CMCT - Earnings call 3 2023 | Creative Media & Community Trust Corporation

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Operator

Hello, and welcome to the Creative Media & Community Trust Third Quarter 2023 Earnings Call. [operator Instructions] Please note, this event is being recorded. I would now like to turn the call over to Steve Altebrando. Please go ahead.

Stephen Altebrando

Hello, everyone, and thank you for joining us. Altebrando, Oversight Steve CMCT. is name the for Portfolio My Thompson, today Executive Chief Also call David Financial our our on the Berlin, are Chief Barry Officer; Officer. and the will call you where find temporarily This webcast release. also section and earnings being archived our is can on Investor our website, Relations of be

of release reconciliation financial discussed the earnings Our a during measures non-GAAP includes today's call.

based currently made this forward-looking statements. to statements are During by make These assumptions of, information will the on call, course beliefs we available of us. and the forward-looking

actual results affected ability be our that will risks, trends, by or unknown Our are known uncertainties to control factors and predict. and other beyond

actual Although from reasonable, those and future they be material. we expected future our are differences to performance maybe our some of believe assumptions are will expectations, not our be and results to that can differ guarantees prove Therefore, incorrect.

of that, description which Relations please detailed With website. can more the David found Thompson. to filings, section in be a potential the Investor call over I'll our our SEC to risks, For turn of refer

David Thompson

and joining Starting highlights our some with quarter. call our Steve, thank for third off of you, today. Thanks, everyone,

We portion execute portfolio. of the continue grow multifamily our on our strategy to to

progress. made pipeline development Our additional

at lease strong. stable. We a office our liquidity saw Our our hotel continued remained and strength asset percentage remains

progress First, up XX.X%, XX of our like our I'd to the occupancy touch the improved to basis quarter. in end overall prior At multifamily. on the from multifamily third quarter, points

below asset growth assets funds of the today's from Two these market. in one year multifamily the the significant operations. lease-up had continue from focused believe substantially in-place this property two of those been improve between assets growing opportunity we've multifamily NOI of Angeles. our and has before, on still continued to rents and more are are Oakland will assets discussed in of to acquisition portfolio XXX to assets. We our the we've balance and multifamily our Los We in side As three multifamily lease-up creative the office units earlier portfolio as third achieve

Turning to our development pipeline.

remained City, notably redevelop our most office During Office entitlement the significant in Culver quarter, we exciting we provide received more recently this Segment, executed at square I'll in progress, moment. In our in Washington stable a where the quarter to the XX.X%. building period. of percentage Boulevard. and NOI XX% the on We details office lease feet on about update made increased compared to in third quarter, XX,XXX our year office prior our by leases

Our compared NOI period. Hotel third prior the decreased to Segment quarter

period, continued However, the increased a year-to-date, hotel NOI from from strong pandemic. rebound by prior year the XX%

the At Lastly, year-over-year, NOI our the under end due our quarter, Series we to quarter, third million on decreased raise primarily availability $XX we AX preferred cash of increased had million $XX to the of the hand, lending that and continue attributable expense segment. first securitization to which of revolver, completed interest in stock.

our to pipeline. back development Turning

entitlement as positive in existing our XX,XXX the allows office Culver XX,XXX stalls. Starting as in received for to Washington into creative building some have XXX building redevelop our building. We updates. feet square office feet entitlement single-story new The square parking about Boulevard is a about City. well and We

potential supply Los and a certification. some plans The stalls, walkable, office of intended Angeles. parking and use, is designed work. office bike permitting room redevelopment. Culver roof showers about this creative a and locker constrained, art for public very Lean ] a Our [ for that include a the in of deck, space, phase employee project PV this new the rents highly next solar commands desirable submarket City We're highest excited will be system

by numerous dining and is walk surrounded the from options. rail it minutes Our properties just a and shopping few light

year XXXX at believe our the neighborhood of in to that Wilshire and section starting quarter Apple, office Beats Boulevard parcel Echo to expect and conversion Los notable Los at would a will multimillion-dollar residential institutional leased, a and Park start our the units single-family units. creative adjacent this more. in include In able XX% is be Park, In Sunset a venture XXXX. to TikTok, this of on Microsoft, XXX our to HBO, Some Jefferson multifamily In between submarket Southwestern continues adjacent investor. This Boulevard, building Amazon, believe is luxury from project Angeles, in leasing XXXX companies we're joint up West the development, is location supply-constrained Angeles, which Work XX-unit This to we'll at and Sony, fourth multifamily add we we in homes. XXXX XX ago. start about construction units to which is add international the now total, XXXX. very is CMCT Hancock another its attractive at at portfolio. We Park, an given office construction XX% XXXX

as For developer the progress if believe making all pipeline increases to develop. on sell value our supports an balance design of of or complete necessary we the approvals well if obtain asset as elect to to another development to elect the our pipeline, growth work continue work. We we this to we

when to previously for look done at assets, With update and advantageous Wilshire. just that, further turn it development a have we diversification mentioned, portfolio. provide on our will to supplement returns Steve generating will to increase by to fee XXXX the like over we bringing As co-investors I income we've

Stephen Altebrando

quarter end an end occupied On our on Thanks, the at David. XXXX at the and the quarter to occupancy was would our Oakland end, end basis assets, update of quarter I to at XX.X%. second Channel of increased Clay a XX.X% XX.X% second XX.X% starting in Oakland multifamily. XX.X%, up was compared from at the consolidated Occupancy House operating the at of XX.X% at like the to multifamily and compared with to provide quarter.

from in at us a the mentioned, acquire discount through is acquired David are of allowed growth premier market XXXX There these year the were year, supply Class As the to assets Oakland cost these up. which substantial process being what this assets significant to replacement in and today. earlier A last leased was in part

quarter, new some we to below While in to continue again. building before it is these Oakland is multifamily fully start development average believe dramatically markets, assets well U.S. for top The we to supply be we this see need local expect to for absorbed, pipeline would for so to the increase XX it economic Park, positioned for rents time been the new take believe XX.X% of we the are are market, XXXX tenants Park executing to in-place our at higher on compared at have Occupancy the rents XXX to basis points end the new below multifamily end quarter. leases at well rate. and substantially growth. At Los second Angeles increased Echo asset well our up the for of

this for a for have waiting the list We units strength of today, demonstrating X-bedroom asset. demand

We leased square office. to feet approximately the quarter. in third Turning XX,XXX

XX.X% Our our occupancy prior was at lease the percentage in in quarter. quarter the to rate the of to compared the end and prior XX.X% XX.X% quarter third was compared XX.X%

Our turn office our basis achieving up of up are On X.X%. leasing spreads that, are than rents expiring new it are we cash of I'll higher the Barry. to a leases the are to leasing while our spreads remain positive GAAP lease same-suite our meaning leases. rates on on quality basis, the speaks our basis This about a spreads points, about With XXX portfolio. year-to-date

Barry Berlin

you, Thank Steve.

Moving on to financial highlights.

Multifamily in NOI This for to million $XX.X $X.X million increased well third Our NOI by driven as prior segment in partially a XXXX in our a as Office our $X.X NOI loss million $XXX,XXX in quarter decrease Segment. lending Segment increase operating the $XXX,XXX compared the increase a $XXX,XXX our an of Hotel offset million from of comparable Segment newly NOI $XX.X decrease year period. by acquired was of in segment our NOI, to net

our largely the $X.X year of compared comparable by Our $X.X in recognized period. $X.X income The and due one expense was from third property an office to Beverly estate an for our occupancy venture during gain of increase office quarter at NOI Texas. to the property prior real unconsolidated revenues million in and to in an a due Hills, office at Office Segment an unrealized increased million rates in rental increased an quarter, in Austin, California, driven increase million to at tax joint rental decrease properties investments increase

to in prior Hotel million the period. Segment quarter decreased million $X.X third Our from $X.X NOI

remained was beverage revenue decrease to in food primarily the room revenue. and a attributable While flat, decrease

new we we March Angeles mentioned, a quarter Segment. the in joint recorded property We the as As NOI reporting late venture well another multifamily as multifamily Segment and a through acquired after Los Multifamily late in began January investment. third Multifamily of from investing we properties of XXXX loss Oakland in net XX-XX in X quarter in $XXX,XXX operating first

is XXXX the increase as securitization capital payroll related in This in allocated prior to level, decrease decreased a an directly acquisitions. to the up Lastly, $XXX,XXX well to our model, securitization in March multifamily as comparable increased interest issuance the us further expensed turn, to that lending to expense Interest due our freed in at lending from closed debt which NOI year business of strategic allow primarily to including transaction was period. through costs. the $X.X the division segment million relating

expense. by in-place an our properties million increase in and assets For Oakland. was of our acquired we depreciation expense an multifamily driven amortization in nonsegment at expenses, new $XX increase The This intangible events. had significant largest two amortization noncash lease was increase located in

been fully these amortized. end the quarter, of As of the have third assets

expense, interest was increased two acquisitions. revolver item with including first rates The around the which the increase quarter connection The of primarily assumption $X.X an in in properties multifamily nonsegment during two and by to allocated of connection with related the acquisition in on of the being our XXXX, million. Oakland in due borrowing market interest our second increase mortgages

their Our comparable multifamily $X.XX in in per two prior compared per negative in were share a driven diluted was negative largely are share which in share period. per the compared year to to primarily our of phase. the FFO and negative to $X.XX by prior $X.XX diluted expense, due period reductions our interest negative These core initial year FFO $X.XX was lease-up still acquisitions, the increase

NOI. grow an mentioned, there David we believe As is our to opportunity significantly multifamily

by the our that, now over $XX $XX.X of With sale proceeds our capacity. quarter. of host our stock additional the million the Finally, can XX, liquidity had approximately questions. we from an during for additional call raising turn million net At Series in borrowing preferred bolstered AX was September

Operator

time, conference attending our the this for this Seeing now concludes at Instructions] question-and-answer today's no has you presentation. and session, concluded. questions Thank [Operator

day. now may a disconnect your have lines, You and nice

Creative Media & Community Trust (CMCT) 15 Nov 232023 Q3 Earnings call transcript