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Rithm's $1.6B Paramount Play Signal Big City Comeback, Shares React
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Key Takeaways
{\"0\":\"Rithm Capital will buy Paramount Group for $1.6B in cash, expanding into office real estate ownership.\",\"1\":\"Paramount shareholders get $6.60 per share, a discount to its prior $7.39 close, sending shares down 11.6%.\",\"2\":\"The deal adds 13.1M sq. ft. of Class A office assets in New York and San Francisco, 85.4% leased as of June.\"}
Rithm Capital Corp. (RITM - Free Report) has agreed to acquire vertically-integrated real estate investment trust, Paramount Group, Inc. (PGRE - Free Report) , for around $1.6 billion in cash. Paramount is a well-known office REIT that owns and manages high-end Class A office properties in major U.S. markets. For Rithm, this deal represents a move adding to its core alternative asset management and mortgage servicing businesses, signaling a deeper push into real estate ownership and operations.
Shares of Rithm Capital gained 3.2% yesterday following the announcement, while Paramount shares plunged 11.6%. Paramount shareholders will receive $6.60 per fully diluted share in cash, which is a steep discount to its previous closing level of $7.39 on Sept. 16, 2025.
The agreement reflects Rithm Capital’s ambition to broaden its investment scope and add long-term value through owning premium assets in highly sought-after urban markets. The transaction covers Paramount’s portfolio of 13 owned and four managed properties, totaling above 13.1 million square feet of office space. As of June 30, 2025, the portfolio was 85.4% leased, with flagship holdings in New York City and San Francisco.
Funding will come from Rithm Capital’s available cash, balance sheet liquidity and potentially co-investors. The transaction is expected to close by the end of the fourth quarter of 2025. It is expected to expand RITM’s presence in commercial real estate, giving it a high-quality portfolio in markets that are poised to recover from recent pressures, including elevated interest rates, the rise of remote work and falling property valuations.
For the broader market, the move sends a strong signal that institutional investors see renewed opportunity in urban office assets, particularly in gateway cities. Roughly a couple of months back, Starwood Property Trust, Inc. (STWD - Free Report) closed the acquisition of Fundamental Income Properties from Brookfield Asset Management for around $2.2 billion to achieve both portfolio diversification and more predictable, long-term earnings.
Rithm Capital’s Price Performance, Valuation and Estimates
Shares of RITM have gained 15.1% year to date, outperforming the broader industry.
Image Source: Zacks Investment Research
From a valuation standpoint, Rithm Capital trades at a forward price-to-earnings ratio of 5.70X, below the industry average of 25.60X. RITM carries a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Rithm Capital’s 2025 earnings implies a roughly 1% increase year over year, followed by 4.6% growth next year.
Image: Bigstock
Rithm's $1.6B Paramount Play Signal Big City Comeback, Shares React
Key Takeaways
Rithm Capital Corp. (RITM - Free Report) has agreed to acquire vertically-integrated real estate investment trust, Paramount Group, Inc. (PGRE - Free Report) , for around $1.6 billion in cash. Paramount is a well-known office REIT that owns and manages high-end Class A office properties in major U.S. markets. For Rithm, this deal represents a move adding to its core alternative asset management and mortgage servicing businesses, signaling a deeper push into real estate ownership and operations.
Shares of Rithm Capital gained 3.2% yesterday following the announcement, while Paramount shares plunged 11.6%. Paramount shareholders will receive $6.60 per fully diluted share in cash, which is a steep discount to its previous closing level of $7.39 on Sept. 16, 2025.
The agreement reflects Rithm Capital’s ambition to broaden its investment scope and add long-term value through owning premium assets in highly sought-after urban markets. The transaction covers Paramount’s portfolio of 13 owned and four managed properties, totaling above 13.1 million square feet of office space. As of June 30, 2025, the portfolio was 85.4% leased, with flagship holdings in New York City and San Francisco.
Funding will come from Rithm Capital’s available cash, balance sheet liquidity and potentially co-investors. The transaction is expected to close by the end of the fourth quarter of 2025. It is expected to expand RITM’s presence in commercial real estate, giving it a high-quality portfolio in markets that are poised to recover from recent pressures, including elevated interest rates, the rise of remote work and falling property valuations.
For the broader market, the move sends a strong signal that institutional investors see renewed opportunity in urban office assets, particularly in gateway cities. Roughly a couple of months back, Starwood Property Trust, Inc. (STWD - Free Report) closed the acquisition of Fundamental Income Properties from Brookfield Asset Management for around $2.2 billion to achieve both portfolio diversification and more predictable, long-term earnings.
Rithm Capital’s Price Performance, Valuation and Estimates
Shares of RITM have gained 15.1% year to date, outperforming the broader industry.
From a valuation standpoint, Rithm Capital trades at a forward price-to-earnings ratio of 5.70X, below the industry average of 25.60X. RITM carries a Value Score of B.
The Zacks Consensus Estimate for Rithm Capital’s 2025 earnings implies a roughly 1% increase year over year, followed by 4.6% growth next year.
The stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.