LEASES
Rithm Capital, through its wholly owned subsidiaries, has non-cancelable operating leases on office space and data centers expiring through 2035, and a non-cancelable operating ground lease expiring through 2075. Rent expense, net of sublease income, totaled $29.8 million, $35.4 million and $45.8 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company has leases that include renewal options and escalation clauses. The terms of the leases do not impose any financial restrictions or covenants.
Operating lease ROU assets represent the right to use an underlying assets for the lease term and lease liabilities represent obligations to make lease payments arising from the leases. In addition, the Company has finance leases for computer hardware. As of December 31, 2025, the Company has pledged collateral related to its lease obligations of $7.6 million, which is presented as part of restricted cash on the consolidated balance sheets. Operating lease ROU assets and lease liabilities are presented as part of other assets and accrued expenses and other liabilities, respectively, on the consolidated balance sheets (Note 13).
The table below summarizes the future commitments under the non-cancelable leases:
| | | | | | | | | | | | | | | | | | | | |
| Year Ending | | Operating Leases | | Finance Leases | | Total |
| 2026 | | $ | 44,894 | | | $ | 228 | | | $ | 45,122 | |
| 2027 | | 47,363 | | | 228 | | | 47,591 | |
| 2028 | | 36,370 | | | — | | | 36,370 | |
| 2029 | | 34,565 | | | — | | | 34,565 | |
| 2030 | | 9,480 | | | — | | | 9,480 | |
| 2031 and thereafter | | 42,131 | | | — | | | 42,131 | |
| Total remaining undiscounted lease payments | | 214,803 | | | 456 | | | 215,259 | |
| Less: imputed interest | | 41,428 | | | 17 | | | 41,445 | |
| Total Remaining Discounted Lease Payments | | $ | 173,375 | | | $ | 439 | | | $ | 173,814 | |
The future commitments under the non-cancelable leases have not been reduced by the sublease rentals of $25.8 million due in the future periods.
Other information related to leases is summarized below:
| | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 |
| | | |
| Weighted Average Remaining Lease Term (Years): | | | |
| Operating leases | 6.3 | | 5.1 |
| Finance leases | 1.5 | | 2.5 |
| | | |
| Weighted Average Discount Rate: | | | |
| Operating leases | 6.7 | % | | 6.5 | % |
| Finance leases | 7.9 | % | | 7.9 | % |
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| Supplemental Information | | 2025 | | 2024 | | 2023 |
| Cash Paid for Amounts Included in the Measurement of Lease Liabilities: | | | | | | |
| Operating cash flows - operating leases | | $ | 46,021 | | | $ | 51,289 | | | $ | 34,655 | |
| Operating cash flows - finance leases | | 3 | | | 4 | | | — | |
| Finance cash flows - finance leases | | 225 | | | 224 | | | — | |
| Supplemental Non-Cash Information on Lease Liabilities Arising from Obtaining ROU Assets: | | | | | | |
| ROU assets obtained in exchange for new operating lease liabilities | | $ | 40,990 | | | $ | 20,465 | | | $ | 1,449 | |
See Note 9 for further information on leases of commercial real estate and SFR properties.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.