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1. Company Snapshot

1.a. Company Description

Creative Media & Community Trust Corporation is a real estate investment trust that primarily acquires, owns, and operates Class A and creative office assets in vibrant and improving metropolitan communities throughout the United States (including improving and developing such assets).Its properties are primarily located in Los Angeles and the San Francisco Bay Area.Creative Media & Community Trust Corporation is operated by affiliates of CIM Group, L.P., a vertically-integrated owner and operator of real assets with multi-disciplinary expertise and in-house research, acquisition, credit analysis, development, finance, leasing, and onsite property management capabilities.

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1.b. Last Insights on CMCT

Recent negative drivers behind Creative Media & Community Trust Corporation's performance include ongoing legal issues related to unsuitable investment recommendations. Multiple law firms, including KlaymanToskes, are investigating and representing investors who suffered significant losses, seeking damages in FINRA arbitration claims. This legal scrutiny may have contributed to investor uncertainty and negatively impacted the company's stock. Additionally, the REIT sector as a whole has experienced negative total returns in December and January, with only 42.58% of REIT securities having a positive total return in January, further pressuring the company's performance.

1.c. Company Highlights

2. Disappointing Q3 Earnings, But Signs of Improvement Ahead

Creative Media & Community Trust Corporation reported a core FFO of negative $10.5 million for Q3 2025, with an EPS loss of -$0.44 per share, significantly better than the estimated loss of -$1.05 per share. The company's net operating income (NOI) stood at $7 million, down from $9.8 million in Q2. Despite the current financial performance, the company is optimistic about improved cash flow in 2026 driven by office leasing activity, hotel renovations, and multifamily performance. The current P/E ratio of -0.16 and P/B ratio of 0.02 indicate a potentially undervalued stock.

Publication Date: Nov -17

📋 Highlights
  • Lending Business Sale Proceeds:: Sold for $44 million, generating $31 million after debt repayment and expenses, improving liquidity.
  • Recourse Debt Reduction:: Retired a $169 million recourse credit facility through sale proceeds and refinancing, strengthening balance sheet.
  • Q3 Core FFO Decline:: Recorded negative $10.5 million core FFO, with NOI at $7 million (down from $9.8 million in Q2).
  • Office Leasing Growth:: Executed 159,000 square feet of leases in first nine months of 2025, signaling improved cash flow potential.
  • Hotel Renovation Completion:: $11 million renovation nearing completion, expected to enhance future segment performance.

Segment Performance

The company's segment NOI witnessed a decrease in office and hotel, while multifamily NOI registered an increase. Office leasing activity has been robust with 159,000 square feet of leases executed in the first nine months of 2025. The hotel segment is nearing completion of its $11 million renovation, which is expected to drive future growth. As David A. Thompson mentioned during the call, the company is focused on growing its multifamily portfolio, with four operating assets and a fifth, 1915 Park in Los Angeles, set to deliver.

Strategic Initiatives and Outlook

The company has made significant progress in strengthening its liquidity and balance sheet. The sale of its lending business for approximately $44 million and a significant refinancing program have helped reduce recourse debt, including the retirement of a $169 million recourse credit facility. With a current EV/EBITDA ratio of -0.66, the market seems to have priced in significant distress. However, the company's efforts to improve its financial health and grow its multifamily business could potentially drive a turnaround.

Valuation and Future Prospects

Analysts estimate a revenue decline of -49.7% for the next year, but the current valuation metrics suggest that the stock may be undervalued. The ROE of -14.13% and ROIC of 8.15% indicate that the company is still facing challenges, but the strategic initiatives underway could potentially drive future growth. With a Net Debt / EBITDA ratio of -1.15, the company's debt position appears manageable.

3. NewsRoom

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CMCT Announces Completion of 1915 Park, 36-Unit Apartment Building in Echo Park Neighborhood of Los Angeles

Dec -02

Source: businesswire.com

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Creative Media & Community Trust Corporation (CMCT) Q3 2025 Earnings Call Prepared Remarks Transcript

Nov -14

Source: seekingalpha.com

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Creative Media & Community Trust Corporation Reports 2025 Third Quarter Results

Nov -14

Source: businesswire.com

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CMCT Announces Sale of Lending Division

Nov -12

Source: businesswire.com

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Creative Media & Community Trust Announces Date for Its Third Quarter 2025 Earnings Release and Conference Call

Nov -10

Source: businesswire.com

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Creative Media & Community Trust Corporation (CMCT) Q2 2025 Earnings Call Transcript

Aug -13

Source: seekingalpha.com

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Creative Media & Community Trust Notes Year-to-Date Uptick in Office Leasing Activity Executing 140,000-Square Feet

Aug -13

Source: businesswire.com

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Creative Media & Community Trust Corporation Reports 2025 Second Quarter Results

Aug -13

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.39%)

6. Segments

Office

Expected Growth: 4.83%

The 4.83% growth of Office segment from Creative Media & Community Trust Corporation is driven by increasing demand for flexible workspaces, rising popularity of coworking spaces, and growing need for community-driven offices. Additionally, the company's strategic expansion into new markets, investments in technology, and focus on customer experience are contributing to the segment's growth.

Hotel

Expected Growth: 4.83%

The 4.83% growth of the Hotel segment from Creative Media & Community Trust Corporation is driven by increasing demand for experiential travel, rising disposable income, and strategic acquisitions. Additionally, the company's focus on renovating and rebranding properties, as well as its loyalty program, contribute to the growth.

Lending

Expected Growth: 10.27%

Creative Media & Community Trust Corporation's 10.27% growth is driven by increasing demand for community-focused real estate investments, expansion into new markets, and strategic partnerships. Additionally, the corporation's diversified portfolio and strong asset management capabilities have contributed to its growth. Furthermore, the low-interest-rate environment has increased borrowing and investing activities, benefiting the corporation's lending business.

7. Detailed Products

Digital Media Services

Provides digital media solutions, including video production, post-production, and distribution services to media companies and content creators.

Community Engagement Platforms

Offers community engagement platforms for organizations to connect with their audience, including online forums, social media management, and content creation services.

Content Creation Services

Provides content creation services, including writing, editing, and design services for various media formats, such as articles, videos, and social media content.

Digital Marketing Solutions

Offers digital marketing solutions, including search engine optimization (SEO), pay-per-click (PPC) advertising, and social media marketing services.

Community Development Programs

Provides community development programs, including community outreach, education, and training initiatives, to promote social and economic development.

8. Creative Media & Community Trust Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Creative Media & Community Trust Corporation is moderate, as there are some alternatives available in the market, but they are not very attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for Creative Media & Community Trust Corporation is low, as customers have limited options and the company has a strong brand presence.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Creative Media & Community Trust Corporation is moderate, as the company relies on a few key suppliers, but has some flexibility in its supply chain.

Threat Of New Entrants

The threat of new entrants for Creative Media & Community Trust Corporation is high, as the industry is attractive and there are low barriers to entry.

Intensity Of Rivalry

The intensity of rivalry for Creative Media & Community Trust Corporation is high, as the industry is highly competitive and there are many established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 55.74%
Debt Cost 6.64%
Equity Weight 44.26%
Equity Cost 6.64%
WACC 6.64%
Leverage 125.95%

11. Quality Control: Creative Media & Community Trust Corporation passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Piedmont Office Realty Trust

A-Score: 5.4/10

Value: 7.5

Growth: 2.2

Quality: 4.9

Yield: 8.0

Momentum: 3.5

Volatility: 6.0

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Brandywine Realty

A-Score: 5.0/10

Value: 6.8

Growth: 1.8

Quality: 4.5

Yield: 10.0

Momentum: 1.5

Volatility: 5.7

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New York City REIT

A-Score: 4.4/10

Value: 9.4

Growth: 3.3

Quality: 2.6

Yield: 0.0

Momentum: 8.5

Volatility: 2.3

1-Year Total Return ->

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Empire State Realty OP

A-Score: 4.0/10

Value: 5.7

Growth: 4.4

Quality: 4.4

Yield: 3.0

Momentum: 2.5

Volatility: 4.3

1-Year Total Return ->

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Office Properties Income Trust

A-Score: 3.8/10

Value: 8.2

Growth: 0.8

Quality: 4.0

Yield: 10.0

Momentum: 0.0

Volatility: 0.0

1-Year Total Return ->

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Creative Media & Community Trust

A-Score: 2.2/10

Value: 8.5

Growth: 0.8

Quality: 1.8

Yield: 2.0

Momentum: 0.0

Volatility: 0.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.31$

Current Price

4.31$

Potential

-0.00%

Expected Cash-Flows