Move follows management internalization ahead of rebranding
New Residential Investment Corp. quietly closed its offices in four states as part of a streamlining that includes an imminent rebranding, Mortgage Professional America has learned.
The parent company of New Rez and Caliber Home Loans, New Residential closed its office in Arizona, Florida and New York on June 30, according to a well-placed source. It’s unknown if any layoffs occurred as a result.
MPA reached out to the company to learn more, but a spokesperson declined to comment. “Thanks for reaching out,” spokesperson Mackenzie Coopman wrote in an emailed response. “At this time, we will not be providing any further comment.”
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The number of workers affected by the office closures is unknown. MPA checked the workplace regulatory sites at each of the three states where offices were closed to see if the company filed advance notice of layoffs in compliance with the Worker Adjustment and Retraining Notification (WARN) Act – designed to provide a 60-day notice of mass layoffs to affected workers – but none were found.
On June 17, the company hinted at the closures in releasing a statement announcing a management “internalization” and its rebranding to Rithm Capital while declaring its second quarter 2022 dividends. Released 13 days before the office closures, the statement made no reference to the office closures.
“New Residential Investment Corp. (NYSE: NRZ) announced today it has entered into agreements providing for the internalization of the company’s management function,” the company said in a June 17 statement. “In conjunction with the internalization, the company announced plans to change its name and rebrand as Rithm Capital Corp.”
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The agreement terminated a management and advisory agreement that results in the company paying FIG LLC $400 million, with $200 million paid on the effective date, another $100 million payable on Sept. 15 and $100 million payable Dec. 15, according to the statement.
As a result of the termination of the management agreement, New Residential has ceased being externally managed, and now operates as an internally managed REIT, the statement details.
“The company will continue to be managed by its strong senior leadership team, with Michael Nierenberg as chairman of the board, chief executive officer and president Nick Santoro as chief financial officer and chief accounting officer,” the statement reads. “In addition, the company intends to retain employees of the manager who currently serve in key roles at the company, including, but not limited to, those who support NRZ’s investment, legal, accounting, tax and treasury operations,” the statement added.
“We believe the internalization positions the company for long-term success,” Nierenberg said in a prepared statement. “We view this transaction as a way to drive value for shareholders with expected cost savings, incremental synergies and ability to leverage employees across the NRZ ecosystem. Our strategy has not changed – we will continue to focus on opportunities across the financial services landscape. We are excited about the company’s future and look forward to continuing to produce great returns for our shareholders.”
In terms of the name change, it’s intended to “…highlight a new chapter in the company’s evolution and reinforce its position as a leading diversified company in the financial servicers and real estate sectors,” the company wrote.
Added Nierenberg: “We are taking this opportunity to rebrand to Rithm Capital and demonstrate the growth of our company. We have changed dramatically since our inception, from an owner of MSR assets to a company with complementary operating companies and a unique portfolio of investments. The new name and brand help distinguish us from our operating companies, including Newrez, and reflect our culture, team and ambitions for growth beyond residential mortgages.”
The name change will take effect on or about August 1, and the company’s new website will be www.RithmCap.com, officials said.
Prior to the internalization, the company was externally managed by the manager, an affiliate of Fortress Investment Group LLC, subject to oversight by the board of directors of the company pursuant to the management agreement, officials explained. In accordance with the agreement, the manager provided the company with a management team, other personnel and corporate infrastructure, officials added. “Accordingly, the individuals who provided services to the company were employees of the manager. In exchange for the manager’s services, the company paid the manager certain fees, including a management fee and, subject to performance, an incentive fee. The company also reimbursed the manager for certain costs.”
