CIM Commercial Trust Corporation Reports 2018 First Quarter Results
First Quarter 2018 Highlights
- Same-store(1) office segment and cash net operating income (“NOI”) increased 7.2% and 6.5%, respectively, from the corresponding period in 2017.
- Executed 61,460 square feet of leases with terms longer than 12 months, including 47,581 square feet of recurring leases; of which, 29,715 square feet were recurring leases executed at our same-store office portfolio, representing same-store cash rent growth per square foot of 17.4%.
- On a same-store basis, the office portfolio was 93.9% leased.
-
Acquired
9460 Wilshire Boulevard inBeverly Hills, California for$132,000,000 (2) in January 2018. -
Funds from operations (“FFO”) available to common stockholders of
$10,122,000 , or$0.23 per diluted share. -
Net loss available to common stockholders of
$3,026,000 , or$0.07 per diluted share.
Management Commentary
We are focused on growing our net asset value and cash flow per share and providing liquidity to shareholders at prices that reflect our strong prospects. We continue to optimize our portfolio to drive returns for our shareholders.”
In January 2018, CMCT acquired a 100% fee-simple interest in
“9460 Wilshire, situated in the prominent
Financial Highlights
As of March 31, 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, with an ancillary parking garage, which has 503 rooms. We also operate a lending business.
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| (1) | Please see the Reconciliation of Net Operating Income on page 9 for our definition of “Same-store.” | |
| (2) | Excludes $48,000 of transaction costs that were capitalized in connection with the acquisition of this property. | |
Net loss available to common stockholders was
FFO available to common stockholders was
Segment Information
Our reportable segments during the three months ended March 31, 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 March 31, 2017 consist
of three types of commercial real estate properties, namely, office,
hotel and multifamily, as well as a segment for our lending business.
Segment NOI was
Office
Same-Store
Same-store office segment NOI increased 7.2% on a GAAP basis and 6.5% on
a cash basis. The increase in same-store segment net operating income is
primarily due to an increase in revenue at certain of our
At March 31, 2018, the Company’s office portfolio was 93.7% occupied, up
90 basis points year-over-year on a same-store basis and 93.9% leased,
down 80 basis points year-over-year on a same store basis. The
annualized rent per occupied square foot on a same store basis was
Total
Office segment NOI decreased to
Hotel
Hotel segment NOI was
Multifamily
At March 31, 2017, we owned five multifamily properties, which were all
sold during the last nine months of 2017. Multifamily segment NOI was
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
Dividends
On March 6, 2018, CIM Commercial Trust’s Board of Directors approved,
and we declared, a quarterly cash dividend of
In addition, the Board of Directors approved, and we declared, a
quarterly cash dividend of
About CMCT
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
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
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CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES |
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Consolidated Balance Sheets |
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(Unaudited and in thousands, except share and per share data) |
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| March 31, 2018 | December 31, 2017 | ||||||||||
| ASSETS | |||||||||||
| Investments in real estate, net | $ | 1,085,165 | $ | 957,725 | |||||||
| Cash and cash equivalents | 39,883 | 129,310 | |||||||||
| Restricted cash | 30,311 | 27,008 | |||||||||
| Loans receivable, net | 70,691 | 81,056 | |||||||||
| Accounts receivable, net | 10,689 | 13,627 | |||||||||
| Deferred rent receivable and charges, net | 86,001 | 84,748 | |||||||||
| Other intangible assets, net | 12,569 | 6,381 | |||||||||
| Other assets | 22,675 | 36,533 | |||||||||
| TOTAL ASSETS | $ | 1,357,984 | $ | 1,336,388 | |||||||
| LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY | |||||||||||
| LIABILITIES: | |||||||||||
| Debt, net | $ | 641,257 | $ | 630,852 | |||||||
| Accounts payable and accrued expenses | 28,715 | 26,394 | |||||||||
| Intangible liabilities, net | 4,349 | 1,070 | |||||||||
| Due to related parties | 9,640 | 8,814 | |||||||||
| Other liabilities | 14,610 | 14,629 | |||||||||
| Total liabilities | 698,571 | 681,759 | |||||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||||
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REDEEMABLE PREFERRED STOCK: Series A, $0.001 par value; 36,000,000 |
34,928 | 27,924 | |||||||||
| EQUITY: | |||||||||||
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Series A cumulative redeemable preferred stock, $0.001 par value;
36,000,000 |
3,568 | 1,508 | |||||||||
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Series L cumulative redeemable preferred stock, $0.001 par value;
9,000,000 |
229,251 | 229,251 | |||||||||
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Common stock, $0.001 par value; 900,000,000 shares authorized;
43,784,939 |
44 | 44 | |||||||||
| Additional paid-in capital | 792,512 | 792,631 | |||||||||
| Accumulated other comprehensive income | 2,814 | 1,631 | |||||||||
| Distributions in excess of earnings | (404,598 |
) |
(399,250 | ) | |||||||
| Total stockholders' equity | 623,591 | 625,815 | |||||||||
| Noncontrolling interests | 894 | 890 | |||||||||
| Total equity | 624,485 | 626,705 | |||||||||
| TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY | $ | 1,357,984 | $ | 1,336,388 | |||||||
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CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES |
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Consolidated Statements of Operations |
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(Unaudited and in thousands, except per share data) |
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| Three Months Ended March 31, | |||||||||||
| 2018 | 2017 | ||||||||||
| REVENUES: | |||||||||||
| Rental and other property income | $ | 33,797 | $ | 51,059 | |||||||
| Hotel income | 9,689 | 9,750 | |||||||||
| Expense reimbursements | 1,609 | 3,030 | |||||||||
| Interest and other income | 3,303 | 3,110 | |||||||||
| 48,398 | 66,949 | ||||||||||
| EXPENSES: | |||||||||||
| Rental and other property operating | 18,020 | 22,960 | |||||||||
| Asset management and other fees to related parties | 6,211 | 8,700 | |||||||||
| Interest | 6,633 | 9,773 | |||||||||
| General and administrative | 3,376 | 1,679 | |||||||||
| Transaction costs | — | 13 | |||||||||
| Depreciation and amortization | 13,148 | 17,231 | |||||||||
| 47,388 | 60,356 | ||||||||||
| Gain on sale of real estate | — | 187,734 | |||||||||
| INCOME BEFORE PROVISION FOR INCOME TAXES | 1,010 | 194,327 | |||||||||
| Provision for income taxes | 388 | 392 | |||||||||
| NET INCOME | 622 | 193,935 | |||||||||
| Net income attributable to noncontrolling interests | (4 | ) | (5 | ) | |||||||
| NET INCOME ATTRIBUTABLE TO THE COMPANY | 618 | 193,930 | |||||||||
| Redeemable preferred stock dividends accumulated | (3,152 | ) | — | ||||||||
| Redeemable preferred stock dividends declared | (493 | ) | (31 | ) | |||||||
| Redeemable preferred stock redemptions | 1 | — | |||||||||
| NET (LOSS) INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | (3,026 | ) | $ | 193,899 | ||||||
| NET (LOSS) INCOME AVAILABLE TO COMMON STOCKHOLDERS PER SHARE: | |||||||||||
| Basic | $ | (0.07 | ) | $ | 2.31 | ||||||
| Diluted | $ | (0.07 | ) | $ | 2.31 | ||||||
| WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING: | |||||||||||
| Basic | 43,785 | 84,048 | |||||||||
| Diluted | 43,785 | 84,048 | |||||||||
CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Funds
from Operations
(Unaudited and in thousands, except per
share data)
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) available to common stockholders, computed
in accordance with generally accepted accounting principals (“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
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 available to common stockholders to FFO available to common stockholders:
| Three Months Ended March 31, | |||||||||||
| 2018 | 2017 | ||||||||||
| Net (loss) income available to common stockholders | $ | (3,026 | ) | $ | 193,899 | ||||||
| Depreciation and amortization | 13,148 | 17,231 | |||||||||
| Gain on sale of depreciable assets | — |
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(187,734 | ) | |||||||
| FFO available to common stockholders | $ | 10,122 | $ | 23,396 | |||||||
| FFO available to common stockholders per diluted share | $ | 0.23 | $ | 0.28 | |||||||
CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Earnings
Per Share
(Unaudited and in thousands, except per share data)
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 (loss) income available to common stockholders:
| Three Months Ended March 31, | ||||||||||
| 2018 | 2017 | |||||||||
| Numerator: | ||||||||||
| Net (loss) income available to common stockholders | $ | (3,026 | ) | $ | 193,899 | |||||
| Redeemable preferred stock dividends declared on dilutive shares | — | — | ||||||||
| Numerator for dilutive net (loss) income available to common stockholders | $ | (3,026 | ) | $ | 193,899 | |||||
| Denominator: | ||||||||||
| Basic weighted average shares of Common Stock outstanding | 43,785 | 84,048 | ||||||||
| Effect of dilutive securities—contingently issuable shares | — | — | ||||||||
| Diluted weighted average shares and common stock equivalents outstanding | 43,785 | 84,048 | ||||||||
| Net (loss) income available to common stockholders per share: | ||||||||||
| Basic | $ | (0.07 | ) | $ | 2.31 | |||||
| Diluted | $ | (0.07 | ) | $ | 2.31 | |||||
CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Reconciliation
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 net operating income, 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 the lending segment, we define net operating income 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 net operating income. 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 January 1, 2017; (ii) sold or otherwise removed from our consolidated financial statements before March 31, 2018; or (iii) that underwent a major repositioning project we believed significantly affected its results at any point during the period commencing on January 1, 2017 and ending on March 31, 2018.
Below is a reconciliation of cash NOI to segment NOI and net income for the three months ended March 31, 2018 and 2017.
| Three Months Ended March 31, 2018 | ||||||||||||||||||||||||||||||
| Non- | ||||||||||||||||||||||||||||||
| Same- | Same- | |||||||||||||||||||||||||||||
| Store | Store | Total | Multi- | |||||||||||||||||||||||||||
| Office | Office | Office | Hotel | family | Lending | Total | ||||||||||||||||||||||||
| Cash net operating income | $ | 20,234 | $ | 928 | $ | 21,162 | $ | 3,938 | $ | — | $ | 1,726 | $ | 26,826 | ||||||||||||||||
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Deferred rent and amortization of |
657 | 729 | 1,386 | 2 | — | — | 1,388 | |||||||||||||||||||||||
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Straight line rent, below-market |
— | — | — | — | — | 11 | 11 | |||||||||||||||||||||||
| Segment net operating income | $ | 20,891 | $ | 1,657 | $ | 22,548 | $ | 3,940 | $ | — | $ | 1,737 | $ | 28,225 | ||||||||||||||||
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Asset management and other fees to |
(5,610 | ) | ||||||||||||||||||||||||||||
| Interest expense | (6,449 | ) | ||||||||||||||||||||||||||||
| General and administrative | (2,008 | ) | ||||||||||||||||||||||||||||
| Depreciation and amortization | (13,148 | ) | ||||||||||||||||||||||||||||
| Income before provision for income taxes | 1,010 | |||||||||||||||||||||||||||||
| Provision for income taxes | (388 | ) | ||||||||||||||||||||||||||||
| Net income | 622 | |||||||||||||||||||||||||||||
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Net income attributable to |
(4 | ) | ||||||||||||||||||||||||||||
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Net income attributable to the |
$ | 618 | ||||||||||||||||||||||||||||
| Three Months Ended March 31, 2017 | ||||||||||||||||||||||||||||||
| Non- | ||||||||||||||||||||||||||||||
| Same- | Same- | |||||||||||||||||||||||||||||
| Store | Store | Total | Multi- | |||||||||||||||||||||||||||
| Office | Office | Office | Hotel | family | Lending | Total | ||||||||||||||||||||||||
| Cash net operating income | $ | 18,994 | $ | 13,646 | $ | 32,640 | $ | 4,071 | $ | 2,137 | $ | 973 | $ | 39,821 | ||||||||||||||||
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Deferred rent and amortization of |
141 | 2,227 | 2,368 | 4 | 7 | — | 2,379 | |||||||||||||||||||||||
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Straight line rent, below-market |
— | (312 | ) | (312 | ) | — | (138 | ) | 9 | (441 | ) | |||||||||||||||||||
| Lease termination income | 356 | — | 356 | — | — | — | 356 | |||||||||||||||||||||||
| Segment net operating income | $ | 19,491 | $ | 15,561 | $ | 35,052 | $ | 4,075 | $ | 2,006 | $ | 982 | $ | 42,115 | ||||||||||||||||
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Asset management and other fees to |
(7,856 | ) | ||||||||||||||||||||||||||||
| Interest expense | (9,631 | ) | ||||||||||||||||||||||||||||
| General and administrative | (791 | ) | ||||||||||||||||||||||||||||
| Transaction costs | (13 | ) | ||||||||||||||||||||||||||||
| Depreciation and amortization | (17,231 | ) | ||||||||||||||||||||||||||||
| Gain on sale of real estate | 187,734 | |||||||||||||||||||||||||||||
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Income before provision for income |
194,327 | |||||||||||||||||||||||||||||
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Provision for income taxes |
(392 | ) | ||||||||||||||||||||||||||||
| Net income | 193,935 | |||||||||||||||||||||||||||||
|
Net income attributable to |
(5 | ) | ||||||||||||||||||||||||||||
|
Net income attributable to the |
$ | 193,930 | ||||||||||||||||||||||||||||
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Source:
For CIM Commercial Trust Corporation
Media Relations:
Bill
Mendel, 212-397-1030
bill@mendelcommunications.com
or
Shareholder
Relations:
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shareholders@cimcommercial.com
