Company: SQFTP
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001437749-25-010185
Chunk: 1253

Company: Presidio Property Trust, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 5
Chunk 1253
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 the next few years. Occupiers continue to reduce space as their leases expire but are likely to upgrade to a higher quality space and building. Despite headlines focused on large companies' return-to-office efforts, most have evolved their office operations, embracing flexibility to encourage productivity. Large, sprawling campuses are being rethought, with the potential for redevelopment opportunities."

(2) Source: https://www.bankrate.com/mortgages/mortgage-rates/#mortgage-news

(3) Source: https://selectcommercial.com/commercial-mortgage-rates.php

(4) Source: https://www.federalreserve.gov/newsevents/pressreleases/monetary20250129a.htm

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    Going forward  returning federal employees to offices five days a week could positively impact office occupancy, according to Colliers. However, initiatives to reduce overall leased space could negatively affect markets with a significant federal presence. Opportunities for the private sector to buy federally owned properties could stimulate redevelopment or conversion to another use, primarily if local municipalities assist with efforts to streamline approvals. Capital markets have been rebounding, noted Colliers.  Price adjustments are leading investors back into the office market. While sales are not at pre-pandemic levels, Colliers noted that volume topped $21 billion in the fourth quarter, nearing year-end 2022 levels. Total sales increased 36% compared to one year ago, with  central business district activity rebounding. Office sales have more than doubled from one year ago and have had the largest quarterly volume since first-quarter 2022.

MANAGEMENT EVALUATION OF RESULTS OF OPERATIONS

Management’s evaluation of operating results includes an assessment of our ability to generate cash flow necessary to pay operating expenses, general and administrative expenses, debt service and to fund distributions to our stockholders. As a result, management’s assessment of operating results gives less emphasis to the effects of unrealized gains and losses and other non-cash charges, such as depreciation and amortization and impairment charges, which may cause fluctuations in net income for comparable periods but have no impact on cash flows. Management’s evaluation of our potential for generating cash flow includes assessments of our recently acquired properties, our non-stabilized properties, long-term sustainability of our real estate portfolio, our future operating cash flow from anticipated acquisitions, and the proceeds from the sales of our real estate assets or other assets.

In addition, management evaluates the results of the operations of our portfolio and individual properties with a primary focus on increasing and enhancing the value