SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

18. SUBSEQUENT EVENTS

Property Acquisitions

On January 31, 2023, the Company acquired an 89.42% interest in each of Channel House, an 8-story apartment building with 333 units in Jack London Square, Oakland, California, land parcel F-3 and land parcel Site D, in each case located in Oakland, California, from related party entities also managed by CIM Group (collectively the “JLS Sellers”) for $120.4 million, $200,000 and $2.2 million, respectively (including, in the case of Channel House, an assumption of a mortgage of $103.0 million). The purchase price is based on bids received by the JLS Sellers in connection with a marketed sales process and is subject to customary post-closing adjustments and does not include transaction costs relating to the acquisition. CMCT’s knowledge of the asset, the market in which it is located and the ability of CMCT to close the transaction rapidly and with certainty were key factors in securing this opportunity. In March, 2023, the Company made a principal payment of $16.0 million on the Channel House mortgage.

On February 17, 2023, an indirect wholly owned subsidiary of the Company announced the closing of a co-investment transaction pursuant to which three international co-investors acquired an 80% interest in a property owned by such subsidiary located at 4750 Wilshire Blvd in Los Angeles (“4750 Wilshire”) for an aggregate of approximately $34.4 million, excluding transaction costs. The Company intends to convert two out of the three floors of 4750 Wilshire into for-lease multifamily units. The total cost of the conversion is expected to be approximately $31.0 million, which will be financed by a combination of equity contributions from the Company and co-investors as well as a $38.5 million mortgage from a bank Pursuant to the co-investment agreement, each co-investor will pay an on-going management fee to the Company. In addition, the Company may earn incentive fees from co-investors based on the performance of 4750 Wilshire after conversion. The Company will account for its retained ownership interest in the 4750 Wilshire Project as an equity method investment.

On February 28, 2023, the Company and a co-investor acquired from an unrelated third-party a 100% fee-simple interest in a 75-unit four-story multifamily property located in the Echo Park neighborhood of Los Angeles, California for a purchase price of $19.1 million, excluding transaction costs. The Company owns 50% of this property. A mortgage of $9.6 million on the property was obtained in connection with the acquisition. The Company will account for its ownership interest as an equity method investment.

On March 9, 2023, our lending division completed a securitization of the unguaranteed portion of certain of our SBA 7(a) loans receivable with the issuance of $54.1 million of unguaranteed SBA 7(a) loan-backed notes (with net proceeds of approximately $43.3 million, after payment of fees and expenses in connection with the securitization and the funding of a reserve account and an escrow account). 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, 2048, with monthly payments due as payments on the collateralized loans are received. The SBA 7(a) loan-backed notes bear interest at a per annum rate equal to the lesser of (i) 30-day average compounded SOFR plus 2.90% and (ii) prime rate minus 0.35%. The annual interest rate for the first interest payment date shall be 7.40%. 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.

On March 28, 2023, an indirect wholly-owned subsidiary of the Company acquired a 98.05% interest in Eleven Fifty Clay, a 16-story apartment building with 288 units in downtown Oakland, California, from a related party also managed by CIM Group (the “Clay Seller”). The purchase price is $142.7 million (including an assumption of a mortgage of $78.3 million), exclusive of transactions costs. The purchase price is based on bids received by the Clay Seller in connection with a marketed sales process and will be subject to customary adjustments at closing. CMCT’s knowledge of the asset, the market in which it is located and the ability of CMCT to close the transaction rapidly and with certainty were key factors in securing this opportunity.

Dividend DeclarationOn March 20, 2023, the Company declared a cash dividend of $0.085 per share of its Common Stock, to be paid on April 11, 2023 to stockholders of record at the close of business on March 30, 2023.