Creative Media & Community Trust Corp (CMCT)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 was weak operationally: total revenues fell 13.8% year over year to $29.69M and net loss widened to $(14.28)M, or $(18.94) per share; FFO and Core FFO were $(7.85)M ($(10.42)/sh) and $(7.18)M ($(9.53)/sh), respectively .
• Segment NOI dropped to $9.82M from $16.22M a year ago, driven by Oakland office vacancies, lower multifamily occupancy/rents in Oakland, reduced lending income and Q2 hotel public-space renovation timing; hotel metrics (ADR/RevPAR) were roughly flat YoY while room renovations completed earlier in the year .
• Balance sheet progress continued: corporate revolver fully repaid in April; a $20M SBA 7(a) lending revolver was added in June; Bay Area multifamily debt maturities extended (1150 Clay to mid‑2026; Channel House to Jan 2027) .
• Leasing momentum is the near‑term catalyst: ~140k sf executed YTD through July (+55% YoY), including an ~11‑year lease with an investment‑grade tenant at Penn Field; management expects stronger office demand in LA/Austin and improved multifamily NOI as occupancy and rents recover, positioning for 2026 .

What Went Well and What Went Wrong

• What Went Well

  • “We made further progress in the quarter on our previously announced plan to accelerate our focus towards premier multifamily assets, strengthen our balance sheet and improve our liquidity.” – CEO David Thompson .
  • Leasing acceleration: ~78k sf in 1H25 and another ~61.7k sf signed in July; ~140k sf executed YTD through July (+55% YoY), with notable wins in LA and Austin (including an ~11‑year lease at Penn Field) .
  • Hotel execution: all 505 rooms at the Sheraton Grand Sacramento renovated; hotel NOI rose ~15% YoY in Q1 and public‑space upgrades are underway, supported by $8M of key money, setting up 2026 .

• What Went Wrong

  • NOI compression: total segment NOI fell to $9.82M (from $16.22M YoY) on office, multifamily and lending weakness; core FFO/share declined to $(9.53) from $(21.93) YoY (adjusted for reverse split), reflecting lower operating income and higher interest expense .
  • Office headwinds centered in Oakland: same‑store office NOI and cash NOI declined on occupancy losses tied to a large tenant’s partial termination; office occupancy 68.1% and leased 70.3% at Q2 end (down 1,540 bps and 1,220 bps YoY, respectively) .
  • Multifamily softness in Oakland and JV fair‑value marks: Multifamily segment NOI was $0.189M vs $2.3M YoY, with occupancy at 83.4% and net monthly rent per occupied unit at $2,284 vs $2,469 YoY; lending segment swung to a $(47)k NOI loss on lower interest income and higher CECL .

Financial Results

Values with * retrieved from S&P Global.

Segment and KPI details:

• Office (portfolio): Occupied 68.1%, leased 70.3% at 6/30/25; annualized rent/occupied SF $60.96; executed 47,859 sf in Q2 .
• Hotel (Sheraton Grand Sacramento): Q2 occupancy 78.4%, ADR $212.92, RevPAR $166.83 .
• Multifamily (portfolio): Occupancy 83.4%; monthly rent/occupied unit $2,458; net monthly rent/occupied unit $2,284 at 6/30/25 .

Results vs. estimates (S&P Global):

• EPS: Consensus unavailable; company reported $(18.94) .
• Revenue: Consensus unavailable; company reported $29.689M .
  Values retrieved from S&P Global.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We made further progress in the quarter on our previously announced plan to accelerate our focus towards premier multifamily assets, strengthen our balance sheet and improve our liquidity.” – CEO David Thompson .
• “We continue to see an increase in office leasing activity in the Los Angeles and Austin markets… 78,192 square feet of leasing during the first six months of 2025 and another 61,747 square feet of leases executed in July.” – CEO .
• “We believe there is a meaningful opportunity to grow NOI in 2026… supported by continued improvement in office leasing… full completion of renovations at our hotel asset… and steady gains in the multifamily performance.” – CEO .
• “Our office segment NOI… was $5.5 million versus $8.9 million during Q2 2024… driven by a decrease in rental revenue at our office property in Oakland, California… and a decrease in income from our unconsolidated office entities.” – CFO Barry Berlin .

Q&A Highlights

• There was no analyst Q&A; the call concluded without questions after prepared remarks .
• Management reiterated focus on leasing momentum, hotel renovation schedule, and liquidity improvements without offering formal financial guidance .

Estimates Context

• Wall Street consensus (S&P Global) for Q2 2025 EPS and revenue was unavailable; as such, beat/miss analysis versus Street is not determinable. Company reported $(18.94) EPS and $29.689M revenue . Values retrieved from S&P Global.
• Given leasing momentum into July and renovation phasing, we expect Street models to reassess near‑term NOI cadence (softer 2H25 hotel/public-space period) and incorporate 2026 uplift assumptions, especially for office and hotel .

Key Takeaways for Investors

• Leasing is inflecting: ~140k sf YTD through July (+55% YoY) with stronger LA/Austin demand; expect incremental office NOI as signed leases commence and TI/abatement periods burn off .
• Hotel is a 2026 story: room renovations completed; public‑space upgrades in 2H25 likely dampen near‑term contribution but set up rate and mix improvements next year .
• Oakland remains the swing factor: office occupancy losses and softer multifamily demand in Oakland continued to pressure NOI; limited new MF supply could help over time .
• Liquidity and debt profile improved: revolver repayment and multifamily maturity extensions reduce near‑term refinancing risk; new SBA lending revolver adds flexibility .
• Earnings quality: Core FFO remained negative in Q2 on segment NOI declines and higher interest costs; absent formal guidance, monitoring lease start schedules and hotel renovation milestones is critical for near‑term modeling .
• Preferred capital remains part of the structure; preferred dividends were declared for Q2; equity optionality depends on asset sales and NOI recovery track .

Appendices

KPIs – Operational metrics (latest quarter)

• Office: 68.1% occupied; 70.3% leased; annualized rent/occ SF $60.96; 47,859 sf executed in Q2 .
• Hotel: 78.4% occupancy; ADR $212.92; RevPAR $166.83 in Q2 .
• Multifamily: 83.4% occupied; monthly rent/occ unit $2,458; net monthly rent/occ unit $2,284 .

Balance sheet snapshot (as of 6/30/25)

• Debt, net $535.6M; cash & cash equivalents $27.8M; total assets $885.0M .
• Debt mix roughly balanced across fixed/variable; floating-rate exposures hedged in part via caps; extended key MF maturities (1150 Clay, Channel House) .