Anticipates $0.21 per share in annualized cost
savings
Management intends to recommend a dividend
increase starting in first quarter 2022
CIM Commercial Trust Corporation (NASDAQ: CMCT and TASE: CMCT‑L)
(“we”, “our”, “CMCT”, “CIM Commercial”, or the “Company”) announced
that CIM Group, the manager to CMCT, has agreed to a fee waiver
that is expected to reduce CMCT’s management fee by approximately
55%, resulting in $0.21 per share of annualized cost savings. The
agreement is effective January 1, 2022.
“This new fee structure more closely aligns our manager with the
success of the common stockholders of CIM Commercial,” said David
Thompson, Chief Executive Officer of CIM Commercial Trust.
“Management intends to recommend to the Board that CIM Commercial
use substantially all of the cost savings achieved by the lower
management fee to reward common stockholders through a dividend
increase starting in the first quarter. With the new fee structure,
the company is now well-positioned for growth. We have an
attractive portfolio with a significant same store growth
opportunity. In addition, we will continue to leverage the
resources of CIM Group’s large scale vertically integrated real
asset platform to source and execute on attractive acquisitions to
create value for shareholders.”
CIM Group has agreed to the new management fee structure and
will waive all fees in excess of this new calculation.
New Existing Base Fee 1% of CMCT’s net asset
value attributable to its common stock
Based on the fair value
of RE assets Less than $500 million
1.00%
$500 million to $1 billion
0.95%
$1 billion to $1.5 billion
0.90%
$1.5 billion to $4 billion
0.85%
$4 billion+
0.40%
Incentive Fee In any quarter, 100% of CIM
Commercial’s quarterly core funds from operations (“core FFO”) in
excess of a quarterly threshold equal to 1.75% (the “hurdle rate”)
(i.e., 7.00% on an annualized basis), but less than 2.1875% (i.e.,
8.75% annualized), of CIM Commercial’s average adjusted common
stockholders’ equity (i.e., common stockholders’ equity plus
accumulated depreciation and amortization) for such quarter and 20%
of the amount of the quarterly core FFO, if any, that exceeds
2.1875% (8.75% annualized) of CMCT’s average adjusted common
stockholders’ equity for such quarter. In any quarter, 15% of CIM
Commercial’s quarterly core FFO in excess of a quarterly threshold
equal to 1.75% (i.e., 7.00% on an annualized basis) of CIM
Commercial’s average adjusted common stockholders’ equity (i.e.,
common stockholders’ equity plus accumulated depreciation and
amortization) for such quarter.
Capital Gains (i) 15%
of cumulative aggregate realized capital gains net of aggregate
realized capital losses minus (ii) the aggregate capital gains fees
paid in prior periods. Realized capital gains and realized capital
losses are calculated by subtracting from the sales price of a
property (a) any costs and expenses incurred to sell such property
and (b) the property’s original acquisition price plus any
subsequent, non-reimbursed capital improvements thereon paid for by
CIM Commercial. NA
Annualized Management fee (based on
3Q’21) $4.0 million $9.0 million
Independent Board
Member Option CMCT, at the direction of the independent members
of its Board of Directors, will have a rolling, one-time option to
revert to the existing management fee methodology if the cumulative
fees paid to CIM under the new methodology exceed the cumulative
fees that would have been paid to CIM under the existing
methodology. NA
ABOUT CIM COMMERCIAL TRUST CORPORATION
CIM Commercial Trust is a real estate investment trust that
primarily owns and operates Class A and creative office real assets
in vibrant and improving metropolitan communities throughout the
United States. CIM Commercial Trust, supported by the broad real
estate capabilities of CIM Group, seeks to focus on the
acquisition, ownership, operation and development of cash flowing
creative office, multifamily, retail, parking, infill industrial
and limited service hospitality real assets in communities
qualified by CIM Group. 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 onsite property management capabilities.
(www.cimcommercial.com).
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 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, the
amount of any future common stock dividend increase and estimates
of the savings to be achieved from the reduced fee structure. 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, and
the winding-down or termination of governmental assistance programs
implemented to address the pandemic, (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, and (vi) 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, 2020 filed with the Securities and Exchange Commission (“SEC”)
on March 16, 2021 and amended on April 30, 2021 (the “2020. Form
10-K”). 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,
except as may be required by applicable law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220103005500/en/
For CIM Commercial Trust Corporation Media Relations: Karen
Diehl, Diehl Communications, 310-741-9097
karen@diehlcommunications.com
or Shareholder Relations: Steve Altebrando, 646-652-8473
shareholders@cimcommercial.com
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