Rithm Capital invests in its SFR portfolio by acquiring and maintaining a geographically diversified portfolio of high-quality single-family homes and leasing them to high-quality residents.

SFR properties HFI are carried at cost less accumulated depreciation and impairment and are presented within single-family rental properties on the consolidated balance sheets.

SFR properties HFS are managed for near term sale and disposition. They are measured at the lower of cost less accumulated depreciation and impairment or fair value less estimated cost to sell and presented within single-family rental properties on the consolidated balance sheets. For the nine months ended September 30, 2024, Rithm Capital transferred 199 SFR properties HFI to HFS.

The following table summarizes the net carrying value of investments in SFR properties:


	September 30, 2024		December 31, 2023
Land	$	193,402	$	183,359
Building	773,609		733,437
Capital improvements	149,434		138,869

Total gross investment in SFR properties	1,116,445		1,055,665
Accumulated depreciation	(75,800)		(53,737)
Investment in SFR Properties, Net	$	1,040,645	$	1,001,928

Depreciation expense for the three months ended September 30, 2024 and 2023, totaled $7.3 million and $7.1 million, respectively, and, for the nine months ended September 30, 2024 and 2023, totaled $22.3 million and $21.0 million, respectively. Depreciation expense is included in other income (loss), net in the consolidated statements of operations.

As of September 30, 2024 and December 31, 2023, the carrying amount of the SFR properties includes capitalized acquisition costs of $7.3 million and $7.5 million, respectively.

The following table summarizes the activity for the period related to the net carrying value of investments in SFR properties:


	SFR Properties HFI		SFR Properties HFS		Total
Balance at December 31, 2023	$	1,000,357	$	1,571	$	1,001,928
Acquisitions and capital improvements	64,925		—		64,925
Transfers to HFS	(50,615)		50,615		—
Dispositions	(1,140)		(2,738)		(3,878)

Accumulated depreciation	(22,247)		(83)		(22,330)
Balance at September 30, 2024	$	991,280	$	49,365	$	1,040,645

Rithm Capital generally rents its SFR properties under non-cancelable lease agreements with a term of one to two years. The following table summarizes rental revenue and other variable revenue based on the specific lease terms for the period:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Rental revenue	$	19,348	$	18,297	$	57,216	$	54,163
Other variable revenue	833		683		2,492		1,901
Total Revenue	$	20,181	$	18,980	$	59,708	$	56,064

The following table summarizes the future minimum rental revenues under existing leases on SFR properties:

The following table summarizes the activity for the period of the SFR portfolio by units:


	SFR Properties HFI	SFR Properties HFS	Total
Balance at December 31, 2023	3,882	6	3,888
Acquisition of SFR units	204	—	204
Transfer to HFS	(199)	199	—
Disposition of SFR units	(4)	(9)	(13)

Balance at September 30, 2024	3,883	196	4,079