UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 001-36844 (Commission file number) RITHM PROPERTY TRUST INC. (Exact name of registrant as specified in its charter) Maryland 46-5211870 State or other juri ...

Financial Performance - Comprehensive income for Q1 2025 was $1.1 million, or $0.02 per diluted common share, down from $2.2 million, or $0.05 per diluted common share in Q4 2024[4] - Earnings available for distribution increased to $0.7 million, or $0.02 per diluted common share, compared to $0.3 million, or $0.01 per diluted common share in the previous quarter[4] - The company reported a net loss attributable to common stockholders of $3.7 million for Q1 2025, compared to a net income of $2.9 million in Q4 2024[14] - Comprehensive income for Q1 2025 was $1,114,000, compared to $2,202,000 for Q4 2024[23] - Earnings Available for Distribution (Non-GAAP) increased to $717,000 in Q1 2025 from $323,000 in Q4 2024[23] - Basic and diluted Earnings Available for Distribution per common share were both $0.02 in Q1 2025, up from $0.01 in Q4 2024[23] Equity and Assets - Book value per common share slightly decreased to $5.40 from $5.44 in Q4 2024, with total equity rising to $295.9 million from $246.9 million[4] - Total assets increased to $1,028.3 million from $977.3 million, with cash and cash equivalents rising to $97.4 million from $64.3 million[16] - The weighted average shares outstanding for basic and diluted calculations were 45,422,030 in Q1 2025, slightly up from 45,298,505 in Q4 2024[23] Dividends and Investments - The company declared a cash dividend of $0.06 per share, totaling $2.7 million, consistent with the previous quarter[8] - The company deployed $64 million into commercial real estate investments, including $46.7 million in commercial mortgage-backed securities, bringing total CMBS investments to $274.6 million[12] - Issued 2,084,232 shares of 9.875% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock for net proceeds of $50.8 million[12] - Sold legacy RMBS with a total unpaid principal balance of $20.7 million, resulting in a remaining RMBS portfolio of $101.1 million[12] Income and Interest - Interest income for Q1 2025 was $13.2 million, an increase from $12.9 million in Q4 2024, while net interest income rose to $3.8 million from $3.6 million[14] Strategic Direction - Rithm Property Trust has transitioned to a flexible commercial real estate investment strategy following a strategic transaction with Rithm Capital in 2024[25] - The company focuses on acquiring, investing in, and managing re-performing and non-performing loans secured by residential and commercial properties[25] Forward-Looking Statements - Forward-looking statements indicate management's expectations regarding future events, highlighting inherent uncertainties[26] - The company disclaims any obligation to update or revise forward-looking statements except as required by law[26] Investor Relations - Investor relations contact is available for further inquiries at 646-868-5483 or ir@rithmpropertytrust.com[27]

Strategic Transactions and Management Changes - The company completed a strategic transaction with Rithm on June 11, 2024, involving the sale of $14.0 million of common stock at a price of $4.87 per share[21]. - The company terminated its existing management contract with the former manager in exchange for approximately 3.2 million shares of common stock and $0.6 million in cash[21]. - The management agreement with RCM GA is effective until June 11, 2027, with automatic renewals for successive two-year terms[42]. - The company disposed of its interest in Great Ajax FS LLC and assigned servicing agreements to Newrez as part of the strategic transaction[22]. Investment Strategy and Asset Management - The company shifted its investment strategy to focus on originating and acquiring loans and securities collateralized by various commercial real estate assets, moving away from RPLs and NPLs[26]. - The new investment strategy includes targeting senior loans, subordinated debt, mezzanine loans, preferred equity, and commercial mortgage servicing rights[27]. - The company anticipates financing its strategy through various options, including borrowing under credit facilities and issuing commercial real estate collateralized loan obligations[28]. - The investment guidelines adopted by the board allow for changes in target asset classes without stockholder approval[31]. - The company does not currently hedge the risk associated with its investment portfolio but may undertake risk mitigation activities in the future[36]. Financial Performance and Risks - The company incurred a net loss attributable to common stockholders of $92.2 million for the year ended December 31, 2024[82]. - The market value of the company's residential and commercial mortgage loans has significantly deteriorated, leading to substantial operating losses[82]. - Higher historical interest rates are expected to continue negatively impacting the company's loan assets, extending duration and decreasing fair market value[83]. - The company has identified certain mortgage loans for potential sale, but unfavorable market conditions may result in losses upon sale[84]. - The company may face significant liabilities related to environmental contamination at properties it owns or acquires[74]. Compliance and Regulatory Risks - The company intends to qualify as a REIT and must distribute at least 90% of its current taxable income each year to avoid federal income tax[64]. - The company conducts operations to avoid registration as an investment company under the Investment Company Act, ensuring less than 40% of total assets consist of investment securities[66]. - The company monitors compliance with the Investment Company Act to ensure subsidiaries meet applicable exemptions or exclusions[69]. - Regulatory compliance is critical for the Servicer, and any failure could increase expenses and adversely affect results[147]. - The Dodd-Frank Act has introduced significant regulatory changes that impact the financial services industry, including enhanced regulations for mortgage lending and servicing[186]. Market Conditions and Economic Factors - The overall level of commercial mortgage loan defaults remains significant, with many underlying commercial real estate market values distressed[93]. - The company is exposed to risks from weather conditions and natural disasters, which could materially impact asset values and financial performance[95]. - Difficult conditions in the mortgage and real estate markets have adversely affected asset values and are expected to persist in the foreseeable future[100]. - Changes in underwriting standards by Freddie Mac, Fannie Mae, or FHA could adversely affect the company's ability to refinance mortgage loans, impacting business operations[113]. Conflicts of Interest and Management Challenges - Conflicts of interest may arise between the company and its New Manager, potentially leading to decisions that prioritize incentive compensation over capital preservation[199]. - The Servicing Agreements are not negotiated at arm's length, which may result in less favorable terms compared to agreements with unaffiliated third parties[201]. - Rithm's investment policy allows for significant latitude in asset selection, which may lead to investments with lower returns or higher risks than anticipated[209]. - The complexity of managing conflicts of interest may lead to regulatory scrutiny or litigation, negatively impacting Rithm's business and financial condition[208]. Financial Strategies and Risks - The company uses leverage to enhance financial returns, but this increases both potential gains and losses, impacting cash available for distribution to stockholders[168]. - The company's financing strategy relies on placing debt at rates that provide a positive net spread; widening spreads could severely restrict future financings[162]. - The company may pursue various hedging strategies to reduce exposure to adverse interest rate changes, but these strategies can be expensive and may not provide the intended protection[179]. - The inability to refinance short-term facilities may require the company to seek less attractive financing options or liquidate assets at unfavorable times[176].

Financial Performance - GAAP net income for Q4 2024 was $2.9 million, or $0.06 per diluted share, compared to a loss of $8.0 million in Q3 2024[3] - Earnings available for distribution for Q4 2024 were $0.3 million, or $0.01 per diluted common share, up from a loss of $5.4 million in Q3 2024[3] - The company stabilized its book value and achieved positive earnings growth from a loss of $12.7 million in Q2 2024 to a net income of $2.9 million in Q4 2024[4] - Net income attributable to common stockholders for the three months ended December 31, 2024, was $2.914 million, compared to a loss of $8.029 million for the previous quarter[23] - Earnings available for distribution (EAD) for the same period was $323,000, a significant improvement from a loss of $5.360 million in the prior quarter[23] - Basic and diluted earnings available for distribution per common share were both $0.01 for the three months ended December 31, 2024, compared to a loss of $0.12 per share in the previous quarter[23] Asset and Liability Management - Total assets decreased to $977.3 million as of December 31, 2024, down from $1.3 billion a year earlier[15] - Total liabilities were reported at $730.6 million, a decrease from $1.0 billion at the end of 2023[15] - Book value per common share decreased slightly to $5.44 at December 31, 2024, from $5.47 at September 30, 2024[3] Dividend Declaration - The company declared a cash dividend of $0.06 per share, totaling $2.8 million, to be paid on February 28, 2025[6] Investment Strategy - The company acquired $154 million in UPB of commercial mortgage-backed securities, increasing total investment in CMBS to $244 million[10] - The transition to a commercial real estate-focused investment strategy was highlighted following the rebranding to Rithm Property Trust on December 2, 2024[10] Earnings Distribution Policy - The company views earnings available for distribution as a consistent financial measure of its portfolio's ability to generate income for distribution to common stockholders[21] - To maintain qualification as a REIT, the company is required to distribute at least 90% of its REIT taxable income annually[21] - Management excludes certain realized and unrealized losses from earnings available for distribution as they are not considered part of the company's core operations[20] Strategic Transactions - The company reported unrealized losses of $1.516 million for the quarter ended December 31, 2024, compared to unrealized gains of $1.640 million in the prior quarter[23] - The company incurred $1.010 million in expenses related to a strategic transaction during the previous quarter[23] - The strategic transaction with Rithm Capital involved a management agreement with an affiliate to serve as the external manager for Rithm Property Trust[23]

Core Insights - The article discusses the investment landscape in the real estate sector, particularly focusing on the performance and potential of various real estate investment trusts (REITs) and related securities [2][3]. Group 1: Company Insights - Hoya Capital Research & Index Innovations is affiliated with Hoya Capital Real Estate, providing investment advisory services and market commentary focused on publicly traded securities in the real estate industry [2]. - The commentary emphasizes the importance of consulting with investment, tax, or legal advisers before making investment decisions, highlighting the complexities involved in real estate investments [2]. Group 2: Industry Insights - The article notes that investments in real estate companies and housing industry companies carry unique risks, which may not be suitable for all investors [2]. - It mentions that past performance of market data does not guarantee future results, indicating the volatile nature of the real estate market [3].

Market Risks - The primary market risks include real estate risk, interest rate risk, prepayment risk, and credit risk, which the company actively manages [268]. - Increases in interest rates are expected to lower refinancing volume and potentially increase defaults on CMBS, while home price increases may slow down [269]. - Higher interest rates could lead to a decline in the value of real estate assets and net income if not accompanied by increases in loan yield and rental yield [273]. - Prepayment risk is influenced by various factors, including interest rates and borrower behavior, which can affect the yield on assets and reinvestment opportunities [274]. - Credit risk is present due to potential borrower defaults, which may arise from personal income reductions, job loss, or poor property management [276]. - Inflation and interest rate increases by the Federal Reserve have raised the company's cost of funds, impacting the value of residential mortgage assets [277]. Financial Management - The company plans to continue securitizing whole loan portfolios to create long-term, fixed-rate financing, while utilizing repurchase lines of credit as interim financing [271]. - The company has not experienced any material changes in internal control over financial reporting during the last fiscal quarter [281]. - There are no material pending legal or regulatory proceedings involving the company or its subsidiaries [283]. - No material changes to risk factors were reported for the three months ended September 30, 2024 [284].

Financial Data and Key Metrics Changes - The company reported a GAAP net income loss of $8 million or $0.18 per diluted share for Q3 2024 [12] - Earnings available for distribution were negative $5.4 million or $0.12 per diluted share [12] - Book value remained relatively stable at $5.47, compared to $5.50 in the previous quarter [8] - The dividend declared for Q3 was $0.06, with a current dividend yield of 7.2% [12] Business Line Data and Key Metrics Changes - The company sold $85 million of residential mortgage loans, generating nearly $18 million in cash [13] - Approximately 91% of legacy residential mortgage loans held for sale were sold since the end of Q1 [13] - The company also sold $62.7 million of residential securities, generating $14 million in cash [13] - Net interest income increased by 126% from $1.6 million to $3.6 million by the end of Q3 [14] Market Data and Key Metrics Changes - The company is focusing on cash-flowing assets, particularly in the commercial real estate sector, with recent bids on $1 billion of assorted commercial real estate loans [9][21] - The company is seeing some movement from banks in terms of asset availability, although caution is advised due to potential risks in the market [17] Company Strategy and Development Direction - The company aims to sell down legacy residential assets and redeploy capital into cash-flowing CMBS, targeting breakeven by the end of Q1 2025 [6] - A name change from Great Ajax to Rithm Property Trust is planned for Q4 2024 [10] - The management strategy involves being patient and ensuring that any transactions are significant winners to transform the company [9][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about finding the right transactions to transform the company into a successful entity, emphasizing the importance of patience for investors [11] - The current economic environment presents both challenges and opportunities, particularly in the commercial real estate sector [17][27] - Management believes that the need for equity and debt financing in commercial real estate will continue, regardless of interest rate fluctuations [28] Other Important Information - Cash and equivalents on the balance sheet totaled $84 million, with approximately $30 million available for investment [12] - The company has a reserve of roughly $50 million and stockholder equity is just under $250 million [12] Q&A Session Summary Question: What segments of the commercial real estate debt universe have dislocation and mispricing that match a Rithm type investing strategy? - Management highlighted a recent bid on a portfolio that included multifamily and affordable housing, emphasizing the need for cash-flowing assets [21] Question: Could lower rates give borrowers some cushion to ride out distress, reducing opportunities? - Management indicated that while lower rates could provide some cushion, there will still be significant opportunities for recapitalization in distressed assets [27] Question: Has any more cash been deployed in October, and are there smaller investments that could be monetized soon? - Management stated that about $20 million to $25 million remains available for deployment, with various small positions being cleaned up [30] Question: Will the vehicle be financed using bank lines or look to the markets for other financing alternatives? - Management noted that bank lines would be specific to the securities portfolio, but there are plans to explore debt and equity markets for different securities in the future [40]

Financial Performance - GAAP net loss attributable to common stockholders was $(8.0) million, or $(0.18) per diluted share, compared to a loss of $(12.7) million, or $(0.32) per diluted share in Q2 2024[1][2] - Earnings Available for Distribution was $(5.4) million, or $(0.12) per diluted common share, improving from $(9.6) million, or $(0.24) per diluted common share in the previous quarter[2][3] - The company reported a net loss attributable to common stockholders of $(8,029,000) for the three months ended September 30, 2024, compared to $(12,742,000) for the previous quarter[27] - Earnings available for distribution for the quarter ended September 30, 2024, were $(5,360,000), down from $(9,598,000) in the prior quarter[27] - Basic and diluted earnings available for distribution per common share were both $(0.12) for the quarter ended September 30, 2024, consistent with the previous quarter[27] - The company reported realized and unrealized gains of $1,640,000 for the quarter ended September 30, 2024, compared to $2,058,000 in the previous quarter[27] Asset and Liability Management - Total assets decreased to $858.2 million from $1.3 billion at the end of 2023[17] - Total liabilities decreased to $611.1 million from $1.0 billion at the end of 2023[18] - Total liabilities and equity amounted to $858,151,000 as of December 31, 2023, down from $1,336,291,000 in the previous period[19] - The company had 1,135,590 shares issued and outstanding as of December 31, 2023[19] - The company’s retained deficit increased to $(158,126,000) from $(54,382,000) in the previous period[19] Equity and Book Value - Book value per common share decreased to $5.47 from $5.56 in Q2 2024, with total book value at $246.1 million[2][3] - As of December 31, 2023, the company had total equity of $247,093,000, a decrease from $310,895,000 at the end of the previous period[19] - The company’s accumulated other comprehensive loss improved to $(8,279,000) from $(14,027,000) in the previous period[19] Strategic Transactions and Investments - The company sold residential loans and securities with an unpaid principal balance of approximately $148.0 million, generating net proceeds of approximately $31.7 million[4] - Acquired $81.9 million in unpaid principal balance of commercial mortgage-backed securities, increasing total investment in CMBS to $101.9 million[4] - The company incurred expenses related to the Strategic Transaction amounting to $1,010,000 for the quarter ended September 30, 2024[27] Corporate Actions - The company declared a cash dividend of $0.06 per common share, to be paid on November 29, 2024[6] - The company filed a shelf registration statement with the SEC to increase the maximum offering price of its securities to $400 million[5] - The company plans to rebrand as Rithm Property Trust Inc. and change its ticker symbol to "RPT" in Q4 2024[7]

Financial Performance - Net interest income for the three months ended June 30, 2024, was $348 thousand, a decrease of 89% compared to $3,301 thousand for the same period in 2023[14]. - Consolidated net loss attributable to common stockholders for the six months ended June 30, 2024, was $87,061 thousand, compared to a loss of $19,975 thousand for the same period in 2023, indicating a significant increase in losses[14]. - Consolidated net loss for the six months ended June 30, 2024, was $86,853 thousand, compared to a loss of $18,826 thousand for the same period in 2023[20]. - The company reported a net loss of $73.978 million for the six months ended June 30, 2024[27]. - The company recorded a net loss of $481 thousand from Gaea Real Estate Corp. for the three months ended June 30, 2024, compared to a net loss of $594 thousand for the same period in 2023[181]. Assets and Liabilities - Total assets decreased from $1,336,291 thousand as of December 31, 2023, to $911,516 thousand as of June 30, 2024, representing a decline of approximately 32%[10]. - Total liabilities decreased from $1,025,396 thousand as of December 31, 2023, to $657,035 thousand as of June 30, 2024, a reduction of approximately 36%[10]. - Total equity attributable to stockholders decreased from $308,933 thousand as of December 31, 2023, to $253,552 thousand as of June 30, 2024, a decline of approximately 18%[10]. - The Company’s accumulated deficit stood at $147.361 million as of June 30, 2024[31]. - The Company’s total stockholders' equity as of June 30, 2024, was $254.481 million[31]. Cash Flow and Investments - Cash and cash equivalents increased from $52,834 thousand as of December 31, 2023, to $72,026 thousand as of June 30, 2024, reflecting a growth of approximately 36%[10]. - Net cash from operating activities increased to $8,019 thousand from a negative $23,636 thousand year-over-year[20]. - Net cash from investing activities significantly rose to $383,103 thousand, up from $88,258 thousand in the prior year[20]. - Proceeds from the sale of mortgage loans amounted to $311,279 thousand, with no proceeds reported in the previous year[20]. - The total investments as of June 30, 2024, amounted to $258.764 million, with gross unrealized losses of $31.816 million[153]. Mortgage Loans - Mortgage loans held-for-sale, net increased from $55,718 thousand as of December 31, 2023, to $108,868 thousand as of June 30, 2024, showing an increase of about 95%[10]. - The carrying value of mortgage loans held-for-investment is approximately $413.9 million, down from $864.6 million as of December 31, 2023, indicating a decrease of about 52%[128]. - The Company sold 1,477 and 1,712 mortgage loans held-for-sale with a carrying value of $263.7 million and $314.3 million during the three and six months ended June 30, 2024, respectively[133]. - The Company has not purchased any RPLs during the three and six months ended June 30, 2024, compared to 68 and 71 RPLs purchased in the same periods of 2023[133]. - The Company recorded a credit loss expense on mortgage loans of $(10) thousand for the three months ended June 30, 2024[140]. Stock and Equity Transactions - The weighted average shares outstanding for basic loss per common share increased from 23,250,725 for the three months ended June 30, 2023, to 39,344,128 for the same period in 2024, an increase of about 69%[14]. - The company declared dividends of $0.10 per share, totaling $15.506 million[28]. - The company reported a stock-based management termination fee and compensation expense of $16,952 thousand, up from $892 thousand in the prior year[20]. - The Company issued an aggregate of $125.0 million of preferred stock in two series during the year ended December 31, 2020[69]. - The Company exchanged 424,949 shares of its 7.25% Series A and 1,135,590 shares of its 5.00% Series B preferred stock for newly issued common stock, totaling 12,046,218 common shares[72]. Debt and Financing - The Company redeemed senior convertible notes totaling $103,516 thousand during the period[22]. - The Company entered into a $70.0 million term loan agreement with NIC RMBS LLC, an affiliate of Rithm Capital Corp.[34]. - The Company has entered into two repurchase facilities with a ceiling of $150.0 million and $400.0 million, respectively, for acquiring and selling mortgage loans[194]. - The total amount outstanding for repurchase transactions is $246.5 million, with a weighted average interest rate of 6.99%[199]. - The Company’s maximum borrowing capacity subject to sufficient collateral was $400.0 million as of June 30, 2024[200]. Credit Quality and Risk Management - The Company monitors the credit quality of its mortgage loans and assesses expected cash flows and fair value of underlying collateral[62]. - The Company has recognized a cumulative allowance for expected credit losses of zero as of June 30, 2024, compared to $3.4 million as of December 31, 2023[131]. - The allowance for expected credit losses at the end of the period was zero for June 30, 2024, compared to $5.985 million for June 30, 2023[140]. - Risks in the beneficial interest portfolio include default risk and delays in payment, with ongoing monitoring of credit quality[67]. - The Company’s expectation of undiscounted cash flows is evaluated at the end of each calendar quarter, impacting the allowance for expected credit losses[66].

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $12.7 million, which is significantly lower than the first quarter of 2024, driven by mark-to-market losses and additional realized losses on mortgage loan sales [11] - Earnings available for distribution decreased compared to the previous quarter, with a negative net interest margin contributing to the loss [11] - Book value per common share is reported at $5.56, with a potential fair value of around $4.20 if fully marked [12] Business Line Data and Key Metrics Changes - The company is transitioning from reperforming residential assets to investing in cash-flowing commercial real estate assets, having already begun this process [6][9] - The management team is focused on commercial real estate opportunities, leveraging expertise from Rithm Capital and Sculptor Asset Management [10] Market Data and Key Metrics Changes - The commercial real estate market is viewed as presenting some of the best investment opportunities since the financial crisis, particularly in AAA CMBS with levered returns estimated between 12% and 15% [7][20] - The company plans to sell approximately $120 million of legacy assets to clean up the balance sheet [18] Company Strategy and Development Direction - The company aims to grow its equity capital and generate real earnings while maintaining a focus on commercial real estate investments [9][14] - The dividend policy will be evaluated quarterly based on the ability to grow earnings, with the current dividend maintained at $0.06 per share [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to reposition the company and achieve cash flow positivity over time, despite current losses [7][11] - The company is optimistic about the commercial real estate investing environment and believes it can generate attractive returns [14][15] Other Important Information - The company has a total stockholders' equity of $253.6 million and is focused on growing this over time [12] - The management team consists of experienced professionals in commercial real estate, with a significant number of staff dedicated to this area [10] Q&A Session Summary Question: Impact of marking the whole book to fair value and current balance of legacy RPL portfolio - Management indicated that full mark-to-market would bring book value to around $4.23, with approximately $120 million of assets left to be sold [18][19] Question: Focus on commercial real estate and expected returns - The company has made investments primarily in AAA CMBS, expecting returns between 12% and 15% [20] Question: Capital allocation for risk retention and new investments - Approximately $15 million to $16 million of equity capital is allocated to risk retention securities, with $35 million to $40 million for non-risk retention assets [23] Question: Future investment mix and origination efforts - Management believes they have sufficient resources for investment sourcing and will focus on a mix of CMBS, senior loans, and opportunistic investments [25] Question: Willingness to acquire distressed assets - The company has a history of successfully acquiring distressed assets and is open to similar opportunities in the future [31] Question: Geographic or asset class focus for senior loans - Currently, the focus is on highly liquid AAA CMBS, with flexibility to explore various opportunities as they arise [33]