CMCT(US:CMCT)2023-03-31 23:18Financial Data and Key Metrics Changes - The company reported a net loss attributable to common stockholders of $8.9 million in Q4 2022, compared to a loss of $4.3 million in Q4 2021, primarily due to preferred stock redemption costs of $7.9 million [19] - Core FFO was reported at $0.11, with an increase in office NOI from the prior quarter [27] - The company reduced corporate overhead by 28% in 2022, driven by a permanent reduction in the management team [30] Business Segment Data and Key Metrics Changes - The Office segment NOI increased to $6.9 million from $6.6 million in the prior year, driven by a decrease in real estate tax expenses [17] - The Lending division NOI decreased to $1.8 million in Q4 2022, down from $3.6 million in Q4 2021 due to the end of government support for SBA loans [18] - The Hotel segment NOI increased to $3.1 million from $1.8 million, with improved occupancy rising to 72% from 70% [39][61] Market Data and Key Metrics Changes - The company noted that the Oakland submarket saw significant supply growth from 2018 to 2022, but future development pipelines are expected to be below average for top U.S. markets [33] - The company has a significant pipeline of multifamily development opportunities on land already owned, with plans to develop over 1,500 multifamily units [13] Company Strategy and Development Direction - The company is focused on growing the multifamily side of its portfolio to achieve a balance between creative office and multifamily assets [7] - The company plans to co-invest in value-add and development assets to increase diversification and supplement returns [8] - The company aims to target a 6% return on cost for its multifamily acquisitions, with expectations of low teens returns for specific deals [82] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of improving liquidity and balance sheet in a capital-scarce environment [9] - The company expects to renew over 70% of its leases, with only one tenant expiration over 10,000 square feet in 2023 [38] - Management expressed optimism about the multifamily acquisitions, indicating that they are targeting attractive returns even without co-investors [82] Other Important Information - The company closed on a construction loan for the conversion of an office building to luxury multifamily apartments, expected to take about 18 months [37] - The company has approximately $15 million in cash available, plus $28 million on its credit line for future borrowings [54] Q&A Session Summary Question: Can you provide some color on the cap rate on these acquisitions? - The Echo Park deal is stabilized, but rents are significantly below market, targeting a 6% return on cost in the medium term [44] Question: Can you give us some color on the coupons for the assumed debt? - The Channel House mortgage is SOFR plus 336, and Clay is SOFR plus 350, with maturities running through mid-2025 [47] Question: Can you elaborate on your liquidity position as of March 31? - The company has around $15 million in cash and $28 million available on its line [54] Question: Have you run into any rezoning issues with the 1450 Wilshire transition? - No significant issues were encountered; the community was supportive of the transition from office to multifamily [56]