Creative Media

Good afternoon, and welcome to the Creative Media and Community Trust Fourth Quarter 2025 Earnings Conference Call. All participants will be in 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 your telephone keypad. To withdraw your question, please press star, then two. 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 are David Thompson, our Chief Executive Officer, and Brandon Hill, 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, our 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 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. Good afternoon, and thanks everyone for joining us today. We continue to execute on the strategic plan we have discussed on previous calls. We are making significant progress in accelerating our focus towards premier multifamily assets, strengthening our balance sheet, and improving liquidity. At the same time, operating trends within the portfolio are moving in the right direction across our multifamily portfolio, our Los Angeles and Austin office assets, and the company's hotel asset in Sacramento. Since announcing our strategic plan in September 2024, we've taken actions to significantly improve our balance sheet. We completed financing on nine assets since September 2024 and fully retired our recourse credit facility in April 2025. We completed the sale of our lending division in January 2026, and we redeemed approximately $153.3 million of preferred stock into common stock since September of 2024. Building on that progress, the company announced today that it is redeeming approximately 2 million shares of Series A preferred stock, approximately 7.8 million shares of Series A1 preferred stock, and approximately 22,000 shares of the Series D preferred stock, with a redemption price to be paid in shares of common stock. This redemption is expected to improve CMCT's annual funds from operations. approximately $16 million per year and returns the company's capital structure back to our long-term target, approximately 38% common equity, 7% preferred equity, and 55% debt on a fair value basis adjusted for the redemption. Importantly, given the company's significantly improved financial position, we do not currently intend to initiate at our election additional preferred stock redemptions into common stock. However, we will continue to evaluate redemption requests submitted by holders of our preferred stock as they are received and may elect to redeem those shares in common stock or cash at the company's discretion. With respect to asset sales, as we mentioned, we completed the sale of our lending division in January for a purchase price of approximately $44.9 million, net of the outstanding debt related to the 2023 securitization of certain loan receivables and subject to customary post-closing adjustments. After giving effect to the repayment of other debt, transaction expenses, and related items, the transaction generated approximately $31.2 million of net cash proceeds to the company. We continue to actively evaluate additional asset sales as part of our broader effort to enhance liquidity and optimize our balance sheet. In terms of operating trends, looking ahead, we see opportunities to improve cash flow in 2026, supported by several key drivers across the portfolio. First, net operating income continues to improve across all segments. In our office portfolio, leased occupancy reached 88.5% at the end of 2025, excluding our Oakland asset, representing a 190 basis point increase from the third quarter of 2025 and a 680 basis point improvement over year-end 2024. And multifamily, excluding our building in Echo Park in Los Angeles, which just began lease up during Q4, our occupancy increased to 88.5% at the end of 2025, up 320 basis points from the third quarter of 2025, and then 680 basis points year over year. At our hotel property, we substantially completed the upgrades to the public spaces in the first quarter of 2026, following the renovation to all 505 guest rooms a year ago. With these improvements largely complete, the property is well positioned to drive strong performance in 2026 and beyond. We also anticipate lower interest expense supported by a potentially more favorable rate environment and the opportunity to refinance the hotel following the completion of its renovation. Finally, as mentioned earlier, the conversion of preferred equity into common stock is expected to improve annual FFO by approximately $16 million. Turning to our fourth quarter results, our core FFO was negative $5.9 million. Our overall net operating income was $10.9 million compared to $7 million in the prior quarter. Within our office segment, NOI increased by approximately $1.4 million from the third quarter, largely due to higher appraised value at one of our JVs. NOI also modestly increased at our wholly owned properties. Hotel NOI was $2.1 million in the quarter compared to $850,000 in the third quarter, primarily reflecting a greater disruption from a renovation of the public space in the prior quarter. Our multifamily NOI decreased by approximately $1.7 million from the prior quarter. The decrease was primarily due to a lower appraisal of two of our JVs in the current quarter. With that, I'll turn the call over to Steve to give more color on our refinancing activities and property level performance.