Breaking Down CTO Realty Growth, Inc. (CTO) Financial Health: Key Insights for Investors

You're looking at CTO Realty Growth, Inc. (CTO) and wondering if the retail real estate story still holds up in late 2025, especially with mixed signals in the market. Honestly, the third quarter results, released in October 2025, paint a nuanced but defintely encouraging picture: they posted a Core Funds from Operations (FFO) of $0.50 per share, beating consensus and prompting a raised full-year FFO guidance to a range of $1.84 to $1.87 per share. That's a solid beat, but you also saw a net income of just $0.03 per diluted share. The operational strength is real, though-Same-Property Net Operating Income (NOI) grew 2.3% year-over-year, and their portfolio is 94.2% leased, showing strong demand for their Sun Belt-focused properties. We need to map that operational success against the balance sheet, which carries a debt-to-equity ratio of 1.08, and see if the $0.38 quarterly dividend is truly safe. The quick math shows a company executing on leasing, but still navigating the profitability side of the REIT structure.

Revenue Analysis

You need a clear picture of where CTO Realty Growth, Inc. (CTO) is actually making its money, especially with the market noise around real estate investment trusts (REITs). The direct takeaway is that CTO's revenue growth is strong in 2025, primarily driven by its core income properties and a deliberate push into higher-yielding interest income.

The company's trailing twelve months (TTM) revenue, ending September 30, 2025, hit $146.95 million, which is a significant jump. Here's the quick math: that represents a 23.84% year-over-year revenue growth from the previous TTM period, which is defintely a healthy acceleration compared to the 14.11% growth seen in the full fiscal year 2024. This kind of growth shows their strategy of acquiring and managing retail and mixed-use properties in high-growth U.S. markets is paying off. Exploring CTO Realty Growth, Inc. (CTO) Investor Profile: Who's Buying and Why?

Primary Revenue Streams and Segment Contribution

CTO Realty Growth, Inc. operates across four main business segments, but the bulk of the income comes from the first one. It's a real estate investment trust (REIT), so the core revenue is the rent check, but they've diversified a bit, which is smart.

• Income Properties: Long-term rental revenue from their portfolio of retail, office, and commercial properties. This is the main engine.
• Commercial Loans and Investments: Income from investments in commercial loans and preferred equity. This stream is growing and helped boost the Q2 2025 revenue.
• Management Services: Fee income, largely from managing assets for Alpine Income Property Trust, Inc.
• Real Estate Operations: This segment is winding down; they sold their subsurface mineral interests in 2024.

For the nine months ended September 30, 2025, the income properties portfolio shows a clear geographical concentration in the high-growth Sunbelt region. This regional focus is a key driver of their base rent revenue, which is the most stable part of the business.

Analyzing Revenue Stream Shifts

The biggest change you need to track is the shift away from non-core assets. The sale of subsurface mineral interests in 2024 simplified the Real Estate Operations segment, focusing the company more purely on its retail and mixed-use properties. This is a positive move for a REIT, as it clarifies the investment thesis.

Also, look at the quarterly data: Q2 2025 revenue jumped 30.6% year-over-year to $37.6 million, and Q3 2025 revenue was $37.8 million, up 18.71% year-over-year. What this estimate hides is that the growth isn't just from rent, but also from a 10.3% increase in management fee income and higher interest income from their commercial loans, which is a good hedge against slower property income growth. The leasing team is also executing well, achieving a notable 21.6% cash rent spread on comparable new leases in Q2 2025.

Profitability Metrics

You need to look past the headline numbers on a REIT's income statement to understand its true profitability. CTO Realty Growth, Inc. (CTO) shows a classic REIT pattern: a strong Gross Margin but a deeply negative Net Profit Margin on a GAAP (Generally Accepted Accounting Principles) basis. The quick takeaway is this: their core property operations are highly efficient, but non-cash depreciation and one-time charges are masking the underlying cash flow strength.

For the trailing twelve months (TTM) leading up to the end of the third quarter of 2025, CTO's margins tell a clear story about their cost structure and operational efficiency:

Here's the quick math: CTO's Gross Margin of nearly 75% is excellent and typical for a high-quality Real Estate Investment Trust (REIT). It means for every dollar of revenue, $0.75 is left over after the direct costs of property operations (like maintenance and utilities). That's a sign of strong property-level cash flow and effective cost management. Still, the Operating Margin drops sharply to 12.10% due to substantial general and administrative expenses, plus the depreciation that all real estate companies carry.

Profitability Trends and Operational Efficiency

The trend data shows a mixed, yet realistic, picture. While the Gross Margin remains high, its long-term trend has been a decline averaging -1.9% per year, and the Operating Margin has seen a sharper decline, averaging -17.1% annually over the last five years. This suggests that while property income is robust, the total operating expense base is growing faster than revenue, squeezing the margin before interest and taxes.

The net result of these pressures is that net losses have been widening at an annual rate of 67.6% over the past five years. This is a red flag on a GAAP basis, but remember the REIT context: the massive non-cash depreciation expense is the primary driver of the negative Net Income, not necessarily a lack of cash flow.

To be fair, the company's operational efficiency, measured by Same-Property Net Operating Income (NOI), is a positive sign. In the third quarter of 2025, CTO reported a 2.3% increase in same-property NOI, meaning their existing properties are generating more income. Plus, their leasing team is doing great work, achieving a notable 21.6% positive cash rent spread on comparable leases in Q2 2025. That's a defintely strong indication of pricing power in their high-growth Sunbelt markets.

• Gross Margin is strong at 74.96%, reflecting high property-level efficiency.
• Operating Margin is squeezed to 12.10% by rising G&A and depreciation.
• The TTM Net Margin is -22.77%, primarily due to non-cash depreciation and a one-time $20.4 million charge in Q2 2025 for debt extinguishment.

Industry Comparison: Context is Crucial

When you compare CTO Realty Growth, Inc.'s profitability to the broader market, you have to use the right lens. Their Gross Margin of nearly 75% is far superior to the 30-50% typical for a traditional retail company, which is what their tenants are. This is simply because a REIT's cost of goods sold (COGS) is minimal-it's mostly property-related expenses, not inventory cost.

The negative Net Profit Margin of -22.77% (TTM) is not unusual for a REIT, but it is a warning sign that must be reconciled with cash flow metrics like Funds From Operations (FFO). For context, the Real Estate Development industry average Net Profit Margin can also be highly volatile, sometimes dipping to -16.35%. CTO's core business is sound, but its GAAP net income is heavily penalized by accounting rules. You should focus on the underlying cash flow to get the full picture, which we cover in detail in Breaking Down CTO Realty Growth, Inc. (CTO) Financial Health: Key Insights for Investors.

Next step: Check the Q4 2025 guidance on Core FFO to see if the leasing momentum is expected to convert into better cash-based earnings.

Debt vs. Equity Structure

You need to know how CTO Realty Growth, Inc. (CTO) funds its operations, and the quick takeaway is they rely on a slightly higher proportion of debt than the average real estate investment trust (REIT), but they are actively managing their maturity schedule.

As of the third quarter of 2025, CTO's total debt stood at approximately $608.6 million, balanced against total shareholder equity of roughly $557.3 million. This capital structure is typical for a REIT, a business that uses borrowed money to buy income-producing properties, but the balance is what matters. Their debt-to-equity (D/E) ratio is a key metric here.

The company's D/E ratio sits around 1.09 to 1.11 (or 109.2%). Honestly, that's a bit higher than the Real Estate sector average, which is about 97.4%. A ratio above 1.0 means debt is greater than equity, suggesting a significant reliance on debt financing, but still within a manageable range for a property-heavy business like this. The good news is they've been proactive in sorting out their long-term debt profile.

In September 2025, CTO closed on a significant $150 million term loan financing. This wasn't just piling on more debt; it was a smart refinancing move to extend their maturity schedule and reduce near-term risk. They used the proceeds to retire a $65 million term loan that was due in March 2026. That's a huge step in pushing out potential refinancing headaches.

• Secured a new $125 million term loan due September 2030.
• Upsized an existing term loan by $25 million, now due September 2029.
• Initial fixed interest rate for the new debt is approximately 4.2%, adjusting to roughly 4.7% in March 2026.

Here's the quick math on that move: they replaced a 2026 maturity with loans due in 2029 and 2030, securing a fixed rate in a high-interest environment. That provides welcome predictability. Still, their interest coverage ratio is low at 0.8x, meaning their earnings before interest and taxes (EBIT) don't fully cover their interest payments right now, which is a risk to watch.

CTO balances debt and equity funding through a mix of strategic transactions. For example, in April 2025, the company executed a debt-for-equity exchange, swapping approximately $35.2 million in 2025 Notes for 1,089,555 shares of common stock. This directly reduced debt by issuing new shares. Plus, they repurchased 571,473 shares for $9.3 million through October 2025, which is an equity-based move to return capital to shareholders and support the stock price. You can see their long-term strategy in their Mission Statement, Vision, & Core Values of CTO Realty Growth, Inc. (CTO).

The overall picture is a company leveraging debt to grow its property portfolio, a necessary evil in real estate, but one that requires careful management. The recent refinancing shows management is focused on extending maturities, which is a clear positive action for investors worried about a credit crunch.

Next Step: Check the upcoming earnings reports for any further changes to the interest coverage ratio, as that's defintely the near-term risk tied to this debt load.

Liquidity and Solvency

You need a clear picture of CTO Realty Growth, Inc.'s (CTO) ability to meet its short-term obligations, and honestly, the numbers for the 2025 fiscal year paint a strong, if slightly unusual, liquidity profile. The short-term picture is defintely solid, backed by substantial cash and credit capacity.

As of the most recent reporting, CTO's liquidity positions are excellent, which is a key comfort for a real estate investment trust (REIT) focused on growth. The company's Current Ratio, which measures current assets against current liabilities, stands at 3.96. Even more telling is the Quick Ratio (or acid-test ratio), which excludes less-liquid assets like inventory, coming in at 4.94.

Here's the quick math on what those ratios mean:

• Current Ratio of 3.96: CTO has nearly four dollars of current assets for every one dollar of short-term debt.
• Quick Ratio of 4.94: The ratio is higher than the current ratio, which is uncommon but indicates that the liquid assets (cash and receivables) are more than sufficient to cover all current liabilities, a sign of minimal short-term risk.

This strength translates directly into a healthy working capital trend. The fact that the Quick Ratio is so high confirms that CTO's working capital-the capital available for day-to-day operations-is not tied up in slow-moving assets. This is a sign of financial flexibility, bolstered by a total liquidity position of $170.3 million as of September 30, 2025, which includes cash on hand and undrawn credit facility commitments.

Cash Flow Statement Overview: Operations, Investing, and Financing

Looking at the Cash Flow Statement for the nine months ended September 30, 2025, you see a company actively managing its portfolio and capital structure.

Cash flow from operations (CFO) is the lifeblood of any company, and for CTO, it shows a strong operational cash generation, totaling $81.25 million year-to-date (YTD) through Q3 2025. This positive cash flow is what ultimately funds the dividend and is the foundation of the company's financial health.

The Investing Cash Flow (CFI) is where CTO is spending its capital, primarily for growth. YTD through Q3 2025, the company used $122.1 million in investing activities. This includes the acquisition of one multi-tenant income property for $79.5 million. This is a deliberate use of cash to expand the asset base, directly aligning with their strategy.

The Financing Cash Flow (CFF) shows significant activity, resulting in a net inflow of $48.57 million YTD through Q3 2025. This was driven by strategic moves, notably securing a $150.0 million term loan financing at an initial fixed interest rate of 4.2%, which was used in part to repay a $65.0 million term loan due in March 2026. They also repurchased 571,473 shares of common stock for $9.3 million.

This is a picture of a company using debt strategically to fund accretive acquisitions and manage its debt maturity schedule. You can learn more about the shareholder base in Exploring CTO Realty Growth, Inc. (CTO) Investor Profile: Who's Buying and Why?

Near-Term Liquidity Concerns and Strengths

While the liquidity ratios are strong, there are two points to watch. The first is that the high dividend payout ratio of 633.3% based on recent GAAP net income means the company is relying on its balance sheet and non-cash earnings (like depreciation) to cover the dividend. However, the more relevant metric for REITs, Funds From Operations (FFO), tells a better story, with the dividend covered by 122% based on the midpoint of the raised full-year 2025 Core FFO guidance of $1.84 to $1.87 per diluted share.

The core strength remains:

• High liquidity of $170.3 million provides a buffer.
• Strong operational cash flow (CFO) of $81.25 million YTD Q3 2025.
• Proactive debt management, extending maturities with the new $150.0 million term loan.

The risk is manageable because the operational cash flow (FFO) covers the dividend, and the high liquidity provides ample cushion. The firm is not facing an immediate liquidity crunch; it is simply managing its cash flow for growth and shareholder returns.

Valuation Analysis

You're looking at CTO Realty Growth, Inc. (CTO) and trying to figure out if the market has it priced right. As a seasoned analyst, I'll tell you straight: based on the latest 2025 fiscal year data, the consensus suggests CTO is undervalued, but you have to look past the misleading GAAP (Generally Accepted Accounting Principles) numbers, which is typical for a Real Estate Investment Trust (REIT).

The stock was trading around $17.09 as of mid-November 2025. Over the last 52 weeks, the price has seen a high of $20.88 and a low of $15.06, reflecting a -11.26% decline over that period. This dip is what's creating the current opportunity, but it also signals market skepticism you need to understand.

Decoding the Valuation Ratios

For a REIT, traditional metrics like the Price-to-Earnings (P/E) ratio can be misleading because of non-cash depreciation charges. CTO's trailing twelve-month (TTM) P/E ratio is a negative -13.46, which simply tells us the company had a net GAAP loss, not that it's a poor investment. You should focus on cash flow metrics instead.

Here's the quick math on the more relevant metrics for CTO, using data from the 2025 fiscal year:

• Price-to-Book (P/B): At 1.02, the stock is trading essentially at its book value. This is defintely a strong indicator of potential value, suggesting you aren't paying a large premium for the assets on the balance sheet.
• Price-to-Funds From Operations (P/FFO): This is the REIT equivalent of P/E. CTO's ratio is 13.68. This is a reasonable multiple for a retail-focused REIT, sitting below many high-growth peers.
• Enterprise Value-to-EBITDA (EV/EBITDA): The EV/EBITDA ratio is 12.89. This provides a clean look at the company's operating performance relative to its total value, including debt.

Dividend Health and Analyst Consensus

The dividend is a major part of the investment thesis here. CTO has an annualized dividend of $1.52 per share, resulting in an attractive dividend yield of about 8.8% based on the November 2025 price. What this estimate hides is the TTM GAAP payout ratio of -117.83%, which is negative because of the net loss. Still, the dividend is well-covered by its operational cash flow, with FFO coverage estimated at 118% to 120%.

Wall Street analysts are generally bullish. The consensus rating is a Buy, with an average one-year price target set at $22.00. This target implies an upside of over 28% from the current stock price of around $17.09. That's a clear opportunity for capital appreciation, plus you get the high dividend yield while you wait.

The core takeaway, as detailed in our full analysis on Breaking Down CTO Realty Growth, Inc. (CTO) Financial Health: Key Insights for Investors, is that CTO Realty Growth, Inc. is priced for a turnaround that is already showing up in its Funds From Operations (FFO) and leasing spreads, not its GAAP earnings.

Risk Factors

You're looking at CTO Realty Growth, Inc. (CTO) and seeing strong operational metrics, like a 94.2% leased occupancy rate in Q3 2025, but a seasoned analyst knows to look past the headline numbers to the underlying risks. The biggest near-term challenge for CTO is managing its cost of capital and ensuring dividend sustainability in a high-interest-rate environment. That's the core of the financial risk right now.

The company's net income attributable to the company for Q3 2025 was $2.9 million, a notable drop from the $6.2 million in the prior year, and this was primarily due to increased interest expenses. That higher cost of debt directly impacts the bottom line, which is why the current dividend payout ratio is a flashing yellow light. Honesty, the current payout ratio of 633.3% means the dividend isn't covered by recent earnings, so the company is relying on its balance sheet to maintain that attractive yield.

Here's the quick math on the financial leverage: As of Q1 2025, CTO's net debt to Pro Forma Adjusted EBITDA stood at 6.6 times. While management is actively addressing debt, this ratio is a key indicator of financial flexibility, and a higher number means less wiggle room if market conditions worsen.

The external environment adds significant pressure. As a Real Estate Investment Trust (REIT), CTO is exposed to macroeconomic and geopolitical factors that can quickly erode value. We're talking about the big-picture risks that are hard to defintely control:

• Inflationary Pressures: Higher costs for property maintenance and development.
• Interest Rate Volatility: Increases the cost of future borrowings and refinancings.
• General Real Estate Conditions: A downturn in the retail sector could hurt leasing demand.
• REIT Qualification: Failure to meet complex tax requirements could fundamentally change the business model.

On the operational front, there's a geographic concentration that warrants attention. As of September 30, 2025, the portfolio's square footage is concentrated with 32% in Georgia, 19% in North Carolina, 17% in Texas, and 16% in Florida. This focus on the Southeast and Southwest is a growth strategy, but it also creates a concentration risk if one of those regional economies faces an unexpected downturn.

The good news is that management is executing clear mitigation strategies, especially on the debt front, which is a smart move right now. In September 2025, they closed on a $150 million term loan financing, using the proceeds to retire the majority of their 2026 maturities-specifically, a $65 million term loan due in March 2026. This extends the debt maturity profile and locks in an initial fixed interest rate of approximately 4.2% on the new loans, which is a key de-risking action against rate hikes. Also, the company's leasing team is doing heavy lifting, with a signed-not-open (SNO) pipeline representing $5.5 million in future NOI, which should start to boost earnings in the near term.

To be fair, the company's success in re-leasing vacant space is a significant opportunity, with new leases signed in Q1 2025 at an impressive 82% cash spread over previous rents, showing embedded value in the portfolio. But still, the key is execution and getting those tenants to commence paying rent.

Here is a summary of the most pressing risks and the company's direct response:

For a deeper dive into the company's long-term philosophy, check out their Mission Statement, Vision, & Core Values of CTO Realty Growth, Inc. (CTO).

Action for you: Review the Core FFO guidance range of $1.80 to $1.86 per diluted share for 2025 and model how much of the dividend is covered by FFO versus balance sheet drawdowns, especially if interest rates move higher than expected.

Growth Opportunities

You're looking for a clear path to growth, not just a high dividend, and the good news is that CTO Realty Growth, Inc. (CTO) has a few strong, near-term tailwinds. The core of their strategy is simple: buy high-quality, open-air shopping centers in the fastest-growing markets-think the Southeast and Southwest US-and then execute strong leasing deals. It's a trend-aware, boots-on-the-ground approach.

This focus on high-growth regions is defintely paying off. In the first quarter of 2025, CTO acquired Ashley Park, a lifestyle center in the Atlanta, Georgia, submarket, for $79.8 million, which immediately expanded their footprint in a desirable area. This isn't a complex product innovation; it's smart real estate investing. Plus, they're actively filling vacant space, which is a clear path to higher revenue.

Here's the quick math on their leasing momentum:

• Leasing Spreads: Year-to-date through June 2025, comparable leases saw a 26.6% growth in cash base rent. That's huge rent roll growth.
• Future Revenue Pipeline: The signed-not-open (SNO) pipeline-leases signed but not yet paying rent-stands at $4.6 million in annual cash base rent, representing 4.6% of their in-place Annual Base Rent (ABR). This provides clear earnings tailwinds into 2026.
• Occupancy: Leased occupancy is strong at 94.2% as of Q3 2025.

The company's strategic initiatives are focused on funding this growth and managing their capital structure. They recently secured a $150 million term loan financing, which gives them the financial flexibility to pursue new acquisitions and manage existing debt. Also, they authorized a new $10 million common stock repurchase program in Q3 2025, signaling management's confidence in the stock's value.

For the full 2025 fiscal year, analysts see consensus revenue estimates around $149.02 million. More importantly for a REIT, management recently raised their guidance for Core Funds From Operations (FFO) to a range of $1.84 to $1.87 per diluted share, and Adjusted FFO (AFFO) to $1.96 to $1.99 per diluted share. This raised guidance, coming on the heels of a Q3 2025 FFO beat of $0.50 per share, shows their operational strength is accelerating.

Their competitive advantage is twofold: they are geographically focused on high-growth markets, and they offer a compelling income opportunity. Their annualized dividend yield is approximately 8.8%, which significantly outpaces the peer average of 4.8%. This high yield, coupled with a 2025 Core FFO multiple of 9.4x (compared to the peer average of 12.3x), suggests the stock is attractively valued relative to its cash flow generation potential.

Here is a summary of the 2025 financial outlook:

To understand the long-term vision behind these numbers, you should review the company's foundational principles: Mission Statement, Vision, & Core Values of CTO Realty Growth, Inc. (CTO).

Next Step: Finance: Model a scenario where the $4.6 million SNO pipeline is fully realized in 2026 to project the impact on next year's FFO.