Presidio Property Trust, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES   We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-14(c). In designing and evaluating the disclosure controls and procedures, Management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and Management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.   As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.   Changes in Internal Control over Financial Reporting   There were no changes in our internal control over financial reporting that occurred during the fiscal year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Although we have modified our workplace practices due to the COVID-19 pandemic, resulting in most of our employees working remotely, this has not materially affected our internal controls over financial reporting. We continue to monitor and assess the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.   Management’s Report on Internal Control over Financial Reporting   Our Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our Management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on our evaluation under the framework in Internal Control — Integrated Framework, our Management concluded that our internal control over financial reporting was effective as of December 31, 2020.   This annual report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm regarding our internal control over financial reporting as such report is not required for the Company.     ITEM 9B. OTHER INFORMATION   None.   34 Table of Contents   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   The information required by this item is set forth under the captions “Board of Directors” and “Executive Officers of the Company” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive Proxy Statement for the 2021 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference. The Annual Meeting of Stockholders is presently scheduled to be held on May 20, 2021.     ITEM 11. EXECUTIVE COMPENSATION   The information required by this item is set forth under the caption “Executive Compensation” in our definitive Proxy Statement for the 2021 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.     ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS   The information required by this item will be set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in our definitive Proxy Statement for the 2021 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.     ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE   The information required by this item is set forth under the caption “Related Party Transactions” in our definitive Proxy Statement for the 2021 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.     ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES   The information required by this item is set forth under the caption “Independent Registered Public Accounting Firm Fees and Services” in our definitive Proxy Statement for the 2021 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A, and is incorporated herein by reference.       PART IV   ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES   (1) Financial Statements - the following documents are filed as part of this report:     • Report of Independent Registered Public Accounting Firm   • Consolidated Balance Sheets as of December 31, 2020 and 2019   • Consolidated Statements of Operations for the years ended December 31, 2020 and 2019   • Consolidated Statements of Equity for the years ended December 31, 2020 and 2019   • Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019   • Notes to Consolidated Financial Statements   (2) Financial Statement Schedules - the following documents are filed as part of this report:     • Schedule III - Real Estate Assets and Accumulated Depreciation and Amortization as of December 31, 2020   All other financial statement schedules have been omitted for the reason that the required information is presented in the financial statements or notes thereto, the amounts involved are not significant or the schedules are not applicable.   35 Table of Contents   (3) Exhibits - an index to the Exhibits as filed as part of this Form 10-K is set forth below.   Number   Description           3.1   Articles of Merger filed with the Maryland State Department of Assessments and Taxation and the California Secretary of State on August 4, 2010 (incorporated by reference to Exhibit 3.03 of the Company’s Current Report on Form 8-K filed on August 10, 2010).           3.2   Articles of Amendment and Restatement of the Articles of Incorporation, dated as of July 30, 2010 (incorporated by reference to Exhibit 3.01 of the Company’s Current Report on Form 8-K filed on August 10, 2010).           3.3   Articles of Amendment effecting the Company’s name change, dated as of October 18, 2017 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on October 19, 2017).           3.4   Articles of Amendment effecting the reverse stock split (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on July 31, 2020).           3.5   Articles Supplementary classifying and designating the Series C Common Stock, dated July 29 2020 (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on July 31, 2020).           3.6   Second Amended and Restated Bylaws of Presidio Property Trust, Inc. (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on October 19, 2017).           4.1   Form of Series A Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form 10-12B filed on May 6, 2008).           4.2   Description of Securities.*           10.1+   1999 Flexible Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Registration Statement on Form 10-12B filed on May 6, 2008).           10.2+   Employment Agreement for Mr. Heilbron, effective as of October 18, 2017.*           10.3   Promissory Note, dated as of September 17, 2019, by and between Presidio Property Trust, Inc. and Polar Multi-Strategy Master Fund (incorporated by reference to Exhibit 1.1 of the Company’s Current Report on Form 8-K filed on September 23, 2019).           10.4   Agreement, dated as of September 17, 2019, by and between Presidio Property Trust, Inc. and Polar Multi-Strategy Master Fund (incorporated by reference to Exhibit 1.2 of the Company’s Current Report on Form 8-K filed on September 23, 2019).           10.6+   Form of Indemnification Agreement entered into between the Company and each of its directors and executive officers (incorporated by reference to Exhibit 10.10 of the Company’s Registration Statement on Form S-11 filed on September 18, 2017).           10.7+   Form of Restricted Stock Agreement under 1999 Flexible Incentive Plan (incorporated by reference to Exhibit 10.23 of the Company’s Registration Statement on Form S-11 filed on September 18, 2017).           10.8+   Presidio Property Trust, Inc. 2017 Incentive Award Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on October 19, 2017).           10.9+   Form of Restricted Stock Agreement under 2017 Incentive Award Plan (incorporated by reference to Exhibit 10.25 of the Company’s Registration Statement on Form S-11 filed on January 17, 2019).           14   Code of Ethics *           21.1   Subsidiaries of the Registrant*           23.1   Consent of Independent Registered Public Accounting Firm *           31.1   Certificate of the Company’s Chief Executive Officer (Principal Executive Officer) pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *           31.2   Certification of the Company’s Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *           31.3   Certification of the Company’s Principal Accounting Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *           32.1   Certification of Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *           101.INS   Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)     36 Table of Contents   101.SCH   Inline XBRL Taxonomy Extension Schema Document        101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document        101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document        101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document        101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document        104            Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)   ____________________________________________________   ∗ Filed herewith   + Denotes a compensatory plan or arrangement   37 Table of Contents   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.     Signature   Title   Date           /s/ Jack K. Heilbron   Director, Chairman of the Board and Chief Executive Officer   March 30, 2021 Jack K. Heilbron   (Principal Executive Officer)               /s/ Adam Sragovicz   Chief Financial Officer   March 30, 2021 Adam Sragovicz                   /s/ Ed Bentzen   Chief Accounting Officer   March 30, 2021 Ed Bentzen   (Principal Accounting Officer)               /s/ Larry G. Dubose   Director,  President, Dubose Advisors, LLC, Chief Financial Officer,   March 30, 2021 Larry G. Dubose   NetREIT Dubose Model Home REIT, Inc.               /s/ Jennifer A. Barnes   Director   March 30, 2021 Jennifer A. Barnes                   /s/ David T. Bruen   Director   March 30, 2021 David T. Bruen                   /s/ James R. Durfey   Director   March 30, 2021 James R. Durfey                   /s/ Sumner J. Rollings   Director   March 30, 2021 Sumner J. Rollings           38 Table of Contents         INDEX TO CONSOLIDATED FINANCIAL STATEMENTS     Page     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-1     FINANCIAL STATEMENTS:   Consolidated Balance Sheets F-3 Consolidated Statements of Operations F-4 Consolidated Statements of Equity F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated Financial Statements F-7 Schedule III - Real Estate Assets and Accumulated Depreciation and Amortization F-22     Table of Contents     Report of Independent Registered Public Accounting Firm     To the Shareholders and the Board of Directors of Presidio Property Trust, Inc. and Subsidiaries   Opinion on the Financial Statements   We have audited the accompanying consolidated balance sheets of Presidio Property Trust, Inc. and Subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, equity and cash flows for the years then ended, the related notes to the consolidated financial statements, and schedule in Item 15 (a), Schedule III – Real Estate and Accumulated Depreciation and Amortization (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.   Basis for Opinion   These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.   Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.   Critical Audit Matters   The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.   REAL ESTATE ASSET AND LEASE INTANGIBLE IMPAIRMENT ASSESSMENT   Critical Audit Matter Description   As described in Notes 4 and 14 to the consolidated financial statements, the Company’s consolidated real estate assets balance (including real estate properties and lease intangibles) was approximately $166.3 million at December 31, 2020. Real estate asset and lease intangibles are tested for impairment at least annually at the individual real estate property level. Management continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate assets may not be recoverable, management assesses the recoverability by estimating whether the Company will recover the carrying value of its real estate assets through the undiscounted future cash flows and the eventual disposition of the investment. In some instances, there may be various potential outcomes for an investment and its potential future cash flows. In these instances, the undiscounted future cash flows used to assess recoverability are based on several assumptions and are probability-weighted based on management’s best estimates as of the date of evaluation. These assumptions include, among others, cash flow projections, discount rates, market capitalization rates, and recent sales data for comparable properties. The assumptions are generally based on management’s experience and assessment of market participants in its local real estate markets, and the effects of current market conditions, which are subject to economic and market uncertainties. As disclosed by management, changes in these assumptions could have a significant impact on either the cash flows or fair value of the real estate assets, the amount of any impairment charge, or both.   We identified the real estate asset and lease intangibles impairment assessment of the Company as a critical audit matter. The Company experienced fluctuations in tenant occupancy and related cash flows from the real estate properties based on rental demand, completion of tenant improvements, and other economic factors. In turn, auditing management’s judgments regarding forecasts of future revenue and cash flows, and the resulting fair value of real estate assets compared to their carrying value involved a high degree of judgement and subjectivity.     F-1 Table of Contents   How We Addressed the Matter in Our Audit   The primary procedures we performed to address this critical audit matter included:     ● Testing management’s process for determining the fair value of real estate assets including testing the completeness and accuracy of underlying data used in management’s model.     ● Evaluating the reasonableness of management’s fair value estimates which are based on Argus models that include rental revenues per executed lease agreements, occupancy, and expected renewal rates, and on Broker Opinions of Value which utilize historical listing and sale prices for comparable real estate properties.     ● Independently comparing current fair values to trends in fair value of each property over time and for consistency with evidence obtained in other areas of the audit.     ● Evaluating whether the assumptions used were reasonable by considering the past performance of real estate properties, management’s assumptions about market demand and market leasing rates and lease terms, and whether such assumptions were consistent with evidence obtained in other areas of the audit.     ● Obtaining marketing materials or letters of intent for specific real estate properties deemed by management to qualify for held-for-sale treatment and comparing estimated sales prices to current property book values.     /s/ Baker Tilly US, LLP     We have served as the Company’s auditor since 2009.   Irvine, California March 30, 2021   F-2 Table of Contents     Presidio Property Trust, Inc. and Subsidiaries Consolidated Balance Sheets       December 31,     December 31,       2020     2019   ASSETS                 Real estate assets and lease intangibles:                 Land   $ 18,827,000     $ 19,844,739   Buildings and improvements     115,409,423       118,446,764   Tenant improvements     11,960,018       10,696,181   Lease intangibles     4,110,139       4,230,706   Real estate assets and lease intangibles held for investment, cost     150,306,580       153,218,390   Accumulated depreciation and amortization     ( 26,551,789 )     ( 22,482,219 ) Real estate assets and lease intangibles held for investment, net     123,754,791       130,736,171   Real estate assets held for sale, net     42,499,176       69,470,449   Real estate assets, net     166,253,967       200,206,620   Cash, cash equivalents and restricted cash     11,540,917       10,391,275   Deferred leasing costs, net     1,927,951       2,053,927   Goodwill     2,423,000       2,423,000   Other assets, net     3,422,781       5,709,586   TOTAL ASSETS   $ 185,568,616     $ 220,784,408   LIABILITIES AND EQUITY                 Liabilities:                 Mortgage notes payable, net   $ 94,664,266     $ 99,996,306   Mortgage notes payable related to properties held for sale, net     25,365,430       42,396,686   Mortgage notes payable, total net     120,029,696       142,392,992   Note payable, net     7,500,086       12,238,692   Accounts payable and accrued liabilities     5,126,199       5,673,815   Accrued real estate taxes     2,548,686       2,987,601   Lease liability, net     102,323       560,188   Below-market leases, net     139,045       309,932   Total liabilities     135,446,035       164,163,220   Commitments and contingencies (Note 10)                     Equity:                 Series A Common Stock, $ 0.01 par value, shares authorized: 100,000,000 ; 9,508,363 and 8,881,842 shares were both issued and outstanding at December 31, 2020 and December 31, 2019, respectively     95,038       88,818   Additional paid-in capital     156,463,146       152,129,120   Dividends and accumulated losses     ( 121,674,505 )     ( 113,037,144 ) Total stockholders' equity before noncontrolling interest     34,883,679       39,180,794   Noncontrolling interest     15,238,902       17,440,394   Total equity     50,122,581       56,621,188   TOTAL LIABILITIES AND EQUITY   $ 185,568,616     $ 220,784,408     See Notes to Consolidated Financial Statements   F-3 Table of Contents     Presidio Property Trust, Inc. and Subsidiaries Consolidated Statements of Operations       For the Year Ended December 31,       2020     2019   Revenues:                 Rental income   $ 23,444,119     $ 27,467,410   Fees and other income     907,673       1,173,701   Total revenue     24,351,792       28,641,111   Costs and expenses:                 Rental operating costs     8,818,283       10,410,574   General and administrative     5,751,754       5,268,315   Depreciation and amortization     6,274,321       7,364,688   Impairment of real estate assets     1,730,851       —   Total costs and expenses     22,575,209       23,043,577   Other income (expense):                 Interest expense-Series B preferred stock     —       ( 2,226,101 ) Interest expense-mortgage notes     ( 6,097,834 )     ( 7,337,423 ) Interest expense - note payable     ( 2,715,233 )     ( 1,086,122 ) Interest and other income (expense), net     ( 20,636 )     141,306   Gain on sales of real estate, net     1,245,460       6,319,272   Gain on extinguishment of government debt     451,785       —   Deferred offering costs     ( 530,639 )     —   Acquisition costs     —       ( 24,269 ) Income tax expense     ( 370,884 )     ( 611,263 ) Total other income (expense), net     ( 8,037,981 )     ( 4,824,600 ) Net (loss) income     ( 6,261,398 )     772,934   Less: Loss attributable to noncontrolling interests     ( 1,412,507 )     ( 1,383,140 ) Net loss attributable to Presidio Property Trust, Inc. common stockholders   $ ( 7,673,905 )   $ ( 610,206 ) Basic and diluted loss per common share   $ ( 0.85 )   $ ( 0.07 ) Weighted average number of common shares outstanding - basic and diluted     9,023,914       8,862,958     See Notes to Consolidated Financial Statements   F-4 Table of Contents     Presidio Property Trust, Inc. and Subsidiaries Consolidated Statements of Equity                       Additional     Dividends and     Total     Non-               Common Stock     Paid-in     Accumulated     Stockholders’     controlling     Total       Shares     Amount     Capital     Losses     Equity     Interests     Equity   Balance, December 31, 2018     8,860,711     $ 88,608     $ 151,670,625     $ ( 111,343,840 )   $ 40,415,393     $ 15,725,650     $ 56,141,043   Net loss     -       -       -       ( 610,206 )     ( 610,206 )     1,383,140       772,934   Dividends paid     -       -       -       ( 1,083,098 )     ( 1,083,098 )     -       ( 1,083,098 ) Contributions received from noncontrolling interests, net of distributions paid     -       -       -       -       -       331,604       331,604   Repurchase of common stock     ( 30,498 )     ( 306 )     ( 227,122 )     -       ( 227,428 )     -       ( 227,428 ) Vesting of restricted stock     51,629       516       685,617       -       686,133       -       686,133   Balance, December 31, 2019     8,881,842     $ 88,818     $ 152,129,120     $ ( 113,037,144 )   $ 39,180,794     $ 17,440,394     $ 56,621,188   Net loss     -       -       -       ( 7,673,905 )     ( 7,673,905 )     1,412,507       ( 6,261,398 ) Shares issued, initial public offering, net of fees     500,000       5,000       1,999,984       -       2,004,984       -       2,004,984   Dividends paid     -       -       -       ( 963,456 )     ( 963,456 )     -       ( 963,456 ) Distributions in excess of contributions received     -       -       -       -       -       ( 2,366,009 )     ( 2,366,009 ) Repurchase of common stock     ( 3,000 )     ( 30 )     ( 17,970 )     -       ( 18,000 )     -       ( 18,000 ) Share reconciliation adjustment     ( 16,080 )     ( 162 )     162       -       -       -       -   Issuance of stock for Limited Partnership interests     59,274       594       1,247,396       -       1,247,990       ( 1,247,990 )     -   Vesting of restricted stock     86,327       818       1,104,454       -       1,105,272       -       1,105,272   Balance, December 31, 2020     9,508,363     $ 95,038     $ 156,463,146     $ ( 121,674,505 )   $ 34,883,679     $ 15,238,902     $ 50,122,581     See Notes to Consolidated Financial Statements.   F-5 Table of Contents     Presidio Property Trust, Inc. and Subsidiaries Consolidated Statements of Cash Flows       For the Year Ended December 31,       2020     2019   Cash flows from operating activities:                 Net (loss) income   $ ( 6,261,398 )   $ 772,934   Adjustments to reconcile net (loss) income to net cash provided by operating activities:                 Depreciation and amortization     6,274,321       7,364,688   Stock compensation     1,105,272       686,133   Bad debt expense (recoveries)     77,898       ( 32,544 ) Gain on sale of real estate assets, net     ( 1,245,460 )     ( 6,319,272 ) Impairment of real estate assets     1,730,851       —   Accretion of original issue discount     1,013,405       386,595   Amortization of financing costs     1,287,430       965,239   Amortization of above-market leases     50,682       55,466   Amortization of below-market leases     ( 170,887 )     ( 185,995 ) Straight-line rent adjustment     108,998       ( 63,895 ) Changes in operating assets and liabilities:                 Other assets     1,957,641       1,035,806   Accounts payable and accrued liabilities     ( 1,796,421 )     ( 767,440 ) Accrued real estate taxes     ( 438,915 )     ( 106,779 ) Net cash provided by operating activities     3,693,417       3,790,936   Cash flows from investing activities:                 Real estate acquisitions     ( 10,161,613 )     ( 13,037,562 ) Additions to buildings and tenant improvements     ( 2,834,373 )     ( 6,393,711 ) Additions to deferred leasing costs     ( 175,828 )     ( 661,401 ) Proceeds from sales of real estate, net     40,849,654       32,073,721   Net cash provided by investing activities     27,677,840       11,981,047   Cash flows from financing activities:                 Proceeds from mortgage notes payable, net of issuance costs     14,152,838       15,494,715   Proceeds from government debt relief     451,785       —   Repayment of mortgage notes payable     ( 36,808,331 )     ( 23,176,581 ) Proceeds from note payable, net of issuance cost of $ 1.1 million     —       11,479,237   Repayment of note payable     ( 6,324,401 )     —   Payment of extension costs, note payable     ( 351,025 )     —   Redemption of mandatorily redeemable preferred stock     —       ( 16,900,000 ) Payment of deferred offering costs     ( 45,016 )     —   (Distributions) contributions to noncontrolling interests, net     ( 2,366,009 )     331,603   Issuance of stock for Initial Public Offering, net of underwriters fees     2,050,000       —   Repurchase of common stock     ( 18,000 )     ( 227,428 ) Dividends paid to stockholders     ( 963,456 )     ( 2,158,469 ) Net cash used in financing activities     ( 30,221,615 )     ( 15,156,923 ) Net increase in cash equivalents and restricted cash     1,149,642       615,060   Cash, cash equivalents and restricted cash - beginning of period     10,391,275       9,776,215   Cash, cash equivalents and restricted cash - end of period   $ 11,540,917     $ 10,391,275   Supplemental disclosure of cash flow information:                 Interest paid-Series B preferred stock   $ —     $ 1,859,672   Interest paid-mortgage notes payable   $ 5,892,025     $ 6,442,750   Interest paid-notes payable   $ 778,414     $ 713,262   Non-cash financing activities:                 Issuance of stock for limited partnership interests   $ 1,247,990     $ —   Unpaid deferred financing costs   $ 83,659     $ —     See Notes to Consolidated Financial Statements   F-6 Table of Contents   Presidio Property Trust, Inc. and Subsidiaries Notes to Consolidated Financial Statements     1. ORGANIZATION AND BASIS OF PRESENTATION   Organization. Presidio Property Trust, Inc. (“we”, “our”, “us” or the “Company”) is an internally-managed real estate investment trust (“REIT”). We were incorporated in the State of California on September  28, 1999, and in August 2010, we reincorporated as a Maryland corporation. In October 2017, we changed our name from “NetREIT, Inc.” to “Presidio Property Trust, Inc.” Through Presidio Property Trust, Inc., its subsidiaries and its partnerships, we own 14 commercial properties in fee interest and have partial interests in one property through our investments in limited partnerships for which we serve as the general partner.   The Company or one of its affiliates operate the following partnerships during the periods covered by these consolidated financial statements:     • The Company is the sole general partner and limited partner in two limited partnerships (NetREIT Palm Self-Storage LP and NetREIT Casa Grande LP), all with ownership in real estate income producing properties. The Company refers to these entities collectively, as the “NetREIT Partnerships”.     • The Company is the general partner and/or limited partner in six limited partnerships that purchase model homes and lease them back to homebuilders (Dubose Model Homes Investors #202, LP, Dubose Model Homes Investors #203, LP, Dubose Model Homes Investors #204, LP, Dubose Model Homes Investors #205, LP, Dubose Model Homes Investors #206, LP and NetREIT Dubose Model Home REIT, LP). The Company refers to these entities collectively, as the “Model Home Partnerships”.   The Company has determined that the limited partnerships in which it owns less than 100%, should be included in the Company’s consolidated financial statements as the Company directs their activities and holds a variable interest in these limited partnerships for which the Company is the primary beneficiary.   Unit-based information used herein (such as references to square footage or property occupancy rates) is unaudited.   Initial Public Offering . On  October 6, 2020,  we completed an initial public offering ("IPO"), selling  500,000  shares of Series A Common Stock at $ 5.00  per share. Proceeds from our IPO were $ 2.0  million after deducting approximately $ 0.5  million in underwriting discounts, commissions and fees and before giving effect to $ 0.5 million in other expenses relating to the IPO. Incremental costs of $0.5 million that were directly attributable to issuing new shares were deducted from equity in the Consolidated Statements of Equity, while costs that were not directly related to issuing new shares of $0.5 million were expensed in deferred offering costs in the Consolidated Statements of Operation. We utilized the net proceeds of this offering for general corporate and working capital purposes.   Reverse Stock Split .  On  July  29,   2020,  we amended our charter to effect a  one -for- two  reverse stock split of every outstanding share of our Series A Common Stock. The financial statements and accompanying footnotes have been retroactively restated to reflect the reverse stock split.   Liquidity. On September  17, 2019  the Company executed a Promissory Note ("Note") pursuant to which Polar Multi-Strategy Master Fund ("Polar"), executed a loan in the principal amount of $ 14.0 million to the Company. The Note bears interest at a fixed rate of 8 % per annum and requires monthly interest-only payments. On  September 1, 2020,  we extended the maturity of the Polar Note from  October  1,   2020  to  March 31, 2021 ( "Maturity"), as of December 31, 2020  the entire outstanding principal balance of $ 7.7 million and accrued and unpaid interest will be due and payable. On  September 30, 2020  we paid a renewal fee of  4 % on the unpaid principal balance. The final payment due at Maturity includes payment of the outstanding principal and accrued and unpaid interest. The Company used the proceeds of the Note from Polar to redeem all of the outstanding shares of the Series B Preferred Stock. During March 2021, prior to Maturity, the Polar note was paid in full, from available cash on hand. See Note 14. Subsequent Events for additional information.   We have $ 10.2 million of mortgage notes payable maturing in 2021 related to the model home properties. Management expects certain model home properties will be sold and the underlying mortgage notes will be paid off with sales proceeds while other mortgage notes will be refinanced. We have $ 16.4 million of mortgage notes payable maturing in 2021 related to the commercial properties. We plan to sell properties or refinance a significant portion of the mortgage notes payable, in the event the commercial property securing the respective mortgage note is not sold on or before maturity.   Segments. The Company acquires and operates income producing properties in three business segments including Office/Industrial Properties, Model Home Properties and Retail Properties. See Note 14. “Segments”.   Customer Concentration. Concentration of credit risk with respect to tenant receivable is limited due to the large number of tenants comprising the Company’s rental revenue. We had one tenant account for 6.2 % of total rental income for the year ended December 31, 2020  and one single tenant accounted for 6.1 % of total rental income for the year ended December 31, 2019 .   F- 7 Table of Contents     2. SIGNIFICANT ACCOUNTING POLICIES   Basis of Presentation. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).   Principles of Consolidation . The accompanying consolidated financial statements include the accounts of Presidio Property Trust and its subsidiaries, NetREIT Advisors, LLC and Dubose Advisors LLC (collectively, the “Advisors”), and NetREIT Dubose Model Home REIT, Inc. The consolidated financial statements also include the results of the NetREIT Partnerships, the Model Home Partnerships.  As used herein, references to the “Company” include references to Presidio Property Trust, its subsidiaries, and the partnerships. All significant intercompany balances and transactions have been eliminated in consolidation.   The Company classifies the noncontrolling interests in the NetREIT Partnerships as part of consolidated net income (loss) in 2020  and 2019  and has included the accumulated amount of noncontrolling interests as part of equity since inception in February 2010. If a change in ownership of a consolidated subsidiary results in loss of control and deconsolidation, any retained ownership interest will be remeasured, with the gain or loss reported in the statement of operations. Management has evaluated the noncontrolling interests and determined that they do not contain any redemption features.   Use of Estimates . The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include the allocation of purchase price paid for property acquisitions between land, building and intangible assets acquired including their useful lives; valuation of long-lived assets, and the allowance for doubtful accounts, which is based on an evaluation of the tenants’ ability to pay. Actual results may differ from those estimates.   Real Estate Assets and Lease Intangibles. Land, buildings and improvements are recorded at cost, including tenant improvements and lease acquisition costs (including leasing commissions, space planning fees, and legal fees). The Company capitalizes any expenditure that replaces, improves, or otherwise extends the economic life of an asset, while ordinary repairs and maintenance are expensed as incurred. The Company allocates the purchase price of acquired properties between the acquired tangible assets and liabilities (consisting of land, building, tenant improvements, and long-term debt) and identified intangible assets and liabilities (including the value of above-market and below-market leases, the value of in-place leases, unamortized lease origination costs and tenant relationships), based in each case on their respective fair values.   The Company allocates the purchase price to tangible assets of an acquired property based on the estimated fair values of those tangible assets assuming the building was vacant. Estimates of fair value for land, building and building improvements are based on many factors including, but not limited to, comparisons to other properties sold in the same geographic area and independent third -party valuations. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair values of the tangible and intangible assets and liabilities acquired.   The value allocated to acquired lease intangibles is based on management’s evaluation of the specific characteristics of each tenant’s lease. Characteristics considered by management in allocating these values include the nature and extent of the existing business relationships with the tenant, growth prospects for developing new business with the tenant, the remaining term of the lease and the tenant’s credit quality, among other factors.   The value allocable to the above-market or below-market component of an acquired in-place lease is determined based upon the present value (using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of rents that would be paid using fair market rates over the remaining term of the lease. The amounts allocated to above or below-market leases are amortized on a straight-line basis as an increase or reduction of rental income over the remaining non-cancelable term of the respective leases. Amortization of above and below-market rents resulted in a net increase in rental income of approximately $ 0.1 million for the years ended December 31, 2020  and 2019 .   The value of in-place leases and unamortized lease origination costs are amortized to expenses over the remaining term of the respective leases, which range from less than a year to ten years. The amount allocated to acquired in-place leases is determined based on management’s assessment of lost revenue and costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased. The amount allocated to unamortized lease origination costs is determined by what the Company would have paid to a third -party to secure a new tenant reduced by the expired term of the respective lease. The amount allocated to tenant relationships is the benefit resulting from the likelihood of a tenant renewing its lease. Amortization expense related to these assets was approximately $ 0.4 million and $ 0.6 million for years ended December 31, 2020  and 2019 , respectively.   F- 8 Table of Contents   Real Estate Held for Sale and Discontinued Operations. Real estate sold during the current period is classified as “real estate held for sale” for all prior periods presented in the accompanying condensed consolidated financial statements. Mortgage notes payable related to the real estate sold during the current period is classified as “notes payable related to real estate held for sale” for all prior periods presented in the accompanying condensed 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.   Impairment of Real Estate Assets. The Company reviews the carrying value of each property on a quarterly basis to determine if circumstances that indicate impairment in the carrying value of the investment exist or that depreciation periods should be modified. If circumstances support the possibility of impairment, the Company prepares a projection of the undiscounted future cash flows, without interest charges, of the specific property and determines if the investment in such property is recoverable. If impairment is indicated, the carrying value of the property is written down to its estimated fair value based on the Company’s best estimate of the property’s discounted future cash flows, considering sales and leasing data for comparable properties or sales price if an offer is accepted on the property. During the year ended December 31, 2020 , the Company determined that an impairment existed in two of its properties (Waterman Plaza and Highland Court) and, as a result, recorded a non-cash asset impairment charge of approximately $ 1.3 million and $ 0.4 million, respectively. There were no impairment charges recorded for the year ended December 31, 2019 .    Intangible Assets .  Intangible assets, including goodwill and lease intangibles, are comprised of finite-lived and indefinite-lived assets. Lease intangibles represents the allocation of a portion of the purchase price of a property acquisition representing the estimated value of in-place leases, unamortized lease origination costs, tenant relationships and land purchase options. Intangible assets that are not deemed to have an indefinite useful life are amortized over their estimated useful lives. Indefinite-lived assets are not amortized. Amortization expense of intangible assets that are not deemed to have an indefinite useful life was approximately $ 0.2 million and $ 0.3 million, respectively, for the years ended December 31, 2020  and 2019  and is included in depreciation and amortization in the accompanying consolidated statements of operation.   The Company is required to perform a test for impairment of goodwill and other definite and indefinite lived assets at least annually, and more frequently as circumstances warrant. Impairment is recognized only if the carrying amount of the intangible asset is considered to be unrecoverable from its undiscounted cash flows and is measured as the difference between the carrying amount and the estimated fair value of the asset. Based on the review, no impairment was deemed to exist at December 31, 2020  and 2019 .   Depreciation and Amortization. The Company records depreciation and amortization expense using the straight-line method over the useful lives of the respective assets. The cost of buildings are depreciated over estimated useful lives of 39 years, the costs of improvements are amortized over the shorter of the estimated life of the asset or term of the tenant lease (which range from 1 to 10 years), the costs associated with acquired tenant intangibles over the remaining lease term and the cost of furniture, fixtures and equipment are depreciated over 4 to 5 years. Depreciation and amortization expense for the years ended December 31, 2020  and 2019  was approximately $ 6.3 million and $ 7.4 million, respectively, and is included in depreciation and amortization in the accompanying consolidated statements of operations.   Cash, Cash Equivalents and Restricted Cash. The Company considers all short-term, highly liquid investments that are both readily convertible to cash and have an original maturity of three months or less at the date of purchase to be cash equivalents. Items classified as cash equivalents include money market funds. Cash balances in individual banks may exceed the federally insured limit of $250,000 by the Federal Deposit Insurance Corporation (the "FDIC"). No losses have been experienced related to such accounts. At December 31, 2020 , the Company had approximately $ 9.8 million in deposits in financial institutions that exceeded the federally insurable limits. Restricted cash consists of funds held in escrow for Company lenders for properties held as collateral by the lenders. The funds in escrow are for payment of property taxes, insurance, leasing costs and capital expenditures. As of December 31, 2020 , the Company has approximately $ 4.1 million of restricted cash.   Account Receivables. The Company periodically evaluates the collectability of amounts due from tenants and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under lease agreements. In addition, the Company maintains an allowance for deferred rent receivable that arises from straight lining of rents. The Company exercises judgment in establishing these allowances and considers payment history and current credit status of its tenants in developing these estimates. As of December 31, 2020  and 2019 , the balance of allowance for possible uncollectable tenant receivables included in other assets, net in the accompanying consolidated balance sheets was approximately $ 70,000 and $ 21,000 , respectively.   Deferred Leasing Costs. Costs incurred in connection with successful property leases are capitalized as deferred leasing costs and amortized to leasing commission expense on a straight-line basis over the terms of the related leases which generally range from one to five years. Deferred leasing costs consist of third -party leasing commissions. Management re-evaluates the remaining useful lives of leasing costs as the creditworthiness of the tenants and economic and market conditions change. If management determines the estimated remaining life of the respective lease has changed, the amortization period is adjusted. At December 31, 2020  and 2019 , the Company had net deferred leasing costs of approximately $ 1.9 million and $ 2.1 million, respectively. Total amortization expense for the years ended December 31, 2020  and 2019  was approximately $ 0.4  million and $ 0.6 million, respectively.   F- 9 Table of Contents   Deferred Financing Costs. Costs incurred, including legal fees, origination fees, and administrative fees, in connection with debt financing are capitalized as deferred financing costs, are amortized using the straight line method, which approximates the effective interest method, over the contractual term of the respective loans and recorded as an offset to the carrying value of the debt. At December 31, 2020  and 2019 , unamortized deferred financing costs related to mortgage notes payable were approximately $ 0.8 million and $ 1.1 million. In 2019, the Company incurred debt financing costs related to the execution of the Polar Note (see note 8. Note Payable). At December 31, 2020 , unamortized deferred financing cost related to the Polar Note were approximately $ 0.2 million. For the years ended December 31, 2020  and 2019 , total amortization expense related to the mortgage notes payable deferred financing costs was approximately $ 0.4 million and $ 0.5 million, respectively, and total amortization expense related to the Series B Preferred Stock costs was approximately $ 0.1 million during fiscal 2019.   For the years ended December 31, 2020  and 2019 , total amortization expense related to the Polar Note costs was approximately $ 0.9 million and $ 0.4 million, respectively. Amortization of deferred financing costs are included in interest expense in the accompanying consolidated statements of operations.   Deferred Offering Costs.  Deferred offering costs represent legal, accounting and other direct costs related to our public offerings. As of December 31, 2020 , we have incurred an aggregate of $ 0.1 million in direct costs related to our offering of common and preferred stock in connection with the S- 3 filed on December 29, 2020. These costs were deferred and recorded as a long-term asset at December 31, 2020 . Approximately $ 0.5 million in previously deferred costs were expensed in our Consolidated Statement of Operations upon effectiveness of our IPO.   Income Taxes.   We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code (the “Code”), for federal income tax purposes. To maintain our qualification as a REIT, we are required to distribute at least 90 % of our REIT taxable income to our stockholders and meet the various other requirements imposed by the Code relating to such matters as operating results, asset holdings, distribution levels and diversity of stock ownership. Provided we maintain our qualification for taxation as a REIT, we are generally not subject to corporate level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. If we fail to maintain our qualification as a REIT in any taxable year, and are unable to avail ourselves of certain savings provisions set forth in the Code, all of our taxable income would be subject to federal income tax at regular corporate rates, including any applicable alternative minimum tax. We are subject to certain state and local income taxes. As of December 31, 2020 , we have estimated approximately $ 11.0 million of Federal net operating losses (NOLs) carryforwards to offset potential future federal tax obligations. We may not generate sufficient taxable income in future periods to be able to realize fully the tax benefits of our NOL carry-forwards.   We, together with our subsidiary, NetREIT Dubose, have elected to treat such subsidiary as taxable REIT subsidiary (a “TRS”) for federal income tax purposes. Certain activities that we undertake must be conducted by a TRS, such as non-customary services for our tenants, and holding assets that we cannot hold directly. A TRS is subject to federal and state income taxes.   The Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. Neither the Company nor its subsidiaries have been assessed any significant interest or penalties for tax positions by any major tax jurisdictions.   Fair Value Measurements. Certain assets and liabilities are required to be carried at fair value, or if long-lived assets are deemed to be impaired, to be adjusted to reflect this condition. The guidance requires disclosure of fair values calculated under each level of inputs within the following hierarchy:   Level 1 – Quoted prices in active markets for identical assets or liabilities at the measurement date.   Level 2 – Inputs other than quoted process that are observable for the asset or liability, either directly or indirectly.   Level 3 – Unobservable inputs for the asset or liability.   Fair value is defined as the price at which an asset or liability is exchanged between market participants in an orderly transaction at the reporting date. Cash equivalents, mortgage notes receivable, tenant receivable and payables and accrued liabilities all approximate fair value due to their short-term nature. During the year ended December 31, 2020 , the Company measured the fair value of two of its real estate properties on a nonrecurring basis using Level 3 inputs. The Company estimated the fair value for the impaired real estate asset held for investment based on an estimated sales price, less estimated costs to sell.  Management believes that the recorded and fair values of notes payable are approximately the carrying value as of December 31, 2020  and 2019 .   Sales of Real Estate Assets .  Effective January 1, 2018, we adopted the guidance of ASC 610 - 20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610 - 20” ), which applies to sales or transfers to noncustomers of nonfinancial assets or in substance nonfinancial assets that do not meet the definition of a business. Generally, our sales of real estate would be considered a sale of a nonfinancial asset as defined by ASC 610 - 20.   ASC 610 - 20 refers to the revenue recognition principles under ASU No. 2014 - 9. Under ASC 610 - 20, if we determine we do not have a controlling financial interest in the entity that holds the asset and the arrangement meets the criteria to be accounted for as a contract, we would derecognize the asset and recognize a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer.   F- 10 Table of Contents   Revenue Recognition and Accounts Receivables . We recognize minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectability is reasonably assured and record amounts expected to be received in later years as deferred rent receivable. If the lease provides for tenant improvements, we determine whether the tenant improvements, for accounting purposes, are owned by the tenant or by us. When we are the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that the tenant can take in the form of cash or a credit against its rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to:     • whether the lease stipulates how a tenant improvement allowance may be spent;     • whether the amount of a tenant improvement allowance is in excess of market rates;     • whether the tenant or landlord retains legal title to the improvements at the end of the lease term;     • whether the tenant improvements are unique to the tenant or general-purpose in nature; and     • whether the tenant improvements are expected to have any residual value at the end of the lease.   We record property operating expense reimbursements due from tenants for common area maintenance, real estate taxes, and other recoverable costs in the period the related expenses are incurred.   We make estimates of the collectability of our tenant receivables related to base rents, including deferred rent receivable, expense reimbursements and other revenue or income. We specifically analyze accounts receivable, deferred rent receivable, historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, we will record a bad debt reserve for the tenant’s receivable balance and generally will not recognize subsequent rental revenue until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments.   Income (Loss) per Common Share. Basic income (loss) per common share (Basic EPS) is computed by dividing net income (loss) available to common shareholders (Numerator) by the weighted average number of common shares outstanding (Denominator) during the period. Diluted loss per common share (Diluted EPS) is similar to the computation of Basic EPS except that the Denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. In addition, in computing the dilutive effect of convertible securities, the Numerator is adjusted to add back the after-tax amount of interest recognized in the period associated with any convertible debt. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net earnings per share.   For the years ended December 31, 2020  and 2019, the basic and diluted net loss per share are equivalent at $( 0.85 ) and ($ 0.07 ) per share because the Company had incurred a net loss causing any potentially dilutive securities to be anti-dilutive.    F- 11 Table of Contents   Recently Issued Accounting Pronouncements.   In  March 2020,  the FASB issued Accounting Standards Update (“ASU”)  No.   2020 - 04,  Reference Rate Reform which provides optional expedients and exceptions in order to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting as it relates to contracts, hedging relationships and other transactions by allowing companies to modify contracts that previously contained LIBOR rates without evaluating whether the modification constituted a new contract. The expedients and exceptions provided by the amendments do  not  apply to contract modifications made and hedging relationships entered into or evaluated after  December 31, 2022  and are used on a prospective basis upon adoption. The Company adopted this guidance as of  March 2020  noting  no  impact to the financial statements.   In  June 2017,  the FASB issued ASU  No.   2016 - 13,  Financial Instruments – Credit Losses, amended in  February 2020  with ASU  No.   2020 - 02,  Financial Instruments—Credit Losses (Topic  326 ) and Leases (Topic  842 ). ASU  2016 - 13  introduces a new model for estimating credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU  2016 - 13  also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses. While ASU  2016 - 13  was effective for periods beginning after  December 15, 2019,  the issuance of ASU  2020 - 02  has allowed for the delay in adoption for certain smaller public companies, and is now effective for fiscal periods beginning after  December 15, 2022.  Retrospective adjustments shall be applied through a cumulative-effect adjustment to retained earnings. The Company is continuing to evaluate the impact of this guidance on its financial statements, and does  not  believe it will have a material impact on the financial statements.   In  August 2018,  the FASB issued ASU  No.   2018 - 13,  Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC  820.  This guidance is effective for public companies in fiscal years beginning after  December 15, 2019  with early adoption permitted. The Company adopted this guidance as of  January 1, 2020  and noted  no  impact on its consolidated financial statements.     3. RECENT REAL ESTATE TRANSACTIONS   During year ended December 31, 2020  we disposed of the following properties:     • Centennial Tech Center, which was sold on  February 5, 2020  for approximately $ 15.0  million and the Company recognized a loss of approximately $ 0.9 million.     • Union Terrace, which was sold on  March 13, 2020   for approximately $ 11.3  million and the Company recognized a gain of approximately $ 0.7 million.     • One of four Executive Office Park buildings, which was sold on December 2, 2020  for approximately $ 2.3 million and the Company recognized a loss of approximately $ 78,000 .         • During the year ended December 31, 2020 , we disposed of  46 model homes for approximately $ 18.1 million and recognized a gain of approximately $ 1.6 million.   During year ended  December 31, 2019 we disposed of the following properties:     • Morena Office Center, which was sold on January  15, 2019 for approximately $ 5.6  million and the Company recognized a gain of approximately $ 0.7 million.     • Nightingale land, which was sold on May  8, 2019 for approximately $ 0.9 million and the Company recognized a loss of approximately $ 93,000 .     • On July 1, 2019, NetREIT Genesis, LLC sold a 43 % tenants-in-common interest in Genesis Plaza (“TIC Interest”) for $ 5.6  million to a newly formed entity, NetREIT Genesis II, LLC, in which NetREIT Casa Grande LP is the sole member. NetREIT Casa Grande LP owned and sold Morena Office Center on January 15, 2020. The sale of the TIC Interest was structured as a 1031 exchange and included $ 2.9  million in cash and assumption of debt. The Company remains a guarantor of the debt and NetREIT Genesis, LLC and NetREIT Genesis II, LLC are jointly and severally liable for the debt securing Genesis Plaza, the financial terms and conditions of which remain materially unchanged.     • The Presidio office building, which was sold on July 31, 2019 for approximately $ 12.3  million and the Company recognized a gain of approximately $ 4.5  million.   F- 12 Table of Contents     • During the year ended December 31, 2019 , we disposed of  41 model homes for approximately $ 14.6 million and recognized a gain of approximately $ 1.2 million.   We acquired 28  Model Home Properties and leased them back to the homebuilders under triple net leases during the year ended December 31, 2020 . The purchase price for the properties was $ 10.2 million. The purchase price consisted of cash payments of $ 3.1 million and mortgage notes of $ 7.1 million.   We acquired 33 Model Home Properties and leased them back to the homebuilders under triple net leases during the year ended December 31, 2019 . The purchase price for the properties was $ 13.0 million. The purchase price consisted of cash payments of $ 3.9 million and mortgage notes of $ 9.1 million.     4.  REAL ESTATE ASSETS   The Company owns a diverse portfolio of real estate assets. The primary types of properties the Company invests in are office, industrial, retail, and NNN leased model home properties located primarily in Southern California and Colorado, with four properties located in North Dakota. Our model home properties are located in seven states. As of December 31, 2020 , the Company owned or had an equity interest in:     • Ten office buildings and one industrial buildings (“Office/Industrial Properties”) which total approximately 982,796 rentable square feet;     • Four retail shopping centers (“Retail Properties”) which total approximately 131,722  rentable square feet;     • 118 homes owned by our affiliated limited partnerships and one corporation (“Model Homes” or “Model Home Properties”) leased back on a triple-net basis to homebuilders that are owned by  six  affiliated limited partnerships and  one  wholly-owned corporation.   The Company’s real estate assets consisted of the following as of December 31, 2020  and 2019 :       Date       Real estate assets, net (in thousands)   Property Name   Acquired   Location   2020     2019   Garden Gateway Plaza (1)   March 2007   Colorado Springs, Colorado   $ 11,465     $ 11,428   World Plaza (1)   September 2007   San Bernardino, California     9,272       8,305   Executive Office Park (3)   July 2008   Colorado Springs, Colorado     5,106       7,723   Waterman Plaza (1)   August 2008   San Bernardino, California     3,500       4,889   Genesis Plaza   August 2010   San Diego, California     8,651       8,789   Dakota Center   May 2011   Fargo, North Dakota     8,597       8,855   Grand Pacific Center   March 2014   Bismarck, North Dakota     5,684       5,914   Union Terrace (4)   August 2014   Lakewood, CO     —       8,425   Centennial Tech Center (4)   December 2014   Colorado Springs, Colorado     —       13,132   Arapahoe Center   December 2014   Centennial, Colorado     9,233       9,748   Union Town Center   December 2014   Colorado Springs, Colorado     9,345       9,612   West Fargo Industrial   August 2015   Fargo, North Dakota     7,061       7,212   300 N.P.   August 2015   Fargo, North Dakota     3,280       3,405   Research Parkway   August 2015   Colorado Springs, Colorado     2,438       2,512   One Park Center   August 2015   Westminster, Colorado     8,586       8,518   Highland Court (1)   August 2015   Centennial, Colorado     10,500       11,421   Shea Center II   December 2015   Highlands Ranch, Colorado     21,026       21,853   Presidio Property Trust, Inc. properties               123,744       151,741   Model Home properties (2)     2014 - 2020   AZ, FL, IL, PA, TX, WI     42,510       48,466   Total real estate assets and lease intangibles, net             $ 166,254     $ 200,207     ( 1 ) Property held for sale as of December 31, 2020 . ( 2 ) Includes seven Model Homes that are listed as held for sale as of December 31, 2020 . ( 3 ) One of four buildings within this property was sold as of December 31, 2020 . ( 4 ) This property was sold during the year ended December 31, 2020 .   F- 13 Table of Contents   The Company’s commercial properties are leased to tenants under non-cancelable operating leases for which terms and expirations vary.  Future minimum rental revenues under existing leases on Office/Industrial and Retail Properties as of December 31, 2020  are expected to be as follows:   2021   $ 3,259,261   2022     3,406,500   2023     2,564,601   2024     1,211,331   2025     1,526,142   Thereafter     2,477,552   Totals   $ 14,445,387     The Company generally rents Model Home Properties to homebuilders under non-cancelable lease agreements with a term of 18 months with an option to extend in six months increments. Future minimum rental revenues under existing leases on Model Home Properties as of December 31, 2020  are expected to be as follows:   2021   $ 2,784,108   2022     696,768       $ 3,480,876       5. LEASE INTANGIBLES   Lease intangibles consist of the following:       December 31, 2020     December 31, 2019       Lease     Accumulated     Lease     Lease     Accumulated     Lease       Intangibles     Amortization     Intangibles, net     Intangibles     Amortization     Intangibles, net   In-place leases   $ 3,136,587     $ ( 2,757,530 )   $ 379,057     $ 4,360,027     $ ( 3,283,027 )   $ 1,077,000   Leasing costs     1,730,656       ( 1,510,559 )     220,097       2,937,976       ( 2,002,711 )     935,265   Above-market leases     333,485       ( 291,421 )     42,064       333,485       ( 240,739 )     92,746       $ 5,200,728     $ ( 4,559,510 )   $ 641,218     $ 7,631,488     $ ( 5,526,477 )   $ 2,105,011     As of December 31, 2020  and 2019 , gross lease intangible assets of $ 1.1 million and $ 3.4 million, respectively, were included in real estate assets held for sale. As of December 31, 2020  and 2019 , accumulated amortization related to the lease intangible assets of $ 1.1 million and $ 2.4 million, respectively, were included in real estate assets held for sale.   The net value of acquired intangible liabilities was $ 0.1 million and $ 0.3 million relating to below-market leases as of December 31, 2020  and 2019 , respectively.   Aggregate approximate amortization expense for the Company's lease intangible assets is as follows:   2021   $ 372,484   2022     202,479   2023     17,663   2024     17,663   2025     17,663   Thereafter     13,266   Total   $ 641,218               The weighted average amortization period for the intangible assets as of December 31, 2020  was approximately 1.6 years. Lease intangible assets are amortized over the term of the related lease and included as a reduction of rental income in the Statement of Operations.   F- 14 Table of Contents     6. OTHER ASSETS   Other assets consist of the following:     December 31,     December 31,       2020     2019   Deferred rent receivable   $ 1,912,048     $ 2,680,886   Prepaid expenses, deposits and other     299,187       601,897   Accounts receivable, net     541,885       1,336,122   Right-of-use assets, net     102,144       561,375   Other intangibles, net     142,483       212,932   Notes receivable     316,374       316,374   Deferred offering costs     108,660       —   Total other assets   $ 3,422,781     $ 5,709,586       7.  MORTGAGE NOTES PAYABLE   Mortgage notes payable consisted of the following:             Principal as of                                 December 31,     December 31,   Loan   Interest           Mortgage note property   Notes     2020     2019   Type   Rate (1)     Maturity   Waterman Plaza     (3) (6)     $ 3,207,952     $ 3,274,097   Variable     4.25 %   4/29/2021   World Plaza     (3) (5)       5,802,568       4,979,384   Variable     2.91 %   7/5/2021   Garden Gateway Plaza     (3)       5,861,523       6,071,315   Fixed     5.00 %   8/5/2021   300 N.P.             2,273,478       2,311,739   Fixed     4.95 %   6/11/2022   Highland Court     (3)       6,274,815       6,424,366   Fixed     3.82 %   9/1/2022   Dakota Center             9,900,279       10,111,693   Fixed     4.74 %   7/6/2024   Union Terrace     (2)       -       6,240,396   Fixed     4.50 %   8/5/2024   Centennial Tech Center     (2)       -       9,561,652   Fixed     4.43 %   12/5/2024   Research Parkway             1,760,432       1,813,305   Fixed     3.94 %   1/5/2025   Arapahoe Service Center             7,932,255       8,085,727   Fixed     4.34 %   1/5/2025   Union Town Center             8,315,550       8,440,000   Fixed     4.28 %   1/5/2025   One Park Centre             6,385,166       6,487,532   Fixed     4.77 %   9/5/2025   Genesis Plaza             6,276,273       6,378,110   Fixed     4.71 %   9/6/2025   Shea Center II             17,727,500       17,727,500   Fixed     4.92 %   1/5/2026   Executive Office Park     (3)       2,985,998       4,839,577   Fixed     4.83 %   6/1/2027   West Fargo Industrial             4,262,718       4,216,565   Fixed     3.27 %   8/5/2029   Grand Pacific Center     (4)       3,738,142       3,851,962   Fixed     4.02 %   8/1/2037   Subtotal, Presidio Property Trust, Inc. Properties           $ 92,704,649     $ 110,814,920                     Model Home mortgage notes     (3)       28,083,356       32,644,129   Fixed     (7 )     2021 - 2023   Mortgage Notes Payable           $ 120,788,005     $ 143,459,049                     Unamortized loan costs             ( 758,309 )     ( 1,066,057 )                   Mortgage Notes Payable, net           $ 120,029,696     $ 142,392,992                       ( 1 ) Interest rates as of December 31, 2020 . ( 2 ) Property sold during the year ended December 31, 2020 , see Footnote 3 above for further detail.  One  of  four  buildings at Executive Office Park were sold. ( 3 ) Properties held for sale as of  December 31, 2020.  Seven model homes were included as held for sale. ( 4 ) Interest rate is subject to reset on September 1, 2023. ( 5 ) Interest on this loan is ABR + 0.75 % and LIBOR plus 2.75 %. For the year-ended December 31, 2020 , the weighted average interest rate was 3.37 %. ( 6 ) Interest on this loan resets annually at LIBOR plus  3.00 %, with a floor of  4.25 % ( 7 ) Each Model Home has a stand-alone mortgage note at interest rates ranging from 2.5 % to 5.6 % at December 31, 2020 .    F- 15 Table of Contents   The Company is in compliance with all conditions and covenants of its mortgage notes payable.   Scheduled principal payments of mortgage notes payable are as follows:       Presidio Property     Model               Trust, Inc.     Homes     Total Principal   Years ending December 31:   Notes Payable     Notes Payable     Payments   2021   $ 16,385,688     $ 10,169,248     $ 26,554,936   2022     9,780,330       11,735,522       21,515,852   2023     1,493,749       6,178,586       7,672,335   2024     10,447,888       —       10,447,888   2025     28,902,297       —       28,902,297   Thereafter     25,694,697       —       25,694,697   Total   $ 92,704,649     $ 28,083,356     $ 120,788,005       8. NOTE PAYABLE   On September  17, 2019, the Company executed a Promissory Note pursuant to which Polar Multi-Strategy Master Fund (“Polar”), extended a loan in the principal amount of $ 14.0 million to the Company ("Polar Note"). The Polar Note bears interest at a fixed rate of 8 % per annum and requires monthly interest-only payments. On  September 1, 2020 ,  we extended the maturity of the Polar Note from  October  1,   2020  to  March 31, 2021 ,  at which time the entire outstanding principal balance of $ 8.8  million and accrued and unpaid interest will be due and payable. On  September 30, 2020 ,  we paid the extension or renewal fee, which was  4 % of the unpaid principal balance.  The Company may repay the Polar Note at any time, subject to the payment of an Optional Redemption Fee (as defined in the Note), if applicable. Such fee is not applicable to repayments made from the proceeds of property sales.   The principal balance of the Note as of December 31, 2020  consists of cash received, less cash repayments from property sales of $ 6.3 million and Original Issue Discount ("OID") of $ 1.4 million. The OID was recorded on the accompanying consolidated balance sheets as a direct deduction from the principal of the Note and was recognized as interest expense over the term of the Note commencing on September  17, 2019 through October  1, 2020. There was  no  unrecognized OID as of December 31, 2020 . The accretion of the OID recognized during the year ended December 31, 2020  was $ 1.0 million.   The Company incurred approximately $ 1.1 million in legal and underwriting costs related to the transaction. These costs have been recorded as debt issuance costs on the accompanying consolidated balance sheets as a direct deduction from the principal of the Note and are being amortized over the term of the Note. Amortization expense totaling approximately $ 0.9 million was included in interest expenses for the year ended December 31, 2020 , in the accompanying condensed consolidated statements of operations. The unamortized debt issuance costs related to the  4%  renewal fee for the loan extension totaled $ 0.4 million to be amortized over the extended term of the Note, of which the Company recognized $ 0.2 million through  December 31, 2020 .   Under the terms of the Polar Note, the Company is subject to certain financial covenants including maintaining a debt to property fair value ratio of no greater than 75 %. As of December 31, 2020 , the Company is in compliance with such covenants.   On  April 22, 2020,  the Company received an Economic Injury Disaster Loan ("EIDL") of $ 10,000  from the Small Business Administration ("SBA") which will provide economic relief during the COVID- 19  pandemic. This loan advance is  not  required to be repaid, has  no  stipulations on use, and has been recorded as fees and other income in the Condensed Consolidated Statements of Operations during fiscal  2020 . On  August 17, 2020  we received an additional EIDL of $ 0.2 million, for which principal and interest payments are deferred for  twelve  months from the date of issuance, and interest accrues at  3.75%  per year. The loan matures on  August 17, 2050.  We utilized the funds for general corporate purposes to alleviate economic injury caused by the COVID- 19  pandemic, which economic injury included abating or deferring rent to certain tenants (primarily retail tenants).   F- 16 Table of Contents   On  April 30, 2020,  the Company received a Paycheck Protection Program ("PPP") loan of $ 0.5 million from the SBA which will provide additional economic relief during the COVID- 19  pandemic. The PPP loan, less the $ 10,000 related to the EIDL received on April 22, 2020, was forgiven by the SBA prior to December 31, 2020 and the remaining $ 10,000 was fully forgiven in January 2021 upon repeal of the EIDL holdback requirements. On  June 5, 2020,  the period over which the loan could be utilized was extended to  24  weeks. The unforgiven portion of the PPP loan was recorded in accounts payable and accrued liabilities on the Consolidated Balance Sheets as of  December 31, 2020, while the forgiven portion was recorded a gain on extinguishment of debt in the Consolidated Statement of Operations. We have used the funds to cover payroll related costs.     9. SERIES B MANDATORILY REDEEMABLE PREFERRED STOCK   During the year ended  December 31, 2019, the Company redeemed all of its remaining  16,900  shares of its Series B Preferred Stock for $ 16.9  million. As of  December 31, 2020  and  December 31, 2019,  no  Series B Preferred Stock remained issued or outstanding. Amortization expense of $ 0.1 million was included in interest expense for the year ended  December 31, 2019, and  no  related amortization expense was incurred during the year ended  December 31, 2020  in the accompanying condensed consolidated statements of operations. There were  no  unamortized deferred costs as of  December 31, 2020  and 2019.     10.  COMMITMENTS AND CONTINGENCIES   The Company is obligated under certain tenant leases to fund tenant improvements and the expansion of the underlying leased properties.   Litigation. From time to time, we may become involved in various lawsuits or legal proceedings which arise in the ordinary course of business. Neither the Company nor any of the Company’s properties are presently subject to any material litigation nor, to the Company’s knowledge, is there any material threatened litigation.   Environmental Matters. The Company monitors its properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist, the Company is not currently aware of any environmental liability with respect to the properties that would have a material effect on the Company’s financial condition, results of operations and cash flow. Further, the Company is not aware of any environmental liability or any unasserted claim or assessment with respect to an environmental liability that the Company believes would require additional disclosure or recording of a loss contingency.     11.  STOCKHOLDERS’ EQUITY     Preferred Stock. The Company is authorized to issue up to 1,000,000 shares of Preferred Stock (the “Preferred Stock”). The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is authorized to fix the number of shares of any series of the Preferred Stock, to determine the designation of any such series, and to determine or alter the rights granted to or imposed upon any wholly unissued series of Preferred Stock including the dividend rights, dividend rate, conversion rights, voting rights, redemption rights (including sinking fund provisions), redemption price, and liquidation preference. As of  December 31, 2020  and  December 31, 2019,  no  Series B Preferred Stock remained issued or outstanding.   Common Stock. The Company is authorized to issue up to 100,000,000 shares of Series A Common Stock,  1,000 shares of Series B Common Stock and 9,000,000 shares of Series C Common Stock (collectively, the “common stock”) each with a $ 0.01  par value. The common stock have identical rights, preferences, terms and conditions except that the Series B Common Stockholders are not entitled to receive any portion of Company assets in the event of Company liquidation. There have been no Series B or Series C Common Stock issued. Each share of Common Stock entitles the holder to one vote. The Common Stock is not subject to redemption and it does not have any preference, conversion, exchange or pre-emptive rights. The articles of incorporation contain a restriction on ownership of the Common Stock that prevents one person from owning more than 9.8 % of the outstanding shares of common stock.   F- 17 Table of Contents   Cash Dividends. For the year ended December 31, 2020 , the Company declared and paid cash dividends of $ 1.0 million at a rate of $ 0.10  per share. For the year ended  December 31, 2019 the Company declared and paid $ 1.1 million and $ 2.2 million, respectively at a rate of $ 0.12 per share.   Partnership Interests.  Through the Company, its subsidiaries and its partnerships, we own  15  commercial properties in fee interest,  two  of which we own partial interests in through our holdings in various affiliates in which we serve as general partner, member and/or manager. We purchased the partnership interest in  one  limited partnership that owned  one  property during  2016.  Each of the limited partnerships is referred to as a “DownREIT.” In each DownREIT, we have the right, through put and call options, to require our co-investors to exchange their interests for shares of our common stock at a stated price after a defined period (generally  five  years from the date they  first  invested in the entity’s real property), the occurrence of a specified event or a combination thereof. The Company is a limited partner in  four  partnerships and sole stockholder in  one  corporation, which entities purchase and leaseback model homes from homebuilders.   During the year ended December 31, 2020 , the Company exercised  two  put options with a limited partner in  two  limited partnerships and exchanged a total of  59,274  shares of the Company’s Series A Common Stock for the limited partner’s partnership interests, resulting in an increase in ownership interest of each limited partnership by the Company. As part of this non-cash equity transaction, the Company reclassified $ 1.2  million in minority interest to common stock and additional paid in capital on the Condensed Consolidated Balance Sheets.   Dividend Reinvestment Plan. The Company had adopted a distribution reinvestment plan that allowed stockholders to have dividends or other distributions otherwise distributable to them invested in additional shares of Company common stock. The Company registered 3,000,000 of common stock pursuant to the dividend reinvestment plan. The purchase price per share is 95 % of the price the Company was formerly selling its shares for $ 10.00 per share. No sales commission or dealer manager fee will be paid on shares sold through the dividend reinvestment plan. The Company may amend, suspend or terminate the Plan at any time. Any such amendment, suspension or termination will be effective upon a designated dividend record date and notice of such amendment, suspension or termination will be sent to all Participants at least thirty ( 30 ) days prior to such record date. The dividend reinvestment plan became effective on January 23, 2012, was suspended on December 7, 2019 and adopted on  October 6, 2020   in connection with our IPO, updated to reflect a change in transfer agent and registrar. No dividend reinvestments were made for the year ended December 31, 2020 . As of December 31, 2020 , approximately $ 17.4 million or 1,834,147 shares of common stock have been issued under the dividend reinvestment plan to date.     12. SHARE-BASED INCENTIVE PLAN   The Company maintains a restricted stock incentive plan for the purpose of attracting and retaining officers, key employees and non-employee board members. Share awards vest in equal annual installments over a three to ten year period from date of issuance. Non-vested shares have voting rights and are eligible for any dividends paid to common shares. The Company recognized compensation cost for these fixed awards over the service vesting period, which represents the requisite service period, using the straight-line method. Prior to our IPO, the value of non-vested shares was calculated based on the offering price of the shares in the most recent private placement offering of $ 20.00 , adjusted for stock dividends since granted and assumed selling costs, which management believed approximated fair market value as of the date of grant. Upon our IPO, the value of non-vested shares granted is calculated based on the closing price of our common stock on the date of the grant.   A summary of the activity for the Company’s restricted stock was as follows:     Common Shares   Outstanding shares:         Balance at December 31, 2019     125,943   Granted     91,173   Forfeited     ( 4,599 ) Vested     ( 86,327 ) Balance at December 31, 2020     126,190     The non-vested restricted shares outstanding as of December 31, 2020  will vest over the next one to seven years.   The value of non-vested restricted stock granted for the years ended December 31, 2020  and 2019  was approximately $ 0.9 million and $ 1.7 million, respectively.   Share-based compensation expense for the years ended December 31, 2020  and 2019  was approximately $ 1.1 million and $ 0.8 million, respectively.     F- 18 Table of Contents     13.  SEGMENTS   The Company’s reportable segments consist of the three types of commercial real estate properties for which the Company’s decision-makers internally evaluate operating performance and financial results: Office/Industrial Properties, Model Homes and Retail Properties. The Company also has certain corporate level activities including accounting, finance, legal administration and management information systems which are not considered separate operating segments. The accounting policies of the reportable segments are the same as those described in Note 2.  There is no significant intersegment activity.   The Company evaluates the performance of its segments based upon net operating income (“NOI”), which is a non-GAAP supplemental financial measure. The Company defines NOI for its segments as operating revenues (rental income, tenant reimbursements and other operating income) less property and related expenses (property operating expenses, real estate taxes, insurance, asset management fees, impairments and provision for bad debt) excluding interest expense. NOI excludes certain items that are not considered to be controllable in connection with the management of an asset such as non-property income and expenses, depreciation and amortization, real estate acquisition fees and expenses and corporate general and administrative expenses. The Company uses NOI to evaluate the operating performance of the Company’s real estate investments and to make decisions about resource allocations.   The following tables reconcile the Company’s segment activity to its results of operations and financial position as of and for the years ended December 31, 2020  and 2019 , respectively.     For the Year Ended December 31,       2020     2019   Office/Industrial Properties:                 Rental, fees and other income   $ 17,580,472     $ 21,490,215   Property and related expenses     ( 7,977,561 )     ( 9,317,720 ) Net operating income, as defined     9,602,911       12,172,495   Model Home Properties:                 Rental, fees and other income     4,251,980       4,194,489   Property and related expenses     ( 202,667 )     ( 193,367 ) Net operating income, as defined     4,049,313       4,001,122   Retail Properties:                 Rental, fees and other income     2,971,125       2,956,407   Property and related expenses     ( 2,368,906 )     ( 899,487 ) Net operating income, as defined     602,219       2,056,920   Reconciliation to net loss:                 Total net operating income, as defined, for reportable segments     14,254,443       18,230,537   General and administrative expenses     ( 5,751,754 )     ( 5,268,315 ) Depreciation and amortization     ( 6,274,321 )     ( 7,364,688 ) Interest expense     ( 8,813,067 )     ( 10,649,646 ) Deferred offering costs     ( 530,639 )     —   Other income (expense), net     ( 20,636 )     117,037   Income tax expense     ( 370,884 )     ( 611,263 ) Gain on sale of real estate     1,245,460       6,319,272   Net loss   $ ( 6,261,398 )   $ 772,934   F- 19 Table of Contents       December 31,     December 31,   Assets by Reportable Segment:   2020     2019   Office/Industrial Properties:                 Land, buildings and improvements, net (1)   $ 99,120,649     $ 126,421,648   Total assets (2)   $ 100,046,782     $ 131,180,612   Model Home Properties:                 Land, buildings and improvements, net (1)   $ 42,509,596     $ 48,466,371   Total assets (2)   $ 42,246,022     $ 51,389,400   Retail Properties:                 Land, buildings and improvements, net (1)   $ 24,555,371     $ 25,318,601   Total assets (2)   $ 26,108,109     $ 26,588,254   Reconciliation to Total Assets:                 Total assets for reportable segments   $ 168,400,913     $ 209,158,266   Other unallocated assets:                 Cash, cash equivalents and restricted cash     2,149,088       1,591,041   Other assets, net     15,018,615       10,035,101   Total Assets   $ 185,568,616     $ 220,784,408     ( 1 ) Includes lease intangibles and the land purchase option related to property acquisitions. ( 2 ) Includes land, buildings and improvements, current receivables, deferred rent receivables and deferred leasing costs and other related intangible assets, all shown on a net basis.       For the Year Ended December 31,   Capital Expenditures by Reportable Segment   2020     2019   Office/Industrial Properties:                 Capital expenditures and tenant improvements   $ 2,825,168     $ 6,373,464   Model Home Properties:                 Acquisition of operating properties     10,161,613       13,037,562   Retail Properties:                 Capital expenditures and tenant improvements     9,205       20,247   Totals:                 Acquisition of operating properties, net     10,161,613       13,037,562   Capital expenditures and tenant improvements     2,834,373       6,393,711   Total real estate investments   $ 12,995,986     $ 19,431,273     F- 20 Table of Contents     14.  SUBSEQUENT EVENTS   Dispositions   We disposed of the following properties subsequent to December 31, 2020:     • Waterman Plaza was sold on January 28, 2021  for approximately $ 3.5 million.         • Garden Gateway was sold on February 19, 2021 for approximately $ 11.2 million.   Notes Payable   On September 1, 2020, we extended the maturity of the Polar Note from October 1, 2020 to March 31, 2021 ( "Maturity"), as of December 31, 2020, the outstanding principal balance was approximately $ 7.7 million. During the first quarter of 2021, prior to maturity, the Polar note was paid in full mainly from available cash on hand and proceeds of property sales as noted above.     Dividends    On February 23, 2021,  our Board of Directors declared a dividend of $ 0.101 per share of Series A Common Stock, payable on  March 16, 2021   to stockholders of record as of  March 9, 2021 .     F- 21 Table of Contents     Presidio Property Trust, Inc. and Subsidiaries Schedule III - Real Estate and Accumulated Depreciation and Amortization – as of December 31, 2020   All amounts are in thousands           Initial Cost             Total Cost     (1)                                   Property Name/ Location   Encumbrances     Land Cost     Building & Improvements     Acquisition Price     Capitalized Improvements     Land Cost     Building & Improvements     Total Cost     Accumulated Depreciation & Amortization     Reserve for Impairment     NBV Real Estate     Date Acquired     Year Built/ Renovated   Garden Gateway, Colorado Springs, CO (2)   $ 5,861     $ 3,035     $ 12,091     $ 15,126     $ 3,329     $ 3,035     $ 10,874     $ 17,238     $ 5,774     $ —     $ 11,464     03/07     1982/2006   Executive Park, Colorado Springs, CO (2)     2,986       583       8,815       10,081       1,473       583       5,561       7,617       2,510       —       5,107     07/08       2000   Genesis Plaza, San Diego, CA     6,276       1,400       8,600       10,000       2,625       1,400       8,323       12,348       3,697       —       8,651     08/10       1989   Dakota Center, Fargo, ND     9,900       832       8,743       9,575       1,306       832       9,960       12,098       3,500       —       8,598     05/11       1982   Grand Pacific Center, Bismarck, ND     3,738       413       4,926       5,339       904       413       6,099       7,416       1,732       —       5,684     03/14       1976   Arapahoe Center, Centennial, CO     7,932       1,420       10,430       11,850       2,078       1,420       8,857       12,355       3,122       —       9,233     12/14       2000   West Fargo Industrial, Fargo, ND     4,263       1,693       6,207       7,900       264       1,693       6,099       8,056       995       —       7,061     08/15     1998/2005   300 N.P., Fargo, ND     2,274       135       3,715       3,850       319       135       3,589       4,043       764       —       3,279     08/15       1922   Highland Court, Centennial, CO (2)     6,275       3,608       9,442       13,050       3,408       3,608       7,767       14,783       3,883       400       10,500     08/15       1984   One Park Centre, Westminster, CO     6,385       1,206       7,944       9,150       1,952       1,206       7,416       10,574       1,987       —       8,587     08/15       1983   Shea Center II, Highlands Ranch, CO     17,728       2,214       23,747       25,961       6,065       2,214       19,526       27,805       6,779       —       21,026     12/15       2000   Total Office/ Industrial properties     73,618       16,539       104,660       121,882       23,723       16,539       94,071       134,333       34,743       400       99,190                                                                                                                             World Plaza , San Bernardino, CA (2)     5,803       1,698       6,232       7,930       1,761       1,698       8,758       12,217       2,246       700       9,271     09/07       1974   Waterman Plaza, San Bernardino, CA (2)     3,208       2,350       4,814       7,164       239       2,383       4,324       6,946       1,282       2,164       3,500     08/08       2008   Union Town Center, Colorado Springs, CO     8,316       1,750       9,462       11,212       513       1,750       8,932       11,195       1,851       —       9,344     12/14       2003   Research Parkway, Colorado Springs, CO     1,760       408       2,442       2,850       43       408       2,349       2,800       361       —       2,439     8/15/2016       2003   Total Retail properties     19,087       6,206       22,950       29,156       2,556       6,239       24,363       33,158       5,740       2,864       24,554                                                                                                                             Model Homes -NDMHR, LP     974       534       2,047       2,581       —       534       2,047       2,581       197       —       2,384       2010 - 2016       2010 - 2016   Model Homes-DMH LP #202     3,149       741       4,238       4,979       —       741       4,238       4,979       337       —       4,642       2014 - 2019       2014 - 2019   Model Homes-DMH LP #203     5,271       1,600       7,132       8,732       —       1,600       7,132       8,732       441               8,291       2016 - 2020       2016 - 2020   Model Homes-DMH LP #204     5,385       1,412       6,787       8,199       —       1,412       6,787       8,199       345               7,854       2019 - 2020       2019 - 2020   Model Homes-DMH LP #205     5,214       1,461       6,287       7,748       —       1,461       6,287       7,748       179       —       7,569       2020       2020   Model Homes-DMH LP #206     1,696       294       2,181       2,475       —       294       2,181       2,475       27               2,448       2020       2020   Model Homes-NMH Inc.     6,394       1,510       8,190       9,700       —       1,510       8,190       9,700       378       —       9,322       2016 - 2020       2016 - 2020   Total Model Home properties     28,083       7,552       36,862       44,414       —       7,552       36,862       44,414       1,904       —       42,510                                                                                                         —                   CONSOLIDATED TOTALS:   $ 120,788     $ 30,297     $ 164,472     $ 195,452     $ 26,279     $ 30,330     $ 155,296     $ 211,905     $ 42,387     $ 3,264     $ 166,254                     ( 1 )     Depreciation is computed on a straight-line basis using useful lives up to 39 years. ( 2 )     Property held for sale as of December 31, 2020 . ( 3 )     Waterman Plaza sold for approximately $ 3.5 million on January 28, 2021. ( 4 )     Garden Gateway sold for approximately $ 11.2  million on February 19, 2021.   F- 22 Table of Contents   Presidio Property Trust, Inc. and Subsidiaries Schedule III - Real Estate and Accumulated Depreciation and Amortization (continued) – as of December 31, 2020       For the Year Ended December 31,       2020     2019   Real estate                 Balance at the beginning of the year   $ 244,320,582     $ 254,675,874   Acquisitions     10,161,613       13,037,562   Improvements     2,834,367       6,393,711   Impairments     ( 1,730,851 )     —   Dispositions of real estate     ( 46,944,545 )     ( 29,786,565 ) Balance at the end of the year   $ 208,641,166     $ 244,320,582   Accumulated depreciation and amortization                 Balance at the beginning of the year   $ ( 44,113,962 )   $ ( 43,567,809 ) Depreciation and amortization expense     ( 5,938,958 )     ( 6,693,613 ) Dispositions of real estate     7,665,721       6,147,460   Balance at the end of the year   $ ( 42,387,199 )   $ ( 44,113,962 )                   Real estate assets, net   $ 166,253,967     $ 200,206,620     F-23