Creative Media & Community Trust Corp

Creative Media & Community Trust Corporation is a Maryland corporation and REIT that primarily acquires, develops, owns and operates premier multifamily properties situated in vibrant communities throughout the United States and Class A and creative office real assets in markets with similar business and employment characteristics to its multifamily investments. The company also owns one hotel in northern California. All of the company's real estate assets are and will generally be located in communities qualified by CIM Group, which are located in areas that include traditional downtown areas and suburban main streets, which have high barriers to entry, high population density, positive population trends and a propensity for growth. The company believes that the critical mass of redevelopment in such areas creates positive externalities, which enhance the value of real estate assets in the area.

The company competes with others engaged in the acquisition, origination, development, and operation of real estate and real estate-related assets, including REITs, insurance companies, pension funds, private equity funds, sovereign wealth funds, hedge funds, mortgage banks, investment banks, commercial banks, savings and loan associations, specialty finance companies, and private and institutional investors. Many of these competitors may be larger than the company with greater access to capital and other resources. The company believes that its relationship with CIM Group gives it a competitive advantage that allows it to operate more effectively in the markets in which it conducts its business.

The company generates revenue through four reportable segments: office properties, hotel properties, multifamily properties, and a lending business. For the year ended December 31, 2025, the office portfolio contributed approximately 43.1% of revenue from the four segments on a combined basis, the hotel segment contributed approximately 35.6%, the multifamily segment contributed approximately 13.6%, and the lending segment contributed approximately 7.7%. The company also leverages the investor relationships of CIM Group to execute on its investment pipeline using an asset-light approach for certain investments, co-investing with third parties, maintaining an economic interest, and in some cases earning a management fee and a percentage of the profits.

As of December 31, 2025, the company's real estate portfolio consisted of 27 assets, all of which were fee-simple properties, and five of which the company owns through investments in Unconsolidated Joint Ventures. The Unconsolidated Joint Ventures contain one office property, three multifamily properties (one of which has been partially converted from office into multifamily units and is now classified as a multifamily property) and one commercial development site. As of December 31, 2025, the company's 12 office properties, totaling approximately 1.3 million rentable square feet, were 74.8% occupied; the one hotel with an ancillary parking garage, which has a total of 505 rooms, had RevPAR of $152.70 ¹ for the year ended December 31, 2025; and the five multifamily properties were 85.3% occupied. Additionally, as of December 31, 2025, the company had eight development sites (two of which were being used as parking lots).

The company's lending segment, prior to its divestiture, was a national lender that primarily originated loans to small businesses under the SBA 7(a) loan program. As previously announced on November 12, 2025, the company and First Western SBLC, LLC entered into a Membership Interest Purchase Agreement with PG FR Holding, LLC. The closing occurred on January 21, 2026, at which the buyer purchased all of the issued and outstanding equity interests of First Western SBLC, LLC for a purchase price of approximately $44.9 million ² (which is net of the outstanding balance of debt related to the 2023 securitization of certain loan receivables), subject to adjustment. At the closing and upon giving effect to the payment of other debt, transaction expenses and other matters, the transactions yielded net cash proceeds to the company of approximately $31.2 million ³.

During the year ended December 31, 2025, the company redeemed, at its option, 0 and 2,589,606 ⁴ shares of Series A1 Preferred Stock, respectively, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of the applicable redemption date and, in addition, the company redeemed 536,737 ⁵ and 181,912 ⁶ shares of Series A1 Preferred Stock at the option of the holders during the years ended December 31, 2025 and 2024, respectively, that were paid in shares of Common Stock. The Series A1 In-Kind Redemptions resulted in the aggregate issuance of 1,010,063 ⁷ and 192,698 ⁸ shares of Common Stock during the years ended December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, the company redeemed 4,122 ⁹ shares of Series D Preferred Stock that were paid in shares of Common Stock, resulting in the aggregate issuance of 11,556 ¹⁰ shares of Common Stock. On or about March 16, 2026, the company expects to redeem approximately 1,957,023 ¹¹ shares of Series A Preferred Stock, approximately 7,767,609 ¹² shares of Series A1 Preferred Stock and approximately 21,760 ¹³ shares of Series D Preferred Stock in shares of Common Stock.

The company had a net loss of $39.6 million ¹⁴ for the year ended December 31, 2025, representing an increase of $13.8 million ¹⁵ compared to a net loss of $25.8 million ¹⁶ for the year ended December 31, 2024. Total revenues were $116,669,000 ¹⁷ for the year ended December 31, 2025, compared to $124,512,000 ¹⁸ for the year ended December 31, 2024. FFO attributable to common stockholders was $(31.5) million ¹⁹ for the year ended December 31, 2025, an increase of $14.8 million ²⁰ compared to $(46.3) million ²¹ for the year ended December 31, 2024.

The company intends to increase its focus towards premier multifamily properties. The company intends to dispose of assets that do not fit into its strategy over time and opportunistically, and does not have any specific time frame with respect to such dispositions. The company regularly evaluates each asset within its portfolio as well as its strategy, which may result in dispositions when the company believes the proceeds generated from the sale of an asset can be redeployed in one or more assets that will generate better returns, or the market value of such asset is equal to or exceeds its view of its intrinsic value.

The company seeks to apply the expertise of CIM Group to the acquisition, development and operation of premier multifamily properties situated in vibrant communities throughout the United States. While the company may acquire, develop and operate creative office assets that cater to rapidly growing industries such as technology, media and entertainment in markets with similar business and employment characteristics to its multifamily investments, it intends to increase its focus towards premier multifamily properties. The company also leverages the investor relationships of CIM Group to execute on its investment pipeline using an asset-light approach for certain of its investments, co-investing with one or more third parties on an asset-level basis by raising capital from such third parties, maintaining an economic interest in the asset and, in some cases, earning a management fee and a percentage of the profits.

The company expects to see expiring cash rents over the next four quarters as set forth in the table below: for the three months ended March 31, 2026, expiring square feet of 20,003 ²² and expiring rent per square foot of $44.49 ²³; for the three months ended June 30, 2026, expiring square feet of 35,226 ²⁴ and expiring rent per square foot of $56.38 ²⁵; for the three months ended September 30, 2026, expiring square feet of 30,978 ²⁶ and expiring rent per square foot of $49.26 ²⁷; and for the three months ended December 31, 2026, expiring square feet of 21,607 ²⁸ and expiring rent per square foot of $55.77 ²⁹.

The company started its renovation of Sheraton Grand Hotel's lobbies and common areas during the third quarter of 2025. The estimated cost for the Lobby Renovation Project is approximately $11.6 million ³⁰, of which $7.4 million ³¹ had been incurred as of December 31, 2025. Both the Rooms Renovation Project and Lobby Renovation Project are being funded by a combination of draws on the mortgage loan at the property and key money from the Sheraton Grand Hotel's franchisor.

The company will seek to satisfy its long-term liquidity needs through one or more of the following methods: offerings of shares of Common Stock, Preferred Stock or other equity and/or debt securities of the company; issuances of interests in its operating partnership in exchange for properties; credit facilities and term loans; the addition of senior recourse or non-recourse debt using target acquisitions as well as existing assets as collateral; the sale of existing assets; and/or cash flows from operations. The company has not paid dividends on its Common Stock since 2024, and cannot predict with certainty if or when it may be able to resume paying such dividends on its Common Stock.

The company expects to pay dividends on the Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock in arrears on a monthly basis, unless its results of operations, its general financing conditions, general economic conditions, applicable requirements of the MGCL or other factors make it imprudent to do so. The annual rate of dividend of the Series A1 Preferred Stock during the first quarter of 2026 is 6.39% ³².

The company believes that a continued high interest rate environment, which is the economic environment that the company expects to face in 2026, will result in increases in the variable rate component of its indebtedness. As of December 31, 2025, $27.1 million ³³ was outstanding under the company's junior subordinated notes and $36.6 million ³⁴ in aggregate was outstanding on two mortgage loans, all of which bears interest at a variable rate. The company has not hedged its interest rate with respect to this variable rate indebtedness.

The company may not have sufficient funds on hand or may not be able to obtain additional financing to cover all of its long-term cash requirements. The nature of its business, and the requirements imposed by REIT rules that it distribute a substantial majority of its REIT taxable income on an annual basis in the form of dividends, may cause the company to have substantial liquidity needs over the long-term.

A significant portion of the company's properties, by aggregate net operating income and square feet, are located in California, making the company dependent on the California real estate market and economy and susceptible to risks such as adverse market conditions, changes in local laws or regulations, and natural disasters. Kaiser, which occupies space in one of the company's Oakland, California properties, accounted for 23.4% ³⁵ of the company's annualized rental income for the year ended December 31, 2025, creating tenant concentration risk. The company has incurred significant indebtedness, with $545,604,000 ³⁶ in total outstanding mortgage debt as of December 31, 2025, and may incur significant additional indebtedness, which could make the company more vulnerable to a downturn in business or the economy generally. As of December 31, 2025, $27.1 million ³⁷ was outstanding under the company's junior subordinated notes and $36.6 million ³⁸ in aggregate was outstanding on two mortgage loans, all of which bears interest at a variable rate, and the company has not hedged its interest rate with respect to this variable rate indebtedness, exposing it to increases in interest rates.

Management's message emphasizes the company's strategy as a REIT that primarily acquires, develops, owns and operates premier multifamily properties and Class A and creative office real assets, seeking to apply the expertise of CIM Group. Management highlights the company's intention to increase its focus towards premier multifamily properties and to dispose of assets that do not fit into its strategy over time. Management also notes the completion of the sale of the lending business on January 21, 2026, which yielded net cash proceeds to the company of approximately $31.2 million ³⁹, and the redemption of Preferred Stock in shares of Common Stock, which are expected to strengthen the company's balance sheet and improve liquidity, better positioning the company to take advantage of opportunities expected to arise in a recovering real estate market.