What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-03-07 compared with 2024-03-29 · 39 added, 36 removed, 223 unchanged (25% of the section changed)

2 unchanged sentences

CIM is a vertically-integrated community-focused real estate and infrastructure owner, operator, lender and developer.

CIM is headquartered in Los Angeles, CA, with offices in Atlanta, GA, Chicago, IL, Dallas, TX, London, UK, New York, NY, Orlando, FL, Phoenix, AZ, and Tokyo, Japan.

CIM also maintains additional offices across the United States and in South Korea to support its platform.

CIM Group is headquartered in Los Angeles, California and has offices in Atlanta, Georgia, Chicago, Illinois, Dallas, Texas, New York, New York, Orlando, Florida, Phoenix, Arizona, London, U.K.

and Tokyo, Japan.

CIM also maintains additional offices with distribution staff and JV partnerships.

See the sections “Overview and History of CIM Group”, “CIM Urban Partnership Agreement” and “Investment Management Agreement” in “Item 1—Business” of this Annual Report on Form 10-K.

7 unchanged sentences

Our current reportable segments during the years ended December 31, 2024 and 2023 consist of three types of commercial real estate properties, namely office, hotel and multifamily, as well as a segment for our lending business.

As of December 31, 2023, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties, and five of which we own through investments in unconsolidated joint ventures (the “Unconsolidated Joint Ventures”).

As of December 31, 2024, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties, and five of which we own through investments in Unconsolidated Joint Ventures.

Our Unconsolidated Joint Ventures contain one office property, one multifamily site currently under development, two multifamily properties (one of which has been partially converted from office into multifamily units and is now classified as a multifamily property) and one commercial development site.

As of December 31, 2024, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 70.6% occupied;

our one hotel with an ancillary parking garage, which has a total of 503 rooms, had RevPAR of $145.80 for the year ended December 31, 2023 and our three multifamily properties were 79.3% occupied.

our one hotel with an ancillary parking garage, which has a total of 505 rooms, had RevPAR of $135.90 for the year ended December 31, 2024 and our four multifamily properties were 81.7% occupied.

Additionally, as of December 31, 2024, we had nine development sites (three of which were being used as parking lots).

4 unchanged sentences

We seek to apply the expertise of CIM Group to the acquisition, development and operation of premier multifamily properties situated in vibrant communities throughout the United States.

We also seek to acquire, develop and operate creative office assets that cater to rapidly growing industries such as technology, media and entertainment in markets with similar business and employment characteristics to our multifamily investments.

While we may acquire, develop and operate creative office assets that cater to rapidly growing industries such as technology, media and entertainment in markets with similar business and employment characteristics to our multifamily investments, we intend to increase our focus towards premier multifamily properties.

All of our multifamily and creative office assets are and will generally be located in communities qualified by CIM Group as described further below.

4 unchanged sentences

Further, we leverage the investor relationships of CIM Group to execute on our investment pipeline using an asset-light approach for certain of our investments.

Under this approach, we co-invest with one or more third parties on an asset-level basis by raising capital from such third parties, maintain an economic

interest in the asset and, in some cases, earn a management fee and a percentage of the profits.

Under this approach, we co-invest with one or more third parties on an asset-level basis by raising capital from such third parties, maintain an economic interest in the asset and, in some cases, earn a management fee and a percentage of the profits.

We believe this is a compelling model that is expected to contribute to strong returns on invested capital while reducing risk by reducing our capital outlay.

28 unchanged sentences

CIM Group is vertically-integrated and organized into the following functional groups:

Real Asset Services (which includes Development, Onsite Property Management,

Commercial Leasing and Hospitality Services), Real Asset Management (which includes Investments, Portfolio Oversight, Capital Markets, Partner & Co-Investor Relations - Strategy Solutions and Distribution) and Shared Services (which includes Human Resources, Compliance, Operations, Finance, Legal & Risk Management).

Real Asset Services (which includes Development, Onsite Property Management, Commercial Leasing and Hospitality Services), Real Asset Management (which includes Investments, Capital Markets, Global Client Group) and Shared Services (which includes Human Resources, Compliance, Operations, Finance, Legal & Risk Management).

CIM also has an internal audit team.

8 unchanged sentences

CIM Group leverages the deep operating and industry experience of its principals and professionals, as well as their extensive relationships, to source and execute opportunistic, value add, core, debt, ground-up development and infrastructure acquisitions.

Each opportunity is typically overseen by a dedicated Investment team, including an oversight Principal, one Investment lead (vice president level and above), one associate vice president and one associate from the Investments team.

Each opportunity is typically overseen by a dedicated Investment team, including an oversight Principal, one Senior Investment Professional (vice president level and above), one associate vice president and one associate from the Investments team.

The team is assembled based on the expertise needed for the particular transaction.

15 unchanged sentences

CIM Group's experience with multiple asset types does not predispose CIM Group to select certain asset types, but instead ensures that they deliver a product mix that is consistent with the market's requirements and needs.

Additionally, there is a growing trend towards developing mixed-use real estate properties in metropolitan markets which requires a diversified platform to successfully execute.

Additionally, there is a growing trend

towards developing mixed-use real estate properties in metropolitan markets which requires a diversified platform to successfully execute.

• Community-Based Tenanting —CIM Group’s strategy focuses on the entire community and the best use of assets in that community.

Owning a critical mass of key properties in an area better enables CIM Group to meet the co-tenancy needs of national retailers and office tenants and thus optimize the value of these real estate properties.

CIM Group believes that its community perspective gives it a significant competitive

advantage in attracting tenants to its retail, office and mixed-use properties and creating synergies between the different tenant types.

CIM Group believes that its community perspective gives it a significant competitive advantage in attracting tenants to its retail, office and mixed-use properties and creating synergies between the different tenant types.

• Local Market Leadership with North American Footprint —CIM Group maintains local market knowledge and relationships, along with a diversified North American presence, through its 135 Qualified Communities (thus, CIM Group has the flexibility to deploy capital in its Qualified Communities only when the market environment meets CIM Group’s underwriting standards).

11 unchanged sentences

Financing Strategy

We may finance our future activities through one or more of the following methods:

(i) offerings of shares of our common stock, par value $0.001 per share (“Common Stock”), preferred stock or other equity and or debt securities of the Company;

(ii) issuances of interests in our operating partnership in exchange for properties, (iii) credit facilities and term loans;

(iv) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral, including the securitization of portions of our loan portfolio;

We will seek to satisfy our long-term liquidity needs through one or more of the following methods:

(i) offerings of shares of Common Stock, Preferred Stock or other equity and/or debt securities of the Company;

(ii) issuances of interests in our operating partnership in exchange for properties;

(iii) credit facilities and term loans;

(iv) the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral;

(v) the sale of existing assets;

(vi) partnering with co-investors;

and/or (vii) cash flows from operations.

and/or (vi) cash flows from operations.

Risk Management

As part of its risk management strategy, CIM Group continually evaluates our assets and actively manages the risks involved in our business strategies.

As part of its risk management strategy, CIM Group periodically evaluates our assets and actively manages the risks involved in our business strategies.

CIM Group’s Investments and Portfolio Oversight teams share asset management responsibilities, setting the strategy for and monitoring the performance of our assets relative to market and industry benchmarks and internal underwriting assumptions using direct knowledge of local markets provided by CIM Group’s in-house onsite property management, and leasing professionals.

3 unchanged sentences

The Real Assets Management Committee reviews and approves strategic decisions related to financing strategies and hold/sell analyses and tracks performance relative to overall business plan execution.

The Real Assets Management Committee is comprised of CIM’s founding principals, Chief Compliance Officer, the Head of Portfolio Oversight and is chaired by Richard Ressler.

The Real Assets Management Committee is comprised of CIM’s founding principals, Mukya Porter (Principal, Chief Compliance Officer), Robert Dupree (Principal, Co-Head of Investments), Jason Schreiber (Principal, Co-Head of Investments) and is chaired by Richard Ressler.

The Real Assets Management Committee meets monthly to review updates across the various strategies.

In addition to reviewing specific property-level conditions and recommendations, the Real Assets Management Committee reviews real estate and related capital market conditions, considers current market trends and monitors fund strategies and portfolio composition.

In addition to reviewing specific property-level conditions and recommendations, the Real Assets Management Committee reviews real estate and related capital market

conditions, considers current market trends and monitors fund strategies and portfolio composition.

See “Item 1C—Cybersecurity” for information on our cybersecurity risk management, strategy and governance.

14 unchanged sentences

Further, these or other environmental studies may not identify all potential environmental liabilities or accurately assess whether we will incur material environmental liabilities in the future.

If we do incur material environmental liabilities in the future, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock (as defined in “Item 1A—Risk Factors”) could be materially adversely affected.

If we do incur material environmental liabilities in the future, our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Preferred Stock (as defined in “Item 1A—Risk Factors”) could be materially adversely affected.

Americans with Disabilities Act of 1990

10 unchanged sentences

CIM Group was founded in 1994 by Shaul Kuba, Richard Ressler and Avraham Shemesh and has approximately $30.2 billion of assets owned and operated across its vehicles as of September 30, 2024.

“Assets owned and operated” (“AOO”) represents the aggregate assets owned and operated by CIM on behalf of partners (including where CIM contributes capital alongside for its own account) and co-investors, whether or not CIM has discretion, in each case without duplication.

“Assets owned and operated” (“AOO”)

represents the aggregate assets owned and operated by CIM on behalf of partners (including where CIM contributes capital alongside for its own account) and co-investors, whether or not CIM has discretion, in each case without duplication.

CIM Group’s successful track record is anchored by CIM Group’s community-oriented approach to acquisitions as well as a number of other competitive advantages including its prudent use of leverage, underwriting approach, disciplined capital deployment, vertically-integrated capabilities and strong network of relationships.

CIM Group has generated strong risk-adjusted returns

across multiple market cycles by focusing on improved asset and community performance and capitalizing on market inefficiencies and distressed situations.

CIM Group has generated strong risk-adjusted returns across multiple market cycles by focusing on improved asset and community performance and capitalizing on market inefficiencies and distressed situations.

CIM Urban Partnership Agreement

18 unchanged sentences

Master Services Agreement

CIM Service Provider, LLC, an affiliate of CIM Group (the “Administrator”) provides, or arranges for other service providers to provide, management and administration services (the “Base Services”) to us and our subsidiaries under the terms of a master services agreement, dated as of March 11, 2014, as amended on May 11, 2020 (the “Master Services Agreement”).

of a master services agreement, dated as of March 11, 2014, as amended on May 11, 2020 (the “Master Services Agreement”).

Pursuant to the Master Services Agreement, we appointed an affiliate of CIM Group as the Administrator of CIM Urban GP (“Urban GP Administrator”).

For fiscal quarters prior to April 1, 2020, we paid to the Administrator, on a quarterly basis, a base service fee (the “Base Service Fee”) of approximately $1.0 million per year (which, for each year after 2014, was subject to an annual escalation by a specified inflation factor beginning on January 1 of each year).

On May 11, 2020, the Master Services

Agreement was amended to replace the Base Service Fee with an incentive fee (the “Prior Incentive Fee”) pursuant to which the Administrator was entitled to receive, on a quarterly basis, 15.00% of our quarterly core funds from operations in excess of a quarterly threshold equal to 1.75% (i.e., 7.00% on an annualized basis) of our average adjusted common stockholders’ equity (i.e., common stockholders’ equity plus accumulated depreciation and amortization) for such quarter.

On May 11, 2020, the Master Services Agreement was amended to replace the Base Service Fee with an incentive fee (the “Prior Incentive Fee”) pursuant to which the Administrator was entitled to receive, on a quarterly basis, 15.00% of our quarterly core funds from operations in excess of a quarterly threshold equal to 1.75% (i.e., 7.00% on an annualized basis) of our average adjusted common stockholders’ equity (i.e., common stockholders’ equity plus accumulated depreciation and amortization) for such quarter.

The amendment was effective as of April 1, 2020.

2 unchanged sentences

In addition, pursuant to the terms of the Master Services Agreement, the Administrator may receive compensation and/or reimbursement for performing certain services (other than the Base Services) for us and our subsidiaries.

Such services performed by the Administrator and its affiliates may include accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources, corporate communications, operational and on-going support in connection with our registered public offering of our Series A Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”) and Series D Preferred Stock, par value $0.001 per share (“Series D Preferred Stock” and, together with the Series A Preferred Stock and Series L Preferred Stock, “Preferred Stock”).

Such services performed by the Administrator and its affiliates may include accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources, corporate communications, operational and ongoing support in connection with our registered public offering of our Series A Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”) and Series D Preferred Stock, par value $0.001 per share (“Series D Preferred Stock” and, together with the Series A Preferred Stock and Series L Preferred Stock, “Preferred Stock”).

The Administrator’s compensation for such services is based on the salaries and benefits of the employees of the Administrator and/or its affiliates who performed such services (allocated based on the percentage of time spent on the affairs of us and our subsidiaries).

13 unchanged sentences

(i) no Revised Incentive Fee in any quarter in which the Excess Core FFO is $0;

(ii) 100% of any Excess Core FFO up to an amount equal to the product of (x) the average of the Adjusted Common Equity as of the first and last day of the applicable quarter and (y) 0.4375%;

(ii) 100% of any

Excess Core FFO up to an amount equal to the product of (x) the average of the Adjusted Common Equity as of the first and last day of the applicable quarter and (y) 0.4375%;

and (iii) 20% of any Excess Core FFO thereafter.

26 unchanged sentences

The maximum loan amount for an SBA 7(a) loan is $5.0 million.

Key eligibility factors are based on what the business does to generate its income, its credit history, its liquidity, its size standards and where it operates.

We work with potential borrowers to identify the type of loan that would be appropriate for each such borrower’s needs.

Key eligibility factors are based on what the business does to generate its income, its credit history, the liquidity of the borrower, size standards and where the business operates.

We work with potential borrowers to identify the type

of loan that would be appropriate for each such borrower’s needs.

Our SBA 7(a) term loans have monthly repayment terms of principal and interest and are originated with variable interest rates based on the prime rate.

1 unchanged sentence

While we have focused on originating real estate loans almost exclusively to the limited service and mid-scale hospitality industry, we intend to increase our efforts to originate other real estate collateralized loans.

These loans are anticipated to be primarily concentrated in industries in which we previously had positive experiences, including convenience store, RV park and single purpose building owner-occupied restaurant operations and may include owner-occupied industrial operations/warehouse buildings.

These loans are anticipated to be primarily concentrated in industries in which we previously had positive experience, including convenience store, RV park and single purpose building owner-occupied restaurant operations and may include owner-occupied industrial operations/warehouse buildings.

Our revenues and expenses for our hotel property are subject to seasonality during the year.

2 unchanged sentences

In addition, the hotel industry is cyclical and demand generally follows, on a lagged basis, key macroeconomic factors.

Tenant Concentration

Kaiser Foundation Health Plan, Incorporated (“Kaiser”), which occupied office space in one of our Oakland, California properties accounted for 28.7% of our annualized rental income for the year ended December 31, 2023.

Property Concentration

Kaiser Foundation Health Plan, Incorporated, which occupied space in one of our Oakland, California properties, accounted for 22.9% of our annualized rental income for the year ended December 31, 2024.

No other tenant accounted for greater than 10.0% of our annualized rental income for the year ended December 31, 2024.

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business