NEW YORK, Aug. 09, 2025 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against CTO Realty Growth, Inc. (“CTO” or the “Company”) (NYSE: CTO) and certain officers.   The class action, filed in the United States District Court for the Middle District of Florida, and docketed under 25-cv-01516, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired CTO securities between February 18, 2021 and June 24, 2025, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.

If you are an investor who purchased or otherwise acquired CTO securities during the Class Period, you have until October 7, 2025, to ask the Court to appoint you as Lead Plaintiff for the class.  A copy of the Complaint can be obtained at www.pomerantzlaw.com.   To discuss this action, contact Danielle Peyton at newaction@pomlaw.com or 646-581-9980 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.   

[Click here for information about joining the class action]

CTO is a publicly traded real estate investment trust (“REIT”) that owns and operates a portfolio of purported high-quality, retail-based properties located primarily in higher growth markets in the United States (“U.S.”). The Company converted into a REIT in February 2021 and, as of December 31, 2024, owned 23 income properties in seven states, including Ashford Lane, a retail and dining center in Atlanta, Georgia.

Under guidelines established by the U.S. Securities and Exchange Commission (“SEC”), REITs must pay out at least 90% of their taxable profits to shareholders annually as dividends. In return, REIT companies are exempt from most corporate income tax. CTO has touted that its operation as a REIT “provides the tax-efficient organizational structure for [its] stockholders” that “will allow [it] to provide them with an attractive and sustainable dividend.”

To measure its performance, CTO uses the financial metric Adjusted Funds from Operations (“AFFO”). The AFFO of a REIT, though subject to varying methods of computation, is generally equal to the REIT’s funds from operations with adjustments made for recurring capital expenditures (also referred to as “capex”) used to maintain the quality of the REIT’s underlying assets. Professional analysts tend to prefer AFFO because it takes into consideration additional costs incurred by the REIT as well as additional income sources, such as rent increases. Thus, analysts believe that AFFO provides for a more accurate base number when estimating present values and a better predictor of the REIT’s future ability to pay dividends.

The Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) CTO’s dividends were less sustainable than Defendants had led investors to believe; (ii) the Company used deceptive and unsustainable practices to artificially inflate its AFFO and overstate the true profitability of its Ashford Lane property; (iii) accordingly, CTO’s business and/or financial prospects were overstated; and (iv) as a result, Defendants’ public statements were materially false and misleading at all relevant times.

On June 25, 2025, Wolfpack Research (“Wolfpack”) published a report entitled “CTO: The B. Riley of REITs” (the “Wolfpack Report” or the “Report”), which compared CTO unfavorably to B. Riley, a financial services company that recently lost more than 90% of its value amid three years of losses, soured investments, delayed financial reports and revelations that the SEC had been investigating whether the firm gave shareholders an accurate picture of its health.  Citing interviews with former employees and whistleblowers, the Wolfpack Report accused CTO of, among other things, “not generat[ing] enough cash to pay its recurring capex and cover its dividends since converting to a REIT in 2021” and instead “rel[ying] on dilution (increasing shares outstanding by 70% since December 2022) to cover a $38 million dividend shortfall from 2021 to 2024,” employing a “manipulative definition of [AFFO] where they exclude recurring capex, unlike all of their self-identified shopping center REIT peers,” and “us[ing] a sham loan to hide the collapse of a top tenant from shareholders at Ashford Lane.” (Emphasis in original).   Further, Wolfpack predicted imminent further dilution of the Company, noting that CTO has just $8.4 million in cash while facing quarterly dividends of $14 million and average recurring capital expenditures of $5.7 million per quarter, along with approximately $12 million in additional planned capital expenditures.

On this news, CTO’s stock price fell $0.98 per share, or 5.42%, to close at $17.10 per share on June 25, 2025.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com. 

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CONTACT: 
Danielle Peyton 
Pomerantz LLP 
dpeyton@pomlaw.com 
646-581-9980 ext. 7980