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What changed in Rithm Property Trust Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Rithm Property Trust Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+488 added−519 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-18)

Top changes in Rithm Property Trust Inc.'s 2025 10-K

488 paragraphs added · 519 removed · 312 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

62 edited+24 added−58 removed1 unchanged
Biggest changeThe Strategic Transaction included (i) the entry into a Securities Purchase Agreement, dated as of February 26, 2024, by and among the Company, the Operating Partnership, the Former Manager and Rithm (the “Securities Purchase Agreement”), which provided for, among other things, upon the approval of our stockholders on May 20, 2024, the sale of $14.0 million of our common stock, par value $0.01 (“Common Stock”), at a price of $4.87 per share (which represents the trailing five-day average closing price of our Common Stock on the New York Stock Exchange (“NYSE”) as of the date of the Securities Purchase Agreement, and (ii) upon the approval of our stockholders on May 20, 2024, the entry into a new Management Agreement, dated as of June 11, 2024 (as amended by that First Amendment to the Management Agreement, dated as of October 18, 2024 and as may be further amended, modified or supplemented from time to time, the “Management Agreement”), by and between RCM GA and the Company, under which, RCM GA became our new external manager.
Biggest changeThe Company also entered into a management agreement, dated June 11, 2024 (as amended by that First Amendment to the Management Agreement, dated October 18, 2024, and as further amended by that Second Amendment to the Management Agreement, dated February 12, 2026, and as may be further amended, modified or supplemented from time to time, the “Management Agreement”) with RCM GA, which became the Company’s external manager; terminated its prior management agreement; entered into a term loan with a subsidiary of Rithm; and issued warrants to Rithm to purchase shares of the Company’s Common Stock.
Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities.
Section 3(a)(1)(A) of the Investment Company Act generally defines an investment company as any issuer that is, or holds itself out as being, engaged primarily in the business of investing, reinvesting or trading in securities.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are available to the public from the SEC’s internet site at http://www.sec.gov and are made available on our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available to the public from the SEC’s website at http://www.sec.gov and are made available on our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Also posted on our website in the “Company Info—Corporate Governance” section are charters for our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, as well as our Corporate Governance Guidelines and policies, including our Code of Ethics governing our directors, officers and employees.
Also posted on our website in the “Company Info—Corporate Governance” section are charters for our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, as well as our Corporate Governance Guidelines and certain of our policies, including our Code of Ethics governing our Board of Directors, officers and employees.
Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, which we refer to as the 40% test.
Section 3(a)(1)(C) of the Investment Company Act generally defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and that owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of the issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% test”).
Section 3(c)(5)(C), as interpreted by the staff of the SEC, requires an entity to invest at least 55% of its assets in “mortgages and other liens on and interests in real estate,” which we refer to as “qualifying real estate interests,” and at least 80% of its assets in qualifying real estate interests plus “real estate-related assets” (together, the “3(c)(5)(C) Real Estate Assets Tests”).
Section 3(c)(5)(C), as interpreted by the staff of the SEC, requires an entity to invest at least 55% of its assets in “mortgages and other liens on and interests in real estate” (“qualifying real estate interests”) and at least 80% of its assets in qualifying real estate interests together with “real estate-related assets” (the “3(c)(5)(C) Real Estate Assets Tests”).
We believe that, commencing with our initial taxable year ended December 31, 2014, we have been organized in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code and that our manner of operation will enable us to meet the requirements for qualification and taxation as a REIT.
We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code commencing with our initial taxable year ended December 31, 2014, and we intend to continue to operate in a manner that will enable us to maintain our REIT qualification.
If our Board of Directors materially changes any of our investment guidelines, we will disclose such changes in our next required periodic report or as otherwise required by applicable law.
If the Board of Directors materially modifies the investment guidelines, we will disclose the change in our next required periodic report or otherwise as required by applicable law.
Item 1. Business Overview Rithm Property Trust, formerly Great Ajax Corp, a Maryland corporation, is an externally managed REIT formed on January 30, 2014, and capitalized on March 28, 2014, by its then sole stockholder, Aspen, an affiliate of Aspen Capital. The Company operates as a mortgage REIT.
ITEM 1. BUSINESS Overview Rithm Property Trust (formerly Great Ajax Corp.), a Maryland corporation, is an externally managed REIT formed on January 30, 2014, and capitalized on March 28, 2014, by its then sole stockholder, Aspen Yo LLC, an affiliate of the Aspen Capital group of companies. The Company focuses on investments in the CRE sector.
If any Servicing Agreement has been terminated other than for cause and/or the Servicer terminates the Servicing Agreement, we will be required to pay a termination fee equal to the aggregate servicing fees payable under the applicable Servicing Agreement for the immediately preceding 12-month period.
If the Newrez Servicing Agreement is terminated other than for cause and/or the Servicer terminates the agreement, we are required to pay a termination fee equal to the aggregate servicing fees paid under the applicable Servicing Agreement for the immediately preceding 12-month period.
Risk Factors — Risks Related to Our Organizational Structure — Maintenance of our exclusion from regulation as an investment company under the Investment Company Act imposes significant limitations on our operations.” Commodity Pool Operator Exemption Under the Dodd-Frank Act, any investment fund that trades in swaps may be considered a “commodity pool,” which would cause its operators to be regulated as a “commodity pool operator,” or (“CPO”).
Risk Factors—Risks Related to Our Organizational Structure—Maintenance of our exclusion from regulation as an investment company under the Investment Company Act imposes significant limitations on our operations.” Commodity Pool Operator Exemption Under the Dodd-Frank Act, an investment vehicle that trades in swaps may be deemed a “commodity pool,” which could cause its operator to be regulated as a “commodity pool operator” (“CPO”) under the Commodity Exchange Act and related Commodity Futures Trading Commission (“CFTC”) rules.
The presence of contamination or the failure to remediate contamination at our properties also may expose us to third-party liability for personal injury or property damage or adversely affect our ability to sell, lease or renovate the real estate or to borrow using the real estate as collateral. See also “Item 1A.
In addition, the presence of contamination or failure to remediate contamination could expose us to third-party claims for personal injury or property damage and could adversely affect our ability to sell, lease, develop, renovate or finance such properties, including our ability to borrow using the real estate as collateral. See “Item 1A.
Section 3(c)(6) generally excludes from the definition of investment company any company that is directly or through subsidiaries primarily engaged in Section 3(c)(5)(C) real estate and/or other banking/finance businesses excepted from the definition of “investment company” pursuant to Sections 3(c)(3), 3(c)(4) or 3(c)(5) of the Investment Company Act. 9 We are organized as a holding company and conduct our businesses primarily through wholly owned subsidiaries of our Operating Partnership.
Section 3(c)(6) generally excludes from the definition of investment company any company that is directly or through subsidiaries primarily engaged in real estate activities described in Section 3(c)(5)(C) and/or other banking or finance businesses that are themselves excepted from the definition of “investment company” pursuant to Sections 3(c)(3), 3(c)(4) or 3(c)(5) of the Investment Company Act.
Risk Factors — Risks Related to Regulatory and Legislative Actions — We may be unable to operate within the parameters that allow us to be excluded from regulation as a commodity pool operator, which would subject us to additional regulation and compliance requirements, and could materially adversely affect our business and financial condition.” 10 Environmental Matters To the extent we own or acquire real estate, we are subject to various U.S. federal, state and local environmental laws, regulations and ordinances and also could be liable to third parties resulting from environmental contamination or noncompliance with environmental laws at any such properties.
Risk Factors—Risks Related to Regulatory and Legislative Actions—We may be unable to operate within the parameters that allow us to be excluded from regulation as a CPO, which would subject us to additional regulation and compliance requirements, and could materially adversely affect our business and financial condition.” Environmental Matters To the extent we own or acquire real estate, we are subject to a variety of U.S. federal, state and local environmental laws, regulations and ordinances and may incur liability for environmental conditions at, on, under or migrating from such properties.
In addition, we conduct our operations so that we, our Operating Partnership and Great Ajax Funding (i) do not come within the definition of an investment company, by ensuring that less than 40% of the value of our total assets on an unconsolidated basis consists of “investment securities”; or (ii) meet the 3(c)(5)(C) Real Estate Assets Test or the Section 3(c)(6) primarily engaged test.
We conduct our operations so that we, our Operating Partnership and Great Ajax Funding LLC (“Great Ajax Funding”) (i) do not meet the definition of an investment company under Section 3(a)(1)(C) by ensuring that less than 40% of the value of our total assets on an unconsolidated basis consists of “investment securities,” or (ii) satisfy the 3(c)(5)(C) Real Estate Assets Tests or the “primarily engaged” test under Section 3(c)(6).
The amount of leverage we deploy for a particular investment depends upon an assessment of a variety of factors, which may include the anticipated liquidity and price volatility of our assets; the gap between the duration of assets and liabilities, including hedges; the availability and cost of financing the assets; our opinion of the creditworthiness of financing counterparties; the health of the U.S. economy and the residential and commercial mortgage and real estate markets; our outlook on interest rates; the credit quality of the loans underlying our investments; and our outlook for asset spreads relative to financing costs.
The amount of leverage we use for a particular investment is determined based on a range of factors, which may include the expected liquidity and price volatility of the asset; the duration profile of our assets and liabilities (including any hedges); the availability and cost of financing; our assessment of the creditworthiness of financing counterparties; conditions in the U.S. economy and the commercial and residential mortgage and real estate markets; our interest rate outlook; the credit quality of the loans underlying our investments; and our view of asset spreads relative to financing costs.
Among other services, RCM GA provides us with a management team and necessary administrative and support personnel. We do not currently have any employees and do not expect to have any employees in the foreseeable future. Each of our executive officers is an officer, employee, consultant, or contractor of RCM GA (or its affiliates).
We do not have any employees and do not expect to have any employees in the foreseeable future. Each of our executive officers is an officer, employee, consultant or contractor of RCM GA or its affiliates.
We also may make loans to, or provide guarantees of certain obligations of, our subsidiaries. Subject to the percentage ownership and gross income and asset tests necessary for REIT qualification, we may invest in securities of other REITs, other entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over such entities.
Subject to the ownership limitations and the gross income and asset tests required to maintain our qualification as a REIT, we may invest in securities of other REITs, other entities engaged in real estate-related activities, or other issuers, including for the purpose of acquiring or exercising control over such entities.
Former Management Agreement We were historically a party to that certain Third Amended and Restated Management Agreement, dated as of April 28, 2020 (as amended by that First Amendment, dated as of March 1, 2023, the “Former Management Agreement”), by and between us and the Former Manager.
Former Management Agreement Prior to June 11, 2024, we were party to a Third Amended and Restated Management Agreement, dated as of April 28, 2020, with Thetis Asset Management LLC (the “Former Manager”) (as amended by that First Amendment, dated March 1, 2023, the “Former Management Agreement”).
Risk Factors.” Employees Exclusive of certain incentive stock grants, we do not currently have any employees who are paid directly by us, and, excluding incentive stock grants, do not expect to have any employees paid directly by us in the foreseeable future.
Risk Factors.” Employees We do not currently have any employees who are paid directly by us, and we do not expect to have any employees paid directly by us in the foreseeable future, with the exception of incentive equity awards that may be issued.
Each of our executive officers is an officer, employee or contractor of our New Manager (or its affiliates) and they are paid by our New Manager (or its affiliates); however, we reimburse the New Manager or its affiliates, as applicable, for our allocable share of the compensation (whether paid in cash, stock or other forms), including annual base salary, bonus, any related withholding taxes and employee benefits, paid to (i) the New Manager’s personnel serving as our chief financial officer based on the percentage of his or her time spent managing the Company’s affairs and (ii) other corporate finance, tax, accounting, middle office, internal audit, legal, risk management, operations, compliance and other non-investment personnel of the New Manager and its affiliates who spend all or a portion of their time managing our affairs.
We reimburse the Manager or its affiliates, as applicable, for our allocable share of compensation and related costs (whether paid in cash, equity or other forms), including base salary, bonuses, payroll taxes and employee benefits, for (i) the personnel serving as our chief financial officer, based on the percentage of time devoted to managing our affairs, and (ii) other corporate support personnel, including corporate finance, tax, accounting, middle office, internal audit, legal, risk management, operations and compliance, who devote all or a portion of their time to supporting and managing our business.
On December 2, 2024, we rebranded and changed our name to Rithm Property Trust Inc. from Great Ajax Corp. In connection with the Strategic Transaction, we terminated our loan servicing agreement with the Former Servicer, and disposed of our interest in Great Ajax FS LLC, the parent company of Gregory.
The Company relocated its corporate headquarters to New York, New York, and on December 2, 2024, rebranded and changed its name to Rithm Property Trust Inc. In connection with the Strategic Transaction, the Company terminated its prior loan servicing arrangement and disposed of its interest in Great Ajax FS LLC.
See Note 8 - Debt, to our consolidated financial statements included in this Annual Report for further details about our debt obligations. We currently do not hedge the risk associated with our investment portfolio. However, we may undertake risk mitigation activities with respect to our debt financing interest rate obligations.
See Note 9—Debt to our consolidated financial statements included in this Annual Report for additional information regarding our debt obligations. We do not currently hedge portfolio risks associated with our investment portfolio. However, we may seek to mitigate interest rate risk related to our financing obligations.
Excluded from the term ‘‘investment securities,’’ among other things, are securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exclusion from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.
Securities issued by majority-owned subsidiaries that are not themselves investment companies and that do not rely on the exclusions set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act are excluded from the definition of “investment securities” for purposes of the 40% test.
Our qualification as a REIT will depend upon our ability to meet, on a continuing basis, various complex requirements under the Internal Revenue Code of 1986, as amended, (the “Internal Revenue Code”), relating to, among other things, the sources of our gross income, the composition and values of our assets, our distribution levels to our stockholders and the concentration of ownership of our capital stock.
Our REIT qualification depends on our ability to satisfy, on an ongoing basis, numerous and complex requirements under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), relating to, among other things, the sources and nature of our gross income, the composition and value of our assets, the timing and amount of distributions to our stockholders and the concentration of ownership of our capital stock.
Our Board of Directors has adopted a broad set of investment guidelines to evaluate specific investments. Our general investment guidelines prohibit any investment that would cause us to fail to qualify as a REIT and any investment that would cause us to be regulated as an “investment company” under the Investment Company Act.
The guidelines prohibit any investment that would cause us to fail to qualify as a REIT or that would cause us to be regulated as an “investment company” under the Investment Company Act.
We may not be able to achieve our business objectives due to the competitive risks that we face. Operating and Regulatory Structure Tax Requirements We have elected and intend to qualify to be taxed as a REIT for U.S. federal income tax purposes.
Operating and Regulatory Structure Tax Requirements We have elected and intend to continue to qualify to be taxed as a REIT for U.S. federal income tax purposes.
On February 26, 2024, we issued a termination notice to the Former Manager, in connection with the Strategic Transaction, and on June 11, 2024, we terminated the Former Management Agreement, entered into a termination and release agreement with the Former Manager and issued approximately 3.2 million shares of Common Stock and paid $0.6 million in cash to the Former Manager in connection with the termination.
We had the option to pay management fees in cash or in shares of our Common Stock. 2 In connection with the Strategic Transaction, we delivered a termination notice to the Former Manager on February 26, 2024 and terminated the Former Management Agreement, effective June 11, 2024.
On June 1, 2024, the Former Servicer transferred the Servicing Agreements to Newrez, an affiliate of the New Manager, pursuant to the Servicing Transfer Agreement. The terms of the Servicing Agreements remain substantially the same.
Effective June 1, 2024, the Former Servicer transferred the Servicing Agreements to Newrez, an affiliate of our Manager, pursuant to a servicing transfer agreement (the “Servicing Transfer Agreement” and, such Servicing Agreements following the transfer, the “Newrez Servicing Agreement”). The material terms of the Servicing Agreements remain substantially unchanged.
On August 31, 2011, the SEC published a concept release entitled “Companies Engaged in the Business of Acquiring Mortgages and Mortgage Related Instruments” (Investment Company Act Rel. No. 29778). This release notes that the SEC is reviewing the Section 3(c)(5)(C) exclusion relied upon by companies similar to us that invest in mortgage loans.
On August 31, 2011, the SEC issued a concept release entitled Companies Engaged in the Business of Acquiring Mortgages and Mortgage-Related Instruments (Investment Company Act Rel. No. 29778), which indicates that the SEC continues to review the scope and application of the Section 3(c)(5)(C) exclusion.
There can be no assurance that the laws and regulations governing the Investment Company Act status of companies similar to ours, or the guidance from the SEC or its staff regarding the treatment of assets as qualifying real estate assets or real estate-related assets, will not change in a manner that adversely affects our operations as a result of this review.
There can be no assurance that future laws, regulations, interpretations or guidance from the SEC or its staff regarding the classification of qualifying real estate interests or real estate-related assets will not change in a manner that adversely affects our ability to rely on this exclusion.
To mitigate this risk, we may use derivative financial instruments such as interest rate swaps and interest rate options in an effort to reduce the variability of earnings caused by changes in the interest rates we pay on our debt. We may also fund floating rate investments with floating rate debt.
To manage this exposure, we may use derivative instruments, such as interest rate swaps or interest rate options, to reduce the variability of earnings attributable to changes in the interest rates applicable to our debt. We may also seek to align our interest rate exposure by funding floating-rate investments with floating-rate liabilities.
This exclusion applies to our majority-owned subsidiaries that are excepted from the definition of investment company pursuant to Section 3(c)(5)(C) or Section 3(c)(6).
Our majority-owned subsidiaries rely on exclusions from the definition of investment company pursuant to Sections 3(c)(5)(C) or 3(c)(6) of the Investment Company Act.
“Earnings Available for Distribution” is a non-GAAP financial measure and is defined as net income (loss) as determined according to GAAP, excluding tax-effected, non-cash equity compensation expense and any unrealized gains or losses from mark-to-market valuation changes (including impairments) that are included in net income for the applicable period.
EAD is a non-GAAP (as defined below) financial measure defined as net income (loss) determined in accordance with generally accepted accounting principles (“GAAP”), excluding non-cash equity compensation expense and unrealized gains or losses from mark-to-market valuation changes, including impairments.
All of our investment activities are currently conducted by our New Manager on our behalf pursuant to the Management Agreement, which is in effect until June 11, 2027 (at which time such Management Agreement will automatically renew for two year periods, subject to certain termination rights as described therein).
All of our investment activities are conducted by our external Manager pursuant to the Management Agreement, which remains in effect until June 11, 2027 and will automatically renew for successive two-year terms, subject to certain termination rights as described therein. Our principal objective is to generate attractive risk-adjusted returns for our stockholders over the long-term through dividends and capital appreciation.
Servicing Agreements Until June 1, 2024, we were party to various Servicing Agreements with the Former Servicer. We owned a 9.72% interest in the Former Servicer which was disposed of in the quarter ended June 30, 2024.
Servicing Agreements Until June 1, 2024, our mortgage loans and real property were serviced pursuant to various servicing agreements (the “Servicing Agreements”) with Gregory Funding LLC (the “Former Servicer” or “Gregory”). We owned a 9.72% equity interest in the Former Servicer, which we disposed of during the quarter ended June 30, 2024.
We believe that our ability to actively manage investments, and the flexibility of our strategy, should position the Company to generate attractive returns for stockholders in a variety of market conditions over the long-term horizon.
The Company believes the flexibility of its investment strategy and its ability to actively manage assets position it to generate attractive long-term returns for stockholders across a range of market conditions.
These investment guidelines additionally provide that investments will be predominated made in the types of assets described under “Proposal 4—Management Proposal—Strategy of Rithm,” in the Company’s Proxy Stated filed on April 10, 2024. However, these investment guidelines may be changed by our Board of Directors at any time and from time to time without the approval of our stockholders.
The guidelines also contemplate that our investments will be primarily in the types of assets described under “Proposal 4—Management Proposal—Strategy of Rithm” in the Company’s definitive proxy statement filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) on April 10, 2024. The Board of Directors may amend the investment guidelines at any time, without stockholder approval.
In the event that we decide to raise additional equity capital, our Board of Directors has the authority, without stockholder approval (subject to certain NYSE) requirements), to issue additional Common Stock or preferred stock in any manner and on such terms and for such consideration it deems appropriate, including in exchange for property.
If we determine to raise additional equity capital, the Board of Directors has authority, without stockholder approval (subject to applicable New York Stock Exchange (“NYSE”) requirements), to issue additional shares of Common Stock or preferred stock on such terms, and for such consideration, as it deems appropriate, including in exchange for property. 1 Decisions regarding the form and other terms of financing for our investments are made by our officers, subject to the general investment guidelines adopted by the Board of Directors.
The termination fee will be equal to three times the base fee plus the higher of (i) three times the incentive fees payable to the New Manager during the 12-month period ended as of the end of the most recently completed fiscal quarter prior to the date of termination and (ii) the total amount of inventive fee that the New Manager would have earned based on the total unrealized gain calculated as of the end of the most recently completed fiscal quarter prior to the date of termination.
The termination fee generally equals three times the base management fee plus the greater of (i) three times the incentive fees paid during the trailing twelve-month period or (ii) the incentive fee that would have been earned based on total unrealized gains as of the most recently completed fiscal quarter prior to termination.
These derivative transactions will be entered into solely for risk management purposes, not for investment purposes. When undertaken, these derivative instruments likely will expose us to certain risks such as price and interest rate fluctuations, timing risk, volatility risk, credit risk, counterparty risk and changes in the liquidity of markets.
Any derivative transactions would be entered into solely for risk management purposes and not for investment or speculative purposes. The use of derivatives may expose us to certain risks, including market and interest rate risk, timing and volatility risk, counterparty and credit risk, and reduced market liquidity.
Under the Management Agreement, the New Manager is entitled to a base management fee and an incentive fee calculated and payable quarterly with respect to each calendar quarter (or partial quarter that the agreement is in effect) in arrears in cash or, at the election of the New Manager, in shares of Common Stock of the Company.
Under the Management Agreement, RCM GA is entitled to receive a base management fee and an incentive fee, each calculated and payable quarterly in arrears, in cash or, at the election of RCM GA, in shares of our Common Stock. The base management fee is equal to 1.5% per annum of our stockholders’ equity, including equity equivalents.
Under the Former Management Agreement, the Former Manager implemented our business strategy and managed our business and investment activities and day-to-day operations subject to oversight by our Board of Directors. Among other services, the Former Manager provided us with a management team and necessary administrative and support personnel.
Pursuant to the Management Agreement, RCM GA is responsible for implementing our business strategy and managing our business, investment activities and day-to-day operations, subject to oversight by our Board of Directors. RCM GA provides a management team and the administrative and support personnel necessary to conduct our operations.
Competition In acquiring our assets, we compete with other mortgage and hybrid REITs, hedge funds, specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, mutual funds, investment banking firms, financial institutions, governmental bodies and other entities.
Competition In acquiring and originating our CRE-related investments, we compete with a broad range of market participants, including commercial mortgage and hybrid REITs, private equity and real estate funds, hedge funds, credit funds, specialty finance companies, banks, mortgage bankers, insurance companies, investment banking firms, mutual funds and other financial institutions, as well as governmental and quasi-governmental entities.
Policies with Respect to Certain Other Activities Subject to the approval of our Board of Directors, we have the authority to offer our Common Stock or other equity or debt securities in exchange for property and to repurchase or otherwise reacquire our shares or any other securities and may engage in such activities in the future.
As a result, derivatives may not be effective in offsetting changes in our financing costs. No derivative instruments are currently outstanding. Policies with Respect to Certain Other Activities Subject to the approval of our Board of Directors, we have the authority to offer our Common Stock or other equity or debt securities in exchange for property.
We monitor our compliance with the aforementioned tests and the holdings of our subsidiaries to ensure that each of our subsidiaries is in compliance with an applicable exemption or exclusion from registration as an investment company under the Investment Company Act.
We continuously monitor our compliance with these tests and the asset holdings of our subsidiaries to ensure that each subsidiary qualifies for an applicable exemption or exclusion from registration under the Investment Company Act. Our 19.8% equity interest in our Former Manager is held through GA-TRS LLC (“GA-TRS”), a special purpose subsidiary of our Operating Partnership.
Environmental laws can impose liability on an owner or operator of real property for the investigation and remediation of contamination at or migrating from such real property, without regard to whether the owner or operator knew of or was responsible for the presence of the contaminants. The costs of any required investigation or cleanup of these substances could be substantial.
Environmental laws may impose liability on owners and operators of real property for the investigation and remediation of contamination, regardless of whether the owner or operator knew of, or was responsible for, the presence of hazardous substances.
In order to be exempt from registration as a CPO under the no-action relief, we must, among other non-operation requirements: (1) limit our initial margin and premiums required to establish our swap or futures positions to no more than 5% of the fair market value of our total assets; and (2) limit our net income derived annually from our swaps and futures positions that are not “qualifying hedging transactions” to less than 5% of our gross income.
We rely on CFTC no-action relief from CPO registration and have filed the applicable notice/claim with the CFTC in order to rely on such relief. 4 To maintain the benefit of this no-action relief, we must satisfy certain conditions, including, among other requirements, that (i) the aggregate initial margin and option premiums required to establish our swap and futures positions do not exceed 5% of the fair market value of our total assets, and (ii) the net income we derive annually from swap and futures positions that are not “qualifying hedging transactions” remains below 5% of our gross income.
The securities issued by any wholly owned or majority-owned subsidiary that we may form and that are excluded from the definition of “investment company” based on Section 3(c)(1) or 3(c)(7) of the Investment Company Act, together with any other investment securities we may own, would not have a value in excess of 40% of the value of our total assets on an unconsolidated basis or would meet the 3(c)(5)(C) Real Estate Assets Test or the Section 3(c)(6) test.
The value of the securities issued by any such subsidiaries, together with any other investment securities we may own, will not exceed 40% of the value of our total assets on an unconsolidated basis, or we will otherwise satisfy the 3(c)(5)(C) Real Estate Assets Tests or the Section 3(c)(6) primarily engaged test.
We also may form certain other wholly owned or majority-owned subsidiaries that will invest, subject to our investment guidelines, in other real estate-related assets. These subsidiaries may rely upon the exclusion from the definition of investment company under the Investment Company Act pursuant to Section 3(c)(1) or 3(c)(7) of the Investment Company Act.
GA-TRS may rely on Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act, and accordingly our interest in GA-TRS constitutes an “investment security” for purposes of the 40% test. We may also form other wholly owned or majority-owned subsidiaries that invest in real estate-related assets and that rely on the exclusions provided by Sections 3(c)(1) or 3(c)(7).
Our principal objective is to generate attractive risk-adjusted returns for our stockholders over the long-term through dividends and capital appreciation. 5 Financing Strategy Our objective is to generate attractive risk-adjusted returns for our stockholders, which at times incorporates the use of leverage.
Financing Strategy Our objective is to generate attractive risk-adjusted returns for our stockholders, and we may use leverage as part of our strategy.
On June 1, 2024, Gregory assigned all of the servicing agreements for its mortgage loans and real property (the “Servicing Agreements”) to Newrez, an affiliate of Rithm through a Servicing Transfer Agreement dated June 1, 2024, by and between Gregory and Newrez (the “Servicing Transfer Agreement”). The terms of the Servicing Agreements remain unchanged.
Effective June 1, 2024, servicing of the Company’s mortgage loans and real property was transferred to Newrez, an affiliate of Rithm and the Manager, pursuant to the Servicing Transfer Agreement (as defined below). The terms of the underlying servicing agreements remain unchanged.
The New Manager is entitled to an incentive fee, which is payable quarterly in arrears in cash, or, at the election of the New Manager, in shares of Common Stock of the Company, in an amount equal to 20% of the dollar amount by which (i) Earnings Available for Distribution (as defined below) exceeds the product of (A) the average common book value per share (excluding fair value marks, impairments, transaction/ deal expenses and associated tax impact and such other items that in the judgment of our officers should be excluded) of the Common Stock of the Company during such calendar quarter and (B) 8%.
RCM GA is also entitled to receive an incentive fee equal to 20% of the amount by which earnings available for distribution (“EAD”) for the applicable quarter exceeds an annualized return of 8% on our average common book value per share during such quarter, as adjusted to exclude certain items, including fair value marks, impairments, transaction and deal expenses and associated tax impacts.
In addition to the base management fee and the incentive fee described above, we also pay all of the New Manager’s costs and expenses and reimburse the New Manager (to the extent incurred by the New Manager) on a monthly basis for the costs and expenses of providing services under the Management Agreement, including reimbursing the New Manager or its affiliates, as applicable, for our allocable share of the compensation (whether paid in cash, stock or other forms), including annual base salary, bonus, any related withholding taxes and employee benefits, paid to (i) the New Manager’s personnel serving as our chief financial officer based on the percentage of his or her time spent managing the Company’s affairs and (ii) other corporate finance, tax, accounting, middle office, internal audit, legal, risk management, operations, compliance and other non-investment personnel of the New Manager and its affiliates who spend all or a portion of their time managing our affairs.
In addition to the base management fee and incentive fee, we reimburse RCM GA and its affiliates for costs and expenses incurred in providing services under the Management Agreement, including our allocable share of compensation and benefits paid to personnel providing finance, accounting, tax, legal, risk management, compliance, operations, internal audit and other non-investment services.
On February 26, 2024, we issued a termination notice to our Former Manager, and, on June 11, 2024, we terminated our existing management contract with the Former Manager in exchange for approximately 3.2 million shares of our Common Stock and $0.6 million in cash.
In connection with the termination, we entered into a termination and release agreement with the Former Manager, which provided for the issuance of approximately 0.5 million shares of Common Stock and the payment of $0.6 million in cash to the Former Manager.
The loss of our exemption from regulation pursuant to the Investment Company Act could require us to restructure our operations, sell certain of our assets or abstain from the purchase of certain assets, which could have an adverse effect on our financial condition and results of operations. See “Item 1A.
If we were to lose our exclusion from regulation under the Investment Company Act, we could be required to restructure our operations, dispose of certain assets or refrain from acquiring certain assets, any of which could materially adversely affect our financial condition, results of operations and/or cash flows. See “Item 1A.
We may engage in the purchase and sale of investments. Our officers and directors may change any of these policies or our investment guidelines without a vote of our stockholders.
We may also buy and sell investments in the ordinary course of managing our portfolio. Our Board of Directors may modify these policies or our investment guidelines without obtaining stockholder approval.
Investment Guidelines We make decisions about our investments in accordance with broad investment guidelines adopted by our board of directors (“Board of Directors”) on June 11, 2024. Accordingly, we may, without a stockholder vote, change our target asset classes and acquire a variety of assets that may differ from, and are possibly riskier than, our current portfolio.
As a result, we may, without obtaining stockholder approval, modify our target asset classes and acquire a range of investments that may differ from, and may be riskier than, those held in our current portfolio. The Board of Directors has adopted these guidelines to evaluate potential investments.
Investment Company Act Exclusion We conduct our operations so that neither we nor any of our subsidiaries is required to register as an investment company under the Investment Company Act.
As a REIT, we generally are not subject to U.S. federal income tax on taxable income that we distribute to our stockholders, provided that we distribute at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gain) each year and satisfy certain other requirements. 3 Investment Company Act Exclusion We conduct our operations so that neither we nor any of our subsidiaries is required to register as an investment company under the Investment Company Act.
Additionally, we paid directly for the internal audit function that reported directly to the Audit Committee and the Board of Directors. Under the Former Management Agreement, we paid a quarterly base management fee based on our stockholders’ equity, including equity equivalents such as our issuance of convertible senior notes.
Under the Former Management Agreement, we paid a quarterly base management fee based on stockholders’ equity, including certain equity equivalents, and were also subject to an incentive fee based on cash distributions and changes in book value.
The need to operate within these parameters could limit the use of swaps by us below the level that we would otherwise consider optimal or may lead to the registration of our company or our directors as CPOs. See “Item 1A.
Operating within these parameters may limit our ability to use swaps or futures to the extent we would otherwise consider appropriate, and failure to satisfy the conditions of the no-action relief could require us (or certain of our affiliates or personnel) to register as a CPO and become subject to additional regulation and compliance requirements. See “Item 1A.
A proliferation of such companies may increase the competition for equity capital and thereby adversely affect the price of our shares of common stock. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of assets and establish more business relationships than us.
Further, certain competitors may have higher risk tolerances or different risk assessments, which could allow them to pursue a broader range of CRE assets and establish business relationships that we may not pursue. We may not be able to achieve our business objectives due to the competitive risks that we face.
Removed
Historically, the Company primarily targeted acquisitions of (i) RPLs, which are residential mortgage loans on which at least five of the seven most recent payments have been made, or the most recent payment has been made and accepted pursuant to an agreement, or the full dollar amount, to cover at least five payments has been paid in the last seven months and (ii) NPLs, which are residential mortgage loans on which the most recent three payments have not been made.
Added
On June 11, 2024, the Company completed its previously announced strategic transaction with Rithm (such transactions together, the “Strategic Transaction”). In connection with the Strategic Transaction, the Company entered into a Securities Purchase Agreement (the “SPA”) pursuant to which, following stockholder approval on May 20, 2024, it issued $14.0 million of common stock, par value $0.01 (“Common Stock”), to Rithm.
Removed
We acquired RPLs and NPLs either directly or in joint ventures with institutional accredited investors. The joint ventures were structured as securitization trusts, from which the Company acquired debt securities and beneficial interests. On June 11, 2024, we completed our previously announced strategic transaction with Rithm (such transactions together, the “Strategic Transaction”).
Added
Under RCM GA’s management, the Company repositioned its business from a predominantly residential mortgage strategy to a flexible CRE focused investment strategy, which includes originating and acquiring CRE-related investments and managing a diversified portfolio of assets. The Company believes current market conditions are creating refinancing challenges and capital dislocations in the CRE sector that may present attractive risk-adjusted investment opportunities.
Removed
Additionally, on February 26, 2024, we entered into a term loan with a subsidiary of Rithm (the “Credit Agreement”), for which the draw period has expired.
Added
Target investments may include senior and subordinated mortgage loans, mezzanine loans, preferred equity, commercial mortgage servicing rights, CRE properties and other CRE-related debt and equity investments. The Company has largely transitioned away from residential mortgage loans and RMBS and does not expect to make further investments in RPLs, NPLs or RMBS.
Removed
Pursuant to the Securities Purchase Agreement, the entry into the Credit Agreement was accompanied by the entry into a Warrant Agreement, dated as of April 23, 2024, by and between the Company and Equiniti Trust Company, pursuant to which the Company issued warrants to Rithm to purchase 6.5 million of shares with an exercise price of $5.36 per share (the “2024 Warrants”).
Added
The Company expects to finance its investments through a variety of capital sources, which may include secured and unsecured credit facilities, capital markets transactions, securitizations and other corporate financing arrangements, depending on market conditions and investment characteristics. Through its external Manager, the Company leverages Rithm’s real estate and capital markets expertise across sourcing, underwriting, financing, asset management and disposition.
Removed
See Note 7 — Commitments and Contingencies to our consolidated financial statements included in this Annual Report for additional information.
Added
In December 2025, as part of the execution of its CRE investment strategy, the Company acquired an indirect minority interest in PGOP, which through its affiliates and joint ventures owns a portfolio (the “PGRE Portfolio”) of CRE properties, through an investment (the “PGRE Investment”) in affiliated aggregator vehicles formed in connection with Rithm’s acquisition of Paramount Group, Inc. (“Paramount”).
Removed
For a full description of the components of the Strategic Transaction, see our Definitive Proxy Statement filed with the Securities and Exchange Commission (the “SEC”) on April 10, 2024. In addition, in connection with the Strategic Transaction, we changed our principal place of business and corporate headquarters to 799 Broadway, 8th Floor, New York, NY 10003.
Added
The PGRE Portfolio consists of ten properties: 1633 Broadway, 1301 Avenue of the Americas, 1325 Avenue of the Americas, 31 W 52nd Street, 712 Fifth Avenue, 1600 Broadway and 900 3rd Avenue in New York, New York and One Market Plaza, 300 Mission Street and One Front Street in San Francisco, California.
Removed
Prior to the Strategic Transaction, Rithm Property Trust’s investment strategy focused on: (i) owning a portfolio of residential RPLs and small balance commercial loans (“SBC Loans”) at discounts to the unpaid principal balance (“UPB”) and significant discounts to underlying property values; (ii) expanding acquisitions of RPLs, SBC Loans, and limited acquisitions of NPLs through joint ventures; (iii) working, through a licensed mortgage servicer, to (a) support the continued performance of RPLs; (b) convert a portion of the Company’s NPLs to performing status; (c) determining the optimal loss mitigation strategy on an asset-by-asset basis; and (d) managing the process timelines for converting NPLs to real estate properties (“REO”) held-for-sale; (iv) securitizing the Company’s RPL portfolio to create long-term, fixed rate, non-recourse financing, while retaining one or more tranches of any subordinated securities created; (v) mitigating the Company’s interest rate and prepayment risk; and (vi) working through joint ventures with third party investors to acquire pools of mortgage loans and other mortgage related assets, which may create value additive opportunities for the Company.
Added
The Company made an initial cash investment of $50.0 million and committed to make up to an additional $7.5 million of capital contributions under certain circumstances. The PGRE Investment was approved by the Company’s independent directors and was funded with cash on hand.
Removed
We believe the Strategic Transaction creates a number of benefits for our stockholders, including the opportunity to benefit from a shift in our strategic direction and the opportunity for Rithm Property Trust to benefit from Rithm’s real estate, financial services and capital markets expertise, as well as Rithm’s industry relationships.
Added
On December 19, 2025, the Company’s board of directors (the “Board of Directors”) approved a reverse stock split, which was effected on December 30, 2025, of its Common Stock at a ratio of one share for every six shares issued and outstanding (the “Reverse Stock Split”).
Removed
In connection with the Strategic Transaction, we have shifted our investment focus to a flexible commercial real estate strategy.
Added
Unless otherwise indicated, all share and per-share amounts in this Annual Report on Form 10-K have been retroactively adjusted to reflect the Reverse Stock Split. 1 Investment Guidelines We make investment decisions pursuant to broad investment guidelines adopted by our Board of Directors on June 11, 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeUnder current Maryland law, our present and former directors and officers will not have any liability to us or our stockholders for money damages other than liability resulting from: • actual receipt of an improper benefit or profit in money, property or services; or • active and deliberate dishonesty by the director or officer that was established by a final judgment and is material to the cause of action. 37 In addition, our charter authorizes us to indemnify our present and former directors and officers for actions taken by them in those and other capacities to the maximum extent permitted by Maryland law and our bylaws require us to indemnify our present and former directors and officers, to the maximum extent permitted by Maryland law, in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service to us as a director or officer in these and other capacities.
Biggest changeUnder current Maryland law, our present and former directors and officers will not have any liability to us or our stockholders for money damages other than liability resulting from: • actual receipt of an improper benefit or profit in money, property or services; or • active and deliberate dishonesty by the director or officer that was established by a final judgment and is material to the cause of action.
If a loan is prepaid in whole or in part at a faster than its expected rate or contractual term (as applicable), we must expense all or a part of the remaining unamortized portion of the premium that was paid at the time of the purchase, which will adversely affect our profitability.
If a loan is prepaid in whole or in part at a rate faster than expected or its contractual term (as applicable), we must expense all or a part of the remaining unamortized portion of the premium that was paid at the time of the purchase, which will adversely affect our profitability.
The properties we acquire may also be subject to covenants, conditions or restrictions that restrict the use or ownership of such properties, including zoning laws and regulations and prohibitions on leasing or on tenant evictions, or requirements to obtain the approval of home owner associations prior to leasing.
The properties we may acquire may also be subject to covenants, conditions or restrictions that restrict the use or ownership of such properties, including zoning laws and regulations and prohibitions on leasing or on tenant evictions, or requirements to obtain the approval of home owner associations prior to leasing.
We may not opt back in to either of these provisions without the approval of the holders of a majority of our shares of common stock. Our authorized but unissued common and preferred stock may prevent a change in control of the Company.
We may not opt back in to either of these provisions without the approval of the holders of a majority of our shares of common stock. Our authorized but unissued Common Stock and preferred stock may prevent a change in control of the Company.
Interest rate hedging may fail to protect or could adversely affect us because, among other things: • interest rate hedging can be expensive, particularly during periods of rising and volatile interest rates; • available interest rate hedges may not correspond directly with the interest rate risk for which protection is sought; 29 • the duration of the hedge may not match the duration of the related assets or liabilities being hedged; • to the extent hedging transactions do not satisfy certain provisions of the Internal Revenue Code or are not made through a TRS, the amount of income that a REIT may earn from hedging transactions to offset interest rate losses is limited by the Internal Revenue Code provisions governing REITs; • the value of derivatives used for hedging is adjusted from time to time in accordance with accounting rules to reflect changes in fair value; and downward adjustments, or “mark-to-market losses,” would reduce our stockholders’ equity; • the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; and • the hedging counterparty owing money in the hedging transaction may default on its obligation to pay.
Interest rate hedging may fail to protect or could adversely affect us, because, among other things: • interest rate hedging can be expensive, particularly during periods of rising and volatile interest rates; • available interest rate hedges may not correspond directly with the interest rate risk for which protection is sought; • the duration of the hedge may not match the duration of the related assets or liabilities being hedged; • to the extent hedging transactions do not satisfy certain provisions of the Internal Revenue Code or are not made through a TRS, the amount of income that a REIT may earn from hedging transactions to offset interest rate losses is limited by the Internal Revenue Code provisions governing REITs; • the value of derivatives used for hedging is adjusted from time to time in accordance with accounting rules to reflect changes in fair value; and downward adjustments, or “mark-to-market losses,” would reduce our stockholders’ equity; • the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; and • the hedging counterparty owing money in the hedging transaction may default on its obligation to pay.
While we intend to distribute to our stockholders an amount equal to at least 90% of our REIT taxable income determined before applying the deduction for dividends paid and by 40 excluding net capital gains consistent with our intention to maintain our qualification as a REIT under the Internal Revenue Code, we have not established a minimum distribution payment level on our Common Stock and there can be no assurance regarding the amounts and timing of the approval and declaration of cash dividends, our ability to declare dividends, or that our Board of Directors will not determine to reduce such distributions, in the future.
While we intend to distribute to our stockholders an amount equal to at least 90% of our REIT taxable income determined before applying the deduction for dividends paid and by excluding net capital gains consistent with our intention to maintain our qualification as a REIT under the Internal Revenue Code, we have not established a minimum distribution payment level on our Common Stock and there can be no assurance regarding the amounts and timing of the approval and declaration of cash dividends, our ability to declare dividends, or that our Board of Directors will not determine to reduce such distributions, in the future.
Real estate assets are subject to various risks, including: • declines in the value of real estate; • acts of nature, including earthquakes, floods, wildfires, and other natural disasters, which may result in uninsured losses; • acts of war or terrorism, including the consequences of terrorist attacks; • adverse changes in national and local economic and market conditions; • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • costs of remediation and liabilities associated with environmental conditions such as indoor mold; and • the potential for uninsured or under-insured property losses.
Real estate assets are subject to various risks, including: • declines in the value of real estate; • acts of nature, including earthquakes, floods, wildfires and other natural disasters, which may result in uninsured losses; • acts of war or terrorism, including the consequences of terrorist attacks; • adverse changes in national and local economic and market conditions; 16 • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • costs of remediation and liabilities associated with environmental conditions such as indoor mold; and • the potential for uninsured or under-insured property losses.
Non-compliance by us, or potentially by third parties with which we share information, with any applicable privacy and cybersecurity law or regulation, including accidental loss, inadvertent disclosure, unauthorized access or dissemination or breach of security, may result in damage to our reputation and could subject us to fines, penalties, required corrective actions, lawsuits, payment of damages or restrictions on our use or transfer of data.
Non-compliance by us, our Servicer or potentially by third parties with which we share information with any applicable privacy and cybersecurity law or regulation, including accidental loss, inadvertent disclosure, unauthorized access or dissemination or breach of security, may result in damage to our reputation and could subject us to fines, penalties, required corrective actions, lawsuits, payment of damages or restrictions on our use or transfer of data.
There may be a limited number of special servicers available, particularly those which do not have conflicts of interest. In addition, to the extent any such servicers fail to effectively perform their obligations pursuant to the applicable servicing agreements, such failure may adversely affect our investments. There are certain risks associated with an investment in CMBS.
There may be a limited number of special servicers available, particularly those which do not have conflicts of interest. In addition, to the extent any such servicers fail to effectively perform their obligations pursuant to the applicable servicing agreements, such failure may adversely affect our investments. 9 There are certain risks associated with an investment in CMBS.
In the event that any such licensing requirement is applicable and we are not able to obtain such licenses in a timely manner or at all, our ability to implement our business strategy could be adversely affected, which could materially and adversely affect us. Certain jurisdictions require a license to purchase, hold, enforce or sell residential mortgage loans.
Certain jurisdictions require licenses to purchase, hold, enforce or sell residential mortgage loans. In the event that any such licensing requirement is applicable, and we are not able to obtain such licenses in a timely manner or at all, our ability to implement our business strategy could be adversely affected, which could materially and adversely affect us.
Our New Manager’s or our Servicer’s failure to comply with these laws, regulations and rules may result in reduced payments by borrowers, modification of the original terms of mortgage loans, permanent forgiveness of debt, restrictions on tenant evictions, delays in the foreclosure process, increased servicing advances, litigation, enforcement actions, and repurchase and indemnification obligations.
Our Manager’s or our Servicer’s failure to comply with these laws, regulations and rules may result in reduced payments by borrowers, modification of the original terms of mortgage loans, permanent forgiveness of debt, restrictions on tenant evictions, delays in the foreclosure process, increased servicing advances, litigation, enforcement actions, and repurchase and indemnification obligations.
Treasury, the Federal Reserve Board or other U.S. governmental agencies that are intended to regulate the origination, underwriting guidelines, servicing guidelines, servicing compensation and other aspects of mortgage loans guaranteed by the GSEs or U.S. governmental agencies (known as “Agency RMBS”) can have indirect and sometimes direct effects on our business and business model, results of operations and liquidity.
Treasury, the Federal Reserve or other U.S. governmental agencies that are intended to regulate the origination, underwriting guidelines, servicing guidelines, servicing compensation and other aspects of mortgage loans guaranteed by the GSEs or U.S. governmental agencies (known as “Agency RMBS”) can have indirect and sometimes direct effects on our business and business model, results of operations and liquidity.
We therefore are required to retain five percent or more of the credit risk associated with the assets we securitize. 20 In addition to these laws and rules, other U.S. federal or state laws and regulations that could affect our ability to sell assets into securitization programs may be proposed, enacted, or implemented.
We therefore are required to retain five percent or more of the credit risk associated with the assets we securitize. In addition to these laws and rules, other U.S. federal or state laws and regulations that could affect our ability to sell assets into securitization programs may be proposed, enacted or implemented.
Similarly, any hedging based on faulty models and data may prove to be unsuccessful. 22 Valuations of some of our assets will be inherently uncertain, may be based on estimates, may fluctuate over short periods of time and may differ from the values that would have been used if a ready market for these assets existed.
Similarly, any hedging based on faulty models and data may prove to be unsuccessful. Valuations of some of our assets will be inherently uncertain, may be based on estimates, may fluctuate over short periods of time and may differ from the values that would have been used if a ready market for these assets existed.
We and our New Manager are required to comply with a wide array of U.S. federal, state and local laws and regulations that regulate, among other things, the manner in which each of us conducts our businesses. These regulations directly impact our business and require constant compliance, monitoring and internal and external audits.
We and our Manager are required to comply with a wide array of U.S. federal, state and local laws and regulations that regulate, among other things, the manner in which each of us conducts our businesses. These regulations directly impact our business and require constant compliance, monitoring and internal and external audits.
While total cash collection may be higher than anticipated over the life of the loan, current period operating results could be adversely impacted. 21 The real estate assets and real estate-related assets we invest in are subject to the risks associated with real property. We own real estate directly as well as assets that are secured by real estate.
While total cash collection may be higher than anticipated over the life of the loan, current period operating results could be adversely impacted. The real estate assets and real estate-related assets we invest in are subject to the risks associated with real property. We own real estate directly, as well as assets that are secured by real estate.
Failing to qualify as a REIT would cause us to be subject to U.S. federal income tax (and any applicable state and local taxes) on all of our income and decrease profitability and cash available for distributions to stockholders. We may not be able to achieve our optimal leverage or target leverage ratios.
Failing to qualify as a REIT would cause us to be subject to U.S. federal income tax (and any applicable state and local taxes) on all of our income and decrease profitability and cash available for distributions to stockholders. 23 We may not be able to achieve our optimal leverage or target leverage ratios.
Investments with higher yield potential are generally riskier or more speculative. This could result in increased risk to the value of our investment portfolio. As an externally managed REIT, we are entirely managed by the New Manager, which negotiates all of our agreements and deals with all of our contractual counterparties on our behalf.
Investments with higher yield potential are generally riskier or more speculative. This could result in increased risk to the value of our investment portfolio. As an externally managed REIT, we are entirely managed by the Manager, which negotiates all of our agreements and deals with all of our contractual counterparties on our behalf.
In addition, if we exceed our target leverage ratios, the potential adverse impact on our financial condition and results of operation described above may be amplified. 28 Non-recourse long-term financing structures such as securitizations expose us to risks that could result in losses to us.
In addition, if we exceed our target leverage ratios, the potential adverse impact on our financial condition and results of operation described above may be amplified. Non-recourse long-term financing structures, such as securitizations, expose us to risks that could result in losses to us.
Net operating income of an income-producing property can be affected by, among other things: • tenant mix; • success of tenant businesses; • property management decisions; • property location and condition; • competition from comparable types of properties; • changes in laws that increase operating expenses or limit rents that may be charged; • any need to address environmental contamination at the property or the occurrence of any uninsured casualty at the property; • changes in national, regional or local economic conditions and/or specific industry segments; 17 • declines in regional or local real estate values; • declines in regional or local rental or occupancy rates; • increases in interest rates; • real estate tax rates and other operating expenses; • changes in governmental rules, regulations and fiscal policies, including environmental legislation; and • acts of God, terrorist attacks, social unrest and civil disturbances.
Net operating income of an income-producing property can be affected by, among other things: • tenant mix; • success of tenant businesses; • property management decisions; • property location and condition; • competition from comparable types of properties; • changes in laws that increase operating expenses or limit rents that may be charged; • any need to address environmental contamination at the property or the occurrence of any uninsured casualty at the property; • changes in national, regional or local economic conditions and/or specific industry segments; • declines in regional or local real estate values; 12 • declines in regional or local rental or occupancy rates; • increases in interest rates; • real estate tax rates and other operating expenses; • changes in governmental rules, regulations and fiscal policies, including environmental legislation; and • acts of God, terrorist attacks, social unrest and civil disturbances.
As a result of these legislative and regulatory actions, the Servicer may not perform in our best interests or up to our expectations, which could materially adversely affect our business, financial condition, results of operations and our ability to make distributions to our stockholders. 24 Contingent or unknown liabilities could materially and adversely affect us.
As a result of these legislative and regulatory actions, the Servicer may not perform in our best interests or up to our expectations, which could materially adversely affect our business, financial condition, results of operations and our ability to make distributions to our stockholders. Contingent or unknown liabilities could materially and adversely affect us.
Our ability to obtain permanent non-recourse financing through securitizations is affected by a number of factors, including: • conditions in the securities markets, generally; • conditions in the asset-backed securities markets, specifically; • yields on our portfolio of mortgage loans; • the credit quality of our portfolio of mortgage loans; and • our ability to obtain any necessary credit enhancement.
Our ability to obtain permanent non-recourse financing through securitizations is affected by a number of factors, including: • conditions in the securities markets, generally; • conditions in the asset-backed securities (“ABS”) markets, specifically; • yields on our portfolio of mortgage loans; • the credit quality of our portfolio of mortgage loans; and • our ability to obtain any necessary credit enhancement.
Such ownership creates conflicts of interest when such directors or members of our management team are faced with decisions that involve us and New Manager, our Servicer, or any of their respective subsidiaries. See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Item 13.
Such ownership creates conflicts of interest when such directors or members of our management team are faced with decisions that involve us and Manager, our Servicer or any of their respective subsidiaries. See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Item 13.
As part of the risk management process, we use our New Manager’s detailed proprietary models to evaluate, depending on the asset class, house price appreciation and depreciation by county, region, prepayment speeds and foreclosure frequency, cost and timing.
As part of the risk management process, we use our Manager’s detailed proprietary models to evaluate, depending on the asset class, house price appreciation and depreciation by county, region, prepayment speeds and foreclosure frequency, cost and timing.
These higher risk loans, combined with decreases in property values, have caused increases in loan-to-value ratios, resulting in borrowers having little or negative equity in their property, which may provide an incentive to borrowers to strategically default on their loans.
Additionally, these higher risk loans, combined with decreases in property values, have caused increases in loan-to-value ratios, resulting in borrowers having little or negative equity in their property, which may provide an incentive to borrowers to strategically default on their loans.
Our New Manager is authorized to follow a very broad investment policy and guidelines and, therefore, has great latitude in determining the types of assets that are proper investments for us, as well as the individual investment decisions.
Our Manager is authorized to follow a very broad investment policy and guidelines and, therefore, has great latitude in determining the types of assets that are proper investments for us, as well as the individual investment decisions.
Business — Operating and Regulatory Structure — Investment Company Act Exclusion” for additional information regarding the 40% test). Certain of our subsidiaries may rely on the exclusion provided by Section 3(c)(5)(C) or Section 3(c)(6)under the Investment Company Act.
Business — Operating and Regulatory Structure — Investment Company Act Exclusion” for additional information regarding the 40% test). 30 Certain of our subsidiaries may rely on the exclusion provided by Section 3(c)(5)(C) or Section 3(c)(6)under the Investment Company Act.
In connection with these licenses we would be required to comply with various information reporting and other regulatory requirements to maintain those licenses, and there is no assurance that we will be able to satisfy those requirements on an ongoing basis.
In connection with these licenses, we would be required to comply with various information reporting and other regulatory requirements to maintain those licenses, and there is no assurance that we would be able to satisfy those requirements on an ongoing basis.
Certain Relationships and Related Transactions and Director Independence.” Rithm’s failure to appropriately manage or address conflicts of interest could damage its and our reputation and adversely affect our business, financial condition and results of operations.
Certain Relationships and Related Transactions and Director Independence.” 28 Rithm’s failure to appropriately manage or address conflicts of interest could damage its and our reputation and adversely affect our business, financial condition and/or results of operations.
We could be subject to liability for potential violations of predatory lending laws, which could materially adversely affect our business, financial condition and results of operations and our ability to make distributions to our stockholders.
We could be subject to liability for potential violations of predatory lending laws, which could materially adversely affect our business, financial condition and/or results of operations and our ability to make distributions to our stockholders.
Our business has historically been, and may in the future be, materially affected by conditions in the residential mortgage market, the residential real estate market, the commercial real estate market, including the smaller commercial real estate market, the financial markets and the economy in general.
Our business has historically been, and may in the future be, materially affected by conditions in the residential mortgage and real estate markets, the commercial mortgage and real estate markets, including the smaller CRE market, the financial markets and the economy in general.
The liquidation proceeds upon sale of such real estate may not be sufficient to recover our cost basis in the loan, and any costs or delays involved in the foreclosure or liquidation process may increase losses. 18 Whole mortgage loans are also subject to “special hazard” risk such as property damage caused by hazards, such as earthquakes, wildfires or floods or other environmental hazards, not covered by standard property insurance policies.
The liquidation proceeds upon sale of such real estate may not be sufficient to recover our cost basis in the loan, and any costs or delays involved in the foreclosure or liquidation process may increase losses. 13 Whole mortgage loans are also subject to “special hazard” risk such as property damage caused by hazards, such as earthquakes, wildfires or floods or other environmental hazards, not covered by standard property insurance policies.
In the future, our New Manager may make investments with lower rates of return than those anticipated under current market conditions and/or may make investments with greater risks to achieve those anticipated returns.
In the future, our Manager may make investments with lower rates of return than those anticipated under current market conditions and/or may make investments with greater risks to achieve those anticipated returns.
Our financial performance, government regulatory action, tax laws, interest rates and market conditions in general could have a significant impact on the future market price of our common stock.
Our financial performance, government regulatory action, tax laws, interest rates and market conditions in general could have a significant impact on the future market price of our Common Stock and preferred stock.
In periods following home price declines, “strategic defaults” (decisions by borrowers to default on their mortgage loans despite having the ability to pay) also may become more prevalent. 16 In the event of defaults under mortgage loans backing any of our MBS, we will bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the mortgage loan.
In periods following home price declines, “strategic defaults” (decisions by borrowers to default on their mortgage loans despite having the ability to pay) also may become more prevalent. 11 In the event of defaults under mortgage loans backing any of our MBS, we will bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the mortgage loan.
Through the Servicing Agreement, the Servicer currently passes along to us many of the additional third-party expenses incurred by it in servicing these higher risk loans. The greater cost of servicing higher risk loans, which may be further increased through regulatory changes, could adversely affect our business, financial condition and results of operations.
Through the Newrez Servicing Agreement, the Servicer currently passes along to us many of the additional third-party expenses incurred by it in servicing these higher risk loans. The greater cost of servicing higher risk loans, which may be further increased through regulatory changes, could adversely affect our business, financial condition and/or results of operations.
In the event of the bankruptcy of a mortgage loan borrower, the mortgage loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the mortgage loan will be subject to the avoidance powers of the bankruptcy trustee or debtor in possession to the extent the lien is unenforceable under state law.
In the event of the bankruptcy of a commercial mortgage loan borrower, the CRE loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the such loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law.
These investments also subject us to the risks inherent with real estate-related investments, including: • risks of delinquency and foreclosure, and risks of loss in the event thereof; • the dependence upon the successful operation of, and net income from, real property; • risks generally incident to interests in real property; and • risks specific to the type and use of a particular property.
These investments also subject us to the risks inherent with real estate-related investments, including: • risks of delinquency and foreclosure, and risks of loss in the event thereof; • risks related to increases in property taxes; • the dependence upon the successful operation of, and net income from, real property; • risks generally incident to interests in real property; and • risks specific to the type and use of a particular property.
Cybersecurity may subject us to increased costs as we (i) continue to update our cybersecurity defenses in order to reflect the evolving risks, (ii) monitor our systems for cyber-attacks and security threats, and (iii) seek to determine the extent of our losses in the event of a cybersecurity breach.
Cybersecurity may subject us to increased costs as we, through Rithm, (i) continue to update our cybersecurity defenses in order to reflect the evolving risks, (ii) monitor our systems for cyber-attacks and security threats and (iii) seek to determine the extent of our losses in the event of a cybersecurity breach.
We have used and expect to continue to use securitization and other non-recourse long-term financing for our investments if, and to the extent, available. In such structures, lenders typically have only a claim against the assets included in the securitizations rather than a general claim against the owner-entity.
We have used and may continue to use securitization and other non-recourse long-term financing for our investments if, and to the extent, available. In such structures, lenders typically have only a claim against the assets included in the securitizations rather than a general claim against the owner-entity.
Certain provisions of the MGCL may have the effect of inhibiting a third party from making a proposal to acquire us or impeding a change of control under circumstances that otherwise could provide our stockholders with the opportunity to realize a premium over the then-prevailing market price of our common stock, including: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock or an affiliate or associate of ours who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of our then-outstanding stock) or an affiliate of an interested stockholder for five years after the most recent date on which the stockholder became an interested stockholder, and thereafter require two supermajority stockholder votes to approve any such combination; and • “control share” provisions that provide that a holder of our “control shares” (defined as voting shares of stock which, when aggregated with all other shares of stock owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), entitle the acquiror to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares,” subject to certain exceptions) generally has no voting rights with respect to the control shares except to the extent approved by our stockholders by the affirmative vote of two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
Certain provisions of the Maryland General Corporation Law (“MGCL”) may have the effect of inhibiting a third party from making a proposal to acquire us or impeding a change of control under circumstances that otherwise could provide our stockholders with the opportunity to realize a premium over the then-prevailing market price of our Common Stock and preferred stock, including: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock or an affiliate or associate of ours who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of our then-outstanding stock) or an affiliate of an interested stockholder for five years after the most recent date on which the stockholder became an interested stockholder, and thereafter require two supermajority stockholder votes to approve any such combination; and 32 • “control share” provisions that provide that a holder of our “control shares” (defined as voting shares of stock which, when aggregated with all other shares of stock owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), entitle the acquiror to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares,” subject to certain exceptions) generally has no voting rights with respect to the control shares except to the extent approved by our stockholders by the affirmative vote of two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
Some of the other factors that could negatively affect our share price or result in fluctuations in our share price include: • weakening of the mortgage loan market or the commercial real estate market; • actual or anticipated variations in our quarterly operating results; • increases in market interest rates that lead purchasers of our Common Stock to demand a higher yield; • changes in our cumulative core earnings or earnings estimates; • changes in market valuations of similar companies; • political and social unrest or instability and military conflicts; • actions or announcements by our competitors; • actual or perceived conflicts of interest, or the discontinuance of our strategic relationships, with our New Manager or the Servicer; • adverse market reaction to any increased indebtedness we incur in the future; • additions or departures of key personnel; 39 • actions by stockholders; • speculation in the press or investment community; • our ability to maintain the listing of our Common Stock on a national securities exchange; • failure to qualify or maintain our qualification as a REIT; and • failure to maintain our exemption from registration under the Investment Company Act.
Some of the other factors that could negatively affect our share price or result in fluctuations in our share price include: • weakening of the mortgage loan market or the CRE market; • actual or anticipated variations in our quarterly operating results; • increases in market interest rates that lead purchasers of our Common Stock to demand a higher yield; • changes in our cumulative core earnings or earnings estimates; • changes in market valuations of similar companies; • political and social unrest or instability and military conflicts; • actions or announcements by our competitors; • actual or perceived conflicts of interest, or the discontinuance of our strategic relationships, with our Manager or the Servicer; • adverse market reaction to any increased indebtedness we incur in the future; • additions or departures of key personnel; • actions by stockholders; • speculation in the press or investment community; • our ability to maintain the listing of our Common Stock on a national securities exchange; • failure to qualify or maintain our qualification as a REIT; and • failure to maintain our exemption from registration under the Investment Company Act.
Under the Servicing Agreements, the Servicer provides us with critically important services, including, among many others, the servicing of our whole mortgage loans, including the mortgage loans underlying our MBS, loan modification services, assisted deed-in-lieu of foreclosure services, assisted deed-for-lease services and other loss mitigation services with respect to our mortgage loans and property management, leasing management and renovation management services with respect to our real property assets and assistance in finding third party financing for such properties.
Under the Newrez Servicing Agreement, the Servicer provides us with critically important services, including, among many others, the servicing of our whole mortgage loans, including the mortgage loans underlying our MBS, loan modification services, assisted deed-in-lieu of foreclosure services, assisted deed-for-lease services and other loss mitigation services with respect to our mortgage loans and property management, leasing management and renovation management services with respect to our real property assets and assistance in finding third party financing for such properties.
Difficult conditions in the mortgage, residential real estate and commercial real estate markets as well as general market concerns, have adversely affected the value of the assets in which we invest and these conditions continue to persist for the foreseeable future.
Difficult conditions in the mortgage, CRE and residential real estate markets, as well as general market concerns, have adversely affected the value of the assets in which we invest and these conditions continue to persist for the foreseeable future.
Unpredictable events, such as the current ongoing military conflicts, may create economic shocks, to which federal, state, and local governments respond with new borrower and tenant rights and protections. Certain federal and state regulators continue to consider proposals to apply regulatory prudential standards to nonbank servicers, which may impact how our service providers, including the Servicer, are regulated.
Unpredictable events, such as the current ongoing military conflicts, may create economic shocks, to which federal, state and local governments respond with new borrower and tenant rights and protections. Certain state regulators continue to consider proposals to apply regulatory prudential standards to non-bank servicers, which may impact how our service providers, including the Servicer, are regulated.
The overall level of commercial mortgage loan defaults remains significant and market values of the underlying commercial real estate remain distressed in many cases. It has also become increasingly difficult for lenders to dispose of foreclosed commercial real estate without incurring substantial investment losses, ultimately leading to a decline in the value of such investments.
The overall level of commercial mortgage loan defaults remains significant and market values of the underlying CRE remain distressed in many cases. It has also become increasingly difficult for lenders to dispose of foreclosed CRE without incurring substantial investment losses, ultimately leading to a decline in the value of such investments.
We expect that legislative and regulatory changes will continue in the foreseeable future, which may increase our operating expenses, either to comply with applicable law, to deal with regulatory examinations or investigations, or to satisfy our lenders and investors that we are in compliance with those laws, regulations and rules that are applicable to our business.
We expect that legislative and regulatory changes, as well as uncertainties, will continue in the foreseeable future, which may increase our operating expenses, either to comply with applicable law, to deal with regulatory examinations or investigations, or to satisfy our lenders and investors that we are in compliance with those laws, regulations and rules that are applicable to our business.
Any weather conditions, man-made or natural disasters, including wildfire and flooding events, or effects of climate change, whether or not insured, could have a material adverse effect on our financial performance, the market price of our common shares and our ability to pay dividends.
Any weather conditions, man-made or natural disasters, including wildfire and flooding events, or effects of climate change, whether or not insured, could have a material adverse effect on our financial performance, the market price of our Common Stock and preferred stock and our ability to pay dividends.
In addition, we may change our investment policy and guidelines and targeted asset classes at any time without the consent of our stockholders, and this could result in our making investments that are different in type from, and possibly riskier than, our current investments or the investments currently contemplated.
In addition, our Board of Directors may change our investment policy and guidelines and targeted asset classes at any time without the consent of our stockholders, and this could result in our making investments that are different in type from, and possibly riskier than, our current investments or the investments currently contemplated.
In order to qualify, we must, among other non-operation requirements: (1) limit our initial margin and premiums required to establish our swap or futures positions to no more than 5% of the fair market value of our total assets; and (2) limit our net income derived annually from our swaps and futures positions that are not “qualifying hedging transactions” to less than 5% of our gross income.
In order to qualify, we must, among other non-operation requirements: (i) limit our initial margin and premiums required to establish our swap or futures positions to no more than 5% of the fair market value of our total assets; and (ii) limit our net income derived annually from our swaps and futures positions that are not “qualifying hedging transactions” to less than 5% of our gross income.
Failure of our New Manager or service providers to comply with these laws could subject us, as an assignee or purchaser of the related residential mortgage loans, to monetary penalties and could result in impairment in the ability to foreclose such loans or the borrowers rescinding the affected residential mortgage loans.
Failure of our Manager, our Servicer or our other service providers to comply with these laws could subject us, as an assignee or purchaser of the related residential mortgage loans, to monetary penalties and could result in impairment in the ability to foreclose such loans or the borrowers rescinding the affected residential mortgage loans.
Our commercial real estate loans in respect of smaller multi-family residential properties or smaller mixed use retail/residential properties may be subject to defaults, foreclosure timeline extension, fraud, commercial price depreciation and unfavorable modification of loan principal amount, interest rate and amortization of principal.
Our CRE loans in respect of smaller multi-family residential properties or smaller mixed use retail/residential properties may be subject to defaults, foreclosure timeline extension, fraud, commercial price depreciation and unfavorable modification of loan principal amount, interest rate and amortization of principal.
Commercial real estate debt instruments (e.g., mortgages and mezzanine loans) that are secured by commercial property are subject to risks of delinquency and foreclosure and risks of loss that are arguably greater than similar risks associated with a pool of loans secured by single-family residential properties.
CRE debt instruments (e.g., mortgages and mezzanine loans) that are secured by commercial property are subject to risks of delinquency and foreclosure and risks of loss that are arguably greater than similar risks associated with a pool of loans secured by single-family residential properties.
A continued decline in specific commercial real estate markets and property valuations may result in higher delinquencies and defaults and potentially foreclosures. In the event of default, the lender will have no right to assets beyond collateral attached to the commercial mortgage loan.
A continued decline in specific CRE markets and property valuations may result in higher delinquencies and defaults and potentially foreclosures. In the event of default, the lender will have no right to assets beyond collateral attached to the commercial mortgage loan.
Our ability to sell mortgage loans into securitizations could also be delayed, limited, or precluded by legislative and regulatory reforms applicable to asset-backed securities and the institutions that sponsor, service, rate, or otherwise participate in, or contribute to, the successful execution of a securitization transaction. Other factors could also limit, delay, or preclude our ability to sell assets into securitizations.
Our ability to sell mortgage loans into securitizations could also be delayed, limited or precluded by legislative and regulatory reforms applicable to ABS and the institutions that sponsor, service, rate or otherwise participate in, or contribute to, the successful execution of a securitization transaction. Other factors could also limit, delay or preclude our ability to sell assets into securitizations.
Security breaches and other cyber-security incidents could result in a loss of data, interruptions in our business, subject us to regulatory actions and increased costs, each of which could have a material adverse effect on our business and results of operations.
Security breaches and other cybersecurity incidents could result in a loss of data, interruptions in our business, subject us to regulatory actions and increased costs, each of which could have a material adverse effect on our business and/or results of operations.
The manner in which we compete and the types of commercial real estate loans we are able to acquire will be affected by changing conditions resulting from sudden changes in the commercial real estate industry, regulatory environment, the role of credit rating agencies or their rating criteria or process, or the U.S. and global economies generally.
The manner in which we compete and the types of CRE loans we are able to acquire will be affected by changing conditions resulting from sudden changes in the CRE industry, regulatory environment, the role of credit rating agencies or their rating criteria or process, or the U.S. and global economies generally.
If we do not effectively respond to these changes, or if our strategies to respond to these changes are not successful, our financial condition and results of operations may be adversely affected. In addition, we can provide no assurances that we will be successful in executing our business strategy in successfully acquiring commercial real estate loans.
If we do not effectively respond to these changes, or if our strategies to respond to these changes are not successful, our financial condition and results of operations may be adversely affected. In addition, we can provide no assurances that we will be successful in executing our business strategy in successfully acquiring CRE loans.
A determination as to the creditworthiness of a prospective borrower is based on a wide range of information including, without limitation, information relating to the form of entity of the prospective borrower, which may indicate whether the borrower can limit the impact that its other activities have on its ability to pay obligations related to the commercial real estate loan.
A determination as to the creditworthiness of a prospective borrower is based on a wide range of information including, without limitation, information relating to the form of entity of the prospective borrower, which may indicate whether the borrower can limit the impact that its other activities have on its ability to pay obligations related to the CRE loan.
In addition, the market value of our RPLs, NPLs and SBC Loans have significantly deteriorated and we have incurred substantial operating losses on loans we have sold or intend to sell. We expect to continue to incur operating losses for the foreseeable future given the current market conditions for our mortgage asset holdings.
In addition, the market value of our RPLs, NPLs and small balance commercial loans have significantly deteriorated, and we have incurred substantial operating losses on loans we have sold or intend to sell. We expect to continue to incur operating losses for the foreseeable future given the current market conditions for our mortgage asset holdings.
Upon any termination of the Servicing Agreements, it may be difficult for us to secure suitable replacements or we may secure alternative servicers with less effective servicing platforms or at greater expense.
Upon any termination of the Newrez Servicing Agreement, it may be difficult for us to secure suitable replacements or we may secure alternative servicers with less effective servicing platforms or at greater expense.
Furthermore, competition for assets in our targeted asset classes may lead to the price of such assets increasing, may reduce the number of attractive commercial real estate investment opportunities available to us or increase the bargaining power of asset owners seeking to sell, which would increase the prices for these assets.
Furthermore, competition for assets in our targeted asset classes may lead to the price of such assets increasing, may reduce the number of attractive CRE investment opportunities available to us or increase the bargaining power of asset owners seeking to sell, which would increase the prices for these assets.
While Section 15G includes an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as “qualified residential mortgages” (as defined in the accompanying regulations), RPLs of the type that we purchased and securitized generally do not qualify for this exemption.
While Section 15G includes an exemption for ABS that are collateralized exclusively by residential mortgages that qualify as “qualified residential mortgages” (as defined in the accompanying regulations), RPLs of the type that we purchased and securitized generally do not qualify for this exemption.
The Servicer must comply with a wide array of U.S. federal, state and local laws and regulations, including certain licensing requirements, that regulate, among other things, the manner in which it services our mortgage loans and manages our real property in accordance with the Servicing Agreement, including CFPB mortgage servicing regulations promulgated pursuant to the Dodd-Frank Act, as well as the Gramm-Leach-Bliley Act, the Fair Debt Collection Practices Act, the Real Estate Settlement Procedures Act, the Truth in Lending Act, the Fair Credit Reporting Act, the Servicemembers Civil Relief Act, the Homeowners Protection Act, the Federal Trade Commission Act, the Telephone Consumer Protection Act and the Equal Credit Opportunity Act, as well as individual state licensing, privacy, foreclosure laws and federal and local bankruptcy rules.
The Servicer must comply with a wide array of U.S. federal, state and local laws and regulations, including certain licensing requirements, that regulate, among other things, the manner in which it services our mortgage loans and manages our real property in accordance with the Newrez Servicing Agreement, including Consumer Financial Protection Bureau (“CFPB”) mortgage servicing regulations promulgated pursuant to the Dodd-Frank Act, as well as the Gramm-Leach-Bliley Act, the Fair Debt Collection Practices Act, the Real Estate Settlement Procedures Act (the “RESPA”), the TILA, the Fair Credit Reporting Act, the Servicemembers Civil Relief Act, the Homeowners Protection Act, the Federal Trade Commission Act, the Telephone Consumer Protection Act and the Equal Credit Opportunity Act, as well as individual state licensing, privacy, foreclosure laws and federal and local bankruptcy rules.
The commercial real estate lending business depends on the creditworthiness of borrowers, which we must judge. In making such judgment, we may depend on information obtained from non-public sources and the borrowers in making acquisition decisions and such information may be difficult to obtain or may be inaccurate.
The CRE lending business depends on the creditworthiness of borrowers, which we must judge. In making such judgment, we may depend on information obtained from non-public sources and the borrowers in making acquisition decisions and such information may be difficult to obtain or may be inaccurate.
If the Management Agreement has been terminated other than for cause and the Servicer terminates the Servicing Agreements, we will be required to pay a significant termination fee. The Management Agreement will automatically terminate at the same time as the Servicing Agreements if the Servicing Agreements are terminated for any reason.
If the Management Agreement has been terminated other than for cause and the Servicer terminates the Newrez Servicing Agreement, we will be required to pay a significant termination fee. The Management Agreement will automatically terminate at the same time as the Newrez Servicing Agreement if the Newrez Servicing Agreement is terminated for any reason.
Laws, regulations, rules and judicial and administrative decisions relating to mortgage loans include those pertaining to Real Estate Settlement Procedures Act (“RESPA”), equal credit opportunity, fair lending, fair credit reporting, truth in lending, fair debt collection practices, service members protections, compliance with net worth and financial statement delivery requirements, compliance with U.S. federal and state disclosure and licensing requirements, the establishment of maximum interest rates, finance charges and other charges, qualified mortgages, secured transactions, payment processing, escrow, loss mitigation, collection, foreclosure, repossession and claims-handling procedures, and other trade practices and privacy regulations providing for the use and safeguarding of non-public personal financial information of borrowers.
Laws, regulations, rules and judicial and administrative decisions relating to mortgage loans include those pertaining to RESPA, equal credit opportunity, fair lending, fair credit reporting, TILA, fair debt collection practices, service members protections, compliance with net worth and financial statement delivery requirements, compliance with U.S. federal and state disclosure and licensing requirements, the establishment of maximum interest rates, finance charges and other charges, qualified mortgages, secured transactions, payment processing, escrow, loss mitigation, collection, foreclosure, repossession and claims-handling procedures, and other trade practices and privacy regulations providing for the use and safeguarding of non-public personal financial information of borrowers.
Regulatory scrutiny of, or litigation in connection with, conflicts of interest would have a material adverse effect on our reputation, which would materially adversely affect Rithm Property Trust’s business, financial condition or results of operations in a number of ways, including an inability to raise additional funds and a reluctance of counterparties to do business with Rithm Property Trust.
Regulatory scrutiny of, or litigation in connection with, conflicts of interest would have a material adverse effect on our reputation, which would materially adversely affect our business, financial condition and/or results of operations in a number of ways, including an inability to raise additional funds and a reluctance of counterparties to do business with us.
If the net operating income of the property is reduced, the borrower’s ability to repay the loan may be impaired.
If the net operating income of the property is reduced, the borrower’s ability to repay the CRE may be impaired.
Our acquisition activities are subject to many risks.
Our investment acquisition activities are subject to many risks.
Residential mortgage loans are secured by single-family residential property and, are subject to risks of delinquency and foreclosure and risks of loss. The payment of the principal and interest on the mortgage loans we acquire would not typically be guaranteed by any GSE, such as Fannie Mae and Freddie Mac, or securitized through Ginnie Mae or any other governmental agency.
Residential mortgage loans are secured by single-family residential property and are subject to risks of delinquency and foreclosure and risks of loss. The payment of the principal and interest on the mortgage loans we acquire would not typically be guaranteed by any GSE or securitized through Ginnie Mae or any other governmental agency.
Our hedging transactions, which would be intended to limit losses, may actually adversely affect our earnings, which could reduce our cash available for distribution to our stockholders. Risks Related to Regulatory and Legislative Actions RCM GA has registered under the Investment Advisers Act and is subject to regulation under that Act.
Our hedging transactions, which would be intended to limit losses, may actually adversely affect our earnings, which could reduce our cash available for distribution to our stockholders. Risks Related to Regulatory and Legislative Actions RCM GA is subject to regulation under the Investment Advisers Act as a registered investment adviser.
The exercise of remedies and successful realization of liquidation proceeds relating to commercial real estate loans may be highly dependent on the performance of the servicer or special servicer. The servicer may not be appropriately staffed or compensated to immediately address issues or concerns with the underlying loans.
The exercise of remedies and successful realization of liquidation proceeds relating to CRE loans may be highly dependent on the performance of the servicer or special servicer. The servicer may not be appropriately staffed or compensated to immediately address issues or concerns with the underlying loans.
Business — The Servicer.” The Servicing Agreements were not negotiated at arm’s length; accordingly, it may contain terms that are less favorable to us than agreements negotiated with one or more unaffiliated third parties might contain.
Business—The Servicer.” The Newrez Servicing Agreement was not negotiated at arm’s length; accordingly, it may contain terms that are less favorable to us than agreements negotiated with one or more unaffiliated third parties might contain.
Although we purchased loans at significant discounts to UPB and underlying property value, if actual results are different from our assumptions in determining the prices for such loans, particularly if the market value of the underlying property decreases significantly, we have previously and may continue to incur significant losses.
Although we purchased loans at significant discounts to unpaid principal balance (“UPB”) and underlying property value, if actual results are different from our assumptions in determining the prices for such loans, particularly if the market value of the underlying property decreases significantly, we have previously and may continue to incur significant losses.
Our Chief Executive Officer is an executive officer of our New Manager or the Servicer or both and has interests in our relationship with them that may be different from the interests of our stockholders which may encourage the support of strategies in furtherance of their financial success that adversely affect us.
Our Chief Executive Officer is an executive officer of our Manager and of Rithm and has interests in our relationship with them that may be different from the interests of our stockholders, which may encourage the support of strategies in furtherance of their financial success that adversely affect us.
The Servicing Agreements were also not negotiated at arm’s length and could contain terms that are less favorable to us than similar agreements negotiated with unaffiliated third parties. In addition, the Servicer is generally not prohibited from providing similar services to other owners of mortgage loans and real estate assets, including other affiliates of Rithm.
The Newrez Servicing Agreement was also not negotiated at arm’s length and could contain terms that are less favorable to us than similar agreements negotiated with unaffiliated third parties. In addition, the Servicer is generally not prohibited from providing similar services to other owners of mortgage loans and real estate assets, including other affiliates of Rithm, and currently does so.
Our commercial real estate loans secured by multi-family or commercial property may be subject to risks of delinquency and foreclosure, and risk of loss that may be greater than similar risks associated with loans made on the security of single-family residential property.
Our CRE loans secured by multi-family, mixed-use or commercial property may be subject to risks of delinquency and foreclosure, and risk of loss that may be greater than similar risks associated with loans made on the security of single-family residential property.
In addition, the Servicer has no liability to us for its negligence in performing services for us under the Servicing Agreements, unless that negligence rises to the level of gross negligence or willful misconduct. The material terms of the Servicing Agreements are further described in “Item 1.
In addition, the Servicer has no liability to us for its negligence in performing services for us under the Newrez Servicing Agreement, unless that negligence rises to the level of gross negligence or willful misconduct. The material terms of the Newrez Servicing Agreement is further described in “Item 1.
Changes in our investment policy and guidelines and targeted asset classes may increase our exposure to interest rate risk, counterparty risk, default risk and real estate market fluctuations, which could materially and adversely affect us. 34 The Servicing Agreements were not negotiated at arm’s length.
Changes in our investment policy and guidelines and targeted asset classes may increase our exposure to interest rate risk, counterparty risk, default risk and real estate market fluctuations, which could materially and adversely affect us. The Newrez Servicing Agreement was not negotiated at arm’s length.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFurthermore, Rithm collects and evaluates SIG, SOC 1 reports and Business Continuity and Disaster Recovery documents for our key service providers. 41 To date, we have not experienced a material cybersecurity breach and no risks from cybersecurity threats have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
Biggest changeTo date, cybersecurity risks, including those arising from known prior cybersecurity incidents, have not materially affected our business strategy, results of operations or financial condition, and we are not aware of any cybersecurity incidents that are reasonably likely to have a material impact on the Company. For additional information regarding cybersecurity risks, see “Part I, Item 1A.
Rithm’s independent testing includes both (i) periodic testing and evaluations performed by its internal audit team and (ii) annual network penetration testing conducted through independent third parties. Rithm’s processes for assessing, identifying and managing material risks from cybersecurity threats have been integrated into its overall risk management system and processes.
Independent testing includes (i) periodic reviews and evaluations conducted by Rithm’s internal audit function and (ii) annual network penetration testing performed by independent third-party specialists. Rithm’s processes for assessing, identifying and managing material cybersecurity risks are integrated into its overall risk management systems and processes.
Item 1C. Cybersecurity We are an externally managed company and our day-to-day operations are managed by our New Manager and our officers under the oversight of our Board of Directors. We are reliant on our New Manger, in identifying, assessing and managing material risks to our business from cybersecurity threats.
ITEM 1C. CYBERSECURITY We are an externally managed company, and our day-to-day operations are conducted by our Manager and our officers under the oversight of our Board of Directors. Accordingly, we rely on our Manager’s cybersecurity risk management program and processes to identify, assess and manage material cybersecurity risks to our business.
Risk Factors – Risks Related to Our Company – Security breaches and other cyber-security incidents could result in a loss of data, interruptions in our business, subject us to regulatory action and increased costs, each of which could have a material adverse effect on our business and results of operations.” in this Annual Report.
Risk Factors—Risks Related to Our Company—Security breaches and other cybersecurity incidents could result in a loss of data, business interruptions, regulatory actions and increased costs, each of which could have a material adverse affect on our business and results of operations.” 37 Governance Our Board of Directors oversees the Company’s enterprise risk management program, including cybersecurity risk, both directly and through its committees.
Rithm’s cybersecurity program is led by its interim Chief Information Security Officer (“CISO”) and is part of its overall enterprise risk management program. Rithm’s dedicated cybersecurity personnel supervise and monitor our controls, technologies, systems and other processes utilized to mitigate any data loss, theft, exploitation, unauthorized access or other vulnerabilities that may affect our information or data.
Rithm’s dedicated cybersecurity personnel oversee the controls, technologies, systems and processes used to mitigate risks related to data loss, theft, exploitation, unauthorized access or other cybersecurity vulnerabilities that could affect our information or data.
Governance Our Board of Directors oversees the Company’s risk management process, including cybersecurity risks, directly and through its committees. The Audit Committee of the Board of Directors, in conjunction with the New Manager, oversees the Company’s risk management program, which focuses on the most significant risks the Company faces in the short-, intermediate-, and long-term timeframe.
The Audit Committee of the Board of Directors, together with our Manager, provides oversight of the Company’s risk management framework and the most significant risks facing the Company over the short-, intermediate- and long-term. The Audit Committee receives regular updates and engages in periodic discussions regarding key risk areas, including cybersecurity.
As part of these processes, Rithm monitors the privacy and cybersecurity laws, regulations and guidance applicable to us in the regions where we do, as well as proposed privacy and cybersecurity laws, regulations, guidance and emerging risks.
As part of these efforts, Rithm monitors developments in applicable privacy and cybersecurity laws, regulations and guidance in the jurisdictions in which it operates, including, among others, SEC rules and privacy laws, as well as emerging regulatory requirements and evolving cybersecurity threats.
In doing so, the CISO receives regular reports prepared by our experienced cybersecurity personnel on cybersecurity threats and continuously reviews risk management measures implemented by the Company to help identify and mitigate data protection and cybersecurity risks.
In carrying out these responsibilities, the CISO receives regular reports from Rithm’s cybersecurity and information technology personnel regarding cybersecurity threats, vulnerabilities and incidents and oversees the ongoing evaluation of risk management measures designed to identify and mitigate data protection and cybersecurity risks.
Additionally, Rithm has protocols by which certain cybersecurity incidents would be escalated in a timely manner to our Audit Committee and Board of Directors. The New Manager, through Rithm, takes a risk-based approach to cybersecurity and has implemented cybersecurity policies throughout its operations that are designed to address cybersecurity threats and incidents.
Pursuant to the Management Agreement, our Manager, through Rithm, employs a risk-based approach to cybersecurity supported by policies, standards and controls designed to address cybersecurity threats and incidents across its operations.
Specifically, Rithm’s cybersecurity program consists of incident response procedures, information security and vendor management due diligence, as well as participation in industry consortiums, ongoing monitoring, internal and independent testing of information systems and continuous employee education and simulations.
Rithm’s cybersecurity program includes incident response and recovery planning; information security policies and standards; vendor and third-party risk management; employee training and awareness programs, including simulated phishing exercises; participation in industry information-sharing forums; and ongoing internal and external testing of information systems.
Risk Management and Strategy Our New Manager, through Rithm, maintains a comprehensive cybersecurity program and regularly assesses any risk of cybersecurity threats. In doing so, Rithm continuously monitors and tests our information systems for potential vulnerabilities pursuant to our cybersecurity program.
Rithm regularly assesses cybersecurity threats and continuously monitors and tests information systems for potential vulnerabilities as part of its cybersecurity program, which is led by Rithm’s Chief Information Security Officer (“CISO”) and integrated into Rithm’s broader enterprise risk management framework.
Audit Committee meetings include discussions of specific risk areas throughout the year, including, among others, those relating to cybersecurity, and reports from Rithm’s CISO and Chief Information Officer (“CIO”) on the Company’s enterprise risk profile and the Company’s risk treatment policies and processes on a quarterly basis or as needed.
The Audit Committee receives reports from Rithm’s CISO and Chief Information Officer (“CIO”) regarding the Company’s cybersecurity posture, enterprise risk profile and risk management policies and processes. In addition, Rithm maintains escalation protocols pursuant to which certain cybersecurity incidents are reported in a timely manner to the Audit Committee and, as appropriate, to the full Board of Directors.
Removed
Additionally, in order to reduce cybersecurity risks related to our use of third-party service providers, Rithm (i) obligates our service providers to adhere to strict privacy and cybersecurity measures and (ii) performs risk assessments of each new service provider during onboarding based on, among other things, the nature of their business and the type of information we provide to such service providers.
Added
Risk Management and Strategy Pursuant to the Management Agreement, our Manager, through Rithm, maintains and administers a cybersecurity risk management program designed to identify, assess, manage and monitor cybersecurity risks applicable to our business and operations.
Removed
Each service provider is assigned a tiered risk rating, which determines the frequency and extent of evaluation for the service provider.
Added
To address cybersecurity risks associated with third-party service providers, Rithm maintains a third-party risk management program that includes contractual requirements for appropriate data protection and cybersecurity controls and risk-based due diligence during onboarding. Service providers are assigned tiered risk ratings that determine the frequency and scope of ongoing assessments.
Removed
While the New Manager has implemented processes and procedures that it believes are tailored to address and mitigate the cybersecurity threats that our Company faces, there can be no assurances that such an incident will not occur despite our efforts, as more fully described in Item 1A. Risk Factors.
Added
For key service providers, Rithm obtains and reviews materials such as System and Organization Control (“SOC”) reports, including SOC 1 reports, standard information gathering (SIG) questionnaires and business continuity and disaster recovery documentation.
Removed
For a discussion of how risks from cybersecurity threats affect our business, and our reliance on our New Manager managing these risks, see “Part 1. Item 1A.
Added
Responsibility for cybersecurity risk management is led by the CISO, who oversees the design and implementation of the Company’s information security program and works to enhance the security posture of Rithm and its subsidiaries and affiliates. The CISO coordinates closely with other members of senior management, including the CIO and Rithm’s Chief Legal Officer, in managing cybersecurity risks.
Removed
In particular, the CISO is focused on assessing, managing, mitigating and reporting on cybersecurity threats and risks. The CISO plays a critical role in protecting the Company’s assets, data and reputation by developing a robust security strategy and security awareness.
Added
At the operational level, Rithm maintains an information technology and cybersecurity team responsible for implementing privacy and cybersecurity controls and supporting the CISO in monitoring, reporting and mitigation activities. Rithm provides ongoing employee training related to cybersecurity, privacy, records and information management, and conducts simulated phishing and other awareness exercises designed to promote cybersecurity risk awareness across the organization.
Removed
Rithm’s current CISO brings over 20 years of experience in IT operations and information security with a proven track record working in large financial institutions, mortgage companies and banks, with expertise in managing complex security environments. The CISO, in conjunction with other executive leaders such as the CIO and the Chief Legal Officer, manages the Company’s cybersecurity posture.
Removed
At the employee level, the New Manager maintains an experienced information technology team tasked with implementing our privacy and cybersecurity program and support the CISO in carrying out reporting, security and mitigation functions. The New Manager also holds employee trainings on privacy and cybersecurity, as well as records and information management, and it conduct phishing tests.
Removed
We generally seek to promote awareness of cybersecurity risk through communication and education of our employee population.

Item 2. Properties

Properties — owned and leased real estate

1 edited+1 added−0 removed0 unchanged
Biggest changeItem 2. Properties Our principal executive offices are shared with our New Manager and our Servicer and are located at 799 Broadway, 8th Floor New York, New York 10003. The lease for these premises expires on June 30, 2033; we are not responsible for any lease costs. We do not own any material real property.
Biggest changeITEM 2. PROPERTIES Our principal executive offices are located at 799 Broadway, 8th Floor, New York, New York 10003, and are shared with our Manager and our Servicer. The lease for these premises expires on June 30, 2033, and the lease obligations are borne by our Manager or Servicer, as applicable; we do not incur lease costs for these premises.
Added
We do not own any material real property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeMine Safety Disclosures Not applicable. 42 PART II.
Biggest changeMINE SAFETY DISCLOSURES Not applicable. 38 PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−4 removed6 unchanged
Biggest changeWe anticipate that our distributions generally will be taxable as capital gain to our stockholders, although a portion of the distributions may be designated by us as ordinary income or may constitute a return of capital.
Biggest changeWe generally are not required to make distributions with respect to activities conducted through GA-TRS or any other TRS that we may form. We anticipate that our distributions generally will be taxable as capital gain to our stockholders, although a portion of the distributions may be designated by us as ordinary income or may constitute a return of capital.
Holders As of February 12, 2025, there were 240 common stockholders of record. Dividends We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2014.
No fractional shares were issued in connection with the Reverse Stock Split; stockholders received cash in lieu of any fractional shares. Holders As of February 12, 2026, there were 215 common stockholders of record. Dividends We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2014.
We furnish annually to each of our stockholders a statement setting forth distributions paid during the preceding year and their characterization as ordinary income, return of capital or capital gains. Performance Graph We have one class of common stock, which is listed on the NYSE under the symbol “RPT”.
We furnish annually to each of our stockholders a statement setting forth distributions paid during the preceding year and their characterization as ordinary income, return of capital or capital gains. Unregistered Sales of Equity Securities None. ITEM 6. [RESERVED] 39
Removed
We generally are not required to make distributions with respect to activities conducted through GA-TRS, GAJX Real Estate Corp. (“GAJX”) or any other TRS that we may form.
Added
On December 19, 2025, the Company’s Board of Directors approved the Reverse Stock Split at a ratio of one share for every six shares issued and outstanding of its Common Stock and the outstanding common units of its Operating Partnership, which became effective at 5:00 p.m. Eastern Time on December 30, 2025.
Removed
The following graph compares the cumulative total return for our Common Stock (stock price change plus reinvested dividends) with the comparable return of four indices: NAREIT All REIT, Russell 2000, NAREIT Mortgage REIT and S&P 500.
Removed
The graph assumes an investment of $100 in our Common Stock and in each of the indices on December 31, 2019 through December 31, 2024. The past performance of our Common Stock is not an indication of future performance.
Removed
The graph and table below shall not be deemed to be “soliciting material” or to be “filed,” or to be incorporated by reference in future filings with the SEC, or to be subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act. 43 Year Ended December 31, Index 2019 2020 2021 2022 2023 2024 Rithm Property Trust Inc. $ 100 $ 77.5 $ 103.6 $ 64.3 $ 53.5 $ 32.5 NAREIT All REIT 100 94.9 134.1 100.8 112.2 116.6 Russell 2000 100 119.9 137.7 109.5 128.0 142.7 NAREIT Mortgage REIT 100 81.4 94.0 69.3 79.8 78.6 S&P 500 100 118.4 152.3 124.7 157.5 196.8 Unregistered Sales of Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

47 edited+91 added−108 removed19 unchanged
Biggest changeTable 8: Loans by State The following table identifies our mortgage loans for our top 10 states by number of loans, loan value, collateral value and percentages thereof at December 31, 2024 and 2023 ($ in thousands): December 31, 2024 December 31, 2023 State Count UPB % UPB Collateral Value (1) % of Collateral Value State Count UPB % UPB Collateral Value (1) % of Collateral Value CA 433 127,133 27.9 % $ 325,507 28.0 % CA 678 $ 216,124 22.6 % $ 508,854 24.0 % FL 346 55,550 12.2 % 157,625 13.6 % FL 792 159,018 16.6 % 366,829 17.3 % TX 165 13,487 3.0 % 44,561 3.8 % NY 344 101,946 10.7 % 209,509 9.9 % GA 144 15,227 3.3 % 44,549 3.8 % NJ 274 60,837 6.4 % 115,635 5.5 % NY 144 41,757 9.2 % 101,167 8.7 % MD 198 47,391 5.0 % 79,587 3.8 % NJ 136 27,374 6.0 % 63,381 5.5 % VA 171 35,359 3.7 % 68,100 3.2 % MD 115 25,083 5.5 % 45,794 3.9 % TX 318 31,445 3.3 % 85,808 4.1 % IL 105 16,741 3.7 % 32,072 2.8 % GA 264 30,719 3.2 % 77,210 3.6 % NC 100 11,567 2.5 % 32,913 2.8 % IL 182 29,826 3.1 % 48,824 2.3 % VA 86 17,108 3.8 % 37,916 3.3 % MA 136 27,266 2.8 % 64,592 3.1 % Other 851 103,866 22.9 % 275,188 23.8 % Other 1,666 217,244 22.6 % 490,909 23.2 % 2,625 454,893 100.0 % $ 1,160,673 100.0 % 5,023 $ 957,175 100.0 % $ 2,115,857 100.0 % 57 Liquidity and Capital Resources Source and Uses of Cash During the year ended December 31, 2024, our primary sources of cash have consisted of proceeds from the sale of residential mortgage loans and securities, as well as paydowns and interest income from our investment portfolio.
Biggest change(3) UPB as of December 31, 2025 and 2024, divided by market value of collateral and weighted by the UPB of the loan. 51 Table 7: Portfolio Characteristics The following tables present certain characteristics about our mortgage loans by year of origination as of December 31, 2025 and 2024, respectively: Portfolio at December 31, 2025: Years of Origination ($ in thousands) After 2008 2006 – 2008 2005 and prior Number of loans 285 1,386 765 UPB $ 48,008 $ 275,394 $ 92,153 Percent of mortgage loan portfolio by year of origination 11.6 % 66.2 % 22.2 % Loan Attributes: Weighted average loan age (months) 171.1 227.5 266.4 Weighted average loan-to-value 40.7 % 43.7 % 34.5 % Delinquency Performance: Current 75.3 % 82.3 % 81.6 % 30 days delinquent 10.1 % 8.7 % 6.7 % 60 days delinquent — % 0.1 % 0.3 % 90+ days delinquent 5.7 % 5.2 % 6.7 % Foreclosure 8.9 % 3.7 % 4.7 % Portfolio at December 31, 2024 Years of Origination ($ in thousands) After 2008 2006 – 2008 2005 and prior Number of loans 304 1,485 836 UPB $ 51,872 $ 300,938 $ 102,083 Percent of mortgage loan portfolio by year of origination 11.4 % 66.2 % 22.4 % Loan Attributes: Weighted average loan age (months) 157.3 215.3 254.3 Weighted average loan-to-value 46.8 % 51.1 % 40.3 % Delinquency Performance: Current 76.7 % 79.7 % 76.9 % 30 days delinquent 7.2 % 10.8 % 10.6 % 60 days delinquent 0.1 % 0.2 % 0.4 % 90+ days delinquent 9.6 % 6.0 % 8.0 % Foreclosure 6.4 % 3.4 % 4.1 % 52 Table 8: Loans by State The following table identifies our mortgage loans for our top 10 states by number of loans, loan value, collateral value and percentages thereof as of December 31, 2025 and 2024 ($ in thousands): December 31, 2025 December 31, 2024 State Count UPB % UPB Collateral Value (1) % of Collateral Value State Count UPB % UPB Collateral Value (1) % of Collateral Value CA 414 $ 117,380 28.2 % $ 341,107 26.6 % CA 433 $ 127,133 27.9 % $ 325,507 28.0 % FL 318 51,038 12.3 % 173,348 13.5 % FL 346 55,550 12.2 % 157,625 13.6 % NY 133 38,119 9.2 % 108,189 8.5 % NY 144 41,757 9.2 % 101,167 8.7 % NJ 128 25,109 6.0 % 74,474 5.8 % NJ 136 27,374 6.0 % 63,381 5.5 % MD 103 22,476 5.4 % 49,838 3.9 % MD 115 25,083 5.5 % 45,794 3.9 % VA 81 15,520 3.7 % 42,565 3.3 % VA 86 17,108 3.8 % 37,916 3.3 % IL 100 15,344 3.7 % 35,835 2.8 % IL 105 16,741 3.7 % 32,072 2.8 % GA 135 14,098 3.4 % 48,399 3.8 % TX 165 13,487 3.0 % 44,561 3.8 % TX 153 11,986 2.9 % 46,420 3.6 % GA 144 15,227 3.3 % 44,549 3.8 % NC 93 10,745 2.6 % 37,760 2.9 % MA 66 12,756 2.8 % 34,866 3.0 % Other 778 93,740 22.6 % 322,163 25.3 % Other 885 102,677 22.6 % 273,234 23.6 % 2,436 $ 415,555 100.0 % $ 1,280,098 100.0 % 2,625 $ 454,893 100.0 % $ 1,160,672 100.0 % (1) As of the reporting date.
These trusts are considered to be variable interest entities (“VIEs”), and we have determined that we are the primary beneficiary of the VIEs. 45 We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2014.
These trusts are considered to be variable interest entities (“VIEs”), and we have determined that we are the primary beneficiary of the VIEs. We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2014.
Under CECL, we determine the allowance for credit losses by comparing the contractual cash flows for our mortgage loans held-for-investment, investments in securities, held-to-maturity (“HTM”) and investments in beneficial interests by comparing the contractual cash flows to the projected cash flows as determined by management.
Under CECL, we determine the allowance for credit losses by comparing the contractual cash flows for our residential mortgage loans held-for-investment, investments in securities, held-to-maturity (“HTM”) and investments in beneficial interests by comparing the contractual cash flows to the projected cash flows as determined by management.
Increases in interest rates, in general, may over time cause: (1) the value of our mortgage loan and MBS portfolio to further decline; (2) coupons on our ARM and Hybrid ARM mortgage loans and MBS to reset, although on a delayed basis, to higher interest rates; (3) impact adversely our ability to securitize, re-securitize or sell our assets on attractive terms; (4) reduce the ability or desire of borrowers to refinance their loans; (5) mortgage related assets may become more illiquid during periods of interest rate volatility; (6) difficulties refinancing our securitizations and increases in the costs of our repurchase facility financings; (7) increase our financing costs as we seek to renew or replace borrowing facilities; and (8) to the extent we enter into interest rate swap agreements as part of our hedging strategy, the value of these agreements to increase.
Changes in Market Interest Rates — Increases in interest rates, in general, may over time cause: (1) the value of our mortgage loan and MBS portfolio to further decline; (2) coupons on our ARMs and Hybrid ARM loans and MBS to reset, although on a delayed basis, to higher interest rates; (3) impact adversely our ability to securitize, re-securitize or sell our assets on attractive terms; (4) reduce the ability or desire of borrowers to refinance their loans; (5) mortgage related assets may become more illiquid during periods of interest rate volatility; (6) difficulties refinancing our securitizations and increases in the costs of our repurchase facility financings; (7) increase our financing costs as we seek to renew or replace borrowing facilities; and (8) to the extent we enter into interest rate swap agreements as part of our hedging strategy, the value of these agreements to increase.
Generally, we are required to maintain minimum levels of Liquidity (as defined in the indenture governing the 2027 Notes) (in cash and cash equivalents) and tangible net worth of $30.0 million and $240.0 million, respectively.
Generally, we are required to maintain minimum levels of Liquidity (as defined in the indenture governing our 2027 Notes) (in cash and cash equivalents) and tangible net worth of $30.0 million and $240.0 million, respectively.
Additionally, our Former Manager incurred and our New Manager incurs direct, out-of-pocket costs and expenses related to managing our business, which are contractually reimbursable by us.
Additionally, our Former Manager incurred, and our Manager incurs, direct, out-of-pocket costs and expenses related to managing our business, which are contractually reimbursable by us.
We believe the estimates and assumptions underlying our consolidated financial statements are reasonable and supportable based on the information available as of December 31, 2024; however, uncertainty over the current macroeconomic conditions makes any estimates and assumptions as of December 31, 2024, inherently less certain than they would be absent the current economic environment.
We believe the estimates and assumptions underlying our consolidated financial statements are reasonable and supportable based on the information available as of December 31, 2025; however, uncertainty over the current macroeconomic conditions makes any estimates and assumptions as of December 31, 2025, inherently less certain than they would be absent the current economic environment.
The Company believes that the following discussion addresses the Company’s most critical accounting policies, which are those that are most important to the presentation of the Company’s financial condition and results of operations and require management’s most difficult, subjective and complex judgments. 48 The mortgage and financial sectors operate in a challenging and uncertain economic environment.
The Company believes that the following discussion addresses the Company’s most critical accounting policies, which are those that are most important to the presentation of the Company’s financial condition and results of operations and require management’s most difficult, subjective and complex judgments. 44 The mortgage and financial sectors operate in a challenging and uncertain economic environment.
Great Ajax Funding LLC is a wholly-owned subsidiary of the Operating Partnership formed to act as the depositor of mortgage loans into securitization trusts and to hold the subordinated securities issued by such trusts and any additional trusts the Company may form for additional secured borrowings.
Great Ajax Funding LLC is a wholly-owned subsidiary of the Operating Partnership formed to act as the depositor of mortgage loans into securitization trusts and to hold the subordinated securities issued by such trusts and any additional trusts the Company may form for additional secured bonds payable .
For additional information on our borrowing obligations, please see “Note 8 — Debt” in our consolidated financial statements included in this Annual Report.
For additional information on our borrowing obligations, please see “Note 9 — Debt” in our consolidated financial statements included in this Annual Report.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and related notes included in Item 8. Financial statements and supplementary data, as well as other cautionary statements and risks described elsewhere in this Annual Report. Overview Rithm Property Trust Inc.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and related notes included in Item 8. Financial statements and supplementary data, as well as other cautionary statements and risks described elsewhere in this Annual Report.
Management’s Discussion and Analysis of Financial Condition and Results of Operations In this Annual Report, unless the context indicates otherwise, references to “Rithm Property Trust,” “we,” “the Company,” “our” and “us” refer to the activities of and the assets and liabilities of the business and operations of Rithm Property Trust Inc. and its subsidiaries (formerly Great Ajax Corp.); references to “Rithm” refer to Rithm Capital Corp. and its subsidiaries; references to “Operating Partnership” refers to Great Ajax Operating Partnership L.P., a Delaware limited partnership; references to our “Former Manager” refer to Thetis Asset Management LLC, a Delaware limited liability company; references to “RCM GA” or our “New Manager” refer to RCM GA LLC; references to our “Servicer” or “Newrez” refer to Newrez LLC, a Delaware limited liability company and an affiliate of RCM GA; references to “Rithm” refer to Rithm Capital Corp., a Delaware corporation and the parent entity of RCM GA; and references to “Gregory” or our “Former Servicer” refer to Gregory Funding LLC, an Oregon limited liability company.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS In this Annual Report on Form 10-K, unless the context indicates otherwise, references to “Rithm Property Trust,” “we,” the “Company,” “our” and “us” refer to the activities of and the assets and liabilities of the business and operations of Rithm Property Trust Inc. and its subsidiaries; references to “Rithm” refer to Rithm Capital Corp., a Delaware corporation and the parent entity of RCM GA, and its subsidiaries; references to “Operating Partnership” refer to Great Ajax Operating Partnership L.P., a Delaware limited partnership; references to our “Former Manager” refer to Thetis Asset Management LLC, a Delaware limited liability company; references to “RCM GA” or our “Manager” refer to RCM GA Manager LLC; references to our “Servicer” or “Newrez” refer to Newrez LLC, a Delaware limited liability company and an affiliate of RCM GA; and references to our “Former Servicer” refer to Gregory Funding LLC, an Oregon limited liability company.
Similarly, our Consolidated Recourse Indebtedness to our Stockholders’ Equity ratio (as defined in the indenture governing the 2027 Notes) cannot exceed 4.0 to 1.0, excluding our secured borrowings. See Note 8 — Debt to the consolidated financial statements included in this report, for additional details on our financing arrangements.
Similarly, our Consolidated Recourse Indebtedness to our Stockholders’ Equity ratio (as defined in the indenture governing the 2027 Notes) cannot exceed 4.0 to 1.0, excluding our secured bonds payable. See Note 9 — Debt to the consolidated financial statements included in this Annual Report, for additional details on our financing arrangements.
Additionally, pursuant to the Management Agreement, we also pay all of the New Manager’s costs and expenses and reimburse the New Manager (to the extent incurred by the New Manager) on a monthly basis for the costs and expenses of providing services under the Management Agreement, including reimbursing the New Manager or its affiliates, as applicable, for our allocable share of the compensation (whether paid in cash, stock or other forms), including annual base salary, bonus, any related withholding taxes and employee benefits, paid to (i) the New Manager’s personnel serving as our chief financial officer based on the percentage of his or her time spent managing the Company’s affairs and (ii) other corporate finance, tax, accounting, middle office, internal audit, legal, risk management, operations, compliance and other non-investment personnel of the New Manager and its affiliates who spend all or a portion of their time managing our affairs.
Additionally, pursuant to the Management Agreement, we also pay all of the Manager’s costs and expenses and reimburse the Manager (to the extent incurred by the Manager) on a monthly basis for the costs and expenses of providing services under the Management Agreement, including reimbursing the Manager or its affiliates, as applicable, for our allocable share of the compensation (whether paid in cash, stock or other forms), including annual base salary, bonus, any related withholding taxes and employee benefits, paid to the Manager for corporate finance, tax, accounting, middle office, internal audit, legal, risk management, operations, compliance and other non-investment personnel of the Manager and its affiliates who spend all or a portion of their time managing our affairs.
AJX Mortgage Trust I and AJX Mortgage Trust II are wholly-owned subsidiaries of the Operating Partnership formed to hold mortgage loans used as collateral for financings under the Company’s repurchase agreements. In addition, the Company, through its Operating Partnership, holds REO properties acquired upon the foreclosure or other settlement of its owned NPLs.
AJX Mortgage Trust I is a wholly-owned subsidiary of the Operating Partnership formed to hold mortgage 40 loans used as collateral for financings under the Company’s repurchase agreements. In addition, the Company, through its Operating Partnership, holds REO properties acquired upon the foreclosure or other settlement of its owned NPLs.
The 12-month increase in the overall Consumer Price Index (“CPI”) was 2.9% in December 2024, versus 2.4% in September 2024 and 3.4% in December 2023, while core CPI price inflation (i.e., excluding food and energy prices) for December 2024, stood at 3.2%, only slightly lower than the 3.3% core CPI inflation rate reported for September 2024, but down from 3.9% for December 2023.
The 12-month increase in the overall Consumer Price Index (“CPI”) was 2.7% in December 2025 versus 3.0% in September 2025 and 2.9% in December 2024, while core CPI price inflation (i.e., excluding food and energy prices) for December 2025 stood at 2.6%, lower than the 3.0% core CPI inflation rate reported for September 2025, and down from 3.2% for December 2024.
Our Operating Partnership, through interests in certain entities as of December 31, 2024, owns 99.9% of Great Ajax II REIT Inc., which owns Great Ajax II Depositor LLC, which then acts as the depositor of mortgage loans into securitization trusts and holds subordinated securities issued by such trusts.
Our Operating Partnership, through interests in certain entities as of December 31, 2025, owns 99.7% of Rithm Property Trust II REIT Inc. (formerly known as Great Ajax II REIT Inc.), which owns Great Ajax II Depositor LLC, which then acts as the depositor of mortgage loans into securitization trusts and holds subordinated securities issued by such trusts.
Similarly, as of December 31, 2024, the Operating Partnership wholly-owned Great Ajax III Depositor LLC, which was formed to act as the depositor for a single joint venture with our partners. We have securitized mortgage loans through these securitization trusts and retained subordinated securities from the secured borrowings.
The Operating Partnership wholly-owns Great Ajax III Depositor LLC, which was formed to act as the depositor for a single joint venture with our partners. We have securitized mortgage loans through these securitization trusts and retained subordinated securities from the secured bonds payable .
As disclosed in the Note 2, the preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ significantly from those estimates.
The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions about future events that could affect the amounts reported in the financial statements and accompanying notes. Actual results could significantly differ from those estimates.
Allowance for Credit Losses We adopted ASU 2016-13, Financial Instruments - Credit Losses, otherwise known as CECL using the prospective transition approach for PCD assets on January 1, 2020.
Allowance for Credit Losses We adopted ASU 2016-13, Financial Instruments - Credit Losses, otherwise known as credit losses under the current expected credit loss (“CECL”) impairment model using the prospective transition approach for purchased financial assets with credit deterioration on January 1, 2020.
(2) Represents amounts that have been deferred in connection with a loan modification on which interest does not accrue. These amounts generally become payable at the time of maturity. (3) UPB as of December 31, 2024 and 2023, divided by market value of collateral and weighted by the UPB of the loan.
(2) Represents amounts that have been deferred in connection with a loan modification on which interest does not accrue. These amounts generally become payable at the time of maturity.
Any allowance for credit losses is determined under CECL as discussed in “Allowance for Credit Losses” above. 50 Fair Value Fair Value of financial instruments — A fair value hierarchy has been established that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
Fair Value Fair Value of financial instruments — A fair value hierarchy has been established that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
Additionally, market events, including inflation and the related Federal Reserve bank actions, may still adversely impact our future operating cash flows due to the inability of some of our borrowers to make scheduled payments on time or at all, and through increased interest rates on secured borrowings and repurchase lines of credit.
See “Risk Factors—Risks Related to Financing and Hedging—We may not be able to access financing sources on favorable terms, or at all, which could adversely affect our ability to execute our business strategy.” Additionally, market events, including inflation and the related Federal Reserve bank actions, may still adversely impact our future operating cash flows due to the inability of some of our borrowers to make scheduled payments on time or at all, and through increased interest rates on secured bonds payable and repurchase financing agreements.
Consolidation The determination of whether or not to consolidate a VIE under GAAP requires a significant amount of judgment concerning the degree of control over an entity by its holders of variable interests.
Pricing observability is impacted by a number of factors, including the type of asset or liability, whether it is new to the market and not yet established, and the characteristics specific to the transaction. 45 Consolidation The determination of whether to consolidate a VIE under GAAP requires a significant amount of judgment concerning the degree of control over an entity by its holders of variable interests.
GA-TRS is a wholly-owned subsidiary of the Operating Partnership that owns an equity interest in the Former Manager and previously owned an equity interest in the Former Servicer. GAJX is a wholly-owned subsidiary of the Operating Partnership formed to own, maintain, improve and sell REO properties acquired by the Company.
These entities own an equity interest in the Former Manager, previously owned an equity interest in the Former Servicer and were also formed to own, maintain, improve and sell REO properties acquired by the Company.
In 2023, our net loss was also impacted by a loss on joint venture refinancing on beneficial interests, which did not reoccur in 2024. Changes in various factors such as market interest rates, prepayment speeds, estimated future cash flows, and credit quality could affect the amount of net interest income for a given period.
Changes in various factors such as market interest rates, prepayment speeds, estimated future cash flows and credit quality could affect the amount of net interest income for a given period. Changes in market interest rates directly impact the borrowing cost on our repurchase financing agreements.
Accordingly, if our delinquency estimate is overstated and our valuation estimates are overstated, there could be a negative impact on our allowance for credit losses. Mortgage Loans Our loans are classified as (i) held-for-investment at amortized cost net of the allowance for credit losses or (ii) held-for-sale at lower of cost or market.
Accordingly, if our delinquency estimate is overstated and our valuation estimates are overstated, there could be a negative impact on our allowance for credit losses.
The declaration of dividends to our stockholders and the amount of such dividends are at the discretion of our Board of Directors. We generally need to distribute at least 90% of our taxable income each year (subject to certain adjustments) to our shareholders to qualify as a REIT under the Internal Revenue Code.
We generally need to distribute at least 90% of our taxable income each year (subject to certain adjustments) to our shareholders to qualify as a REIT under the Internal Revenue Code. This distribution requirement limits our ability to retain earnings and thereby replenish or increase capital to support our activities.
Management continually reconsiders whether we should consolidate a variable interest entity. Upon the occurrence of certain events, management will reconsider its conclusion regarding the status of an entity as a variable interest entity.
Management continually reconsiders whether we should consolidate a variable interest entity. Upon the occurrence of certain events, management will reconsider its conclusion regarding the status of an entity as a variable interest entity. RECENT ACCOUNTING PRONOUNCEMENTS See Note 2 — Basis of Presentation and Significant Accounting Policies to our consolidated financial statements included in this Annual Report.
However, home price growth picked up with the 12-month increase in the median resale price of an existing home at 6.0% in December 2024 compared to 4.1% in December 2023. The economic conditions discussed above influence our investment strategy and results.
However, home price growth slowed with the 12-month increase in the median resale price of an existing home at 0.4% in December 2025 compared to 5.8% in December 2024.
The Federal Open Market Committee (“FOMC”) lowered the federal funds rate target range by 25 basis points on December 18, 2024, but projected fewer 2025 rate cuts compared to its projections made in September 2024.
The FOMC lowered the federal funds rate target range by 25 basis points on December 10, 2025 and projected two further rate cuts for 2026, which was unchanged from its projections made in September 2024.
Changes in market interest rates directly impact the borrowing cost on our repurchase lines of credit. Our operating results may also be affected by credit losses in excess of initial estimates or unanticipated credit events experienced by borrowers whose mortgage loans underlie our investments in mortgage loans, beneficial interests, CMBS and RMBS.
Our operating results may also be affected by credit losses in excess of initial estimates or unanticipated credit events experienced by borrowers whose mortgage loans underlie our investments in mortgage loans, beneficial interests, CMBS and realization of losses or gains from our legacy RMBS portfolio. 46 Summary of Results of Operations The following table summarizes the changes in our results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
In addition, in connection with the Strategic Transaction, we changed our principal place of business and corporate headquarters to 799 Broadway, 8th Floor, New York, NY 10003. On December 2, 2024, we rebranded and changed our name to Rithm Property Trust Inc. from Great Ajax Corp.
The Company relocated its corporate headquarters to New York, New York, and on December 2, 2024, rebranded and changed its name to Rithm Property Trust Inc. In connection with the Strategic Transaction, the Company terminated its prior loan servicing arrangement and disposed of its interest in Great Ajax FS LLC.
Currently there is substantial uncertainty in the securitization markets which has limited our access to financing. Distributions — To qualify as a REIT under the Internal Revenue Code, we generally need to distribute at least 90% of our taxable income each year (subject to certain adjustments) to our stockholders.
Distributions — To qualify as a REIT under the Internal Revenue Code, we generally need to distribute at least 90% of our taxable income each year (subject to certain adjustments) to our stockholders. This distribution requirement limits our ability to retain earnings and thereby replenish or increase capital to support our activities.
The secured borrowings are structured as debt financings and not sales through a real estate mortgage investment conduit (“REMIC”). We completed the securitization transactions pursuant to Rule 144A under the Securities Act, in which we issued notes primarily secured by seasoned, performing and non-performing mortgage loans primarily secured by first liens on one-to-four family residential properties.
We completed the securitization transactions pursuant to Rule 144A under the Securities Act of 1933, as amended, in which we issued notes primarily secured by seasoned, performing and NPLs primarily secured by first liens on one-to-four family residential properties. Currently there is substantial uncertainty in the securitization markets which has limited our access to financing.
A breakdown of other expense is provided in the table below ($ in thousands): Table 4: Other Expense Year ended December 31, Variance 2024 2023 Year-over-Year Borrowing related expenses $ 3,223 $ 625 $ 2,598 Employee and service provider share grants 1,408 1,347 61 Insurance 1,326 1,019 307 Taxes and regulatory expense 780 476 304 Directors' fees and grants 691 902 (211) Impairment on real estate owned 605 1,096 (491) Consulting expense 614 218 396 Other expense 984 1,302 (318) Total other expense $ 9,631 $ 6,985 $ 2,646 Mortgage Loan Portfolio Our loan portfolio activity for the years ended December 31, 2024 and 2023, is presented below ($ in thousands): Table 5: Loan Portfolio Activity Year ended December 31, 2024 2023 Mortgage loans held-for-investment, net Mortgage loans held-for-sale, net Mortgage loans held-for-investment, net Mortgage loans held-for-sale, net Beginning carrying value $ 864,551 $ 55,718 $ 989,084 $ — Mortgage loans acquired — — 14,400 — Accretion recognized 31,802 — 51,326 — Payments received on loans, net (67,128) (9,996) (129,230) — Net reclassifications (to)/from mortgage loans held-for-sale, net (428,029) 428,029 (64,277) 64,277 Mark-to-market on loans held-for-sale — (54,537) — (8,559) Reclassifications to REO (1,696) (345) (2,379) — Sale of mortgage loans — (388,590) — — Net change in the allowance for credit losses (1,112) — 5,597 — Other (2,336) (2,491) 30 — Ending carrying value $ 396,052 $ 27,788 $ 864,551 $ 55,718 55 Table 6: Loan Portfolio Composition As of December 31, 2024 and 2023, our loan portfolios consisted of the following ($ in thousands): December 31, 2024 December 31, 2023 No. of Loans 2,625 No. of Loans 5,023 Total UPB (1) $ 454,893 Total UPB (1) $ 957,175 Interest-Bearing Balance $ 413,131 Interest-Bearing Balance $ 875,209 Deferred Balance (2) $ 41,763 Deferred Balance (2) $ 81,966 Market Value of Collateral $ 1,160,673 Market Value of Collateral $ 2,115,857 Current Purchase Price/Total UPB 80.0 % Current Purchase Price/Total UPB 81.6 % Current Purchase Price/Market Value of Collateral 37.4 % Current Purchase Price/Market Value of Collateral 41.5 % Weighted Average Coupon 4.48 % Weighted Average Coupon 4.51 % Weighted Average LTV (3) 48.2 % Weighted Average LTV (3) 54.2 % Weighted Average Remaining Term (months) 270 Weighted Average Remaining Term (months) 288 (1) At December 31, 2024 and 2023, our loan portfolio consists of fixed rate (62.6% of UPB), ARM (7.3% of UPB) and Hybrid ARM (30.1% of UPB); and fixed rate (60.0% of UPB), ARM (6.4% of UPB) and Hybrid ARM (33.6% of UPB), respectively.
The increase in other losses was primarily attributable to higher realized and unrealized losses on debt securities in 2025 and write-downs related to the Company’s investment in Gaea Real Estate Corp., partially offset by losses on sales of mortgage loans recorded in 2024 that did not recur in the current year. 50 Residential Mortgage Loan Portfolio Our loan portfolio activity for the years ended December 31, 2025 and 2024, is presented below: Table 5: Loan Portfolio Activity Year ended December 31, 2025 2024 ($ in thousands) Residential mortgage loans held-for-investment, net Residential mortgage loans held-for-sale, net Residential mortgage loans held-for-investment, net Residential mortgage loans held-for-sale, net Beginning carrying value $ 396,052 $ 27,788 $ 864,551 $ 55,718 Accretion recognized 18,241 — 31,802 — Payments received on loans, net (51,172) (2,411) (67,128) (9,996) Net reclassifications (to) from residential mortgage loans held-for-sale, net — — (428,029) 428,029 Change in unrealized gain (loss) on residential mortgage loans held-for-sale, net — 5,892 — (54,537) Reclassifications to REO (92) (196) (1,696) (345) Sale of mortgage loans — (1,659) — (388,590) Net change in the allowance for credit losses — — (1,112) — Other (200) 5 (2,336) (2,491) Ending Carrying Value $ 362,829 $ 29,419 $ 396,052 $ 27,788 Table 6: Loan Portfolio Composition As of December 31, 2025 and 2024, our loan portfolio consisted of the following: ($ in thousands) December 31, 2025 December 31, 2024 No. of Loans 2,436 2,625 Total UPB (1) $ 415,555 $ 454,893 Interest-Bearing Balance $ 375,028 $ 413,130 Deferred Balance (2) $ 40,527 $ 41,763 Market Value of Collateral $ 1,280,098 $ 1,160,673 Current Purchase Price/Total UPB 80.0 % 80.0 % Current Purchase Price/Market Value of Collateral 31.9 % 37.4 % Weighted Average Coupon 4.4 % 4.5 % Weighted Average LTV (3) 41.3 % 48.2 % Weighted Average Remaining Term (months) 262 270 (1) As of December 31, 2025 and 2024, our loan portfolio consisted of fixed rate (62.8% of UPB), ARM (6.4% of UPB) and Hybrid ARM (30.8% of UPB); and fixed rate (62.6% of UPB), ARM (7.3% of UPB) and Hybrid ARM (30.1% of UPB), respectively.
Factors That May Affect Our Operating Results Acquisitions — In light certain financial challenges, including the significant losses we have incurred to date and limited sources of financing, we do not expect to be able to acquire significant new commercial mortgage assets in the near future. 47 Financing — We previously securitized our whole loan portfolios, primarily as a financing tool, when economically efficient to create long-term, fixed rate, non-recourse financing with moderate leverage, while retaining one or more tranches of the subordinate MBS so created.
Financing — We previously securitized our whole loan portfolios, primarily as a financing tool, when economically efficient to create long-term, fixed rate, non-recourse financing with moderate leverage, while retaining one or more tranches of the subordinate MBS so created. The secured bonds payable are structured as debt financings and not sales through a real estate mortgage investment conduit.
The unemployment rate was 4.1% in December 2024, identical to the unemployment rate report for September 2024, but higher than the rate reported for year-end 2023.
The unemployment rate increased from 4.1% at the end of 2024 to 4.4% at the end of 2025, but the rate in December 2025 was unchanged from September 2025.
The Company conducts substantially all of its business through our Operating Partnership and its subsidiaries. The Company, through a wholly-owned subsidiary, Great Ajax Operating LLC, is the sole general partner of the Operating Partnership.
The Company, through a wholly-owned subsidiary, Great Ajax Operating LLC, is the sole general partner of the Operating Partnership. The Company has certain wholly-owned subsidiaries that it has elected to treat as TRSs under the Internal Revenue Code.
This distribution requirement limits our ability to retain earnings and thereby replenish or increase capital to support our activities. Dividends declared for the year ended December 31, 2024, were $12.3 million. We will continue to monitor market conditions and the potential impact the ongoing volatility and uncertainty may have on our business.
Dividends declared in the year ended December 31, 2025, were $11.0 million on Common Stock, and in the same period the Company accrued $4.2 million on Series C Preferred Stock dividend. 55 We will continue to monitor market conditions and the potential impact the ongoing volatility and uncertainty may have on our business.
Interest expense, which is subtracted from our Interest income to arrive at Net interest income, consists of the costs to borrow money. Changes in Market Interest Rates — The FOMC recently cut the federal funds rate by 50 basis points which has had a favorable impact on the cost of funds of our repurchase lines of credit.
Interest expense, which is subtracted from our Interest income to arrive at Net interest income, consists of the costs to borrow money.
This distribution requirement limits our ability to retain earnings and thereby replenish or increase capital to support our activities. Expenses — Our expenses primarily consist of the fees and expenses payable by us under the Management Agreement and the Servicing Agreements.
Expenses — Our expenses primarily consist of the fees and expenses payable by us under the Management Agreement and the servicing agreements transferred by our Former Servicer to Newrez pursuant to a Servicing Transfer Agreement (the “Servicing Agreements”).
As such, we are not materially exposed to any market, credit, liquidity or financing risk that could arise if we had engaged in such relationships. 60 Table 10: Investments in Joint Ventures We form joint ventures with third party institutional accredited investors to purchase mortgage loans and other mortgage related assets.
As such, we are not materially exposed to any market, credit, liquidity or financing risk that could arise if we had engaged in such relationships. 56 CONTRACTUAL OBLIGATIONS For 2025, our contractual obligations include secured bonds payable, repurchase financing agreements and our 2027 Notes.
Under the indenture governing the 2027 Notes, a subsidiary guarantor’s guarantee will terminate upon: (i) the sale, exchange, disposition or other transfer (including by way of consolidation) of the subsidiary guarantor or the sale or disposition of all or substantially all the assets of the subsidiary guarantor otherwise permitted by the indenture, (ii) satisfaction of the requirements for legal or covenant defeasance or discharge of the 2027 Notes, or (iii) no default or event of default has occurred and is continuing under the indenture. 59 The following table presents summarized financial information for the guarantors and our Operating Partnership, on a combined basis after eliminating (i) intercompany transactions and balances among the guarantor entities and (ii) equity in earnings from, and any investments in, any subsidiary that is a non-guarantor ($ in thousands): Table 9: Summary of Issuer and Guarantor Financial Statements December 31, 2024 December 31, 2023 Total Assets $ 505,465 $ 382,962 Borrowings under repurchase transactions 291,140 158,741 Convertible senior notes and notes payable, net 107,647 210,360 Other liabilities 15,986 44,931 Total liabilities 414,773 414,032 Total equity (deficit) 90,692 (31,070) Total Liabilities and Equity $ 505,465 $ 382,962 Year ended December 31, 2024 December 31, 2023 Total loss on revenue, net $ 20,873 $ (17,839) Management fees and loan servicing fees 22,207 6,491 Other expenses 6,215 13,173 Loss attributable to the Company (7,549) (37,503) Less: dividends on preferred stock 341 2,190 Net loss attributable to common stockholders $ (7,890) $ (39,693) Dividends We may declare dividends based on, among other things, our earnings, our financial condition, our working capital needs, new opportunities, and distribution requirements imposed on REITs.
The following table presents summarized financial information for the Guarantors and our Operating Partnership on a combined basis after eliminating (i) intercompany transactions and balances among the Guarantor entities and (ii) equity in earnings from, and any investments in, subsidiaries that are non-guarantors: ($ in thousands) December 31, 2025 December 31, 2024 Total Assets $ 278,568 $ 505,465 Repurchase financing agreements 96,025 291,140 Unsecured notes, net 108,507 107,647 Other liabilities 17,566 15,986 Total Liabilities 222,098 414,773 Total equity 56,470 90,692 Total Liabilities and Equity $ 278,568 $ 505,465 Year ended ($ in thousands) December 31, 2025 December 31, 2024 Total gain on revenue, net $ 2,351 $ 20,873 Management fees and loan servicing fees 1,603 22,207 Other expenses 1,148 6,215 Loss attributable to the Company (400) (7,549) Dividends on Preferred Stock 1,286 341 Net Loss Attributable to Common Stockholders $ (1,686) $ (7,890) OFF-BALANCE SHEET ARRANGEMENTS Other than our investments in RMBS and beneficial interests issued by joint ventures, our investment in a certain equity REIT and our investment in our Former Manager, we do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.
Year ended Variance ($ in thousands except per share data) December 31, 2024 December 31, 2023 Year-over-Year Revenues: Interest income $ 52,874 $ 72,332 $ (19,458) Interest expense (43,572) (59,286) 15,714 Net interest income 9,302 13,046 (3,744) Net change in the allowance for credit losses (5,087) (8,137) 3,050 Net interest income after the net change in the allowance for credit losses 4,215 4,909 (694) Loss from investments in affiliates (1,077) (1,308) 231 Loss on joint venture refinancing on beneficial interests — (11,024) 11,024 Mark-to-market loss on mortgage loans held-for-sale, net (54,537) (8,559) (45,978) Other loss (4,089) (1,092) (2,997) Total revenue/(loss), net (55,488) (17,074) (38,414) Expenses: Related party loan servicing fee 4,175 7,269 (3,094) Related party management fee 23,276 7,769 15,507 Professional fees 3,413 3,157 256 Fair value adjustment on mark-to-market liabilities (3,078) 4,491 (7,569) Other expense 9,631 6,985 2,646 Total expense 37,417 29,671 7,746 Gain on debt extinguishment — (31) 31 Loss before provision for income taxes (92,905) (46,714) (46,191) Provision for income taxes 145 243 (98) Net loss (93,050) (46,957) (46,093) Less: net (loss)/income attributable to the non-controlling interests (1,215) 114 (1,329) Net loss attributable to the Company (91,835) (47,071) (44,764) Less: dividends on preferred stock 340 2,190 (1,850) Net loss attributable to common stockholders $ (92,175) $ (49,261) $ (42,914) For the discussion of results of operations for the year ended December 31, 2023, compared to year ended December 31, 2022, please see “Item 7.
Year ended Variance ($ in thousands) December 31, 2025 December 31, 2024 Year-over-Year Net Interest Income Interest income $ 52,800 $ 52,874 $ (74) Interest expense (37,387) (43,572) 6,185 Net interest income 15,413 9,302 6,111 Expenses Related party loan servicing fee 1,964 4,175 (2,211) Related party management fee 6,253 23,276 (17,023) Professional fees 3,612 3,413 199 General and administrative 4,160 9,026 (4,866) Total expense 15,989 39,890 (23,901) Other Income (Loss) Net change in the allowance for credit losses 7,003 (5,087) 12,090 Change in unrealized gain (loss) on residential mortgage loans held-for-sale, net 5,892 (54,537) 60,429 Fair value adjustment on mark-to-market liabilities — 3,078 (3,078) Other loss (10,785) (5,771) (5,014) Total other income (loss) 2,110 (62,317) 64,427 Income (Loss) Before Income Taxes 1,534 (92,905) 94,439 Income tax expense 60 145 (85) Net Income (Loss) 1,474 (93,050) 94,524 Net income (loss) attributable to the noncontrolling interests 2 (1,215) 1,217 Net Income (Loss) Attributable to Rithm Property Trust Inc. 1,472 (91,835) 93,307 Dividends on Preferred Stock 4,212 340 3,872 Net Loss Attributable to Common Stockholders $ (2,740) $ (92,175) $ 89,435 For the discussion of results of operations for the year ended December 31, 2024, compared to year ended December 31, 2023, please see “Item 7.
Our Portfolio The following table outlines the carrying value of our portfolio of mortgage loan assets, investments in securities and REO as of December 31, 2024 and 2023 ($ in millions): December 31, 2024 December 31, 2023 Mortgage loans held-for-investment, net $ 396.1 $ 864.6 Mortgage loans held-for-sale, net 27.8 55.7 CMBS available-for-sale, at fair value 246.6 — RMBS available-for-sale, at fair value 62.2 131.6 Investments in securities, held-to-maturity 46.0 59.7 Investments in beneficial interests, net 89.7 104.2 Other investments, at fair value 29.9 — Real estate owned 4.1 3.8 Total mortgage related assets $ 902.4 $ 1,219.6 We closely monitor the status of our mortgage loans held-for-investment and held-for-sale, as well as the mortgage loans underlying our RMBS and, through our Servicer, work with our borrowers to improve their payment records.
OUR PORTFOLIO The following table outlines the carrying value of our portfolio of mortgage loan assets, investments in securities, other investments and REO as of December 31, 2025 and 2024: ($ in millions) December 31, 2025 December 31, 2024 Residential mortgage loans held-for-investment, net $ 362.8 $ 396.1 Residential mortgage loans held-for-sale, net 29.4 27.8 Commercial mortgage-backed securities, at fair value 273.8 246.6 Residential mortgage-backed securities 189.9 197.9 Other investments 79.2 30.5 Real estate owned 1.4 4.1 $ 936.5 $ 903.0 41 MARKET TRENDS AND OUTLOOK Summary The evaluation of economic trends continues to be clouded due to the impact of the 43-day government shutdown in the fourth quarter of 2025 that led to some reports being cancelled or delayed.
The 30-year fixed mortgage rate rose to 6.85% at the end of the fourth quarter from 6.08% at the end of the third quarter of 2024, up from 6.6% at the end of 2023.
The 30-year fixed mortgage rate fell to 6.27% at the end of the fourth quarter from 6.39% at the end of the third quarter of 2025 and from 6.85% at the end of 2024. 42 Commercial Real Estate The U.S. CRE market ended 2025 in a more functional (if still bifurcated) state than it began.
Removed
(formerly Great Ajax Corp.) is a Maryland corporation that is organized and operated in a manner intended to allow us to qualify as a REIT. Historically, we acquired RPLs and NPLs either directly or in security form through joint ventures with institutional accredited investors.
Added
OVERVIEW Rithm Property Trust (formerly Great Ajax Corp.) is a Maryland corporation that is organized and operates as an externally managed REIT. The Company focuses on investments in the CRE sector. On June 11, 2024, the Company completed its previously announced Strategic Transaction with Rithm.
Removed
As discussed below, under RCM GA’s management, we have started to shift our strategic direction towards investments in the commercial real estate sector, and we have begun to invest in CMBS. Our mortgage loans and real properties are serviced by Newrez, a Rithm affiliate. On June 11, 2024, we completed our previously announced Strategic Transaction with Rithm.
Added
In connection with the Strategic Transaction, the Company entered into SPA pursuant to which, following stockholder approval on May 20, 2024, it issued $14.0 million of Common Stock to Rithm.
Removed
The Strategic Transaction included (i) the entry into the Securities Purchase Agreement, which provided for, among other things, upon the approval of the Company’s stockholders on May 20, 2024, the sale of $14.0 million of the Company’s Common Stock to Rithm at a price of $4.87 per share (which represents the trailing five-day average closing price of the Company’s Common Stock on NYSE) as of the date of the Securities Purchase Agreement, and (ii) upon the approval of our stockholders on May 20, 2024, the entry into the Management Agreement with RCM GA, under which RCM GA became our new external manager.
Added
The Company also entered into the Management Agreement, with RCM GA, which became the Company’s external manager; terminated its prior management agreement; entered into a term loan with a subsidiary of Rithm; and issued warrants to Rithm to purchase shares of the Company’s Common Stock.
Removed
In connection with the Strategic Transaction, we terminated our existing management contract with the Former Manager in exchange for approximately 3.2 million shares of our Common Stock and $0.06 million in cash. For a full description of the components of the Strategic Transaction, see our Definitive Proxy Statement filed with the SEC on April 10, 2024.
Added
Effective June 1, 2024, servicing of the Company’s mortgage loans and real property was transferred to Newrez, an affiliate of Rithm and the Manager, pursuant to the Servicing Transfer Agreement. The terms of the underlying servicing agreements remain unchanged. Historically, we acquired RPLs and NPLs either directly or in security form through joint ventures with institutional accredited investors.
Removed
The Company elected to treat GA-TRS and GAJX as TRSs under the Internal Revenue Code.
Added
Under RCM GA’s management, the Company repositioned its business from a predominantly residential mortgage strategy to a flexible CRE focused investment strategy, which includes originating and acquiring CRE-related investments and managing a diversified portfolio of assets. The Company believes current market conditions are creating refinancing challenges and capital dislocations in the CRE sector that may present attractive risk-adjusted investment opportunities.
Removed
Under RCM GA’s management, we shifted our strategic direction towards investments in the commercial real estate sector, and we have begun to invest in CMBS.
Added
Target investments may include senior and subordinated mortgage loans, mezzanine loans, preferred equity, commercial mortgage servicing rights, CRE properties and other CRE-related debt and equity investments. The Company has largely transitioned away from residential mortgage loans and RMBS and does not expect to make further investments in RPLs, NPLs or RMBS.
Removed
Although we will evaluate all potentially accretive opportunities, our new investment strategy is focused on originating and/or acquiring loans and securities collateralized by various commercial real estate assets and investing in certain target assets, including senior loans, subordinated debt, mezzanine loans secured by pledges of equity interests in entities that own commercial real estate or other forms of subordinated debt in connection with commercial real estate, preferred equity or debt instruments secured by mortgages on commercial real estate, SBC Loans, as well as commercial mortgage servicing rights, commercial real estate properties and operating businesses in the commercial real estate sector.
Added
The Company expects to finance its investments through a variety of capital sources, which may include secured and unsecured credit facilities, capital markets transactions, securitizations and other corporate financing arrangements, depending on market conditions and investment characteristics. Through its external manager, the Company leverages Rithm’s real estate and capital markets expertise across sourcing, underwriting, financing, asset management and disposition.
Removed
We do not anticipate investing further in residential mortgage loans, RPLs or NPLs, and we have begun to sell our residential mortgage loans and RMBS. Given the change in focus of our business, we intend to, over time, reposition much of our existing portfolio.
Added
The Company believes the flexibility of its investment strategy and its ability to actively manage assets position it to generate attractive long-term returns for stockholders across a range of market conditions. The Company conducts substantially all of its business through our Operating Partnership and its subsidiaries.
Removed
We believe commercial real estate offers an attractive investment opportunity given market dynamics that are creating significant refinancing challenges and funding gaps. Through our New Manager, we have access to Rithm’s extensive expertise and network, creating opportunities to source, underwrite, and structure credit investments in the commercial real estate sector.
Added
Recent Developments In December 2025, as part of the execution of its CRE investment strategy, the Company acquired an indirect minority interest in PGOP, which through its affiliates and joint ventures owns the PGRE Portfolio, through the PGRE Investment.
Removed
Market Trends and Outlook Summary The U.S. economy expanded at a solid rate during the fourth quarter of 2024, as real gross domestic product (“GDP”) rose an annualized 2.3%, which put real growth at 2.5% in 2024 versus 3.2% in 2023.
Added
The PGRE Portfolio consists of ten properties: 1633 Broadway, 1301 Avenue of the Americas, 1325 Avenue of the Americas, 31 W 52nd Street, 712 Fifth Avenue, 1600 Broadway and 900 3rd Avenue in New York, New York and One Market Plaza, 300 Mission Street and One Front Street in San Francisco, California.
Removed
Longer-term Treasury yields rose during both the fourth quarter and in the full year2024, with most of the increase due to higher real yields from Treasury Inflation Protected Securities (“TIPS”).
Added
The Company made an initial cash investment of $50.0 million and committed to make up to an additional $7.5 million of capital contributions under certain circumstances. The investment was approved by the Company’s independent directors and was funded with cash on hand.
Removed
Interest rates remained elevated in 2024, despite the Federal Reserve initiating its first federal funds target rate cut in more than four years in September 2024, followed by additional cuts in the fourth quarter of 2024.
Added
On December 19, 2025, the Company’s Board of Directors approved the Reverse Stock Split, which was effected on December 30, 2025, of its Common Stock at a ratio of one share for every six shares issued and outstanding.
Removed
In addition to the steady unemployment rate, other signs of a solid labor market during the fourth quarter included a strengthening in nonfarm payroll growth, continued low levels of claims for unemployment benefits, and a rising ratio of job openings to unemployed job seekers. 46 Inflation Although inflation slowed during 2024, progress towards lower inflation stalled in the second half of the year.
Added
Unless otherwise indicated, all share and per-share amounts in this Annual Report on Form 10-K have been retroactively adjusted to reflect the Reverse Stock Split. In February 2026, the Company evaluated a potential common equity offering to finance the acquisition of commercial mortgage assets.
Removed
Treasury Yields The nominal 10-year Treasury yield rose to 4.57% at the end of 2024 from 3.78% in September 2024 and 3.88% at the end of 2023. Most of this increase was due to higher real yields from TIPS, which rose to 2.23% in December 2024, from 1.59% in September 2024, and 1.71% at the end of 2023.
Added
In light of prevailing market conditions, the Company determined not to pursue the equity raise or the related acquisition at that time. The Company continues to evaluate capital markets activity and strategic investment opportunities intended to benefit stockholders.
Removed
The 10-year breakeven inflation rate was 2.34% in December 2024, versus 2.19% in September 2024, and 2.17% at the end of 2023. Labor Markets Average payroll growth picked up to 170,000 jobs per month in the fourth quarter versus an average of 159,000 jobs per month in the third quarter.
Added
For the first three quarters of 2025, real GDP growth was approximately 2.5%, which was slightly ahead of the pace seen in 2024, and estimates for the fourth quarter of 2025 suggest another strong growth quarter. The unemployment rate was 4.4% in December 2025, which was unchanged from September 2025, but above the 4.1% reading for December 2024.
Removed
For 2024, payroll rose an average of 186,000 per month versus 251,000 per month in 2023. The unemployment rate was unchanged at 4.1% in December 2024 compared to September 2024, however, 0.3% higher from December 2023.
Added
The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditure price index (“core PCE”), was also unchanged from September 2025 to November 2025, at 2.8%, but down from 2024’s rate of 3.0% despite the imposition of tariffs on a wide range of goods and countries.
Removed
Judged by the ratio of job openings to unemployed job seekers, which rose to 1.18 in December 2024, from 1.06 in September 2024, the labor market tightened during the fourth quarter; however, improved overall over the course of 2024 when compared to December 2023 ratio of 1.45.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeProperty values are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns, public health crises and other factors), local real estate conditions (such as an oversupply of housing), changes or continued weakness in specific industry segments, construction quality, age and design, demographic factors and retroactive changes to building or similar codes.
Biggest changeProperty values are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns, public health crises and other factors), local real estate conditions (such as an oversupply of housing), changes or continued weakness in specific industry segments, construction quality, age and design, demographic factors and retroactive changes to building or similar codes. 57 There are many reasons borrowers will fail to pay including but not limited to, in the case of residential mortgage loans, reductions in personal income, job loss and personal events such as divorce or health problems, and in the case of commercial mortgage loans, reduction in market rents and occupancy and poor property management services by borrowers.
We will rely on the Servicer to mitigate our risk. Such mitigation efforts may include loan modifications and prompt foreclosure and property liquidation following a default. If a sufficient number of re-performing borrowers default, our results of operations will suffer, and we may not be able to pay our own financing costs.
We will rely on the Servicer to mitigate our risk. Such mitigation efforts may include loan modifications and prompt foreclosure and property liquidation following a default. If a sufficient number of RPL borrowers default, our results of operations will suffer, and we may not be able to pay our own financing costs.
Real Estate Risk Residential and commercial property values are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns, public health crises and other factors); local real estate conditions (such as an oversupply of housing and commercial and residential vacancies); construction quality, age and design; demographic factors; and retroactive changes to building or similar codes.
Real Estate Risk Residential and commercial property values are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns, public health crises and other factors); local real estate conditions (such as an oversupply of housing and commercial and residential vacancies and corresponding impacts on market rents); construction quality, age and design; demographic factors; and retroactive changes to building or similar codes.
We expect to continue to utilize repurchase lines of credit as an interim financing tool until we have sufficient volume to execute a secured borrowing. Increases in interest rates will increase our cost of funds for new secured borrowings and our cost of funds on repurchase lines of credit on the repurchase reset date.
We expect to continue to utilize repurchase lines of credit as an interim financing tool until we have sufficient volume to issue secured bonds payable. Increases in interest rates will increase our cost of funds for new secured bonds payable and our cost of funds on repurchase lines of credit on the repurchase reset date.
Changes in interest rates may affect the fair value of the mortgage loans and real estate underlying our portfolios as well as our financing interest rate expense.
Changes in interest rates may affect the fair value of the mortgage loans and real estate underlying our portfolios as well as our financing interest rate expense. Additionally, rises in interest rates may result in a lower refinance volume of our portfolio.
Higher interest rates could be accompanied by inflation and higher household incomes which generally correlate closely to higher rent levels and property values.
Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. Higher interest rates could be accompanied by inflation and higher household incomes which generally correlate closely to higher rent levels and property values.
Additionally, inflation that outpaces wage increases could drive a decrease in disposable household income and increase the credit risk of certain borrowers.
Additionally, inflation that outpaces wage increases could drive a decrease in disposable household income and increase the credit risk of certain borrowers. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Our financial statements, the related notes thereto and the report of independent auditors are included in this annual report beginning on page F-1. ITEM 9.
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Additionally, rises in interest rates may result in a lower refinance volume of our portfolio. 63 Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
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There are many reasons borrowers will fail to pay including but not limited to, in the case of residential mortgage loans, reductions in personal income, job loss and personal events such as divorce or health problems, and in the case of commercial mortgage loans, reduction in market rents and occupancy and poor property management services by borrowers.

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