SQFT WACC - Weighted Average Cost of Capital
The WACC of Presidio Property Trust Inc (SQFT) is 11.9%.
| Range | Selected | |
| Cost of equity | 7.3% - 10.4% | 8.85% |
| Tax rate | 3.0% - 4.5% | 3.75% |
| Cost of debt | 4.5% - 20.9% | 12.7% |
| WACC | 4.7% - 19.1% | 11.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.75 | 0.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 10.4% |
| Tax rate | 3.0% | 4.5% |
| Debt/Equity ratio | 10.97 | 10.97 |
| Cost of debt | 4.5% | 20.9% |
| After-tax WACC | 4.7% | 19.1% |
| Selected WACC | 11.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SQFT | Presidio Property Trust Inc | 10.97 | 0.64 | 0.05 |
| BELP | Belpointe Reit Inc | 0.3 | 0.93 | 0.72 |
| FCD.UN.V | Firm Capital Property Trust | 1.1 | 1.25 | 0.61 |
| FREVS | First Real Estate Investment Trust of New Jersey | 1.03 | -0.02 | -0.01 |
| FRO.UN.V | Fronsac REIT | 0.83 | 0.25 | 0.14 |
| GNL | Global Net Lease Inc | 2.44 | 0.16 | 0.05 |
| MDRR | Medalist Diversified Reit Inc | 2.57 | 0.26 | 0.08 |
| MR.UN.TO | Melcor Real Estate Investment Trust | 5.56 | 0.62 | 0.1 |
| MRT.UN.TO | Morguard Real Estate Investment Trust | 3.37 | 0.22 | 0.05 |
| PINE | Alpine Income Property Trust Inc | 1.44 | -0.05 | -0.02 |
| Low | High | |
| Unlevered beta | 0.05 | 0.08 |
| Relevered beta | 0.63 | 0.99 |
| Adjusted relevered beta | 0.75 | 0.99 |
SQFT's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for SQFT:
cost_of_equity (8.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.75) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.