Company: SQFTP
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001437749-25-010185
Chunk: 313

Company: Presidio Property Trust, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 9A
Chunk 313
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, 2024 and 2023, respectively.
    
   Real Estate Held for Sale and Discontinued Operations. We generally reclassify assets to "held for sale" when the disposition has been approved, it is available for immediate sale in its present condition, we are actively seeking a buyer, and the disposition is considered probable within one year.  Additionally, real estate sold during the current period is classified as “real estate assets held for sale” for all prior periods presented in the accompanying consolidated financial statements. Mortgage notes payable related to the real estate sold during the current period are classified as “mortgage notes payable related to properties held for sale” for all prior periods presented in the accompanying consolidated financial statements. Additionally, we record the operating results related to real estate that has been disposed of as discontinued operations for all periods presented if the operations have been eliminated and represent a strategic shift and we will not have any significant continuing involvement in the operations of the property following the sale. Properties considered held for sale are recorded at the lesser of the carrying value or fair value less costs to sell.  As of  December 31, 2024, three commercial properties, Union Town Center, Research Parkway, and Dakota Center met the criteria to be classified as "held for sale", and  9 model homes were classified as "held for sale", but are not considered discontinued operations or a strategic shift in our operations.
    
   Impairments of Real Estate Assets. We regularly review for impairment on a property-by-property basis. Impairment is recognized on a property held for use when the expected undiscounted cash flows for a property are less than the carrying amount at which time the property is written-down to fair value. Impairment is recognized on a property held for sale when the fair value less costs to sell is less than the carrying amount. The calculation of both discounted and undiscounted cash flows requires management to make estimates of future cash flows that are determined based on a number of inputs and assumptions such as the intended hold period, market rental rates, leasing assumptions, capitalization rates and discount rates. Actual results could be significantly different from the estimates. Although our strategy is to hold our properties over the long-term, if our strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss  may be recognized to reduce the property to fair value and such loss could be material.

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