CTO Realty Growth, Inc. - 10-Q Summary (Period Ended June 30, 2026)
Business Context and Reporting Period
This is a Quarterly Report on Form 10-Q for CTO Realty Growth, Inc., a self-managed equity REIT focused on retail and mixed-use properties, commercial loans, and preferred equity investments. The report covers the three and six months ended June 30, 2026. As of the reporting date, the Company owned and managed 21 commercial real estate properties across seven states, comprising 5.8 million square feet of gross leasable space.
Key Financial Metrics
| Metric | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 |
|---|---|---|
| Total Revenues | $85.0 million | $73.4 million |
| Net Income (Company) | $21.3 million | $(21.2) million |
| Net Income (Common Stockholders) | $17.6 million | $(24.9) million |
| Diluted EPS (Common) | $0.52 | $(0.78) |
| Operating Cash Flow | $34.6 million | $27.5 million |
| Long-Term Debt (Net) | $658.7 million | $616.3 million |
| Cash & Restricted Cash | $43.5 million | $18.8 million |
| Total Assets | $1,405.7 million | $1,263.9 million |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased by 15.7% ($11.6 million) year-over-year, driven by income property acquisitions, lease-up activity, and increased interest income from a expanded commercial loan portfolio.
- Profitability Turnaround: The Company reported a net income of $21.3 million compared to a net loss of $21.2 million in the prior year. This $42.5 million swing is primarily due to the absence of a $20.4 million loss on extinguishment of debt recorded in 2025 and a $10.0 million unrealized gain on the Company's investment in Alpine Income Property Trust (PINE) in 2026 (versus a $4.9 million loss in 2025).
- Portfolio Expansion: The Company acquired two shopping centers and a land parcel for $138.1 million and originated $96.4 million in new preferred equity investments during the period. Conversely, it disposed of two shopping centers for $90.7 million, generating a $2.1 million gain.
- Debt and Liquidity: Long-term debt increased by $42.4 million. The Company raised $97.8 million in net proceeds from common stock issuances under its ATM program.
Guidance, Outlook, and Risks
- Investment Guidance: Management expects 2026 investments in income-producing properties and structured investments to range between $300.0 million and $400.0 million.
- Capital Strategy: Future acquisitions are expected to be funded by cash on hand, operations, 1031 exchange proceeds, and the Revolving Credit Facility (which has $107.0 million undrawn). The Company maintains an active ATM program with $117.2 million remaining availability.
- Risks: Key risks include interest rate fluctuations (mitigated by swaps), tenant/borrower credit risk, competition for acquisitions, and the potential failure to qualify as a REIT. The Company is also subject to market risks related to the valuation of its investment in PINE.
- Unusual Items: The 2025 period included a significant non-recurring loss on debt extinguishment. The 2026 period includes a $0.8 million provision for impairment and adjustment to the CECL reserve related to commercial loans.
Investor Verification Checklist
- Debt Covenants: Verify continued compliance with financial maintenance covenants under the BMO and KeyBank credit agreements, specifically the maximum indebtedness ratio and minimum fixed charge coverage ratio.
- 1031 Exchange Status: Confirm the tax-deferred status of proceeds from the $90.7 million property dispositions to ensure no immediate tax liability impacts future cash flows.
- Commercial Loan Performance: Review the specific credit quality of the new $96.4 million preferred equity investments and the $33.5 million in unfunded loan commitments.
- PINE Valuation: Assess the volatility of the unrealized gains/losses on the $51.3 million investment in PINE, which significantly impacts reported net income.
- Dividend Coverage: Analyze Adjusted Funds From Operations (AFFO) of $37.4 million for the six-month period against dividend obligations to ensure sustainable payout ratios.