Rithm Capital (NYSE:RITM) used its fourth-quarter and full-year 2025 earnings call to highlight what management described as an “excellent year,” driven by higher earnings, platform diversification, and continued expansion of its asset management and mortgage businesses. Chairman, CEO and President Michael Nierenberg was joined by CFO Nick Santoro, Newrez President Baron Silverstein, and Paramount leasing executive Peter Brindley, who discussed the company’s recently acquired office portfolio.
2025 results and balance sheet highlights
Nierenberg said the company’s diversification “is paying off,” pointing to a record fourth quarter from an earnings available for distribution (EAD) perspective and higher year-over-year book value “despite paying out north of $600 million in dividends.”
On a GAAP basis, Rithm reported fourth-quarter net income of $53 million, or $0.09 per diluted share, and full-year GAAP net income of $567 million, or $1.04 per diluted share. Nierenberg attributed a key driver of the quarterly-to-annual comparison to an MSR mark taken in the quarter “to be a little bit more conservative.”
Book value at Dec. 31 was cited as $7 billion, or $12.60 per common share. Nierenberg also said book value “today is probably between 12 and three quarters and 13 dollars,” while noting changes in the rate environment. The company ended the year with $1.7 billion of cash and liquidity, which management said was after funding the Paramount transaction on balance sheet.
Asset management growth: Sculptor and Crestline
Rithm emphasized the increasing scale of its asset management platform, stating it manages over $100 billion in investable assets across the firm. Nierenberg broke this out as $63 billion of Rithm Asset Management AUM and $53 billion for the Rithm balance sheet business.
At Sculptor, management highlighted 2025 gross inflows of $5.8 billion and AUM growth to $38 billion from $34 billion. Nierenberg also pointed to a $4.6 billion new real estate fund raised during the year and said asset management revenues in 2025 were up $95 million from 2024.
Rithm also discussed its acquisition of Crestline, which Nierenberg described as “a terrific credit shop,” adding that Crestline brings capabilities the firm did not previously have, including direct lending, insurance and reinsurance, and capital solutions. Management cited Crestline at about $18 billion in total AUM with roughly 700 investors. Nierenberg said the combined credit business across Sculptor and Crestline is “something north of $40 billion.”
Paramount acquisition: office exposure and leasing trends
Management framed the Paramount acquisition as an opportunistic entry into a dislocated office market, noting it acquired 13 large office buildings in New York and San Francisco. Nierenberg said the company has “no legacy office” exposure and called the investment “transformational” for Rithm’s commercial real estate presence, adding the deal made Rithm the fourth-largest owner of office in New York City.
Nierenberg cited an acquisition basis of $585 per square foot, a going-in cap rate of 7%, and purchase pricing he described as a 40% discount to pre-COVID values and a 75% discount to replacement cost. He also said the Paramount name will eventually be changed due to confusion with other brands.
Brindley provided detail on portfolio composition and leasing results:
- 10 core assets totaling 9.9 million square feet and three non-core assets totaling 2.4 million square feet, plus three managed New York assets totaling 600,000 square feet (about 13 million square feet overall).
- Core assets leased more than 1.7 million square feet in 2025, up 235% from 2024 and the highest annual total on record.
- Core portfolio leased occupancy at share was 86.9% at year-end, up 220 basis points year-over-year, with a weighted average lease term of 8.4 years and average in-place rent of $90 per square foot.
In New York, Brindley said core leased occupancy reached 92.8% at share, up 780 basis points year-over-year, with 43 deals totaling 1.3 million square feet and an average lease term of 13.8 years. He characterized Manhattan’s return-to-office momentum as the strongest in the country, saying “work from home is in the rearview mirror in New York.”
In San Francisco, Brindley said core leased occupancy ended the year at 62.2% at share, down year-over-year due largely to “a couple of large known move-outs.” He said Paramount is adding “market-leading amenities” at key buildings and noted leasing activity rose 330% year-over-year, with 16 deals totaling 411,000 square feet and an average term of 8.6 years. He also cited broader market indicators, including about 9 million square feet of citywide leasing activity in 2025 and $134 billion of venture capital funding raised by San Francisco-based companies, with AI-related leasing accounting for more than 20% of San Francisco’s annual leasing total.
Newrez performance, MSR marks, and technology investments
Silverstein said Newrez delivered pre-tax income (excluding mark-to-market) of approximately $1.1 billion in 2025, up 17% year-over-year, with fourth-quarter pre-tax income (excluding mark-to-market) of $249 million. He cited a 17% ROE for the quarter and 20% ROE for 2025, despite faster prepayment speeds.
He detailed the servicing portfolio mix, including about 30% in third-party fee-based servicing and a meaningful Ginnie MSR component. Regarding the quarter’s MSR mark-to-market, Silverstein said Newrez saw seasonal increases in delinquencies and advances and pointed to a new FHA modification rule that “has increased immediate delinquencies to encourage long-term stability,” adding the company’s valuation approach remained consistent and “conservative.”
Management highlighted two technology partnerships: Valon Technologies for a servicing operating system and HomeVision for an underwriting decision engine. Silverstein said the first phase of the HomeVision rollout has “already doubled our underwriting capacity,” with additional functionality planned through 2026, while Valon is expected to improve efficiency across 4 million homeowners and third-party clients. He added both partnerships include “significant long-term minority equity ownerships” intended to support future earnings growth.
In origination, Silverstein said fourth-quarter funded volume was $18.8 billion (up 15% quarter-over-quarter) and $63 billion for 2025, placing Newrez as the fifth-largest mortgage lender. He said fourth-quarter pretax income (excluding mark-to-market) for originations was $126 million and approximately $360 million for the year, and emphasized the company maintained pricing discipline amid competitive pressure on gain-on-sale margins. Non-agency production grew 147% year-over-year, with non-QM originations up 200% year-over-year.
Outlook themes: mortgage production, capital allocation, and capital raising
On the macro backdrop, Nierenberg cited geopolitical risk and said the administration is focused on affordability, also referencing announced plans around GSE purchases of agency MBS. He said mortgage basis tightened during the quarter, which he said should support mortgage production and create opportunities for origination gains as amortization rises. He reiterated an expectation for a steepening yield curve and said the company is positioned for that environment.
During Q&A, management attributed a higher refinance mix in the quarter largely to market dynamics tied to a rate rally in late summer and September, with a further pickup into January as spreads tightened. Nierenberg said the company’s 2026 production forecast is expected to be up roughly in line with market estimates of about 10%, while emphasizing Newrez is “not in a race to grow origination” and will not chase uneconomic pricing.
On corporate structure, Nierenberg said Rithm “at some point” needs to be a C-corp but indicated it is tied to growing the asset management business and fee-related earnings, while reiterating performance remains the priority. He also discussed exploring capital formation around Rithm Property Trust, which he said could be fed by Genesis and third-party multifamily originations.
Regarding capital raising for Paramount, Nierenberg said the structure is “fluid,” with the company exploring a mix of fundraises, permanent capital raises, and joint venture partnerships, adding Rithm is “in no rush” given its liquidity position.
About Rithm Capital (NYSE:RITM)
Rithm Capital Corporation is a specialty finance company that originates, acquires and manages structured credit investments collateralized by real estate assets in the United States. The company focuses primarily on senior floating-rate loans secured by multifamily, commercial, industrial and single-family rental properties, aiming to deliver attractive risk-adjusted yields through a diversified portfolio of floating-rate real estate debt.
In addition to senior loans, Rithm Capital invests in residential mortgage-backed securities, including agency and non-agency pools, as well as other real estate-related credit instruments.
