Company: CMCT
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0000908311-25-000096
Chunk: 147

Company: Creative Media & Community Trust Corp
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 3
Chunk 147
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Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Our future income, cash flow and fair values relevant to financial instruments are dependent upon prevalent market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. We are exposed to market risk in the form of changes in interest rates and the potential impact such changes may have on the cash flows from our floating rate debt or the fair values of our fixed rate debt. As of September 30, 2025 and December 31, 2024 (including our variable rate mortgages payable subject to interest rate cap agreements and excluding premiums, discounts, and deferred loan costs), $439.5 million (or 82.3%) and $440.4 million (or 86.1%) of our debt, respectively, was fixed rate borrowings. As of September 30, 2025 and December 31, 2024 (excluding our variable rate mortgages payable subject to interest rate cap agreements as well as premiums, discounts and deferred loan costs), $94.4 million (or 17.7%) and $71.3 million (or 13.9%), respectively, was floating rate borrowings. Based on the level of floating rate debt outstanding as of September 30, 2025 and December 31, 2024, a 50 basis point change in SOFR would result in an annual impact to our earnings of approximately $472,000 and $356,000, respectively. We calculate interest rate sensitivity by multiplying the amount of floating rate debt by the respective change in rate. 

As of September 30, 2025, we had two interest rate cap agreements outstanding with an aggregate notional amount of $171.0 million and an aggregate fair value of the net derivative asset of $10,000. As of September 30, 2025, an increase or decrease of 50 basis points in interest rates would not result in a significant change to the fair value of the derivative asset.