			17,764,281			19,231,109
Costs and expenses:
Rental operating costs		1,475,615			1,443,933			5,841,396			6,183,189
General and administrative		1,856,981			1,864,214			6,163,816			6,225,510
Depreciation and amortization		1,491,433			1,293,479			5,465,015			5,397,498
Impairment of real estate assets		—			308,000			—			608,000
Total costs and expenses		4,824,029			4,909,626			17,470,227			18,414,197
Other income (expense):
Interest expense-mortgage notes		(1,226,794	)		(999,772	)		(4,712,487	)		(4,542,712	)
Interest expense - note payable		—			—			—			(279,373	)
Interest and other (expense), net		1,282,604			63,912			2,039,922			(3,416	)
Gain on sales of real estate, net		1,022,385			427,193			5,079,912			2,487,528
Gain on extinguishment of government debt		—			—			—			10,000
Income tax expense		(396,353	)		519,127			(1,215,873	)		47,620
Total other income (expense), net		681,842			10,460			1,191,528			(2,280,353	)
Net income (loss)		336,117			(559,573	)		1,485,528			(1,463,441	)
Less: Income attributable to noncontrolling interests		(579,841	)		(402,533	)		(3,612,647	)		(2,162,140	)
Net income (loss) attributable to Presidio Property Trust, Inc. stockholders	$	(243,724	)	$	(962,106	)	$	(2,127,119	)	$	(3,625,581	)
Less: Preferred Stock Series D dividends		(536,343	)		(539,056	)		(2,152,740	)		(1,173,948	)
Less: Series A Warrant dividend		—			—			(2,456,512	)		—
Net income (loss) attributable to Presidio Property Trust, Inc. common stockholders	$	(780,067	)	$	(1,501,162	)	$	(6,859,966	)	$	(4,799,530	)
Net income (loss) per share attributable to Presidio Property Trust, Inc. common stockholders:
Basic & Diluted	$	(0.07	)	$	(0.13	)	$	(0.57	)	$	(0.46	)
Weighted average number of common shares outstanding - basic & diluted		11,659,691			11,486,177			11,753,041			10,340,975

 
CONSOLIDATED STATEMENT OF CASH FLOWS

	For the Twelve Months Ended December 31,
	2022			2021
Cash flows from operating activities:
Net income (loss)	$	1,485,528		$	(1,463,442	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		5,465,015			5,397,498
Stock compensation		1,204,106			1,614,228
Bad debt expense		73,055			164,623
Gain on sale of real estate assets, net		(5,079,912	)		(2,487,528	)
Gain on extinguishment of government debt		—			(10,000	)
Net change in fair value marketable securities		(42,664	)		(39,429	)
Net change in fair value SPAC Trust Account		(1,976,183	)		—
Impairment of real estate assets		—			608,000
Amortization of financing costs		240,090			479,853
Amortization of above-market leases		—			42,064
Amortization of below-market leases		(54,890	)		(60,203	)
Straight-line rent adjustment		(252,759	)		(231,577	)
Changes in operating assets and liabilities:
Other assets		1,050,221			190,354
Accounts payable and accrued liabilities		(1,131,752	)		(1,221,725	)
Accrued real estate taxes		(61,038	)		(607,773	)
Net cash provided operating activities		928,817			2,374,943
Cash flows from investing activities:
Real estate acquisitions		(15,673,575	)		(22,224,826	)
Additions to buildings and tenant improvements		(2,107,505	)		(1,597,186	)
Investment in marketable securities		(1,762,095	)		(3,819,882	)
Proceeds from sale of marketable securities		2,363,063			2,380,476
Investment of SPAC IPO proceeds into Trust Account		(134,895,000	)		—
Additions to deferred leasing costs		(70,889	)		(117,062	)
Proceeds from sales of real estate, net		25,768,334			49,583,445
Net cash (used in) provided by investing activities		(126,377,667	)		24,204,965
Cash flows from financing activities:
Proceeds from mortgage notes payable, net of issuance costs		20,288,093			11,703,440
Repayment of mortgage notes payable		(11,958,568	)		(43,069,312	)
Repayment of note payable		—			(7,675,598	)
Payment of deferred offering costs		(3,201,266	)		(572,458	)
Distributions to noncontrolling interests, net		(4,412,046	)		(7,588,197	)
Proceeds from initial public offering of SPAC		134,024,416			—
SPAC offering non-controlling interest adjustment		(1,774,416	)		—
Issuance of Series A Common Stock, net of offering costs		—			8,871,879
Issuance of Series D Preferred Stock, net of offering costs		—			20,489,803
Repurchase of Series A Common Stock, at cost		(313,389	)		(110,631	)
Repurchase of Series D Preferred Stock, at cost		(122,141	)		—
Dividends paid to Series D Preferred Stockholders		(2,152,741	)		(994,263	)
Dividends paid to Series A Common Stockholders		(3,114,456	)		(4,473,399	)
Net cash provided by (used in) financing activities		127,263,486			(23,418,736	)
Net increase in cash equivalents and restricted cash		1,814,636			3,161,172
Cash, cash equivalents and restricted cash - beginning of period		14,702,089			11,540,917
Cash, cash equivalents and restricted cash - end of period	$	16,516,725		$	14,702,089
Supplemental disclosure of cash flow information:
Interest paid-mortgage notes payable	$	4,110,288		$	4,320,174
Interest paid-notes payable	$	—		$	103,861
Non-cash financing activities:
Potentially convertible common stock for SPAC		134,895,000			—
Dividends payable – Preferred Stock		178,511			179,685
Deferred offering cost SPAC		4,628,750			—
Unpaid deferred financing costs	$	—		$	15,449

      EBITDAre RECONCILIATION

	For the Three Months Ended						For the Twelve Months Ended
	12/31/2022			12/31/2021			12/31/2022			12/31/2021
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders	$	(780,067	)	$	(1,501,162	)	$	(6,736,371	)	$	(4,799,529	)
Adjustments:
Interest Expense		1,226,794			999,772			4,712,487			4,822,085
Depreciation and Amortization		1,477,710			1,279,757			5,410,126			5,379,359
Asset Impairments		—			308,000			—			608,000
Net Loss on Sales of RE		(1,022,385	)		(427,193	)		(5,079,912	)		(2,487,528	)
Gain Extinguishment of Government Debt		—			—			—			(10,000	)
Income Taxes		396,353			(519,127	)		1,215,873			(47,620	)
EBITDAre	$	1,298,405		$	140,047		$	(477,797	)	$	3,464,767

FFO AND CORE FFO RECONCILIATION

(Unaudited)

	For the Three Months Ended						For the Twelve Months Ended
	12/31/2022			12/31/2021			12/31/2022			12/31/2021
Net (loss) income attributable to Presidio Property Trust, Inc. common stockholders	$	(780,067	)	$	(1,501,162	)	$	(6,736,371	)	$	(4,799,529	)
Adjustments:
Income attributable to noncontrolling interests		579,841			402,533			3,612,647			2,162,140
Depreciation and amortization		1,491,433			1,293,479			5,465,015			5,397,498
Amortization of above and below market leases, net		(13,722	)		(13,722	)		(54,889	)		(18,139	)
Impairment of real estate assets		—			308,000			—			608,000
Loss (gain) on sale of real estate assets, net		(1,022,385	)		(427,193	)		(5,079,912	)		(2,487,528	)
FFO	$	255,100		$	61,935		$	(2,793,510	)	$	862,442
Restricted stock compensation		342,270			746,325			1,204,106			1,614,228
Series A Warrant Dividend		—			—			2,456,512			—
Core FFO	$	579,369		$	808,260		$	867,108		$	2,476,670
Weighted average number of common shares outstanding - basic and diluted		11,659,691			11,486,177			11,753,041			10,340,975
Core FFO / Wgt Avg Share	$	0.05		$	0.07		$	0.07		$	0.24

SEGMENT DATA  

DEFINITIONS – NON-GAAP MEASUREMENTS

EBITDAre - EBITDAre is defined by NAREIT as earnings before interest, taxes, depreciation, and amortization, gain or loss on disposal of depreciated assets, and impairment write-offs.

Funds from Operations (“FFO”) – The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO, a non-GAAP measure, as net income or loss (computed in accordance with GAAP), excluding gains (or losses) from sales of property, hedge ineffectiveness, acquisition costs of newly acquired properties that are not capitalized and lease acquisition costs that are not capitalized plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.

However, because FFO excludes depreciation and amortization as well as the changes in the value of the Company’s properties that result from use or market conditions, each of which have real economic effects and could materially impact the Company’s results from operations, the utility of FFO as a measure of the Company’s performance is limited. In addition, other REITs may not calculate FFO in accordance with the NAREIT definition as the Company does, and, accordingly, the Company’s FFO may not be comparable to other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the Company’s performance.

Core Funds from Operations (“Core FFO”) – We calculate Core FFO, a non-GAAP measure, by using FFO as defined by NAREIT and adjusting for certain other non-core items. We also exclude from our Core FFO calculation acquisition costs, loss on early extinguishment of debt, changes in the fair value of the earn-out, changes in fair value of contingent consideration, non-cash warrant dividends and the amortization of stock-based compensation.

We believe Core FFO provides a useful metric in comparing operations between reporting periods and in assessing the sustainability of our ongoing operating performance. Other equity REITs may calculate Core FFO differently or not at all, and, accordingly, the Company’s Core FFO may not be comparable to such other REITs’ Core FFO.