CaliberCos Inc.

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Caliber Fourth 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 a question, again, press the star one. I would now like to turn the conference over to Ilya Grasovsky, Vice President, Investor Relations and Corporate Development. You may begin.

Ilya Grasovsky Thank you. Good afternoon, everyone. Welcome to Caliber's fourth quarter and year-end 2025 Financial Results Conference call. With me today are Chris Laughlin, Chief Executive Officer and Co-Founder, and Jay Leong, 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 anticipates 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. Good afternoon, everyone. I've structured my commentary today starting with an update on our strategic expansion into digital assets and blockchain, and then moving to some comments on Caliber's financial position, then on to our private equity and real estate platform and the related project activity, and finally ending with our outlook for 2026. In the third quarter, Caliber expanded our business into digital assets, starting with the launch of our Digital Asset Treasury, or DAT, based on Chainlink's LINK token. The DAT offered an attractive starting point to enter this broader line of business, and I'm happy to share that Caliber sees follow-on opportunity to apply Chainlink's technology and participate in the rapidly maturing industry of private asset tokenization, specifically real estate fund tokenization. Taken together, I will refer to this in the future as digital asset technologies. During the fourth quarter, we made progress on this expansion by advancing projects to tokenize two specific real estate funds, our investment in the largest pickleball facility in North America, Pure Pickleball in Padel, and our investments in the development of 15 Hyatt Studios hotels. We believe that tokenization of real estate is a very natural step in the evolution of real estate investing. with the potential to improve liquidity, enhance transparency and investor reporting, and expand the speed and efficiency of capital formation for projects. For example, Caliber operates Opportunity Zone funds. These investments require a minimum of 10 to 13 years of illiquidity. If tokenized, investors in the funds may gain greater visibility to their asset values and the performance of those assets, and may gain the ability to either borrow again their fund investment for enhanced personal liquidity or sell their fund investment to a new party for exit liquidity. This is an exciting evolution in a private real estate investment industry. While digital asset technologies remain an emerging area, we are encouraged by the early progress we have made in the space and believe it can become an important extension of our platform over the long term. Turning to financial visibility. As we discussed in our earnings release in 2025, it was impacted by delays in capital markets activities, which affected the timing of project financings and the recognition of related fees. In simple terms, Caliber has built a pipeline of projects that include contractual rights to revenue, which are realized when key capital markets activities, primarily construction financing and fundraising milestones, are completed. While we expected several closings in the fourth quarter, many shifted into 2026. Importantly, these delays did not reduce the underlying value of our revenue pipeline. Instead, they shifted the timing of revenue realization. As we move into 2026, our focus on executing these financings and converting our existing pipeline into realized revenue. We've updated our platform performance supplement through December 31st, 2025, which provides investors with a clear view of our operating business. This supplement excludes consolidated assets and focuses on the portion of our platform that directly drives shareholder value. At year end, our estimated performance allocations totaled $104 million, up from $90.5 million in the prior quarter, reflecting continued progress across the portfolio. I would like to point out that some alternative asset managers, which may have a business model similar to Calipers, may utilize investment company accounting or fair value-based rules, while Caliber follows operating company or historical cost-based accounting rules. Our team has begun analyzing the difference in these methodologies as a way to enhance investor visibility to Caliber's business and included some of that analysis in our 10-K filing. The results show that if Caliber had been utilizing investment company accounting rules in 2025, we estimate we would have recorded an unrealized gain in the range of $10 to $15 million. The full supplement is available on our website, and we encourage all shareholders to review it. Turning to fundraising, managed capital reached $517 million at year end, up from $506 million in the third quarter and $492.5 million a year ago. Our wholesale distribution channel expanded in 2025, and we believe it positions us well for continued growth in 2026. We added a total of 19 new selling group relationships in 2025, many of which have made their first investments. We hope to expand these key relationships in 2026. Calibre's wholesale focus for 2026 is to reach 50 high-quality producing relationships, which we believe allows the company to more than meet its objectives. We have heard from advisors that we are engaging with that Calibre's focus on quality, not quantity, is a refreshing change as compared to similar issuers. We remain focused on investing in hospitality, multifamily, and multi-tenant industrial real estate, which we believe offers Caliber's investor clients the best opportunities in the current market environment. Now we'll turn to updates on assets we manage and the performance of our managed real estate funds. These updates are important because our revenue is directly tied to the progress of these projects, specifically as they reach financing and development milestones. In the interest of your time each quarter, I touch on what I believe are the most important changes that occur during and after the quarter's end, but will not attempt to comprehensively discuss every movement and every fund. Starting with Hyatt Studios, our Hyatt Studios developments continued to progress as planned, with multiple projects advancing through pre-development, These assets are designed to transition into long-term ownership within Caliber Hospitality Trust, which we expect will exercise an option agreement to acquire the assets once built and stabilized, offering Hyatt Studios investors a defined exit and CHT investors a proprietary pipeline of new income-producing hotels. Our first four projects are well underway, and we will share significant milestones as they are completed. Our Pure Pickleball and Paddle Project at Riverwalk in Scottsdale, Arizona, will deliver a world-class pickleball and paddle facility featuring 50 courts, a full-service clubhouse, and a fitness center sponsored by Honor Health. Following the approval of Pure's building permits in late February 2026, Pure continues to advance towards shovel-ready status. The focus now is on finalizing construction financing and rounding out the overall capital structure, which is actively in progress. As part of the process of obtaining financing, the project recently completed a third-party market study, which reaffirmed the business case to proceed to construction. Turning to Canyon, our large-scale mixed-use project in North Phoenix, in the TSMC and Apple Fab Development Corridor. During the fourth quarter, we made meaningful progress on design and site readiness, including the completion of interior demolition and advancement of construction plans, The HUD financing process continues, and we are working towards closing construction financing and breaking ground later in 2026. At Encore, we continue to advance construction site development and planning and commercial activity, including the ongoing discussions with national retailers for sales or leasing. Project progress remains tied to financing and infrastructure milestones. In terms of Caliber's primary hotel investment vehicle, the Caliber Hospitality Trust, we continue to work on refinancing several of the hotels in the CHT portfolio and using the capital for improvements to the properties to grow their NOI. Also in February 2026, we announced the sale of the Holiday Inn Ocotillo in the Phoenix Chandler Submarket for $13 million. as part of our repositioning strategy with the goal to utilize the resulting capital to assist CHT's growth plans. We acquired the Holiday in Ocotillo prior to COVID, navigated through one of the most disruptive periods in the history of the hospitality industry, and exited the investment at a time we are seeing better uses of capital. We're continuing to advance a strong pipeline of acquisition opportunities for CHT, including both cash transactions and tax-deferred portfolio acquisitions. and we look forward to announcing these acquisitions once closing timelines are firmly established. Overall, 2025 was a year of repositioning for Caliber. While capital markets delays impacted the timing of revenue, our underlying platform continued to advance across our projects, our fundraising capabilities, and our expansion into digital assets. As we enter into 2026, our focus is on execution of the business plan we have made shareholders aware of. We expect growth to be driven by three primary factors. The first, the closing of project-level financings across our existing portfolio. The second, continued capital formation through fundraising. And the third, opportunities for new lines of revenue and cost savings with the linked at the tokenization of our real estate assets and Caliber's overarching digital asset strategy. Taking together, these activities are expected to convert our existing pipeline into realized revenue and to deliver, through Caliber, a unique dual-sided platform for investors to gain exposure to both the ongoing recovery in commercial real estate and the exploding growth of digital asset technologies. I'm pleased to share with today's earnings release that Caliber has issued its first forward-looking guidance as a public company, offering an expected range of revenues in 2026. of 18 to 22 million, and the guidance that management believes that we are positioned to achieve adjusted EBITDA profitability and positive net operating income in 2026.