Creative Media & Community Trust Corporation (CMCT): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of Creative Media & Community Trust Corporation (CMCT), and honestly, the PESTLE framework is the right tool to map the near-term landscape. As a seasoned analyst, I see a REIT sitting squarely at the intersection of high-cost capital and high-demand experiential real estate. The challenge isn't the assets; it's the macro environment.

Here's the breakdown, focusing on late 2025 trends. We must look past the noise and focus on what drives cash flow and valuation in this specific niche.

You're holding Creative Media & Community Trust Corporation (CMCT) and, honestly, you need to know if the 2025 macro environment will crush its niche appeal. The short answer: high interest rates are defintely a capital cost headwind, but the underlying demand for experiential, community-focused real estate is a powerful tailwind. It's a tug-of-war where political stability and technological efficiency-like the potential to cut operating expenses by up to 15% with smart building systems-are the tie-breakers. This PESTLE analysis cuts through the noise to show you exactly where CMCT's cash flow is most exposed and where the real opportunities lie for the next 18 months.

Creative Media & Community Trust Corporation (CMCT) - PESTLE Analysis: Political factors

Federal interest rate policy directly impacts CMCT's cost of capital.

The Federal Reserve's (Fed) monetary policy is the single biggest political lever affecting Creative Media & Community Trust Corporation's (CMCT) balance sheet. As a Real Estate Investment Trust (REIT), CMCT relies heavily on debt financing for acquisitions and developments, so the cost of borrowing dictates profitability. The Fed's actions in 2025 have provided some relief, but the cost of capital remains high.

The benchmark interest rate, the federal funds rate, was last recorded at 4 percent as of November 2025. This follows a 25 basis point (bps) reduction at the October 2025 FOMC meeting, bringing the target range to 3.75%-4.00%. Still, the lingering effects of the previous high-rate environment are clear in CMCT's financials.

Here's the quick math: CMCT's interest payments on its debt are poorly covered by its earnings before interest and taxes (EBIT), showing a low 0.1x coverage as of the latest data. This high-interest expense environment contributed to an increase of $1.3 million in interest expense in the second quarter of 2025 compared to the same period in 2024. CMCT is defintely focused on managing this, evidenced by the refinancing of an $81.0 million mortgage loan in Q3 2025.

Shifting municipal zoning laws can accelerate or block community-focused projects.

Local government policy, particularly zoning, is critical for CMCT, given its focus on premier multifamily and creative office assets in high-density, urban communities like Los Angeles. Shifting zoning rules can turn a stalled asset into a high-value development opportunity overnight.

In Los Angeles, a key CMCT market, a major zoning overhaul took effect on February 11, 2025, with the adoption of the Citywide Housing Incentive Program (CHIP) Ordinance. This program is LA's main strategy to meet its state-mandated Regional Housing Needs Allocation (RHNA) of 456,643 new units for the 2021-2029 period.

The CHIP Ordinance directly impacts CMCT's development strategy by providing developers with incentives, like the ability to exceed current building limits, if they include a certain percentage of affordable units, especially near public transit or in commercial zones. This creates a clear path for CMCT to accelerate its community-focused development pipeline, particularly in areas like Downtown Los Angeles, where the new zoning code has been fully adopted.

Government incentives for creative arts production influence studio space demand.

The demand for CMCT's creative office and studio-related real estate is directly tied to government-backed film and television tax credits. These incentives influence where production companies choose to film, driving occupancy and rent growth for CMCT's specialized portfolio.

California has significantly ramped up its program to remain competitive, increasing the base tax credit rate to 35% and doubling the total annual allocation to $750 million. This has already translated into concrete activity: in August 2025, 22 television shows were awarded funding, which is projected to generate $1.1 billion in spending across the state.

This political support underpins the strong market fundamentals for CMCT's assets.

• Demand for soundstage production space in Los Angeles and New York City continues to outpace supply through 2025.
• New York is also enhancing its program, proposing a $100 million Empire State Independent Film Production Credit and extending the program through 2036.

Tax law stability is crucial for maintaining the Real Estate Investment Trust (REIT) structure.

For CMCT to maintain its REIT status-a structure that avoids corporate income tax by distributing most of its income to shareholders-tax law stability is paramount. The passage of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, provided significant clarity and structural benefits.

The most critical change is the permanent extension of the Section 199A deduction (Qualified Business Income or QBI deduction). This allows individual shareholders to deduct up to 20% of their ordinary REIT dividend income, keeping the effective top individual tax rate on these dividends at 29.6%. This permanence makes REITs a much more attractive long-term investment vehicle.

Also, the law enhanced operational flexibility:

• The asset test limit for a Taxable REIT Subsidiary (TRS) will increase from 20% to 25% of a REIT's total assets for 2026 and beyond.
• The Section 163(j) interest deduction limitation calculation was relaxed for 2025, reverting to the more favorable EBITDA (earnings before interest, taxes, depreciation, and amortization) method.

This last point is a direct financial benefit, allowing CMCT to deduct more of its substantial interest expense, which is a major win in a high-rate environment.

Creative Media & Community Trust Corporation (CMCT) - PESTLE Analysis: Economic factors

High interest rates keep borrowing costs elevated, pressuring net income margins.

The persistent high-rate environment set by the Federal Reserve is the single biggest headwind for Creative Media & Community Trust Corporation's (CMCT) profitability in 2025. You're seeing this pressure play out directly in the debt service line, where CMCT's interest expense increased by $782,000 in the third quarter of 2025 compared to the same period in 2024. This increase is a direct result of higher aggregate debt outstanding, meaning the cost of carrying your existing debt is rising, which eats into the bottom line.

Here's the quick math: with the Federal Funds Effective Rate sitting in the 3.75% to 4.00% range and the Bank Prime Loan rate at a steady 7.00% as of late 2025, refinancing is expensive. This elevated cost contributed to a Core Funds From Operations (Core FFO) loss of $(10.5) million in Q3 2025. CMCT is defintely working to mitigate this, successfully extending an $81.0 million mortgage loan on a multifamily property in Oakland, California, to January 2027, but the overall cost of capital remains a major drag on net income.

Inflationary growth in operating expenses (utilities, maintenance) affects property NOI (Net Operating Income).

Inflation is a double-edged sword for real estate, and for CMCT, it's squeezing Net Operating Income (NOI). While revenue growth can sometimes outpace inflation, the rising cost of property operations is a constant threat to margin. For the broader multifamily sector, operating expenses grew at a 4.15% Compound Annual Growth Rate (CAGR) from 2015 to 2024, with property insurance premiums spiking at an 11.77% annual rate. That's a massive fixed-cost increase.

CMCT's Q3 2025 results show this mixed impact:

• Office Segment NOI: Decreased to $5.0 million in Q3 2025 from $5.4 million in Q3 2024, partly due to higher real estate taxes in Austin, Texas.
• Multifamily Segment NOI: Increased to $792,000 in Q3 2025 from $508,000, primarily driven by a reduction in real estate taxes in Oakland, California, which offset a decrease in rental revenues.

What this estimate hides is the regional variation. You can't rely on a national CPI of 3.4% (year-over-year in May 2025) when specific local costs like real estate taxes or insurance can jump by double digits, as seen in the Austin office portfolio. That's why granular cost control is critical right now.

Strong consumer spending on experiences boosts demand for experiential retail tenants.

The shift in consumer spending toward experiences remains a clear opportunity. The U.S. experiential retail market is valued at $132 billion in 2025, with projections showing it could more than quadruple to $543.45 billion by 2035. This trend supports the hotel and retail components of CMCT's portfolio.

For CMCT, the Hotel segment NOI was $850,000 in Q3 2025, down from $1.0 million year-over-year. However, this decline was explicitly due to a lobby renovation project, not a lack of demand. The company is strategically renovating its hotel asset to capture this spending trend, setting the property up for a stronger 2026 performance. This is a short-term pain for long-term gain play.

Media sector advertising spend volatility impacts the long-term stability of studio leases.

The volatility in the media and entertainment sector, a key tenant base for CMCT's 'creative office' properties, is complex. While total U.S. media ad spend is forecast to reach $422 billion in 2025, representing a healthy 7.3% growth over 2024, the growth is highly bifurcated. The money is moving to digital channels like Connected TV (CTV) and social media, while traditional media (like Linear TV) faces significant headwinds.

CMCT's office segment is showing resilience in leasing volume, which is a good sign. The company executed approximately 159,000 square feet of leases through the first nine months of 2025, a 69% increase from the prior year period. The office portfolio was 73.6% leased at the end of Q3 2025. This suggests that CMCT's focus on creative office assets in markets like Los Angeles and Austin is attracting the growing parts of the media and tech ecosystem, not the volatile, shrinking parts. The risk is less about overall media spend and more about tenant-specific exposure to traditional, non-digital media formats.

Creative Media & Community Trust Corporation (CMCT) - PESTLE Analysis: Social factors

Post-pandemic demand for flexible, mixed-use community hubs is a core tailwind.

You're seeing it everywhere: the old separation of where you live, work, and shop is dead, and the post-pandemic social preference for convenience and connectivity is driving a massive shift in real estate. This is a core tailwind for Creative Media & Community Trust Corporation's (CMCT) strategy, which focuses on mixed-use properties.

People-especially the younger generations-want a 'live, work, play' environment, and the market is responding. Mixed-use developments are a top commercial real estate trend for 2025 because they diversify revenue and attract urban professionals. CMCT's properties, which blend creative office, multifamily, and retail, are perfectly positioned to capitalize on this social desire for a single, walkable community hub.

Increased tenant focus on ESG (Environmental, Social, and Governance) compliance drives property upgrades.

Honesty, ESG is no longer a 'nice-to-have' checkbox; it's a non-negotiable social and financial requirement in 2025. Corporate tenants, particularly the large, investment-grade ones, are now demanding ESG-compliant buildings to meet their own corporate social responsibility goals and attract environmentally conscious employees. This is a direct driver of capital expenditure (CapEx) for landlords like CMCT.

For CMCT, this means that investing in the 'S' and 'G' factors-like community engagement, health-focused amenities, and transparent governance-is crucial for retaining tenants and commanding premium rents. Properties with strong ESG policies show better retention rates, and that's a direct line to your net operating income (NOI). Here's a quick look at how social and environmental factors are now core to property value:

Demographic shifts in urban centers change the mix of required community retail and services.

The population mix in CMCT's key urban markets, like Los Angeles and New York, is changing the retail game. Millennials and Gen Z are fueling consumer spending in 2025, and they prioritize experiences over just products. They want to combine shopping with dining and place a higher importance on sustainability. This means the retail component of CMCT's mixed-use assets must pivot from traditional stores to experiential retail.

Plus, the rise of single-person households, which now account for over 30% in many major cities, is creating demand for smaller, smarter, and highly-amenitized living spaces. This demographic reality supports CMCT's strategic shift toward premier multifamily assets, as noted in their Q3 2025 results, where they reported a net loss of $(17.7) million but are actively pivoting to this more resilient asset class.

To be fair, you also can't ignore the aging population, which is increasing demand for senior-oriented services and healthcare real estate in some urban-adjacent markets.

Creative professionals increasingly prefer collaborative, amenity-rich production spaces.

This is where CMCT's core 'Creative Media' focus comes into play. The modern creative professional-filmmakers, podcasters, designers, and tech startups-has abandoned the isolated office cube. They want flexible, multi-use commercial properties that act as an ecosystem for innovation. Traditional offices feel isolating.

In 2025, the demand is for 'social workspaces' and 'dynamic collaboration hubs' that offer specialized infrastructure and community. CMCT's creative office portfolio, which was 73.6% leased as of September 30, 2025, is positioned to capture this demand, especially when excluding their challenging Oakland asset, which brings the leased percentage up to a much stronger 86.6%.

The key is providing the right amenities that foster organic collaboration and lower upfront costs for tenants:

• Offer flexible, month-to-month lease terms.
• Provide specialized equipment, like soundproof booths for podcasting.
• Host networking events and skill-sharing workshops.
• Design team-oriented zones over rigid, private offices.

The ability to adapt space quickly for a photoshoot in the morning and a team meeting in the afternoon is defintely what drives leasing in this segment.

Creative Media & Community Trust Corporation (CMCT) - PESTLE Analysis: Technological factors

Adoption of smart building systems can reduce property operating expenses by up to 15%.

You need to see smart building technology not as a luxury upgrade, but as a critical operational cost-saver right now. For Creative Media & Community Trust Corporation, with its portfolio of 1.3 million rentable square feet of office space, implementing these systems is a clear path to boosting Net Operating Income (NOI). Here's the quick math: buildings that implement advanced energy management systems, which are part of the smart building framework, are reporting 20% to 30% reductions in energy costs within the first year. This significantly surpasses the 15% benchmark we look for. Predictive maintenance, powered by Internet of Things (IoT) sensors, shifts your maintenance from costly reactive firefighting to proactive planning, cutting emergency repair costs by up to 40% and extending asset lifespans by 20% to 30%. That's a defintely material gain in an environment where every dollar matters.

Fiber-optic and 5G infrastructure is a non-negotiable requirement for media production tenants.

The tenant base for CMCT's creative office spaces-media, entertainment, and tech firms-demands a level of connectivity that traditional copper wiring simply can't deliver in 2025. Fiber optic cabling is now the gold standard and the non-negotiable backbone for real-time cloud computing and high-volume data transfer, which is essential for rendering and large file sharing. You must ensure your buildings are fiber-first planned, meaning the conduit and access points are in place even if the final fiber isn't yet run. Plus, the rollout of advanced 5G networks, which is accelerating through 2025, requires this robust fiber foundation to support the high-speed, low-latency connectivity needed for applications like broadcast production and private enterprise networks. If a building lacks this infrastructure, it will not compete for premium creative tenants, period.

PropTech (Property Technology) tools streamline property management, improving efficiency.

PropTech is moving from a pilot program to mission-critical infrastructure, with 78% of real estate executives identifying technology adoption as their top strategic priority. For CMCT, utilizing these tools can drive substantial NOI improvements. Real estate firms implementing comprehensive data analytics platforms are achieving average NOI improvements of 8% to 12% within 24 months through better-informed asset management decisions. This is where the operational efficiency really shines:

• Mobile apps handle 67% of all tenant service requests.
• Average service resolution times drop from 72 hours to under 12 hours.
• Automated lease administration reduces documentation errors by 91%.
• Tenant retention rates rise by 23% in properties with advanced digital systems.

You should be investing in platforms that unify data from leasing, maintenance, and utility consumption into a single, actionable dashboard.

The rise of virtual production impacts the long-term spatial needs of traditional studio facilities.

The global virtual production market is estimated at $3.16 billion in 2025 and is forecasted to grow at a 16.38% Compound Annual Growth Rate (CAGR) through 2030. This trend, driven by technologies like LED volume stages (large, curved screens used for in-camera visual effects, or ICVFX), is a direct threat to the traditional, cavernous sound stage model. LED volume stages are expanding at a 32.4% CAGR, and they are projected to eclipse traditional chromakey (green screen) spend before 2030. This technology allows production companies to shoot complex, location-dependent scenes in a smaller, controlled environment, cutting down on travel, set-build, and post-production expenses. For CMCT's creative office portfolio, this means the demand may shift away from massive, purpose-built stages toward more flexible, high-ceiling, high-power-density spaces that can be quickly converted into these virtual production volumes. You need to assess which of your assets can handle the significant power and cooling requirements of these LED walls.

Creative Media & Community Trust Corporation (CMCT) - PESTLE Analysis: Legal factors

Evolving Landlord-Tenant Laws in Key Markets Increase Compliance Risk

You're operating a diversified real estate portfolio, and right now, the most immediate legal risk to your multifamily Net Operating Income (NOI) is the rapid evolution of landlord-tenant laws in your core, high-cost markets. These shifts aren't minor; they directly impact your cash flow and operational complexity.

In Los Angeles, the City Council significantly lowered the allowable annual rent increase for rent-stabilized units-which cover about three-quarters of the market-capping them between 1% and 4% based on inflation, a sharp reduction from the previous 3% to 8% range. This change, taking effect in 2025, severely limits your revenue growth in those assets. Plus, starting in 2025, non-Rent Stabilization Ordinance properties face a new annual fee of $31.05 per unit, with the first payment due by February 28, 2025, adding another layer of administrative cost and penalty risk if compliance is missed.

New York City presents its own set of challenges. The Fairness in Apartment Rental Expenses (FARE) Act, effective June 11, 2025, shifts the financial burden of broker fees from the tenant to the landlord when the landlord hires the broker. This is a direct, unrecoverable increase in your leasing costs for multifamily units in New York. Also, the New York City Fair Chance Housing Law (effective January 1, 2025) restricts your ability to consider a prospective tenant's criminal background during the initial application, which forces a change in your underwriting and risk management processes.

• LA Rent Cap: Limits annual rent increases to 1%-4%.
• NYC FARE Act: Shifts broker fees to the landlord starting June 11, 2025.
• LA Fee: Adds a $31.05 per unit annual fee for non-RSO properties.

Adherence to Complex REIT Income and Asset Tests is Vital for Tax Efficiency

As a Real Estate Investment Trust (REIT), CMCT's entire business model hinges on maintaining its qualification under the Internal Revenue Code. Fail the tests, and you lose your tax-advantaged status, which would be catastrophic for shareholder returns. The core issue is the 75% asset test and the 95% and 75% income tests, which require the vast majority of your assets and income to be derived from real estate. Your strategic move to sell the lending business is a direct, decisive action to manage this legal risk.

Here's the quick math: CMCT entered into an agreement on November 6, 2025, to sell its lending business for approximately $44 million. This sale is crucial because the lending business is considered a non-qualifying asset and produces non-qualifying income (bad income) for REIT purposes. By divesting this non-core, non-real estate asset, you are proactively de-risking your REIT compliance for the 2025 fiscal year and beyond, particularly as you pivot toward premier multifamily assets. Your Q3 2025 financial results showing a Net loss of $(17.7) million underscore the need for this strategic clarity and focus on core, qualifying real estate operations.

Stricter Building Codes and Permitting Processes Slow Down Adaptive Reuse Projects

You are actively looking at adaptive reuse to repurpose underutilized office space, but the regulatory environment is a double-edged sword. While Los Angeles has made an effort to streamline the process, the underlying compliance costs are still substantial. The Los Angeles City Council approved the revised Citywide Adaptive Reuse Ordinance (Citywide ARO), which is planned to take effect in 2025, expanding incentives citywide and allowing conversions of structures at least 15 years old. This is a clear opportunity to unlock value from older office stock.

Still, every adaptive reuse project must meet current Energy and Green Building Codes, which often triggers significant, costly upgrades for the entire building. In New York City, the compliance burden is even more explicit with Local Law 97 (LL97). This law applies to most buildings over 25,000 square feet, requiring a 40% reduction in emissions by 2030. The first compliance report for LL97 was due on May 1, 2025, which means your New York properties are now fully exposed to the risk of fines and the massive capital expenditure required for retrofits. This is a non-negotiable cost that will be passed through to tenants where leases allow, or directly impact your NOI.

Data Privacy Regulations Indirectly Affect Media Tenants' Business Models and Space Needs

The legal landscape for your creative and media tenants-who occupy your specialized office spaces-is being reshaped by a wave of state-level data privacy regulations. This doesn't directly affect your property ownership, but it absolutely affects your tenants' profitability and, therefore, their long-term commitment to your space. You need to think like your tenant.

Across the US, states are passing laws like the expanded Connecticut Data Privacy Act (CTDPA), with key amendments taking effect in 2025. These amendments significantly lower the applicability threshold to entities that process personal data of at least 35,000 consumers (down from 100,000) or offer consumers' sensitive data for sale. For your media tenants, who rely on consumer data for targeted advertising, this means a massive increase in compliance costs, legal overhead, and operational restrictions, including the prohibition of selling a minor's sensitive data without consent.

The indirect real estate impact is two-fold: First, the rising cost of compliance for media tenants can reduce their overall operating budget, potentially leading to slower rent growth or space downsizing. Second, the need for enhanced data security and compliance drives demand for specialized, high-security office infrastructure, which you can turn into a competitive advantage by offering certified, secure space. This is a defintely a trend to watch.

Creative Media & Community Trust Corporation (CMCT) - PESTLE Analysis: Environmental factors

Increasing municipal mandates for building energy efficiency raise capital expenditure requirements.

You are facing immediate, non-negotiable compliance costs, especially in your core markets like Los Angeles and New York City. The biggest near-term risk is New York City's Local Law 97 (LL97), which mandates carbon emission caps for buildings over 25,000 square feet starting in the 2024-2025 compliance period. Fail to comply, and the fine is $268 per metric ton of CO₂ equivalent over the limit. That is a steep penalty that directly hits your Net Operating Income (NOI).

In Los Angeles, the Existing Building Energy and Water Efficiency (EBEWE) ordinance requires annual energy benchmarking and periodic energy audits and retro-commissioning for buildings over 20,000 square feet. While the fines for non-compliance are lower than NYC's, a missed audit under NYC's Local Law 87 (LL87) still brings a penalty of $3,000 for the first year, escalating to $5,000 for each subsequent year. This isn't just about utility bills; it is about regulatory risk management.

Your financial statements for 2025 Q1 through Q3 show a focus on debt refinancing (like the $81.0 million mortgage extension in Oakland) and hotel renovations (all 505 rooms completed), but they don't explicitly detail the CapEx for environmental compliance. This lack of transparency around a critical and rising cost center is a red flag for investors. You need to budget for significant mechanical, electrical, and plumbing (MEP) system upgrades, especially given the new California 2025 Building Energy Efficiency Standards and New York's move toward all-electric new construction.

Here is the quick math on the compliance risk:

Tenant and investor demand for LEED-certified or sustainable properties is rising sharply.

The market is clearly bifurcating: tenants and investors are paying a premium for green buildings, and assets without certifications like LEED (Leadership in Energy and Environmental Design) are becoming functionally obsolete. Globally, there are over 111,397 LEED-certified projects, and the commercial sector accounts for nearly 40% of those.

For your 1.3 million rentable square feet of office space and 696 multifamily units, a lack of certification is a competitive disadvantage. LEED-certified buildings typically consume 25% less energy and have 34% lower CO2 emissions than conventional buildings, translating directly into lower operating expenses (OpEx) for your tenants. This is a huge selling point when you are trying to improve your office portfolio's occupancy, which was only 69.8% as of September 30, 2025.

• Tenant Action: Demand for certified multifamily projects is increasing, impacting your strategic pivot toward that asset class.
• Investor Action: Over 70% of property professionals are concerned about meeting decarbonization requirements by 2030, meaning your ESG strategy is a primary factor in attracting institutional capital.
• Value Proposition: Incorporating climate-resilient CapEx can result in a 15-20% improvement in long-term value retention. That's defintely a better investment than just cosmetic upgrades.

Climate change risk assessments are now crucial for insuring and valuing coastal assets.

With properties in coastal markets like Los Angeles and the Bay Area (Oakland), climate change risk is a systemic financial threat, not a distant environmental issue. The insurance industry is now the 'unseen arbiter' of economic viability, using increasingly sophisticated models to assess micro-level flood risk. This means higher, highly localized premiums that directly reduce your NOI.

Lenders are already getting cautious, sometimes requiring larger down payments or denying coverage in high-risk zones. This is a major factor in refinancing. You just extended the maturity date on your $81.0 million mortgage at a multifamily property in Oakland, California, through January 2027, but future extensions or new financing will face stricter climate risk scrutiny. Ignoring this risk leads to mispricing assets and a measurable devaluation, as seen in a 2.2% decline in home values near wildfire-affected areas in California. You must integrate climate-resilient design into your CapEx planning to maintain long-term asset value.

CMCT must plan to reduce its portfolio's carbon footprint to align with 2030 targets.

While Creative Media & Community Trust Corporation has not publicly disclosed a specific, Science Based Targets initiative (SBTi)-validated 2030 carbon reduction goal in its recent 2025 financial filings, the regulatory and market pressure dictates your action plan. New York State's Climate Leadership and Community Protection Act (CLCPA) mandates a 70% decrease in greenhouse gas emissions by 2030 statewide. Your properties operate within this mandate's shadow.

To align with the spirit of the 2030 targets, you must immediately:

• Measure: Establish a verifiable baseline for Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain) emissions across your 27 assets.
• Target: Set an internal, absolute reduction goal for Scope 1 and 2 emissions, aiming for at least a 50% reduction by 2030 to meet industry-standard 1.5°C alignment.
• Act: Prioritize CapEx for energy-saving retrofits-like heat pump installations and building envelope improvements-in your 1.3 million square feet of office space to mitigate the inevitable LL97 fines.

The cost of inaction is a permanent discount on your asset values and recurring regulatory fines. Finance: Start modeling the cash flow impact of a $268/ton LL97 fine on your New York assets by end of Q1 2026.