Great Ajax Q2 2025 Earnings Report

Great Ajax EPS Results

• Actual EPS: N/A
• Consensus EPS: $0.03
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Great Ajax Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $5.51 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Great Ajax Announcement Details

• Quarter: Q2 2025
• Date: 7/24/2025
• Time: After Market Closes
• Conference Call Date: Thursday, July 24, 2025
• Conference Call Time: 5:00PM ET

RPT Realty owns and operates a national portfolio of open-air shopping destinations principally located in top U.S. markets. The Company's shopping centers offer diverse, locally-curated consumer experiences that reflect the lifestyles of their surrounding communities and meet the modern expectations of the Company's retail partners. The Company is a fully integrated and self-administered REIT publicly traded on the New York Stock Exchange (the "NYSE"). The common shares of the Company, par value $0.01 per share (the "common shares") are listed and traded on the NYSE under the ticker symbol "RPT". As of September 30, 2023, the Company's property portfolio (the "aggregate portfolio") consisted of 43 wholly-owned shopping centers, 13 shopping centers owned through its grocery-anchored joint venture, and 49 retail properties owned through its net lease joint venture, which together represent 14.9 million square feet of gross leasable area ("GLA"). As of September 30, 2023, the Company's pro-rata share of the aggregate portfolio was 93.5% leased.

Great Ajax Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: In the past year, Rhythm Property Trust has deployed $300 million in commercial real estate and currently has a robust $2 billion pipeline of deals expected to close, driving future growth opportunities.
• Positive Sentiment: Q2 GAAP income was $1.4 million (or $0.03 per diluted share), and management has maintained the quarterly dividend at $0.06 per common share.
• Positive Sentiment: The REIT holds nearly $98.6 million in cash and liquidity, carries no legacy assets, and its shares trade at roughly a 50% discount to $5.37 GAAP book value, suggesting significant upside.
• Positive Sentiment: Management plans to avoid further dilution by leveraging preferred equity offerings and third-party capital to finance larger transactions while targeting double-digit returns.
• Negative Sentiment: Despite the growing pipeline, current earnings remain modest and executives acknowledge it will take time for new investments to meaningfully boost per-share results and stock performance.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Rhythm Property Trust Inc. Second Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

[Operator]

After the speakers' remarks, there will be a question and answer session. Thank you. I would now like to turn the conference over to Emma Bola, Associate General Counsel. Emma, you may begin.

[Emma Bolla, Associate General Counsel at Rithm Capital]

Thank you, and good afternoon, everyone. I would like to thank you for joining us today for Rhythm Property Trust's second quarter twenty twenty five earnings call. Joining me today are Michael Nierenberg, Chairman, CEO and President of Rhythm Capital and CEO of Rhythm Property Trust and Nick Santoro, Chief Financial Officer of Rhythm Capital and Rhythm Property Trust. Throughout the call, we are going to reference the earnings supplement that was posted this afternoon to the Rhythm Property Trust website, www.rhythmpropertytrust.com. If you've not already done so, I'd encourage you to download the presentation now.

[Emma Bolla, Associate General Counsel at Rithm Capital]

I would like to point out that some 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.

[Emma Bolla, Associate General Counsel at Rithm Capital]

With that, I will turn the call over to Michael.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Good afternoon. Thanks, Emma. Good afternoon, everyone, and thanks for joining the call. The way one year ago, we took over the management contract of this REIT, was formerly known as Great Ajax. The company was losing money, needed more liquidity and quite frankly, a new leadership team and a new mission.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

We renamed the company to Rhythm Property Trust. We sold down legacy assets, which were not accretive for shareholders, and we repositioned the company to be an opportunistic commercial real estate REIT. Over the course of the past year, we went out and deployed $300,000,000 or bought 300,000,000 in commercial real estate assets. We raised a new pool of capital without diluting shareholders. We did that via a pref offering, and we put the company on a path towards success and profitability.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

While the numbers this past quarter are similar to last, we have a ton of deals and investments in the pipeline. When we're at Fortress, we took a company at that time, which was known as New Residential, which is currently Rhythm Capital today, from $1,000,000,000 of equity in 2013. Today, we stand at almost $8,000,000,000 of permanent capital or equity. We manage over $80,000,000,000 of assets across all of our various business lines. We intend to do the same here.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Unfortunately, it takes some time. If you think about the company this way, I'm confident you will be rewarded well in the future. One, that we do not have any legacy commercial real estate assets. Two, the equity trades at a 50% discount on book. So we believe as we continue to execute on our plan, there'll be huge upside in the valuation of the equity.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Three, with what's going on in the real estate market whether it be on the equity or debt side, we have very large pipelines of deals we are currently evaluating. And then we also have a number of deals that should close here in the third quarter. So net net, while we're not thrilled with the current stock price, obviously, I believe the value proposition here is a good one. I'll now refer to the supplement, which we have posted online. I'm going to start on Page three.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

So again, the way to think about this is an opportunistic equity investment in a publicly traded commercial real estate REIT, and it doesn't have to be commercial. It could be opportunistic as well. Current pipeline is in and around $2,000,000,000 of assets that we're currently evaluating. We have a little under $300,000,000 in total equity. Our real estate portfolio is $300,000,000 and we're sitting on approximately $100,000,000 of cash and liquidity.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

As you flip to Page four, earnings kind of fairly similar to where it was last quarter, dollars 1,400,000.0 in GAAP income or $03 per diluted share. The EAD is about 100,000 or effectively virtually zero. Second quarter common stock dividend is $06 per common share. We do not intend to reduce that anytime here soon. Cash and cash equivalents about $98,600,000 and total equity of $2.95 GAAP book value is $5.37 with the stock trading, I believe, something around $2.7 so about a 50% discount to book.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

The opportunity for Rhythm Property Trust. Why now? We're entering what we think the real estate market at a very attractive time. We've been pretty vocal about that. While saying that not every real estate asset is the same and we need to be extremely diligent and careful in our underwriting and how we deploy capital in this and every other vehicle that we manage.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

So why Rhythm Property Trust? One, again no legacy commercial real estate exposure. Two, again the company is trading at a sizable discount to book value. Three, the amount of employees and management team here at Rhythm and this does not include our Greenbarn subsidiary or Sculptor. There's approximately 75 to 100 folks in the house here that work on our various vehicles.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

When we think about the commercial real estate landscape, one, the repricing in commercial real estate assets, the continuous debt maturities and dislocations in the market are and will continue to create opportunities across the capital stack. As we look at changing capital structures, there's a huge need for pref equity in a number of the different assets and things that we're looking at that will continue to create what we think are extremely attractive opportunities to deploy capital. As we go forward, the pipeline as of the June was $2,000,000,000 of different types of real estate investments that include senior mortgages, subordinate loans, mezzanine loans and other opportunistic investments. The emphasis and finally, our emphasis on growth. As we achieve scale, that is something that's going to enable us, in our own opinion, to drive the valuation of the company higher.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

The asset profitability, if you have a look at page six, when we took over the company, as I mentioned before, the company was losing money. Q2 of twenty twenty four, the company lost $0.35 per diluted share. If you look at where we are now, we made $03 per diluted share. So continued risk discipline around one, the asset side of the balance sheet and then two, as we think about growing earnings. Like I pointed out in my opening remarks, it will take some time because the equity base here is $300,000,000 and we intend to take the same vehicle or this vehicle like we did at Fortress where we started new residential with $1,000,000,000 of assets and we grew it to 8,000,000,000 over time.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

When you look at 7,000,000,000 as we think about Q2 investment activities and you look at where we are today, one, the deal source of approximately $6,500,000,000 And as I pointed out, we have a number of deals that we believe we're going to close here in the third quarter. And that should deploy about $50,000,000 of equity here with double digit returns. We look at the investment opportunities. There's a number of different things we look at. Again, as I pointed out, whether it be debt, pref equity, mezz and opportunistic equity across the stack.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Strength of the platform, we are at Rhythm, obviously, we take our performance extremely seriously. When you look at Rhythm as a whole from a parent perspective, typically our ROEs are anywhere from 15% to 20%. We'd like to try to position this company to be able to do the same thing over time. Page eight, just looking at the potential portfolio over the future between CMBS senior loans, opportunistic investments and subordinated and mezzanine loans, we believe that we're going to generate target yields of in and around 15%. So before I turn it over to Q and A, what I would say is we love the optionality in this platform.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

We're very happy with where the balance sheet stands. We are working on a number of situations that I believe will enable us to deploy significant amounts of capital. We do not intend to dilute shareholders to the extent that we don't need to. So that will likely be bringing in third party partners on some of the larger things that we're looking at. And with that, I'll turn it back to the operator and we'll open up for Q and A.

[Operator]

Thank you. We will now begin the question and answer session. Your first question comes from Jason Stewart with Janney. Please go ahead.

[Jason Stewart, Director - Mortgage Finance at Janney Montgomery Scott]

Hi, thank you. Thank you, Michael. In terms of the near term opportunities in the pipeline, could you talk about how that splits up between the different sectors, loans, securities, etcetera?

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Sure. So most of the stuff when we look at securities today, for example, when you look at our portfolio, most of it's floating rate around the on the real estate side. When we look going forward and most of that is up in the capital stack in AAA CMBS. We do have some loans on the balance sheet that we made. We did a small SRT deal with one of our larger bank counterparties.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Going forward, looking at pipelines, we have anything from something that will fund we're hopeful in the next couple of weeks, which is a retail asset up in Seattle anchored by some very strong tenants including Albertsons, Staples, etcetera. We're looking at stuff in the multifamily space. We have some nice opportunities, we believe, on the office side as well. And then we're looking at some larger M and A opportunities that we think could change the landscape of this organization for years to come.

[Jason Stewart, Director - Mortgage Finance at Janney Montgomery Scott]

Okay. That's helpful then. And then on the last point, and I think you started to perhaps talk about this in your comments, you said commercial and opportunistic, but not necessarily doesn't have to be commercial. Maybe you could elaborate a little bit more on what you meant there in terms of opportunistic?

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

It's going to be right now, the intent is for this vehicle to be focused on commercial opportunities. I think back to our fortress days when we bought a little under $4,000,000,000 of consumer loans into our REIT along with some other capital vehicles we had and that was the beginning of what became OneMain Financial. I'm just using that as an example. Right now though, what I would say is I'd focus the focus for all of us here at Rhythm is to build this as a dedicated opportunistic commercial REIT.

[Jason Stewart, Director - Mortgage Finance at Janney Montgomery Scott]

Got it. Okay. Thanks for taking the questions. Appreciate it.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Thanks, Jason.

[Operator]

Your next question comes from the line of Randy Binner with B. Riley Securities. Please go ahead.

[Randy Binner, Managing Director at B.Riley Securities]

Hi. Thank you for taking the question. This is Tim D'Agostino on for Randy Binner. When we think about the go forward plan for the portfolio, what should we think about in terms of capital being put to work per quarter and where we may see that capital be putting to work?

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

So again, it's the capital that's going to where it's going to go, it's going to be the very same assets that I just described. So you'll have the pipeline between retail multifamily office. We have some industrial things we're looking at. We did an SRT deal with one of our like I pointed out, one of our larger bank counterparties. So it's going to be in those very same pockets.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

When you think about capital deployment, the good news is we're sitting with roughly $100,000,000 of cash and liquidity on balance sheet, where as much as we want to deploy that capital yesterday and we could, we want to make sure that we are we find the right opportunities to create what we're really striving to do, which is going to be something with teens type returns. So that $100,000,000 that sits there, I think our projections are we'll be deploying about $50,000,000 this quarter here in the third quarter assuming that all the different loan opportunities we're working on close here in the third quarter. And then going forward, obviously, we'd like the stock to right itself, but we'll likely continue to tap into the pref market, as well so we don't dilute shareholders.

[Randy Binner, Managing Director at B.Riley Securities]

Okay, great. Thank you so much. That's all for me.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Thank you.

[Operator]

Your next question comes from the line of Tom Catherwood with BTIG. Please go ahead.

[Thomas Catherwood, MD & Analyst - REIT at BTIG]

Thank you, and good afternoon, everybody. So my question is, I want to kind of try to tie a couple of ends together here. So it really does sound like your pipeline of opportunities has scaled up. And you took us through the cleanup that you did on legacy grade Ajax over the past twelve months. But as far as that pipeline and it seems that you've gotten to the point in time when it'll really be an execution opportunity right now.

[Thomas Catherwood, MD & Analyst - REIT at BTIG]

Was it just a matter of time of building that? Or was there a shift in what you were looking at that helped that scale? Or were you missing out in deals and you've gotten more aggressive and some more is dropping to the bottom line? What's kind of changed between 1Q and 2Q that's helped that pipeline scale the way it has?

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Yes. No, I think those are great questions. One is the team is out hunting and having lots of conversations whether it be with our large bank friends with some third party origination platforms or just stuff that where we get calls directly from sponsors. So we're seeing a lot more of that. And I think part of it is building the not the Rhythm brand because I think the Rhythm brand resonates extremely well in the investment community, but the Rhythm Property Trust brand, which wasn't really as well known since other than when we initially took over the platform.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

So the pipelines are building, the teams are having a ton of conversation. What I would say though on the flip side of that is we're not going to compete for the less dollar to drive cap rates extremely low on for example on office if we don't think it makes sense for the vehicle. Our goal here is to take what we have which is clean in our opinion, a clean balance sheet sitting on some liquidity, we could use more and deploy that capital prudently with teens type returns. We're not going to get into a bidding war with somebody, at least for now, on things that we don't think make a lot of sense. So I think it's a combination of one, we are seeing a lot more directly from sponsors two, we're having a lot more conversations with our banking partners, of which we have a lot of And three, the brand is the Rhythm Property Trust brand overall, with the great job the team is doing, is getting out there so the teams are getting the call on these, not just, for example, the largest real estate players in the industry.

[Thomas Catherwood, MD & Analyst - REIT at BTIG]

Got it. Appreciate that color Michael. And then if we think of sources and uses here, right? The opportunity set scales, there's more deals falling to the bottom line. You've obviously built this large book of CMBS securities.

[Thomas Catherwood, MD & Analyst - REIT at BTIG]

You did it over a period of time where spreads were wider. They've obviously tightened down towards record levels again. How do you think about either taking on more debt, using the cash on your balance sheet or even selling the securities, which again, we assume you would have a gain on in order to put them into more of this direct lending opportunity, which is what it sounds like that's more of that's in that pipeline right now. How do you think of securities book as a as a funding source?

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

It could easily be that. Right? Because one of the reasons thanks for leading me to the answer here. One of the reasons why we stayed up in the cap stack was as we continue to grow this, we wanted to deploy capital to create some earnings for the balance sheet. As we look at some opportunities we're seeing in typical and the way we're going to grow this company honestly is by doing things that are a little bit more meaningful and larger over time.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Yes, we'll hit our singles, but we have to do something that's meaningful and be able to raise a bunch of capital around that. And that and the way to if you look, we did a I think it was a $50,000,000 pref offering kind of a few months back. We don't want to dilute shareholders to the extent that we don't need to. I think what we're going to likely do is bringing third party capital alongside a larger transaction, which is going to help get this platform off the ground. And then I think once we do that, you're going to see the stock really write itself.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

So I think the optionality in this company and the stock, I think, extremely high and significant to the upside.

[Thomas Catherwood, MD & Analyst - REIT at BTIG]

Got it. Appreciate that. And last one for me. If we think of kind of once you allocate that let's assume the $50,000,000 in opportunities that are near term close. If we do a quick back of the envelope that looks to us like just about maybe a little bit over a penny a share per quarter.

[Thomas Catherwood, MD & Analyst - REIT at BTIG]

Does that check out? And is this the kind of thing where to get up to that dividend level you're going to need to put out $300,000,000 of incremental capital? Or are there other catalysts that help you kind of boost earnings back to that dividend level?

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

I think in your math, it's about $0.2 a quarter. Again, it's we're going to have to create some scale around our capital formation side. But I think we'll get to whatever our current dividend that we're paying. We came into this thing not looking to cut the dividend because folks have suffered a lot of pain prior to us acquiring the management contract here. So we're going to do all we can to maintain this dividend and continue to try to grow earnings.

[Thomas Catherwood, MD & Analyst - REIT at BTIG]

Understood. Appreciate all the answers. That's it for me. Thanks.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Thanks, Tom.

[Operator]

Your next question comes from the line of Doug Harter with UBS. Please go ahead.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Hey, Doug.

[Douglas Harter, Equity Research Analyst at UBS Group]

Thanks, Michael. Hey. Hoping you could just talk about kind of trying to square all the things you've said about a growing pipeline, lack of interest in diluting shareholders, and just how you think about kind of the patience that you have to try to scale the business while kind of looking at those two factors and kind of how you think that plays out?

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

I think the scale of the business is going to be around a larger scale transaction. That's how we're going be able to raise capital to create a vehicle that's where we're going to start generating significant earnings. While saying that, I alluded to likely bringing third party capital alongside us. I think you'll see that without going out to truly dilute the shareholders here that with the stock trading at, again, give or take $2.7 I don't you can't quite frankly, you can't raise enough stock around that level to make a significant dent in this company. Pipeline wise, I'm looking at 11 different transactions on a sheet in front of me right here.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

They range anywhere from a large M and A opportunity to a retail loan that I pointed out. I gave you some color with Albertsons and Staples as some of the anchor tenants to looking at some multifamily stuff in Florida to some New Jersey office to some local office. So our pipelines are pretty robust. The one thing we want to make sure that we do though is obviously be extremely thoughtful on deploying the capital.

[Douglas Harter, Equity Research Analyst at UBS Group]

Great. Appreciate it. Thanks, Michael.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Thanks, Doug.

[Operator]

And that concludes our question and answer session. And I will now turn the conference back over to Michael Nierenberg for closing comments.

[Michael Nierenberg, Chairman, President & CEO at Rithm Capital]

Thanks so much for the questions, guys. Look forward to updating you next quarter or during the quarter. Again, I do like where we sit. We're going to be patient, but we need to try to grow our stock price here and we're extremely mindful of that. So have a great rest of the summer if we don't chat, and have a good weekend. Thank you.

[Operator]

This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Participants

Analysts

• Emma Bolla, Associate General Counsel at Rithm Capital
• Michael Nierenberg, Chairman, President & CEO at Rithm Capital
• Jason Stewart, Director - Mortgage Finance at Janney Montgomery Scott
• Randy Binner, Managing Director at B.Riley Securities
• Thomas Catherwood, MD & Analyst - REIT at BTIG
• Douglas Harter, Equity Research Analyst at UBS Group