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Creative Media & Community Trust Corp (CMCT)·Q1 2025 Earnings Summary

Executive Summary

  • CMCT reported total revenues of $32.3M and diluted EPS of $(20.73) for Q1 2025; revenues were higher than Q4 2024 ($27.5M) and Q3 2024 ($28.6M) while per-share comparability reflects the April 15, 2025 1-for-25 reverse split .
  • Segment NOI totaled $11.8M vs $13.6M in Q1 2024; hotel NOI rose 15% YoY on stronger occupancy/ADR, offset by office and multifamily declines; FFO was $(5.4)M ($(9.42)/share) and Core FFO $(5.1)M ($(8.85)/share) .
  • Balance sheet derisking: CMCT fully repaid and retired its recourse corporate-level credit facility after closing a $35.5M mortgage on Penn Field (Austin) on April 3, 2025; 12 assets are now unencumbered, increasing flexibility .
  • Management highlighted rising office leasing activity in Los Angeles and Austin (30,333 sq ft executed in Q1) and a multifamily lease-up trajectory at 701 South Hudson (from ~22% at year-end to ~41% at Q1-end and ~63% in early May) as potential catalysts .

What Went Well and What Went Wrong

What Went Well

  • Balance sheet: “We have now fully repaid and retired our recourse corporate-level credit facility,” concluding four financings across six properties in a challenging office financing environment; majority of debt is now nonrecourse at the property level and 12 assets are unencumbered .
  • Hotel performance: Hotel segment NOI increased to $4.7M (+15% YoY); occupancy rose to 80.0%, ADR to $220.57, and RevPAR to $176.47 after completing renovation of all 505 rooms at the Sheraton Grand Sacramento .
  • Leasing momentum: Office lease percentage at quarter-end was 71.4%; CMCT executed ~30K sq ft of leases and cited active pipelines in LA and Austin; excluding Oakland, office lease percentage was 83% according to management remarks .

What Went Wrong

  • Multifamily pressure: Segment NOI was a loss of $0.62M vs income of $0.92M in Q1 2024, primarily due to an unrealized loss on investment in real estate at an unconsolidated JV; Oakland occupancy and net rents per occupied unit were lower YoY (80.2% occupied; $2,461 monthly rent; $2,341 net monthly rent) .
  • Office occupancy: Same-store office occupancy and lease percentages fell YoY (70.2% occupied, 71.4% leased), driven by a large tenant’s partial lease termination in Oakland impacting rental revenue and cash NOI .
  • Higher interest expense: Interest expense rose $1.1M YoY as aggregate debt balance increased, which, together with lower segment NOI, pressured FFO/Core FFO despite lower preferred dividends and transaction costs .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Total Revenues ($USD Millions)$28.616 $27.459 $32.295
Net Loss Attributable to Common Stockholders ($USD Millions)$(34.775) $(16.606) $(11.898)
Diluted EPS ($)$(1.22) $(1.78) $(20.73)
FFO ($USD Millions)$(28.420) $(8.656) $(5.405)
FFO per share ($)$(1.00) $(0.93) $(9.42)
Core FFO ($USD Millions)$(11.469) $(6.953) $(5.079)
Core FFO per share ($)$(0.40) $(0.75) $(8.85)

Segment breakdown (NOI):

Segment NOI ($USD Millions)Q3 2024Q4 2024Q1 2025
Office$5.419 $5.226 $7.101
Hotel$0.973 $2.097 $4.684
Multifamily$0.508 $0.855 $(0.620)
Lending$0.688 $0.980 $0.590
Total Segment NOI$7.588 $9.158 $11.755

KPIs:

KPIQ3 2024Q4 2024Q1 2025
Office same-store occupancy (%)72.2 70.6 70.2
Office same-store leased (%)72.9 71.0 71.4
Office leases executed (sq ft)4,850 175,654 30,333
Hotel occupancy (%)55.5 54.5 80.0
Hotel ADR ($)$184.69 $195.55 $220.57
Hotel RevPAR ($)$102.55 $106.59 $176.47
Multifamily occupancy (%)92.0 (excl. 701 South Hudson) 81.7 80.2
Multifamily monthly rent per occupied unit ($)$2,555 $2,468 $2,461
Multifamily net monthly rent per occupied unit ($)$2,444 $2,319 $2,341

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Recourse corporate credit facility balanceQ4 2024 vs Q1 2025$15M outstanding at Q4-end; plan to retire facility Fully repaid and retired on April 3, 2025 after closing $35.5M mortgage on Penn Field Raised balance reduced to zero (facility retired)
Reverse stock splitQ4 2024 vs Q1 2025Sought shareholder approval; 1-for-25 reverse split proposal 1-for-25 reverse split effective April 15, 2025; trading split-adjusted Implemented
Preferred dividendsQ4 2024Series A $0.34375; Series A1 $0.489375; Series D $0.353125 per share Q1 2025: Series A $0.34375; Series A1 $0.44250; Series D $0.353125 per share Maintained nominal levels; A1 rate reset with Fed funds
Hotel renovation2024 vs 2025505-room renovation completed by Q1 2025; public space upgrades planned Public space renovation expected later 2025 using operations, mortgage funding, and $8M key money Execution update

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Balance sheet/financingAdvanced stages of refinancing hotel and LA offices; target shift to property-level financing; reduce corporate facility Completed 4 financings; fully repaid corporate facility; 12 unencumbered assets Improving balance sheet flexibility
Office leasingLease percentage fell due to Oakland; 176K sq ft executed in Q4; pipelines in LA/Austin 30K sq ft executed; growing pipeline in LA/Austin; 71.4% leased; excluding Oakland at 83% Positive momentum ex-Oakland
Multifamily strategyConversion at 4750 Wilshire to 701 South Hudson (10% leased Q3); 1915 Park mid-2025; co-investment at 1902 Park 701 South Hudson lease-up accelerated (~41% at Q1-end; ~63% early May); 1915 Park lease-up expected Q3 Lease-up progressing
Hotel operationsRenovation disrupted Q3 occupancy; renovation nearing completion All rooms renovated; NOI +15% YoY; public space renovation planned, $8M key money Strong seasonal/renovation uplift
Capital actionsPreferred redemptions and offering suspension; evaluation of asset sales Additional preferred redemptions; reverse split; ongoing asset sales evaluation Structural optimization continues

Management Commentary

  • CEO: “We have now fully repaid and retired our recourse corporate-level credit facility… we successfully completed 4 financings across 6 properties… in a highly challenging environment for office financing. As of today, the majority of the debt is held at the property level… nonrecourse… and we now have 12 unencumbered assets” .
  • CEO: “There is significant opportunity to grow our multifamily net operating income through improving occupancy and marketing rents to the current market” .
  • Portfolio Oversight: “Multifamily occupancy [701 South Hudson] reached approximately 41% at the end of the quarter… as of early May is approximately 63%… we believe there’s an opportunity to develop additional units on the back surface lot” .
  • CFO: “Segment NOI was $11.8 million… decreases of $764,000 [Office], $1.5 million [Multifamily], and $199,000 [Lending], partially offset by an increase of $622,000 [Hotel]… FFO was negative $5.4 million… Core FFO was negative $5.1 million” .

Q&A Highlights

  • Q1 2025: No Q&A conducted; the session concluded without questions .
  • Prior quarter context (Q3 2024): Topics included preferred-to-common conversions to strengthen liquidity and rebalance capital structure, refinancing rate/maturity considerations (favoring property-level fixed rates except hotel floater), potential asset sales to raise capital, and buyback evaluation contingent on completing refis and liquidity build .

Estimates Context

  • S&P Global consensus estimates for Q1 2025 EPS and revenue were not available; therefore, we cannot assess beat/miss versus Street for EPS or revenue. Values retrieved from S&P Global.*
  • Actual Q1 2025 revenue reported: $32.3M; diluted EPS: $(20.73). Without consensus, analysts may need to recalibrate forecasts focusing on hotel uplift and office leasing momentum while incorporating higher interest expense and multifamily JV fair value impacts .

Key Takeaways for Investors

  • De-risking completed: Retirement of the recourse corporate facility meaningfully reduces corporate-level risk and enhances flexibility; expect incremental financing and asset sales to further fortify liquidity and fund growth in multifamily .
  • Hotel is a near-term earnings lever: Renovation-driven uplift (+15% YoY NOI, occupancy/ADR higher) should support Q2 seasonality; public space investments and $8M key money provide additional runway into 2026 .
  • Office leasing traction ex-Oakland: Executed 30K sq ft with active pipelines in LA/Austin; monitor Oakland headwinds given the tenant termination impact on same-store metrics .
  • Multifamily lease-up/internal growth: 701 South Hudson leasing accelerated, and 1915 Park lease-up expected in Q3; watch occupancy/rent trends in Oakland and potential Phase 2 at Hudson for incremental value .
  • Earnings quality: FFO/Core FFO remain negative, pressured by lower segment NOI and higher interest expense; lower preferred dividends help, but sustainable improvement hinges on leasing, hotel performance, and multifamily stabilization .
  • Corporate actions: Reverse split effective April 15 aligns share count with listing requirements; preferred redemptions and paused issuance lower dividend cash burden (A1 rate reset tied to Fed funds) .
  • Tactical implication: Near-term trading may respond to continued hotel strength and leasing updates; medium-term thesis depends on successful asset recycling into premier multifamily, stabilization of Oakland exposures, and maintaining property-level nonrecourse financing discipline .
Notes:
* Values retrieved from S&P Global.

Sources:

  • Q1 2025 press release and financials
  • Q1 2025 earnings call transcripts
  • Q1 2025 related press releases (call date; credit facility repayment; reverse split; preferred dividends)
  • Q4 2024 press release and transcript
  • Q3 2024 press release and transcript