Rithm Property Trust (RPT) Earnings Transcript

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DATE

Friday, Feb. 13, 2026 at 8 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Michael Nierenberg
• Chief Financial Officer — Nick Santoro
• Associate General Counsel — Emma Bolla

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TAKEAWAYS

• GAAP Net Income -- $2.5 million reported for the quarter with flat earnings highlighted after the June 2024 management transition.
• Earnings Available for Distribution (EAD) -- Negative $500,000, equating to $0.06 loss per diluted share.
• Book Value -- Approximately $300 million, or $31 per diluted share.
• Common Dividend -- Maintained at an 8.7% yield, with management stating they "are going to continue to pay that dividend."
• Cash and Liquidity -- Roughly $100 million as of quarter-end, described as "in great shape."
• Market Price Discount -- Shares priced at $15.15 represent "roughly 50% of book," according to management comments.
• Reverse Split -- Executed on a 6-to-1 basis, increasing share price from around $2 to between $15 and $16 to "hopefully attract more interest."
• Recapitalization Plan -- Management indicated a clear goal to recapitalize, targeting future annual earnings per share between $1.00 and $1.70 and a 9% dividend yield, contingent on capital formation.
• Paramount Transaction -- Rithm Property Trust (NYSE:RPT) holds $50 million of Paramount's transaction on its balance sheet, with expected earnings impact proportional to this stake.
• Genesis Business Production -- Projected $6 billion to $7 billion of multifamily loan production this year, a significant rise from $1.7 billion in 2022.
• Multifamily Pipeline -- Approximately $1 billion of identified multifamily assets could be placed into the vehicle, pending board approval, expected to trigger "an immediate pop in earnings."
• Fannie/Freddie Licensing -- Management is "currently working on" acquiring licenses to serve as a Fannie Mae or Freddie Mac multifamily servicer or originator.
• Third-Party Loan Sourcing -- The company has established flow agreements with several originators and is increasing channels for sourcing third-party multifamily and sponsored loans.
• Portfolio Discipline -- Leadership underscored that, "we have to be mindful of our credit box," especially when sourcing third-party credit, emphasizing risk controls.

SUMMARY

Management declared a strategic vision centered on recapitalization, opportunistic commercial real estate growth, and accretive deployment of multifamily loan assets sourced primarily from the Genesis platform. Explicit capital constraints were acknowledged, with leaders signaling that additional equity will not be issued at current discount-to-book pricing levels unless highly accretive. The company outlined a target for acquiring licenses to vertically integrate Fannie/Freddie servicing and origination, aiming for end-to-end customer capture across multifamily finance. Diversified sourcing, including both internal originations and third-party flow agreements, is being pursued to accelerate earnings and mitigate market timing risks linked to sector dislocations.

• Leadership stressed that the long-term plan includes leveraging operational synergies with related businesses to achieve both earnings and dividend growth.
• The balance sheet remains positioned for opportunistic investments, with $100 million in liquidity and notable asset flexibility highlighted in management commentary.
• Rithm Property Trust's exposure to the $1.6 billion Paramount acquisition is limited to its $50 million stake, clarifying the proportional nature of future income streams.
• Senior management described a market environment in which regional banks are retreating from multifamily lending, providing Rithm's Genesis platform with a competitive opening.

INDUSTRY GLOSSARY

• Earnings Available for Distribution (EAD): A non-GAAP metric often used by REITs to represent recurring cash earnings available for dividends, distinct from standard GAAP net income.
• Book Value per Share: The total equity attributable to common shareholders divided by the number of diluted shares outstanding, a critical valuation benchmark for REIT investors.
• J-curve: A phenomenon in investment return profiles where initial periods show losses or low returns before a significant eventual upswing as investments season or assets are deployed.
• Non-QM: Mortgage loans that do not meet "qualified mortgage" standards set by regulators, typically with different underwriting requirements and risk characteristics.

Full Conference Call Transcript

Operator: Thank you for standing by. At this time, I would like to welcome everyone to the Rithm Property Trust Inc. Fourth Quarter 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to withdraw your question, thank you. I would now like to turn the call over to Emma Bolla, Associate General Counsel. You may begin. Thank you, and good morning, everyone. I would like to thank you for joining us today for Rithm Property Trust Inc.’s fourth quarter and full year 2025 earnings call.

Joining me today are Michael Nierenberg, Chief Executive Officer of Rithm Capital and Rithm Property Trust Inc., and Nick Santoro, Chief Financial Officer of Rithm Capital and Rithm Property Trust Inc. Throughout the call, we are going to reference the earnings supplement that was posted this morning to the Rithm Property Trust Inc. website, www.rithmpropertytrust.com. If you have not already done so, I would encourage you to download the presentation now. I would like to point out that certain statements made today will be forward-looking statements, including any statements regarding illustrative portfolios or earnings. These statements, by their nature, are uncertain and may differ materially from actual results.

I encourage you to review the disclaimers in our press release and earnings supplement regarding forward-looking statements and to review the risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will be discussing some non-GAAP financial measures during today's call. Reconciliations of these measures to the most directly comparable GAAP measures can be found in our earnings supplement. With that, I will turn the call over to Michael. Thanks, Emma. Good morning, and happy Friday the 13th. Thanks for joining us on Rithm Property Trust Inc., our fourth quarter earnings call. Just a few things. While investment activity remained light

Michael Nierenberg: away from a small investment that Rithm Property Trust Inc. made in the Paramount transaction that our parent, Rithm, announced in December. The balance sheet cash, the company remains in great shape. During the fourth quarter, we also announced a reverse split of our shares on a 6-to-1. So when you look at it today, with the stock trading between $15 and $16, versus where it was, I think it was something around $2. We feel like it is going to hopefully attract more interest in the stock with a higher share price, recognizing that we did do a reverse split.

As many of you know, and we have said this repeatedly, we took over the management contract of what was formerly known as Great Ajax in June 2024, with the intent of making it a dedicated commercial real estate vehicle as well as an opportunistic investment vehicle. What we did then is we repositioned the company. We cleaned up the balance sheet. We raised capital. And today, we remain focused on what I would say is a potential recap of the company along with earnings and dividend growth.

We have a clear path which depends on capital formation, to be clear, to take the company from flat earnings to a future state where the company is earning something between $1.00 and $1.70 per share and trades, give or take, about a 9% dividend yield with a book value of approximately $20. That all depends on, one, the recap, and two, where you actually raise the capital. The plan for the vehicle would be to acquire multifamily loans from our operating business Genesis, which we have already identified, that pool of loans along with other commercial real estate investments, so there will be no J-curve as we think about earnings growth and where we are going with the vehicle.

Today, as we know, many REITs, BDCs, and other capital vehicles are not trading well. And while we will be patient, we hope to accomplish this when the markets stabilize. I will now refer to the supplement which we have posted online, and I am going to begin on page 3. So, when you look at the company today, there is a pretty active investment pipeline. The company today sits with about $100 million of cash and liquidity. Total equity in the vehicle is $300 million. When you look at our trading price, which I think is around $15.15, the company is trading at roughly 50% of book. When we look at the vehicle, it is externally managed by Rithm.

So when you look across the firm, we have a ton of real estate investment professionals and others here to support the vehicle and support the growth. As you all know, we have done this before when we started New Residential back at Fortress in 2013. And we hope to achieve the same level of growth and success from an earnings perspective and a growth perspective in this vehicle as we go forward. You look at financial highlights, earnings were flat. We took over this thing, as pointed out, in June 2024, where the company was not making any money. You look at Q4 GAAP earnings, $2.5 million.

EAD is $500,000 to the negative, which leads to per diluted share of $0.06 negative. Book value, as we pointed out, was about $300 million or $31 per diluted share. Common stock dividend that we pay, we are going to continue to pay that dividend as 8.7% from a dividend EPO perspective. And then, as I pointed out, cash and liquidity is about $100 million. Really, the whole play here is you have a clean balance sheet. You have a clean company. You have a dislocated sector in the real estate space. You have many commercial REITs which are underwater because they have either liquidity issues or they have a balance sheet that continues to need to get cleaned up.

For us, we are going to be patient. We are not going to keep this vehicle outstanding forever. But while saying that, having a clean vehicle where we want to recap this, similar to what Blackstone did around BXMT with CapTrust, I think it was, that is our ultimate goal here as we look to grow the vehicle. And it is not just about growth. It is how do we make our shareholders money. We do think that this, and then some of the capital vehicles, including Rithm and Rithm Property Trust Inc., are trading at extremely low valuations. So, hopefully, they right themselves. But as we think about this vehicle, we will be patient.

We are sitting on cash and liquidity. We do want to do a recap, and we think from an opportunistic standpoint, we have the assets that will now take this business to grow earnings to something between $1.06 and $1.70 per share, assuming that we do a recap of the vehicle. When you look at the portfolio on page 6, what are we going to do with it? We speak about multifamily loans, our Genesis business, which we bought from Goldman in 2022. At that time, they were doing $1.7 billion of production. This year, I think we are projecting we are going to do something between $6 and $7 billion of production.

We are going to be growing our multifamily lending business. We are seeing some potential opportunities in that space, even around acquiring licenses to become a Fannie/Freddie servicer or originator in the multifamily space. So that is something that we are currently working on. Obviously, we are making a big push in the commercial real estate space. We announced the acquisition of Paramount. We love that transaction. It will take a little bit of time, but we are really excited about where we sit there, our entry level, our basis, and where we are going to go with that company.

And then when we think about opportunistic investments, we have been very good at identifying them and acquiring them through the course of our careers, taking the company back to 2013 on the New Residential/Rithm level. When you look at page 7, we talk about our ability to source, whether it be at the Rithm parent level, whether it be at Genesis, whether it be at Paramount. Obviously, we announced the closing of Crestline in December, and then along with our partners at Sculptor, we have a lot of opportunity to source product. Looking ahead at the opportunity on page 8, commercial real estate, we love the office story.

I know there is, yesterday with the AI story, a lot of the commercial real estate REITs got hit. One thing I want to point out from a company perspective, both at the Rithm level and at Rithm Property Trust Inc., we have a very diversified business. If you look at Rithm’s earnings in the fourth quarter, we produced north of $400 million in earnings available for distribution. We had certain things that performed extremely well, other things where we had, for example, higher amortization in our mortgage company.

But net-net, when you look at that business and you look at our diversified earnings streams, whether it be at Rithm or Rithm Property Trust Inc., we are very good, in my opinion, at creating diversified earnings streams that if one lever is not working great, another lever will work great. So when we look at the opportunity here, obviously, commercial real estate we like a lot. There will be other things in the opportunistic space that we think are going to be highly accretive to what we are going to do in this vehicle as well, and we look forward to executing around that. I will now turn the call over to the operator. We will open for Q&A.

Operator: Press star then the number 1 on your telephone keypad. Your first question comes from Craig Kucera with Lucid Capital Markets. Please go ahead.

Craig Kucera: Hey. Good morning, guys. You know, I think the Paramount transaction at Rithm Capital closed for about $1.6 billion and was generating about $300 million in NOI. Will Rithm Property Trust Inc. be receiving a slice of that NOI going forward, or how should we think about the earnings impact or accretion from that investment? You should I would think about it more as something that is probably back-ended. It is a pro rata share of what Rithm did on the balance sheet. So when you look at it, Rithm Property Trust Inc. has $50 million of the Paramount deal on its balance sheet, and it will be pro rata versus Rithm. Okay. That is helpful.

And just thinking about the loans that you are originating at Genesis, which I believe would be accretive to Rithm relative to where you raised capital last year. Are you exploring getting Rithm with more of those types of loans? And I guess when you talk about your future state on a larger capital base, is that sort of a wait for the common to get closer to book value or what is the path there?

Michael Nierenberg: So, Genesis, which I pointed out is going to do $6 to $7 billion of production we expect this year. There is plenty of loans that go into both the Rithm balance sheet. Obviously, if we are successful around a capital raise for Rithm Property Trust Inc., there will be loans that we have identified. So as I pointed out, there is no J-curve. The loans would go right onto the balance sheet. You would see a real pop in earnings at the Rithm Property Trust Inc. level. We also source third party.

We are actually developing more and more channels around sourcing third party loans in that very same space, whether it be multifamily or in the kind of sponsored-type loans that Genesis does. The other thing I would point out, we have a funds business, and we have either funds or SMAs with sovereigns around the globe. We also have a vehicle. We launched a fund on one of the wirehouses that is actually taking some of that product. So we have a number of different capital vehicles that are actually acquiring, whether it be Genesis loans and/or similar-type loans from other originators. And we expect that to continue.

Regarding your question on the capital side, Rithm sits with anywhere from typically $1.5 billion to $2.5 billion of cash and liquidity on balance sheet at most times. Obviously, our stock is trading at a discount to book. I do not anticipate us issuing equity here unless there is something that is highly accretive for what we are trying to do as an organization. So that would be my comment around the equity side. Okay. That is helpful. Thanks, guys. Thank you.

Operator: Your next question comes from the line of Henry Coffey with Wedbush. Please go ahead. Good morning, Michael. It is good to be on the phone with you all.

Michael Nierenberg: Hey, man. So timing. I mean, I think that is the only question at this point. Getting Rithm Property Trust Inc. over book value, that is a big jump. Is there a tolerance for finding other sources of capital, be they preferred or common, that would allow you to move ahead with the recap plan? Or are we just going to have to wait?

Michael Nierenberg: I think timing is a good one. I would respond to markets. So you say timing, I say markets. The short answer is yes. There is third party capital that wants to be part of the vehicle. Is it possible at some point that we bring in third party capital alongside the vehicle as it exists today? I think the short answer is yes. But, while saying that, we are not going to leave this vehicle outstanding trading where it does forever. So, yes, it is a timing thing. We want to make sure that we do not want to do something that is highly dilutive. If you recall last year, we did a pref in and around this.

The company is sitting with some cash and liquidity. We also have what I would call liquid floaters on balance sheet. So to the extent that we found something more accretive, it is likely that we would sell those down and then invest in something else. But it is a timing thing. It is a market thing, and it is also, I would expect us to continue to add more third party capital to our lives. And then, basically, just to reiterate, the primary source of loans is going to be multifamily and what Genesis generates, mainly higher-yielding repositioning loans, so you will be doing some more traditional multifamily lending as well inside of Rithm Property Trust Inc.

Michael Nierenberg: I think right now what we have identified is a pool of assets. I think it is something around $1 billion of assets that would go right into the vehicle, subject to Board approvals. And once that happened, you would see an immediate pop in earnings. So that is the way I would view it. Could there be other types of loans? The answer is yes. But you look at the Genesis loans from a levered perspective, they are well north of 15%, and I think they will be highly accretive to what we are doing in the vehicle. Alright. Thank you very much. I look forward to moving forward with you on this. Good to hear your voice, Henry.

Have a good weekend. Thank you, sir.

Operator: Again, if you would like to ask a question, press 1. Your next question comes from the line of Jason Michael Stewart with Compass Point. Please go ahead.

Jason Michael Stewart: Hey. Good morning. Thank you. Hey, Michael. Interesting opportunity at Genesis. You know, obviously, Genesis is not a forced seller. You do know the quality of the loans. You are familiar with them, but could you talk about the pros and cons of buying from Genesis versus a third party who might be more of a motivated or forced seller in the market?

Michael Nierenberg: We do both. The short answer is the more we could do, the better. Based on our third party fundraising, we have, I am not going to call it insatiable demand, but we have a tremendous amount of demand for this product both in our funds business, on the Rithm balance sheet because they are higher coupon earners, as well as into the Rithm Property Trust Inc. So it is going to be a combination of everything. We have already set up flow agreements with a number of originators. The one thing I would point out is we are extremely mindful of credit as we source product from other third parties.

And one thing I like about our Genesis business is that the gentleman who runs it, Clint Arrowsmith, as you have probably spoken with in the past, does a great job around credit. His background, he comes from a bank as a credit officer. That is really important. So while we could turn on the jets and grow origination, we have to be mindful of our credit box, and that is something that we also have to think about as we source from third parties.

Because you see this in this business, once things get in, I am not singling anybody out, but once things get a little bit where this product is probably the most in demand from what I would call our LPs and what we want to do on balance sheet, you just have to make sure you do not have any missteps around the credit side. And that is something that we are extremely mindful of. But my short answer to my long-winded explanation is we are going to source from third parties wherever we can as long as we are comfortable with the credit.

Jason Michael Stewart: Got it. Okay. And you mentioned banks. I would have expected banks to have been sort of rate-dislocated sellers in this market. Is that something you are seeing, an opportunity to acquire, especially since it is multi, or is that opportunity passed?

Michael Nierenberg: You are not seeing a lot of bank selling is what I would say. When I talk about the banks, we launched a fund on one of the wirehouses, on the bank platform, and that is creating more demand for the product that Genesis is making, and some of our non-QM products. So I think the banks are probably better buyers. What you have seen from the banks, the regional banks pulling back. We have seen that over the course of the past couple of years, which has created this great opportunity for Genesis and some of our other lending businesses to grow production.

Jason Michael Stewart: Okay. Got it. One big-picture question. You mentioned the Fannie/Freddie licensing. Is the ultimate goal here to be able to go end-to-end from an intermediate loan to permanent financing through the GSEs? Is that the vision for Rithm Property Trust Inc. down the road to have that license and create the customer relationship end-to-end?

Michael Nierenberg: Yes. If we could do it, for sure. When you think about the power of the franchise, look at Genesis. Genesis could go and they can make a loan to a builder in, let us say, the build-to-rent space. The mortgage company, NewRez, can then work in conjunction with Genesis and provide loans, for example, to that community of builders. Or it could be a builder that is building and selling on a go-forward basis. A lot of our thesis and what we are trying to do across the board is to be able to capture as much wallet as we can from our customer base. You look even at the mortgage company, which has over 4 million customers.

Are there other products that we could offer them that are going to generate earnings for our shareholders? We are working on cards and other things that we hope to roll out here in the near future. So that is an example, but end-to-end is something that we are trying to do for sure.

Jason Michael Stewart: Got it. Okay. Thanks, Michael. Appreciate it. Thanks, Jason.

Operator: There are no further questions at this time. I will now turn the call back over to Michael Nierenberg for closing remarks.

Michael Nierenberg: Have a great holiday weekend, everyone. Thanks for your support. Thanks for listening, and be safe. Speak to you soon.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

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