Stonegate Capital Partners Initiates Coverage on Creative Media & Trust, Highlighting Shift to FFO Recovery
Stonegate initiates coverage on CMCT, noting the company's recapitalization efforts shift focus to FFO conversion, with 2Q26 expected to provide a cleaner baseline for earnings power.
Stonegate Capital Partners has initiated coverage on Creative Media & Trust Corp. (NASDAQ: CMCT), marking a pivotal shift in the company's narrative from balance sheet repair to funds from operations (FFO) conversion. 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, CMCT is now positioned to demonstrate its post-recapitalization earnings potential.
According to Stonegate's analysis, CMCT's first-quarter 2026 results were distorted by the late-March redemption of $242.8 million in preferred stock, along with office-related items, hotel disruption, and lost lending net operating income. However, the redemption is expected to improve FFO by approximately $16.0 million annually starting in the second quarter of 2026. This sets the stage for the next several quarters to serve as a cleaner test of the company's earnings power.
"The key equity driver is now whether lower preferred dividends, improving multifamily occupancy, completed hotel renovations, and refinancing activity translate into visible FFO recovery," Stonegate noted in the announcement. The firm highlighted that multifamily occupancy is improving, hotel renovations are complete, and refinancing and liquidity execution will drive the next phase of the investment thesis.
CMCT's recapitalization efforts have brought the company closer to its long-term target capital structure. With the redemption of preferred stock and the sale of non-core assets, the company has reduced its financial burden and is now focusing on operational improvements. Stonegate's coverage initiation underscores the importance of these changes for investors monitoring CMCT's performance.
For more details, the full announcement is available here. Stonegate Capital Partners, a leading capital markets advisory firm, provides investor relations, equity research, and institutional investor outreach services. Its affiliate, Stonegate Capital Markets (member FINRA), offers investment banking and capital raising services for public and private companies.