Company: SQFTP
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001437749-25-010185
Chunk: 1713

Company: Presidio Property Trust, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 1713
---
 6.15% - 6.98%, depending on the term(2). Current market rates for 5–10 year fixed rate loans for commercial properties ranged from 5.55% - 6.88%, depending on the type of building (retail/industrial/office)(3). Interest rates decreased in 2024 compared to 2023 due to the Federal Reserve cutting interest rates 100 basis points, or 1%, in hopes of slowing down inflation going from 5.5% in July 2023 to 4.5% in December 2024.  According to the Federal Reserve "The Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective”(4).  Although rates decreased in 2024, it does not necessarily indicate that we would be unable to refinance or obtain mortgages on new homes or commercial properties at the same rate we have historically when they come due, as rates vary by property and are dependent upon factors including property cash flows, occupancy rates and lender credit.

As noted by Colliers Securities in its Q32024 Office Outlook: "The U.S. office market ended 2024 with early signs of stability as metrics improved throughout the year, and much less space was returned to the market than in 2023. However, strong headwinds in 2025 suggest an uneven recovery and likely several bumps over 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/press