Rithm Property Trust Q2 2026 Earnings Call Transcript

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July 28, 2026

Key Takeaways

  • Positive Sentiment: Rithm Property Trust reached breakeven earnings after management reduced legacy losses, cleaned up the balance sheet and sold down noncore assets. Book value was $30.17 per share versus $30.33 in the prior quarter, while the company paid a $0.36 dividend, implying a roughly 10% yield.
  • Positive Sentiment: The company invested $117 million in Genesis-originated residential and multifamily transitional loans during and after the quarter. Management characterized these as senior, short-duration, high-coupon assets generating approximately a 14% levered return, with a 9.1% gross weighted-average coupon.
  • Negative Sentiment: Rithm withdrew a planned public equity offering after the stock price weakened and short selling increased, saying issuance at a substantial discount to book value would not serve shareholders. Additional capital is needed to materially grow the platform, although management said it may use preferred equity, debt or other structures.
  • Neutral Sentiment: Management is evaluating alternatives to maximize shareholder value if another capital raise cannot be completed, including share repurchases, M&A, a tender offer or potentially folding the vehicle back into Rithm. Executives expect a decision or action during 2026, no later than year-end.
  • Positive Sentiment: The trust reports no legacy commercial real estate exposure and retains more than $50 million of equity liquidity after recent deployment. Management said Genesis provides a sizable pipeline of potential mid-teens-return assets, though growth will remain constrained without new capital.
AI Generated. May Contain Errors.
Earnings Conference Call
Rithm Property Trust Q2 2026
00:00 / 00:00

Transcript Sections

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Operator

Thank you for standing by. At this time, I would like to welcome everyone to the Rithm Property Trust second quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Emma Hoelke, Deputy General Counsel. You may begin.

Emma Hoelke
Emma Hoelke
Deputy General Counsel at Rithm Property Trust

Thank you. Good evening, everyone. I would like to thank you for joining us today for Rithm Property Trust second 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're going to reference the earnings supplement that was posted this afternoon 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.

Emma Hoelke
Emma Hoelke
Deputy General Counsel at Rithm Property Trust

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.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Good evening, everyone. We're going to chat about Rithm Property Trust. I'll give you my opening comments, we'll go through the supplement, and we'll open up for some Q&A. Thanks for joining the call. Since Rithm took over the management of the contract, which was formerly known as Great Ajax, we've transformed this company pretty dramatically. We changed the name from Great Ajax to Rithm Property Trust, set out on a mission to actually grow this into a dedicated commercial real estate vehicle. During that time, we have improved liquidity, we've cleaned up the balance sheet, and we grew earnings so the company no longer loses money. During the quarter in Q2 and subsequent to Q2, we've invested in multifamily transitional loans, which have been originated by our affiliate, Genesis Capital, with the intent to grow earnings and transform the business further.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

We've also attempted during the quarter, a couple of weeks back, to raise equity in the public markets. Based on the stock performance at the time and some of the shorts that were put in the market by the hedge funds, we decided it was in the best interest of shareholders to pull the offering. To grow the company, quite frankly, we'll need to raise capital. In the event we're not able to do so, we'll explore different avenues, which could include buying back equity, M&A, as well as tendering for the shares of the underlying company. Our whole goal here is to protect our shareholders, figure out ways that we could actually either grow the company, more importantly, make money for our shareholders. With that, I'll refer to the supplement which has been posted online. We'll start on page three.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

We have a few short pages. I think the real story is here. We have a very clean balance sheet, which is very different than a lot of mortgage REITs out there. We've gotten the company from where it was not making any money and actually losing money to where today it's breakeven. Now the path forward has to be where we could grow earnings and grow the capital base. When you think about Rithm Property Trust, it's managed by an affiliate of Rithm, which is, quite frankly, us. Rithm has nine billion of permanent capital, north of $100 billion of assets. It's led by our seasoned team here who've been working together for many years at both Rithm and, going back to the Great Ajax, when we took over Great Ajax.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

When we look at the pipeline, we have a world-class origination business in Genesis Capital that makes these residential transition loans as well as multifamily transition loans. Currently today, we have the origination business at Genesis, supplies loans to third-party funds, to different SMAs we have, as well as to the Rithm balance sheet. Now we're doing it with Rithm Property Trust. These loans are very high-coupon, short-duration, senior loans, which we think are great for this vehicle. Hopefully we could figure out a way to raise capital to grow the vehicle. When we look at our dividend yield, we're currently at 10%. Again, we have no legacy commercial real estate exposure, which differentiates us, I think, from the pack in the commercial real estate space. When you look at Q2 financial highlights, essentially, earnings were flat.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Book value is $30.17, which is comparable to where it was the quarter before, which I think was $30.33. Overall, flat. Dividend paid is $0.36 for a dividend yield at 10%. Priorities, how do we unlock shareholder value? How do we create real value out of this vehicle? How do we reset the vehicle? That is truly what our goal is. When we look at page five, the strategic evolution, I pointed out how we took over the management contract from Great Ajax. We took it from where it was losing a little under $10 million on a quarterly basis to where it's breakeven. We've taken actions to position the vehicle for growth. We've sold down the legacy assets that we don't think we can make money on here.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Again, the future state of this is to actually figure out a way to either grow capital or, at some point, potentially retire the vehicle. Bottom part of the page, you can look at the balance sheet between Q2 2024 and Q2 2026. Very clean, and I would tell you that we have a world-class investment team managing this vehicle. Page six talks about what we've done in Q2. This is just the profile of the assets purchased by Rithm Property Trust: $117 million of RTL and MTL loans, 9.1% gross WAC. Very short duration levered return of about 14%. Could have future funding down the road, so what that effectively means is we're not in any chase to actually replace the assets as they amortize down.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Advance rates on the underlying assets are 75%, and the dollar price paid a little bit under one-on-one with a cost of funds of about 5.65%. That really is the story here. It's the story of resetting this vehicle, raising capital so we could actually deploy capital and grow earnings to the extent that we can. We'll have to explore alternative avenues to figure out a way to maximize shareholder value. One of the main reasons we did not do the equity offering was it was substantially below the dollar price where the equity's trading today. With that, I'll turn it back to the operator. We'll open up for Q&A, and hopefully we can figure out a way to reset the vehicle.

Operator

At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. Your first question comes from Tom Catherwood with BTIG. Please go ahead.

Tom Catherwood
Tom Catherwood
Analyst at BTIG

Thanks. Good afternoon, Michael. Just wanted to touch on this. You added on slide five, the future state. You added this comment about exploring opportunities to enhance shareholder value, which was different than the wording you've used in the past. What exactly does that entail? Why not follow Apollo and KKR in their CMRE vehicles and conduct a formal strategic review?

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Here's what I would say. Apollo's vehicle is different. It was a much larger capital base, and I think the direction of that organization, and I can't speak for their leadership team, is probably a little bit different. We're still in a position where we'd like to see us reset or grow this vehicle. As we look at KKR, that vehicle is definitely not as clean as anything that we have on ours. Our whole goal here is how do we create real shareholder value? We took over this thing, book value is substantially higher than where the equity's trading. While saying that, this will be a board decision as far as the direction of what we do here, whether this thing gets cleaned up, whether we tender for shares, whether we try to do M&A deals, et cetera.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

I think when we did this initially, we did this with the intent of trying to grow the vehicle. Clearly, we haven't been able to do that, and obviously that's been illustrated by the latest attempt to raise equity, and there's no lack of effort on this. It'll be a board thing. In the meantime, if we could raise some equity here, that would be great. If not, we'll go back to the board, and we'll try to figure out the best way to clean this thing up.

Tom Catherwood
Tom Catherwood
Analyst at BTIG

Got it. I appreciate it. Then maybe, just sticking on that whole concept of growing the vehicle, we're trying to figure out how much more investment capacity that balance sheet can support. I think you've got $111 million of future funding for the Genesis loans that you took on this quarter, which at a 75% advance rate is roughly $28 million of equity. What's the minimum cash balance you're comfortable carrying, and how much equity is left in the $84 million of CMBS loans that could be redeployed into these Genesis loans?

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

There's something north of $50 million, I believe, in common right now. I shouldn't say in common, in equity, that remains in the vehicle. Quite frankly, we could do a preferred if we wanted to. We could do another debt deal if we wanted to. We're not fussed about that. Obviously, these things pay down and turn over, so we feel that there's enough liquidity in the vehicle today to take care of any potential draws that we may see over the next couple of years.

Tom Catherwood
Tom Catherwood
Analyst at BTIG

All right. If it's $50 million of equity, $28 million is already sort of committed to that $111 million; that leaves you with $20 million, $22 million.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

It's $50 million net after the deployment of the $20-odd million of the loans that I believe funded today.

Tom Catherwood
Tom Catherwood
Analyst at BTIG

Okay. With that, again, thinking of the same 75% advance rate that you used to take the loans on this past quarter, you could take down another $200 million of loans from Genesis. Is that the near-term plan, or are you holding that liquidity for something else?

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

No. We'll keep more liquidity. We might deploy a little bit more capital into more loans to try to grow earnings. The net of it is, if we can't raise equity here or capital in the near term, we'll go back to the board, and we'll have to make a board decision to do something different.

Tom Catherwood
Tom Catherwood
Analyst at BTIG

Got it. Appreciate the answers. Thanks, Michael.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Thank you.

Operator

Your next question comes from line of Craig Kucera with Lucid Capital Markets. Please go ahead.

Craig Kucera
Analyst at Lucid Capital Markets

Yeah. Hey, good evening, guys. You made mention in the deck that you're looking to sell some subordinate positions in several securitizations. Can you give us a sense of how much capital that might free up?

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Yeah. I think we've sold everything that we can. We've got to hold on to a number of these retained interests for purposes of Dodd-Frank. There's some stuff that we could potentially call and then liquidate. That would create a little bit of a loss here. I think for now, we should assume that whatever has been able to be sold has been sold from the legacy side. I think the total equity remaining, and Nick, correct me if I'm wrong, on the Rithm side is give or take about $100 million. Is that right?

Nick Santoro
Nick Santoro
CFO at Rithm Property Trust

It's $170 million after the-

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Yeah,

Nick Santoro
Nick Santoro
CFO at Rithm Property Trust

last transaction.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

This is not that much there. Most of them are just retained interest that we have to hold for because they were securitized years ago, and the coupons are low, and they're not in the money now to be called. I think some of them actually come up here in the fall, just based on time and factors, and we'll have another hard look at those. For now, I would assume they sit here until we figure something different out.

Craig Kucera
Analyst at Lucid Capital Markets

Okay, got it. Changing gears, just given the highly accretive nature of the residential transition loans and the multifamily transition loans, was there any thought to selling ownership in Paramount back to Rithm to deploy more of a higher current-yielding product, or do you feel that investing in Paramount is best for the vehicle?

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

I think we did that at a time when we thought we were going to be able to raise capital for the vehicle. Honestly, we were extremely excited about the so-called Paramount/Elecor investment. While saying that, I don't know that gets us over the hump no matter what we do here, because you still need to raise capital. The challenge in raising equity, and this is our second bout of trying to raise equity over the course of the past six months or so, is once you go out with a potential equity offering, and we've had just a ton of conversations, and supported by what I would say are large money center bank friends who have actually given it all they can to try to help us raise equity, is that as soon as you do that, the stock gets hit.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

We started when the stock was at $14. To do a deal, it would've had to be south of $10. It wouldn't have been distributed, and we went out where Rithm was going to backstop it, and it just wouldn't have been a good solution for what I would say Rithm Property Trust shareholders. Yeah, there's the $50 million that sits there. We can deploy a little bit more capital. We should assume, unless we raise equity, that this vehicle will get cleaned up some way, somehow, going back to the earlier comments from Tom, what Apollo did with ARI.

Craig Kucera
Analyst at Lucid Capital Markets

Okay, got it. Just the fact that you were willing to put $200 million in as a backstop, I think a mix of common and convertible preferred. Is some capital raise similar to that a possibility, or would you need the market's involvement?

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

No. If you looked at the Rithm earnings today as of the end of 630, we had $2.1 billion of cash on liquidity. It's more about, I think, where the equity comes. We're extremely sensitive about taking a $14 stock, issuing equity at $9, and then seeing the stock pop a few dollars. That doesn't work for shareholders, and that's not who we are.

Craig Kucera
Analyst at Lucid Capital Markets

Okay. Thanks. That's it for me.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Thank you.

Operator

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

Henry Coffey
Analyst at Wedbush Securities

Good afternoon, everyone. Mike, it seems however hard we push you on the idea of putting on more assets, putting more on assets, the answer is, "No, we're not going to ramp up our leverage beyond anything that's reasonable. We need more capital." That could come in a lot of different forms. I think we all know that. I guess, A, is how quickly would you move on one front or the other, and B, what does the final clock look like in terms of how you're thinking about this business, whether it should be acquired and folded back into Rithm, whether you should tender for the stock, or however you want to ultimately resolve the thing. It's kind of like, A, you're going to get some form of capital in here, or B, you're going to take it private.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Yeah. I think it's a 2026 event. We begin August here. It'll be something that we'll continue to work with our board, to the extent that we could bring in a sleeve of capital. The stock is trading a little bit better here. Great. I would assume it's a 2026 event.

Henry Coffey
Analyst at Wedbush Securities

All right. Thank you.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Thank you, Henry.

Operator

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

Jason Stewart
Jason Stewart
Analyst at Compass Point

All right. Thank you. Michael, you started to, I think, address part of my question, which is how would a raise look different next time? Is there a way to structurally address the perceived market concerns, like a wrap or a backstop? Then I think you started to address that with the Rithm backstop. Is there any other option on the table that you're considering in terms of structural enhancement?

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

If you have an idea, you call me. I don't know. We've tried to bring in third-party capital alongside this. We've tried to obviously work through a backstop. The equity is fundamentally extremely cheap. It's just one of these things that there's no float. It's trading a little bit more volume these days. With a stated book value of $30. We do need to reset the vehicle, but you don't want to reset it with $25 million or $50 million because you're going to be in the same boat as we look down the road. The idea initially was to go out with a reasonable-sized offering. Rithm would participate because we believe in it, we believe in what we do, but we need to get real participation from others away from Rithm. We've had a ton of conversations. There is some participation away.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

It's a question of where the equity comes.

Jason Stewart
Jason Stewart
Analyst at Compass Point

Yeah. Okay. I think from the beginning here, we've talked about the potential for a transformative commercial real estate transaction outside of the Genesis book. Is your feeling now that there's just too much capital chasing those opportunities, and that's unlikely to happen? Or do you think it's still, based on the flow you're seeing, possible?

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Yeah. We're doing some different debt deals. I think if you go back to the Rithm earnings call that we did this morning and you look at some of the monetizations we're in the middle of or things that we've done. We did that of Rithm. We put out a couple of $100 million. Those returns have been very good on both the debt and equity stuff that we've done there. We're hunting, and it doesn't have to be specific to office, quite frankly. We're looking at some public company stuff. We're looking at some private company stuff. I think the runway alone, even in the Genesis business, gives us plenty of ability to create mid-teens levered assets with real cash flow that hopefully we can figure out ways to fund those in our PT.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

Some of that stuff goes in funds now. Some of it sits on Rithm's balance sheet, that's what we're working towards. I think there's plenty of stuff to look at. Banks are back in lending. I think that's very healthy for the market. There's opportunities. We work with our broker friends. We see a ton of different things. We just got to figure out what's right.

Jason Stewart
Jason Stewart
Analyst at Compass Point

Okay. Thank you.

Michael Nierenberg
Michael Nierenberg
CEO at Rithm Property Trust

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
Michael Nierenberg
CEO at Rithm Property Trust

Appreciate everybody's thoughtful questions. If you have any real good ideas that we're not thinking about, quite frankly, give us a buzz, and we're always happy to listen. We want to protect our shareholders in this one and not just come out and do a deal that doesn't make any sense. To the extent that we can get a deal done, we will. If not, we'll try to figure out what plan B is. Our intent is to have all that stuff done by the end of the year, no later than the end of the year. With that said, have a great rest of the summer, and appreciate your thoughtful questions. Take care. Bye-bye.

Operator

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

Executives
    • Emma Hoelke
      Emma Hoelke
      Deputy General Counsel
    • Michael Nierenberg
      Michael Nierenberg
      CEO
    • Nick Santoro
      Nick Santoro
      CFO
Analysts
    • Tom Catherwood
      Analyst at BTIG
    • Craig Kucera
      Analyst at Lucid Capital Markets
    • Henry Coffey
      Analyst at Wedbush Securities
    • Jason Stewart
      Analyst at Compass Point
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