Creative Media & Community Trust Corporation (NASDAQ:CMCT) executives used the company’s first quarter 2026 earnings call to emphasize balance sheet actions taken over the past several months, including a large preferred stock redemption and the sale of its lending business, while also outlining property-level operating trends across multifamily, office, and hospitality.
Preferred stock redemptions and capital structure shift
CEO David Thompson said the company made “meaningful progress” against a strategic plan previously outlined to “strengthen our balance sheet, improve liquidity, and sharpen our focus on premier multifamily assets.”
More broadly, Thompson said that since first announcing its balance sheet plan in September 2024, the company has redeemed approximately $396 million of preferred stock into common stock.
Financing strategy and sale of lending division
Management also pointed to a shift toward asset-based financing. Thompson said CMCT has completed financings on nine assets and has “fully retired our recourse credit facility,” leaving the company with “minimal recourse debt.”
In addition, Thompson said CMCT sold its lending division in January 2026. He stated that, after debt repayment, transaction expenses, and other items, the transaction generated approximately $31 million of net cash proceeds for the company.
CFO Brandon Hill added that the lending business, First Western, was sold for a purchase price of approximately $44.9 million. Hill noted that lending segment activity was “de minimis” during the period it remained under CMCT’s ownership in the first quarter of 2026, and the related amounts were excluded from segment-level activity, compared with $590,000 of lending division NOI in the prior-year quarter.
Portfolio performance: multifamily, office, and hotel
Thompson said CMCT’s focus looking ahead is improving FFO in 2026 and 2027, citing two primary levers: improving property-level performance and reducing preferred dividend obligations. He noted that because the preferred redemption was completed near the end of the first quarter, the impact was “only minimally reflected” in first-quarter FFO, with the “full benefit” expected to begin in the second quarter.
On operating results, Thompson said office net operating income declined by about $600,000 year-over-year, primarily due to a one-time tax appeal benefit recorded in the prior-year period. He also reported that, excluding the company’s Oakland office asset, the office lease percentage was approximately 85.7% at quarter end, representing a 470 basis point improvement year-over-year.
Multifamily performance was described as stronger. Thompson said that excluding joint venture properties, multifamily NOI increased 64% year-over-year; when including JV properties, NOI increased modestly “primarily due to non-cash changes in appraised values.” Multifamily occupancy across the portfolio improved to 89.6% at quarter end, up 940 basis points from the prior year.
In hospitality, Thompson said hotel NOI declined approximately $700,000 year-over-year, attributing the change to temporary renovation-related disruptions and a mechanical issue that took rooms out of service in March. He said the renovation was “substantially completed” during the quarter and covered all 505 guest rooms and common areas.
Hill provided additional detail on segment results, reporting total segment NOI of $9.8 million in the first quarter of 2026 compared with $11.8 million in the prior-year quarter. Hill said the $1.9 million decrease was driven by declines of $728,000 in hotel NOI, $602,000 in office NOI, and $590,000 from the lending business. Hotel NOI was $4.0 million versus $4.7 million a year earlier, while office NOI was $6.5 million compared with $7.1 million. Hill said the office decline was driven by lower tenant reimbursement revenue at an Oakland office property and higher real estate tax expense at a Beverly Hills office property, tied to a tax refund recorded in the prior-year period.
Hill also said the multifamily segment net operating loss was $613,000, “fairly consistent” with the prior-year quarter.
Market commentary and leasing updates
Portfolio Oversight executive Steve Altebrando said CMCT is positioned to benefit from improving Bay Area multifamily fundamentals. He said the company owns 621 residential units across two Class A assets in the market.
In Oakland, Altebrando reported multifamily occupancy increased to 91.9% at the end of the first quarter, an improvement of 860 basis points year-over-year, and said concessions are easing, “particularly at our 1150 Clay asset.”
Altebrando also cited broader San Francisco market metrics, stating that in 2025, rent growth reached 7.6% (which he described as the highest rate in 25 years), followed by an additional 7% increase in the first quarter of 2026. He said vacancy declined to 4.3%, the lowest level in nearly 20 years. In Oakland, he said vacancy declined to 7.8% at the end of the first quarter, down from a peak of approximately 18% in 2021, and that rent growth turned positive in 2025 and rose 2.9% in the first quarter of 2026.
In Los Angeles multifamily, Altebrando said 701 South Hudson’s partial office-to-residential conversion was 88.2% occupied, and that the company received entitlements in the first quarter of 2026 to build an additional 50 units on the property’s surface lot, with pre-development underway and an option to start later in the year. At 1915 Park, a 36-unit Echo Park development delivered in the fourth quarter, Altebrando said the property was 52.8% leased at quarter end and is a joint venture with an international pension fund.
In office leasing, Altebrando said the company executed 20,562 square feet of leases in the first quarter and continues to see an “active pipeline,” particularly in Los Angeles and Austin. He also said CMCT recently began a renovation program for several small suites at 11600 Wilshire Boulevard, expected to be completed over the next few months.
Debt maturities and refinancing initiatives
Management discussed ongoing financing work on several properties. Thompson said the company is actively working to extend debt maturities on a “handful of assets” and will continue to evaluate selective asset sales to unlock value, improve portfolio quality, or redeploy capital.
Altebrando outlined three financing initiatives:
- Sheraton Grand: With renovations substantially complete, CMCT believes it can increase the loan balance and reduce the borrowing spread.
- 1150 Clay: The company is in active discussions with the lender and anticipates securing a one-year mortgage extension as it works to improve NOI.
- Oakland office property: CMCT is seeking an extension of the loan maturity, though Altebrando said the company “cannot guarantee” it will reach an agreement.
As additional context on the Oakland office property, Altebrando said that in the first quarter of 2025, the asset generated approximately $800,000 of cash flow after debt service.
FFO results and non-cash items
Hill reported FFO of -$28.8 million, or -$58.47 per diluted share, compared with -$5.4 million, or -$900.83 per diluted share, in the prior-year quarter. He attributed the change primarily to $21.9 million of increased preferred stock redemptions, the decline in segment NOI, and a $705,000 increase in loss on early extinguishment of debt, partially offset by a $1.3 million decrease in redeemable preferred stock dividends.
Hill reported Core FFO of -$5.9 million, or -$11.89 per diluted share, compared with -$5.1 million, or -$846.50 per diluted share, in the prior-year quarter. He said the Core FFO decrease reflects the changes impacting FFO except for the loss on early extinguishment of debt and the increase in redeemable preferred stock redemptions, which are excluded from the Core FFO calculation.
Below the segment NOI line, Hill said depreciation and amortization expense increased by $1.2 million, driven by higher tenant improvement amortization at a Beverly Hills office property and increased depreciation at the hotel property due to renovation projects. He also cited a $705,000 loss on early extinguishment of debt tied to the full payoff of the lending division revolving credit facility, partially offset by a $1.7 million gain on sale from the First Western transaction.
No analyst questions were asked during the call’s Q&A session.
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.
