-$2.76
-$1.07
bear -$2.76
base -$1.62
bull -$1.07
margin of safety $0.43
market price* $2.58
Business condition attached to the margin of safety
Before-interest business cash flow (after all corporate overhead, stock compensation and capital spending) of at least $17 million a year for two consecutive fiscal years, with total debt and preferred stock no higher than the roughly $230 million owed at mid-2026, and the 15% Line of Credit fully repaid.
What the business is. Mobile Infrastructure owns parking garages and surface lots in downtown districts across the United States. At the end of 2025 it owned 36 facilities with about 13,500 spaces in 19 markets, including Cincinnati, Cleveland, Detroit, Chicago, Houston, Fort Worth, Oklahoma City, Nashville, Milwaukee, Minneapolis, St. Louis, Denver and Honolulu. In 2024 most properties moved from leases to management agreements run by operators such as SP+, so the company now reports gross parking revenue (about $35 million in 2025) and pays the operating costs itself. The company became public through a SPAC merger in August 2023, so our history starts in 2022 and we judge the current business mainly on 2024-2025. What the business earns. We measure cash earnings as operating cash flow, less working-capital swings, stock compensation ($3.1 million in 2025) and upkeep capital spending. After interest, those earnings were negative every year: about -$11.2 million in 2022, -$10.8 million in 2023, -$3.2 million in 2024 and -$8.4 million in 2025. That is roughly -$0.08 to -$0.41 per share, counting the Operating Company units held by outsiders, since they share in the same cash flow. Before interest, the business produced about $9.2 million in 2024 and about $10.5 million in 2025. The 2025 figure excludes $2.6 million of one-time prepayment penalties and legal fees from the October 2025 refinancing. It also counts the 15% Line of Credit interest that is being accrued rather than paid. The properties themselves produce roughly $19 million a year of operating income, but about $8 million a year of corporate costs, including stock compensation, take a large share of it. Since late 2025 the company has sold a garage in Lubbock, Texas for $11 million, lots in Indianapolis and Denver, and about $15 million more of property in the first half of 2026, mostly at or near book value. We therefore set the ongoing level at about $9.5 million a year before interest. The first half of 2026 ($5.1 million, against $4.7 million a year earlier) supports that level despite the sales. We credit no growth. The company has no contracted rate increases, it has been shrinking rather than steadily adding properties, and acquisitions it calls a pipeline are not yet done. In 2025 the before-interest figure rose about 14% on a normalized basis. The base case starts flat at year 1, which is below that rate, because the assets sold since then no longer contribute. The debt problem. The company owes about $211 million of principal. That includes $99.6 million of 4.15% securitized notes due to be repaid in October 2030, with interest rising if they are not. It also includes a $75 million loan at a fixed 7.755% to 2034, a Line of Credit at 15% ($22.2 million at June 30, 2026, plus about $6 million of accrued interest owed at maturity), and about $20 million of other property loans, including roughly $20 million due in 2027. About $14 million of Series A and Series 1 preferred stock ranks ahead of common shareholders. Interest runs about $15-16 million a year, well above the roughly $9.5 million the business earns before interest. The gap has been covered by selling properties and borrowing. The 2025 annual report said the Line of Credit maturity raised substantial doubt about the company's ability to continue. Management concluded that its plan to extend the line and sell properties removed that doubt. The line was still outstanding and classed as due within a year at June 30, 2026, and the sales program is under way. The company also used the 15% Line of Credit to repurchase its own shares, which is expensive money for that purpose. The cases. We value each case as the business first and then subtract the debt. Net debt is about $230 million after adding the preferred stock and the accrued Line of Credit interest, subtracting cash, and adjusting for loans that cost more or less than a normal rate. Cash flows are discounted at 6% over the roughly 40-year remaining life of the structures, plus the land ($143 million at cost) at the end.
Base case: before-interest cash flow holds at about $9.5 million a year with no growth. The business is worth about $157 million against $230 million owed, a shortfall of about $74 million, or about -$1.62 per share.
Bear case: upkeep spending rises back to the 2022 level of about $2.5 million a year from today's unusually low $0.5-1.1 million on ageing garages, and cash flow settles near $7.5 million. The securitized notes are refinanced in 2030 at about 8%, similar to the company's 2024 CMBS rate, and the Line of Credit stays outstanding at 15% for another year. The business is worth about $127 million against about $252 million owed, a shortfall of about $126 million, or about -$2.76 per share.
Bull case: the first-half 2026 improvement holds and cash flow reaches about $11 million a year, and property sales near book value pay off the 15% Line of Credit quickly. The business is worth about $180 million against about $228 million owed, a shortfall of about $49 million, or about -$1.07 per share. In all three cases the company appears to owe more than its cash flow is worth. What would make this wrong. The parking properties would likely fetch more in a private sale than their cash flow is worth to shareholders today, because an acquirer would not carry this company's public-company overhead. The company's own sales have come in near book value. A sale of the whole portfolio, or a large permanent cut in corporate costs, could leave something for common shareholders. Neither is announced or evidenced in the filings, so neither is in our numbers. Growth in downtown parking demand or rates would also help, but the company has not shown it on a same-property basis. The analysis would be revisited if before-interest cash flow reached roughly $17 million a year, enough to cover interest, for two straight years without more borrowing. Accounting notes. Share counts include about 4.3 million Operating Company units and 1.8 million LTIP units held by others, about 45.5 million in total. The 2.8 million performance units, which vest only at share-price targets, and 2.55 million warrants are excluded. The $11.7 million discount on the securitized notes is counted at face value, which is the amount owed at repayment. Their below-market 4.15% coupon lowers the debt figure by about $6.5 million. The 7.755% loan and the 15% line raise it by about $10 million.