Cim Group, Inc 10-Q for FY2021 Q1

Cim Group, Inc. (CMRF)

10-Q 2021-05-17 For: 2021-03-31

Added on April 04, 2026

About this 10-Q

Cim Group, Inc filed this 10-Q on May 17, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $88.88M; up 20.1% from $74.01M a year earlier
Net loss: $2.75M; compared with a net loss of $12.18M a year earlier

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020			3

Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020			4

Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2021 and 2020			5

Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2021 and 2020			6

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020			7

Notes to Condensed Consolidated Financial Statements			8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			39

Item 3. Quantitative and Qualitative Disclosures About Market Risk			52

Item 4. Controls and Procedures			54

PART II — OTHER INFORMATION

Item 1. Legal Proceedings			55

Item 1A. Risk Factors			55

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			56

Item 3. Defaults Upon Senior Securities			56

Item 4. Mine Safety Disclosures			56

Item 5. Other Information			56

Item 6. Exhibits			57

Signature			58


	March 31, 2021		December 31, 2020
ASSETS
Real estate assets:
Land	$	874,610	$	881,896
Buildings, fixtures and improvements	2,463,130		2,490,030
Intangible lease assets	389,004		389,564
Condominium developments	201,031		—
Total real estate assets, at cost	3,927,775		3,761,490
Less: accumulated depreciation and amortization	(477,865)		(453,385)
Total real estate assets, net	3,449,910		3,308,105
Real estate-related securities	67,222		38,194

Loans held-for-investment and related receivables, net	1,022,279		962,624
Less: Allowance for credit losses	(12,888)		(70,358)
Total loans held-for-investment and related receivables, net	1,009,391		892,266
Cash and cash equivalents	57,550		121,385
Restricted cash	20,372		7,023
Rents and tenant receivables, net	67,208		74,419


Prepaid expenses and other assets	14,516		10,406
Deferred costs, net	4,444		4,293
Assets held for sale	31,241		3,518
Total assets	$	4,721,854	$	4,459,609
LIABILITIES AND STOCKHOLDERS’ EQUITY
Credit facilities, notes payable and repurchase facilities, net	$	2,445,246	$	2,144,993
Accrued expenses and accounts payable	31,653		30,419

Due to affiliates	15,376		14,723
Intangible lease liabilities, net	31,075		32,718
Distributions payable	10,969		10,969
Deferred rental income, derivative liabilities and other liabilities	21,351		27,361
Total liabilities	2,555,670		2,261,183
Commitments and contingencies
Redeemable common stock	—		—
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding	—		—
Common stock, $0.01 par value per share; 490,000,000 shares authorized, 362,001,968 shares issued and outstanding as of both March 31, 2021 and December 31, 2020	3,620		3,620
Capital in excess of par value	3,157,899		3,157,859
Accumulated distributions in excess of earnings	(996,665)		(961,006)
Accumulated other comprehensive income (loss)	1,330		(2,047)
Total stockholders’ equity	2,166,184		2,198,426
Total liabilities, redeemable common stock and stockholders’ equity	$	4,721,854	$	4,459,609


	Three Months Ended March 31,
	2021		2020
Revenues:
Rental and other property income	$	76,930	$	68,436
Interest income	11,953		5,571
Total revenues	88,883		74,007
Operating expenses:
General and administrative	5,471		3,682
Property operating	10,119		6,865
Real estate tax	12,219		6,978
Management and advisory fees and expenses	13,014		11,090
Transaction-related	185		252
Depreciation and amortization	25,738		20,823
Real estate impairment	4,300		11,676
Provision for credit losses	568		17,777
Total operating expenses	71,614		79,143
Gain on disposition of real estate, net	—		13,110

Operating income	17,269		7,974
Other expense:
Interest expense and other, net	(20,022)		(15,767)
Loss on extinguishment of debt	—		(4,382)
Total other expense	(20,022)		(20,149)
Net loss	$	(2,753)	$	(12,175)


Weighted average number of common shares outstanding:
Basic and diluted	362,001,968		311,248,421
Net loss per common share:
Basic and diluted	$	(0.01)	$	(0.04)


	Three Months Ended March 31,
	2021		2020
Net loss	$	(2,753)	$	(12,175)
Other comprehensive income (loss)
Unrealized gain on real estate-related securities	122		—

Unrealized gain (loss) on interest rate swaps	123		(10,805)
Amount of loss reclassified from other comprehensive income (loss) into income as interest expense and other, net	3,132		977
Total other comprehensive income (loss)	3,377		(9,828)
Comprehensive income (loss)	$	624	$	(22,003)


	Common Stock			Capital in Excess of Par Value		Accumulated Distributions in Excess of Earnings		Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	Number of Shares	Par Value
Balance as of January 1, 2021	362,001,968	$	3,620	$	3,157,859	$	(961,006)	$	(2,047)	$	2,198,426

Equity-based compensation	—	—		40		—		—		40
Distributions declared on common stock — $0.09 per common share	—	—		—		(32,906)		—		(32,906)


Comprehensive (loss) income	—	—		—		(2,753)		3,377		624
Balance as of March 31, 2021	362,001,968	$	3,620	$	3,157,899	$	(996,665)	$	1,330	$	2,166,184


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Buildings			40 years
Site improvements			15 years
Tenant improvements			Lesser of useful life or lease term
Intangible lease assets			Lease term


	Balance as of March 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
CMBS	$	67,222	$	—	$	27,441	$	39,781
Total financial assets	$	67,222	$	—	$	27,441	$	39,781
Financial liabilities:
Interest rate swaps	$	(7,622)	$	—	$	(7,622)	$	—
Total financial liabilities	$	(7,622)	$	—	$	(7,622)	$	—


	Balance as of December 31, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
CMBS	$	38,194	$	—	$	27,461	$	10,733
Total financial assets	$	38,194	$	—	$	27,461	$	10,733
Financial liabilities:
Interest rate swaps	$	(12,308)	$	—	$	(12,308)	$	—
Total financial liabilities	$	(12,308)	$	—	$	(12,308)	$	—


	CMBS
Beginning Balance, January 1, 2021	$	10,733
Total gains and losses:
Unrealized loss included in other comprehensive income, net	70
Purchases and payments received:
Purchases	34,491
Discounts, net	(5,676)
Capitalized interest income	173
Principal payments received	(10)
Ending Balance, March 31, 2021	$	39,781


Three Months Ended March 31, 2021
Discount Rate						Terminal Capitalization Rate
7.9% - 9.7%						7.4% - 9.2%


	As of March 31, 2021

Buildings, fixtures and improvements	192,182
Acquired in-place leases and other intangibles	134

Intangible lease liabilities	(326)
Total purchase price	$	191,990


	March 31, 2021		December 31, 2020
Intangible lease assets:
In-place leases and other intangibles, net of accumulated amortization of $140,462 and $132,967, respectively (with a weighted average life remaining of 9.6 years and 9.7 years, respectively)
	$	209,676	$	217,431
Acquired above-market leases, net of accumulated amortization of $22,607 and $22,054, respectively (with a weighted average life remaining of 7.7 years and 7.6 years, respectively)
	16,398		17,112
Total intangible lease assets, net	$	226,074	$	234,543
Intangible lease liabilities:
Acquired below-market leases, net of accumulated amortization of $33,341 and $31,933, respectively (both with a weighted average life remaining of 7.5 years)
	$	31,414	$	32,718


	Amortization
	In-Place Leases and Other Intangibles		Above-Market Leases		Below-Market Leases
Remainder of 2021	$	22,301	$	1,813	$	4,012
2022	27,702		2,323		4,752
2023	24,509		2,070		4,088
2024	21,314		1,575		3,128
2025	17,534		1,334		2,760
Thereafter	96,316		7,283		12,674
Total	$	209,676	$	16,398	$	31,414


	CRE Loans (1) (2)						Broadly Syndicated Loans
	March 31, 2021			December 31, 2020			March 31, 2021			December 31, 2020
Number of loans	6			12			221			194
Principal balance	$	530,301		$	481,438		$	501,095		$	477,777
Net book value	$	521,562		$	428,393		$	487,829		$	463,873
Weighted-average interest rate	4.9		%	7.5		%	3.6		%	3.8		%

Weighted-average maximum years to maturity	2.6			2.2			5.0			4.9


			During the Three Months Ended March 31, 2021
	Balance as of December 31, 2020		Debt Issuances & Assumptions (1)		Repayments & Modifications		Accretion and (Amortization)		Balance as of March 31, 2021
Notes payable – fixed rate debt	$	578,096	$	—	$	(243)	$	—	$	577,853
Notes payable – variable rate debt	—		102,553		—		—		102,553
Credit facilities	1,336,500		160,000		(85,000)		—		1,411,500
Repurchase facilities	235,380		122,323		(55)		—		357,648
Total debt	2,149,976		384,876		(85,298)		—		2,449,554
Net premiums (2)	149		—		—		(23)		126
Deferred costs – credit facility (3)	(3,543)		—		—		733		(2,810)
Deferred costs – fixed rate debt	(1,589)		—		—		586		(1,003)
Deferred costs – variable rate debt	—		(621)		—		—		(621)
Total debt, net	$	2,144,993	$	384,255	$	(85,298)	$	1,296	$	2,445,246


	Three Months Ended March 31,
	2021		2020
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Distributions declared and unpaid	$	10,969	$	16,463
Accrued capital expenditures	$	1,412	$	87
Accrued deferred financing costs	$	417	$	8
Real estate acquired via foreclosure	$	191,990	$	—
Foreclosure of assets securing the mezzanine loans	$	(79,968)	$	—
Mortgage notes payable assumed in connection with foreclosure of assets securing the mezzanine loans	$	102,553	$	—
Change in interest income capitalized to loans held-for-investment	$	(9,469)	$	539
Common stock issued through distribution reinvestment plan	$	—	$	19,231
Change in fair value of interest rate swaps	$	4,686	$	(9,823)
Change in fair value of real estate-related securities	$	122	$	—
Supplemental Cash Flow Disclosures:
Interest paid	$	18,493	$	15,665
Cash paid for taxes	$	739	$	138


	Real Estate-Related Securities
	Amortized Cost Basis		Unrealized Gain		Fair Value
CMBS	$	65,953	$	1,269	$	67,222
Total real estate-related securities	$	65,953	$	1,269	$	67,222


	Available-for-sale securities
	Amortized Cost		Estimated Fair Value
Due within one year	$	—	$	—
Due after one year through five years	26,989		27,441
Due after five years through ten years	—		—
Due after ten years	38,964		39,781
Total	$	65,953	$	67,222


	As of March 31,		As of December 31,
	2021		2020
Mezzanine loans	$	—	$	147,475
Senior loans	525,447		341,546
Total CRE loans held-for-investment and related receivables, net	525,447		489,021
Broadly syndicated loans	496,832		473,603
Loans held-for-investment and related receivables, net	$	1,022,279	$	962,624

Less: Allowance for credit losses	$	(12,888)	$	(70,358)
Total loans held-for-investment and related receivable, net	$	1,009,391	$	892,266


	Principal Balance		Deferred Fees / Other Items (1)		Loan Fees Receivable		Net Book Value
Balance, December 31, 2020	$	959,215	$	(74,116)	$	7,167	$	892,266
Loan originations and acquisitions	268,214		—		—		268,214
Cure payments receivable (2)	—		(7,351)		—		(7,351)
Sale of loans	(7,594)		38		—		(7,556)
Principal repayments received	(51,650)		—		—		(51,650)
Capitalized interest (2)	(9,469)		—		—		(9,469)
Deferred fees and other items	—		(2,461)		—		(2,461)
Accretion and amortization of fees and other items	—		584		—		584
Foreclosure of assets (2)	(127,320)		3,831		(7,167)		(130,656)
Allowance for credit losses (3)	—		57,470		—		57,470
Balance, March 31, 2021	$	1,031,396	$	(22,005)	$	—	$	1,009,391


		Amortized Cost of Loans Held-For-Investment by Year of Origination (1)
		As of March 31, 2021
	Number of Loans	2021	2020	2019	Total
Senior loans by internal risk rating:
1	—	—	—	—	—
2	—	—	—	—	—
3	6	176,908	232,573	115,966	525,447
4	—	—	—	—	—
5	—	—	—	—	—
Total senior loans	6	176,908	232,573	115,966	525,447
Broadly syndicated loans by internal risk rating:
1	—	—	—	—	—
2	3	—	6,906	—	6,906
3	216	64,986	415,232	3,057	483,275
4	2	—	6,651	—	6,651
5	—	—	—	—	—
Total broadly syndicated loans	221	64,986	428,789	3,057	496,832
Less: Allowance for credit losses					(12,888)
Total loans held-for-investment and related receivables, net	227				$	1,009,391
Weighted Average Risk Rating (2)					3.0


	Principal Repayments
Remainder of 2021	$	240,520
2022	1,184,391
2023	677,051
2024	347,592
2025	—
Thereafter	—
Total	$	2,449,554


	Future Minimum Rental Income
Remainder of 2021	$	191,931
2022	248,096
2023	231,349
2024	212,216
2025	193,595
Thereafter	1,245,868
Total	$	2,323,055


	Real Estate		Credit		Corporate/Other (1)		Company Total
Three Months Ended March 31, 2021
Rental and other property income	$	76,794	$	—	$	136	$	76,930
Interest income	—		11,953		—		11,953
Total revenues	76,794		11,953		136		88,883

General and administrative	64		376		5,031		5,471
Property operating	8,523		—		1,596		10,119
Real estate tax	7,869		—		4,350		12,219
Management and advisory fees and expenses	9,331		2,246		1,437		13,014
Transaction-related	4		—		181		185
Depreciation and amortization	25,738		—		—		25,738
Real estate impairment	4,300		—		—		4,300
Provision for credit losses	—		568		—		568
Total operating expenses	55,829		3,190		12,595		71,614



Operating income (loss)	20,965		8,763		(12,459)		17,269
Other expense:
Interest expense and other, net	(4,116)		(3,547)		(12,359)		(20,022)

Segment net income (loss)	$	16,849	$	5,216	$	(24,818)	$	(2,753)

Total assets as of March 31, 2021	$	3,371,496	$	1,155,640	$	194,718	$	4,721,854


	Real Estate		Credit		Corporate/Other		Company Total
Three Months Ended March 31, 2020
Rental and other property income	$	68,436	$	—	$	—	$	68,436
Interest income	—		5,571		—		5,571
Total revenues	68,436		5,571		—		74,007

General and administrative	62		12		3,608		3,682
Property operating	6,865		—		—		6,865
Real estate tax	6,978		—		—		6,978
Management and advisory fees and expenses	7,981		1,869		1,240		11,090
Transaction-related	125		—		127		252
Depreciation and amortization	20,823		—		—		20,823
Real estate impairment	11,676		—		—		11,676
Provision for credit losses	—		17,777		—		17,777
Total operating expenses	54,510		19,658		4,975		79,143
Gain on disposition of real estate, net	13,110		—		—		13,110


Operating income (loss)	27,036		(14,087)		(4,975)		7,974
Other expense:
Interest expense and other, net	(6,335)		200		(9,632)		(15,767)
Loss on extinguishment of debt	(4,382)		—		—		(4,382)
Segment net income (loss)	$	16,319	$	(13,887)	$	(14,607)	$	(12,175)

Total assets as of March 31, 2020	$	2,749,026	$	627,479	$	224,187	$	3,600,692


	Senior Loans (1) (2)			Broadly Syndicated Loans			CMBS
Number of loans	6			221			5
Net book value	$	521,562		$	487,829		$	67,222
Weighted-average interest rate	4.9		%	3.6		%	6.8		%
Weighted-average maximum years to maturity	2.6			5.0			19.5


	For the Three Months Ended March 31,
	2021		2020		Change
Net loss	$	(2,753)	$	(12,175)	$	9,422
Loss on extinguishment of debt	—		4,382		(4,382)
Interest expense and other, net	20,022		15,767		4,255
Operating income	17,269		7,974		9,295


Gain on disposition of real estate, net	—		(13,110)		13,110
Provision for credit losses	568		17,777		(17,209)
Real estate impairment	4,300		11,676		(7,376)
Depreciation and amortization	25,738		20,823		4,915
Transaction-related expenses	185		252		(67)
Management and advisory fees and expenses	13,014		11,090		1,924
General and administrative expenses	5,471		3,682		1,789
Interest income	(11,953)		(5,571)		(6,382)
Net operating income	$	54,592	$	54,593	$	(1)


	Total						Same Store						Non-Same Store
	For the Three Months Ended March 31,						For the Three Months Ended March 31,						For the Three Months Ended March 31,
	2021		2020		Change		2021		2020		Change		2021		2020		Change


Rental and other property income	$	76,930	$	68,436	$	8,494	$	61,680	$	64,162	$	(2,482)	$	15,250	$	4,274	$	10,976

Property operating expenses	10,119		6,865		3,254		6,217		6,319		(102)		3,902		546		3,356
Real estate tax expenses	12,219		6,978		5,241		6,659		6,542		117		5,560		436		5,124
Total property operating expenses	22,338		13,843		8,495		12,876		12,861		15		9,462		982		8,480

Net operating income	$	54,592	$	54,593	$	(1)	$	48,804	$	51,301	$	(2,497)	$	5,788	$	3,292	$	2,496


Record Date						Distribution Amount
April 30, 2020						$0.0130
May 31, 2020						$0.0130
June 30, 2020						$0.0161
July 30, 2020						$0.0304
August 28, 2020						$0.0303
September 29, 2020						$0.0303
October 29, 2020						$0.0303
November 27, 2020						$0.0303
December 30, 2020						$0.0303
January 28, 2021						$0.0303
February 25, 2021						$0.0303
March 29, 2021						$0.0303
April 29, 2021						$0.0303
May 28, 2021						$0.0303
June 29, 2021						$0.0303


	Payments due by period (1)
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
Principal payments — fixed rate debt (2)	$	577,853	$	138,794	$	373,083	$	65,976	$	—
Interest payments — fixed rate debt (3)	42,498		19,134		22,467		897		—
Principal payments — variable rate debt	102,553		102,553		—		—		—
Interest payments — variable rate debt (4)	587		587		—		—		—
Principal payments — credit facilities (5)	1,411,500		1,155,000		—		256,500		—
Interest payments — credit facilities (5)	44,039		30,607		9,760		3,672		—
Principal payments — repurchase facilities (6)	357,648		—		357,648		—		—
Interest payments — repurchase facilities (6)	20,232		8,696		11,536		—		—
Total	$	2,556,910	$	1,455,371	$	774,494	$	327,045	$	—


	Balance as of
	March 31, 2021
Credit facilities, notes payable and repurchase facilities, net	$	2,445,246
Deferred costs and net premiums (1)	4,308

Less: Cash and cash equivalents	(57,550)
Net debt	$	2,392,004
Gross real estate and related assets, net (2)	$	5,001,401
Net debt leverage ratio	47.8		%


	Three Months Ended March 31, 2021				Year Ended December 31, 2020
	Amount		Percent		Amount			Percent
Distributions paid in cash	$	32,906	100	%	$	90,655		73	%
Distributions reinvested	—		—	%	34,191			27	%
Total distributions	$	32,906	100	%	$	124,846		100	%
Sources of distributions:
Net cash provided by operating activities (1)	$	28,747	87	%	$	115,985	(2)	93	%
Proceeds from the issuance of debt (3)	4,159		13	%	553			—	%
Proceeds from the issuance of common stock	—		—	%	8,308		(4)	7	%
Total sources	$	32,906	100	%	$	124,846		100	%


Exhibit No.			Description















3.1			Articles of Amendment and Restatement of CIM Real Estate Finance Trust, Inc. (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-54939), filed August 20, 2019).
3.2			Amended and Restated Bylaws of CIM Real Estate Finance Trust, Inc. (Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 000-54939), filed August 20, 2019).
4.1			Second Amended and Restated Distribution Reinvestment Plan (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 000-54939), filed May 1, 2020).


















31.1*			Certifications of the Principal Executive Officer of the Company pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*			Certifications of the Principal Financial Officer of the Company pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**			Certifications of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*			XBRL Instance Document.
101.SCH**			XBRL Taxonomy Extension Schema Document.
101.CAL*			XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*			XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*			XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*			XBRL Taxonomy Extension Presentation Linkbase Document.
104*			Cover Page Interactive Data File (formatted as InLine XBRL and contained in Exhibit 101).


*			Filed herewith.
**			In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.


	CIM Real Estate Finance Trust, Inc. (Registrant)

By:		/s/ Nathan D. DeBacker
Name:		Nathan D. DeBacker
Title:		Chief Financial Officer and Treasurer (Principal Financial Officer)