Creative Media & Community Trust Corporation (NASDAQ:CMCT) used its fourth-quarter 2025 earnings call to highlight continued execution of its strategic plan, emphasizing a shift toward “premier multifamily assets,” balance sheet improvements, and improving operating trends across much of its portfolio.
Strategic plan progress: refinancings, preferred redemptions, and lending business sale
CEO David Thompson said the company has made “significant progress” since announcing its strategic plan in September 2024, including completing financing on nine assets and fully retiring its recourse credit facility in April 2025. Steve Altebrando, portfolio oversight, added that CMCT also retired its lending warehouse facility upon the sale of the lending business.
On capital structure, Thompson said CMCT has redeemed approximately $153.3 million of preferred stock into common stock since September 2024. He also announced additional preferred redemptions to be paid in shares of common stock:
- Approximately 2 million shares of Series A preferred stock
- Approximately 7.8 million shares of Series A-1 preferred stock
- Approximately 22,000 shares of Series D preferred stock
Thompson said the redemption is expected to improve annual funds from operations by approximately $16 million per year and move CMCT’s capital structure back to its long-term target of about 38% common equity, 7% preferred equity, and 55% debt on a fair value basis, adjusted for the redemption.
He added that, given the company’s “significantly improved financial position,” CMCT does not currently intend to initiate additional preferred stock redemptions into common stock at its election, but will continue to evaluate redemption requests from holders and may elect to redeem in common stock or cash at the company’s discretion. Thompson also said the company continues to evaluate additional asset sales to enhance liquidity and optimize the balance sheet.
Operating trends: occupancy gains in office and multifamily, hotel renovation nearing completion
Management pointed to improving net operating income and occupancy trends heading into 2026. Thompson said office lease occupancy reached 88.5% at year-end 2025, excluding the Oakland asset, up 190 basis points from the third quarter of 2025 and up 680 basis points from year-end 2024.
In multifamily, Thompson said occupancy (excluding the Echo Park building in Los Angeles that began lease-up during the fourth quarter) increased to 88.5% at year-end 2025, up 320 basis points from the third quarter and up 680 basis points year over year.
At the Sheraton Grand Sacramento, Thompson said upgrades to public spaces were substantially completed in the first quarter of 2026, following the renovation of all 505 guest rooms completed about a year earlier. Altebrando said the public-space project was an $11 million renovation covering the ballroom, banquet space, public space, and food and beverage areas, describing it as the first large-scale renovation since CMCT acquired the property in 2008. Management said the hotel is positioned to drive stronger performance in 2026 and beyond and noted the company plans to refinance the hotel now that renovations are largely complete.
Multifamily and office property updates
Altebrando detailed leasing progress across the multifamily portfolio, which he said totals five operating assets (including joint ventures): 1150 Clay and Channel House in the Bay Area, and 701 South Hudson, 1902 Park Avenue, and 1915 Park Avenue in Los Angeles.
In Los Angeles, Altebrando said CMCT continues to lease up 701 South Hudson, which includes the residential portion of a partial office-to-residential conversion completed late last year. Multifamily occupancy at the property was about 83.8% at the end of the fourth quarter, up from 80.9% at the end of the third quarter. Altebrando said the top two floors were converted into 68 high-end residential units, while the ground-floor creative office component, known as 4750 Wilshire, remains 100% leased. He also said CMCT received entitlements in the first quarter of 2026 to build an additional 50 units on the back surface lot and is working on pre-development, with an option to start later in 2026.
Also in Los Angeles, Altebrando said the company completed 1915 Park in the fourth quarter, a 36-unit ground-up multifamily development in a joint venture with an international pension fund. The building was 52% leased at the end of February 2026, which he said is “off to a very strong start.”
In Oakland, Altebrando said occupancy improved and the market “appears to be starting to recover.” He cited a rebound in downtown San Francisco multifamily fundamentals in 2025, stating rent growth was 7.6% and vacancy declined to its lowest levels in 15 years. He said Oakland’s vacancy rate has declined to 8% from a high of 18% in 2001 and rent growth turned positive in 2025 after three straight years of declines. CMCT owns 621 units in Oakland across 1150 Clay and Channel House, and Altebrando said occupancy improved to 88.4% at year-end 2025, a 370-basis-point increase from the end of the third quarter.
In office, Altebrando said CMCT executed about 182,000 square feet of leases during 2025. Excluding the company’s Oakland office building, the portfolio was 88.5% leased at year-end 2025. He highlighted 1130 Howard, where occupancy increased to 100% in the fourth quarter from 38.9% in the third quarter. He also said CMCT started a renovation program on several small office suites at 11600 Wilshire Boulevard to support leasing.
For the Oakland office asset, Altebrando said demand remains soft and the mortgage matures in the third quarter of 2026. The company is seeking an extension, but he said CMCT cannot guarantee it will reach an agreement with the lender. He added that the Oakland office property generated approximately $0.5 million of cash flow after debt service in the fourth quarter of 2025.
Fourth-quarter results: higher NOI, but Core FFO remained negative
Thompson said fourth-quarter Core FFO was negative $5.9 million, while overall net operating income was $10.9 million compared to $7.0 million in the third quarter. He said office NOI increased about $1.4 million sequentially, largely due to a higher appraised value of one joint venture, along with modest improvements at wholly owned properties. Hotel NOI was $2.1 million versus $850,000 in the third quarter, which he attributed primarily to greater renovation disruption in the prior quarter. Thompson said multifamily NOI decreased about $1.7 million sequentially, primarily due to lower appraisals at two joint ventures.
CFO Brandon Hill compared the fourth quarter of 2025 with the fourth quarter of 2024, reporting segment NOI of $10.9 million versus $9.2 million. Hill said the $1.7 million increase was driven by increases of $2.3 million from the lending business and $1.2 million from office properties, offset by a $1.7 million decrease from multifamily properties.
Hill said office segment NOI rose to $6.4 million from $5.2 million, driven primarily by higher NOI at an Austin office property due to increased occupancy and at a Beverly Hills property due to higher occupancy and rental rates, as well as lower property taxes. Those gains were partially offset by lower rental revenues at a Los Angeles office property due to lower occupancy and at a San Francisco office property due to lower rental rates.
Hill said lending division NOI increased to $3.3 million from $980,000, primarily due to a reversal of CECL related to reclassifying First Western’s assets and liabilities as held for sale, partially offset by lower interest income from loan payoffs and lower interest rates. He noted the lending segment was sold in January 2026. Hotel segment NOI was $2.1 million, consistent with the prior-year quarter.
Multifamily segment NOI declined to a loss of $870,000 compared with income of $855,000 a year earlier, which Hill attributed primarily to an increase in unrealized loss on investments in real estate at unconsolidated joint ventures.
Below segment NOI, Hill said results included a $3.5 million increase in impairment of real estate due to an impairment charge on a multifamily development site in Oakland, and a $941,000 increase in interest expense driven by higher aggregate debt outstanding. Those were partially offset by higher segment NOI and a $1.4 million decrease in loss on early extinguishment of debt tied to a partial payoff of the revolving credit facility in the fourth quarter of 2024.
Hill reported FFO of negative $7.1 million, or negative $4.49 per diluted share, compared with negative $8.7 million, or negative $23.21 per diluted share, in the prior-year quarter. Core FFO was negative $5.9 million, or negative $3.74 per diluted share, compared with negative $7.0 million, or negative $18.64 per diluted share, in the prior-year quarter.
About Creative Media & Community Trust Corporation (NASDAQ:CMCT)
Creative Media & Community Trust Corporation is a real estate investment trust (REIT) that specializes in originating and acquiring first-lien mortgage loans on non-owner-occupied residential properties in the United States. The company focuses on providing capital to real estate investors and rental homeowners, offering financing solutions tailored to single-family homes, small multifamily properties and other residential real estate investments. Its business model centers on underwriting, closing and servicing mortgage loans that help facilitate real estate acquisitions, refinancings and portfolio expansions for its clients.
The company’s loan portfolio is diversified across key U.S.
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