Bore Family Office
Valuation Report — CTO Realty Growth (CTO) • March 9, 2026
3-Stage DDM (Ke) • Discount Rate: 9.00% • Current Price: $19.77
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
CTO Realty Growth is a Daytona Beach, FL-based REIT that owns and operates a diversified portfolio of open-air retail properties across high-growth Sun Belt markets. Originally Consolidated-Tomoka Land Company (founded 1929), CTO converted to REIT status in 2020 to unlock value from its commercial real estate holdings. The company also has an ~18% interest in Alpine Income Property Trust (PINE), a publicly traded net lease REIT that CTO helped create in 2019.
CTO's portfolio (FY2025) consists of approximately 20-25 multi-tenant retail centers concentrated in Florida, the Carolinas, Georgia, and Texas — all high-population-growth Sun Belt corridors. The company actively recycles capital: selling older/lower-growth properties and deploying proceeds into newer, higher-productivity centers.
| Segment | Description | % Revenue | Revenue (FY25) | YoY Growth | Notes |
|---|
| Multi-Tenant Retail | Open-air shopping centers — Sun Belt markets | ~70% | ~$105M | +20% | Core portfolio |
| Single-Tenant Net Lease | Net lease via PINE stake + direct | ~15% | ~$22M | +15% | Lower risk, fixed escalators |
| Loans & Other | CRE loans, management fees from PINE, other income | ~15% | ~$22M | +25% | Higher yield, some credit risk |
Property NOI has grown strongly as CTO recycled capital from older assets into Sun Belt retail with better demographics. The PINE stake provides fee income and dividend income. Key risk: high leverage ($616M LTD on $1.26B assets = 49% LTV) limits financial flexibility and constrains DPS growth. Rising interest rates have pressured FFO coverage.
📊 Financial Snapshot
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|
| Revenue ($M) | $70,270 | $82,320 | $109,120 | $124,520 | $149,550 |
| EBITDA ($M) | $63,900 | $92,280 | $123,490 | $140,800 | $168,870 |
| Operating Income ($M) | $43,320 | $63,420 | $79,320 | $75,750 | $108,860 |
| Net Income ($M) | $27,620 | $-1,620 | $760 | $-8,780 | $2,580 |
| EPS (diluted) | $1.56 | $-0.09 | $0.03 | $-0.35 | $0.08 |
| Free Cash Flow ($M) | $-228,800 | $-257,830 | $-56,640 | $-182,030 | $-95,630 |
| Annual DPS | $1.330 | $1.490 | $1.520 | $1.520 | $1.520 |
| Total Debt ($M) | $278,270 | $445,580 | $495,370 | $518,990 | $616,350 |
| Rev YoY Growth | — | +17.1% | +32.6% | +14.1% | +20.1% |
⚙️ Ke (DDM)
| Input | Value | Notes |
|---|
| Risk-Free Rate (Rf) | 4.30% | 10-yr US Treasury yield |
| Beta (β) | 0.850 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 9.00% | Ke = Rf + β × ERP |
📈 DDM Scenarios
📋 Full 10-Year Projection Tables
Bear Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|
| Year 1 | Stage 1 | $1.520 | $1.394 | $1.39 |
| Year 2 | Stage 1 | $1.520 | $1.279 | $2.67 |
| Year 3 | Stage 1 | $1.520 | $1.174 | $3.85 |
| Year 4 | Stage 1 | $1.520 | $1.077 | $4.92 |
| Year 5 | Stage 1 | $1.520 | $0.988 | $5.91 |
| Year 6 | Stage 2 | $1.520 | $0.906 | $6.82 |
| Year 7 | Stage 2 | $1.520 | $0.831 | $7.65 |
| Year 8 | Stage 2 | $1.520 | $0.763 | $8.41 |
| Year 9 | Stage 2 | $1.520 | $0.700 | $9.11 |
| Year 10 | Stage 2 | $1.520 | $0.642 | $9.75 |
| Terminal | — | TV=$22.15 | PV(TV)=$9.36 (49% of IV) | |
Base Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|
| Year 1 | Stage 1 | $1.566 | $1.436 | $1.44 |
| Year 2 | Stage 1 | $1.613 | $1.357 | $2.79 |
| Year 3 | Stage 1 | $1.661 | $1.283 | $4.08 |
| Year 4 | Stage 1 | $1.711 | $1.212 | $5.29 |
| Year 5 | Stage 1 | $1.762 | $1.145 | $6.43 |
| Year 6 | Stage 2 | $1.797 | $1.072 | $7.51 |
| Year 7 | Stage 2 | $1.833 | $1.003 | $8.51 |
| Year 8 | Stage 2 | $1.870 | $0.938 | $9.45 |
| Year 9 | Stage 2 | $1.907 | $0.878 | $10.32 |
| Year 10 | Stage 2 | $1.945 | $0.822 | $11.15 |
| Terminal | — | TV=$30.68 | PV(TV)=$12.96 (54% of IV) | |
Bull Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|
| Year 1 | Stage 1 | $1.611 | $1.478 | $1.48 |
| Year 2 | Stage 1 | $1.708 | $1.437 | $2.92 |
| Year 3 | Stage 1 | $1.810 | $1.398 | $4.31 |
| Year 4 | Stage 1 | $1.919 | $1.359 | $5.67 |
| Year 5 | Stage 1 | $2.034 | $1.322 | $7.00 |
| Year 6 | Stage 2 | $2.115 | $1.261 | $8.26 |
| Year 7 | Stage 2 | $2.200 | $1.204 | $9.46 |
| Year 8 | Stage 2 | $2.288 | $1.148 | $10.61 |
| Year 9 | Stage 2 | $2.380 | $1.096 | $11.70 |
| Year 10 | Stage 2 | $2.475 | $1.045 | $12.75 |
| Terminal | — | TV=$42.48 | PV(TV)=$17.95 (58% of IV) | |
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|
| 7.0% | $30 | $32 | $35 | $38 | $41 |
| 7.5% | $28 | $29 | $31 | $34 | $36 |
| 8.0% | $26 | $27 | $28 | $30 | $32 |
| 8.5% | $24 | $25 | $26 | $28 | $29 |
| 9.0% | $22 | $23 | $24 | $25 | $27 |
| 9.5% | $21 | $22 | $22 | $23 | $24 |
| 10.0% | $20 | $20 | $21 | $22 | $23 |
| 10.5% | $19 | $19 | $20 | $20 | $21 |
| 11.0% | $18 | $18 | $18 | $19 | $20 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | P/FFO | Yield | EV/EBITDA | Leverage | Notes |
|---|
| CTO | 4.3x | 7.7% | 6.8x | 49% LTV | Self |
| PINE | 7.5x | 7.0% | 9.2x | 42% LTV | CTO's PINE stake vehicle |
| NNN | 11.5x | 5.7% | 14.2x | 40% LTV | Investment grade net lease |
| WPC | 10.8x | 6.2% | 13.5x | 43% LTV | Diversified net lease |
| Retail REITs avg | 9.5x | 6.0% | 12.0x | 40-45% | Peer group |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|
| Annual DPS | $1.520 |
| Current Yield | 7.69% |
| Consecutive Growth Years | 3 |
| 1-yr DPS CAGR | +0.0% |
| 3-yr DPS CAGR | +0.7% |
| 5-yr DPS CAGR | +1.4% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 1900.0% ⚠️ |
| FCF Payout Ratio | 0.0% |
| Sustainability Verdict | Safe |
CTO FFO/share ~$4.61 (FY2025) vs DPS $1.52 = 33% FFO payout — very conservatively funded. The dividend is well-covered by operating cash flow ($64.6M vs $56.6M in dividends paid). Dividend is flat since 2022 reflecting management's focus on leverage reduction over distribution growth. Expect modest DPS increases as leverage normalizes. SAFE rating — no threat to current dividend.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
| 2021 | $1.56 | — | — | — | Actual |
| 2022 | $-0.09 | — | — | — | Actual |
| 2023 | $0.03 | — | — | — | Actual |
| 2024 | $-0.35 | — | — | — | Actual |
| 2025 | $0.08 | — | — | — | Actual |
| 2026 | $0.08 | $0.14 | $0.23 | 4 | Estimate |
| 2027 | $0.14 | $0.14 | $0.15 | 3 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
| 2021 | $70.3B | — | — | — | Actual |
| 2022 | $82.3B | — | — | — | Actual |
| 2023 | $109.1B | — | — | — | Actual |
| 2024 | $124.5B | — | — | — | Actual |
| 2025 | $149.6B | — | — | — | Actual |
| 2026 | $150.5B | $160.9B | $173.9B | 4 | Estimate |
| 2027 | $137.9B | $165.4B | $188.4B | 3 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $21.50 | Range $21–$22
| Analyst | Firm | Rating | PT | Upside |
|---|
| RJ Milligan | Raymond James | Strong Buy | $22 | +11.3% |
| Jason Weaver | Jones Trading | Strong Buy | $21 | +6.2% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|
| Q4 2025 | $0.02 vs $0.02 | +$0.00 ✅ | $41.5B vs $40.0B | +$1.5B ✅ | In-line |
| Q3 2025 | $0.06 vs $0.05 | +$0.01 ✅ | $38.7B vs $37.5B | +$1.2B ✅ | In-line |
| Q2 2025 | $0.05 vs $0.04 | +$0.01 ✅ | $36.4B vs $35.0B | +$1.4B ✅ | In-line |
| Q1 2025 | $-0.05 vs $-0.06 | +$0.01 ✅ | $32.9B vs $32.0B | +$0.9B ✅ | In-line |
(e) Confidence Band Commentary
Very thin analyst coverage (only 2 price targets) makes consensus PT ($21.50) unreliable. GAAP EPS is meaningless for REITs — focus on FFO/share ($4.61) and DPS coverage. PT range is tight ($21-$22) but reflects a heavily discounted NAV multiple. The stock is a yield play: at 7.7% yield with flat-to-modest DPS growth, it prices in essentially zero capital appreciation thesis.
💡 Investment Thesis
Bull Case — Sun Belt Retail + Capital Recycling: CTO trades at a significant discount to NAV and peer P/FFO multiples (~4.3x vs peer avg ~9.5x). The discount reflects leverage concerns but management has been successfully recycling capital into higher-growth Sun Belt assets. Revenue grew 20% in FY2025. If leverage normalizes to 40% LTV and DPS increases to $1.80+/yr by 2027, the stock could re-rate to $22-25 on a 7.5% yield basis.
Bear Case — High Leverage + Rate Sensitivity: With $616M of debt and only $6.5M cash, CTO has very limited financial flexibility. Interest expense ($26.9M in FY2025) consumes 25% of operating cash flow ($64.6M). Rate hikes would directly crimp FFO. If retail property values decline, forced asset sales at below-NAV prices could be dilutive. The preferred stock outstanding adds another layer of capital structure complexity.
Base Assumptions: Dividend stays flat at $1.52 through 2026, modest $0.04-$0.06 increases annually thereafter as FFO coverage grows. Sun Belt retail fundamentals remain supportive. No major dilutive equity raise needed near term. The 7.7% yield at current price provides adequate income return given position size (1,895 shares, ~$37K position).
⚖️ DDM Verdict: Hold — CTO Realty Growth (CTO)
Current price: $19.77 | Analyst Avg PT: $21.50
| Tier | Price | Action |
|---|
| Tier 1 — Starter | ≤$18 | Begin position |
| Tier 2 — Add | ≤$18 | Add on weakness |
| Tier 3 — Full | ≤$16 | Full allocation |
| Sell Alert | ≥$23 | Above fair value — consider trimming |
📂 Current Position Summary
| Metric | Value |
|---|
| Shares Held | 5,978 |
| Average Cost Basis | $18.70 |
| Current Market Value | $118,185 |
| Unrealized P&L | $+6,396 (+5.7%) |
| Annual DPS | $1.520/yr |
| Annual Dividend Income | $9,087/yr |
| Current Yield (at price) | 7.69% |
| Yield on Cost | 8.13% |
| vs Target (~$200K) | $118,185 / $200,000 (59%) |
Bore Family Office • Analysis generated by Lurch • Not investment advice.
