Presidio Property Trust, Inc. Segments Disclosure

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 ("CEO"), as the CEO 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 test 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 with 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 years ended December 31, 2025 and 2024, 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 Pharmaceutical, 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 years ended December 31, 2025, and 2024:

 

		For the Year Ended December 31, 2025
		Retail				Office/Industrial				Model Homes				Corporate and Other				Total
Rental revenue		$	487,161			$	9,585,303			$	3,952,162			$	—			$	14,024,626
Recovery revenue			56,439				2,389,853				—				—				2,446,292
Other operating revenue			400				257,414				5,776				80,200				343,790
Total revenues			544,000				12,232,570				3,957,938				80,200				16,814,708
Rental operating costs			115,047				6,423,862				212,817				(593,674	)			6,158,052
Net Operating Income (NOI)			428,953				5,808,708				3,745,121				673,874				10,656,656
Gain on Sale - Model Homes			—				—				950,434				—				950,434
Impairment of Model Homes			—				—				(339,609	)			—				(339,609	)
Adjusted NOI		$	428,953			$	5,808,708			$	4,355,946			$	673,874			$	11,267,481

 

		For the Year Ended December 31, 2024
		Retail				Office/Industrial				Model Homes				Corporate and Other				Total
Rental revenue		$	1,595,464			$	9,778,458			$	4,368,169			$	—			$	15,742,091
Recovery revenue			463,158				2,318,564				—				—				2,781,722
Other operating revenue			62,041				241,530				68,084				29,807				401,462
Total revenues			2,120,663				12,338,552				4,436,253				29,807				18,925,275
Rental operating costs			608,667				6,136,564				171,621				(660,775	)			6,256,077
Net Operating Income (NOI)			1,511,996				6,201,988				4,264,632				690,582				12,669,198
Gain on Sale - Model Home			—				—				3,426,572				—				3,426,572
Impairment of Model Homes			—				—				(406,374	)			—				(406,374	)
Adjusted NOI		$	1,511,996			$	6,201,988			$	7,284,830			$	690,582			$	15,689,396

 

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 as of and for the years ended December 31, 2025 and 2024, 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 Year Ended December 31, 2025
		Retail				Office/Industrial				Model Homes				Corporate and Other				Total
Revenues:
Rental income		$	543,600			$	11,975,156			$	3,952,162			$	—			$	16,470,918
Fees and other income			400				257,414				5,776				80,200				343,790
Total revenue			544,000				12,232,570				3,957,938				80,200				16,814,708
Costs and expenses:
Rental operating costs			115,047				6,423,862				212,817				(593,674	)			6,158,052
General and administrative			—				19,195				813,705				4,871,930				5,704,830
Depreciation and amortization			100,472				3,910,547				846,818				4,430				4,862,267
Impairment of goodwill and real estate assets			—				6,031,828				339,609				72,000				6,443,437
Total costs and expenses			215,519				16,385,432				2,212,949				4,354,686				23,168,586
Other income (expense):
Interest expense - mortgage notes			(276,961	)			(3,757,328	)			(2,010,791	)			(5,357	)			(6,050,437	)
Interest and other income, net			—				—				(13,735	)			34,616				20,881
Net loss in Conduit Pharmaceuticals marketable securities (see footnote 9)			—				—				—				(188,287	)			(188,287	)
Gain on sales of real estate, net			4,494,358				—				950,434				—				5,444,792
Income tax (expense) benefit			—				(9,600	)			(60,875	)			(392,695	)			(463,170	)
Total other income, net			4,217,397				(3,766,928	)			(1,134,967	)			(551,723	)			(1,236,221	)
Net income (loss)			4,545,878				(7,919,790	)			610,022				(4,826,209	)			(7,590,099	)
Less: Income attributable to noncontrolling interests			—				(47,710	)			(637,876	)			—				(685,586	)
Net income (loss) attributable to Presidio Property Trust, Inc. stockholders		$	4,545,878			$	(7,967,500	)		$	(27,854	)		$	(4,826,209	)		$	(8,275,685	)

 

 

		For the Year Ended December 31, 2024
		Retail				Office/Industrial				Model Homes				Corporate and Other				Total
Revenues:
Rental income		$	2,058,622			$	12,097,022			$	4,368,169			$	—			$	18,523,813
Fees and other income			62,041				241,530				68,084				29,807				401,462
Total revenue			2,120,663				12,338,552				4,436,253				29,807				18,925,275
Costs and expenses:
Rental operating costs			608,667				6,136,564				171,621				(660,775	)			6,256,077
General and administrative			—				2,330				820,217				6,704,128				7,526,675
Depreciation and amortization			394,461				4,154,769				952,627				13,661				5,515,518
Impairment of goodwill and real estate assets			—				1,377,937				406,374				185,000				1,969,311
Total costs and expenses			1,003,128				11,671,600				2,350,839				6,242,014				21,267,581
Other income (expense):
Interest expense - mortgage notes			(577,761	)			(3,457,360	)			(2,009,641	)			(5,434	)			(6,050,196	)
Interest and other income, net			—				(171,734	)			(23,890	)			44,268				(151,356	)
Net gain in Conduit Pharmaceuticals marketable securities (see footnote 9)			—				—				—				(17,925,723	)			(17,925,723	)
Gain on sales of real estate, net			—				—				3,426,572				—				3,426,572
Income tax (expense) benefit			—				—				(55,543	)			(5,312	)			(60,855	)
Total other income, net			(577,761	)			(3,629,094	)			1,337,498				(17,892,201	)			(20,761,558	)
Net income (loss)			539,774				(2,962,142	)			3,422,912				(24,104,408	)			(23,103,864	)
Less: Income attributable to noncontrolling interests			—				(86,686	)			(2,437,979	)			—				(2,524,665	)
Net income (loss) attributable to Presidio Property Trust, Inc. stockholders		$	539,774			$	(3,048,828	)		$	984,933			$	(24,104,408	)		$	(25,628,529	)

 

		December 31,				December 31,
Assets by Reportable Segment:		2025				2024
Office/Industrial Properties:
Land, buildings and improvements, net (1)		$	67,445,290			$	74,425,180
Total assets (2)		$	68,980,087			$	76,292,662
Model Home Properties:
Land, buildings and improvements, net (1)		$	36,688,462			$	37,416,000
Total assets (2)		$	37,301,777			$	38,166,964
Retail Properties:
Land, buildings and improvements, net (1)		$	4,508,851			$	15,743,789
Total assets (2)		$	4,669,852			$	16,673,605
Reconciliation to Total Assets:
Total assets for reportable segments		$	110,951,716			$	131,133,231
Corporate and other assets:
Cash, cash equivalents and restricted cash		$	173,621				564,922
Other assets, net		$	10,927,537				10,871,497
Total Assets		$	122,052,874			$	142,569,650

 

(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 Year Ended December 31,
Capital Expenditures by Reportable Segment		2025				2024
Office/Industrial Properties:
Capital expenditures and tenant improvements, office		$	2,513,488			$	2,044,704
Model Home Properties:
Acquisition of operating properties, model home			9,444,465				9,729,351
Retail Properties:
Capital expenditures and tenant improvements, retail			—				217,121
Totals:
Acquisition of operating properties, net			9,444,465				9,729,351
Capital expenditures and tenant improvements			2,513,488				2,261,825
Total real estate investments		$	11,957,953			$	11,991,176