Business
Creative Media & Community Trust Corporation Reports 2026 First Quarter Results
LOS ANGELES, May 08, 2026--CMCT reports first quarter 2026 results.
About this update from Creative Media
LOS ANGELES, May 08, 2026 --( BUSINESS WIRE )--Creative Media & Community Trust Corporation (NASDAQ: CMCT) ("we", "our", "CMCT", or the "Company") today reported operating results for the three months ended March 31, 2026. On March 26, 2026, the Company effected a 1-for-10 reverse stock split on the Company’s Common Stock, par value $0.001 per share (the "Common Stock"), and on April 20, 2026, the Company effected a 1-for-10 reverse stock split on its Common Stock. All of the share and per share amounts in this release have been adjusted to give retroactive effect to the reverse stock splits (collectively, the "Reverse Stock Splits"). First Quarter 2026 Highlights Real Estate Portfolio Financial Results Asset Sales and Preferred Redemptions Management Commentary The Company made significant progress on its plan to accelerate its focus towards premier multifamily assets, strengthen the balance sheet and improve liquidity. Operating trends continue to improve across the multifamily portfolio, the Los Angeles and Austin office assets and the company’s one hotel. Since announcing this plan in September 2024, the Company has significantly improved its balance sheet having completed financings on nine assets, fully retired its recourse credit facility, sold its lending business and redeemed approximately $396.2 million of Preferred Stock, into shares of the Company’s Common Stock, including $242.8 million of redemptions in the first quarter of 2026. The March Redemption is expected to improve CMCT’s FFO 1 by approximately $16.0 million per year 3 and returns the Company’s capital structure back to its long-term target (approximately 38% common equity, 7% preferred equity and 55% debt when adjusting for the Redemption), on a fair value basis. Given the company’s significantly improved financial position, the company does not currently intend to redeem, at the Company’s election, additional Preferred Stock in shares of Common Stock. However, the Company will evaluate redemption requests submitted by holders of Preferred Stock at the time it receives such requests and may elect to redeem those Preferred Shares in Common Stock or cash, at the Company’s discretion. Operating Trends The Company believes there is an opportunity to significantly improve net operating income of its multifamily portfolio by increasing occupancy and by renewing leases at market rents which exceed in-place rents. CMCT’s multifamily occupancy, excluding its premier, Class A Echo Park Los Angeles apartment building which just began lease-up during the fourth quarter of 2025, was 91.4% as of March 31, 2026, representing a 1,120 basis point improvement from the first quarter of 2025. The Company is seeing improving demand at its Bay Area multifamily buildings with occupancy improving to 91.9% at the end of the first quarter, representing a 860 basis point improvement from the first quarter 2025. At the end of the first quarter, the recently developed Echo Park multifamily building was 52.8% occupied. In the office segment, excluding the Oakland Office Building, the leased percentage was 85.7% at the end of March 31, 2026 representing a 470 basis point improvement from the first quarter of 2025. At 11600 Wilshire Boulevard, the Company expects to finalize its renovation program on several small suites in the first half of 2026, which is anticipated to fuel leasing activity. The company is also seeing an increase in activity at its Culver City and Austin creative office assets. The Company owns one office asset in Oakland, where demand continues to be challenging. The mortgage on the asset matures in the third quarter of 2026; the Company is currently seeking an extension of the maturity but cannot guarantee it will reach an agreement with the lender. In the hotel segment, the Company has substantially completed the renovation of the public space during the first quarter of 2026, following the renovation of all 505 rooms, setting the property up well for 2026 and beyond. The renovation was the first large scale renovation of the property since it was acquired in 2008. The company is also exploring an opportunity to convert underutilized space into 8 additional rooms. Asset Sales In January 2026, the Company completed the sale of its lending division for a purchase price of approximately $44.9 million (which is net of the outstanding balance of debt related to the 2023 securitization of certain loan receivables), subject to post-closing adjustments. Giving effect to the payment of other debt, transaction expenses and other matters, the transactions yielded net cash proceeds to the Company of approximately $31.2 million. The Company continues to evaluate additional asset sales. First Quarter 2026 Results Real Estate Portfolio As of March 31, 2026, our real estate portfolio consisted of 27 assets, all of which were fee-simple properties and five of which we own through investments in unconsolidated joint ventures. Our unconsolidated joint ventures contain one office property, three multifamily properties (one of which has been partially converted from office into multifamily units and is now classified as a multifamily property) and one commercial development site. As of March 31, 2026, our 12 office properties, totaling approximately 1.3 million rentable square feet, were 73.1% occupied; our one hotel with an ancillary parking garage, which has a total of 505 rooms, had RevPAR of $178.71 for the three months ended March 31, 2026, and our five multifamily properties were 89.6% occupied. Additionally, as of March 31, 2026, we had eight development sites (two of which were being used as parking lots). Financial Results Net loss attributable to common stockholders was $(34.7) million, or $(70.52) per diluted share of Common Stock, for the three months ended March 31, 2026, compared to a net loss attributable to common stockholders of $(11.9) million, or $(1,983.00) per diluted share of Common Stock, for the same period in 2025. The increase in net loss attributable to common stockholders was primarily driven by an increase in redeemable preferred stock redemptions of $21.9 million and a decrease in segment net operating income of $1.9 million. FFO (3)4 was $(28.8) million, or $(58.47) per diluted share of Common Stock, for the three months ended March 31, 2026, compared to $(5.4) million, or $(900.83) per diluted share of Common Stock, for the same period in 2025. The decrease in FFO 4 was primarily attributable to an increase in redeemable preferred stock redemptions of $21.9 million, a decrease of $1.9 million in segment net operating income and an increase of $705,000 in loss on early extinguishment of debt, partially offset by a decrease in redeemable preferred stock dividends of $1.3 million. Core FFO (4)5 was $(5.9) million, or $(11.89) per diluted share of Common Stock for the three months ended March 31, 2026, compared to $(5.1) million, or $(846.50) per diluted share of Common Stock for the same period in 2025. The decrease in Core FFO 5 is attributable to the aforementioned changes in FFO 5 , while not impacted by the increase in loss on early extinguishment of debt or the increase in redeemable preferred stock redemptions, as these are excluded from our Core FFO 5 calculation. Segment Information Our reportable segments during the three months ended March 31, 2026 and 2025 consisted of three types of commercial real estate properties, namely, office, hotel and multifamily. Total segment net operating income ("NOI") (5) was $9.8 million for the three months ended March 31, 2026, compared to $11.8 million for the same period in 2025. Office Same-Store Same-store (2) office segment NOI (5) was $6.5 million for the three months ended March 31, 2026, a decrease from $7.1 million compared to the same period in 2025, while same-store (1) office Cash NOI (6)5 was $6.9 million for the three months ended March 31, 2026, a decrease from $7.8 million in the same period in 2025. The decrease in same-store (2) office Segment NOI (5) and same-store (1) office Cash NOI (5) was primarily driven by a decrease in tenant reimbursement revenue at an office property in Oakland, California and an increase in real estate tax expense at an office property in Beverly Hills, California driven by a tax refund recorded in the prior-year period. At March 31, 2026, the Company’s same-store (2) office portfolio was 73.1% occupied, an increase of 290 basis points year-over-year on a same-store (2) basis, and 73.1% leased, an increase of 170 basis points year-over-year on a same-store (2) basis. The annualized rent per occupied square foot (7) on a same-store (2) basis was $58.47 at March 31, 2026, compared to $61.14 at March 31, 2025. During the three months ended March 31, 2026, the Company executed 20,562 square feet of leases with terms longer than 12 months at our same-store (2) office portfolio. Total Office Segment NOI (5) decreased to $6.5 million for the three months ended March 31, 2026, as compared to $7.1 million for the same period in 2025, driven by the aforementioned decrease in same-store (2) office Segment NOI (5) . Hotel Hotel Segment NOI (5) was $4.0 million for the three months ended March 31, 2026, as compared to $4.7 million for the same period in 2025. The decrease was largely attributable to temporary factors, including a renovation-related disruption early in the quarter, and an issue in one of the mechanical systems that temporarily removed a number of rooms from service in March. Multifamily Our Multifamily Segment consists of two multifamily buildings located in Oakland, California as well as three investments in multifamily buildings in Los Angeles, California owned through unconsolidated joint ventures. Our multifamily segment NOI (5) remained fairly consistent at $(613,000) for the three months ended March 31, 2026, compared to $(620,000) for the same period in 2025. As of March 31, 2026, our Multifamily Segment was 89.6% occupied, monthly rent per occupied unit (8) was $2,493 and net monthly rent per occupied unit (9) was $2,156, compared to 80.2%, $2,461, and $2,341, respectively, as of March 31, 2025. Debt and Equity During the three months ended March 31, 2026, the Company redeemed 7,734,130 shares of Series A1 Preferred Stock, 1,957,823 shares of Series A Preferred Stock, and 21,760 shares of Series D Preferred Stock (all shares of which were redeemed in shares of Common Stock). These redemptions resulted in the collective issuance of 2,612,161 shares of Common Stock (adjusted for the Reverse Stock Splits) during the three months ended March 31, 2026. As of May 1, 2026, the Company has received redemption requests related to Series A1 Preferred Stock and Series A Preferred Stock, totaling approximately $204,000, which the Company intends to redeem in shares of Common Stock as soon as practical after the Company opens its trading window in accordance with its Insider Trading Policy. We are evaluating a potential refinancing and are in discussions with and receiving proposals from potential lenders related to the Sheraton Hotel that could result in an upsized loan and a reduced interest rate. In connection with the closing of the sale of First Western, we repaid in full the remaining balance of $10.4 million under the Lending Division Revolving Credit Facility. Dividends We declared preferred stock dividends on our Series A, Series A1 and Series D Preferred Stock for the first quarter of 2026. The dividends were payable on April 15, 2026 to holders of record at the close of business on April 5, 2026. The dividend amounts are as follows: *The quarterly cash dividend of $0.399375 per share represents an annualized dividend rate of 6.39% (2.5% plus the federal funds rate of 3.89% on the applicable determination date). The terms of the Series A1 Preferred Stock provide for cumulative cash dividends (if, as and when authorized by the Board of Directors) on each share of Series A1 Preferred Stock at a quarterly rate of the greater of (i) 6.00% of the Series A1 Stated Value, divided by four (4) and (ii) the Federal Funds (Effective) Rate on the applicable determination date, plus 2.50%, of the Series A1 Stated Value, divided by four (4), up to a maximum of 2.50% of the Series A1 Stated Value per quarter. About the Data Descriptions of certain performance measures, including Segment NOI, Cash NOI, FFO attributable to common stockholders, and Core FFO attributable to common stockholders are provided below. Certain of these performance measures—Cash NOI, FFO attributable to common stockholders and Core FFO attributable to common stockholders—are non-GAAP financial measures. Refer to the subsequent tables for reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure. FORWARD-LOOKING STATEMENTS This press release contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are intended to be covered by the safe harbors created thereby. These statements include the plans and objectives of management for future operations, including plans and objectives relating to future growth of CMCT’s business and availability of funds. Such forward-looking statements can be identified by the use of forward-looking terminology such as "may," "will," "project," "target," "expect," "intend," "might," "believe," "anticipate," "estimate," "could," "would," "continue," "pursue," "potential," "forecast," "seek," "plan," or "should," or "goal" or the negative thereof or other variations or similar words or phrases. Such forward-looking statements also include, among others, statements about CMCT’s plans and objectives relating to future growth and outlook. Such forward-looking statements are based on particular assumptions that management of CMCT has made in light of its experience, as well as its perception of expected future developments and other factors that it believes are appropriate under the circumstances. Forward-looking statements are necessarily estimates reflecting the judgment of CMCT’s management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include those associated with (i) the timing, form, and operational effects of CMCT’s development activities, (ii) the ability of CMCT to raise in place rents to existing market rents and to maintain or increase occupancy levels, (iii) fluctuations in market rents, (iv) the effects of inflation and continuing higher interest rates on the operations and profitability of CMCT and (v) general economic, market and other conditions, including the effects of high unemployment rates, continued or renewed inflation and any recession or slowdown in economic growth, and (vi) our approach to artificial intelligence ("AI"). Additional important factors that could cause CMCT’s actual results to differ materially from CMCT’s expectations are discussed in "Item 1A—Risk Factors" in CMCT’s Annual Report on Form 10-K for the year ended December 31, 2025 and in Part II, Item 1A of CMCT’s Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission from time to time. The forward-looking statements included herein are based on current expectations and there can be no assurance that these expectations will be attained. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond CMCT’s control. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements expressed or implied will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements expressed or implied herein, the inclusion of such information should not be regarded as a representation by CMCT or any other person that CMCT’s objectives and plans will be achieved. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made. CMCT does not undertake to update them to reflect changes that occur after the date they are made, except as may be required by applicable securities laws. View source version on businesswire.com: https://www.businesswire.com/news/home/20260508387185/en/ Contacts For Creative Media & Community Trust Corporation Media Relations: Bill Mendel, 212-397-1030 [email protected] or Shareholder Relations: Steve Altebrando, 646-652-8473 [email protected]