CIM Commercial Trust Corporation (NASDAQ & TASE: CMCT)
("we", "our", “CMCT”, or “CIM Commercial Trust”), a real estate
investment trust ("REIT") that primarily acquires, owns, and
operates Class A and creative office assets in vibrant and
improving urban communities throughout the United States, today
reported operating results for the three months ended June 30,
2018.
Second Quarter 2018 Highlights
- Same-store1 office segment and cash net
operating income (“NOI”) increased 8.6% and 4.8%, respectively, for
the second quarter of 2018 from the corresponding period in
2017.
- Annualized rent per occupied square
foot on a same-store basis increased 7.4% to $42.99 as of
June 30, 2018 compared to June 30, 2017; annualized rent
per occupied square foot across all properties was $44.54 as of
June 30, 2018.
- On a same-store basis, the office
portfolio was 94.1% leased as of June 30, 2018.
- During the second quarter of 2018, we
executed 25,898 square feet of leases with terms longer than 12
months, including 19,442 square feet of recurring leases; all of
which were executed at our same-store office portfolio,
representing same-store cash rent growth per square foot of
17.0%.
- Net loss attributable to common
stockholders was $1,876,000, or $0.04 per diluted share, for the
second quarter of 2018.
- Funds from operations (“FFO”)
attributable to common stockholders was $11,449,000, or $0.26 per
diluted share, for the second quarter of 2018.
Management Commentary
Charles E. Garner II, CEO of CMCT, stated, “We again generated
strong same-store NOI growth in the quarter, driven by higher
average rent per square foot.
In addition, our same-store cash rent growth on recurring leases
signed during the second quarter of 2018 was 17.0%. We expect this
increase to benefit NOI and FFO in the future as these new leases
commence.
Our premium rents, NOI growth, high leased percentage, and
strong re-leasing spreads reflect the strength of our platform and
Class A and creative office portfolio, which is concentrated in
high barrier to entry gateway markets. We continue to target 4% to
6% annualized same-store NOI growth through 2022 driven by
contractual rent increases and below market in-place leases rolling
to market. We also have additional growth potential from already
owned development sites.
We are focused on growing our net asset value ("NAV") and cash
flow per share and providing liquidity to shareholders at prices
that reflect our strong prospects. As we have done since our 2014
merger, we will continue to actively manage our portfolio to drive
returns for our shareholders, while further progressing toward a
prudent capital structure that we anticipate will consist of
approximately 45% common equity, based on fair values.
Since the beginning of 2014, we have provided $8.61 per share in
regular dividends, special dividends, and a tender offer made
available to all shareholders2,3. Since the time of our merger in
2014, increases in our NAV per share plus the cumulative amount of
regular and special dividends paid per share have resulted in a
return per share of approximately 41%2,4.”
Financial Highlights
As of June 30, 2018, our real estate portfolio consists of
21 assets, all of which are fee-simple properties. The portfolio
includes 19 office properties (including one parking garage and two
development sites, one of which is being used as a parking lot),
totaling approximately 3.4 million rentable square feet and one
hotel, which has 503 rooms and an ancillary parking garage. We also
operate a lending business.
Second Quarter 2018
Net loss attributable to common stockholders was $1,876,000, or
$0.04 per diluted share of common stock, for the three months ended
June 30, 2018, compared to net income attributable to common
stockholders of $91,291,000, or $1.16 per diluted share of common
stock, for the three months ended June 30, 2017. The decrease
is primarily attributable to a decrease in the gain on sale of real
estate of $116,283,000, a decrease of $3,117,000 in net operating
income of our operating segments, and an increase of $632,000 in
corporate general and administrative expenses, partially offset by
a decrease of $13,100,000 in impairment of real estate, a decrease
of $11,271,000 in transaction costs, a decrease of $3,057,000 in
interest expense, a decrease of $1,575,000 in asset management and
other fees to related parties, and a decrease of $1,436,000 in
depreciation and amortization expense.
FFO attributable to common stockholders was $11,449,000, or
$0.26 per diluted share of common stock, for the three months ended
June 30, 2018, compared to $2,869,000, or $0.04 per diluted
share of common stock, for the three months ended June 30,
2017. The increase in FFO attributable to common stockholders was
primarily attributable to a decrease of $11,271,000 in transaction
costs, a decrease of $3,057,000 in interest expense, and a decrease
of $1,575,000 in asset management and other fees to related
parties, partially offset by $3,152,000 in redeemable preferred
stock dividends accumulated, a decrease of $3,117,000 in net
operating income of our operating segments, and an increase of
$632,000 in corporate general and administrative expenses.
Year to Date 2018
Net loss attributable to common stockholders was $4,902,000, or
$0.11 per diluted share of common stock, for the six months ended
June 30, 2018, compared to net income attributable to common
stockholders of $285,190,000, or $3.50 per diluted share of common
stock, for the six months ended June 30, 2017.
FFO attributable to common stockholders was $21,571,000, or
$0.49 per diluted share of common stock, for the six months ended
June 30, 2018, compared to $26,265,000, or $0.32 per diluted
share of common stock, for the six months ended June 30,
2017.
___________________________
1 Please see Reconciliation of Net Operating Income on page 10
for our definition of "same-store."
2 CMCT is the product of a merger (the “Merger”) between CIM
Urban REIT, LLC (“CIM REIT”), a fund operated by CIM Group, L.P.,
and PMC Commercial Trust in Q1 2014. Represents dividends declared
on our common stock from January 1, 2014 through June 30, 2018.
Excludes a special dividend paid to PMC Commercial Trust’s
shareholders in connection with the Merger, but includes 2014
dividends received by CIM REIT shareholders prior to the Merger and
dividends on convertible preferred stock received by Urban Partners
II, LLC, an affiliate of CIM REIT and CIM Group, L.P., on an as
converted basis, in the Merger. The amounts of regular and special
cash dividends per share are based on the number of shares
outstanding as of the applicable record dates. Past performance is
not a guarantee of future results.
3 The per share equivalent in proceeds from the tender offer is
$2.15, calculated by dividing $210,000,000, the amount used by CMCT
to purchase shares of common stock of CMCT in the tender offer, by
97,676,197, the number of shares of common stock outstanding
immediately prior to such tender offer.
4 The total return is calculated based on (i) NAV growth which
represents the change in NAV from December 31, 2013 (the last
period before the Merger) to December 31, 2017 and (ii) the
aggregate amount of regular and special dividends declared and paid
on our common stock described in Note 2 above. No NAV has been
calculated since December 31, 2017. Please see Net Asset Value on
page 13 for more information on our NAV and the calculation
thereof. Past performance is not a guarantee of future results.
Segment Information
Our reportable segments during the three months ended
June 30, 2018 consist of two types of commercial real estate
properties, namely, office and hotel, as well as a segment for our
lending business. Our reportable segments during the three months
ended June 30, 2017 consist of three types of commercial real
estate properties, namely, office, hotel and multifamily, as well
as a segment for our lending business. Aggregate segment NOI was
$29,352,000 for the three months ended June 30, 2018, compared
to $32,469,000 for the three months ended June 30, 2017.
Office
Same-Store
Same-store office segment NOI increased 8.6% on a GAAP basis and
4.8% on a cash basis. The increase in same-store segment NOI is
primarily due to an increase in revenue at certain of our
California and Washington D.C. properties due to increases in
occupancy and or rental rates and an increase in expense
reimbursements at certain of our California properties and at one
of our Washington, D.C. properties, partially offset by an increase
in operating expenses and other reimbursable expenses at certain of
our California properties and one of our Washington, D.C.
properties and a decrease in lease termination income at one of our
California properties.
At June 30, 2018, the Company’s office portfolio was
94.0% occupied, an increase of 80 basis points year-over-year on a
same-store basis and 94.1% leased, a decrease of 10 basis points
year-over-year on a same store basis. The annualized rent per
occupied square foot on a same store basis was $42.99 at
June 30, 2018 compared to $40.01 at June 30, 2017. For
the three months ended June 30, 2018, the Company executed
19,442 square feet of recurring leases at our same-store office
portfolio, representing same-store cash rent growth per square foot
of 17.0%.
Total
Office segment NOI decreased to $23,863,000 in the three months
ended June 30, 2018, from $25,716,000 in the three months
ended June 30, 2017. Such decrease was primarily attributable
to the sale of five office properties and a parking garage during
the last nine months of 2017, a decrease in lease termination
income at one of our California properties, and an increase in
operating expenses and other reimbursable expenses at certain of
our California properties and at one of our Washington, D.C.
properties, partially offset by an increase due to the acquisition
of two office properties in December 2017 and January 2018 and an
increase in rental revenue and expense reimbursements at certain of
our California and Washington D.C. properties due to increases in
occupancy and or rental rates.
Hotel
Hotel segment NOI was $4,110,000 in the three months ended
June 30, 2018, compared to $3,983,000 in the three months
ended June 30, 2017.
Multifamily
During the three months ended June 30, 2017, we sold three
of our five multifamily properties and sold the remaining two
multifamily properties during the last six months of 2017.
Multifamily segment NOI was $1,742,000 for the three months ended
June 30, 2017.
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 was $1,379,000 in the three months ended June 30,
2018, compared to $1,028,000 in the three months ended
June 30, 2017. The increase is primarily due to an increase in
premium income from the sale of the guaranteed portion of our SBA
7(a) loans, an increase in interest income due to an increase in
the principal balance of our loan portfolio as well as increases in
the prime rate, and higher revenue as a result of the recognition
of accretion for discounts related to increased prepayments on our
loans, partially offset by interest expense that commenced in May
2018 as a result of the issuance of the SBA 7(a) loan-backed notes
and an increase in interest expense from secured borrowings.
Debt and Equity
On May 30, 2018, we completed a securitization of the
unguaranteed portion of certain of our SBA 7(a) loans receivable
with the issuance of $38,200,000 of unguaranteed SBA 7(a)
loan-backed notes. The SBA 7(a) loan-backed notes are
collateralized by the right to receive payments and other
recoveries attributable to the unguaranteed portions of certain of
our SBA 7(a) loans receivable. The SBA 7(a) loan-backed notes
mature on March 20, 2043, with monthly payments due as payments on
the collateralized loans are received. Based on the
anticipated repayments of our collateralized SBA 7(a) loans, we
estimate the weighted average life of the SBA 7(a) loan-backed
notes to be approximately three years. The SBA 7(a)
loan-backed notes bear interest at the lower of the one-month LIBOR
plus 1.40% or the prime rate less 1.08%. We reflect the SBA
7(a) loans receivable as assets on our consolidated balance sheet
and the SBA 7(a) loan-backed notes as debt on our consolidated
balance sheet.
During the three months ended June 30, 2018, we issued
476,462 Series A preferred units, with each Series A preferred unit
consisting of one share of Series A preferred stock and one warrant
to purchase 0.25 shares of our common stock, resulting in net
proceeds of approximately $10,971,000. Net proceeds represent
gross proceeds offset by costs specifically identifiable to the
offering of the Series A preferred units, such as commissions,
dealer manager fees, and other offering fees and expenses.
Dividends
On June 4, 2018, CIM Commercial Trust’s Board of Directors
approved, and we declared, a quarterly cash dividend of $0.125 per
common share. The dividend was paid on June 28, 2018 to
stockholders of record on June 15, 2018.
In addition, the Board of Directors approved, and we declared, a
quarterly cash dividend of $0.34375 per share of CMCT's Series A
preferred stock. For shares of Series A preferred stock issued
during the second quarter of 2018, the dividend was prorated from
the time of issuance. The dividend was paid on July 16, 2018
to stockholders of record on July 5, 2018.
About CMCT
CIM Commercial Trust is a real estate investment trust that
primarily acquires, owns, and operates Class A and creative office
assets in vibrant and improving urban communities throughout the
United States. Its properties are primarily located in Los Angeles,
the San Francisco Bay Area and Washington, D.C. CIM Commercial
Trust is operated by affiliates of CIM Group, L.P., a
vertically-integrated owner and operator of real assets with
multi-disciplinary expertise and in-house research, acquisition,
credit analysis, development, finance, leasing, and asset
management capabilities (www.cimcommercial.com).
FORWARD-LOOKING STATEMENTS
The information set forth herein contains "forward-looking
statements." You can identify these statements by the fact that
they do not relate strictly to historical or current facts or
discuss the business and affairs of CIM Commercial Trust on a
prospective basis. Further, statements that include words such as
"may," "will," "project," "might," "expect," “target,” "believe,"
"anticipate," "intend," "could," "would," "estimate," "continue,"
"pursue," or "should" or the negative or other words or expressions
of similar meaning, may identify forward-looking statements.
CIM Commercial Trust bases these forward-looking statements on
particular assumptions that it 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.
These forward-looking statements are necessarily estimates
reflecting the judgment of CIM Commercial Trust 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 forward-looking statements are subject to risks,
uncertainties and other factors, including those set forth in CIM
Commercial Trust's Annual Report on Form 10-K for the fiscal year
ended December 31, 2017, the Registration Statement on Form S-11
(Reg. No 333-210880) relating to the Series A preferred stock, and
the Registration Statement on Form S-3 (Reg. No, 333-203639)
relating to the sale of common stock by a selling shareholder.
As you read and consider the information herein, you are
cautioned to not place undue reliance on these forward-looking
statements. These statements are not guarantees of performance or
results and speak only as of the date hereof. These forward-looking
statements involve risks, uncertainties and assumptions. In light
of these risks and uncertainties, there can be no assurance that
the results and events contemplated by the forward-looking
statements contained herein will in fact transpire. New factors
emerge from time to time, and it is not possible for CIM Commercial
Trust to predict all of them. Nor can CIM Commercial Trust assess
the impact of each such factor or the extent to which any factor,
or combination of factors may cause results to differ materially
from those contained in any forward-looking statement. CIM
Commercial Trust undertakes no obligation to publicly update or
release any revisions to these forward-looking statements to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events, except as required by
law.
CIM COMMERCIAL TRUST CORPORATION AND
SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited and in thousands, except
share and per share amounts)
June 30, 2018 December 31,
2017 ASSETS Investments in real estate, net $ 1,075,931
$ 957,725 Cash and cash equivalents 91,192 129,310 Restricted cash
22,800 27,008 Loans receivable, net 71,606 81,056 Accounts
receivable, net 9,169 13,627 Deferred rent receivable and charges,
net 86,162 84,748 Other intangible assets, net 11,625 6,381 Other
assets 19,876 36,533 TOTAL ASSETS $ 1,388,361
$ 1,336,388
LIABILITIES, REDEEMABLE PREFERRED STOCK, AND
EQUITY LIABILITIES: Debt, net $ 666,932 $ 630,852 Accounts
payable and accrued expenses 27,391 26,394 Intangible liabilities,
net 3,829 1,070 Due to related parties 9,203 8,814 Other
liabilities 14,529 14,629 Total liabilities 721,884
681,759 COMMITMENTS AND CONTINGENCIES REDEEMABLE
PREFERRED STOCK: Series A, $0.001 par value; 36,000,000 shares
authorized; 1,845,473 and 1,842,353 shares issued and outstanding,
respectively, at June 30, 2018 and 1,225,734 and 1,224,712 shares
issued and outstanding, respectively, at December 31, 2017;
liquidation preference of $25.00 per share, subject to adjustment
42,037 27,924 EQUITY: Series A cumulative redeemable preferred
stock, $0.001 par value; 36,000,000 shares authorized; 308,775 and
307,510 shares issued and outstanding, respectively, at June 30,
2018 and 61,435 and 60,592 shares issued and outstanding,
respectively, at December 31, 2017; liquidation preference of
$25.00 per share, subject to adjustment 7,637 1,508 Series L
cumulative redeemable preferred stock, $0.001 par value; 9,000,000
shares authorized; 8,080,740 shares issued and outstanding at June
30, 2018 and December 31, 2017; liquidation preference of $28.37
per share, subject to adjustment 229,251 229,251 Common stock,
$0.001 par value; 900,000,000 shares authorized; 43,795,073 and
43,784,939 shares issued and outstanding at June 30, 2018 and
December 31, 2017, respectively 44 44 Additional paid-in capital
792,245 792,631 Accumulated other comprehensive income 3,221 1,631
Distributions in excess of earnings (408,797 ) (399,250 ) Total
stockholders' equity 623,601 625,815 Noncontrolling interests 839
890 Total equity 624,440 626,705 TOTAL
LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY $ 1,388,361
$ 1,336,388
CIM COMMERCIAL TRUST CORPORATION AND
SUBSIDIARIES
Consolidated Statements of
Operations
(Unaudited and in thousands, except per
share amounts)
Three Months Ended June
30,
Six Months EndedJune 30, 2018
2017 2018 2017 REVENUES: Rental and
other property income $ 34,900 $ 46,124 $ 68,697 $ 97,183 Hotel
income 10,160 9,832 19,849 19,582 Expense reimbursements 3,351
2,526 4,960 5,556 Interest and other income 3,148 2,817
6,451 5,927 51,559 61,299 99,957
128,248 EXPENSES: Rental and other property operating
20,780 27,249 38,800 50,209 Asset management and other fees to
related parties 6,143 7,863 12,354 16,563 Interest 6,811 9,513
13,444 19,286 General and administrative 1,915 1,647 5,291 3,326
Transaction costs 344 11,615 344 11,628 Depreciation and
amortization 13,325 14,761 26,473 31,992 Impairment of real estate
— 13,100 — 13,100 49,318 85,748
96,706 146,104 Gain on sale of real estate —
116,283 — 304,017 INCOME BEFORE
PROVISION FOR INCOME TAXES 2,241 91,834 3,251 286,161 Provision for
income taxes 292 462 680 854 NET INCOME
1,949 91,372 2,571 285,307 Net income attributable to
noncontrolling interests (12 ) (9 ) (16 ) (14 ) NET INCOME
ATTRIBUTABLE TO THE COMPANY 1,937 91,363 2,555 285,293 Redeemable
preferred stock dividends accumulated (3,152 ) — (6,304 ) —
Redeemable preferred stock dividends declared (662 ) (72 ) (1,155 )
(103 ) Redeemable preferred stock redemptions 1 — 2
— NET (LOSS) INCOME ATTRIBUTABLE TO COMMON
STOCKHOLDERS $ (1,876 ) $ 91,291 $ (4,902 ) $ 285,190
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE:
Basic $ (0.04 ) $ 1.16 $ (0.11 ) $ 3.50 Diluted $
(0.04 ) $ 1.16 $ (0.11 ) $ 3.50 WEIGHTED AVERAGE
SHARES OF COMMON STOCK OUTSTANDING: Basic 43,791 78,871
43,788 81,445 Diluted 43,791 78,871
43,788 81,445
CIM COMMERCIAL TRUST CORPORATION AND
SUBSIDIARIESFunds from Operations(Unaudited and in
thousands, except per share amounts)
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. FFO represents net income (loss) attributable to
common stockholders, computed in accordance with generally accepted
accounting principles ("GAAP"), which reflects the deduction of
redeemable preferred stock dividends accumulated, excluding gains
(or losses) 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").
Like any metric, 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, all of which
have real economic effect and could materially impact our operating
results. Other REITs may not calculate FFO in accordance with the
standards established by the NAREIT; accordingly, our FFO may not
be comparable to the FFOs of other REITs. Therefore, 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 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.
The following table sets forth a reconciliation of net (loss)
income attributable to common stockholders to FFO attributable to
common stockholders:
Three Months Ended June
30,
Six Months EndedJune 30, 2018
2017 2018 2017 Net (loss) income
attributable to common stockholders $ (1,876 ) $ 91,291 $ (4,902 )
$ 285,190 Depreciation and amortization 13,325 14,761 26,473 31,992
Impairment of real estate — 13,100 — 13,100 Gain on sale of
depreciable assets — (116,283 ) — (304,017 ) FFO
attributable to common stockholders $ 11,449 $ 2,869
$ 21,571 $ 26,265 FFO attributable to common
stockholders per diluted share $ 0.26 $ 0.04 $ 0.49
$ 0.32
CIM COMMERCIAL TRUST CORPORATION AND
SUBSIDIARIESEarnings Per Share(Unaudited and in
thousands, except per share amounts)
Earnings per share ("EPS") for the year-to-date period may
differ from the sum of quarterly EPS amounts due to the required
method for computing EPS in the respective periods. In addition,
EPS is calculated independently for each component and may not be
additive due to rounding.
The following table reconciles the numerator and denominator
used in computing our basic and diluted per-share amounts for net
income (loss) attributable to common stockholders for the three
months ended June 30, 2018 and 2017:
Three Months Ended June
30,
Six Months EndedJune 30, 2018
2017 2018 2017 Numerator:
Net (loss) income attributable to common stockholders $
(1,876 ) $ 91,291 $ (4,902 ) $ 285,190 Redeemable preferred stock
dividends declared on dilutive shares — — — —
Numerator for dilutive net (loss) income attributable to common
stockholders $ (1,876 ) $ 91,291 $ (4,902 ) $ 285,190
Denominator: Basic weighted average shares of Common Stock
outstanding 43,791 78,871 43,788 81,445 Effect of dilutive
securities—contingently issuable shares — — —
— Diluted weighted average shares and common stock equivalents
outstanding 43,791 78,871 43,788 81,445
Net
(loss) income attributable to common stockholders per share:
Basic $ (0.04 ) $ 1.16 $ (0.11 ) $ 3.50 Diluted $ (0.04 ) $
1.16 $ (0.11 ) $ 3.50
CIM COMMERCIAL TRUST CORPORATION AND
SUBSIDIARIESReconciliation of Net Operating
Income(Unaudited and in thousands)
We internally evaluate the operating performance and financial
results of our real estate segments based on segment NOI, which is
defined as 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, impairment of real
estate, transaction costs, and provision for income taxes. For our
lending segment, we define NOI as interest income net of interest
expense and general overhead expenses. We also evaluate the
operating performance and financial results of our operating
segments using cash basis NOI, or cash NOI. We define cash NOI
as segment NOI adjusted to exclude the effect of the straight
lining of rents, acquired above/below market lease amortization and
other adjustments required by GAAP.
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.
To facilitate a comparison of our segments and portfolio between
reporting periods, we calculate comparable amounts for a subset of
our segments and portfolio referred to as our “same-store
properties.” Our same-store properties are ones which 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 April 1, 2017; (ii) sold or
otherwise removed from our consolidated financial statements before
June 30, 2018; or (iii) that underwent a major repositioning
project we believed significantly affected its results at any point
during the period commencing on April 1, 2017 and ending on June
30, 2018.
CIM COMMERCIAL TRUST CORPORATION AND
SUBSIDIARIES
Reconciliation of Net Operating Income
(Continued)
(Unaudited and in thousands)
Below is a reconciliation of cash NOI to
segment NOI and net income for the three months ended June 30,
2018 and 2017.
Three Months Ended June 30, 2018
Same-StoreOffice
Non-Same-Store
Office
Total Office
Hotel
Multi-family
Lending Total Cash net operating
income $ 20,888 $ 1,553 $ 22,441 $ 4,113 $ — $ 1,372 $ 27,926
Deferred rent and amortization of intangible assets, liabilities,
and lease inducements 467 955 1,422 (3 ) — — 1,419 Straight line
rent, below-market ground lease and amortization of intangible
assets — — — — — 7 7
Segment net operating income $ 21,355 $ 2,508 $ 23,863 $
4,110 $ — $ 1,379 $ 29,352 Asset management and other fees to
related parties (5,504 ) Interest expense (6,511 ) General and
administrative (1,427 ) Transaction costs (344 ) Depreciation and
amortization (13,325 ) Income before provision for income taxes
2,241 Provision for income taxes (292 ) Net income 1,949 Net income
attributable to noncontrolling interests (12 ) Net income
attributable to the Company $ 1,937
CIM COMMERCIAL TRUST CORPORATION AND
SUBSIDIARIES
Reconciliation of Net Operating Income
(Continued)
(Unaudited and in thousands)
Three Months Ended June 30, 2017
Same-Store
Office
Non-Same-Store
Office
Total Office
Hotel
Multi-family
Lending Total Cash net operating
income $ 19,927 $ 6,272 $ 26,199 $ 3,983 $ 1,900 $ 1,018 $ 33,100
Deferred rent and amortization of intangible assets, liabilities,
and lease inducements 212 91 303 — (20 ) — 283 Straight line rent,
below-market ground lease and amortization of intangible assets —
(312 ) (312 ) — (138 ) 10 (440 ) Lease termination income (474 ) —
(474 ) — — — (474 ) Segment net
operating income $ 19,665 $ 6,051 $ 25,716 $ 3,983 $ 1,742 $ 1,028
$ 32,469 Asset management and other fees to related parties (7,079
) Interest expense (9,568 ) General and administrative (795 )
Transaction costs (11,615 ) Depreciation and amortization (14,761 )
Impairment of real estate (13,100 ) Gain on sale of real estate
116,283 Income before provision for income taxes 91,834
Provision for income taxes (462 ) Net income 91,372 Net income
attributable to noncontrolling interests (9 ) Net income
attributable to the Company $ 91,363
CIM COMMERCIAL TRUST CORPORATION AND
SUBSIDIARIESNet Asset Value(Unaudited and in
thousands)
As of December 31, 2017, we have established an estimated NAV
per share of common stock of $23.96. Neither the Financial Industry
Regulatory Authority nor the Securities and Exchange Commission
provides rules on the methodology we must use to determine our
estimated NAV per share. The determination of estimated NAV
involves a number of subjective assumptions, estimates and
judgments that may not be accurate or complete. We believe there is
no established practice among public REITs for calculating
estimated NAV. Different firms using different property-specific,
general real estate, capital markets, economic and other
assumptions, estimates and judgments could derive an estimated NAV
that is significantly different from our estimated NAV. Thus, other
public REITs’ methodologies used to calculate estimated NAV may
differ materially from ours. Additionally, the estimated NAV does
not give effect to changes in value, investment activities, capital
activities, indebtedness levels, and other various activities
occurring after December 31, 2017 that would have an impact on our
estimated NAV.
The estimated NAV per share of $23.96 was calculated relying in
part on appraisals of our real estate assets and the assets of our
lending segment. We engaged various third party appraisal firms to
perform appraisals of our real estate assets and the assets of our
lending segment as of December 31, 2017. Except for one office
property acquired in December 2017, which was based on the purchase
price (including transaction costs that were capitalized and
assumption of liabilities) negotiated with the unrelated
third-party seller, the fair values of our investments in real
estate were based on appraisals obtained as of December 31, 2017.
The fair values of the assets of our lending segment were based on
an appraisal obtained as of December 31, 2017.
The December 31, 2017 appraisals were performed in accordance
with standards set forth by the American Institute of Certified
Public Accountants. Each of our appraisals were prepared by
personnel who are subject to and in compliance with the code of
professional ethics and the standards of professional conduct set
forth by the certification programs of the professional appraisal
organizations of which they are members.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180809005643/en/
For CIM Commercial Trust CorporationMedia Relations:Bill
Mendel, 212-397-1030bill@mendelcommunications.comorShareholder
Relations:Steve Altebrando, 646-652-8473shareholders@cimcommercial.com
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