CIM Commercial Trust Corporation Reports 2018 Second Quarter Results
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.
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CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited and in thousands, except share and per share amounts)
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|
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|
|
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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 |
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COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
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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: |
|
|
|
|
|
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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 |
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TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY |
|
|
|
$ |
1,388,361 |
|
|
$ |
1,336,388 |
|
|
|
|
|
|
|
|
|
|
|
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CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited and in thousands, except per share amounts)
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Three Months Ended
June 30,
|
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Six Months Ended
June 30, |
|
|
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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 |
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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 |
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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 |
|
|
— |
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NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS |
|
|
|
$ |
(1,876 |
) |
|
$ |
91,291 |
|
|
$ |
(4,902 |
) |
|
$ |
285,190 |
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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 |
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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 |
|
|
|
|
|
|
|
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|
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CIM COMMERCIAL TRUST CORPORATION AND SUBSIDIARIES
Funds 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 Ended
June 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 SUBSIDIARIES
Earnings 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 Ended
June 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 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 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-
Store
Office
|
|
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 SUBSIDIARIES
Net 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.
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For CIM Commercial Trust Corporation
Media Relations:
Bill Mendel, 212-397-1030
bill@mendelcommunications.com
or
Shareholder Relations:
Steve Altebrando, 646-652-8473
shareholders@cimcommercial.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20180809005643/en/