Company: SQFTP
Filing Date: 2025-12-09
Form Type: S-8
Source: 0001493152-25-026716
Chunk: 6

Company: Presidio Property Trust, Inc.
Filing Date: 2025-12-09
Form: S-8
Chunk 6
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, one in Texas and one in Maryland. Our model home properties are
located in four states. While geographical clustering of real estate enables us to reduce our operating costs through economies of scale
by servicing several properties with less staff, it makes us susceptible to changing market conditions in these discrete geographic areas.
We do not develop properties but acquire properties that are stabilized or that we anticipate will be stabilized within two or three years
of acquisition. We consider a property to be stabilized once it has achieved an 80% occupancy rate for a full year as of January 1 of
such year or has been operating for three years.

Most of our office and retail
properties are leased to a variety of tenants ranging from small businesses to large public companies, many of which are not investment
grade. We have, in the past, entered into, and intend in the future to enter into, purchase agreements for real estate having net leases
that require the tenant to pay all of the operating expenses or pay increases in operating expenses over specific base years. Most of
our office leases are for terms of three to five years with annual rental increases. Our model homes are typically leased back for two
to three years to the home builder on a triple-net lease. Under a triple-net lease, the tenant is required to pay all operating, maintenance
and insurance costs and real estate taxes with respect to the leased property.

We seek to diversify our portfolio
by commercial real estate segments, including office, industrial, retail and model home properties to reduce the adverse effect of a single
under-performing segment and/or tenant. We further mitigate risk at the tenant level through our credit review process, which varies by
tenant class. For example, our commercial and industrial tenants tend to be corporations or individually owned businesses. In these cases,
we typically obtain financial records, including financial statements and tax returns (depending on the circumstance), and run credit
reports for any prospective tenant to support our decision to enter into a rental arrangement. We also typically obtain security deposits
from these commercial tenants. Our Model Home commercial tenants are well-known homebuilders with established credit histories. These
tenants are subjected to financial review and analysis prior to us entering into a sales-leaseback transaction.

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<div align='center'>Our Current Portfolio</div>

Our commercial portfolio currently
consists of three commercial properties located in Colorado, four in North Dakota, one in Southern California, one in Texas and one in
Maryland, and 87 model home properties located in four states