Creative Media & Community Trust Corporation Reports $25.8M Net Loss, Focuses on Multifamily Investments

Creative Media & Community Trust Corporation (CMCT) reported a net loss of $25.8 million for the fiscal year ending December 31, 2024, a significant improvement from the $51.5 million loss recorded in the previous year. This reduction in losses was primarily attributed to a $25.1 million decrease in depreciation and amortization expenses, alongside a $3.0 million reduction in transaction costs. Total revenues increased by 4.4% to $124.5 million, driven by a notable 73.9% rise in multifamily revenue, which reached $19.5 million, compared to $11.2 million in 2023. However, hotel and office revenues saw declines, with hotel revenue decreasing to $39.4 million and office revenue slightly down to $54.3 million.

The company’s real estate portfolio consisted of 27 assets, including 12 office properties, one hotel, and four multifamily properties, as of December 31, 2024. The office properties had an occupancy rate of 70.6%, while the hotel achieved a revenue per available room (RevPAR) of $135.90. The multifamily properties reported an occupancy rate of 81.7%. CMCT also maintained nine development sites, three of which were utilized as parking lots. The company’s strategic focus remains on premier multifamily properties, with plans to increase its investments in this sector.

In terms of operational changes, CMCT executed a series of preferred stock redemptions, opting to pay holders in shares of common stock. During the year, the company redeemed 2,589,606 shares of Series A1 Preferred Stock and 2,150,076 shares of Series A Preferred Stock, resulting in the issuance of over 4.8 million shares of common stock. This move is part of CMCT's strategy to enhance liquidity and strengthen its balance sheet. The company also plans to continue satisfying redemption requests in common stock during 2025.

Looking ahead, CMCT faces challenges related to its compliance with Nasdaq listing requirements, as it received a notice for failing to maintain a minimum bid price of $1.00 per share. The company has until May 6, 2025, to regain compliance. Additionally, CMCT's financial strategy includes addressing its outstanding debt, particularly the 2022 Credit Facility, which has seen modifications due to non-compliance with certain covenants. Management is optimistic about refinancing opportunities that could improve liquidity and support ongoing operations.

Overall, CMCT's financial performance reflects a strategic pivot towards multifamily investments while navigating challenges in its office and hotel segments. The company aims to leverage its real estate assets and operational strategies to enhance shareholder value and maintain its REIT status amidst evolving market conditions.