CMCT 10-K Fiscal year ended Dec. 31, 2019

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(1)	3601 S Congress Avenue consists of ten buildings. The Company expects to complete the development of an existing surface parking lot into approximately 42,000 square feet of additional rentable office space by mid-2020.

(2)	Lindblade Media Center consists of three buildings.

(3)	2 Kaiser Plaza Parking Lot is a 44,642 square foot parcel of land currently being used as a surface parking lot. We are entitled to develop a building, which we are in the process of designing, having between 425,000 and 800,000 rentable square feet.

(4)	The site of the Sheraton Grand Hotel Parking Garage & Retail is being evaluated for potential redevelopment.

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Sale of Assets . During 2019, the Company sold eight properties in accordance with the approval of its then‑principal stockholder, and an additional two properties (one office property and one development site in Washington, D.C.) after evaluating each asset within its portfolio and the intrinsic value of each property (such sales, collectively, the “Asset Sale”). The Asset Sale generated an aggregate gross sales price to the Company of $990,996,000 .

•	Repayment of Certain Indebtedness . We used a portion of the net proceeds from the Asset Sale to repay balances on certain of the Company’s indebtedness.

•	Return of Capital to Holders of Common Stock . On August 30, 2019 , we paid a special dividend of $42.00 per share of Common Stock ( $14.00 per share of Common Stock prior to the Reverse Stock Split) (the "Special Dividend"), or $613,294,000 in the aggregate, to stockholders of record of our Common Stock at the close of business on August 19, 2019 .

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CIM REIT Liquidation .  In connection with its liquidation process, CIM Urban REIT, LLC, the former indirect principal stockholder of the Company ("CIM REIT"), (i) distributed during the year ended December 31, 2019 approximately 10,624,000 shares of our Common Stock formerly indirectly held by CIM REIT, representing approximately 72.8% of the outstanding shares of our Common Stock, to a diverse group of institutional investors that were former members of CIM REIT and (ii) sold, in October 2019, 2,468,390 shares of our Common Stock formerly indirectly held by CIM REIT, representing approximately 16.9% of the outstanding shares of our Common Stock, for $19.1685 per share to an affiliate of CIM Group in a private transaction. As of March 12, 2020 , CIM Group, its affiliates, and our officers and directors have an aggregate economic interest in approximately 19.6% of the outstanding shares of our Common Stock.

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(1)	The "March Oakland Properties" consist of 1901 Harrison Street, 2100 Franklin Street, 2101 Webster Street, and 2353 Webster Street Parking Garage.

(2)

The "Union Square Properties" consist of 899 North Capitol Street, 901 North Capitol Street and 999 North Capitol Street. Prior to the sale, we determined that the book values of such properties exceeded their estimated fair values and recognized an impairment charge of $69,000,000 for the year ended December 31, 2019 . Our determination of the fair values of these properties was based on negotiations with the third-party buyer and the contract sales price. The gain on sale includes $113,000 of extinguishment of noncontrolling interests as a result of the sale.

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Product Non-Specific: CIM Group has extensive experience owning and operating a diverse range of property types, including retail, residential, office, parking, hotel, signage, and mixed-use, which gives CIM Group the ability to execute and capitalize on its strategy effectively. Successful acquisitions require selecting the right markets coupled with providing the right product. CIM Group's experience with multiple asset types does not predispose CIM Group to select certain asset types, but instead ensures that they deliver a product mix that is consistent with the market's requirements and needs. Additionally, there is a growing trend towards developing mixed-use real estate properties in metropolitan markets which requires a diversified platform to successfully execute.

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Community-Based Tenanting: CIM Group's strategy focuses on the entire community and the best use of assets in that community. Owning a significant number of key properties in an area better enables CIM Group to meet the needs of national retailers and office tenants and thus optimize the value of these real estate properties. CIM Group believes that its community perspective gives it a significant competitive advantage in attracting tenants to its retail, office and mixed-use properties and creating synergies between the different tenant types.

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Local Market Leadership with North American Footprint: CIM Group maintains local market knowledge and relationships, along with a diversified North American presence, through its 135 Qualified Communities. Thus, CIM Group has the flexibility to deploy capital in its Qualified Communities only when the market environment meets CIM Group's underwriting standards. CIM Group does not need to acquire assets in a given community or product type at a specific time due to its broad proprietary pipeline of communities.

•	Deploying Capital Across the Capital Stack: CIM Group has extensive experience structuring transactions across the capital stack including equity, preferred equity, debt and mezzanine positions, giving it the flexibility to structure transactions in efficient and creative ways.

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"business combination" provisions that, subject to limitations, prohibit certain business combinations between us and an "interested stockholder" (defined generally as any person who beneficially owns, directly or indirectly, 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose special appraisal rights and special stockholder voting requirements on these combinations; and

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"control share" provisions that provide that "control shares" of our Company (defined as shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a "control share acquisition" (defined as the direct or indirect acquisition of ownership or control of "control shares") have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.

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•	adverse changes in economic and socioeconomic conditions (including as a result of the outbreak of the novel strain of the Coronavirus (COVID-19) that began in the fourth quarter of 2019);

•	vacancies or our inability to rent space on favorable terms;

•	adverse changes in financial conditions of buyers, sellers and tenants of properties;

•	inability to collect rent from tenants;

•	competition from real estate investors with significant capital, including but not limited to real estate operating companies, publicly-traded REITs and institutional investment funds;

•	reductions in the level of demand for office and hotel space and changes in the relative popularity of properties;

•	increases in the supply of office and hotel space;

•	fluctuations in interest rates and the availability of credit, which could adversely affect our ability, or the ability of buyers and tenants of properties, to obtain financing on favorable terms or at all;

•	dependence on third parties to provide leasing, brokerage, onsite property management and other services with respect to certain of our assets;

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•	increases in expenses, including insurance costs, labor costs, utility prices, real estate assessments and other taxes and costs of compliance with laws, regulations and governmental policies, and our inability to pass on some or all of these increases to our tenants; and

•	changes in, and changes in enforcement of, laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning, real estate tax, federal and state laws, governmental fiscal policies and the ADA.

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the tenants in our office properties may experience a deterioration in their sales or other revenue, or experience a constraint on the availability of credit necessary to fund operations, which in turn may adversely impact those tenants' ability to pay contractual base rents and tenant recoveries. Some tenants may terminate their occupancy due to an inability to operate profitably for an extended period of time, impacting our ability to maintain occupancy levels; and

•	constraints on the availability of credit to tenants, necessary to purchase and install improvements, fixtures and equipment and to fund business expenses, could impact our ability to procure new tenants for spaces currently vacant in existing office properties or properties under development.

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•	construction cost overruns and delays;

•	a possible shortage of available cash to fund capital improvements and the related possibility that financing for these capital improvements may not be available to us on affordable terms;

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•	uncertainties as to market demand or a loss of market demand after capital improvements have begun;

•	disruption in service and room availability causing reduced demand, occupancy and rates;

•	possible environmental problems; and

•	disputes with our manager/franchise owner regarding our compliance with the requirements under our management or franchise agreements.

•	we may be unable to deploy capital in additional real estate assets because of competition from real estate investors with better access to less expensive capital, including real estate operating companies, publicly-traded REITs and investment funds;

•	we may acquire properties that are not accretive to our results upon acquisition, and we may not successfully manage and lease those properties to meet our expectations;

•	competition from other potential acquirers may significantly increase purchase prices;

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•	acquired properties may be located in new markets where we may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area and unfamiliarity with local governmental and permitting procedures;

•	we may be unable to generate sufficient cash from operations or obtain the necessary debt or equity financing to consummate a transaction on favorable terms or at all;

•	we may need to spend more money than anticipated to make necessary improvements or renovations to acquired properties;

•	we may spend significant time and money on potential transactions that we do not consummate;

•	we may be unable to quickly and efficiently integrate new acquisitions into our existing operations;

•	we may suffer higher than expected vacancy rates and or lower than expected rental rates; and

•	we may acquire properties without any recourse, or with only limited recourse, for liabilities against the former owners of the properties.

•	disputes with joint venture partners might affect our ability to develop, operate or dispose of a property;

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•	the refinancing of unconsolidated joint venture debt may require additional equity commitments on our part;

•	joint venture partners may control or share certain approval rights over major decisions or might have economic or other business interests or goals that are inconsistent with our business interests or goals that would affect our ability to operate the property;

•	we may be forced to fulfill the obligations of a joint venture or of joint venture partners who default on their obligations including those related to debt or interest rate swaps; and

•	there may be conflicts of interests because our joint venture partners may have varying interests such as different needs for liquidity, different assessments of the market, different tax objectives or ownership of competing interests in properties in our markets.

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•	Debt Markets —The debt market is sensitive to the macro environment, such as Federal Reserve policy, market sentiment, or regulatory factors affecting the banking and commercial mortgage backed securities ("CMBS") industries. Should overall borrowing costs increase, due to either increases in index rates or increases in lender spreads, our operations may generate lower returns.

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Real Estate Markets —While incremental demand growth has helped to reduce vacancy rates and support modest rental growth in recent years, and while improving fundamentals have resulted in gains in property values, in many markets property values, occupancy and rental rates continue to be below those previously experienced before the most recent economic downturn. If recent improvements in the economy reverse course, the properties we acquire could substantially decrease in value after we purchase them. Consequently, we may not be able to recover the carrying amount of our properties, which may require us to recognize an impairment charge or record a loss on sale in our earnings.

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•	our cash flows may be insufficient to meet our required principal and interest payments;

•	we may be unable to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our liquidity for acquisitions or operations;

•	we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our existing indebtedness;

•	we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms;

•	we may violate restrictive covenants in our debt documents, which would entitle the lenders to accelerate our debt obligations;

•	we may default on our obligations and the lenders or mortgagees may foreclose on our properties and take possession of any collateral that secures their loans; and

•	our default under any of our indebtedness with cross-default provisions could result in a default on other indebtedness.

•	general market conditions;

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•	government action or regulation, including changes in tax law;

•	the market's perception of our future growth potential;

•	the extent of stockholder interest;

•	analyst reports about us and the REIT industry;

•	the general reputation of REITs and the attractiveness of their equity securities in comparison to other equity securities, including securities issued by other real estate-based companies;

•	our financial performance and that of our tenants;

•	our current debt levels;

•	our current and expected future earnings; and

•	our cash flow and cash distributions, including our ability to satisfy the dividend requirements applicable to REITs.

•	our financial condition and market conditions at the time;

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•	restrictions in the agreements governing our indebtedness;

•	general economic and capital market conditions;

•	the availability of credit from banks or other lenders; and

•	our results of operations.

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•	changes in national or regional economic conditions;

•	changes in real estate market conditions due to changes in national, regional or local economic conditions or property market characteristics;

•	competition from other properties;

•	changes in interest rates and the condition of the debt and equity capital markets;

•	the ongoing need for capital repairs and improvements;

•	increases in real estate tax rates and other operating expenses (including utilities);

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adverse changes in governmental rules and fiscal policies; acts of God, including earthquakes, hurricanes, fires and other natural disasters; pandemic outbreaks and other global health emergencies (including as a result of the outbreak of COVID-19 that began in the fourth quarter of 2019); disruptive global political events, including terrorist activity and war; or a decrease in the availability of or an increase in the cost of insurance;

•	adverse changes in zoning laws;

•	the impact of environmental legislation and compliance with environmental laws; and

•	other factors that are beyond our control or the control of the commercial property owners .

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•	we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to federal income tax at regular corporate rates;

•	we also could be subject to increased state and local taxes; and

•	unless we are entitled to relief under statutory provisions, we could not elect to be subject to be taxed as a REIT for four taxable years following the year during which we are disqualified.

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(1)	Based on leases signed as of December 31, 2019 .

(2)	Represents gross monthly base rent, as of December 31, 2019 , multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

(3)	3601 S Congress Avenue consists of ten buildings. The Company expects to complete the development of an existing surface parking lot into approximately 42,000 square feet of additional rentable office space by mid-2020.

(4)	Lindblade Media Center consists of three buildings.

(5)	2 Kaiser Plaza Parking Lot is a 44,642 square foot parcel of land currently being used as a surface parking lot. We are entitled to develop a building, which we are in the process of designing, having between 425,000 and 800,000 rentable square feet.

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(1)	Based on leases signed as of December 31, 2019 .

(2)	Represents gross monthly base rent, as of December 31, 2019 , multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

(3)	2 Kaiser Plaza Parking Lot is a 44,642 square foot parcel of land currently being used as a surface parking lot. We are entitled to develop a building, which we are in the process of designing, having between 425,000 and 800,000 rentable square feet.

(4)	Lindblade Media Center consists of three buildings.

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(5)	3601 S Congress Avenue consists of ten buildings. The Company expects to complete the development of an existing surface parking lot into approximately 42,000 square feet of additional rentable office space by mid-2020.

(1)	Represents trailing 12-month occupancy as of December 31, 2019 , calculated as the number of occupied rooms divided by the number of available rooms.

(2)	Represents trailing 12-month RevPAR as of December 31, 2019 , calculated as room revenue divided by the number of available rooms.

(3)	The Sheraton Grand Hotel is part of the Sheraton franchise and is managed by Sheraton Operating Corporation, a subsidiary of Marriott International, Inc.

(4)	Based on leases commenced as of December 31, 2019 .

(5)	Represents gross monthly contractual rent under parking and retail leases commenced as of December 31, 2019 , multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

(6)	The site of the Sheraton Grand Hotel Parking Garage & Retail is being evaluated for potential redevelopment.

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(1)	Represents gross monthly base rent, as of December 31, 2019 , multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

(2)

Prior to February 28, 2023 , the tenant may terminate up to 140,000 square feet of space in the aggregate (of which no more than 100,000 rentable square feet may be terminated with respect to the rentable square feet expiring in 2027 ), effective as of any date specified by the tenant in a written notice given to us at least 12 months prior to the termination, in exchange for a termination penalty. From and after February 28, 2023 with respect to the rentable square feet expiring in 2025 , and February 28, 2025 with respect to rentable square feet expiring in 2027 , the tenant has the right to terminate all or any portions of its lease with us, effective as of any date specified by the tenant in a written notice given to us at least 15 months prior to the termination, in each case in exchange for a termination penalty. The amount of such termination penalties is dependent on a variety of factors, including but not limited to the date of the termination notice, the amount of the square feet to be terminated and the location within the building of the space to be terminated.

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(1)	Represents gross monthly base rent, as of December 31, 2019 , multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

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(1)	Represents gross monthly base rent, as of December 31, 2019 , multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

(2)	Includes 22,416 square feet of month-to-month leases as of December 31, 2019 .

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(1)	Historical occupancy rates for office properties are shown as a percentage of rentable square feet and are based on leases commenced as of December 31st of each historical year.

(2)	3601 S Congress Avenue consists of ten buildings. The Company expects to complete the development of an existing surface parking lot into approximately 42,000 square feet of additional rentable office space by mid-2020.

(3)	9460 Wilshire Boulevard was acquired on January 18, 2018 .

(4)	Lindblade Media Center consists of three buildings.

(5)	1130 Howard Street was acquired on December 29, 2017 .

(6)	2 Kaiser Plaza Parking Lot is a 44,642 square foot parcel of land currently being used as a surface parking lot. We are entitled to develop a building, which we are in the process of designing, having between 425,000 and 800,000 rentable square feet.

(7)	211 Main Street, 200 S College Street, 980 9th Street, 1010 8th Street Parking Garage & Retail, 800 N Capitol Street, 7083 Hollywood Boulevard, 370 L'Enfant Promenade, 1901 Harrison Street, 2100 Franklin Street, 2101 Webster Street, 2353 Webster Street Parking Garage, 830 1st Street, 260 Townsend Street, 1333 Broadway, 899 N Capitol

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(1)

Other than as set forth in (5) below, Annualized Rent Per Occupied Square Foot represents gross monthly base rent as of December 31 of each historical year, multiplied by twelve and divided by the respective total occupied square feet. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

(2)	3601 S Congress Avenue consists of ten buildings. The Company expects to complete the development of an existing surface parking lot into approximately 42,000 square feet of additional rentable office space by mid-2020.

(3)	9460 Wilshire Boulevard was acquired on January 18, 2018 .

(4)	Lindblade Media Center consists of three buildings.

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(5)	1130 Howard Street was acquired on December 29, 2017 . The annualized rent as of December 31, 2017 for 12,944 rentable square feet of the building is presented using the actual rental income under a signed lease with a different tenant who took possession in March 2018, as the space was occupied by the prior owner and annualized rent under the short-term lease was de minimis.

(6)	2 Kaiser Plaza Parking Lot is a 44,642 square foot parcel of land currently being used as a surface parking lot. We are entitled to develop a building, which we are in the process of designing, having between 425,000 and 800,000 rentable square feet.

(7)

211 Main Street, 200 S College Street, 980 9th Street, 1010 8th Street Parking Garage & Retail, 800 N Capitol Street, 7083 Hollywood Boulevard, 370 L'Enfant Promenade, 1901 Harrison Street, 2100 Franklin Street, 2101 Webster Street, 2353 Webster Street Parking Garage, 830 1st Street, 260 Townsend Street, 1333 Broadway, 899 N Capitol Street, 901 N Capitol Street (a parcel of land located between 899 and 999 N Capitol Street) and 999 N Capitol Street, were sold on March 28, 2017, June 8, 2017, June 20, 2017, June 20, 2017, August 31, 2017, September 21, 2017, October 17, 2017, March 1, 2019, March 1, 2019, March 1, 2019, March 1, 2019, March 1, 2019, March 14, 2019, May 16, 2019, July 30, 2019, July 30, 2019, and July 30, 2019, respectively.

(1)	3636 McKinney Avenue, 3839 McKinney Avenue, 4649 Cole Avenue, 47 E 34th Street, and 4200 Scotland Street were sold on May 30, 2017, May 30, 2017, June 23, 2017, September 26, 2017, and December 15, 2017, respectively.

(2)	Historical occupancies for multifamily properties are based on leases commenced as of December 31st of each historical year and were calculated using units and not square feet.

(3)	4649 Cole Avenue consisted of fifteen buildings.

(4)	3839 McKinney Avenue consisted of two buildings.

(1)	3636 McKinney Avenue, 3839 McKinney Avenue, 4649 Cole Avenue, 47 E 34th Street, and 4200 Scotland Street were sold on May 30, 2017, May 30, 2017, June 23, 2017, September 26, 2017, and December 15, 2017, respectively.

(2)	Represents gross monthly base rent under leases commenced divided by occupied units as of December 31st of each historical year. This amount reflects total cash rent before concessions.

(3)	4649 Cole Avenue consisted of fifteen buildings.

(4)	3839 McKinney Avenue consisted of two buildings.

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(1)	Historical occupancies for hotel properties are shown as a percentage of rentable rooms and represent the trailing 12-months occupancy as of December 31st of each historical year. For sold properties, occupancy is presented for our period of ownership only.

(2)	This property was sold on July 19, 2016.

(3)	This property was sold on February 2, 2016.

(1)	Represents the trailing 12-months average daily rate as of December 31st of each historical year, calculated by dividing the amount of room revenue by the number of occupied rooms. For sold properties, the average daily rate is presented for our period of ownership only.

(2)	This property was sold on July 19, 2016.

(3)	This property was sold on February 2, 2016.

(1)	Represents the trailing 12-months RevPAR as of December 31st of each historical year, calculated by dividing the amount of room revenue by the number of available rooms. For sold properties, RevPAR is presented for our period of ownership only.

(2)	This property was sold on July 19, 2016.

(3)	This property was sold on February 2, 2016.

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(1)	Loan is generally not prepayable prior to April 1, 2026.

(1)	Represents gross monthly base rent, as of December 31, 2019 , multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

(2)	The Kaiser Foundation Health Plan, Inc. lease agreements include a renewal option, except with respect to 30,481 of the occupied square feet.

(3)	Includes 7,161 square feet of month-to-month leases as of December 31, 2019 .

(4)

Prior to February 28, 2023 , the tenant may terminate up to 140,000 square feet of space in the aggregate (of which no more than 100,000 rentable square feet may be terminated with respect to the rentable square feet expiring in 2027 ), effective as of any date specified by the tenant in a written notice given to us at least 12 months prior to the termination, in exchange for a termination penalty. From and after February 28, 2023 with respect to the rentable square feet expiring in 2025 , and February 28, 2025 with respect to rentable square feet expiring in 2027 , the tenant has the right to terminate all or any portions of its lease with us, effective as of any date specified by the tenant in a written notice given to us at least 15 months prior to the termination, in each case in exchange for a termination penalty. The amount of such termination penalties is dependent on a variety of factors, including but not limited to the date of the termination notice, the amount of the square feet to be terminated and the location within the building of the space to be terminated.

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(1)	Represents gross monthly base rent, as of December 31, 2019 , multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

(2)	Includes 20,030 square feet of month-to-month leases as of December 31, 2019 .

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(1)	Represents gross monthly base rent, as of December 31, 2019 , multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

(2)	Includes 300 square feet of month-to-month leases as of December 31, 2019 .

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(1)	Represents gross monthly base rent, as of December 31, 2019 , multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

(2)	Includes 300 square feet of month-to-month leases as of December 31, 2019 .

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(1)	Amounts have been adjusted to give retroactive effect to the Reverse Stock Split.

(2)

On August 30, 2019, in connection with the Program to Unlock Embedded Value in Our Portfolio and Improve Trading Liquidity of Our Common Stock, as defined in "Item 1—Business" of this Annual Report on Form 10-K, we paid a special cash dividend of $42.00 per share of Common Stock ( $14.00 per share of Common Stock prior to the Reverse Stock Split), or $613,294,000 in the aggregate, to stockholders of record at the close of business on August 19, 2019. The Special Dividend was funded primarily by the net proceeds (after the repayment of debt) received from the sale of ten properties during 2019 and borrowings on our revolving credit facility.

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(1)	All share amounts have been adjusted to give retroactive effect to the Reverse Stock Split.

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(1)	Reflects shares of Common Stock that were purchased by the Administrator for its own account from Urban Partners II, LLC, a Delaware limited liability company and affiliate of CIM Group, on October 11, 2019 in a private transaction.

(1)	Reflects shares of Series L Preferred Stock that were repurchased by the Company pursuant to a tender offer commenced on October 22, 2019 for the purchase of up to 2,693,580 shares of Series L Preferred Stock, representing one‑third of the then‑outstanding shares of Series L Preferred Stock. The tender offer was oversubscribed and expired on November 20, 2019.

(2)	The purchase price of $29.12 per share was converted to ILS prior to payment to the tendering stockholders and includes $1.39 of accrued and unpaid dividends on the Series L Preferred Stock as of November 20, 2019 .

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(1)

To conform with the current period presentation, consistent with ASU 2016-02, bad debt expense associated with changes in the Company's collectability assessment for operating leases has been reclassified as an adjustment to rental and other property income rather than rental and other property operating expenses. The impact of this reclassification resulted in a $254,000 , $317,000 , $360,000 and $1,013,000 decrease in total expenses and total revenues for the years ended December 31, 2018 , 2017 , 2016 and 2015 , respectively.

(2)	To conform with the current period presentation, we reclassified $6,361,000 from gain on sale of real estate to loss on early extinguishment of debt, which is included with total expenses on the consolidated statement of operations for the year ended December 31, 2017.

(3)

Net income from discontinued operations represents revenues and expenses from the parts of our lending segment acquired in March 2014 in connection with the merger, which were discontinued during 2015 and 2016. On December 17, 2015, we sold substantially all of our commercial mortgage loans with a carrying value of $77,121,000 to an unrelated third-party and recognized a gain of $5,151,000 . On December 29, 2016, we sold our commercial real estate lending subsidiary, which was classified as held for sale and had a carrying value of $27,587,000 , which was equal to management's estimate of fair value, to a fund managed by an affiliate of CIM Group. We did not recognize any gain or loss in connection with the transaction. Management's estimate of fair value was determined with assistance from an independent third-party valuation firm.

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(4)	See “—Funds from Operations” below for a discussion of why we believe funds from operations ("FFO") is a useful supplemental measure of operating performance and the limitations of FFO as a measurement tool and a reconciliation of net income (loss) attributable to common stockholders to FFO attributable to common stockholders.

(5)	To conform with the current period presentation, we reclassified $6,361,000 from gain on sale of real estate to loss on early extinguishment of debt, which reduced FFO for the year ended December 31, 2017 .

(6)

Cash dividends in 2019 do not include the Special Dividend of $42.00 per share of Common Stock paid to stockholders of record at the close of business on August 19, 2019. Cash dividends in 2017 do not include the special cash dividends that allowed the common stockholders that did not participate in the September 14, 2016, June 12, 2017 and December 18, 2017 private share repurchases to receive the economic benefit of such repurchases. Urban II, an affiliate of CIM REIT and CIM Urban, waived its right to receive these special cash dividends as to its shares of our Common Stock owned as of the applicable record dates.

(7)	All share and per share amounts have been adjusted to give retroactive effect to the Reverse Stock Split.

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(1)

During the years ended December 31, 2019 , 2018 , 2017 and 2016 , we recognized $29,982,000 , $808,000 , $8,215,000 , and $417,000 , respectively, of loss on early extinguishment of debt. Such losses are included in, and have the effect of reducing, net income (loss) attributable to common stockholders and FFO attributable to common stockholders, because loss on early extinguishment of debt is not an adjustment prescribed by NAREIT.

(2)

During the year ended December 31, 2019 , the Company recognized redeemable preferred stock redemptions of $5,882,000 primarily in connection with the Tender Offer. Such amount is included in, and has the effect of reducing, net income (loss) attributable to common stockholders and FFO attributable to common stockholders, because redeemable preferred stock redemptions are not an adjustment prescribed by NAREIT.

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Sale of Assets . During 2019, the Company sold eight properties in accordance with the approval of its then‑principal stockholder, and an additional two properties (one office property and one development site in Washington, D.C.) after evaluating each asset within its portfolio and the intrinsic value of each property. The Asset Sale generated an aggregate gross sales price to the Company of $990,996,000 .

•	Repayment of Certain Indebtedness . We used a portion of the net proceeds from the Asset Sale to repay balances on certain of the Company’s indebtedness.

•	Return of Capital to Holders of Common Stock . On August 30, 2019 , we paid a Special Dividend of $42.00 per share of Common Stock ( $14.00 per share of Common Stock prior to the Reverse Stock Split), or $613,294,000 in the aggregate, to stockholders of record of our Common Stock at the close of business on August 19, 2019 .

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CIM REIT Liquidation .  In connection with its liquidation process, CIM REIT, the former indirect principal stockholder of the Company, (i) distributed during the year ended December 31, 2019 approximately 10,624,000 shares of our Common Stock formerly indirectly held by CIM REIT, representing approximately 72.8% of the outstanding shares of our Common Stock, to a diverse group of institutional investors that were former members of CIM REIT and (ii) sold, in October 2019, 2,468,390 shares of our Common Stock formerly indirectly held by CIM REIT, representing approximately 16.9% of the outstanding shares of our Common Stock, for $19.1685 per share to an affiliate of CIM Group in a private transaction. As of March 12, 2020 , CIM Group, its affiliates, and our officers and directors have an aggregate economic interest in approximately 19.6% of the outstanding shares of our Common Stock.

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(1)

The information presented in this table represents historical information as of the date indicated without giving effect to any property sales occurring thereafter. We sold eight office properties, one development site and one parking garage during the year ended December 31, 2019 , we acquired one office property during the year ended December 31, 2018 , and we sold six office properties and one parking garage during the year ended December 31, 2017 . Excluding these properties, the occupancy and annualized rent per occupied square foot were 86.7% and $43.83 as of December 31, 2019 , 94.7% and $39.90 as of December 31, 2018 and 94.9% and $37.89 as of December 31, 2017 .

(2)

Other than as set forth in (3) below, represents gross monthly base rent under leases commenced as of the specified periods, multiplied by twelve. This amount reflects total cash rent before abatements. Total abatements for the years ended December 31, 2019 , 2018 and 2017 were $1,816,000 , $5,146,000 and $3,128,000 , respectively. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent. Annualized rent for certain office properties includes rent attributable to retail.

(3)	1130 Howard Street was acquired on December 29, 2017. The annualized rent as of December 31, 2017 for 12,944 rentable square feet of the building is presented using the actual rental income under a signed lease with a different tenant who took possession in March 2018, as the space was occupied by the prior owner and annualized rent under the short-term lease was de minimis.

(1)	Month-to-month tenants occupying a total of 22,416 square feet are included in the expiring leases in the first quarter listed.

(2)	Represents gross monthly base rent, as of December 31, 2019 , under leases expiring during the periods above, multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

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(1)	Based on the number of tenants that signed leases.

(2)	Cash rents represent gross monthly base rent, multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent.

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(1)	During the years ended December 31, 2019 and 2018 , we recognized $29,982,000 and $808,000 , respectively, of loss on early extinguishment of debt. Such losses are included in, and have the effect of reducing, net income (loss) attributable to common stockholders and FFO attributable to common stockholders, because loss on early extinguishment of debt is not an adjustment prescribed by NAREIT.

(2)

During the year ended December 31, 2019 , the Company recognized redeemable preferred stock redemptions of $5,882,000 primarily in connection with the Tender Offer. Such amount is included in, and has the effect of reducing, net income (loss) attributable to common stockholders and FFO attributable to common stockholders, because redeemable preferred stock redemptions are not an adjustment prescribed by NAREIT.

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(1)	During the years ended December 31, 2018 and 2017 , we recognized $808,000 and $8,215,000 , respectively, of loss on early extinguishment of debt. Such losses are included in, and have the effect of reducing, net income (loss) attributable to common stockholders and FFO attributable to common stockholders, because loss on early extinguishment of debt is not an adjustment prescribed by NAREIT.

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(1)	Represents the junior subordinated notes, SBA 7(a) loan-backed notes, and revolving credit facility.

(2)

Principal payments on SBA 7(a) loan-backed notes, which are included in Other, and secured borrowings are generally dependent upon cash flows received from the underlying loans. Our estimate of their repayment is based on scheduled payments on the underlying loans. Our estimate will differ from actual amounts to the extent we experience prepayments and or loan liquidations or charge-offs. No payment is due unless payments are received from the borrowers on the underlying loans.

(3)

Excludes premiums and discounts. For the mortgage payable and junior subordinated notes, the interest expense is calculated based on the effective interest rate on the related debt. For our revolving credit facility, we use the balance outstanding and the applicable rates in effect at December 31, 2019 to calculate the unused commitment fees. For our secured borrowings related to our government guaranteed loans, we use the variable rate in effect at December 31, 2019 .

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(1)	Excludes $3,744,000 , which represents a prorated cash dividend from January 1, 2019 to November 20, 2019 related to the 2,693,580 shares of Series L Preferred Stock that were repurchased in connection with the Series L Preferred Stock Tender Offer on November 20, 2019.

(2)	Includes $1,436,000 , which represents a prorated cash dividend from November 20, 2017 to December 31, 2017. For the year ended December 31, 2017, the accumulated dividends of $1,436,000 are included in the numerator for purposes of calculating basic and diluted net income (loss) attributable to common stockholders per share.

(1)	Amounts have been adjusted to give retroactive effect to the Reverse Stock Split.

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*	Filed herewith.

+	Management contract or compensatory plan

(b)	Exhibits

(c)	Excluded Financial Statements

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(1)	All share and per share amounts have been adjusted to give retroactive effect to the one-for-three reverse stock split of our common stock effected on September 3, 2019.

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(1)	All share and per share amounts have been adjusted to give retroactive effect to the one-for-three reverse stock split of our common stock effected on September 3, 2019.

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(1)	All share and per share amounts have been adjusted to give retroactive effect to the one-for-three reverse stock split of our common stock effected on September 3, 2019.

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(1)	All share and per share amounts have been adjusted to give retroactive effect to the one-for-three reverse stock split of our common stock effected on September 3, 2019.

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(1)	All share and per share amounts have been adjusted to give retroactive effect to the one-for-three reverse stock split of our common stock effected on September 3, 2019.

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(1)	Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the lease term, including amortization of acquired above-market leases, below-market leases and lease incentives.

(2)	Variable lease payments include expense reimbursements billed to tenants and percentage rent, net of bad debt expense from our operating leases.

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(1)	The "March Oakland Properties" consist of 1901 Harrison Street, 2100 Franklin Street, 2101 Webster Street, and 2353 Webster Street Parking Garage.

(2)

The "Union Square Properties" consist of 899 North Capitol Street, 901 North Capitol Street and 999 North Capitol Street. Prior to the sale, we determined that the book values of such properties exceeded their estimated fair values and recognized an impairment charge of $69,000,000 for the year ended December 31, 2019 (Note 2). Our determination of the fair values of these properties was based on negotiations with the third-party buyer and the contract sales price. The gain on sale includes $113,000 of extinguishment of noncontrolling interests as a result of the sale.

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(1)	In December 2017, at the time we entered into the purchase and sale agreement, we made a $20,000,000 non-refundable deposit to an escrow account that was included in other assets on our consolidated balance sheet at December 31, 2017. Transaction costs that were capitalized in connection with the acquisition of this property totaled $48,000 , which are not included in the purchase price above.

(1)	Transaction costs that were capitalized and assumption of liabilities totaled $1,915,000 , which are excluded from the purchase price above.

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(1)	Reflects the square footage of office properties and number of units of multifamily properties.

(2)	A mortgage collateralized by this property was prepaid in connection with our sale of the property (Note 7).

(3)	A mortgage collateralized by this property was assumed by the buyer in connection with our sale of the property (Note 7).

(4)

In August 2017, we negotiated an agreement with an unrelated third-party for the sale of this property. We determined that the book value of this property exceeded its estimated fair value less costs to sell, and recognized an impairment charge of $13,100,000 for the year ended December 31, 2017 (Note 2). Our determination of fair value was based on the sales price negotiated with the third-party buyer.

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(1)

Debt, net for the year ended December 31, 2019 is presented net of deferred loan costs of $1,704,000 and accumulated amortization of $576,000 . Additionally, a mortgage loan with an outstanding principal balance of $28,200,000 was assumed by the buyer in connection with the sale of our property in San Francisco, California. A mortgage loan with an outstanding principal balance of $46,000,000 was prepaid in connection with the sale in March 2019 of our property in Washington, D.C. that was collateral for the loan. Mortgage loans with an aggregate outstanding principal balance of $205,500,000 were legally defeased in connection with the sale of the March Oakland Properties that were collateral for the loans. A mortgage loan with an outstanding principal balance of $39,500,000 was legally defeased in connection with the sale in May 2019 of our property in Oakland, California that was collateral for the loan.

(2)	Debt, net for the year ended December 31, 2017 is presented net of $665,000 of premium on assumed mortgage. Additionally, debt of $50,260,000 was assumed by certain buyers in connection with sales of certain properties.

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(1)	Acquired in-place leases have a weighted average amortization period of 3 years and 5 years , respectively, for the 2018 and 2017 acquisitions.

(2)	Acquired above-market leases have a weighted average amortization period of 2 years and 7 years , respectively, for the 2018 and 2017 acquisitions.

(3)	Acquired below-market leases have a weighted average amortization period of 3 years and 2 years , respectively, for the 2018 and 2017 acquisitions.

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(1)	Investments in real estate of $24,832,000 are presented net of accumulated depreciation of $7,709,000 .

(2)	Deferred rent receivable and charges consist of deferred rent receivable of $2,909,000 and deferred leasing costs of $1,669,000 net of accumulated amortization of $569,000 .

(3)	Other intangible assets, net, represent acquired in-place leases of $1,778,000 , which are presented net of accumulated amortization of $1,558,000 .

(4)	Debt, net, includes the outstanding principal balance of 260 Townsend Street of $28,200,000 , net of deferred loan costs of $243,000 and accumulated amortization of $61,000 .

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(1)

Principal payments on secured borrowings and SBA 7(a) loan-backed notes, which are included in Other, are generally dependent upon cash flows received from the underlying loans. Our estimate of their repayment is based on scheduled payments on the underlying loans. Our estimate will differ from actual amounts to the extent we experience prepayments and or loan liquidations or charge-offs. No payment is due unless payments are received from the borrowers on the underlying loans.

(2)	Represents the junior subordinated notes, SBA 7(a) loan-backed notes, and revolving credit facility.

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(1)	Excludes $3,744,000 , which represents a prorated cash dividend from January 1, 2019 to November 20, 2019 related to the 2,693,580 shares of Series L Preferred Stock that were repurchased in connection with the Series L Preferred Stock Tender Offer on November 20, 2019.

(2)	Includes $1,436,000 , which represents a prorated cash dividend from November 20, 2017 to December 31, 2017. For the year ended December 31, 2017, the accumulated dividends of $1,436,000 are included in the numerator for purposes of calculating basic and diluted net income (loss) attributable to common stockholders per share (Note 9).

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(1)	Amounts have been adjusted to give retroactive effect to the Reverse Stock Split.

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(1)	The amounts from AOCI were reclassified as a (decrease) increase to interest expense in our consolidated statements of operations.

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(1)	The December 31, 2018 carrying amount and estimated fair value of mortgages payable exclude one mortgage loan with a carrying value of $28,018,000 that had been classified as liabilities associated with assets held for sale, net, on our consolidated balance sheet at December 31, 2018 (Notes 3 and 7).

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(1)	The December 31, 2018 percentage for California includes the assets of 260 Townsend Street, which was classified as held for sale on our consolidated balance sheet at December 31, 2018 and sold in March 2019 (Note 3).

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(1)	The December 31, 2018 balances include the assets of 260 Townsend Street, which was classified as held for sale on our consolidated balance sheet at December 31, 2018 and sold in March 2019 (Note 3).

(2)	Represents additions and improvements to real estate investments, excluding acquisitions. Includes the activity for dispositions through their respective disposition dates.

(1)	EPS for the year-to-date period may differ from the sum of quarterly EPS amounts due to the required method for computing EPS in the respective periods. In addition, EPS is calculated independently for each component and may not be additive due to rounding.

(2)	Amounts have been adjusted to give retroactive effect to the Reverse Stock Split.

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(1)

Represents revenues for the three months ended March 31, June 30, September 30, and December 31, 2018 , as previously reported in the Annual Report on Form 10-K for the year ended December 31, 2018 . Under the new leasing guidance, bad debt expense associated with changes in the collectability assessment for operating leases shall be recorded as adjustments to rental and other property income rather than other property operating expense (Note 2).

(2)	EPS for the year-to-date period may differ from the sum of quarterly EPS amounts due to the required method for computing EPS in the respective periods. In addition, EPS is calculated independently for each component and may not be additive due to rounding.

(3)	Amounts have been adjusted to give retroactive effect to the Reverse Stock Split.

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(1)	These properties collateralize the revolving credit facility, which had a $153,000,000 outstanding balance as of December 31, 2019 .

(2)	The aggregate gross cost of property included above for federal income tax purposes approximates $661,503,000 (unaudited) as of December 31, 2019 .

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(1)	Excludes general reserves of $450,000 .

(2)	Includes $242,000 of loans with subordinate lien positions.

(3)	Interest rates are variable at spreads over the prime rate unless otherwise noted.

(4)	Includes a loan with a retained face value of $284,000 , a valuation reserve of $116,000 and a fixed interest rate of 7.75% .

(5)	Includes a loan with a retained face value of $80,000 , a valuation reserve of $32,000 and a fixed interest rate of 8.25% .

(6)	Represents the government guaranteed portions of our SBA 7(a) loans detailed above retained by us. As there is no risk of loss to us related to these portions of the guaranteed loans, the geographic information is not presented as it is not meaningful.

(7)	Represents the guaranteed portion of SBA 7(a) loans which were sold with the proceeds received from the sale reflected as secured borrowings. For Federal income tax purposes, these proceeds are treated as sales and reduce the carrying value of loans receivable.

(8)	For Federal income tax purposes, the aggregate cost basis of our loans was approximately $54,925,000 (unaudited).

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