S-11: Presidio Property Trust Files S-11 for Warrant Resale

Sentiment:

Registration Statement for Resale Offering 14 August 2025 8:15 PM

📋All filings for Presidio Property Trust, INC

Presidio Property Trust filed an S-11 registration statement for the resale of up to 200,000 Series A Common Stock shares by a selling stockholder, with the company not receiving direct proceeds from the sale but potentially from warrant exercises.

Delay expectedThe non-recourse loan on the Dakota Center property matured on July 6, 2024, and management has been in negotiations with the lender and special servicer regarding modification, extension, or sale, indicating a delay in resolving the loan situation.The company has not decided when it will resume dividends to common stockholders on a quarterly basis, indicating an indefinite delay in common stock dividend payments.

Capital raiseThe S-11 filing is a registration statement for the resale of up to 200,000 shares of Series A Common Stock by a selling stockholder, which, while not a direct capital raise for the company from the sale, facilitates liquidity for the selling stockholder.The company will receive proceeds of up to approximately $2,400,000 if the Common Stock Warrants are exercised for cash in the future. These proceeds are intended for general corporate and working capital purposes, including potentially acquiring additional properties.The model home limited partnerships (DMHI #206 and DMHI #207) continue to raise capital through the sale of additional limited partnership units.The company may, without stockholder approval, issue debt or equity securities to obtain additional capital for future financings and acquisitions.

Worse than expectedNo dividends were paid to Series A Common Stock holders in 2024 and the first six months of 2025, and there is no decision on when quarterly common stock dividends will resume, indicating a negative impact on common shareholders.The non-recourse loan on the Dakota Center property matured, leading to an agreement to sell the property and an impairment charge of approximately $0.7 million, reflecting an underperforming asset.The expiration of Halliburton's lease at Shea Center II resulted in a loss of approximately $536,080 in annual base rent, with a significant portion (46%) of the space still vacant as of February 2025, indicating a substantial revenue hit and ongoing leasing challenge.The significant loss on the Conduit Pharmaceuticals Inc. investment, with shares valued at ~$0.2 million in Dec 2024 selling for only $13,989 in May 2025 after a reverse split, represents a poor investment outcome.

Summary

Presidio Property Trust, an internally managed, diversified REIT, filed an S-11 registration statement for the resale of up to 200,000 shares of Series A Common Stock by a selling stockholder, Armistice Capital Master Fund Ltd.
The company will not receive proceeds from the direct sale of these shares by the selling stockholder but could receive up to approximately $2.4 million if the underlying Common Stock Warrants are exercised for cash.
Warrants issued in July 2021 were amended on July 14, 2025, reducing the exercise price from $55.00 to $12.00 per share and extending the termination date to July 16, 2030, from July 16, 2026.
The company completed a 1-for-10 reverse stock split of its Series A Common Stock, effective May 19, 2025, and subsequently regained compliance with Nasdaq's minimum bid price requirement on June 3, 2025.
As of June 30, 2025, the portfolio included 8 office buildings and 1 industrial property (758,175 sq ft, 81.8% occupancy), 1 retail building (10,500 sq ft, 100% occupancy), and 87 model home residential properties (260,227 sq ft).
The commercial portfolio had a net book value of approximately $73.7 million, and the model home portfolio had a net book value of approximately $40.9 million as of June 30, 2025.
No dividends were paid to Series A Common Stock holders in 2024 and the first six months of 2025, though monthly dividends were declared for Series D Preferred Stock holders.
The company sold two commercial properties (Union Town Center and Research Parkway) in February 2025 for approximately $17.0 million, recognizing a net gain of approximately $4.2 million.
The loan on the Dakota Center property matured on July 6, 2024, and management agreed with the lender to sell the property to settle the non-recourse loan balance, recording an impairment charge of approximately $0.7 million as of September 30, 2024.
The lease for the largest tenant, Halliburton, at Shea Center II expired on December 31, 2022, resulting in a loss of approximately $536,080 in annual base rent, with 54% of the vacant space leased as of February 2025.
Total mortgage notes payable were $95.4 million as of June 30, 2025, down from $102.8 million as of December 31, 2024.

Sentiment

Score: 4

Explanation: While the company regained Nasdaq compliance and had some successful property sales/leases, the lack of common stock dividends, significant tenant loss at Shea Center II, impairment charges, and the poor outcome of the SPAC investment weigh negatively. The S-11 itself is for a resale, not a primary offering, and the potential proceeds from warrant exercise are not guaranteed. The overall picture suggests ongoing challenges in certain segments and a cautious approach to shareholder returns for common stock.

Positives

Regained compliance with Nasdaq's minimum stock price requirement on June 3, 2025, following a 1-for-10 reverse stock split.
Successfully sold two commercial properties (Union Town Center and Research Parkway) in February 2025 for approximately $17.0 million, realizing a net gain of approximately $4.2 million.
Secured a major lease with KLJ Engineering for Grand Pacific Center (33,296 sq ft, 122-month term, $532,736 starting annualized rent), leading to its removal from held-for-sale status.
Model home sales generated gains of approximately $0.6 million in H1 2025, $2.8 million in H1 2024, $3.4 million in FY 2024, and $3.2 million in FY 2023.
Management has finalized terms sheets to refinance loans on Genesis Plaza and One Park Centre, expected to close in August and September 2025.
Maintained REIT qualification for federal income tax purposes through December 31, 2024, and intends to continue doing so.
Experienced senior management team with over 75 combined years in public REIT and real estate experience.
The company's strategy of focusing on regionally dominant, overlooked/underserved markets aims for higher risk-adjusted returns and less competition.

Negatives

No dividends were paid to Series A Common Stock holders in 2024 and the first six months of 2025, with no decision on when quarterly common stock dividends will resume.
The non-recourse loan on the Dakota Center property matured on July 6, 2024, and management agreed to sell the property to settle the loan, resulting in an impairment charge of approximately $0.7 million as of September 30, 2024.
The lease for the largest tenant, Halliburton, at Shea Center II expired on December 31, 2022, leading to a loss of approximately $536,080 in annual base rent, with 46% of the 45,535 square foot space still vacant as of February 2025.
Recorded a $2.0 million impairment charge for One Park Centre during the year ended December 31, 2023.
The company sold its remaining shares of Conduit Pharmaceuticals Inc. common stock in May 2025 for only $13,989, after a 1-for-100 reverse stock split, indicating a significant loss on this investment.

Risks

Inability to comply with Nasdaq's continued listing requirements could lead to delisting, affecting market price, liquidity, and ability to raise capital.
Management's broad discretion over the use of proceeds from warrant exercises may not align with stockholder expectations or yield significant returns.
Ownership of taxable REIT subsidiaries is subject to restrictions, and transactions not conducted on an arm's length basis could incur a 100% penalty tax.
Inherent risks associated with real estate investments and the real estate industry, including significant competition, decreased demand for commercial space, and increased operating costs.
Failure by major tenants to make rental payments, early lease termination, non-renewal, or renewal on less favorable terms.
Challenging economic conditions affecting the company and its tenants may have a material adverse effect on financial condition and results of operations.
Inability to generate sufficient cash to service or retire debt obligations in a timely manner.
Inability to borrow or raise sufficient capital to maintain or expand the real estate investment portfolio.
Adverse changes in real estate financing markets, including potential increases in interest rates and borrowing costs.
Potential losses, including from adverse weather conditions, natural disasters, and title claims, may not be covered by insurance.
Inability to complete acquisitions or dispositions and, even if these transactions are completed, failure to successfully operate acquired properties or sell properties without incurring significant defeasance costs.
Reliance on third-party property managers to manage a substantial number of properties and brokers and/or agents to lease properties.
Decrease in supply and/or demand for single-family homes, inability to acquire additional model homes, and increased competition to buy such properties.
Failure to continue to qualify as a REIT could result in corporate-level taxation.
Adverse results of any legal proceedings.
Changes in laws, rules, and regulations affecting the business.
The possibility that if any of the banking institutions in which funds are deposited ultimately fails, the company may lose any amounts of deposits over federally insured levels.
The potential adverse effects of a resurgence of the COVID-19 pandemic or of new epidemics, pandemics, or public health crises and ensuing economic turmoil on financial condition, results of operations, cash flows, and performance.
Geographical clustering of commercial properties in Colorado and North Dakota makes the company susceptible to changing market conditions in these discrete geographic areas.
The company may be required to fund distributions from working capital, sell assets, or borrow funds to make cash distributions or make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities if cash flow is insufficient.
The Board of Directors has the sole discretion to determine the timing, form, and amount of any distributions, and there can be no assurance that distributions will be made or sustained.

Future Outlook

The company aims to maximize long-term stockholder value through active management, leasing, selective redevelopment of its existing commercial property portfolio, and selectively acquiring future properties in regionally dominant, overlooked/underserved markets. It plans to continue purchasing model homes at a 5% to 10% discount, anticipating unlevered pro forma returns over 8% during the holding period, with sales proceeds typically reinvested. The company expects to refinance significant portions of maturing mortgage notes payable or sell model home properties to repay debt. It intends to continue monthly dividends for Series D Preferred Stock holders but has not decided when to resume quarterly dividends for common stockholders. The 2025 Act makes the 20% deduction for REIT dividends permanent for tax years beginning after December 31, 2025.

Management Comments

Our management team is working to fill the 45,535 square foot space [at Shea Center II] and has leased approximately 54% of the space as of February 2025 and has reviewed various proposals for the remaining 46%.
Our management team's extensive public REIT and general real estate experience distinguishes us from many other public and private real estate companies.
We believe that our focus on attractive regionally dominant markets provides higher risk-adjusted returns than other public REITs and institutional investors which are focused on gateway markets and major metropolitan areas, as our target markets provide less competition resulting in higher initial returns and greater opportunities to enhance value through institutional quality asset management.
We continue to identify and execute these types and sizes of transactions efficiently, which we believe provides us an advantage over other institutional investors, including larger REITs that focus on larger properties or portfolios in more competitively marketed investment transactions.
We expect these relationships, as well as our ability to establish such relationships in new markets, to provide valuable access to an acquisition pipeline.
We believe that through professional environmental inspections and testing for asbestos, lead paint and other hazardous materials, coupled with a relatively conservative posture toward accepting known environmental risk, we minimize our exposure to potential liability associated with environmental hazards.
Management believes the final outcome of such matters [legal proceedings] will not have a material adverse effect on our financial position, results of operation or liquidity.

Industry Context

The company operates as a diversified REIT, focusing on office, industrial, retail, and model home properties. Its strategy of targeting 'overlooked and/or underserved markets' with acquisitions between $10 million and $30 million aims to reduce competition from larger REITs and institutional investors focused on 'gateway markets and major metropolitan areas.' This niche strategy suggests an attempt to find higher risk-adjusted returns and value-creation opportunities outside of highly competitive core markets. The model home segment provides a unique investment vehicle with triple-net leases, mitigating some operational risks associated with residential properties. The broader real estate market faces challenges such as potential increases in interest rates and borrowing costs, which could impact the company's ability to refinance debt and acquire new properties. The company's ability to maintain occupancy and rental rates is subject to local and regional economic conditions, especially given its geographical clustering in certain states.

Comparison to Industry Standards

The company's focus on 'regionally dominant markets' and acquisitions between $10 million and $30 million is a deliberate strategy to differentiate from 'larger, better capitalized buyers focused on core markets' and 'larger REITs that focus on larger properties or portfolios,' implying a deviation from typical large-cap REIT investment strategies.
The model home investment approach, seeking a 5% to 10% discount and anticipating unlevered pro forma returns over 8%, suggests a specific return target that can be compared to typical unlevered returns for other real estate asset classes or private equity real estate funds.
The company's competitive strengths highlight its experienced management team, with the CEO having co-founded two other REITs, which could be seen as a strong internal governance and operational asset compared to less experienced management teams in smaller REITs.
The company's ability to procure nine out of twelve acquisitions since 2014 either off-market or through historical broker relationships suggests a competitive advantage in deal sourcing compared to market-rate transactions, which often involve more competitive bidding processes.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Composition Authority	The Board of Directors has the authority to establish the number of directors, which may not be fewer than six nor more than eleven, unless approved by stockholders.	NA	Provides flexibility for board size but limits direct stockholder control over the exact number of directors.
Director Election and Removal	Directors are elected by a plurality of votes, with cumulative voting rights if notice is given. Directors can be removed with or without cause by a majority vote of common stockholders, with an exception for cumulative voting.	NA	Cumulative voting provides minority shareholders a greater chance to elect directors, while majority vote for removal offers a mechanism for accountability.
Vacancy Filling	Vacancies on the Board can be filled by a majority vote of the remaining directors, except for vacancies from removal, which require a majority vote of common stockholders.	NA	Ensures continuity of board operations but limits stockholder input on vacancies not resulting from removal.
Charter and Bylaw Amendments	Amendments to the charter require Board advice and a majority stockholder vote. Bylaws can be amended by the Board or a majority stockholder vote.	NA	Provides the Board with significant power over governance documents, potentially limiting stockholder influence on certain changes.
Business Combination Exemption	The Board of Directors has exempted business combinations from certain Maryland General Corporation Law (MGCL) supermajority vote requirements, provided the Board approves the combination.	NA	Could facilitate certain business combinations by lowering the approval threshold, potentially making the company more attractive for M&A but also reducing stockholder power to block such transactions.
Control Share Acquisition Exemption	Bylaws contain a provision exempting from the control share acquisition statute any acquisition of the company's stock.	NA	Removes a potential anti-takeover defense, making it easier for an acquirer to gain control without a supermajority stockholder vote on voting rights.
Classified Board Election	The company elected to be subject to the classified board provisions of Subtitle 8 of the MGCL.	NA	Staggers director terms, making it more difficult for a hostile bidder to gain control of the board in a single election cycle, thus serving as an anti-takeover measure.
Stockholder Action by Written Consent	Stockholder action may be taken without a meeting if a consent, setting forth the action so taken, is given by stockholders entitled to cast not less than the minimum number of votes that would be necessary to authorize or take the action at a stockholders meeting.	NA	Allows for efficient stockholder action without a physical meeting, but still requires a significant threshold of consent.
Advance Notice Requirements	Bylaws require advance notice for director nominations and new business proposals at annual or special stockholder meetings.	NA	Provides the company with adequate time to consider stockholder nominees and proposals, but can make it more challenging for stockholders to introduce unexpected items or challenge incumbent directors.
Director and Officer Liability Limitation	The company's charter limits the liability of directors and officers to the maximum extent permitted by Maryland law.	NA	Reduces personal financial risk for directors and officers, potentially aiding in attracting and retaining qualified individuals, but may limit recourse for stockholders in cases of certain misconduct.
Indemnification Agreements	The company has entered into indemnification agreements with each of its directors and executive officers.	NA	Provides additional protection for directors and executive officers against expenses and liabilities, further supporting their willingness to serve.

Legal Proceedings

The company is subject to various legal proceedings and claims that arise in the ordinary course of business.
Management believes the final outcome of such matters will not have a material adverse effect on the company's financial position, results of operation, or liquidity.

Related Party Transactions

Genesis Plaza is owned by two tenants-in-common, NetREIT Genesis and NetREIT Genessis II, with the company beneficially owning an aggregate of 92.0% and controlling both entities.
Mandolin is owned by NetREIT Palm Self-Storage LP, through its wholly owned subsidiary NetREIT Highland LLC, and the company is the sole general partner and owns 61.3% of NetREIT Palm Self-Storage LP.
The model home business operates through six limited partnerships (DMHI #202, #203, #204, #205, #206, #207) and one wholly-owned corporation (NetREIT Model Homes, Inc.), all of which the company controls.
The company provides management services to its limited partnerships through wholly-owned subsidiaries, NetREIT Advisors, LLC and Dubose Advisors LLC, receiving ongoing management fees, acquisition fees, and other fees.
The company has put and call options to require co-investors in DownREITs to exchange their interests for shares of Series A Common Stock.
The S-11 filing is for the resale of shares by Armistice Capital Master Fund Ltd., which was issued warrants in a private placement.

Stakeholder Impact

Shareholders (Series A Common Stock): No dividends in 2024 and H1 2025, and no clear timeline for resumption, negatively impacting income-focused investors. The reverse stock split aimed to maintain Nasdaq listing, which is positive for liquidity, but the underlying stock price performance remains a concern. The warrant amendment reduced the exercise price, potentially increasing dilution if exercised, but also making exercise more likely, which would bring cash to the company.
Shareholders (Series D Preferred Stock): Continue to receive monthly cumulative cash dividends at 9.375% per annum, providing stable income.
Warrant Holders (Armistice Capital Master Fund Ltd.): The warrant amendment significantly reduced the exercise price and extended the term, making the warrants more valuable and exercise more probable, facilitating their ability to realize value.
Lenders: The company is actively managing maturing debt, including refinancing and selling properties, which is important for maintaining creditworthiness. The non-recourse nature of some loans limits the company's direct exposure.
Tenants: The company's strategy of enhancing properties and actively managing leases aims to attract and retain tenants, but the loss of a major tenant (Halliburton) highlights ongoing leasing challenges in some properties.
Employees: The company reduced office space and has 14 full-time employees, indicating a lean operational structure.

Next Steps

Cause the registration statement to go effective within 60 days of the closing of the registered direct offering (related to the warrant amendment).
Refinance loans on Genesis Plaza and One Park Centre, expected to close in August and September 2025.
Explore options for the Shea Center II loan, which matures in January 2026.
Continue working to fill the remaining 46% vacant space at Shea Center II.
Continue to actively manage the portfolio to maximize opportunities to recycle capital.
Continue to acquire high-quality commercial properties in target markets.
Continue to purchase model homes in the move-up and first-time homebuyer markets.
Continue to pay monthly dividends to holders of Series D Preferred Stock.
Finalize plans for maturing loans, including refinancing, restructuring, selling properties, or surrendering properties to lenders.
Monitor the value of investments to ensure compliance with REIT asset test limitations.
Structure hedging transactions to avoid jeopardizing REIT status.
Make timely distributions sufficient to satisfy annual REIT distribution requirements and minimize federal corporate income tax obligations.

Key Dates

Date	Description
July 14, 2021	Original Placement of Common Stock Warrants.
December 7, 2022	Signed major lease with KLJ Engineering for Grand Pacific Center.
December 31, 2022	Halliburton lease at Shea Center II expired.
May 5, 2023	Refinanced mortgage loan on Grand Pacific Center property.
December 2023	KLJ Engineering moved into Grand Pacific Center.
January 5, 2024	Employment agreement with Jack Heilbron.
February 9, 2024	Employment agreements with Ed Bentzen, Gary Katz, Steven Hightower.
February 28, 2024	Rent commenced for KLJ Engineering at Grand Pacific Center.
March 22, 2024	Articles Supplementary relating to election to be subject to Section 3-803 of the Maryland General Corporation Law.
May 9, 2024	Cooperation Agreement by and between Presidio Property Trust, Inc. and Zuma Capital Management, LLC.
June 7, 2024	Received written notice from Nasdaq notifying failure to meet $1.00 per share minimum bid price requirement.
June 20, 2024	Refinanced the mortgage loan on West Fargo Industrial properties.
July 6, 2024	Non-recourse loan on the Dakota Center property matured.
July 2024	Completed a minority ownership conversion option in NetREIT Genesis II.
August 22, 2024	Letter of Baker Tilly US, LLP to the Securities and Exchange Commission.
September 30, 2024	Recorded an impairment charge of approximately $0.7 million for the Dakota Center property.
October 2024	Management agreed with the lender to sell the Dakota Center property to settle the loan balance.
December 4, 2024	End of initial 180 calendar day compliance period for Nasdaq minimum bid price requirement.
December 5, 2024	Nasdaq notified eligibility for an additional 180 calendar day period to regain compliance.
December 2024	Lender agreed on the broker the company would use to sell the Dakota Center property.
December 31, 2024	Dakota Center property was included in real estate assets held for sale, net on the consolidated balance sheet.
January 6, 2025	Current Report on Form 8-K filed.
January 22, 2025	Conduit Pharmaceuticals Inc. filed a certificate of amendment to effectuate a 1-for-100 reverse stock split.
January 24, 2025	Conduit Pharmaceuticals Inc. reverse stock split became effective.
January 27, 2025	New CDT shares began trading on The Nasdaq Global Market on a Reverse Stock Split-adjusted basis.
February 2025	Leased approximately 54% of the vacant space at Shea Center II. Sold Union Town Center and Research Parkway.
March 14, 2025	Current Report on Form 8-K filed.
April 7, 2025	Current Report on Form 8-K filed.
April 8, 2025	Current Report on Form 8-K/A filed.
April 16, 2025	Current Report on Form 8-K filed.
April 17, 2025	Definitive Proxy Statement for the 2025 Annual Meeting of the Stockholders filed.
May 1, 2025	Board of Directors determined to effect the 1-for-10 reverse stock split.
May 7, 2025	Current Report on Form 8-K filed.
May 14, 2025	Quarterly Report for the Period ending March 31, 2025, filed.
May 16, 2025	Articles of Amendment to effect the Reverse Split filed with the State Department of Assessments and Taxation of Maryland. Current Report on Form 8-K filed.
May 19, 2025	Implementation of the Reverse Split took effect in the public markets.
May 2025	Sold all remaining shares of CDT common stock for $13,989.
June 2, 2025	Current Report on Form 8-K filed.
June 3, 2025	Received written notice from Nasdaq notifying regaining compliance with Nasdaq's minimum stock price requirement. Current Report on Form 8-K filed.
June 5, 2025	Letter of Moss Adams LLP to the Securities and Exchange Commission. Current Report on Form 8-K filed.
June 30, 2025	Portfolio snapshot date for commercial and model home properties.
July 9, 2025	Current Report on Form 8-K filed.
July 14, 2025	Entered into the 2025 Amendment, which amended the Common Stock Warrants. Form of Securities Purchase Agreement dated.
July 15, 2025	Current Report on Form 8-K filed.
August 11, 2025	Date for outstanding shares count of Series A Common Stock and Series D Preferred Stock.
August 14, 2025	Date of this prospectus. Quarterly Report for the Period ending June 30, 2025, filed.
August 2025	Expected closing for refinancing the loan on Genesis Plaza.
September 2025	Expected closing for refinancing the loan on One Park Centre.
January 2026	Shea Center II loan matures.
July 16, 2026	Original termination date of Common Stock Warrants.
June 10, 2028	Interest rate subject to reset for Grand Pacific Center refinanced loan.
July 16, 2030	Extended termination date of Common Stock Warrants.

Recommendation

hold

The company has taken steps to address Nasdaq compliance and has shown some success in property sales and new leases (Grand Pacific Center). The warrant amendment, while potentially dilutive, also makes it more likely the company will receive cash from exercises. However, the suspension of common stock dividends, the impairment of Dakota Center, and the significant vacancy at Shea Center II indicate ongoing operational and financial challenges. The company's strategy of focusing on overlooked markets and active asset management has potential, but current performance metrics for common shareholders are weak. A 'hold' recommendation reflects the mixed signals: some positive strategic actions and a stable preferred dividend, but also significant concerns regarding common stock returns and asset performance in certain areas. Investors should monitor the refinancing efforts and progress in filling vacant spaces.

Keywords

REIT, Real Estate Investment Trust, Commercial Real Estate, Office Properties, Industrial Properties, Retail Properties, Model Homes, Triple-Net Lease, SEC Filing, S-11, Warrants, Stock Split, Nasdaq Compliance, Property Acquisitions, Property Dispositions, Debt Refinancing, Dividends, Risk Factors, Presidio Property Trust

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