DALLAS, TX -- June 1, 2026 -- Initiates Coverage on Creative Media & Trust Corp. (NASDAQ: CMCT): Stonegate Capital Partners Initiates Coverage on Creative Media & Trust Corp. (NASDAQ: CMCT). CMCT’s 1Q26 update shifts the story from balance sheet repair to FFO conversion. Reported results remained noisy given the late-quarter preferred redemption, but the Company has now redeemed $396.2M of preferred stock since September 2024, sold First Western, retired its recourse credit facility, and moved closer to its long-term target capital structure. The March redemption of $242.8M is expected to improve FFO by approximately $16.0M annually beginning in 2Q26, making the next several quarters a cleaner test of post-recapitalization earnings power. The key equity driver is now whether lower preferred dividends, improving multifamily occupancy, completed hotel renovations, and refinancing activity translate into visible FFO recovery.
Quarterly Results: Net loss attributable to common stockholders was $34.7M, or $70.52 per diluted share, while FFO was negative $28.8M, or $58.47 per diluted share, and Core FFO was negative $5.9M, or $11.89 per diluted share. Segment NOI declined to $9.8M from $11.8M, driven by office comparison items, temporary hotel disruption, and the loss of prior-year lending NOI, rather than a clean read-through on the post-redemption earnings base. With the preferred redemption completed near quarter-end, 2Q26 should provide the more relevant starting point for assessing normalized FFO.
Portfolio & Operating Trends: Multifamily remains the clearest NOI lever, with same-store occupancy excluding Echo Park up 1,120 bps y/y to 91.4% and Bay Area occupancy up 860 bps to 91.9%, supported by easing concessions and improving local fundamentals. LA lease-up progressed, with 701 South Hudson 88.2% occupied and 1915 Park 52.8% leased. Office remains asset-specific, though leased percentage excluding Oakland improved 470 bps y/y to 85.7%; reported office NOI declined to $6.5M from $7.1M due largely to Oakland reimbursement pressure and a prior-year Beverly Hills tax benefit. Hotel NOI declined to $4.0M from $4.7M due to temporary disruption, but completion of all 505 rooms and public spaces should support cleaner comparisons ahead.
Refinancing & Outlook: CMCT’s near-term focus is converting the lower preferred dividend burden into FFO improvement while advancing refinancing and liquidity initiatives. Priorities include a potential Sheraton refinancing, extensions at 1150 Clay and the Oakland office asset, and selective asset sales where proceeds can improve liquidity or portfolio quality. Management also does not currently intend to electively redeem additional preferred stock in common, reducing one source of dilution concern while retaining flexibility around holder requests.
Valuation: We use an EV/EBITDA comp analysis to guide our valuation. We apply an EV/EBITDA range of 14.2x to 14.4x with a midpoint of 14.3x which moves CMCT closer to comp companies. This arrives at a valuation range of $5.50 to $8.04 with a mid-point of $6.77. For more information please see the valuation page.
About Stonegate
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking, equity research and capital raising for public and private companies.
SOURCE: Stonegate, Inc.
