Rithm Property Trust Inc. Common stock

Thank you and good morning, everyone. I would like to thank you for joining us today for Rhythm Property Trust's first quarter 2026 earnings call. Joining me today are Michael Nirenberg, Chief Executive Officer of Rhythm Capital and Rhythm Property Trust, and Nick Santoro, Chief Financial Officer of Rhythm Capital and Rhythm Property Trust. Throughout the call, we are going to reference the earnings supplement that was posted this morning to the Rhythm Property Trust website, www.rhythmpropertytrust.com. If you've not already done so, I'd encourage you to download the presentation now. I would like to point out that certain statements made today will be forward-looking statements. These statements, by their nature, are uncertain and may differ materially from actual results. I encourage you to review the disclaimers in our press release and earnings supplement regarding forward-looking statements and to review the risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will be discussing some non-GAAP financial measures during today's call. Reconciliations of these measures to the most directly comparable gap measures can be found in our earnings supplement. And with that, I will turn the call over to Michael.

Thanks, Emma. Good morning, everyone, and thanks for joining us. For the quarter, the company had a pretty uneventful quarter as we continue to look for opportunities that could be a game changer for this capital vehicle. With asset manager valuations under pressure, downward pressure on equity valuations in the public markets, We're going to continue to remain patient and work towards creating value for shareholders. While the geopolitical events affecting the world, credit spreads have remained actually in a relatively tight range, and markets in general are performing well away from the headline risk we've seen in some of the retail private credit. Even there, if you take out the retail component, private credit is still performing well. The software headlines you've been reading about will take a while to play out, and the earlier vintages in the private credit world where companies borrowed money at large multiples of revenue will likely be the ones affected negatively in the future. And a lot of those deals were originated back in the 20, 21, and 21-ish kind of vintage. For RPT, we positioned the company for success by doing the following. When we took over this vehicle in 24, we made a decision to... to clean up the balance sheet, liquidate a lot of the residential stuff, and reposition the company in the commercial space, using this as an opportunistic vehicle to deploy capital in the commercial world. Today, the company has just a little under $100 million of cash and liquidity. The balance sheet is extremely clean. There's no problem loans and, again, is in great shape. While we continue to wait for the opportunity to transform the company, we'll continue to pay the dividend. From an optionality standpoint, at some point, it's likely if we can, we need to grow the vehicle, quite frankly, from an overall capital standpoint. If we can, we'll be looking at different opportunities in the M&A world, and at some point, we may consider even buying back a little bit of stock here. With that, I'll refer to the supplement that we posted online. I'm going to start on page three. And again, this is just really the summary of what Rhythm is, Rhythm Property Trust. Today, the pipeline is give or take about $2 billion. It's always fairly robust. We're looking at large opportunities in the multifamily space. We also evaluate things that we could potentially do around our Genesis business where we continue to grow our multifamily lending there. The equity is a little bit under $300 million. It's about $287 million. the commercial real estate portfolio. This is all post-24 vintage things that we've done. It's $236 million, and we have, give or take, a little bit under $100 million in cash and liquidity. When you look at the financial highlights for the quarter, quite frankly, not a lot of activity. We sold down a little bit of – we sold a few CRE floaters in the quarter to create a little liquidity, looking for better opportunities, quite frankly, to increase earnings. As I pointed out in my opening remarks, the credit markets have continued to perform well. The CMBS markets perform well. But while saying that, we'll continue to monitor opportunities to turn over the portfolio and deploy capital and higher yielding assets. Gap income, negative 3.2 million or 42 cents per diluted share. Keep in mind we did a reverse split. I think it was in Q4. Earnings available for distribution, a negative $300,000 or 4 cents per diluted share. Again, not a lot of activity. A lot of this relates to either the GNA or the dividend paid. Dividend paid in the quarter, 36 cents per diluted share, which correlates to about a 10.8% dividend yield based on where the equity is trading today. Book value, $236.2 million or $30. and 83 cents, and then as I pointed out, cash and liquidity a little under $100 million. When you look at RPT, I mentioned again earlier the strategic transformation. Again, going back to when we took over this vehicle, we cut G&A dramatically. We cleaned up the balance sheet. We sold down a lot of the residential portfolio where we could, and I'll talk a little bit about the equity that's remaining in the book. We've made some new CRE investments, and that was mostly done in floating rate AAA CMBS. We made a few loans on the debt side. We deployed $50 million in equity alongside Rhythm in the Paramount transaction, which we closed in December of 25. We continue to renegotiate our repo agreements, and we continue to improve liquidity. So overall, the company's in what I would say, as much as there's very little activity, in great shape, and we look for an opportunity to deploy capital or create more capital, quite frankly, on something that's going to be a game changer. You know, I'd like to go back and refer to what Blackstone did with BSMT many years ago or what we did with Rhythm, which was going back to 2013, where we started that with $1 billion of capital, and today, you know, the company has about $8 billion of capital. So we need to be patient here. As I pointed out, we'll continue to pay the dividend. At some point, we need to make a move and either clean up the vehicle or figure out a way to grow it. And obviously, we're actively trying to grow the vehicle. When you look at page six, the repositioning of the portfolio, you know, where we can go here, I pointed out on the Genesis side, we're doing more... lending in the multifamily space, there could be some opportunities to work together with that company. We continue to look for opportunities to put out capital in the debt markets on the CRE side, and then we'll continue to evaluate opportunistic investments and figure out different ways that we can increase shareholder value. And then on page seven, it really just talks about how Rhythm Property Trust benefits from the overall Rhythm ecosystem, and that includes you know, the Paramount transaction that we closed in December, and then our asset management businesses, Sculptor and Crestline. So with that, I'll turn it back to the operator. We could open up for Q&A and then get on with our beautiful Friday.

At this time, I would like to tell everyone, in order to ask a question, press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. We'll pause for a moment to compile a Q&A roster. And your first question comes from the line of Craig Kucera with Lucid Capital Markets. Please go ahead.