Creative Media

Please note, this event is being recorded. I would now like to turn the call over to Steve Altebrando, Portfolio Oversight. Please go ahead.

Hello, everyone, and thank you for joining us. My name is Steve Altebrando, 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 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'll begin with an update on our strategic priorities before reviewing our second quarter operating results. Starting with our strategic priorities, first, we remain focused on improving our funds from operations in 2026 and 2027. We continue to see operating trends strengthening across our multifamily portfolio, our Los Angeles and Austin office assets, and at our hotel asset in Sacramento. These improvements are translating into stronger operating results. Excluding our JV loss in the quarter, which was primarily impacted by large non-cash items, our net operating income increased 22% from the prior year period, driven by our multifamily, office, and hotel segments. Second, we continue to strengthen our balance sheet while still funding critical growth initiatives such as office leasing and our hotel renovations. Despite a $2.8 million increase in our JV losses, which was primarily driven by non-cash items, our core FFO still improved by $3.6 million compared to the second quarter of last year. The improvement was primarily due to a reduction in preferred dividends. Third, we continue to evaluate the potential sale of one or more of our real estate assets. We believe executing on this strategy will further strengthen our balance sheet while also helping close what we view as a significant gap between our current share price and the intrinsic value of the portfolio. Turning now to our operating performance by segment. Beginning with multifamily, we believe CMCT is well positioned to benefit from the continued recovery in the Bay Area residential market. Approximately 78% of our multifamily units are located in the Bay Area where leasing demand has continued to improve. Same-store multifamily occupancy reached 95.3% as of June 30, 2026, an increase of 1,190 basis points from a year ago. As a result, multifamily NOI increased 238% year over year. In addition, in-place rents at our Bay Area multifamily properties are approximately 12% below current asking rents, providing a meaningful opportunity to continue NOI growth as new leases roll to market. Within our office segment, leasing trends continue to improve. Excluding our Oakland office asset, lease occupancy increased to 84.4% at quarter end, up 470 basis points from the second quarter of 2025. Office NOI declined to $4 million from $5.5 million due to a $2.4 million increase in our JV loss. The JV loss was primarily driven by non-cash items. Excluding our JV loss, consolidated NOI increased year over year, primarily due to improved performance at our Wilshire office assets. Our hotel property in Sacramento also delivered improved operating performance. Following the completion of recent renovations, hotel NOI increased 11% year over year. We believe the property remains well positioned to generate additional NOI growth. Overall, we're encouraged by the continued improvement we're seeing across each of our operating segments, and we believe we are positioned to continue to grow our FFO. With that, I'll turn the call over to Steve to provide more color on our refinancing activities and property level performance in the quarter.