Company: SQFTP
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001437749-25-034461
Chunk: 45

Company: Presidio Property Trust, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 45
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 period, market rental rates, leasing assumptions, capitalization rates and discount rates. Actual results could be significantly different from the estimates. Although our strategy is to hold our properties over the long-term, if our strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss
      may be recognized to reduce the property to fair value and such loss could be material.

      We review the carrying value of each of our real estate properties regularly to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the 
     nine months ended  September 30, 2025 and 2024, we recognized non-cash impairment charges of approximately 
     $4.4 million and 
     $0.9 million, respectively, related to commercial properties and model homes. 

   Fair Value Measurements.  Certain assets and liabilities are required to be carried at fair value, or if long-lived assets are deemed to be impaired, to be adjusted to reflect this condition. The guidance requires disclosure of fair values calculated under each level of inputs within the following hierarchy:
    
     •  Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; 

     •  Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and 

     •  Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. 

   When available, we utilize quoted market prices from independent third-party sources to determine fair value and classify such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require us to make a significant adjustment to derive a fair value measurement.
    
   Additionally, in an inactive market, a market price quoted from an independent third-party  may rely more on models with inputs based on information available only to that independent third-party. When we determine the market for a financial instrument owned by us to be illiquid or when market transactions for similar instruments do not appear orderly, we use several valuation sources (including internal valuations, discounted cash flow analysis and quoted