AJX - Earnings call transcript Q3 2024 | Rithm Property Trust Inc.

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Operator

Good day, and welcome to the Great Ajax Third Quarter 2024 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Emma Bolla, Associate General Counsel. Please go ahead.

Emma Bolla

Thank you, and good morning, everyone. I would like to thank you for joining us today for Great Ajax's Third Quarter 2024 Earnings Call.

Ajax. Throughout Michael CEO CEO Mary earnings of Financial of are Rithm President Doyle, supplement today are Ajax Officer and we website, this Capital Great Great the that me was Nierenberg, reference morning and Chairman, of Principal going posted Joining to call, to the Great the Ajax; and www.greatajax.com.

be so, actual to forward-looking encourage download the review reports the SEC. made regarding would results. like forward-looking point materially our If their that risk uncertain to today review from supplement These nature, press you've filed presentation and with statements. you to will and in not statements, by I quarterly the the may our disclaimers and I'd in encourage already statements statements earnings factors out done certain are to now. I and release contained you annual differ

In most over can addition, call. with discussing these today's be earnings call our will of measures that, non-GAAP comparable Michael. during measures supplement. And I directly turn some financial we found in will the to to GAAP the Reconciliations be measures

Michael Nierenberg

Good thanks morning, everyone, the joining Ajax call. Emma. for earnings Thanks, Great and

much the During for the from to what on continues company mission Obviously, the by quarter, be intent with is QX. to as CMBS to flowing same call negative which perspective, to earnings would dividends. an possible this discussed and cash which soon of breakeven real as I into the what we the as sell capital assets we our end pretty before happen get redeploying call, our earnings legacy, prior the is down residential carry expect

$X.XX way are will earn make while continue are dividend, the of deficit the (sic) we does our not this that [ $X.XX we there today, no of maintaining ]. Obviously, dividend the guarantees. while hopeful current to Regarding money out company

to alternative our what playbook done asset similar of for the the in to is past, grow mortgage were large and which pointed transformational Fortress, grow Fortress, legacy in done when of out will I looking a known a other some company. we've Newcastle. we in to born was and as while done the XXXX while that was As at that I REIT the New be managers mentioned as at And Residential we've past, opportunity earnings out, what have before

number legacy last Regarding sheet which unchanged are the $X.XX, the essentially attempting quarter. continue balance reported during maintain was $X.XX-something is quarter unwind on value sheet resi was balance to value. book which we'll that today, to Book while the the from assets,

away While not we're smaller to saying that just going on give that sheet. balance assets many sit of the these

the we'll on going way legacy funds be securitizations our where continue sit of And grow at out our to X.XX%. other on securitization largest and actual are the balance look assets the are patient. -- to we're sheet, the that earnings of again, earn cost you -- this. When portion earn So some

while. transactions, there's reason those So to and stay call will outstanding a for those no

all the half this About of some of But bit to movement little and week, a to see opportunities, to Regarding office. commercial with multifamily sense, some Obviously, we were patient. on estate they a see vehicle. we assets. are give starting just of starting come you banks out bid $X half loans. be real go billion we'll past and This into sorted wouldn't were

that or transactions balance saying to this do whatever that around winners. are huge make transaction sure need we While we sheet

made Great a Page on on to Great this it's out you the what earnings the going from platform. we're the of this to and just associated investment I positions that cleaning the here on So all where year, we're we the vehicle June along the there. updating of are think June at point name management transform of of what in think winner. externally we been Property look company between and real platform. at find Ajax, opportunity, now, up took exact. in page. the again, again, from is and X, websites going call or the much today the company are that. There's this over our information Trust real we has estate the going call go to supplement, into am legacy which be so more refer as I'm quarter. would Rithm managed, that our balance clean way fourth that, not be would grow to or the and now transaction intend to look all it I sheet. When We'll deficit. With that we'll this to I Ajax XX, go-forward the an at it And to that again, And be We and a time -- transactions posted a to I progress market right about sit basis, change patient it some website. we've confident with continue same to tremendous the We

point around you're continues Rithm here have -- at and a externally any on of this look managed. New patients all managed, be here. how here. When was the work team will rewarded, So is we opportunities to investors all Fortress, again, were very space, good when part aggressively patient I think, The if team Residential at and we you that

Going back we're capital. $X billion roughly $X started Residential days, to Fortress billion permanent And capital. with to the of today, New of billion $X.X we

very we do the So story. be to committed page, then side smart to that. about this success look grow have you a good but how again, to And when we the vehicle, we're right of

a share. quarter highlights. $X Earnings $X.XX or of million quarter Third net declared available in loss share. We per dividend or the financial diluted $X.XX. million per GAAP distribution, third for of $X.X negative diluted income $X.XX

I misquoted, before. I said $X.XX think, I

equivalents million, way Cash on would sheet, will roughly it $XX-odd think Of $XX investment. is X/XX. yield $X.XX. million is Dividend it $XX So -- balance end about and we'll sitting be the I at available for the million. X.X% of that maintain currently that

And it a roughly $XX going of committed, million. million been equity Some then keep has a that reserve. then money is $XXX and already under little stockholder to we're

You we of sold look under $XX residential loans, in Since company, of end sold of little mortgage QX, transformation million that million its of residential the the loans $XX at mortgage held-for-sale. they've cash. roughly the a during XX% generating this QX, company legacy

which what's the $XX of also actually $XX.X the million -- during of you cash. CMBS a then XX% million on Obviously, a million AAA left residential roughly of return. When to can we of And you We balance sheet. securities, generated not really there. deployed quarter, on team amount $XXX $XXX or see notional levered look lot there's at the sold of million closed bottom,

bunch wholly-owned of dividend million the as And the was earlier going few to we no as breakeven I part the income while of what about of we middle legacy run you of look hopefully, it is interest of commercial again, servicing with Shellpoint $X.X than page, company servicing small, the back You saves, think, that real of at can -- servicing done so. million, the this QX. the a resi by to And Rithm. a We net went which we've to to our at to from by closing can path one went more estate of Mortgage, lowered or profitability, investing. we our look probably, And before XX% expense the the XXX% moved important drove my at look I later at here and -- we up well. can of subs the breakout one there the see things all end dividends. cover end QX. When We we've about think $X.X we've think fee comments, things, then to I done expect

mark-to-market and think I sit to recapitalize on up any not to number. investments in about. funds clean some sales, stuff left we've or talking talk balance assets. future, been deal to the look not portion sheet significant mark-to-market went we small honestly, going that come up XX the and about commercial continue with time the There's initiatives, that redeploy a to on basis full there, the everything spend the all and opportunities It's of then items that the cleaning holidays, by source as to financing. margin capital, either We to we of real this. much or took resi company, non-daily forward improved the Look of will points. On space. Playbook, opportunistic either about. Ongoing cost mark-to-market here. from remaining and go that look again, for we daily I'm to that's legacy legacy our the We of sold non

contemplate would or hair I a about of talk obviously, now. I And that out, As now. opportunities opportunities, lot got and should a to commercial obviously, that be transactions or are important. we that make we we we can do here, We in be right you What the is a estate a the on to is the of look sector, and to do And really, be things The of going there's large first at of really, lot come -- ones. the real very, estate careful you there's we see that time to real really careful lot transaction be lot say. not are sure say really here. vehicles that are want these do very going

really be to going we're So patient.

of it see seen the little something it kind we we'll low flowing haven't flow I shareholders. to returns do more on so-called Ajax a we're with is Great what to a You more. When really, see frankly, mid-teens ton portfolio Rithm cash Trust some banks, at is this portfolio, to snapshot are forward, Property continue would say, could Quite out different. bit like. like X could or just what the trying portfolio a the Page we But of of to create of going in a look the look come for come out totally yet, but but starting look

of of involved in We this company. deal the are part manager, the invested we the success highly all the in over we're That took when was seeing and obviously equity.

some open you. operator. Thank that, it So with up turn I'll questions. to We back the can to

Operator

[Operator from BTIG. with question comes Instructions] Catherwood Tom Our first

William Catherwood

Michael, inception. has succeeded with type its them strategy Rithm ain't since they hit where

that segments dislocation real estate Now in debt commercial investing Ajax, or of what strategy? you've a be match with have soon the been Rithm-type that segment RPT, to and mispricing universe digging the

Michael Nierenberg

you some bid there give there we I'll then before, both -- large are what focus, to and I these have Sculptor team be office. a affordable estate different question. multifamily things in of to last that terrific the look real we The there. There we that say housing, the that we portfolio as was well. on would mentioned some real obviously, example an need was week, cash we estate thing at some here for When I and need team one Thanks classes, a has flowing. asset truly on was

we office, look when all So lot bid what no. Potentially. But fit at and debt this at answer that of so. this next on fit housing. look coming against did on loans that that maturity affordable We walls vehicle? vehicle? for a or or year these loans could Does up over is expect we were these you is The example, the

fairly come going going would to large think single focus. I and that more what to going not before, groups. low sit in that really not buying going to stuff the -- gives focus. We're going out us of banks and we've That's That's mentioned I you're where see workout been return. the CMBS some to where to we're double-digit that AAA go they're we're That's of do say, deals. liquid. property the I

hot if where to got But rotate we think portfolio we're It's the that always that assets the be out low cash at rate to going looked or makes of up with have more We to a low manage to -- a us deploy sense, mean, are think could flowing. up right? a be those. yes. things centers, thing, main topic now. a the to expertise on I centers, But in. it's at extremely to I data housing or for deal got we with come answer we will got be the yielding student come think look capital days going that. Certain through data do be it's right of around is probably So the not we of solid able house I strategy to for these we little multifamily, cap bit just

call stack. in some they opportunity our cap preferred always will Rithm, The other thing would and the I I do which the is would preferred out billion there's at point our equity nice in or business, type for what amount capabilities do loans fair of $X-plus -- in this manufacturing preferred mezz a lending, multifamily mezz Genesis year, coupon

So we're company got flowing solid again. to money but to get it's start going really out anything, be to making not this cash to rule actually

William Catherwood

coming a that kind lower I the to give spur the apologize. out and that's past, Michael. you're Appreciate you've we on some this scenario I answer, transaction rates it. really is maybe up the is Got market? cuts crystal borrowers ball that the so of banks not cushion distress to just Or know and get kind to to a a And question, that out where so referring activity. of there that, there less kind of opportunity ride very scenario? then there be and much likely to But rate maybe mentioned is in helping the by But type following Fed

Michael Nierenberg

Yes.

this the month the right? first at or market right the trading north back of fairly significantly rates XXs, the got seen bond you've front past You up so, end of think, X.XX%, course X% you over all, of I got morning, now.

While not or or that, just historically X.XX% high. think high a at X.X% is mortgage XX-year is is rates a note X% saying coupon I not historically,

some the lot a have sponsors, you is seen lot of large equity deals, out you've that properties, for these these been the very the has equity what of problem and wiped in in deals. a the particularly is the very, So office in it really of

at that recap a will of basis. to there number we be So look these opportunity the daily a things on

was perspective, goes at XX Fed XX where whether another look going XX you I meeting mistake, real I or back. we think a now another the where we points, spur rates And cuts from for it. commercial not, and the the financing only and be next think debt rate obviously, equity that will huge there's or think do a are I as do still basis I sector. Fed think the both XXX estate whether that in need to sit

relates to out. impairment bank it want a they the takes banks, an once As asset, on

that their So out. going sitting banks you the get are If look number earnings, can on you they so much look today to make banking at they're and the a get large And system at these you money. at assets. quarterly very when out, of they look

continue whether distressed rates are So clean balance to able it think I to to out, hold see against be assets, up come sheet not X%. and whether you'll they're or capital X.X%

William Catherwood

far in for bucket, Understood. million that October? are even remaining so color. the put obviously, quarter in me, capital you loans kind you any could third balance cash resi And twofold. Appreciate And of the of there $XX that sheet lot of near work tranches held-for-sale balance beyond investments of put One, are the monetize that to smaller term? mortgage then to one of your in last the that other look you the in any Have then of a in CMBS. to more kind AAA work buying

Michael Nierenberg

Yes.

equity about I about securities the the like look about there's amount Really, think patient total we're I lot small just were Ajax you this a going give look and of balance positions candidly, to of at sheet. you the of we portfolio. And say amount the debt. is buy of or today, could When million mentioned that our of actually something million. sell, between that pieces. some much today, what $XX that's would real on They're small and amount $X.X the like going odd things that AA the the sheets. for notional equity, available deployment I cash. I at huge stuff position in It's about equity and stuff this, rest speak a lot is that to think So The the million just of not cleaning position up. at to we it's as looking balance remaining not $XX be sheet when I'm of On we Great created amount earlier, there,

look I call we that -- were would that. Humanity. I coupon million, $X.XX, good Habitat by made X So where bought think of including at that somebody we're of things at when feel loans were what value scattered about pretty The for bunch in some marked, there, a made that book sit there's loan and I book today $XX-odd that

$XX a sheet, forward. But of the lot or in I $XX structure, to, solutions and stuff to cash carries for you there's gives coupon. would where sense shape. things of a I well. time going going the little we're here. that. bit XX.XX% get debt capital take what it that think is is now that of good short to million up, figuring this to to in working some cleaned a to what's that again, and are think loans you a $XXX the of million company to very just we There's that's think for of to left those we'll remains balance So to deal a that capital a and the of refinance shareholders general, about get We're message deploy. is there you. But million out the of on take group sheet to going story market same, it's the or to deploy do make look have continue But clear be sense say number addressing broader out balance the as When of around to want us transformational that We'll large the little we unless sales,

like million $XXX the million a be with to use now. that vehicle this great a upside end deal right word our or shareholders. again, so it's Board maintain stuff. has opportunity, think decision, of we'll of XX.XX% commercial for of coupon. tremendous debt blank dividend fully like Look that Obviously, canvas. policy by think and the it deployed I But in a, that's $XXX hate I a It's almost think I I for a QX

Operator

Laws Raymond comes question The next James. from with Stephen

Stephen Laws

your was Tom, lot in with make want sure covered comments I to a Michael, but tie this just together.

in kind $XX capital. You think QX. dividend in quarter $XX remarks, of of the supporting investable prepared you And commented remaining breakeven million I mentioned to million your this maybe and

QX of quarter remaining CMBS? that deployed is getting most AAA likely really these the into So impact full just proceeds being

Michael Nierenberg

Yes.

the of which not rest that today coupon I whatever our I'm but sheet, capital. addressing where not so-called debt, assets. a XX.XX% our can things. deploying debt. couple legacy One right, we -- it's the million we're are with is of balance think on Two, cleaning is Three, $XXX up we concerned it's of balance sheet-wise really

think it's I breakeven. -- believe to don't question, Stephen, I I your see quarter. this don't

to that But going thing think QX. a some, capital going reengineering, rather and I say, could I cover pre-dividend. how out get than be sooner what it's quarter more in to there think that's ways general, look think I first later. would to if we of And figure to I would do we're I

Stephen Laws

where the the I on that expect uncertain? then have and of active significantly Or in? just is bite or accretive really is the slide right that timing changed lean become situation lending this itself looking a that I kind interested of where to for presents banks it's big really And mean you're less we opportunity when you was large should really that's much, construction Great. hasn't right? thought much now. Is multi non-multi CRE, pretty and Page interesting. But bank X, in that

Michael Nierenberg

into one I to going class any I don't we to asset think it's Tom's both. back need lean question. that know

Great side, things We think on asset The asset itself, Genesis in REIT and an multifamily do you could together as between good class about have if extremely we is forward. for be us. we Genesis. lender a construction/multifamily There go the large it Ajax that

created look a monitor you owning that plenty at Ajax, to get continue the Great we'll that. And result then us of we see opportunity. of So as opportunities

not of So what I say, married I not we're think -- it's vertical. any -- one type would we're to lending

to don't basket. in want our we eggs all However, one put

do banks going a diverse. And to the loans. little be don't do to bank -- to So of to they don't more construction I loans, bit want types the really your other point, it's and think and want Stephen,

our for them. Great So Genesis does going possibility but business, at it is there is that a forward some a point something with great Ajax opportunity

Stephen Laws

try as improving And side. look of think Great. then just know, financing be financing financed the if or and to in the financing on and to you markets find lines? some look way noticed a this deck, to I CLOs? lastly, you maybe from largely the other financing and maybe another forward, both note progress you some the bank alternative made it's Or bank lines using guys will type early for you facilities. have do we cost reducing on CLO? away vehicle of the some Will to too find But construction,

Michael Nierenberg

Yes.

specific markets portfolio. the point, or think we'll would debt to bank security different will at markets to type be lines the But what for I is hit the the some I securities say. want some of equity

Operator

would like conference the concludes This I to back our question-and-answer for any turn session. Nierenberg Michael remarks. closing over to

Michael Nierenberg

the for stay all join This tuned. endeavor forward. shareholders and the earnings this greater Appreciate call, us take going I create vehicle about and everyone. what along holders that would this, looking future. equity is And our questions, to We're

So great care. dialing Thanks have a in. for Take week.

Operator

conference The attending concluded. today's presentation. now for you Thank has

may disconnect. You now

Rithm Property Trust (RPT) 21 Oct 242024 Q3 Earnings call transcript