Company: SQFTP
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001437749-25-010185
Chunk: 218

Company: Presidio Property Trust, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 9
Chunk 218
---
 intended hold period, market rental rates, leasing assumptions, capitalization rates and discount rates. For the year ended December 31, 2024, the Company recorded approximately $1.8 million of impairment related to its real estate assets.
 
We identified the auditing of the Company’s impairment assessment for real estate assets as a critical audit matter. Auditing the Company’s impairment assessment for real estate assets is especially challenging due to the high degree of auditor judgement, subjectivity, and effort, including the need to involve our valuation specialists, in evaluating management’s identification of indicators of potential impairment for certain real estate assets, and in determining the future cash flows and estimated fair values, where applicable, for certain real estate assets where indicators of impairment were determined to be present.
 
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming an overall opinion on the consolidated financial statements. Our audit procedures related to the matter included the following, among others:
 
  ●  Evaluating the significant judgments applied in determining whether indicators of impairment were present, including the intended hold period, obtaining evidence to corroborate management’s judgments, and searching for evidence contrary to such judgments. 

  ●  Testing the mathematical accuracy of the valuation models for certain real estate assets. 

  ●  Involving our valuation professionals with specialized skills and knowledge in (1) evaluating the reasonableness of the valuation methodology and (2) testing the underlying assumptions such as the market rental rates, leasing assumptions, capitalization rates and discount rates used to estimate future cash flows and, where applicable, fair values for certain real estate assets. The evaluation included comparison of Company assumptions to independently developed ranges using market data from industry transaction databases and published industry reports. 

  ●  Evaluating whether the assumptions used by management were consistent with evidence obtained in other areas of the audit. 

/s/ Moss Adams
 
Irvine, California
 
March 31, 2025
 
We have served as the Company’s auditor since 2024.

    F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the shareholders and the board of directors of Presidio Property Trust, Inc. and Subsidiaries:
 
Opinion on the Financial Statements 
 
We have audited the accompanying consolidated balance sheets of Presidio Property Trust, Inc. and Subsidiaries (the Company) as of December 31, 2023, the related consolidated statements of operations, equity and cash flows, for the years