Creative Media & Community Trust Corporation Reports 2022 Third Quarter Results

DALLAS–()–Creative Media & Community Trust Corporation (NASDAQ: CMCT and TASE: CMCT-L) (“we”, “our”, “CMCT”, or the “Company”) today reported operating results for the three and nine months ended September 30, 2022.

Third Quarter 2022 Highlights

Real Estate Portfolio

  • Stabilized office portfolio(1) was 86.5% leased.
  • Executed 58,666 square feet of leases with terms longer than 12 months.
  • Purchased an Austin, Texas property for $1.9 million. We are currently working on multifamily pre-development on this and an already owned adjacent site.

Financial Results

  • Repurchased $4.4 million of common stock at an average price of $7.10 per share.
  • Repurchased $66.7 million of Series L Preferred Stock at approximately 96.6% of stated value.
  • Net loss attributable to common stockholders of $11.7 million, or $0.50 per diluted share.
  • Funds from operations (“FFO”) attributable to common stockholders(3) was $(6.6) million, or $(0.28) per diluted share.
  • Core FFO attributable to common stockholders(4) was $(1.5) million, or $(0.07) per diluted share.

Management Commentary

“We had another quarter of robust leasing activity and continue to make progress on our multifamily value-add and development pipeline,” said David Thompson, Chief Executive Officer of Creative Media & Community Trust Corporation. “We executed an approximately 18,000 square foot lease for the retail space at our Beverly Hills property in the quarter – we expect to start recognizing revenue on this lease during the first half of 2023.

“CMCT has an attractive pipeline of multifamily development opportunities. We plan to start converting 4750 Wilshire Boulevard’s unleased space into luxury multifamily units by early 2023 and, in connection with the project, anticipate closing on equity contributions from coinvestors and a mortgage on the property at about the same time. We intend to leverage our distribution and development capabilities to execute on our pipeline using an asset-light approach, where we raise third party capital on an asset level basis, maintain a minority interest and earn a percentage of the profits. We believe this asset light approach is a compelling model for the Company that will contribute to strong returns on invested capital.

“We also took steps to improve our balance sheet and liquidity which we believe will position us to take advantage of potential market opportunities. We saw an increase in our preferred capital raising activity and expect to refinance our credit facility in the fourth quarter. In addition, we repurchased 621,088 shares of common stock in the quarter and repurchased $66.7 million of Series L Preferred Stock at a 3.4% discount to stated value.”

Third Quarter 2022 Results

Real Estate Portfolio

As of September 30, 2022, our real estate portfolio consisted of 19 assets, all of which were fee-simple properties, including one office property which the Company has an approximate 44% ownership interest through its investment in an unconsolidated joint venture. The portfolio included 13 office properties and four development sites (one being used as a parking lot), totaling approximately 1.3 million rentable square feet, and one 503-room hotel with an ancillary parking garage.

Financial Results

Net loss attributable to common stockholders was $11.7 million, or $0.50 per diluted share of common stock, for the three months ended September 30, 2022, compared to a net loss attributable to common stockholders of $3.2 million, or $0.14 per diluted share of common stock, for the same period in 2021.

FFO attributable to common stockholders(3) was $(6.6) million, or $(0.28) per diluted share of common stock, for the three months ended September 30, 2022, compared to $1.8 million, or $0.08 per diluted share of common stock, for the same period in 2021. The increase in net loss attributable to common stockholders and decrease in FFO and was primarily attributable to an increase in redeemable preferred stock redemptions of $4.8 million (resulting from amounts recognized in connection with the Series L Repurchase (defined on page 3) during the three months ended September 30, 2022), a decrease in lending segment net operating income of $3.7 million, an increase in redeemable preferred stock dividends declared or accumulated of $1.9 million, a decrease in office segment net operating income of $994,000 and an increase in general and administrative expenses of $600,000. The aforementioned amounts were partially offset by an increase in hotel segment net operating income of $1.5 million, a decrease in asset management fees of $1.3 million and a decrease in provision for income taxes of $759,000.

Core FFO attributable to common stockholders(4) was $(1.5) million, or $(0.07) per diluted share of common stock, for the three months ended September 30, 2022, compared to $2.0 million, or $0.08 per diluted share of common stock, for the same period in 2021. The decrease in Core FFO is attributable to the aforementioned changes in FFO, while not impacted by the increases in redeemable preferred stock redemption as these are excluded from our Core FFO calculation.

Segment Information

Our reportable segments during the three months ended September 30, 2022 and 2021 consisted of two types of commercial real estate properties, namely, office and hotel, as well as a segment for our lending business. Total Segment net operating income (“NOI”)(5) was $10.1 million for the three months ended September 30, 2022, compared to $13.3 million for the same period in 2021.

Office

Same-Store

Same-store(2) office Segment NOI(5) decreased to $6.7 million for the three months ended September 30, 2022, compared to $6.8 million in the same period in 2021, while same-store(1) office Cash NOI(6) excluding lease termination income increased to $7.1 million for the three months ended September 30, 2022, compared to $7.0 million in the same period in 2021. The increase in same-store(1) office Cash NOI(6) excluding lease termination income was primarily due to increased rental revenue at an office property in Austin, Texas as a result of higher rental rates and higher occupancy and an increase in rental revenues at an office property in Los Angeles, California and an office property in Beverly Hills, California, both as a result of increased occupancy. These amounts were partially offset by increased operating expenses at the aforementioned office property in Austin, Texas and at an office property in Oakland, California. The decrease in Same-store(2) office Segment NOI(5) was a result of lease termination income earned during the three months ended September 30, 2021.

At September 30, 2022, the Company’s same-store(2) office portfolio was 83.3% occupied, an increase of 490 basis points year-over-year on a same-store(2) basis, and 86.1% leased, an increase of 820 basis points year-over-year on a same-store(2) basis1. The annualized rent per occupied square foot(7) on a same-store(2) basis was $55.10 at September 30, 2022 compared to $52.50 at September 30, 2021. During the three months ended September 30, 2022, the Company executed 52,285 square feet of leases with terms longer than 12 months at our same-store(2) office portfolio.

______________________

1 We are no longer classifying approximately 110,000 square feet of vacant space at its property at 4750 Wilshire Boulevard in Los Angeles, California as rentable office square footage as of September 30, 2022 in connection with the planned conversion of that space from rentable office space to multifamily units.

Total

Office Segment NOI(5) decreased to $6.5 million for the three months ended September 30, 2022, from $7.5 million for the same period in 2021. The decrease is primarily due to a decrease in non-same-store(2) office Segment NOI(5) of $877,000. This included a loss from our unconsolidated entity (acquired in February 2022) included in non-same-store office Segment NOI of $204,000 for the three months ended September 30, 2022, primarily due to increases in the unconsolidated joint venture’s administrative expenses as well as expenses related to the unconsolidated joint venture’s mortgage debt origination.

Hotel

Hotel Segment NOI(5) increased to $2.4 million for the three months ended September 30, 2022, from $877,000 for the same period in 2021, due to an increase in occupancy and average daily rate as a result of the hospitality industry continuing to recover from the impact of COVID-19.

 

 

Three Months Ended September 30,

 

 

2022

 

2021

Occupancy

 

 

73.7

%

 

 

66.6

%

Average daily rate(a)

 

$

164.33

 

 

$

137.29

 

Revenue per available room(b)

 

$

121.03

 

 

$

91.46

 

______________________

(a)

Calculated as trailing 3-month room revenue divided by the number of rooms occupied.

(b)

Calculated as trailing 3-month room revenue divided by the number of available rooms.

Lending

Our lending segment primarily consists of our SBA 7(a) lending platform, which is a national lender that primarily originates loans to small businesses in the hospitality industry. Lending Segment NOI(5) was $1.2 million for the three months ended September 30, 2022, compared to $4.9 million for the same period in 2021. The decrease is primarily due to lower premium income as a result of lower loan sale volume and a reduction in the market premium achieved during the three months ended September 30, 2022, compared to the three months ended September 30, 2021. We expect lending revenue to be lower materially for the fourth quarter of 2022, when compared to the fourth quarter of 2021 because of lower loan origination volume compared to 2021, a year when the SBA temporarily increased guaranteed percentages for SBA 7(a) loan originations.

Debt and Equity

In May 2022, CMCT’s Board of Directors authorized a repurchase program of up to $10 million of the Company’s common stock (the “SRP”). During the three months ended September 30, 2022, CMCT repurchased 621,088 shares at an average price of $7.10 per share. As of September 30, 2022, CMCT has made repurchases totaling $4.7 million in aggregate under the SRP.

On September 15, 2022, CMCT repurchased 2,435,284 shares of its Series L Preferred Stock in a privately negotiated transaction (the “Series L Repurchase”). The shares were repurchased at a purchase price of $27.40 per share (a 3.4% discount to the stated value of $28.37) plus $1.12 per share of accrued and unpaid dividends (or $2.7 million in the aggregate). The total cost to complete the Series L Repurchase, including transactions costs of $700,000, was $70.1 million. In connection with the Series L Repurchase, the Company recognized redeemable preferred stock redemptions of $4.8 million on its consolidated statement of operations for the three and nine months ended September 30, 2022.

During the three months ended September 30, 2022, we issued 2,667,001 shares of Series A1 Preferred Stock for aggregate net proceeds of $57.4 million. Net proceeds represent gross proceeds offset by costs specifically identifiable to the offering, such as commissions, dealer manager fees and other offering fees and expenses. Additionally, during the three months ended September 30, 2022, we had net incremental borrowings of $10.0 million on our revolving credit facility.

In addition, thus far in the fourth quarter of 2022, we have issued another 2,027,305 shares of Series A1 Preferred stock for aggregate net proceeds of approximately $46.5 million.

Dividends

On September 22, 2022, we declared a quarterly cash dividend of $0.0850 per share of our common stock, which was paid on October 17, 2022.

On September 22, 2022, we declared a quarterly cash dividend of $0.34375 per share of our Series A Preferred Stock for the fourth quarter of 2022. The dividend will be payable as follows: $0.114583 per share to be paid on November 15, 2022 to Series A Preferred Stockholders of record on November 5, 2022; $0.114583 per share to be paid on December 15, 2022 to Series A Preferred Stockholders of record on December 5, 2022; and $0.114583 per share to be paid on January 17, 2023 to Series A Preferred Stockholders of record on January 5, 2023.

On September 22, 2022, we declared a quarterly cash dividend of $0.375 per share of our Series A1 Preferred Stock for the fourth quarter of 2022. The dividend will be payable as follows: $0.125 per share to be paid on November 15 , 2022 to Series A1 Preferred Stockholders of record on November 5, 2022; $0.125 per share to be paid on December 15, 2022 to Series A1 Preferred Stockholders of record on December 5, 2022; and $0.125 per share to be paid on January 17, 2023 to Series A1 Preferred Stockholders of record on January 5, 2023. For shares of Series A1 Preferred stock issued during the fourth quarter of 2022, the dividend will be prorated from the date of issuance, and the monthly dividend payments will reflect such proration, as applicable.

On September 22, 2022, we declared a quarterly cash dividend of $0.353125 per share of our Series D Preferred Stock for the fourth quarter of 2022. The dividend will be payable as follows: $0.117708 per share to be paid on November 15, 2022 to Series D Preferred Stockholders of record on November 5, 2022; $0.117708 per share to be paid on December 15, 2022 to Series D Preferred Stockholders of record on December 5, 2022; and $0.117708 per share to be paid on January 17, 2023 to Series D Preferred Stockholders of record on January 5, 2023.

Acquisitions

In July 2022, CMCT acquired 1007 E 7th Street in Austin, Texas property for $1.9 million. The property is located on a land site of approximately 7,450 square feet and is adjacent to 1021 E 7th Street, an office building that CMCT acquired in 2020. CMCT is actively working on pre-development plans for a future multifamily development across both sites. In August 2022, CMCT acquired 3109 S Western Avenue in Jefferson Park, Los Angeles property for $700,000. CMCT intends to redevelop approximately seven commercial units totaling 5,635 rentable square feet and six parking stalls starting in 2024.

During the first half of 2022, CMCT also acquired 3101 S Western in Jefferson Park, Los Angeles for $2.3 million (CMCT intends to entitle the property and develop approximately 40 residential units starting in 2023) and 3022 S Western, an adjacent site, for $5.7 million (CMCT intends to entitle the property and develop 119 residential units starting in 2024).

About the Data

Descriptions of certain performance measures, including Segment NOI, Cash NOI, FFO attributable to common stockholders, and Core FFO are provided below. Refer to the subsequent tables for reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure.

(1)

Stabilized office portfolio: represents office properties where occupancy was not impacted by a redevelopment or repositioning during the period.

 

(2)

Same-store properties: are properties that we have owned and operated in a consistent manner and reported in our consolidated results during the entire span of the periods being reported. We excluded from our same-store property set this quarter any properties (i) acquired on or after July 1, 2021; (ii) sold or otherwise removed from our consolidated financial statements on or before September 30, 2022; or (iii) that underwent a major repositioning project we believed significantly affected its results at any point during the period commencing on July 1, 2021 and ending on September 30, 2022. When determining our same-store properties as of September 30, 2022, one property was excluded pursuant to (i) and (iii) above and no properties were excluded pursuant to (ii) above.

 

(3)

FFO attributable to common stockholders: represents net income (loss) attributable to common stockholders, computed in accordance with GAAP, which reflects the deduction of redeemable preferred stock dividends accumulated, excluding gain (or loss) from sales of real estate, impairment of real estate, and real estate depreciation and amortization. We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (the “NAREIT”). See ‘Core FFO’ definition below for discussion of the benefits and limitations of FFO as a supplemental measure of operating performance.

 

(4)

Core FFO attributable to common stockholders (“Core FFO”): represents FFO attributable to common stockholders (computed as described above), excluding gain (loss) on early extinguishment of debt, redeemable preferred stock deemed dividends, redeemable preferred stock redemptions, gain (loss) on termination of interest rate swaps, and transaction costs.

 

We believe that FFO is a widely recognized and appropriate measure of the performance of a REIT and that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. In addition, we believe that Core FFO is a useful metric for securities analysts, investors and other interested parties in the evaluation of our Company as it excludes from FFO the effect of certain amounts that we believe are non-recurring, are non-operating in nature as they relate to the manner in which we finance our operations, or transactions outside of the ordinary course of business.

 

Like any metric, FFO and Core FFO should not be used as the only measure of our performance because it excludes depreciation and amortization and captures neither the changes in the value of our real estate properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, and Core FFO excludes amounts incurred in connection with non-recurring special projects, prepaying or defeasing our debt, repurchasing our preferred stock, and adjusting the carrying value of our preferred stock classified in temporary equity to its redemption value, all of which have real economic effect and could materially impact our operating results. Other REITs may not calculate FFO and Core FFO in the same manner as we do, or at all; accordingly, our FFO and Core FFO may not be comparable to the FFOs and Core FFOs of other REITs. Therefore, FFO and Core FFO should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a supplement to or substitute measure for cash flows from operating activities computed in accordance with GAAP. FFO and Core FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends. FFO and Core FFO per share for the year-to-date period may differ from the sum of quarterly FFO and Core FFO per share amounts due to the required method for computing per share amounts for the respective periods. In addition, FFO and Core FFO per share is calculated independently for each component and may not be additive due to rounding.

 

(5)

Segment NOI: for our real estate segments represents rental and other property income and expense reimbursements less property related expenses and excludes non-property income and expenses, interest expense, depreciation and amortization, corporate related general and administrative expenses, gain (loss) on sale of real estate, gain (loss) on early extinguishment of debt, impairment of real estate, transaction costs, and benefit (provision) for income taxes. For our lending segment, Segment NOI represents interest income net of interest expense and general overhead expenses. See ‘Cash NOI’ definition below for discussion of the benefits and limitations of Segment NOI as a supplemental measure of operating performance.

 

(6)

Cash NOI: for our real estate segments, represents Segment NOI adjusted to exclude the effect of the straight lining of rents, acquired above/below market lease amortization and other adjustments required by generally accepted accounting principles (“GAAP”). For our lending segment, there is no distinction between Cash NOI and Segment NOI. We also evaluate the operating performance and financial results of our operating segments using cash basis NOI excluding lease termination income, or “Cash NOI excluding lease termination income.”

 

Segment NOI and Cash NOI are not measures of operating results or cash flows from operating activities as measured by GAAP and should not be considered alternatives to income from continuing operations, or to cash flows as a measure of liquidity, or as an indication of our performance or of our ability to pay dividends. Companies may not calculate Segment NOI or Cash NOI in the same manner. We consider Segment NOI and Cash NOI to be useful performance measures to investors and management because, when compared across periods, they reflect the revenues and expenses directly associated with owning and operating our properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing a perspective not immediately apparent from income from continuing operations. Additionally, we believe that Cash NOI is helpful to investors because it eliminates straight line rent and other non-cash adjustments to revenue and expenses.

 

(7)

Annualized rent per occupied square foot: represents gross monthly base rent under leases commenced as of the specified periods, multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent. Annualized rent for certain office properties includes rent attributable to retail.

FORWARD-LOOKING STATEMENTS

This press release contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), which are intended to be covered by the safe harbors created thereby. Such forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “project,” “target,” “expect,” “intend,” “might,” “believe,” “anticipate,” “estimate,” “could,” “would,” “continue,” “pursue,” “potential,” “forecast,” “seek,” “plan,” or “should,” or “goal” or the negative thereof or other variations or similar words or phrases. Such forward-looking statements include, among others, statements about CMCT’s plans and objectives relating to future growth and outlook. Such forward-looking statements are based on particular assumptions that management of CMCT has made in light of its experience, as well as its perception of expected future developments and other factors that it believes are appropriate under the circumstances. Forward-looking statements are necessarily estimates reflecting the judgment of CMCT’s management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include those associated with (i) the scope, severity and duration of the current pandemic of COVID-19, and actions taken to contain the pandemic or mitigate its impact, (ii) the adverse effect of COVID-19 on the financial condition, results of operations, cash flows and performance of CMCT and its tenants and business partners, the real estate market and the global economy and financial markets, among others, (iii) the timing, form, and operational effects of CMCT’s development activities, (iv) the ability of CMCT to raise in place rents to existing market rents and to maintain or increase occupancy levels, (v) fluctuations in market rents, including as a result of COVID-19, (vi) the effects of inflation and higher interest rates on the operations and profitability of CMCT and (vii) general economic, market and other conditions. Additional important factors that could cause CMCT’s actual results to differ materially from CMCT’s expectations are discussed under the section “Risk Factors” in CMCT’s Annual Report on Form 10-K for the year ended December 31, 2021 and in CMCT’s Quarterly Report on Form 10-Q for the period ended September 30, 2022. The forward-looking statements included herein are based on current expectations and there can be no assurance that these expectations will be attained. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond CMCT’s control. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included herein will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by CMCT or any other person that CMCT’s objectives and plans will be achieved. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made. CMCT does not undertake to update them to reflect changes that occur after the date they are made.

CREATIVE MEDIA & TRUST CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited and in thousands, except share and per share amounts)

 

 

 

September 30, 2022

 

December 31, 2021

ASSETS

 

 

 

 

Investments in real estate, net

 

$

503,790

 

 

$

497,984

 

Investment in unconsolidated entity – at fair value

 

 

12,149

 

 

 

 

Cash and cash equivalents

 

 

14,794

 

 

 

22,311

 

Restricted cash

 

 

12,006

 

 

 

11,340

 

Loans receivable, net

 

 

66,627

 

 

 

73,543

 

Accounts receivable, net

 

 

3,930

 

 

 

3,396

 

Deferred rent receivable and charges, net

 

 

36,408

 

 

 

36,095

 

Other intangible assets, net

 

 

4,665

 

 

 

5,251

 

Loan servicing asset, net and other assets

 

 

11,228

 

 

 

10,946

 

TOTAL ASSETS

 

$

665,597

 

 

$

660,866

 

LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY

 

 

 

 

LIABILITIES:

 

 

 

 

Debt, net

 

$

216,442

 

 

$

201,145

 

Accounts payable and accrued expenses

 

 

24,339

 

 

 

26,751

 

Intangible liabilities, net

 

 

78

 

 

 

237

 

Due to related parties

 

 

3,984

 

 

 

4,541

 

Other liabilities

 

 

19,537

 

 

 

16,861

 

Total liabilities

 

 

264,380

 

 

 

249,535

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

REDEEMABLE PREFERRED STOCK: Series A cumulative redeemable preferred stock, $0.001 par value; 36,000,000 shares authorized; 1,266,400 and 1,265,200 shares issued and outstanding, respectively, as of September 30, 2022 and 1,633,965 and 1,631,965 shares issued and outstanding, respectively, as of December 31, 2021; liquidation preference of $25.00 per share, subject to adjustment

 

 

29,073

 

 

 

37,782

 

EQUITY:

 

 

 

 

Series A cumulative redeemable preferred stock, $0.001 par value; 36,000,000 shares authorized; 7,553,938 and 7,134,335 shares issued and outstanding, respectively, as of September 30, 2022 and 6,492,632 and 6,271,337 shares issued and outstanding, respectively, as of December 31, 2021; liquidation preference of $25.00 per share, subject to adjustment

 

 

178,287

 

 

 

156,431

 

Series A1 cumulative redeemable preferred stock, $0.001 par value; 28,000,000 shares authorized; 2,859,441 shares issued and outstanding as of September 30, 2022 and no shares issued or outstanding as of December 31, 2021; liquidation preference of $25.00 per share, subject to adjustment

 

 

69,490

 

 

 

 

Series D cumulative redeemable preferred stock, $0.001 par value; 27,000,000 shares authorized; 56,857 shares issued and outstanding as of September 30, 2022 and 56,857 shares issued and outstanding as of December 31, 2021; liquidation preference of $25.00 per share, subject to adjustment

 

 

1,396

 

 

 

1,396

 

Series L cumulative redeemable preferred stock, $0.001 par value; 9,000,000 shares authorized; 8,080,740 and 2,951,876 shares issued and outstanding, respectively, as of September 30, 2022 and 8,080,740 and 5,387,160 shares issued and outstanding, respectively, as of December 31, 2021; liquidation preference of $28.37 per share, subject to adjustment

 

 

83,745

 

 

 

152,834

 

Common stock, $0.001 par value; 900,000,000 shares authorized; 22,737,853 shares issued and outstanding as of September 30, 2022 and 23,369,331 shares issued and outstanding as of December 31, 2021.

 

 

23

 

 

 

24

 

Additional paid-in capital

 

 

862,360

 

 

 

866,746

 

Distributions in excess of earnings

 

 

(823,523

)

 

 

(804,227

)

Total stockholders’ equity

 

 

371,778

 

 

 

373,204

 

Noncontrolling interests

 

 

366

 

 

 

345

 

Total equity

 

 

372,144

 

 

 

373,549

 

TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY

 

$

665,597

 

 

$

660,866

 

CREATIVE MEDIA & TRUST CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited and in thousands, except per share amounts)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2022

 

2021

 

2022

 

2021

REVENUES:

 

 

 

 

 

 

 

 

Rental and other property income

 

$

14,194

 

 

$

12,838

 

 

$

42,484

 

 

$

39,496

 

Hotel income

 

 

7,965

 

 

 

5,212

 

 

 

24,476

 

 

 

10,074

 

Interest and other income

 

 

2,694

 

 

 

6,199

 

 

 

9,078

 

 

 

16,231

 

Total Revenues

 

 

24,853

 

 

 

24,249

 

 

 

76,038

 

 

 

65,801

 

EXPENSES:

 

 

 

 

 

 

 

 

Rental and other property operating

 

 

13,334

 

 

 

9,958

 

 

 

37,557

 

 

 

27,363

 

Asset management and other fees to related parties

 

 

916

 

 

 

2,262

 

 

 

2,757

 

 

 

6,781

 

Expense reimbursements to related parties—corporate

 

 

511

 

 

 

533

 

 

 

1,459

 

 

 

1,592

 

Expense reimbursements to related parties—lending segment

 

 

539

 

 

 

55

 

 

 

1,612

 

 

 

1,219

 

Interest

 

 

2,193

 

 

 

2,185

 

 

 

6,766

 

 

 

7,490

 

General and administrative

 

 

1,907

 

 

 

1,625

 

 

 

4,975

 

 

 

5,393

 

Transaction costs

 

 

201

 

 

 

 

 

 

201

 

 

 

 

Depreciation and amortization

 

 

5,093

 

 

 

5,061

 

 

 

15,071

 

 

 

15,167

 

Total Expenses

 

 

24,694

 

 

 

21,679

 

 

 

70,398

 

 

 

65,005

 

(Loss) income from unconsolidated entity

 

 

(204

)

 

 

 

 

 

176

 

 

 

 

(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES

 

 

(45

)

 

 

2,570

 

 

 

5,816

 

 

 

796

 

Provision for income taxes

 

 

187

 

 

 

946

 

 

 

815

 

 

 

2,316

 

NET (LOSS) INCOME

 

 

(232

)

 

 

1,624

 

 

 

5,001

 

 

 

(1,520

)

Net (income) loss attributable to noncontrolling interests

 

 

(5

)

 

 

 

 

 

(19

)

 

 

4

 

NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY

 

 

(237

)

 

 

1,624

 

 

 

4,982

 

 

 

(1,516

)

Redeemable preferred stock dividends declared or accumulated

 

 

(6,584

)

 

 

(4,723

)

 

 

(16,763

)

 

 

(13,810

)

Redeemable preferred stock deemed dividends

 

 

 

 

 

(90

)

 

 

(19

)

 

 

(253

)

Redeemable preferred stock redemptions

 

 

(4,863

)

 

 

(27

)

 

 

(5,044

)

 

 

(53

)

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

 

$

(11,684

)

 

$

(3,216

)

 

$

(16,844

)

 

$

(15,632

)

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE:

 

 

 

 

 

 

 

 

Basic

 

$

(0.50

)

 

$

(0.14

)

 

$

(0.72

)

 

$

(0.88

)

Diluted

 

$

(0.50

)

 

$

(0.14

)

 

$

(0.72

)

 

$

(0.88

)

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:

 

 

 

 

 

 

 

 

Basic

 

 

23,209

 

 

 

23,349

 

 

 

23,303

 

 

 

17,784

 

Diluted

 

 

23,209

 

 

 

23,350

 

 

 

23,303

 

 

 

17,784

 

CREATIVE MEDIA & TRUST CORPORATION AND SUBSIDIARIES

Funds from Operations

(Unaudited and in thousands, except per share amounts)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2022

 

2021

 

2022

 

2021

Numerator:

 

 

 

 

 

 

 

 

Net loss attributable to common stockholders

 

$

(11,684

)

 

$

(3,216

)

 

$

(16,844

)

 

$

(15,632

)

Depreciation and amortization

 

 

5,093

 

 

 

5,061

 

 

 

15,071

 

 

 

15,167

 

FFO attributable to common stockholders

 

$

(6,591

)

 

$

1,845

 

 

$

(1,773

)

 

$

(465

)

Redeemable preferred stock dividends declared on dilutive shares (a)

 

 

(6

)

 

 

 

 

 

(7

)

 

 

 

Diluted FFO attributable to common stockholders

 

$

(6,597

)

 

$

1,845

 

 

$

(1,780

)

 

$

(465

)

Denominator:

 

 

 

 

 

 

 

 

Basic weighted average shares of common stock outstanding

 

 

23,209

 

 

 

23,349

 

 

 

23,303

 

 

 

17,784

 

Effect of dilutive securities—contingently issuable shares (a)

 

 

13

 

 

 

3

 

 

 

5

 

 

 

1

 

Diluted weighted average shares and common stock equivalents outstanding

 

 

23,222

 

 

 

23,352

 

 

 

23,308

 

 

 

17,785

 

FFO attributable to common stockholders per share:

 

 

 

 

 

 

 

 

Basic

 

$

(0.28

)

 

$

0.08

 

 

$

(0.08

)

 

$

(0.03

)

Diluted

 

$

(0.28

)

 

$

0.08

 

 

$

(0.08

)

 

$

(0.03

)

______________________

(a)

For the three and nine months ended September 30, 2022 and 2021, the effect of certain shares of redeemable preferred stock were excluded from the computation of diluted FFO attributable to common stockholders and the diluted weighted average shares and common stock equivalents outstanding as such inclusion would be anti-dilutive.

CREATIVE MEDIA & TRUST CORPORATION AND SUBSIDIARIES

Core Funds from Operations

(Unaudited and in thousands, except per share amounts)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2022

 

2021

 

2022

 

2021

Numerator:

 

 

 

 

 

 

 

 

Net loss attributable to common stockholders

 

$

(11,684

)

 

$

(3,216

)

 

$

(16,844

)

 

$

(15,632

)

Depreciation and amortization

 

 

5,093

 

 

 

5,061

 

 

 

15,071

 

 

 

15,167

 

FFO attributable to common stockholders

 

$

(6,591

)

 

$

1,845

 

 

$

(1,773

)

 

$

(465

)

Redeemable preferred stock redemptions

 

 

4,863

 

 

 

27

 

 

 

5,044

 

 

 

53

 

Redeemable preferred stock deemed dividends

 

 

 

 

 

90

 

 

 

19

 

 

 

253

 

Transaction costs

 

 

201

 

 

 

 

 

 

201

 

 

 

 

Core FFO attributable to common stockholders

 

$

(1,527

)

 

$

1,962

 

 

$

3,491

 

 

$

(159

)

Redeemable preferred stock dividends declared on dilutive shares (a)

 

 

(6

)

 

 

 

 

 

(7

)

 

 

 

Diluted Core FFO attributable to common stockholders

 

$

(1,533

)

 

$

1,962

 

 

$

3,484

 

 

$

(159

)

Denominator:

 

 

 

 

 

 

 

 

Basic weighted average shares of common stock outstanding

 

 

23,209

 

 

 

23,349

 

 

 

23,303

 

 

 

17,784

 

Effect of dilutive securities-contingently issuable shares (a)

 

 

13

 

 

 

3

 

 

 

25

 

 

 

1

 

Diluted weighted average shares and common stock equivalents outstanding

 

 

23,222

 

 

 

23,352

 

 

 

23,328

 

 

 

17,785

 

Core FFO attributable to common stockholders per share:

 

 

 

 

 

 

 

 

Basic

 

$

(0.07

)

 

$

0.08

 

 

$

0.15

 

 

$

(0.01

)

Diluted

 

$

(0.07

)

 

$

0.08

 

 

$

0.15

 

 

$

(0.01

)

______________________

(a)

For the three and nine months ended September 30, 2022 and 2021, the effect of certain shares of redeemable preferred stock were excluded from the computation of diluted Core FFO attributable to common stockholders and the diluted weighted average shares and common stock equivalents outstanding as such inclusion would be anti-dilutive.

CREATIVE MEDIA & TRUST CORPORATION AND SUBSIDIARIES

Reconciliation of Net Operating Income

(Unaudited and in thousands)

 

 

 

Three Months Ended September 30, 2022

 

 

Same-Store

Office

 

Non-Same-

Store Office

 

Total Office

 

Hotel

 

Lending

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash net operating income excluding lease termination income

 

$

7,050

 

 

$

(228

)

 

$

6,822

 

 

$

2,378

 

 

$

1,191

 

$

10,391

 

Cash lease termination income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash net operating income (loss)

 

$

7,050

 

 

$

(228

)

 

$

6,822

 

 

$

2,378

 

 

$

1,191

 

 

$

10,391

 

Deferred rent and amortization of intangible assets, liabilities, and lease inducements

 

 

(382

)

 

 

79

 

 

 

(303

)

 

 

(1

)

 

 

 

 

 

(304

)

Segment net operating income (loss)

 

 

6,668

 

 

 

(149

)

 

 

6,519

 

 

 

2,377

 

 

 

1,191

 

 

 

10,087

 

Interest and other income

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Asset management and other fees to related parties

 

 

 

 

 

 

 

 

 

 

 

 

(916

)

Expense reimbursements to related parties—corporate

 

 

 

 

 

 

 

 

 

 

 

 

(511

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

(2,059

)

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

(1,353

)

Transaction costs

 

 

 

 

 

 

 

 

 

 

 

 

(201

)

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

(5,093

)

Loss before benefit for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

(45

)

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

(187

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

(232

)

Net loss attributable to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

(5

)

Net loss attributable to the Company

 

 

 

 

 

 

 

 

 

 

 

$

(237

)

 

 

Three Months Ended September 30, 2021

 

 

Same-Store

Office

 

Non-Same-

Store Office

 

Total Office

 

Hotel

 

Lending

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash net operating income excluding lease termination income

 

$

6,963

 

 

$

728

 

$

7,691

 

 

$

880

 

 

$

4,869

 

$

13,440

 

Cash lease termination income

 

 

246

 

 

 

 

 

 

246

 

 

 

 

 

 

 

 

 

246

 

Cash net operating income

 

$

7,209

 

 

$

728

 

 

$

7,937

 

 

$

880

 

 

$

4,869

 

 

$

13,686

 

Deferred rent and amortization of intangible assets, liabilities, and lease inducements

 

 

(320

)

 

 

 

 

 

(320

)

 

 

(3

)

 

 

 

 

 

(323

)

Straight line lease termination income

 

 

(104

)

 

 

 

 

 

(104

)

 

 

 

 

 

 

 

 

(104

)

Segment net operating income (loss)

 

 

6,785

 

 

 

728

 

 

 

7,513

 

 

 

877

 

 

 

4,869

 

 

 

13,259

 

Asset management and other fees to related parties

 

 

 

 

 

 

 

 

 

 

 

 

(2,262

)

Expense reimbursements to related parties—corporate

 

 

 

 

 

 

 

 

 

 

 

 

(533

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

(2,080

)

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

(753

)

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

(5,061

)

Income before benefit for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

2,570

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

(946

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

1,624

 

Net income attributable to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to the Company

 

 

 

 

 

 

 

 

 

 

 

$

1,624

 

 

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