Rithm Property Trust Inc. (RPT) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals several concerns: flat earnings, negative EAD, and low market confidence with the company trading at 50% of book value. The commercial real estate sector's instability further exacerbates these issues. Although the dividend yield is attractive, the ongoing restructuring, lack of clear guidance on recapitalization, and management's vague responses in the Q&A suggest uncertainty. Despite some growth initiatives, the overall sentiment leans negative due to financial challenges and unclear strategic direction.
Key Financial Performance
GAAP earnings for Q4 2025 $2.5 million, flat year-over-year. The company was not making any money when management took over in June 2024.
Earnings Available for Distribution (EAD) for Q4 2025 Negative $500,000, leading to a per diluted share of $0.06 negative. This reflects the company's ongoing restructuring and repositioning efforts.
Book Value $300 million or $31 per diluted share. This reflects the company's clean balance sheet and efforts to stabilize its financial position.
Cash and Liquidity Approximately $100 million. This is part of the company's strategy to maintain a clean balance sheet and prepare for future investments.
Common Stock Dividend Yield 8.7%. This reflects the company's commitment to maintaining shareholder returns despite financial restructuring.
Genesis Business Production Projected to grow from $1.7 billion in 2022 to $6 billion-$7 billion in 2025. This growth is attributed to the company's focus on expanding its multifamily lending business.
Rithm Parent Level Earnings for Q4 2025 North of $400 million in earnings available for distribution. This reflects the diversified earnings streams of the parent company.
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Operating Highlights
Multifamily Lending Business: The company is growing its multifamily lending business, projecting $6 billion to $7 billion in production for the year, up from $1.7 billion in 2022.
Paramount Acquisition: The company announced the acquisition of Paramount, which is expected to contribute to growth in the commercial real estate space.
Commercial Real Estate Expansion: The company is making a significant push into the commercial real estate sector, including exploring opportunities to acquire licenses to become a Fannie, Freddie servicer or originator in the multifamily space.
Balance Sheet and Liquidity: The company has a clean balance sheet with $100 million in cash and liquidity, and total equity of $300 million.
Reverse Stock Split: A 6:1 reverse stock split was executed to attract more interest in the stock, increasing the trading price to $15-$16.
Recapitalization Plan: The company plans to recapitalize the vehicle to grow earnings to $1.60-$1.70 per share and achieve a 9% dividend yield with a book value of approximately $20.
Diversified Earnings Streams: The company is focused on creating diversified earnings streams to mitigate risks and enhance stability.
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Risk or Challenges
Investment Activity: Investment activity remained light, with only a small investment in the Paramount transaction. This indicates potential challenges in identifying or executing profitable investment opportunities.
Capital Formation: The company's future growth depends on capital formation, which is uncertain and subject to market stabilization. This poses a risk to achieving projected earnings and dividend growth.
Market Conditions: The real estate sector is dislocated, with many commercial REITs facing liquidity issues or balance sheet challenges. This could impact the company's ability to execute its strategy effectively.
Earnings Performance: Earnings were flat, with Q4 GAAP earnings at $2.5 million and EAD at negative $500,000. This reflects ongoing challenges in achieving profitability.
Valuation: The company is trading at approximately 50% of book value, indicating low market confidence and potential difficulties in raising capital or attracting investors.
Commercial Real Estate Investments: The company is making a push into commercial real estate, but this sector faces significant challenges, including low valuations and potential market instability.
Diversified Earnings Streams: While the company has diversified earnings streams, some segments, such as the mortgage company, experienced higher amortization, which could offset gains in other areas.
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Guidance & Outlook
Earnings Growth: The company aims to grow earnings to $1.60-$1.70 per share, contingent on a recapitalization of the vehicle and market stabilization.
Dividend Yield: The company expects to maintain a dividend yield of approximately 9% with a book value of $20, depending on the recapitalization and capital raising efforts.
Multifamily Lending Business: Plans to grow multifamily lending production to $6-$7 billion in 2025, up from $1.7 billion in 2022. Exploring opportunities to acquire licenses to become a Fannie Mae or Freddie Mac servicer or originator in the multifamily space.
Commercial Real Estate Investments: Focus on acquiring multifamily loans and other commercial real estate investments to drive earnings growth. The company is optimistic about the office real estate sector and plans to leverage its diversified earnings streams.
Paramount Acquisition: The company is optimistic about the recently announced acquisition of Paramount, viewing it as a strategic opportunity for growth.
Market Conditions: Plans to be patient with investments and recapitalization efforts until market conditions stabilize, particularly in the dislocated real estate sector.
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Shareholder Return Plan
Dividend Yield: 8.7% from a dividend yield perspective.
Dividend Continuation: The company will continue to pay the common stock dividend.
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Key Q&A
Q:Will RPT be receiving a slice of the NOI from the Paramount transaction at Rithm Capital?
A:RPT has $50 million of the Paramount deal on its balance sheet, and it will receive a pro rata share of what Rithm did on the balance sheet.
Q:Are you exploring feeding Rithm with more loans from Genesis, and what is the future state on a larger capital base?
A:Genesis is expected to produce $6 billion to $7 billion this year, with loans going into both the Rithm balance sheet and potentially RPT if a capital raise is successful. Rithm has $1.5 billion to $2.5 billion in cash and liquidity but does not anticipate issuing equity unless highly accretive.
Q:Is there a tolerance for finding other sources of capital to move ahead with the recap plan for RPT?
A:Yes, there is potential for bringing in third-party capital alongside the vehicle. The company is cautious about avoiding highly dilutive actions and may sell liquid floaters to invest in more accretive opportunities.
Q:What types of loans will RPT focus on, and will there be traditional multifamily lending?
A:RPT has identified a pool of assets worth around $1 billion, primarily Genesis loans with levered returns well north of 15%. Other types of loans may be considered, but the focus is on highly accretive Genesis loans.
Q:What are the pros and cons of buying loans from Genesis versus third parties?
A:The company sources loans from both Genesis and third parties. Genesis loans are preferred due to strong credit oversight, but third-party loans are also considered if credit quality is satisfactory. There is high demand for these products in funds and on the Rithm balance sheet.
Q:Are banks selling loans in the current market, and is there an opportunity to acquire from them?
A:Banks are not selling many loans currently. Instead, regional banks have pulled back, creating opportunities for Genesis and other lending businesses to grow production.
Q:Is the goal for RPT to have end-to-end capabilities from intermediate loans to permanent financing through GSEs?
A:Yes, the goal is to create an end-to-end solution, capturing as much wallet share as possible from customers. This includes leveraging Genesis and Newrez to provide comprehensive financing solutions and exploring additional products like cards.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer regarding the timing and specifics of moving RPT over book value and the exact path for recapitalization. They used vague language like 'timing thing' and 'market thing' without offering concrete details.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Capital Rithm
Chief Executive
Chief Financial
Deputy General
Executive Officer
Financial Officer
General addition
Instructions Deputy
Officer Rithm
Rithm Capital
Rithm Property
SEC supplement
Trust Chief
Trust Instructions
addition measure
portfolio statement
statement portfolio
supplement Rithm
today Chief
today Rithm
RPT Transcript
Rithm Property Trust Inc. (RPT) Q4 2025 Earnings Call Transcript
Unknown2-13
The earnings call reveals several concerns: flat earnings, negative EAD, and low market confidence with the company trading at 50% of book value. The commercial real estate sector's instability further exacerbates these issues. Although the dividend yield is attractive, the ongoing restructuring, lack of clear guidance on recapitalization, and management's vague responses in the Q&A suggest uncertainty. Despite some growth initiatives, the overall sentiment leans negative due to financial challenges and unclear strategic direction.
Rithm Property Trust Inc. (RPT) Q3 2025 Earnings Call Transcript
Unknown10-31
The company's earnings call presents a mixed picture. While there are positive elements such as a maintained dividend, a strong cash position, and promising real estate investments, there are also significant concerns. These include the disparity between stock and book value, flat earnings, and operational challenges. The Q&A session reveals management's cautious optimism but lacks concrete plans for growth. Given these mixed signals, the stock price is likely to remain stable in the short term, resulting in a neutral sentiment.
Rithm Property Trust Inc. (RPT) Q2 2025 Earnings Call Transcript
Unknown7-24
The earnings call reveals a mixed sentiment. Financial performance shows improvement, but profitability remains limited. The company has a strong pipeline and strategic focus on opportunistic investments, which is positive. However, there are concerns about operational scaling and economic uncertainty. The Q&A section highlights management's cautious approach to capital deployment and shareholder dilution, but lacks specific details on strategy execution. The absence of negative guidance and dividend reduction intentions are positives, but the lack of clear guidance on scaling and shareholder returns tempers overall sentiment, resulting in a neutral outlook.
Rithm Property Trust Inc. (NYSE:RPT) Q1 2025 Earnings Call Transcript
Unknown4-29
The earnings call presents a mixed picture. Financial performance shows no significant change, and the stock is undervalued compared to book value. However, regulatory issues and potential supply chain challenges are concerns. The Q&A reveals stability in market activity and a focus on diversification, but lacks clarity on key financial strategies. The dividend remains stable, but capital raise and legacy asset sales suggest financial adjustments. Overall, the sentiment is neutral, with no strong positive or negative catalysts identified.
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