Company: SQFTP
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001437749-25-010185
Chunk: 909

Company: Presidio Property Trust, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 3
Chunk 909
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 approximately $0.2 million was related to goodwill impairment.  The impairment on our commercial property, Dakota Center, was the result of the loan maturing in July and the Company not being able to reach an agreement with the lenders regarding a loan modification or extension. In October, the lender has agreed to a sale of the property to settle the balance of the non-recourse loan.  Due to the uncertainties in the Fargo market, we concluded it was necessary to impair the property’s book value, in accordance with ASC 360-10.  As such, we recorded an impairment charge of approximately $0.7 million, during September 2024. The impairment on 300 NP, totaling approximately $0.7 million related to changing cap rates in the area and low historical occupancy.  This property is not listed for sale and has no debt.  The new impairment charges for the model homes reflects the estimated and actual sales prices for these specific model homes that were sold after the end of each quarter.  This was the result of an abnormally short hold period, less than two years, on model homes purchased in 2022.  The builder changed their product style in the neighborhoods where these model homes are located, in Texas, after we had purchased the homes. We do not believe these losses are indicative of our overall model home portfolio.  As noted above in the Overview section, during the year ended December 31, 2024, we sold 51 model homes for approximately $24.8 million and the Company recognized a gain of approximately $3.4 million.  We expect to record a net gain on model home sales in the first quarter of 2025 as well. The impairment to goodwill was related to NTR Property Management and the fair market value adjustment based on future expected cash flows. 

During the year ended December 31, 2023, we recognized a non-cash impairment charge of approximately $3.2 million related to goodwill and model homes. Of the $3.2 million impairment for the year, approximately $2.0 million was related to our One Park Center property, approximately $0.4 million was related to eight model homes, and approximately $0.8 million was related to goodwill impairment. The impairment charge for One Park Center reflects management’s revised