Hello, and welcome to the Creative Media & Community Trust Third Quarter 2023 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the call over to Steve Altebrando. Please go ahead.

Hello, everyone, and thank you for joining us. My name is Steve Altebrando, the Portfolio Oversight for CMCT. Also on the call today are David Thompson, our Chief Executive Officer; 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. Our earnings release includes a reconciliation of the 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 other 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 maybe 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.

Thanks, Steve, and thank you, everyone, for joining our call today. Starting off with some highlights of our third quarter, we continue to execute on our strategy to grow the multifamily portion of our portfolio. Our development pipeline made additional progress. Our office lease percentage remained stable. We saw a continued strength at our hotel asset and our liquidity remains strong. First, I'd like to touch on our progress in multifamily. At the end of the third quarter, our overall multifamily occupancy improved to 84.1%, up 20 basis points from the prior quarter. As we've discussed before, we've been focused on growing the multifamily side of our portfolio to achieve more balance between creative office and multifamily assets. We had 696 units to our portfolio earlier this year from the acquisition of two multifamily assets in Oakland and one multifamily property in Los Angeles. Two of those three assets are still in lease-up and the third asset has significant NOI growth opportunity as the in-place rents are substantially below today's market. We believe the continued lease-up of these assets will continue to improve our funds from operations. Turning to our development pipeline. During the quarter, we made significant progress, most notably in Culver City, where we recently received entitlement to redevelop our office building on Washington Boulevard. I'll provide more details on this exciting update in a moment. In our Office Segment, our lease percentage remained stable in the third quarter at 84.3%. We executed about 29,000 square feet of office leases in the quarter, and our office NOI increased by 43% compared to the prior year period. Our third quarter Hotel Segment NOI decreased compared to the prior period. However, year-to-date, hotel NOI increased by 27% from the prior year period, a continued strong rebound from the pandemic. Lastly,…

Thanks, David. I would like to provide an update on our operating assets, starting with multifamily. On a consolidated basis at quarter end, our multifamily was 84.1% occupied compared to 83.9% at the end of the second quarter. Occupancy at Channel House and Oakland was 77.5% at the end of the quarter compared to 81.4% at the end of the second quarter and occupancy at 1150 Clay in Oakland increased to 90.3%, up from 86.5%. As David mentioned, these premier Class A assets were acquired earlier this year and are in the process of being leased up. There was significant supply growth in the Oakland market from 2018 through last year, which in part allowed us to acquire these assets at a substantial discount to what the replacement cost is today. While we continue to expect it to take some time for this new supply to be fully absorbed, we believe local rents would need to increase dramatically before it is economic to see multifamily building start again. The pipeline for development in Oakland is well below the average for the top 25 U.S. markets, so we believe these assets are well positioned for growth. At Echo Park Los Angeles on our multifamily asset at 1902 Park, our in-place rents are well below market, and we have been executing new leases for new tenants at substantially higher rate. Occupancy increased to 89.3% at the end of the quarter, up 400 basis points compared to the end of the second quarter. We have a waiting list for two-bedroom units today, demonstrating the strength of demand for this asset. Turning to office. We leased approximately 29,000 square feet in the third quarter. Our occupancy rate at the end of the third quarter was 82.6% compared to 83.0% in the prior quarter and our lease percentage was 84.3% compared to 84.5% in the prior quarter. Our leasing spreads remain positive meaning on a same-suite basis the rents we are achieving on new leases are higher than the rates of our expiring leases. This speaks to the quality of our office portfolio. On a year-to-date basis, our cash lease spreads are up about 100 basis points, while our GAAP leasing spreads are up about 4.6%. With that, I'll turn it to Barry.

Thank you, Steve. Moving on to financial highlights. Our segment NOI increased to $11.2 million for the third quarter of 2023 compared to $10.1 million in the prior year comparable period. This increase in NOI of $1.1 million was driven by a $2.8 million increase in our Office Segment NOI partially offset by an $800,000 decrease in our lending segment NOI, a $500,000 decrease in our Hotel Segment NOI as well as a net operating loss of $400,000 from our newly acquired Multifamily Segment. Our third quarter Office Segment NOI increased to $9.3 million compared to $6.5 million for the prior year comparable period. The increase of $2.8 million was driven by an increase in income from our unconsolidated office properties largely due to an unrealized gain at one of our joint venture investments recognized during the quarter, an increase in rental revenues at an office property in Beverly Hills, California, due to increased occupancy and rental rates and a decrease in real estate tax expense at an office property in Austin, Texas. Our third quarter Hotel Segment NOI decreased to $1.9 million from $2.4 million in the prior period. While room revenue remained flat, the decrease was attributable primarily to a decrease in food and beverage revenue. As we mentioned, we recorded a third quarter net operating loss of $400,000 from the new Multifamily Segment. We began reporting Multifamily Segment NOI in the first quarter of 2023 after we acquired two multifamily properties in Oakland in late January and late March as well as investing in another multifamily property in Los Angeles through a 50-50 joint venture investment. Lastly, our lending division NOI decreased to $400,000 from $1.2 million in the prior year comparable period. This decrease was primarily due to the increased interest expense related to the issuance…

Thank you for attending today's presentation. You may now disconnect your lines, and have a nice day.