CMCT(US:CMCT)2022-11-13 16:00Real Estate Portfolio - As of September 30, 2022, the real estate portfolio consisted of 19 assets, with 13 office properties totaling approximately 1.3 million rentable square feet and an occupancy rate of 83.2%[211] - The company is focused on acquiring assets in Qualified Communities, which have high barriers to entry, high population density, and positive population trends[217] - The company regularly evaluates its portfolio and may dispose of assets that do not fit its strategy, reinvesting proceeds into more suitable assets[216] - The company believes that the critical mass of redevelopment in targeted areas enhances the value of real estate assets[214] - The company has four development sites, with one currently used as a parking lot[211] Financial Performance - Total revenues for the three months ended September 30, 2022, were $24.85 million, a 2.5% increase from $24.25 million in the same period in 2021[234] - Total expenses increased by 13.9% to $24.69 million for the three months ended September 30, 2022, compared to $21.68 million in 2021[234] - The net loss for the three months ended September 30, 2022, was $(232,000), a decrease of $1.86 million compared to a net income of $1.62 million in 2021[234] - Funds from operations (FFO) attributable to common stockholders were $(6.59 million) for the three months ended September 30, 2022, a decrease of $8.4 million from $1.84 million in 2021[240] - Total revenues for the nine months ended September 30, 2022, were $76.038 million, an increase of $10.237 million or 15.6% compared to $65.801 million for the same period in 2021[260] - Total expenses for the nine months ended September 30, 2022, were $70.398 million, an increase of $5.393 million or 8.3% compared to $65.005 million for the same period in 2021[260] - Net income increased to $5.0 million for the nine months ended September 30, 2022, compared to a net loss of $1.5 million for the same period in 2021, an increase of $6.521 million[260] Revenue Breakdown - Office revenue increased to $14.0 million, or by 8.0%, for the three months ended September 30, 2022, compared to $12.998 million for the same period in 2021[244] - Hotel revenue increased to $8.5 million, or by 54.4%, for the three months ended September 30, 2022, compared to $5.5 million for the same period in 2021[245] - Lending revenue decreased to $2.4 million, or by 59.2%, for the three months ended September 30, 2022, compared to $5.8 million for the same period in 2021[246] - Office revenue increased to $42.2 million, a 5.9% increase compared to $39.9 million for the same period in 2021[266] - Hotel revenue surged to $25.8 million, representing a 138.4% increase from $10.8 million in the prior year, driven by higher occupancy and average daily rates[267][268] - Lending revenue decreased to $8.0 million, down 47.1% from $15.1 million in the previous year, primarily due to lower loan sale volume and market premiums[269] Expenses Overview - Office expenses increased to $7.3 million, or by 33.5%, for the three months ended September 30, 2022, compared to $5.5 million for the same period in 2021[248] - Hotel expenses increased to $6.1 million, or by 32.1%, for the three months ended September 30, 2022, compared to $4.6 million for the same period in 2021[249] - General and administrative expenses increased to $1.4 million for the three months ended September 30, 2022, compared to $753,000 for the same period in 2021[255] - Office expenses rose to $20.0 million, a 17.5% increase from $17.0 million in the prior year, mainly due to higher operating costs[270] - Hotel expenses increased to $17.8 million, a 65.4% rise from $10.8 million in the previous year, attributed to increased occupancy[271] - Lending expenses grew to $3.4 million, a 9.6% increase from $3.1 million in the prior year, driven by higher salary expenses and provisions for loan losses[272] Financing and Capital Structure - The company may finance future activities through offerings of common stock, preferred stock, credit facilities, term loans, and cash flows from operations[221] - As of September 30, 2022, the outstanding balance under the 2018 Revolving Credit Facility was $85.0 million, with a variable interest rate of 4.33%[286][291] - The Company has a mortgage loan agreement with an outstanding balance of $97.1 million as of September 30, 2022[290] - The Company executed a one-year extension of the 2018 Revolving Credit Facility, extending its maturity to October 2023[293] - The Company expects to pay dividends on Series A1 Preferred Stock at an annual rate of 6.0%, equivalent to $0.3750 per share per quarter[301] - The outstanding balance of SBA 7(a) loan-backed notes was $2.7 million as of September 30, 2022[294] - The Company is actively evaluating options regarding the redemption of Series L Preferred Stock, totaling $83.7 million as of September 30, 2022[286] Market and Operational Insights - The hotel property had a RevPAR of $125.64 for the nine months ended September 30, 2022[211] - The hotel in Sacramento, California reported an occupancy rate of 73.5% for the nine months ended September 30, 2022, up from 48.2% in 2021, with an ADR of $171.05 compared to $128.06[227] - The company anticipates expiring cash rents of 22,033 square feet at a rate of $52.69 per square foot for the quarter ending September 30, 2023[223] - Kaiser Foundation Health Plan accounted for 29.5% of the company's annualized rental income for the three months ended September 30, 2022[233] - The company plans to increase efforts in originating real estate collateralized loans in industries where it has had positive experiences, including convenience stores and RV parks[232] Cash Flow and Liquidity - Net cash provided by operating activities increased by $14.4 million compared to the same period in 2021, primarily due to higher net income and proceeds from loan sales[281] - Net cash used in financing activities decreased by $14.2 million to $11.5 million, influenced by net proceeds from debt and preferred stock issuance[283] - Outstanding commitments to fund loans were $11.5 million as of September 30, 2022, with government guarantees of 75%[287] Interest Rate Sensitivity - A 50 basis point change in LIBOR would impact the company's annual earnings by approximately $604,000 based on the floating rate debt outstanding as of September 30, 2022[312] - The fair value of the mortgage payable was sensitive to interest rate fluctuations, with rates of 6.28% and 3.22% as of September 30, 2022, and December 31, 2021, respectively[311]