Q2 2026 Creative Media & Community Trust Corporation Earnings Call Transcript
Key Points
- Multifamily NOI surged 238% year-over-year, driven by a 1,190 basis point increase in same-store occupancy to 95.3%.
- Bay Area multifamily market is experiencing record rent growth (11% in San Francisco, 7.6% in Oakland) and historically low vacancy, positioning CMCT for continued gains.
- In-place rents at Bay Area multifamily properties are 12% below asking rents, offering a clear path to further NOI growth as leases roll.
- Hotel NOI increased 11% year-over-year following the completion of comprehensive renovations, with potential for additional growth from adding 8 new guestrooms.
- Core FFO improved by $3.6 million year-over-year, primarily due to a reduction in preferred dividends, despite higher JV losses.
- Excluding JV losses, consolidated NOI increased 22% year-over-year, reflecting strong performance across multifamily, office, and hotel segments.
- Office leasing momentum continues, with leased occupancy (excluding Oakland) up 470 basis points to 84.4%.
- The company is actively evaluating asset sales to strengthen the balance sheet and close the gap between share price and intrinsic value.
- Successful refinancing of the 1150 Clay mortgage and plans to refinance the Sheraton Grand at a lower spread and higher loan balance enhance financial flexibility.
- FFO remained negative at -$3.5 million, and Core FFO was also negative at -$3.4 million, indicating ongoing profitability challenges.
- Loss from unconsolidated entities increased significantly to $3.2 million from $437,000, driven by noncash fair value adjustments at multiple properties.
- Office segment NOI declined to $4 million from $5.5 million, primarily due to the increased JV loss.
- The company incurred a $455,000 casualty loss due to water damage at its hotel property.
- Asset management fees increased by $510,000 due to the issuance of additional common shares, adding to costs.
- The Oakland office asset's mortgage matured, and the company chose not to refinance, leading to ongoing engagement with the servicer and potential uncertainty.
- Depreciation and amortization expense increased by $807,000, partly due to renovation projects, which could pressure future earnings.
- The multifamily segment NOI, while improved, remains relatively low at $638,000, indicating the segment is still in early recovery.
- The company's strategic priority to sell assets has not yet resulted in completed transactions, leaving balance sheet strengthening incomplete.
Good afternoon, and welcome to the Creative Media & Community Trust second quarter 2026 earnings conference call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the call over to Steve Altebrando, Portfolio Oversight. Please go ahead.
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Hello, everyone, and thank you for joining us. My name is Steve Altebrando, the portfolio oversight for CMCT. Also on the call today are David Thompson, our Chief Executive Officer; and Brandon Hill, our Chief Financial Officer. This call is being webcast and will be temporarily archived on the Investor Relations section of our website, where you can also find our earnings release. Our earnings release includes a reconciliation of non-GAAP financial measures discussed during today's call.
During this call, we will make forward-looking statements. These forward-looking statements are based on the beliefs of assumptions made by and information currently available to us
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