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 six months ended June 30, 2024, Rithm Capital transferred ten SFR properties to HFS.

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


	June 30, 2024		December 31, 2023
Land	$	189,694	$	183,359
Building	758,777		733,437
Capital improvements	145,465		138,869

Total gross investment in SFR properties	1,093,936		1,055,665
Accumulated depreciation	(68,612)		(53,737)
Investment in SFR properties, net	$	1,025,324	$	1,001,928

Depreciation expense for the six months ended June 30, 2024 and 2023 totaled $15.0 million and $13.9 million, respectively, and is included in other income (loss), net in the Consolidated Statements of Operations.

As of June 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	41,955		—		41,955
Transfers to HFS	(3,270)		3,270		—
Dispositions	(1,140)		(2,372)		(3,512)

Accumulated depreciation	(14,895)		(152)		(15,047)
Balance at June 30, 2024	$	1,023,007	$	2,317	$	1,025,324

Rithm Capital generally rents its SFR properties under non-cancelable lease agreements with a term of one to two years. 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	132	—	132
Transfer to HFS	(10)	10	—
Disposition of SFR units	(4)	(8)	(12)

Balance at June 30, 2024	4,000	8	4,008