-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Fym3r0j9S06bbrWcZB8VSDmFoGR2ntQr2RMO4a9C+3dTBev4gFOBH7VLP6k7HfKa QVubGEdJ6Kzj2omuQptZtw== 0000950116-01-500461.txt : 20010710 0000950116-01-500461.hdr.sgml : 20010710 ACCESSION NUMBER: 0000950116-01-500461 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010330 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010706 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAIT INVESTMENT TRUST CENTRAL INDEX KEY: 0001045425 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 232919819 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14760 FILM NUMBER: 1675744 BUSINESS ADDRESS: STREET 1: 1818 MARKET ST STREET 2: 28TH FL CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2155465119 MAIL ADDRESS: STREET 1: 1521 LOCUST ST STREET 2: 6TH FL CITY: PHILADELPHIA STATE: PA ZIP: 19102 FORMER COMPANY: FORMER CONFORMED NAME: RESOURCE ASSET INVESTMENT TRUST DATE OF NAME CHANGE: 19970904 8-K 1 eight-k.txt 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) March 30, 2001 RAIT Investment Trust ----------------------------------------------------- (Exact name of registrant as specified in its charter) Maryland 1-14760 23-2919819 - ----------------------- -------------- ------------------ (State of incorporation (Commission (I.R.S. Employer or organization) File Number) Identification No.) 1818 Walnut Street, 28th Floor, Philadelphia, PA 19103 ------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including are code (215) 861-7900 ------------------------ Item 5 Other Events and Regulation FD Disclosure Earnings Announcement. We have announced our earnings for the second quarter of 2001. A copy of the form of announcement is set forth in Exhibit 99.1 hereto, which is incorporated by reference in this Item 5. This incorporation by reference, however, excludes our web site, to which we refer in the press release. Recent Investments and Commitments. On March 28, 2001, we completed a public offering of 2,800,000 shares. Following that offering, we have made, or committed to make, the eight loans described below. In June 2001, we committed to provide $2.0 million of first mortgage financing to a limited liability company that has agreed to acquire a 152 unit apartment complex in Horseheads, New York for $2.3 million. We anticipate that the transaction will close early in our third fiscal quarter. In June 2001, we provided $7.0 million of mezzanine financing to a limited liability company in connection with its acquisition of a hotel property in Coral Gables, Florida for $24.4 million. The acquisition also was financed by a $16.3 million first mortgage loan from a third party. Our loan is secured by a pledge of 100% of the membership interests of the borrower, a pledge of 100% of the membership interests of the non-member manager of the borrower and a conditional assignment of the management agreements with Omni Hotels Management Corporation, the current manager of the property. In June 2001, we provided $1.6 million of financing in connection with the borrower's acquisition of a loan from Resource America, Inc. with respect to an 81 unit apartment complex in Middletown, Connecticut. Our loan is secured by a collateral assignment of all of the underlying documents evidencing the loan acquired from Resource America, including assignment of the first mortgage encumbering the property. In June 2001, we provided $7.5 million of financing with respect to a residential real property located in Naples, Florida with an appraised value of $20.0 million. Our loan is to a limited liability company and is guaranteed by the members of the borrower. The guaranty is secured by a first priority mortgage on the residential real property. We are currently negotiating with Commerce Bank to sell a $5.0 million participation interest in the financing. We cannot assure you, however, that an interest ultimately will be sold to Commerce Bank, or as to the size of any interest we finally may sell. In June 2001, we provided $5.5 million of mezzanine financing in connection with a limited partnership's acquisition of a 516 unit apartment building in Philadelphia, Pennsylvania for $19.0 million, including closing costs. The acquisition also was financed by a $13.5 million first mortgage loan from a third party. Our financing was in the form of a loan to the sole limited partner of the acquiring partnership, which contributed the funds to the acquiring partnership. To secure our loan, the partners of the acquiring partnership pledged all of their ownership interest in the acquiring partnership to us. Through a subsidiary, we also own 50% of, and are the managing member of, the general partner of the acquiring partnership. In addition, we are the non-member manager of the general partner of the borrower, which is the sole limited partner of the acquiring partnership. Further, Brandywine Construction & Management, Inc., an affiliate of Resource America, provides management services to the property. In April 2001, we made a $9.1 million loan, secured by a first lien mortgage on an office complex located in Willow Grove, Pennsylvania, and a pledge of the equity interests of the borrower. We simultaneously entered into a master lease agreement with the borrower under which we leased the premises for a term of 29 years and 11 months and were given all rights to operate and lease the property. The monthly rent under the master lease is equal to the debt service payment on the loan plus approximately $10,000. The monthly net operating income from the property is approximately $86,000. Although we do not own the premises, we are the manager of the borrower's general partner, with all rights to control the borrower. As part of this transaction, we received a purchase option to purchase the limited partnership interests in the borrower for fair market value upon the death of the last to die of the limited partners. Approximately 20% of the property is operated as short-term office space. Because REITs are subject to restrictions with respect to the income derived from operating short-term office space, we subleased this portion of the office complex to a subsidiary of Brandywine Construction & Management for an annual rent of $410,000. Also in April 2001, we made an $8.6 million loan, secured by a first lien mortgage on an office complex located in Cherry Hill, New Jersey and a pledge of the equity interests of the borrowers. We entered into a master lease agreement with the borrowers to lease the property for a term of 40 years. The monthly rent under the master lease is equal to the debt service payment on the loan plus approximately $10,000. The monthly net operating income from the property is approximately $76,000. We are the manager of the borrowers with all rights to control the borrowers. We received a purchase option from the members of the sole member of the borrowers to purchase their membership interests for fair market value upon the death of the last to die of the members. Approximately 15% of the property is operated as short-term office space. Therefore, we subleased this portion of the office complex to a subsidiary of Brandywine Construction & Management for an annual rent of $242,000. In March, 2001, we provided $3.2 million of mezzanine financing in connection with a limited liability company's acquisition of and construction of leasehold and other capital improvements to a 184,000 square foot office building in Voorhees, New Jersey. The total cost of the acquisition and improvements was approximately $19.7 million. The project was also financed by a $15.1 million first mortgage loan from a third party. Our loan is secured by a pledge of 100% of the membership interests in the borrower. As additional security, the borrower granted to us an option to purchase the property, for which a memorandum of purchase option was recorded. The loan is further secured by an assignment of the management agreement with The Arden Group, Inc., the current manager of the property. Item 7 Financial Statements and Exhibits (c) Exhibits Exhibit 99.1-Form of news release SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. RAIT INVESTMENT TRUST By: /s/ Ellen J. DiStefano ----------------------- Ellen J. DiStefano Chief Financial Officer EX-99.1 2 ex99-1.txt EX-99.1 Exhibit 99.1 RAIT Announces Record Earnings Second Quarter Highlights: o Return on equity reaches 18.2% (eighth consecutive quarter in excess of 17.0%). o Revenues increase $3.1 million (31.5%) from 2nd quarter 2000. o Net income increases $2.0 million (65.3%) from 2nd quarter 2000. o FFO per diluted share increases to $0.62 for the second quarter 2001 (based on 9.3 million weighted average shares outstanding) from $0.61 for the first quarter 2001 (based on 6.2 million weighted average shares outstanding.) PHILADELPHIA--July 5, 2001--RAIT Investment Trust ("RAIT") (AMEX: RAS), a company that provides specialized financing to the mid-sized real estate market, reported funds from operations ("FFO") of $5.8 million or $0.62 per share (basic and diluted) for the second quarter ended June 30, 2001 (based on 9.3 million weighted average shares outstanding) as compared to $3.7 million or $0.60 per share (basic and diluted) for the second quarter ended June 30, 2000 (based on 6.2 million weighted average shares outstanding). FFO was $9.7 million or $1.23 per share basic ($1.22 per share diluted) for the six months ended June 30, 2001 (based on 7.9 million weighted average shares outstanding) as compared to $7.4 million or $1.20 per share basic ($1.19 per share diluted) for the six months ended June 30, 2000 (based on 6.2 million weighted average shares outstanding). Revenues were $12.8 million and $9.7 million for the quarters ended June 30, 2001 and 2000, respectively and were $23.1 million and 18.5 million for the six months ended June 30, 2001 and 2000, respectively. RAIT's return on equity (FFO / average shareholders' equity) for the quarter ended June 30, 2001 was 18.2%. This is the eighth consecutive quarter that the Company's return on equity has exceeded 17.0%. Net income was $4.9 million ($0.53 per share basic and diluted), after depreciation and amortization of $811,000 for the second quarter ended June 30, 2001 (based on 9.3 million weighted average shares outstanding), as compared to $3.0 million ($0.48 per share basic and diluted), after depreciation and amortization of $724,000 for the second quarter ended June 30, 2000 (based on 6.2 million weighted average shares outstanding). Net income was $12.6 million ($1.61 per share basic, $1.60 per share diluted) after depreciation and amortization of $1.7 million ($0.21 per share basic and diluted) for the six months ended June 30, 2001 (based on 7.9 million weighted average shares outstanding) as compared to $6.1 million ($0.98 per share basic and diluted) after depreciation and amortization of $1.3 million ($0.22 per share basic and diluted) for the six months ended June 30, 2000 (based on 6.2 million weighted average shares outstanding). During the six months ended June 30, 2001 the Company completed the purchase of two loans underlying one of its property interests for $20.3 million. The difference between the purchase price and the underlying face value of the loans resulted in the consolidated extinguishment of debt, which was recorded as an extraordinary gain of $4.6 million ($0.59 per share basic and diluted). As of June 30, 2001, total assets were $312.9 million (including $166.7 million of investments in real estate loans and $124.6 million of investments in real estate). As of December 31, 2000, total assets were $270.1 million, (including $140.7 million of investments in real estate loans and $107.9 million of investments in real estate). Total equity was $131.6 million at June 30, 2001 and $86.7 million at December 31, 2000. On June 11, 2001, RAIT declared a second quarter dividend of $0.52 per share (payable on July 13, 2001 to shareholders of record on June 22, 2001). This dividend represents an annualized yield of 13%. Including this second quarter dividend, RAIT has paid a regular quarterly cash dividend of at least $0.51 per share during each of the past twelve quarters. In the second quarter of 2001, RAIT issued an additional 420,000 shares associated with the over allotment of its first quarter offering, bringing the total Common Shares sold during the first six months of 2001 to 3,220,000. at $13.75 per share. After underwriting discounts and commissions, the Company received total net proceeds of $41.8 million during the first six months of 2001. The net proceeds were used to originate or acquire commercial mortgage loans and other interests in real estate. RAIT Investment Trust is a publicly traded financial company focused on the commercial real estate industry. RAIT provides structured financing to private and corporate owners of real estate nationwide, including senior and junior mortgage debt and mezzanine lending, and acquires real estate for its own account. RAIT, which is taxed as a real estate investment trust, seeks to deliver superior risk-adjusted returns on equity to shareholders by providing tailored and flexible financing products to its customers. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding RAIT Investment Trust's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward looking statement, see "Risk Factors" in the Company's Registration Statement and 2000 Form 10K filed with the Securities and Exchange Commission. NOTE: You may download the Webcast of our Quarterly Earnings Conference Call beginning at 11 AM EST on Friday, July 6, 2001 by clicking on the Webcast link on our homepage at www.raitinvestmenttrust.com . SOURCE: RAIT Investment Trust CONTACT: Ellen F. Warren 215-886-1666 ellen@levywarren.com Visit our web site at www.raitinvestmenttrust.com RAIT INVESTMENT TRUST and Subsidiaries Consolidated Statements of Income (Unaudited)
For the three months For the six months ended June 30, ended June 30, ------------- ------------- REVENUES 2001 2000 2001 2000 ---- ---- ---- ---- Mortgage interest income $ 5,388,647 $ 4,046,307 $ 10,232,472 $ 8,707,033 Rental income 5,836,733 4,936,921 10,619,125 8,786,931 Fee income and other 1,479,660 557,317 2,157,360 699,300 Investment income 61,872 171,619 137,193 343,808 ------------ ------------ ------------ ------------ Total revenues 12,766,912 9,712,164 23,146,150 18,537,072 COSTS AND EXPENSES Interest 2,808,210 3,212,113 5,958,285 6,014,409 Property operating expenses 3,115,494 2,284,384 5,439,170 4,243,970 Salaries and benefits 560,421 278,049 1,232,293 526,344 General and administrative 435,842 172,359 759,231 274,174 Depreciation and amortization 810,834 723,508 1,651,084 1,349,809 ------------ ------------ ------------ ------------ Total costs and expenses 7,730,801 6,670,413 15,040,063 12,408,706 ------------ ------------ ------------ ------------ Net income before minority interest and extraordinary gain 5,036,111 3,041,751 8,106,087 6,128,366 Minority interest (94,700) (52,704) (94,936) (52,704) Extraordinary gain--consolidated extinguishment of indebtedness underlying investment in real estate -- -- 4,633,454 -- ------------ ------------ ------------ ------------ Net Income $ 4,941,411 $ 2,989,047 $ 12,644,605 $ 6,075,662 ============ ============ ============ ============ Earnings per share-basic: Net income per common share before minority interest and extraordinary gain $ .54 $ .48 $ 1.03 $ .98 Minority interest (.01) -- (.01) -- Extraordinary gain -- -- .59 -- ------------ ------------ ------------ ------------ Net income $ .53 $ .48 $ 1.61 $ .98 ============ ============ ============ ============ Weighted average common shares-basic 9,253,722 6,218,995 7,836,522 6,209,061 ============ ============ ============ ============ Earnings per share-diluted: Net income per common share before minority interest and extraordinary gain $ .54 $ .48 $ 1.02 $ .98 Minority interest (.01) -- (.01) -- Extraordinary gain -- -- .59 -- ------------ ------------ ------------ ------------ Net income $ .53 $ .48 $ 1.60 $ .98 ============ ============ ============ ============ Weighted average common shares-diluted 9,345,657 6,225,788 7,908,400 6,215,697 ============ ============ ============ ============ Funds from operations (1) $ 5,752,245 $ 3,712,555 $ 9,662,235 $ 7,425,471 ============ ============ ============ ============ Funds from operations per common share-basic $ .62 $ .60 $ 1.23 $ 1.20 ============ ============ ============ ============ Funds from operations per common share-diluted $ .62 $ .60 $ 1.22 $ 1.19 ============ ============ ============ ============
(1) Funds from operations ("FFO") represent net income before depreciation and amortization and exclude extraordinary gain from consolidated extinguishment of indebtedness underlying investment in real estate. -----END PRIVACY-ENHANCED MESSAGE-----