Creative Media

Good day, and welcome to the Creative Media and Community Trust Second Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Steve Altibrando, Portfolio Oversight. Please go ahead.

Hello, everyone, and thank you for joining us. My name is Steve Altibrando, the Portfolio Oversight for CMCT. Also on the call today is Shaul Kuba, our Chief Investment Officer, David Thompson, our Chief Executive Officer, and Barry Berlin, our Chief Financial Officer. This call is being webcast and will be temporarily archived on the investor relations section of our website, where you can also find our earnings release. Our earnings release includes a reconciliation of non-GAAP financial measures discussed during today's call. During the course of this call, we will be making forward looking statements. These forward looking statements are based on the beliefs of, assumptions made by, and information currently available to us. Our actual results will be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance, and some will prove to be incorrect. Therefore, our actual future results can be expected to differ from our expectations, and those differences may be material. For a more detailed description of potential risks, please refer to our SEC filings, which can be found in the investor relations section of our website. With that, I'll turn the call over to David Thompson.

Thanks, Steve. And thank you everyone for joining our call today. In the second quarter, we made good progress improving occupancy at our recently acquired multifamily assets. These acquisitions are part of our previously defined plan to grow the multifamily side of our portfolio to achieve more balance between creative office and multifamily assets. As a reminder, during the first quarter, we completed the acquisition of two multifamily assets in Oakland and one multifamily property in Los Angeles. These newer vintage, highly amenitized premier multifamily assets in high barrier to entry markets added 696 units to our portfolio. At the end of the June quarter, our overall multifamily occupancy improved to 83.9%, up 320 basis points from the prior quarter. Two of the three assets we acquired in the first quarter are still in their initial lease-up phase. We believe there's an opportunity to significantly grow net operating income at these properties as we execute on completing the lease-up. During the quarter, we also made significant progress on our development pipeline, most notably in Austin, where we can now develop multifamily buy-right at both our Penfield and East 7th Street properties. Shell will provide more detail on this positive update. We also took further steps to improve our liquidity and balance sheet during the quarter. We paid down our credit facility by $30 million in the quarter, primarily with proceeds from our Series A1 preferred stock offering. Turning to the second quarter financials, we continued to see a strong rebound in our hotel NOI, which increased by 28% from the prior year period. Our multifamily segment generated just over half a million dollars in NOI in the quarter. As I mentioned earlier, we believe there's an opportunity to significantly grow our multifamily NOI as our assets continue to lease up. Our office NOI declined on a year-over-year basis, but increased from the first quarter due to higher occupancy. Our lending NOI decreased year-over-year, partially due to the securitization completed in the first quarter, which increased interest expense attributable to that segment. I would now like to turn the call over to Shaul Kuba.