Q2 2025 Caliber Cos Inc Earnings Call

Thank you for standing by my name is Eric and I'll be your conference operator today.

Operator: Thank you for standing by. My name is Eric, I will be your conference operator today. At this time, I would like to welcome everyone to the Caliber Q2 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 a question 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. I would now like to turn the call over to Ilya Grozovsky, Vice President, Investor Relations and Corporate Development. Please go ahead.

Chris Loeffler: Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the CaliberCos Q2 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 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. I would now like to turn the call over to Ilya Gurzowski, Vice President, Investor Relations and Corporate Development. Please go ahead.

At this time I would like to welcome everyone to the caliber second quarter 2025 earnings conference call.

All lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there'll be a question and answer session.

Like to ask a question during this time simply press star followed by the number one on your telephone keypad.

I would like to withdraw your question Press Star one again.

I would now like to turn the call over to Elliot good Gozofsky.

<unk> President of Investor Relations and corporate development. Please go ahead.

Good afternoon, everyone welcome to calibers second quarter 2025 financial results Conference call.

Ilya Gurzovsky: Good afternoon, everyone. Welcome to Caliber's second 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 in the Investor Relations section of our website at www.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 risks and uncertainties. Words like "believe," "expect," and "anticipate" refer to our best estimates as of this call, and there can be no assurances that these will actually take place. So our actual future results could differ significantly from these statements.

Ilya Grozovsky: Good afternoon, everyone. Welcome to Caliber's Q2 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 in the investor relations section of our website at www.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 risks and uncertainties. Words like believe, expect, and anticipate refer to our best estimates as of this call, and there can be no assurances that these will actually take place. Our actual future results could differ significantly from these statements.

With me today are Chris Loughlin, Chief Executive Officer, and cofounder, and Jamie I'll, 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 in the Investor Relations section of our website at Www dot caliber coal dot 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 risks and uncertainties.

Words like believe expect anticipates referred to our best estimates as of this call and there can be no assurances that these will actually take place. So our actual future results could differ significantly from these statements.

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. Please go ahead.

Ilya Gurzovsky: 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. Please go ahead.

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. Please go ahead.

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

Chris Loeffler: Thank you, Ilya, and thank you to our investors, employees, and participating call attendees. The Q2 2025 was another step towards our goal of achieving Platform Adjusted EBITDA profitability in the H2 2025. To that end, with essentially similar revenues in the Q2 2025 versus the Q2 2024, we have narrowed our Platform Adjusted EBITDA loss to $54,000 compared to $2.5 million in the year ago quarter, importantly. The cost savings initiatives that we have implemented in the H1 2025 should show their full impact in the Q3 and beyond and drive positive results in the Q4. Our long-term objective continues to be an annual EBITDA margin of 25% or greater on a sustainable basis.

Chris Loeffler: Thank you, Ilya, and thank you to our investors, employees, and participating call attendees. The second quarter of 2025 was another step towards our goal of achieving platform-adjusted EBITDA profitability in the second half of 2025. To that end, with essentially similar revenues in the second quarter of 2025 versus the second quarter of 2024, we have narrowed our platform-adjusted EBITDA loss to $54,000 compared to $2.5 million in the year ago and quarter, importantly. The cost savings initiatives that we have implemented in the first half of 2025 should show their full impact in the third quarter and beyond and drive positive results in the fourth quarter. Our long-term objective continues to be an annual EBITDA margin of 25% or greater on a sustainable basis.

The second quarter of 2025 was another step towards our goal of achieving platform adjusted EBITDA profitability in the second half of 2025.

To that end with essentially similar revenues in the second quarter of 2025 versus the second quarter of 2024, we have narrowed our platform adjusted EBITDA loss to $54000 compared to $2 5 million in the year ago quarter Importantly.

The cost savings initiatives that we have implemented in the first half of 2025 should show their full impact in the third quarter and beyond and drive positive results in the fourth quarter.

Our long term objective continues to be an annual EBITDA margin of 25% or greater on a sustainable basis.

In terms of overall industry dynamics commercial real estate values continue to show signs of stability.

Chris Loeffler: In terms of overall industry dynamics, commercial real estate values continue to show signs of stability, and we continue to believe that we are in a period of long-term opportunity for Caliber, given our experience in complex and distressed transactions. The recent passage of the One Big Beautiful Bill offers Caliber tailwinds, as the Opportunity Zone program that underpins one of our most successful fund strategies was made permanent as part of the tax code, and as investors are seeking to gain access to a 100% bonus depreciation vis-à-vis our investment strategies. We expect this legislation will help Caliber drive fundraising results and, combined with the market opportunity to buy real estate at historically attractive prices, drive results for our investor clients. After Caliber's restructuring in May, we are a now more focused company centered around three core verticals: hospitality, multifamily, and multi-tenant industrial.

Chris Loeffler: In terms of overall industry dynamics, commercial real estate values continue to show signs of stability. We continue to believe that we are in a period of long-term opportunity for Caliber, given our experience in complex and distressed transactions. The recent passage of the One Big Beautiful Bill offers Caliber tailwinds as the opportunity zone program that underpins one of our most successful fund strategies was made permanent as part of the tax code and as investors are seeking to gain access to 100% bonus depreciation vis-à-vis our investment strategies. We expect this legislation will help Caliber drive fundraising results and, combined with the market opportunity to buy real estate at historically attractive prices, drive results for our investor clients. After Caliber's restructuring in May, we are now a more focused company centered around three core verticals: hospitality, multifamily, and multi-tenant industrial.

We continue to believe that we are in a period of long term opportunity for caliber given our experience in complex and distressed transactions.

The recent passage of the one big beautiful Bill offers caliber tailwind as the opportunity zone program that underpins one of our most successful fund strategies was made permanent as part of the tax code and.

And as investors are seeking to gain access to a 100% bonus depreciation vis vis our investment strategies.

We expect this legislation will help caliber drive fund raising results and combined with the market opportunity to buy real estate at historically attractive prices drive results for our investor clients.

After calibers restructuring in May we are now more focused company centered around three core verticals hospitality multifamily and multi tenant industrial.

Chris Loeffler: We believe these asset classes offer the greatest opportunity for scalable fee-based growth. We remain opportunistic, a core component of Caliber's culture, and we are seeking to maximize value for our shareholders. Touching on visibility to Caliber's financial performance, we have updated our platform performance financial supplement as of June 30, 2025. As a reminder, the platform supplement excludes consolidated assets to offer a simple and transparent view of our operating business. Caliber's estimated performance allocations, or carried interest, as it's sometimes referred to in our industry, were updated, totaling $84.8 million. We first published this carried interest estimate in our 2024 10-K and have worked to help investors understand how including it in a calculation of the company's book value transforms investors' views into Caliber's balance sheet.

Chris Loeffler: We believe these asset classes offer the greatest opportunity for scalable fee-based growth. We remain opportunistic, a core component of Caliber's culture, and we are seeking to maximize value for our shareholders. Touching on visibility to Caliber's financial performance, we have updated our platform performance financial supplement as of 30 June 2025. As a reminder, the platform supplement excludes consolidated assets to offer a simple and transparent view of our operating business. Caliber's estimated performance allocations, or carried interest, as it's sometimes referred to in our industry, were updated totaling $84.8 million. We first published this carried interest estimate in our 2024 10-K and have worked to help investors understand how including it in a calculation of the company's book value transforms investors' views into Caliber's balance sheet.

We believe these asset classes offer the greatest opportunity for scalable fee base growth.

We remain opportunistic a core component of calibers culture, and we are seeking to maximize value for our shareholders.

Touching on visibility to calibers financial performance, we have updated our platform performance financial supplement as of June 32025.

As a reminder, the platform supplement excludes consolidated assets to offer a simple and transparent view of our operating business.

Calibers estimated performance allocations were carried interest as it sometimes referred to in our industry.

Were updated totaling $84 8 million.

We first published this carried interest estimate in our 2024 10-K and have worked to help investors understand how including it in our calculation of the Companys book value transforms investors views into calibers balance sheet.

The supplement is available on our website and we encourage you to review it and get a better sense of calibers estimated net worth or book value.

Chris Loeffler: The supplement is available on our website, and we encourage you to review it and get a better sense of Caliber's estimated net worth or book value that is not reflected in our GAAP financials. I'll continue on with some business updates. In the second quarter, Caliber announced that it entered a development rights agreement with an affiliate of Hyatt Hotels Corporation to develop 15 new Hyatt Studios hotels. Under the terms of the agreement, Caliber Hospitality Development will receive exclusive development rights for future development of Hyatt Studios hotels in target market areas within Arizona, Colorado, Nevada, Texas, and Louisiana. As of today, Caliber has placed three sites in escrow to purchase and develop into Hyatt Studios hotels. The first is in Georgetown, Texas, a suburb of the Austin metropolitan area and the fastest growing city of its size for the last three years in the United States.

Chris Loeffler: The supplement is available on our website, and we encourage you to review it and get a better sense of Caliber's estimated net worth or book value that is not reflected in our GAAP financials. I'll continue on with some business updates. In the Q2, Caliber announced that it entered a development rights agreement with an affiliate of Hyatt Hotels Corporation to develop 15 new Hyatt Studios hotels. Under the terms of the agreement, Caliber Hospitality Development will receive exclusive development rights for future development of Hyatt Studios hotels in target market areas within Arizona, Colorado, Nevada, Texas, and Louisiana. As of today, Caliber has placed three sites in escrow to purchase and develop into Hyatt Studios hotels. The first is in Georgetown, Texas, a suburb of the Austin metropolitan area and the fastest-growing city of its size for the last three years in the United States.

That is not reflected in our GAAP financials.

I'll continue on with some business updates.

In the second quarter caliber announced that it entered a development rights agreement with an affiliate of Hyatt Hotels Corporation.

Develop 15, New Hyatt studios hotels under the terms of the agreement caliber hospitality development will receive exclusive development rights for future development of Hyatt hotels in target market areas within Arizona, Colorado, Nevada, Texas and Louisiana.

As of today caliber has placed three sites in escrow to purchase and develop into highest studios hotels.

The first is in Georgetown, Texas, a suburb of Austin Metropolitan area, and the fastest growing city of that size for the last three years in the United States.

Chris Loeffler: The second site is adjacent to Taiwan Semiconductor, or TSMC's $165 billion semiconductor fabrication facility in Phoenix, Arizona. The third site is located in Steamboat, Colorado, a highly attractive destination market with significant barriers to entry. We hope to close on these three acquisitions through the end of this year, adding them to the existing sites we own vis-à-vis our Opportunity Zone funds near Scottsville, Arizona. Besides the prestige and vote of confidence of working with Hyatt, I wanted to discuss the economic benefit of the developments. We believe the first four Hyatt Studios locations will increase Caliber's AUM by approximately $100 million, generating approximately $4 million in one-time fees for Caliber and generating approximately $700,000 on an annualized recurring basis through asset management fees.

Chris Loeffler: The second site is adjacent to Taiwan Semiconductor, or TSMC's $165 billion-dollar semiconductor fabrication facility in Phoenix, Arizona. The third site is located in Steamboat, Colorado, a highly attractive destination market with significant barriers to entry. We hope to close on these three acquisitions through the end of this year, adding them to the existing sites we own vis-a-vis our opportunity zone funds near Scottsdale, Arizona. Besides the prestige and vote of confidence of working with Hyatt, I wanted to discuss the economic benefit of the developments. We believe the first four Hyatt Studios locations will increase Caliber's AUM by approximately $100 million, generating approximately $4 million in one-time fees for Caliber and generating approximately $700,000 on an annualized recurring basis through asset management fees.

The second site is adjacent to Taiwan semiconductor or Tsmc's $165 billion semiconductor fabrication facility in Phoenix, Arizona.

The third site is located in steamboat, Colorado, a highly attractive destination market with significant barriers to entry.

We hope to close on these three acquisitions through the end of this year, adding them to the existing sites, we own visa VR opportunities on funds near Scottsdale, Arizona.

Besides the prestige and vote of confidence in working with Hyatt I wanted to discuss the economic benefit of the developments.

We believe the first four highest use locations will increased calibers AUM by approximately $100 million.

Generating approximately $4 million in one time fees for caliber and generating approximately 700000 on an annualized recurring basis through asset management fees.

Our long term goal will be to either sell the assets to a third party buyer our harvest performance allocations by doing so.

Chris Loeffler: Our long-term goal will be to either sell the assets to a third-party buyer or harvest performance allocations by doing so, or contribute the assets to our Caliber Hospitality Trust, which could yield Caliber additional revenues, holding the assets for long-term cash flow. Fundraising in the second quarter continued to show improvement, driven by strength in our wholesale distribution channel. Managed capital at the end of the second quarter was $498 million, up from $495 million at the end of Q1 and up from $470 million from a year ago. Caliber spent much of the second quarter working to open and launch offerings, as well as supplement existing offerings to accommodate a change in our managing broker-dealer. This work sets us up for Q3 and Q4 to focus on fundraising instead of product development.

Chris Loeffler: Our long-term goal will be to either sell the assets to a third-party buyer or harvest performance allocations by doing so or contribute the assets to our Caliber Hospitality Trust, which could yield Caliber additional revenues holding the assets for long-term cash flow. Fundraising in Q2 continued to show improvement driven by strength in our wholesale distribution channel. Managed capital at the end of Q2 was $498 million, up from $495 million at the end of Q1 and up from $470 million from a year ago. Caliber spent much of Q2 working to open and launch offerings as well as supplement existing offerings to accommodate a change in our managing broker-dealer.

Or contribute the assets to our caliber hospitality trust, which could yield caliber additional revenues holding the assets for long term cash flow.

Fund raising in the second quarter continued to show improvement driven by strength in our wholesale distribution channel.

<unk> managed capital at the end of the second quarter was $498 million up from $495 million at the end of Q1 and up from $470 million from a year ago.

Caliber spent much of the second quarter working to open and launch offerings as well as supplement existing offerings to accommodate a change in our managing broker dealer.

This work sets us up for Q3, and Q4 to focus on fundraising instead of product development.

Chris Loeffler: This work sets us up for Q3 and Q4 to focus on fundraising instead of product development. In wholesale fundraising, we saw consistent momentum build through the quarter, reflected in increased advisor participation and deeper engagement across our platform. Advisor production steadily increased over the quarter, with 3 firm relationships produced in April, 4 new relationships in May, and 6 new relationships in June. A total of 13 new advisors in Q2. This growth underscores the expanding reach of our distribution efforts and shows our momentum heading into H2 of 2025. In addition to growing order flows with new advisors, we secured 3 new selling agreements in Q2, representing strategic partners with long, strong long-term pipeline potential. We remain highly encouraged by the acceleration in advisor engagement and the continued diversification of our capital base toward more wholesale fundraising.

And wholesale fund raising we saw consistent momentum build through the quarter reflected in increased advisor participation in deeper engagement across our platform.

Chris Loeffler: In wholesale fundraising, we saw consistent momentum build through the quarter, reflected in increased advisor participation and deeper engagement across our platform. Advisor production steadily increased over the quarter, with three firm relationships produced in April, four new relationships in May, and six new relationships in June, a total of 13 new advisors in the second quarter. This growth underscores the expanding reach of our distribution efforts and shows our momentum heading into the second half of 2025. In addition to growing order flows with new advisors, we secured three new selling agreements in the second quarter, representing strategic partners with strong long-term pipeline potential. We remain highly encouraged by the acceleration in advisor engagement and the continued diversification of our capital base toward more wholesale fundraising. Now I'll turn to some material updates on assets we manage and the performance of our managed real estate fund.

Advisor production steadily increased over the quarter with three firm relationships produced in March and April four new relationships in May and six new relationships in June a total of 13, new advisors in the second quarter.

This growth underscores the expanding reach of our distribution efforts and shows our momentum heading into the second half of 2025.

In addition to growing order flows with new advisors, we secured three new selling agreements in the second quarter, representing strategic partners with long strong long term pipeline potential.

We remain highly encouraged by the acceleration in advisor engagement and the continued diversification of our capital base toward more wholesale fundraising.

Now I will turn to some more some material updates on assets, we manage and the performance of our managed real estate funds.

Chris Loeffler: Now I'll turn to some more, some material updates on assets we manage and the performance of our managed real estate funds. In the interest of your time, each quarter I touch on what I believe are the most important changes that occurred during and after 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 Caliber has cash invested in those assets, you are an owner in the fees they generate and the potential profit sharing of the funds and the assets that we manage vis-a-vis the carried interest. As shareholders, we are jointly vested in the success of Caliber's investor clients. Caliber's Canyon project is moving along well.

In the interest of your time each quarter I touch on what I believe are the most important changes that occurred during and after the quarter's end.

Chris Loeffler: In the interest of your time, each quarter I touch on what I believe are the most important changes that occurred during and after 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 Caliber has cash invested in those assets, you are an owner in the fees they generate and the potential profit sharing of the funds and the assets that we manage, vis-à-vis the carried interest. As shareholders, we are jointly vested in the success of Caliber's investor clients. Caliber's Canyon project is moving along well. We are working with the architect, mechanical, electrical, and plumbing consultants to complete the working drawings.

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 asset other than to the extent caliber has cash invested in those assets you are an owner in the fees they generate and the potential profit sharing of the funds and the assets that we manage vis vis the carried interest.

As shareholders. We are jointly invested in the success of calibers investor clients.

Calibers Canyon project is moving along well.

Chris Loeffler: We are working with the architect, mechanical, electrical, and plumbing consultants to complete the working drawings. We expect to have working drawings submitted for review in approximately 90 days. From there, we should be able to pull the demolition permit for the interior of the first phase buildings, and we will be performing demolition during the drawing completion phase. Currently, we are reviewing construction financing options and believe that there is an excellent option for a construction to permanent loan of $56 million on the project. Importantly, the Metro Center Mall transformation, an $800 million redevelopment project, has completed its demolition phase. The development will create an outdoor open-air shopping experience with on-site new residential units.

Working with the architect mechanical electrical and plumbing consultants to complete the working drawings we have.

Chris Loeffler: We expect to have working drawings submitted for review in approximately 90 days. From there, we should be able to pull a demolition permit for the interior of the first phase buildings, and we will be performing demolition during the drawing completion phase. Currently, we are reviewing construction financing options and believe that there is an excellent option for a construction-to-permanent loan of $56 million on the project. Importantly, the Metro Center Mall transformation, an $800 million redevelopment project, has completed its demolition phase. The development will create an outdoor open-air shopping experience with on-site new residential units. We believe the project will provide significant tailwinds for Canyon, as it's only one step away on the new light rail, or one stop away on the new light rail line that's directly in front of our project.

We expect to have working drawings submitted for review in approximately 90 days.

From there, we should be able to pull the demolition permit for the interior of the first phase buildings.

And we will be performing demolition during the drawing completion phase <unk>.

Currently we are reviewing construction financing options and believe that there is an excellent option for our construction to permanent loan of $56 million on the project.

Importantly, the Metro Center mall transformation and $800 million.

The redevelopment project has completed its demolition phase the.

The development will create an out door open air shopping experience with onsite new residential units.

Chris Loeffler: We believe the project will provide significant tailwinds for Canyon, as it's only 1 stop away on the new light rail line that's directly in front of our project. We also anticipate tailwinds for Canyon coming from TSMC, the chip manufacturer, which has recently announced an additional $100 billion investment on top of its initial investment for a total of $165 billion invested in their facility. Last week, Apple has announced a $100 billion investment in the area. This is reported to be part of the largest single infrastructure investment by Apple in US history. Moving to SP Ten, we have taken meaningful steps to improve SP Ten's capital structure and ensure long-term success advancing towards vertical construction.

We believe the project will provide significant tailwind for canyon as its only one step away on a new light rail our one stop away on the new light rail line that's directly in front of our project.

We also anticipate tailwind for canyon coming from TSMC.

Chris Loeffler: We also anticipate tailwinds for Canyon coming from TSMC, the chip manufacturer, which has recently announced an additional $100 billion investment on top of its initial investment for a total of $165 billion invested in their facility. In addition, last week, Apple has announced a $100 billion investment in the area. This is reported to be part of the largest single infrastructure investment by Apple in U.S. history. Moving to SP10, we have taken meaningful steps to improve SP10's capital structure and ensure long-term success in advancing towards vertical construction. The hotel tower interior has been cleared and is ready for vertical improvements to deliver 104 modern apartment units. Permits for both the adaptive reuse tower and the new construction, the 84-unit build-to-rent, are secured. Our original financing structure involved a three-phase loan with builder's capital.

The chip manufacturer, which has recently announced an additional $100 billion investment on top of its initial investment for a total of $165 billion invested in their facility.

In addition last week Apple has announced a $100 billion investment in the area. This is reported to be part of the largest single infrastructure investment by Apple in U S history.

Okay.

Moving to <unk>, we have taken meaningful steps to improve <unk> capital structure and ensure long term success advancing towards vertical construction.

Chris Loeffler: The hotel tower interior has been cleared and is ready for vertical improvements to deliver 104 modern apartment units. Permits for both the adaptive reuse tower and the new construction, the 84-unit build to rent, are secured. Our original financing structure involved a 3-phase loan with Builders Capital. This phased approach introduced inefficiencies due to strict disbursement schedules and overlapping infrastructure needs across the 3 phases. As a result, we were unable to deploy capital as efficiently as planned, which created a short-term cash flow imbalance in the project. Rather than continue with fragmented funding, we made the decision to consolidate all phases into a single construction loan. This will enable us to treat the project as one cohesive development, improving speed, coordination, and capital access.

The hotel tower interior has been cleared and is ready for vertical improvements to deliver a 104 modern apartment units.

Permits for the for both the adaptive reuse tower and a new construction. The 84 unit built to rent are secured.

Our original financing structure involved a three phased loan with builders capital.

This phased approach introduced inefficiencies due to strict disbursement schedules and overlapping infrastructure needs across the three phases.

Chris Loeffler: This phased approach introduced inefficiencies due to strict disbursement schedules and overlapping infrastructure needs across the three phases. As a result, we were unable to deploy capital as efficiently as planned, which created a short-term cash flow imbalance in the project. Rather than continue with fragmented funding, we made the decision to consolidate all phases into a single construction loan. This will enable us to treat the project as one cohesive development, improving speed, coordination, and capital access. We've executed a term sheet with a lender that consolidates the prior loans and provides sufficient funding to complete the full 188-unit project, and we believe it should close soon, subject to customary closing processes. Moving up to Encore in Northern Colorado, we are working with several potential lenders on a construction loan, which has taken longer than we expected to conclude.

As a result, we were unable to deploy capital as efficiently as planned and Cree, which created a short term cash flow imbalance in the project.

Other than continue with fragmented funding, we made the decision to consolidate all phases into a single construction loan this will enable us to treat the project as one cohesive development, improving speed coordination and capital access.

Chris Loeffler: We've executed a term sheet with a lender that consolidates the prior loans and provides sufficient funding to complete the full 188 unit project, and we believe it should close soon, subject to customary closing processes. Moving up to Encore in northern Colorado, we are working with several potential lenders on a construction loan, which has taken longer than we expected to conclude. This delay has been indicative of the difficulty faced by real estate developers nationwide recently to obtain financing, specifically debt financing for land and infrastructure. Our goal is to secure a $10 to 15 million facility to be able to replenish the interest reserves for the project and start the improvements to Highway 34. We also intend to secure a $30 million facility for the on-site improvements, and we are working to establish a special improvement district bond financing through our metro district.

We've executed a term sheet with a lender that consolidates the prior loans and provide sufficient funding to complete the 488 unit project.

And we believe it should close soon subject to customary closing processes.

Moving up to Oncor, and northern Colorado, we are working with several potential lenders on a construction loan.

Which has taken longer than we expected to conclude.

Chris Loeffler: This delay has been indicative of the difficulty faced by real estate developers nationwide recently to obtain financing, specifically debt financing for land and infrastructure. Our goal is to secure a $10 to $15 million facility to be able to replenish the interest reserves for the project and start the improvements to Highway 34. We also intend to secure a $30 million facility for the on-site improvements, and we are working to establish a special improvement district bond financing through our Metro District. This process to obtain a bond can take time, and we have met with the town manager and several council members to obtain their support for approval at council. We are also working with several retailers for sales of plots for a gas station and several pad users. Our final construction drawings have been approved.

This delay has been indicative of the difficulties faced by real estate developers nationwide recently to obtain financing specifically debt financing for land and infrastructure.

Our goal is to secure a 10% to $15 million facility to be able to replenish the interest reserves for the project and start the improvements the highway 34.

We also intend to secure a $30 million facility for the onsite improvements and we are working to establish a special improvement district bond financing through our Metro District.

Chris Loeffler: This process to obtain a bond can take time, and we have met with the town manager and several council members to obtain their support for approval at council. We are also working with several retailers for sales of plots for gas station and several pad users. Our final construction drawings have been approved. The expected total duration of the construction, 6 months for Highway 34 and 14 months for the on-site improvements and property sales, are projected to begin at the end of 2026 once substantial construction is completed, presuming we obtain financing in a reasonable period of time.

This process to obtain a bond can take time and we have met with the account manager and Federal Council members to obtain their support for approval of counsel.

We are also working with several retailers for sales of plots for gas station and several pad users.

Our final construction drawings have been approved the expected total duration of the construction six months for highway 34 in 2014 months for the onsite improvements and property sales are projected to begin at the end of 2026, one substantial construction is completed presuming we obtained financing in a reasonable period of time.

Chris Loeffler: The expected total duration of the construction is six months for Highway 34 and 14 months for the on-site improvements and property sales. Our projected to begin at the end of 2026, once substantial construction is completed, presuming we obtain financing in a reasonable period of time. Moving on to Caliber's pure pickleball and padel project at Riverwalk in Scottsdale, where we're 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, and a fitness center that is sponsored by Honor Health. We have recently concluded a 10-year agreement with a very large and well-known food services company to be the exclusive food and beverage provider for Pure. Also, as part of the agreement, the company has agreed to contribute $2 million towards the project's build-out.

Moving onto calibers peer pickle ball and Padel project at Riverwalk in Scottsdale.

Chris Loeffler: Moving on to Caliber's PURE Pickleball & Padel project at Riverwalk in Scottsdale, where we're 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 that is sponsored by HonorHealth. We have recently concluded a 10-year agreement with a very large and well-known food services company to be the exclusive food and beverage provider for PURE. Also, as part of the agreement, the company has agreed to contribute $2 million towards the project's build-out. We believe this partnership will generate significant one-time and recurring revenues for Caliber over the course of the next 10 years. The project has received design review board approval from the Salt River Pima-Maricopa Indian Community Planning Department, and the next step is to have final construction documents approved to seek a building permit.

We're building a state of the art Pickle ball infidel facility, including 50 courts with some available for daily open play as well as large tournaments are clubhouse, a fitness center.

That is sponsored by honored honor health.

We have recently concluded a 10 year agreement with a very large and well known food services company to be the exclusive food and beverage provider for pure.

Also as part of the agreement the company has agreed to contribute $2 million towards the projects build out <unk>.

Chris Loeffler: We believe this partnership will generate significant one-time and recurring revenues for Caliber over the course of the next 10 years. The project has received design review board approval from the Salt River Pima Maricopa Indian Community Planning Department, and the next step is to have final construction documents approved to seek a building permit. Groundbreaking will occur shortly after the permit is received. Moving on to the Opportunity Zone investment front, in the second quarter, Fund One refinanced the DoubleTree by Hilton Hotel in Tucson at the Convention Center. This was Caliber's first transaction with the lending team at Citibank, and we hope to continue to build the relationship for future financing opportunities. The financing released some cash-out proceeds, which we reinvested across the portfolio. Both Opportunity Zone funds are expected to benefit from the Opportunity Zone permanence as a result of the new BBB.

We believe this partnership will generate significant onetime and recurring revenues for caliber over the course of the next 10 years.

The project has received designer Board review Board approval from the Salt River Pima America Indian community Planning Department.

And the next step is to have final construction documents approved to seek a building permit groundbreaking will occur shortly after the permit is received.

Chris Loeffler: Groundbreaking will occur shortly after the permit is received. Moving on to the Opportunity Zone investment front. In Q2, Fund One refinanced the DoubleTree by Hilton Hotel in Tucson at the Convention Center. This was Caliber's first transaction with the lending team at Citibank. We hope to continue to build the relationship for future financing opportunities. The financing released some cash-out proceeds, which we reinvested across the portfolio. Both Opportunity Zone funds are expected to benefit from the Opportunity Zone permanence as a result of the new One Big Beautiful Bill Act. As the program continues to gain capital, it will be directed towards the designated Opportunity Zones. Those investments may offer a better-than-market rate level of appreciation for our existing projects.

Moving onto the opportunity zone investment front in the second quarter fund one refinance the doubletree by Hilton Hotel in Tucson at the Convention Center. This was calibers first transaction with the lending team at Citibank and we hope to continue to build the relationship for future financing opportunities.

The financing release, some cash out proceeds, which we reinvested across the portfolio.

Both opportunities on funds are expected to benefit from the opportunities on permanent as a result of the new BBB.

We expect that the program as the program continues to gain capital it.

Chris Loeffler: We expect that as the program continues to gain capital, it will be directed towards the designated Opportunity Zones, and those investments may offer a better-than-market rate level of appreciation for our existing projects. In terms of the Caliber Hospitality Trust, the Holiday Inn Newport News is beginning to show meaningful signs of stabilization as we head into the second half of the year. Efforts at enhanced cost controls and more targeted revenue strategies have driven monthly improvements. More importantly, key developments in our group base are expected to significantly strengthen the performance over the next several months of the hotel. We finalized an agreement with the 138th Fighter Wing, a key government group that began arriving on June 26 and will remain through October 1st. This stay aligns with peak season and will materially support ADR and RevPAR through the third quarter of 2025.

It will be directed towards the designated opportunity zones, and those investments may offer a better than market rate level of appreciation for our existing projects.

In terms of the caliber hospitality trust the holiday in Newport News is beginning to show meaningful signs of stabilization as we head into the second half of the year.

Chris Loeffler: In terms of the Caliber Hospitality Trust, the Holiday Inn Newport News is beginning to show meaningful signs of stabilization as we head into H2 of the year. Efforts at enhanced cost controls and more targeted revenue strategies have driven monthly improvements. More importantly, key developments in our group base are expected to significantly strengthen the performance over the next several months of the hotel. We finalized an agreement with the 130th Airlift Wing, a key government group that began arriving on 26 June and will remain through 1 October. This stay aligns with peak season and will materially support ADR and RevPAR through Q3 of 2025. Looking ahead, we are forecasting a strong Q3 with expectations to exceed budgeted room revenue driven by this high-impact group.

Efforts it enhanced cost controls and more targeted revenue strategies have driven monthly improvements.

More importantly key developments in our group base are expected to significantly strengthen the performance over the next several months of the hotel.

We we finalized an agreement with the 138th Fighter wing, a key government group that began arriving in June 26, and will remain through October one.

This day aligns with peak season, and will materially support ADR and revpar through the third quarter of 2025.

Chris Loeffler: Looking ahead, we are forecasting a strong third quarter with expectations to exceed budget room revenue, driven by this high-impact group, continued momentum in social, military, education, religious and fraternal groups, or SMRF groups, and local negotiated rates or L&R segments, and a more disciplined approach to revenue management. As a result, our current forecast anticipates an increase in revenue and gross operating profit compared to our prior projections. Despite the challenging start to 2025, the most difficult since the onset of COVID in 2020, we believe the hotel may finish the year with gross operating profit close to 2024 levels. Also, Caliber's management team is in active discussions with the current lender associated with the Holiday Inn Newport News to allow for a potential refinance of the existing loans.

Looking ahead, we are forecasting a strong third quarter with expectations to exceed budgeted room revenue driven by this high impact group.

Chris Loeffler: Continued momentum in social, military, education, religious, and fraternal groups or SMERF groups, and local negotiated rates or LNR segments, and a more disciplined approach to revenue management. As a result, our current forecast anticipates an increase in revenue and gross operating profit compared to our prior projections. Despite the challenging start to 2025, the most difficult since the onset of COVID in 2020, we believe the hotel may finish the year with gross operating profit close to 2024 levels. Also, Caliber's management team is in active discussions with the current lender associated with the Holiday Inn Newport News to allow for a potential refinance of the existing loans.

Continued momentum in social military education, religious and fraternal groups or smurf groups and local negotiated rates are LNR segments.

And a more disciplined approach to revenue management.

As a result, our current forecast anticipates, an increase in revenue and gross operating profit compared to our prior projections. Despite the.

The challenging start to 2025, the most difficult since the onset of Covid in 2020, we believe the hotel may finished the year with gross operating profit close to 2024 levels.

Also <unk> management team is in active discussions with the current lenders associated with the holiday in Newport news to allow for a potential refinance of the existing loans.

Sure.

Chris Loeffler: Other properties inside of the CHT portfolio, which is concentrated in the southwestern United States, are seeing traditional extreme summer heat as it relates to Arizona, where we're based, which consistently drives some seasonal softness in demand. This annual pattern impacts both occupancy and ADR, which in turn leads to decreased profitability during the summer months. As cooler weather returns, we expect a rebound in performance and improved profitability across the portfolio. To that effect, we continue to target new acquisitions for CHT, and we are looking forward to announcing those acquisitions when the prospects of closing are firm. Simultaneously with the filing of our 10-Q, we plan on filing a shelf registration with an at-the-market offer or an ATM.

Chris Loeffler: Other properties inside of the CHT portfolio, which is concentrated in the Southwestern United States, are seeing traditional extreme summer heat, as it relates to Arizona, where we're based, which consistently drives some seasonal softness in demand. This annual pattern impacts both occupancy and ADR, which in turn leads to decreased profitability during the summer months. As cooler weather returns, we expect to rebound in performance and improve profitability across the portfolio. To that effect, we continue to target new acquisitions for CHT, and we are looking forward to announcing those acquisitions when the prospects of closing are firm. Simultaneously with the filing of our Form 10-Q, we plan on filing a shelf registration with an at-the-market offering or an ATM.

Other properties inside of the CHP portfolio, which is concentrated in the southwestern United States are seeing traditional extreme summer heat.

As it relates to Arizona, where we're based which consistently drives some seasonal softness in demand.

The annual this annual pattern impacts, both occupancy and ADR, which in turn leads to decreased profitability. During the summer months as cooler weather returns, we expect to rebound in performance and improved profitability across the portfolio.

To that effect, we are we continue to target new acquisitions for CHP and we're looking forward to announcing those acquisitions when the prospects of closing our firm.

Okay.

Simultaneously with the filing of our 10-Q, we plan on filing a shelf registration.

Within Abbvie with an at the market offering or an ATM.

Chris Loeffler: We do not have any plans to offer shares right now, but as part of a good corporate governance, we believe that it's good to have an ATM in place should we ever need it. This would allow Caliber to raise capital incrementally and opportunistically and not in a large transaction in order to fund the future growth initiatives that we have, pay down debt, or simply have a stronger balance sheet. Overall, I'm pleased with the second quarter and excited for our continued positive momentum in the second half of the year. With that, I'll turn the call over to Jade, who will cover our platform financial results and provide more insights into Caliber's business performance. Jade.

Chris Loeffler: We do not have any plans to offer shares right now, but as part of a good corporate governance, we believe that it's good to have an ATM in place should we ever need it. This would allow Caliber to raise capital incrementally and opportunistically and not in a large transaction in order to fund the future growth initiatives that we have, pay down debt, or simply have a stronger balance sheet. Overall, I'm pleased with the Q2 and excited for our continued positive momentum in the H2 of the year. With that, I'll turn the call over to Jade, who will cover our platform financial results and provide more insights into Caliber's business performance. Jade?

We do not have any plans to offer shares right now, but as part of good corporate governance. We believe that it is good to have an ATM in place should we ever need it.

This would allow caliber to raise capital incrementally and opportunistically and not in a large transaction in order to fund the future growth initiatives that we have pay down debt or simply have a stronger balance sheet.

Overall, I'm pleased with the second quarter.

And excited for our continued positive momentum in the second half of the year with that I'll turn the call over to Jason who will cover our platform financial results and provide more insights into calibers business performance.

Jade.

Thank you Chris good afternoon, everyone.

Jade Leung: Thank you, Chris. Good afternoon, everyone. I wanted to start with progress on our efforts to deconsolidate our financial statements. On 9 May 2025, the company completed a refinance of the existing debt of the DoubleTree by Hilton next to the Tucson Convention Center. With the refinancing of this loan, Caliber no longer guarantees the debt of the asset and, as a result, is no longer required to include it in our consolidated balance sheet at 30 June 2025. Caliber had aggregated and reported the results of operations of this asset in consolidated fund revenues and consolidated fund expenses within the accompanying condensed consolidated statements of operations through the date of deconsolidation, which was, in this case, 9 May.

Jade Leong: Thank you, Chris. Good afternoon, everyone. I wanted to start with progress on our efforts to deconsolidate our financial statements. On May 9th, 2025, the company completed a refinance of the existing debt of the DoubleTree by Hilton next to the Tucson Convention Center. With the refinancing of this loan, Caliber no longer guarantees the debt of the asset and, as a result, is no longer required to include it in our consolidated balance sheet at June 30th, 2025. Caliber had aggregated and reported the results of operations of this asset and consolidated fund revenues and consolidated fund expenses within the accompanying condensed consolidated statements of operations through the date of deconsolidation, which was, in this case, May 9th. Since Caliber went public, we have deconsolidated a total of 11 assets, and we have two remaining assets that we plan to deconsolidate in the future when the opportunity presents itself.

I wanted to start with progress on our efforts to deconsolidation our financial statements.

On May nine 2025, the company completed a refinance of the existing debt of the doubletree by Hilton next to the Tucson Convention Center.

With the refinancing of this loan caliber no longer guaranteed the debt of the asset and as a result.

There is no longer required to included in our consolidated balance sheet at June 32025.

Caliber had aggregated and reported the results of operations of this asset and consolidated fund revenues and consolidated fund expenses within the accompanying condensed consolidated statements of operations through the date of deconsolidation, which wasn't in this case may nine.

Since calendar went public we have deconsolidation and a total of 11 assets and we have two remaining assets that we plan to be consolidated in the future when the opportunity presents itself.

Jade Leung: Since Caliber went public, we have deconsolidated a total of 11 assets, and we have 2 remaining assets that we plan to deconsolidate in the future when the opportunity presents itself. The main reason we provide Caliber's platform results is to avoid the noise that these consolidations create until such time when we have completed deconsolidating these remaining assets. Turning to our progress on addressing the platform's leverage, we have 3 primary programs available to help us manage Caliber's debt 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 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.

The main reason, we provide calibers platform results is to avoid the noise that these consolidations create until such time when we have completed deconsolidation. These remaining assets.

Jade Leong: The main reason we provide Caliber's platform results is to avoid the noise that these consolidations create until such a time when we have completed deconsolidating these remaining assets. Turning to our progress on addressing the platform's leverage, we have three primary programs available to help us manage Caliber's debt 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 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 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.

Turning to our progress on addressing the platforms leverage we have three primary programs available to help us manage calibers debt 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 refunding.

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 two offerings a series a and a series of February.

Jade Leung: 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. To date, we have raised $2.4 million in Series A. The Series AA was approved on 12 March 2025 through Reg A+ to raise up to $20 million. 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. To date, we have raised about $1.2 million. Our raise under each program continues to gain traction, 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.

The series, a as our private placement convertible preferred stock through which we can raise up to $15 million to date, we have raised $2 $4 million in series a.

Jade Leong: To date, we have raised $2.4 million in Series A. The Series AA was approved on March 12th, 2025, through Reg A+ to raise up to $20 million. 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. To date, we have raised about $1.2 million. Our raise under each program continues to gain 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. To date, we have raised $2.3 million through this program. We continue to focus on collecting our outstanding accounts and notes receivable.

The series <unk> was approved on March 12, 2025 through Reg a plus <unk>.

To raise up to $20 million.

Half of the proceeds from the series <unk> are expected to be used to repay maturing corporate notes. The other half will be used for general corporate purposes.

Including calendars plans to grow to date, we have raised about $1 2 million.

Okay.

Our raised under each program continues to gain traction and we expect 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 to date, we have raised.

Jade Leung: To date, we have raised $2.3 million through this program. We continue to focus on collecting our outstanding accounts and notes receivable. Thus far in 2025 to the end of the Q2, we have collected over $9.7 million in investments and notes receivable, but we also recognized an impairment charge of $2.3 million in the Q2 related to investments we made in our lending fund through that effort. 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 become due. Turning to our results for the Q1, for the Q2 of 2025, total Q2 platform revenue of $4.1 million was driven by asset management revenues.

$2 3 million through this program.

We continue to focus on collecting our outstanding accounts receivable accounts and notes receivable.

Jade Leong: Thus far, in 2025 to the end of the second quarter, we have collected over $9.7 million in investments and notes receivable, but we also recognize an impairment charge of $2.3 million in the quarter related to investments we made in our lending fund through that effort. We believe these measures are part of a holistic plan of strong corporate finance, and they will help us manage satisfying our commitments if they become due. Turning to our results for the second quarter of 2025, total second quarter platform revenue of $4.1 million was driven by asset management revenues. This was essentially flat compared to last year's Q2 results due to a change in the mixture of revenue activities. However, I am happy to note that the asset management fees continued to expand.

Thus far in $2025 at the end of the second quarter, we have collected over $9 $7 million of investments in notes receivable.

But we also recognized an impairment charge of $2 3 million in the quarter related to investments we made in our lending fund through that effort.

We believe these measures are part of a holistic plan strong corporate finance.

And they will help us manage satisfying our commitments as they become due.

Turning to our results for the first quarter, sorry for the second quarter of 2025.

Total second quarter platform revenue of $4 1 million was driven by asset management revenues. This was essentially flat compared to last year's.

Jade Leung: This was essentially flat compared to last year's Q2 results due to a change in the mixture of revenue activities. I am happy to note that the asset management fees continued to expand. Total platform expenses in Q2 were $5.3 million, a decrease of 35% compared to last year's Q2 of $8.2 million, primarily due to a decrease in operating costs related to payroll and payroll-related expenses. Average employee headcount decreased 36% from those two quarters as part of our continued comprehensive cost-saving initiatives to return Caliber to profitability. These impacts on our performance translate to Platform Adjusted EBITDA loss for the second quarter of $54,000 compared to Platform Adjusted EBITDA loss of $2.5 million during the same period a year ago.

Q2 results due to a change in the next year and revenue activities. However, I am happy to note that the asset management fees continue to expand.

Total platform expenses in Q2 were $5 3 million a decrease of 35% compared to last year's Q2.

Jade Leong: Total platform expenses in Q2 were $5.3 million, a decrease of 35% compared to last year's Q2 of $8.2 million, primarily due to a decrease in operating costs related to payroll and payroll editing expenses. Average employee headcount decreased 36% from those two quarters as part of our continued comprehensive cost-saving initiatives to return Caliber to profitability. These impacts on our performance translate to platform-adjusted EBITDA loss for the second quarter of $54,000 compared to platform-adjusted EBITDA loss of $2.5 million during the same period a year ago. Managed capital was $498 million, a 6% increase compared to the year-ago quarter. Turning to an update on our balance sheet, as of the end of Q2, we had 195 individual unsecured notes with an aggregate principal balance of approximately $33 million, of which $26.1 million will mature within the next 12 months.

$8 2 million, primarily due to a decrease in operating costs related to payroll and payroll and expenses average employee head count decreased 36%.

From those two quarters as part of our continued comprehensive cost saving initiatives to return calendar to profit profitability.

These.

<unk> on our performance translate to platform adjusted EBITDA loss for the first for the second quarter of $54000 compared to platform adjusted EBITDA loss of $2 5 million during the same period a year ago.

Managed capital was 498, million% to 6% increase compared to the year ago quarter.

Jade Leung: Managed capital was $498 million, a 6% increase compared to the year-ago quarter. Turning to an update on our balance sheet. As of the end of Q2, we had 195 individual unsecured notes with an aggregate principal balance of approximately $33 million, of which $26.1 million 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. I will now turn it back to the operator for your questions.

Okay.

Turning to an update on our balance sheet.

As of the end of Q2, we had 195 individual unsecured notes with an aggregate principal balance of approximately $33 million of which $26 1 million will mature within the next 12 months.

Jade Leong: 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. I will now turn it back to the operator for your questions.

Each note generally has a 12 months 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.

I will now turn it back to the operator for your questions.

As a reminder, if you'd like to ask a question. Please press star followed by the number one on your telephone keypad.

Operator: As a reminder, if you would like to ask a question, please press star followed by number 1 on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Brendan McCarthy with Sidoti. Please go ahead.

Ilya Gurzovsky: As a reminder, if you would like to ask a question, please press star, followed by the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Brendan McCarthy with Sadoty. Please go ahead.

I'll pause for just a moment to compile the Q&A roster.

Your first question comes from the line of Brendan Mccarthy with Sidoti.

Please go ahead.

Hey, Chris Hey, Jay Good afternoon.

Brendan McCarthy: Hey, Chris. Hey, Jade. Good afternoon. Appreciate you taking the questions today.

Brendan Mccarthy: Hey, Chris. Hey, Jade. Good afternoon. Appreciate you taking the questions today.

Are you taking the questions today.

Hey, Brendan.

Jade Leung: Hey, Brendan.

Jade Leong: Hey, Brendan.

Hey, I wanted to start off looking at the expectation for the back half of this year positive adjusted EBITDA forecast.

Brendan Mccarthy: Hey, I wanted to start off looking at the expectation for the back half of this year, positive adjusted EBITDA forecast. Just curious as to your outlook for the financing environment. It looks like we might get a lower interest rate environment later this year. Just curious as to whether you see upside or downside to your forecast depending on the interest rate environment.

Brendan McCarthy: Hey. Wanted to start off looking at the expectation for H2 of this year, positive adjusted EBITDA forecast. Just curious as to your outlook for the financing environment. Looks like we might get a, you know, lower interest rate environment later this year. Just curious as to whether you see upside or downside to your forecast depending on the interest rate environment.

I'm just curious as to your outlook in the finance for the financing environment. It looks like we might get a lower interest rate environment. Later this year, just curious as to whether you see upside or downside to your forecast depending on the interest rate environment.

Sure.

Jade Leung: Sure. On the interest rate side, a lower interest rate environment would be positive for Caliber, primarily because it would loosen likely and improve the ability for us to finance the projects inside of the funds that we manage. Those financings have been struggling to get done because of the environment we've been in for the last 2 years. As those financings get completed, that provides proceeds for us to build or renovate some of the portfolio we have, which generates revenues at the time that we execute those services. In addition to that, it gives us the ability to start selling off some assets and cycling capital, which is also very favorable for our business.

Chris Loeffler: Sure. On the interest rate side, that lower interest rate environment would be positive for Caliber, primarily because it would loosen likely and improve the ability for us to finance the projects inside of the fund that we manage. And those financings have been struggling to get done because of the environment we've been in for the last two years. As those financings get completed, that provides proceeds for us to build or renovate some of the portfolio we have, which generates revenues at the time that we execute those services. And then, in addition to that, it gives us the ability to start selling off some assets and cycling capital, which is also very favorable for our business. So presuming that we get a decrease in interest rates, the improvement to our business would come primarily from just more activity on the platform.

On the interest rate side.

Lower interest rate environment would be positive for caliber.

Primarily because it would loosen likely and improve the ability for us to finance the projects inside of the funds that we manage and those financings have been struggling to get done because of the environment. We've been in for the last two years.

As those financings get completed that provides proceeds for us to build or renovate some of the portfolio, we have which generates revenues at the time that we execute those services and then in addition to that it gives us the ability to start selling off some assets in cycling capital, which is also very favorable for our business. So.

Jade Leung: Presuming that we get a, you know, a decrease in interest rates, the improvement to our business would come primarily from just more activity on the platform. If you combine that with the fact that we think that the commercial real estate market has seen a significant decline in values similar to 2008, and that we're starting to find opportunities to buy assets at a discount to their inherent value and to their construction value, that's a really good combination for our business because we are designed to raise capital into our funds and go take advantage of those types of opportunities.

Presuming that we get.

A.

Decrease in interest rates.

The.

The improvement to our business would come primarily from just more activity on the platform.

Chris Loeffler: If you combine that with the fact that we think that the commercial real estate market has seen a significant decline in values similar to 2008 and that we're starting to find opportunities to buy assets at a discount to their inherent value and to their construction value, that's a really good combination for our business because we are designed to raise capital into our funds and go take advantage of those types of opportunities.

If you combine that with the fact that we think that the commercial real estate market has seen a significant decline in values similar to 2008 and that we're starting to find opportunities to buy assets at a discount.

To their inherent value into their construction value.

That's a really good combination for our business because we are designed to.

Raise capital into our funds and go take advantage of those types of opportunities.

That makes sense, Chris and you mentioned.

Brendan McCarthy: That makes sense, Chris. You mentioned performance allocations. Just curious as to what other factors might, you know, make it a more, you know, favorable environment to harvest some of the gains in the funds. I think you mentioned roughly $84 million, you know, locked up or potentially, you know, visibility into $84 million of performance allocations. Just curious as to kind of what else aside from interest rates might lead to an uptick there.

Brendan Mccarthy: That makes sense, Chris. And you mentioned performance allocations. I'm just curious as to what other factors might get you to, or I guess, make it a more favorable environment to harvest some of the gains in the funds. I think you mentioned roughly $84 million locked up or potentially visibility into $84 million of performance allocations. I'm just curious as to kind of what else, aside from interest rates, might lead to an uptick there.

Performance allocations.

I'm, just curious as to what other factors might.

Get get you to I guess.

Make it a more favorable environment to harvest some of the gains in the in the funds.

I think you mentioned roughly $84 million locked up or potentially visibility into $84 million of performance applications.

I'm, just curious kind of what else aside from interest rates might lead to an uptick there.

Jade Leung: Yeah. I'll just sort of make sure everyone understands what they are in the first place and how they're calculated, and then that I think that actually answers your question.

Chris Loeffler: Yeah, so I'll just sort of make sure everyone understands what they are in the first place and how they're calculated, and then I think that actually answered your question. So the performance allocations are, in Caliber's business model, we're managing private equity real estate funds. And typically, we're going to earn 20% to 30% of the profitability of that fund or that asset over and above a minimum rate of return. And so every single asset that we manage inside of our platform, we have a business plan for every asset. We know if we're going to keep it for three years or four years or five years or six years or whatever the timeframe is. And we know that upon sale, based on our estimated sales price, mathematically, we stand to capture certain revenues in this carried interest or performance allocation.

Yes, so I'll just sort of make sure everyone understands what they are in the first place and how they are calculated and then that I think that actually answered. Your question. So the performance allocations are in calories business model that we're managing private equity real estate funds and typically we're going to earn 20% to 30% of the profitability of that fund or that asset.

Chris Loeffler: The performance allocations are, you know, in Caliber's business model. We're managing private equity real estate funds, typically we're gonna earn 20% to 30% of the profitability of that fund or that asset, over and above a minimum rate of return. Every single asset that we manage inside of our platform, we have a business plan for every asset. You know, we know if we're gonna keep it for 3 years or 4 years or 5 years or 6 years or whatever the timeframe is. We know that upon sale, based on our estimated sales price, mathematically, we stand to capture certain revenues in this carried interest or performance allocation.

Over and above a minimum rate of return and so every single asset that we manage inside of our platform.

We have a business plan for every asset we know we're going to keep it for three years or four years five years or six years or whatever the timeframe is and we know that upon sale based on our estimated sales price.

Mathematically, we stand to capture certain revenues in this carried interest or performance allocation, so sort of like.

Chris Loeffler: sort of like a, not from a GAAP perspective, but from a, you know, kind of a accounting concept perspective, it's like deferred revenue, that we get to collect in the future. Interest rates going down allows us to execute those plans faster and potentially sell those assets faster, which would, to your point, Brendan, allow us to harvest some of that carry at a faster pace. In addition, what else helps us in that, in that space, you know, a return to a more normalized real estate market where the market is no longer declining in values and the values have stabilized and started to climb again as they more typically do. That, that pricing stability in commercial real estate happened nationwide in roughly, you know, September, October of 2024 was sort of the bottom.

Chris Loeffler: So it's sort of like a, not from a GAAP perspective, but from a kind of an accounting concept perspective, it's like deferred revenue that we get to collect in the future. So interest rates going down allow us to execute those plans faster and potentially sell those assets faster, which would, to your point, Brendan, allow us to harvest some of that carry at a faster pace. In addition, what else helps us in that space? You know, a return to a more normalized real estate market where the market is no longer declining in values and the values have stabilized and started to climb again as they more typically do. That pricing stability in commercial real estate happened nationwide in roughly, you know, September, October of 2024 was sort of the bottom. And the first half of this year, we've started to see that pricing has become stable.

From a GAAP perspective, but from a kind of an accounting concept perspective, it's like deferred.

<unk> revenue.

We get to collect in the future.

So interest rates going down.

It allows us to execute those plans faster and potentially sell those assets faster, which would to your point Brendan and allow us to harvest some of that carry at a faster pace.

In addition.

What else helps us in that in that space.

A return to a more normalized real estate market, where the market is no longer declining and values and the values have stabilized and started to.

Client again as they typically do.

That.

That pricing stability and commercial real estate happened nationwide in roughly.

In September October of 2024 with sort of the bottom in the first half of this year, we started to see that that pricing has become stable. So you get a stable market you get favorable interest rates, you get banks lending again and.

Chris Loeffler: H1 of this year, we've started to see that pricing has become stable. You get a stable market, you get favorable interest rates, you get banks lending again, and that all adds to our ability to harvest that carried interest.

Chris Loeffler: So you get a stable market, you get favorable interest rates, you get banks lending again, and that all adds to our ability to harvest that carried interest.

That all adds to our ability to harvest that carried interest.

Got it that's helpful. One more question for me you wanted to look at the hospitality trusts DHT.

Brendan McCarthy: Got it. That's helpful. One more question from me. Wanted to look at the hospitality trust, the HT. Can you talk a little bit more about the pipeline there and how the hotels contributed by the Satori Collective, do those remain on track to close, you know, in the timeframe that you were considering originally? How can we kinda think about, you know, those contributions from Satori?

Brendan Mccarthy: Got it. That's helpful. And one more question from me. You wanted to look at the hospitality trust, the HT. Can you talk a little bit more about the pipeline there and how the hotels contributed by the Satori Collective? Do those remain on track to close in the timeframe that you were considering originally, or how can we kind of think about those contributions from Satori?

Can you talk a little bit more about the pipeline there and how the.

The hotels contributed by the Satori collective.

It doesn't remain on track to close in.

The timeframe that you were considering.

Originally or how can we kind of think about those contributions from statutory.

Yes. The hotel Trust has has gone the first sort of half of this year has gone through the <unk>.

Chris Loeffler: The hotel trust has gone through H1 of this year, a series of challenges. The trust itself and the assets that exist in the trust are doing fine, and in fact, I think will be improving their performance going forward. The ability to close on some of these transactions was first impacted by us canceling the L.T.D. transaction due to the fact that half of their business came from government spending, and therefore, they saw this significant decline in their results, which we did buy one of the 9 L.T.D. assets, which is the Holiday Inn Newport News that we reported on. You can see H1 was a pretty rough H1 of the year for that asset.

Chris Loeffler: Yeah, the hotel trust has gone, the first sort of half of this year has gone through a series of challenges. The trust itself and the assets that exist in the trust are doing fine, and in fact, I think we'll be improving their performance going forward. But the ability to close on some of these transactions was first impacted by us canceling the LTD transaction due to the fact that half of their business came from government spending, and therefore they saw this significant decline in their results, which we did buy one of the nine LTD assets, which is the Holiday Inn Newport News that we reported on. And you can see the first half was a pretty rough first half of the year for that asset. So I'm very happy that we didn't acquire the other eight.

Series of Av.

Of challenges.

The trust itself and the assets that exist in the trusts or are doing fine and in fact, I think we will be improving their performance going forward, but the ability to close on some of these transactions was first impacted by us canceling the LTV transaction due to the fact that half of their business came from.

Government spending and therefore.

They saw this significant decline in there and their results, which we did by one of the 9% LTV assets, which is the holiday in Newport News that we reported on and you can see the first half was a pretty rough first half for the year four.

For that asset so I'm very happy that we didn't acquire the other eight.

Chris Loeffler: I'm very happy that we didn't acquire the other eight. On the Satori side, same thing. They had a very similar operating decline in their portfolio that we were unable to overcome and come to a modified deal to close on their deal. In both cases, we've certainly offered the portfolio contributors the ability to come back and do a deal that makes sense for the trust, but we're not willing to move forward based on the terms that we have currently. That's the downside.

On the <unk> side same thing they had a very similar operating decline in their portfolio that we were unable to overcome and income to modified deal to close on their deal. So in both cases, we've certainly offer that portfolio.

Chris Loeffler: On the Satori side, same thing, they had a very similar operating decline in their portfolio that we were unable to overcome and come to a modified deal to close on their deal. So in both cases, we've certainly offered the portfolio contributors the ability to come back into a deal that makes sense for the trust, but we're not willing to move forward based on the terms that we have currently. So that's the downside. The upside has been that because of the fact that these interest rates have been persistently high and because of the fact that there's been some declines in hotel operating performance across the country for a variety of reasons, the opportunity that Caliber Hospitality Trust presents to an existing portfolio owner has improved, and our negotiating leverage has improved.

Contributors the ability to come back and do a deal that makes sense for the trust, but we're not willing to move forward based on the terms that we have currently.

So that's the that's the downside the upside has been that because of the fact that.

Chris Loeffler: The upside has been that because of the fact that these interest rates have been persistently high and because of the fact that there's been some declines in hotel operating performance across the country for a variety of reasons, the opportunity that Caliber Hospitality Trust presents to an existing portfolio owner has improved, and our negotiating leverage has improved. We have been hitting the market looking to do deals with what we think are even more favorable terms than what we had originally put out in the first round. We've also added in some ability to start acquiring assets in cash, in a distressed format, which would be at a deeper discount and provide more value, we think, to the hospitality trust. There's now a three-part strategy to build the trust.

These interest rates have been persistently high and because of the fact that there has been some declines in hotel operating performance across the country for a variety of reasons.

The opportunity that caliber hospitality trust presents to an existing portfolio owner has improved and our negotiating leverage has improved so we have been hitting the market and looking to do deals with what we think are even more favorable terms than what we had originally put out in the first round.

Chris Loeffler: So we have been hitting the market looking to do deals with what we think are even more favorable terms than what we had originally put out in the first round. And then we've also added in some ability to start acquiring assets in cash in a distressed format, which would be at a deeper discount and provide more value, we think, to the hospitality trust. So there's now a three-part strategy to build the trust. One is the contribution model to find more portfolios and bring them in. The second is through cash acquisitions of single assets, presumably in a distressed format at a discount to their inherent value. And the third would be as a takeout acquirer of the Hyatt Studios portfolio, which we think is pretty attractive to the trust.

And then we've also added in.

Some ability to start acquiring assets and cash.

In a distressed format, which would be at a deeper discount and provide more value, we think to the hospitality trusts. So.

There is now a three part strategy to build the trust one is the contribution model to find more portfolios and bring them in the.

Chris Loeffler: One is the contribution model to find more portfolios and bring them in. The second is through cash acquisitions of single assets, presumably in a distressed format, at a discount to their inherent value. The third would be as a takeout acquirer of the Hyatt Studios portfolio, which we think is pretty attractive to the trust. While we don't have anything significant to announce today in terms of an opportunity or a new portfolio we've added to the ecosystem, we are in pursuit of those.

The second is through cash acquisitions of single assets.

<unk> in a distressed format at a discount to their inherent value.

And the third would be as it take out acquirer of the highest studios' portfolio, which we think is pretty attractive to the trust. So.

Chris Loeffler: So while we don't have anything significant to announce today in terms of an opportunity or a new portfolio we've added to the ecosystem, we are in pursuit of those.

While we don't have anything significant to announce today in terms of.

An opportunity or a new portfolio, we've added to the to the ecosystem.

We are in pursuit of those.

Got it I appreciate the color there and one last question for me on the wholesale fund raising side of the business. It sounds like there's some solid momentum there you mentioned three new selling agreements.

Brendan McCarthy: Got it. I appreciate the color there. One last question from me on the wholesale fundraising side of the business. It sounds like there's been some solid momentum there. You mentioned three new selling agreements. I guess how many selling agreements is the firm at to date? You know, what do you kinda gauge that market opportunity in terms of asset size?

Brendan Mccarthy: Got it. I appreciate the color there. And one last question from me on the wholesale fundraising side of the business. It sounds like there's some solid momentum there. You mentioned three new selling agreements. I guess how many selling agreements is the firm at to date, and what do you kind of gauge that market opportunity in terms of asset size?

I guess, how many sellers selling agreements as a firm at to date and what are you kind of gauge that market opportunity in terms of asset size.

Chris Loeffler: Sure. Yeah. Approximately, I think we're at approximately 35, but that's me trying to remember off the top of my head. As far as the market size goes, it's significant. We have, we haven't scratched the surface in terms of the market opportunity. I think the adoption of an alternative investments and investment advisors seeking real estate alternatives has been very strong. We have seen that Caliber's offerings make a lot of sense for these advisors because the funds are new or newly issued and don't have a lot of exposure to the prior cycle that we just went through with COVID and interest rates.

Chris Loeffler: Sure. Yeah, approximately, I think we're at approximately 35, but that's me trying to remember off the top of my head. And as far as the market size goes, it's significant. We haven't scratched the surface in terms of the market opportunity. I think the adoption of alternative investments and investment advisors seeking real estate alternatives has been very strong. We have seen that Caliber's offerings make a lot of sense for these advisors because the funds are new or newly issued and don't have a lot of exposure to the prior cycle that we just went through with COVID and interest rates. And we've seen that there's a desire to go beyond the few types of investment funds and real estate investments they typically have access to, which is kind of the household names. So it's going well. We're building relationships.

Sure, Yes, approximately I think we're at approximately 35, but.

That's me trying to remember off the top of my head.

And as far as the market size goes.

It's it's it's significant we have.

We havent scratched the surface in terms of the market opportunity I think.

The adoption of alternative investments and investment advisors seeking real estate alternatives has been very strong.

We have seen that.

Calibers offerings make a lot of sense for these advisors because the funds are new or newly issued and don't have a lot of exposure to the prior cycle that we just went through with Covid and interest rates.

Chris Loeffler: We've seen that there's a desire to go beyond the, you know, the few types of investment funds and real estate investments they typically have access to, which is, you know, kind of the household names. It's going well. We're building relationships. The process is to sign a selling agreement. Then after that, we have to build individual relationships with individual advisors and start to get them to incorporate our investments into their practice. As you see from our results, we're starting to see that happen on a monthly basis.

And we've seen that there is a desire to go beyond.

The few types of investment funds and real estate investments. They typically have access to which is kind of the household names. So.

<unk>.

Going well, we're building relationships the processes to sign a selling agreement and then after that we have to build individual relationships with individual advisors.

Chris Loeffler: The process is to sign a selling agreement, and then after that, we have to build individual relationships with individual advisors and start to get them to incorporate our investments into their practice. And as you see from our results, we're starting to see that happen on a monthly basis.

And start to get them to incorporate our investments into their practice and as you see from our results, we're starting to see that happen on a monthly basis.

Got it that's great and what's the can you remind us what the typical time frame looks like after you sign a selling agreement I think you mentioned there was roughly a three to six month ramp up period, when you start to see your asset inflows.

Brendan McCarthy: Got it. That's great. What's the, can you remind us what the, you know, typical timeframe looks like after you sign a selling agreement? I think you mentioned there's roughly a three to six-month, you know, ramp up period when you start to see, you know, asset inflows.

Brendan Mccarthy: Got it. That's great. And what's the, can you remind us what the typical timeframe looks like after you sign a selling agreement? I think you mentioned there's roughly a three to six-month ramp-up period when you start to see asset inflows.

Chris Loeffler: Yeah, I think that's right. Although it seems to be moving faster now because we're starting to become a proven commodity in this space, and advisors and their firms understand what we have to offer. So we're starting to see orders come in faster, which is nice to see. But right now, with our 35 or so selling agreements, we probably cover about 500, 600 advisors. We will feel like we've achieved success when we're touching thousands, probably somewhere in the $2,000 to $10,000 range of advisors. So we still are out there trying to build the initial distribution group. But Caliber is very focused on making sure that we can raise sustainably about $200 million a year, which is significantly higher than what we're raising right now. But at that level, we are consistently able to find great projects. We can remain boutique in nature.

Yes, I think thats right.

Chris Loeffler: Yeah, I think that's right. Although it seems to be moving faster now because we're starting to become a proven commodity in this space and, you know, advisors and their firms understand what we have to offer. We're starting to see orders come in faster, which is nice to see. Right now with our 35 or so selling agreements, we probably cover about 500 to 600 advisors. We will feel like we've achieved success when we're touching thousands, probably somewhere in the 2,000 to 10,000 range of advisors. We're still are out there trying to build the initial distribution group. Caliber is very focused on making sure that we can raise sustainably about $200 million a year, which is significantly higher than what we're raising right now. At that level, we are consistently able to find great projects.

Although it seems to be moving faster now because we're starting to become a proven commodity in this space and advisers and their firms and understand what we have to offer.

So that when we start we're starting to see orders come in faster.

Which is which is nice to see but right now with our 35 or so selling agreements, we've probably covered it.

About <unk>.

Five 600 advisors.

We will feel like we've achieved success when we're touching thousands probably somewhere in the two to 10000 range of advisers. So.

We're still are out there trying to build the initial.

Distribution grid, but caliber is.

Very focused on making sure that we can raise.

Sustainably about $200 million, a year, which is significantly higher than we're raising right now.

But at that level, we are consistently able to find great projects. We can remain boutique in nature, we don't get too big.

Chris Loeffler: We can remain boutique in nature. You know, we don't get too big and, you know, outgrow our infrastructure. We can find a home for $200 million a year in capital into what we think are really attractive projects in the region that we invest in. That's currently the target is get enough of a selling group that we can consistently raise that amount and hopefully turn a few people away because we're full.

Chris Loeffler: You know, we don't get too big and outgrow our infrastructure. And we can find a home for $200 million a year in capital into what we think are really attractive projects in the region that we invest in. So that's currently the target, is get enough of a selling group that we can consistently raise that amount and hopefully turn a few people away because we're full.

Outgrow our infrastructure and we can find a home for $200 million a year in capital into what we think are really attractive projects in the region that we invest in so that's currently the target is to get enough of our selling group that we can consistently raised that amount and hopefully turn a few people away because we're full.

Understood. Thanks, Chris Thanks, everybody that's all for me.

Brendan McCarthy: Understood. Thanks, Chris. Thanks, everybody. That's all from me.

Brendan Mccarthy: Understood. Thanks, Chris. Thanks, everybody. That's all from me.

There are no further questions at this time.

Ilya Gurzovsky: There are no further questions at this time. I will now turn the call back over to Ilya Gurzowski for closing remarks. Please go ahead.

Operator: There are no further questions at this time. I will now turn the call back over to Ilya Grozovsky for closing remarks. Please go ahead.

I will now turn the call back over to <unk> for closing remarks. Please go ahead.

Thank you for your time today, we look forward to speaking and meeting with many of you in the near future.

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.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 engage with you directly. Thank you and have a good evening.

Ilya Gurzovsky: 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.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 engage with you directly. Thank you and have a good evening.

Have any additional questions. Please visit our website at www dot caliber co dot com.

And followed the path for public shareholders. There you can download our financial supplement and sign up.

Mailing list, specifically focused for public investors. If you have any questions. Please complete the contact us form. So we can engage with you directly thank you and have a good evening.

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

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

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

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