Stonegate Initiates Coverage on Creative Media & Trust Corp., Highlighting Shift to FFO Recovery

Stonegate Capital Partners has initiated coverage on Creative Media & Trust Corp. (NASDAQ: CMCT), signaling a pivotal shift in the company's financial narrative from balance sheet repair to funds from operations (FFO) conversion. The firm's analysis, released June 1, 2026, underscores CMCT's progress in restructuring its capital structure, which includes 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.

According to Stonegate, CMCT's first-quarter 2026 results were noisy due to a late-quarter preferred redemption, but 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. This sets the stage for the next several quarters to provide a cleaner test of the company's post-recapitalization earnings power. The key equity driver is now whether lower preferred dividends, improving multifamily occupancy, completed hotel renovations, and refinancing activity will translate into visible FFO recovery.

Stonegate emphasizes that the second quarter of 2026 will 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 is expected to materialize from the second quarter onward. Operating upside will depend on multifamily occupancy improvements, the completion of hotel renovations, and successful refinancing and liquidity execution, which will drive the next phase of the investment thesis.

For more details, the full announcement, including downloadable images and bios, is available here.