Q1 2025 Caliber Cos Inc Earnings Call

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Operator: Good day, everyone, and thank you for standing by.

Operator: Good day everyone, and thank you for standing by. My name is RJ, and I will be your conference operator today. At this time, I would like to welcome everyone to the Caliber Q1 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask questions during this time, simply press star followed by 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Ilya Grozovsky, Vice President of Investor Relations and Corporate Development. Please go ahead.

Speaker Change: Good day, everyone and thank you for standing by my name is <unk> and I will be a conference operator today at this time I would like to welcome everyone to the caliber of Q1 'twenty 25 earnings conference call. All lines have been please on mute to prevent any background noise. After the speakers' remarks, there will be a question.

Operator: My name is RG, and I will be your conference operator today.

Operator: At this time, I would like to welcome everyone to the Caliber Q1 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask questions during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

Speaker Change: And the answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star one again, thank you.

Ilya Grzovsky: I would now like to turn the call over to Ilya Grzovsky, Vice President of Investor Relations and Corporate Development. Please go ahead. Good afternoon, everyone.

Speaker Change: I would now like to turn the call over to Iliad, Russo ski Vice President of Investor Relations and corporate development. Please go ahead.

Speaker Change: Yeah.

Ilya Grozovsky: Thank you. Good afternoon, everyone. Welcome to Caliber's Q1 2025 Financial Results Conference Call. With me today are Chris Loeffler, Chief Executive Officer and co-founder, and Jade Leung, Chief Financial Officer of Caliber. Please note that we have a quarterly earnings presentation which will serve as a supplement to today's prepared remarks. You can access the presentation on the investor relations section of our website at www.ir.caliberco.com. After management's commentary, we will open the call for questions. As a reminder, the information discussed today may include forward-looking statements that involve the risks and uncertainties. Words like believe, expect, and anticipates refer to our best estimates of this call. There can be no assurances that these will actually take place. Our actual future results could differ significantly from these statements.

Speaker Change: Thank you.

JJ: Good afternoon, everyone. Welcome to calibers first quarter 2025 financial results Conference call with me today are Chris Loughlin, Chief Executive Officer, and co founder and JJ <unk>.

Ilya Grzovsky: Welcome to Caliber's first quarter 2025 Financial Results Conference call. With me today are Chris Loeffler, Chief Executive Officer and co-founder, and Jade Leong, Chief Financial Officer of Caliber. Please note that we have a quarterly earnings presentation which will serve as a supplement to today's prepared remarks. You can access the presentation on the investor relations section of our website at www.caliberco.com.

Speaker Change: Chief Financial officer of caliber.

Speaker Change: Please note that we have a quarterly earnings presentation, which will serve as a supplement to today's prepared remarks, you can access the presentation on the Investor Relations section of our website at Www Dot caliber co dot com.

Ilya Grzovsky: After management's commentary, we will open the call for questions. As a reminder, the information discussed today may include forward-looking statements that involve the risks and uncertainties. Words like believe, expect, and anticipates refer to our best estimates of this call and there can be no insurances that these will actually take place. So our actual future results could differ significantly from these statements. Further information on the company's risk factors is contained in the company's quarterly and annual reports and filed with the Securities and Exchange Commission.

Speaker Change: After management's commentary, we will open the call for questions.

Speaker Change: As a reminder, the information discussed today may include forward looking statements that involve risks and uncertainties.

Speaker Change: Words like believe expect anticipate referred to our best estimates of this call and there can be no assurances that these will actually take place so our actual whereas actual future results could differ significantly from these statements further information on the company.

Ilya Grozovsky: Further information on the company's risk factors is contained in the company's quarterly and annual reports and filed with the Securities and Exchange Commission. It is now my pleasure to turn the call over to Chris. Go ahead.

Speaker Change: Our risk factors is contained in the Companys quarterly.

Speaker Change: And annual reports and filed with the Securities and Exchange Commission.

Chris Loeffler: It is now my pleasure to turn the call over to Chris. Go ahead. Thank you, Ilya. Thank you to our investors, employees and participating call attendees. The first quarter of 2025 reflected a continuation of the strategic repositioning we began in late 2024. As expected, this was a transitional period, but we remain focused on achieving profitability in 2025, a goal that we believe is within reach, particularly in the second half of the year. Through the first quarter of 2025, we continue to execute a series of cost savings initiatives and expect their full impact to materialize starting in Q3.

Chris Loughlin: It is now my pleasure to turn the call over to Chris go.

Speaker Change: Go ahead.

Chris Loeffler: Thank you, Ilya, and thank you to our investors, employees, and participating call attendees. The Q1 of 2025 reflected a continuation of the strategic repositioning we began in late 2024. As expected, this was a transitional period, but we remain focused on achieving profitability in 2025, a goal that we believe is within reach, particularly in the H2 of the year. Through the Q1 of 2025, we continued to execute a series of cost savings initiatives and expect their full impact to materialize starting in Q3. Our objective is to obtain an annual EBITDA margin of 25% or greater on a sustainable basis. Despite ongoing market headwinds, we are encouraged by signs of stability across commercial real estate values, and we believe we are entering a window of long-term opportunity, especially for groups like Caliber with experience in complex and distressed transactions.

Chris Loughlin: Thank you Julia and thank you to our investors employees and participating call attendees.

Chris Loughlin: The first quarter of 2025 reflected a continuation of the strategic repositioning we began in late 2024 as expected. This was a transitional period, but we remain focused on achieving profitability in 2025.

Chris Loughlin: Our goal that we believe is within reach particularly in the second half of the year.

Chris Loughlin: Through the first quarter of 2025, we continue to execute a series of cost savings initiatives and expect their full impact materialize starting in Q3.

Chris Loeffler: Our objective is to obtain an annual EBITDA margin of 25% or greater on a sustainable basis. Despite ongoing market headwinds, we are encouraged by signs of stability across commercial real estate values, and we believe we are entering a window of long-term opportunity, especially for groups like Caliber with experience in complex and distressed transactions. We are now a more focused company centering around three core verticals, hospitality, multifamily, and multi-tenant industrial investment. These asset classes offer the greatest opportunity for scalable and fee-based growth. As a result of this narrowed focus, we are reducing exposure to long term development activities that do not generate current rents to a targeted maximum of 30% of our portfolio.

Chris Loughlin: Our objective is to obtain annual EBITDA margin of 25% or greater on a sustainable basis.

Chris Loughlin: Despite ongoing market headwinds, we are encouraged by signs of stability across commercial real estate values and we believe we are entering a window of a long term opportunity, especially for groups like caliber with experience in complex in distressed transactions.

Chris Loeffler: We are now a more focused company centering around three core verticals, hospitality, multifamily, and multi-tenant industrial investing. These asset classes offer the greatest opportunity for scalable and fee-based growth. As a result of this narrowed focus, we are reducing exposure to long-term development activities that do not generate current rents to a targeted maximum of 30% of our portfolio. We are executing this change through the orderly completion and sale of our existing developments, which we believe will generate cash for new investments and revenue growth in Caliber's asset management fees. To continue to grow our AUM, Caliber has sought new asset-level financing moving forward with key construction and development projects, and we are pleased to report the financing environment for commercial real estate has begun to improve.

Chris Loughlin: We are now a more focused company centering around three core verticals hospitality multifamily and multi tenant industrial investing.

Chris Loughlin: These asset classes offer the greatest opportunity for scalable and <unk>.

Chris Loughlin: And fee based growth.

Chris Loughlin: As a result of this narrowed focus we are reducing exposure to long term development activities.

Chris Loughlin: That do not generate current rents to a targeted maximum of 30% of our portfolio.

Chris Loeffler: We are executing this change through the orderly completion and sale of our existing developments, which we believe will generate cash for new investments and revenue growth in Caliber's asset management fees. To continue to grow our AUM, Caliber has sought new asset level financing, moving forward with key construction and development projects, and we are pleased to report the financing environment for commercial real estate has begun to improve. More muted access to certain core real estate financing strategies has impacted our prior results. And an improving environment gives us confidence that our strategies to increase AUM will yield a more attractive growth path going forward.

Chris Loughlin: We are executing this change is due to the orderly completion and sale of our existing developments, which we believe will generate cash for new investments and revenue growth and calibers asset management fees.

Chris Loughlin: To continue to grow our AUM caliber has sought new asset level financing moving forward with key construction and development projects and we are pleased to report the financing environment for commercial real estate has begun to improve.

Chris Loeffler: More muted access to certain core real estate financing strategies has impacted our prior results. An improving environment gives us confidence that our strategies to increase AUM will yield a more attractive growth path going forward. In Q1, we updated and published our platform performance financial supplement, which excludes consolidated fund financials and offers a more simple and transparent view of our operating business. This document, now covering the period between 2019 through Q1 of 2025, is available on our website. We encourage you to review it. We believe you will find valuable insights to Caliber's past and current financial performance through reviewing this document and following the KPIs included in it in each quarter. We also introduced a new performance allocation estimate in our 10-K, which is a significant milestone in investor transparency.

Chris Loughlin: More muted access to certain core real estate finance financing strategies has impacted our prior results.

Chris Loughlin: In an improving environment gives us confidence that our strategy is to increase AUM will yield a more attractive growth path going forward.

Chris Loeffler: In Q1, we updated and published our platform performance financial supplement, which excludes consolidated fund financials and offers a more simple and transparent view of our operating business. This document, now covering the period between 2019 through Q1 of 2025, is available on our website, and we encourage you to review it. We believe you will find valuable insights to Caliber's past and current financial performance through reviewing this document and following the KPIs included in each quarter. We also introduced a new performance allocation estimate in our 10-K. which is a significant milestone in investor transparency. As of March 31st, 2025, Caliber's estimated performance allocations, or carried interest as it's sometimes referred to in our industry, totaled $87.7 million.

Chris Loughlin: In Q1, we updated and publish our platform performance financial supplement, which excludes consolidated fund financials and offers a more simple and transparent view of our operating business. This document now covering the period between 2019 through Q1 of 2025 is available on our website and we encourage you to review.

Chris Loughlin: Good.

Chris Loughlin: We believe you will find valuable insights to calibers past and current financial performance through reviewing reviewing this document and following the Kpis included in each quarter.

Chris Loughlin: We also introduced a new performance allocation estimate in our 10-K.

Chris Loughlin: Which is a significant milestone in investor transparency.

Chris Loeffler: As of 31 March 2025, Caliber's estimated performance allocations or carried interest, as it's sometimes referred to in our industry, totaled $87.7 million. This amount is not included in our GAAP financials, and we consider it pertinent to the estimated net worth or book value of our business. We intend to update this estimate regularly as we grow AUM and progress towards monetization events to capture these performance allocations. Continuing with some of Caliber's business updates, in March, Caliber announced our offering of Series AA Cumulative Redeemable Preferred Stock had been qualified by the SEC, and the company is seeking to raise up to $20 million through the offering. Since that announcement, we have been building a syndicate of broker-dealers to distribute the offering and are pleased to report we have made significant progress to that end.

Chris Loughlin: As of March 31, 2025, calibers estimated performance allocations are carried interests as it sometimes referred to in our industry totaled $87 7 million.

Chris Loeffler: This amount is not included in our GAP financials. and we consider it pertinent to the estimated net worth or book value of our business. We intend to update this estimate regularly as we grow AUM and progress towards monetization events to capture these performance allocations.

Chris Loughlin: This amount is not included in our GAAP financials.

Chris Loughlin: And we consider it pertinent to the estimated net worth or a book value of our business.

Chris Loughlin: We intend to update this estimate regularly as we grow AUM and.

Chris Loughlin: And progress towards monetization events to capture these performance allocations.

Chris Loeffler: Continuing with some of Caliber's business updates, in March, Caliber announced our offering of Series AA Cumulative Redeemable Preferred Stock had been qualified by the SEC, and the company is seeking to raise up to $20 million through the offering. Since that announcement, we have been building a syndicate of broker-dealers to distribute the offering and are pleased to report we have made significant progress to that end. The offering has brought in its first investments and our team expects to raise the full $20 million in the near term.

Chris Loughlin: Continuing with some of the Calvert business updates in March caliber announced our offering of series double a cumulative redeemable preferred stock had been qualified by the SEC and the company is seeking to raise up to $20 million through the offering.

Chris Loughlin: Since that announcement, we have been building a syndicate of broker dealers to distribute the offering and are pleased to report we have made significant progress to that end the.

Chris Loeffler: The offering has brought in its first investments, and our team expects to raise the full $20 million in the near term. Also in March, Caliber announced the launch of its 1031 Exchange Program, a tax deferral strategy that allows real estate investors to sell a property and reinvest all of the proceeds into one or more new properties while deferring capital gains taxes. We believe this program offers an attractive combination of a new and growing channel for capital matched to a channel for Caliber to acquire and manage more stable income-producing assets. Finally, before I move on to discuss our funds and our assets, I will touch on fundraising. Fundraising in Q1 remained challenging, though wholesale distribution continued to gain traction during the period.

Chris Loughlin: The offering has broadened its first investments in our team expects to raise the full $20 million in the near term.

Chris Loeffler: Also in March, Caliber announced the launch of its 1031 exchange program, a tax deferral strategy that allows real estate investors to sell a property and reinvest all of the proceeds into one or more new properties while deferring capital gains tax. We believe this program offers an attractive combination of a new and growing channel for capital matched to a channel for Caliber to acquire and manage more stable income producing assets.

Chris Loughlin: Also in March caliber announced the launch of its 10 31 exchange program a tax deferral strategy that allows real estate investors to sell a property and reinvest all of the proceeds into one or more new properties, while deferring capital gains taxes.

Chris Loughlin: We believe this program offers an attractive combination of a new and growing channel for capital matched to a channel for caliber to acquire and manage more stable income producing assets.

Chris Loeffler: Finally, before I move on to discuss our funds and our assets, I will touch on fundraising. Fundraising in Q1 remained challenging, though wholesale distribution continued to gain traction during the period. We are happy to report that in the first quarter of 2025, we matched in wholesale fundraising, the same total capital we raised in all of 2024 from that same channel. We continue to make progress with new selling agreements and deepening relationships with high quality investment professionals. Caliber's strategy in this arena is relationship-based. We're seeking to build real relationships with real people and seeking to offer financial professionals we work with a key differentiator in their offering of investments to their clients.

Chris Loughlin: Finally, before I move on to discuss our funds and our assets I will touch on fundraising.

Chris Loughlin: Fund raising in Q1 remained challenging through the wholesale distribution continued to gain traction during the period we.

Chris Loeffler: We are happy to report that in Q1 2025, we matched in wholesale fundraising the same total capital we raised in 2024 from that same channel. We continue to make progress with new selling agreements and deepening relationships with high-quality investment professionals. Caliber's strategy in this arena is relationship-based. We're seeking to build real relationships with real people and seeking to offer financial professionals we work with a key differentiator in their offering of investments to their clients. We have been through over 2 years of muted fundraising as compared to our expectations and to our efforts. We do believe it's important to note that investors seem to be rotating back to commercial real estate as they perceive the opportunity to invest now to be well-timed.

Chris Loughlin: We are happy to report that in the first quarter of 2025, we matched in wholesale fund raising the same total capital we raised in all of 2024 from that same channel.

Chris Loughlin: We continue to make progress with new selling agreements and deepening relationships with high quality investment professionals.

Chris Loughlin: Caliber strategy in this arena is relationship based.

Chris Loughlin: We're seeking to build real relationships with real people and seeking to offer financial professionals, we work with our key differentiator in their offering and investments to their clients.

Chris Loeffler: We have been through over two years of muted fundraising as compared to our expectations and to our efforts. We do believe it's important to note that investors seem to be rotating back to commercial real estate as they perceive the opportunity to invest now to be well-timed.

Chris Loughlin: We have been through over two years of muted fundraising as compared to our expectations and to our efforts we.

Chris Loughlin: We do believe it's important to note that investors seem to be rotating back to commercial real estate as they perceive the opportunity to invest now to be well timed.

Chris Loeffler: As we have done in the past and plan to continue to do, I will turn to some of the material updates on assets we manage and the performance of our managed real estate fund. In the interest of your time each quarter, I will touch on what I believe is the most important changes that occurred during and subsequent to the quarter's end. but will not attempt to comprehensively discuss every movement in every fund.

Chris Loeffler: As we have done in the past and plan to continue to do, I will turn to some of the material updates on assets we manage and the performance of our managed real estate funds. In the interest of your time each quarter, I will touch on what I believe is the most important changes that occurred during and subsequent to the quarter's end but will not attempt to comprehensively discuss every movement in every fund. I believe these updates are critical to our shareholders. Even though as a shareholder of Caliber, you are not an owner in a specific fund or asset, other than to the extent that Caliber has a cash invested in those assets, you are an owner in the fees that those assets generate and the potential profit of the funds and the assets we manage.

Chris Loughlin: As we have done in the past and plan to continue to do I will turn to some of the material updates on assets, we manage and the performance of our managed real estate funds.

Chris Loughlin: In the interest of your time each quarter I will touch on what I believe is the most important changes that occurred during the subsequent during and subsequent to the quarters then.

Chris Loughlin: We will not attempt to comprehensively discuss every movement in every fund I.

Chris Loeffler: I believe these updates are critical to our shareholders. Even though as a shareholder of Caliber, you are not an owner in a specific fund or asset, other than to the extent that Caliber has a cash invested in those assets, you are an owner in the fees that those assets generate and the potential profit of the funds and the assets we manage.

Chris Loughlin: I believe these updates are critical to our shareholders.

Chris Loughlin: Even though as a shareholder of caliber you are not an owner in a specific fund or asset.

Chris Loughlin: Other than to the extent that caliber and the cash invested in those assets you are an owner in the fees that those assets generate and the potential profit of the funds and the assets we manage.

Chris Loeffler: Starting with Canyon, Caliber's first distressed real estate acquisition since 2012, I'm happy to share that the project has recently received the Phoenix City Council's unanimous approval to proceed with our plan to convert the 300,000 square foot office building to 392 units of multifamily residential. Investors in Canyon also benefit from Opportunity Zone tax incentives and Caliber will now be raising the project's next round of equity to commence construction in 2025.

Chris Loeffler: Starting with Canyon, Caliber's first distressed real estate acquisition since 2012, I'm happy to share that the project has recently received the Phoenix City Council's unanimous approval to proceed with our plan to convert the 300,000 square foot office building to 392 units of multifamily residential. Investors in Canyon also benefit from Opportunity Zone tax incentives, Caliber will now be raising the project's next round of equity to commence construction in 2025. On SP10, the conversion of a hotel into multifamily development, we had paused construction after receiving our building permits in favor of refinancing our construction debt. We are reviewing several new construction loans that offer more favorable terms than the existing debt and that allow us to move to a single-phase project instead of a three-phase project. We expect to finalize this soon and restart construction.

Chris Loughlin: Starting with Canyon calibers first distressed real estate acquisitions in 2012, I'm happy to share that the project has recently received the Phoenix City Council's unanimous approval to proceed with our plan to convert the 300000 square foot office building to 392 units of multifamily residential.

Chris Loughlin: Investors and Canyon also benefited from opportunity zone tax incentives and caliber will now be raising the projects next round of equity to commence construction in 2025.

Chris Loeffler: On SP 10, the conversion of a hotel into multifamily development, we had paused construction after receiving our building permits in favor of refinancing our construction debt. We are reviewing several new construction loans that offer more favorable terms than the existing debt. And that allow us to move to a single phase project instead of a three phase project. We expect to finalize this soon and restart construction.

Chris Loughlin: On SP 10, the conversion of a hotel in a multifamily development, we had pause construction after receiving our building permits in favor of refinancing our construction that.

Chris Loughlin: We are reviewing several new construction loans that offer more favorable terms than the existing debt.

Chris Loughlin: And that allow us to move to a single phase project instead of a three phase project, we expect to finalize this soon and restart construction.

Chris Loeffler: Moving to Caliber's Pure Pickleball and Padel project in Riverwalk in Scottsdale, Arizona, we are happy to report the project has gained Design Review Board approval from the Salt River Pima Maricopa Indian Community Planning Department. This approval positions the project to seek a building permit once final construction documents are complete, with a plan groundbreaking shortly after we receive the permit. As a reminder, the project entails building a state-of-the-art pickleball and padel facility, including 50 courts, with some available for daily open play, as well as large tournaments, a clubhouse, a fitness center sponsored by Honor Health, pro shop, teen room, office space, restaurant, cafe, and locker.

Chris Loeffler: Moving to Caliber's PURE Pickleball & Padel project in Riverwalk in Scottsdale, Arizona, we are happy to report the project has gained design review board approval from the Salt River Pima-Maricopa Indian Community Planning Department. This approval positions the project to seek a building permit once final construction documents are complete, with a planned groundbreaking shortly after we receive the permit. As a reminder, the project entails building a state-of-the-art pickleball and padel facility, including 50 courts, with some available for daily open play as well as large tournaments, a clubhouse, a fitness center sponsored by HonorHealth, pro shop, teen room, office space, restaurant, cafe, and locker rooms. Caliber's Opportunity Zone funds are an investor in both the real estate and the operating business of PURE Pickleball.

Chris Loughlin: Moving to calibers pure pickle ball and Padel project in.

Chris Loughlin: And Riverwalk in Scottsdale, Arizona, we are happy to report. The project has gained design review board approval from the Salt River Pima Mericopa, Indeed community planning Department.

Chris Loughlin: This approval position the project to seek a building permit.

Chris Loughlin: Once final construction documents are complete with our planned brown groundbreaking shortly after we received the permit.

Chris Loughlin: As a reminder, the project entails building a state of the art Pickle ball and Padel facility, including 50 courts with some available for daily open play as well as large tournaments are clubhouse, a fitness center sponsored by honor Health Pro shop Teen room office space restaurant Cafe and locker rooms.

Chris Loeffler: Caliber's Opportunity Zone funds are an investor in both the real estate and the operating business of Pure Pickleball.

Speaker Change: Calibers opportunities on funds arent investor in both the real estate and the operating business of pure Pickle ball.

Chris Loeffler: Speaking of opportunities on investing, we recently closed on the refinance of the Double Tree by Hilton Hotel in Tucson, Arizona at the Convention Center.

Chris Loeffler: Speaking of Opportunity Zone investing, we recently closed on the refinance of the DoubleTree by Hilton Hotel in Tucson, Arizona, at the convention center. This financing on an award-winning asset that Caliber had developed offers Caliber's first Opportunity Zone fund attractive terms and cash to reinvest in other assets within its portfolio. It was also Caliber's first transaction with the team at Citibank, and we hope to continue to build the relationship with future financing opportunities. Moving on to the Caliber Hospitality Development or CHD, Caliber announced that CHD had entered into a development rights agreement with an affiliate of Hyatt Hotels Corporation to exclusively develop 15 new Hyatt Studios hotels in target market areas within Arizona, Colorado, Nevada, Texas, and Louisiana, an estimated $400 million in projects.

Speaker Change: Speaking of opportunities on investing we recently closed on the refinance of the Doubletree by Hilton Hotel in Tucson, Arizona at the Convention Center.

Chris Loeffler: This financing on an award-winning asset that Caliber had developed offers Caliber's first Opportunity Zone Fund attractive terms and cash to reinvest in other assets within its portfolio. It was also Caliber's first transaction with the team at Citibank and we hope to continue to build the relationship with future financing opportunities.

Speaker Change: This financing on an award winning asset the caliber had developed offers calibers first opportunity zone fund attractive terms and cash to reinvest in other assets within its portfolio.

Speaker Change: Also calibers first transaction with the team at Citibank, and we hope to continue to build the relationship.

Speaker Change: With future financing opportunities.

Chris Loeffler: Moving on to the Caliber Hospitality Development, or CHD, Caliber announced that CHD had entered into a development rights agreement with an affiliate of Hyatt Hotels Corporation to exclusively develop 15 new Hyatt Studios hotels in target market areas within Arizona, Colorado, Nevada, Texas, and Louisiana, an estimated 400 million in projects. This agreement is the result of over a year of work together and marks a major milestone in Caliber's growth as a hotel investor and developer. CHD, a new joint venture for Caliber, brought in $2 million in new operating capital to bolster Caliber's ability to pursue distressed hotel acquisitions, along with a narrow lane of new development in Hyatt Studios.

Speaker Change: Moving on to the caliber hospitality development, where C. H D caliber announced that CHD had entered into a development rights agreement.

Speaker Change: With an affiliate of Hyatt Hotels Corporation to exclusively developed 15, New Hyatt Studios hotels in target market areas within Arizona, Colorado, Nevada, Texas, and Louisiana, an estimated $400 million in projects.

Chris Loeffler: This agreement is the result of over a year of work together and marks a major milestone in Caliber's growth as a hotel investor and developer, CHD, a new joint venture for Caliber, brought in $2 million in new operating capital to bolster Caliber's ability to pursue distressed hotel acquisitions, along with a narrow lane of new development in Hyatt Studios. This capital, along with commitments from Caliber's funds and investors, will be utilized to aggressively pursue opportunities through H2 2025. Turning to the Caliber Hospitality Trust, or CHT, which is Caliber's strategy to acquire performing cash flow positive hotel assets, we disclosed last quarter that the previously expected LTD hotel contributions did not move forward due to the declining performance at those properties.

Speaker Change: This agreement is the result of over a year of work together and marks a major milestone and calibers growth as the hotel investor and developer.

Speaker Change: C H D. A new joint venture for caliber brought in $2 million and new operating capital to bolster calibers ability to pursue distressed hotel acquisitions, along with a narrow lane of new development, New development and Hyatt Studios.

Chris Loeffler: This capital, along with commitments from Caliber's funds and investors, will be utilized to aggressively pursue opportunities through the second half of 2025.

Speaker Change: This capital along with commitments from calibers funds and investors will be utilized to aggressively pursue opportunities through the second half of 2025.

Chris Loeffler: Turning to the Caliber Hospitality Trust, or CHT, which is Caliber's strategy to acquire performing cash flow positive hotel assets, we disclosed last quarter that the previously expected LTD hotel contributions did not move forward due to the declining performance at those properties.

Speaker Change: Turning to the caliber hospitality trust or C. H T, which is calibers strategy to acquire performing cash flow positive hotel assets, we disclosed last quarter that the previously expected LTV hotel contributions did not move forward due to the declining performance at those properties.

Chris Loeffler: While this has caused a shift in our AUM trajectory for CHT, we've already onboarded three new contributor groups into the CHT pipeline and continue to see strong interest from operators seeking to roll assets into a tax-deferred upgrade structure. We are still assessing the precise impact of this transaction, not closing on our AUM target of $3 billion by the end of 2026, but we believe the actions taken by Caliber to streamline costs will help keep us on track to our profitability goals this year.

Chris Loeffler: While this has caused a shift in our AUM trajectory for CHT, we've already onboarded three new contributor groups into the CHT pipeline and continue to see strong interest from operators seeking to roll assets into a tax-deferred UPREIT structure. We are still assessing the precise impact of this transaction not closing on our AUM target of $3 billion by the end of 2026. We believe the actions taken by Caliber to streamline costs will help keep us on track to our profitability goals this year. Finally, Caliber is making progress in closing prior funds and seeking liquidity for its investors in those funds. We recently listed for sale our two Alaska fishing properties, hoping to execute a sale through the summer season. In addition, we expect to finalize the sale of our Eclipse Townhomes project soon.

Speaker Change: While this has caused a shift in our AUM trajectory for <unk>, we've already on boarded three new contributor groups into the CHD pipeline and continued to see strong interest from operators seeking the rou assets into a tax deferred up REIT structure.

Speaker Change: We are still assessing the precise impact of this transaction not closing on our AUM target of $3 billion by the end of 2026, but we believe the actions taken by caliber to streamline costs will help keep us on track to our profitability goals. This year.

Chris Loeffler: Finally, Caliber is making progress in closing prior funds and seeking liquidity for its investors in those funds.

Speaker Change: Finally caliber is making progress in closing prior funds and seeking liquidity for its investors in those funds. We recently listed for sale or to Alaska fishing properties, hoping to execute a sale through the summer season and.

Chris Loeffler: We recently listed for sale our two Alaska fishing properties, hoping to execute a sale through the summer season. In addition, we expect to finalize the sale of our Eclipse Townhomes project soon. Finally, we are making progress on our developments in Johnstown, Colorado, expecting another sale at the ridge to close in the next month and moving forward with many letters of intent and contracts for additional land sales in the five projects we managed there.

Speaker Change: In addition, we expect to finalize the sale of our Eclipse Townhomes project soon.

Chris Loeffler: Finally, we are making progress on our developments in Johnstown, Colorado, expecting another sale at The Ridge to close in the next month and moving forward with many letters of intent and contracts for additional land sales in the five projects we manage there. I'll now turn the call over to Jade, who will cover our platform financial results and provide more insights into Caliber's business performance. Jade?

Speaker Change: Finally, we are making progress on our developments in Johnstown, Colorado expecting another sale at the ridge to close in the next month and moving forward with many letters of intent and contracts for additional land sales in the five projects we manage there.

Jade Leong: I'll now turn the call over to Jade, who will cover our platform financial results and provide more insights into Caliber's business performance. Thank you, Chris. Good afternoon, everyone. As Chris just mentioned, we are continuing to increase the transparency in our financial reports with the goal of helping investors understand, analyze and value Caliber's performance. That includes transparency into the value of the assets we hold and manage in our portfolio. To give investors a better understanding of Caliber's assets, beginning in the last quarter, 2024, we began reporting managed assets, which includes both AUM, fair value AUM, and assets under development or AUD.

Speaker Change: I'll now turn the call over to Jay who will cover our platform financial results and provide more insights into calibers business performance.

Speaker Change: Good.

Jade Leung: Thank you, Chris. Good afternoon, everyone. As Chris just mentioned, we are continuing to increase the transparency in our financial reports with the goal of helping investors understand, analyze, and value Caliber's performance. That includes transparency into the value of the assets we hold and manage in our portfolio. To give investors a better understanding of Caliber's assets, beginning in the last Q4 2024, we began reporting managed assets, which includes both AUM, fair value AUM, and assets under development or AUD. AUD includes the value at estimated cost of development or improvement work we expect to complete on land we own or assets we own which are not yet improved. In addition, we also disclosed the value of the estimated performance allocations we expect to earn on total managed assets, which we had not previously reported.

Speaker Change: Thank you Chris Good afternoon, everyone as Chris just mentioned, we are continuing to increase the transparency in our financial reports with the goal of helping investors understand analyze and value calibers performance.

Speaker Change: That includes transparency into the value of the assets, we hold in managing our portfolio.

Speaker Change: Yeah.

Speaker Change: To give investors a better understanding of calibers assets beginning in the last quarter.

Speaker Change: 2024, we began reporting managed assets, which includes both <unk> share value.

Speaker Change: Assets under development or AED.

Jade Leong: AUD includes the value at estimated cost of development or improvement work we expect to complete on land we own or assets we own which are not yet improved. In addition, we also disclosed the value of the estimated performance allocations we expect to earn on total managed assets. which we had not previously reported. For those of you who are not familiar, performance allocations, which may also be called carried interest or promote in our industry, is the portion of the profits of each project or fund we earn and expect to receive when we sell an asset or liquidate a fund.

Speaker Change: <unk> includes the value add estimated cost of development or improvement work, we expect to complete on land, we own our assets, we own which are not yet improved.

Speaker Change: In addition, we also disclosed the value of the estimated performance allocations, we expect to earn on total managed assets.

Speaker Change: Which we had not previously reported.

Jade Leung: For those of you who are not familiar, performance allocations, which may also be called carried interest or promote in our industry, is the portion of the profits of each project or fund we earn and expect to receive when we sell an asset or liquidate a fund. The anticipated performance allocations are forecasted in the detailed life cycle plans we develop for each asset prior to investing. These plans are updated every quarter and are rigorously tested and reviewed by external specialists and auditors each year. Because these performance allocations are all estimates, there is no guarantee that they will be achieved, and a material change to an asset plan will likely cause the amount of an expected performance allocation to change as well.

Speaker Change: For those of you who are not familiar performance allocations, which may also be cone carried interest or promote in our industry is the portion of the profits of each project or fund.

Speaker Change: <unk>.

Speaker Change: And expect to receive when we sell an asset when liquidator fund.

Jade Leong: The anticipated performance allocations are forecasted in the detailed life cycle plans we developed for each asset prior to investing. These plans are updated every quarter and are rigorously tested and reviewed by external specialists and auditors each year. Because these performance allocations are all estimates, there is no guarantee that they will be achieved, and a material change to an asset plan will likely cause the amount of an expected performance allocation to change as well. Investors should understand that many of the assets driving these performance allocations may be following a multi-year business plan or strategy, and the allocations are expected to be harvested over time.

Speaker Change: The anticipated performance applications are forecasted in the detailed lifecycle plans, we develop for each asset prior to investing these plans are updated every quarter and our rigorous rigorously tested and reviewed by external specialists and auditors each year.

Speaker Change: Because these performance applications are all estimates there is no guarantee that they will be achieved.

Speaker Change: And a material change to an asset plan will likely cause the amount of unexpected performance allocation to change as well.

Jade Leung: Investors should understand that many of the assets driving these performance allocations may be following a multi-year business plan or strategy, and the allocations are expected to be harvested over time. Adding in the value of our performance allocations, currently estimated to be $87.7 million, has the effect of increasing Caliber's net worth or book value substantially and providing an important picture for investors to understand a component of Caliber's value as a business. Moving on, I also want to highlight developments related to the company's liquidity and going concern disclosures. Beginning in December 2023 and throughout 2024, we addressed how we were managing the cost structure of the business in light of our reoccurring losses.

Speaker Change: Investors should understand that many of the assets driving these performance allocations, maybe following a multiyear business plan and our strategy and the allocations are expected to be harvested over time.

Speaker Change: Okay.

Jade Leong: Adding in the value of our performance allocations, currently estimated to be 87.7 million, has the effect of increasing Caliber's net worth or book value substantially, and providing an important picture for investors to understand a component of Caliber's value as a business.

Speaker Change: Adding in the value of our performance allocations currently estimated to be $87 7 million has the effective increase in calibers net worth or book value substantially and providing an important picture for investors to understand our component of calibers value as a business.

Okay.

Jade Leong: Moving on, I also want to highlight developments related to the company's liquidity and going concerns. beginning in December 2023 and throughout 2024. We addressed how we were managing the cost structure of the business in light of our reoccurring losses. We also disclosed the progress we were making with regards to our efforts. to refinance one-year unsecured term loans that had various maturities throughout the following 12-month period, without having a corresponding amount of cash on hand to meet those obligations as they became due. We have two primary programs available to help us manage these obligations. The first is refinancing existing notes into a 36-month unsecured note print.

Speaker Change: Moving on I also want to highlight developments related to the company's liquidity and going concern disclosures beginning in December 30 December 2023 and throughout 2024.

Speaker Change: We addressed how we were managing the cost structure of the business in light of our reoccurring losses. We also disclose the progress we were making with regards to our efforts.

Jade Leung: We also disclosed the progress we were making with regards to our efforts to refinance 1-year unsecured term loans that had various maturities throughout the following 12-month period without having a corresponding amount of cash on hand to meet those obligations as they became due. We have 2 primary programs available to help us manage these obligations. The first is refinancing existing notes into a 36-month unsecured note program. We have approximately $5 million of notes that have completed this refinance or are in the process of completing this refinance. We expect or we anticipate continued success in this program going forward as the investors in our corporate notes learn about the merits of the offering. The second is raising newly issued preferred stock. We have 2 offerings, a Series A and a Series Double A.

Speaker Change: To refinance one year unsecured term loans that had various maturities throughout the following 12 months period without having a corresponding amount of cash on hand to meet those obligations as they became due.

Speaker Change: We have two primary programs available to help us manage these obligations. The first is refinancing existing nodes into a 36 month unsecured note current Ryan.

Jade Leong: We have approximately 5 million of notes that have completed this refinance or are in the process of completing this refinance. We expect or we anticipate continued success in this program going forward as the investors in our corporate notes learn about the merits of the offer. The second is raising newly issued preferred stock. We have two offerings, a Series A and a Series AA. The Series A is our private placement convertible preferred stock through which we can raise up to $15 million. The Series AA was approved on March 12, 2025 through Reg A Plus. to raise up to $20 million.

Speaker Change: We have approximately $5 million of notes that have completed this refinance are in the process of completing this refinance.

Speaker Change: We expect our we anticipate continued success in this program going forward as the investors in our corporate notes learn about the merits of the offering.

Speaker Change: The second is raising newly issued preferred stock.

Speaker Change: We have two offerings a series a and a series double a the series a is our private placement convertible preferred stock through which we can raise up to $15 million.

Jade Leung: The Series A is our private placement convertible preferred stock through which we can raise up to $15 million. The Series Double A was approved on 12 March 2025, through Reg A+ to raise up to $20 million. Half of the proceeds from the Series Double A are expected to be used to repay matured corporate notes. The other half will be used for general corporate purposes, including Caliber's plans to grow. Our raise under each program has been gaining traction, and we expect both programs to be successful. We have also backstopped our cash position by executing an equity purchase agreement for up to $25 million of common stock. We believe these measures are part of a holistic plan of strong corporate finance, and they will help us manage satisfying our commitments as they come due.

Speaker Change: Series <unk> was approved on March 12, 2025 through Reg a plus.

Speaker Change: To raise up to $20 million.

Jade Leong: Half of the proceeds from the Series AA are expected to be used to repay matured corporate notes. The other half will be used for general corporate purposes, including Caliber's plans to grow. Our raise under each program has been gaining traction and we expect both programs to be successful. We have also backstopped our cash position by executing an equity purchase agreement for up to $25 million of common stock. We believe these measures are part of a holistic plan of strong corporate finance, and they will help us manage satisfying our commitments as they come due. We also expect these programs will offer Caliber the access to capital it needs to take advantage of the numerous revenue generating opportunities Chris mentioned previously.

Speaker Change: Half of the proceeds from the series <unk> are expected to be used to repay matured corporate notes. The other half will be used for general corporate purposes, including calibers plans to grow.

Speaker Change: Our raise under each program has been gaining traction and we expect both programs to be successful.

Speaker Change: Okay.

Speaker Change: We have also backstopped, our cash position by executing an equity purchase agreement for up to $25 million of common stock.

Speaker Change: We believe these measures are part of a holistic plan of strong corporate finance and they will help us manage satisfying our commitments as they come due.

Jade Leung: We also expect these programs will offer Caliber the access to capital it needs to take advantage of the numerous revenue-generating opportunities Chris mentioned previously. Turning now to our results for Q1 2025. Total Q1 platform revenue of $3.5 million was driven by asset management revenues. This was a 25% decrease compared to the prior period, primarily driven by a decrease in active development projects, which were 8 in Q1 2024 and 4 in the current year Q1. The decrease is partially offset by a 7% increase in asset management and administrative fees earned from the contribution of Holiday Inn Newport News. Total platform expenses were $6.1 million in Q1 2025, a decrease of 21% compared to Q1 of the prior year, primarily due to a decrease in operating costs related to payroll and payroll-related expenses.

Speaker Change: We also expect these programs will offer caliber the access to capital it needs to take advantage of the numerous revenue generating opportunities Chris mentioned previous.

Jade Leong: Turning now to our results for the first quarter of 2025. Total Q1 platform revenue of $3.5 million was driven by asset management revenue. This was a 25% decrease compared to the prior period, primarily driven by a decrease in active development projects, which were eight in Q1 2024 and four in the current year quarter. The decrease is partially offset by a 7% increase in asset management and administrative fees earned from the contribution of Holiday and Newport News. Total platform expenses were $6.1 million in the first quarter of 2025, a decrease of 21% compared to Q1 of the prior year, primarily due to a decrease in operating costs related to payroll and payroll-related expenses.

Speaker Change: Turning now to our results for the first quarter of 2025.

Speaker Change: Total Q1 platform revenue of $3 $5 million was driven by asset management revenues.

Speaker Change: This was a 25% decrease compared to the prior period, primarily driven by a decrease in active development projects, which were eight in Q1 2024 and four in the current year quarter.

Speaker Change: The decrease was personnel, partially offset by a 7% increase in asset management and administrative fees earned from the contribution of holiday and Newport News.

Speaker Change: Total platform expenses were <unk>.

Speaker Change: $6 1 million in the first quarter of 2025, a decrease of 21% compared to Q1 of the prior year, primarily due to a decrease in operating costs related to payroll and payroll related expenses.

Jade Leong: Average employee headcount decreased by about 25% from Q1 2024 to Q1 of 2025 as part of our comprehensive cost-saving initiatives to return Caliber to profitability. These impacts on our performance translate to platform-adjusted EBITDA loss for the first quarter of $1.4 million compared to platform-adjusted EBITDA loss of $1.7 million during the same period a year ago. Managed capital was $495.2 million, a 9.1% increase compared to the year ago quarter.

Jade Leung: Average employee headcount decreased by about 25% from Q1 2024 to Q1 2025 as part of our comprehensive cost-saving initiatives to return Caliber to profitability. These impacts on our performance translate to Platform Adjusted EBITDA loss for the first quarter of $1.4 million, compared to Platform Adjusted EBITDA loss of $1.7 million during the same period a year ago. Managed capital was $495.2 million, a 9.1% increase compared to the year-ago quarter. Now turning to an update on our balance sheet. As of the end of Q1, we had 196 individual unsecured notes with an aggregate principal balance of approximately $33.2 million, of which $26.1 million have matured or will mature within the next 12 months. Each note generally has a 12-month term with an option to extend for an additional 12 months.

Speaker Change: Average employee head count decreased by about 25% from Q1 2024 to Q1 of 2025 as.

Speaker Change: As part of our comprehensive cost saves or cost saving initiatives to return caliber to profitability.

Speaker Change: These impacts on our performance translate to platform adjusted EBITDA loss for the first quarter of $1 $4 million compared to platform adjusted EBITDA loss of $1 $7 million during the same period a year ago.

Speaker Change: Manage capital was $495 2 million, a nine 1% increase compared to the year ago quarter.

Jade Leong: And now turning to an update on our balance sheet. As of the end of Q1, we had 196 individual unsecured notes with an aggregate principal balance of approximately $33.2 million, of which $26.1 million have matured or will mature within the next 12 months. Each note generally has a 12-month term, with an option to extend for an additional 12 months. Although we have historically been able to extend a significant number of these notes, we have moved forward with the steps I mentioned earlier to either refinance these notes on a longer term basis or repay them. We continue to focus on collecting our outstanding accounts and notes receivable.

Speaker Change: Now turning to an update on our balance sheet.

Speaker Change: As of the end of Q1, we had 196 individual unsecured notes with an aggregate principal balance of approximately $33 2 million.

Of which $26 $1 million of matured or will mature within the next 12 months each.

Speaker Change: Each note generally has a 12 month term with an option to extend for an additional 12 months.

Jade Leung: Although we have historically been able to extend a significant number of these notes, we have moved forward with the steps I mentioned earlier to either refinance these notes on a longer-term basis or repay them. We continue to focus on collecting our outstanding accounts and notes receivable. Over the past year, we have collected over $9.7 million in investments in notes receivable, and our overall accounts receivable decreased by approximately $2 million. We're excited to already start seeing the impact of these efforts and what their contribution can be to strengthen the platform's performance throughout 2025. We continue to look for opportunities to refinance and recapitalize our balance sheet and are confident in our ability to achieve our goals.

Speaker Change: Although we have historically been able to extend a significant number of these notes we.

Speaker Change: We have moved forward with the steps I mentioned earlier to either refinance these notes on a longer term basis, where repay them.

We continue to focus on collecting our outstanding accounts and notes receivable over the past year, we have collected over $9 7 million in investments in notes receivable.

Jade Leong: Over the past year, we have collected over $9.7 million in investments and notes receivable. And our overall accounts receivable decreased by approximately $2 million. We're excited to already start seeing the impact of these efforts and what their contribution can be to strengthen the performance, the platform's performance throughout 2025. We continue to look for opportunities to refinance and recapitalize our balance sheet and are confident in our ability to achieve our goal. We have noted an increase in lender activities following a slowdown that began in April 2023 and continued through the November 2024 election and hope to capitalize on a more normal environment going forward.

Speaker Change: And our overall accounts receivable decreased by approximately $2 million.

Speaker Change: We're excited to already start seeing the impact of these efforts and what their contribution can be.

Speaker Change: Strength in the performance the platforms performance throughout 2025.

Speaker Change: We continue to look for opportunities to refinance and recapitalize, our balance sheet and are confident in our ability to achieve our goals.

Jade Leung: We have noted an increase in lender activities following a slowdown that began in April 2023 and continued through the November 2024 election and hope to capitalize on a more normal environment going forward. I'll now turn it back to the operator for your questions.

Speaker Change: We have noted an increase in lender activities. Following a slowdown that began in April 2023 and continued.

Speaker Change: Through the November 2020 for election, and hope to capitalize on a more normal environment going forward.

Operator: I'll now turn it back to the operator for your question. At this time, I would like to remind everyone that in order to ask a question, press star then the number one on your telephone. We will pause for just a moment to compile the Q&A run.

Speaker Change: I'll now turn it back to the operator for your questions.

Operator: We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Brendan McCarthy of Sidoti & Company. Please go ahead.

Speaker Change: At this time I would like to remind everyone that in order to ask a question.

Speaker Change: Star then the number one and your telephone keypad.

Speaker Change: We will pause for just a moment to compile the Q&A roster.

Operator: Your first question comes from the line of Brandon McCarthy of Sidoti and Company. Please go ahead. Great. Good morning, Chris. Good morning, Jade. I'm sorry. Good afternoon.

Speaker Change: Your first question comes from the line of Brandon Mccarthy of Sidoti and company. Please go ahead.

Brendan McCarthy: Great. Good morning, Chris. Good morning, Jade. I am sorry. Good afternoon, that is. Just wanted to talk about the Hyatt deal. Can you go into detail on how that ultimately developed? Maybe kind of walk us through the near-term and long-term financial impact of that deal.

Speaker Change: Great. Good morning, Chris Good morning, Jade I'm sorry. Good afternoon that is just wanted to talk about the the Hyatt deal can you go into detail on how that ultimately developed maybe kind of walk us through the near term and long term financial impact of that deal.

Brandon McCarthy: That is just wanted to talk about the Hyatt deal. Can you go into detail on how that ultimately developed? Maybe you kind of walk us through the near term and long term financial impact of that deal. Yeah, absolutely. And good afternoon, Brendan. It's morning somewhere, I guess. We just had some investors in town from another part of the world, and it's amazing how connected we all are these days.

Jade Leung: Yeah. Absolutely. Good afternoon, Brendan McCarthy. It's morning somewhere, I guess.

Speaker Change: Yeah, absolutely and good afternoon Brendan.

Speaker Change: Its morning somewhere I guess.

We sure. We just had we just had some investors in town from from another part of the world in its amazing how.

Brendan McCarthy: Sure.

Jade Leung: We just had some investors in town from another part of the world, and it's amazing how connected we all are these days. The Hyatt deal is something that we've been working on actually for many years. Hyatt announced the Studios brand almost as a surprise at one of their owners' conferences, and in that announcement, Caliber was one of 5 developers nationwide identified as expected to be a preferred developer for this particular product. It's been something we've been working closely with the Hyatt team on. At this point in time, I believe we're one of the faster-moving developers in the country putting the other sites and opportunities for this. I guess probably I should start with what makes it attractive to us. There's about the same amount of supply in hotels today as there was in January 2020.

How connected we all are these days.

Chris Loeffler: The Hyatt deal is something that we've been working on, actually, for many years. Hyatt announced the Studios brand almost as a surprise at one of their owners conferences. And in that announcement, Caliber was one of five developers nationwide identified as expected to be a preferred developer for this particular product. So it's been something we've been working closely with the Hyatt team on. At this point in time, I believe we're one of the faster moving developers in the country, putting the other sites and opportunities for this. And I guess probably I should start with what makes it attractive to us.

Speaker Change: The Hyatt deal.

Speaker Change: Is something that we've been working on actually for many years.

<unk> announced the studios brand almost as a surprise at one of their owners conferences and in that announcement caliber was one of five developers nationwide identify it is expected to be a preferred developer for this particular product.

So it's been something we've been working closely with the Hyatt team on.

Speaker Change: At this point in time I believe we're one of the faster moving developers in the country.

Speaker Change: Putting the other sites and opportunities for this.

Speaker Change: And I guess, probably I should start with <unk>.

Speaker Change: What makes it attractive to us.

Chris Loeffler: Hotels today There's about the same amount of supply in hotels today as there was in January of 2020. And the shift in where people travel to, where populations are growing, where jobs are happening, has changed fundamentally in the last five years. And so the demand is the same or higher, supply is muted, and where people are traveling to has changed. So it really creates an interesting opportunity to build the right kind of hotel in the right kind of market. And that's what Caliber is targeting to do. And then we looked across the ecosystem. Hyatt was one of the first brands to this new extended stay model that's much less costly to operate, requires less full-time employees, generates a better profit margin, and ultimately generates a nice outcome for our investors.

Speaker Change: The hotels today.

Speaker Change: There is about the same amount of supply in hotels today as there was in January of 2020.

Jade Leung: The shift in where people travel to, where populations are growing, where jobs are happening, has changed fundamentally in the last five years. The demand is the same or higher, supply is muted, and where people are traveling to has changed. It really creates an interesting opportunity to build the right kind of hotel in the right kind of market, and that's what Caliber's targeting to do. Then we looked across the ecosystem. Hyatt was one of the first brands to introduce this new extended stay model that's much less costly to operate, requires less full-time employees, and generates a better profit margin.

Speaker Change: And the shift in where people travel to where our populations are growing where jobs are happening.

Speaker Change: Has changed fundamentally in the last five years and so the demand is is the same or higher supply is muted.

Speaker Change: And where people are traveling to has changed so it really creates an interesting opportunity to build the right kind of hotel in the right kind of market.

Speaker Change: And Thats a caliber is targeting to do and then we looked across the ecosystem Hyatt was one of the first brands to introduce this new extended stay model. That's much less costly to operate requires less fulltime employees generates a better profit margin and ultimately generates.

Chris Loeffler: Ultimately generates a nice outcome for our investors. We kind of combined those two concepts. We worked with Hyatt for many years to put this together, and then the announcement is something that we're quite proud of. As far as an impact on Caliber, $400 million worth of assets under management if we build these. That's probably based on cost. Each time we construct one of these assets, we're looking at about $2 million worth of fees to the company, maybe a bit more, and then annual recurring fees from managing the assets.

Speaker Change: A nice outcome for our investors and so we kind of combine those two concepts we worked with Hyatt for many years to put this together and then the announcement is something that we're quite proud of as far as an impact on caliber.

Chris Loeffler: And so we kind of combined those two concepts. We worked with Hyatt for many years to put this together. And then the announcement is something that we're quite proud of.

Brandon McCarthy: As far as an impact on Caliber, $400 million worth of assets under management. If we build these, that's probably based on cost. And each time we construct one of these assets, we're looking at about $2 million worth of fees to the company, maybe a bit more, and then annual recurring fees from managing the assets. God, that's helpful. Go ahead. Thank you.

Speaker Change: $400 million worth of assets under management, if we build these that's probably based on cost.

Speaker Change: And each time, we construct one of these assets, we're looking at about $2 million worth of fees to the company, maybe a bit more.

Speaker Change: And then annual recurring fees from managing assets.

Brendan McCarthy: Got it. That's helpful.

Speaker Change: Got it Thats helpful.

Speaker Change: Yes.

Chris Loeffler: Go ahead.

Speaker Change: Good morning.

Brendan McCarthy: Thank you. I wanted to pivot to fundraising. Chris, I know you mentioned it's obviously been a challenging environment for 2 years or so. I know you mentioned the impact of the LTD termination, and that has led you to kind of reassess some of those financial targets you talked about. Are you able to provide any kind of insight to, I guess, on those 2026 financial targets? I know the fundraising goal there had been $750 million. Just curious. I know a big part of that was for CHT, but really just curious as to how investors kind of think about those targets going forward.

Speaker Change: Thank you wanted to pivot to fundraising and Chris I know you mentioned, it's obviously been a challenging environment for two years or so.

Brandon McCarthy: I wanted to pivot to fundraising, Chris. I know you mentioned it's obviously been a challenging environment for two years or so. And, yeah, I know you mentioned the impact of the LP. termination. And that has led you to kind of reassess some of those financial targets you talked about. Are you able to provide any kind of insight to You know, I guess on those 2026 financial targets, I know the fundraising goal, there had been 750 million just curious. I know a big part of that was for CHT, but really just curious as to how investors kind of think about those targets going forward.

Speaker Change: Yeah, I know you mentioned the impact of the LCD termination.

Speaker Change: That has led you to kind of reassess some of those financial targets. He talks about are you able to provide any kind of insight to.

Speaker Change: Yeah, I guess on those 2026 financial targets I know the fund raising goal there had been $750 million.

Speaker Change: Just curious I know a big part of that was <unk>.

Speaker Change: <unk> CH, but really just curious as to.

Speaker Change: How investors can I kind of think about those targets going forward.

Chris Loeffler: Sure, yeah, we're still working through, you know, the timing of those targets because obviously the not closing on that transaction was not expected and not something we had planned for. And what we see, you know, as we look into our crystal ball is that we are still going to achieve the goal we're seeking to achieve with CHT. We're just trying to determine based on the time it takes to find, source, and negotiate these types of larger contracts, whether that'll all occur by the end of 2026 or whether we would be pushing that date out into 2027.

Chris Loeffler: Sure. Yeah. We're still working through the timing of those targets because obviously the not closing on that transaction was not expected and not something we had planned for. What we see as we look into our crystal ball is that we are still going to achieve the goal we're seeking to achieve with CHT. We're just trying to determine, based on the time it takes to find, source, and negotiate these types of larger contracts, whether that'll all occur by the end of 2026 or whether we would be pushing that date out into 2027. I think that's the bogey we're still analyzing.

Speaker Change: Sure Yeah, we're still working through.

Speaker Change: The timing of those targets because obviously the not closing on that transaction was not expected and not something we had planned for.

Speaker Change: And what we see as we look into our Crystal ball is that we're still going to achieve the goal where we're seeking to achieve this ht. We're just trying to determine based on the the time it takes to find source and negotiate these types of larger contracts.

Speaker Change: Whether that will all occur by the end of 2026 or whether we would be pushing that date out into 2027. So I think that's the that's the bogey we're still analyzing.

Chris Loeffler: So I think that's the, that's the bogey we're still analyzing. And I think it's fair to say that, you know. We're feeling better and more bullish about our prospects considering the fact that investors seem to be turning back to real estate as an opportunity and Considering the fact that we are picking up new potential portfolio contributors in the CHT that we had not been talking to before So we feel good about those Those elements, I guess you would call them sort of green shoots of momentum But we're having we still need some more time to quantify that and really produce I'd say more concrete guidance on timing Got it.

Chris Loeffler: I think it's fair to say that we're feeling better and more bullish about our prospects considering the fact that investors seem to be turning back to real estate as an opportunity, and considering the fact that we are picking up new potential portfolio contributors into CHT that we had not been talking to before. We feel good about those elements, I guess you would call them sort of green shoots of momentum. We still need some more time to quantify that and really produce, I'd say, more concrete guidance on timing.

Speaker Change: And I think it's fair to say that.

Speaker Change: We're feeling better and more bullish about our prospects considering the fact that investors seem to be turning back to real estate as an opportunity and considering the fact that we are picking up new potential portfolio contributors and the DHT that we had not been talking to before so we feel good about those.

Those elements I guess, you would call them sort of green shoots of momentum.

Speaker Change: But we're having we're still need some more time to quantify that and really produce I'd say more concrete guidance on timing.

Speaker Change: Okay.

Brendan McCarthy: Got it. That makes sense. On the wholesale distribution channel front, it sounds like Q1 2025 was pretty strong relative to 2024. What's the progress like there? What are your expectations for wholesale heading into the last 3 quarters of the year?

Speaker Change: Got it that makes sense and on the wholesale distribution channel front.

Brandon McCarthy: That makes sense.

Chris Loeffler: And on the wholesale distribution channel front. You know, it sounds like the first quarter 25 was was pretty strong relative to 2024. What's what's the progress like there? What are your expectations for wholesale heading into the last three quarters of the year? I feel really good about the channel. Driven by the fact that not only are we seeing an increase in selling agreements, but we're seeing an increase in order flow coming from those selling agreements, like we mentioned, having the same order flow in the first quarter of 2025 that we saw in all of last year.

Speaker Change: So it sounds like the first quarter of 25 was pretty strong relative to 2024.

Speaker Change: What's what's the progress like there what are your expectations for wholesale heading into the last three quarters of the year.

Chris Loeffler: I feel really good about the channel, driven by the fact that not only are we seeing an increase in selling agreements, but we're seeing an increase in order flow coming from those selling agreements, like we mentioned, having the same order flow in Q1 2025 that we saw in all of last year. That's pretty impressive, and that's really showing us that the selling agreements that we've been signing and the relationships we've been working on have been activated. Having said that, I think that the hardest part is that first selling agreement and that first order. As we start to see more and more momentum, I do expect it to get easier to continue to build that momentum and for to see that momentum start to accelerate.

Speaker Change: I feel really good about the channel.

Speaker Change: Driven by the fact that not only are we seeing an increase in selling agreements, but we are seeing an increase in order flow coming from the selling agreements like we mentioned, having the same order flow in the first quarter of 2025 that we saw in all of last year.

Chris Loeffler: That's pretty impressive, and that's really showing us that the selling agreements that we've been signing and the relationships we've been working on have been activated.

Speaker Change: That's pretty impressive.

Speaker Change: That's really showing us that the selling agreements that we've been signing and the relationships. We've been working on have been activated.

Chris Loeffler: Having said that, I think that the hardest part is that first selling agreement and that first order. As we start to see more and more momentum, I do expect it to get easier to continue to build that momentum and to see that momentum start to accelerate. The other thing I'll mention to you is what we have found in our conversations with these advisors is there's a really strong fit between what they're looking for, which is what I would call an institutional quality investment management platform. aligned to a more boutique and focused real estate investment strategy like Caliber offers.

Speaker Change: Having said that I think that the hardest part is that first selling agreement that first order.

Speaker Change: So as we start to see more and more momentum I do expect it to get easier to continue to build that momentum.

Speaker Change: And for us to see that momentum start to accelerate.

Chris Loeffler: The other thing I'll mention to you is what we have found in our conversations with these advisors is there's a really strong fit between what they're looking for, which is what I would call an institutional quality investment management platform, aligned to a more boutique and focused real estate investment strategy like Caliber offers. There's not a lot of companies like ourselves that are doing that and providing that type of a combination of that institutional quality investment management with the boutique nature of our investment platform. As we talk to these advisors and as we start to onboard with them, we're finding more and more are pleasantly surprised with what we have to offer.

Speaker Change: The other thing I'll mention to us what we have found in our conversations with these advisors is there's a really strong fit between what they're looking for which is what I would call it institutional quality investment management platform.

Speaker Change: Aligned to a more boutique and focused real estate investment strategy like caliber offers so there's not a lot of <unk>.

Chris Loeffler: So there's not a lot of companies like ourselves that are doing that and providing that type of a combination of that institutional quality investment management with the boutique nature of our investment platform. And, you know, as we talk to these advisors and as we start to on board with them, we're finding more and more are pleasantly surprised with what we have to offer. Got it, got it.

Speaker Change: Companies like ourselves that are doing that and providing that type of a combination of that institutional quality investment management with the boutique nature of our investment platform.

Speaker Change: And.

Speaker Change: As we talked these advisors and as we start to on board with them, we're finding more and more are pleasantly surprised with what we have to offer.

Brendan McCarthy: Got it. One more question from me, just on the assets under development and really on the refocus of your kind of business strategy here. As you kind of move forward and maybe monetize some of those non-core development projects, do you expect there to be a material impact on performance allocations?

Speaker Change: Got it got it one more question for me just on the assets under development and really on the refocus of your kind of business strategy here as you kind of move forward and maybe monetize some of those non core development projects do you expect.

Brandon McCarthy: One more question for me, just on the assets under development and really on the refocus of your kind of business strategy here, as you kind of move forward and maybe monetize some of those non-core development projects, do you expect there to be a material impact on performance allocation? I think you can expect to see the typical fees of us generating from sales of brokerage fees and things like that. Because we're making the decision to sell some of those assets and not continue to develop them, you probably will not see sizable performance allocations associated with those sales.

Speaker Change: There to be a material impact on performance applications.

Chris Loeffler: I think you can expect to see the typical fees of us generating from sales of brokerage fees and things like that. Because we're making the decision to sell some of those assets and not continue to develop them, you probably will not see sizable performance allocations associated with those sales. Those estimates are already included in the $87.7 million of estimated performance allocations we provided. If we're expecting to sell something and not generate a performance allocation, that's already included in that figure.

Speaker Change: I think you can expect to see.

Typical fees of us generating from sales of brokerage fees and things like that.

Speaker Change: Because we're making the decision to sell some of those assets and not.

Speaker Change: And not continue to develop them you probably will not see sizable performance allocations associated with those sales but.

Chris Loeffler: But those estimates are already included in the 87.7 million of estimated performance allocations we provided. So if we're expecting to sell something and not generate a performance allocation, that's already included in that figure. Yeah, that makes sense.

Speaker Change: Those those estimates are already included in the $87 7 million of estimated performance allocations we provided.

Speaker Change: So if we're expecting to sell something and not generated performance allocation. That's already included in that in that figure.

Brendan McCarthy: Yeah, that makes sense. One last question just on the outlook for profitability. You mentioned the back half of this year is a little bit more favorable for profitability. I guess what factors could really drive maybe an outperformance or underperformance relative to your expectations?

Speaker Change: Yes that makes sense and one last.

Brandon McCarthy: And yeah, one last question just on the You know, outlook for profitability, you know, you mentioned the back half of this year is a little bit more favorable for profitability. It's what factors could really drive maybe an outperformance or underperformance relative to your expectations. I would say an outperformance is going to be driven primarily by an improving financing environment and an improving fundraising. Both of those seem to be improving, but, you know, we hope that that momentum continues. And an underperformance would be sort of a continued, you know, remaining, what do we have seven months or seven, six and a half months of just lack of decision making from investors in any one direction.

Speaker Change: Last question just on the.

Speaker Change: Outlook for profitability that you mentioned in the back half of this year is a little bit more favorable for profitability.

Speaker Change: What factors can really.

Speaker Change: Drive maybe in the outperformance or underperformance relative to your expectations.

Chris Loeffler: I would say an outperformance is going to be driven primarily by an improving financing environment and an improving fundraising. Both of those seem to be improving, we hope that that momentum continues. An underperformance would be sort of a continued remaining, what do we have? Seven months or six and a half months of just lack of decision-making from investors in any one direction. That's what we've experienced quite a bit of in the last two years, we think that that is starting to change.

Speaker Change: I would say an outperformance is going to be driven primarily by.

Speaker Change: And improving financing environment, and an improving fundraising both of those seem to be improving but.

Speaker Change: We hope that that momentum continues.

Speaker Change: And in underperformance would be sort of a continued.

Speaker Change: <unk>.

Speaker Change: Remaining.

Speaker Change: What do we have seven months or 765 months of just.

Speaker Change: Lack of.

Speaker Change: Of decision, making from investors in any one direction. That's what we have experienced quite a bit of in the last two years, but we think that that is starting to change.

Chris Loeffler: That's what we've experienced quite a bit of in the last two years. But we think that that is starting to change. Got it. Thanks, Chris. That's all for me.

Brendan McCarthy: Got it. Thanks, Chris. That's all from me.

Speaker Change: Got it thanks, Chris that's all from me.

Operator: Again, if you would like to ask a question, press star 1 on your telephone.

Operator: Again, if you would like to ask a question, press star one on your telephone keypad. That's all for our Q&A session, and we appreciate your participation. I will now turn the call over to Ilya Grozovsky, Vice President of Investor Relations and Corporate Development. Please go ahead.

Speaker Change: Again, if he would like to ask a question press star one on your telephone keypad.

Operator: That's all for our Q&A session, and we appreciate your participation.

Speaker Change: That's all for our Q&A session and we appreciate the participation.

Ilya Grzovsky: I will now turn the call over to Ilya Gurzufsky, Vice President of Investor Relations and Corporate Development. Please go ahead. Thank you for your time today. We look forward to speaking and meeting with many of you in the near future.

Speaker Change: I will now turn the call over to Elliott goes of ski Vice President of Investor Relations and corporate development. Please go ahead.

Ilya Grozovsky: Thank you for your time today. We look forward to speaking and meeting with many of you in the near future. If you have any additional questions, please visit our website at www.ir.caliberco.com and follow the path for public shareholders. There, you can download our financial supplement and sign up on the mailing list specifically focused for public investors. If you have any questions, please complete the Contact Us form so we can get engaged with you directly. Thank you and have a good evening. You may now disconnect.

Speaker Change: Thank you for your time today.

Speaker Change: Look forward to speaking and meeting with many of you in the near future. If you have any additional questions. Please visit our website at www caliber co dot com and follow the path for public shareholders. There you can download our financial supplement at.

Ilya Grzovsky: If you have any additional questions, please visit our website at www.calibercode.com and follow the path for public shareholders. There you can download our financial supplement and sign up on the mailing list specifically focused for public investors. If you have any questions, please complete the contact us form so we can get engaged with you directly.

Speaker Change: Sign up on the <unk>.

Speaker Change: Selling list specifically focused for public investors. If you have any questions. Please complete the contact us form. So we can get engaged with you directly. Thank you and have a good evening you may now disconnect.

Ilya Grzovsky: Thank you and have a good evening.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. Thanks for watching!

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Speaker Change: [music].