CTO Realty Growth, Inc. (CTO) Investigation

CTO represents itself as a “self-managed equity REIT that focuses on the ownership, management, and repositioning of high-quality retail and mixed-use properties[.]”

The investigation is focused on the propriety of CTO’s assurances to investors that it adheres to applicable accounting rules and its use of certain non-GAAP accounting metrics.

CTO’s statements may have come into question on June 25, 2025, when Wolfpack published its report based, in part, on interviews with former employees and whistleblowers, in which it accuses CTO’s management team of:

• “[L]ying to investors about the sustainability of their dividend while enriching themselves[;]” and
• “[E]ngag[ing] in accounting shenanigans like using a sham loan to cover up a top tenant’s failure.”

In contrast to CTO’s assurances of “high-quality retail and mixed-use” exposures, Wolfpack identified a subset of CTO properties in extreme financial distress and concluded that CTO is focused on buying and managing aging shopping centers, has not generated sufficient cash to pay its recurring capex, and relies on dilution to cover a $38 million dividend shortfall.

The “linchpin of management’s deception,” according to Wolfpack, is its “manipulative definition of Adjusted Funds From Operation (AFFO) where they exclude recurring capex, unlike all of their self-identified shopping center REIT peers[]” and management “uses the same non-GAAP metric for 70% of its performance pay, inflating $8 million in bonuses we think they never should have received[.]”

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the CTO investigation about?

We are investigating whether CTO may have misled investors about the quality of its real estate portfolio, the reported asset values, and/or the propriety of its use of AFFO.

WHAT SHOULD I DO?

I worked at CTO. What should I do?

If you were an employee of CTO, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in CTO, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any CTO investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.