CTO Realty Growth, Inc. (CTO): BCG Matrix [Dec-2025 Updated]

You're looking at CTO Realty Growth, Inc.'s portfolio strategy, and honestly, the Boston Consulting Group Matrix tells a clear story about where the capital is working hardest right now. We see high-growth Sun Belt retail assets acting as Stars, driving 21.7% weighted average base rent spreads, supported by the steady income from mature retail Cash Cows that reliably fund the 8.8% dividend yield. Still, the key is understanding the capital recycling from Dogs-like the small office segment-and how the company manages the risk embedded in its $108 million structured investments, which carry a 10.65% yield but also higher credit risk, all while keeping leverage in check at 6.7x Net Debt-to-EBITDA. Dive in below to see the specific assets powering this balance and where CTO needs to focus its next big allocation decision.

Background of CTO Realty Growth, Inc. (CTO)

You're looking at CTO Realty Growth, Inc. (CTO), which is a real estate investment trust, or REIT, focusing on owning and operating retail properties. Honestly, their strategy centers on high-growth U.S. markets, specifically in the Southeast and Southwest regions, often called the Sun Belt states. They've been busy transforming their holdings since 2019, moving away from a more diverse mix to a heavy concentration in multi-tenant retail.

This transformation is significant; by mid-2025, multi-tenant retail made up 95% of their Annual Base Rent (ABR). The portfolio structure, based on Q2 2025 figures, leaned heavily into lifestyle centers at 34% and power centers at 40%, with grocery-anchored retail making up about 20% of the space. As of late 2025, CTO also brings in fee-based revenue by externally managing and holding a stake in another REIT, Alpine Income Property Trust, Inc. (PINE).

Operationally, things looked solid heading into the end of 2025. For the third quarter ending September 30, 2025, CTO reported same-property Net Operating Income (NOI) growth of 2.3% year-over-year. Leasing momentum has been a real driver; over the first nine months of 2025, they signed nearly 482,000 square feet of leases, achieving a robust 21.7% comparable rent spread. By the end of Q3 2025, the overall leased occupancy rate stood at a healthy 94.2%.

Financially, management raised its full-year 2025 guidance for Core Funds From Operations (FFO) per share to a range between $1.80 and $1.86. To manage the balance sheet, CTO closed on $150.0 million in new term loan financings at a fixed rate of 4.2% in Q3 2025, while also using $9.3 million to repurchase shares. As of September 30, 2025, the company reported $170.3 million in liquidity, which helps cover their annualized dividend of $1.52 per share, yielding close to 9%.

CTO Realty Growth, Inc. (CTO) - BCG Matrix: Stars

The Star quadrant represents CTO Realty Growth, Inc.'s business units operating in high-growth markets with a leading market share, demanding significant investment to maintain that position.

The leasing execution across the portfolio, heavily weighted toward Sun Belt retail assets, demonstrates this high-growth, high-share dynamic, evidenced by year-to-date comparable leasing results.

• - High-growth Sun Belt retail assets driving 21.7% weighted average base rent spreads in the first nine months of 2025.
• - Value-add repositioning of anchor boxes is targeted to yield 40% to 60% higher new rents upon re-leasing of the remaining vacant spaces.
• - The $5.5 million Signed-Not-Open (SNO) pipeline, representing approximately 5.3% of annual cash base rent in place as of the end of Q3 2025, provides clear future growth visibility.
• - Strategic investment activity includes the $137.5 million acquisition of a three-property portfolio in August 2024, expanding footprint into high-demand markets like Charlotte and Tampa.

This leasing success is translating directly into higher current cash rents, which is the hallmark of a Star segment capturing market premium.

The repositioning of large spaces, where CTO Realty Growth, Inc. has a mark-to-market opportunity, shows the potential for substantial near-term cash flow improvement. You're seeing the upfront investment in leasing and repositioning consume cash now to secure higher returns later.

The SNO pipeline is critical because it shows committed future revenue that hasn't started paying yet, which is typical for a Star needing support before it fully converts to cash flow.

• - Total SNO pipeline value as of October 28, 2025: $5.5 million in annualized cash rent.
• - Estimated recognition of SNO pipeline in 2026: Approximately 76% of the $5.5 million.
• - Full recognition of SNO pipeline: 100% by 2027.
• - Anchor box leasing goal: Positive cash leasing spread of 40% to 60%.

The acquisition of the Three Property Portfolio for $137.5 million in August 2024, which includes Carolina Pavilion in Charlotte and Lake Brandon Village in Tampa, was a deployment of capital into high-growth markets to secure or enhance market share, fitting the investment profile for a Star asset class.

The company's liquidity position as of September 30, 2025, was $170.3 million, which is the necessary support to fund the ongoing leasing and repositioning efforts required by these high-potential assets.

CTO Realty Growth, Inc. (CTO) - BCG Matrix: Cash Cows

Cash Cows represent the bedrock of CTO Realty Growth, Inc.'s financial stability, characterized by high market share in mature, steady segments of the retail real estate market. These assets generate substantial cash flow that funds corporate obligations and shareholder returns.

Core Portfolio Stability and Income Predictability

• - Core retail portfolio occupancy is stable, recently reported at 94.2% leased as of the third quarter of 2025, following a 93.9% rate in the second quarter of 2025, demonstrating reliable, predictable income streams.

The consistent high occupancy across the established portfolio underpins the commitment to shareholder returns. This reliable cash flow directly supports the distribution policy.

• - Stable cash flow supports the high annualized common dividend of $1.52 per share, derived from the fourth quarter 2025 quarterly declaration of $0.38 per share, which implies an annualized yield of approximately 8.8% based on the November 17, 2025 closing price.

The composition of the portfolio leans heavily into asset types known for steady performance in mature markets. These are the properties that require less aggressive capital deployment for growth and more for maintenance and efficiency improvements.

• - Dominant power and grocery-anchored centers, which comprise up to 48% of annualized base rent when including shadow-anchored assets, are mature, steady performers, with power centers making up 40% and grocery-anchored retail at 20% of ABR as of mid-2025.

The modest growth profile confirms the maturity of these assets, which is typical for a Cash Cow segment. While leasing activity shows strong pricing power, the overall portfolio growth rate reflects a stable base rather than rapid expansion.

This modest growth, evidenced by the full-year guidance of approximately 1.0% for Same-Property NOI, indicates maturity. Still, the quarterly results, such as the 2.3% year-over-year increase in Q3 2025, show these assets are effectively managed and can generate incremental cash flow through active leasing, like the 21.7% comparable rent spread achieved year-to-date through September 2025.

CTO Realty Growth, Inc. (CTO) - BCG Matrix: Dogs

You're looking at the units CTO Realty Growth, Inc. (CTO) is actively pruning to sharpen its focus on higher-growth Sun Belt retail. These Dogs are characterized by low market share in low-growth areas, and the action here is clear: minimize exposure and harvest capital. The remaining non-core office segment is a prime example, accounting for only 4% of Annualized Base Rent (ABR) as of the latest reporting. This small slice of the portfolio represents the low-growth, low-return assets management is moving away from to fund core acquisitions.

The strategy for these units is recycling capital, not expensive turnarounds. You see this clearly in the disposition of legacy non-Sun Belt properties, which are being sold off to generate cash for reinvestment into strategic Sun Belt shopping centers. Honestly, tying up capital in these low-momentum assets just doesn't make sense when you have high-growth opportunities available. For context on this capital recycling, look at the recent sales activity:

The sale of the Main Street properties in Daytona Beach in August 2025 is a perfect illustration of this divestiture approach. CTO Realty Growth announced the sale for \$7.1 million, generating a gain on sale of approximately \$1.1 million. To be fair, the transaction included seller financing of \$5.0 million over 5 years at a 6.50% annual rate. This asset was disposed of at an exit cash cap rate of 10.0%. This move aligns with the stated intent to recycle proceeds into larger format shopping centers in high-growth Southeast and Southwest markets, continuing the portfolio transformation that saw the exit of the non-Sun Belt Jordan Landing property for \$18.0 million in 2024.

These dispositions help maintain the strength of the core portfolio, which as of September 30, 2025, boasted a leased occupancy of 94.2%. The cash generated, along with the \$150.0 million in new term loan financings closed in Q3 2025, supports ongoing operations and growth initiatives, leaving the Company with \$170.3 million in liquidity at that same date. The pipeline of future revenue from signed-not-open leases stood at \$5.5 million, or 5.3% of in-place annual cash base rent as of October 28, 2025. Finance: draft 13-week cash view by Friday.

CTO Realty Growth, Inc. (CTO) - BCG Matrix: Question Marks

You're analyzing the segments of CTO Realty Growth, Inc. (CTO) that fit the Question Mark quadrant-high market growth potential but currently low market share, meaning they consume cash while awaiting a significant payoff. These are the areas demanding heavy investment to capture market share quickly or risk becoming Dogs.

One area fitting this profile is the $108 million structured investments portfolio. This portfolio currently delivers a high yield of 10.65%, but this return comes with the acknowledgment of higher associated credit risk, which is a key factor in its Question Mark status-high potential return balanced by elevated risk exposure. This investment strategy requires careful monitoring to ensure the expected growth materializes without significant write-downs.

Another component requiring capital and strategic focus is the external management of and investment in Alpine Income Property Trust (PINE). This arrangement provides CTO Realty Growth, Inc. with an estimated $7.0 million in annual income, yet this income stream is derived from a non-controlling interest, fitting the low-market-share aspect of a Question Mark. The performance of PINE directly impacts this fee-based revenue source.

Properties with significant recent anchor vacancies represent a clear cash drain and repositioning challenge. For instance, management confirmed that six of ten vacant anchor boxes have been leased, but negotiations continue for the remaining four. Management is targeting a positive cash leasing spread of 40% to 60% across these ten anchor spaces, but the time and capital expenditure needed to fully stabilize these large spaces are substantial, consuming cash now for future growth.

Finally, the overall balance sheet structure demands careful capital management, which is typical for a Question Mark strategy requiring investment. As of September 30, 2025, the overall leverage remains somewhat elevated at 6.7x Net Debt-to-EBITDA. This ratio, though slightly improved from 6.9x in Q2 2025, necessitates prioritizing debt reduction or ensuring new investments rapidly generate sufficient cash flow to improve this metric.

Here's a quick look at the key financial characteristics defining these Question Mark elements for CTO Realty Growth, Inc. as of late 2025:

The strategy here is clear: invest heavily in leasing up the remaining vacancies and manage the leverage while waiting for the structured investments to mature favorably. If the leasing momentum falters or credit issues arise in the portfolio, these assets quickly shift into the Dog category.