Presidio Property Trust, Inc. (SQFT)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered stabilizing top line but a smaller net loss versus last year, with revenue of $4.38M (down 4.5% YoY; up 6.1% QoQ) and net loss to common of $(5.85)M (vs. $(12.39)M LY), aided by sharply lower G&A and despite $4.3M of property impairments concentrated in Dakota Center and Shea Center II .
• Non-GAAP metrics improved: FFO rose to $(0.41)M and Core FFO to $(0.09)M (from $(1.26)M and $(0.44)M LY), and EBITDAre was $0.89M (vs. $(0.12)M LY), reflecting operating discipline even as impairments and Conduit mark-to-market weighed on GAAP earnings .
• Management emphasized ~90% YTD leasing retention and a steady model home platform (87 homes; 10 acquired, 7 sold in Q2), but noted builder discounting and above-average inventories; commercial headwinds drove the Dakota Center impairment ahead of an expected Q3 short sale and a $0.9M Shea II impairment given leasing progress but remaining vacancy .
• Capital actions and listing compliance underpin the equity narrative: odd-lot/mini-tender completed (2.14M shares at $0.68), 1-for-10 reverse split executed, and Nasdaq bid-price compliance regained—potential near-term stock catalysts alongside the pending Dakota Center sale .

What Went Well and What Went Wrong

• What Went Well

  • G&A efficiency: G&A fell to ~$1.22M (28% of revenue) vs. $2.20M (48%) LY, aided by the absence of prior-year Zuma/proxy/legal costs and accrual reversals—supporting Core FFO improvement to $(0.09)M from $(0.44)M LY .
  • Model home operations resilient: 87 model homes at quarter-end, 10 acquisitions ($5.1M) and 7 sales ($3.1M) with a ~$0.32M gain; steady rent base primarily across Sun Belt states .
  • Leasing retention and NOI: Management cited ~90% YTD renewals; Office/Industrial NOI of ~$1.68M and Model Homes adjusted NOI of ~$1.20M helped offset retail softness .

• What Went Wrong

  • Asset impairments: ~$3.3M impairment at Dakota Center (expected short sale in Q3) and ~$0.9M at Shea Center II; model home impairments of ~$0.1M—dragging GAAP results .
  • Builder discounting: Residential builders continued discounting to reduce above-average inventories; while resale portfolio performance was “overall positive,” the environment remains challenging .
  • Conduit mark-to-market and interest costs: Continued non-cash losses on Conduit securities and ~$1.48M quarterly interest expense with higher weighted-average rates (5.90% vs. 5.38% LY) constrained earnings .

Financial Results

Segment revenue and NOI (consolidated):

• Segment Revenue | Segment | Q1 2025 Revenue ($) | Q2 2025 Revenue ($) | |---|---|---| | Retail | 263,278 | 93,574 | | Office/Industrial | 2,916,392 | 3,233,771 | | Model Homes | 913,767 | 1,019,729 | | Corporate & Other | 31,747 | 31,666 | | Total | 4,125,184 | 4,378,740 |

• Segment NOI | Segment | Q1 2025 NOI ($) | Q2 2025 NOI ($) | |---|---|---| | Retail | 162,710 | 88,750 | | Office/Industrial | 1,298,027 | 1,684,274 | | Model Homes | 865,610 | 969,789 | | Corporate & Other | 186,195 | 173,322 | | Total | 2,512,542 | 2,916,135 | | Model Homes Adjusted NOI | 1,079,566 | 1,202,379 |

KPIs and balance sheet highlights:

• Model Homes: 87 homes (260,227 sqft); state mix led by TX (86% of sqft; $3.21M current base annual rent) .
• Q2 Acquisitions/Dispositions: acquired 10 model homes ($5.1M); sold 7 ($3.1M) with ~$0.32M gain .
• Impairments: ~$3.3M (Dakota Center, pending short sale in Q3), ~$0.9M (Shea Center II), ~$0.1M model homes .
• Interest expense/Rate: ~$1.48M in Q2; weighted average rate 5.90% (vs. 5.38% LY) .
• Mortgage notes payable: $95.4M (incl. held for sale) at 6/30/25 vs. $102.0M at 6/30/24 .
• Lease retention: ~90% YTD renewals (management) .
• Series D dividends: $0.19531 per month for April–June 2025; Q2 total $0.58593 .

Guidance Changes

No explicit revenue/EPS/FFO quantitative guidance was issued in the Q2 2025 materials.

Earnings Call Themes & Trends

No Q2 2025 earnings call transcript was available in the document set; table reflects narrative themes from company press releases/8-Ks.

Management Commentary

• “I am proud of the way our team members performed this quarter and feel we are well positioned as we head into the second half of 2025.” — Jack Heilbron, President & CEO .
• “Leasing retention rates have continued positive for the second quarter of 2025 with approximately 90% renewing their current leases year-to-date.” — Gary Katz, CIO .
• “Builders continue to offer discounted prices and strong incentive packages... Despite these challenges... overall positive performance in our resale portfolio. We remain focused on capturing value and reducing risk...” — Steve Hightower, President, Model Home Division .

Q&A Highlights

• No Q2 2025 earnings call transcript was available in the document archive; therefore, no Q&A themes or guidance clarifications could be extracted [List: earnings-call-transcript not found].

Estimates Context

• S&P Global consensus: No Street EPS or revenue consensus was available for Q2 2025 (Primary EPS Consensus Mean and # of estimates not populated); thus, we cannot assess beat/miss versus estimates (Values retrieved from S&P Global).*
• The “Revenue Consensus Mean” field only carried the reported actual revenue for Q2 2025; no forward consensus inputs were available (Values retrieved from S&P Global).*

Key Takeaways for Investors

• Operating efficiency improved materially (G&A 27.9% vs. 48.0% LY), helping Core FFO narrow to near-breakeven at $(0.09)M despite impairments—evidence of cost control and portfolio pruning momentum .
• Commercial de-risking remains central: the Q3-expected Dakota Center short sale and Shea II impairment highlight management’s willingness to recognize market realities and redeploy capital over time .
• Model home platform is a relative ballast: steady acquisitions/dispositions and broad Sun Belt exposure underpin rent stability even as builders manage elevated inventories with incentives .
• Capital structure optics improved through the reverse split and regained Nasdaq compliance; the concluded odd-lot/mini-tender may reduce small-holder overhang—supportive for liquidity and institutional perception .
• Non-cash Conduit mark-to-market volatility is now much smaller than FY24, but still a potential noise factor for GAAP—focus on FFO/Core FFO and NOI for underlying performance .
• Near-term catalysts: closing of the Dakota Center transaction in Q3, incremental leasing progress at Shea II, and continued model home recycling could drive narrative and valuation inflections .
• With no Street coverage, trading likely hinges on internal milestones and asset-level news flow; investors should monitor segment NOI trajectories and G&A run-rate into H2’25 .

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Additional reference press releases in Q2 2025:

• Odd-lot/mini-tender (final results): 2,144,116 shares accepted at $0.68, total ~$1.46M .
• Reverse stock split: 1-for-10 effective May 19, 2025 .
• Nasdaq compliance regained: achieved minimum bid for 10 consecutive days by June 2, 2025 .
• Series D preferred: declared $0.19531 per month for April–June 2025 .

Notes:

• No Q2 earnings call transcript was available in the document set [List: earnings-call-transcript not found].
• Consensus estimates for Q2 2025 were not available from S&P Global; as a result, beat/miss versus Street could not be assessed (Values retrieved from S&P Global).*