Rithm Property Trust NYSE: RPT reported a relatively quiet first quarter of 2026 as management emphasized patience in deploying capital amid shifting market conditions and said it is evaluating opportunities that could meaningfully change the company’s earnings profile.
Chief Executive Officer Michael Nierenberg said the quarter was “pretty uneventful” while the company continues to search for what he described as a potential “game changer” for the vehicle. He noted that asset manager valuations have been under pressure and that public equity markets have also faced downward pressure, but credit spreads have remained in a “relatively tight range.”
Portfolio positioning and liquidity
Nierenberg said Rithm Property Trust has “just a little under $100 million of cash and liquidity” and described the balance sheet as “extremely clean,” adding that there are “no problem loans.” He said the company’s commercial real estate portfolio consists of “post-2024 vintage” investments totaling $236 million, while equity totaled about $287 million.
Management reiterated that it has been repositioning the company since taking over the vehicle in 2024. Nierenberg said the firm “made a decision to clean up the balance sheet, liquidate a lot of the residential stuff, and reposition the company in the commercial space.” He also cited steps including cutting general and administrative expenses, renegotiating repo agreements, and improving liquidity.
As part of its activity during the quarter, Nierenberg said the company sold “a few CRE floaters” to create liquidity and pursue higher-return opportunities. The company’s pipeline was described as “give or take about $2 billion,” with a focus on large opportunities in multifamily and areas that could connect with the company’s Genesis business.
Quarterly results and dividend
For the first quarter, Nierenberg reported GAAP income of negative $3.2 million, or negative $0.42 per diluted share, and earnings available for distribution of negative $300,000, or negative $0.04 per diluted share. He also referenced a reverse split completed in the fourth quarter.
The company paid a dividend of $0.36 per diluted share, which Nierenberg said equated to an approximate 10.8% dividend yield based on the stock’s trading level at the time of the call. Book value was cited as $236.2 million, or $30.83 per share.
Nierenberg said that while management continues to wait for an opportunity to transform the company, it plans to “continue to pay the dividend.” He added that the company may eventually need to grow and could consider “different opportunities in the M&A world” and potentially “buying back a little bit of stock.”
CMBS sales, leverage, and redeployment plans
During the question-and-answer session, Craig Kucera of Lucid Capital Markets asked whether the company’s reduction in CMBS holdings and deleveraging would persist. Nierenberg said the sales were driven by a desire to create capital for opportunistic investing rather than a broader shift to lower leverage.
He said the company sold down “levered AAA CMBS” that were yielding “give or take about 10%” after markets fell, with the idea that capital could be redeployed into higher-yielding assets. “Quite frankly, at this point, we’ll continue to sit on the cash and look for those opportunities,” Nierenberg said, adding that the company is evaluating a “large portfolio” of multifamily assets expected to come to market in May.
Nierenberg also said the company is seeing opportunities on the debt side that could offer higher yields than its AAA CMBS. He framed the broader environment as one where headlines and geopolitics have been negative, but market performance and liquidity across RMBS and CMBS have been “actually okay.”
Expenses, Paramount investment, and Genesis strategy
Kucera also asked about a jump in professional fees. Chief Financial Officer Nick Santoro said the increase was “a one-time event in the quarter” related to reviewing “various capital options.”
On the company’s investment alongside Rithm in the Paramount transaction, Santoro said Paramount’s impact “for the quarter was essentially flat,” but added it “will ramp up as the investment continues to accrete and as we make progress on Paramount.”
Nierenberg provided additional details on Paramount, saying the transaction closed on Dec. 20 and the team has since reduced G&A “from $65 million down to about $30 million.” He also said lease-up activity was at “the highest levels we’ve seen in 20+ years,” and noted the portfolio includes properties in New York and San Francisco, along with refinancing work and potential joint venture equity investments. Nierenberg said the intent is to raise capital from third parties or bring in JV partners and target returns of “2x and 20%+,” with some returns expected to be back-ended.
Jason Stewart of Compass Point asked about potential opportunities tied to Genesis and the company’s unsecured debt. Nierenberg said the unsecured debt carried a “9, 7, 8 kind of coupon,” and that improving the company’s rating could lower that cost. He also described Genesis as a successful acquisition, saying it had grown from $1.7 billion of production and “$40 odd million” of EBITDA at the time of purchase to an expected $6 billion to $7 billion of production this year and $150 million to $200 million of EBITDA.
Nierenberg said the company has launched a non-traded REIT with a large money-center bank to raise capital alongside Genesis production and has executed a separately managed account tied to Genesis flow with an overseas sovereign investor. He added that management is exploring whether some assets could be securitized at returns “north of 20% or 15%-20%” and whether Rithm Property Trust could use assets not placed into flow programs to “actually grow earnings” at RPT.
M&A interest and scale considerations
Several analysts focused on the challenges of scaling a small vehicle in the current commercial mortgage REIT environment. Henry Coffey of Wedbush Securities asked what is holding up capital deployment and whether the company could lever up now if it chose to. Nierenberg responded that the vehicle is “extremely small” and needs a “large pool of capital” to materially change its earnings and profile. He said management created liquidity in the quarter to be ready for better opportunities, but “we just haven’t seen it come to fruition.”
Pressed on potential capital raises and dilution, Nierenberg said the company would pursue such steps only “around an accretive transaction,” adding that the one-time professional fee increase was part of efforts to “figure out a way to raise a pool of capital.”
Jade Rahmani of KBW asked whether the company is seeing increased engagement around combination scenarios, given pressure on smaller commercial mortgage REITs and the importance of scale. Nierenberg said the company continues to look at M&A and described Rithm Property Trust’s balance sheet as “crystal clean,” contrasting it with other REITs that have “suffered a little bit” from earlier-vintage lending. He also noted that about “$100-ish million of equity” remains tied up in residential deals—re-performing loan transactions created by the prior management team when the company was known as Great Ajax—which he said are “marked extremely well.”
At the same time, Nierenberg said combinations can be difficult because “not everybody wants to give up their business” even if it is underperforming, and he emphasized that small businesses can struggle to grow without sufficient capital.
Nierenberg closed the call by thanking participants and saying he looked forward to providing updates during the quarter.
About Rithm Property Trust NYSE: RPT
Rithm Property Trust Inc is a real estate investment trust (REIT) externally managed by an affiliate of Rithm Capital Corp. (Rithm). The company focuses on commercial real estate-focused investment, including originating, acquiring and managing portfolios of CMBS, commercial real property, commercial mortgage loans and other CRE investments. It has two reportable operating segments: Residential and Commercial. The majority of the company's revenue is derived from the Residential segment, which is focused on managing a portfolio that includes residential mortgage assets, including whole mortgage loans, RMBS and beneficial interests.
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