Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
     FORM10-Q
(Mark One):
ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017March 31, 2023
OR
o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                             to                            
Commission File Number 1-13610
CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION
(Exact name of registrant as specified in its charter)
Maryland
75-6446078
(State or other jurisdictionOther Jurisdiction of
incorporation Incorporation or organization)
Organization)
75-6446078
(I.R.S. Employer
Identification No.)
17950 Preston Road,
Suite 600,Dallas, TX Texas75252
(Address of principal executive offices)Principal Executive Offices)(Zip Code)
(972)
(972) 349-3200
(Registrant'sRegistrant’s telephone number)number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Common Stock, $0.001 Par ValueCMCTNasdaq Global Market
Common Stock, $0.001 Par ValueCMCTTel Aviv Stock Exchange
(Title of each class)(Trading symbol)(Name of each exchange on which registered)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ý    NO oYes ☒ No ☐
Indicate by check mark whether the Registrantregistrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrantregistrant was required to submit and post such files). YES ý    NO oYes ☒  No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large“large accelerated filer," "accelerated” “accelerated filer," "smaller” “smaller reporting company,"” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
☐
Accelerated filero
☐
Non-accelerated filero☒
Smaller reporting company ý
☒
Emerging growth company o(Do not check if a
smaller reporting company)☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o    NO ýYes ☐  No ☒
As of November 3, 2017,May 1, 2023, the Registrant had outstanding 57,875,84822,737,853 shares of common stock, par value $0.001 per share.



CIM COMMERCIAL
Table of Contents
CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
INDEX
PAGE NO.
PART I.Financial Information
Financial Statements
1
2
PAGE NO.
PART I.Financial Information
Financial Statements
Consolidated Balance Sheets—September 30, 2017 and December 31, 2016 (Unaudited)
2
Consolidated Statements of Operations—Equity — Three and Nine Months Ended September 30, 2017March 31, 2023 and 2016 (Unaudited)2022
3
4
Consolidated Statements of Equity—Nine Months Ended September 30, 2017 and 2016 (Unaudited)
5
Consolidated Statements of Cash Flows—NineFlows — Three Months Ended September 30, 2017March 31, 2023 and 2016 (Unaudited)2022
64
86
3837
5649
5650
PART II.Other Information
5751
5751
5751
5751
5751
5751
5852




Table of Contents
PART I
Financial Information

Item 1.
Financial Statements


CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share data)amounts) (Unaudited)
 March 31, 2023December 31, 2022
ASSETS  
Investments in real estate, net$715,850 $502,006 
Investments in unconsolidated entities28,375 12,381 
Cash and cash equivalents22,491 46,190 
Restricted cash24,342 11,290 
Loans receivable, net (Note 5)62,442 62,547 
Accounts receivable, net7,982 3,780 
Deferred rent receivable and charges, net33,894 37,543 
Other intangible assets, net27,591 4,461 
Other assets34,589 10,050 
TOTAL ASSETS$957,556 $690,248 
LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY  
LIABILITIES:  
Debt, net$520,748 $184,267 
Accounts payable and accrued expenses31,445 107,220 
Intangible liabilities, net234 20 
Due to related parties3,877 3,155 
Other liabilities15,737 17,856 
Total liabilities572,041 312,518 
COMMITMENTS AND CONTINGENCIES (Note 15)
REDEEMABLE PREFERRED STOCK: Series A cumulative redeemable preferred stock, $0.001 par value; 35,246,719 shares authorized; 302,136 and 302,136 shares issued and outstanding, respectively, as of March 31, 2023 and 693,741 and 693,741 shares issued and outstanding, respectively, as of December 31, 2022; liquidation preference of $25.00 per share, subject to adjustment6,833 15,697 
EQUITY:  
Series A cumulative redeemable preferred stock, $0.001 par value; 35,246,719 shares authorized; 8,518,202 and 7,764,921 shares issued and outstanding, respectively, as of March 31, 2023 and 8,126,597 and 7,565,349 shares issued and outstanding, respectively, as of December 31, 2022; liquidation preference of $25.00 per share, subject to adjustment194,024 189,048 
Series A1 cumulative redeemable preferred stock, $0.001 par value; 27,977,200 shares authorized; 6,998,510 and 6,975,710 shares issued and outstanding, respectively, as of March 31, 2023 and 5,966,077 and 5,956,147 shares issued and outstanding, respectively, as of December 31, 2022; liquidation preference of $25.00 per share, subject to adjustment172,764 147,514 
Series D cumulative redeemable preferred stock, $0.001 par value; 26,992,000 shares authorized; 56,857 and 48,857 shares issued and outstanding, respectively, as of March 31, 2023 and 56,857 and 48,857 shares issued and outstanding, respectively, as of December 31, 2022; liquidation preference of $25.00 per share, subject to adjustment1,200 1,200 
Common stock, $0.001 par value; 900,000,000 shares authorized; 22,737,853 shares issued and outstanding as of March 31, 2023 and 22,737,853 shares issued and outstanding as of December 31, 2022.23 23 
Additional paid-in capital859,029 861,721 
Distributions in excess of earnings(853,108)(837,846)
Total stockholders’ equity373,932 361,660 
Noncontrolling interests4,750 373 
Total equity378,682 362,033 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY$957,556 $690,248 
  September 30, 2017 December 31, 2016
  (Unaudited)
ASSETS  
  
Investments in real estate, net $941,237
 $1,606,942
Cash and cash equivalents 252,955
 144,449
Restricted cash 25,375
 32,160
Accounts receivable, net 15,899
 13,086
Deferred rent receivable and charges, net 86,994
 116,354
Other intangible assets, net 5,345
 17,623
Other assets 89,602
 92,270
Assets held for sale, net 173,897
 —
TOTAL ASSETS $1,591,304
 $2,022,884
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY  
  
LIABILITIES:  
  
Debt, net $780,016
 $967,886
Accounts payable and accrued expenses 23,720
 39,155
Intangible liabilities, net 907
 3,576
Due to related parties 8,668
 10,196
Other liabilities 16,170
 34,056
Liabilities associated with assets held for sale, net 36,948
 —
Total liabilities 866,429
 1,054,869
COMMITMENTS AND CONTINGENCIES (Note 16) 

 

REDEEMABLE PREFERRED STOCK: Series A, $0.001 par value; 36,000,000 shares authorized; 568,921 and 61,435 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively; liquidation preference of $25.00 per share 12,976
 1,426
EQUITY:  
  
Common stock, $0.001 par value; 900,000,000 shares authorized; 57,875,848 and 84,048,081 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively 58
 84
Additional paid-in capital 1,077,217
 1,566,073
Accumulated other comprehensive income (loss) 936
 (509)
Distributions in excess of earnings (367,197) (599,971)
Total stockholders' equity 711,014
 965,677
Noncontrolling interests 885
 912
Total equity 711,899
 966,589
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY $1,591,304
 $2,022,884

The accompanying notes are an integral part of these consolidated financial statements.

1
CIM COMMERCIAL
Table of Contents
CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)amounts) (Unaudited)
  Three Months Ended September 30, Nine Months Ended
September 30,
  2017 2016 2017 2016
  (Unaudited)
REVENUES:  
  
  
  
Rental and other property income $45,048
 $57,414
 $161,813
 $181,886
Expense reimbursements 4,717
 3,884
 10,273
 10,128
Interest and other income 5,619
 3,034
 11,546
 9,295
  55,384
 64,332
 183,632
 201,309
EXPENSES:  
  
  
  
Rental and other property operating 26,058
 31,723
 76,267
 95,300
Asset management and other fees to related parties           6,896
 8,496
 23,459
 25,503
Interest 9,359
 10,276
 28,645
 24,386
General and administrative 1,342
 2,226
 4,668
 6,299
Transaction costs (Note 16) 242
 53
 11,870
 320
Depreciation and amortization 13,472
 17,724
 45,464
 54,262
Impairment of real estate (Note 3) —
 —
 13,100
 —
  57,369
 70,498
 203,473
 206,070
Gain on sale of real estate (Note 3) 74,715
 14,927
 378,732
 39,666
INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES 72,730
 8,761
 358,891
 34,905
   Provision for income taxes 339
 379
 1,193
 1,040
NET INCOME FROM CONTINUING OPERATIONS 72,391
 8,382
 357,698
 33,865
DISCONTINUED OPERATIONS:  
  
  
  
Income from operations of assets held for sale (Note 7) —
 703
 —
 3,061
NET INCOME FROM DISCONTINUED OPERATIONS —
 703
 —
 3,061
NET INCOME 72,391
 9,085
 357,698
 36,926
Net loss (income) attributable to noncontrolling interests 4
 3
 (10) (9)
NET INCOME ATTRIBUTABLE TO THE COMPANY 72,395
 9,088
 357,688
 36,917
Redeemable preferred stock dividends (Note 11) (138) —
 (241) —
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $72,257
 $9,088
 $357,447
 $36,917
BASIC AND DILUTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS PER SHARE:  
  
  
  
Continuing operations $1.25
 $0.10
 $4.86
 $0.36
Discontinued operations $—
 $0.01
 $—
 $0.03
Net income $1.25
 $0.10
 $4.86
 $0.39
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:  
  
  
  
Basic 57,876
 87,045
 73,503
 93,772
Diluted 57,876
 87,045
 73,503
 93,772
 Three Months Ended March 31,
 20232022
REVENUES:  
Rental and other property income$14,886 $14,096 
Hotel income10,923 7,404 
Interest and other income3,103 3,282 
Total Revenues28,912 24,782 
EXPENSES:  
Rental and other property operating15,225 11,492 
Asset management and other fees to related parties          720 921 
Expense reimbursements to related parties—corporate528 422 
Expense reimbursements to related parties—lending segment608 469 
Interest6,236 2,170 
General and administrative1,925 1,815 
Transaction-related costs3,360 — 
Depreciation and amortization9,502 5,004 
Total Expenses38,104 22,293 
Income from unconsolidated entities768 120 
Gain on sale of real estate (Note 3)1,104 — 
(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES(7,320)2,609 
Provision for income taxes256 307 
NET (LOSS) INCOME(7,576)2,302 
Net loss (income) attributable to noncontrolling interests625 (5)
NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY(6,951)2,297 
Redeemable preferred stock dividends declared or accumulated (Note 11)(5,391)(5,018)
Redeemable preferred stock deemed dividends (Note 11)— (15)
Redeemable preferred stock redemptions (Note 11)(373)(75)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS$(12,715)$(2,811)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE:  
Basic$(0.56)$(0.12)
Diluted$(0.56)$(0.12)
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:  
Basic22,707 23,349 
Diluted22,707 23,351 
   
The accompanying notes are an integral part of these consolidated financial statements.

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(In thousands)
2
  Three Months Ended September 30, Nine Months Ended
September 30,
  2017 2016 2017 2016
  (Unaudited)
NET INCOME $72,391
 $9,085
 $357,698
 $36,926
Other comprehensive income (loss): cash flow hedges 333
 3,272
 1,445
 (7,098)
COMPREHENSIVE INCOME 72,724
 12,357
 359,143
 29,828
Comprehensive loss (income) attributable to noncontrolling interests 4
 3
 (10) (9)
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY $72,728
 $12,360
 $359,133
 $29,819
Table of Contents
The accompanying notes are an integral part of these consolidated financial statements.


CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Equity
(In thousands, except share and per share data)amounts) (Unaudited)
 Three Months Ended March 31, 2023
Common StockPreferred Stock
 SharesPar
Value		SharesPar
Value		Additional
Paid-in
Capital		Distributions
in Excess of Earnings		Total Stockholders’ EquityNon-controlling
Interests		Total Equity
Balances, December 31, 202222,737,853 $23 13,570,353 $337,762 $861,721 $(837,846)$361,660 $373 $362,033 
Cumulative-effect adjustment
upon adoption of ASU 2016-13 (Note 2)
— — — — — (619)(619)— (619)
Adjustment to noncontrolling interests— — — — — — — 5,002 5,002 
Stock based compensation expense— — — — 55 — 55 — 55 
Common dividends ($0.085 per share)— — — — — (1,933)(1,933)— (1,933)
Issuance of Series A1 Preferred Stock— — 1,032,433 25,569 (2,291)— 23,278 — 23,278 
Redemption of Series A1 Preferred Stock— — (12,870)(319)28 (11)(302)— (302)
Dividends to holders of Series A1 Preferred Stock ($0.39563 per share)— — — — — (2,559)(2,559)— (2,559)
Dividends to holders of Series D Preferred Stock ($0.35313 per share)— — — — — (17)(17)— (17)
Reclassification of Series A Preferred stock to permanent equity— — 389,325 9,699 (887)— 8,812 — 8,812 
Redemption of Series A Preferred Stock— — (189,753)(4,723)403 (362)(4,682)— (4,682)
Dividends to holders of Series A Preferred Stock ($0.34375 per share)— — — — — (2,810)(2,810)— (2,810)
Net loss— — — — — (6,951)(6,951)(625)(7,576)
Balances, March 31, 202322,737,853 $23 14,789,488 $367,988 $859,029 $(853,108)$373,932 $4,750 $378,682 
  Nine Months Ended September 30, 2017
  Common
Stock
Outstanding		 Common
Stock
Par Value		 Additional
Paid-in
Capital		 Accumulated
Other
Comprehensive
Income (Loss)		 Distributions
in Excess of Earnings		 Noncontrolling
Interests		 Total
Equity
  (Unaudited)
Balances, December 31, 2016 84,048,081
 $84
 $1,566,073
 $(509) $(599,971) $912
 $966,589
Distributions to noncontrolling interests —
 —
 —
 —
 —
 (37) (37)
Stock-based compensation expense 9,585
 —
 116
 —
 —
 —
 116
Share repurchase (26,181,818) (26) (489,027) —
 (86,947) —
 (576,000)
Special cash dividends paid to certain common stockholders ($2.26 per share) (Note 12) —
 —
 —
 —
 (4,872) —
 (4,872)
Common dividends ($0.46875 per share) —
 —
 —
 —
 (32,854) —
 (32,854)
Issuance of Warrants —
 —
 55
 —
 —
 —
 55
Dividends to holders of Series A Preferred Stock ($1.03125 per share) —
 —
 —
 —
 (241) —
 (241)
Other comprehensive income (loss) —
 —
 —
 1,445
 —
 —
 1,445
Net income —
 —
 —
 —
 357,688
 10
 357,698
Balances, September 30, 2017 57,875,848
 $58
 $1,077,217
 $936
 $(367,197) $885
 $711,899

  Nine Months Ended September 30, 2016
  Common
Stock
Outstanding		 Common
Stock
Par Value		 Additional
Paid-in
Capital		 
Accumulated
Other
Comprehensive
Income (Loss)
 Distributions
in Excess of
Earnings		 Noncontrolling
Interests		 Total
Equity
  (Unaudited)
Balances, December 31, 2015 97,589,598
 $98
 $1,820,451
 $(2,519) $(521,620) $937
 $1,297,347
Distributions to noncontrolling interests —
 —
 —
 —
 —
 (36) (36)
Stock-based compensation expense 10,176
 —
 114
 —
 —
 —
 114
Issuance of shares pursuant to employment agreements 76,423
 —
 —
 —
 —
 —
 —
Share repurchases (13,628,116) (14) (254,547) —
 (35,573) —
 (290,134)
Common dividends ($0.65625 per share) —
 —
 —
 —
 (58,930) —
 (58,930)
Other comprehensive income (loss) —
 —
 —
 (7,098) —
 —
 (7,098)
Net income —
 —
 —
 —
 36,917
 9
 36,926
Balances, September 30, 2016 84,048,081
 $84
 $1,566,018
 $(9,617) $(579,206) $910
 $978,189
 Three Months Ended March 31, 2022
Common StockPreferred Stock
 SharesPar
Value		SharesPar
Value		Additional
Paid-in
Capital		Distributions
in Excess of Earnings		Total Stockholders’ EquityNon-controlling
Interests		Total Equity
Balances, December 31, 202123,369,331 $24 11,715,354 $310,661 $866,746 $(804,227)$373,204 $345 $373,549 
Stock based compensation expense— — — — 55 — 55 — 55 
Common dividends ($0.085 per share)— — — — — (1,986)(1,986)— (1,986)
Dividends to holders of Series A Preferred Stock ($0.34375 per share)— — — — — (2,896)(2,896)— (2,896)
Dividends to holders of Series D Preferred Stock ($0.35313 per share)— — — — — (21)(21)— (21)
Reclassification of Series A Preferred stock to permanent equity— — 329,921 8,304 (637)— 7,667 — 7,667 
Redeemable preferred stock accretion— — — — — (15)(15)— (15)
Redemption of Series A Preferred Stock— — (49,341)(1,228)108 (75)(1,195)— (1,195)
Net income— — — — — 2,297 2,297 5 2,302 
Balances, March 31, 202223,369,331 $24 11,995,934 $317,737 $866,272 $(806,923)$377,110 $350 $377,460 
The accompanying notes are an integral part of these consolidated financial statements.

3

Table of Contents
CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
  Nine Months Ended
September 30,
  2017 2016
  (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:  
  
Net income $357,698
 $36,926
Adjustments to reconcile net income to net cash provided by operating activities:  
  
Deferred rent and amortization of intangible assets, liabilities and lease inducements (2,528) (4,263)
Depreciation and amortization 45,464
 54,262
Transfer of right to collect supplemental real estate tax reimbursements (5,097) —
Gain on sale of real estate (378,732) (39,666)
Impairment of real estate 13,100
 —
Straight line rent, below-market ground lease and amortization of intangible assets 1,079
 1,326
Straight line lease termination income (2,041) —
Amortization of deferred loan costs 1,691
 2,508
Amortization of premiums and discounts on debt (586) (773)
Unrealized premium adjustment 1,747
 1,240
Amortization and accretion on loans receivable, net 270
 (912)
Bad debt expense (recovery) 411
 (36)
Deferred income taxes 1
 138
Stock-based compensation 116
 114
Loans funded, held for sale to secondary market (37,149) (27,653)
Proceeds from sale of guaranteed loans 36,701
 30,152
Principal collected on loans subject to secured borrowings 6,966
 3,520
Other operating activity (1,079) 634
Changes in operating assets and liabilities:  
  
Accounts receivable and interest receivable (1,414) 181
Other assets (665) (419)
Accounts payable and accrued expenses (8,559) (237)
Deferred leasing costs (5,979) (8,114)
Other liabilities (3,031) 1,122
Due to related parties (1,205) 192
Net cash provided by operating activities 17,179
 50,242
CASH FLOWS FROM INVESTING ACTIVITIES:  
  
Additions to investments in real estate (19,075) (27,051)
Proceeds from sale of real estate property, net 851,629
 94,568
Loans funded (12,383) (51,156)
Principal collected on loans 7,686
 31,979
Restricted cash 6,785
 (33,037)
Other investing activity 93
 1,101
Net cash provided by investing activities 834,735
 16,404

(Unaudited)
 Three Months Ended
March 31,
 20232022
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net (loss) income$(7,576)$2,302 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:  
Depreciation and amortization, net9,604 5,037 
Gain on sale of real estate(1,104)— 
Amortization of deferred debt origination costs395 297 
Amortization of premiums and discounts on debt(1)(3)
Unrealized premium adjustment265 573 
Amortization of deferred costs and accretion of fees on loans receivable, net(99)(150)
Write-offs of uncollectible receivables13 109 
Loss on interest rate caps339 — 
Deferred income taxes(11)56 
Stock-based compensation55 55 
Income from unconsolidated entities(768)(120)
Loans funded, held for sale to secondary market(7,849)(12,369)
Proceeds from sale of guaranteed loans6,271 12,211 
Principal collected on loans subject to secured borrowings605 374 
Commitment fees remitted and other operating activity(150)(600)
Changes in operating assets and liabilities:  
Accounts receivable(4,163)372 
Other assets(5,424)(3,510)
Accounts payable and accrued expenses14,007 (1,717)
Deferred leasing costs(246)(304)
Other liabilities(2,119)4,755 
Due to related parties722 1,271 
Net cash provided by operating activities2,766 8,639 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Capital expenditures(4,816)(2,383)
Acquisition of real estate(96,731)(2,274)
Proceeds from sale of real estate, net16,714 — 
Investment in unconsolidated entity(6,626)(22,408)
Loans funded(2,932)(10,407)
Principal collected on loans3,323 4,393 
Net cash used in investing activities(91,068)(33,079)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Payment of revolving credit facilities, mortgages payable, term notes and principal on SBA 7(a) loan-backed notes(108,203)(12,867)
Proceeds from revolving credit facilities, term notes and mortgages212,000 40,000 
Proceeds from the issuance of SBA 7(a) loan-backed notes54,141 — 
Payment of principal on secured borrowings(607)(374)
Payment of deferred preferred stock offering costs(283)(223)
Payment of deferred debt origination costs(2,400)— 
Payment of common dividends(1,933)(1,753)
Net proceeds from issuance of Preferred Stock23,644 8,942 
Payment of preferred stock dividends(9,820)(11,166)
Redemption of Preferred Stock(88,884)(1,147)
Net cash provided by financing activities77,655 21,412 
(Continued)

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CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
(In thousands) (Unaudited)
  Nine Months Ended
September 30,
  2017 2016
  (Unaudited)
CASH FLOWS FROM FINANCING ACTIVITIES:  
  
(Payment of) proceeds from mortgages payable (65,722) 388,766
Payment of unsecured revolving lines of credit, revolving credit facilities and term notes (65,000) (107,000)
Payment of principal on secured borrowings (6,966) (13,600)
Proceeds from secured borrowings —
 9,956
Payment of deferred preferred stock offering costs (1,462) (733)
Payment of deferred loan costs (304) (1,363)
Payment of common dividends (32,854) (58,930)
Payment of special cash dividends (4,872) —
Repurchase of Common Stock (576,000) (289,886)
Payment of borrowing costs (8) —
Net proceeds from issuance of Warrants 55
 —
Net proceeds from issuance of Series A Preferred Stock 11,594
 —
Payment of preferred stock dividends (112) —
Noncontrolling interests' distributions (37) (36)
Net cash used in financing activities (741,688) (72,826)
Change in cash balances included in assets held for sale (1,720) 925
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 108,506
 (5,255)
CASH AND CASH EQUIVALENTS:  
  
Beginning of period 144,449
 139,101
End of period $252,955
 $133,846
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:  
  
Cash paid during the period for interest $28,104
 $22,651
Federal income taxes paid $1,090
 $500
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:  
  
Additions to investments in real estate included in accounts payable and accrued expenses $8,689
 $6,229
Net increase (decrease) in fair value of derivatives applied to other comprehensive income (loss) $1,445
 $(7,098)
Reduction of loans receivable and secured borrowings due to the SBA's repurchase of the guaranteed portion of a loan $534
 $2,663
Additions to deferred loan costs included in accounts payable and accrued expenses $—
 $626
Expenses related to repurchase of common stock included in accounts payable and accrued expenses $—
 $248
Additions to preferred stock offering costs included in accounts payable and accrued expenses $1,148
 $1,135
Accrual of dividends payable to preferred stockholders $138
 $—
Preferred stock offering costs offset against redeemable preferred stock $44
 $—

 Three Months Ended
March 31,
 20232022
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH(10,647)(3,028)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:  
Beginning of period57,480 33,651 
End of period$46,833 $30,623 
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents$22,491 $17,055 
Restricted cash24,342 13,568 
Total cash and cash equivalents and restricted cash$46,833 $30,623 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:  
Cash paid during the period for interest$4,093 $1,865 
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:  
Accrued capital expenditures, tenant improvements and real estate developments$3,494 $1,144 
Proceeds from the sale of real estate committed but not yet paid$17,657 $— 
Other amounts due from unconsolidated joint venture partners included in other assets$1,445 $— 
Non-cash contributions to unconsolidated joint venture$8,600 $— 
Accrued preferred stock offering costs$101 $151 
Accrual of dividends payable to common stockholders$1,933 $1,986 
Accrual of dividends payable to preferred stockholders$1,832 $3,802 
Preferred stock offering costs offset against redeemable preferred stock$403 $134 
Reclassification of Series A Preferred Stock from temporary equity to permanent equity$8,812 $7,667 
Mortgage notes assumed in connection with our acquisition of real estate$181,318 $— 
Redeemable preferred stock deemed dividends$— $15 
Accrued redeemable preferred stock fees$413 $596 
Adjustment to noncontrolling interests$5,002 $— 
The accompanying notes are an integral part of these consolidated financial statements.

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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and DecemberNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 20162023 (Unaudited)



1. ORGANIZATION AND OPERATIONS
Creative Media & Community Trust Corporation (formerly known as CIM Commercial Trust Corporation ("CIM Commercial" or the "Company"Corporation) (the “Company”), is a Maryland corporation and real estate investment trust ("REIT"(“REIT”), or together with its wholly-owned subsidiaries ("we," "us" or "our"). The Company primarily invests in,acquires, develops, owns and operates both premier multifamily properties situated in vibrant communities throughout the United States and Class A and creative office investmentsreal assets in markets with similar business and employment characteristics to its multifamily investments.The Company also owns one hotel in northern California and a lending platform that originates loans under the Small Business Administration (“SBA”) 7(a) loan program. The Company seeks to apply the expertise of CIM Group, L.P. (“CIM Group”) to the acquisition, development and operation of premier multifamily properties and creative office assets that cater to rapidly growing industries such as technology, media and entertainment in vibrant and improving urbanemerging communities throughout the United States. These communities are located in areas that include traditional downtown areas and suburban main streets, which have high barriers to entry, high population density, improving demographic trends and a propensity for growth. We were originally organized in 1993 as PMC Commercial Trust ("PMC Commercial"), a Texas real estate investment trust.
On July 8, 2013, PMC Commercial entered into a merger agreement (the "Merger Agreement") with CIM Urban REIT, LLC ("CIM REIT"), an affiliate of CIM Group, L.P. ("CIM Group" or "CIM"), and subsidiaries of the respective parties. CIM REIT was a private commercial REIT and was the owner of CIM Urban Partners, L.P. ("CIM Urban"). The transaction (the "Merger") was completed on March 11, 2014 (the "Acquisition Date"). As a result of the Merger and related transactions, CIM Urban became our wholly-owned subsidiary.
OurCompany’s common stock, $0.001 par value per share ("(“Common Stock"Stock”), is currently traded on the NASDAQNasdaq Global Market (“Nasdaq”) under the ticker symbol "CMCT." We have“CMCT”, and on the Tel Aviv Stock Exchange (the “TASE”) under the ticker symbol “CMCT.” The Company has authorized for issuance 900,000,000 shares of common stock and 100,000,000 shares of preferred stock.stock (“Preferred Stock”).
CIM CommercialSince June 2022, the Company has qualified and intends been conducting a continuous public offering with respect to continueshares of its Series A1 Preferred Stock, par value $0.001 per share with an initial stated value of $25.00 per share, subject to qualify as a REIT, as defined in the Internal Revenue Code of 1986, as amended.adjustment (Note 11).
2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For more information regarding ourthe Company’s significant accounting policies and estimates, please refer to "Basis“Basis of Presentation and Summary of Significant Accounting Policies"Policies” contained in Note 32 to ourthe Company’s consolidated financial statements for the year ended December 31, 2016,2022, included in ourthe Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC"(“SEC”) on March 16, 2017.30, 2023.
Interim Financial Information—The accompanying interim consolidated financial statements of CIM Commercialthe Company have been prepared by ourthe Company’s management in accordance with accounting principles generally accepted in the United States of America ("GAAP"(“GAAP”). Certain information and note disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the interim consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The accompanying financial information reflects all adjustments which are, in the opinion of ourthe Company’s management, of a normal recurring nature and necessary for a fair presentation of ourthe Company’s financial position, results of operations and cash flows for the interim periods. Operating results for the three and nine months ended September 30, 2017March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. Our2023. The accompanying interim consolidated financial statements should be read in conjunction with ourthe Company’s audited consolidated financial statements and the notes thereto, included in our Annual Report onthe 2022 Form 10-K filed with the SEC on March 16, 2017.10-K.
Principles of Consolidation—The consolidated financial statements include the accounts of CIM Commercialthe Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. In determining whether the Company has controlling interests in an entity and the requirement to consolidate the accounts in that entity, the Company analyzes its investments in real estate in accordance with standards set forth in GAAP to determine whether they are variable interest entities (“VIEs”), and if so, whether the Company is the primary beneficiary. The Company’s judgment with respect to its level of influence or control over an entity and whether the Company is the primary beneficiary of a VIE involves consideration of various factors, including the form of the Company’s ownership interest, the Company’s voting interest, the size of the Company’s investment (including loans), and the Company’s ability to participate in major policy-making decisions. The Company’s ability to correctly assess its influence or control over an entity affects the presentation of these investments in real estate on the Company’s consolidated financial statements. As of March 31, 2023, the Company has determined that the trust formed for the benefit of the note holders (the “Trust”) for the securitization of the unguaranteed portion of certain of the Company’s SBA 7(a) loans receivable is considered a VIE. Applying the consolidation requirements for VIEs, the Company determined that it is the primary beneficiary based on its power to direct activities through its role as servicer and its obligations to absorb losses and right to receive benefits. In addition, as of March 31, 2023, the Company has determined that its Unconsolidated Joint Ventures (as defined below) are considered VIEs. Applying the consolidation requirements for VIEs, the Company determined that it is not the primary beneficiary based on its lack of power to direct activities and its obligations to absorb losses and right to receive benefits. Therefore, the Unconsolidated Joint Ventures do not qualify for consolidation. The Company accounts for its investments in Unconsolidated Joint Ventures as equity method investments.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
Investments in Real Estate—Real estate acquisitions are recorded at cost as of the acquisition date. Costs related to the acquisition of properties are expensed as incurred. Investments in real estate are stated at depreciated cost. Depreciation and amortization are recorded on a straight linestraight-line basis over the estimated useful lives as follows:
Buildings and improvements15 - 40 years
Furniture, fixtures, and equipment3 - 5 years
Tenant improvementsShorterLesser of the useful liveslife or the
terms of the related leaseslease term
The fair value of real estate acquired is recorded to acquired tangible assets, consisting primarily of land, land improvements, building and improvements, tenant improvements, furniture, fixtures, and equipment, and identified intangible assets and liabilities, consisting of the value of acquired above-market and below-market leases, in-place leases and ground leases, if any, based in each case on their respective fair values. Loan premiums, in the case of above-market rate loans, or loan discounts, in the case of below-market rate loans, are recorded based on the fair value of any loans assumed in connection with acquiring the real estate.
Capitalized Project Costs
The Company capitalizes project costs, including pre-construction costs, interest expense, property taxes, insurance, and other costs directly related and essential to the development, redevelopment, or construction of a project, while activities are ongoing to prepare an asset for its intended use. Costs incurred after a project is substantially complete and ready for its intended use are expensed as incurred. Improvements and replacements are capitalized when they extend the useful life, increase capacity, or improve the efficiency of the asset. Ordinary repairs and maintenance are expensed as incurred.

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements asRecoverability of September 30, 2017Investments in Real Estate—The Company continually monitors events and December 31, 2016, and
forchanges in circumstances that could indicate that the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

carrying amounts of its real estate assets may not be recoverable. Investments in real estate are evaluated for impairment on a quarterly basis or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. RecoverabilityIf, and when, such events or changes in circumstances are present, the recoverability of assets to be held and used requires significant judgment and estimates and is measured by a comparison of the carrying amount to the future netundiscounted cash flows undiscounted and without interest, expected to be generated by the asset.assets and their eventual disposition. If suchthe undiscounted cash flows are less than the carrying amount of the assets, are consideredan impairment is recognized to be impaired, the impairment to be recognized is measured by the amount by whichextent the carrying amount of the assets exceeds the estimated fair value of the assets. The process for evaluating real estate impairment requires management to make significant assumptions related to certain inputs, including rental rates, lease-up period, occupancy, estimated fair value ofholding periods, capital expenditures, growth rates, market discount rates and terminal capitalization rates. These inputs require a subjective evaluation based on the asset group identified for step two ofspecific property and market. Changes in the impairment testing under GAAP is basedassumptions could have a significant impact on either the income approach with market discount rate, terminal capitalization rate and rental rate assumptions being most critical,fair value, the amount of impairment charge, if any, or on the sales comparison approach to similar properties. Assets to be disposed of areboth. Any asset held for sale is reported at the lower of the asset’s carrying amount or fair value, less costs to sell. We recognized no impairment of long-lived assets during eachWhen an asset is identified by the Company as held for sale, the Company will cease recording depreciation and amortization of the three months ended September 30, 2017 and 2016, respectively, and $13,100,000 and $0asset. The Company did not recognize any impairment of long-lived assets during the ninethree months ended September 30, 2017March 31, 2023 and 2016, respectively2022 (Note 3).
Investments in Unconsolidated Entities—The Company accounts for its investments in the unconsolidated joint ventures (the “Unconsolidated Joint Ventures”) under the equity method, as the Company has the ability to exercise significant influence over the investments. The Unconsolidated Joint Ventures record their assets and liabilities at fair value. As such, the Company records its share of the Unconsolidated Joint Ventures’ unrealized gains or losses as well as its share of the revenues and expenses on a quarterly basis as an adjustment to the carrying value of the investment on the Company’s consolidated balance sheet and such share is recognized within the Company’s income from unconsolidated entities on the consolidated statements of operations.
Derivative Financial Instruments—As part of our risk management and operational strategies, from time to time, we may enter into derivative contracts with various counterparties. All derivatives are recognized on the balance sheet at their estimated fair value. On the date that we enter into a derivative contract, we designate the derivative as a fair value hedge, a cash flow hedge, a foreign currency fair value or cash flow hedge, a hedge of a net investment in a foreign operation, or a trading or non-hedging instrument.
ChangesAccounting for changes in the estimated fair value of a derivative that is highly effectiveinstrument depends on the intended use and that is designated and qualifies as a cash flow hedge, to the extent that the hedge is effective, are initially recorded in other comprehensive income ("OCI"), and are subsequently reclassified into earnings as a component of interest expense when the variability of cash flowsdesignation of the hedged transaction affects earnings (e.g., when periodic settlements of a variable-rate asset or liabilityderivative instrument. The Company has interest rate caps that are recordedused to manage exposure to interest rate movements, but do not meet the requirements to be designated as hedging instruments. The change in earnings). Any hedge ineffectiveness (which represents the amount by which the changes in the estimated fair value of the derivative differ from the variability in the cash flows of the forecasted transaction)instruments that are not designated as hedges is recognized in current-periodrecorded directly to earnings as a component of interest expense. When an interest rate swap designated as a cash flow hedge no longer qualifies for hedge accounting, we recognize changes in estimated fair value of the hedge previously deferred to accumulated other comprehensive income ("AOCI"), along with any changes in estimated fair value occurring thereafter, through earnings. We classify cash flows from interest rate swap agreements as net cash provided from operating activitiesexpense on the accompanying consolidated statements of cash flows as our accounting policy is to present the cash flows from the hedging instruments in the same category in the consolidated statements of cash flows as the category for the cash flows from the hedged items.operations. See Note 138 for further disclosures about our derivative financial instruments and hedging activities.
Loans Receivable
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
Revenue Recognition—Our loans receivableAt the inception of a revenue-producing contract, the Company determines if a contract qualifies as a lease and if not, then as a customer contract. Based on this determination, the appropriate treatment in accordance with GAAP is applied to the contract, including its revenue recognition.
Revenue from leasing activities
The Company operates as a lessor of both office and multifamily real estate assets. When the Company enters into a contract or amends an existing contract, the Company evaluates if the contracts meet the definition of a lease using the following criteria:
•One party (lessor) must hold an identified asset;
•The counterparty (lessee) must have the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of the contract; and
•The counterparty (lessee) must have the right to direct the use of the identified asset throughout the period of the contract.
The Company determined that the Company’s contracts with its tenants explicitly identify the premises and that any substitution rights to relocate tenants to other premises within the same building stated in the contract are not substantive. Additionally, so long as payments are made timely under such contracts, the Company’s tenants have the right to obtain substantially all the economic benefits from the use of the identified asset and can direct how and for what purpose the premises are used to conduct their operations. Therefore, the contracts with the Company’s tenants constitute leases.
All leases are classified as operating leases and minimum rents are recognized on a straight-line basis over the terms of the leases when collectability is probable and the tenant has taken possession or controls the physical use of the leased asset. The excess of rents recognized over amounts contractually due pursuant to the underlying leases is recorded as deferred rent. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is considered the owner of the improvements, any tenant improvement allowance that is funded is treated as an incentive. Lease incentives paid to tenants are included in other assets and amortized as a reduction to rental revenue on a straight-line basis over the term of the related lease. As of March 31, 2023 and December 31, 2022, lease incentives of $3.9 million and $3.9 million, respectively, are presented net of accumulated amortization of $3.0 million and $3.0 million, respectively.
Reimbursements from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes, insurance, and other recoverable costs, are recognized as revenue and are included in rental and other property income in the period the expenses are incurred, with the corresponding expenses included in rental and other property operating expense. Tenant reimbursements are recognized and presented on a gross basis when the Company is primarily responsible for fulfilling the promise to provide the specified good or service and control that specified good or service before it is transferred to the tenant. The Company has elected not to separate lease and non-lease components as the pattern of revenue recognition does not differ for the two components, and the non-lease component is not the primary component in the Company’s leases.
In addition to minimum rents, certain leases, including the Company’s parking leases with third-party operators, provide for additional rents based upon varying percentages of tenants’ sales in excess of annual minimums. Percentage rent is recognized once lessees’ specified sales targets have been met.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
For the three months ended March 31, 2023 and 2022, the Company recognized rental income as follows (in thousands):
Three Months Ended March 31,
20232022
Rental and other property income
Fixed lease payments (1)
$12,474 $11,623 
Variable lease payments (2)
2,412 2,473 
Rental and other property income$14,886 $14,096 
______________________
(1)Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the lease term, including amortization of acquired above-market leases, below-market leases and lease incentives.
(2)Variable lease payments include expense reimbursements billed to tenants and percentage rent, net of bad debt expense from the Company’s operating leases plus cash payments from tenants deemed not probable of collection.
Collectability of Lease-Related Receivables
The Company continually reviews whether collection of lease-related receivables, including any straight-line rent, and current and future operating expense reimbursements from tenants is probable. The determination of whether collectability is probable takes into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Upon the determination that the collectability of a receivable is not probable, the Company will record a reduction to rental and other property income and a decrease in the outstanding receivable. Revenue from leases where collection is deemed to be not probable is recorded on a cash basis until collectability becomes probable. Management’s estimate of the collectability of lease-related receivables is based on the best information available at the time of estimate. The Company does not use a general reserve approach. As of March 31, 2023 and December 31, 2022, the Company had identified certain tenants where collection was no longer considered probable and decreased outstanding receivables by $673,000 and $387,000, respectively, across all operating leases.
Revenue from lending activities
Interest income included in interest and other income is comprised of interest earned on loans and the Company’s short-term investments and the accretion of loan discounts. Interest income on loans is accrued as earned with the accrual of interest suspended when the related loan becomes a Non-Accrual Loan (as defined below).
Revenue from hotel activities
The Company recognizes revenue from hotel activities separate from its leasing activities. At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or implied by customary business practices. Various performance obligations of hotel revenues can be categorized as follows:
•cancellable and noncancelable room revenues from reservations and
•ancillary services including facility usage and food or beverage.
Cancellable reservations represent a single performance obligation of providing lodging services at the hotel. The Company satisfies its performance obligation and recognizes revenues associated with these reservations over time as services are rendered to the customer. The Company satisfies its performance obligation and recognizes revenues associated with noncancelable reservations at the earlier of (i) the date on which the customer cancels the reservation or (ii) over time as services are rendered to the customer.
Ancillary services include facilities usage and providing food and beverage. The Company satisfies its performance obligation and recognizes revenues associated with these services at a point in time when the good or service is delivered to the customer.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
At inception of a contract with a customer for hotel goods and services, the contractual price is equivalent to the transaction price as there are no elements of variable consideration to estimate.
The Company presents hotel revenues net of sales, occupancy, and other taxes.
Below is a reconciliation of the hotel revenue from contracts with customers to the total hotel segment revenue disclosed in Note 17 (in thousands):
Three Months Ended March 31,
20232022
Hotel properties
Hotel income$10,923 $7,404 
Rental and other property income490 374 
Interest and other income79 15 
Hotel revenues$11,492 $7,793 
Tenant recoveries outside of the lease agreements
Tenant recoveries outside of the lease agreements are related to construction projects in which the Company’s tenants have agreed to fully reimburse the Company for all costs related to construction. These services include architectural, permit expediter and construction services. At inception of the contract with the customer, the contractual price is equivalent to the transaction price as there are no elements of variable consideration to estimate. While these individual services are distinct, in the context of the arrangement with the customer, all of these services are bundled together and represent a single package of construction services requested by the customer. The Company satisfies its performance obligation and recognizes revenues associated with these services over time as the construction is completed. No such amounts were recognized for tenant recoveries outside of the lease agreements for each of the three months ended March 31, 2023 and 2022. As of March 31, 2023, there were no remaining performance obligations associated with tenant recoveries outside of the lease agreements.
Loans Receivable—The Company’s loans receivable are carried at their unamortized principal balance less
unamortized acquisition discounts and premiums, retained loan discounts and reserves for expected credit losses. Acquisition discounts or premiums, origination fees and retained loan loss reserves. Fordiscounts are amortized as a component of interest and other income using the effective interest method over the life of the respective loans, or on a straight-line basis when it approximates the effective interest method. All loans were originated pursuant to programs sponsored by the Small Business Administration (the “SBA”). The programs consist of loans originated under the SBA 7(a) Small Business Administration's ("SBA") 7(a) Guaranteed Loan Program ("(the “SBA 7(a) Program”).
Pursuant to the SBA 7(a) Program"), we sellProgram, the Company sells the portion of the loan that is guaranteed by the SBA. Upon sale of the SBA guaranteed portion of the loans, which are accounted for as sales, the unguaranteed portion of the loan retained by usthe Company is valued on arecorded at fair value basis and a discount (the "Retained Loan Discount") is recorded as a reduction in basis of the retained portion of the loan.
At the Acquisition Date, the carrying value of our loans was adjusted to estimated fair market value Unamortized retained loan discounts were $8.8 million and acquisition discounts of $33,907,000 were recorded, which are being accreted to interest and other income using the effective interest method. We sold substantially all of our commercial mortgage loans with unamortized acquisition discounts of $15,951,000 to an unrelated third party in December 2015 (Note 7). Acquisition discounts of $1,455,000 remained$9.0 million as of September 30, 2017, which have not yet been accreted to income.March 31, 2023 and December 31, 2022, respectively.
A loan receivable is generally classified as non-accrual (a "Non-Accrual Loan"“Non-Accrual Loan”) if (i) it is past due as to payment of principal or interest for a period of 60 days or more, (ii) any portion of the loan is classified as doubtful or is charged-off or (iii) the repayment in full of the principal and/and or interest is in doubt. Generally, loans are charged-off when management determines that wethe Company will be unable to collect any remaining amounts due under the loan agreement, either through liquidation of collateral or other means. Interest income, included in interest and other income, or discontinued operations, on a Non-Accrual Loan is recognized on either the cash basis or the cost recovery basis.
Current Expected Credit Losses—On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses, and subsequent amendments (“ASU 2016-13”). The current expected credit losses (“CECL”) required under ASU 2016-13 reflects the Company’s current estimate of potential credit losses related to the Company’s loans receivable included in the consolidated balance sheets. The initial current expected credit losses recorded on January 1, 2023 is reflected as a quarterly basis,direct charge to distributions in excess of earnings on the Company’s consolidated statements of equity; however subsequent changes to the current expected credit losses are recognized through net income on the Company’s consolidated statements of operations. While ASU 2016-13 does not require any particular method for determining the current expected credit losses, it does specify the allowance should be based on relevant information about past
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
events, including historical loss experience, current portfolio and more frequently if indicators exist, we evaluatemarket conditions, and reasonable and supportable forecasts for the collectabilityduration of oureach respective loan. In addition, other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the credit loss model have some amount of loss reserve to reflect the GAAP principal underlying the credit loss model that all loans, receivable. Our evaluationdebt securities, and similar assets have some inherent risk of collectability involves judgment,loss, regardless of credit quality, subordinate capital, or other mitigating factors.
The Company estimates the current expected credit loss for its loans primarily using its historical experience with loan write-offs, historical charge-offs from third-party firms, and the Weighted Average Remaining Maturity method, which has been identified as an acceptable method for estimating CECL reserves in the Financial Accounting Standards Board (“FASB”) Staff Q&A Topic 326, No. 1. This method requires the Company to reference historical loan loss data across a reviewcomparable data set and apply such loss rate to each loan investment over its expected remaining term, taking into consideration expected economic conditions over the relevant timeframe. The Company considers loans that are both (i) expected to be substantially repaid through the operation or sale of the ability of the borrower to make principal and interest payments, the underlying collateral, and (ii) for which the borrowers' business modelsborrower is experiencing financial difficulty, to be “collateral-dependent” loans. For such loans that the Company determines that foreclosure of the collateral is probable, the Company measures the expected losses based on the difference between the fair value of the collateral less costs to sell and the amortized cost basis of the loan as of the measurement date. For collateral-dependent loans with respect to which the Company determines foreclosure is not probable, the Company applies a practical expedient to estimate expected losses using the difference between the collateral’s fair value (less costs to sell the asset if repayment is expected through the sale of the collateral) and the amortized cost basis of the loan. The Company may use other acceptable alternative approaches in the future operations in accordance with Accounting Standards Codification ("ASC") 450-20, Contingencies—Loss Contingencies,depending on, among other factors, the type of loan, underlying collateral, and ASC 310-10, Receivables. Foravailability of relevant historical market loan loss data.
The Company adopted ASU 2016-13 using the three and nine months ended September 30, 2017, wemodified retrospective method for all financial assets measured at amortized cost. The Company recorded a net impairmentcumulative-effective adjustment to the opening distributions in excess of $137,000 and $149,000 on our loans

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statementsearnings in its consolidated statement of equity as of September 30, 2017January 1, 2023 of $619,000. This represents a total CECL reserve transition adjustment of approximately $783,000, net of a $164,000 deferred tax asset.
Prior to adoption, the Company considered a loan to be impaired when the Company did not expect to collect all of the contractual interest and December 31, 2016, and
forprincipal payments as scheduled in the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

receivable, respectively. For the three and nine months ended September 30, 2016, we recorded a net recovery of $3,000 and $239,000 on our loans receivable, respectively. We establishloan agreements. The Company also established a general loan loss reserve when available information indicatesindicated that it iswas probable a loss hashad occurred based on the carrying value of the portfolio and if the amount of the loss cancould be reasonably estimated. Significant judgment is required in determiningAs of December 31, 2022, the generalCompany had loan loss reserve, including estimatesreserves of the likelihood of default and the estimated fair value of the collateral. The general loan loss reserve includes those loans,$1.1 million, which may have negative characteristics which have not yet become known to us. In additionis recorded as a reduction to the reserves establishedloans receivable, net balance on loans not considered impaired that have been evaluated underthe consolidated balance sheet. As of March 31, 2023, the Company had a specific evaluation, we establish the general loantotal current expected credit loss reserve using a consistent methodology to determine a loss percentage to be applied to loan balances. These loss percentages are based on many factors, primarily cumulative and recent loss history and general economic conditions.of $1.9 million.
Deferred Rent Receivable and Charges—Deferred rent receivable and charges consist of deferred rent, deferred leasing costs, deferred offering costs (Note 11) deferred financing costs and other deferred costs. Deferred rent receivable is $52,905,000 and $64,010,000 at September 30, 2017 and December 31, 2016, respectively. Deferred leasing costs, which represent lease commissions and other direct costs associated with the acquisition of tenants, are capitalized and amortized on a straight-line basis over the terms of the related leases. Deferred leasing costs of $52,860,000 and $76,063,000 are presented net of accumulated amortization of $23,294,000 and $25,914,000 at September 30, 2017 and December 31, 2016, respectively. Deferred offering costs represent direct costs incurred in connection with our offeringthe Company’s offerings of UnitsSeries A1 Preferred Stock (as defined in Note 11)below), Series A Preferred Stock (as defined below), and, after January 2020, Series A Preferred Stock (as defined below) and Series D Preferred Stock (as defined below), excluding costs specifically identifiable to a closing, such as commissions, dealer-manager fees, and other registration fees. Foroffering fees and expenses. Generally, for a specific issuance of Units, associatedsecurities, issuance-specific offering costs are reclassifiedrecorded as a reduction of proceeds raised on the issuance date. Offeringdate and offering costs incurred but not directly related to a specifically identifiable closing of a security are deferred. Deferred offering costs are first allocated to each issuance of a security on a pro-rata basis equal to the ratio of Unitsthe number of securities issued in ana given issuance to the maximum number of Unitssecurities that are expected to be issued. Then,issued in the related offering. In the case of the Series A Preferred Stock issued prior to February 2020, the issuance-specific offering costs and the deferred offering costs allocated to such issuance arewere further allocated to the Series A Preferred Stock (as defined in Note 11) and Series A Preferred Warrants (as defined in Note 11) issued in such issuance based on the relative fair value of the instruments on the date of issuance. The deferred offering costs allocated to the Series A Preferred Stock and Series A Preferred Warrants are reductions to temporary equity and permanent equity, respectively. Deferred offeringfinancing costs of $2,973,000 and $2,060,000 related to our offeringthe securing of Unitsa revolving line of credit are includedpresented as an asset and amortized ratably over the term of the line of credit arrangement. As such, the Company’s current and corresponding prior period total deferred costs, net in the accompanying consolidated balance sheets relate only to the revolving loan portion of the credit facilities.
11
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
As of March 31, 2023 and December 31, 2022, deferred rent receivable and charges at September 30, 2017 and December 31, 2016, respectively. Other deferred costs are $1,550,000 and $135,000 at September 30, 2017 and December 31, 2016, respectively.consist of the following (in thousands):
 March 31, 2023December 31, 2022
Deferred rent receivable$18,210 $20,949 
Deferred leasing costs, net of accumulated amortization of $9,728 and $9,637, respectively7,641 8,319 
Deferred offering costs5,577 5,664 
Deferred financing costs, net of accumulated amortization of $213 and $30, respectively1,975 2,120 
Other deferred costs491 491 
Deferred rent receivable and charges, net$33,894 $37,543 

Redeemable Preferred Stock—Beginning on the date of original issuance of any given shares of Series A1 Preferred Stock, par value $0.001 per share (“Series A1 Preferred Stock”), with an initial stated value of $25.00 per share, subject to adjustment (the “Series A1 Preferred Stock Stated Value”), Series A Preferred Stock, (Note 11)par value $0.001 per share (“Series A Preferred Stock”) with an initial stated value of $25.00 per share, subject to adjustment (the “Series A Preferred Stock Stated Value”), or Series D Preferred Stock, par value $0.001 per share (“Series D Preferred Stock”), with an initial stated value of $25.00 per share, subject to adjustment (the “Series D Preferred Stock Stated Value”), the holder of such shares will havehas the right to require the Company to redeem such shares, at a redemption price of 100% of the Stated Value (as definedsubject to certain limitations as discussed in Note 11), plus accrued and unpaid dividends, subject11. The Company records the activity related to the payment of a redemption fee until the fifth anniversary of such issuance. From and after the fifth anniversary of the date of the original issuance, the holder will have the right to require the Company to redeem such shares at a redemption price of 100% of the Stated Value, plus accrued and unpaid dividends, without a redemption fee, and the Company will have the right (but not the obligation) to redeem such shares at 100% of the Stated Value, plus accrued and unpaid dividends. The applicable redemption price payable upon redemption of anySeries A1 Preferred Stock, Series A Preferred Stock will be in cash or, on or after the first anniversary of the issuance of such shares ofWarrants and Series AD Preferred Stock to be redeemed, in permanent equity. In the Company's sole discretion, in cash or in equal value through the issuance of shares of Common Stock, based on the volume weighted average price of our Common Stock for the 20 trading days prior to the redemption. Sinceevent a holder of Series A Preferred Stock has the right to requestrequests redemption of such shares and redemptionssuch redemption takes place prior to the first anniversary areof the date of original issuance, the Company is required to be paidpay such redemption in cash, we havecash. As a result, the Company recorded the activity related to ourissuances of Series A Preferred Stock in temporary equity. We recorded the activity related to our Warrants (Note 11) in permanent equity. On the first anniversary of the date of original issuance of a particular share of Series A Preferred Stock, we intend to reclassifythe Company reclassifies such share of Series A Preferred Stock from temporary equity to permanent equity because the feature giving rise to temporary equity classification, the requirement to satisfy redemption requests in cash, lapses on the first anniversary date. Proceeds and expenses from the sale of the Units are allocated to the Series A Preferred Stock and Warrants using their relative fair values on the date of issuance.
Noncontrolling Interests—Noncontrolling interests represent the interests in various properties owned by third parties.third-parties.
Restricted Cash—OurThe Company’s mortgage loan and hotel management agreements provide for depositing cash into restricted accounts reserved for capital expenditures, free rent, tenant improvement and leasing commission obligations. Restricted cash also includes cash required to be segregated in connection with certain of ourthe Company’s loans receivable.receivable and with its SBA 7(a) loan-backed notes.
Assets Held for Sale and Discontinued Operations—In the ordinary course of business, we may periodically enter into agreements relating to dispositions of investments. Some of these agreements are non-binding because either they do not

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

obligate either party to pursue any transactions until the execution of a definitive agreement or they provide the potential buyer with the ability to terminate without penalty or forfeiture of any material deposit, subject to certain specified contingencies, such as completion of due diligence at the discretion of such buyer. We do not classify assets that are subject to such non-binding agreements as held for sale.
We classify assets as held for sale, if material, when they meet the necessary criteria, which include: a) management commits to and actively embarks upon a plan to sell the assets, b) the assets to be sold are available for immediate sale in their present condition, c) the sale is expected to be completed within one year under terms usual and customary for such sales and d) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. We generally believe that we meet these criteria when the plan for sale has been approved by our board of directors (the "Board of Directors"), there are no known significant contingencies related to the sale and management believes it is probable that the sale will be completed within one year.
Assets held for sale are recorded at the lower of cost or estimated fair value less cost to sell. In addition, if we were to determine that the asset disposal associated with assets held for sale or disposed of represents a strategic shift, the revenues, expenses and net gain (loss) on dispositions would be recorded in discontinued operations for all periods presented through the date of the applicable disposition.
We have assessed the sale of four of our multifamily properties and our agreement to sell our remaining multifamily property (Note 3) in accordance with ASC 205-20, Discontinued Operations. In our assessment, we considered, among other factors, the materiality of the revenue, net operating income, and total assets of our multifamily segment during the three and nine months ended September 30, 2017 and for the years ended December 31, 2016 and 2015. Based on our qualitative and quantitative assessment, we concluded the disposals do not represent a strategic shift that will have a major effect on our operations and financial results and they should not be classified as discontinued operations on our consolidated financial statements.
Consolidation Considerations for Our Investments in Real Estate—ASC 810-10, Consolidation, addresses how a business enterprise should evaluate whether it has a controlling interest in an entity through means other than voting rights that would require the entity to be consolidated. We analyze our investments in real estate in accordance with this accounting standard to determine whether they are variable interest entities, and if so, whether we are the primary beneficiary. Our judgment with respect to our level of influence or control over an entity and whether we are the primary beneficiary of a variable interest entity involves consideration of various factors, including the form of our ownership interest, our voting interest, the size of our investment (including loans), and our ability to participate in major policy-making decisions. Our ability to correctly assess our influence or control over an entity affects the presentation of these investments on our consolidated financial statements.
Use of Estimates—The preparation of consolidated financial statements in conformity with GAAP requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and
expenses during the reporting period. The Company bases such estimates on historical experience, information available at the
time, and assumptions the Company believes to be reasonable under the circumstances at such time. Actual results could
differ from those estimates.
Recently Issued Accounting Pronouncements—Pronouncements—In JanuaryJune 2016, the Financial Accounting Standards Board ("FASB"(“FASB”) issued Accounting Standards Update ("ASU"(“ASU”) No. 2016-01, 2016-13, Financial Instruments-Overall (Subtopic 825-10)Instruments-Credit Losses (Topic 326): Recognition and Measurement of Credit Losses on Financial Assets and Financial LiabilitiesInstruments, which is designedwas subsequently amended by ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses (“ASU 2018-19”) in November 2018. Subsequently, the FASB issued ASU No. 2019-04, ASU No. 2019-05, ASU No. 2019-10, ASU No. 2019-11 and ASU No. 2020-02 to provide additional guidance on the credit losses standard. ASU 2016-13 and the related updates improve thefinancial reporting requiring more timely recognition of credit losses on loans and measurement ofother financial instruments through targeted changes to existing GAAP. The ASU requires an entity to: (i) measure equity investmentsthat are not accounted for at fair value through net income, with certain exceptions; (ii) presentincluding loans held-for-investment, held-to-maturity debt securities, net investment in OCIleases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the changesnet amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in instrument-specificASU 2016-13 require the Company to measure all expected credit risk for financial liabilities measured usinglosses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the fair value option; (iii) presentcollectability of the financial assets and financial liabilities by measurement categoryeliminates the “incurred loss” methodology under current GAAP. ASU 2018-19 clarified that receivables arising from operating leases are not within the scope of Topic 326.
12
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
Instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASU No. 2016-02, Leases (Topic 842). For smaller reporting companies, public entities that are not SEC filers, and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price; and (v) assess a valuation allowance on deferred tax assets related to unrealized losses of available-for-sale debt securities in combination with other deferred tax assets. In addition, the ASU provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. The ASU also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. Forentities that are not public business entities, the ASU is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early adoption by public entities to financial statements that have not yet been issued is permitted only for the provision related to instrument-specific credit risk. We are currently in the process of evaluating the impact of adoption of this new accounting guidance on our consolidated financial statements.

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which is intended to improve financial reporting about leasing transactions. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP, which requires a lessee to recognize only capital leases on the balance sheet, the new ASU will require a lessee to recognize both types of leases on the balance sheet. The lessor accounting will remain largely unchanged from current GAAP. However, the ASU contains some targeted improvements that are intended to align, where necessary, lessor accounting with the lessee accounting model and with the updated revenue recognition guidance issued in 2014. For public entities, the ASU is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2018.
We are currently conducting an evaluation of the impact of the guidance on our consolidated financial statements. We currently believe that the adoption of the standard will not significantly change the accounting for operating leases on our consolidated balance sheet where we are the lessor, and that such leases will be accounted for in a similar method to existing standards with the underlying leased asset being recognized and reported as a real estate asset. We currently expect that certain non-lease components may need to be accounted for separately from the lease components, with the lease components continuing to be recognized on a straight-line basis over the term of the lease and certain non-lease components (such as certain expense reimbursements) being accounted for under the new revenue recognition guidance in ASU 2014-09. We expect to adopt the guidance on a modified retrospective basis.
In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which is intended to simplify several aspects of the accounting for share-based payment transactions, including accounting for income taxes, classification of excess tax benefits on the statement of cash flows, forfeitures, minimum statutory tax withholding requirements, and classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. In addition, the ASU eliminated certain guidance in ASC 718, which was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment. For public entities, the ASU became effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. The adoption of this guidance did not have a material impact on our consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity. The amendments in the ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For public entities, the ASU is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2019.2022. Early adoption is permitted for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2018. We are currently inThe Company adopted ASU 2016-13 and the process of evaluatingrelated updates on January 1, 2023 and the impact of adoption of this new accounting guidance on our consolidated financial statements.did not have a material impact.
In August 2016,On March 31, 2022, the FASB issued ASU No. 2016-15, Statement2022-02, Troubled Debt Restructurings and Vintage Disclosures (Topic 326) (“ASU 2022-02”). ASU 2022-02 eliminates the recognition and measurement guidance for troubled debt restructurings (“TDRs”) and, instead, requires that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of Cash Flows (Topic 230): Classificationan existing loan. The ASU also enhances existing disclosure requirements and introduces new requirements related to certain modifications of Certain Cash Receiptsreceivables made to borrowers experiencing financial difficulty. The ASU became effective for the Company beginning January 1, 2023 and Cash Payments, which provides guidance on how certain cash receipts and cash payments areis generally to be presented and classified in the statement of cash flows. For public entities, theapplied prospectively. ASU is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption of this new accounting guidance on our consolidated financial statements.
In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230):Restricted Cash, which requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update do2022-02 did not provide a definition of restricted cash or restricted cash equivalents. For public entities, the ASU is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption of this new accounting guidance on our consolidated financial statements.

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which make certain technical corrections and improvements to ASU 2014-09. For public entities, the ASU is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early adoption is permitted for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016.
We are currently conducting our evaluation of the impact of the guidance on our consolidated financial statements. Specifically, we have evaluated thean impact on the timing of gain recognition for dispositions but currently do not believe there will be a material impact to ourCompany’s consolidated financial statements for dispositions given the Company's historical disposition transactions. In addition, we currently believe that certain non-lease components of revenue from leases (upon the adoption of ASU 2016-02, on January 1, 2019) and certain ancillary revenue may be impacted by the adoption of ASU 2014-09. We are in the process of evaluating the impact of the standard but currently believe the impact would be limited to the timing and income statement presentation of revenue and not the total amount of revenue recognized over time. We are still assessing the potential impact to our hotel revenues, but due to the short-term, day-to-day nature of the Company's hotel revenues, the pattern of revenue recognition is not expected to change materially. The Company plans on adopting the standard on January 1, 2018 using the modified retrospective approach.
In January 2017, the FASB issued ASU No. 2017-01, Business Combinations: Clarifying the Definition of a Business, which narrows the definition of a business and provides a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset or a business. For public entities, the ASU is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. Early adoption is permitted under certain circumstances as outlined in the ASU. We are currently in the process of evaluating the impact of adoption of this new accounting guidance on our consolidated financial statements.
In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies the scope of modification accounting. Under the guidance, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions, and classification as an equity or liability instrument remain the same immediately before and after the change. For public entities, the ASU is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. Early adoption is permitted. We currently do not anticipate the adoption of this new accounting guidance will have a material impact on our consolidated financial statements.
In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities, which simplifies and expands the eligible hedging strategies for financial and nonfinancial risks by more closely aligning hedge accounting with a company’s risk management activities, and also simplifies the application of Topic 815, Derivatives and Hedging, through targeted improvements in key practice areas. In addition, the ASU prescribes how hedging results should be presented and requires incremental disclosures. Further, the ASU provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in earnings in the current period. For public entities, the ASU is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2018. Early adoption is permitted in any interim period after issuance of the ASU for existing hedging relationships on the date of adoption. We are currently in the process of evaluating the impact of adoption of this new accounting guidance on our consolidated financial statements.
3. ACQUISITIONS AND DISPOSITIONS
The fair value of real estate acquired is recorded to the acquired tangible assets, consisting primarily of land, land improvements, building and improvements, tenant improvements, and furniture, fixtures, and equipment, and identified intangible assets and liabilities, consisting of the value of acquired above-market and below-market leases, in-place leases and ground leases, if any, based in each case on their respective fair values. Loan premiums, in the case of above-market rate loans, or loan discounts, in the case of below-market rate loans, are recorded based on the fair value of any loans assumed in connection with acquiring the real estate.
There were no acquisitions during the ninethree months ended September 30, 2017.March 31, 2023.
On March 28, 2017, we sold a 100% fee-simple interest in 211 Main Street located in San Francisco, California to an unrelated third party. Transaction costs expensed in connection with this sale totaled $2,943,000 and included a prepayment penalty of $1,508,000 incurred in connection with the prepayment of the property's mortgage (Note 8).

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

On May 30, 2017, we sold a 100% fee-simple interest in 3636 McKinney Avenue and 3839 McKinney Avenue, both located in Dallas, Texas, to an unrelated third party. Transaction costs expensed in connection with these sales totaled $2,258,000 and included prepayment penalties of $1,901,000 incurred in connection with the prepayment of the properties' mortgages (Note 8).
On June 8, 2017, we sold a 100% fee-simple interest in 200 S College Street located in Charlotte, North Carolina to an unrelated third party. Transaction costs expensed in connection with this sale totaled $833,000.
On June 20, 2017, we sold a 100% fee-simple interest in 980 9th Street and 1010 8th Street, both located in Sacramento, California, to an unrelated third party. Transaction costs expensed in connection with these sales totaled $1,119,000.
On June 23, 2017, we sold a 100% fee-simple interest in 4649 Cole Avenue located in Dallas, Texas to an unrelated third party. Transaction costs expensed in connection with this sale totaled $3,311,000 and included a prepayment penalty of $2,812,000 incurred in connection with the prepayment of the property's mortgage (Note 8).
On August 31, 2017, we sold a 100% leasehold interest in 800 N Capitol Street located in Washington, D.C. to an unrelated third party. Transaction costs expensed in connection with this sale totaled $2,388,000.
On September 21, 2017, we sold a 100% fee-simple interest in 7083 Hollywood Boulevard located in Los Angeles, California to an unrelated third party. Transaction costs expensed in connection with this sale totaled $584,000. A mortgage collateralized by this property was assumed by the buyer in connection with our sale of this property (Note 8).
On September 26, 2017, we sold a 100% fee-simple interest in 47 E 34th Street located in New York, New York to an unrelated third party. Transaction costs expensed in connection with this sale totaled $3,157,000.
The results of operations of the aforementioned properties have been included in the consolidated statements of operations through their respective disposition dates.
Property 
Asset
Type
 Date of Sale Square Feet / Units 
Sales
Price
 
Gain on
Sale
        (in thousands)
211 Main Street, San Francisco, CA Office March 28, 2017 417,266 $292,882
 $187,734
3636 McKinney Avenue, Dallas, TX Multifamily May 30, 2017 103 $20,000
 $5,488
3839 McKinney Avenue, Dallas, TX Multifamily May 30, 2017 75 $14,100
 $4,224
200 S College Street, Charlotte, NC Office June 8, 2017 567,865 $148,500
 $45,906
980 9th Street and 1010 8th Street, Sacramento, CA Office & Parking Garage June 20, 2017 485,926 $120,500
 $34,559
4649 Cole Avenue, Dallas, TX Multifamily June 23, 2017 334 $64,000
 $25,836
800 N Capitol Street, Washington, D.C. Office August 31, 2017 311,593 $119,750
 $34,759
7083 Hollywood Boulevard, Los Angeles, CA Office September 21, 2017 82,193 $42,300
 $23,670
47 E 34th Street, New York, NY Multifamily September 26, 2017 110 $80,000
 $16,556







CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

The following is the detail of the carrying amount of assets and liabilities at the time of the sales of the properties in 2017:
  (in thousands)
Assets  
Investments in real estate, net $469,816
Deferred rent receivable and charges, net 29,954
Other intangible assets, net 11,283
Other assets 38
Total assets $511,091
Liabilities  
Debt, net (1) $86,477
Other liabilities 14,029
Intangible liabilities, net 1,800
Total liabilities $102,306

(1)Net of $665,000 of premium on assumed mortgage.
There were no acquisitions during the nine months ended September 30, 2016.
On February 2, 2016, we sold a 100% fee-simple interest in the Courtyard Oakland located in Oakland, California to an unrelated third party.
On July 19, 2016, we sold a 100% fee-simple interest in the LAX Holiday Inn located in Los Angeles, California to an unrelated third party.
The results of operations of the aforementioned properties have been included in the consolidated statements of operations through their respective disposition dates.
Property Asset
Type		 Date of Sale Rooms Sales
Price		 Gain on
Sale
        (in thousands)
Courtyard Oakland, Oakland, CA Hotel February 2, 2016 162 $43,800
 $24,739
LAX Holiday Inn, Los Angeles, CA Hotel July 19, 2016 405 $52,500
 $14,927
We have entered into a purchase and sale agreement with an unrelated third party for the sale of a multifamily property located at 4200 Scotland Street in Houston, Texas. The contracted sales price for this property is $64,025,000. In connection with the disposition, $28,715,000 of the outstanding balance of the mortgages payable as of September 30, 2017 will be assumed by the buyer. The purchase and sale agreement was entered into and became subject to a non-refundable deposit prior to September 30, 2017. Therefore, the property has been classified as held for sale as of September 30, 2017. We expect the closing of this transaction to occur during the fourth quarter of 2017.
In addition, on October 17, 2017, we sold a 100% fee-simple interest in 370 L'Enfant Promenade located in Washington, D.C. to an unrelated third party for $126,680,000 and recognized a gain of approximately $2,000,000. As of June 30, 2017, based on negotiations with the buyer, we determined the book value of 370 L'Enfant Promenade exceeded its estimated fair value less costs to sell, and as such, an impairment charge of $0 and $13,100,000 was recognized during the three and nine months ended September 30, 2017, respectively. The purchase and sale agreement was entered into and became subject to a non-refundable deposit prior to September 30, 2017. Therefore, the property has been classified as held for sale as of September 30, 2017.

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

The following is the detail of the carrying amounts of assets and liabilities of the properties that are classified as held for sale on our consolidated balance sheet as of September 30, 2017:
  (in thousands)
Assets  
Investments in real estate, net (1) $167,361
Cash and cash equivalents 1,720
Accounts receivable, net 543
Deferred rent receivable and charges, net 4,105
Other assets 168
Total assets held for sale, net $173,897
Liabilities  
Debt, net (2) $28,618
Accounts payable and accrued expenses 6,980
Due to related parties 323
Other liabilities 1,027
Total liabilities associated with assets held for sale, net $36,948

(1)Investments in real estate of $217,304,000 are presented net of accumulated depreciation of $49,943,000.
(2)Debt represents the outstanding principal balance of 4200 Scotland Street of $28,715,000. Debt is presented net of deferred loan costs of $264,000 and accumulated amortization of $167,000.
4.3. INVESTMENTS IN REAL ESTATE
Investments in real estate consist of the following:following (in thousands):
 March 31, 2023December 31, 2022
Land$175,709 $151,727 
Land improvements6,012 1,837 
Buildings and improvements632,536 455,275 
Furniture, fixtures, and equipment12,468 4,339 
Tenant improvements31,066 34,372 
Work in progress13,490 12,863 
Investments in real estate871,281 660,413 
Accumulated depreciation(155,431)(158,407)
Net investments in real estate$715,850 $502,006 
  September 30, 2017 December 31, 2016
  (in thousands)
Land $213,495
 $343,564
Land improvements 17,746
 26,177
Buildings and improvements 835,215
 1,475,415
Furniture, fixtures, and equipment 3,273
 4,955
Tenant improvements 127,824
 159,677
Work in progress 8,223
 11,706
Investments in real estate 1,205,776
 2,021,494
Accumulated depreciation (264,539) (414,552)
Net investments in real estate $941,237
 $1,606,942
WeFor the three months ended March 31, 2023 and 2022, the Company recorded depreciation expense of $11,311,000$4.8 million and $15,402,000 for$4.2 million, respectively.
2023 Transactions—During the three months ended September 30, 2017 and 2016, respectively, and $38,665,000 and $47,105,000March 31, 2023, the Company acquired an interest in the following properties from subsidiaries indirectly wholly-owned by a fund that is managed by affiliates of CIM Group Management, LLC. The purchases were accounted for the nine months ended September 30, 2017 and 2016, respectively.as asset acquisitions.
AssetDate ofInterestPurchase
PropertyTypeAcquisitionUnitsAcquiredPrice
(in thousands)
Channel House
Multifamily(1)
January 31, 202333389.4 %$134,615 
F3 Land Site
Multifamily (1)
January 31, 2023N/A89.4 %$250 
466 Water Street Land Site
Multifamily (1)
January 31, 2023N/A89.4 %$2,500 
1150 Clay
Multifamily (2)
March 28, 202328898.1 %$145,500 

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CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and DecemberNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 20162023 (Unaudited) – (Continued)

5. OTHER INTANGIBLE ASSETS
A schedule of our intangible assets and liabilities and related accumulated amortization and accretion as of September 30, 2017 and December 31, 2016 is as follows:
  Assets Liabilities
September 30, 2017 Acquired
In-Place
Leases		 Trade Name and License Acquired
Below-Market
Leases
  (in thousands)
Gross balance $10,008
 $2,957
 $(5,073)
Accumulated amortization (7,620) —
 4,166
  $2,388
 $2,957
 $(907)
Average useful life (in years) 10
 Indefinite
 7
  Assets Liabilities
December 31, 2016 Acquired
Above-Market
Leases		 Acquired
In-Place
Leases		 Tax
Abatement (1)		 Acquired
Below-Market
Ground
Lease (2)		 Trade Name and License Acquired
Below-Market
Leases
  (in thousands)
Gross balance $215
 $11,551
 $4,273
 $11,685
 $2,957
 $(18,893)
Accumulated amortization (180) (8,443) (2,873) (1,562) —
 15,317
  $35
 $3,108
 $1,400
 $10,123
 $2,957
 $(3,576)
Average useful life (in years) 8
 10
 8
 84
 Indefinite
 8

(1)Tax abatement is associated with 47 E 34th Street, which was sold during the nine months ended September 30, 2017 (Note 3).
(1)Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of these property totaled $37,000, which are not included in the purchase prices above. The building at Channel House also includes approximately 1,864 square feet of retail space. The F3 Land Site is currently being utilized as a surface parking lot.
(2)Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of this property totaled $149,000, which are not included in the purchase price above. The building also includes approximately 3,968 square feet of retail space.
In addition, please see “Investments in Unconsolidated Entities” (Note 4) for information on the Company’s real estate acquisitions through its investments in unconsolidated entities.
The Company sold an interest in the following property during the three months ended March 31, 2023.
AssetDate ofInterestSalesGain on
PropertyTypeSaleSoldPriceSale
(in thousands)
4750 Wilshire Boulevard (1)
Office / MultifamilyFebruary 17, 202380.0 %$34,400 $1,104 
(2)
Acquired below-market ground lease is associated with 800 N Capitol Street, which was sold during the nine months ended September 30, 2017 (Note 3).
(1)The Company sold 80% of its interest in 4750 Wilshire Boulevard (excluding a vacant land parcel which was not included in the sale) to co-investors with whom it formed the 4750 Wilshire JV (defined in Note 4). The Company received net proceeds of $16.7 million and recorded a receivable of $17.7 million, which the Company expects to collect over a six month period, is included in other assets on the consolidated balance sheet as of March 31, 2023. The Company owns a 20% interest in the 4750 Wilshire JV and accounts for its investment as an equity method investment as of March 31, 2023.
2022 Transactions—During the three months ended March 31, 2022, the Company acquired a 100% fee-simple interest in the following properties from unrelated third-parties which transaction was accounted for as an asset acquisition.
AssetDate ofPurchase
PropertyTypeAcquisitionSquare FeetPrice
(in thousands)
3101 S Western Avenue, Los Angeles, CA (1) (2)
Multifamily development site (2)
February 11, 20223,752$2,260 
(1)Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of this property totaled $22,000, which are not included in the purchase price above.
(2)The property is located on a land site of approximately 11,300 square feet. The Company intends to entitle the property and develop approximately 40 residential units starting in 2023.
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
There were no dispositions during the three months ended March 31, 2022.
The results of operations of the properties the Company acquired have been included in the consolidated statements of operations from the dates of acquisition. The following table summarizes the purchase price allocation of the aforementioned acquisitions during the three months ended March 31, 2023 and 2022.
Three Months Ended March 31,
20232022
(in thousands)
Land$36,613 $2,271 
Land improvements4,523 3 
Buildings and improvements206,717 — 
Furniture, fixtures, and equipment8,140 
Acquired in-place leases (1)27,210 — 
Acquired above-market leases (2)71 — 
Acquired below-market leases (3)(223)— 
Net assets acquired$283,051 $2,274 
(1)The amortization period for the acquired in-place leases was approximately 6 months at the date of acquisition.
(2)The amortization period for the acquired above-market leases was approximately 7 months at the date of acquisition.
(3)The amortization period for the acquired below-market leases was approximately 5 months at the date of acquisition.
4. INVESTMENT IN UNCONSOLIDATED ENTITIES
The following table details the Company’s equity method investments in its Unconsolidated Joint Ventures. See Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (dollars in thousands):
Carrying Value
PropertyAsset TypeLocationAcquisition DateOwnership InterestMarch 31, 2023December 31, 2022
1910 Sunset Boulevard (1)
OfficeLos Angeles, CAFebruary 11, 202244.2%$12,320 $12,381 
4750 Wilshire Boulevard (2)
Office / MultifamilyLos Angeles, CAFebruary 17, 202320.0%8,597 — 
1902 Park Avenue (3)
MultifamilyLos Angeles, CAFebruary 28, 202350.0%7,458 — 
Total investments in unconsolidated entities$28,375 $12,381 
______________________
(1)1910 Sunset Boulevard is an office building with 97,202 square feet of office space and 2,760 square feet of retail space The plan for the property is to undertake a capital improvement program to renovate and modernize the building into creative office space as well as a limited number of multifamily units.
(2)4750 Wilshire Boulevard is a three-story office building with 30,335 square feet of office space located on the first floor. The remainder of the building is being converted into for-lease multifamily units.
(3)1902 Park Avenue is a 75-unit four-story multifamily building.
1910 Sunset Boulevard— In February 2022, the Company invested in a joint venture (the “1910 Sunset JV”) with a CIM-managed separate account (the “1910 Sunset JV Partner) to purchase an office property in Los Angeles, California for a gross purchase price of approximately $51.0 million, of which decreased rentalthe Company initially contributed approximately $22.4 million and otherthe CIM JV Partner initially contributed the remaining balance. In September 2022, the 1910 Sunset JV obtained financing through a mortgage loan of $23.9 million secured by the office property (the “1910 Sunset Mortgage Loan”). The Company provided a limited guarantee to the lender under the 1910 Sunset Mortgage Loan.
The Company recorded a loss of $61,000 and income was $0 and $17,000 forof $120,000 related to its investment in the 1910 Sunset JV during the three months ended September 30, 2017March 31, 2023 and 2016,March 31, 2022, respectively, in the consolidated statements of operations.
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
The Company’s investment in the 1910 Sunset JV was $12.3 million and $3,000 and $81,000 for the nine months ended September 30, 2017 and 2016, respectively. The amortizationits ownership percentage remained unchanged as of March 31, 2023.
4750 Wilshire Boulevard— In February 2023, three co-investors (the “4750 Wilshire JV Partners”) acquired an 80% interest in a property owned by a subsidiary of the acquired in-place leases includedCompany located at 4750 Wilshire Boulevard in depreciationLos Angeles, California (“4750 Wilshire”) for a gross sales price of $34.4 million (excluding transaction costs). The Company retained a 20% interest in 4750 Wilshire through a joint venture arrangement between the Company and amortization expense was $212,000the 4750 Wilshire JV Partners (the “4750 Wilshire JV”). The 4750 Wilshire JV Partners is converting two of the three floors of 4750 Wilshire from office-use into for-lease multifamily units, with the first floor of 4750 Wilshire continuing to function as 30,335 square feet of office space. The total cost of the conversion is expected to be approximately $31.0 million, which will be financed by a combination of equity contributions from the 4750 Wilshire JV Partners and $330,000a third-party construction loan, secured by 4750 Wilshire, which closed in March 2023, that allows for total draws of $38.5 million (the “4750 Wilshire Construction Loan”). The Company provided a limited guarantee to the lender, under the 4750 Wilshire Construction Loan. Pursuant to the co-investment agreement, the 4750 Wilshire JV Partners will pay an on-going management fee to the Company. In addition, the Company may earn incentive fees based on the performance of 4750 Wilshire after the conversion.
The Company recorded a loss of $3,000 related to its investment in the 4750 Wilshire JV during the three months ended September 30, 2017March 31, 2023 in the consolidated statements of operations. The Company’s investment in the 4750 Wilshire JV was $8.6 million and 2016, respectively,its ownership percentage remained unchanged as of March 31, 2023.
1902 Park Avenue— In February 2023, the Company and $623,000 and $1,078,000a CIM-managed interval fund (the “1902 Park JV Partner) purchased a multifamily property in the Echo Park neighborhood of Los Angeles, California for a gross purchase price of $19.1 million (excluding transaction costs) (the “1902 Park JV”). The Company owns 50% of the nine months ended September 30, 2017 and 2016, respectively. Included1902 Park JV. In connection with the closing in depreciation and amortization expense was franchise affiliation fee amortizationFebruary 2023, the 1902 Park JV obtained financing through a mortgage loan of $0 and $0 for$9.6 million secured by the multifamily property (the “1902 Park Mortgage Loan”). The Company provided a limited guarantee to the lender under the 1902 Park Mortgage Loan.
The Company recorded income of $832,000 related to its investment in the 1902 Park JV during the three months ended September 30, 2017 and 2016, respectively, and $0 and $33,000 forMarch 31, 2023 in the nine months ended September 30, 2017 and 2016, respectively. Tax abatement amortizationconsolidated statements of $0 and $138,000 foroperations. The Company’s investment in the three months ended September 30, 2017 and 2016, respectively, and $276,000 and $414,000 for the nine months ended September 30, 2017 and 2016, respectively,1902 Park JV was included in rental and other property operating expenses. The amortization of the acquired below-market ground lease of $23,000 and $35,000 for the three months ended September 30, 2017 and 2016, respectively, and $93,000 and $105,000 for the nine months ended September 30, 2017 and 2016, respectively, was included in rental and other property operating expenses. The amortization of the acquired below-market leases included in rental and other property income was $231,000 and $630,000 for the three months ended September 30, 2017 and 2016, respectively, and $869,000 and $1,892,000 for the nine months ended September 30, 2017 and 2016, respectively.


CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements$7.5 million as of September 30, 2017 and DecemberMarch 31, 2016, and2023.
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

5. LOANS RECEIVABLE
A schedule of future amortization and accretion of acquisition related intangible assets and liabilities as of September 30, 2017, is as follows:
  Assets Liabilities
Years Ending December 31, Acquired
In-Place
Leases		 Acquired
Below-Market
Leases
  (in thousands)
2017 (Three months ending December 31, 2017) $185
 $(197)
2018 718
 (510)
2019 459
 (200)
2020 202
 —
2021 202
 —
Thereafter 622
 —
  $2,388
 $(907)
6. OTHER ASSETS
Other assetsLoans receivable consist of the following:following (in thousands):
 March 31, 2023December 31, 2022
SBA 7(a) loans receivable, subject to credit risk$2,915 $56,116 
SBA 7(a) loans receivable, subject to loan-backed notes53,010 — 
SBA 7(a) loans receivable, subject to secured borrowings5,497 6,127 
SBA 7(a) loans receivable, held for sale1,684 117 
Loans receivable63,106 62,360 
Deferred capitalized costs, net1,276 1,293 
Loan loss reserves (1)(1,940)(1,106)
Loans receivable, net$62,442 $62,547 
____________________
  September 30, 2017 December 31, 2016
  (in thousands)
SBA 7(a) loans, subject to credit risk $49,925
 $43,623
SBA 7(a) loans, subject to secured borrowings 21,989
 29,524
Other assets 17,688
 19,123
  $89,602
 $92,270
(1)On January 1, 2023, the Company adopted ASU 2016-13. As such, the amounts as of March 31, 2023 reflect the Company’s current estimate of potential credit losses related to the Company’s loans receivable.

SBA 7(a) Loans Receivable, Subject to Credit Risk—Represents the non‑government guaranteed retained portionunguaranteed portions of loans originated under the SBA 7(a) Program andwhich were retained by the government guaranteed portionCompany.
SBA 7(a) Loans Receivable, Subject to Loan-Backed Notes—Represents the unguaranteed portions of loans that have not yet been fully funded or sold.originated under the SBA 7(a) Program which were transferred to a trust and are held as collateral in connection with a securitization transaction. The proceeds received from the transfer were reflected as loan-backed notes payable (Note 7). These loans were subject to credit risk.
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
SBA 7(a) Loans Receivable, Subject to Secured Borrowings—Represents the government guaranteed portionportions of loans originated under the SBA 7(a) Program which were sold with the proceeds received from the sale reflected as secured borrowings—government guaranteed loans. There iswas no credit risk associated with these loans since the SBA has guaranteed payment of the principal.
At September 30, 2017SBA 7(a) Loans Receivable, Held for Sale— Represents the government guaranteed portion of loans held for sale at the end of the period or that had been sold but in respect of which proceeds had not been received as of the end of the period.
Current Expected Credit Losses
Current expected credit losses (“CECL”) reflect the Company’s current estimate of potential credit losses related to loans receivable included in the Company’s consolidated balance sheets as of March 31, 2023 pursuant to ASU 2016-13 as implemented effective January 1, 2023. Refer to Note 2 for further discussion of CECL.
The following table presents the activity in the Company’s current expected credit losses for the three months ended March 31, 2023 (dollar amounts in thousands):
Loans Receivable
Allowance for credit losses as of December 31, 2022$1,106 
Transition adjustment on January 1, 2023783 
Reserve for expected credit losses51 
Current expected credit losses as of March 31, 2023$1,940 
The Company’s initial estimate of its current expected credit losses against the loans receivable of $783,000, net of a $164,000 deferred tax asset, was recorded on January 1, 2023 directly to distributions in excess of earnings on the Company’s consolidated statements of equity. Subsequent changes to the allowance for credit losses are recognized through net income on the Company’s consolidated statements of operations. During the three months ended March 31, 2023, the Company recorded a $51,000 increase in its current expected credit losses related to its loans receivable, which is recorded in general and administrative in the consolidated statement of operations, bringing the total current expected credit loss to $1.9 million as of March 31, 2023.
Other
As of March 31, 2023 and December 31, 2016, 99.0% and 99.7%, respectively, of our2022, the Company’s loans subject to credit risk were current with99.9% and 99.9%, respectively, concentrated in the remainder ($494,000hospitality industry. As of March 31, 2023 and $249,000, respectively) greater than 29 days delinquent. We classifyDecember 31, 2022, 98.9% and 98.4%, respectively, of the Company’s loans subject to credit risk were current. The Company classifies loans with negative characteristics in substandard categories ranging from special mention to doubtful. At September 30, 2017As of March 31, 2023 and December 31, 2016, $494,0002022, $740,000 and $804,000,$1.0 million, respectively, of loans subject to credit risk were classified in substandard categories.
At September 30, 2017 and December 31, 2016, our loans subject to credit risk were 95.9% and 94.6%, respectively, concentrated in the hospitality industry.

17
CIM COMMERCIAL
Table of Contents
CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial StatementsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
6. OTHER INTANGIBLE ASSETS AND LIABILITIES
A schedule of the Company’s intangible assets and liabilities and related accumulated amortization and accretion as of September 30, 2017March 31, 2023 and December 31, 2016,2022 is as follows (in thousands):
March 31, 2023December 31, 2022
Intangible assets:
Acquired in-place leases, net of accumulated amortization of $11,923 and $7,795, respectively, with an average useful life of 3 and 8 years, respectively.$24,571 $1,488 
Acquired above-market leases, net of accumulated amortization of $63 and $39, respectively, with an average useful life of 3 and 6 years, respectively63 16 
Trade name and license2,957 2,957 
Total intangible assets, net$27,591 $4,461 
Intangible lease liabilities:
Acquired below-market leases, net of accumulated amortization of $32 and $22, respectively, both with an average useful life of 1 year$234 $20 
Amortization of the acquired above-market leases is recorded as a reduction to rental and
for other property income, and amortization of the Threeacquired in-place leases is included in depreciation and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

7. DISCONTINUED OPERATIONS
We had reflected the lending segment, which was acquired on the Acquisition Date as disclosed in Note 1, as held for sale commencing in 2014, based on a plan approved by the Board of Directors to sell the lending segment that, when completed, would have resultedamortization in the deconsolidation of the lending segment, which at that time was focused on small business lending in the hospitality industry. In July 2015, to maximize value, we modified our strategy from a strategy of selling the lending segment as a whole to a strategy of soliciting buyers for components of the business, including our commercial mortgage loans and the SBA 7(a) lending platform. This change in the sale methodology resulted in the need to extend the period to complete the sale of the lending segment beyond one year. In connection with our plan, we expensed transaction costs of $14,000 and $34,000 as incurred during the three and nine months ended September 30, 2016, respectively.
On December 17, 2015, pursuant to the modified plan, we sold substantially all of our commercial mortgage loans with a carrying value of $77,121,000 to an unrelated third party and recognized a gain of $5,151,000. In September 2016, we discontinued our efforts to sell the SBA 7(a) lending platform, and the activities related to the SBA 7(a) lending platform have been reclassified to continuing operations for all periods presented.
On December 29, 2016, we sold our commercial real estate lending subsidiary, which was classified as held for sale and had a carrying value of $27,587,000, which was equal to management's estimate of fair value, to a fund managed by an affiliate of CIM Group. We did not recognize any gain or loss in connection with the transaction. Management's estimate of fair value was determined with assistance from an independent third party valuation firm.
The following is the detail of income from operations of assets held for sale classified as discontinued operations on theaccompanying consolidated statements of operations foroperations. Amortization of the threeacquired below-market leases is recorded as an increase to rental and nine months ended September 30, 2016:
  Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016
  (in thousands)
Revenue—Interest and other income
 $1,198
 $4,729
     
Expenses:    
Interest expense 355
 1,231
Fees to related party 137
 417
General and administrative 3
 20
Total expenses 495
 1,668
Income from operations of assets held for sale $703
 $3,061
other property income in the accompanying consolidated statements of operations.
During the ninethree months ended September 30, 2017, we sold fourMarch 31, 2023 and 2022, the Company recognized amortization related to its intangible assets and liabilities as follows (in thousands):
Three Months Ended March 31,
20232022
Acquired above-market lease amortization$24 $3 
Acquired in-place lease amortization$4,127 $238 
Acquired below-market lease amortization$9 $69 
A schedule of our five multifamily properties to unrelated third partiesfuture amortization and we entered into a purchaseaccretion of acquired intangible assets and sale agreement subject to a non-refundable deposit with an unrelated third party for the remaining multifamily property, which has been classified as held for sale on our consolidated balance sheetliabilities as of September 30, 2017. We expect the closingMarch 31, 2023, is as follows (in thousands):
 AssetsLiabilities
Years Ending December 31,Acquired
Above-Market
Leases		Acquired
In-Place
Leases		Acquired
Below-Market
Leases
2023$57 $23,585 $(234)
20245 374 — 
20251 171 — 
2026— 123 — 
2027— 123 — 
Thereafter— 195 — 
$63 $24,571 $(234)
18
Table of this sales transaction to occur during the fourth quarter of 2017.Contents
We have assessed the sale of four of our multifamily properties and our agreement to sell our remaining multifamily property (Note 3) in accordance with ASC 205-20, Discontinued Operations. In our assessment, we considered, among other factors, the materiality of the revenue, net operating income, and total assets of our multifamily segment during the three and nine months ended September 30, 2017 and for the years ended December 31, 2016 and 2015. Based on our qualitative and quantitative assessment, we concluded the disposals do not represent a strategic shift that will have a major effect on our operations and financial results and they should not be classified as discontinued operations on our consolidated financial statements.

CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial StatementsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
7. DEBT
The following table summarizes the debt balances as of September 30, 2017March 31, 2023 and December 31, 2016,2022, and
the debt activity for the Threethree months ended March 31, 2023 (in thousands):
During the Three Months Ended March 31, 2023
Balances as of December 31, 2022Debt Issuances & AssumptionsRepaymentsAccretion & (Amortization)Balances as of March 31, 2023
Mortgages Payable:
Fixed rate mortgage payable$97,100 $— $— $— $97,100 
Variable rate mortgages payable181,318 (16,000)— 165,318 
97,100 181,318 (16,000)— 262,418 
Deferred debt origination costs — Mortgages Payable(94)(1,088)— 135 (1,047)
Total Mortgages Payable97,006 180,230 (16,000)135 261,371 
Secured Borrowings — Government Guaranteed Loans:
Outstanding Balance5,979 — (607)— 5,372 
Unamortized premiums258 — — (26)232 
Total Secured Borrowings — Government Guaranteed Loans6,237 — (607)(26)5,604 
Other Debt:
2022 credit facility revolver— 212,000 (90,000)— 122,000 
2022 credit facility term loan56,230 — — — 56,230 
Junior subordinated notes27,070 — — — 27,070 
SBA 7(a) loan-backed notes— 54,141 (2,203)— 51,938 
Deferred debt origination costs — other(779)(1,312)— 98 (1,993)
Discount on junior subordinated notes(1,497)— — 25 (1,472)
Total Other Debt81,024 264,829 (92,203)123 253,773 
Total Debt, Net$184,267 $445,059 $(108,810)$232 $520,748 
Fixed Rate Mortgage Payable—The Company’s fixed rate mortgage payable is secured by a deed of trust on a property and Nine Months Ended September 30, 2017 and 2016 (Unaudited)
assignments of rents receivable. As of March 31, 2023, the Company’s fixed rate mortgage payable had a fixed interest rate of 4.14% per annum, with monthly payments of interest only, due on July 1, 2026. The loan is nonrecourse.

8. DEBT
Information on our debt is as follows:
  September 30, 2017 December 31, 2016
  (in thousands)
Mortgage loans with a fixed interest rate of 4.14% per annum, with monthly payments of interest only, and balances totaling $370,300,000 due on July 1, 2026. The loans are nonrecourse. In September 2017, one loan with an outstanding principal balance of $21,700,000 was assumed by the buyer in connection with the sale of the property that was collateral for the loan (Note 3). $370,300
 $392,000
Mortgage loan with a fixed interest rate of 4.50% per annum, with monthly payments of interest only for 10 years, and payments of interest and principal starting in February 2022. The loan has a $42,008,000 balance due on January 5, 2027. The loan is nonrecourse.  46,000
 46,000
Mortgage loans with a fixed interest rate of 5.39% per annum, with monthly payments of principal and interest, and balances totaling $35,695,000 due on March 1, 2021. The loans were nonrecourse. The loans were repaid in May and June 2017 in connection with the sale of the properties that were collateral for the loans. —
 39,134
Mortgage loan with a fixed interest rate of 5.18% per annum, with monthly payments of principal and interest, and a balance of $26,232,000 due on June 5, 2021. The loan is nonrecourse. The loan was reclassified to liabilities associated with assets held for sale at September 30, 2017 (Note 3). —
 29,167
Mortgage loan with a fixed interest rate of 6.65% per annum, with monthly payments of principal and interest. The loan had a 25-year amortization schedule with a $21,136,000 balance due on July 15, 2018. The loan was nonrecourse. The loan was repaid in March 2017 in connection with the sale of the property that was collateral for the loan. —
 26,136
  416,300
 532,437
Deferred loan costs related to mortgage loans (1,582) (2,366)
Premiums and discounts on assumed mortgages, net —
 722
Total Mortgages Payable 414,718
 530,793
Secured borrowing principal on SBA 7(a) loans sold for a premium and excess spread—variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 5.19% and 4.13% at September 30, 2017 and December 31, 2016, respectively. 17,015
 23,122
Secured borrowing principal on SBA 7(a) loans sold for excess spread—variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 2.60% and 1.83% at September 30, 2017 and December 31, 2016, respectively. 3,918
 4,777
  20,933
 27,899
Unamortized premiums 1,490
 2,077
Total Secured Borrowings—Government Guaranteed Loans 22,423
 29,976
Unsecured term loan facility 320,000
 385,000
Junior subordinated notes with a variable interest rate which resets quarterly based on the 90-day LIBOR plus 3.25%, with quarterly interest only payments. Balance due at maturity on March 30, 2035.  27,070
 27,070
Unsecured credit facility —
 —
  347,070
 412,070
Deferred loan costs related to unsecured term loan and credit facilities (2,238) (2,938)
Discount on junior subordinated notes (1,957) (2,015)
Total Other 342,875
 407,117
Total Debt $780,016
 $967,886
Variable Rate Mortgages Payable—The Company’s variable rate mortgages payable are secured by deedsa deed of trust on certain of the respective properties and assignments of rents.rents receivable. As of March 31, 2023, the Company’s variable rate mortgages payable had a variable interest rates ranging from SOFR plus 3.25% - 3.35%, with monthly payments of interest only, due on various dates from June 7, 2024 to July 7, 2025 with extension options subject to certain conditions being met. The loans are nonrecourse.

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

The junior subordinated notes may be redeemed at par at our option.
Secured Borrowings—Government Guaranteed Loans—Secured borrowings—government guaranteed loans represent sold loans which are treated as secured borrowings because the loan sales did not meet the derecognition criteria provided for in ASC 860-30, Secured Borrowing and Collateral. These loans included cash premiums that are amortized as a reduction to interest expense over the life of the loan using the effective interest method and are fully amortized when the underlying loan is repaid in full. As of March 31, 2023, the Company’s secured borrowings-government guaranteed loans included $3.0 million of loans sold for a premium and excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 8.13% at March 31, 2023, and $2.4 million of loans sold for an excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 5.82% at March 31, 2023.
2022 Credit Facility—In December 2022, the Company refinanced its 2018 credit facility and replaced it with a new 2022 credit facility, entered into with a bank syndicate, that includes a $56.2 million term loan (the “2022 Credit Facility Term
19
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
Loan”) as well as a revolver allowing the Company to borrow up to $150.0 million (the “2022 Credit Facility Revolver”), both of which are collectively subject to a borrowing base calculation. The 2022 credit facility is secured by certain properties in the Company’s real estate portfolio: six office properties and one hotel property (as well as the hotel’s adjacent parking garage and retail property). The 2022 credit facility bears interest at (A) the base rate plus 1.50% or (B) SOFR plus 2.60%. As of March 31, 2023, the variable interest rate was 7.36%. The 2022 Credit Facility Revolver is also subject to an unused commitment fee of 0.15% or 0.25% depending on the amount of aggregate unused commitments. The 2022 credit facility is guaranteed by the Company and the Company is subject to certain financial maintenance covenants. The 2022 credit facility matures in December 2025 and provides for two one-year extension options under certain conditions, including providing notice of the election and paying an extension fee of 0.15% of each lender’s commitment being extended on the effective date of such extension. As of March 31, 2023 and December 31, 2022, $28.0 million and $150.0 million, respectively, was available for future borrowings.
Junior Subordinated Notes—The Company has junior subordinated notes with a variable interest rate which resets quarterly based on the three-month LIBOR plus 3.25%, with quarterly interest only payments. The junior subordinated balance is due at maturity on March 30, 2035. The junior subordinated notes may be redeemed at par at the Company’s option.
SBA 7(a) Loan-Backed Notes—On March 9, 2023, the Company completed a securitization of the unguaranteed portion of certain of its SBA 7(a) loans receivable with the issuance of $54.1 million of unguaranteed SBA 7(a) loan-backed notes (with net proceeds of approximately $43.3 million, after payment of fees and expenses in connection with the securitization and the funding of a reserve account and an escrow account). The SBA 7(a) loan-backed notes are collateralized by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of our SBA 7(a) loans receivable. The SBA 7(a) loan-backed notes mature on March 20, 2048, with monthly payments due as payments on the collateralized loans are received. The SBA 7(a) loan-backed notes bear interest at a per annum rate equal to the lesser of (i) 30-day average compounded SOFR plus 2.90% and (ii) prime rate minus 0.35%. As of March 31, 2023, the variable interest rate was 7.40%. The Company reflects the SBA 7(a) loans receivable as assets on its consolidated balance sheet and the SBA 7(a) loan-backed notes as debt on its consolidated balance sheet. The restricted cash on the Company’s consolidated balance sheets included funds related to the Company’s SBA 7(a) loan-backed notes was $7.7 million as of March 31, 2023.
Deferred loandebt issuance costs, which represent legal and third-party fees incurred in connection with ourthe Company’s borrowing activities, are capitalized and amortized to interest expense on a straight-line basis over the life of the related loan, approximating the effective interest method. Deferred loandebt issuance costs of $5,533,000 and $7,122,000 are presented net of accumulated amortization of $1,713,000 and $1,818,000 at September 30, 2017 and December 31, 2016, respectively, and are a reduction to total debt.
In September 2014, CIM Commercial entered into an $850,000,000 unsecured credit facility with a bank syndicate consistingAs of a $450,000,000 revolver, a $325,000,000 term loan and a $75,000,000 delayed-draw term loan. CIM Commercial is subject to certain financial maintenance covenants and a minimum property ownership condition. Outstanding advances under the revolver bear interest at (i) the base rate plus 0.20% to 1.00% or (ii) LIBOR plus 1.20% to 2.00%, depending on the maximum consolidated leverage ratio. Outstanding advances under the term loans bore interest at (i) the base rate plus 0.15% to 0.95% or (ii) LIBOR plus 1.15% to 1.95%, depending on the maximum consolidated leverage ratio. The revolver is also subject to an unused commitment fee of 0.15% or 0.25% depending on the amount of aggregate unused commitments. The delayed-draw term loan was also subject to an unused line fee of 0.25%. Proceeds from the unsecured credit facility were used to repay mortgage loans and outstanding balances under our prior unsecured credit facilities, for acquisitions, short-term funding of a Common Stock tender offer in June 2016, short-term funding of a private repurchase of Common Stock in June 2017, and general corporate purposes. In June 2016, we entered into six mortgage loan agreements with an aggregate principal amount of $392,000,000. A portion of the net proceeds from the loans was used to repay outstanding balances under our unsecured credit facility and the remaining portion was used to repurchase shares of our Common Stock in a private repurchase in September 2016. The June 2017 borrowing used to fund the private share repurchase was repaid using proceeds from subsequent asset sales. The credit facility was set to mature in September 2016 and prior to maturity, we exercised the first of two one year extension options through September 2017 and we permanently reduced the revolving credit commitment under the credit facility to $200,000,000. In August 2017, we exercised the second of two one year extension options through September 2018 and, in connection with such exercise, we paid an extension fee of $300,000. At September 30, 2017March 31, 2023 and December 31, 2016, $0 was outstanding under the credit facility. The unused capacity on the unsecured credit facility, based on covenant restrictions at September 30, 2017 and December 31, 2016, was approximately $21,000,000 and $200,000,000, respectively.
In May 2015, CIM Commercial entered into an unsecured term loan facility with a bank syndicate pursuant to which CIM Commercial can borrow up to a maximum of $385,000,000. The term loan facility ranks pari passu with CIM Commercial's unsecured credit facility described above; covenants under the term loan facility are substantially the same as those in the unsecured credit facility. Outstanding advances under the term loan facility bear interest at (i) the base rate plus 0.60% to 1.25% or (ii) LIBOR plus 1.60% to 2.25%, depending on the maximum consolidated leverage ratio. The unused portion of the term loan facility was also subject to an unused fee of 0.20%. The term loan facility matures in May 2022. On November 2, 2015, $385,000,000 was drawn under the term loan facility. Proceeds from the term loan facility were used to repay balances outstanding under our unsecured credit facility. At September 30, 2017 and December 31, 2016, the variable interest rate on this unsecured term loan facility was 2.84% and 2.22%, respectively. The interest rate of the loan has been effectively converted to a fixed rate of 3.16% until May 8, 2020 through interest rate swaps (Note 13). On August 3, 2017, we repaid $65,000,000 of outstanding borrowings on our unsecured term loan facility. In connection with such paydown, we wrote off deferred loan costs of $601,000 and related accumulated amortization of $193,000, a proportionate amount to the borrowings being repaid, and we terminated three interest rate swaps with an aggregate notional value of $65,000,000 (Note 13). Costs incurred to terminate such swaps totaled $38,000 and are reflected in interest expense for the three and nine months ended September 30, 2017. At September 30, 2017 and December 31, 2016, $320,000,000 and $385,000,000, respectively, was outstanding under the term loan facility.
At September 30, 2017 and December 31, 2016, we were in compliance with all of our respective financial covenants under the unsecured credit and term loan facilities.
On March 28, 2017, in connection with the sale of an office property in San Francisco, California, we paid off a mortgage with an outstanding balance of $25,331,000 using proceeds from the sale. Additionally, we paid a prepayment penalty of $1,508,000 in connection with the prepayment of this mortgage (Note 3).

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

On May 30, 2017, in connection with the sale of two multifamily properties, both located in Dallas, Texas, we paid off two mortgages with an aggregate outstanding principal balance of $15,448,000 using proceeds from the sales. Additionally, we paid aggregate prepayment penalties of $1,901,000 in connection with the prepayment of these mortgages (Note 3).
On June 23, 2017, in connection with the sale of a multifamily property in Dallas, Texas, we paid off a mortgage with an outstanding principal balance of $23,333,000 using proceeds from the sale. Additionally, we paid a prepayment penalty of $2,812,000 in connection with the prepayment of this mortgage (Note 3).
On September 21, 2017, in connection with the sale of an office property in Los Angeles, California, a mortgage with an outstanding principal balance of $21,700,000, collateralized by such property, was assumed by the buyer.
As of September 30, 2017, one mortgage loan is included in liabilities associated with assets held for sale on our consolidated balance sheet. The mortgage loan is nonrecourse, is secured by a multifamily property located at 4200 Scotland Street in Houston, Texas, and has an outstanding principal balance of $28,715,000 at September 30, 2017 with a fixed interest rate of 5.18% per annum, requiring monthly payments of principal and interest, with a maturity date of June 5, 2021 (Note 3).
At September 30, 2017 and December 31, 2016,2022, accrued interest and unused commitment fees payable of $2,569,000$2.0 million and $3,133,000,$562,000, respectively, arewere included in accounts payable and accrued expenses.
Future principal payments on ourthe Company’s debt (face value) at September 30, 2017as of March 31, 2023 are as follows:follows (in thousands):
Years Ending December 31,Mortgage Payable
Secured Borrowings Principal (1)
2022 Credit Facility
Other (1) (2)
Total
2023 (Nine months ending December 31, 2023)$— $186 $— $6,834 $7,020 
202478,318 263 — 8,576 87,157 
202587,000 282 178,230 7,767 273,279 
202697,100 302 — 7,047 104,449 
2027— 323 — 6,436 6,759 
Thereafter— 4,016 — 42,348 46,364 
$262,418 $5,372 $178,230 $79,008 $525,028 
______________________
(1)Principal payments on secured borrowings and SBA 7(a) loan-backed notes, which are included in Other, are generally dependent upon cash flows received from the underlying loans. The Company’s estimate of their repayment is based on scheduled payments on the underlying loans. The Company’s estimate will differ from actual amounts to the extent the Company experiences prepayments and or loan liquidations or charge-offs.
(2)Represents the junior subordinated notes and SBA 7(a) loan-backed notes.

20
Years Ending December 31, Secured Borrowings Principal (1) Mortgages
Payable (2)		 Other (3) Total
  (in thousands)
2017 (Three months ending December 31, 2017) $181
 $—
 $—
 $181
2018 745
 —
 —
 745
2019 776
 —
 —
 776
2020 809
 —
 —
 809
2021 844
 —
 —
 844
Thereafter 17,578
 416,300
 347,070
 780,948
  $20,933
 $416,300
 $347,070
 $784,303
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In the normal course of business, the Company may use certain types of derivative instruments for the purpose of managing or hedging its interest rate risk. During the three months ended March 31, 2023, the Company entered into two interest rate cap agreements in connection with the assumption of two mortgage loans.
The following table summarizes the terms of the Company’s interest rate cap agreements as of March 31, 2023 (dollar amounts in thousands):
   Outstanding Notional   Fair Value of Assets as of
Balance SheetAmount as ofStrikeEffectiveMaturityMarch 31,
LocationMarch 31, 2023
Rates (1)
DatesDates2023
Interest Rate CapsOther assets$165,318 
2.5% to
3.5%
6/15/2021 to 8/07/20227/07/2023 to 6/07/2024$2,590 

(1)Principal payments are generally dependent upon cash flows received from the underlying loans. Our estimate of their repayment is based on scheduled principal payments on the underlying loans. Our estimate will differ from actual amounts to the extent we experience prepayments and/or loan liquidations or charge-offs. No payment is due unless payments are received from the borrowers on the underlying loans.
(2)Excludes the future principal payments for 4200 Scotland Street's mortgage, which is classified as liabilities associated with assets held for sale on our consolidated balance sheet at September 30, 2017 (Note 3).
(3)Represents the junior subordinated notes and unsecured term loan facility.
(1)The index used for the Company’s interest rate cap agreements is 1-Month Term SOFR.
Additional disclosures related to the fair value of the Company’s derivative instruments are included in Note 13. The notional amount under the derivative instruments is an indication of the extent of the Company’s involvement in each instrument, but does not represent exposure to credit, interest rate or market risks.
Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company has interest rate caps that are used to manage exposure to interest rate movements, but do not meet the requirements to be designated as hedging instruments. The change in fair value of the derivative instruments that are not designated as hedges is recorded directly to earnings as interest expense on the accompanying consolidated statements of operations.
9. STOCK-BASED COMPENSATION PLANS
InOn April 3, 2015, wethe Company’s board of directors (the “Board of Directors”) unanimously approved the Company’s 2015 Equity Incentive Plan (the “2015 Equity Incentive Plan”), which was approved by the Company’s stockholders. Under the 2015 Equity Incentive Plan, the Company granted awards of 2,000 restricted shares of Common Stock to each of the independent members of the Board of Directors (6,000 in aggregate) under the 2015 Equity Incentive Plan, which fully vested in April 2016 based on one year of continuous service. In May 2016, we granted awards of 3,392 restricted shares of Common Stock to each of the independent members of the Board of Directors (10,176 in aggregate) under the 2015 Equity Incentive Plan, which fully vested in May 2017 based on one year of continuous service. In addition, in June 2017, we granted awards of 3,195 restricted shares of Common Stock to each of the independent members of the Board of Directors (9,585 in aggregate) under the 2015 Equity Incentive Plan, which will vest over one year of continuous service. as follows:
Grant Date (1)Vesting DateRestricted Shares of Common Stock - IndividualRestricted Shares of Common Stock - Aggregate
May 2021May 2022 (2)5,083 20,332 
June 2022June 20237,746 30,984 
______________________
(1)Compensation expense related to these restricted shares of Common Stock is recognized over the vesting period. Weperiod, and generally vests based on one year of continuous service. The Company recorded compensation expense of $38,000 and $48,000 for the three months ended September 30, 2017 and 2016, respectively, and $115,000 and $107,000 for the nine months ended September 30, 2017 and 2016, respectively, related to these restricted shares of Common Stock.

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

We issued to two of our executive officers an aggregate of 2,000 restricted shares of Common Stock on May 6, 2014, which were fully vested in May 2016, and an aggregate of 2,000 restricted shares of Common Stock on March 6, 2015, which were fully vested in March 2017. The restricted shares of Common Stock vested based on two years of continuous service with one-third of the shares of Common Stock vesting immediately upon issuance and one-third vesting at the end of each of the next two years from the date of issuance. Compensation expense related to these restricted shares of Common Stock was recognized overin the vesting period. We recognized compensation expenseamount of $0$55,000 and $1,000$55,000 for the three months ended September 30, 2017March 31, 2023 and 2016, respectively,2022, respectively.
(2)These shares vested after one year of continuous service, other than the shares granted to Mr. Frank Golay, Jr., a former independent director of the Company, which vested on April 29, 2022. Mr. Golay retired from the Board on May 2, 2022 and, $1,000 and $7,000 forin recognition of his service to the nine months ended September 30, 2017 and 2016, respectively, related to these restricted sharesCompany, the Board accelerated the vesting of Common Stock.Mr. Golay’s shares.
As of September 30, 2017,March 31, 2023, there was $99,000$37,000 of total unrecognized compensation expense related to restricted shares of Common Stock which will be recognized ratably over the next year.remaining vesting period.
10. EARNINGS PER SHARE ("EPS")
The computations of basic EPS are based on ourthe Company’s weighted average shares outstanding. TheNo shares of Series D Preferred Stock, Series A Preferred Stock, or Series A1 Preferred Stock outstanding as of March 31, 2023 were included in
21
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
the computation of diluted EPS because they had no dilutive effect. For the three months ended March 31, 2022, the basic weighted average number of shares of Common Stock outstanding were 57,876,000 and 87,045,000 forwas increased by 2,477 shares to reflect the three months ended September 30, 2017 and 2016, respectively, and 73,503,000 and 93,772,000 for the nine months ended September 30, 2017 and 2016, respectively. We had no dilutive securities outstanding for eacheffect of certain shares of the three and nine months ended September 30, 2017 and 2016. Outstanding shares ofCompany’s Series A Preferred Stock andStock. Outstanding Series A Preferred Warrants were not included in the computation of diluted EPS for the three and nine months ended September 30, 2017March 31, 2023 and 2022 because their impact was deemed to be anti-dilutive. Noeither anti-dilutive or such warrants were not exercisable during such periods (Note 12). Outstanding shares of Series AL Preferred Stock or Warrants were outstanding duringnot included in the computation of diluted EPS for the three and nine months ended September 30, 2016.March 31, 2023 (because they were redeemed in January 2023) and 2022 (because such shares were not redeemable during such period).
EPS for the year-to-date period may differ from the sum of quarterly EPS amounts due to the required method for computing EPS in the respective periods. In addition, EPS is calculated independently for each component and may not be additive due to rounding.
The following table reconciles the numerator and denominator used in computing ourthe Company’s basic and diluted per-share amounts for net income availableloss attributable to common stockholders for the three and nine months ended September 30, 2017March 31, 2023 and 2016:2022 (in thousands, except per share amounts):
Three Months Ended March 31,
20232022
Numerator:
Net loss attributable to common stockholders$(12,715)$(2,811)
Redeemable preferred stock dividends declared on dilutive shares— (1)
Diluted net loss attributable to common stockholders$(12,715)$(2,812)
Denominator:
Basic weighted average shares of Common Stock outstanding22,707 23,349 
Effect of dilutive securities—contingently issuable shares— 2 
Diluted weighted average shares and common stock equivalents outstanding22,707 23,351 
Net loss attributable to common stockholders per share:
Basic$(0.56)$(0.12)
Diluted$(0.56)$(0.12)
22
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
 (in thousands, except per share amounts)
Numerator:       
Net income from continuing operations$72,391
 $8,382
 $357,698
 $33,865
Net loss (income) attributable to noncontrolling interests4
 3
 (10) (9)
Redeemable preferred stock dividends(138) —
 (241) —
Numerator for basic and diluted net income from continuing operations available to common stockholders72,257
 8,385
 357,447
 33,856
Net income from discontinued operations—
 703
 —
 3,061
Numerator for basic and diluted net income available to common stockholders$72,257
 $9,088
 $357,447
 $36,917
Denominator:       
Basic weighted average shares outstanding57,876
 87,045
 73,503
 93,772
Effect of dilutive securities—contingently issuable shares and stock options—
 —
 —
 —
Diluted weighted average shares and common stock equivalents outstanding57,876
 87,045
 73,503
 93,772
Basic and diluted net income available to common stockholders per share:       
Continuing operations$1.25
 $0.10
 $4.86
 $0.36
Discontinued operations$—
 $0.01
 $—
 $0.03
Net income$1.25
 $0.10
 $4.86
 $0.39

Table of Contents
CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and DecemberNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016, and2023 (Unaudited) – (Continued)
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

11. REDEEMABLE PREFERRED STOCK
We have an effective registration statement withThe table below provides information regarding the Securitiesissuances, reclassifications and Exchange Commission ("SEC")redemptions of each class of the Company’s preferred stock in permanent equity during the three months ended March 31, 2023 and 2022 (dollar amounts in thousands):
 Preferred Stock
Series A1Series ASeries DSeries LTotal
 SharesAmountSharesAmountSharesAmountSharesAmountSharesAmount
Balances, December 31, 2021— $— 6,271,337 $156,431 56,857 $1,396 5,387,160 $152,834 11,715,354 $310,661 
Reclassification of Series A Preferred stock to permanent equity— — 329,921 8,304 — — — — 329,921 8,304 
Redemption of Series A Preferred Stock— — (49,341)(1,228)— — — — (49,341)(1,228)
Balances, March 31, 2022— $— 6,551,917 $163,507 56,857 $1,396 5,387,160 $152,834 11,995,934 $317,737 
Balances, December 31, 20225,956,147 $147,514 7,565,349 $189,048 48,857 $1,200 — $— 13,570,353 $337,762 
Issuance of Series A1 Preferred Stock1,032,433 25,569 — — — — — — 1,032,433 25,569 
Redemption of Series A1 Preferred Stock(12,870)(319)— — — — — — (12,870)(319)
Reclassification of Series A Preferred stock to permanent equity— — 389,325 9,699 — — — — 389,325 9,699 
Redemption of Series A Preferred Stock— — (189,753)(4,723)— — — — (189,753)(4,723)
Balances, March 31, 20236,975,710 $172,764 7,764,921 $194,024 48,857 $1,200 — $— 14,789,488 $367,988 
Series A1 Preferred Stock—Since June 2022, the Company has been conducting a continuous public offering with respect to the offer and saleshares of up to $900,000,000 of units (collectively, the "Units"), with each unit consisting of (i) one share ofits Series AA1 Preferred Stock, par value $0.001 per share of the Company (collectively, the "Series A Preferred Stock") with an initial stated value of $25.00 per share, ("Stated Value")subject to adjustment. Shares of Series A1 Preferred Stock are recorded in permanent equity at the time of their issuance. As of March 31, 2023, the Company had issued in registered public offerings 6,798,510 shares of the Series A1 Preferred Stock and (ii)received gross proceeds of $168.3 million and additionally, had issued 200,000 shares of Series A1 Preferred Stock as payment for services to the CIM Service Provider, LLC (the “Administrator”), for which no cash proceeds were received. In connection with the issuance of shares of Series A1 Preferred Stock, $12.4 million of costs specifically identifiable to the offering of Series A1 Preferred Stock was allocated to the Series A1 Preferred Stock. Such costs include commissions, dealer manager fees and other offering fees and expenses but do not include non-issuance-specific costs of $9.8 million related to the Company’s offering of Series A Preferred Stock, Series A Preferred Warrants, Series A1 Preferred Stock and Series D Preferred Stock. As of March 31, 2023, the Company had reclassified and allocated $2.3 million from deferred charges to Series A1 Preferred Stock as a reduction to the gross proceeds received. Such reclassification was based on the cumulative number of securities issued relative to the maximum number of securities expected to be issued under the offering.
As of March 31, 2023, there were 6,975,710 shares of Series A1 Preferred Stock outstanding and 22,800 shares of Series A1 Preferred Stock had been redeemed.
Series A Preferred Stock—The Company conducted a continuous public offering of Series A Preferred Stock (with each issued share of Series A Preferred Stock, initially accompanied by one warrant (collectively, the "Warrants"(“Series A Preferred Warrant”) to purchase 0.25 of a share of Common Stock, (Note 12). The registration statement allows ussubject to sell up to a maximum of 36,000,000 Units. Our Series A Preferred Stock ranks senior to our Common Stock with respect to payment of dividends and distributions of amounts upon liquidation, dissolution or winding up.adjustment) from October 2016 through January 2020. Proceeds and expenses from the sale of the Units arewere allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance.
OurFrom February 2020 through June 2022, the Company conducted a continuous public offering with respect to shares of the Company’s Series A Preferred Stock, is redeemable at the option of the holder (the "Holder") or CIM Commercial. The redemption schedule of thewhich, since February 2020, was no longer being issued as a unit with an accompanying Series A Preferred Stock allows redemptions atWarrant. In June 2022, the optionCompany concluded the offering of Series A Preferred Stock.
As of March 31, 2023, the Holder from the date of original issuance of any givenCompany had issued in registered public offerings 8,251,657 shares of Series A Preferred Stock through the second year at Stated Value, plus accrued and unpaid dividends, subject to the payment of a 13.0% redemption fee. After year two, the redemption fee decreases to 10.0% and after year five there is no redemption fee. Also, CIM Commercial has the right to redeem the4,603,287 Series A Preferred Stock after year five at Stated Value, plus accruedWarrants and unpaid dividends. At the Company's discretion, redemptions will be paid in cash or, on or after the first anniversaryreceived gross proceeds of the issuance of such$205.4 million and $761,000, respectively, and additionally, had issued 568,681 shares of Series A Preferred Stock an equal value of Common Stock based on the volume weighted average price of our Common Stockas payment for the 20 trading days priorservices to the redemption. As of September 30, 2017,Administrator, for which no sharescash proceeds were received. In connection with the cumulative issuance of Series A Preferred Stock have been redeemed.
As of September 30, 2017, we had issued 568,921 Units and received gross proceeds of $14,223,000 (of which $14,129,000 was allocated to the Series A Preferred Stock in temporary equity
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
Warrants, $17.0 million and the remaining $94,000 were allocated to the Warrants in permanent equity). In connection with such issuance,$142,000 of costs specifically identifiable to the offering of Units, such as commissions, dealer manager feesthe Series A Preferred Stock and other registration fees, totaled $1,140,000 ($1,106,000 of whichSeries A Preferred Warrants, respectively, were allocated to the Series A Preferred Stock in temporary equity and the remaining $34,000 were allocatedSeries A Preferred Warrants, respectively. Such costs include commissions, dealer manager fees and other offering fees and expenses but do not include non-issuance-specific costs of $9.8 million related to the Company’s offering of Series A Preferred Stock, Series A Preferred Warrants, in permanent equity). In addition, as of September 30, 2017, non issuance specific costs related to this offering totaled $3,020,000.Series A1 Preferred Stock and Series D Preferred Stock. As of September 30, 2017, we haveMarch 31, 2023, the Company had reclassified $47,000 and a de minimis amountallocated $1.9 million and $5,000 from deferred rent receivable and charges to temporary equitySeries A Preferred Stock and stockholders' equity,Series A Preferred Warrants, respectively, as a reduction to the gross proceeds received. Such reclassification was based on the cumulative number of Unitssecurities issued during the period relative to the maximum number of Unitssecurities expected to be issued under the offering.
Net proceeds from the issuance of shares of Series A Preferred Stock were initially recorded in temporary equity at an amount equal to the gross proceeds allocated to such shares of Series A Preferred Stock minus the costs specifically identifiable to the issuance of such shares and the non-issuance specific offering costs allocated to such shares. If the net proceeds from the issuance of shares of Series A Preferred Stock were less than the redemption value of such shares at the time they were issued, or if the redemption value of such shares subsequently becomes greater than the carrying value of such shares, an adjustment was recorded to increase the carrying amount of such shares to their redemption value as of the balance sheet date. Such adjustment was considered a deemed dividend for purposes of calculating basic and diluted EPS. During the three months ended March 31, 2023 and March 31, 2022, the Company recorded redeemable preferred stock deemed dividends of $0 and $15,000, respectively, related to such adjustments.
On the first anniversary of the issuance of a particular share of Series A Preferred Stock, the Company reclassifies such share of Series A Preferred Stock from temporary equity to permanent equity because the feature giving rise to temporary equity classification, the requirement to satisfy redemption requests in cash, lapses on the first anniversary date. As of March 31, 2023, the Company had reclassified an aggregate of $192.8 million in net proceeds from temporary equity to permanent equity.
As of March 31, 2023, there were 8,067,057 shares of Series A Preferred Stock outstanding and 753,281 shares of Series A Preferred Stock had been redeemed.
Series D Preferred Stock—From February 2020 through June 2022, the Company conducted a continuous public offering with respect to shares of its Series D Preferred Stock, par value $0.001 per share, subject to adjustment. The selling price of the Series D Preferred Stock was $25.00 per share for all sales that occurred from the beginning of the offering to and including June 28, 2020 and $24.50 per share thereafter. Shares of Series D Preferred Stock were recorded in permanent equity at the time of their issuance. In June 2022, the Company concluded the offering of its Series D Preferred Stock.
As of March 31, 2023, the Company had issued in registered public offerings 56,857 shares of Series D Preferred Stock and received gross proceeds of $1.4 million. In connection with such issuance, $35,000 of costs specifically identifiable to the offering of Series D Preferred Stock were allocated to the Series D Preferred Stock. Such costs include commissions, dealer manager fees and other offering fees and expenses but do not include non-issuance-specific costs of $9.8 million related to the Company’s offering of Series A Preferred Stock, Series A Preferred Warrants, Series A1 Preferred Stock and Series D Preferred Stock. As of March 31, 2023, the Company had reclassified and allocated $13,000 from from deferred charges to Series D Preferred Stock as a reduction to the gross proceeds received. Such reclassification was based on the cumulative number of securities issued relative to the maximum number of securities expected to be issued under the offering.
As of March 31, 2023, there were 48,857 shares of Series D Preferred Stock outstanding and 8,000 shares of Series D Preferred Stock had been redeemed.
Series L Preferred Stock—On November 21, 2017, the Company issued 8,080,740 shares of Series L Preferred Stock having an initial stated value of $28.37 per share (“Series L Preferred Stock Stated Value”), subject to adjustment. The Company received gross proceeds of $229.3 million from the sale of the Series L Preferred Stock, which was reduced by issuance-specific offering costs.
On September 15, 2022, the Company repurchased 2,435,284 shares of its Series L Preferred Stock in a privately negotiated transaction (the “Series L Repurchase”). The shares were repurchased at a purchase price of $27.40 per share (a 3.4% discount to the stated value of $28.37 per share) plus $1.12 per share of accrued and unpaid dividends (or $2.7 million accrued and unpaid dividends in the aggregate). The total cost to complete the Series L Repurchase, including transactions costs of $700,000 (or $0.29 per share), was $70.1 million. In connection with the Series L Repurchase, the Company recognized redeemable preferred stock redemptions of $4.8 million on its consolidated statement of operations for the three months ended September 30, 2022. The $4.8 million of redeemable preferred stock redemptions represents the difference between the
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
repurchase price (including $0.29 per share of transaction costs) and the carrying value of the repurchased Series L Preferred Stock (representing the stated value of $28.37 per share reduced by $2.65 per share of stock offering costs).
Dividends—With respect to the payment of dividends or the distribution of amounts upon liquidation, dissolution or winding-up, the Series A1 Preferred Stock, the Series A Preferred Stock and Series D Preferred Stock rank on parity with respect to each other and senior to the Common Stock.
Holders of Series A1 Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends (the “Series A1 Dividend”) on each share of Series A1 Preferred Stock at the greater of (i) an annual rate of 6.0% of the Series A1 Preferred Stock Stated Value (i.e., the equivalent of $0.3750 per share per quarter) and (ii) the Federal Funds (Effective) Rate for such quarter and plus 2.5% of the Series A1 Preferred Stock Stated Value divided by four, up to a maximum of 2.5% of the Series A1 Preferred Stock Stated Value per quarter. Holders of Series A Preferred Stock are entitled to receive, if, as and when authorized by ourthe Company’s Board of Directors, and declared by usthe Company out of legally available funds, cumulative cash dividends on each share of Series A Preferred Stock at an annual rate of 5.5%5.50% of the Series A Preferred Stock Stated Value (i.e., the equivalent of $0.34375 per share per quarter) (the “Series A Dividend”). Holders of Series D Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends on each share of Series D Preferred Stock at an annual rate of 5.65% of the Series D Preferred Stock Stated Value (i.e., the equivalent of $0.35313 per share per quarter) (the “Series D Dividend”). Dividends on each share of Series A1 Preferred Stock, Series A Preferred Stock willand Series D Preferred Stock begin accruing on, and will beare cumulative from, the date of issuance. Cash
The Company expects to pay the Series A1 Dividend, Series A Dividend and Series D Dividend in arrears on a monthly basis in accordance with the foregoing provisions, unless the Company’s results of operations, general financing conditions, general economic conditions, applicable requirements of the MGCL or other factors make it imprudent to do so. The timing and amount of the Series A1 Dividend, Series A Dividend and the Series D Dividend will be determined by the Company’s Board of Directors, in its sole discretion, and may vary from time to time.
During the three months ended March 31, 2023, the Company paid $2,384,000, $2.8 million, $17,000 and $4.6 million of cash dividends declared on ourthe Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively. During the three months ended March 31, 2022, the Company paid $—, $2.7 million, $20,000 and $8.4 million of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively.
Redemptions—The Company’s Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock are redeemable at the option of the holder or the Company. The redemption schedule of the Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock allows redemptions at the option of the holder of Series A1 Preferred Stock, Series A Preferred Stock or Series D Preferred Stock from the date of original issuance of any such shares at the Series A1 Preferred Stock Stated Value, Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, less a redemption fee applicable prior to the fifth anniversary of the issuance of such shares, plus accrued and unpaid dividends. The Company has the right to redeem the Series A1 Preferred Stock after the date that is twenty-four months following the original issuance of such shares of Series A1 Preferred Stock at the Series A1 Preferred Stock Stated Value, plus accrued and unpaid dividends. The Company has the right to redeem the Series A Preferred Stock or Series D Preferred Stock after the fifth anniversary of the date of original issuance of such shares at the Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, plus accrued and unpaid dividends. With respect to redemptions of the Series A1 Preferred Stock, Series A Preferred Stock or Series D Preferred Stock, at the Company’s discretion, the redemption price will be paid in cash and/or in Common Stock based on the volume weighted average price of the Company’s Common Stock for the nine months ended September 30, 2017 consist20 trading days prior to the redemption; provided that the redemption price of any shares of Series A Preferred Stock redeemed prior to the first anniversary of the following:date of original issuance of such shares must be paid in cash.
The Company redeemed all outstanding shares of Series L Preferred Stock in cash in January 2023. The total cost to complete the redemption, including transaction costs of $93,000, was $83.8 million. The accrued and unpaid dividends on the redeemed shares of Series L Preferred Stock through December 31, 2022 of $1.56 per share (or $4.6 million accrued and unpaid dividends in the aggregate) were also paid January 25, 2023.
25
      Aggregate
Declaration Date Payment Date Number of Shares Dividends Declared
      (in thousands)
September 7, 2017 October 16, 2017 568,921
 $138
June 12, 2017 July 17, 2017 308,775
 $72
March 8, 2017 April 17, 2017 144,698
 $31

Table of Contents
CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and DecemberNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016, and2023 (Unaudited) – (Continued)
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

12. STOCKHOLDERS'STOCKHOLDERS’ EQUITY
Dividends
DividendsHolders of the Company’s Common Stock are entitled to receive dividends, if, as and when authorized by the Board of Directors and declared by the Company out of legally available funds. In determining the Company’s dividend policy, the Board of Directors considers many factors including the amount of cash resources available for dividend distributions, capital spending plans, cash flow, the Company’s financial position, applicable requirements of the MGCL, any applicable contractual restrictions, and future growth in NAV and cash flow per share prospects. Consequently, the dividend rate on a quarterly basis does not necessarily correlate directly to any individual factor. Cash dividends per share of Common Stock declared duringpaid in respect of the ninethree months ended September 30, 2017March 31, 2023 and 20162022 consist of the following:
Declaration DatePayment DateTypeCash Dividend Per Share of Common Stock
March 20, 2023April 11, 2023Regular Quarterly$0.085 
March 8, 2022April 1, 2022Regular Quarterly$0.085 
Declaration Date Payment Date Type Dividend Per Common Share
September 7, 2017 September 25, 2017 Regular Quarterly $0.12500
June 12, 2017 June 27, 2017 Special Cash $1.98000
June 12, 2017 June 27, 2017 Regular Quarterly $0.12500
April 5, 2017 April 24, 2017 Special Cash $0.28000
March 8, 2017 March 27, 2017 Regular Quarterly $0.21875
       
September 12, 2016 September 28, 2016 Regular Quarterly $0.21875
June 10, 2016 June 28, 2016 Regular Quarterly $0.21875
March 8, 2016 March 29, 2016 Regular Quarterly $0.21875
On June 12, 2017, we declared a special cash dividend of $1.98 per share of Common Stock, or $4,271,000 in the aggregate, that was paid on June 27, 2017 to stockholders of record on June 20, 2017. This special cash dividend allowed common stockholders that did not participate in the June 12, 2017 private repurchase to receive the economic benefit of such repurchase. Urban Partners II, LLC ("Urban II"), a fund managed by an affiliate of CIM Group, the Manager and Advisor of CIM Commercial (each as defined in Note 15), and an affiliate of CIM REIT and CIM Urban, waived its right to receive this special cash dividend.
In addition, on April 5, 2017, we declared a special cash dividend of $0.28 per share of Common Stock, or $601,000 in the aggregate, that was paid on April 24, 2017 to stockholders of record on April 17, 2017. This special cash dividend allowed common stockholders that did not participate in the September 14, 2016 private repurchase to receive the economic benefit of such repurchase. Urban II waived its right to receive this special cash dividend.
Share Repurchases
On June 12, 2017, we repurchased, in a privately negotiated transaction, canceled and retired 26,181,818 shares of Common Stock from Urban II. The aggregate purchase price was $576,000,000, or $22.00 per share. We funded the repurchase using available cash from asset sales and short-term borrowings on our unsecured credit facility. As a result of the repurchase, our stockholders' equity was reduced by the amount we paid for the repurchased shares and the related expenses. The Company paid a special cash dividend, as described above, on June 27, 2017 that allowed stockholders that did not participate in the June 12, 2017 private repurchase to receive the economic benefit of such repurchase.
On September 14, 2016, we repurchased, in a privately negotiated transaction, canceled and retired 3,628,116 shares of Common Stock from Urban II. The aggregate purchase price was $79,819,000, or $22.00 per share. We funded the repurchase using proceeds from the six mortgage loans obtained in June 2016. As a result of the repurchase, our stockholders' equity was reduced by the amount we paid for the repurchased shares and the related expenses. The Company paid a special cash dividend, as described above, on April 24, 2017 that allowed stockholders that did not participate in the September 14, 2016 private repurchase to receive the economic benefit of such repurchase.
In addition, on May 16, 2016, we commenced a cash tender offer to purchase up to 10,000,000 shares of our Common Stock at a price of $21.00 per share. The tender offer expired on June 13, 2016. The tender offer was oversubscribed and, pursuant to the terms of the tender offer, shares of Common Stock were accepted on a pro rata basis. In connection with the tender offer, we repurchased, canceled and retired 10,000,000 shares of our Common Stock for an aggregate purchase price of $210,000,000, excluding fees and expenses related to the tender offer, which were $301,000. Based on the actual total number of shares tendered, Urban II received $208,140,000 of the aggregate purchase price paid. We funded the tender offer using available cash from asset sales and borrowings on our unsecured credit facility. The purchased shares represented

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

approximately 10.24% of our then-outstanding shares of Common Stock. As a result of the repurchase, our stockholders' equity was reduced by the amount we paid for the repurchased shares and the related expenses.
Series A Preferred Warrants
Each Unit consists of (i)Prior to February 2020, the Series A Preferred Stock was sold as a unit that included one share of Series A Preferred Stock (Note 11) and (ii) one Series A Preferred Warrant (Note 11) which allows the holderthat could be exercised to purchase 0.25 of a share of Common Stock. The Series A Preferred Warrants are exercisable beginning on the first anniversary of the date of their original issuance until and including the fifth anniversary of the date of such issuance. TheAt the time of issuance, the exercise price of each Series A Preferred Warrant iswas at a 15.0% premium to the per share estimated net asset valueNAV of ourthe Company’s Common Stock (asthen most recently published by us atand designated as the timeapplicable NAV. However, in accordance with the terms of the Series A Preferred Warrants, the exercise price of each issuance).Series A Preferred Warrant issued prior to the Reverse Stock Split was automatically adjusted to reflect the effect of the Reverse Stock Split and, in the discretion of the Company’s Board of Directors, the exercise price and the number of shares issuable upon exercise of each Series A Preferred Warrant issued prior to the Special Dividend was adjusted to reflect the effect of the Special Dividend.
Proceeds and expenses from the sale of the Units areSeries A Preferred Stock and Series A Preferred Warrants were allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance. As of September 30, 2017, weMarch 31, 2023, the Company had issued 568,9212,925,501 Series A Preferred Warrants outstanding to purchase 756,257 shares of Common Stock in connection with ourthe Company’s offering of Series A Preferred Units and allocated net proceeds of $60,000,$466,000, after specifically identifiable offering costs and allocated general offering costs, to the Series A Preferred Warrants in permanent equity.
13. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
Hedges of Interest Rate RiskShare Repurchase Program
In orderMay 2022, the Company’s Board of Directors approved a repurchase program of up to manage financing costs and interest rate exposure related to our unsecured term loan facility (Note 8), on August 13, 2015, we entered into interest rate swap agreements with multiple counterparties. These swap agreements became effective on November 2, 2015. Each of our interest rate swap agreements meets the criteria for cash flow hedge accounting treatment and we have designated the interest rate swap agreements as cash flow hedges$10.0 million of the riskCompany’s Common Stock (the “SRP”). Under the SRP, the Company, in its discretion, may purchase shares of variability attributableits Common Stock from time to changestime in the one-month LIBORopen market or in privately negotiated transactions. The amount and timing of purchases of shares will depend on a number of factors, including, without limitation, the term loan facility. Accordingly,price and availability of shares, trading volume, general market conditions and compliance with applicable securities law. The SRP has no termination date and may be suspended or discontinued at any time.
There were no repurchases during the interest rate swaps are recorded on the consolidated balance sheets at fair value and the changes in the fair value of the swaps are recorded in OCI and reclassified to earnings as an adjustment to interest expense as interest becomes receivable or payable (Note 2). We do not expect any significant losses from counterparty defaults related to our swap agreements.
Summary of Derivatives
The following table sets forth the key terms of our interest rate swap contracts:
Number of Interest
Rate Swaps(1)(2)		 Total Notional
Amount		 Fixed Rates Floating Rate Index Effective
Date		 Expiration
Date
  (in thousands)        
7 $320,000
 1.559% - 1.565% One-Month LIBOR 11/2/2015 5/8/2020

(1)See Note 14 for our fair value disclosures.
(2)Our interest rate swaps are not subject to master netting arrangements.
These swaps hedge the future cash flows of interest payments on our unsecured term loan facility by fixing the rate until May 8, 2020 at a weighted average rate of 1.563% plus the credit spread, which was 1.60% at September 30, 2017 and Decemberthree months ended March 31, 2016, or an all-in rate of 3.16%.
Credit-Risk-Related Contingent Features
Each of our interest rate swap agreements contains a provision under which we could also be declared in default under such agreements if we default on the term loan facility.2023. As of September 30, 2017 and DecemberMarch 31, 2016, there have been no events2023, the Company had repurchased 662,462 shares of default under our interest rate swap agreements.Common Stock for $4.7 million.




CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

Impact of Hedges on AOCI and Consolidated Statements of Operations
The changes in the balance of each component of AOCI related to our interest rate swaps designated as cash flow hedges are as follows:
  Three Months Ended September 30, Nine Months Ended September 30,
  2017 2016 2017 2016
  (in thousands)
Accumulated other comprehensive income (loss), at beginning of period $603
 $(12,889) $(509) $(2,519)
Other comprehensive income (loss) before reclassifications 40
 2,221
 (149) (10,347)
Amounts reclassified from accumulated other comprehensive income (loss) (1) 293
 1,051
 1,594
 3,249
Net current period other comprehensive income (loss) 333
 3,272
 1,445
 (7,098)
Accumulated other comprehensive income (loss), at end of period $936
 $(9,617) $936
 $(9,617)

(1)The amounts from AOCI are reclassified as an increase to interest expense in the statements of operations.
Future Reclassifications from AOCI
We estimate that $1,064,000 related to our derivatives designated as cash flow hedges will be reclassified out of AOCI as an increase to interest expense during the next twelve months.
In July 2017, we determined that we would repay $65,000,000 of outstanding borrowings under our unsecured term loan facility in August 2017. On August 3, 2017, such repayment occurred and we terminated three interest rate swaps with an aggregate notional value of $65,000,000. In connection with such termination, we reclassified $8,000 related to the associated interest rate swaps from accumulated other comprehensive income to interest expense on our consolidated statements of operations for the three and nine months ended September 30, 2017. In addition, we incurred a termination fee of $38,000, which is included in interest expense on our consolidated statements of operations for the three and nine months ended September 30, 2017.
14.13. FAIR VALUE OF FINANCIAL INSTRUMENTS
We determineThe Company determines the estimated fair value of financial assets and liabilities utilizing a hierarchy of valuation techniques based on whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. The hierarchy for inputs used in measuring fair value is as follows:
Level 1 Inputs—Quoted prices in active markets for identical assets or liabilities

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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
Level 2 Inputs—Observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3 Inputs—Unobservable inputs
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.



CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

Our derivative financial instruments (Note 13) are measured at fair value on a recurring basis and are presented on our consolidated balance sheets at fair value, on a gross basis, excluding accrued interest. The table below presents the fair value of our derivative financial instruments as well as their classification on our consolidated balance sheets:
  September 30, 2017 December 31, 2016 Level Balance Sheet
Location
  (in thousands)    
Assets (Liabilities):  
  
  
  
Interest rate swaps $936
 $(509) 2
 Other assets (Other liabilities)
Interest Rate Swaps—We estimate the fair value of our interest rate swaps by calculating the credit-adjusted present value of the expected future cash flows of each swap. The calculation incorporates the contractual terms of the derivatives, observable market interest rates which we consider to be Level 2 inputs, and credit risk adjustments, if any, to reflect the counterparty's as well as our own nonperformance risk.
The estimated fair values of those financial instruments which are not recorded at fair value on a recurring basis on our consolidated balance sheets are as follows:
  September 30, 2017 December 31, 2016  
  Carrying
Amount		 Estimated
Fair Value		 Carrying
Amount		 Estimated
Fair Value		 Level
  (in thousands)  
Assets:  
  
  
  
  
Loans receivable subject to credit risk           $49,925
 $49,768
 $43,623
 $43,621
 3
SBA 7(a) loans receivable, subject to secured borrowings 21,989
 22,424
 29,524
 29,976
 3
Other loans receivable 429
 355
 2,593
 2,550
 3
Liabilities:  
  
  
  
  
Mortgages payable (1) 414,718
 411,016
 530,793
 516,892
 3
Junior subordinated notes 25,113
 25,508
 25,055
 25,173
 3

(1)The September 30, 2017 carrying amount and estimated fair value of mortgages payable excludes one mortgage loan that has been classified as liabilities associated with assets held for sale on our consolidated balance sheet at September 30, 2017 (Notes 3 and 8).
Management'sManagement’s estimation of the fair value of ourthe Company’s financial instruments other than our interest rate swaps is based on a Level 3 valuation in the fair value hierarchy established for disclosure of how a company values its financial instruments. In general, quoted market prices from active markets for the identical financial instrument (Level 1 inputs), if available, should be used to value a financial instrument. If quoted prices are not available for the identical financial instrument, then a determination should be made if Level 2 inputs are available. Level 2 inputs include quoted prices for similar financial instruments in active markets for identical or similar financial instruments in markets that are not active (i.e., markets in which there are few transactions for the financial instruments, the prices are not current, price quotations vary substantially, or in which little information is released publicly). There is limited reliable market information for ourthe Company’s financial instruments other than our interest rate swaps and we utilizethe Company utilizes other methodologies based on unobservable inputs for valuation purposes since there are no Level 1 or Level 2 inputs available. Accordingly, Level 3 inputs are used to measure fair value.
In general, estimates of fair value may differ from the carrying amounts of the financial assets and liabilities primarily as a result of the effects of discounting future cash flows. Considerable judgment is required to interpret market data and develop estimates of fair value. Accordingly, the estimates presented are made at a point in time and may not be indicative of the amounts wethe Company could realize in a current market exchange.

The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities.
CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

Debt—The carrying amounts of ourthe Company’s secured borrowingsborrowings—government guaranteed loans, SBA 7(a) loan-backed notes, 2022 Revolving Credit Facility and unsecured credit and term loan facilitiesvariable rate mortgages payable approximate their fair values, as the interest rates on these securities are variable and approximate current market interest rates.
Loans Receivable Subject to Credit Risk and Other Loans Receivable—Loans receivable were initially recorded at estimated fair value at The Company determines the Acquisition Date. Loans receivable originated subsequent to the Acquisition Date are recorded at cost upon origination and adjusted by net loan origination fees and discounts. In order to determine the estimated fair value of ourmortgage notes payable and junior subordinated notes by performing discounted cash flow analyses using an appropriate market discount rate. The Company calculates the market discount rate for its mortgage notes payable by obtaining period-end treasury or swap rates, as applicable, for maturities that correspond to the maturities of the Company’s debt and then adding an appropriate credit spread. These credit spreads take into account factors such as the Company’s credit standing, the maturity of the debt, whether the debt is secured or unsecured, and the loan-to-value ratios of the debt. When estimating the fair value of the Company’s mortgages payable as of March 31, 2023 and December 31, 2022, the Company used a rate of 6.20% and 6.48%, respectively. The rate used to estimate the fair value of the Company’s junior subordinated notes was 9.44% and 9.02% as of March 31, 2023 and December 31, 2022, respectively.
Loans Receivable—The Company determines the fair value of loans receivable we useby performing a present value techniqueanalysis for the anticipated future cash flows using certain assumptions. At September 30, 2017, our assumptions includedan appropriate market discount rates ranging from 8.75%rate taking into consideration the credit risk and using an anticipated prepayment rate. The value of the government guaranteed portions of loans held for sale is based primarily on the anticipated proceeds to 13.75%be received upon sale. The following summarizes the ranges of discount rates and prepayment rates ranging from 5.80%used to 20.00%. At December 31, 2016, our assumptions included discount rates ranging from 8.25% to 13.25% and prepayment rates ranging from 5.80% to 20.00%.
SBA 7(a) Loans Receivable, Subject to Secured Borrowings—These loans receivable representarrive at the government guaranteed portion of loans which were sold with the proceeds received from the sale reflected as secured borrowings—government guaranteed loans. There is no credit risk associated with these loans since the SBA has guaranteed paymentestimated fair values of the principal. In order to determine the estimatedCompany’s loans receivable:
March 31, 2023December 31, 2022
Discount RatePrepayment RateDiscount RatePrepayment Rate
SBA 7(a) loans receivable, subject to credit risk11.00% - 11.25%4.67% - 17.00%11.00% - 11.25%5.00% - 17.00%
SBA 7(a) loans receivable, subject to loan-backed notes11.00% - 11.25%4.67% - 17.00%N/AN/A
SBA 7(a) loans receivable, subject to secured borrowings11.00% - 11.25%5.00% - 17.00%11.00% - 11.25%5.00% - 17.00%
Derivative Instruments — The Company’s derivative instruments are comprised of interest rate caps. All derivative instruments are carried at fair value and are valued using Level 2 inputs. The fair value of these loans receivable, we use a present value techniqueinstruments is determined using interest rate market pricing models. In addition, credit valuation adjustments are incorporated into the fair values to account for the anticipated future cash flows taking into consideration the lack of creditCompany’s potential nonperformance risk and using a rangethe performance risk of prepayment rates from 15.50%the respective counterparties.
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
Other Financial Instruments—The carrying amounts of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to 20.00% and 6.70% to 20.00%their short-term maturities at September 30, 2017March 31, 2023 and December 31, 2016, respectively.
Mortgages Payable—The fair values2022. Due to the short-term maturities of mortgages payablethese instruments, Level 1 inputs are estimated based on current interest rates available for debt instruments with similar terms. The fair value of our mortgages payable is sensitive to fluctuations in interest rates. Discounted cash flow analysis is generally usedutilized to estimate the fair value of our mortgages payable, using rates ranging from 4.18% to 4.38% and 4.60% to 4.72%these financial instruments.
The estimated fair values of those financial instruments which are not recorded at September 30, 2017 and December 31, 2016, respectively.
Junior Subordinated Notes—The fair value ofon a recurring basis on the Company’s consolidated balance sheets are as follows (dollar amounts in thousands):
 March 31, 2023December 31, 2022 
 Carrying
Amount		Estimated
Fair Value		Carrying
Amount		Estimated
Fair Value		Level
Assets: 
SBA 7(a) loans receivable, subject to credit risk$2,807 $2,912 $56,237 $58,432 3 
SBA 7(a) loans receivable, subject to loan-backed notes$52,365 $55,101 $— $— 3 
SBA 7(a) loans receivable, subject to secured borrowings$5,528 $5,605 $6,158 $6,237 3 
SBA 7(a) loans receivable, held for sale$1,742 $1,818 $152 $126 3 
Liabilities: 
Fixed rate mortgage payable (1)
$97,100 $91,090 $97,100 $90,002 2, 3
Junior subordinated notes (1)
$27,070 $25,131 $27,070 $25,067 3 
______________________
(1)The carrying amounts for the mortgage payable and junior subordinated notes is estimated based on current interest rates available forrepresents the principal outstanding amounts, excluding deferred debt instruments with similar terms. Discounted cash flow analysis is generally used to estimate the fair value of our junior subordinated notes. The rate used was 5.08%issuance costs and 4.83% at September 30, 2017 and December 31, 2016, respectively.discounts.
15.14. RELATED-PARTY TRANSACTIONS
In May 2005, Asset Management and Other Fees to Related Parties
Asset Management Fees; Administrative Fees and Expenses—CIM Urban and CIM Urban REIT Management, L.P., each an affiliate of CIM REIT and CIM Group, entered into an Investment Management Agreement, pursuant to which CIM Urban engaged CIM Urban REIT Management, L.P. to provide investment advisory services to CIM Urban. CIM Investment Advisors,Capital, LLC, an affiliate of CIM REIT and CIM Group registered with the SEC as(“CIM Capital”), have an investment adviser and, in connection with such registration, CIM Urban entered into a new Investment Management Agreement with CIM Investment Advisors, LLC, in December 2015, on terms substantially similar to those in the previous Investment Management Agreement,management agreement, pursuant to which CIM Urban engaged CIM Investment Advisors, LLCCapital to provide investment advisorycertain services andto CIM Urban (the “Investment Management Agreement”). CIM Capital has assigned its duties under the previous Investment Management Agreement was terminated. "Advisor"to its four wholly-owned subsidiaries: CIM Capital Securities Management, LLC, a securities manager, CIM Capital RE Debt Management, LLC, a debt manager, CIM Capital Controlled Company Management, LLC, a controlled company manager, and CIM Capital Real Property Management, LLC, a real property manager. The “Operator” refers to CIM Capital and its four wholly-owned subsidiaries.
The Company and its subsidiaries have a master services agreement (the “Master Services Agreement”) with CIM Service Provider, LLC (the “Administrator”), an affiliate of CIM Group, pursuant to which the Administrator provides, or arranges for other service providers to provide, management and administration services to the Company and its subsidiaries. Pursuant to the Master Services Agreement, the Company appointed an affiliate of CIM Group as the administrator of Urban REITPartners GP, LLC.
On January 5, 2022, the Company and certain of its subsidiaries entered into a Fee Waiver (the “Fee Waiver”) with the Operator and the Administrator with respect to fees that are payable to them. The Fee Waiver is effective retroactively to January 1, 2022 (the “Effective Date”). Pursuant to the Fee Waiver, the Administrator agreed to voluntarily waive any fees in excess of those set forth in the Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Master Service Agreement, and the Operator agreed to voluntarily waive any fees in excess of those set forth in the Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Investment Management L.P.Agreement. Following the end of each quarter, the Administrator will deliver to the Company (i) a calculation of the cumulative fees earned by the Operator and the Administrator under the methodology prescribed by the Fee Waiver from the Effective Date through the end of such quarter and (ii) a calculation of the cumulative fees that would have been earned by the Operator and the Administrator during such period under the Master Services Agreement and the Investment Management Agreement without giving effect to the Fee Waiver. If, in respect of any quarter, the aggregate fees that are payable under the methodology prescribed by the Fee Waiver exceed the aggregate fees that would have been payable under the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver, such quarter will be deemed an “Excess Quarter”. For any quarter following an Excess Quarter, the Company (upon the direction of the independent
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
members of the Board) may, at its option and upon written notice to Administrator, elect to calculate all fees due to the Administrator and the Operator in accordance with the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver, from and after such Excess Quarter. Any such election by the Company will be irrevocable, and all fees due to the Administrator and the Operator from and after such election will be calculated in accordance with the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver.

The fees payable to the Operator and the Administrator are determined as follows under the Fee Waiver.
1.Base Fee: A base asset management fee (the “Base Fee”) is payable quarterly in arrears to the Operator in an amount equal to an annual rate of 1% (or 0.25% per quarter) of the average of the “Net Asset Value Attributable to Common Stockholders” as of the first and last day of the applicable quarter. Net Asset Value Attributable to Common stockholders is defined as (a) the sum of the Company’s (1) investments in real estate at fair value, (2) cash, (3) loans receivable at fair value and (4) the book value of the other assets of the Company, excluding deferred costs and net of other liabilities at book value, less (b) the Company’s (i) debt at face value, (ii) outstanding preferred stock at stated value, and (iii) non-controlling interests at book value; provided, that, non-controlling interests in any UPREIT operating partnership relating to the Company shall not be excluded.
Subject to applicable laws and regulations under Nasdaq and the TASE and the agreement of the Operator, the Company will pay the Base Fee owed with respect to the first quarter of 2022 in shares of its Series A Preferred Stock and it is likely that the Company will pay some or part of the remainder of the Base Fees incurred during the year ended December 31, 2022 in shares of Series A Preferred Stock.
2.Incentive Fee: An incentive fee (the “Revised Incentive Fee”) is payable quarterly in arrears to the Administrator with respect to the quarterly core funds from operations in excess of a quarterly threshold equal to 1.75% (i.e., 7.00% on an annualized basis) of the Company’s “Adjusted Common Equity” (as defined below) for such quarter (“Excess Core FFO”) as follows: (i) no Revised Incentive Fee in any quarter in which the Excess Core FFO is $0; (ii) 100% of any Excess Core FFO up to an amount equal to the product of (x) the average of the Adjusted Common Equity as of the first and last day of the applicable quarter and (y) 0.4375%; and (iii) 20% of any Excess Core FFO thereafter. Revised Incentive Fees payable for any partial quarter will be appropriately prorated.
“Adjusted Common Equity” means Common Equity plus Excluded Depreciation and Amortization. “Common Equity” means Total Stockholders’ Equity minus Excluded Equity. “Total Stockholders’ Equity” means the amount reflected as total stockholders’ equity in accordance with GAAP on the consolidated balance sheet of the Company and its subsidiaries as of the last day of a given quarter. “Excluded Equity” means the sum of all preferred securities of the Company and its subsidiaries classified as permanent equity in accordance with GAAP on the consolidated balance sheet of the Company and its subsidiaries as of the last day of a given quarter. “Excluded Depreciation and Amortization” means, for a given quarter, the amount of all accumulated depreciation and amortization of (i) the Company and its subsidiaries and (ii) to the extent allocable to the Company and its subsidiaries, the unconsolidated affiliates, in each case as of the last day of such quarter that corresponds to the periodic depreciation and amortization expense calculated in each case in accordance with GAAP that is a permitted add back to net income calculated in accordance with GAAP when calculating funds from operations.
3.Capital Gains Fee: A capital gains fee (the “Capital Gains Fee”) is payable quarterly in arrears to the Administrator in an amount equal to (i) 15% of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses (in each case since the Effective Date), minus (ii) the aggregate capital gains fees paid since the Effective Date. Realized capital gains and realized capital losses are calculated by subtracting from the sales price of a property: (a) any costs incurred to sell such property, and (b) the current gross value of the property (meaning the property’s original acquisition price plus any subsequent, non-reimbursed capital improvements thereon paid for by the Company).
Pursuant to the Investment Management Agreement, the asset management fee prior to December 10, 2015 and to CIM Investment Advisors, LLC on and after December 10, 2015.
CIM Urban pays asset management feesJanuary 1, 2022 fee was calculated (without giving effect to the Advisor on a quarterly basis in arrears. The fee is calculatedFee Waiver) as a percentage of the daily average adjusted fair value of CIM Urban's investments,Urban’s assets as defined, as follows:follows (dollar amounts in thousands):
29
Daily Average Adjusted Fair
Value of CIM Urban's Investments		  
Quarterly Fee
Percentage
From Greater of
 To and Including
 
(in thousands)  
$—
 $500,000
 0.2500%
500,000
 1,000,000
 0.2375%
1,000,000
 1,500,000
 0.2250%
1,500,000
 4,000,000
 0.2125%
4,000,000
 20,000,000
 0.1000%
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The Advisor earned asset management fees of $4,971,000 and $6,589,000 for the three months ended September 30, 2017 and 2016, respectively, and $17,515,000 and $19,305,000 for the nine months ended September 30, 2017 and 2016,

CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and DecemberNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 20162023 (Unaudited) – (Continued)

Daily Average Adjusted Fair
Value of CIM Urban’s Assets		 
Quarterly Fee
Percentage
From Greater ofTo and Including
$— $500,000 0.2500%
$500,000 $1,000,000 0.2375%
$1,000,000 $1,500,000 0.2250%
$1,500,000 $4,000,000 0.2125%
$4,000,000 $20,000,000 0.1000%
respectively. At September 30, 2017 and December 31, 2016, assetAsset management fees of $4,798,000 and $6,448,000, respectively, were due to the Advisor.
CIM Management, Inc. and certain of its affiliates (collectively, the "CIM Management Entities"), all affiliates of CIM REIT and CIM Group, provide property management, leasing, and development services to CIM Urban. The CIM Management Entities earned property management fees, which are included in rentalasset management and other property operating expenses, totaling $1,229,000 and $1,443,000 for the three months ended September 30, 2017 and 2016, respectively, and $3,967,000 and $4,258,000 for the nine months ended September 30, 2017 and 2016, respectively. CIM Urban also reimbursed the CIM Management Entities $2,018,000 and $2,301,000 during the three months ended September 30, 2017 and 2016, respectively, and $6,704,000 and $6,308,000 during the nine months ended September 30, 2017 and 2016, respectively, for the cost of on-site personnel incurred on behalf of CIM Urban, which is included in rental and other property operating expenses. The CIM Management Entities earned leasing commissions of $437,000 and $397,000 for the three months ended September 30, 2017 and 2016, respectively, and $808,000 and $1,151,000 for the nine months ended September 30, 2017 and 2016, respectively, which were capitalized to deferred charges. In addition, the CIM Management Entities earned construction management fees of $233,000 and $119,000 for the three months ended September 30, 2017 and 2016, respectively, and $508,000 and $787,000 for the nine months ended September 30, 2017 and 2016, respectively, which were capitalized to investments in real estate.
At September 30, 2017 and December 31, 2016, fees payable and expense reimbursements due to the CIM Management Entities of $2,639,000 and $2,027,000, respectively, are included in due to related parties. Also included in due to related parties asin the accompanying
consolidated statements of September 30, 2017 and December 31, 2016, was $232,000 and $214,000, respectively, due from the CIM Management Entities and related parties.operations.
On the Acquisition Date, pursuant to the terms of the Merger Agreement, CIM Commercial and its subsidiaries entered into the Master Services Agreement (the "Master Services Agreement") with CIM Service Provider, LLC (the "Manager"), an affiliate of CIM Group, pursuant to which the Manager agrees to provide or arrange for other service providers to provide management and administration services to CIM Commercial and its subsidiaries following the Merger. Pursuant to the Master Services Agreement, we appointed an affiliate of CIM Group as the manager of Urban Partners GP, LLC. Under the Master Services Agreement, CIM Commercial paysfor fiscal quarters prior to April 1,2020, the Company paid a base service fee (the "Base“Base Service Fee"Fee”) to the ManagerAdministrator initially set at $1,000,000$1.0 million per year (subject to an annual escalation by a specified inflation factor beginning on January 1, 2015), payable quarterly in arrears. The Manager earned aOn May 11, 2020, the Master Services Agreement was amended to replace the Base Service Fee with an incentive fee pursuant to which the Administrator was entitled to receive, on a quarterly basis, 15.00% of $265,000the Company’s quarterly core funds from operations in excess of a quarterly threshold equal to 1.75% (i.e., 7.00% on an annualized basis) of the Company’s average Adjusted Common Equity (defined above) for such quarter. The amendment was effective as of April 1, 2020 and $259,000 forwas further modified by the three months ended September 30, 2017 and 2016, respectively, and $795,000 and $784,000 forFee Waiver described above. No such incentive fee was paid by the nine months ended September 30, 2017 and 2016, respectively. Company.
In addition, pursuant to the terms of the Master Services Agreement, the ManagerAdministrator may receive compensation and/and or reimbursement for performing certain services for CIM Commercialthe Company and its subsidiaries that are not covered underby the Base Service Fee. During the ninethree months ended September 30, 2017March 31, 2023 and 2016,2022, such services performed by the ManagerAdministrator and its affiliates included accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources, corporate communications, operational and corporate communications.on-going support in connection with the Company’s offering of Preferred Stock. The Manager'sAdministrator’s compensation is based on the salaries and benefits of the employees of the Manager and/Administrator and or its affiliates who performed these services (allocated based on the percentage of time spent on the affairs of CIM Commercialthe Company and its subsidiaries). We expensed $735,000 and $676,000 for the three months ended September 30, 2017 and 2016, respectively, and $2,357,000 and $2,402,000 for the nine months ended September 30, 2017 and 2016, respectively,The expense for such services whichis included in expense reimbursements to related parties—corporate in the accompanying consolidated statements of operations.
Property Management Fees and Reimbursements—CIM Management, Inc. and certain of its affiliates (collectively, the “CIM Management Entities”), all affiliates of CIM REIT and CIM Group, provide property management, leasing, and development services to CIM Urban. Property management fees earned by the CIM Management entities and onsite management costs incurred on behalf of CIM Urban are included in asset managementrental and other property operating expenses in the accompanying consolidated statements of operations, with the exception of certain onsite management costs which are
capitalized in some cases. Leasing commissions earned are capitalized to deferred charges on the accompanying consolidated balance sheets. Construction management fees are capitalized to related parties. At September 30, 2017 and December 31, 2016, $1,786,000 and $1,935,000 was due toinvestments in real estate on the Manager, respectively, for such services.accompanying consolidated balance sheets.
On January 1, 2015, we entered intoLending Segment Expenses—The Company has a Staffing and Reimbursement Agreement with CIM SBA Staffing, LLC ("(“CIM SBA"SBA”), an affiliate of CIM Group, and ourthe Company’s subsidiary, PMC Commercial Lending, LLC. The Agreementagreement provides that CIM SBA will provide personnel and resources to usthe Company and that wethe Company will reimburse CIM SBA for the costs and expenses of providing such personnel and resources. ForThe expense for such services is included in expense reimbursements to related parties—lending segment in the accompanying consolidated statements of operations.
Offering-Related Fees—CCO Capital, LLC (“CCO Capital”) became the exclusive dealer manager for the Company’s public offering of the Series A Preferred Stock and Series A Preferred Warrants effective as of May 31, 2019. CCO Capital is a registered broker dealer and is under common control with the Operator and the Administrator. The Company’s offering of the Series A Preferred Warrants ended at the end of January 2020. On January 28, 2020, the Company entered into the Second Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital acted as the exclusive dealer manager for the Company’s public offering of its Series A Preferred Stock and Series D Preferred Stock. The Second Amended and Restated Dealer Manager Agreement was subsequently amended by the Company and CCO Capital to address changes to, among other things, selling commissions and dealer manager fees.
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
On June 16, 2022, the Company entered into the Third Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital has been acting as the exclusive dealer manager for the Company’s public offering of its Series A1 Preferred Stock. Thereunder, the Company agreed to compensate CCO Capital, as the dealer manager for the offering, as follows: (1) a dealer manager fee of up to 3.00% of the selling price of each share of Series A1 Preferred Stock sold and (2) selling commissions of up to 7.00% of the selling price of each share of Series A1 Preferred Stock sold. The Company has been informed that CCO Capital generally reallows 100% of the selling commissions on sales of Series A1 Preferred Stock and generally reallows substantially all of the dealer manager fee on sales of Series A1 Preferred Stock, to participating broker-dealers. In addition, pursuant to the Third Amended and Restated Dealer Manager Agreement, CCO Capital will no longer solicit or make any offers for the sale of shares of Series A Preferred Stock or Series D Preferred Stock.
The Company recorded fees and expense reimbursements as shown in the table below for services provided by related parties related to the services described above during the periods indicated (in thousands):
Three Months Ended March 31,
 20232022
Asset Management Fees:
Asset management fees(1)
$720 $921 
Property Management Fees and Reimbursements:
Property management fees(2)
$477 $438 
Onsite management and other cost reimbursement(3)
$1,070 $425 
Leasing commissions(4)
$39 $78 
Construction management fees(5)
$118 $60 
Administrative Fees and Expenses:
Expense reimbursements to related parties - corporate$528 $422 
Lending Segment Expenses:
Expense reimbursements to related parties - lending segment(6)
$608 $469 
Offering-Related Fees:
Upfront dealer manager and trailing dealer manager fees(7)
$320 $122 
Non-issuance specific offering costs (8)
$144 $39 
______________________
(1)The Company issued to the Operator 36,843 shares of Series A1 Preferred Stock in lieu of cash payment for the asset management fees incurred during the three months ended September 30, 2017March 31, 2022.
(2)Does not include the company’s share of the property management fees from the Unconsolidated Joint Ventures of $17,000 and 2016, we incurred expenses related to services subject to reimbursement by us under this agreement of $845,000 and $865,000, respectively, which are included in asset management and other fees to related parties for lending segment costs included in continuing operations, $80,000 and $107,000, respectively, for corporate services, which are included in asset management and other fees to related parties, and $0 and $137,000, respectively, which are included in discontinued operations; for the nine months ended September 30, 2017 and 2016, we incurred expenses related to such services of $2,473,000 and $2,679,000, respectively, which are included in asset management and other fees to related parties for lending segment costs included in continuing operations, $319,000 and $333,000, respectively, for corporate services, which are included in asset management and other fees to related parties, and $0 and $417,000, respectively, which are included in discontinued operations. In addition, we deferred personnel costs of $154,000 and $40,000$4,000 for the three months ended September 30, 2017March 31, 2023 and 2016, respectively,March 31, 2022, respectively.
(3)Does not include the Company’s share of the onsite management and $308,000other cost reimbursements from the Unconsolidated Joint Ventures of $29,000 and $189,000$12,000 for the ninethree months ended September 30, 2017March 31, 2023 and 2016,March 31, 2022, respectively.
(4)Does not include the Company’s share of the leasing commissions from the Unconsolidated Joint Ventures of $12,000 for the three months ended March 31, 2023.
(5)Does not include the Company’s share of the construction management fees from the Unconsolidated Joint Ventures of $4,000 and $1,000 for the three months ended March 31, 2023 and March 31, 2022, respectively.
(6)Expense reimbursements to related parties - lending segment do not include personnel costs capitalized to deferred loan origination costs of $65,000 and $81,000 for the three months ended March 31, 2023 and 2022, respectively.
(7)Represents fees earned by CCO Capital and allocated to Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock.
(8)As of March 31, 2023 and March 31, 2022, $2.5 million and $2.2 million, respectively, associatedwas included in deferred costs as reimbursable expenses incurred pursuant to the Master Services Agreement and the then applicable dealer manager agreement with services providedCCO Capital. These non-issuance specific costs are allocated against the gross proceeds from the sale of the Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock on a pro rata basis for originating loans.each issuance as a percentage of the total offering.

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CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements asNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
As of September 30, 2017March 31, 2023 and December 31, 2016,2022, due to related parties consisted of the following (in thousands):
 March 31, 2023December 31, 2022
Asset management fees$720 $812 
Property management fees and reimbursements1,690 1,214 
Expense reimbursements - corporate528 466 
Expense reimbursements - lending segment275 124 
Upfront dealer manager and trailing dealer manager fees413 454 
Non-issuance specific offering costs75 17 
Other amounts due to the CIM Management Entities and certain of its affiliates176 68 
Total due to related parties$3,877 $3,155 
Affiliate Investments
In February 2022, the Company invested with the CIM JV Partner, a CIM-managed separate account, in the Unconsolidated Joint Venture which purchased an office property in Los Angeles, California for a gross purchase price of approximately $51.0 million, of which the Company initially contributed approximately $22.4 million and the CIM JV Partner initially contributed the remaining balance. See Note 2 and Note 4 for more information.
In February 2023, the Company and the 1902 Park JV Partner invested in the 1902 Park JV, which purchased a multifamily property in the Echo Park neighborhood of Los Angeles, California for a gross purchase price of $19.1 million. The Company owns 50% of the Three1902 Park JV. In connection with the closing in February 2023, the 1902 Park JV obtained financing of $9.6 million through the 1902 Park Mortgage Loan. The Company and Nine Months Ended September 30, 2017the 1902 Park JV Partner both initially contributed $6.6 million to the 1902 Park JV. See Note 2 and 2016 (Unaudited)
Note 4 for more information.

During the three months ended both March 31, 2023, the Company acquired an interest in four assets from entities indirectly wholly-owned by a fund that is managed by affiliates of CIM Group Management, LLC for $282.9 million (exclusive of transactions costs). As part of this transaction, the Company had a $3.7 million receivable due from the affiliate related to certain post-closing items that was included in accounts receivable, net on the consolidated balance sheet as of March 31, 2023. Subsequent to March 31, 2023, the Company received the full proceeds related to these post-closing items. See Note 3 and Note 7 for more information.
Other
On October 1, 2015, an affiliate ofMay 15, 2019, CIM Group entered into a 5-yearan approximately 11-year lease renewalfor approximately 32,000 rentable square feet with respect to a property owned by the Company. WeCompany (4750 Wilshire). The lease was amended on August 7, 2019 to reduce the rentable square feet to approximately 30,000 rentable square feet. In February 2023, the Company sold an 80% interest in 4750 Wilshire and now holds its retained 20% interest in the property through the 4750 Wilshire JV. For the three months ended both March 31, 2023 and 2022, the Company recorded rental and other property income related to this tenant of $27,000$194,000 and $370,000, respectively, and for each of the three months ended September 30, 2017 and 2016 and $81,000 for eachMarch 31, 2023 the Company’s share of the nine months ended September 30, 2017 and 2016.income from the tenant earned by the 4750 Wilshire JV was $37,000.
On May 16, 2016, we commenced a cash tender offer to purchase up to 10,000,000 shares of our Common Stock at a price of $21.00 per share. In connection with the tender offer, we repurchased, canceled and retired 10,000,000 shares of our Common Stock for an aggregate purchase price of $210,000,000, excluding fees and expenses related to the tender offer, which were $301,000. Based on the actual total number of shares tendered, Urban II received $208,140,000 of the aggregate purchase price paid (Note 12).
On September 14, 2016, we repurchased in a privately negotiated transaction 3,628,116 shares of Common Stock from Urban II and retired them on the same date. The aggregate purchase price was $79,819,000, or $22.00 per share (Note 12).
In addition, on June 12, 2017, we repurchased, in a privately negotiated transaction, canceled and retired 26,181,818 shares of Common Stock from Urban II. The aggregate purchase price was $576,000,000, or $22.00 per share (Note 12).
16.15. COMMITMENTS AND CONTINGENCIES
Loan Commitments—Commitments to extend credit are agreements to lend to a customer providedwhen the terms established in the contract are met. OurThe Company’s outstanding loan commitments to fund loans were $20,864,000 at September 30, 2017 and$8.0 million as of March 31, 2023, all of which are for prime-based loans to be originated by ourthe Company’s subsidiary engaged in SBA 7(a) Small Business Loan Program lending, the government guaranteed portion of which is intended to be sold. Commitments generally have fixed expiration dates. Since some commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements.
General—In connection with the ownership and operation of real estate properties, we havethe Company has certain obligations for the payment of tenant improvement allowances and lease commissions in connection with new leases and renewals. CIM CommercialThe Company had a total of $20,799,000, including $2,445,000 related to assets held for sale,$7.4 million in future obligations under leases to fund tenant improvements and other future construction obligations at September 30, 2017. At September 30, 2017, $11,102,000as of March 31, 2023. As of March 31, 2023, $2.5 million was funded to reserve accounts included in restricted cash on ourthe Company’s consolidated balance sheet for these tenant improvement obligations in connection with the mortgage loan agreementsagreement entered into in June 2016.
32
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
Employment Agreements—We haveThe Company has an employment agreementsagreement with twoone of ourits officers. Pursuant to these employment agreements, we issued an aggregate of 76,423 shares of Common Stock under the 2015 Equity Incentive Plan as retention bonuses to these officers in January 2016 (as each executive was not entitled to any disability, death or severance payments on such date). These shares vested immediately. We accrued associated payroll taxes of $444,000 at December 31, 2015, which were paid in January 2016, and recorded no compensation expense during the three and nine months ended September 30, 2017 and 2016 related to these retention bonuses. In addition, underUnder certain circumstances, each of thesethis employment agreements currently agreement provides for (1) severance payment equal to the annual base salary paid to the officer and (2) death and disability payments in an amount equal to two times and one time, respectively, the annual base salary paid to the officers. At September 30, 2017, there was no unrecognized compensation expense related to these awards.officer.
Litigation—We areThe Company is not currently involved in any material pending or threatened legal proceedings nor, to ourthe Company’s knowledge, are any material legal proceedings currently threatened against us,the Company, other than routine litigation arising in the ordinary course of business. In the normal course of business, we arethe Company is periodically party to certain legal actions and proceedings involving matters that are generally incidental to ourthe Company’s business. While the outcome of these legal actions and proceedings cannot be predicted with certainty, in management'smanagement’s opinion, the resolution of these legal proceedings and actions will not have a material adverse effect on ourthe Company’s business, financial condition, results of operations, cash flow or ourthe Company’s ability to satisfy ourits debt service obligations or to maintain ourits level of distributions on Common Stock or Series Preferred Stock.
A Preferred Stock dividend distributionssubsidiary of the Company is a defendant in a lawsuit in connection with injuries sustained by a third-party contractor at a property previously owned by such subsidiary. While it is possible that a loss may be incurred, the Company is unable to estimate a range of potential losses due to the complexity and current status of the lawsuit. However, the Company maintains insurance coverage to mitigate the impact of adverse exposures in lawsuits of this nature and do not expect this lawsuit to have a material adverse effect on the Company’s business, financial condition, results of operations, cash flow or the Company ability to satisfy its debt service obligations or to engage in further repurchasesmaintain the level of distributions on the Company’s Common Stock or Preferred Stock.
In April 2017, the City and County of San Francisco filed suit against certain of our subsidiaries and us claiming past due real property transfer tax relating to a transaction in a prior year. In June 2017, we filed a demurrer against the City and County of San Francisco. The demurrer was denied in July 2017. We filed a writ to appeal the denial of the demurrer in early August 2017. The writ was denied in August 2017 and, in order to continue to contest the asserted tax obligations, we paid the City and County of San Francisco $11,845,000 in penalties, interest and legal fees in late August 2017, which are reflected in transaction costs on our consolidated statements of operations for the nine months ended September 30, 2017, including $253,000 recorded in transaction costs for the three months ended September 30, 2017. Due to the early stage of the suit and the

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

uncertainty and risks inherent in litigation, we cannot determine the amount, if any, of the previously assessed and currently expensed tax obligations that will be recovered through the appeal process. We believe that we have defenses to, and intend to continue to vigorously contest, the asserted tax obligations.
SBA Related—If the SBA establishes that a loss on an SBA guaranteed loan is attributable to significant technical deficiencies in the manner in which the loan was originated, funded or serviced under the PPP or the SBA 7(a) Small Business Loan Program, the SBA may seek recovery of the principal loss related to the deficiency from us.the Company. As of March 31, 2023, the Company serviced an aggregate of $246.6 million of the guaranteed portion of SBA 7(a) loans. With respect to the guaranteed portion of SBA loans that have been sold, the SBA will first honor its guarantee and then seek compensation from usthe Company in the event that a loss is deemed to be attributable to technical deficiencies. Based on historical experience, we dothe Company does not expect that this contingency is probable to be asserted. However, if asserted, it could have a material adverse effect on ourthe Company’s business, financial condition, results of operations, cash flow or ourthe Company’s ability to satisfy ourits debt service obligations or to maintain ourits level of distributions on Common Stock or Series A Preferred Stock dividend distributions or to engage in further repurchases of Common Stock.
Environmental Matters—In connection with the ownership and operation of real estate properties, wethe Company may be potentially liable for costs and damages related to environmental matters, including asbestos-containing materials. We haveThe Company has not been notified by any governmental authority of any noncompliance, liability, or other claim in connection with any of the properties, and we arethe Company is not aware of any other environmental condition with respect to any of the properties that management believes will have a material adverse effect on ourthe Company’s business, financial condition, results of operations, cash flow or ourthe Company’s ability to satisfy ourits debt service obligations or to maintain ourits level of distributions on Common Stock or Series A Preferred Stock dividend distributions or to engage in further repurchases of Common Stock.
Rent Expense—Rent expense under a ground lease for a property that was sold in August 2017, which includes straight-line rent and amortization of acquired below-market ground lease, was $292,000 and $438,000 for the three months ended September 30, 2017 and 2016, respectively, and $1,168,000 and $1,314,000 for the nine months ended September 30, 2017 and 2016, respectively. We record rent expense on a straight-line basis. Straight-line rent liability of $13,289,000 is included in other liabilities in the accompanying consolidated balance sheet as of December 31, 2016.
We lease office space in Dallas, Texas under a lease which expires in May 2018. We recorded rent expense of $54,000 and $57,000 for the three months ended September 30, 2017 and 2016, respectively, and $166,000 and $171,000 for the nine months ended September 30, 2017 and 2016, respectively.
Scheduled future noncancelable minimum lease payments at September 30, 2017 are as follows:
Years Ending December 31, (in thousands)
2017 (Three months ending December 31, 2017) $62
2018 104
2019 —
2020 —
2021 —
Thereafter —
  $166

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

17. FUTURE MINIMUM LEASE RENTALS16. LEASES
Future minimum rental revenue under long-term operating leases at September 30, 2017,as of March 31, 2023, excluding tenant reimbursements of certain costs, are as follows:follows (excludes unconsolidated properties, in thousands):
Years Ending December 31,Total
2023 (Nine months ending December 31, 2023)$44,197 
202447,018 
202528,604 
202620,657 
202713,759 
Thereafter47,408 
$201,643 
33
Years Ending December 31, Governmental
Tenants (1)		 Other
Tenants (1)		 Total
  (in thousands)
2017 (Three months ending December 31, 2017) $9,092
 $20,066
 $29,158
2018 36,347
 80,181
 116,528
2019 35,129
 78,628
 113,757
2020 32,939
 70,397
 103,336
2021 22,416
 59,505
 81,921
Thereafter 51,379
 191,290
 242,669
  $187,302
 $500,067
 $687,369

(1)Excludes future minimum rental revenue of 370 L'Enfant Promenade, which is classified as held for sale on our consolidated balance sheet at September 30, 2017 (Note 3).
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18. CONCENTRATIONSCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Tenant Revenue Concentrations—Rental revenue, excluding tenant reimbursements of certain costs, from the U.S. General Services Administration and other government agencies (collectively, "Governmental Tenants"), which primarily occupy properties located in Washington, D.C., accounted for approximately 23.2% and 20.6% of our rental and other property income forNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 (Unaudited) – (Continued)
17. SEGMENT DISCLOSURE
The Company’s reportable segments during the three months ended September 30, 2017 and 2016, respectively, and 21.2% and 19.9% for the nine months ended September 30, 2017 and 2016, respectively. At September 30, 2017 and DecemberMarch 31, 2016, $8,924,000 and $8,339,000, respectively, was due from Governmental Tenants (Note 17).
Geographical Concentrations of Investments in Real Estate—As of September 30, 2017 and December 31, 2016, we owned 15 and 20 office properties, respectively, one and five multifamily properties, respectively, one hotel property, two and three parking garages, respectively, and two development sites, one of which is being used as a parking lot. These properties are located in two and four states, respectively, and Washington, D.C.
Our revenue concentrations from properties are as follows:
  Three Months Ended September 30, Nine Months Ended September 30,
  2017 2016 2017 2016
California 63.0% 61.7% 62.4% 63.9%
Washington, D.C. 29.0
 21.9
 24.2
 21.2
Texas 5.7
 8.6
 7.3
 8.2
New York 2.3
 1.9
 2.2
 1.9
North Carolina —
 5.9
 3.9
 4.8
  100.0% 100.0% 100.0% 100.0%





CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and December 31, 2016, and
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

Our real estate investments concentrations from properties are as follows:
  September 30, 2017 December 31, 2016
California 55.7% 50.8%
Washington, D.C. (1) 38.3
 32.3
Texas (1) 6.0
 7.7
North Carolina —
 5.5
New York —
 3.7
  100.0% 100.0%

(1)Includes the assets of 4200 Scotland Street and 370 L'Enfant Promenade, which are classified as held for sale on our consolidated balance sheet at September 30, 2017 (Note 3).
19. SEGMENT DISCLOSURE
In accordance with ASC Topic 280, Segment Reporting, our reportable segments2023 consist of threefour types of commercial real estate properties, namely, office, hotel and multifamily, as well as a segment for ourthe Company’s lending business that is included in our continuing operations.business. The lending business that is held for saleCompany’s reportable segments during the three months ended March 31, 2022 consist of three types of commercial real estate properties, namely, office and hotel, as well as a segment for the three and nine months ended September 30, 2016 is not included in our reportable segments.Company’s lending business. Management internally evaluates the operating performance and financial results of the segments based on net operating income. WeThe Company also havehas certain general and administrative level activities, including public company expenses, legal, accounting, and tax preparation that are not considered separate operating segments. The reportable segments are accounted for on the same basis of accounting as described in the notes to ourthe Company’s audited consolidated financial statements for the year ended December 31, 20162022 included in our Annual Report onthe 2022 Form 10-K filed with10-K.
For the SEC on March 16, 2017.
We evaluate the performance of ourCompany’s real estate segments, based onthe Company defines net operating income which is defined(loss) as rental and other property income and expense reimbursements less property related expenses, and excludes non-property income and expenses, interest expense, depreciation and amortization, corporate related general and administrative expenses, gain (loss) on sale of real estate, gain (loss) on early extinguishment of debt, impairment of real estate, transaction costs, and provision (benefit) for income taxes. For the Company’s lending segment, we definethe Company defines net operating income as interest income net of interest expense and general overhead expenses.

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CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and DecemberNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016, and2023 (Unaudited) – (Continued)
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

The net operating income (loss) of ourthe Company’s segments included in continuing operations for the three and nine months ended September 30, 2017March 31, 2023 and 20162022 is as follows:follows (in thousands):
 Three Months Ended March 31,
 20232022
Office:
Revenues$13,487 $14,105 
Property expenses:  
Operating6,523 6,121 
General and administrative100 90 
Total property expenses6,623 6,211 
(Loss) income from unconsolidated entities(64)120 
Segment net operating income—office6,800 8,014 
Hotel:  
Revenues11,492 7,793 
Property expenses:  
Operating7,339 5,371 
General and administrative8 28 
Total property expenses7,347 5,399 
Segment net operating income—hotel4,145 2,394 
Multifamily:
Revenues1,223 — 
Property expenses:
Operating1,363 — 
General and administrative17 — 
Total property expenses1,380 — 
Income from unconsolidated entity832 — 
Segment net operating income—multifamily675 — 
Lending:
Revenues2,710 2,884 
Lending expenses: 
Interest expense245 107 
Expense reimbursements to related parties—lending segment608 469 
General and administrative499 560 
Total lending expenses1,352 1,136 
Segment net operating income—lending1,358 1,748 
Total segment net operating income$12,978 $12,156 
35
  Three Months Ended September 30, Nine Months Ended September 30,
  2017 2016 2017 2016
  (in thousands)
Office:        
Revenues $41,427
 $47,584
 $134,434
 $139,403
Property expenses:  
  
  
  
Operating 18,761
 22,351
 50,318
 60,768
General and administrative 106
 344
 788
 789
Total property expenses 18,867
 22,695
 51,106
 61,557
Segment net operating income—office 22,560
 24,889
 83,328
 77,846
Hotel:  
  
  
  
Revenues 8,406
 9,139
 29,528
 38,918
Property expenses:  
  
  
  
Operating 5,943
 6,479
 18,968
 25,865
General and administrative 30
 229
 69
 622
Total property expenses 5,973
 6,708
 19,037
 26,487
Segment net operating income—hotel 2,433
 2,431
 10,491
 12,431
Multifamily:  
  
  
  
Revenues 2,683
 5,068
 12,400
 15,298
Property expenses:  
  
  
  
Operating 1,354
 2,893
 6,981
 8,667
General and administrative 36
 485
 378
 840
Total property expenses 1,390
 3,378
 7,359
 9,507
Segment net operating income—multifamily 1,293
 1,690
 5,041
 5,791
Lending:        
Revenues 2,868
 2,541
 7,270
 7,690
Lending expenses:  
    
  
Interest expense 116
 124
 203
 306
Fees to related party 845
 865
 2,473
 2,679
General and administrative 294
 283
 971
 881
Total lending expenses 1,255
 1,272
 3,647
 3,866
Segment net operating income—lending 1,613
 1,269
 3,623
 3,824
Total segment net operating income $27,899
 $30,279
 $102,483
 $99,892
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CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements as of September 30, 2017 and DecemberNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016, and2023 (Unaudited) – (Continued)
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

A reconciliation of our segment net operating income to net income attributable to the Company for the three and nine months ended September 30, 2017March 31, 2023 and 20162022 is as follows:follows (in thousands):
  Three Months Ended September 30, Nine Months Ended September 30,
  2017 2016 2017 2016
  (in thousands)
Total segment net operating income $27,899
 $30,279
 $102,483
 $99,892
Asset management and other fees to related parties (6,051) (7,631) (20,986) (22,824)
Interest expense (9,243) (10,152) (28,442) (24,080)
General and administrative (876) (885) (2,462) (3,167)
Transaction costs (242) (53) (11,870) (320)
Depreciation and amortization (13,472) (17,724) (45,464) (54,262)
Impairment of real estate —
 —
 (13,100) —
Gain on sale of real estate 74,715
 14,927
 378,732
 39,666
Income from continuing operations before provision for income taxes 72,730
 8,761
 358,891
 34,905
   Provision for income taxes (339) (379) (1,193) (1,040)
Net income from continuing operations 72,391
 8,382
 357,698
 33,865
Discontinued operations:  
  
  
  
Income from operations of assets held for sale —
 703
 —
 3,061
Net income from discontinued operations —
 703
 —
 3,061
Net income 72,391
 9,085
 357,698
 36,926
Net loss (income) attributable to noncontrolling interests 4
 3
 (10) (9)
Net income attributable to the Company $72,395
 $9,088
 $357,688
 $36,917
 Three Months Ended March 31,
 20232022
Total segment net operating income$12,978 $12,156 
Asset management and other fees to related parties(720)(921)
Expense reimbursements to related parties—corporate(528)(422)
Interest expense(5,991)(2,063)
General and administrative(1,301)(1,137)
Transaction-related costs(3,360)— 
Depreciation and amortization(9,502)(5,004)
Gain on sale of real estate1,104 — 
(Loss) income before provision for income taxes(7,320)2,609 
Provision for income taxes(256)(307)
Net (loss) income(7,576)2,302 
Net loss (income) attributable to noncontrolling interests625 (5)
Net (loss) income attributable to the Company$(6,951)$2,297 
The condensed assets for each of the segments as of September 30, 2017March 31, 2023 and December 31, 2016,2022, along with capital expenditures and loan originations for the ninethree months ended September 30, 2017March 31, 2023 and 2016,2022, are as follows:follows (in thousands):
 March 31, 2023December 31, 2022
Condensed assets:  
Office$458,936 $471,677 
Hotel99,151 99,082 
Multifamily310,990 — 
Lending84,812 76,148 
Non-segment assets3,667 43,341 
Total assets$957,556 $690,248 
 Three Months Ended March 31,
 20232022
Capital expenditures(1) and loan originations:
  
Office$2,156 $1,392 
Hotel1,629 8 
Multifamily5,327 — 
Total capital expenditures9,112 1,400 
Loan originations10,781 22,776 
Total capital expenditures and loan originations$19,893 $24,176 
______________________
(1)Represents additions and improvements to real estate investments, excluding acquisitions. Includes the activity for dispositions through their respective disposition dates.
18. SUBSEQUENT EVENTS
The Company made a paydown of $20.0 million on the revolving portion of its 2022 Credit Facility on April 28, 2023.
36
  September 30, 2017 December 31, 2016
  (in thousands)
Condensed assets:  
  
Office (1) $1,135,614
 $1,568,702
Hotel 111,899
 115,955
Multifamily (1) 45,774
 170,159
Lending assets 88,293
 91,191
Non-segment assets 209,724
 76,877
Total assets $1,591,304
 $2,022,884

CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements asTable of September 30, 2017 and December 31, 2016, andContents
for the Three and Nine Months Ended September 30, 2017 and 2016 (Unaudited)

  Nine Months Ended September 30,
  2017 2016
  (in thousands)
Capital expenditures (2):  
  
Office $22,632
 $24,115
Hotel 267
 619
Multifamily 338
 449
Total capital expenditures 23,237
 25,183
Loan originations 49,532
 78,809
Total capital expenditures and loan originations (3) $72,769
 $103,992

(1)Includes the assets of 4200 Scotland Street and 370 L'Enfant Promenade, which are classified as held for sale on our consolidated balance sheet at September 30, 2017 (Note 3).
(2)Represents additions and improvements to real estate investments, excluding acquisitions.
(3)Includes the activity for dispositions through their respective disposition dates.

Item 2.
Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations

This Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"“Exchange Act”), which are intended to be covered by the safe harbors created thereby. These statements include the plans and objectives of management for future operations, including plans and objectives relating to future growth of our business and availability of funds. Such forward-looking statements can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "might," "believe," "anticipate," "seek," "plan," "estimate," "could," "would," "continue," "pursue,"“may,” “will,” “project,” “target,” “expect,” “intend,” “might,” “believe,” “anticipate,” “estimate,” “could,” “would” “continue,” “pursue,” “potential,” “forecast,” “seek,” “plan,” “should” or "should"“goal” or the negative thereof or other variations or similar words or phrases. TheseSuch forward-looking statements also include, the plans and objectives of management for future operations, including, but not limited to,among others, statements about our plans and objectives relating to future growth and availabilityoutlook. Such forward-looking statements are based on particular assumptions that our management has made in light of funds.its experience, as well as its perception of expected future developments and other factors that it believes are appropriate under the circumstances. Forward-looking statements are necessarily estimates reflecting the judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include those associated with (i) the timing, form, and operational effects of our development activities, (ii) our ability to raise in place rents to existing market rents and to maintain or increase occupancy levels, (iii) fluctuations in market rents, (iv) the effects of inflation and higher interest rates on our operations and profitability and (v) general economic, market and other conditions. Additional important factors that could cause our actual results to differ materially from our expectations are discussed under the section “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 30, 2023 (the “2022 Form 10-K”). The forward-looking statements included herein are based on current expectations and there can be no assurance that these expectations will be attained. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Form 10-Q will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements includedexpressed or implied herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made. We do not undertake to update them to reflect changes that occur after the date they are made.made, except as may be required by applicable securities laws.
The following discussion of our financial condition at September 30, 2017as of March 31, 2023 and results of operations for the three and nine months ended September 30, 2017March 31, 2023 and 20162022 should be read in conjunction with our Annual Report onthe 2022 Form 10-K for the year ended December 31, 2016.10-K. For a more detailed description of the risks affecting our financial condition and results of operations, see "Risk Factors"“Risk Factors” in Part I, Item 1A of our Annualthe 2022 Form 10-K and in Part II, Item 1A of this Quarterly Report. Capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to those terms in “Part I — Financial Information” of this Quarterly Report on Form 10-K10-Q, including the notes to the consolidated financial statements contained therein. The terms “we,” “us,” “our” and the “Company” refer to Creative Media & Community Trust Corporation and its subsidiaries.
Definitions
We use certain defined terms throughout this Quarterly Report on Form 10-Q that have the following meanings:
The phrase “ADR” represents average daily rate. It is calculated as trailing three-month room revenue divided by the number of rooms occupied. For sold properties, ADR is presented for the year ended December 31, 2016.Company’s period of ownership only.
The phrase “annualized rent” represents gross monthly base rent, or gross monthly contractual rent under parking and retail leases, multiplied by 12. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.
The phrase “RevPAR” represents revenue per available room. It is calculated as trailing three-month room revenue divided by the number of available rooms. For sold properties, RevPAR is presented for the Company’s period of ownership only.
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Executive Summary
Business Overview
Creative Media & Community Trust Corporation (formerly known as CIM Commercial Trust Corporation) is a Maryland corporation and REIT. Our principal business is to invest in,We primarily acquire, develop, own and operate both premier multifamily properties situated in vibrant communities throughout the United States and Class A and creative office investmentsreal assets in vibrantmarkets with similar business and improving urbanemployment characteristics to our multifamily investments. We seek to apply the expertise of CIM Group to the acquisition, development and operation of premier multifamily properties and creative office assets that cater to rapidly growing industries such as technology, media and entertainment. All of our real estate assets are and will generally be located in communities throughout the United States.qualified by CIM Group as described further below. These communities are located in areas that include traditional downtown areas and suburban main streets, which have high barriers to entry, high population density, improving demographicpositive population trends and a propensity for growth. We believe that the critical mass of redevelopment in such areas creates positive externalities, which enhance the value of substantially stabilizedreal estate assets in the area. We believe that these assets will provide greater returns than similar assets in other markets, as a result of the population growth, public commitment and significant private investment that characterize these areas.
CIM is headquartered in Los Angeles, CA, with offices in Atlanta, GA, Chicago, IL, Dallas, TX, London, UK, New York, NY, Orlando, FL, Phoenix, AZ, and Tokyo, Japan. CIM also maintains additional offices across the United States, as well as in Korea and Hong Kong to support its platform.
Properties
As of March 31, 2023, our real estate portfolio consisted of 25 assets, all of which were fee-simple properties, including two office properties (one of which is being partially converted into multifamily units) and one multifamily property, which we own through our investment in unconsolidated joint ventures (the “Unconsolidated Joint Ventures”). As of March 31, 2023, our 13 office properties, totaling approximately 1.3 million rentable square feet, were 81.3% occupied, our one hotel with an ancillary parking garage, which has a total of 503 rooms, had RevPAR of $162.85 for the three months ended March 31, 2023 and our three multifamily properties which were 80.7% occupied. Additionally, as of March 31, 2023, we had seven development sites (with two being used as parking lots).
Strategy
We are a Maryland corporation and REIT. Our portfolio of investments currently consists of premier multifamily, Class A and creative office real assets in vibrant and improving demographics,metropolitan communities throughout the United States. We also own one hotel in northern California and a lending platform that originates loans under the Small Business Administration (“SBA”) 7(a) loan program. We seek to apply the expertise of CIM Group to the acquisition, development and operation of premier multifamily properties situated in vibrant communities throughout the United States. We also seek to acquire, develop and operate creative office assets that cater to rapidly growing industries such as technology, media and entertainment in markets with similar business and employment characteristics to our multifamily investments. All of our multifamily and creative office assets are and will generally be located in communities qualified by CIM Group as described further below. These communities are located in areas that include traditional downtown areas and suburban main streets, which have high barriers to entry, high population density, positive population trends and a propensity for growth. We believe that the critical mass of redevelopment in such areas creates positive externalities, which enhance the value of real estate assets in the area. We believe that these assets will provide greater returns than similar assets in other markets, as a result of the population growth, public commitment and significant private investment that characterize these areas.
Our two primary goals are (a) consistently growing our net asset value ("NAV")investments in multifamily and cash flows per share of Common Stock through our principal business and (b) providing liquidity to our common stockholders at prices reflecting our NAV and cash flow prospects. In that regard, in June 2016 we completed a tender offer for 10,000,000 shares of Common Stock at a price of $21.00 per share of Common Stock; in September 2016, we repurchased in a privately negotiated transaction, 3,628,116 shares of our Common Stock at $22.00 per share from Urban II; and in June 2017, we repurchased in a privately negotiated transaction, 26,181,818 shares of our Common Stock at $22.00 per share from Urban II. Additionally, in April 2017, we declared and paid a special cash dividend of $0.28 per share of Common Stock,creative office assets may take different forms, including direct equity or $601,000, to the common stockholders that did not participate in the September 2016 private repurchase and, in June 2017, we declared and paid a special cash dividend of $1.98 per share of Common Stock,preferred investments, real estate development activities, side-by-side investments or $4,271,000, to the common stockholders that did not participate in the June 2017 private repurchase. These special cash dividends allowed such common stockholders that did not participate in the September 2016 and June 2017 private repurchases to receive the economic benefits of such repurchases. In furtherance of our two primary goals, we anticipate additional share repurchases and/co-investments with vehicles managed or special dividends in the future.
We are managedowned by affiliates of CIM Group. Our wholly-owned subsidiary, CIM Urban, is party to an Investment Management Agreement with CIM Investment Advisors, LLC, an affiliate of CIM REIT and CIM Group pursuant to which CIM Investment Advisors, LLC provides investment advisory services to CIM Urban. In addition,and/or originating loans that are secured directly or indirectly by properties primarily located in qualified communities (“Qualified Communities”) that meet our strategy. Further, we are party to a Master Services Agreement withleverage the Manager, an affiliateinvestor relationships of CIM Group pursuant to which the Manager agrees to provide or arrangeexecute on our investment pipeline using an asset-light approach for other service providers to provide management and administration services ("Base Service") to us and allcertain of our directinvestments. Under this approach, we coinvest with one or more third parties on an asset-level basis by raising capital from such third parties, maintain an economic interest in the asset and, indirect subsidiaries. CIM Group isin some cases, earn a vertically-integrated, full-service investment manager with multidisciplinary expertisemanagement fee and in-house research, acquisition, investment, development, finance, leasing, and management capabilities. CIM Group is

headquartered in Los Angeles, California and has offices in Oakland, California; Bethesda, Maryland; Dallas, Texas; and New York, New York.
Properties
Asa percentage of September 30, 2017, our real estate portfolio consisted of 18 office properties (including one parking garage and two development sites, one of which is being used as a parking lot) totaling approximately 3.7 million rentable square feet, one multifamily property comprised of 308 units, and one hotel with 503 rooms.
During the three months ended September 30, 2017, we sold two office properties and one multifamily property and we entered into a purchase and sale agreement that was subject to a nonrefundable deposit for one office property, which is classified as held for sale on our consolidated balance sheet as of September 30, 2017, and was sold in October 2017, along with our one remaining multifamily property that was classified as held for sale as of September 30, 2017.
Strategy
Our investment strategy is to continue to primarily invest in Class A and creative office investments in vibrant and improving urban communities throughout the United States in a manner that will allow us to increase our NAV and cash flows per share of Common Stock. Our investment strategy is centered around CIM's community qualification process.profits. We believe this is a compelling model that is expected to contribute to strong returns on invested capital while reducing risk by reducing our capital outlay.
We intend to dispose of assets that do not fit into our strategy provides usover time and opportunistically (i.e., we do not have any specific time frame with respect to such dispositions). Further, as a significant competitive advantagematter of prudent management, we regularly evaluate each asset within our portfolio as well as our strategy. Such review may result in dispositions when, making urbanamong other things, we believe the proceeds generated from the sale of an asset can be redeployed in one or more assets that will generate better returns, or the market value of such asset is equal to or exceeds our view of its intrinsic value.
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CIM Group Operations
CIM Group believes that a vast majority of the risks associated with acquiring real estate investments. The qualification process generally takesare mitigated by accumulating local market knowledge of the community where the asset is located. As a result, CIM Group typically spends significant resources over a period of between six months and five years and is a critical component of CIM's investment evaluation.evaluating communities prior to making any acquisitions. The distinct districts that CIM examines the characteristics of a marketGroup identifies through this process as targets for acquisitions are referred to determine whether the district justifies the extensive efforts CIM undertakes in reviewing and making potential investments in its qualified communities ("Qualified Communities").as “Qualified Communities.” Qualified Communities generally fall into one of two categories: (i) transitional urban districts that have dedicated resources to become vibrant urban communities and (ii) well-established, thriving urban areas (typically major central business districts). Qualified Communities are distinct districts whichtypically have dedicated resources to become, or are currently, vibrant communities where people can live, work, shop and be entertained—entertained, all within walking distance or close proximity to public transportation. These areas, alsowhich include traditional downtown areas and suburban main streets, generally have high barriers to entry, high population density, improving demographicpositive population trends, and a propensity for growth.growth and support for investment. CIM Group believes that a vast majoritythe critical mass of redevelopment in such Qualified Communities creates positive externalities, which enhance the risks associated with makingvalue of real asset investments are mitigated by accumulating local market knowledge ofestate assets in the community where the investment lies. CIM typically spends significant time and resources qualifying targeted investment communities prior to making any acquisitions. Since 1994,area. CIM Group has qualified 110 communities and has deployed capital in 67targets acquisitions of these Qualified Communities. Although we may not invest exclusively in Qualified Communities, it is expected that mostdiverse types of our investments will be identified through this systematic process. Our investments may also include side-by-side investments in one or more CIM Group-managed funds as well as a side-by-side or direct investment in a CIM Group-managed debt fund that principally originates loans secured directly or indirectly by commercial real estate properties. Furthermore, as part of our investment strategy, we may invest in or originate loans that are secured directly or indirectly by properties primarily located in Qualified Communities that meet our investment strategy. Such loans may include limited and/or non-recourse junior (mezzanine, B-note or 2nd lien)assets, including retail, residential, office, parking, hotel, signage and senior construction loans that meet our investment strategy or limited and/or non-recourse junior (mezzanine, B-note or 2nd lien)mixed-use through CIM Group’s extensive network and senior acquisition, bridge or repositioning loans.its current opportunistic activities.
CIM Group seeks to maximize the value of its investmentsholdings through active asset management.onsite property management and leasing. CIM Group has extensive in-house research, acquisition, investment,credit analysis, development, financing,finance, leasing and onsite property management capabilities, which leverage its deep understanding of urbanmetropolitan communities to position properties for multiple uses and to maximize operating income. As a fully integratedvertically-integrated owner and operator, CIM's assetCIM Group has in-house onsite property management capabilities are complemented by its in-house property managementand leasing capabilities. Property managers prepare annual capital and operating budgets and monthly operating reports, monitor results and oversee vendor services, maintenance and capital improvement schedules. In addition, they ensure that revenue objectives are met, lease terms are followed, receivables are collected, preventative maintenance programs are implemented, vendors are evaluated and expenses are controlled. CIM's assetIn addition, CIM Group’s real assets management committee (the “Real Assets Management Committee”) reviews and approves strategic plans for each investment, including financial, leasing, marketing, property positioningdecisions related to financing strategies and disposition plans. In addition,hold/ sell analyses and performance tracking relative to the asset management committee reviews and approves the annualoverall business plan for each property, including its capital and operating budget. CIM'splan. CIM Group’s organizational structure provides for investment and asset management continuity through multi-disciplinary teams responsible for an asset from the time of the original investment recommendation, through the implementation of the asset'sasset’s business plan, and any repositions or ultimate disposition activities.
AsCIM Group’s Investments and Development teams are separate groups that work very closely together on transactions requiring development or redevelopment. While the Investments team is ultimately responsible for acquisition analysis, both the Investments and Development teams perform due diligence, evaluate and determine underwriting assumptions and participate in the development management and ongoing asset management of CIM Group’s assets under development. The Development team is also responsible for the oversight and or execution of securing entitlements and the development/repositioning process. In instances where CIM Group is not the lead developer, CIM Group’s in-house Development team continues to provide development and construction oversight to co-sponsors through a mattershadow team that oversees the progress of prudent management, we also regularly evaluate each investment withinthe development from beginning to end to ensure adherence to the budgets, schedules, quality and scope of the project in order to maintain CIM Group’s vision for the final product. Both the Investments and Development teams interact as a cohesive team when sourcing, underwriting, acquiring, executing and managing the business plan of an opportunistic acquisition.
Financing Strategy
We may finance our portfoliofuture activities through one or more of the following methods: (i) offerings of shares of our common stock, par value $0.001 per share (“Common Stock”), preferred stock or other equity and or debt securities of the Company; (ii) credit facilities and term loans; (iii) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral, including the securitization of portions of our strategies. Such review may result in dispositions when an investment no longer fits our overall objectives or investment strategies or when our view of the market value of such investment is equal to or exceeds its intrinsic value. As a result of such review, we sold an office property in Santa Ana, California in November 2015; a hotel in Oakland, California in February 2016; a hotel in Los Angeles, California in July 2016; an office property in San Francisco, California in March 2017; two multifamily properties in Dallas, Texas in May 2017; an office property in Charlotte, North Carolina in June 2017; an office property and a parking garage in Sacramento, California in June 2017; a multifamily property in Dallas, Texas in June 2017; an office property

in Washington, D.C. in August 2017; an office property in Los Angeles, California in September 2017; a multifamily property in New York, New York in September 2017; and an office property in Washington, D.C. in October 2017. In addition, we have entered into a purchase and sale agreement with an unrelated third party forloan portfolio; (iv) the sale of a multifamily property in Houston, Texas, which is expected to close during the fourth quarter of 2017. Such review may result in additional dispositionsexisting assets; (v) partnering with co-investors; and or (vi) cash flows from time to time. We are considering using a substantial portion of the net proceeds of such dispositions to provide liquidity to our common stockholders in 2017 at prices reflecting our NAV and cash flow prospects.operations.
Rental Rate Trends
Office Statistics:    The following table sets forth occupancy rates and annualized rent per occupied square foot across our office portfolio as of the specified periods:periods (includes 100% of our properties partially owned through unconsolidated joint ventures):
 As of March 31,
 20232022
Occupancy (1)(2)81.3 %78.9 %
Annualized rent per occupied square foot (1)(3)$55.98 $53.05 
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  As of September 30,
  2017 2016
Occupancy (1) 88.2% 84.6%
Annualized rent per occupied square foot (1) (2) $41.27
 $36.85
(1)The information presented in this table represents historical information as of the date indicated without giving effect to any property sales occurring thereafter. 

(1)Five office properties and a parking garage were sold during the first nine months of 2017 and one office property was classified as held for sale as of September 30, 2017 (Note 3). Excluding these properties, the occupancy and annualized rent per occupied square foot were 94.2% and $40.54 as of September 30, 2017 and 93.0% and $38.90 as of September 30, 2016. No office properties were sold during the last three months of 2016.
(2)Represents gross monthly base rent under leases commenced as of the specified periods, multiplied by twelve. This amount reflects total cash rent before abatements. Total abatements for the twelve months ended September 30, 2017 and 2016 were approximately $3,161,000 and $4,064,000, respectively. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent. Annualized rent for certain office properties includes rent attributable to retail.
(2)In connection with the 4750 Wilshire Project (as defined later), the Company is no longer classifying approximately 110,000 square feet of vacant space at its property at 4750 Wilshire Boulevard in Los Angeles, California as rentable office square footage as of March 31, 2023.
(3)Represents gross monthly base rent under leases commenced as of the specified periods, multiplied by 12. This amount reflects total cash rent before abatements. Total abatements, representing lease incentives in the form of free rent, for the twelve months ended March 31, 2023 and 2022 were approximately $2.8 million and $1.8 million, respectively. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent. Annualized rent for certain office properties includes rent attributable to retail.
Over the next four quarters, we expect to see expiring cash rents as set forth in the table below:below (includes 100% of our properties partially owned through unconsolidated joint ventures):
 For the Three Months Ended
 June 30, 2023September 30, 2023December 31, 2023March 31, 2024
Expiring Cash Rents:    
Expiring square feet (1)39,661 20,172 19,463 47,354 
Expiring rent per square foot (2)$59.15 $55.03 $48.55 $46.35 
  For the Three Months Ended
  December 31, 2017 March 31, 2018 June 30, 2018 September 30, 2018
Expiring Cash Rents (1):  
  
  
  
Expiring square feet (2) 55,520
 131,585
 12,999
 48,082
Expiring rent per square foot (3) $25.71
 $34.20
 $38.19
 $37.57
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(1)Excludes the expiring square feet and rent related to 370 L'Enfant Promenade, which is classified as held for sale on our consolidated balance sheet at September 30, 2017.
(2)All month-to-month tenants occupying a total of 24,825 square feet are included in the expiring leases in the first quarter listed.
(3)Represents gross monthly base rent, as of September 30, 2017, under leases expiring during the periods above, multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

(1)Month-to-month tenants occupying a total of 9,465 square feet are included in the expiring leases in the first quarter listed.
(2)Represents gross monthly base rent, as of March 31, 2023, under leases expiring during the periods above, multiplied by 12. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.
During the three and nine months ended September 30, 2017,March 31, 2023, we executed leases with terms longer than 12 months totaling 175,965 and 369,95143,887 square feet, respectively.feet. The table below sets forth information on certain of our executed leases during the three and nine months ended September 30, 2017,March 31, 2023, excluding space that was vacant for more than one year:year, month-to-month leases, leases with an original term of less than 12 months, related party leases, and space where the previous tenant was a related party:
Number of
Leases (1)		Rentable
Square
Feet		New Cash
Rents per
Square
Foot (2)		Expiring
Cash
Rents per
Square
Foot (2)
Three months ended March 31, 2023832,636$53.96 $53.54 
  Number of
Leases (1) (2)		 Rentable
Square
Feet (2)		 New Cash
Rents per
Square
Foot (2) (3)		 Expiring
Cash
Rents per
Square
Foot (2) (3)
Three months ended September 30, 2017 (3) 13 141,305 $48.29
 $40.13
Nine months ended September 30, 2017 (3) 39 242,487 $48.50
 $40.37
______________________

(1)Based on the number of tenants.
(2)Excludes leases for which the space was vacant for longer than one year, month-to-month leases, leases with an original term of less than 12 months, related party leases, and space where the previous tenant was a related party.
(3)Cash rents represent gross monthly base rent, multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.
(1)Based on the number of tenants that signed leases.
(2)Cash rents represent gross monthly base rent, multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.
Fluctuations in submarkets, buildings and terms of the leases cause large variations in these numbers and make predicting the changes in rent in any specific period difficult.Our rental and occupancy rates are impacted by general economic conditions, including the pace of regional and economic growth, and access to capital. Therefore, we cannot give any assurance that leases will be renewed or that available space will be re-leased at rental rates equal to or above the current market rates. Additionally, decreased demand and other negative trends or unforeseeable events that impair our ability to timely renew or re-leasere lease space could have further negative effectsa material adverse effect on our futurebusiness, financial condition, results of operations, and cash flows.flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
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Multifamily Statistics:    The following table sets forth occupancy rates and the monthly rent per occupied unit across our multifamily portfolio for the specified periods:periods (includes 100% of our property partially owned through an unconsolidated joint venture):
 For the Three Months
Ended March 31,
 20232022
Occupancy80.7 %N/A
Monthly rent per occupied unit (1)$2,852 N/A
______________________
  As of September 30,
  2017 2016
Occupancy (1) 96.1% 95.1%
Monthly rent per occupied unit (1) (2) $1,585
 $1,929

(1)Four multifamily properties were sold during the first nine months of 2017 and the remaining property was classified as held for sale on our consolidated balance sheet as of September 30, 2017 (Note 3). Excluding the sold properties, the occupancy and monthly rent per occupied unit as of September 30, 2016 were 96.4% and $1,681, respectively. No multifamily properties were sold during the last three months of 2016.
(2)Represents gross monthly base rent under leases commenced as of the specified period, divided by occupied units. This amount reflects total cash rent before concessions.

(1)Represents gross monthly base rent under leases commenced as of the specified period, divided by occupied units. This amount reflects total cash rent before concessions.
Hotel Statistics:    The following table sets forth the occupancy, average daily rate ("ADR")ADR and revenue per available room ("RevPAR")RevPAR for theour hotel portfolioin Sacramento, California for the specified periods:
 For the Three Months
Ended March 31,
 20232022
Occupancy80.6 %69.2 %
ADR$202.02 $173.14 
RevPAR$162.85 $119.78 
  For the Nine Months
Ended September 30,
  2017 2016
Occupancy (1) 83.3% 80.3%
ADR (1) $159.14
 $141.60
RevPAR (1) $132.55
 $113.74
Seasonality

(1)Occupancy, ADR, and RevPAR includes activity for hotels that were sold in 2016 for our period of ownership only. Excluding the hotel properties that were sold in 2016, occupancy, ADR, and RevPAR for the nine months ended September 30, 2016 were 80.1%, $151.55, and $121.36, respectively.
Our revenues and expenses for our hotel property are subject to seasonality during the year. Generally, our hotel revenues are greater in the first and second quarters than the third and fourth quarters. This seasonality can be expected to cause quarterly fluctuations in revenues, segment net operating income, net income and cash provided by operating activities. In addition, the hotel industry is cyclical and demand generally follows, on a lagged basis, key macroeconomic factors.
Lending Segment
In order to allow CIM Commercial to increase its focus on Class A and creative office investments,Through our Board of Directors approved a plan in December 2014 for the lending segment that, when completed, would have resulted in the deconsolidation of the lending segment, which at that time was focused on small business lending in the hospitality industry. In July 2015, to maximize value, we modified our strategy from a strategy of selling the lending segment as a whole to a strategy of soliciting buyers for components of the business, including our commercial mortgage loans andoriginated under the SBA 7(a) lending platform. This change in the sale methodology resulted in the need to extend the period to complete the sale of the remainder of the lending segment beyond one year. On December 17, 2015, pursuant to the modified plan, we sold substantially all of our commercial mortgage loans with a carrying value of $77,121,000 to an unrelated third party and recognized a gain of $5,151,000. In September 2016, we discontinued our efforts to sell the SBA 7(a) lending platform, and the activities related to the SBA 7(a) lending platform have been reclassified to continuing operations for all periods presented. On December 29, 2016, we sold our commercial real estate lending subsidiary, which was classified as held for sale and had a carrying value of $27,587,000, which was equal to management's estimate of fair value, to a fund managed by an affiliate of CIM Group. We did not recognize any gain or loss in connection with the transaction. Management's estimate of fair value was determined with assistance from an independent third party valuation firm.
Through our SBA 7(a) lending platform,Program, we are a national lender that primarily originates loans to small businesses. We identify loan origination opportunities through personal contacts, internet referrals, attendance at trade shows and meetings, direct mailings, advertisements in trade publications and other marketing methods. We also generate loans through referrals from real estate and loan brokers, franchise representatives, existing borrowers, lawyers and accountants.
The SBA 7(a) Loan Program is the SBA’s most common loan program. The maximum loan amount for an SBA 7(a)
loan is $5.0 million. Key eligibility factors are based on what the business does to generate its income, its credit history, the
liquidity of the borrower, size standards and where the business operates. We work with potential borrowers to identity the type
of loan that would be appropriate for each such borrower’s needs. Our SBA 7(a) term loans have monthly repayment terms of
principal and interest and are originated with variable interest rates based on the prime rate. Most of our SBA 7(a) loans have
maturities of approximately 25 years.
While we have focused on originating real estate loans almost exclusively to the limited service and mid-scale hospitality industry, we intend to increase our efforts to originate other real estate collateralized loans. These loans are anticipated to be concentrated in industries in which we previously had positive experience, including convenience store, RV park and single purpose building owner-occupied restaurant operations and may include owner-occupied industrial operations/warehouse buildings.
Property Concentration
Kaiser Foundation Health Plan, Incorporated (“Kaiser”), which occupied space in one of our Oakland, California properties, accounted for 30.3% of our annualized office rental income for the three months ended March 31, 2023.
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2023 Results of Operations
Comparison of the Three Months Ended September 30, 2017March 31, 2023 to the Three Months Ended September 30, 2016March 31, 2022
Net (Loss) Income and FFO
 Three Months Ended March 31,Change
 20232022$%
 (dollars in thousands)
Total revenues$28,912 $24,782 $4,130 16.7 %
Total expenses$38,104 $22,293 $15,811 70.9 %
Net (loss) income$(7,576)$2,302 $(9,878)N/A
  Three Months Ended
September 30,		 Change
  2017 2016 $ %
  (dollars in thousands)
Total revenues $55,384
 $64,332
 $(8,948) (13.9)%
Total expenses 57,369
 70,498
 (13,129) (18.6)%
Gain on sale of real estate 74,715
 14,927
 59,788
 —
Net income from discontinued operations —
 703
 (703) —
Net income 72,391
 9,085
 63,306
 —
Net income increased to $72,391,000, or by $63,306,000, loss was $7.6 million for the three months ended September 30, 2017,March 31, 2023 compared to $9,085,000net income of $2.3 million for the three months ended September 30, 2016.March 31, 2022, a decrease of $9.9 million. The increase isdecrease was primarily attributabledue to an increase in the gain on sale of real estate of $59,788,000, as well as a decrease of $4,252,000 in depreciation and amortization expense a decrease of $1,580,000 in asset management and other fees to related parties and a decrease of $909,000$4.5 million, an increase in interest expense not allocated to our operating segments of $3.9 million and an increase in transaction-related costs of $3.4 million (primarily related to transfer tax expenses in connection with the acquisition of two multifamily properties in Oakland, California during the three months ended March 31, 2023). These were partially

offset by a decreasegain of $2,380,000$1.1 million recognized in connection with the sale of 80% of our interest in an office property,an increase of $822,000 in segment net operating income of our operating segments(discussed in continuing operations and a decrease of $703,000 in income from discontinued operations.more detail below).
Funds from Operations ("FFO")
We believe that FFOfunds from operations (“FFO”), a non-GAAP measure, is a widely recognized and appropriate measure of the performance of a REIT and that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO represents net income (loss) availableattributable to common stockholders, computed in accordance with GAAP, which reflects the deduction of redeemable preferred stock dividends accumulated, excluding gains (or losses) from sales of real estate, impairment of real estate, and real estate depreciation and amortization. We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts ("NAREIT"(the “NAREIT”).
Like any metric, FFO should not be used as the only measure of our performance because it excludes depreciation and amortization and captures neither the changes in the value of our real estate properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our operating results. Other REITs may not calculate FFO in accordance with the standards established by the NAREIT; accordingly, our FFO may not be comparable to thosethe FFOs of other REITs' FFO.REITs. Therefore, FFO should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a supplement to or substitute measure for cash flowflows from operating activities computed in accordance with GAAP. FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends.
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The following table sets forth a historical reconciliation of net income availableloss attributable to common stockholders to FFO availableattributable to common stockholders:stockholders (in thousands):
 Three Months Ended March 31,
 20232022
Net loss attributable to common stockholders(1)
$(12,715)$(2,811)
Depreciation and amortization9,502 5,004 
Noncontrolling interests’ proportionate share of depreciation and amortization(477)
Gain on sale of real estate(1,104)— 
FFO attributable to common stockholders(1)
$(4,794)$2,193 
______________________
  Three Months Ended
September 30,
  2017 2016
  (in thousands)
Net income available to common stockholders $72,257
 $9,088
Depreciation and amortization 13,472
 17,724
Impairment of real estate —
 —
Gain on sale of depreciable assets (74,715) (14,927)
FFO available to common stockholders $11,014
 $11,885
(1)During the three months ended March 31, 2023 and 2022, we recognized $373,000 and $75,000, respectively, of redeemable preferred stock redemptions and $0 and $15,000, respectively, of redeemable preferred stock deemed dividends. Such amounts are included in, and have the effect of increasing net loss attributable to common stockholders and FFO attributable to common stockholders because redeemable preferred stock redemptions are not an adjustment prescribed by NAREIT.
FFO availableattributable to common stockholders was $11,014,000$(4.8) million for the three months ended September 30, 2017,March 31, 2023, a decrease of $871,000$7.0 million compared to $11,885,000$2.2 million for the three months ended September 30, 2016. March 31, 2022. The decrease in FFO was primarily attributabledue to a decreasean increase in interest expense not allocated to our operating segments of $2,380,000$3.9 million, an increase in transaction-related costs of $3.4 million (primarily related to transfer tax expenses in connection with the acquisition of two multifamily properties in Oakland, California during the three months ended March 31, 2023) and an increase in redeemable preferred stock dividends and redeemable preferred stock redemptions of $373,000 and $298,000, respectively. These were partially offset by an increase of $822,000 in segment net operating income (discussed in more detail below).
43
Table of our operating segments in continuing operations and a decrease of $703,000 in income from discontinued operations, partially offset by a decrease of $1,580,000 in asset management and other fees to related parties and a decrease of $909,000 in interest expense.Contents

Summary Segment Results
CIM Commercial operatesDuring the three months ended March 31, 2023 we operated in four segments: office, hotel and multifamily properties and lending. During the three months ended March 31, 2022, we operated in three segments: office and hotel properties and lending. Set forth and described below are summary segment results for our fouroperating segments included(dollar amounts in continuing operations.thousands).

 Three Months Ended
September 30,		 Change
 2017 2016 $ % Three Months Ended March 31,Change
 (dollars in thousands) 20232022$%
Revenues:  
  
  
  
Revenues:    
Office $41,427
 $47,584
 $(6,157) (12.9)%Office$13,487 $14,105 $(618)(4.4)%
Hotel 8,406
 9,139
 (733) (8.0)%Hotel$11,492 $7,793 $3,699 47.5 %
Multifamily 2,683
 5,068
 (2,385) (47.1)%Multifamily$1,223 $— $1,223 — %
Lending 2,868
 2,541
 327
 12.9 %Lending$2,710 $2,884 $(174)(6.0)%
Expenses:  
  
  
  
Expenses:    
Office 18,867
 22,695
 (3,828) (16.9)%Office$6,623 $6,211 $412 6.6 %
Hotel 5,973
 6,708
 (735) (11.0)%Hotel$7,347 $5,399 $1,948 36.1 %
Multifamily 1,390
 3,378
 (1,988) (58.9)%Multifamily$1,380 $— $1,380 — %
Lending 1,255
 1,272
 (17) (1.3)%Lending$1,352 $1,136 $216 19.0 %
Income from unconsolidated entitiesIncome from unconsolidated entities
OfficeOffice$(64)$120 $(184)N/A
MultifamilyMultifamily$832 $— $832 — %
Non-Segment Revenue and Expenses:Non-Segment Revenue and Expenses:
Asset management and other fees to related partiesAsset management and other fees to related parties$(720)$(921)$201 (21.8)%
Expense reimbursements to related parties - corporateExpense reimbursements to related parties - corporate$(528)$(422)$(106)25.1 %
Interest expenseInterest expense$(5,991)$(2,063)$(3,928)190.4 %
General and administrativeGeneral and administrative$(1,301)$(1,137)$(164)14.4 %
Transaction-related costsTransaction-related costs$(3,360)$— $(3,360)— %
Depreciation and amortizationDepreciation and amortization$(9,502)$(5,004)$(4,498)89.9 %
Gain on sale of real estateGain on sale of real estate$1,104 $— $1,104 — %
Provision for income taxesProvision for income taxes$(256)$(307)$51 (16.6)%
Revenues
Office Revenue: Office revenue includes rental revenue, from office properties, expense reimbursements and lease termination income.income from office properties. Office revenue decreased to $41,427,000,$13.5 million, or by 12.9%4.4%, for the three months ended September 30, 2017March 31, 2023 compared to $47,584,000$14.1 million for the three months ended September 30, 2016.March 31, 2022. The decrease is primarily due to the sale ofdecreased rental revenues at an office property in Los Angeles, California and an office property in San Francisco, California, in March 2017,both a result of lower occupancy, and the saledisposition of an office property80% interest in Charlotte, North Carolina in June 2017, and the sale of an office property and parking garage in Sacramento, California in June 2017, partially offset by an increase in expense reimbursements revenue at one of our Washington, D.C. properties sold in August 2017, and an increase in lease termination income at one of our California properties due to recognition of fees in connection with the early termination of a large tenant effective in December 2017, which space has been subsequently leased. In addition to the aforementioned sales, the sale of an office property in Los Angeles, California in September 2017 and the sale of an office property in Washington, D.C. in October 2017, which is held for sale at September 30, 2017, are expected to cause office revenue to decline materially for the remainder of 2017.February 2023.
Hotel Revenue: Hotel revenue decreasedincreased to $8,406,000,$11.5 million, or by 8.0%47.5%, for the three months ended September 30, 2017March 31, 2023, compared to $9,139,000$7.8 million for the three months ended September 30, 2016. The decrease is primarilyMarch 31, 2022, due to an increase in occupancy and average daily rate during the salefirst quarter of 2023 as compared to the first quarter of 2022 as a hotel property in Los Angeles, California in July 2016, partially offset by revenue increases atresult of the remaining hotel property duehospitality industry continuing to RevPAR growth resultingrecover from increases in rates and occupancy.the impact of COVID-19.
Multifamily Revenue:Multifamily revenue decreased to $2,683,000, or by 47.1%,was $1.2 million for the three months ended September 30, 2017 compared to $5,068,000March 31, 2023. As our multifamily properties were acquired during the three months ended March 31, 2023, there was no comparable revenue for the three months ended September 30, 2016. The decrease is primarily due to the sale of the three multifamily properties located in Dallas, Texas in May and June 2017. The sale of the three multifamily properties in Dallas, Texas, the sale of the multifamily property in New York, New York in September 2017, and the sale of the multifamily property in Houston, Texas, which is held for sale at September 30, 2017, are expected to cause multifamily revenue to decline materially for the remainder of 2017. However, the magnitude of any such decrease cannot be predicted as it will depend on a number of factors such as the timing of the disposition of the multifamily property held for sale at September 30, 2017.March 31, 2022.
Lending Revenue: Lending revenue represents revenue from our lending subsidiaries, included in continuing operations, including interest income on loans and other loan related fee income. Lending revenue increased to $2,868,000, or by 12.9%, for the three months ended September 30, 2017 compared to $2,541,000 for the three months ended September 30, 2016. The increase is primarily due to an increase in premium income from the sale of the guaranteed portion of our SBA 7(a) loans during the three months ended September 30, 2017.



Expenses
Office Expenses: Office expenses decreased to $18,867,000, or by 16.9%, for the three months ended September 30, 2017 compared to $22,695,000 for the three months ended September 30, 2016. The decrease is primarily due to the sale of an office property in San Francisco, California in March 2017, the sale of an office property in Charlotte, North Carolina in June 2017, the sale of an office property and parking garage in Sacramento, California in June 2017, and a decrease in real estate taxes at certain of our California properties due to supplemental tax assessments received during the third quarter of 2016, partially offset by an increase in certain other tenant reimbursable expenses at one of our Washington, D.C. properties sold in August 2017. In addition to the aforementioned sales, the sale of an office property in Los Angeles, California in September 2017 and the sale of an office property in Washington, D.C. in October 2017, which is held for sale at September 30, 2017, are expected to cause office expenses to decline materially for the remainder of 2017.
Hotel Expenses: Hotel expenses decreased to $5,973,000, or by 11.0%, for the three months ended September 30, 2017 compared to $6,708,000 for the three months ended September 30, 2016. The decrease is primarily due to the sale of a hotel property in Los Angeles, California in July 2016.
Multifamily Expenses: Multifamily expenses decreased to $1,390,000, or by 58.9%, for the three months ended September 30, 2017 compared to $3,378,000 for the three months ended September 30, 2016. The decrease is primarily due to the sale of the three properties located in Dallas, Texas in May and June 2017, as well as a decrease in legal fees at the New York property sold in September 2017. The sale of the three multifamily properties in Dallas, Texas, the sale of the multifamily property in New York, New York in September 2017, and the sale of the multifamily property in Houston, Texas, which is held for sale at September 30, 2017, are expected to cause multifamily expenses to decline materially for the remainder of 2017. However, the magnitude of any such decrease cannot be predicted as it will depend on a number of factors such as the timing of the disposition of the multifamily property held for sale at September 30, 2017.
Lending Expenses: Lending expenses represent expenses from our lending subsidiaries included in continuing operations, including general and administrative expenses and fees to related party, related to the operation of the lending business. Lending expenses decreased to $1,255,000, or by 1.3%, for the three months ended September 30, 2017 compared to $1,272,000 for the three months ended September 30, 2016.
Asset Management and Other Fees to Related Parties: Asset management fees totaled $4,971,000 for the three months ended September 30, 2017 compared to $6,589,000 for the three months ended September 30, 2016. Asset management fees are calculated based on a percentage of the daily average adjusted fair value of CIM Urban's investments, which are appraised in the fourth quarter of each year. The lower fees reflect a decrease in the adjusted fair value of CIM Urban's investments due to the sale of a hotel property in February 2016, the sale of a hotel property in July 2016, the sale of an office property in March 2017, the sale of two multifamily properties in May 2017, the sale of two office properties, a parking garage, and one multifamily property in June 2017, the sale of an office property in August 2017, and the sale of an office property and a multifamily property in September 2017, offset by net increases in the fair value of CIM Urban's real estate investments based on the December 31, 2016 appraised values and incremental capital expenditures incurred in the first nine months of 2017. CIM Commercial also pays a Base Service Fee to the Manager, a related party, which totaled $265,000 for the three months ended September 30, 2017 compared to $259,000 for the three months ended September 30, 2016. In addition, the Manager received compensation and/or reimbursement for performing certain services for CIM Commercial and its subsidiaries that are not covered under the Base Service Fee. For the three months ended September 30, 2017 and 2016, we expensed $735,000 and $676,000 for such services, respectively. For the three months ended September 30, 2017 and 2016, we also expensed $80,000 and $107,000, respectively, related to corporate services subject to reimbursement by us under the CIM SBA Staffing and Reimbursement Agreement. Asset management fees are expected to decline materially for the remainder of 2017 as a result of our completed sales, the disposition of assets held for sale at September 30, 2017, and any additional share repurchases that may occur during the remainder of 2017.
Interest Expense: Interest expense, which is not allocated to our operating segments, was $9,243,000 for the three months ended September 30, 2017, a decrease of $909,000 compared to $10,152,000 in the corresponding period in 2016. The decrease is primarily due to the payoff of a $25,331,000 mortgage in March 2017 in connection with the sale of an office property in San Francisco, California, the payoff of mortgages with a combined balance of $38,781,000 in connection with the sale of our three multifamily properties in Dallas, Texas in May and June 2017, and a decrease in interest expense, including the impact of interest rate swaps, under the unsecured credit and term loan facilities, mainly due to lower average outstanding balances under the unsecured credit and term loan facilities, partially offset by an increase in loan fee amortization, resulting from a write-off of the outstanding deferred loan costs in connection with the repayment of $65,000,000 of outstanding borrowings on our unsecured term loan facility in August 2017. Our interest expense is expected to decrease for the remainder of 2017 due to the payoffs and buyer assumptions of loans in connection with our sales of real estate, the repayment of $65,000,000 of outstanding borrowings on our unsecured term loan facility, and the expected assumption of a $28,715,000 mortgage loan by the buyer of our multifamily property held for sale at September 30, 2017. However, the magnitude of any

such decrease cannot be predicted as it will depend on a number of factors such as usage of our revolving credit facility and the timing of the disposition of our multifamily property held for sale at September 30, 2017.
General and Administrative Expenses: General and administrative expenses, which have not been allocated to our operating segments, were $876,000 for the three months ended September 30, 2017, a decrease of $9,000 compared to $885,000 in the corresponding period in 2016.
Transaction Costs: Transaction costs totaling $242,000 for the three months ended September 30, 2017 represent a $189,000 increase from $53,000 for the three months ended September 30, 2016, mainly due to an additional $253,000 in penalties and interest, expensed in the third quarter of 2017 in connection with a payment made in August 2017, related to a suit filed by the City and County of San Francisco claiming past due real property transfer tax relating to a transaction in a prior year (Note 16). The Company believes that it has defenses to, and intends to continue to vigorously contest, the asserted tax obligations.
Depreciation and Amortization Expense: Depreciation and amortization expense was $13,472,000 for the three months ended September 30, 2017, a decrease of $4,252,000 compared to $17,724,000 for the three months ended September 30, 2016. The decrease is primarily due to the sale of an office property in San Francisco, California that was held for sale starting in mid-February 2017 and sold in March 2017, the sale of three multifamily properties in Dallas, Texas that were held for sale in May 2017 and sold in May and June 2017, the sale of two office properties and a parking garage in Sacramento, California and Charlotte, North Carolina, which were held for sale in April 2017 and sold in June 2017, the sale of an office property in Los Angeles, California that was held for sale in May 2017 and sold in September 2017, a multifamily property in Houston, Texas that was held for sale in July 2017, the sale of a multifamily property in New York, New York that was held for sale in July 2017 and sold in September 2017, the sale of two office properties in Washington, D.C., that were held for sale in August 2017 and sold in August and October 2017, and the acceleration of tenant improvement depreciation and lease commission amortization in connection with the early termination of a large tenant at one of our California properties effective in December 2017, partially offset by an increase in the depreciation expense associated with additional capital expenditures. Depreciation expense is expected to decline materially for the remainder of 2017 as a result of our completed sales and the disposition of assets held for sale at September 30, 2017.
Provision for Income Taxes: Provision for income taxes was $339,000 for the three months ended September 30, 2017, a decrease of $40,000 compared to $379,000 for the three months ended September 30, 2016.
Discontinued Operations
Net Income from Discontinued Operations: Net income from discontinued operations represents revenues and expenses from the part of our lending segment that is included in discontinued operations, including interest income on loans and other loan related fee income, offset by expenses, which include general and administrative expenses, fees to related party, and direct interest expense. Net income from discontinued operations was $0 for the three months ended September 30, 2017, a decrease of $703,000 compared to $703,000 for the three months ended September 30, 2016. The decrease is due to the sale of our commercial real estate lending subsidiary in December 2016.
Comparison of the Nine Months Ended September 30, 2017 to the Nine Months Ended September 30, 2016
Net Income
  Nine Months Ended September 30, Change
  2017 2016 $ %
  (dollars in thousands)
Total revenues $183,632
 $201,309
 $(17,677) (8.8)%
Total expenses 203,473
 206,070
 (2,597) (1.3)%
Gain on sale of real estate 378,732
 39,666
 339,066
 —
Net income from discontinued operations —
 3,061
 (3,061) —
Net income 357,698
 36,926
 320,772
 —
Net income increased to $357,698,000, or by $320,772,000, for the nine months ended September 30, 2017, compared to $36,926,000 for the nine months ended September 30, 2016. The increase is primarily attributable to an increase in the gain on sale of real estate of $339,066,000, as well as a decrease of $8,798,000 in depreciation and amortization expense, an increase of $2,591,000 in net operating income of our operating segments in continuing operations and a decrease of

$1,838,000 in asset management and other fees to related parties, partially offset by an increase of $13,100,000 in impairment of real estate, an increase of $11,550,000 in transaction costs, an increase of $4,362,000 in interest expense, and a decrease of $3,061,000 in income from discontinued operations.
Funds from Operations ("FFO")
We believe that FFO is a widely recognized and appropriate measure of the performance of a REIT and that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO represents net income (loss) available to common stockholders, computed in accordance with GAAP, excluding gains (or losses) from sales of real estate, impairment of real estate, and real estate depreciation and amortization. We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts ("NAREIT").
Like any metric, FFO should not be used as the only measure of our performance because it excludes depreciation and amortization and captures neither the changes in the value of our real estate properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our operating results. Other REITs may not calculate FFO in accordance with the standards established by the NAREIT; accordingly, our FFO may not be comparable to those other REITs' FFO. Therefore, FFO should be considered only as a supplement to net income as a measure of our performance and should not be used as a supplement to or substitute measure for cash flow from operating activities computed in accordance with GAAP. FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends.
The following table sets forth a reconciliation of net income available to common stockholders to FFO available to common stockholders:
  Nine Months Ended
September 30,
  2017 2016
  (in thousands)
Net income available to common stockholders $357,447
 $36,917
Depreciation and amortization 45,464
 54,262
Impairment of real estate 13,100
 —
Gain on sale of depreciable assets (378,732) (39,666)
FFO available to common stockholders $37,279
 $51,513
FFO available to common stockholders was $37,279,000 for the nine months ended September 30, 2017, a decrease of $14,234,000 compared to $51,513,000 for the nine months ended September 30, 2016. The decrease in FFO was primarily attributable to an increase of $11,550,000 in transaction costs, an increase of $4,362,000 in interest expense and a decrease of $3,061,000 in income from discontinued operations, partially offset by an increase of $2,591,000 in net operating income of our operating segments in continuing operations and a decrease of $1,838,000 in asset management and other fees to related parties.

Summary Segment Results
CIM Commercial operates in four segments: office, hotel, multifamily properties and lending. Set forth and described below are summary segment results for our four segments included in continuing operations.

  Nine Months Ended
September 30,		 Change
  2017 2016 $ %
  (dollars in thousands)
Revenues:  
  
  
  
Office $134,434
 $139,403
 $(4,969) (3.6)%
Hotel 29,528
 38,918
 (9,390) (24.1)%
Multifamily 12,400
 15,298
 (2,898) (18.9)%
Lending 7,270
 7,690
 (420) (5.5)%
Expenses:  
  
  
  
Office 51,106
 61,557
 (10,451) (17.0)%
Hotel 19,037
 26,487
 (7,450) (28.1)%
Multifamily 7,359
 9,507
 (2,148) (22.6)%
Lending 3,647
 3,866
 (219) (5.7)%
Revenues
Office Revenue: Office revenue includes rental revenue from office properties, expense reimbursements and lease termination income. Office revenue decreased to $134,434,000, or by 3.6%, for the nine months ended September 30, 2017 compared to $139,403,000 for the nine months ended September 30, 2016. The decrease is primarily due to the sale of an office property in San Francisco, California in March 2017, the sale of an office property in Charlotte, North Carolina in June 2017, the sale of an office property and parking garage in Sacramento, California in June 2017, a decrease at one of our Washington, D.C. properties sold in October 2017 due to the expiration of a lease with a large tenant in January 2016, partially offset by an increase in expense reimbursements revenue at one of our Washington, D.C. properties sold in August 2017, an increase in lease termination income at one of our California properties due to recognition of fees in connection with the early termination of a large tenant effective in December 2017, which space has been subsequently leased and an increase at certain of our California and Washington, D.C. properties due to increases in both occupancy and rental rates. In addition to the aforementioned sales, the sale of an office property in Los Angeles, California in September 2017 and an office property in Washington, D.C. in October 2017, which is held for sale at September 30, 2017, are expected to cause office revenue to decline materially for the remainder of 2017.
Hotel Revenue: Hotel revenue decreased to $29,528,000, or by 24.1%, for the nine months ended September 30, 2017 compared to $38,918,000 for the nine months ended September 30, 2016. The decrease is primarily due to the sale of two hotel properties in February and July 2016, partially offset by revenue increases at the remaining hotel property due to RevPAR growth resulting from increases in rates and occupancy.
Multifamily Revenue: Multifamily revenue decreased to $12,400,000, or by 18.9%, for the nine months ended September 30, 2017 compared to $15,298,000 for the nine months ended September 30, 2016. The decrease is primarily due to the sale of the three multifamily properties located in Dallas, Texas in May and June 2017, and a decrease at the Houston, Texas property as a result of decreased rents. The sale of the three multifamily properties in Dallas, Texas, the sale of the multifamily property in New York, New York in September 2017, and the sale of the multifamily property in Houston, Texas, which is held for sale at September 30, 2017, are expected to cause multifamily revenue to decline materially for the remainder of 2017. However, the magnitude of any such decrease cannot be predicted as it will depend on a number of factors such as the timing of the disposition of the multifamily property held for sale at September 30, 2017.
Lending Revenue: Lending revenue represents revenue from our lending subsidiaries included in continuing operations, including interest income on loans and other loan related fee income. Lending revenue decreased to $7,270,000,$2.7 million, or by 5.5%6.0%, for the ninethree months ended September 30, 2017
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Table of Contents
March 31, 2023, compared to $7,690,000$2.9 million for the ninethree months ended September 30, 2016.March 31, 2022. The decrease is primarily due to lower revenue during the nine months ended September 30, 2017premium income as a result of recognitionlower loan sale volume during the three months ended March 31, 2023, compared to the three months ended March 31, 2022.
(Loss) Income From Unconsolidated Office Entities: The income from our unconsolidated entities included in office segment net operating income decreased to a loss of accretion$64,000 for discounts relatedthe three months ended March 31, 2023 compared to decreased prepayments on our loans, partially offset byincome of $120,000 for the three months ended March 31, 2022. The decrease was primarily due to an increase in premiummortgage interest expense and an unrealized loss related to one of our unconsolidated office entities’ investment in real estate during the three months ended March 31, 2023.
Income From Unconsolidated Multifamily Entity: The income from our unconsolidated entity included in multifamily segment net operating income was $832,000 for the sale of the guaranteed portion ofthree months ended March 31, 2023. As our SBA 7(a) loans and a break-up fee related to a potential loan thatunconsolidated multifamily property was receivedacquired during the ninethree months ended September 30, 2017.

March 31, 2023, there was no comparable income for the three months ended March 31, 2022.
Expenses
Office Expenses: Office expenses decreasedincreased to $51,106,000,$6.6 million, or by 17.0%6.6%, for the ninethree months ended September 30, 2017March 31, 2023, compared to $61,557,000$6.2 million for the ninethree months ended September 30, 2016.March 31, 2022. The decreaseincrease is primarily due to reduced real estate taxes for the nine months ended September 30, 2017an increase in operating expenses at our office properties in Austin, Texas and Los Angeles, California, primarily as a result of our transfer of the right to collect supplemental real estate tax reimbursements related tohigher administrative and utilities expenses, and an increase in operating expenses at an office property in San Francisco,Beverly Hills, California, in March 2017, the saleprimarily as a result of the same office property in San Francisco, California in March 2017, the sale of an office propertyincreased administrative and parking garage in Sacramento, California in June 2017, a decrease inutilities expenses and real estate taxes for the nine months ended September 30, 2017 at our office property in Charlotte, North Carolina, the sale of the same office property in Charlotte, North Carolina in June 2017, a decrease in real estate taxes at certain of our California properties due to supplemental tax assessments received during the nine months ended September 30, 2016, partially offset by an increase in certain other tenant reimbursable expenses at one of our Washington, D.C. properties sold in August 2017. In addition to the aforementioned sales, the sale of an office property in Los Angeles, California in September 2017 and the sale of an office property in Washington, D.C. in October 2017, which is held for sale at September 30, 2017, are expected to cause office expenses to decline materially for the remainder of 2017.expense.
Hotel Expenses: Hotel expenses decreasedincreased to $19,037,000,$7.3 million, or by 28.1%36.1%, for the ninethree months ended September 30, 2017March 31, 2023, compared to $26,487,000$5.4 million for the ninethree months ended September 30, 2016. The decrease isMarch 31, 2022, primarily dueas a result of increased occupancy at the hotel as a result of the hospitality industry continuing to recover from the saleimpact of two hotel properties in February and July 2016.COVID-19.
Multifamily Expenses:Multifamily expenses decreased to $7,359,000, or by 22.6%,were $1.4 million for the ninethree months ended September 30, 2017 compared to $9,507,000March 31, 2023. As our multifamily properties were acquired during the three months ended March 31, 2023, there were no comparable expenses for the ninethree months ended September 30, 2016. The decrease is primarily due to the sale of the three multifamily properties located in Dallas, Texas in May and June 2017, as well as a decrease in legal fees at our New York property sold in September 2017. The sale of the three multifamily properties in Dallas, Texas, the sale of the multifamily property in New York, New York in September 2017, and the sale of the multifamily property in Houston, Texas, which is held for sale at September 30, 2017, are expected to cause multifamily expenses to decline materially for the remainder of 2017. However, the magnitude of any such decrease cannot be predicted as it will depend on a number of factors such as the timing of the disposition of the multifamily property held for sale at September 30, 2017.March 31, 2022.
Lending Expenses: Lending expenses represent expenses from our lending subsidiaries, included in continuing operations, including interest expense, general and administrative expenses and fees to related party,parties. Lending expenses increased to $1.4 million, or by 19.0%, for the three months ended March 31, 2023, compared to $1.1 million for the three months ended March 31, 2022. The increase was primarily due to an increase in allocated salary expenses and an increase in interest expense related to the operationissuance of new SBA 7(a) loan-backed notes in connection with the lending business. Lending expenses decreased to $3,647,000, or by 5.7%, for the nine months ended September 30, 2017 compared to $3,866,000 for the nine months ended September 30, 2016, primarily due to a decreasesecuritization that closed in fees to related party and reductions in general and administrative costs associated with assets acquired in liquidation, partially offset by the recognition of a provision for loan losses during the nine months ended September 30, 2017 compared to a recovery of loan losses during the nine months ended September 30, 2016.March 2023.
Asset Management and Other Fees to Related Parties: Asset management fees totaled $17,515,000and other fees to related parties, which have not been allocated to our operating segments, were $720,000 for the ninethree months ended September 30, 2017March 31, 2023, a decrease of 21.8%, compared to $19,305,000$921,000 for the ninethree months ended September 30, 2016. AssetMarch 31, 2022. The decrease was primarily a result of a reduction in asset management fees are calculated based on a percentage of the daily average adjusted fair value of CIM Urban's investments, which are appraised in the fourth quarter of each year. The lower fees reflectrelated to a decrease in the adjusted fairour net asset value, of CIM Urban's investments due to the sale ofprimarily resulting from a hotel property in February 2016, the sale of a hotel property in July 2016, the sale of an office property in March 2017, the sale of two multifamily properties in May 2017, the sale of two office properties, a parking garage, and one multifamily property in June 2017, the sale of an office property in August 2017, and the sale of an office property and a multifamily property in September 2017, offset by net increasesreduction in the fair value of CIM Urban'sour investments in real estate investments based onas of the December 31, 2016 appraised values as well as incremental capital expenditures incurred in the first nine monthsend of 2017. CIM Commercial also pays a Base Service Fee2022 .
Expense Reimbursements to the Manager, a related party, which totaled $795,000 for the nine months ended September 30, 2017 compared to $784,000 for the nine months ended September 30, 2016. In addition, the Manager receivedRelated Parties—Corporate: The Administrator receives compensation and/and or reimbursement for performing certain services for CIM Commercialthe Company and its subsidiaries that are not covered undersubsidiaries. Expense reimbursements to related parties-corporate increased by 25.1% to $528,000 for the Base Service Fee. For the ninethree months ended September 30, 2017 and 2016, we expensed $2,357,000 and $2,402,000March 31, 2023, compared to $422,000 for such services, respectively. For the ninethree months ended September 30, 2017 and 2016, we also expensed $319,000 and $333,000, respectively, relatedMarch 31, 2022, primarily due to corporate services subjectincreases in allocated payroll primarily due to reimbursement by us under the CIM SBA Staffing and Reimbursement Agreement. Asset management fees are expected to decline materially for the remainder of 2017 as a result of our completed sales, the disposition of assets held for sale at September 30, 2017, and any additional share repurchasestransactions that may occuroccurred during the remainder of 2017.three months ended March 31, 2022.
Interest Expense: Interest expense, which ishas not been allocated to our operating segments, was $28,442,000increased to $6.0 million for the ninethree months ended September 30, 2017, an increase of $4,362,000March 31, 2023, compared to $24,080,000 in$2.1 million for the corresponding period in 2016. The increasethree months ended March 31, 2022. This is primarily due to interest expensehigher outstanding principal balances on our $392,000,000 mortgage loans entered into in June 2016, partially offset by a decrease in2022 revolving line of credit facility for the three months ended March 31, 2023 compared to our 2018 revolving line of credit facility for the three months ended March 31, 2022. Additionally LIBOR and SOFR components of interest expense duerates on our variable-rate debt increased for the three months ended March 31, 2023 as compared to the payoff of a $25,331,000 mortgage inthree months ended March 2017 in connection with the sale of an office property in San Francisco, California, the payoff of31, 2022. In addition, two variable-rate mortgages with a combined balance of $38,781,000 in connection with the sale of our three multifamily properties in Dallas, Texas in May and June 2017, and a decrease in interest expense,

including the impact of interest rate swaps, and loan amortization expense under the unsecured credit and term loan facilities, mainly due to lower average outstanding loan balances under the unsecured credit and term loan facilities. Our interest expense is expected to decrease for the remainder of 2017 due to the payoffs and buyer assumptions of loanswere assumed in connection with our sales of real estate,multifamily acquisitions during the repayment of $65,000,000 of outstanding borrowings on our unsecured term loan facility, and the expected assumption of a $28,715,000 mortgage loan by the buyer of our multifamily property held for sale at September 30, 2017. However, the magnitude of any such decrease cannot be predicted as it will depend on a number of factors such as usage of our revolving credit facility and the timing of the disposition of our multifamily property held for sale at September 30, 2017.three months ended March 31, 2023.
General and Administrative Expenses: General and administrative expenses, which have not been allocated to our operating segments, were $2,462,000$1.3 million for the ninethree months ended September 30, 2017,March 31, 2023 as compared to $1.1 million for the three months ended March 31, 2022. The increase was primarily due to increases in non-recurring legal fees.
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Transaction-Related Costs: Transaction-related costs of $3.4 million for the three months ended March 31, 2023 were primarily related to transfer tax expenses in connection with the acquisition of of two multifamily properties in Oakland, California. There were no transaction-related costs incurred during the three months ended March 31, 2022.
Depreciation and Amortization Expense: Depreciation and amortization expense increased by 89.9% to $9.5 million for the three months ended March 31, 2023, compared to $5.0 million for the three months ended March 31, 2022. The increase is primarily due to an increase in acquired in-place lease intangible assets amortization at multifamily properties located in Oakland, California acquired during the three months ended March 31, 2023.
Gain on sale of real estate: Gain on sale of real estate of $1.1 million was related to the sale of 80% of our interest in an office property in Los Angeles, California. There were no dispositions during the three months ended March 31, 2022.
Provision for Income Taxes: Provision for income taxes decreased by 16.6% to $256,000 for the three months ended March 31, 2023 as compared to $307,000 for the three months ended March 31, 2022. The decrease is due to a decrease in taxable income at our taxable REIT subsidiaries as a result of $705,000the operations of the lending division during the three months ended March 31, 2023 as compared to $3,167,000the three months ended March 31, 2022.
Cash Flow Analysis
Our cash flows from operating activities are primarily dependent upon the real estate assets owned, occupancy level of our real estate assets, the rental rates achieved through our leases, the occupancy and ADR of our hotel, the collectability of rent and recoveries from our tenants, and loan related activity. Our cash flows from operating activities are also impacted by fluctuations in operating expenses and other general and administrative costs. Net cash provided by operating activities decreased by $5.9 million for the correspondingthree months ended March 31, 2023, as compared to the same period in 2016.2022. The decrease iswas primarily due to a decrease in other consulting, professional fees, and shareholder services expenses.
Transaction Costs: Transaction costs totaling $11,870,000net income adjusted for the nine months ended September 30, 2017 represent a $11,550,000 increase from $320,000 for the nine months ended September 30, 2016, mainly due to the $11,845,000 payment made in August 2017 in connection with a suit filed by the City and County of San Francisco claiming past due real property transfer tax relating to a transaction in a prior year (Note 16). The Company believes that it has defenses to, and intends to continue to vigorously contest, the asserted tax obligations. The costs incurred for the nine months ended September 30, 2016 primarily consist of abandoned project costs.
Depreciation and Amortization Expense: Depreciationdepreciation and amortization expense, was $45,464,000partially offset by a $1.9 million increase resulting from a higher level of net working capital used compared to the prior period.
Our cash flows from investing activities are primarily related to property acquisitions and dispositions, expenditures for the ninedevelopment or repositioning of properties, capital expenditures and cash flows associated with loans originated at our lending segment. Net cash used in investing activities increased by $58.0 million for the three months ended September 30, 2017, a decrease of $8,798,000March 31, 2023, as compared to $54,262,000 for the nine months ended September 30, 2016.same period in 2022. The decrease isincrease in cash used in investing activities was primarily due to an increase in acquisitions of real estate of $94.5 million, compared to the same period in 2022. Partially offsetting net cash used in investing activities are $16.7 million in proceeds from the sale of a hotel property in July 2016,to the sale of an office property in San Francisco, California that was held for sale starting in mid-February 2017 and sold in4750 Wilshire JV during the three months ended March 2017, the sale of three multifamily properties in Dallas, Texas that were held for sale in May 2017 and sold in May and June 2017, the sale of two office properties31, 2023 and a parking garagedecrease in Sacramento, Californiacash outlays of $15.8 million related to our investments in unconsolidated joint ventures during the three months ended March 31, 2023, compared to the same period in 2022.
Our cash flows from financing activities are generally impacted by borrowings and Charlotte, North Carolina thatcapital activities. Net cash provided by financing activities increased by $56.2 million for the three months ended March 31, 2023, as compared to the same period in 2022, primarily as a result of net proceeds from debt of $103.8 million during the three months ended March 31, 2023 compared to net debt proceeds of $27.1 million during the three months ended March 31, 2022, the issuance of unguaranteed SBA 7(a) loan-backed notes for net proceeds of approximately $43.3 million, and an increase of $14.7 million in proceeds from the issuance of preferred stock during the three months ended March 31, 2023. The aforementioned amounts increasing net cash provided by financing activities were held for sale in April 2017 and sold in June 2017, the sale of an office property in Los Angeles, California that was held for sale in May 2017 and sold in September 2017, a multifamily property in Houston, Texas that was held for sale in July 2017, the sale of a multifamily property in New York, New York that was held for sale in July 2017 and sold in September 2017, the sale of two office properties in Washington, D.C. that were held for sale in August 2017 and sold in August and October 2017, and the acceleration of tenant improvement depreciation and lease commission amortization in connection with the early termination of a large tenant at one of our California properties effective in December 2017, partially offset by an increase in redemption of preferred stock of $87.7 million during the depreciation expense associated with additional capital expenditures. Depreciation expense is expected to decline materially for the remainder of 2017 as a result of our completed sales and the disposition of assets held for sale at September 30, 2017.
Impairment of Real Estate: Impairment of real estate was $13,100,000 for the ninethree months ended September 30, 2017 and $0 for the nine months ended September 30, 2016. In August 2017, we negotiated an agreement with an unrelated third party for the sale of an office property, which was sold in October 2017. We determined the book value of this property exceeded its estimated fair value less costs to sell, and as such, an impairment charge of $13,100,000 was recognized for the nine months ended September 30, 2017. Our determination of fair value was based on negotiations with the third party buyer.March 31, 2023.
Provision for Income Taxes: Provision for income taxes was $1,193,000 for the nine months ended September 30, 2017, an increase of $153,000 compared to $1,040,000 for the nine months ended September 30, 2016, due to an increase in taxable income at one of our taxable REIT subsidiaries.
Discontinued Operations
Net Income from Discontinued Operations: Net income from discontinued operations represents revenues and expenses from the part of our lending segment that is included in discontinued operations, including interest income on loans and other loan related fee income, offset by expenses, which include general and administrative expenses, fees to related party, and direct interest expense. Net income from discontinued operations was $0 for the nine months ended September 30, 2017, a decrease of $3,061,000 compared to $3,061,000 for the nine months ended September 30, 2016. The decrease is due to the sale of our commercial real estate lending subsidiary in December 2016.
Liquidity and Capital ResourcesCash Flow Analysis
Sources and Uses of Funds
In September 2014, CIM Commercial entered into an $850,000,000 unsecured credit facility with a bank syndicate consisting of a $450,000,000 revolver, a $325,000,000 term loan and a $75,000,000 delayed-draw term loan. CIM Commercial is subject to certain financial maintenance covenants and a minimum property ownership condition. Outstanding advances

underOur cash flows from operating activities are primarily dependent upon the revolver bear interest at (i) the base rate plus 0.20% to 1.00% or (ii) LIBOR plus 1.20% to 2.00%, depending on the maximum consolidated leverage ratio. Outstanding advances under the term loans bore interest at (i) the base rate plus 0.15% to 0.95% or (ii) LIBOR plus 1.15% to 1.95%, depending on the maximum consolidated leverage ratio. The revolver is also subject to an unused commitment fee of 0.15% or 0.25% depending on the amount of aggregate unused commitments. The delayed-draw term loan was also subject to an unused line fee of 0.25%. Proceeds from the unsecured credit facility were used to repay mortgage loans and outstanding balances under our prior unsecured credit facilities, for acquisitions, short-term funding of a Common Stock tender offer in June 2016, short-term funding of a private repurchase of Common Stock in June 2017, and general corporate purposes. In June 2016, we entered into six mortgage loan agreements with an aggregate principal amount of $392,000,000. A portion of the net proceeds from the loans was used to repay outstanding balances under our unsecured credit facility and the remaining portion was used to repurchase sharesreal estate assets owned, occupancy level of our Common Stockreal estate assets, the rental rates achieved through our leases, the occupancy and ADR of our hotel, the collectability of rent and recoveries from our tenants, and loan related activity. Our cash flows from operating activities are also impacted by fluctuations in a private repurchase in September 2016. The June 2017 borrowing used to fund the private share repurchase was repaid using proceeds from subsequent asset sales. The credit facility was set to mature in September 2016operating expenses and prior to maturity, we exercised the first of two one year extension options through September 2017other general and we permanently reduced the revolving credit commitment under the credit facility to $200,000,000. In August 2017, we exercised the second of two one year extension options through September 2018 and, in connection with such exercise, we paid an extension fee of $300,000. At each of November 3, 2017, September 30, 2017 and December 31, 2016, $0 was outstanding under the credit facility. The unused capacity on the unsecured credit facility based on covenant restrictions at November 3, 2017, September 30, 2017 and December 31, 2016, was approximately $21,000,000, $21,000,000, and $200,000,000, respectively.
In May 2015, CIM Commercial entered into an unsecured term loan facility with a bank syndicate pursuant to which CIM Commercial can borrow up to a maximum of $385,000,000. The term loan facility ranks pari passu with CIM Commercial's unsecured credit facility described above; covenants under the term loan facility are substantially the same as those in the unsecured credit facility. Outstanding advances under the term loan facility bear interest at (i) the base rate plus 0.60% to 1.25% or (ii) LIBOR plus 1.60% to 2.25%, depending on the maximum consolidated leverage ratio. The unused portion of the term loan facility was also subject to an unused fee of 0.20%. The term loan facility matures in May 2022. On November 2, 2015, $385,000,000 was drawn under the term loan facility. Proceeds from the term loan facility were used to repay balances outstanding under our unsecured credit facility. At September 30, 2017 and December 31, 2016, the variable interest rate on this unsecured term loan facility was 2.84% and 2.22%, respectively. The interest rate of the loan has been effectively converted to a fixed rate of 3.16% until May 8, 2020 through interest rate swaps (Note 13). On August 3, 2017, we repaid $65,000,000 of outstanding borrowings on our unsecured term loan facility. In connection with such paydown, we wrote off deferred loan costs of $601,000 and related accumulated amortization of $193,000, a proportionate amount to the borrowings being repaid, and we terminated three interest rate swaps with an aggregate notional value of $65,000,000 (Note 13). Costs incurred to terminate such swaps totaled $38,000 and are reflected in interest expenseadministrative costs. Net cash provided by operating activities decreased by $5.9 million for the three and nine months ended September 30, 2017. At each of November 3, 2017March 31, 2023, as compared to the same period in 2022. The decrease was primarily due to a decrease in net income adjusted for depreciation and September 30, 2017, $320,000,000 was outstanding under the unsecured term loan facility and at December 31, 2016, $385,000,000 was outstanding under the unsecured term loan facility.
At September 30, 2017 and December 31, 2016, we were in compliance with all of our respective financial covenants under the unsecured credit and term loan facilities.
On March 28, 2017, in connection with the sale of an office property in San Francisco, California, we paid off a mortgage with an outstanding principal balance of $25,331,000 using proceeds from the sale. Additionally, we paid a prepayment penalty of $1,508,000 in connection with the prepayment of this mortgage.
On May 30, 2017, in connection with the sale of two multifamily properties, both located in Dallas, Texas, we paid off two mortgages with an aggregate outstanding principal balance of $15,448,000 using proceeds from the sales. Additionally, we paid aggregate prepayment penalties of $1,901,000 in connection with the prepayment of these mortgages.
On June 23, 2017, in connection with the sale of a multifamily property in Dallas, Texas, we paid off a mortgage with an outstanding principal balance of $23,333,000 using proceeds from the sale. Additionally, we paid a prepayment penalty of $2,812,000 in connection with the prepayment of this mortgage.
On September 21, 2017, in connection with the sale of an office property in Los Angeles, California, a mortgage with an outstanding principal balance of $21,700,000, collateralized by such property, was assumed by the buyer.
As of September 30, 2017, one mortgage loan is included in liabilities associated with assets held for sale on our consolidated balance sheet. The mortgage loan is nonrecourse, is securedamortization expense, partially offset by a multifamily property located at 4200 Scotland Street in Houston, Texas, and has an outstanding principal balance$1.9 million increase resulting from a higher level of $28,715,000 at September 30, 2017 with a fixed interest rate of 5.18% per annum, requiring monthly payments of principal and interest, with a maturity date of June 5, 2021.
We have an effective registration statement with the SEC with respectnet working capital used compared to the offer and sale of up to $900,000,000 of Series A Units, with each Unit consisting of (i) one share of Series A Preferred Stock, par value $0.001 per share, with an initialprior period.

Stated Value of $25.00 per share and (ii) one Warrant to purchase 0.25 of a share of Common Stock. The registration statement allows us to sell up to a maximum of 36,000,000 Units. Holders of our Series A Preferred Stock are entitled to receive, if, as and when declared by the Board of Directors, cumulative cash dividends on each share of Series A Preferred Stock at an annual rate of 5.5% of the Stated Value. The exercise price of each Warrant will be at a 15.0% premium to the per share estimated NAV of our Common Stock (as most recently published by us at the time of each issuance). As of September 30, 2017, we had issued 568,921 Units and collected net proceeds of $13,036,000 after commissions, fees and allocated costs. As of September 30, 2017, no shares of Series A Preferred Stock have been redeemed.
On October 25, 2017, we filed a registration statement with the SEC with respect to the offer and sale in Israel of up to approximately $280,000,000 of a new series of preferred stock with an anticipated cumulative dividend of 5.50% per annum. There is no guarantee that we will complete the offering, in part or at all, and, if we proceed with the offering, there can be no guarantee of the amount of proceeds that will be raised or of the fixed dividend rate or other terms of such series of preferred stock.
We will likely finance our future activities through one or more of the following methods: (i) offerings of shares of Common Stock, preferred stock, senior unsecured securities, and/or other equity and debt securities; (ii) credit facilities and term loans; (iii) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing investments as collateral; (iv) the sale of existing investments; and/or (v)Our cash flows from operations. We expectinvesting activities are primarily related to employ leverage levels that are comparable to those of other commercial REITs engaged in business strategies similar to our own.
Our long-term liquidity needs will consist primarily of funds necessaryproperty acquisitions and dispositions, expenditures for acquisitions of investments,the development or repositioning of properties, capital expenditures refinancingand cash flows associated with loans originated at our lending segment. Net cash used in investing activities increased by $58.0 million for the three months ended March 31, 2023, as compared to the same period in 2022. The increase in cash used in investing activities was primarily due to an increase in acquisitions of indebtedness, repurchasesreal estate of Common Stock (whether through one or more tender offers, share repurchases or otherwise), dividends on$94.5 million, compared to the Series A Preferred Stock or any othersame period in 2022. Partially offsetting net cash used in investing activities are $16.7 million in proceeds from the sale of a property to the 4750 Wilshire JV during the three months ended March 31, 2023 and a decrease in cash outlays of $15.8 million related to our investments in unconsolidated joint ventures during the three months ended March 31, 2023, compared to the same period in 2022.
Our cash flows from financing activities are generally impacted by borrowings and capital activities. Net cash provided by financing activities increased by $56.2 million for the three months ended March 31, 2023, as compared to the same period in 2022, primarily as a result of net proceeds from debt of $103.8 million during the three months ended March 31, 2023 compared to net debt proceeds of $27.1 million during the three months ended March 31, 2022, the issuance of unguaranteed SBA 7(a) loan-backed notes for net proceeds of approximately $43.3 million, and an increase of $14.7 million in proceeds from the issuance of preferred stock we may issue andduring the three months ended March 31, 2023. The aforementioned amounts increasing net cash provided by financing activities were partially offset by an increase in redemption of Series A Preferred Stock (if we choose to paypreferred stock of $87.7 million during the redemption price in cash instead of in shares of our Common Stock) and dividend distributions on our Common Stock. We may not have sufficient funds on hand or may not be able to obtain additional financing to cover all of these long-term cash requirements although, it should be noted that we do not currently have any significant property development or repositioning projects planned. The nature of our business, and the requirements imposed by REIT rules that we distribute a substantial majority of our REIT taxable income on an annual basis in the form of dividends, may cause us to have substantial liquidity needs over the long-term. We will seek to satisfy our long term liquidity needs through one or more of the methods described in the immediately preceding paragraph. These sources of funding may not be available on attractive terms or at all. If we cannot obtain additional funding for our long-term liquidity needs, our investments may generate lower cash flows or decline in value, or both, which may cause us to sell assets at a time when we would not otherwise do so and could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations, to maintain our level of Common Stock or Series A Preferred Stock dividend distributions or to engage in further repurchases of Common Stock.three months ended March 31, 2023.
Available Borrowings, Cash Balances and Capital Resources
We have typically financed our capital needs through investor equity commitments, long-term secured mortgages, term loans, and unsecured short-term credit facilities. As of September 30, 2017 and December 31, 2016, we had total indebtedness, exclusive of debt included in liabilities associated with assets held for sale, of $780,016,000 and $967,886,000, respectively. As of September 30, 2017 and December 31, 2016, $320,000,000 and $385,000,000 of borrowings under credit and term loan facilities were included in total indebtedness. Based on covenant restrictions as of September 30, 2017 and December 31, 2016, these facilities had total unused capacity of approximately $21,000,000 and $200,000,000, respectively. As of November 3, 2017, $320,000,000 ($0 under the revolver and $320,000,000 under the term loan) was outstanding under the credit and term loan facilities, and, based on covenant restrictions, approximately $21,000,000 was available for future borrowings.
Cash Flow Analysis
Our cash and cash equivalents, inclusive of cash associated with assets held for sale, totaled $254,675,000 and $144,449,000 at September 30, 2017 and December 31, 2016, respectively. Our cash flows from operating activities are primarily dependent upon the real estate assets owned, occupancy level of our real estate assets, the rental rates achieved through our leases, the occupancy and ADR of our hotel, the collectability of rent and recoveries from our tenants.tenants, and loan related activity. Our cash flows from operating activities are also impacted by fluctuations in operating expenses and other general and administrative costs. Net cash provided by operating activities totaled $17,179,000decreased by $5.9 million for the ninethree months ended September 30, 2017March 31, 2023, as compared to $50,242,000 for the nine months ended September 30, 2016.same period in 2022. The decrease was mainlyprimarily due to a decrease of $19,089,000 in net income adjusted for gain on sale of real estate, depreciation and amortization expense, impairment of real estate, and transfer of the right to collect supplemental real estate tax reimbursements at an office property in San Francisco, California that we sold in March 2017,partially offset by a decrease of $13,578,000$1.9 million increase resulting from a higher level of net working capital used compared to the prior period, a $9,496,000 increase in loansperiod.

funded, and a decrease of $1,713,000 in other operating activity, partially offset by an increase of $6,549,000 in proceeds from the sale of guaranteed loans and a $3,446,000 increase in principal collected on loans subject to secured borrowings.
Our cash flows from investing activities are primarily related to property investmentsacquisitions and sales,dispositions, expenditures for the development and redevelopment projects,or repositioning of properties, capital expenditures and cash flows associated with loans originated at our lending segment. Net cash provided byused in investing activities increased by $58.0 million for the ninethree months ended September 30, 2017 was $834,735,000March 31, 2023, as compared to $16,404,000 in the correspondingsame period in 2016.2022. The increase in cash used in investing activities was primarily due to an increase in acquisitions of $757,061,000real estate of $94.5 million, compared to the same period in 2022. Partially offsetting net cash generatedused in investing activities are $16.7 million in proceeds from the sale of real estatea property to the 4750 Wilshire JV during the ninethree months ended September 30, 2017 compared to the nine months ended September 30, 2016, an increase in the change in restricted cash of $39,822,000 primarily related to the anticipated Section 1031 Exchange in connection with the sale of a hotel property in February 2016, offset by the release of reserves during the nine months ended September 30, 2017 in connection with the payoff of mortgages in connection with the sale of three multifamily properties in Dallas, Texas in May and June 2017, and the release of tenant improvement reserves associated with our mortgage loans entered into in June 2016, a decrease in loans funded of $38,773,000,March 31, 2023 and a decrease in additionscash outlays of $15.8 million related to our investments in real estate of $7,976,000, partially offset by a decrease of $24,293,000unconsolidated joint ventures during the three months ended March 31, 2023, compared to the same period in principal collected on loans.2022.
Our cash flows from financing activities are generally impacted by borrowings and capital activities. Net cash used inprovided by financing activities increased by $56.2 million for the ninethree months ended September 30, 2017 was $741,688,000March 31, 2023, as compared to $72,826,000the same period in 2022, primarily as a result of net proceeds from debt of $103.8 million during the three months ended March 31, 2023 compared to net debt proceeds of $27.1 million during the three months ended March 31, 2022, the issuance of unguaranteed SBA 7(a) loan-backed notes for net proceeds of approximately $43.3 million, and an increase of $14.7 million in proceeds from the issuance of preferred stock during the three months ended March 31, 2023. The aforementioned amounts increasing net cash provided by financing activities were partially offset by an increase in redemption of preferred stock of $87.7 million during the three months ended March 31, 2023.
Liquidity and Capital Resources
General
On a short-term basis, our principal demands for funds will be for the acquisition of assets, development or repositioning of properties, or re-leasing of space in existing properties, capital expenditures, paying interest and principal on current and any future debt financings, SBA 7(a) loan originations, paying distributions on our Preferred Stock and Common Stock and making redemption payments on our Preferred Stock. We may finance our future activities through one or more of the following methods: (i) offerings of shares of Common Stock, preferred stock or other equity and or debt securities of the Company; (ii) credit facilities and term loans; (iii) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral; (iv) the sale of existing assets; (v) partnering with co-investors; and or (vi) cash flows from operations. In December 2022, we completed a refinancing of our 2018 credit facility, which was set to mature in October 2023, replacing it with the a new facility (the “2022 Credit Facility”). The 2022 Credit Facility includes a $56.2 million term loan as well as a revolver allowing the Company to borrow up to $150.0 million, both of which are collectively subject to a borrowing base calculation. The 2022 Credit Facility matures in December 2025 and provides for two one-year extension options, subject to certain conditions being satisfied. On December 23, 2022, the Company announced it would redeem all remaining outstanding shares of its Series L Preferred Stock in cash on January 25, 2023 at its stated value of $28.37. The total cost to complete the Series L Redemption, including transaction costs, was $83.8 million. The payment for the Series L
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Redemption was made on January 25, 2023 together with payment of the accrued and unpaid dividends on the redeemed shares of Series L Preferred Stock through December 31, 2022 of $1.56 per share (or $4.6 million accrued and unpaid dividends in the corresponding period in 2016. The primary reason for the increase in usageaggregate) and was funded by a combination of proceeds from financing activities wasthe sale of our repurchaseSeries A1 Preferred Stock, draws on our 2022 Credit Facility, and cash on hand. No additional dividends were owed on the redeemed shares of $576,000,000Series L Preferred Stock subsequent to December 31, 2022.
Our long-term liquidity needs will consist primarily of funds necessary for acquisitions of assets, development or repositioning of properties, or re-leasing of space in existing properties, capital expenditures, paying interest and principal on debt financings, refinancing of indebtedness, SBA 7(a) loan originations, paying distributions on our Preferred Stock or any other preferred stock we may issue, any future repurchase of Common Stock duringand or redemption of our Preferred Stock (if we choose, or are required, to pay the nine months ended September 30, 2017 comparedredemption price in cash instead of in shares of our Common Stock) and distributions on our Common Stock. Additionally, our outstanding commitments to $289,886,000 duringfund loans were $8.0 million as of March 31, 2023, substantially all of which reflect prime-based loans to be originated by our subsidiary engaged in SBA 7(a) Small Business Loan Program lending. A majority of these commitments have government guarantees of 75% (as the nine months ended September 30, 2016. government guarantee has now reverted to 75%) and we believe that we will be able to sell the guaranteed portion of these loans in a liquid secondary market upon fully funding these loans. Since some commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. Further, we are evaluating renovation of certain areas of our hotel in California and development of our development sites. To the extent we decide to proceed with renovating our hotel, undertaking pre-development work and/or conducting development work on any of our development sites, we will have increased liquidity needs.
We had net debt payments, inclusiveown a 20% interest in an unconsolidated joint venture (the “4750 Wilshire Joint Venture”) that is in the process of secured borrowingsconverting a portion of an office building in Los Angeles, California from office space into luxury for-rent residential units (the 4750 Wilshire Project”). The total cost of the lending4750 Wilshire Project is expected to be approximately $31.0 million, which will be financed by a combination of equity contributions from us and co-investors as well as a mortgage loan from a third-party lender. In connection with the 4750 Wilshire Joint Venture, we have commitments to receive cash proceeds from the joint venture partners, enhancing our liquidity. Further, we expect to earn management fees from co-investors in connection with their co-investment in the 4750 Wilshire Project.
We may not have sufficient funds on hand or may not be able to obtain additional financing to cover all of our long-term cash requirements. The nature of our business, and the requirements imposed by REIT rules that we distribute a substantial majority of $137,688,000 forour REIT taxable income on an annual basis in the nine months ended September 30, 2017, mainly dueform of dividends, may cause us to have substantial liquidity needs over the long-term. While we will seek to satisfy such needs through one or more of the methods described in the first paragraph of this section, our ability to take such actions is highly uncertain and cannot be predicted, and could be affected by various risks and uncertainties, including, but not limited to, the prepaymentrisks detailed in “Risk Factors” in “Item 1A—Risk Factors” of mortgagesthis Annual Report on Form 10-K. If we cannot obtain funding for our long-term liquidity needs, our assets may generate lower cash flows or decline in value, or both, which may cause us to sell assets at a time when we would not otherwise do so which could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.
Sources and Uses of Funds
Mortgages
We have mortgage loan agreements with an outstanding balances of $262.4 million as of March 31, 2023.
Revolving Credit Facilities
In October 2018, we entered into the 2018 revolving credit facility that, as amended, allowed us to borrow up to $209.5 million, subject to a borrowing base calculation. The 2018 revolving credit facility was secured by properties in the Company’s real estate portfolio: eight office properties and one hotel property. In December 2022, the Company refinanced its 2018 credit facility and replaced it with a new 2022 Credit Facility, entered into with a bank syndicate, that includes a $56.2 million term loan (the “2022 Credit Facility Term Loan”) as well as a revolver allowing the Company to borrow up to $150.0 million (the “2022 Credit Facility Revolver”), both of which are collectively subject to a borrowing base calculation. The 2022 Credit Facility is secured by properties in the Company’s real estate portfolio: six office properties and one hotel property (as well as the hotel’s adjacent parking garage and retail property). The 2022 Credit Facility bears interest at (A) the base rate plus 1.50% or (B) SOFR plus 2.60%. As of March 31, 2023, the variable interest rate was 7.36%. The 2022 Credit Facility Revolver is also subject to an unused commitment fee of 0.15% or 0.25% depending on the amount of aggregate unused commitments. The 2022 Credit Facility is guaranteed by the Company and the Company is subject to certain financial maintenance covenants. The 2022 Credit Facility matures in December 2025 and provides for two one-year extension options, subject to certain conditions being satisfied, including providing notice of the election and paying an extension fee of 0.15% of each lender’s
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commitment being extended on the effective date of such extension. As of May 1, 2023, March 31, 2023 and December 31, 2022, $158.2 million, $178.2 million, and $56.2 million, respectively, was outstanding under the 2022 Credit Facility and approximately $48.0 million, $28.0 million and $150.0 million, respectively, was available for future borrowings.
Other Financing Activity
On March 9, 2023, our lending division completed a securitization of the unguaranteed portion of certain of our SBA 7(a) loans receivable with the issuance of $54.1 million of unguaranteed SBA 7(a) loan-backed notes (with net proceeds of approximately $43.3 million, after payment of fees and expenses in connection with the salesecuritization and the funding of real estate,a reserve account and an escrow account). The SBA 7(a) loan-backed notes are collateralized by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of our SBA 7(a) loans receivable. The SBA 7(a) loan backed notes mature on March 20, 2048, with monthly payments due as payments on the collateralized loans are received. The SBA 7(a) loan-backed notes bear interest at a repaymentper annum rate equal to the lesser of $65,000,000(i) 30-Day average compounded SOFR plus 2.90% and (ii) prime rate minus 0.35%. As of outstanding borrowingsMarch 31, 2023, the variable interest rate was 7.40%. We reflect the SBA 7(a) loans receivable as assets on our unsecured term loan facility in August 2017, compared to net borrowings of $278,122,000 for the nine months ended September 30, 2016. Dividends of $37,838,000 for the nine months ended September 30, 2017 were sourced from net cash provided by operating activities of $17,179,000consolidated balance sheet and the remainderSBA 7(a) loan-backed notes as debt on our consolidated balance sheet.
We have junior subordinated notes with a variable interest rate that resets quarterly based on the three-month LIBOR plus 3.25%, with quarterly interest‑only payments. The junior subordinated balance is due at maturity on March 30, 2035. The junior subordinated notes may be redeemed at par at our option. The aggregate principal balance of the junior subordinated notes was $27.1 million as of March 31, 2023.
Securities Offerings
We conducted a continuous public offering of Series A Preferred Stock from October 2016 through January 2020, where one Series A Preferred Warrant was issued along with each issued share of Series A Preferred Stock. During the tenure of the offering, we issued 4,603,287 Series A Preferred Stock and Series A Preferred Warrants and received aggregate net proceeds of $105.2 million after commissions, fees and allocated costs.
The Series A Preferred Warrants are exercisable beginning on the first anniversary of the date of their original issuance until and including the fifth anniversary of the date of such issuance. At the time of issuance, the exercise price of each Series A Preferred Warrant was equal to a 15.0% premium to the per share estimated NAV of our cash on handCommon Stock most recently published and designated as the applicable NAV by us at the beginningtime of issuance. However, in accordance with the terms of the periodSeries A Preferred Warrants, the exercise price of $144,449,000, while dividendseach Series A Preferred Warrant issued prior to the reverse stock split in 2019 (the “Reverse Stock Split”) was automatically adjusted to reflect the effect of $58,930,000 for the nine months ended September 30, 2016Reverse Stock Split and, in the discretion of our Board of Directors, the exercise price and the number of shares issuable upon exercise of each Series A Preferred Warrant issued prior to the special dividend in 2019 was adjusted to reflect the effect of the Special Dividend. As of March 31, 2023, there were sourced from net cash provided by operating activities2,925,501 Series A Preferred Warrants to purchase 756,257 shares of $50,242,000Common Stock outstanding.
From February 2020 through June 2022, we conducted a continuous public offering of our Series A Preferred Stock and Series D Preferred Stock. In June 2022, we concluded the offering of our Series A Preferred Stock and Series D Preferred Stock and have since conducted a continuous public offering of our Series A1 Preferred Stock of up to approximately $692.3 million. We intend to use the net proceeds from salethe offerings for general corporate purposes, acquisitions of real estate properties of $94,568,000. Proceeds from the issuanceshares of our Units consistingCommon Stock and Preferred Stock, whether through one or more tender offers, share repurchases or otherwise, and acquisitions consistent with our acquisition and asset management strategies. As of March 31, 2023, we had issued 6,798,510 shares of Series A1 Preferred Stock, 8,251,657 shares of Series A Preferred Stock and associated Warrants were $11,649,000 during the nine months ended September 30, 2017, while cash used for the payment56,857 shares of deferred stock offering costs totaled $1,462,000 for the nine months ended September 30, 2017, compared to $733,000 in the corresponding period in 2016. Deferred loan costsSeries D Preferred Stock and received aggregate net proceeds of $304,000 paid during the nine months ended September 30, 2017 were primarily related to the extension fee$341.5 million after commissions, fees and allocated costs.
Dividends on our unsecured credit facility, while $1,363,000 paid during the nine months ended September 30, 2016 were primarily related to the $392,000,000and Redemptions of mortgage loans we entered into in June 2016.

















Contractual Obligations, Commitments and Contingencies
The following summarizes our contractual obligations at September 30, 2017:
 Payments Due by Period
Contractual ObligationsTotal 2017 2018 - 2019 2020 - 2021 Thereafter
 (in thousands)
Debt:         
Mortgages payable$416,300
 $—
 $—
 $—
 $416,300
Other principal (1)347,070
 —
 —
 —
 347,070
Secured borrowings (2)20,933
 181
 1,521
 1,653
 17,578
Interest and fees:         
Debt (3)228,198
 7,698
 60,399
 54,887
 105,214
Other Contractual Obligations:         
Borrower advances4,644
 4,644
 —
 —
 —
Loan commitments20,864
 20,864
 —
 —
 —
Tenant improvements20,799
 7,585
 13,214
 —
 —
Operating leases (4)166
 62
 104
 —
 —
Total contractual obligations$1,058,974
 $41,034
 $75,238
 $56,540
 $886,162
(1)Represents the junior subordinated notes and unsecured term loan facility.
(2)Principal payments on secured borrowings are generally dependent upon cash flows received from the underlying loans.  Our estimate of their repayment is based on scheduled principal payments on the underlying loans.  Our estimate will differ from actual amounts to the extent we experience prepayments and/or loan liquidations or charge-offs.  No payment is due unless payments are received from the borrowers on the underlying loans.  Excludes deferred premiums which do not represent a future outlay of cash since they are amortized over the life of the loan as a reduction to interest expense.
(3)Excludes premiums and discounts. For the mortgages payable, the interest expense is calculated based on the current effective interest rate on the related debt. For our unsecured credit facility, we use the current balance outstanding and the applicable rates in effect at September 30, 2017 to calculate interest expense and unused commitment fees. For our unsecured term loan facility, the impact of the interest rate swap contracts is incorporated. For our secured borrowings related to our government guaranteed loans, we use the variable rate in effect at September 30, 2017.
(4)Represents future minimum lease payments under our operating leases for office space.
Off-Balance Sheet Arrangements
At September 30, 2017, we did not have any off-balance sheet arrangements.
Recently Issued Accounting Pronouncements
In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which make certain technical corrections and improvements to ASU 2014-09. For public entities, the ASU is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early adoption is permitted for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016.
We are currently conducting our evaluation of the impact of the guidance on our consolidated financial statements. Specifically, we have evaluated the impact on the timing of gain recognition for dispositions but currently do not believe there will be a material impact to our consolidated financial statements for dispositions given the Company's historical disposition transactions. In addition, we currently believe that certain non-lease components of revenue from leases (upon the adoption of ASU 2016-02, on January 1, 2019) and certain ancillary revenue may be impacted by the adoption of ASU 2014-09. We are in the process of evaluating the impact of the standard but currently believe the impact would be limited to the timing and income statement presentation of revenue and not the total amount of revenue recognized over time. We are still assessing the potential impact to our hotel revenues, but due to the short-term, day-to-day nature of the Company's hotel revenues, the pattern of

revenue recognition is not expected to change materially. The Company plans on adopting the standard on January 1, 2018 using the modified retrospective approach.
DividendsPreferred Stock
Holders of Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock are entitled to receive, if, as and when authorized by our Board of Directors, and declared by us out of legally available funds, cumulative cash dividends on each share as follows: (1) at the of greater of (i) an annual rate of 6.0% of the Series A1 Preferred Stock Stated Value (i.e., the equivalent of $0.3750 per share per quarter) and (ii) the Federal Funds (Effective) Rate for such quarter and plus 2.5% of the Series A1 Preferred Stock Stated Value divided by four, up to a maximum of 2.5% of the Series A1 Preferred Stock Stated Value per quarter, (2) 5.50% of the Series A Preferred Stock at an annual rate of 5.5% of the Stated Value (i.e., the equivalent of $0.34375 per share per quarter). Dividends on each share, and (3) 5.65% of the Series AD Preferred Stock will begin accruing on, and will be cumulative from,Stated Value (i.e., the dateequivalent of issuance. Dividends will be payable on the 15th day of the month, or if such day is not a business day, on the first business day thereafter, following the quarter for which the dividend was declared. $0.35313 per share per quarter), respectively.
We expect to pay dividends on ourthe Series A1 Preferred Stock, Series A Preferred Stock quarterly,and Series D Preferred Stock in arrears on a monthly basis, unless our results of operations, our general financing conditions, general economic conditions,
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applicable provisionsrequirements of Maryland General Corporation Law ("MGCL")the MGCL or other factors make it imprudent to do so. The timing and amount of such dividends declared and paid on our Preferred Stock will be determined by our Board of Directors, in its sole discretion, and may vary from time to time. Cash dividends declared on our Series A Preferred Stock for the nine months ended September 30, 2017 consist of the following:
      Aggregate
Declaration Date Payment Date Number of Shares Dividends Declared
      (in thousands)
September 7, 2017 October 16, 2017 568,921 $138
June 12, 2017 July 17, 2017 308,775 $72
March 8, 2017 April 17, 2017 144,698 $31
Holders of our Common Stock are entitled to receive dividends, if, as and when authorized by the Board of Directors and declared by us.us out of legally available funds. In determining our dividend policy, the Board of Directors considers many factors including the amount of cash resources available for dividend distributions, capital spending plans, cash flow, our financial position, applicable requirements of the MGCL, any applicable contractual restrictions, and future growth in net asset valueNAV and cash flow per share prospects. Consequently, the dividend rate on a quarterly basis does not necessarily correlate directly to any individual factor. Dividends
From the date of issuance until the fifth anniversary of the date of issuance, holders of Series A Preferred Stock and Series D Preferred Stock may require us to redeem such shares at a discount to the Series A1 Preferred Stock, Series A Preferred Stated Value and Series D Preferred Stated Value, respectively. From and after the fifth anniversary of the date of original issuance of any share of our Preferred Stock, we generally (subject to certain conditions) have the right (but not the obligation) to redeem, and the holder of such share may require us to redeem, such share at a redemption price equal to 100% of the stated value of such share, plus any accrued but unpaid dividends in respect of such share as of the effective date of the redemption. The redemption price in respect of any share of Preferred Stock, whether redeemed at our option or at the option of a holder, may be paid in cash or in shares of Common Stock in our sole discretion. During the three months ended March 31, 2023, we redeemed 189,753 shares of Series A Preferred Stock and 12,870 shares of Series A1 Preferred Stock.
On September 15, 2022, we repurchased 2,435,284 shares of our Series L Preferred Stock in a privately negotiated transaction (the “Series L Repurchase”). The shares were repurchased at a purchase price of $27.40 per share (a 3.4% discount to the stated value of $28.37 per share) plus $1.12 per share of Common Stock declared duringaccrued and unpaid dividends (or $2.7 million of accrued and unpaid dividends in the nineaggregate). The total cost to complete the Series L Repurchase, including of transactions costs of $700,000, was $70.1 million. In connection with the Series L Repurchase, we recognized redeemable preferred stock redemptions of $4.8 million on our consolidated statement of operations for the three months ended September 30, 2017 consistMarch 31, 2023.
As announced on December 23, 2022, we redeemed all remaining outstanding shares of our Series L Preferred Stock in cash on January 25, 2023 at its stated value of $28.37 (the “Series L Redemption). The total cost to complete the Series L Redemption, including transaction costs, was $83.8 million. In connection with the Series L Redemption, we recognized redeemable preferred stock redemptions of $7.9 million on our consolidated statement of operations for the year ended December 31, 2022. The $7.9 million of redeemable preferred stock redemptions represents the difference between the repurchase price and the carrying value of the following:repurchased Series L Preferred Stock (representing the stated value of $28.37 per share reduced by $2.65 per share of stock offering costs). As of December 31, 2022, $83.8 million was recorded in accounts payable and accrued expenses on our consolidated balance sheet in connection with the Series L Redemption. The accrued and unpaid dividends on the redeemed shares of Series L Preferred Stock through December 31, 2022 of $1.56 per share (or $4.6 million accrued and unpaid dividends in the aggregate) were also paid January 25, 2023. No additional dividends were owed on the redeemed shares of Series L Preferred Stock subsequent to December 31, 2022.
Off-Balance Sheet Arrangements
Declaration Date Payment Date Type (1) Dividend Per Common Share
September 7, 2017 September 25, 2017 Regular Quarterly $0.12500
June 12, 2017 June 27, 2017 Special Cash $1.98000
June 12, 2017 June 27, 2017 Regular Quarterly $0.12500
April 5, 2017 April 24, 2017 Special Cash $0.28000
March 8, 2017 March 27, 2017 Regular Quarterly $0.21875
As of March 31, 2023, we did not have any off-balance sheet arrangements.

(1)Urban II, an affiliate of CIM REIT and CIM Urban, waived its right to receive the April 24, 2017 and June 27, 2017 special cash dividends.

Recently Issued Accounting Pronouncements
Our recently issued accounting pronouncements are described in Note 2 to the consolidated financial statements included in this Quarterly Report on Form 10-Q.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk

The fair value of our mortgages payable is sensitive to fluctuations in interest rates. Discounted cash flow analysis is generally used to estimate the fair value of our mortgages payable, using rates ranging from 4.18% to 4.38% at September 30, 2017 and 4.60% to 4.72% at December 31, 2016. Mortgages payable, exclusive of debt included in liabilities associated with assets held for sale, with book values of $414,718,000 and $530,793,000 as of September 30, 2017 and December 31, 2016, respectively, have fair values of approximately $411,016,000 and $516,892,000, respectively.
Our future income, cash flowsflow and fair values relevant to financial instruments are dependent upon prevalent market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. We are exposed to market risk in the form of changes in interest rates and the potential impact such changes may have on the cash flows from our floating rate debt or the fair values of our fixed rate debt. At September 30, 2017As of March 31, 2023 and December 31, 20162022 (excluding premiums, discounts, and debt issuance costs, including debt included in liabilities associated with assets held for sale, and before the impact related to the interest rate swaps)deferred loan costs), $445,015,000$97.1 million (or 54.7%18.5%) and $532,437,000$97.1 million (or 54.8%52.1%) of our debt, respectively, was fixed rate mortgage loans,borrowings, and $368,003,000$427.9 million (or 45.3%81.5%) and $439,969,000$89.3 million (or 45.2%47.9%), respectively, was floating rate borrowings. Based on the level of floating rate debt outstanding at September 30, 2017as of March 31, 2023 and December 31, 2016, and before the impact of the interest rate swaps,2022, a 12.550 basis point change in LIBOR
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and SOFR would result in an annual impact to our earnings of approximately $460,000$2,140,000 and $550,000,$446,000, respectively. We calculate interest rate sensitivity by multiplying the amount of floating rate debt by the respective change in rate. The sensitivity analysis does not take into consideration possible changes in the balances or fair value of our floating rate debt or the impact of interest rate swaps.
In order to manage financing costs and interest rate exposure related to our $385,000,000 unsecured term loan facility, on August 13, 2015, we entered into interest rate swap agreements with multiple counterparties. These swap agreements became effective on November 2, 2015. These interest rate swaps effectively convert the interest rate on the term loan facility into a fixed weighted average rate of 1.563% plus the credit spread, which was 1.60% at September 30, 2017 and December 31, 2016, or an all-in rate of 3.16% until May 8, 2020. On August 3, 2017, we repaid $65,000,000 of outstanding borrowings on our unsecured term loan facility. In connection with such paydown, we terminated three interest rate swaps with an aggregate notional value of $65,000,000. Our use of these derivative instruments to hedge exposure to changes in interest rates exposes us to credit risk from the potential inability of our counterparties to perform under the terms of the agreements. We attempt to minimize this credit risk by contracting with what we believe to be high-quality financial counterparties. For a description of our derivative contracts, see Note 13 to our consolidated financial statements included in this Report.

Item 4.
Controls and Procedures

Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, regarding the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, as of September 30, 2017,March 31, 2023, our Principal Executive Officer and Principal Financial Officer concluded, as of that time, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC'sSEC’s rules and forms and includesinclude controls and procedures designed to ensure the information required to be disclosed by the Companyus in such reports is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2017March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II
Other Information

Item 1.    Legal Proceedings
We are not currently involved in any material pending or threatened legal proceedings nor, to our knowledge, isare any material legal proceedingproceedings currently threatened against us, other than routine litigation arising in the ordinary course of business. In the normal course of business, we are periodically party to certain legal actions and proceedings involving matters that are generally incidental to our business. While the outcome of these legal actions and proceedings cannot be predicted with certainty, in management'smanagement’s opinion, the resolution of these legal proceedings and actions will not have a material adverse effect on our consolidatedbusiness, financial position,condition, results of operations, cash flow or cash flows.our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.

Item 1A.    Risk Factors
There have been no material changes to the risk factors disclosed in our Annual Report on"Risk Factors" in Part I, Item 1A of the 2022 Form 10-K for the year ended December 31, 2016.10-K.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
None.In May 2022, the Company’s Board of Directors approved a repurchase program of up to $10.0 million of the Company’s Common Stock (the “SRP”). Under the SRP, the Company, in its discretion, may purchase shares of its Common Stock from time to time in the open market or in privately negotiated transactions. The amount and timing of purchases of shares will depend on a number of factors, including the price and availability of shares, trading volume and general market conditions. The SRP has no termination date and may be suspended or discontinued at any time.There were no were repurchases during the three months ended March 31, 2023. As of March 31, 2023, the Company had repurchased 662,462 shares of Common Stock for $4.7 million.

Item 3.    Defaults Upon Senior Securities
None.

Item 4.    Mine Safety Disclosures
Not applicable.

Item 5.    Other Information
None.

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Item 6.    Exhibits
Exhibit NumberExhibit Description
10.1
10.2
10.3
10.4
10.5
10.6
*31.1
*31.2
*32.1
*32.2
*101101.INSInteractiveXBRL Instance Document — the instance document does not appear in the interactive data files pursuant to Rule 405 of Regulation S-Tbecause its XBRL on the Interactive Data File because its XBRL tags are embedded within the inline XBRL document
*101.SCHXBRL Taxonomy Extension Schema Document
*101.CALXBRL Taxonomy Extension Calculation Linkbase Document
*101.DEFXBRL Taxonomy Extension Definition Linkbase Document
*101.LABXBRL Taxonomy Extension Label Linkbase Document
*101.PREXBRL Taxonomy Extension Presentation Linkbase Document
*104Cover page Interactive Data File, formatted in inline XBRL (included in Exhibit 101).

* Filed herewith.

Exhibit Index


52
Exhibit NumberExhibit Description
*31.1
Section 302 Officer Certification—Chief Executive Officer
Table of Contents
*31.2
Section 302 Officer Certification—Chief Financial Officer
*32.1
Section 906 Officer Certification—Chief Executive Officer
*32.2
Section 906 Officer Certification—Chief Financial Officer
*101Interactive data files pursuant to Rule 405 of Regulation S-T

* Filed herewith.

SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION
Dated: November 9, 2017May 5, 2023By:
/s/ CHARLES E. GARNER II
Charles E. Garner II
Chief Executive Officer
Dated: November 9, 2017By:
/s/ DAVID THOMPSON
David Thompson
Chief Executive Officer
Dated: May 5, 2023By:
/s/ BARRY N. BERLIN
Barry N. Berlin
Chief Financial Officer



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