v3.26.3
RELATED PARTY TRANSACTIONS
 9 Months Ended
Sep. 30, 2026
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
A party is considered to be related to the Company if the party, directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners, management and trustees, as well as members of their immediate families or any other parties with which the Company may deal if one party to a transaction controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.
The components of due to related parties of the Company on the consolidated balance sheets were as follows:
September 30, 2026December 31, 2025
Due to (from) servicer$(490)$7,473 
Due to Adviser, net5,256 3,612 
Shareholder Servicing Fees payable594 30 
Trustee fee payable19 19 
Due to Related Parties$5,379 $11,134 
Upfront Selling Commissions and Dealer Manager Fees — The Company does not charge upfront selling commissions, origination fees or dealer manager fees directly with respect to Class S, Class T, Class D, Class J or Class J-2 shares. However, financial intermediaries may charge subscribers transaction or placement fees, including upfront selling commissions, in amounts that vary by share class and intermediary, subject to maximum thresholds. Specifically, Class S and Class T shares may be subject to aggregate upfront fees of up to 3.5% of the transaction price, Class D shares up to 1.5% of the net offering price and Class J and Class J-2 shares up to 2.0% of the transaction price. If a dealer manager is engaged, it may also charge upfront dealer manager fees, provided that total fees do not exceed the stated maximums per share class. No upfront selling commissions, dealer manager fees, or similar placement fees are paid with respect to purchases of Class I or Class E shares, or shares of any class acquired pursuant to the Company’s distribution reinvestment plan.
For the three and nine months ended September 30, 2026, certain Class J shareholders were charged $0.1 million and $0.9 million of selling commissions, respectively. These selling commissions were borne by the applicable shareholders and were not expenses of the Company; accordingly, they are not reflected in the Company’s consolidated financial statements.
Management Fee
Class S, Class T, Class D, Class I, Class J and Class J-2 shares will pay a management fee equal to 1.25% of NAV per annum (less any Shareholder Servicing Fees), payable monthly in arrears. The payment of a management fee to the Adviser for the Class E shareholders will be waived by the Adviser; provided that the Adviser may, in its discretion, reinstate management fees of any Class E shareholder who is no longer an employee, officer or director at the Sponsor or its affiliates.
Any management fee is calculated and paid to the Adviser on a class-by-class basis, based on the NAV of each applicable class of the Company’s shares. In calculating the Adviser’s management fee, the Company will use the NAV before giving effect to accruals for the management fee, performance fee, Shareholder Servicing Fees payable to a dealer manager, if any, or distributions payable on the Company’s shares.
All or a portion of the management fee may be paid, at the Adviser’s election, in cash or Class E shares. The Adviser may elect to receive Class E shares primarily for the Company’s cash management purposes and alignment of interest, but may have its shares repurchased from time to time. For the three and nine months ended September 30, 2026, the Adviser elected to receive $212.3 thousand and $432.9 thousand, respectively, in Class E shares.
For the three and nine months ended September 30, 2026, the Company incurred approximately $236.7 thousand and $564.5 thousand, respectively, of management fees, which are recorded in management fees on the consolidated statements of operations.
Shareholder Servicing Fees
The Company pays Shareholder Servicing Fees with respect to certain classes of its common shares at annual rates of 0.85% for Class S and Class T, 0.25% for Class D, and up to 0.625% for Class J and Class J-2, based on the NAV of the applicable shares. Fees attributable to Class J and Class J-2 are capped at 50% of the aggregate management and shareholder servicing fees for those classes and reduce the management fees otherwise payable to the Adviser on a dollar-for-dollar basis. Class I and Class E are not subject to Shareholder Servicing Fees.
For the three and nine months ended September 30, 2026, the Company incurred approximately $236.7 thousand and $564.5 thousand, respectively, of Shareholder Servicing Fees, which are recorded as a reduction of shareholders’ equity, on the consolidated statements of changes in shareholders’ equity.
Performance Fee — Pursuant to the terms of the Advisory Agreement, the Adviser became entitled to earn a performance fee upon the effectiveness of the Company's Registration Statement on Form 10. The performance fee is accrued monthly and payable quarterly (or part thereof that the Advisory Agreement is in effect) in arrears. The performance fee is an amount, not less than zero, equal to 12.5% of Core Earnings (as defined below) for the immediately preceding quarter, subject to a hurdle rate, expressed as a rate of return on adjusted capital (as defined below), equal to 1.25% per quarter (the “hurdle rate”), or an annualized hurdle rate of 5.0%. As a result, the Adviser does not earn a performance fee for any quarter until Core Earnings for such quarter exceeds the hurdle rate of 1.25%.
Once Core Earnings in any quarter exceeds the hurdle rate, the Adviser shall be entitled to a “catch-up” fee equal to the amount of Core Earnings in excess of the hurdle rate, until Core Earnings for such quarter exceeds a percentage of adjusted capital equal to the hurdle rate divided by 0.875 (or 1 minus 0.125) for such quarter (i.e., approximately 1.429% quarterly, or 5.714% annually, of adjusted capital). Thereafter, the Adviser is entitled to receive 12.5% of Core Earnings.
The performance fee may be paid, at the Adviser’s election, in cash or Class E shares, or any combination thereof. Following the effectiveness of the Company's Registration Statement on Form 10, the payment of the performance fee to the Adviser for the holders of Class J shares and Class E shares was waived by the Adviser.
For purposes of the performance fee, “adjusted capital” means cumulative net proceeds generated from sales of the Company’s Class S, Class T, Class D, Class I and Class J-2 shares (including proceeds from the distribution reinvestment plan) reduced for distributions from non-liquidating dispositions of the Company’s investments paid to the Company’s Class S, Class T, Class D, Class I and Class J-2 shareholders and amounts paid to the Company’s Class S, Class T, Class D, Class I and Class J-2 shareholders for share repurchases pursuant to the Company’s share repurchase plan.
Because the performance fee is calculated based on Core Earnings, the Adviser may be entitled to a performance fee even if shareholders experience a decline in NAV per share in the relevant month.
For purposes of calculating the performance fee, “Core Earnings” means: the net income (loss) attributable to holders of the Company’s Class S, Class T, Class D, Class I and Class J-2 shares, computed in accordance with GAAP, including realized gains (losses) not otherwise included in GAAP net income (loss) and excluding (i) non-cash equity compensation expense, (ii) the performance fee, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income, (v) one-time events pursuant to changes in GAAP and (vi) certain non-cash adjustments and certain material non-cash income or expense items, in each case after discussions between the Adviser and the Company’s independent trustees and approved by a majority of the Company’s independent trustees.
For the three and nine months ended September 30, 2026, no performance fees were earned.
Adviser Authority Over Derivative Trading — In connection with the Company’s futures trading program, the Company appointed the Adviser as its advisor and attorney-in-fact with full trading authority over the Company’s exchange-traded futures account. The Adviser is a registered commodity trading advisor or operates pursuant to an available exemption.
Acquisition Expense Reimbursement — The Company reimburses the Adviser for out-of-pocket expenses in connection with the selection, acquisition, origination, financing and management of investments, whether or not such investments are made. The reimbursements may be paid, at the Adviser’s election, in cash or Class E shares, or any combination thereof.
For the three and nine months ended September 30, 2026, no acquisition expenses were reimbursed.
Fees or Reimbursements for Other Services — The Sponsor or its affiliated service providers may be retained to provide services to the Company or entities through which investments are held by the Company that would otherwise be performed for the Company or such entities by third parties. Any fees, compensation and costs payable to the affiliated service providers in connection with services provided by such affiliated service providers that (i) do not exceed market rates, as determined by the Adviser to be appropriate under the circumstances or (ii) are approved by a majority of the Company's trustees, including a majority of the Company's independent trustees, will not offset or otherwise reduce the management fee or otherwise be shared with the Company.
For the three and nine months ended September 30, 2026, $0.9 million and $1.8 million, respectively, of expenses were reimbursed to the Adviser and affiliates of the Adviser.
Trustee Compensation — The Company compensates each of its independent trustees with an annual retainer of $130.0 thousand, consisting of $65.0 thousand paid in equal $16.3 thousand quarterly installments in cash or vested Class E shares, or a combination thereof, at the election of the trustee, and $65.0 thousand in the form of an annual grant of restricted Class E shares, which will generally be scheduled to vest one year from the date of grant, subject to the trustee’s continued service through the vesting date. Additionally, the Chair of the Audit Committee receives an additional annual retainer of $15.0 thousand, and the other members of the Audit Committee receive an additional annual retainer of $10.0 thousand, in each case paid in equal quarterly installments in cash or vested Class E shares, or a combination thereof, at the election of the Audit Committee member. The Company does not pay its trustees additional fees for attending Board or committee meetings, but it reimburses each of its trustees for reasonable out-of-pocket expenses incurred in attending Board and committee meetings. The Company's trustees who are affiliated with the Adviser do not receive additional compensation for serving on the Company's Board or committees thereof.
The Company's Board has adopted the Rithm Perpetual Life Residential Trust Independent Trustee Compensation Plan (the “Trustee Plan”), which governs the payment of annual retainers and equity awards to its independent trustees. The Trustee Plan includes an initial share authorization of 500,000 Class E shares and provides for equity awards in the form of restricted share awards. The Company's Board serves as the administrator of the Trustee Plan.
On December 1, 2025, as a portion of the annual compensation of the independent trustees, the Company granted each independent trustee an award of 3,250 restricted Class E shares (9,750 shares in aggregate), with a total grant date fair value of $65.0 thousand ($195.0 thousand in aggregate). The awards are scheduled to vest on the one-year anniversary of the grant date.
For the three and nine months ended September 30, 2026, $106.3 thousand and $318.8 thousand, respectively, of Trustee compensation has been recognized.