Creative Media & Community Trust Corporation (NASDAQ:CMCT) said its second-quarter 2026 operating performance improved in its multifamily and hotel businesses, while non-cash fair-value adjustments at unconsolidated entities weighed on office results and overall segment net operating income.
Chief Executive Officer David Thompson said the company remains focused on improving funds from operations in 2026 and 2027, strengthening its balance sheet and evaluating potential asset sales. CMCT believes sales of one or more real estate assets could reduce balance-sheet pressure and help address what management views as a gap between the company’s share price and the portfolio’s intrinsic value.
Financial Results and FFO
Chief Financial Officer Brandon Hill said segment NOI was $9.3 million in the second quarter, compared with $9.8 million a year earlier. The company recorded a $3.2 million loss from unconsolidated entities, compared with a $437,000 loss in the prior-year period, primarily because of fair-value adjustments to real estate at two unconsolidated office entities and two unconsolidated multifamily entities.
Excluding the loss from unconsolidated entities, segment NOI was $12.5 million, up from $10.3 million in the second quarter of 2025.
- Hotel NOI increased to $4.6 million from $4.2 million, driven primarily by higher occupancy, room revenue, and food-and-beverage revenue.
- Multifamily NOI increased to $638,000 from $189,000, reflecting higher occupancy and lower real estate taxes at Oakland multifamily properties.
- Office NOI declined to $4 million from $5.5 million, primarily due to fair-value adjustments at unconsolidated office entities.
FFO was negative $3.5 million, or negative $1.28 per diluted share, compared with negative $7.9 million, or negative $981.63 per diluted share, in the prior-year period. Core FFO was negative $3.4 million, or negative $1.25 per diluted share, compared with negative $7 million, or negative $870.25 per diluted share, a year earlier.
Hill attributed the improvement in FFO primarily to a $4.3 million decrease in redeemable preferred-stock dividends and a $786,000 decline in transaction-related costs, partly offset by the decline in segment NOI. He said Core FFO did not reflect the lower transaction costs because those costs are excluded from the company’s Core FFO calculation.
Below the NOI line, depreciation and amortization rose by $807,000, largely due to tenant-improvement amortization at a Beverly Hills office property and increased depreciation associated with hotel renovations. Asset-management fees increased $510,000 as net asset value attributable to common stockholders rose following additional common-stock issuance, primarily in the first quarter. CMCT also recorded a $455,000 casualty loss related to water damage at its hotel property.
Multifamily Growth and Leasing Activity
Management highlighted the Bay Area multifamily market as a key source of potential growth. Thompson said approximately 78% of CMCT’s multifamily units are in the Bay Area, where demand has improved. Same-store multifamily occupancy reached 95.3% as of June 30, up 1,190 basis points from a year earlier, and multifamily NOI rose 238% year over year, according to Thompson.
Steve Altebrando, Portfolio Oversight, said CMCT owns 621 residential units across two Class A Bay Area properties. He said occupancy at the company’s multifamily properties reached 96.1% at the end of the quarter, improving by more than 1,200 basis points from the end of the second quarter of 2025. Hill cited multifamily segment occupancy of 93.6% as of June 30, compared with 83.4% a year earlier.
Management said in-place rents at Bay Area multifamily properties were about 12% below current asking rents at quarter-end, which it believes supports further NOI growth as leases renew or roll to market.
In Los Angeles, CMCT’s partial office-to-residential conversion at 701 South Hudson was 94.1% occupied. The company is continuing pre-development work for 50 additional units approved for the site’s surface lot and anticipates it could have the option to begin that project later this year. At the 36-unit 1915 Park development in Echo Park, the property was 58.3% leased at quarter-end after delivering in the fourth quarter.
Office, Hotel and Financing Updates
CMCT executed approximately 16,000 square feet of office leases during the quarter. Excluding its Oakland office asset, leased office occupancy was 84.4% at quarter-end, up 470 basis points from the second quarter of 2025. Management said it continues to see leasing interest at properties with vacancy in Los Angeles and Austin.
The company said its Sacramento hotel benefited from renovations, with hotel NOI increasing 11% year over year. Altebrando said renovations to the property’s public spaces were substantially complete following the full renovation of all 505 guest rooms. CMCT is also evaluating a conversion of underused space that could add eight guest rooms.
On financing, Altebrando said CMCT extended the mortgage on its 1150 Clay Oakland multifamily property through mid-2027. The company is working to refinance the Sheraton Grand mortgage and believes the substantially completed renovation could support a larger loan balance and a lower borrowing spread.
CMCT’s non-recourse mortgage on its Oakland office property matured in early July. Management said it elected not to contribute the additional capital required to refinance the loan and is engaging with the loan servicer on a long-term resolution. The asset generated approximately $445,000 of income after debt service during the second quarter, Altebrando said.
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.
