Creative Media

Good day, and welcome to the Creative Media and Community Trust Corporation first quarter 2025 earnings 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 one on a touch-tone phone. To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to turn the conference over to Steve Altibrando. 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 are 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 this call, we will make 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 other factors that are beyond our control or ability to predict. Although we believe 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. like to begin by sharing an update on the progress we've made with our strategic initiatives followed by a review of our results for the quarter as we've discussed on previous calls we remain focused on improving our balance sheet and liquidity and accelerating our focus towards premier multi-family assets with respect to the balance sheet and liquidity we are pleased to share that we have now fully repaid and retired our recourse corporate level credit facility a clear demonstration of the progress we've been making on our strategic initiatives To take a step back, last September we announced our intention to place property-level financing on several of our assets with the objective of using a portion of the proceeds to fully repay and retire the recourse credit facility. When we first discussed this goal, that facility carried a balance of approximately $169 million. In April, we secured a floating-rate mortgage on our creative office campus at 3601 South Congress in Austin, also known as Penfield. This financing marked the conclusion of our broader refinancing program, through which we successfully completed four financings across six properties. We achieved this in a highly challenging environment for office financing. As of today, the majority of the debt is held at the property level in the form of mortgages, and this is non-recourse to CMCT itself. In addition, we now have 12 unencumbered assets, further enhancing our financial flexibility. With respect to our other main priority, growing the multifamily portion of the portfolio, including JVs, we now have four operating assets. These include 1150 Clay and Channel House in the Bay Area and 701 South Hudson and 1902 Park Avenue in Los Angeles. Our fifth operating asset, 1915 Park in Los Angeles, will be delivered on time in the third quarter. We believe there is significant opportunity to grow our multifamily net operating income through improving occupancy and marketing rents to the current market. And lastly, we continue to actively evaluate potential asset sales with the goal of strengthening our balance sheet, improving our liquidity, and growing our portfolio of premier multifamily assets. Turning to our first quarter results, our core FFO improved by approximately $1.9 million from the prior quarter, primarily due to higher net operating income and lower preferred dividends. Our net operating income increased by approximately $2.6 billion from the prior quarter, primarily driven by a $2.6 billion improvement at our hotel. While the first half of the year is typically the strongest seasonally for our hotel, we're also seeing the clear benefits from the recently completed renovation of our hotel asset, the Sheraton Grand Sacramento. First quarter NOI at the hotel increased 15% on a year-over-year basis. Our office NOI improved by $1.9 million from the prior quarter, and we are seeing a pickup in leasing activity, particularly in Los Angeles and in Austin. Our multifamily NOI decreased by $1.5 million from the prior quarter, primarily due to lower occupancy in the seasonally slower winter months. Our lending NOI declined approximately 390,000, primarily due to a decrease in interest income as a result of loan payoffs and lower interest rates. With that, I will turn it over to Steve to provide more detail on the portfolio.