Creative Media

Good afternoon and welcome to the Creative Media and Community Trust first quarter 2026 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, and uncertainties, and other 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. Hello everyone, and thank you for joining us today. I'd like to begin with an update on the strategic plan we outlined on prior calls to strengthen our balance sheet, improve liquidity, and sharpen our focus on premier multifamily assets, and the meaningful progress we've made against those priorities in the first quarter. Over the past several months, we've taken actions to position CMCT for long-term stability and growth. During the quarter, we completed the redemption of $243 million of preferred stock into common stock. This was a transformational step for the company that significantly improved our balance sheet and will improve our funds from operations starting in the second quarter of 2026. We expect the redemption to increase our FFO by approximately $16 million per year, and it returns the company's capital structure back in line with our long-term targets. Since first announcing our plan to strengthen our balance sheet and improve liquidity in September 2024, the company has redeemed approximately $396 million of preferred stock into common stock. In parallel, we have also shifted our financing strategy towards an asset-based approach. We have completed financings on nine assets and have fully retired our recourse credit facility. As a result, we now operate with minimal recourse debt, significantly reducing risk and improving our flexibility. We also sold our lending division in January of 2026. After accounting for debt repayment, transaction expenses, and other related items, this transaction yielded net cash proceeds to the company of approximately $31 million. In summary, we believe that we have restored the company to a position of financial health. With a stronger balance sheet, improved liquidity, and a more focused portfolio, we are now well positioned for growth. Going forward, our primary focus is on improving FFO in 2026 and 2027. We believe there are two key levers that will enable us to achieve this. First, We are focused on improving property level performance across our portfolio. And second, we expect a substantial reduction in preferred dividend obligations. As a reminder, we completed the redemption near the end of the first quarter, so the impact of that action was only minimally reflected in our first quarter FFO. The full benefit of that redemption will begin in the second quarter. In addition, we are continuing to take proactive steps to further strengthen our financial profile. We are actively working to extend debt maturities on a handful of assets, and at the same time, we will continue to evaluate selective asset sales where we see opportunities to unlock value, improve portfolio quality, or redeploy capital more efficiently. We believe that executing on these priorities is critical to reducing what we believe is a substantial gap between our current share price and the intrinsic value of the portfolio. To put that in perspective, on a cost basis, our undepreciated book value was approximately $147 per share at the end of the first quarter. We believe this highlights the underlying value of our assets and reinforces the opportunity ahead as we translate operational improvements and capital structure efficiencies into stronger financial performance. Now turning to net operating income and trends for the first quarter. Starting with office, NOI declined approximately $600,000 year over year. This was primarily driven by a one-time benefit in the prior year period related to a tax appeal we won and which did not recur this year. Excluding our Oakland office asset, our office lease percentage was approximately 85.7% at the end of the first quarter, representing a 470 basis point increase year-over-year. In our multifamily segment, performance was notably stronger. Excluding our joint venture properties, NOI increased 64% year-over-year. When including our JV properties, NOI increased modestly, primarily due to non-cash changes in appraised values. Occupancy across the multi-family portfolio improved to 89.6% at quarter end, an increase of 940 basis points compared to the prior year. Importantly, after several very challenging years in Oakland, we are beginning to see early signs of recovery, supported by improving fundamentals in that market. Turning to our hotel asset, NOI declined by approximately $700,000 year over year. This was largely attributable to temporary factors, including renovation-related disruptions early in the quarter and an issue in one of the mechanical systems that temporarily removed a number of rooms from service in March. However, I'm pleased to report that the renovation was substantially completed during the first quarter. Over the past two years, we have renovated all 505 guest rooms along with the property's common areas, positioning the asset for improved performance going forward. In summary, we continue to see encouraging operating trends across the multifamily portfolio, as well as in our Los Angeles and Austin office assets and at the company's hotel property in Sacramento. With that, I'll turn the call over to Steve to provide additional color on our refinancing activities and property level performance.