Stonegate Capital Partners has initiated coverage on Creative Media & Trust Corp. (NASDAQ: CMCT), marking a pivotal moment for the company as it transitions from balance sheet repair to focusing on funds from operations (FFO) conversion. According to Stonegate's analysis, CMCT's first-quarter 2026 update underscores this shift, despite noisy results due to a late-quarter preferred redemption. The company has now redeemed $396.2 million of preferred stock since September 2024, sold First Western, retired its recourse credit facility, and moved closer to its long-term target capital structure.
The March redemption of $242.8 million is expected to improve FFO by approximately $16.0 million annually beginning in the second quarter of 2026, making the next several quarters a cleaner test of post-recapitalization earnings power. Stonegate analysts believe the key equity driver is now whether lower preferred dividends, improving multifamily occupancy, completed hotel renovations, and refinancing activity translate into visible FFO recovery.
Key takeaways from the coverage initiation include that the recapitalization shifts the story to FFO recovery. CMCT has redeemed $396.2 million of preferred stock, retired its recourse facility, and sold First Western, making FFO conversion the primary equity driver. The second quarter of 2026 is expected to serve as a cleaner baseline, as the first quarter was distorted by the late-March redemption, office items, hotel disruption, and lost lending net operating income. The $16.0 million annual FFO benefit begins in the second quarter.
Operating upside depends on multifamily, hotels, and refinancing. Multifamily occupancy is improving, hotel renovations are complete, and refinancing and liquidity execution will drive the next phase of the thesis. For the full announcement, including downloadable images and bios, click here.
Stonegate Capital Partners is a leading 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 a full spectrum of investment banking, equity research, and capital raising for public and private companies.
