Rithm Property Trust Inc. Liquidation Value

Rithm Property Trust Inc. (RPT) is a small externally-managed REIT holding a runoff residential mortgage loan portfolio (RPL/NPL), RMBS (AFS and HTM), CMBS, and a growing CRE equity investment position. As of March 31, 2026, total assets are $930.6M against total liabilities of $644.1M, yielding GAAP book equity of $286.6M (including noncontrolling interest). Under a liquidation lens, recovery to common equity is materially impaired relative to book due to the liability stack and preferred claim.

Asset-side recovery: Cash of $96.3M haircuts at 100% ($96.3M). Residential mortgage loans held-for-investment (amortized cost basis, $356.1M carrying value) are non-agency RPL/NPL pools purchased at a weighted average of ~80% of UPB; with WA LTV of 41.2% and ~18-20% delinquency/foreclosure exposure by count, a realistic liquidation haircut of 10-15% applies, yielding estimated recovery of $303-320M. Mortgage loans held-for-sale ($28.5M fair value, marked to market) approximate 95% recovery, ~$27M. RMBS and CMBS securities portfolio (fair value $304.8M against amortized cost $340.7M, with net unrealized loss of $35.9M embedded) carries market risk; liquidation recovery on RMBS/CMBS estimated at 90-95% of carrying value, ~$274-290M. The $76.6M equity method investment (Paramount/PGOP indirect minority stake at ~3.9% ownership) receives a 0% intangible/minority interest haircut under liquidation, effectively zero recoverable value. Other assets of $31.7M receive ~50-70% recovery, ~$16-22M.

Liability stack at face: Secured bonds payable $219.2M, repurchase agreements $309.4M (subject to margin calls and 90-day roll risk), unsecured 2027 Notes $108.7M (net, 9.875% coupon, matures Sept 2027), accrued and other liabilities ~$6.7M. Total claim ~$644.1M. Preferred stock ($52.1M liquidation preference) sits senior to common. After satisfying all liabilities ($644.1M) and preferred ($52.1M), residual to common equity is approximately $286.6M book value less the equity method investment writedown (~$76.6M) and other liquidation haircuts, compressing common equity recovery to a range of approximately $110-160M against the MFFAIS-derived CLV/LLV/OLV of $96.3M (cash only basis). The MFFAIS figure reflects only liquid cash, understating asset-side recovery but also ignoring the full liability stack. The gap between book equity ($287M) and realistic liquidation value is driven primarily by the illiquid equity method investment, RPL/NPL credit and execution risk, and the embedded RMBS/CMBS unrealized losses.

Key change vs. prior (annual 10-K): The Q1 2026 filing reflects a significant portfolio contraction: $93.6M in CMBS sold in Q1 2026 with proceeds used to pay down $103.2M of repurchase agreements, reducing the repo book. Secured bonds payable declined from ~$226.9M (prior period) as collateral continues to run off. The $50M PGOP equity investment originated in Q4 2025 remains on balance sheet at $76.6M (inclusive of subsequent contributions or fair value marks; filing discloses write-down related to Gaea Real Estate Corp. investment, suggesting impairment pressure). Professional fees spiked $0.8M QoQ due to costs associated with evaluating a potential common equity raise, which was not consummated in Q1 2026. Preferred dividends of $1.3M/quarter represent a fixed cash drain senior to common. The 2027 Notes ($110M face) mature September 2027, creating a near-term refinancing obligation that directly affects the liability stack in any liquidation or restructuring scenario.