RPT

Thank you and good morning, everyone. I would like to thank you for joining us today for Rithm Property Trust's first quarter 2026 earnings call. Joining me today are Michael Nierenberg, Chief Executive Officer of Rithm Capital and Rithm Property Trust, and Nick Santoro, Chief Financial Officer of Rithm Capital and Rithm Property Trust. Throughout the call, we are going to reference the earnings supplement that was posted this morning to the Rithm Property Trust website, www.rithmpropertytrust.com. If you've not already done so I'd encourage you to download the presentation now. I would like to point out that certain statements made today will be forward-looking statements. 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, everyone, and thanks for joining us. For the quarter the company had a pretty uneventful quarter as we continue to look for opportunities that could be a game changer for this capital vehicle. With asset manager valuations under pressure, downward pressure on equity valuations in the public markets, we're going to continue to remain patient and work towards creating value for shareholders. While the geopolitical events affecting the world, credit spreads have remained actually in a relatively tight range, and markets in general are performing well away from the headline risk we've seen in some of the retail private credit. Even there, if you take out the retail component private credit's still performing well.

The software headlines you've been reading about will take a while to play out, and the earlier vintages in the private credit world, where companies borrowed money at large multiples of revenue will likely be the ones affected negatively in the future. A lot of those deals were originated back in 2021, in 2021 ish kind of vintage. For RPT, we positioned the company for success by doing the following. When we took over this vehicle in 2024, we made a decision to clean up the balance sheet, liquidate a lot of the residential stuff, and reposition the company in the commercial space using this as an opportunistic vehicle to deploy capital in the commercial world. Today, the company has just a little under $100 million of cash and liquidity. The balance sheet is extremely clean there's no problem loans and again is in great shape.

While we continue to wait for the opportunity to transform the company we'll continue to pay the dividend. From an optionality standpoint, at some point it's likely we need to grow the vehicle quite frankly from an overall capital standpoint. If we can, we'll be looking at different opportunities in the M&A world and at some point we may consider even buying back a little bit of stock here. With that, I'll refer to the supplement that we posted online. I'm going to start on page three, and again this is just really the summary of what Rithm is, Rithm Property Trust. Today, the pipeline is give or take about $2 billion it's always fairly robust. We're looking at large opportunities in the multifamily space we also evaluate things that we could potentially do around our Genesis business, where we continue to grow our multifamily lending there.

The equity is a little bit under $300 million it's about $287 million the commercial real estate portfolio, this is all post-2024 vintage things that we've done is $236 million, and we have give or take a little bit under $100 million in cash and liquidity. When you look at the financial highlights for the quarter, quite frankly, not a lot of activity. We sold a few CRE floaters in the quarter to create a little liquidity looking for better opportunities, quite frankly to increase earnings. As I pointed out in my opening remarks the credit markets have continued to perform well the CMBS markets perform well. While saying that, we'll continue to monitor opportunities to turn over the portfolio and deploy capital in higher-yielding assets. GAAP income -$3.2 million or $0.42 per diluted share.

Keep in mind we did a reverse split I think it was in Q4. Earnings available for distribution, a -$300,000 or $0.04 per diluted share. Again, not a lot of activity a lot of this relates to either the G&A or the dividend paid. Dividend paid in the quarter $0.36 per diluted share, which correlates to about a 10.8% dividend yield based on where the equity is trading today. Book value, $236.2 million or $30.83 then as I pointed out cash and liquidity, a little under $100 million. When you look at RPT, I mentioned again earlier the strategic transformation. Again, going back to when we took over this vehicle, we cut G&A dramatically. We cleaned up the balance sheet. We sold down a lot of the residential portfolio where we could. I'll talk a little bit about the equity that's remaining in the book.

We've made some new CRE investments and that was mostly done in floating rate AAA CMBS. We made a few loans on the debt side we deployed $50 million in equity alongside Rithm in the Paramount transaction, which we closed in December 2025. We continue to renegotiate our repo agreements and we continue to improve liquidity. Overall, the company's in, what I would say as much as there's very little activity in great shape, and we look for an opportunity to deploy capital or create more capital, quite frankly, on something that's going to be a game changer. I like to go back and refer to what Blackstone did with BXMT many years ago or what we did with Rithm, which was going back to 2013 where we started that with $1 billion of capital, and today the company has about $8 billion of capital.

We need to be patient here. As I pointed out we'll continue to pay the dividend. At some point we need to make a move and either clean up the vehicle or figure out a way to grow it. Obviously, we're actively trying to grow the vehicle when you look on page six the repositioning of the portfolio, where we can go here, I pointed out on the Genesis side, we're doing more lending in the multifamily space. There could be some opportunities to work together with that company. We continue to look for opportunities to put our capital in the debt markets on the CRE side, and then we'll continue to evaluate opportunistic investments and figure out different ways that we can increase shareholder value.

Then on page seven it really just talks about how our Rithm Property Trust benefits from the overall Rithm ecosystem, and that includes the Paramount transaction that we closed in December, and then our asset management businesses, Sculptor and Crestline. With that, I'll turn it back to the operator. We could open up for Q&A and then get on with our beautiful Friday.

At this time, I would like to tell everyone, in order to ask a question, press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. We'll pause for a moment to compile a Q&A roster. Your first question comes from the line of Craig Kucera with Lucid Capital Markets. Please go ahead.

Yeah. Hey, good morning, guys. Optically, it looks like the strategy this quarter was to reduce your CMBS holdings and deleverage. Are you expecting to lever back up in the near term by investing in other asset classes such as loans from Genesis? Or should we expect leverage to be a little bit diminished for the near term?

Yeah. We looked during the quarter the markets fell. Despite performing well the markets fell, or the world feels horrible. When you think about that and credit spreads, and we saw our high-yield gap a little bit wider but then it came in about 50 basis points to where it is today. We used that as an opportunity to say if the world doesn't feel as good, let's sell down some of our, what I call levered AAA CMBS, which is yielding give or take about 10%, with the thought that we might be able to deploy more capital in higher-yielding assets. Quite frankly, at this point, we'll continue to sit on the cash and look for those opportunities. I mentioned in my opening remarks, we're looking at a large portfolio now of multifamily assets that'll be coming at some point in May.

We're seeing some opportunities on the debt side, quite frankly, that I think we'll be able to deploy capital at higher yields than where we are on some of the AAA CMBS. For now, it wasn't really just to reduce leverage, it was to create more capital for what I would call opportunistic investing. At some point that capital will get redeployed, whether that goes back into a debt, some kind of lending, multifamily, or even buying back some equity here.

Got it. I guess, if the market or at least how you feel about the world continues to be sort of miserable, do you think you'll continue to harvest proceeds from CMBS, or do you think you kind of worked through what you wanted?

We're in a really interesting period of time, right? Because, when you read the headlines or you think about the headlines, there's been a lot of negativity around private credit, yet you look at a lot of firms that are in the PE business and they're still sitting on a lot of these portfolios that go back many, many years. You look at the equity markets we're at all-time highs if you think about private credit, private credit sits on top of equity. What's going to go first the equity.

When you look at the public markets in general, as much as the world feels terrible the markets are performing extremely well. We look across RMBS, you look across CMBS, you look at the liquidity that we're seeing in all these different lending markets, things are actually okay. The geopolitical side just feels horrible, though. Obviously, there's a lot of headline risks coming out of the administration and other places. I think we're just looking for better opportunities to actually create more earnings.

Got it. Changing gears there was a pretty decent pickup in professional fees this quarter. Was that more just a one-time event, or should we expect to see something similar going forward?

That was a one-time event in the quarter. It had to do with us looking at various capital options.

Okay. Fair enough. This quarter, you closed on the Paramount transaction in the fourth quarter and at the Rithm parent, and of course, Rithm Property put in $50 million. Was there any impact to the income statement this quarter from Paramount?

Paramount for the quarter was essentially flat.

Okay. That's helpful. Will that ramp up at any point, or should we expect that to be really more of a back-loaded type of investment?

No, it will ramp up as the investment continues to accrete and as we make progress on Paramount.

Just a little color on that. When we closed the company, I believe we closed the transaction on December 20th. We've had really just a quarter of working on that we've taken G&A from $65 million down to about $30 million. The performance, the lease-up activities is at the highest levels we've seen in 20+ years. When you look at the properties, you have New York and San Francisco. We're in the middle of doing a few refinancing. We have some potential JV equity investments we're excited about that we've had a ton of conversations with different LPs.

The initial thought there was it's an opportunistic situation, but around that, we're going to raise capital either from third parties or just bring in JV partners with the intent of trying to make 2x and 20%+ on our money. Some of it will be back-ended, some of it will be, as to Nick's point, as we accrete up over time. That hopefully should be a good one. You look at our New York portfolio, for the most part, it's essentially leased up things are good on that one.

Okay, great. That's it for me. Thank you.

Thank you.

Your next question comes from the line of Jason Stewart with Compass Point. Please go ahead.

Sorry. Thanks, Michael. On the Genesis loans, are those likely to be more portfolio-based and chunky, or is there an opportunity for flow? A follow-up on Craig's liquidity questions. Is there an opportunity to do anything with the unsecured debt just given how much liquidity is on the balance sheet?

The unsecured debt, I believe, is like a 9, 7, 8 kind of coupon. If we can get the company rated a little better, that drops to 8, 7, 8. When you think about that in the debt markets for this type of company, it's not horrible cost of capital. Obviously, we want to make it more accretive and make sure the investments are more accretive, thus selling down some of the CMBS and looking for an opportunity to deploy in higher-yielding assets. When we think about Genesis, on the Genesis side, we bought this company I think in late 2021/2022. At that time, they were doing $1.7 billion in production the company was making $40 odd million of EBITDA.

We've taken that where this year I think we're going to do something between $6 billion and $7 billion of production, and the company should make between $150 million and $200 million of EBITDA. Knock wood it's been a very good successful acquisition, and it's been a great feeder for our business. From Genesis, we've established a couple things. One is we have a non-traded REIT we launched with one of the large money center banks where we're actually raising capital alongside some of the production that comes out of Genesis. That's gone extremely wel, we've also done a large SMA around some of the Genesis flow with one of the sovereigns overseas. When we look at what we've done there that's been a great one.

Now what we're actually looking at is there a way to take these assets in the securitization market, quite frankly, that could be north of 20% or 15%-20%. Can we actually use this vehicle to either around multi-family or some of the other stuff that's not going into these flow programs to actually grow earnings at RPT? That's something that we're extremely focused on. Hopefully, we get there and that business continues to grow that's really the thought around the Genesis side.

Got it. Okay. Thank you.

Thank you.

Your next question comes from the line of Henry Coffey with Wedbush Securities. Please go ahead.

Good morning. Obviously, actually a lot of progress in here, and you can cut your losses, and if we go with Nick's comments, we're almost at the point of break even on an EAD basis. The environment or the political environment is bad, but it's probably not going to get worse. It's fair to say that the debt and credit markets, whatever they are, aren't going to get worse. What's the hold up in terms of deploying assets? Are there opportunities, like you said, that don't show up until May? Are there enough opportunities out there where you could, if you wanted to push hard, leverage this thing up now? What is sort of the overall temperature of the market right now in terms of opportunities?

This vehicle, on a relative basis, Henry, is extremely small.

Right.

We need to create a large pool of capital to make a difference in the earnings and profile of the company as we go forward. I think to your point on the equity or the debt and credit markets, there's a ton of capital still out there in the markets being deployed. When you look at all the headline risk, you've heard some of the other folks that run some of the larger asset managers. The real headlines around the private credit stuff were really the redemptions that came about from retail. Anybody that has institutional money, those are typically going to be in longer-dated locked-up funds. That's not really the problem in what I would say the credit markets. If somebody comes out and I use this example, I was in Asia last week speaking.

If you look most of these documents have you know, I'll call it redemption limits for a specific reason. To the extent that retail comes in and they want you've seen folks want 10% or 15% out of some of these funds. A lot of the funds have 5% limits, and they have 5% limits for a reason, because you don't want to just liquidate good assets for the sake of liquidating because retail needs the money back. I think my whole view on this is that on the private credit markets, it's really an education process. How does a private wealth client buy into a private debt fund or private credit fund, making sure they understand really what the liquidity functions are? Because what you're seeing in the markets these days, there's been a lot of demand for evergreen-type funds.

We have an evergreen-type fund out there, I mentioned on the Genesis stuff. You just have to make sure there's an ample amount of liquidity. Now, it's a very different thing, I think, when you have assets that are secured by or cash flow that's secured by assets, as what we do in Genesis and really in the so-called ABF space. The gist of it is around the private credit markets is that you're not seeing a lot of selling. You're seeing more capital that continues to get deployed, and you haven't seen this huge gap in spreads. Overall, when you think about where we are, there are going to be opportunities, but we wanted to create a little liquidity during the quarter in the event that we could deploy at a much higher level. Quite frankly, we just haven't seen it come to fruition.

I pointed out on the multifamily stuff, it's a reasonable-sized deal that we're actually looking at. Rithm Property Trust cannot do the entire thing, just to be clear. It could be a combination of third-party capital, Rithm Property Trust, and Rithm. That's similar to the way a lot of these other larger asset managers have grown their business where they're using different capital vehicles and funds to share in the, I'll call it in the wealth of a great investment.

On the capital side, there's a funny Cajun joke that I'll share with Ken later on. This is kind of a chicken or an egg thing. It seems we have a lot of confidence in you as investors, and there seems to be a point where you just have to kind of do it, accept maybe some near-term dilution, and then get on with the business of growing RPT into a bigger business. What does that pain threshold look like for you?

I think as long as we think that we could do something that's accretive longer term for shareholders we'll do it. I think the whole notion of the REIT business, when you think about it logically, where REITs trade relative to asset management companies, and it's effectively the same thing. The only difference is, I look at Rithm, our bigger company, obviously. We're trading give or take 5x EBITDA. You look at some of the larger asset managers, they could trade anywhere from 10x to 30x. So the whole arbitrage, if there is an arbitrage is to continue to create asset management vehicles where you can turn them from 5x to 10x. In the case of Rithm, if we did something like that, the stock's a $20-$30 stock, and it trades at, give or take, $10.

If you look at Rithm Property Trust, we need to raise pools of capital. We've been very good and disciplined around maintaining book value in all of our REIT vehicles because I think we have a lot of expertise in-house. We've been doing this for 30+ years or whatever it is. From a market's perspective we have a reasonable view from a macro level. As it relates to this vehicle, to the extent that we can raise a large pool of capital and it gets deployed accretively and all of a sudden earnings start moving we'll do it in a heartbeat.

The stock's at half of book value. Issuing stock here would be painful, but maybe also the recognition that the market's not really getting it, and maybe the pain from issuing stock at this level would only be temporary. I'm just kind of fishing for you have to.

You need to do it around an accretive transaction it's not just to raise capital is what I would say. If there's something that's hugely accretive, then we'll come back into the market and we'll work with our investor base, and we'll work with our capital formation groups and our banks, and we'll try to get something done. Somebody, I think it was either Craig or Jason, asked about the one-time charge. That was part of what we were working on in the quarter, is to figure out a way to raise a pool of capital.

All right. Thank you. Lots of progress here.

Very well.

Your next question comes from the line of Jade Rahmani with KBW. Please go ahead.

Thank you very much. The commercial mortgage REIT sector has been under pressure for several years, and there only seem to be a few companies successfully emerging from this eerie downturn in values and credit, with scale being a big differentiator. There's been one interesting deal in the space, which is the ARI sale to Athene of its entire loan portfolio. At the same time, we're seeing real estate transaction activity pick up and LP investors start to increase their real estate allocations. I wanted to ask if you're seeing any change in engagement from perhaps public commercial mortgage REITs, the smaller ones, or otherwise private vehicles about potential combination scenarios.

Yeah. I think one of the things that we've been very good at over the years is to try to differentiate ourselves from others. Look at what we've done in the mortgage space we build, it's goes back to the Fortress days we built Mr. Cooper, which is now owned by Rocket. We built OneMain, which is now public market. We've sold down the equity to Apollo and when I was at Fortress. We built Newrez from nothing, and that company is great. We built Genesis Capital, or helped grow Genesis Capital. What I would say is we've been pretty inquisitive, which has enabled us to grow our business. We'll continue to look at M&A, particularly in the world that you point out. It's not easy getting folks, the combination side when you talk about what I would call a lot of broken REITs.

This REIT is not broken this balance sheet is crystal clean. When I look at the equity, just to give you a sense there is give or take about $100-ish million of equity that's tied up in residential deals that are marked extremely well. They're re-performing loan deals that were created by the prior management team at what was known then as Great Ajax. when I look at where we want to go with this, and I think about the overall REIT space, we'd love to do combinations with folks. We want to grow it I will tell you the Paramount transaction has opened up the door as a firm for us to have. We've probably had hundreds of conversations with LPs and different folks about, and it's on the private side, obviously, in different real estate activities or real estate transactions and that'll continue.

I think that's been a really good one. Our asset management business at Sculptor they raised $4.6 billion on their last fund, and they're extremely active in the real estate space. Getting these smaller deals, everybody wants to do a deal, or we want to do deals. Not everybody wants to give up their business, quite frankly, in something that's underperforming. I mean, it's just that simple.

These smaller businesses are very difficult to have them exist and to try to grow because you need the capital to grow it. My long-winded answer is we're always actively looking to do M&A around this, and I think you're going to see more M&A in this. Our balance sheet's crystal clear right Crystal clean. We're very different than I think some of the other legacy REITs that have, quite frankly, suffered a little bit here based on some of the earlier vintage lending that's occurred.

Thanks very much.

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

Thanks so much for your questions. Have a great weekend. Look forward to updating you throughout the quarter.

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