Presidio Property Trust Provides Update on Model Home Activity in Q4 2024

Rhea-AI Summary

Presidio Property Trust (NASDAQ: SQFT) reported its Q4 2024 model home division performance, announcing the sale of five homes for approximately $2.7 million. These properties were originally acquired between 2017 and 2022 for about $2.5 million. As of December 31, 2024, the company's model home portfolio consisted of 78 homes, with 55 being wholly owned, representing approximately 29% of their net real estate assets.

Steve Hightower, President of the Model Homes Division, noted that performance met expectations despite seasonal adjustments and election cycle impacts typically resulting in slower sales. The company continues to evaluate purchasing opportunities from national, regional, and local builders across various markets.

Positive

• Sale of 5 homes generated $2.7M in Q4 2024, representing a gain over $2.5M acquisition cost
• Model homes represent significant portion (29%) of net real estate assets
• Portfolio maintains substantial wholly-owned position with 55 of 78 model homes

Negative

• Seasonal and election cycle slowdown affecting sales velocity

Insights

Real Estate Investment Analyst

The Q4 2024 model home activity reveals some interesting metrics worth unpacking. The five home sales generated approximately $2.7 million against a $2.5 million acquisition cost, translating to a modest 8% gross return over holding periods ranging from 2-7 years. This performance, while positive, suggests relatively thin margins when accounting for holding costs and operating expenses.

The portfolio composition is particularly noteworthy - with model homes comprising 29% of net real estate assets and 55 wholly-owned properties out of 78 total homes, Presidio maintains significant exposure to this segment. This concentration in model homes, while providing steady cash flow through leaseback arrangements with builders, also exposes the REIT to specific risks in the new home construction market.

The management's acknowledgment of seasonal and election cycle impacts on sales velocity is telling. Historically, election years can create hesitancy in real estate markets as buyers await policy clarity. However, the company's ability to maintain sales activity despite these headwinds suggests resilient operational execution.

Looking forward, the strategy to analyze purchasing opportunities across various markets indicates a cautious but opportunistic approach. With a relatively small market cap of $8.47 million, the company's focus on diversification across national, regional and local builders could help mitigate market-specific risks while potentially capturing growth opportunities in stronger performing regions.

SAN DIEGO, Jan. 29, 2025 (GLOBE NEWSWIRE) -- (NASDAQ: SQFT; SQFTP; SQFTW) Presidio Property Trust, Inc. (“Presidio” or the “Company”), an internally managed, diversified real estate investment trust (“REIT”) announced that in the fourth quarter of 2024, through subsidiary and affiliate entities, have sold five homes for a total of approximately $2.7 million. These homes were purchased between 2017 and 2022 with a total acquisition price of approximately $2.5 million. Model homes account for approximately 29% of our net real estate assets and we wholly owned 55 of the 78 model homes in our portfolio as of December 31, 2024.

“The model home division was on par with expectations. Seasonal adjustments as well as election cycles typically result in slower sales. We have been fortunate to navigate those trends as we continue to attract new home buyers within the resale sector. We also remain focused on analyzing purchasing opportunities from national, regional, and local builders across various markets,” said Steve Hightower, President of the Model Homes Division.

About Presidio Property Trust

Presidio is an internally managed real estate investment trust with holdings in model home properties, which are triple net leased to homebuilders, and office, industrial, and retail properties. Presidio’s model homes are leased to homebuilders located in Arizona, Texas, and Florida. Presidio’s office, industrial, and retail properties are located primarily in Colorado, with properties also located in Maryland, North Dakota, Texas, and Southern California. For more information on Presidio, please visit Presidio’s website at https://www.PresidioPT.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and other federal securities laws. Forward-looking statements are statements that are not historical, including statements regarding management’s intentions, beliefs, expectations, representations, plans or predictions of the future, and are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “will,” “should” and “could.” Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon Presidio’s present expectations, but these statements are not guaranteed to occur. Except as required by law, Presidio disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes please refer to Presidio’s filings with the SEC, including those under “Risk Factors” therein, copies of which are available on the SEC’s website, www.sec.gov.

Investor Relations Contact:

Presidio Property Trust, Inc.
Lowell Hartkorn, Investor Relations
LHartkorn@presidiopt.com
Telephone: (760) 471-8536 x1244

This press release was published by a CLEAR® Verified individual.

FAQ

How many model homes did Presidio Property Trust (SQFT) sell in Q4 2024?

Presidio Property Trust sold five model homes in Q4 2024 for approximately $2.7 million.

What was the total acquisition cost of the SQFT model homes sold in Q4 2024?

The model homes sold in Q4 2024 were purchased between 2017 and 2022 for a total acquisition cost of approximately $2.5 million.

How many model homes does SQFT own as of December 31, 2024?

As of December 31, 2024, Presidio Property Trust wholly owned 55 out of 78 model homes in their portfolio.

What percentage of SQFT's net real estate assets are model homes?

Model homes account for approximately 29% of Presidio Property Trust's net real estate assets.

What factors affected SQFT's model home sales in Q4 2024?

Seasonal adjustments and election cycles typically resulted in slower sales during Q4 2024.