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Creative Media & Community Trust Corp (CMCT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 stabilized operationally: total revenues were $27.459M and diluted EPS was −$1.78, while Core FFO/share improved to −$0.75 from −$0.40 in Q3 and FFO/share improved to −$0.93 from −$1.00, driven by lower preferred dividends, lower interest expense, and higher NOI QoQ .
  • Balance sheet progress was significant: CMCT closed $84.3M hotel financing and $105.0M on three LA office assets and repaid $154.3M on the 2022 credit facility, reducing the recourse balance to $15M; management aims to fully retire it via an Austin office refinancing (Penn Field) .
  • Segment dynamics: office leasing accelerated (175,654 sf signed), hotel NOI rebounded QoQ as room renovations completed, while multifamily NOI was lower YoY on JV unrealized losses; lending NOI declined YoY on lower originations but improved QoQ .
  • No Wall Street consensus estimates available via S&P Global for EPS or revenue; beat/miss cannot be assessed* [GetEstimates Q4 2024].
  • Near-term catalysts: full retirement of the recourse credit facility, hotel public-space upgrades, and accelerated lease-up at 701 S Hudson (4750 Wilshire conversion) .

What Went Well and What Went Wrong

What Went Well

  • Executed 175,654 square feet of office leases and completed renovation of all 505 hotel rooms; CEO emphasized focus on premier multifamily growth and liquidity improvement: “We completed three property-level financings... reduce the balance on our recourse credit facility to $15 million (from $169 million)” .
  • Core FFO/share improved to −$0.75 (from −$0.40 in Q3) and FFO/share to −$0.93 (from −$1.00), with CFO citing lower preferred dividends and interest expense as key drivers; NOI rose ~$1.6M QoQ, led by hotel .
  • Balance sheet: $84.3M variable-rate hotel loan and $105.0M fixed-rate office mortgages enabled $154.3M paydown; management expects Austin refinancing proceeds to fully retire the recourse facility .

What Went Wrong

  • Hotel occupancy declined YoY due to renovation disruption (54.5% vs 69.9%); hotel RevPAR fell to $106.59 (from $136.27) and hotel segment NOI dropped YoY to $2.1M (from $2.9M) .
  • Office same-store occupancy and leased rates decreased YoY (70.6% occupied; 71.0% leased), with Oakland impacted by a large tenant’s partial lease termination .
  • Multifamily segment NOI was $0.855M vs $1.109M YoY, driven by an unrealized loss at an unconsolidated JV; lending NOI fell YoY ($0.980M vs $1.311M) on lower originations/sales .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$34.439 $28.616 $27.459
Diluted EPS ($USD)−$0.43 −$1.22 −$1.78
FFO per Share ($USD)−$0.14 −$1.00 −$0.93
Core FFO per Share ($USD)−$0.09 −$0.40 −$0.75
Segment NOI ($USD Millions)$16.223 $7.588 $9.158

Segment breakdown (Segment NOI, $USD Millions):

SegmentQ2 2024Q3 2024Q4 2024
Office$8.908 $5.419 $5.226
Hotel$4.320 $0.973 $2.097
Multifamily$2.252 $0.508 $0.855
Lending$0.743 $0.688 $0.980
Total$16.223 $7.588 $9.158

KPIs:

KPIQ2 2024Q3 2024Q4 2024
Office (same-store) Leased %83.5% 72.9% 71.0%
Office (same-store) Occupied %82.5% 72.2% 70.6%
Office Annualized Rent/Occupied SF ($)$58.85 $60.31 $60.48
Hotel Occupancy %79.9% 55.5% 54.5%
Hotel ADR ($)$210.54 $184.69 $195.55
Hotel RevPAR ($)$168.30 $102.55 $106.59
Multifamily Occupancy %92.5% 92.0% 81.7%
Multifamily Monthly Rent/Occupied Unit ($)$2,647 $2,555 $2,468
Multifamily Net Monthly Rent/Occupied Unit ($)$2,469 $2,444 $2,319

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Recourse Credit FacilityQ4 2024Intend to fully repay/retire via property-level refinancing Balance reduced to $15M; plan to fully retire via Austin (Penn Field) refinancing Maintained; substantial progress
Hotel RenovationQ3–Q4 2024Complete ~year-end and benefit from Convention Center demand Room renovations completed; public space upgrades to commence later this year Achieved rooms; expanding scope
1915 Park (Echo Park)2025Mid-2025 delivery expected Expect completion in Q3 2025 Timeline refined; maintained
4750 Wilshire/701 S Hudson lease-upQ3–Q4 2024Residential portion ~10% leased (Q3) Occupancy 37–40% “as of today” (Q4 release/call) Accelerating lease-up
Dividends – CommonQ4 2024Common dividend suspended (12/18/24) No reinstatement in Q4 materials Maintained suspension
Dividends – PreferredQ4 2024N/ADeclared Series A $0.34375, A1 $0.489375, D $0.353125 per share Declared as stated
Reverse Stock SplitJan 2025N/A1-for-10 effective Jan 6, 2025 Implemented corporate action

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Balance sheet refinancing & recourse facilityPlan to refinance hotel & LA office; intent to retire recourse facility; evaluating asset sales Closed $84.3M hotel and $105M office loans; recourse facility balance cut to $15M; Austin refinancing expected to fully retire Positive execution momentum
Office occupancy/leasing & WFH headwindsAnticipated occupancy decline after Kaiser giveback; challenges in Bay Area 175,654 sf leases signed; same-store leased 71.0% with Oakland headwind Mixed: leasing active, occupancy lower YoY
Multifamily lease-up & Oakland rentsOakland occupancy improved but concessions high; 701 S Hudson lease-up just starting 701 S Hudson occupancy accelerated to ~37–40%; multifamily NOI lower YoY on JV unrealized loss Lease-up improving; rent softness persists
Hotel renovation impactRoom renovation underway, expected completion around year-end Room renovation complete; occupancy still impacted; public-space upgrades to start Transitioning to post-renovation ramp
Capital allocation & asset salesEvaluating dispositions, focus on debt reduction Continue to evaluate asset sales; proceeds targeted to multifamily growth and debt actions Ongoing evaluation
Corporate actions (preferred conversions, reverse split)Preferred conversions in Sept; pipeline turned off Seeking approval for 1-for-25 reverse split (noted on call); subsequently executed 1-for-10 on Jan 6 Executed reverse split; capital structure focus

Management Commentary

  • CEO: “We made additional progress on our previously announced plan to accelerate our focus towards premier multifamily assets, strengthen our balance sheet and improve our liquidity... reduce the balance on our recourse credit facility to $15 million (from $169 million). We are actively working to complete one more refinancing and intend to use the proceeds to fully repay and retire the recourse credit facility.” .
  • CEO: “In our multifamily segment... occupancy [at 4750 Wilshire / 701 S Hudson] increasing to 37% as of today, up from 2% at the end of the third quarter... expect our 36-unit multifamily development in Echo Park... to be completed in the third quarter of 2025.” .
  • Portfolio Oversight: Details on $92.2M Sheraton Grand mortgage, $105M Wilshire portfolio mortgage, and $5M Lindblade mortgage; intent to finance Austin Penn Field to retire the facility .
  • CFO: “Our core FFO improved by approximately $4.5 million from the prior quarter... net operating income increased by $1.6 million from the third quarter, primarily due to our Hotel segment...” .

Q&A Highlights

  • Q4 call had no analyst questions; operator closed without Q&A .
  • Prior quarter focus (context): Preferred conversions rationale and balance sheet implications; property-level refinancing mix (fixed vs floating) and potential rate savings; asset sales/disposition plans; Oakland multifamily demand and concessions; debt reduction prioritization .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 were unavailable for EPS and revenue (no mean, no # of estimates). Actuals: Revenue $27.459M and diluted EPS −$1.78 (company reported) .
  • Table:
MetricQ4 2024 Consensus# of EstimatesQ4 2024 Actual
Revenue ($USD Millions)N/A*N/A*$27.459
Primary EPS ($USD)N/A*N/A*−$1.78

*Values retrieved from S&P Global.

Given lack of coverage, estimate revisions are unlikely to be a near-term driver; internal milestones (refinancing completion, lease-up, hotel ramp) may guide sentiment .

Key Takeaways for Investors

  • Balance sheet de-risking is the primary catalyst: property-level mortgages enabled $154.3M paydown; retiring the recourse facility via Austin refinancing could be a material sentiment lift .
  • Operational trajectory improved QoQ: Core FFO/share and NOI rose sequentially, led by hotel as renovations completed; monitor hotel occupancy/RevPAR ramp in 1H as convention demand normalizes .
  • Office leasing momentum vs structural headwinds: strong Q4 signings, but same-store occupancy/leasing rates remain lower YoY, with Oakland a focal risk; lease extensions (e.g., Kaiser) mitigate some cash flow volatility .
  • Multifamily is the strategic growth vector: accelerated lease-up at 701 S Hudson and Echo Park development timeline intact; Oakland rent softness and concessions still temper NOI .
  • Lending segment is cyclical with origination volumes; expect variability tied to hospitality loan demand and sale premiums .
  • Dividends: Common dividend remains suspended; preferred dividends continue per stated rates—income investors should note capital structure priorities .
  • Corporate actions: Reverse split implemented to address trading dynamics; watch for any future capital structure changes as refinancing completes .