Creative Media & Community Trust Corporation (NASDAQ:CMCT) Q4 2023 Earnings Call Transcript

Brendan McCarthy: Got it. Got it. I know you mentioned spreads. I think you mentioned in the introduction, spreads are positive there on the office side. Are they still? Can you maybe go into detail just on the lease spreads?

Steve Altebrando: Sure. So generally what we have seen, although office market has been well publicized, a little bit challenging, but we generally are seeing rate hold up for the most part. So we mentioned that spreads were down just 2%. We’re pleased with that, given the environment. But we are generally seeing rate hold up, particularly in Austin. And I would say also that’s the case in West LA, where the Bay Area has been a little bit softer on rate.

Brendan McCarthy: Got it. Thanks, Steve. Thanks. One more question, if I may. Just kind of looking at multifamily NOI, obviously really strong in the fourth quarter of 2023 after a negative quarter in the third quarter of 2023. Can you just kind of talk about the outlook there? Is that going to be lumpy going forward? And was that differentiation just from kind of the lease up phase?

Steve Altebrando: Yes, I mean, there’s a lot of opportunity for us to pick up ground with respect to NOI in the Multifamily segment. Generally your costs are very highly fixed in multifamily. So when we have a building that’s just one of Channel House just 80% lease or sub 80% lease, as you get towards stabilized mid-90s figure a lot of the incremental revenue should flow to the bottom line. So we would expect to see continued pickup, specifically in the back half of the year, because as we start seeing leasing activity pick up into the spring and summer that will benefit our NOI later in the year. So I think throughout the year we should see it really progressively improving. Although I would point out we did have a little bit of a one-time benefit in the fourth quarter from a real estate tax adjustment. But outside of that, we would expect NOI to really continue to be trending higher, really, over the next eight quarters.

Brendan McCarthy: Got it. Thanks, Steve. Thanks, everybody. That’s all for me.

Operator: This will conclude our question-and-answer session as well as our conference call for today. Thank you for attending today’s presentation. You may now disconnect.