Presidio Property Trust, Inc.
For the period ended Mar 31, 2026. Filed May 15, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 15, 2026
SQFTW$0.01-0.9%Stored close · as of Nov 5, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001437749-25-034461
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001437749-26-017340
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 84 previous paragraphs and 76 current paragraphs.
39 unchanged; 27 reworded; 8 added; 13 removed; 5 previous and 2 current paragraphs rearranged.
Tables are not compared: 14 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
General and Administrative Expenses. G&A expenses for the*** ***three months ended March 31, 2026 and 2025 totaled approximately $1.7 million and $1.7 million, respectively. G&A expenses as a percentage of total revenue was 44.4%and 40.3%for the three months ended March 31, 2026 and 2025, respectively. G&A expenses for the three months ended March 31, 2026 remained constant compared to the same period ending in 2025; however, the Company is actively looking to reduce G&A expenses during the year. There has been a reduction of employee headcount during the first quarter of 2026 with more expected this year. Starting in April 2026, the Chief Executive Officer has agreed to a voluntary 5% reduction in his annual salary. Additionally, the Board of Directors have approved the reduction by one Director starting in June 2026, which will provide additional G&A savings.
Current report
On January 21, 2026, the Company and NetREIT SC II, LLC, a subsidiary of the Company (the “Borrower” or "Shea Center"), received a notice (the “Default Notice”) from Wells Fargo Bank, National Association (the “Lender”) alleging that the Borrower’s failure to repay in full by January 5, 2026 the indebtedness owed under that certain promissory note dated as of December 24, 2015 issued to The Bancorp Bank (the “Original Lender”) in the original principal amount of $17,727,500 (the “Note”), the related loan agreement, dated as of December 24, 2015 by and between Borrower and the Original Lender (the “Loan Agreement”) and other related agreements (together with the Note and the Loan Agreement, the “Loan Documents”), constituted an event of default under the Loan Documents.
Current report
As a result of the alleged event of default, the entire unpaid amounts shall bear interest at the default interest rate equal to the lesser of (i) the maximum rate permitted by applicable law, or (ii) 5% above the original interest rate of 4.92% per annum.
Current report
In addition, the Lender has the right to foreclose or partially foreclose certain real and personal property that the Borrower had pledged as security for the Note located in Douglas County, Colorado, known as the “Shea Center II” (the “Property”). The Default Notice further states that the Lender revoked the Borrower’s license under the Loan Documents to receive, collect and make use of rents, profits and income from the Property.
Current report
On February 13, 2026, in connection with anex parte motion brought by the Lender, the Borrower entered into a stipulation with the Lender to appoint Trigild IVL (the “Receiver”) as receiver over the Property and for the entry of an Order for Appointment of Receiver (the “Order”). Pursuant to the Order, the Borrower, and certain defendant parties, which included the Company (the “Borrower Parties”) were enjoined and restrained from collecting any rents or fees from or incident to the Property and from interfering with the Property. The Borrower Parties agreed to turn over to the Receiver all sums in existence as of the date of entry of the Order that are related or pertain to, or are derived from, the Property. In addition, the Receiver was given possession of the Property and has full power and authority to operate, manage, and preserve the Property.
Current report
In the case of our non-recourse loan for Shea Center II, our obligation will be settled through the foreclosure process with the lender.
Current report
For the three months ended March 31, 2026, the Company did not declare a cash dividend on shares of Series A Common Stock. For the three months ended March 31, 2026, the Company did not declare and did not pay dividends on shares of Series D Preferred Stock. As of January 28, 2026, the Board of Directors has suspended the Company’s monthly dividend on its Series D Preferred Stock commencing with the January 2026 monthly dividend that would have been paid on February 15, 2026. Since the Company’s Board of Directors did not declare a dividend during the three months ended March 31, 2026, an accrual was not recorded on the balance sheet. However, undeclared preferred stock dividends are reflected in earnings per share as discussed in ASC 260-10-45-11. In accordance with the terms of the Series D Preferred Stock, Preferred stock dividends that are not declared accumulate and are added to the liquidation preference as of the scheduled payment date for the respective series of the preferred stock. No interest, or sum of money in lieu of interest, is payable in respect of any dividend payments on the Series D Preferred Stock that are in arrears. As of March 31, 2026 and December 31, 2025, the cumulative preferred dividends in arrears on the Series D preferred stock was $0.6 million and $0, respectively.
Current report
July 2025, the lender approved a purchase offer from a third party for $5,125,000, and as of January 14, 2026, Dakota Center had sold for a value of $5,125,000. During January 2026, the Company received notice that the Company's failure to repay in full by January 5, 2026 the indebtedness related to the loan agreement governing Shea Center II had triggered a default event. On February 13, 2026 the Company received notification that the Shea Center II property governed by the loan agreement was moved into receivership. The foreclosure sale and public auction is scheduled for June 17, 2026.
Removed paragraphs (13)
Previous report
For details regarding our sponsorship of a special purpose acquisition company, Murphy Canyon Acquisition Corp. ("Murphy Canyon" or the "SPAC"), see Note 9, Investment in Conduit Pharmaceuticals, in the Notes to the Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Quarterly Report.
Previous report
Acquisitions during the nine months ended September 30, 2024
Previous report
Dispositions during the nine months ended September 30, 2024
Previous report
General and Administrative Expenses. G&A expenses for the*** ***three months ended September 30, 2025 and 2024 totaled approximately $1.5 million and $1.6 million, respectively. G&A expenses as a percentage of total revenue was 34.6%and 34.5%for the three months ended September 30, 2025 and 2024, respectively. G&A expenses for the three months ended September 30, 2025 decreased by approximately $0.2 million partially related to a decrease in bonus expense totaling approximately $115,163 for executives and officers. Additionally, stock compensations decreased by approximately $59,574.
Previous report
Revenues. Total revenues were approximately $12.7 million for the nine months ended September 30, 2025, compared to approximately $14.1 million for the same period in 2024. As of September 30, 2025, we had approximately $113.3 million in net real estate assets including 84 model homes, compared to approximately $131.4 million in net real estate assets including 83 model homes at September 30, 2024. The average number of model homes held during the nine months ended September 30, 2025 and 2024 was 81 and 93, respectively. The change in revenue is directly related to the decrease in model home rental income and transaction fees during the current period, and the sale of our two commercial properties on February 7, 2025.
Previous report
Rental Operating Costs. Rental operating costs totaled approximately $4.6 million for the*** nine months ended September 30, 2025, ***compared to approximately $4.7 million for the same period in 2024. Rental operating costs as a percentage of total revenue was 36.3% and 33.0% for the nine months ended September 30, 2025 and 2024, respectively. We expect rental operating costs to continue to be down year over year at December 31, 2025 due to the sale of our retail properties UTC and Research Parkway during February 2025; however, if we purchase additional properties during the fourth quarter of 2025, our rental operating costs could increase.
Previous report
General and Administrative Expenses. G&A expenses for the*** ***nine months ended September 30, 2025 and 2024 totaled approximately $4.3 million and $5.9 million, respectively. G&A expenses as a percentage of total revenue was 34.1%and 42.0%for the nine months ended September 30, 2025 and 2024, respectively. G&A expenses for the nine months ended September 30, 2025 decreased by approximately $1.6 million partially related to consulting fees in 2024 including a one-time payment for the setup of DMH 207, and additional legal fees related to Zuma Capital Management, LLC (Zuma Capital"), which was not repeated in 2025. Additionally, during the nine months ended September 30, 2025, we also reduced our accrual for board fees, income tax preparation fees, and companywide bonus.
Previous report
Depreciation and Amortization. Depreciation and amortization expense wasapproximately $3.7 million and $4.2 millionfor the nine months ended September 30, 2025 and 2024, respectively. The decrease is directly related to the saleof our retail properties UTC and Research Parkway during February 2025.
Previous report
Asset Impairments. We review the carrying value of each of our real estate properties regularly to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the nine months ended September 30, 2024, we recognized a non-cash impairment charge of approximately $0.9 million related to model homes and one commercial property. The impairment on our commercial property, Dakota Center, was the result of the loan maturing in July 2024 and the Company not being able to reach an agreement with the lenders regarding a loan modification or extension. In October the lender agreed to a sale of the property to settle the balance of the non-recourse loan. Due to the uncertainties in the Fargo market, we decided to impair the property’s book value, in accordance with ASC 360-10 impairment of long-lived assets and for long-lived assets to be disposed of, to be in line with the current loan balance and estimated closing costs, which is the expected sales price. As such, we recorded an impairment charge of approximately $0.7 million, as of September 30, 2024. The new impairment charges for the model homes reflects the estimated and actual sales prices for these specific model homes that were sold after the end of each quarter. This was the result of an abnormally short hold period, less than two years, on model homes purchased in 2022. The builder changed their product style in the neighborhoods where these model homes are located, in Texas, after we had purchased the homes. We do not believe these losses are indicative of our overall model home portfolio. During the nine months ended*** ***September 30, 2025, we recognized non-cash impairment charges of approximately $0.1 million, related to seven model homes properties, based on estimated selling prices. Additionally, during the nine months ended September 30, 2025, in connection with the pending sale of Dakota Center, we have impaired the property’s book value and recorded an impairment charge of approximately $3.3 million, with the short sale expected to take place during the fourth quarter of 2025, which will include a discount payoff for the non-recourse loan. During the nine months ended September 30, 2025, we also recorded an impairment charge of approximately $0.9 million, on our Shea Center II property, based on current market conditions, occupancy rates, and the estimated hold period of the property.
Previous report
Interest Expense - mortgage notes. Interest expense, including amortization of deferred finance charges wasapproximately $4.5 millionfor thenine months ended September 30, 2025, compared toapproximately $4.5 millionfor the same period in 2024. The weighted average interest rate on our outstanding debt was 6.17% and 5.44% as of September 30, 2025 and 2024, respectively. Mortgage notes payable totaled approximately $94.6 million and $102.3 million as of September 30, 2025 and 2024, respectively. The decrease in mortgage notes payable is a direct result of the sale of our two commercial properties during February 2025 and the change in the number of model homes.
Previous report
Geographic Diversification Tables
Previous report
Management has begun discussions with various lenders to either restructure, extend or refinance the other three loans. Additionally, management may consider selling these properties if we are unsuccessful in extending the maturity dates or are unable to raise additional funds to pay these non-recourse loans in full. Management expects certain model homes will be sold, and that the underlying mortgage notes will be paid off with sales proceeds, while other mortgage notes will be refinanced as the Company has done in the past. Additional principal payments will be made with cash flows from ongoing operations.
Previous report
Series A Common Stock:
Reworded paragraphs (27)
Previous wording
The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto appearing in Item 1 of this report and the more detailed information contained in our2024 year end Annual Report.
Current wording
The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto appearing in Item 1 of this report and the more detailed information contained in our2025 year end Annual Report.
Previous wording
This Form 10-Q contains forward-looking statements which involve risks and uncertainties. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" and/or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and also of which do not relate solely to historical matters. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Moreover, investors are cautioned to interpret many of the risks identified in the risk factors discussed in this 10-Q and our 2024 year end Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025, respectively. Additional factors which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements include, but are not limited to, the risks associated with the ownership of real estate in general and our real estate assets in particular; the economic health of the metro regions where we conduct business; the risk of failure to enter into/and or complete contemplated acquisitions and dispositions, within the price ranges anticipated and on the terms and timing anticipated; changes in the composition of our portfolio; fluctuations in interest rates; reductions in or actual or threatened changes to the timing of federal government spending; the risks related to the use of third-party providers and joint venture partners; the ability to control our operating expenses; the economic health of our tenants; the supply of competing properties; shifts away from brick and mortar stores to e-commerce; the availability and terms of financing and capital and the general volatility of securities markets; compliance with applicable laws, including those concerning the environment and access by persons with disabilities; terrorist attacks or actions and/or risks relating to information technology and cybersecurity attacks, loss of confidential information and other related business disruptions; weather conditions, natural disasters and pandemics; ability to maintain key personnel; failure to qualify and maintain our qualification as a REIT and the risks of changes in laws affecting REITs; and other risks and uncertainties detailed from time to time in our filings with the SEC, i…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Form 10-Q contains forward-looking statements which involve risks and uncertainties. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" and/or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and also of which do not relate solely to historical matters. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Moreover, investors are cautioned to interpret many of the risks identified in the risk factors discussed in this 10-Q and our 2025 year end Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 27, 2026. Additional factors which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements include, but are not limited to, the risks associated with the ownership of real estate in general and our real estate assets in particular; the economic health of the metro regions where we conduct business; the risk of failure to enter into/and or complete contemplated acquisitions and dispositions, within the price ranges anticipated and on the terms and timing anticipated; changes in the composition of our portfolio; fluctuations in interest rates; reductions in or actual or threatened changes to the timing of federal government spending; the risks related to the use of third-party providers and joint venture partners; the ability to control our operating expenses; the economic health of our tenants; the supply of competing properties; shifts away from brick and mortar stores to e-commerce; the availability and terms of financing and capital and the general volatility of securities markets; compliance with applicable laws, including those concerning the environment and access by persons with disabilities; terrorist attacks or actions and/or risks relating to information technology and cybersecurity attacks, loss of confidential information and other related business disruptions; weather conditions, natural disasters and pandemics; ability to maintain key personnel; failure to qualify and maintain our qualification as a REIT and the risks of changes in laws affecting REITs; and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
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.
Current wording
We own three commercial properties located in Colorado, three 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.
Previous wording
Acquisitions during the nine months ended September 30, 2025
Current wording
Acquisitions during the three months ended March 31, 2026
Previous wording
Dispositions during the nine months ended September 30, 2025
Current wording
Dispositions during the three months ended March 31, 2026
Previous wording
Revenues. Total revenues were approximately $4.2 million for the three months ended September 30, 2025, compared to approximately $4.7 million for the same period in 2024. As of September 30, 2025, we had approximately $113.3 million in net real estate assets including 84 model homes, compared to approximately $131.4 million in net real estate assets including 83 model homes at September 30, 2024. The average number of model homes held during the three months ended September 30, 2025 and 2024 was 86 and 82, respectively. The change in revenue is directly related to the decrease in commercial real estate rental income during the current period, from the sale of our two commercial properties on February 7, 2025.
Current wording
Revenues. Total revenues were approximately $3.8 million for the three months ended March 31, 2026, compared to approximately $4.1 million for the same period in 2025. As of March 31, 2026, we had approximately $100.5 million in net real estate assets including 75 model homes, compared to approximately $117.4 million in net real estate assets, including 84 model homes at March 31, 2025. The average number of model homes held during the three months ended March 31, 2026 and 2025 was approximately 78 and 81, respectively. The change in revenue is directly related to the decrease in commercial real estate rental income during the current period from the sale of Dakota Center.
Previous wording
Rental Operating Costs. Rental operating costs totaled approximately$1.5 million for the*** three months ended September 30, 2025, ***compared to approximately $1.6 million for the same period in 2024. Rental operating costs as a percentage of total revenue was approximately 34% for both the three months ended September 30, 2025 and 2024, respectively.
Current wording
Rental Operating Costs. Rental operating costs totaled approximately $1.5 million for the*** three months ended March 31, 2026, ***compared to approximately $1.6 million for the same period in 2025. Rental operating costs as a percentage of total revenue was approximately 35% and 39% for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
Depreciation and Amortization. Depreciation and amortization expense wasapproximately$1.2 million and $1.5 millionfor thethree months ended September 30, 2025 and 2024, respectively, directly related to the decrease in commercial real estate rental income during the current period, from the sale of our two commercial properties on February 7, 2025.
Current wording
Depreciation and Amortization. Depreciation and amortization expense wasapproximately $1.0 million and $1.2 millionfor thethree months ended March 31, 2026 and 2025, respectively. The decrease in depreciation and amortization expense isdirectly related to the decrease in commercial real estate rental income during the current period, from the sale of Dakota Center and the placement of Shea Center into receivership and listed as held for sale.
Previous wording
Asset Impairments. We review the carrying value of each of our real estate properties regularly to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the three months ended September 30, 2025 and 2024, we recognized non-cash impairment charges of approximately $0.1 million related to four model home properties and approximately $0.7 million related to three model homes and one commercial property (Dakota Center).
Current wording
Asset Impairments. We review the carrying value of each of our real estate properties regularly to determine if circumstances indicate an impairment in the carrying value of these investments exists. During the three months ended March 31, 2026 and 2025, we recognized non-cash impairment charges of approximately $524,373 and $26,943, respectively. Approximately $0.4 million of the impairment charge for the three months ended March 31, 2026 and 2025, was related to the Shea Center II.
Previous wording
Interest Expense - mortgage notes. Interest expense, including amortization of deferred finance charges wasapproximately $1.5 millionfor thethree months ended September 30, 2025, compared toapproximately $1.5 millionfor the same period in 2024. The weighted average interest rate on our outstanding debt was 6.17% and 5.44% as of September 30, 2025 and 2024, respectively. Mortgage notes payable totaled approximately $94.6 million and $103.2 million as of September 30, 2025 and 2024, respectively. The decrease in mortgage notes payable is a direct result of the sale of our two commercial properties during February 2025.
Current wording
Interest Expense - mortgage notes. Interest expense, including amortization of deferred finance charges wasapproximately $2.1 millionfor thethree months ended March 31, 2026, compared toapproximately $1.5 millionfor the same period in 2025. The weighted average interest rate on our outstanding debt was 6.29% and 5.83% as of March 31, 2026 and 2025, respectively. Mortgage notes payable totaled approximately $82.4 million and $94.4 million as of March 31, 2026 and 2025, respectively. While mortgage interest expenses increased over the three months ended March 31, 2026 and 2025, approximately $0.7 million of the interest expense attributed tothe three months ended March 31, 2026 was related to one-time charge for the default interest on the loan for Dakota Center. Management expects future interest expenses to continue to decrease going forward for the year ended 2026. Additionally, during the three months ended March 31, 2026, we recorded defaulted interest expense of approximately $0.1 million related to the Shea Center II loan.
Previous wording
Gain on Sale of Real Estate Assets, net. The change in gain or loss on the sale of real estate assets is dependent on the mix of properties sold and the market conditions at the time of the sale. See "Significant Transactions in 2025 and 2024" above for further detail.
Current wording
Gain (Loss) on Sale of Real Estate Assets, net. The change in gain or loss on the sale of real estate assets is dependent on the mix of properties sold and the market conditions at the time of the sale. See "Significant Transactions in 2026 and 2025" above for further detail.
Previous wording
Income allocated to non-controlling interests. Income allocated to non-controlling interests for thethree months ended September 30, 2025 and 2024 totaled approximately $5,635 and $0.4 million, respectively. This was directly related to the gain on sales of model homes held byour affiliated limited partnerships.
Current wording
Income allocated to non-controlling interests. Income allocated to non-controlling interests for thethree months ended March 31, 2026 and 2025 totaled approximately $0.1 millionand $0.1 million, respectively. This was directly related to the gain on sales of model homes held byour affiliated limited partnerships.
Previous wording
Loss on Conduit remeasurement. As of September 30, 2025, we held 709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $7,515. Conduit's public common stock warrants (CDTTW) and Private CDT Warrants presented on the consolidated balance sheets were measured at fair value using Level 1 and Level 3 market prices, taking into account the adoption of ASU 2022-03*Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.*During the three months ended September 30, 2025, we recorded a loss on Conduit's marketable securities of $213, compared to a loss of approximately $3.9 million during the three months ended September 30, 2024.
Current wording
Loss on Conduit remeasurement. As of March 31, 2026, we held 709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $5,885. Conduit's public common stock warrants (CDTTW) and Private CDT Warrants presented on the consolidated balance sheets were measured at fair value using Level 1 and Level 3 market prices, taking into account the adoption of ASU 2022-03Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.
Previous wording
The following tables show a list of commercial properties owned by the Company grouped by state and geographic region as of September 30, 2025:
Current wording
The following table shows a list of our commercial properties owned by the Company grouped by state and geographic region as of March 31, 2026:
Previous wording
The following tables show a list of our Model Home properties by geographic region as of September 30, 2025:
Current wording
The following table shows a list of our Model Home properties by state and geographic region as of March 31, 2026:
Previous wording
Our anticipated future sources of liquidity may include existing cash and cash equivalents, cash flows from operations, refinancing of existing mortgages, future real estate sales, new borrowings from our model home lines of credit, and the sale of our equity or issuance of debt securities or bonds. Our cash and restricted cash at September 30, 2025 was approximately $8.0 million. Our future capital needs include paying down existing borrowings, maintaining our existing properties, funding tenant improvements, paying lease commissions (to the extent they are not covered by lender-held reserve deposits), and the payment of dividends to our stockholders. We also are actively seeking model home investments that are likely to produce income and achieve long-term gains in order to pay dividends to our stockholders. To ensure that we can effectively execute these objectives, we routinely review our liquidity requirements and continually evaluate all potential sources of liquidity.
Current wording
Our anticipated future sources of liquidity may include existing cash and cash equivalents, cash flows from operations, refinancing of existing mortgages, future real estate sales, new borrowings from our model home lines of credit, and the sale of our equity or issuance of debt securities or bonds. Our cash and restricted cash at March 31, 2026 was approximately $5.2 million. Our future capital needs include paying down existing borrowings, maintaining our existing properties, funding tenant improvements, paying lease commissions (to the extent they are not covered by lender-held reserve deposits), and the payment of dividends to our stockholders. We also are actively seeking model home investments that are likely to produce income and achieve long-term gains in order to pay dividends to our stockholders. To ensure that we can effectively execute these objectives, we routinely review our liquidity requirements and continually evaluate all potential sources of liquidity.
Previous wording
Our short-term liquidity needs include paying our current operating costs, satisfying the debt service requirements of our existing mortgages, completing tenant improvements, paying leasing commissions, and funding dividends to stockholders. Future principal payments due on mortgage notes payable, during the last three months of 2025 and in the year ending December 31, 2026 total approximately$10.4 million and $21.1 million, respectively, of which$1.5 million in 2025 and $4.3 million in 2026 are related to model home properties. See Note 7. Mortgage Notes Payable, in Part I - Financial Information for additional information on the Dakota Center loan that matured on July 6, 2024. Management expects certain model home properties can be sold, and that the underlying mortgage notes will be paid off with sales proceeds while other mortgage notes can be refinanced, as the Company has historically been able to do in the past with all model home properties. Additional principal payments will be made with cash flows from ongoing operations.
Current wording
Our short-term liquidity needs include paying our current operating costs, satisfying the debt service requirements of our existing mortgages, completing tenant improvements, paying leasing commissions, and funding dividends to stockholders. Future principal payments due on mortgage notes payable, during the last three months of 2026 and in the year ending December 31, 2026 total approximately$20.4 million and $2.4 million, respectively, of which$3.8 million in 2025 and $2.0 million in 2026 are related to model home properties. The non-recourse loan for Shea Center matured on January 5, 2026. On January 14, 2026 the Dakota Center property sold to an unrelated third-party for approximately $4.7 million, net of selling costs. The lender received approximately $4.3 million from the sale of the property, which was applied to settle the net loan balance of approximately $8.9 million. The Company was not responsible for the remaining balance on this non-recourse loan, and the transaction resulted in a net gain of approximately $3.4 million. No other commercial property loans mature during 2026.
Previous wording
While we will continue to pursue value creating investments, the Board of Directors believes there is significant embedded value in our assets that is yet to be realized by the market. Therefore, returning capital to stockholders through a repurchase program is an attractive use of capital currently. In November 2023, the Board of Directors authorized a stock repurchase program of up to $6.0 million of outstanding shares of our Series A Common Stock and up to $4.0 million of our Series D Preferred Stock which expired in November 2024. In December 2024, the Board of Directors authorized a stock repurchase program of up to $6.0 million of outstanding shares of our Series A Common Stock and up to $4.0 million of our Series D Preferred Stock, which shall expire in December 2025. During the nine months ended September 30, 2025, we repurchased 16,080 shares of our Series A Common Stock, with an average price of $4.79 per share, including a commission of $0.025 per share, for a total cost of $77,092 for the Series A Common Stock. This does not include the Tender Offer shares repurchased during April 2025. During the nine months ended September 30, 2025, the Company repurchased 22,259 shares of our Series D Preferred Stock at an average price of approximately $14.73 per share, including a commission of $0.035 per share, for a total cost of $327,787 for the Series D Preferred Stock. Any repurchased shares are treated as authorized and unissued in accordance with Maryland law and shown as a reduction of stockholders’ equity at cost.
Current wording
While we will continue to pursue value creating investments, the Board of Directors believes there is significant embedded value in our assets that is yet to be realized by the market. In December 2024, the Board of Directors authorized a stock repurchase program of up to $6.0 million of outstanding shares of our Series A Common Stock and up to $4.0 million of our Series D Preferred Stock, which the Board of Directors did not renew in December 2025. During the year ended December 31, 2025, we repurchased 16,080 shares of our Series A Common Stock, with an average price of $4.79 per share, including a commission of $0.025 per share, for a total cost of $77,092 for the Series A Common Stock. This does not include the shares repurchased in the fixed price self-tender offer (the "Tender Offer") during April-May 2025. During the year ended December 31, 2025, the Company repurchased 23,346 shares of our Series D Preferred Stock at an average price of approximately $14.76 per share, including a commission of $0.035 per share, for a total cost of $344,503 for the Series D Preferred Stock. Any repurchased shares are treated as authorized and unissued in accordance with Maryland law and shown as a reduction of stockholders’ equity at cost. There were no repurchases of Series A Common Stock or Series D Preferred Stock during three months ended March 31, 2026 as there were no repurchase plans in place.
Previous wording
For the nine months ended September 30, 2025 and 2024, the Company did not declare a cash dividend on shares of Series A Common Stock. For the nine months ended September 30, 2025 and 2024, the Company declared and paid approximately $1.7 million and $1.7 million, respectively, in cash dividends on shares of Series D Preferred Stock. Cash permitting, the Company intends to continue to pay dividends on a monthly basis to holders of our Series D Preferred Stock going forward, but there can be no guarantee the Board of Directors will approve any future dividends. The Company has not decided when it will resume dividends to our common stockholders on a quarterly basis. The following is a summary of distributions declared per share of our Series A Common Stock and for our Series D Preferred Stock for the nine months ended September 30, 2025 and 2024.
Current wording
The Board and the Company intend to reassess, on a quarterly basis, when accrued dividends on the Series D Preferred Stock may be paid and when the monthly dividend payments can be reinstated. Under the guidance of ASC 260-10-45-11, if the Company's Board of Directors do not declare a dividend in a given period, an accrual is not recorded on the balance sheet, however; undeclared preferred stock dividends are reflected in earnings per share. Preferred stock dividends that are not declared accumulate and are added to the liquidation preference as of the scheduled payment date for the respective series of the preferred stock. Cash permitting, the Company intends to continue to pay dividends on a monthly basis to holders of our Series D Preferred Stock going forward, but there can be no guarantee the Board of Directors will approve any future dividends. The Company has not decided when it will resume dividends to our common stockholders on a quarterly basis. As of March 31, 2026 and December 31, 2025, the cumulative preferred dividends in arrears on the Series D preferred stock was $0.6 million and $0, respectively.
Previous wording
At September 30, 2025 and December 31, 2024, we had approximately $8.0 million and $8.0 millionin cash equivalents, respectively, including $3.8 million and $5.0 million of restricted cash, respectively. Our cash equivalents and restricted cash consist of invested cash, cash in our operating accounts, short-term bonds and cash held in bank accounts at third-party institutions. During 2025 and 2024, we did not experience any loss or lack of access to our cash or cash equivalents. Approximately $1.5 million to $2.1 million of our cash balance is intended for capital expenditures on existing properties, net of any construction financing (some of which is held in deposits reserve accounts by our lenders) during the rest of the year. We intend to use the remainder of our existing cash and cash equivalents for asset/property acquis itions, reduction of principal debt, general corporate purposes, common stock repurchases (if market conditionsare met), or dividends to our stockholders.
Current wording
At March 31, 2026 and December 31, 2025, we had approximately $5.2 million and $7.4 millionin cash equivalents, respectively, including $3.6 million and $5.7 millionof restricted cash, respectively. Our cash equivalents and restricted cash consist of invested cash, cash in our operating accounts, short-term bonds and cash held in bank accounts at third-party institutions. During 2026 and 2025, we did not experience any loss or lack of access to our cash or cash equivalents. Including any cash committed to current capital expenditures on our properties, the Company may spend approximately $0.6 million on capital expenditures, net of any construction financing (some of which is held in deposits reserve accounts by our lenders) during the rest of the year. We intend to use the remainder of our existing cash and cash equivalents for asset/property acquis itions, reduction of principal debt, general corporate purposes, common stock repurchases (if market conditionsare met), or dividends to our stockholders.
Previous wording
As of September 30, 2025, all our commercial properties, except 300 N.P. which has no debt, had fixed-rate mortgage notes payable in the aggregate principal amount of $67.5 million, collateralized by a total of nine commercial properties with loan terms at issuance ranging from 5 to 10 years. The weighted-average interest rate on these mortgage notes payable as of September 30, 2025, was approximately 5.78%, and our debt to estimated market value for our commercial properties was approximately 72.0%. During the next 12 months, one of our commercial property loans, totaling approximately $16.4 million, will mature. The non-recourse loan on the Dakota Center property matured on July 6, 2024. During December 2024, the lender agreed to the broker the Company would use to sell the property to settle the non-recourse debt. As of September 30, 2025, the property was included in the real estate assets held for sale, net on the consolidated balance sheet. During July 2025, the lender approved a purchase offer from a third party for $5,125,000. In connection with the pending sale, we have impaired the property’s book value and recorded an impairment charge of approximately $3.3 million as of September 30, 2025. The sale is expected to take place during the fourth quarter 2025. The loan is considered non-recourse and we will not be required to make up the difference if the property sells for less than the loan balance. See Note 4. Real Estate Assets above for further discussion on impairment of the property. As of September 30, 2025, the property was included in the real estate assets held for sale, net on the consolidated balance sheet.
Current wording
As of March 31, 2026, all our commercial properties, except 300 N.P. which has no debt, had fixed-rate mortgage notes payable in the aggregate principal amount of $58.5 million, collateralized by a total of seven commercial properties with loan terms at issuance ranging from 5 to 10 years. The weighted-average interest rate on these mortgage notes payable as of March 31, 2026, was approximately 5.78%, and our debt to estimated market value for our commercial properties was approximately 72.0%. During the next 12 months, none of our commercial property loans will mature. The non-recourse loan on the Dakota Center property matured on July 6, 2024; during
Previous wording
As of September 30, 2025, the Company had fixed-rate mortgage notes payable related to model homes in the aggregate principal amount of $27.2 million, collateralized by a total of 84 Model Homes. These loans generally have a term at issuance of three to five years. As of September 30, 2025, the average loan balance per home outstanding and the weighted-average interest rate on these mortgage loans are approximately $323,577 and 7.13%, respectively. Our debt to estimated market value on all our model home properties is approximately 59.0%. We have been able to refinance maturing mortgages to extend maturity dates and we have not experienced any notable difficulties financing our acquisitions. The Company anticipates that any new mortgages used to acquire commercial properties or model homes in the near future will be at rates higher than our currently weighted average interest rate.
Current wording
As of March 31, 2026, the Company had fixed-rate mortgage notes payable related to model homes in the aggregate principal amount of $23.9 million, collateralized by a total of 75 Model Homes. These loans generally have a term at issuance of three to five years. As of March 31, 2026, the average loan balance per home outstanding and the weighted-average interest rate on these mortgage loans are approximately $323,577 and 7.13%, respectively. Our debt to estimated market value on all our model home properties is approximately 59.0%. We have been able to refinance maturing mortgages to extend maturity dates and we have not experienced any notable difficulties financing our acquisitions. The Company anticipates that any new mortgages used to acquire commercial properties or model homes in the near future will be at rates higher than our currently weighted average interest rate.
Previous wording
Cash Flow for thenine months ended September 30, 2025, and September 30, 2024
Current wording
Cash Flow for thethree months ended March 31, 2026, and March 31, 2025
Previous wording
*Operating Activities:*Net cash used in operating activities for thenine months ended September 30, 2025, totaled approximately$0.4 million, as compared to cash used in operating activities of$0.7 million for thenine months ended September 30, 2024. The change in net cash used in operating activities is mainly due to changes in net income, which fluctuates due to new leases, leasing renewals, tenant move outs and model home sales and acquisitions, as well as changes in non-cash addbacks or subtractions such as straight-line rent.
Current wording
*Operating Activities:*Net cash used in operating activities for thethree months ended March 31, 2026, totaled approximately$1.0 million, as compared to cash used in operating activities of$0.1 million for thethree months ended March 31, 2025. The change in net cash used in operating activities is primarily due to the sale of Dakota Center, combined with other changes in net income, which fluctuates due to new leases, leasing renewals, tenant move outs and model home sales and acquisitions, as well as changes in non-cash addbacks or subtractions such as straight-line rent, are the primary drivers of the increase in cash used in operating activities.
Previous wording
*Investing Activities:*Net cash provided by investing activities for thenine months ended September 30, 2025, was approximately$11.4 million compared to approximately$10.7 million used in investing activities during the same period in 2024. The change from each period was primarily related to the sale of our commercial properties in February 2025 for approximately$15.9 million, net of selling costs, and the sale of model home properties for approximately $7.4 million during thenine months ended September 30, 2025. There were no similar commercial property sales during the nine months ended September 30, 2024, however, model home sales during the nine months ended September 30, 2024 totaled approximately $22.3 million. Cash used in real estate acquisition and capital improvement totaled approximately $11.6 million, for the nine months ended September 30, 2025.
Current wording
*Investing Activities:*Net cash provided by investing activities for thethree months ended March 31, 2026, was approximately$6.9 million compared to approximately$13.6 million used in investing activities during the same period in 2025. The change from each period was primarily related to the sale of our commercial properties in February 2025 for approximately$4.7 million, net of selling costs, and the sale of model home properties for approximately $7.4 million during thethree months ended March 31, 2026. There were no similar commercial property sales during the three months ended March 31, 2025, however, model home sales during the three months ended March 31, 2025 totaled approximately $22.3 million. Cash used in real estate acquisition and capital improvement totaled approximately $0.2 million, for the three months ended March 31, 2026 compared to $4.8 million for the same period in 2025.
Previous wording
We currently project that we could spend up to $2.7 million (some of which is held in deposits reserve accounts by our lenders) on capital improvements, tenant improvements and leasing costs for properties within our portfolio during the next 12 months. Capital expenditures may fluctuate in any given period subject to the nature, extent, and timing of improvements required to the properties. We may spend more on capital expenditures in the future due to rising construction costs. Tenant improvements and leasing costs may also fluctuate in any given year depending upon factors such as the property, the term of the lease, the type of lease, the involvement of external leasing agents and overall market conditions.
Current wording
We currently project that we could spend up to $0.6 million (some of which is held in deposits reserve accounts by our lenders) on capital improvements, tenant improvements and leasing costs for properties within our portfolio during the next 12 months. Capital expenditures may fluctuate in any given period subject to the nature, extent, and timing of improvements required to the properties. We may spend more on capital expenditures in the future due to rising construction costs. Tenant improvements and leasing costs may also fluctuate in any given year depending upon factors such as the property, the term of the lease, the type of lease, the involvement of external leasing agents and overall market conditions.
Previous wording
*Financing Activities:*Net cash used in financing activities during thenine months ended September 30, 2025, was$11.1 million compared to$9.3 million provided by financing activities for the same period in 2024 and was primarily due to the following activities for thenine months ended September 30, 2025:
Current wording
*Financing Activities:*Net cash used in financing activities during thethree months ended March 31, 2026, was$8.2 million compared to$9.5 million provided by financing activities for the same period in 2025 and was primarily due to the following activities for thethree months ended March 31, 2026:
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Acquisitions during the three months ended March 31, 2025
Current report — wording carried from elsewhere
Dispositions during the three months ended March 31, 2025
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
RESULTS OF OPERATIONS FOR THE nine MONTHS ENDED September 30, 2025 and 2024
Previous report — wording carried elsewhere
Gain on Sale of Real Estate Assets, net. The change in gain or loss on the sale of real estate assets is dependent on the mix of properties sold and the market conditions at the time of the sale. S ee "Significant Transactions in 2025 and 2024" above for further detail.
Previous report — wording carried elsewhere
Income allocated to non-controlling interests. Income allocated to non-controlling interests for the nine months ended September 30, 2025 and 2024 totaled approximately $0.3 million and $2.3 million, respectively. This was directly related to the gain on sales of model homes held by our affiliated limited partnerships.
Previous report — wording carried elsewhere
Loss on Conduit remeasurement. During the nine months ended September 30, 2025, we had sold our remaining 29,445 shares of CDT for $13,990, and held 709,000 public common stock warrants of CDTTW, and 540,000 private common stock warrants, with a combined value of approximately $7,515. Conduit's public common stock warrants (CDTTW) and Private CDT Warrants presented on the consolidated balance sheets were measured at fair value using Level 1 and Level 3 market prices, taking into account the adoption of ASU 2022-03*Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.*During the nine months ended September 30, 2025, we recorded a loss on Conduit's marketable securities of $0.2 million, compared to a loss of approximately $17.8 million during the nine months ended September 30, 2024.
Previous report — wording carried elsewhere
As the Company continues its operations, it may re-finance or seek additional financing. However, there can be no assurance that any such re-financing or additional financing will be available to the Company on acceptable terms, if at all. If events or circumstances occur such that the Company does not obtain additional funding, it will most likely be required to reduce its plans and/or certain discretionary spending, which could have a material adverse effect on the Company's ability to achieve its intended business objectives. Management believes that the combination of working capital on hand and the ability to refinance commercial and model home mortgages will fund operations through at least the next twelve months from the date of the issuance of these unaudited interim financial statements.