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    CMCT
    Earnings call· Jun 2026(Q2 FY26)

    Creative Media & Community Trust Q2 FY26 earnings call CMCT

    Aug 14, 2026 Source

    Executive summary

    Creative Media & Community Trust Q2 FY26 — Strong Multifamily and Hotel Performance, FFO Improvement

    Creative Media & Community Trust reported a quarter of strengthening operating trends across its multifamily and hotel segments, leading to a significant improvement in Core FFO despite increased JV losses from noncash items. The company continues to focus on balance sheet strength and evaluating asset sales to address the valuation gap. Multifamily occupancy and NOI saw substantial gains, particularly in the Bay Area, while the office segment faced headwinds from unconsolidated entity losses.

    Highlights

    5

    • Net operating income (excluding JV loss) increased 22% year-over-year.

    • Core FFO improved by $3.6 million compared to Q2 FY25, primarily due to reduced preferred dividends.

    • Same-store multifamily occupancy reached 95.3% as of June 30, 2026, an increase of 1,190 basis points year-over-year.

    • Multifamily NOI increased 238% year-over-year.

    • Hotel NOI increased 11% year-over-year following renovations.

    Concerns

    5

    • Loss from unconsolidated entities was $3.2 million in Q2 FY26, up from $437,000 in Q2 FY25, primarily due to noncash fair value adjustments.

    • Office Segment NOI declined to $4 million from $5.5 million, largely due to a $2.4 million increase in JV loss.

    • FFO was negative $3.5 million, or negative $1.28 per diluted share.

    • Core FFO was negative $3.4 million, or negative $1.25 per diluted share.

    • A nonrecourse mortgage on the Oakland office property matured in early July, with the company electing not to invest additional capital for refinancing.

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Multifamily
    Strong year-over-year NOI growth driven by increased occupancy and reduced real estate taxes in Oakland. Significant opportunity for future NOI growth as in-place rents are below current asking rents.
    Occupancy rate (June 30, 2026): 95.3%Occupancy rate (June 30, 2026, CMCT properties): 96.1%In-place rents below asking rents (Bay Area): 12%
    		—238%—$638,000
    Office
    NOI declined from $5.5 million in Q2 FY25, primarily due to a $2.4 million increase in JV loss from noncash fair value adjustments. Partially offset by increased rental revenue and tenant reimbursement revenue in Los Angeles, and decreased administrative costs in Austin.
    Leased occupancy (excluding Oakland): 84.4%Leases executed: 16,000 sq ft
    		———$4 million
    Hotel
    NOI increased from $4.2 million in Q2 FY25, driven by increased occupancy, room revenues, and food and beverage revenues following renovations. Partially offset by higher operating expenses.
    		—11%—$4.6 million

    Operational metrics

    28
    Net operating income (excluding JV loss)
    increased 22%YoY
    Q2 FY26

    Excluding our JV loss in the quarter, which was primarily impacted by large noncash items, our net operating income increased 22% from the prior year period, driven by our multifamily, office and hotel segments.

    Core FFO improvement
    $3.6 millionvs Q2 FY25
    Q2 FY26

    Despite a $2.8 million increase in our JV losses, which was primarily driven by noncash items, our core FFO still improved by $3.6 million compared to the second quarter of last year. The improvement was primarily due to a reduction in preferred dividends.

    Loss from unconsolidated entities
    $3.2 millionvs $437,000 in Q2 FY25
    Q2 FY26

    Loss from unconsolidated entities was $3.2 million in the second quarter of 2026, compared to $437,000 in the prior year comparable period, primarily driven by fair value adjustments to real estate at 2 of our unconsolidated office entities and 2 of our unconsolidated multifamily entities.

    Segment NOI
    $9.3 millionvs $9.8 million in Q2 FY25
    Q2 FY26

    Our segment NOI, which was $9.3 million in the second quarter of 2026, compared to $9.8 million in the prior year comparable period.

    Segment NOI (excluding loss from unconsolidated entities)
    $12.5 millionvs $10.3 million in Q2 FY25
    Q2 FY26

    Excluding loss from unconsolidated entities, Segment NOI was $12.5 million in Q2 2026, compared to $10.3 million in Q2 2025.

    Segment NOI decrease (total)
    $510,000YoY
    Q2 FY26

    Broken down by segment, the decrease in Segment NOI of approximately $510,000 was driven by a decrease of $1.5 million from our office properties, partially offset by increases of $449,000 from our multifamily properties and $466,000 from our hotel property.

    Office Segment NOI decrease
    $1.5 millionYoY
    Q2 FY26

    Broken down by segment, the decrease in Segment NOI of approximately $510,000 was driven by a decrease of $1.5 million from our office properties, partially offset by increases of $449,000 from our multifamily properties and $466,000 from our hotel property.

    Multifamily Segment NOI increase
    $449,000YoY
    Q2 FY26

    Broken down by segment, the decrease in Segment NOI of approximately $510,000 was driven by a decrease of $1.5 million from our office properties, partially offset by increases of $449,000 from our multifamily properties and $466,000 from our hotel property.

    Hotel Segment NOI increase
    $466,000YoY
    Q2 FY26

    Broken down by segment, the decrease in Segment NOI of approximately $510,000 was driven by a decrease of $1.5 million from our office properties, partially offset by increases of $449,000 from our multifamily properties and $466,000 from our hotel property.

    FFO
    negative $3.5 millionvs negative $7.9 million in Q2 FY25
    Q2 FY26

    Our FFO was negative $3.5 million or negative $1.28 per diluted share, compared to negative $7.9 million or negative $981.63 per diluted share in the prior year comparable period.

    FFO per diluted share
    negative $1.28vs negative $981.63 in Q2 FY25
    Q2 FY26

    Our FFO was negative $3.5 million or negative $1.28 per diluted share, compared to negative $7.9 million or negative $981.63 per diluted share in the prior year comparable period.

    Core FFO
    negative $3.4 millionvs negative $7 million in Q2 FY25
    Q2 FY26

    Our Core FFO was negative $3.4 million or negative $1.25 per diluted share, compared to negative $7 million or negative $870.25 per diluted share in the prior year comparable period.

    Core FFO per diluted share
    negative $1.25vs negative $870.25 in Q2 FY25
    Q2 FY26

    Our Core FFO was negative $3.4 million or negative $1.25 per diluted share, compared to negative $7 million or negative $870.25 per diluted share in the prior year comparable period.

    Decrease in redeemable preferred stock dividends
    $4.3 millionYoY
    Q2 FY26

    The increase in FFO was primarily attributable to a decrease in redeemable preferred stock dividends of $4.3 million and a decrease in transaction-related costs of $786,000, partially offset by a decrease in segment net operating income of $510,000.

    Decrease in transaction-related costs
    $786,000YoY
    Q2 FY26

    The increase in FFO was primarily attributable to a decrease in redeemable preferred stock dividends of $4.3 million and a decrease in transaction-related costs of $786,000, partially offset by a decrease in segment net operating income of $510,000.

    Depreciation and amortization expense increase
    $807,000YoY
    Q2 FY26

    Below the Segment NOI line, depreciation and amortization expense increased $807,000, primarily due to an increase in tenant improvement, amortization at an office property located in Beverly Hills, California and increased depreciation at our hotel property due to renovation projects, which have increased depreciable assets.

    Asset management fees increase
    $510,000YoY
    Q2 FY26

    Asset management fees increased $510,000, driven by an increase in our net asset value attributable to common stockholders, resulting from the issuance of additional shares of common stock, primarily during the first quarter of 2026.

    Casualty loss
    $455,000
    Q2 FY26

    We also incurred a $455,000 casualty loss during Q2 2026 due to water damage at our hotel property.

    Multifamily units
    621
    Q2 FY26

    Today, CMCT owns 621 residential units across 2 premier Class A assets in the market.

    Multifamily units in Bay Area
    78%
    Q2 FY26

    Approximately 78% of our multifamily units are located in the Bay Area, where leasing demand has continued to improve.

    San Francisco multifamily rent growth
    11%vs 6% in 2025
    Q2 FY26

    In the adjacent San Francisco market, multifamily rents increased by approximately 11% in the second quarter after increasing approximately 6% in 2025. This rent growth represents a 25-plus year high.

    San Francisco multifamily vacancy
    3.7%
    Q2 FY26

    And vacancy has declined to 3.7%, which is a 25-year low.

    Oakland multifamily rent growth
    7.6%
    Q2 FY26

    In Oakland, rent growth was 7.6% in the second quarter, also the highest rate of growth in over 25 years, while vacancy declined to 7% at the end of the second quarter, down from a peak of approximately 18% in 2021.

    Oakland multifamily vacancy
    7%down from 18% in 2021
    Q2 FY26

    In Oakland, rent growth was 7.6% in the second quarter, also the highest rate of growth in over 25 years, while vacancy declined to 7% at the end of the second quarter, down from a peak of approximately 18% in 2021.

    701 South Hudson occupancy
    94.1%
    Q2 FY26

    At 701 South Hudson, our partial conversion of office to residential is now 94.1% occupied.

    1915 Park leased
    58.3%
    Q2 FY26

    At 1915 Park, our ground-up development in Echo Park, we achieved 58.3% leased at the quarter end. This 36-unit project delivered in the fourth quarter and is located in the highly desirable walkable submarket with significant dining and entertainment options.

    Operating multifamily assets
    5
    Q2 FY26

    Including our joint ventures, we now have 5 operating multifamily assets.

    Oakland office asset income after debt service
    $445,000
    Q2 FY26

    For context, in the second quarter of 2026, this asset generated approximately $445,000 of income after debt service.

    Industry KPIs

    6
    MetricValueDetails
    Occupancy rate93.6%%
    Same store noi growth95.3%%
    Leasing bookings volume signed16,000sq ft
    Ffo core ffo normalized ffo per sharenegative $1.28USD per diluted share
    Development pipeline under construction36 unitsunits
    Lease renewal spread re leasing recapture12%%

    Deals & partnerships

    2
    Servicer (Oakland office mortgage)Long-term resolution for nonrecourse mortgage

    The nonrecourse mortgage on the Oakland office property matured in early July. The company elected not to invest additional capital required for refinancing and is engaging with the servicer for a long-term resolution.

    UndisclosedPotential sale of one or more real estate assets

    The company continues to evaluate the potential sale of one or more of its real estate assets.

    Capital programs

    3
    Sheraton Grand Hotel Renovationnearing completion
    Spent to date: substantially completed
    Start: post-acquisition 2008

    Benefit: 505 guestrooms fully renovated; public spaces renovated

    Substantially completed the renovation of the property's public spaces following the full renovation of all 505 guestrooms. This marks the first comprehensive renovation of the asset since its acquisition in 2008 and positions the hotel well for improved performance in 2026 and beyond.

    701 South Hudson Surface Lot Developmentunderway
    Spent to date: predevelopment underway

    Benefit: 50 units

    We continue to work on predevelopment on the 50 units we are entitled to build on the surface lot. We anticipate having the option to start that project later this year.

    Sheraton Grand Guestroom Additionannounced

    Benefit: 8 new guestrooms

    We are also evaluating an opportunity to add 8 new guestrooms by converting currently underutilized space, which we believe will be highly accretive.

    Risks & headwinds

    3
    Increased JV losses from noncash itemsQ2 FY26

    $2.8 million increase in JV losses, primarily noncash items

    Mitigation: Management highlighted these as noncash and focused on core FFO improvement.

    Oakland office property mortgage maturity and non-refinancingMatured early July 2026

    Nonrecourse mortgage matured in early July; company elected not to invest additional capital for refinancing. Asset generated $445,000 income after debt service in Q2 FY26.

    Mitigation: Engaging with the servicer on a long-term resolution.

    Fair value adjustments at unconsolidated entitiesQ2 FY26

    $3.2 million loss from unconsolidated entities in Q2 FY26 (vs $437,000 in Q2 FY25), primarily due to fair value adjustments at 2 office and 2 multifamily entities.

    Mitigation: Management noted these were primarily noncash items.

    What to watch in Q3 FY26

    4

    Oakland office property resolution

    Next quarter
    CurrentNonrecourse mortgage matured in early July; company elected not to refinance.
    TargetLong-term resolution with servicer

    Why it matters

    The resolution of this asset's mortgage situation will impact the company's balance sheet and future operating income, given it generated $445,000 of income after debt service in Q2 FY26.

    Finally, at our Oakland office property, our nonrecourse mortgage matured in early July. We elected not to invest the additional capital in the asset that would have been required to refinance the mortgage. We continue to engage with the servicer on a long-term resolution.

    3 min read6 chapters

    Detailed Narrative

    01

    Strategic Priorities and Balance Sheet

    CMCT remains focused on improving funds from operations in 2026 and 2027, driven by strengthening operating trends across its multifamily, Los Angeles and Austin office assets, and the Sacramento hotel. The company is also committed to strengthening its balance sheet while funding critical growth initiatives like office leasing and hotel renovations. Management continues to evaluate potential asset sales to further strengthen the balance sheet and address the perceived gap between share price and intrinsic value.

    02

    Multifamily Segment Performance

    The multifamily segment demonstrated strong recovery, particularly in the Bay Area, where 78% of units are located. Same-store multifamily occupancy reached 95.3% as of June 30, 2026, an increase of 1,190 basis points year-over-year, leading to a 238% increase in multifamily NOI. In-place rents at Bay Area properties are approximately 12% below current asking rents, providing a significant opportunity for future NOI growth. Occupancy at CMCT's multifamily properties increased to 96.1% at quarter end, up over 1,200 basis points from Q2 FY25.

    03

    Office Segment Performance and Challenges

    Office leasing trends showed improvement, with leased occupancy (excluding the Oakland asset) increasing to 84.4% at quarter end, up 470 basis points from Q2 FY25. However, Office NOI declined to $4 million from $5.5 million, primarily due to a $2.4 million increase in JV loss, driven by noncash fair value adjustments. The company elected not to invest additional capital to refinance the nonrecourse mortgage on its Oakland office property, which matured in early July, and is engaging with the servicer for a long-term resolution.

    04

    Hotel Segment and Development Updates

    The Sacramento hotel property delivered improved operating performance, with NOI increasing 11% year-over-year following substantial completion of renovations to public spaces and all 505 guestrooms. The company is also evaluating adding 8 new guestrooms by converting underutilized space, which is expected to be highly accretive. In Los Angeles, the partial office-to-residential conversion at 701 South Hudson is 94.1% occupied, and predevelopment is underway for 50 additional units. The 36-unit ground-up development at 1915 Park in Echo Park is 58.3% leased.

    05

    Market Fundamentals and Rent Growth

    The Bay Area recovery is gaining momentum, bolstered by AI-related employment and investment. San Francisco multifamily rents increased approximately 11% in Q2 FY26, a 25-plus year high, with vacancy declining to a 25-year low of 3.7%. Oakland saw 7.6% rent growth in Q2 FY26, also a 25-year high, with vacancy declining to 7% from a peak of 18% in 2021. Supply growth in the market remains very low, supporting continued rent and occupancy gains.

    06

    Financial Highlights and FFO Reconciliation

    Segment NOI was $9.3 million in Q2 FY26, compared to $9.8 million in Q2 FY25. Excluding a $3.2 million loss from unconsolidated entities (primarily noncash fair value adjustments), Segment NOI was $12.5 million, up from $10.3 million. FFO was negative $3.5 million (-$1.28 per diluted share), an improvement from negative $7.9 million (-$981.63 per diluted share) in Q2 FY25, driven by a $4.3 million decrease in preferred stock dividends and reduced transaction costs. Core FFO was negative $3.4 million (-$1.25 per diluted share), also an improvement from negative $7 million (-$870.25 per diluted share) in Q2 FY25.

    AI-generated summary of the company’s earnings call. Not investment advice.