Stonegate Capital Partners has initiated coverage on Creative Media & Trust Corp. (NASDAQ: CMCT), shifting the focus from balance sheet repair to funds from operations (FFO) conversion. According to the announcement, CMCT's first quarter 2026 update indicates a transition toward cleaner earnings power following a series of strategic moves, including the redemption of $396.2 million in preferred stock since September 2024, the sale of First Western, and the retirement of its recourse credit facility. These actions have brought the company closer to its long-term target capital structure.
The March 2026 redemption of $242.8 million in preferred stock is expected to improve FFO by approximately $16.0 million annually, beginning in the second quarter of 2026. This makes the upcoming quarters a cleaner test of post-recapitalization performance. The key equity driver now hinges on whether lower preferred dividends, improving multifamily occupancy, completed hotel renovations, and refinancing activity translate into visible FFO recovery.
Stonegate highlighted that the first quarter results were noisy due to the late-quarter preferred redemption, office items, hotel disruption, and lost lending net operating income. However, the $16.0 million annual FFO benefit is set to commence in the second quarter, providing a clearer baseline for evaluating the company's earnings power. Operating upside is expected to depend on multifamily occupancy trends, hotel renovations that have been completed, and execution on refinancing and liquidity initiatives.
For the full announcement, including downloadable images and bios, click here. Stonegate Capital Partners is a capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Its affiliate, Stonegate Capital Markets (member FINRA), offers investment banking, equity research, and capital raising services.
