Presidio Property Trust, Inc. Q2 FY2021 earnings call

• Jack Heilbron mentioned that in June 2021, the company raised $23 million of gross proceeds by selling a new series of preferred shares and in July raised an additional $10 million of gross proceeds by selling additional common shares and warrants. The company hopes to announce acquisitions soon with the recently raised capital.
• Adam Sragovicz noted that core FFO was higher in the first half of 2021 compared to the first half of 2020 due to significantly lower interest expense. In the second quarter, 97% of consolidated rent was collected, with Model Homes and Office Properties at 100%, Industrial at 85%, and Retail at 81%.
• Gary Katz reported that in the first half of 2021, 29 leases covering about 1,100 square feet were executed, with a third being new tenants and the rest renewals/extensions. Three Colorado office properties and one California retail property were sold in 2021 for $33 million, and one California retail center is currently on the market.
• Larry Dubose stated that Model Homes markets performed well with 100% billed rent collection in the first half of 2021, sold 32 model homes for $15.1 million with a gain over $2 million, and acquired six model home properties at $2.9 million.

For the second quarter of 2021, core FFO in the first half of 2021 was $1.7 million versus $1.5 million in the first half of 2020. In the second quarter, Model Homes and Office Properties saw 100% of budgeted revenue collected and accounted for 83% of the quarter's rents. Industrial properties had 85% of budgeted rent collected, and retail had 81% of billed rents. The Model Homes and Office Properties segments performed strongly, with Model Homes collecting 100% of billed rents in the first half of 2021 and selling 32 model homes for approximately $15.1 million with a gain of over $2 million, while acquiring six model home properties at a purchase price of approximately $2.9 million.

• Jack Heilbron anticipated that the raised capital would be deployed through the remainder of the third quarter and into the fourth quarter. Gary Katz mentioned a property in escrow to close next week and a pipeline of assets to hit investment targets within the next quarter or so. Jack also noted the company filed a shelf offering (S-3) for up to $200 million of varied capital, expecting to access that amount between $50 million and $200 million depending on market conditions and business opportunities.

• Potential impact of another lockdown, though Jack Heilbron and Gary Katz noted previous lockdowns had limited effect on the company, especially given the diversified portfolio locations like Colorado and North Dakota vs California.
• Market conditions affecting the company's ability to raise capital and deploy it effectively as planned.

Q: All the money that's been raised, when do you expect that you'll be deploying it by purchasing new properties?

A: Jack Heilbron anticipated it would probably take through the remainder of the third quarter and into the fourth quarter before the money is put to use. Gary Katz added there's a property in escrow to close next week and a pipeline of assets to hit investment targets within the next quarter or so.

Q: How might another lock affect the properties?

A: Jack Heilbron said it depends on the type of lockdown; with delta variant, no lockdowns yet but some slowing with mask mandates. Gary Katz added the bulk of properties are in Colorado and North Dakota vs California, so previous lockdowns were minimally effective and they feel they'd survive another similarly.

Q: Do you have plans to raise more capital what can we expect?

A: Jack Heilbron stated as a REIT, they goal to continually raise capital and filed a shelf offering for up to $200 million. Adam Sragovicz added the shelf is effective from April 2021 to April 2024 and they'd access that amount between $50 million and $200 million depending on market conditions and business opportunities.

Q: Are there any major mergers or acquisition that would affect the bottom-line?

A: Jack Heilbron said they are always open to the right merger or combination but have no talks ongoing, nothing planned and nothing in the pipeline.