Company: CMCT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0000908311-25-000067
Chunk: 191

Company: Creative Media & Community Trust Corp
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 191
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 1 inputs are utilized to estimate the fair value of these financial instruments. The estimated fair values of those financial instruments which are not recorded at fair value on a recurring basis on the Company’s consolidated balance sheets are as follows (dollar amounts in thousands): June 30, 2025December 31, 2024  CarryingAmountEstimatedFair ValueCarryingAmountEstimatedFair ValueLevelAssets: SBA 7(a) loans receivable, subject to credit risk$19,572 $19,967 $18,850 $18,994 3 SBA 7(a) loans receivable, subject to loan-backed notes$30,166 $33,245 $34,452 $37,657 3 SBA 7(a) loans receivable, subject to secured borrowings$1,356 $1,356 $1,383 $1,383 3 SBA 7(a) loans receivable, held for sale$— $— $1,525 $1,600 3 Liabilities: Mortgages payable (1)$269,100 $233,949 $269,100 $233,364 3 Junior subordinated notes (1)$27,070 $26,137 $27,070 $25,415 3 ______________________(1)The carrying amounts for the mortgages payable and junior subordinated notes represents the principal outstanding amounts, excluding deferred debt issuance costs and discounts. Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges)Certain financial and nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The Company’s process for identifying and recording impairment related to investments in real estate is discussed in Note 2. As discussed in Note 3, during the three months ended June 30, 2025, one property was deemed to be impaired due to a revised cash flow estimate that was less than its carrying value, and its carrying value was reduced to an estimated fair value of $1.9 million, resulting in impairment charges of $221,000. The revised cash flow estimate was a result of a decline in performance and a change in the Company’s intended use for the property in the medium term. The Company estimated fair values using Level 3 inputs and a market approach,