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Shares of Creative Media & Community Trust (Nasdaq: CMCT) nearly doubled on Wednesday after the real estate investment trust (REIT) agreed to sell its lending division to PG FR Holding.

The transaction that marks a strategic pivot toward CMCT’s core focus – urban multi-family and creative office assets – is expected to generate about $31 million in net cash proceeds.

Despite the explosive rally this morning, CMCT stock remains down sharply (year-to-date) – with the aforementioned divestiture expected to be a catalyst for further upside in 2026.

Here are three reasons why the lending division sale may unlock more value for Creative Media shareholders in the year ahead.

CMCT stock to benefit from leaner balance sheet

Creative Media’s exit from the lending business frees up $31 million in net cash, after accounting for debt tied to a 2023 securitization – a meaningful capital infusion for a small-cap REIT.

According to CMCT’s press release, it plans on using the proceeds to reduce leverage and reinvest in high-yielding multifamily developments.

This shift toward capital discipline and core asset growth will likely continue to resonate well with investors seeking cleaner, more focused real estate play, potentially driving CMCT stock up further in 2026.

As David Thompson, company’s chief executive, noted, “This transaction enhanced our financial flexibility and allows us to sharpen our focus on our core real estate strategy.”

CMCT shares to rally on improved investor visibility

For years, Creative Media’s hybrid structure – part real estate, part lending – blurred its valuation narrative.

Divesting its lending division removes that ambiguity, positioning CMCT as a pure-play urban real estate operator.

This clarity could help narrow the discount to NAV that’s plagued the stock.

Additionally, the leadership transition – Barry Berlin (chief of finance) departing to join the buyer, and Brandon Hill stepping in as replacement, further reinforces the strategic reset.

All in all, investors tend to reward companies that streamline their operations and messaging.

With a cleaner structure and renewed focus, CMCT shares are now much better positioned to attract institutional capital and analyst coverage in 2026.

Urban multi-family tailwinds to drive CMCT higher

Finally, Creative Media’s pivot toward urban multifamily assets aligns with broader market trends.

As interest rates stabilize and housing demand remains strong, especially in supply-constrained cities, the company’s portfolio stands to benefit from rising rents and asset values.

CMCT has already begun expanding its development pipeline – and the lending unit sale provides fresh capital to accelerate that growth.

If the Nasdaq-listed firm can execute on its multifamily strategy while maintaining discipline, CMCT stock could see a major valuation uplift as investors re-rate it alongside more focused REIT peers.

What’s also worth mentioning, however, is that Creative Media hardly receives any coverage from Wall Street at present, which makes it increasingly difficult to assess its fair value.

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