Creative Media & Community Trust Corporation (NASDAQ:CMCT) Q3 2022 Earnings Conference Call November 15, 2022 12:00 PM ET

Company Participants

Stephen Altebrando - VP, Equity Capital Markets

David Thompson - CEO

Shaul Kuba - Director

Barry Berlin - CFO

Conference Call Participants

Gaurav Mehta - EF Hutton

Eric Speron - First Foundation Advisors

Operator

Hello, and welcome to the Creative Media & Community Trust Third Quarter 2022 Earnings Conference Call. [Operator Instructions].

Stephen Altebrando

Good morning, everyone, and thank you for joining us. My name is Steve Altebrando, the portfolio oversight for CMCT. Also on today is David Thompson, our Chief Executive Officer; Shaul Kuba, CIM Co-Founder and CMCT Board member; and Barry Berlin, our Chief Financial Officer.

This call is being webcast, and will be temporarily archived on the Investor Relations section of our website, where you can also find our earnings release and latest investor presentation. Our earnings release also includes reconciliations of non-GAAP financial measures discussed during today's call. During the course of this call, we will make forward-looking statements. These forward-looking statements are based on the beliefs of, assumptions made by and information currently available to us. Our actual results will be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance, and some will prove to be incorrect. Therefore, our actual future results can be expected to differ from our expectations, and those differences may be material. For a more detailed description of potential risks, please refer to our SEC filings, which can be found in the Investor Relations section of our website.

With that, I'll turn the call over to David Thompson.

David Thompson

Thanks, Steve, and thank you, everyone, for joining our call today. Yesterday, we announced our third quarter 2022 earnings. Some highlights from the quarter: First, we had continued strong leasing activity, which is positioning us well for next year; second, we made significant progress on our value-add and development pipeline; third, we took steps to improve our liquidity and balance sheet, and this is extremely important in the current rising interest rate environment where we expect future acquisition opportunities; and fourth, we accretively deployed capital through both common and preferred share repurchases.

Our core FFO per share was negative $0.07 in the third quarter. While we completed a significant amount of new leases this year, and have a strong lease pipeline, we will not see the full benefit until next year. Most notably, this includes our lease signed in August with the Rolls-Royce dealership at our Beverly Hills property, which will start generating revenue in 2023. Trends at our One Hotel continued to improve on a year-over-year basis, and the outlook for 2023 looks strong based on the pickup in group bookings. The third quarter is typically a seasonally slower quarter for the hotel. And in our lending business, we had a slowdown in originations in the quarter due to, among other things, the reduced volume of commercial real estate transactions market-wide.