RPT

Rithm Property Trust (formerly Great Ajax) is a tiny, externally-managed REIT in the middle of a full strategic overhaul: after Rithm Capital's June 2024 Strategic Transaction it rebranded, relocated, swapped managers/servicers to Rithm affiliates (RCM GA, Newrez), and is deliberately winding down residential mortgages/RMBS to reposition into commercial real estate (CMBS, mezzanine, preferred equity, CRE debt). The MD&A confirms the transition is real — average residential loan book fell to $405M from $581M while CMBS/RMBS rose to $460M — but this is a business being rebuilt, not a proven earnings engine. That is the core problem for an outside investor: you are underwriting a turnaround into distressed CRE credit ('refinancing challenges and capital dislocations') at the exact moment the company itself flags that sector as stressed.

The headline 'FY2025 net income $1.47M, +101.6%' flatters reality. Diluted EPS is still negative at -$0.36, meaning after preferred/senior claims common shareholders lost money for the fifth straight year on that basis; the four prior years ran -$15.0M, -$47.1M, -$91.8M in net income before this year's razor-thin positive. ROE is 0.5%, operating cash flow is negative (-$8.3M), retained earnings are a -$172M accumulated deficit, and no common dividend has been evident since FY2020 ($17.5M) despite REIT distribution requirements — the 10-K even warns it may have to sell assets, borrow, or issue taxable stock/debt distributions to meet REIT payout rules. Much of 2025's 'improvement' is optical: total expenses fell $23.9M mostly because 2024 carried a one-time $15.5M manager-termination fee and $2.8M of accelerated warrant expense — non-recurring items, not a structurally leaner cost base. The one genuine bright spot is net interest income rising to $15.4M from $9.3M, driven by redeploying into higher-margin CMBS and $6.2M lower interest expense.