v3.26.1
Note 13 - Segments
 6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Segment Reporting [Text Block]

13. SEGMENTS

 

The Company’s reportable segments consist of three types of real estate properties for which the Company’s chief operating decision maker (CODM), which is our Chief Executive Officer, has the final decision when allocating capital and personnel to the various segments, internally evaluate operating performance and financial results: Office/Industrial Properties, Model Home Properties and Retail Properties. The Company also has certain corporate-level activities including accounting, finance, legal administration, and management information systems which are not considered separate operating segments. There is no material inter-segment activity.

 

The CODM evaluates the performance of our segments based upon an internal net operating income (“NOI”), which is a non-GAAP supplemental financial measure on a quarterly basis as disclosed in the 10-Qs and 10-Ks. We believe that NOI is a widely accepted measure of comparative operating performance in the real estate community. However, our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount. The Company defines NOI for its segments as operating revenues (rental income, tenant reimbursements, parking income, and other operating income, net of provision for bad debt) less rental operating costs (property operating expenses, real estate taxes, insurance, utilities, repairs and maintenance, and asset management fees) excluding interest expense. NOI excludes certain items that are not considered to be controllable in connection with the management of an asset such as non-property income & expenses, depreciation & amortization, real estate acquisition fees & expenses, non-cash impairments and corporate general & administrative expenses. Quarterly, the Company reviews and tests for non-cash impairments, as required by GAAP, on all our properties (i.e., Office/Industrial Properties, Retail Properties, and Model Home Properties); however, the CODM does not consider those non-cash impairments when evaluating the segment’s cash operations and NOI.

 

The CODM uses NOI to evaluate and assess each segments' performance and in deciding how to allocate resources. For Model Home performance, the CODM also includes the gain or loss on sale of real estate assets net of any impairments, because we believe that is a major component in the operating success of the segment and part of the business model for Model Homes. The gain on sale of model homes resulted in cash flows to the Company that the CODM can decide on how to allocate to future operations. 

 

The following tables compare the Company’s segment activity and NOI and adjusted NOI for Model Home income to its results of operations and financial position as of and for the six months ended June 30, 2026 and 2025, respectively. The line items listed in the below NOI tables include the significant expense considered by the CODM for cash allocations on future investments. The Other Non-Segment & Consolidating Items represent corporate activity, the investment in Conduit, and other eliminating items for consolidation. The information for Corporate and Other are presented to reconcile back to the consolidated statement of operations, but is not considered a reportable segment. This includes the loss on Conduit marketable securities.

 

The following tables compare the Company's segment activity to its results of operations and financial position as of and for the three and six months ended June 30, 2026, and June 30, 2025:

 

  

For the Three Months Ended June 30, 2026

 
                     
  

Retail

  

Office/Industrial

  

Model Homes

  

Corporate and Other

  

Total

 
                     

Rental revenue

 $93,574  $2,448,222  $816,060  $—  $3,357,856 

Recovery revenue

  -   398,512   —   —   398,512 

Other operating revenue

  -   51,316   512   6,879   58,707 

Total revenues

  93,574   2,898,050   816,572   6,879   3,815,075 
                     

Rental operating costs

  5,261   1,323,387   42,064   (112,048)  1,258,664 

Net Operating Income (NOI)

  88,313   1,574,663   774,508   118,927   2,556,411 
                     

Gain on Sale - Model Homes

  —   —   (21,997)  —   (21,997)

Impairment of Model Homes

  —   —   (144,688)  —   (144,688)
                     

Adjusted NOI

 $88,313  $1,574,663  $607,823  $118,927  $2,389,726 

 

 

  

For the Three Months Ended June 30, 2025

 
                     
  

Retail

  

Office/Industrial

  

Model Homes

  

Corporate and Other

  

Total

 
                     

Rental revenue

 $93,574  $2,452,956  $1,019,301  $—  $3,565,831 

Recovery revenue

  -   715,922   —   —   715,922 

Other operating revenue

  -   64,893   428   31,666   96,987 

Total revenues

  93,574   3,233,771   1,019,729   31,666   4,378,740 
                     

Rental operating costs

  4,824   1,549,497   49,940   (141,656)  1,462,605 

Net Operating Income (NOI)

  88,750   1,684,274   969,789   173,322   2,916,135 
                     

Gain on Sale - Model Home

  —   —   323,359   —   323,359 

Impairment of Model Homes

  —   —   (90,769)  —   (90,769)
                     

Adjusted NOI

 $88,750  $1,684,274  $1,202,379  $173,322  $3,148,725 

 

  

For the Six Months Ended June 30, 2026

 
                     
  

Retail

  

Office/Industrial

  

Model Homes

  

Corporate and Other

  

Total

 
                     

Rental revenue

 $187,148  $4,682,717  $1,735,949  $—  $6,605,814 

Recovery revenue

  -   834,598   —   —   834,598 

Other operating revenue

  -   134,115   6,047   7,301   147,463 

Total revenues

  187,148   5,651,430   1,741,996   7,301   7,587,875 
                     

Rental operating costs

  10,093   2,954,224   90,941   (252,153)  2,803,105 

Net Operating Income (NOI)

  177,055   2,697,206   1,651,055   259,454   4,784,770 
                     

Gain on Sale - Model Homes

  —   —   150,099   —   150,099 

Impairment of Model Homes

  —   —   (220,327)  —   (220,327)
                     

Adjusted NOI

 $177,055  $2,697,206  $1,580,827  $259,454  $4,714,542 

 

  

For the Six Months Ended June 30, 2025

 
                     
  

Retail

  

Office/Industrial

  

Model Homes

  

Corporate and Other

  

Total

 
                     

Rental revenue

 $300,013  $4,920,507  $1,934,822  $—  $7,155,342 

Recovery revenue

  56,439   1,102,401   —   —   1,158,840 

Other operating revenue

  400   127,255   (1,326)  63,414   189,743 

Total revenues

  356,852   6,150,163   1,933,496   63,414   8,503,925 
                     

Rental operating costs

  105,392   3,167,862   98,097   (296,103)  3,075,248 

Net Operating Income (NOI)

  251,460   2,982,301   1,835,399   359,517   5,428,677 
                     

Gain on Sale - Model Home

  —   —   564,258   —   564,258 

Impairment of Model Homes

  —   —   (117,712)  —   (117,712)
                     

Adjusted NOI

 $251,460  $2,982,301  $2,281,945  $359,517  $5,875,223 

 

Since a significant portion of the total operating expense for Retail and Office/Industrial are recouped as part of recovery revenue, the CODM looks at NOI as a whole when reviewing the segments. For the Model Home segment, the properties are leased on a triple net basis and the tenants are responsible for a significant portion of the operating expenses. Therefore, the CODM focuses on Model Home revenue, any impairments and the gain on sale of model homes.

 

The CODM reviews on a regular basis the GAAP performance of each segment, including the significant segment expenses reported for GAAP shown in the table below. Our significant segment expenses include consolidated expense categories presented in our consolidated statements of operations, as well as rental operating costs. This information is provided to the CODM and factors into the CODM’s decision making for company-wide strategy. The following tables compare the Company’s segment activity and to its results of GAAP operations and financial position for the three and six months ended June 30, 2026, and June 30, 2025, respectively. The information for Corporate and Other are presented to reconcile back to the consolidated statement of operations, but is not considered a reportable segment as noted above.

 

  

For the Three Months Ended June 30, 2026

 
                     
  

Retail

  

Office/Industrial

  

Model Homes

  

Corporate and Other

  

Total

 

Revenues:

                    

Rental income

 $93,574  $2,846,734  $816,060  $—  $3,756,368 

Fees and other income

  -   51,316   512   6,879   58,707 

Total revenue

  93,574   2,898,050   816,572   6,879   3,815,075 

Costs and expenses:

                    

Rental operating costs

  5,261   1,323,387   42,064   (112,048)  1,258,664 

General and administrative

  —   20   225,959   1,115,318   1,341,297 

Depreciation and amortization

  22,928   694,602   180,707   473   898,710 

Impairment of goodwill and real estate assets

  —   2,833,462   144,688   —   2,978,150 

Total costs and expenses

  28,189   4,851,471   593,418   1,003,743   6,476,821 

Other income (expense):

                    

Interest expense - mortgage notes

  (38,728)  (670,352)  (441,573)  (1,279)  (1,151,932)

Interest and other income, net

  —   —   8   5,198   5,206 

Net loss in Conduit Pharmaceuticals marketable securities (see footnote 9)

  —   —   —   5,743   5,743 

Gain on sales of real estate, net

  —   —   (21,997)  —   (21,997)

Gain on disposition of assets and liabilities, net

  —   —   —   —   - 

Income tax (expense) benefit

  —   (2,000)  (3,630)  (21,000)  (26,630)

Total other income (expense), net

  (38,728)  (672,352)  (467,192)  (11,338)  (1,189,610)

Net income (loss)

  26,657   (2,625,773)  (244,038)  (1,008,202)  (3,851,356)

Less: Income attributable to noncontrolling interests

  —   (11,438)  51,668   —   40,230 

Net income (loss) attributable to Presidio Property Trust, Inc. stockholders

 $26,657  $(2,637,211) $(192,370) $(1,008,202) $(3,811,126)

 

 

  

For the Three Months Ended June 30, 2025

 
                     
  

Retail

  

Office/Industrial

  

Model Homes

  

Corporate and Other

  

Total

 

Revenues:

                    

Rental income

 $93,574  $3,168,878  $1,019,301  $—  $4,281,753 

Fees and other income

  -   64,893   428   31,666   96,987 

Total revenue

  93,574   3,233,771   1,019,729   31,666   4,378,740 

Costs and expenses:

                    

Rental operating costs

  4,824   1,549,497   49,940   (141,656)  1,462,605 

General and administrative

  —   —   187,935   1,035,723   1,223,658 

Depreciation and amortization

  22,928   955,575   231,954   1,234   1,211,691 

Impairment of goodwill and real estate assets

  —   4,226,620   90,769   —   4,317,389 

Total costs and expenses

  27,752   6,731,692   560,598   895,301   8,215,343 

Other income (expense):

                    

Interest expense - mortgage notes

  (39,942)  (921,953)  (514,636)  (1,339)  (1,477,870)

Interest and other income, net

  —   —   8   5,198   5,206 

Net gain in Conduit Pharmaceuticals marketable securities (see footnote 9)

  —   —   —   (7,802)  (7,802)

Gain on sales of real estate, net

  —   —   323,359   —   323,359 

Income tax (expense) benefit

  —   —   (30,310)  (23,600)  (53,910)

Total other income (expense), net

  (39,942)  (921,953)  (221,579)  (27,543)  (1,211,017)

Net income (loss)

  25,880   (4,419,874)  237,552   (891,178)  (5,047,620)

Less: Income attributable to noncontrolling interests

  —   (11,655)  (217,250)  —   (228,905)

Net income (loss) attributable to Presidio Property Trust, Inc. stockholders

 $25,880  $(4,431,529) $20,302  $(891,178) $(5,276,525)

 

  

For the Six Months Ended June 30, 2026

 
                     
  

Retail

  

Office/Industrial

  

Model Homes

  

Corporate and Other

  

Total

 

Revenues:

                    

Rental income

 $187,148  $5,517,315  $1,735,949  $—  $7,440,412 

Fees and other income

  —   134,115   6,047   7,301   147,463 

Total revenue

  187,148   5,651,430   1,741,996   7,301   7,587,875 

Costs and expenses:

                    

Rental operating costs

  10,093   2,954,224   90,941   (252,153)  2,803,105 

General and administrative

  —   17,519   452,842   2,544,759   3,015,120 

Depreciation and amortization

  45,856   1,478,878   371,998   947   1,897,679 

Impairment of goodwill and real estate assets

  —   3,282,197   220,326   —   3,502,523 

Total costs and expenses

  55,949   7,732,818   1,136,107   2,293,553   11,218,427 

Other income (expense):

                    

Interest expense - mortgage notes

  (81,845)  (2,213,435)  (904,131)  (2,595)  (3,202,006)

Interest and other income, net

  —   —   15   10,340   10,355 

Net loss in Conduit Pharmaceuticals marketable securities (see footnote 9)

  —   —   —   7,728   7,728 

Gain on sales of real estate, net

  —   —   150,099   —   150,099 

Gain on disposition of assets and liabilities, net

  —   3,416,501   —   —   3,416,501 

Income tax (expense) benefit

  —   (2,000)  (19,287)  (23,400)  (44,687)

Total other income (expense), net

  (81,845)  1,201,066   (773,304)  (7,927)  337,990 

Net income (loss)

  49,354   (880,322)  (167,415)  (2,294,179)  (3,292,562)

Less: Income attributable to noncontrolling interests

  —   (9,385)  (68,270)  —   (77,655)

Net income (loss) attributable to Presidio Property Trust, Inc. stockholders

 $49,354  $(889,707) $(235,685) $(2,294,179) $(3,370,217)


 

  

For the Six Months Ended June 30, 2025

 
                     
  

Retail

  

Office/Industrial

  

Model Homes

  

Corporate and Other

  

Total

 

Revenues:

                    

Rental income

 $356,452  $6,022,908  $1,934,822  $—  $8,314,182 

Fees and other income

  400   127,255   (1,326)  63,414   189,743 

Total revenue

  356,852   6,150,163   1,933,496   63,414   8,503,925 

Costs and expenses:

                    

Rental operating costs

  105,392   3,167,862   98,097   (296,103)  3,075,248 

General and administrative

  —   16,850   417,895   2,450,889   2,885,634 

Depreciation and amortization

  54,617   1,954,744   443,967   2,468   2,455,796 

Impairment of goodwill and real estate assets

  —   4,226,620   117,712   —   4,344,332 

Total costs and expenses

  160,009   9,366,076   1,077,671   2,157,254   12,761,010 

Other income (expense):

                    

Interest expense - mortgage notes

  (198,039)  (1,813,284)  (974,346)  (2,672)  (2,988,341)

Interest and other income, net

  —   —   15   10,339   10,354 

Net gain in Conduit Pharmaceuticals marketable securities (see footnote 9)

  —   —   —   (184,459)  (184,459)

Gain on sales of real estate, net

  4,213,068   —   564,259   —   4,777,327 

Income tax (expense) benefit

  —   —   (52,481)  23,980   (28,501)

Total other income (expense), net

  4,015,029   (1,813,284)  (462,553)  (152,812)  1,586,380 

Net income (loss)

  4,211,872   (5,029,197)  393,272   (2,246,652)  (2,670,705)

Less: Income attributable to noncontrolling interests

  —   (29,614)  (310,854)  —   (340,468)

Net income (loss) attributable to Presidio Property Trust, Inc. stockholders

 $4,211,872  $(5,058,811) $82,418  $(2,246,652) $(3,011,173)

 

 

       

Assets by Reportable Segment:

 

June 30, 2026

  

December 31, 2025

 

Office/Industrial Properties:

        

Land, buildings and improvements, net (1)

 $58,357,566  $67,445,290 

Total assets (2)

 $66,450,387  $68,980,087 

Model Home Properties:

        

Land, buildings and improvements, net (1)

 $32,185,582  $36,688,462 

Total assets (2)

 $32,091,087  $37,301,777 

Retail Properties:

        

Land, buildings and improvements, net (1)

 $4,462,995  $4,508,851 

Total assets (2)

 $4,633,481  $4,669,852 

Reconciliation to Total Assets:

        

Total assets for reportable segments

 $103,174,955  $110,951,716 

Corporate and other assets:

        

Cash, cash equivalents and restricted cash

  248,834   173,621 

Other assets, net

  3,234,967   10,927,537 

Total Assets

 $106,658,756  $122,052,874 

 

(1)

Includes lease intangibles.

 

(2)

Includes land, buildings and improvements, cash, cash equivalents, and restricted cash, current receivables, deferred rent receivables and deferred leasing costs and other related intangible assets, all shown on a net basis.

 

  

For the Six Months Ended June 30,

 

Capital Expenditures by Reportable Segment

 

2026

  

2025

 

Office/Industrial Properties:

        

Capital expenditures and tenant improvements, office

 $379,206  $360,708 

Model Home Properties:

        

Acquisition of operating properties, model home

  —   4,270,192 

Totals:

        

Acquisition of operating properties, net

  —   4,270,192 

Capital expenditures and tenant improvements

  379,206   360,708 

Total real estate investments

 $379,206  $4,630,900