Rithm Property Trust Inc.
For the period ended Sep 30, 2025. Filed Nov 4, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 4, 2025
RPT$11.00-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0001614806-25-000029
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0001614806-25-000035
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 125 current paragraphs.
75 unchanged; 32 reworded; 16 added; 14 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
The economy has shown resilience year-to-date despite elevated policy uncertainty. The evaluation of economic trends has been clouded since the September data cycle began by the shutdown in nonessential government spending. Although core personal consumption expenditure inflation was 2.9% in August 2025, the Federal Open Market Committee cut interest rates in September 2025, lowering the fed funds target by a quarter percentage point to support the employment side of their dual mandate. The median projections of committee participants pointed to two more rate cuts in 2025. Longer-term Treasury yields declined slightly during the third quarter of 2025, as an increase in the implied inflation breakeven was more than offset by a decline in real yields as measured by Treasury Inflation Protected Securities (“TIPS”). The unemployment rate rose slightly 0.2% points from June to August 2025 based on low layoffs but also very slow hiring. The growth outlook for the economy is cautiously optimistic but risks remain due to uncertainty around trade and immigration policy. Equity markets advanced, the S&P 500 composite climbed 7.8% during the third quarter of 2025, posting its best third quarter performance since 2020.
Current report
The CRE market showed tentative progress toward stabilization in the third quarter of 2025. After nearly two years of repricing and tight liquidity, activity is beginning to normalize as investors adjust to the higher-rate environment. Sentiment has improved modestly, supported by clearer monetary signals, disciplined underwriting, and early evidence that leasing fundamentals are holding in several core property types.
Current report
Industrial & Retail: Industrial remains one of the most durable sectors. Long-term drivers—e-commerce logistics, manufacturing reshoring, and supply-chain diversification—continue to underpin occupancy and rent stability, even as trade frictions and higher input costs slowed expansion decisions. Retail remains a tale of two markets: grocery-anchored and daily-needs centers continue to perform steadily, while discretionary formats are contending with slower spending and cost pressures.
Current report
Multifamily: Apartment performance remains solid but less exceptional than in recent years. Rent growth has flattened as new supply delivers in select metros, yet structural demand from affordability constraints and household formation continues to support occupancy. Rising expenses—from insurance to maintenance—are keeping operators focused on efficiency and asset quality.
Current report
Office: The office sector remains the most scrutinized segment, but conditions are gradually becoming more two-sided. Broad vacancy persists, particularly in older and commodity stock, yet high-quality and well-located assets are showing signs of traction. Leasing interest has concentrated around amenitized buildings that support return-to-office efforts and employee retention. This “flight-to-quality” trend, already evident in large markets, is beginning to filter into secondary business districts with institutional product. At the same time, the new-construction pipeline has slowed materially, which should help re-establish balance over time. While distress continues to surface in aging assets, the tone around office has shifted from capitulation to differentiation—suggesting the beginnings of price discovery and, for some markets, early stabilization.
Current report
Capital remains selective. Lenders continue to focus on lower leverage, proven sponsorship and predictable income streams. Equity investors are re-engaging where basis resets have created clearer value, particularly in sectors with visible demand support. Office is attracting attention at adjusted pricing levels, with capital now distinguishing between structural obsolescence and cyclical dislocation. Broader transaction activity remains below historical averages, but bid-ask spreads have narrowed and recapitalizations are occurring more frequently, signaling that investors are willing to transact under the new cost of capital.
Current report
CRE enters the final quarter of 2025 on firmer footing but still uneven ground. We believe that industrial and multifamily assets should continue to demonstrate relative stability, retail will remain mixed, and office is likely to progress through an extended sorting phase—where quality, location and modernization determine outcomes. Looking ahead, modest macro tailwinds – a more predictable rate path and limited new construction—support a cautiously constructive view. Markets appear to be transitioning from valuation reset to operational focus, and capital is beginning to differentiate between distress and opportunity. CRE is stabilizing rather than recovering, but the tone has shifted to selectivity.
Current report
In this environment, we believe a mortgage REIT such as Rithm Property Trust is well positioned to capitalize on emerging dislocations, providing liquidity where traditional lenders remain cautious and deploying capital across sectors and structures that offer both yield and optionality.
Current report
Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024
Current report
Our interest expense increased for the three months ended September 30, 2025, versus the comparable period in 2024, primarily due to higher average balances in repurchase financing agreement balances.
Current report
Nine Months ended September 30, 2025 versus Nine Months ended September 30, 2024
Current report
Our interest expense decreased for the nine months ended September 30, 2025, versus the comparable period in 2024, primarily driven by continued pay down throughout the year of secured bonds payable.
Current report
Nine Months Ended September 30, 2025 versus Nine Months Ended September 30, 2024
Current report
Other Loss
Current report
Nine Months Ended September 30, 2025 versus Nine Months Ended September 30, 2024
Current report
Table 4: Other Loss
Removed paragraphs (14)
Previous report
Real gross domestic product (“GDP”) rose an annualized 3.0% in the second quarter of 2025 largerly due to a decline in imports that added 5.2% points to the change in real GDP. This drop in imports followed an increase in the first quarter of 2025 that was the result of the front running of tariffs. Longer-term Treasury yields were relatively unchanged during the second quarter of 2025, as an increase in real yields from Treasury Inflation Protected Securities (“TIPS”) was offset by a decline in the implied inflation breakeven. The unemployment rate fell slightly with overall labor market stability during the second quarter of 2025, including solid employment growth, continued low levels of claims for unemployment benefits and a modestly higher ratio of job openings to unemployed job seekers. Though fiscal policy uncertainty has been reduced by the passage of the One Big Beautiful Bill Act in early July 2025, the outlook for the economy remains uncertain given shifting policies related to global trade.
Previous report
The economic conditions discussed above influence our investment strategy and results. Following 100 basis points of rate cuts in the final four months of 2024, the majority of the Federal Open Market Committee (“FOMC”) participants continue to wait for greater clarity with respect to the effects of government policies before making any further adjustments to the federal funds rate. The FOMC’s June 2025 Summary of Economic Projections contained a median forecast of two quarter-point rate cuts before the end of 2025.
Previous report
The commercial real estate (“CRE”) market continued to navigate a complex landscape in the second quarter of 2025. Early-year optimism around easing inflation and anticipated FOMC rate cuts initially bolstered liquidity and sentiment across asset classes. However, renewed trade tensions and tariff-induced volatility in the second quarter tempered momentum, creating pockets of uncertainty across several sectors.
Previous report
Industrial & Retail: Trade-related disruptions to global supply chains led to short-term demand volatility, particularly in logistics and manufacturing markets that have high exposure to imports. While long-term industrial fundamentals remain favorable, occupier decision-making has slowed in trade-sensitive regions. Retail performance has been uneven, with essential goods and experiential retail holding firm, while discretionary segments face pressure from higher input costs and softer consumer confidence.
Previous report
Multifamily: The sector remains resilient, buoyed by strong household formation, constrained new supply and relative affordability compared to homeownership. However, rising utility and material costs—partly driven by tariffs—continue to pressure operating margins and capital expenditure budgets.
Previous report
Office: Office fundamentals remain challenged with persistently high vacancy rates and ongoing tenant right-sizing. Nonetheless, select Class A submarkets are showing early signs of stabilization, supported by return-to-office mandates and sustained flight-to-quality leasing.
Previous report
In 2025, transaction volumes remained near multi-year lows, though the market appears to be finding a floor. Investors are cautiously re-engaging, with well-capitalized buyers selectively pursuing distressed and value-add opportunities, particularly in the office sector. Prospects of interest rate cuts later in the year provide some support for modest capitalization rate compression and incremental deal flow, though underwriting remains disciplined given macroeconomic and trade-related risks.
Previous report
The CRE sector enters the second half of 2025 off a low baseline of activity, following a multi-year reset driven by higher rates, office sector dislocation and regional banking pressures. While current volatility has tempered the early-year recovery, the market appears more resilient than in prior cycles, and downside impacts from trade-related disruptions are somewhat mitigated by already-depressed transaction levels. We believe opportunistic investors with flexible capital and a longer-term view are well-positioned to capitalize on selective dislocations in the coming quarters.
Previous report
Three and Six Months Ended June 30, 2025 versus Three and Six Months Ended June 30, 2024
Previous report
Our interest expense decreased for the three and six months ended June 30, 2025, versus the comparable periods in 2024, due to lower average carrying balance of secured bonds payable, primarily due to paydowns and asset sales, and a lower cost of financing for repurchase financing agreements.
Previous report
Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024
Previous report
Other Income (Loss)
Previous report
Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024
Previous report
Table 4: Other Income (Loss)
Reworded paragraphs (32)
Previous wording
Rithm Property Trust Inc. (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. 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.
Current wording
Rithm Property Trust Inc. (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. As discussed below, under RCM GA’s management, we have started to shift our strategic direction towards investments in the CRE sector, and we have begun to invest in CMBS. Our mortgage loans and real properties are serviced by Newrez, a Rithm affiliate.
Previous wording
On June 11, 2024, we completed a strategic transaction with Rithm (the “Strategic Transaction”). The Strategic Transaction included (i) the entry into the Securities Purchase Agreement, dated February 26, 2024 (the “SPA”), by and among the Company, the Operating Partnership, the Former Manager and Rithm, which provided for, among other things, the sale of $14.0 million of the Company’s common stock (“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 the New York Stock Exchange) as of the date of the SPA, 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. 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 $0.6 million in cash. For a full description of the components of the Strategic Transaction, see our Definitive Proxy Statement filed with the Securities and Exchange Commission 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. On December 2, 2024, we rebranded and changed our name to Rithm Property Trust Inc. from Great Ajax Corp.
Current wording
On June 11, 2024, we completed a strategic transaction with Rithm (the “Strategic Transaction”). The Strategic Transaction included (i) the entry into the Securities Purchase Agreement, dated February 26, 2024 (the “SPA”), by and among the Company, the Operating Partnership, the Former Manager and Rithm, which provided for, among other things, the sale of $14.0 million of the Company’s common stock (“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 the New York Stock Exchange) as of the date of the SPA, and (ii) upon the approval of our stockholders on May 20, 2024, the entry into the Management Agreement, dated as of June 11, 2024, (as amended by that First Amendment to the Management Agreement, dated as of October 18, 2024 (the “Amendment”), 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. 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 $0.6 million in cash. For a full description of the components of the Strategic Transaction, see our Definitive Proxy Statement filed with the Securities and Exchange Commission 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. On December 2, 2024, we rebranded and changed our name to Rithm Property Trust Inc. from Great Ajax Corp.
Previous wording
Our Operating Partnership, through interests in certain entities as of June 30, 2025, 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. 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. These trusts are considered to be variable interest entities (“VIEs”), and we have determined that we are the primary beneficiary of the VIEs.
Current wording
Our Operating Partnership, through interests in certain entities as of September 30, 2025, owns 99.9% 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. 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. These trusts are considered to be variable interest entities (“VIEs”), and we have determined that we are the primary beneficiary of the VIEs.
Previous wording
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. Although we will evaluate all potentially accretive opportunities, our go forward investment strategy is focused on originating and/or acquiring loans and securities collateralized by various commercial real estate assets and investing in 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, small balance commercial loans, as well as commercial mortgage servicing rights, commercial real estate properties and operating businesses in the commercial real estate sector. We do not anticipate investing further in residential mortgage loans, RPLs or NPLs, and we have been selling 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. We believe commercial real estate offers an attractive investment opportunity given market dynamics that are creating significant refinancing challenges and funding gaps.
Current wording
Under RCM GA’s management, we shifted our strategic direction towards investments in the CRE sector, and we have begun to invest in CMBS. We continually evaluate all potentially accretive opportunities, including investing in CMBS, commercial real estate and commercial mortgage loans, with a focus on originating and/or acquiring loans and securities collateralized by various CRE assets and investing in senior loans, subordinated debt, mezzanine loans secured by pledges of equity interests in entities that own CRE or other forms of subordinated debt in connection with CRE, preferred equity or debt instruments secured by mortgages on CRE, and small balance commercial loans, as well as acquiring direct or indirect interests in commercial mortgage servicing rights, CRE properties and operating businesses in the CRE sector. We do not anticipate investing further in residential mortgage loans, RPLs or NPLs, and we have been selling 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. We believe commercial real estate offers an attractive investment opportunity given market dynamics that are creating significant refinancing challenges and funding gaps.
Previous wording
Through our 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.
Current wording
Through our Manager, we have access to Rithm’s extensive expertise and network, creating opportunities to source, underwrite, and structure credit investments in the CRE sector.
Previous wording
Inflation picked up in the second quarter of 2025 with the 12-month increase in the overall Consumer Price Index (“CPI”) rising to 2.7% in June 2025 from 2.4% in March 2025. Core CPI price inflation (excluding food and energy prices) rose slightly to 2.9% in June 2025 from 2.8% in March 2025. The faster gains in CPI prices were driven by higher energy and other goods prices and slower disinflation in services prices.
Current wording
Inflation picked up further during the third quarter of 2025, with the 12-month increase in the overall Consumer Price Index (“CPI”) rising to 3.0% in September 2025 from 2.7% in June 2025. Core CPI price inflation (excluding food and energy prices) also rose to 3.0% in September 2025 from 2.9% in June 2025. The faster gains in CPI prices were driven by both faster increases in core goods prices and core services prices.
Previous wording
The nominal 10-year Treasury yield was relatively unchanged at 4.24% at the end of June 2025 versus 4.23% at the end of March 2025. The real yields on 10-year TIPS rose to 1.95% in June 2025 from 1.85% in March 2025, whereas the 10-year breakeven inflation rate was 2.29% in June 2025, a decline from 2.38% in March 2025.
Current wording
The nominal 10-year Treasury yield declined slightly to 4.15% at the end of September from 4.23% at the end of June 2025. The real yields on 10-year TIPS fell to 1.78% at the end of September 2025 from 1.93% in June 2025, whereas the 10-year breakeven inflation rate rose to 2.37% in September 2025 from 2.28% in June 2025.
Previous wording
Nonfarm payrolls rose an average of 150,000 jobs per month in the second quarter of 2025 versus an average of 111,000 jobs per month in the first quarter of 2025. The unemployment rate decreased slightly to 4.1% in June 2025 from 4.2% in March 2025. Based upon the ratio of job openings to unemployed job seekers, which rose to 1.06 in June 2025 from 1.02 in March 2025, the labor market did not loosen further during the second quarter of 2025. Nonetheless, year-over-year growth in average hourly earnings was 3.7% in June 2025, a slowing from the 3.9% wage rate growth reported for March 2025.
Current wording
Average payroll rose an average of 51,000 jobs per month in the first two months of the third quarter of 2025, which was little changed from an average of 55,000 jobs per month in the second quarter of 2025. The unemployment rate increased to 4.3% in August 2025 from 4.1% in June 2025. Based upon the ratio of job openings to unemployed job seekers, which slipped to 0.98 in August 2025 from 1.05 in June 2025, the labor market did loosen slightly during the first two months of the third quarter of 2025. Nonetheless, year-over-year growth in average hourly earnings was 3.7% in August 2025, unchanged from June 2025.
Previous wording
Total home sales (new and existing) averaged 4.64 million units in the second quarter of 2025, 2.9% lower than the average of 4.78 million in the first quarter of 2025. Home sales remain at a low level with total sales in a range of 4.5 million and 5.1 million since the beginning of 2023. Home price growth moderated further with the 12-month increase in the median resale price of an existing home at 2.0% in June 2025, which compares to 2.6% in March 2025. The 30-year fixed mortgage rate rose modestly to 6.77% at the end of the second quarter of 2025 from 6.65% at the end of the first quarter of 2025.
Current wording
Total home sales (new and existing) averaged 4.69 million units in the first two months of the third quarter of 2025, which was virtually unchanged from the average of 4.66 million in the second quarter of 2025. Home sales remain at a low level with total sales in a range of 4.5 million and 5.1 million since the beginning of 2023. Home price growth picked up slightly with the 12-month increase in the median resale price of an existing home at 2.0% in August 2025, which compares to 1.4% in June 2025. The 30-year fixed mortgage rate declined somewhat to 6.39% at the end of the third quarter of 2025 from 6.77% at the end of the second quarter of 2025.
Previous wording
The Company’s significant accounting policies are described detail in Note 2 — Basis of Presentation and Significant Accounting Policies to the consolidated financial statements included in our Annual Report. As disclosed in 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 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.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). 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. 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.
Previous wording
Our net income (loss) is primarily generated from net interest income, our operating expenses and other gains and losses, which are primarily related to unrealized and realized gains and losses on our mortgage and debt securities portfolios, including allowance for credit losses on our mortgages and beneficial interests.
Current wording
Our net loss attributable to common stockholders is primarily generated from net interest income, our operating expenses and other gains and losses, which are primarily related to unrealized and realized gains and losses on our commercial and residential mortgage and debt securities portfolios, including allowance for credit losses on our residential mortgages and beneficial interests, mark-to-market adjustments on RMBS and CMBS carried at fair value, and income from investments in affiliates.
Previous wording
Net interest income increased by $3.9 million and by $6.0 million for the three and six months ended June 30, 2025, from the respective prior year periods, primarily as a result of reinvesting net proceeds from sales of residential mortgage loans and RMBS into higher yielding CMBS with lower cost of financing.
Current wording
Net interest income increased by $0.3 million and by $6.3 million for the three and nine months ended September 30, 2025, from the respective prior year periods, primarily as a result of reinvesting net proceeds from sales of residential mortgage loans and RMBS into CMBS with a higher net interest margin.
Previous wording
The interest income detail and interest expense for the three and six months ended June 30, 2025 and 2024 are presented in the table below:
Current wording
The interest income detail and interest expense for the three and nine months ended September 30, 2025 and 2024 are presented in the table below:
Previous wording
The average carrying balances for our portfolio and debt are included in the table below:
Current wording
The average carrying balances for our portfolio and debt for the nine months ended September 30, 2025 and 2024 are included in the table below:
Previous wording
The average carrying balance of our mortgage loan portfolio decreased for the six months ended June 30, 2025, versus the comparable period in 2024, primarily due to loan sales and paydowns, partially offset by the increase in debt securities, as we reposition our balance sheet into investments in CMBS.
Current wording
The average carrying balance of our mortgage loan portfolio decreased for the nine months ended September 30, 2025, versus the comparable period in 2024, primarily due to loan sales and paydowns, partially offset by the increase in debt securities, as we reposition our balance sheet into investments in CMBS.
Previous wording
Our total expenses decreased by $5.0 million for the three months ended June 30, 2025, versus the comparable period in 2024, primarily due to lower general and administrative expenses, as detailed in the table below.
Current wording
Our total expenses decreased by $1.2 million for the three months ended September 30, 2025, versus the comparable period in 2024, primarily due to lower general and administrative expenses, as detailed in the table below.
Previous wording
Total expenses decreased by $23.2 million for the six months ended June 30, 2025, versus the comparable period in 2024, primarily as a result of a decrease in management fee expense of $16.6 million, due to the management termination fee of $15.5 million recorded in the six months ended June 30, 2024, a decrease in general and administrative expenses of $4.8 million and a decrease in related party loan servicing fee of $2.1 million as the average balance of our mortgage loan portfolio declined year-over-year.
Current wording
Total expenses decreased by $24.4 million for the nine months ended September 30, 2025, versus the comparable period in 2024, primarily as a result of a decrease in management fee expense of $17.2 million, due to the management termination fee of $15.5 million recorded in the nine months ended September 30, 2024, a decrease in general and administrative expenses of $5.1 million and a decrease in related party loan servicing fee of $2.2 million as the average balance of our mortgage loan portfolio declined year-over-year.
Previous wording
Our other income increased for the three months ended June 30, 2025, versus the comparable period in 2024, primarily due to gains recognized on mortgage loans held-for-sale, as compared to losses recognized in the prior year period, as well as other gains. These improvements were partially offset by a gain on mark-to-market put option liability, recorded in the prior year period, which did not re-occur in three months ended June 30, 2025, as the instruments were settled in 2024, as well as by a loss on fair value of securities recorded in the three months ended June 30, 2025.
Current wording
Our other loss decreased for the three months ended September 30, 2025, versus the comparable period in 2024, primarily due to gains recognized on mortgage loans held-for-sale, as compared to losses recognized in the prior year period, as well as other income including income earned on the Company’s joint real estate venture with Rithm. These improvements were partially offset by a gain on mark-to-market put option liability, recorded in the prior year period, which did not re-occur in three months ended September 30, 2025, as the instruments were settled in 2024, as well as by a loss on fair value of securities recorded in the three months ended September 30, 2025.
Previous wording
Our other loss decreased for the six months ended June 30, 2025, versus the comparative period in 2024, due to lower losses in our mortgage portfolio, primarily as a result of a $53.8 million loss recorded on mortgage loans held-for-sale in 2024, as compared to a gain of $3.5 million recorded in the current year period.
Current wording
Our other loss decreased for the nine months ended September 30, 2025, versus the comparative period in 2024, due to lower losses in our mortgage portfolio, primarily as a result of a $55.5 million loss recorded on mortgage loans held-for-sale in 2024, as compared to a gain of $3.7 million recorded in the current year period.
Previous wording
Mortgage loans held-for-sale, net are not subject to CECL, as a result in the six months ended June 30, 2024, the allowance on loans classified as held-for-sale was reversed and reclassified to the mark-to-market loss recorded during the same period. We recorded no allowance for credit losses on our mortgage loans held-for-investment, net and beneficial interests’ portfolio in the three and six months ended June 30, 2025 and three months ended June 30, 2024, as compared to allowance of $4.2 million for the six months ended June 30, 2024.
Current wording
Mortgage loans held-for-sale, net are not subject to CECL, as a result in the nine months ended September 30, 2024, the allowance on loans classified as held-for-sale was reversed and reclassified to the mark-to-market loss recorded during the same period. We recorded no allowance for credit losses on our mortgage loans held-for-investment, net and beneficial interests’ portfolio in the three and nine months ended September 30, 2025 and three months ended September 30, 2024, as compared to allowance of $5.1 million for the nine months ended September 30, 2024.
Previous wording
The decreases in losses year-over-year, were partially offset by higher losses on debt securities recorded in the six months ended June 30, 2025. The loss on sale of securities of $3.0 million was related to our legacy RMBS and was reclassified from other comprehensive income into net income. We recorded no material gain or losses on securities in earnings in the comparative period in 2024. Additionally, other income decreased as a result of a gain recorded on a put option on our outstanding common stock warrants issued with our Preferred Stock, which were all exchanged for Common Stock during the six months ended June 30, 2024.
Current wording
The decreases in losses year-over-year were partially offset by higher losses on debt securities recorded in the nine months ended September 30, 2025. The loss on sale of securities of $3.0 million was related to our legacy RMBS and was reclassified from other comprehensive income into net income.
Previous wording
Our loan portfolio activity for the three and six months ended June 30, 2025 and 2024, is presented below:
Current wording
Our loan portfolio activity for the three and nine months ended September 30, 2025 and 2024, is presented below:
Previous wording
(1)At June 30, 2025 and December 31, 2024, our loan portfolio consists of fixed rate (62.7% of unpaid principal balance (“UPB”)), ARM (6.9% of UPB) and Hybrid ARM (30.5% of UPB); and fixed rate (62.6% of UPB), ARM (7.3% of UPB) and Hybrid ARM (30.1% of UPB), respectively.
Current wording
(1)At September 30, 2025 and December 31, 2024, our loan portfolio consists of fixed rate (62.7% of unpaid principal balance (“UPB”)), ARM (6.6% of UPB) and Hybrid ARM (30.6% of UPB); and fixed rate (62.6% of UPB), ARM (7.3% of UPB) and Hybrid ARM (30.1% of UPB), respectively.
Previous wording
Our primary sources of funds are cash provided by net interest income, sales and repayments of our investments, debt financing sources, including secured bonds payable and repurchase financing agreements, and the issuance of equity securities when feasible and appropriate. Our total cash and cash equivalents at June 30, 2025 was $98.6 million.
Current wording
Our primary sources of funds are cash provided by net interest income, sales and repayments of our investments, debt financing sources, including secured bonds payable and repurchase financing agreements, and the issuance of equity securities when feasible and appropriate. Our total cash and cash equivalents at September 30, 2025 was $81.4 million.
Previous wording
During the six months ended June 30, 2025, we issued 2,084,232 shares of 9.875% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, $0.01 par value per share, with a liquidation preference of $25.00 per share (the “Series C Preferred Stock”), with 400,000 of such shares of Series C Preferred Stock sold to certain affiliates of the Manager at the public offering price of $25.00 per share. Total net proceeds to the Company from the issuance of the Series C Preferred stock were $50.8 million, after deducting underwriting discounts and offering expenses.
Current wording
During the nine months ended September 30, 2025, we issued 2,084,232 shares of 9.875% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, $0.01 par value per share, with a liquidation preference of $25.00 per share (the “Series C Preferred Stock”), with 400,000 of such shares of Series C Preferred Stock sold to certain affiliates of the Manager at the public offering price of $25.00 per share. Total net proceeds to the Company from the issuance of the Series C Preferred stock were $50.8 million, after deducting underwriting discounts and offering expenses.
Previous wording
Currently, our primary sources of financing are repurchase financing agreements and secured bonds payable. As of June 30, 2025, our RMBS and CMBS portfolios had outstanding financing on repurchase financing agreements of $341.1 million which generally have 90-day terms and are subject to margin calls. Under secured bonds payable agreements, we sell a security to a counterparty and concurrently agree to repurchase the same security at a later date for a higher specified price. The sale price represents financing proceeds and the difference between the sale and repurchase prices represents interest on the financing. The price at which the security is sold generally represents the market value of the security less a discount or “haircut,” which can range broadly. During the term of the secured financing agreement, the counterparty holds the security as collateral. If the agreement is subject to margin calls, the counterparty monitors and calculates what it estimates to be the value of the collateral during the term of the agreement. If this value declines by more than a de minimis threshold, the counterparty could require us to post additional collateral, or margin, in order to maintain the initial haircut on the collateral. This margin is typically required to be posted in the form of cash and cash equivalents. We seek to maintain adequate cash reserves and other sources of available liquidity to meet any margin calls or related requirements resulting from decreases in value related to a reasonably possible (in our judgment) change in interest rates.
Current wording
Currently, our primary sources of financing are repurchase financing agreements and secured bonds payable. As of September 30, 2025, our RMBS and CMBS portfolios had outstanding financing on repurchase financing agreements of $340.4 million which generally have 90-day terms and are subject to margin calls. Under secured bonds payable agreements, we sell a security to a counterparty and concurrently agree to repurchase the same security at a later date for a higher specified price. The sale price represents financing proceeds and the difference between the sale and repurchase prices represents interest on the financing. The price at which the security is sold generally represents the market value of the security less a discount or “haircut,” which can range broadly. During the term of the secured financing agreement, the counterparty holds the security as collateral. If the agreement is subject to margin calls, the counterparty monitors and calculates what it estimates to be the value of the collateral during the term of the agreement. If this value declines by more than a de minimis threshold, the counterparty could require us to post additional collateral, or margin, in order to maintain the initial haircut on the collateral. This margin is typically required to be posted in the form of cash and cash equivalents. We seek to maintain adequate cash reserves and other sources of available liquidity to meet any margin calls or related requirements resulting from decreases in value related to a reasonably possible (in our judgment) change in interest rates.
Previous wording
The following table summarizes changes to our cash and cash equivalents for the periods presented:
Current wording
The following table summarizes changes to our cash and cash equivalents and restricted cash for the periods presented:
Previous wording
Net cash from operating activities decreased by $9.6 million in the six months ended June 30, 2025, as compared to net cash provided by operating activities in the six months ended June 30, 2024, primarily driven by net interest income and the timing of payment of certain expenses.
Current wording
Net cash from operating activities decreased by $10.2 million in the nine months ended September 30, 2025, as compared to net cash provided by operating activities in the nine months ended September 30, 2024, primarily driven by liquidation of other assets including collection of receivables in the nine months ended September 30, 2024 offset by higher net interest income and lower expenses in the nine months ended September 30, 2025.
Previous wording
Net cash from investing activities decreased by $381.4 million in the six months ended June 30, 2025, as compared to cash flow generated in the six months ended June 30, 2024, primarily due to lower proceeds from sales of mortgage loans and increased investment into CMBS and other holdings in the current year period.
Current wording
Net cash from investing activities decreased by $426.9 million in the nine months ended September 30, 2025, as compared to cash flow generated in the nine months ended September 30, 2024, primarily due to lower proceeds from sales of mortgage loans and increased investment into CMBS and other holdings, as well as a commercial loan investment, in the current year period.
Previous wording
Net cash from financing activities increased by $406.2 million in the six months ended June 30, 2025, as compared to cash used in the six months ended June 30, 2024, primarily due redemption of our 2024 Notes, net outflows of cash related to our repurchase financings, as well as redemption of senior convertible notes in the prior year period; the cash inflow for the current year period was primarily driven by issuance of our Series C Preferred Stock in the first quarter of 2025.
Current wording
Net cash from financing activities increased by $424.1 million in the nine months ended September 30, 2025, as compared to cash used in the nine months ended September 30, 2024, primarily due redemption of our 2024 Notes, net inflows of cash related to our repurchase financings, as well as redemption of senior convertible notes in the prior year period; the cash inflow for the current year period was primarily driven by issuance of our Series C Preferred Stock in the first quarter of 2025.
Previous wording
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. Dividends declared in the six months ended June 30, 2025, were $5.5 million on Common Stock, and in the same period the Company accrued $1.6 million on Series C Preferred Stock dividend.
Current wording
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. Dividends declared in the nine months ended September 30, 2025, were $8.2 million on Common Stock, and in the same period the Company accrued $2.9 million on Series C Preferred Stock dividend.
Previous wording
The total equity of the guarantors increased by $18.3 million at June 30, 2025, as compared to December 31, 2024.
Current wording
The total equity of the guarantors increased by $11.2 million at September 30, 2025, as compared to December 31, 2024.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Three Months Ended September 30, 2025 versus Three Months Ended September 30, 2024
Current report — wording carried from elsewhere
Fair value adjustment on mark-to-market liabilities decreased as a result of a gain recorded on a put option on our outstanding common stock warrants issued with our Preferred Stock, which were all exchanged for Common Stock during the nine months ended September 30, 2024.