Rithm (RITM) & Partners to Buy $120M BTR Project in Virginia
Rithm Capital Corp. RITM partnered with American Real Estate Partners and GreenBarn Investment Group to buy a luxury 200-unit subdivision of townhouses in Ashburn, VA. The alliance is expected to pay $120 million for the assets to Dream Finders Homes.
The community will be launched as CityHouse Ashburn Station, which will target those individuals and families who are renters by choice. Phase one of the assets will likely be available for rent in mid-August, while the remaining phases are expected to be delivered over the next year and three months.
CityHouse Ashburn Station is expected to benefit from the post-COVID hybrid work environment, providing smart home functionality and easy metro access to the DMV region through the Silver Line. The average unit size in the project is expected to be 2,000 square feet.
Through its strategic partnership with GreenBarn, Rithm is expected to provide equity capital for the project. It will also offer acquisition and construction loans of $86.4 million through its subsidiary, Genesis Capital. RITM will have AREP and GreenBarn as co-general partners for the build-to-rent (BTR) project.
Sculptor Receives Bids
Sculptor Capital Management, which agreed to be acquired by Rithm for $639 million last month, has received multiple bids that were higher than RITM’s offer. Some of these bids were rejected by Sculptor due to stiff conditions, while some were withdrawn. Notably, Rithm’s deal is expected to cap CEO James Levin’s performance pay at $30 million.
Price Performance
Rithm’s shares have gained 17.8% in the year-to-date period, outperforming the industry’s rise of 5%.
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Zacks Rank & Other Key Picks
Rithm currently has a Zacks Rank #2 (Buy). Investors interested in the broader finance space may also look at other top-ranked players like Globe Life Inc. GL, Moody's Corporation MCO and Ponce Financial Group, Inc. PDLB, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Globe Life’s 2023 earnings indicates a 28.7% year-over-year increase to $10.49 per share. It has witnessed five upward estimate revisions over the past month against no movement in the opposite direction. GL beat earnings estimates in all the last four quarters, with the average surprise being 2.2%.
The Zacks Consensus Estimate for 2023 earnings of Moody's signals a 17.5% year-over-year jump. It has witnessed nine upward estimate revisions during the past month against no movement in the opposite direction. The consensus mark for MCO’s current-year revenues signals a 9% year-over-year increase.
The Zacks Consensus Estimate for Ponce Financial’s 2023 bottom line suggests an 81.7% year-over-year improvement. It has witnessed one upward estimate revision in the past month against none in the opposite direction. PDLB beat earnings estimates in two of the last four quarters and missed twice.
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