Company: SQFTP
Filing Date: 2025-10-28
Form Type: DRS
Source: 0001493152-25-019889
Chunk: 21

Company: Presidio Property Trust, Inc.
Filing Date: 2025-10-28
Form: DRS
Chunk 21
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| ● | 87                                                                                                                                    
 model home residential properties (“Model Homes” or “Model Home Properties”), totaling approximately 260,227                          
 square feet (unaudited), leased back on a triple-net basis to homebuilders, that are owned by four affiliated limited partnerships    
 and one wholly-owned corporation, all of which we control. As of June 30, 2025, all of the model homes in Dubose Model Home Investors 
 #202, LP and Dubose Model Home Investors #206, LP had been sold.                                                                      |

We own three commercial properties located in Colorado, four in North Dakota, one in Southern California, 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