Good day, and welcome to the Creative Media & Community Trust Corporation Third Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Steve Altebrando, Portfolio Oversight. Please go ahead. Hello, everyone, and thank you for joining us.

My name is Steve Altebrando, the portfolio oversight for Creative Media & Community Trust Corporation. Also on the call today are David A. Thompson, our Chief Executive Officer, and Barry Neil 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 non-GAAP financial measures discussed during today's call. During this call, we will make forward-looking statements. 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 our assumptions are reasonable, they are not guarantees of future performance and some will prove to be incorrect. Therefore, actual future results can be expected to differ from our expectations. Those differences may be material. For a more detailed description of potential risks, please refer to our SEC file which can be found in the Investor Relations section of our website. With that, I'll turn the call over to David A. Thompson.

Thanks, Steve, and thank you to everyone for joining our call today. I'll begin with an update on the progress we're making with our strategic initiatives and then review our results for the quarter. As a reminder, our key priorities remain focused on two main goals: strengthening our liquidity and our balance sheet and growing our multifamily business. To advance these objectives, which we first outlined last September, we've been executing a significant refinancing program and evaluating selective asset sales. Earlier this week, we announced that we have entered into a definitive agreement to sell our lending business. This business is primarily focused on originating SBA seven loans for limited service hotels and it was considered a non-core asset for the company. As of September 30, the purchase price was estimated to be approximately $44 million and yield the company about $31 million after repayment of debt transaction and other expenses. The transaction remains subject to Small Business Administration approval as well as certain closing conditions. At the same time, we continue to make meaningful progress on our refinancing initiatives. Since last September, we completed financings on seven assets and put in place a warehouse facility for our lending division. This facility will be retired at the close of our sale transaction. We are also working on an upsize of our mortgage up on Penfield, our creative office asset in Austin. After closing this financing earlier this year, we signed a lease with an investment-grade tenant, which should allow us to upsize the loan. We're now finalizing the loan documents with the lender. Taken together, these actions were important steps for the company. They provided proceeds that allowed us to significantly reduce our recourse debt, including the full retirement of our $169 million recourse credit facility earlier this year. They…

Thanks, David. We remain focused on improving property-level performance across all segments and growing our premier newer vintage multifamily portfolio. This continues to be a key growth area for us. Including our joint ventures, we now have four operating assets: 1150 Clay and Channel House in the Bay Area, and 701 South Hudson and 1902 Park Avenue in Los Angeles. We are making steady progress on the lease-up of 701 South Hudson, the residential portion of our partial office-to-residential conversion completed late last year. Multifamily occupancy at the property was approximately 81% at the end of the third quarter, up from 68% at the end of the second quarter. As a reminder, the top two floors of the building were converted into 68 high-end residential units, while the Ground Floor creative office component known as 4,750 remains 100% leased. As mentioned on our prior calls, we believe there's an opportunity to develop additional units on the back surface lot of the property given recent zoning changes, and we continue to make progress on those plans. Our fifth project, 1915 Park in Los Angeles, will deliver this month. This 36-unit ground-up multifamily development is a joint venture with an international pension fund and is located adjacent to our office building at 1910 West Sunset in Echo Park, a highly desirable walkable submarket with attractive dining and entertainment options. In Oakland, we saw a modest improvement in total occupancy during the quarter. We believe our properties will benefit from limited new construction in the Oakland residential market, as well as the ongoing recovery across the broader Bay Area. In San Francisco, multifamily properties continue to improve with area vacancy at its lowest level since 2011. The third-quarter rent growth of 5.2% in San Francisco is the strongest year-over-year growth rate since 2015.…

I'm going to spend a few minutes going over the comparative year-over-year financial highlights for 2025 versus 2024, starting with our segment NOI, which was $7 million in 2025 compared to $7.6 million in the prior year comparable period. Broken down by segment, the decrease of approximately $600,000 was driven by decreases of $400,000 for our office properties, $174,000 from our lending business, and $123,000 from our hotel property. Partially offset by an increase of $284,000 from our multifamily properties. Our office segment NOI for Q3 2025 was $5 million versus $5.4 million during Q3 2024. The decrease was primarily driven by a decrease in NOI at an office property in Los Angeles, California, and at an office property in San Francisco, California, attributable to lower rental revenues resulting from a decline in occupancy, as well as NOI at an office property in Austin, Texas, as a result of higher real estate taxes. Our lending division NOI was $314,000 compared to $688,000 in the prior year comparable period, primarily due to a decrease in interest income as a result of loan payoffs and lower interest rates, partially offset by a decrease in interest expense resulting from net loan paydowns and a decrease in additions to current expected credit losses. Our hotel segment NOI for Q3 2025 was $850,000 compared to $1 million in the prior year comparable period. The decrease was driven by a decrease in food and beverage sale revenues, partially offset by an increase in room revenue. Operations at our hotel property were negatively impacted by our lobby renovation project during Q3 2025, and our room renovation project during Q3 2024. Our multifamily segment NOI was $792,000 during Q3 2025 compared to $508,000 from the prior year comparable period. The increase was primarily driven by reductions in real…

We will now begin the question and answer session. To join the queue, please press star and then two. It appears there are no questions. I would like to conclude the conference. Thank you for attending today's presentation. You may now disconnect.