Rithm Property Trust Announces Pricing of Public Offering of 9.875% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock

Rhea-AI Summary

Rithm Property Trust (NYSE: RPT) has announced the pricing of a public offering of 2,000,000 shares of its 9.875% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock at $25.00 per share, generating gross proceeds of $50 million. The company has granted underwriters a 30-day option to purchase up to 300,000 additional shares for over-allotments.

The offering is expected to close on March 4, 2025, with proceeds intended for investments and general corporate purposes. RPT plans to list the Series C Preferred Stock on the NYSE under the symbol 'RPTP'. The offering is being managed by Janney Montgomery Scott, BTIG, and Piper Sandler as book-running managers, with Lucid Capital Markets, JonesTrading, and Wedbush Securities as co-managers.

Positive

• High dividend rate of 9.875% for preferred stockholders
• $50M capital raise strengthens financial position
• Listing on NYSE provides liquidity for investors

Negative

• Potential dilution of existing shareholders
• Additional dividend payment obligations increase financial burden
• High 9.875% dividend rate indicates elevated cost of capital

Insights

Financial Analyst

Rithm Property Trust's $50 million preferred stock offering represents a significant capital raise relative to its $149 million market cap, signaling an ambitious expansion of its commercial real estate strategy. The 9.875% dividend rate is notably high in the current environment, reflecting both the company's smaller size and the perceived risk in its strategic transition from residential loan management to commercial property investments.

This financing structure offers several strategic advantages. The preferred shares don't dilute common shareholders' voting rights or earnings potential, while providing RPT with permanent capital without maturity dates. However, the fixed dividend creates a substantial ongoing obligation - approximately $4.94 million annually - that must be paid before common shareholders receive distributions.

The timing aligns with RPT's recent strategic repositioning following its transaction with Rithm Capital Corp. While the external management structure provides access to RITM's expertise and resources, investors should note this arrangement typically involves management fees that impact overall returns.

For commercial real estate investors, this move is particularly interesting as it signals RPT's confidence in finding attractive investment opportunities despite current market uncertainties. The substantial capital raise suggests they've identified specific acquisition targets or investment strategies in the commercial sector.

The fixed-to-floating rate structure provides some protection against future interest rate fluctuations, but the immediate high yield requirement could pressure the company to pursue higher-yield investments with corresponding risk profiles. Investors should monitor how management deploys this capital and whether the returns generated justify the cost of this preferred equity financing.

NEW YORK--(BUSINESS WIRE)-- Rithm Property Trust Inc. (formerly known as Great Ajax Corp.) (NYSE: RPT, “RPT” or the “Company”) announced today the pricing of a public offering of 2,000,000 shares of its 9.875% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”) with a $25.00 per share liquidation preference, for gross proceeds of $50,000,000, before deducting underwriting discounts and offering expenses.  The Company has granted the underwriters an option for a period of 30 days to purchase up to an additional 300,000 shares of the Series C Preferred Stock to cover over-allotments, if any. The offering is subject to customary closing conditions and is expected to close on March 4, 2025. The Company intends to use the net proceeds from the offering for investments and general corporate and working capital purposes.

The Company intends to file an application to list the Series C Preferred Stock on the New York Stock Exchange under the symbol “RPTP.”

Janney Montgomery Scott LLC, BTIG, LLC and Piper Sandler & Co. acted as book-running managers for the offering, and Lucid Capital Markets, LLC, JonesTrading Institutional Services LLC and Wedbush Securities Inc. acted as co-managers for the offering.

The offering is being made pursuant to the Company’s effective shelf registration statement filed with the Securities and Exchange Commission (the “SEC”). The offering is being made only by means of a prospectus and a related prospectus supplement. Prospective investors should read the prospectus supplement and the prospectus in that registration statement and other documents the Company has filed or will file with the SEC for more complete information about the Company and the offering. You may obtain these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, copies of the prospectus supplement and the prospectus may be obtained from Janney Montgomery Scott, Attention: Syndicate Department, 60 State Street, Boston, Massachusetts 02109, by telephone at (617) 557-2975 or by emailing prospectus@janney.com; BTIG, Attention: Debt Capital Markets, 65 East 55^th Street, New York, New York 10022, by telephone at (212) 593-7555 or by emailing BTIG-IBD-DebtCapitalMarkets@btig.com or Piper Sandler, Attention: DCM/Syndicate, 1251 Avenue of the Americas, 6th Floor, New York, New York 10020, by telephone at (866) 805-4128 or by emailing fsg-dcm@psc.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

ABOUT RITHM PROPERTY TRUST

Rithm Property Trust is a real estate investment platform externally managed by an affiliate of Rithm Capital Corp. (NYSE: RITM). Rithm Property Trust has historically focused on acquiring, investing in and managing re-performing loans and non-performing loans secured by single-family residences and commercial properties. In connection with its recent strategic transaction with Rithm Capital Corp., the Company is transitioning to a flexible commercial real estate focused investment strategy. Rithm Property Trust is a Maryland corporation that is organized and conducts its operations to qualify as a real estate investment trust (REIT) for federal income tax purpose.

FORWARD-LOOKING STATEMENTS

This press release contains certain information which constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “seek,” “believes,” “intends,” “expects,” “projects,” “anticipates,” “plans” and “future” or similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements in this press release include, without limitation, statements regarding the proposed offering of the Series C Preferred Stock, the expected use of the net proceeds from the offering, the listing of the shares of Series C Preferred Stock sold in this offering on the New York Stock Exchange and the Company’s expectations concerning market conditions for an offering of the Series C Preferred Stock.  These statements are not historical facts. These forward-looking statements represent management’s current expectations regarding future events and are subject to the inherent uncertainties in predicting future results and conditions, many of which are beyond our control. Accordingly, you should not place undue reliance on any forward-looking statements contained herein. No assurance can be given that the offering discussed above will be consummated, or that the net proceeds of the offering will be used as indicated. Consummation of the offering and the application of the net proceeds of the offering are subject to numerous possible events, factors and conditions, many of which are beyond the control of the Company and not all of which are known to it, including, without limitation, market conditions and those described under the heading “Risk Factors” in the prospectus supplement relating to the offering and in the Company’s most recent annual and quarterly reports filed with the SEC. The Company undertakes no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances and expressly disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

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Investor Relations

646-868-5483

ir@rithmpropertytrust.com

Source: Rithm Property Trust Inc.

FAQ

What is the size and price of RPT's Series C Preferred Stock offering?

RPT is offering 2,000,000 shares at $25.00 per share, totaling $50 million in gross proceeds, with an option for 300,000 additional shares.

When will RPT's Series C Preferred Stock offering close?

The offering is expected to close on March 4, 2025, subject to customary closing conditions.

What is the dividend rate for RPT's Series C Preferred Stock?

The Series C Preferred Stock offers a 9.875% Fixed-to-Floating Rate Cumulative dividend.

How will RPT use the proceeds from the Series C Preferred Stock offering?

The net proceeds will be used for investments and general corporate and working capital purposes.

What is the trading symbol for RPT's new Series C Preferred Stock?

The Series C Preferred Stock is planned to trade on the NYSE under the symbol 'RPTP'.