CMCT(CMCT) - 2024 Q1 - Quarterly Report

Financial Performance - Total revenues for the three months ended March 31, 2024, were $33.998 million, an increase of 17.6$28.912 million for the same period in 2023[195]. - Net loss for the three months ended March 31, 2024, was $3.905 million, a 48.5$7.576 million in the same period in 2023[195]. - Funds from Operations (FFO) attributable to common stockholders was $(5.921) million for the three months ended March 31, 2024, a decrease of$1.1 million compared to $(4.794) million for the same period in 2023[201]. - Office revenue increased by 8.3$14.611 million for the three months ended March 31, 2024, compared to $13.487 million for the same period in 2023[203]. - Hotel revenue rose to$11.854 million, a 3.2% increase from $11.492 million for the three months ended March 31, 2023[203]. - Multifamily revenue surged to$4.749 million for the three months ended March 31, 2024, compared to $1.223 million for the same period in 2023, reflecting a significant increase due to new property acquisitions[203]. - Lending revenue was$2.640 million for the three months ended March 31, 2024, a slight decrease from $2.710 million for the same period in 2023[203]. Occupancy and Rent Metrics - As of March 31, 2024, net annualized rent per occupied square foot was$56.32, an increase from $54.36 as of March 31, 2023, reflecting a growth of approximately 3.6$211.06 for the three months ended March 31, 2024, compared to $202.02 for the same period in 2023[189]. Asset Management and Strategy - The company targets acquisitions in "Qualified Communities" characterized by high barriers to entry, high population density, and positive population trends, which are expected to enhance asset value[175]. - CIM Group's strategy includes leveraging investor relationships to execute on investment pipelines using an asset-light approach, which is anticipated to contribute to strong returns while reducing risk[172]. - The company intends to dispose of assets that do not fit its strategy over time, evaluating each asset regularly for potential redeployment into higher-return opportunities[173]. - CIM Group's multifamily and creative office assets are located in vibrant communities with significant private investment and public commitment, aiming for greater returns compared to similar assets in other markets[169]. Expenses and Costs - Office expenses rose to$6.9 million, a 3.6% increase from $6.6 million in Q1 2023, driven by higher operating expenses due to increased occupancy[210]. - Hotel expenses increased by 6.1$7.8 million for Q1 2024, compared to $7.3 million in Q1 2023, primarily due to higher wage expenses[211]. - Multifamily expenses surged to$3.4 million for Q1 2024, up from $1.4 million in Q1 2023, reflecting a full quarter of expenses from newly acquired properties[212]. - Interest expense increased by 34.5$8.1 million for Q1 2024, compared to $6.0 million in Q1 2023, attributed to higher principal balances and increased interest rates[225]. Financing and Debt - The company may finance future activities through various methods, including equity offerings, credit facilities, and cash flows from operations[182]. - As of March 31, 2024, the company has outstanding mortgage loan agreements with a total balance of$250.7 million, with maturities ranging from June 7, 2024, to July 1, 2026[236]. - The company refinanced its 2018 revolving credit facility into a new 2022 Credit Facility, which includes a $56.2 million term loan and a revolver allowing borrowing up to$150.0 million, with an outstanding balance of $173.2 million as of May 14, 2024[238]. - As of March 31, 2024, the company was not in compliance with a financial covenant under the 2022 credit facility, which constituted an event of default, but lenders waived this event for the test period ending March 31, 2024[239]. - The company has junior subordinated notes with a principal balance of$27.1 million as of March 31, 2024, with a variable interest rate that resets quarterly[244]. - As of March 31, 2024, 52.6% of the company's debt, amounting to $250.7 million, was fixed rate borrowings, while 47.4$225.5 million[257]. - A 50 basis point change in SOFR would result in an annual impact of approximately $1.1 million on the company's earnings based on the level of floating rate debt outstanding[257]. - The company has one interest rate cap agreement with a notional amount of$87.0 million and a fair value of the net derivative asset of $544,000 as of March 31, 2024[259]. Project Costs - Total costs incurred for the 4750 Wilshire Project reached$17.3 million as of March 31, 2024, with an expected total project cost of approximately $31.0 million[231]. - The Sheraton Grand Hotel renovation is expected to cost approximately$20.9 million, with $1.6 million of pre-construction costs incurred as of March 31, 2024[232]. - The 1910 Sunset JV project is estimated to cost approximately$19.3 million, with total costs of $2.3 million incurred as of March 31, 2024[234]. Joint Ventures - Income from Unconsolidated Joint Ventures in the office segment increased to$117,000 for Q1 2024, compared to a loss of $64,000 in Q1 2023, primarily due to an unrealized gain on real estate[209]. - Loss from Unconsolidated Joint Ventures in the multifamily segment was$443,000 for Q1 2024, down from income of $832,000 in Q1 2023, mainly due to an unrealized loss on real estate[209]. Leasing Activity - During the three months ended March 31, 2024, the company executed leases totaling 36,961 square feet with terms longer than 12 months[179].