CMCT's Net Loss Widens to $28M Amid Revenue Dip, Rising Expenses

TL;DR

**CMCT is bleeding cash, and its core business is shrinking; steer clear until they show a clear path to profitability.**

AI Summary

Creative Media & Community Trust Corp (CMCT) reported a significant net loss of $28.009 million for the nine months ended September 30, 2025, a substantial increase from the $15.333 million net loss in the prior year period. Total revenues decreased to $88.218 million from $97.053 million, primarily driven by a decline in rental and other property income to $49.161 million from $56.172 million. Hotel income, however, saw a slight increase to $30.550 million from $29.768 million. Total expenses rose to $114.268 million from $111.371 million, with interest expense increasing to $30.246 million from $27.819 million. The company also incurred a loss from unconsolidated entities of $2.285 million, a sharp rise from $0.442 million in the previous year. Strategic outlook includes a focus on premier multifamily properties and Class A office assets, alongside its SBA 7(a) loan program. The company completed two reverse stock splits in 2025: a 1-for-10 split on January 6, 2025, and a 1-for-25 split on April 15, 2025, and voluntarily delisted from the Tel Aviv Stock Exchange on August 15, 2025.

Why It Matters

CMCT's widening net loss and declining revenues signal significant operational challenges, particularly in its core real estate segments, which could erode investor confidence and impact stock performance. The increase in interest expenses and losses from unconsolidated entities suggests broader market pressures and potential issues with its investment strategy. For employees, continued financial underperformance could lead to restructuring or reduced growth opportunities. Customers might see less investment in property upgrades or services. Competitors in the multifamily and creative office space may gain market share if CMCT struggles to maintain its portfolio value and attract tenants.

Risk Assessment

Risk Level: high — The company reported a net loss of $28.009 million for the nine months ended September 30, 2025, significantly worse than the $15.333 million loss in the prior year. Total revenues decreased by 9.1% from $97.053 million to $88.218 million, while total expenses increased by 2.6% to $114.268 million, indicating a deteriorating financial position.

Analyst Insight

Investors should exercise extreme caution and consider divesting from CMCT given the substantial and increasing net losses, declining revenues, and rising expenses. Await clear evidence of a turnaround strategy and sustained profitability before considering any investment.

Financial Highlights

debt To Equity

1.85

revenue

$88.218M

operating Margin

N/A

total Assets

$871.826M

total Debt

$527.767M

net Income

-$28.009M

eps

N/A

gross Margin

N/A

cash Position

$17.320M

revenue Growth

-9.1%

Revenue Breakdown

Key Numbers

• $28.009M — Net Loss (Increased from $15.333M in 2024, indicating worsening profitability.)
• $88.218M — Total Revenues (Decreased from $97.053M in 2024, showing a decline in top-line performance.)
• $114.268M — Total Expenses (Increased from $111.371M in 2024, contributing to wider losses.)
• $49.161M — Rental and other property income (Decreased from $56.172M in 2024, highlighting weakness in core real estate.)
• $30.246M — Interest Expense (Increased from $27.819M in 2024, adding pressure to profitability.)
• $2.285M — Loss from unconsolidated entities (Significantly increased from $0.442M in 2024, indicating underperforming investments.)
• 789,251 — Common Stock Shares Outstanding (As of November 7, 2025, after reverse stock splits.)
• 1-for-10 — Reverse Stock Split (Effected on January 6, 2025.)
• 1-for-25 — Reverse Stock Split (Effected on April 15, 2025.)
• $43,913 — Net Loss Attributable to Common Stockholders (For the nine months ended September 30, 2025, compared to $56,737 in 2024.)

Key Players & Entities

• Creative Media & Community Trust Corporation (company) — registrant
• CIM Group Management, LLC (company) — affiliate providing expertise
• Nasdaq Capital Market (regulator) — stock exchange for CMCT common stock
• Tel Aviv Stock Exchange (regulator) — former stock exchange for CMCT common stock
• $28.009 million (dollar_amount) — net loss for nine months ended September 30, 2025
• $15.333 million (dollar_amount) — net loss for nine months ended September 30, 2024
• $88.218 million (dollar_amount) — total revenues for nine months ended September 30, 2025
• $97.053 million (dollar_amount) — total revenues for nine months ended September 30, 2024
• $114.268 million (dollar_amount) — total expenses for nine months ended September 30, 2025
• $111.371 million (dollar_amount) — total expenses for nine months ended September 30, 2024

FAQ

Risk Factors

• Increased Net Loss and Expenses [high — financial]: The company reported a net loss of $28.009 million for the nine months ended September 30, 2025, a significant increase from $15.333 million in the prior year. Total expenses rose to $114.268 million from $111.371 million, driven by higher interest expenses of $30.246 million.
• Declining Total Revenues [medium — financial]: Total revenues decreased to $88.218 million from $97.053 million year-over-year. This decline was primarily attributed to a drop in rental and other property income to $49.161 million.
• Underperforming Unconsolidated Entities [medium — financial]: The loss from unconsolidated entities surged to $2.285 million from $0.442 million in the prior year period, indicating significant underperformance in these investments.
• Dependence on CIM Group Expertise [medium — operational]: The company relies on CIM Group Management, LLC for expertise in acquiring, developing, and operating multifamily and office assets. Any disruption or failure in this relationship could impact operations.
• Real Estate Market Fluctuations [medium — market]: As a REIT focused on multifamily and office properties, the company is exposed to fluctuations in the real estate market, including changes in occupancy rates, rental income, and property values.
• High Debt Levels [high — financial]: Total debt increased to $527.767 million as of September 30, 2025, from $505.732 million at the end of 2024. This high debt level, coupled with rising interest expenses, poses a financial risk.
• REIT Compliance [low — regulatory]: As a REIT, the company must comply with specific tax regulations. Failure to meet these requirements could result in the loss of REIT status and significant tax liabilities.

Industry Context

Creative Media & Community Trust Corp operates within the real estate investment trust (REIT) sector, focusing on premier multifamily and Class A office properties, alongside a niche in SBA 7(a) lending. The multifamily sector generally benefits from consistent demand, while the office sector faces evolving dynamics due to remote work trends. The company aims to leverage CIM Group's expertise in these segments.

Regulatory Implications

As a REIT, CMCT must adhere to strict IRS regulations regarding income distribution and asset ownership to maintain its tax-advantaged status. The company's delisting from the TASE and continued listing on Nasdaq Capital Market also subjects it to Nasdaq's corporate governance and financial listing standards.

What Investors Should Do

1. Monitor expense control and revenue diversification.
2. Analyze the performance of unconsolidated entities.
3. Evaluate debt management strategy.
4. Assess the impact of reverse stock splits.

Key Dates

• 2025-01-06: Effected 1-for-10 reverse stock split — Aims to increase the per-share market price of common stock, potentially improving marketability and meeting exchange listing requirements.
• 2025-04-15: Effected 1-for-25 reverse stock split — Further consolidation of shares to manage stock price and potentially meet listing standards, following the earlier split.
• 2025-04-17: Transferred listing to Nasdaq Capital Market — Moved from Nasdaq Global Market to Nasdaq Capital Market, which has different financial and corporate governance requirements.
• 2025-08-15: Voluntarily delisted from Tel Aviv Stock Exchange (TASE) — Simplifies reporting and compliance by reducing the number of exchanges the company is listed on.
• 2025-09-30: Nine months ended financial reporting — Period covered by the 10-Q, showing a significant net loss and declining revenues.

Glossary

REIT

Real Estate Investment Trust. A company that owns, operates, or finances income-generating real estate. (Creative Media & Community Trust Corp operates as a REIT, subject to specific tax and operational rules.)

VIE

Variable Interest Entity. An entity where equity investors do not have sufficient equity at risk for the entity to finance its activities without additional support from other parties. (The company determined that its Unconsolidated Joint Ventures are VIEs, impacting how they are accounted for (equity method).)

Reverse Stock Split

A corporate action to reduce the number of outstanding shares of stock, increasing the per-share price. (CMCT executed two reverse stock splits in 2025 to manage its stock price.)

SBA 7(a) loan program

The Small Business Administration's primary program to help small businesses start up, expand, and recover. (CMCT operates a lending platform that originates loans under this program.)

Unconsolidated Joint Ventures

Investments in entities where the company does not have control and therefore does not consolidate them into its financial statements. (These investments are accounted for using the equity method and contributed to losses from unconsolidated entities.)

Year-Over-Year Comparison

Compared to the prior year period, Creative Media & Community Trust Corp has experienced a significant deterioration in financial performance. Total revenues decreased by 9.1% to $88.218 million, primarily due to a decline in rental income. Concurrently, total expenses increased, leading to a net loss of $28.009 million, nearly double the $15.333 million loss reported previously. Interest expense also rose, further pressuring profitability, and losses from unconsolidated entities saw a substantial jump.

Key Financial Figures

• $0.001 — ection 12(b) of the Act: Common Stock, $0.001 Par Value CMCT The Nasdaq Stock Market

Filing Documents

• cmct-20250930.htm (10-Q) — 2364KB
• exhibit311q32025.htm (EX-31.1) — 9KB
• exhibit312q32025.htm (EX-31.2) — 9KB
• exhibit321q32025.htm (EX-32.1) — 5KB
• exhibit322q32025.htm (EX-32.2) — 5KB
• 0000908311-25-000096.txt ( ) — 13358KB
• cmct-20250930.xsd (EX-101.SCH) — 95KB
• cmct-20250930_cal.xml (EX-101.CAL) — 107KB
• cmct-20250930_def.xml (EX-101.DEF) — 576KB
• cmct-20250930_lab.xml (EX-101.LAB) — 956KB
• cmct-20250930_pre.xml (EX-101.PRE) — 811KB
• cmct-20250930_htm.xml (XML) — 2276KB

Financial Information

PART I. Financial Information Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Balance Sheets — September 30, 2025 and December 31, 2024 1 Consolidated Statements of Operations — Three and Nine Months Ended September 30, 2025 and 2024 2 Consolidated Statements of Equity — Nine Months Ended September 30, 2025 and 2024 3 Consolidated Statements of Cash Flows — Nine Months Ended September 30, 2025 and 2024 5

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 43 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 61 Item 4.

Controls and Procedures

Controls and Procedures 61

Other Information

PART II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 63 Item 1A.

Risk Factors

Risk Factors 63 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 63 Item 3. Defaults Upon Senior Securities 63 Item 4. Mine Safety Disclosures 63 Item 5. Other Information 63 Item 6. Exhibits 64 Table of Contents PART I Financial Information Item 1.

Financial Statements

Financial Statements CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share and per share amounts) (Unaudited) September 30, 2025 December 31, 2024 ASSETS Investments in real estate, net $ 702,671 $ 709,194 Investments in unconsolidated entities 32,601 33,677 Cash and cash equivalents 17,320 20,262 Restricted cash 30,907 32,606 Loans receivable, net (Note 5) 51,517 56,210 Accounts receivable, net 3,379 4,345 Deferred rent receivable and charges, net 19,687 19,896 Other intangible assets, net 3,427 3,568 Other assets 10,317 9,797 TOTAL ASSETS $ 871,826 $ 889,555 LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY LIABILITIES: Debt, net $ 527,767 $ 505,732 Accounts payable and accrued expenses 31,757 32,204 Due to related parties 18,611 14,068 Other liabilities 10,740 10,488 Total liabilities 588,875 562,492 COMMITMENTS AND CONTINGENCIES (Note 15) REDEEMABLE PREFERRED STOCK: Series A1 cumulative redeemable preferred stock, $ 0.001 par value; 0 and 25,045,401 shares authorized as of September 30, 2025 and December 31, 2024, respectively; no shares issued or outstanding as of September 30, 2025 and 913,630 and 913,590 shares issued and outstanding, respectively, as of December 31, 2024; liquidation preference of $ 25.00 per share, subject to adjustment — 20,799 EQUITY: Series A cumulative redeemable preferred stock, $ 0.001 par value; 31,200,554 and 31,305,025 shares authorized as of September 30, 2025 and December 31, 2024, respectively; 8,820,338 and 4,020,892 shares issued and outstanding, respectively, as of September 30, 2025 and 8,820,338 and 4,125,363 shares issued and outstanding, respectively, as of December 31, 2024; liquidation preference of $ 25.00 per share, subject to adjustment 100,720 103,326 Series A1 cumulative redeemable preferred stock, $ 0.001 par value; 24,851,185 and 25,045,401 shares authorized as of September 30, 2025 and December 31, 2024, respectiv

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 (Unaudited) 1. ORGANIZATION AND OPERATIONS Creative Media & Community Trust Corporation (the "Company") is a Maryland corporation and real estate investment trust ("REIT"). The Company primarily acquires, develops, owns and operates both premier multifamily properties situated in vibrant communities throughout the United States and Class A and creative office real assets in markets with similar business and employment characteristics to its multifamily investments. The Company also owns one hotel in northern California and a lending platform that originates loans under the Small Business Administration ("SBA") 7(a) loan program. The Company seeks to apply the expertise of CIM Group Management, LLC ("CIM Group") and its affiliates to the acquisition, development and operation of premier multifamily properties and creative office assets that cater to rapidly growing industries such as technology, media and entertainment in vibrant and emerging communities throughout the United States. The Company's common stock, $ 0.001 par value per share ("Common Stock"), is currently traded on the Nasdaq Capital Market ("Nasdaq") under the ticker symbol "CMCT." On August 15, 2025, the Company voluntarily delisted its Common Stock from the Tel Aviv Stock Exchange (the "TASE"), where it had previously been listed under the ticker symbol "CMCT." See Part II Item 5 of this Quarterly Report on Form 10-Q. On January 6, 2025, the Company effected a 1-for-10 reverse stock split (the "January Reverse Stock Split") on its Common Stock. On April 14, 2025, the Company received approval from the Listing Qualifications Department of The Nasdaq Stock Market, LLC to transfer the listing of the Company's Common Stock from the Nasdaq Global Market to the Nasdaq Capital Market. The transfer of listing became effective on April 17, 2025. The Nasdaq Capital Market is a continuous trading market that operates in substantially the same

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 (Unaudited) – (Continued) The Company's ability to correctly assess its influence or control over an entity affects the presentation of these investments in real estate on the Company's consolidated financial statements. As of September 30, 2025, the Company has determined that the trust formed for the benefit of the note holders (the "Trust") for the securitization of the unguaranteed portion of certain of the Company's SBA 7(a) loans receivable is considered a VIE. Applying the consolidation requirements for VIEs, the Company determined that it is the primary beneficiary based on its power to direct activities through its role as servicer and its obligations to absorb losses and right to receive benefits. In addition, as of September 30, 2025, the Company has determined that its Unconsolidated Joint Ventures (as defined below) are considered VIEs. Applying the consolidation requirements for VIEs, the Company determined that it is not the primary beneficiary based on its lack of power to direct activities and its obligations to absorb losses and right to receive benefits. Therefore, the Unconsolidated Joint Ventures do not qualify for consolidation. The Company accounts for its investments in Unconsolidated Joint Ventures as equity method investments. Investments in Real Estate —Investments in real estate are stated at depreciated cost. Depreciation and amortization are recorded on a straight-line basis over the estimated useful lives as follows: Buildings and improvements 15 - 40 years Furniture, fixtures, and equipment 3 - 5 years Tenant improvements Lesser of useful life or lease term The fair value of real estate acquired is recorded to acquired tangible assets, consisting primarily of land, land improvements, building and improvements, tenant improvements, furniture, fixtures, and equipment, and identified intangible assets and liabilities, consisting of the value of acquired above-marke

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