리즘 캐피탈(Rithm Capital) 2026년 3분기 실적 발표 요약

핵심 요약

• 리즘 캐피탈은 2026년 3분기 분배 가능 이익(EAD)이 3억 1,500만 달러(희석주당 0.55달러)를 기록해 주당 보통주 배당금인 0.25달러를 상회했다고 발표했습니다.
• GAAP 기준 순이익은 2억 1,700만 달러(희석주당 0.38달러)였습니다. 분기 말 기준 현금 및 유동성은 총 19억 달러를 기록했습니다.
• 뉴레즈(Newrez)는 시가평가 조정을 제외하고 전분기 대비 7% 증가한 약 3억 3,000만 달러의 세전이익을 거두었으며, 연환산 영업 ROE는 24%를 기록했습니다.
• 제3자 운용자산(AUM)은 600억 달러를 넘어섰습니다. 경영진은 자체 자금 조달 및 잠재적 인수를 통해 2028년 말까지 AUM 750억~800억 달러 달성을 목표로 하고 있습니다.
• 기술 및 AI 투자를 통해 뉴레즈에서 연간 약 1억 2,500만 달러의 비용 절감 효과가 발생할 것으로 예상되며, 이러한 효과는 2027년에 시작되어 2028년까지 지속될 전망입니다.
• 금리 상승으로 모기지 대출 승인실적이 압박을 받았으나, 낮은 중도상환 속도가 뉴레즈의 약 8,800억 달러 규모 모기지 서비스권(MSR) 포트폴리오 수익성을 뒷받침했습니다.

주요 재무 데이터

사업 및 영업 실적

뉴레즈

뉴레즈는 약 8,800억 달러 규모의 모기지 서비스권을 보유하며 이번 분기를 마감했습니다. 경영진은 낮은 중도상환 속도와 고금리 환경이 서비스 부문 수익을 계속 지원했다고 밝혔습니다.

모기지 대출 취급액은 금리 상승으로 업계 전반의 활동이 축소되면서 전분기 대비 19% 감소한 129억 달러를 기록했습니다. 비증권화(Non-agency) 대출 규모는 전분기 대비 8%, 전년 동기 대비 30% 증가했습니다. 연초 이후 비증권화 대출 취급액은 주로 비적격 모기지(non-QM) 대출에 힘입어 51억 달러에 달하며 해당 상품군에서 회사 자체 최고 기록을 세웠습니다.

서비스 플랫폼은 2026년 동안 15개의 고객사와 약 800억 달러의 신규 대출 관리 자산을 추가했습니다. 또한 뉴레즈는 이번 분기 중 50억 달러 규모의 액면 기준 공동 발행 MSR 인수를 완료했습니다.

경영진은 외형 성장보다 마진 관리를 강조했습니다. 소비자 직접(Consumer-direct) 대출의 매각 이익률은 주택담보대출(Home equity) 및 non-QM 상품 중심의 포트폴리오 전환 덕을 본 반면, 도매(Wholesale) 마진은 경쟁 압박을 지속적으로 받았습니다.

자산운용

리즘은 이번 분기 동안 5억 6,900만 달러의 신규 자금을 조달하여 연초 이후 총 유입액이 30억 달러에 육박했습니다. 수수료 부과 대상 AUM은 전체 AUM의 약 76%를 차지했습니다.

크레스트라인(Crestline)은 6억 2,500만 달러의 약정액으로 유럽 자본 솔루션 펀드(European Capital Solutions Fund)의 최종 펀딩을 완료했습니다. 리즘 역시 미국 대형 연기금과 함께 신규 자산 기반 금융 펀드의 1차 클로징을 마쳤습니다.

경영진은 신용, 부동산, 멀티스트래티지, 자산 기반 금융을 핵심 성장 분야로 꼽았습니다. 또한 인프라 부문이 향후 확장 분야가 될 수 있으며, 이는 소규모 팀 구축보다는 규모 있는 인수를 통해 이루어질 가능성이 높다고 덧붙였습니다.

제네시스

제네시스(Genesis)는 3분기 동안 15억 달러 규모의 주택 전환 대출(residential transition loans)을 실행하여 연초 이후 누적 실행액이 50억 달러에 달했으며, 2025년 전체 실적을 초과 달성했습니다. 연체율은 약 3% 수준이었습니다.

경영진은 대출 심사(Underwriting)가 우량 차주(Sponsor) 확보 및 10%대 중반의 수익률 유지에 계속 중점을 두고 있다고 밝혔습니다. 향후 성장의 더 큰 비중은 다가구 주택(Multifamily) 대출이 차지할 것으로 예상되는 반면, 고공행진 중인 모기지 금리가 주택 전환 대출을 제약할 수 있습니다.

엘리코 프로퍼티스

엘리코(Elecor)는 뉴욕과 샌프란시스코의 핵심 포트폴리오 전반에 걸쳐 연초 이후 약 100만 평방피트 규모의 임대 계약을 체결했거나 진행 중입니다. 가중평균 초기 임대료는 평방피트당 약 100달러로, 2025년 비교 수준보다 22% 높았습니다.

뉴욕의 임대 점유율은 88.6%였습니다. 체결 및 진행 중인 뉴욕 임대 계약의 초기 임대료는 평방피트당 평균 약 110달러로 2025년 거래 대비 36% 높았습니다.

샌프란시스코의 임대 점유율은 65%에 달해 2026년 1분기 이후 590베이시스포인트(bp) 상승했습니다. 연초 이후 전체 임대 활동의 약 65%가 샌프란시스코에서 발생했으며, 그중 96%는 포트폴리오에 새롭게 유입된 기업들이었습니다.

경영진 가이던스

• 경영진은 자체 자금 조달과 잠재적인 자산운용사 인수를 바탕으로 2028년 말까지 AUM 750억~800억 달러 달성을 목표로 삼고 있습니다.
• 뉴레즈의 기술 및 AI 프로젝트를 통해 연간 약 1억 2,500만 달러의 비용 절감이 이뤄질 것으로 기대됩니다. 경영진은 이러한 절감 효과가 2027년부터 이익에 기여하기 시작하여 2028년까지 이어질 것으로 예상합니다.
• 바론 OS(Valon OS)로의 단계적 이관은 2027년 1분기에 시작될 예정이며, 전반적인 이관 작업은 2027년 말까지 지속될 예정입니다.
• 경영진은 신용도와 시장 상황에 따라 제네시스의 실적이 약 60억~65억 달러 규모가 될 것으로 전망하고 있습니다.
• 리즘은 증권화, 대출 지원, 제3자 펀드 공동 투자 등을 우선시하며 대차대조표 자본을 기회주의적으로 집행할 계획입니다.

리스크 및 주요 관찰 사항

• 금리 상승으로 뉴레즈의 대출 취급 활동이 줄어들었으며, 경영진은 9월에서 10월 사이 실적이 상당폭(약 25% 수준) 감소했다고 언급했습니다.
• 도매 모기지 시장의 경쟁으로 인해 4분기에도 매각 이익률이 지속적으로 압박을 받을 것으로 예상됩니다.
• 모기지 중도상환 속도가 바닥에 근접한 것으로 보여 상각비 감소에 따른 서비스 관련 추가 이익은 제한적일 것으로 보입니다.
• 7.25%~7.5% 수준의 모기지 금리는 제네시스의 주택 전환 대출 영업에 부담이 될 수 있습니다.
• 경영진은 현재 신용 연체율이 전반적으로 악화하는 모습을 보이지는 않지만, 신용 시장이 약화할 경우 상승할 수 있다고 말했습니다.
• 샌프란시스코의 점유율은 개선되었으나 여전히 65% 수준에 머물러 있어, 지속적인 임대 유치와 계획된 자본 개선 작업의 실행 여부에 성패가 달려 있습니다.

애널리스트 Q&A 하이라이트

AUM 성장: 경영진은 대형 자산관리 플랫폼을 통한 판매 네트워크, 자산 기반 금융 수요, 일임계좌(SMA) 및 추가적인 부동산 상품이 자금 조달을 지원할 것이라고 밝혔습니다. 인수는 여전히 전략의 일부이며, 특히 인프라 역량 확보를 위해 추진될 수 있습니다.

모기지 수익성: 뉴레즈는 서비스업과 대출 영업이 상호 보완 관계를 유지할 것으로 전망합니다. 대출 영업 감소는 낮은 MSR 상각비, 서비스 수수료, 그리고 약 150억 달러의 에스크로 예치금에서 발생하는 이자 수익으로 일부 상쇄됩니다.

기술 전략: 리즘은 워크플로우, 고객 경험, ROE를 개선할 수 있는 외부 기술 파트너십과 AI 프로젝트를 우선시하고 있습니다. 바론(Valon)은 핵심 서비스 플랫폼 이니셔티브이며, 홈 비전(Home Vision)을 통한 요건 충족 대출의 자동 직행 처리(STP)는 4분기에 출시될 것으로 예상되었습니다.

자본 배분: 경영진은 모기지 자산, 제네시스, 자산운용 및 기회주의적 부동산 전반에 걸쳐 위험 조정 수익률이 가장 높은 곳에 자본을 배분할 것이라고 밝혔습니다. 뉴레즈는 매각 이익률과 MSR 가치 평가가 매력적이지 않은 한 코레스폰던트(correspondent) 대출 물량을 무리하게 추진하지 않을 것입니다.

장부가치: 경영진은 실적 발표 당시 이번 분기 누적 장부가치가 거의 변동이 없었다고 밝혔습니다.

실적 발표 전화회의 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

[Audio Gap]

Deputy General Counsel; Emma, go ahead.

Emma Hoelke

Thank you, and good morning, everyone. I would like to thank you for joining us today for Rithm Capital's Third Quarter 2026 Earnings Call. Joining me today are Michael Nierenberg, Chairman, CEO and President of Rithm Capital; Nick Santoro, Chief Financial Officer of Rithm Capital; Baron Silverstein, President of Newrez; and Peter Brindley, Head of Real Estate at Elecor Properties.

Throughout the call, we are going to reference the earnings supplement that was posted this morning to the Rhythm Capital website, www.rithmcap.com. If you've not already done so, I'd encourage you to tell the presentation now. I would like to point out that certain statements made today will be forward-looking statements. These statements, by their nature, are uncertain and may differ materially from actual results.

I encourage you to review the disclaimers in our press release and earnings supplement regarding forward-looking statements and to review the risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will be discussing some non-GAAP financial measures during today's call. Reconciliations of these measures to the most directly comparable GAAP measures can be found in our earnings supplement.

With that, I will turn the call over to Michael.

Michael Nierenberg

Thanks, Emma. Good morning, everyone. Thanks for joining our call this morning. This quarter, we demonstrated the power of the platform and the risk discipline we bring to our investors and partners despite a very challenging environment. If you take a step back and look at the quarter, all indices related to markets we invest in were wider. Interest rates rose significantly, geopolitical concerns persist, oil rose, and we still had a great quarter.

Our operating business lines, Newrez, Genesis performed really well. Scale matters in those businesses and with our MSR business, at approximately $880 billion of MSRs at Newrez and Genesis clicking on all cylinders, we sit in a very good position in the marketplace.

AI initiatives and expense management will help us drive higher earnings in the future, and I firmly believe AI will change the archaic nature of the mortgage industry. Our real estate business in Rithm and our Asset Management business should be a very good growth area for us going forward. Our Elecor investment, which was formerly known as Paramount, which -- where we took the company private and invested in New York City and San Francisco office is an area we're very excited about. We are seeing significant leasing activity, growing rents and brought in a partner on 1301 Sixth Avenue. As with most assets, entry point matters and buying off a 75% discount to replacement value should reward our shareholders well.

The scope to real estate business is world-class and with an amazing track record. They continue to see more inflows into all of their differentiated strategies as well as their recent fundraise, which was approximately $5.5 billion. Our asset management business is seeing real inflows. We are launching new funds and did a first close on our new ABF fund. We now have multiple funds in the marketplace, including partnerships with a large bank on the distribution side, investing in our clients, people and products is essential to our success.

I will say when we set out to launch our asset management business in 2022 upon our separation from Fortress, we were running around the globe, making connections and developing relationships with investors everywhere. Today, we stand at $60-plus billion of third-party AUM. We have well north of 200 different partners in LPs, and I feel like we've just begun.

Our mantra of Performance First and making sure we have the expertise in the products we offer our clients is the backbone of our business. We need to differentiate ourselves from others, and we will. I've never been more excited about the trajectory of our firm and the collaboration that is happening, really exciting times for us and our partners.

This quarter, we changed our presentation a bit and we speak a little bit to the Rithm journey and where we're going. Please have a look. I'll now refer to the presentation that's been posted online, and I will begin on Page 3.

So when you look at Rithm today, it's roughly $110 billion of investable assets that includes both the balance sheet and third-party assets that we manage on behalf of -- that we manage on behalf of others. When you look to the left side of the page, Newrez is the third largest mortgage servicer in the United States. I pointed out earlier that we have approximately $800 billion -- $880 billion of mortgage servicing rights, to something -- and we originate roughly $60 billion in mortgages. To something there, we don't need to originate a mortgage to make money. If the economics are there, we'll do it. If not, the business performs extremely well and makes a lot of money.

Genesis, the #2 residential transition lender in the country doing a lot more today in both RTLs as well as in multifamily, and we serve well north of 700 sponsors. Elecor Properties, as I mentioned before, was the company we took private. That was the formerly known as Paramount; and Peter Brindley, who's with me here today, who runs real estate there, we'll speak to that in a minute.

When you look to the right side of the page, our AUM north of $60 billion. I pointed out when we first started this journey in '22 to raise money from third parties, we were running around everywhere and now we have well north of $60 billion of real AUM multiple funds in the marketplace, a great brand and most importantly, great teams that manage the money on behalf of our partners in the marketplace.

When you look across this north of 30 years of performance across all of our different strategies. The other thing that I think will differentiate us as we go forward in the future is we do invest our own capital along folks that invest in our funds.

When you look at the quarter on Page 4, very strong quarter. Third quarter EAD of $0.55 per diluted share, 28 consecutive quarters where our EAD was greater than dividends paid, cumulative dividends paid just a little bit south of $7 billion at $6.8 billion. Earnings available for distribution in the quarter, again, $315 million; GAAP net income $217 million or $0.38 per diluted share.

When you look at book value for the quarter, $7 billion, we're actually a little bit higher quarter-over-quarter. A lot of that is due to, honestly, our hedging activities as well as our MSR business, which in a high rate environment is going to perform extremely well.

Our common stock dividend 11.2%, $0.25 per diluted share, and cash and liquidity, we ended the quarter at $1.9 billion.

Page 5, if you look at the Rithm story and then certain slides I'll take you through, but I'll take you through real quick on this one. We started this company in 2013 to take advantage of opportunistic investing in at that time, mortgage servicing rights because the banks needed to sell them due to bottle 3 capital rules as they related to the amount of capital that they needed to hold on balance sheet.

Over the years, we focused on broadening our internal capabilities through acquisitions while working with our private equity business at Fortress, which owned at that time, Mr. Cooper, and we also had built one main financial at that time. In 2018, when it was clear that we were going to sell these portfolio companies because they said in our private equity business, we decided to build our own. So we acquired a company called New Penn Financial, and that was the beginning of Newrez. Today, again, Newrez is one of the top mortgage companies in the United States.

2022, we buy back the management contract from Fortress, and we rebrand the company as Rithm Capital. It was formerly known as New Residential. Over the years, we said, "Okay, let's go broaden our asset management business." 2023, we buy Sculptor. 2025, we buy Crestline. And again, we take Paramount Private in 2025 as well. So that's really the beginning as far as how we got to the place that we did on the asset management side.

When you look at our origination businesses at both Newrez and at Genesis, we are -- it truly differentiates our product offerings in the ABS space. We not only have the ability to underwrite a borrower, we have the ability to service that borrower and whether those underlying loans go into funds or whether they sit on balance sheet, it is a factor that will differentiate us from others in the marketplace because we don't have to just go out and bid in competition against everybody else to buy a certain asset class.

And as I pointed out before, we have north of 200 institutional investors globally and well north of $61 billion in AUM.

So where are we going? Where we're going on a forward basis? Our origination businesses will continue to be the core of our earnings at the public company level. We're going to continue to try to scale our asset management business, which we're really excited about. As asset management earnings scale, we have the potential to optimize our corporate structure and actually have that as its own segment, but we need to continue to grow our so-called FRE or fee related earnings in order to do that.

When you look at Page 6, the quarter end review. Asset Management, I pointed out, we're starting to see real momentum in some of the new funds we have in the marketplace. During the quarter, we raised $569 million of new capital, and we're starting to see real commitment as it looks -- as we look to the fourth quarter for fund inflows. Year-to-date gross inflows are a little bit south of $3 billion.

Fee paid in AUM is about 76% of our total AUM, and that is a key to developing the platform into a more durable earnings stream.

Crestline held their final close on a European Capital Solutions Fund and bringing total commitments there to $625 million. And again, we continue to see healthy inflows into our business post the end of the quarter.

When we look at our core areas, Elecor, expanded its third-party capital base to a JV with a strategic partner for 1301 Sixth Avenue, while also signing 320,000 square feet of new leases in the quarter. Genesis originated $1.5 billion in RTL originations in the quarter, bringing year-to-date originations of $5 billion and exceeding all of what we did in 2025. And also Newrez originated when you look from a year-to-date perspective, $5.1 billion of non-agency loans, mostly in the non-QM space. It's a new record for Newrez in the product class. I bring that up, as I pointed out in my opening remarks, we don't need to originate a loan to be competitive with someone else for the sake of doing it.

This is an area where we're using our origination business, we use our funds business, we use our balance sheet to originate products where we're going to make more money for both our shareholders and our clients.

When you look at -- from a leverage perspective, we continue to leverage technology and investments in AI to achieve additional efficiencies. We expect to drive going forward, $125 million in savings for Newrez. I pointed out in prior quarters, we own roughly 9.9% of a software company called Valon. Valon is going to be our new servicing technology that will come online in the -- should come online at the end of Q1 in '27.

Our continued focus on expense discipline will help drive consistent sustainable earnings growth. And we look in the quarter, Newrez delivered a 24% operating ROE, showcasing the strong performance in a challenging environment.

When you look about our resilience across markets, Newrez is $879 -- or $880 billion of servicing, we'll continue to reward shareholders extremely well as we go forward -- with a very strong earnings stream, strong credit at Genesis compared to the rest of the industry, and then we remain extremely vigilant on our interest rate management across the board.

Page 7, really just talks again to the sum of the parts valuation. I'm not going to take you through this. The bottom line here is we think our equity is extremely cheap. We trade at a discount to book. When you look at our book value of, give or take, [ $12.5 ] the stock will likely open up higher this morning, but we still trade way too cheap on a relative basis, and we continue to evaluate ways to get our share price up.

In the Asset Management segment, have a look at Page 9, 200 institutional investors, 16 global offices. The products that we offer, and I pointed this out again in my opening remarks. We must have expertise in any fund or product that we offer to the market. The way that I think about our business, we are everything in credit, we are everything in real estate, we are everything in the multi-strat business. Our ABF franchise should be significantly bigger. And sometimes we think about -- we always think about what's next, and it's likely going to be something in infrastructure as we go forward. It is extremely scalable and the TAM in that marketplace is massive.

Page 19, the asset management business. I'm not going to hit the same bullet that I did. If you look to the bottom part of the page, the performance numbers, I think, stand -- they stand out relative to the pack. You look at some of the Crestline numbers. You look at Scope on the multi-strat side, which has been around forever. And again, very, very excited about where we're going in that business.

Page 11, the asset management business as we continue to scale. Again, a lot of these numbers will repeat. A couple of things I do want to point out where I think we go organically. When you look at our organic growth initiatives, we expect to deliver AUM of about $75 billion to $80 billion by the end of 2028. We continue to look at opportunities to grow our asset management business in the M&A world. And again, like I say always, we need to lead with performance.

On the commercial real estate side, I'll have one bullet here, just talking about opportunistic investing. We had bought 2 years ago in office building just outside Washington DC that we monetized in the third quarter. Again, these are examples of how we think about buying assets at the right times. This asset was located in Boston, Virginia. I think we paid $26 million or $27 million for it. We sold it with a $50-something million handle, 30% IRR, 1.6 -- And when you look across the rhythm side on the balance sheet, third quarter realizations from an IRR perspective, 43%, 1.6 mic across 3 different transactions.

The other thing is when you look at capital markets and our financing business, we closed on 31 West 52nd Street on a $500-plus million transaction, and we continue to focus on selective of our refinancing.

With that, I'll turn it over to Peter, who will take you through Elecor.

Peter Brindley

Thanks, Michael, and good morning. And turning to Page 14. We had a great quarter at Elecor Properties, and we continue to execute on our business plan. The third quarter was largely defined by strong leasing results, the refinancing of 31 West 52nd Street. The new joint venture agreement at 1301 Avenue of the Americas, the advancement of our significant amenity plans and continued operational excellence across the portfolio.

Year-to-date, we have executed leases and have leases pending on approximately 1 million square feet across our New York and San Francisco core portfolio with a weighted average initial rent of approximately $100 per square foot, 22% higher at share than the weighted average initial rent for our 2025 transactions.

Year-to-date, approximately 77% of our leasing activity in New York and San Francisco has occurred on vacant space and space scheduled to expire in 2026, and the balance has served to derisk lease roll in 2027 and beyond. Our pipeline remains robust and our lease expiration profile was manageable with approximately 2% at share expiring per annum in 2027 and 2028, paving the way for occupancy gains in our portfolio going forward.

Turning to Page 15, our markets and our portfolio. In New York, Midtown's leasing fundamentals continue to strengthen, particularly in well-located, well-amenitized Class A buildings. Looking at the broader Midtown market, the third quarter marked the 12th consecutive quarter of leasing activity outpaced the 5-year quarterly average.

Net absorption in Midtown remained positive for the ninth consecutive quarter, the longest run on record, resulting in the ongoing reduction of availability, particularly in Midtown's core submarkets. We continue to gain momentum and expect robust demand, coupled with the ongoing absorption of quality space in Midtown to support significantly improved deal economics moving forward. We believe we are well positioned to capitalize on current tenant demand in Midtown as we execute on our growth-focused business plan.

At quarter end, our New York core portfolio's leased occupancy was 88.6% at share. Year-to-date, initial rents in our New York portfolio of approximately $110 per square foot on leases signed and leases pending are approximately 36% higher as compared to our 2025 transactions.

Our third quarter was highlighted by the 113,000 square foot renewal and expansion of a financial institution at 1301 Avenue of the Americas, a building that is currently 100% leased.

Turning to San Francisco. Market-wide leasing activity in the third quarter was 2.7 million square feet, bringing the year-to-date total to approximately 9.7 million square feet on pace to be the strongest year-end total since 2018. San Francisco-based companies have raised a historic $270 billion of venture capital this year, mainly benefiting AI companies, which have contributed 36.5% leasing velocity year-to-date. This is further reinforcing San Francisco as the world's leading hub for AI innovation and has powered San Francisco to its fifth consecutive quarter of positive absorption.

At quarter end, our San Francisco core portfolio leased occupancy was 65% at share, up 590 basis points since Q1 2026. Approximately 65% of the 1 million square feet of leasing year-to-date has occurred in San Francisco, 96% of which has occurred with companies that are new to our portfolio.

Our third quarter was largely defined by a 76,000 square foot lease with a Fortune 100 entertainment company, and the 119,000 square foot lease with an AI-powered health care company, two of San Francisco's top 10 deals during the third quarter.

As previously mentioned, planning is underway to deliver exceptional amenities at both One Market Plaza and One Front Street, which has already begun to generate buzz in the market and will support our growth-focused strategy in San Francisco going forward.

We remain focused on further developing our tenant relationships, delivering market-leading hospitality, securing renewals for upcoming lease expirations and filling our vacant spaces. Finally, we believe our capital improvement strategy will drive significant rent growth and occupancy gains in 2026 and beyond. We are moving quickly to execute our key objectives and look forward to updating you on our progress.

Michael Nierenberg

Thanks, Peter. I'm going to take the Genesis section, which begins on Page 17, and then Baron will wrap up with -- and talk about Newrez.

As I mentioned on the Genesis business, truly scaled, great reputation with high-quality sponsors. When you look at this business and you look at delinquency trends across some of the other, what I would call, pure originators in the business, we truly stand out. I mean our delinquency percentages are about 3%, as I mentioned again, in earlier comments, we don't need to originate something for the sake of doing it. We need to do it with high-quality sponsors.

The $1.5 billion in the quarter, which takes us now to $5 billion. It's not a so-called race to get to 5 or 10 or whatever the number is, it's just creating high-quality loans that are going to generate mid-teens returns for both our third-party partners as well as our balance sheet.

When you look to the left side of the page, pretax income for the quarter, $33 million, 14% -- growth year-over-year. And then the annualized ROE on that business right now is about 13%. And I do think, again, with AI and technology, those numbers will likely go up over time.

When you look at Page 18, it's just a snapshot of the portfolio. You can have a look at that at your own leisure.

And then finally, if you look at Page 19, we continue to outpace the broader market. We continue to establish more relationships. We are investing in our people, we are investing in our sales force. And when you look at the overall growth, that will continue over time.

With that, I'll turn it over to Baron, who will take you through the Newrez section.

Baron Silverstein

Thank you, Michael, and good morning to everybody. Starting on Slide 21. And just kind of continuing with Michael's comments as well, Newrez had another great quarter with third quarter pretax income, excluding mark-to-market of approximately $330 million, which is up 7% quarter-over-quarter and delivering a 24% annualized operating ROE for the quarter. The results driven by our origination strategy, growth in subservicing, higher servicing fees and lower amortization.

And the performance continues to show the power of the platform, delivering on our results first ethos by achieving 15 consecutive quarters of high teens to low 20s annualized operating ROE.

Moving to Slide 22. Our edge is simple. We stay disciplined and nimble to optimize returns while maintaining operational excellence and client trust. We execute through a dynamic channel strategy, coupled with a robust product ecosystem with a focus on our homeowners and clients. And we invest in game-changing technologies to redefine workflows, raising the bar on customer experience, driving our efficiency throughout our platform.

Turning to Slide 23. We estimate annualized savings from our technology and AI investments of approximately $125 million, which will further drive our cost leadership. Our co-development with Home Vision is ahead of schedule with straight-through processing of eligible loans expected to launch in the fourth quarter.

Our partnership with Valon is on track with phased migration of loans to Valon OS in the first quarter of 2027. And once these platform investments are completed, they are a key driver and us growing market share without sacrificing any shareholder return.

Turning to Slide 24, our originations business. Funded volume came in at $12.9 billion, down 19% quarter-over-quarter, mainly due to interest rate environment lowering overall origination volumes. However, we remain focused on non-agency growth and increased overall non-agency volumes up 8% quarter-over-quarter and 30% year-over-year despite the market conditions. And while market competition continues to pressure gain on sale margins, we maintain pricing discipline, we do not chase market share, and we stay focused on maximizing returns.

We also remain opportunistic on co-issue MSR acquisitions with $5 billion in notional volume as we continue to diversify our investment strategy. New products this quarter include our Easy Click home equity solution, expansion of Vantage score utilization and we're excited about our new joint venture with EXP Realty, the second largest real estate platform in the U.S., and are working through our due diligence and more to come in the next few weeks.

Moving to Slide 25. In and our market-leading servicing platform, our focus remains in growing our capital-light fee-based third-party business with 15 new clients and approximately $80 billion in new loan boarding this year. Subservicing remains a foundational capability of our platform and our operational performance is evidenced by our client retention rate.

Our owned MSR portfolio continues to perform well across products. And while agency and Ginnie delinquencies increased slightly quarter-over-quarter, we attribute this to seasonal factors. And while delinquencies remain low from a historical context, our special servicing business has significant opportunities to deliver superior outcomes for both homeowners and clients across market cycles. Our business has never been better positioned, and I look forward to continuing to share the next chapter of the Newrez growth story.

Back to you, Michael.

Michael Nierenberg

Thanks, Baron. Finally, just on the investment portfolio, continue to look for opportunities in this marketplace where we see certain dislocations. I would say while spreads are a little bit wider, as I -- again, as I pointed out earlier, the balance sheet has really been there to support our origination businesses as well as our asset management business. And I think you'll see a lot more of that as we go forward.

So again, exciting times for us. We look forward to answering any questions that you may have. We'll now turn it back to the operator. And -- that's it so far.

Operator

[Operator Instructions] Your first question comes from the line of Doug Harter with BTIG.

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Douglas Harter

Can you could -- talk a little bit more talk a little bit more about the plans to grow the AUM and asset management, which products do you see the most momentum in right now to deliver that growth?

Michael Nierenberg

Sure. So I'd -- one is continue to establish more relationships with what I would call the big wire house banks who are distributing products through the wealth divisions. When you look where we are across, whether it be the sculpture platform, we launched something called our home, which is a Rithm fund through One of the large banks will continue to do more of that. So that should -- that will help with growth.

The product areas around what I would say, the wealth side are things such as capital solutions, which take advantage of dislocations in markets. We're looking at 40 Act funds on the sculpture side through some of the large banks. That's more of a liquidity vehicle around a hedge fund type product. The real estate business, as I mentioned earlier, will continue to grow. So when you look at the kind of the wirehouses, that's an area of focus for us as well.

What I would really say, and then I pointed out, we had our first close on our ABF fund this past quarter from a large pension fund here in the U.S. the amount of demand that we're seeing today for products that we either manufacture or that we have expertise in, is probably the highest I've seen in, quite frankly, in my career. I'm old, and I've been doing this for a long time.

So when you look, for example, on the resi side, we have a ton of interest in whether it be SMAs on, Baron pointed out, doing all this non-agency product, we make the products that our clients want. So right now, we're seeing extreme demand, what I would say, in ABF and ABF type products, again, whether it be through our funds business or through specific SMAs.

You take the Genesis business. When you look at some of this stuff on a levered basis, you're talking about mid-teen returns. We put our money where our mouth is. We take equity positions. So you're going to see a lot more growth in those businesses. When we look at the broader platform, one thing that I think is extremely different today than where we've been in the past is we have real collaboration across the house. We're working on branding when you look at -- we have three brands. So we have Rithm, Scope or Crestline. We sit down with a client, and we're not changing any of the investment teams. We're not changing any of the investment processes, but it takes us 10 minutes to talk through what the three different brands.

We need to get to a place where we have a common brand. It's a much easier story. And quite frankly, LPs want to allocate to fewer managers that have more products that are available. We're going to lead with our expertise. We're going to lead with our performance first. Credit is going to grow. Our multi-strat business is going to grow. Our real estate business is going to grow and our ABF business is going to grow. And then we'll continue to look at opportunities to acquire other managers.

The other area I pointed out that we need to be in at some point is infrastructure. It's not hiring one or two people to build around that. We need to actually have a real infrastructure business. So I think you're going to see some significant growth as we go forward, and we're really excited about it.

Operator

Your next question comes from the line of Bose George with KBW.

Bose George

Actually I wanted to ask on the mortgage banking side, it looks like your gain on sale margin was up in the Consumer Direct and the wholesale. Is that just a mix of product? Or was there sort of actual improvement? And then just on gain on sale trends that you're seeing for locks in September, October after rates have gone up?

Baron Silverstein

So -- yes, I would tell you on the direct-to-consumer channel, it definitely is a little bit of a product mix, right? You're seeing less refinances, and you'll start to see more of our home equity products and more of our non-QM products. So you're basically driving a little bit of a higher return overall.

On the wholesale side, obviously, it's a very competitive market. And we're continuing to basically test that product and not chase. But I do think that coming into the fourth quarter, you're going to continue to see that. There's definitely going to be more pressure on the wholesale side on margins overall.

And, Bose, not surprisingly, the interest rate environment is going to drive overall origination volumes. And we've seen a pretty material, I would say, decline in production coming from September to October, and you're likely going to see something close to about 25%.

Michael Nierenberg

And, Bose, part of that is the market. The other part is like when we think about having one investment dollar, what is going to be the best return for our shareholders. So that's the other way we think about the origination business. And again, this echoes the earlier comments in that we don't need to originate a loan for the sake of originating loan. With prepayment speeds at very low levels, our MSR book will continue to manufacture and produce a lot of great results for the company. So I think that's the other thing to point out here.

Bose George

Okay. Great. And then just on the book value quarter-to-date, is that relatively stable?

Michael Nierenberg

Yes. It's -- I mean, you should assume it's roughly unchanged.

Operator

Your next question comes from the line of Crispin Love with Piper Sandler.

Crispin Love

Just in the Asset Manager on further growth, you've called out infrastructure a couple of times. So can you think about a potential inorganic opportunity there? Do you think it would follow a similar playbook to Sculptor, Crestline? Is that capability that you need to buy fully with scale? Or if you do it on a smaller scale and then build within the current platform? And then just relatedly, is there any interest in adding digital infrastructure data center investment to the platform?

Michael Nierenberg

Yes. So I think it's more likely to be similar to the Sculptor, Crestline or something that's even potentially larger. Yes. I mean we need to be in the space. We do invest in that space when you look at the credit business, and you look at the teams at Sculptor. Sculptor has, give or take, 350 professionals there, give or take, 100 investment professionals, you think that where everything in credit where everything in ABF, so there is investing that goes on there.

Same thing at the Crestline side. We're not putting these kind of investments today on our balance sheet at the Rithm level. So it's got to be something of scale. I don't -- we don't want to start with something that is a couple of folks, and then it's going to take us 5 years to scale it up and miss that opportunity. So it's something that -- we have our eyes and ears out and hopefully there's something that's attractive to us and a potential partner that will help us scale.

Crispin Love

Great. And then just a second question on mortgage. You called out $125 million of potential cost savings. Just kind of first kind of timing of those and then also just the ROE impact in -- ROEs and new rents have been strong, talking by, I think, 24% or so this quarter. So when you look out over the intermediate term, kind of what's possible for the operating ROEs in that segment. Could you see expansion from levels today just given the AI savings and eventual normalizing of the mortgage environment?

Michael Nierenberg

Yes. So I mean I'll just start with top line stuff. So if you think about our mortgage company, which says, give or take, about $4.5 billion of revenue and you look at what we bring to the bottom line, I think there's a lot of room for higher earnings there. That -- and AI is going to help that. And I mentioned in my opening remarks, you talk about anybody that's ever taken out of mortgage, which most folks have, the archaic nature of that with providing paperwork and you think about underwriting guidelines, what have you -- that will change, and I think AI is going to help significantly.

Couple that with the investment and this company Valon that we're working with, which is really a tech company I referred to it earlier as a software company, but we're going to be using their software platform for our servicing business. That is going to make us highly efficient.

As far as the timing of -- and I'll talk to this in a second. And the timing of really seeing the earnings, I think, is going to be most likely you'll start to see them kick in, in '27, but they'll go on for '27, '28. When you look at product, the one thing -- and I look across the board and obviously, a lot of other peer companies that are in, whether they be in the Buy Now Pay Later business. And I look at the valuations on some of those companies versus us where we trade at 5x earnings in -- and we actually make more money than most of these other companies out there when I look at some of the kind of the digital banks that are valued higher. We got to figure out a way, one to roll out more products but to change our valuation. And I think a couple of things here, and it will catch on. Everybody wants to be in a growth equity type stock. I look at us relative to our peers across the board, and this is no reason for us to be trading where we do. That's one. But I do think you're going to see these savings come in, in '27, '28. And then -- and I'd like to see us launch more products, but they've got to be creditworthy products because I do think at some point the credit markets will turn and you start to see delinquencies trend higher. Right now, we're not seeing that, but I do think you'll see that at some point, and that's where our special servicer, which is second to none, should kick in and generate even more earnings for the house.

Operator

Your next question comes from the line of Kenneth Lee with RBC Capital Markets.

Kenneth Lee

Just on the Genesis capital side, wondering if you could just give us sort of like updated outlook or thoughts around potential originations volume, just given the current rate outlook there.

Michael Nierenberg

So our goal there, when you look at the business, if we're going to do -- I think the production numbers will probably do something between $6 billion and $6.5 billion of production. Credit really matters, as we all know, and all this stuff while saying that I think the opportunity for us to grow our multifamily business on the lending side is significant. As we -- so the way to think about that business as we rollout, whether it be SMEs or funds around the Genesis product, a good chunk of production could go into those funds. But what we want to do is really grow the amount of origination we have. So you continue to grow earnings at the public company level.

So it's a combination where I think that the multifamily business from the origination side will grow significantly over time, and it has grown significantly over time. The RTL business, we all know things get challenged when interest rates, you have mortgage rates of 7.25%, 7.5% or something in and around there, things could be challenged. But when you look at this paper, we make loans to high-quality sponsors. That's really the bottom line. High quality sponsors, the velocity or the turnover of this product, the duration here is give or take a couple of years. So the real growth, I think, is going to be more on the multifamily side as we go forward.

Kenneth Lee

Great. Very helpful there. And just one follow-up, if I may, on the Elecor Properties side. Just looking at the San Francisco leased occupancy rates. Just curious, looking for, what factors do you see that could potentially help drive higher occupancy rates going forward?

Nicola Santoro

Yes. Kenneth, thank you for the question. I would say two things really. One is we have very manageable lease roll over the next couple of years. So we have firm ground by which to really, I think, achieve significant occupancy gains going forward. We also know that in San Francisco, tenants are pursuing the best product, and we have a very, very fine portfolio in San Francisco. Tenant demand is currently in the neighborhood of 10 million square feet of tenants out looking for space. And we are incredibly active. We're as active in San Francisco currently as we have been in a very long time with leading companies across a variety of industries, including tech, AI, legal, financial services. So we're really firing on all cylinders, and the market has certainly been very receptive to the capital improvements that we're making specifically at one market and one front, which we've not mentioned a few times.

So the team is hyper-focused on getting that occupancy up, back to levels that San Francisco and these three buildings in particular, are more accustomed to, but we feel really good about the progress and the execution currently.

Operator

Your next question comes from the line of Trevor Cranston with Citizens JMP.

Trevor Cranston

Another question on Newrez. I'm looking at Slide 36, particularly the prepaid speed and amortization on the MSR. Just curious if you could just give an outlook for how much room you think there is for MSR or prepay speeds to come down in 4Q and going forward if mortgage rates kind of stick above 7%? And more broadly, if that benefit plus the expense savings you guys have talked about is kind of enough to offset the pressure on the origination side?

Baron Silverstein

So yes, I mean, I think you're kind of getting to the floor on speeds. You just have a certain amount of turnover for just life events that are going to continue to drive plus also when you think about some of the seasoning on our portfolio, you're just going to really be at that floor. So I don't really think that speed are going to come in very much lower than what you saw in, say, September speeds overall. And the offset, I will tell you, in between amortization and originations is prettily near, right, from the balanced business model on how we look at it. But also you have to think about it as Michael's comments and my comments, right, we're not driving just growth for growth sake, right? We want to make sure that we're focused on margins. And if the market really gets very, very competitive, I think that -- we're going to look at it in that manner as opposed to just chasing volumes. But I will tell you overall, we do think that we have a balanced business model. We want to stay in front of our customer base, right, in our 4 million customers and making sure that we are delivering products for them, right, as our core focus. And if there's opportunity outside of that, we'll basically -- look to basically enter into those markets, and that's our multi channel strategy helps us kind of take advantage of those opportunities when they become available.

Michael Nierenberg

The other thing I would say is if you look at the business and to your question about how the servicing book will offset the origination volumes, we look at the entire company. When you look at the servicing book today, I think there's roughly $15 billion of escrow deposits, Fed raises rates 25 basis points, it's a huge lift to kind of the firm from a net interest income standpoint. So the balanced nature, I think, of everything that we do across our entire business and that can include anything from the mortgage company to Genesis to Elecor, Asset Management business is something that I think it's going to reward shareholders as we go forward. So that's why when you look at our business model this quarter versus some of the other folks in the marketplace, that's one of the other reasons why I think we had a good quarter.

Operator

Your next question comes from the line of Marissa Lobo with UBS.

Ameeta Lobo Nelson

I wanted to ask about the investment portfolio and how you're thinking about the opportunity here? Are the new deployment levels attractive enough to grow the portfolio? Or is the focus more on securitizing and recycling capital?

Michael Nierenberg

I think it's both. It's also the investment portfolio. We will continue to recycle that. I'm going to give you the example where if we don't originate a mortgage loan, but we could take $1 of capital and reinvest that back in our asset management business, along with a third-party LP who's paying us a management fee, those earnings are recurring, and they trade at a much higher multiple than the so-called the mortgage loan that's going to sit on the balance sheet.

So I think it's a combination where we'll use our balance sheet to continue to support our origination businesses. We're going to be opportunistic and look for areas where we can deploy significant amounts of capital. And Baron pointed out, the non-agency business at Newrez year-to-date, I think $6-plus billion. When you look at that, a good chunk of that is not QM that actually sits on balance sheet, and then we do securitization.

So there'll continue to be significant earnings as we support our origination businesses, look for opportunities where we have market dislocations. As I pointed out, this office building, for example, that we sold in Boston, Virginia. Some of the other stuff where we're entering that business had a 75% to replacement value, and we'll continue to look at other things, and there's always something that comes up.

The beauty, I think, where we sit as an organization is that between myself and some of my partners, Charles Sorrentino and others, we've been doing this for a long, long time, and we have very, very good relationships with our bank partners, but also we know a lot of folks in the marketplace and we should continue to see opportunities across the board. So it's a little bit of everything and the investment portfolio will grow over time, but it's going to be opportunistic.

Ameeta Lobo Nelson

That's helpful. And there's been a lot of movement on housing policy recently, particularly around LLPA Vantage scores and now mortgage insurance. Can you talk about how you're thinking about the potential impact on Newrez?

Baron Silverstein

Look, we -- obviously, we have good relationship with our partners in D.C. And I do think that the policies that the director of the FHFA are putting out there, we support them. We were on the pilot program with Freddie Mac on the Vantage score. So certainly, from our perspective, we do think that, that will continue to drive benefits for our homeowners. And if there are changes on any of the insurance premiums. Obviously, we'll incorporate that and deliver those savings directly to homeowners. And so we certainly support the initiatives that the director continues to drive.

Operator

Your next question comes from the line of Jason Stewart with Compass Point.

Jason Stewart

Just a follow-up on Marissa's question. In terms of the Newrez platform, how important is the technology aspect of the platform? I mean this is a very dynamic mortgage market and implementing these changes seems like it's a little probably tougher today than it has been in the past. Could you just talk about where you're positioned in terms of technology versus some of the other peers?

Michael Nierenberg

Baron could probably -- I'll give you from a high level and then I'll turn it to Baron. Our technology budget, when we look at expense overall is pretty significant. The amount of personnel we have around the house related to the technology, so-called business is very significant. I'm a believer that on technology, you're better outsourcing to so-called experts in the industry who are going to be there to either build you models or build your software that's going to make your business run better. But while saying that, we have a ton of people there, and we have a ton of investment. The partnership with Valent should be extremely significant across our entire business as we go forward. And it's not only Valon, but there's others as well. So Baron, do you want to share...

Baron Silverstein

No. Michael, you are right. I would tell you that we look at our technology dollars to try to focus on prioritizing the initiatives that have the biggest impact. And Michael talks about Valon, right? And if you think about Valon overall, and there is nothing like it in the market, and we're really excited to basically incorporate that technology into our business, the investments that Rithm made in Valon back in 2019, we've had that front row seat. We've talked about this before, really kind of seeing how it just drives overall operational efficiency, improvement in workflow, our entire servicing organization has been working with Valon for the last year plus. Everybody is definitely excited about what's ahead. Obviously, there's a lot of work for us to basically go from, I'll just say, today, throughout the end of 2027 and basically in doing that overall conversion.

But the -- if you just even look at all of the AI initiatives and you just continue to see how and what AI does. It's pretty remarkable about how we think about different initiatives and how that can impact our business. And our focus really is just making sure that we're prioritizing our technology dollars and our technology focus on the items that really move the needle that drive our efficiency and to drive ROE. And that -- it sounds easy. I know we focus on a lot, the management team here, and we worked through it, obviously, with Michael on what we try to prioritize every day. So that's what I would tell you on how we focus. This is -- and you asked the question in the beginning, how does this basically -- and how will this impact how we perform in the industry and how we compete. We think this is one of the top components of how we can continue to drive performance from an ROE perspective and differentiate Newrez in -- throughout the market. No question.

Jason Stewart

And Michael, a follow-up to Marisaa's question on the investment portfolio. There seems to be, I call it, episodic opportunities to buy things like non-QM and secondary. If you could just elaborate a little bit on how you're thinking about liquidity relative to opportunities, if there's sort of a metric that we can look at as a minimum liquidity measure? Or how are you thinking about funding markets in relation to the opportunity?

[Audio Gap]

clean portfolio. We cleaned it up. We took over the management contract a couple of years ago. We can't get that off the ground because nobody cares. It's tiny. And at some point, we'll either -- we're evaluating our options what to do with that.

Yes, we're always looking for opportunities. I mean if we are going to grow our real estate presence whether it be Elecor, we continue to look at more office opportunities, but we don't need to be just an office. I brought up the scope folks. They have an unbelievable track record. And they do things that are very, very different from the rest of the pack. So across the board, you're going to see us grow pretty significantly, I think, on the real estate space. If there's an opportunity to acquire another commercial REIT, we'll do it as long as from a credit standpoint, it underwrites, we don't want to take over someone else's issues right now. I think that's part of the issue with a lot of these REITs that are stuck out there.

Unknown Analyst

And in the correspondent business, what are the real economics of originating in a 7%-plus market in terms of do you own the customer? What -- how do you think about that?

Michael Nierenberg

I'm sorry. Can you repeat the question?

Unknown Analyst

In the correspondent residential mortgage on the Newrez.

Michael Nierenberg

Yes. I think if you want to buy cheap MSRs, if MSRs are cheap, you do it. And if not, and this is -- Baron and I on the same page on this, we don't need to originate a loan just to have more corresponding value unless we love the valuation of the underlying MSR and there is real gain on sale. If there's real gain on sale and there's margin, we'll do it, and you love your MSR valuation. If not, I'd rather take the dollar and support our asset management business or put it into a Genesis or something else where we think we're going to earn a mid-teens return.

Operator

There are no further questions at this time. I will now turn the call back to Michael Nierenberg for closing remarks.

Michael Nierenberg

Thanks for all the questions. We look forward to updating you during the quarter and next quarter. And thanks for the support always. Have a beautiful weekend.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.