CaliberCos Inc.

Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Calibre second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the call over to Ilya Grzegorzewski, Vice President, Investor Relations and Corporate Development. Please go ahead.

Good afternoon, everyone. Welcome to Caliber's second quarter 2025 Financial Results Conference call. With me today are Chris Loeffler, Chief Executive Officer and Co-Founder, and Jade Miao, Chief Financial Officer of Caliber. Please note, that we have a quarterly earnings presentation which will serve as a supplement to today's prepared remarks. You can access the presentation in the investor relations section of our website at www.caliberco.com. After management's commentary, we will open the call for questions. As a reminder, the information discussed today may include forward-looking statements that involve risks and uncertainties. Words like believe, expect, and anticipate refer to our best estimates as of this call, and there can be no assurances that these will actually take place. So, our actual future results could differ significantly from these statements. Further information on the company's risk factors is contained in the company's quarterly and annual reports and filed with the Securities and Exchange Commission. It is now my pleasure to turn the call over to Chris. Please go ahead.

Thank you, Ilya, and thank you to our investors, employees, and participating call attendees. The second quarter of 2025 was another step towards our goal of achieving platform adjusted EBITDA profitability in the second half of 2025. To that end, with essentially similar revenues in the second quarter of 2025 versus the second quarter of 2024, We have narrowed our platform-adjusted EBITDA loss to $54,000 compared to $2.5 million in the year ago and quarter, importantly. The cost savings initiatives that we have implemented in the first half of 2025 should show their full impact in the third quarter and beyond and drive positive results in the fourth quarter. Our long-term objective continues to be an annual EBITDA margin of 25 percent or greater on a sustainable basis. In terms of overall industry dynamics, commercial real estate values continue to show signs of stability. And we continue to believe that we are in a period of long-term opportunity for Caliber, given our experience in complex and distressed transactions. The recent passage of the One Big Beautiful Bill offers Caliber tailwinds, as the Opportunity Zone program that underpins one of our most successful fund strategies was made permanent as part of the tax code. And as investors are seeking to gain access to 100% bonus depreciation vis-a-vis our investment strategies. We expect this legislation will help Caliber drive fundraising results and, combined with the market opportunity to buy real estate at historically attractive prices, drive results for our investor clients. After Caliber's restructuring in May, we are now a more focused company centered around three core verticals, hospitality, multifamily, and multi-tenant industrials. We believe these asset classes offer the greatest opportunity for scalable fee-based growth. We remain opportunistic, a core component of Caliber's culture, and we are seeking to maximize value for our shareholders. Touching on visibility to Caliber's financial performance, we have updated our platform performance financial supplement as of June 30, 2025. As a reminder, the platform supplement excludes consolidated assets to offer a simple and transparent view of our operating business. Calibre's estimated performance allocations, or carried interest as it's sometimes referred to in our industry, were updated, totaling $84.8 million. We first published this carried interest estimate in our 2024 10-K and have worked to help investors understand how including it in a calculation of the company's book value transforms investors' views into Calibre's balance sheet. The supplement is available on our website, and we encourage you to review it and get a better sense of Caliber's estimated net worth or book value that is not reflected in our GAAP financials. I'll continue on with some business updates. In the second quarter, Caliber announced that it entered a development rights agreement with an affiliate of Hyatt Hotels Corporation to develop 15 new Hyatt Studios hotels under the terms of the agreement, Caliber Hospitality Development, will receive exclusive development rights for future development of Hyatt Studios hotels in target market areas within Arizona, Colorado, Nevada, Texas, and Louisiana. As of today, Caliber has placed three sites in escrow to purchase and develop into Hyatt Studios hotels. The first is in Georgetown, Texas, a suburb of the Austin metropolitan area and the fastest growing city of its size for the last three years in the United States. The second site is adjacent to Taiwan Semiconductor, or TSMC's, $165 billion semiconductor fabrication facility in Phoenix, Arizona. The third site is located in Steamboat, Colorado, a highly attractive destination market with significant barriers to entry. We hope to close on these three acquisitions through the end of this year, adding them to the existing sites we own vis-a-vis our Opportunity Zone funds near Scottsdale, Arizona. Beside the prestige and vote of confidence of working with Hyatt, I wanted to discuss the economic benefit of the developments. We believe the first four Hyatt Studios locations will increase Caliber's AUM by approximately $100 million, generating approximately $4 million in one-time fees for Caliber and generating approximately $700,000 on an annualized recurring basis through asset management fees. Our long-term goal will be to either sell the assets to a third-party buyer or harvest performance allocations by doing so, or contribute the assets to our Caliber Hospitality Trust, which could yield Caliber additional revenues holding the assets for long-term cash flow. Fundraising in the second quarter continued to show improvement, driven by strength in our wholesale distribution channel. Managed capital at the end of the second quarter was $498 million, up from $495 million at the end of Q1, and up from $470 million from a year ago. Caliber spent much of the second quarter working to open and launch offerings as well as supplement existing offerings to accommodate a change in our managing broker dealer. This work sets us up for Q3 and Q4 to focus on fundraising instead of product development. In wholesale fundraising, we saw consistent momentum build through the quarter, reflected in increased advisor participation and deeper engagement across our platform. Advisor production steadily increased over the quarter with three firm relationships produced in April, four new relationships in May, and six new relationships in June, a total of 13 new advisors in the second quarter. This growth underscores the expanding reach of our distribution efforts and shows our momentum heading into the second half of 2025. In addition to growing order flows with new advisors, we secured three new selling agreements in the second quarter, representing strategic partners with strong long-term pipeline potential. We remain highly encouraged by the acceleration in advisor engagement and the continued diversification of our capital base toward more wholesale fundraising. Now I'll turn to some material updates on assets we manage and the performance of our managed real estate funds. In the interest of your time, each quarter I touch on what I believe are the most important changes that occurred during and after the quarter's end, but will not attempt to comprehensively discuss every movement and every fund. I believe these updates are critical to our shareholders. Even though as a shareholder of Caliber, you are not an owner in a specific fund or asset, other than to the extent Caliber has cash invested in those assets, you are an owner in the fees they generate and the potential profit sharing of the funds and the assets that we manage, vis-a-vis the carried interest. As shareholders, we are jointly vested in the success of Caliber's investor clients. Caliber's Canyon project is moving along well, We are working with the architect, mechanical, electrical, and plumbing consultants to complete the working drawings. We expect to have working drawings submitted for review in approximately 90 days. From there, we should be able to pull the demolition permit for the interior of the first phase buildings, and we will be performing demolition during the drawing completion phase. Currently, we are reviewing construction financing options. and believe that there is an excellent option for a construction to permanent loan of $56 million on the project. Importantly, the Metro Center Mall transformation, an $800 million redevelopment project, has completed its demolition phase. The development will create an outdoor open-air shopping experience with on-site new residential units. We believe the project will provide significant tailwinds for Canyon, as it's only one step away on the new light rail, or one stop away on the new light rail line that's directly in front of our project. We also anticipate tailwinds for Canyon coming from TSMC, the chip manufacturer, which has recently announced an additional $100 billion investment on top of its initial investment for a total of $165 billion invested in their facility. In addition, last week, Apple has announced a $100 billion investment in the area. This is reported to be part of the largest single infrastructure investment by Apple in U.S. history. Moving to SP10, we have taken meaningful steps to improve SP10's capital structure and ensure long-term success advancing towards vertical construction. The hotel tower interior has been cleared and is ready for vertical improvements to deliver 104 modern apartment units. Permits for both the adaptive reuse tower and a new construction, the 84-unit built to rent, are secured. Our original financing structure involved a three-phase loan with builders' capital. This phased approach introduced inefficiencies due to strict disbursement schedules and overlapping infrastructure needs across the three phases. As a result, we were unable to deploy capital as efficiently as planned, which created a short-term cash flow imbalance in the project. Rather than continue with fragmented funding, we made the decision to consolidate all phases into a single construction loan. This will enable us to treat the project as one cohesive development, improving speed, coordination, and capital access. We've executed a term sheet with a lender that consolidates the prior loans and provides sufficient funding to complete the full 188-unit project. And we believe it should close soon, subject to customary closing processes. Moving up to Encore in Northern Colorado, we are working with several potential lenders on a construction loan, which has taken longer than we expected to conclude. This delay has been indicative of the difficulty faced by real estate developers nationwide recently to obtain financing, specifically debt financing for land and infrastructure. Our goal is to secure a $10 to $15 million facility to be able to replenish the interest reserves for the project and start the improvements to Highway 34. We also intend to secure a $30 million facility for the on-site improvements, and we are working to establish a special improvement district bond financing through our metro district. This process to obtain a bond can take time, and we have met with the town manager and several council members to obtain their support for approval at council. We are also working with several retailers for sales of plots for a gas station and several pad users. Our final construction drawings have been approved. The expected total duration of the construction is six months for Highway 34 and 14 months for the on-site improvements and property sales are projected to begin at the end of 2026 once substantial construction is completed, presuming we obtain financing in a reasonable period of time. Moving on to Caliber's Pure Pickleball and Padel project at Riverwalk in Scottsdale. We're building a state-of-the-art pickleball and padel facility, including 50 courts with some available for daily open play, as well as large tournaments, a clubhouse, a fitness center that is sponsored by Honor Health. We have recently concluded a 10-year agreement with a very large and well-known food services company to be the exclusive food and beverage provider for Pure. Also as part of the agreement, the company has agreed to contribute $2 million towards the project's build-out. We believe this partnership will generate significant one-time and recurring revenues for Caliber over the course of the next 10 years. The project has received design review board approval from the Salt River Pima Maricopa Indian Community Planning Department. And the next step is to have final construction documents approved to seek a building permit. Groundbreaking will occur shortly after the permit is received. Moving on to the opportunity zone investment front, In the second quarter, Fund 1 refinanced the Doubletree by Hilton Hotel in Tucson at the Convention Center. This was Caliber's first transaction with the lending team at Citibank, and we hope to continue to build the relationship for future financing opportunities. The financing released some cash-out proceeds, which we reinvested across the portfolio. Both Opportunity Zone funds are expected to benefit from the Opportunity Zone permanence as a result of the new BBB. We expect that as the program continues to gain capital, it will be directed towards the designated opportunity zones, and those investments may offer a better-than-market-rate level of appreciation for our existing projects. In terms of the Caliber Hospitality Trust, the holiday in Newport News is beginning to show meaningful signs of stabilization as we head into the second half of the year. Efforts at enhanced cost controls and more targeted revenue strategies have driven monthly improvements. More importantly, key developments in our group base are expected to significantly strengthen the performance over the next several months of the hotel. We finalized an agreement with the 138th Fighter Wing, a key government group that began arriving on June 26th and will remain through October 1st. This stay aligns with peak season and will materially support ADR and REVPAR through the third quarter of 2025. Looking ahead, we are forecasting a strong third quarter with expectations to exceed budgeted room revenue driven by this high-impact group, continued momentum in social, military, education, religious and fraternal groups, or SMRF groups, and local negotiated rates, or L&R segments, and a more disciplined approach to revenue management. As a result, our current forecast anticipates an increase in revenue and gross operating profit compared to our prior projections. Despite the challenging start to 2025, the most difficult since the onset of COVID in 2020, we believe the hotel may finish the year with gross operating profit close to 2024 levels. Also, Caliber's management team is in active discussions with the current lender associated with the Holiday Inn Newport News to allow for a potential refinance of the existing loans. Other properties inside of the CHT portfolio, which is concentrated in the southwestern United States, are seeing traditional extreme summer heat, As it relates to Arizona, where we're based, which consistently drives some seasonal softness in demand. This annual pattern impacts both occupancy and ADR, which in turn leads to decreased profitability during the summer months. As cooler weather returns, we expect a rebound in performance and improved profitability across the portfolio. To that effect, we continue to target new acquisitions for CHT, and we are looking forward to announcing those acquisitions when the prospects of closing are firm. Simultaneously with the filing of our 10Q, we plan on filing a shelf registration with an at-the-market offer or an ATM. We do not have any plans to offer shares right now, but as part of a good corporate governance, we believe that it's good to have an ATM in place should we ever need it. This would allow Caliber to raise capital incrementally and opportunistically and not in a large transaction in order to fund the future growth initiatives that we have, pay down debt, or simply have a stronger balance sheet. Overall, I'm pleased with the second quarter and excited for our continued positive momentum in the second half of the year. With that, I'll turn the call over to Jade, who will cover our platform financial results and provide more insights into Caliber's business performance.