CMCT Leans Into Multifamily and Hotel Growth Amid Portfolio Shifts and $44 Million Lending Sale

Asset Sale and Strategic Shift to Multifamily Stand Out in Q3 Results

Creative Media & Community Trust Corporation (NASDAQ and TASE: CMCT) is pushing forward on its pivot toward multifamily and hospitality, as third quarter 2025 results revealed progress on balance sheet strengthening and a landmark deal to divest its lending business for $44 million. These steps highlight management's continued realignment of the company's property and income mix, with a focus on boosting stability and positioning for longer-term growth.

Multifamily NOI Surges as Occupancy Remains Below Year-Ago Levels

CMCT’s multifamily segment saw Net Operating Income (NOI) jump to $792,000 in Q3 2025, up from $508,000 in the prior year. The improvement came despite occupancy slipping to 85.3% from 92.0% and average rent per occupied unit edging lower to $2,508. Net rents after concessions also trended down. The increase in NOI was driven mainly by reduced real estate taxes in Oakland properties.

Hotel Metrics Improve, Though Renovations Affect Short-Term Results

The company’s 505-room hotel property showed recovery in core metrics as renovations wrapped up. Occupancy improved from 55.5% to 68.9%, while average daily rate (ADR) climbed to $194.47 and revenue per available room (RevPAR) hit $133.92, both up from prior year levels. The property’s Segment NOI dipped to $850,000, reflecting continued impacts from ongoing renovations.

Office Portfolio: Leased Percentages Tick Up Despite Soft NOI

CMCT’s office assets reflected the wider commercial real estate headwinds, but there are some green shoots. While office Segment NOI decreased to $5.0 million (from $5.4 million), the leased rate improved to 73.6% from 72.9%. Excluding the troubled Oakland office property, the leased percentage reached 86.6%, a solid rise from 81.7% at 2024 year-end. Annualized rent per occupied square foot was relatively steady at $60.22. Lease execution remained active with 80,962 square feet signed for terms longer than one year.

Core Financials: Losses Narrow, Proceeds from Asset Sale to Aid Liquidity

Despite an attributable net loss of $17.7 million and negative Funds From Operations (FFO) and Core FFO for the quarter, CMCT’s losses were significantly reduced compared to Q3 2024. A key development is the definitive agreement to sell the company’s SBA lending business for a gross price of $44 million (estimated net proceeds of $31 million). This is expected to improve the company’s liquidity and allow a sharper focus on its core property portfolio. Management is actively pursuing additional asset sales and debt extensions.

Debt Profile and Balance Sheet Moves Support Flexibility

During the quarter, CMCT refinanced an $81 million multifamily mortgage in Oakland, pushing the maturity out to 2027, and made a $6 million principal paydown. The company also declared preferred dividends and is working to extend other key mortgage maturities. Total debt rose to $527.77 million from $505.73 million at year-end, while total assets stood at $871.83 million. Preferred stock levels increased as part of capital allocation decisions during the year.

Management Commentary: Long-Term Focus Remains on Portfolio Quality

CEO David Thompson noted the “significant progress” toward CMCT’s plan to focus on premier multifamily assets, strengthen the balance sheet, and boost liquidity. He highlighted both the lending business sale and several refinancings, alongside an uptick in office leasing and ongoing hotel and multifamily upgrades, as positive indicators for future performance.

Bottom Line: Eyes on Portfolio Evolution and Potential Asset Sales

CMCT’s third quarter update underscores its deliberate pivot toward higher-yielding property types and away from riskier lending exposure. As asset sales and balance sheet actions free up capital, investors and stakeholders will be watching for how effectively CMCT redeploys funds, drives occupancy in its multifamily assets, and capitalizes on recovery in its hotel segment. The ability to sustain leasing momentum and extract further cost efficiencies will likely set the tone for 2026 and beyond.

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