Presidio Property Trust is no longer behaving like a conventional diversified REIT. The San Diego landlord is selling or surrendering stressed office assets, has halted cash on the preferred layer, and is now asking that preferred to convert into common. The June quarter is the first clean look at a smaller book after Dakota Center left the portfolio and Shea Center II moved into foreclosure. Common equity is a residual claim sitting under a preferred stack whose coupon has already stopped.
Second-quarter revenue fell to $3.8 million as sold buildings dropped out of the rent roll. A non-cash impairment near $3.0 million then erased most of the operating contribution. Cumulative preferred arrears reached about $1.1 million after six unpaid months. The remaining engine is a model-home leaseback book concentrated in a single homebuilder, plus a thinner commercial stub scattered across a handful of regional markets. That mix can throw off rent, but it has not covered corporate overhead, preferred economics, and mortgage service at the same time.
The exchange offer that opened in September asks preferred holders to take five and a half common shares for each preferred share. Wide acceptance would retire a liquidation claim near $24 million and flood the common float. The next several months resolve whether preferred holders accept that recap, whether remaining mortgages refinance on the contracted book, and whether the model-home franchise can buy again after a half-year with no acquisitions.