8-K

UNITED STATES
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): May 4, 2010

CAPITAL TRUST, INC.

(Exact name of registrant as specified in its charter)

Maryland	1-14788	94-6181186
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

410 Park Avenue, 14th Floor, New York, NY	10022
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 655-0220

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On May 4, 2010, Capital Trust, Inc. (the “Company”) issued a press release reporting the financial results for its fiscal quarter ended March 31, 2010. A copy of the press release is attached to this Current Report on Form 8-K (this “Current Report”) as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 2.02 disclosure.

On May 5, 2010, the Company held a conference call to discuss the financial results of the Company for its first fiscal quarter ended March 31, 2010. A copy of the transcript of the call is attached to this Current Report as Exhibit 99.2 and is incorporated herein solely for purposes of this Item 2.02 disclosure. The transcript has been selectively edited to facilitate the understanding of the information communicated during the conference call.

The information in this Current Report, including the exhibits attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in this Current Report, including the exhibits, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act, regardless of any incorporation by reference language in any such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit Number	Description
99.1	Press Release dated May 4, 2010
99.2	Transcript from first quarter earnings conference call held on May 5, 2010

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.

CAPITAL TRUST, INC.
By:	/s/ Geoffrey G. Jervis
	Name:	Geoffrey G. Jervis
	Title:	Chief Financial Officer

Date: May 7, 2010

Exhibit Index

Exhibit Number		Description
	99.1	Press Release dated May 4, 2010
	99.2	Transcript from first quarter earnings conference call held on May 5, 2010

EX-99.1

Exhibit 99.1

Contact: Douglas Armer
(212) 655-0220

Capital Trust Reports First Quarter 2010 Results

NEW YORK, NY — May 4, 2010 — Capital Trust, Inc. (NYSE: CT) today reported results for the quarter ended March 31, 2010.

• Operating Results:

• Reported a net loss of $63.5 million or $2.84 per share for the first quarter.

• Net loss was driven primarily by loan loss provisions and securities impairments of $72.0 million for the quarter.

• Consolidated Variable Interest Entities (“VIEs”)

• Effective January 1, 2010 new accounting guidance changed the criteria for consolidation of VIEs, requiring the Company to consolidate an additional seven CMBS and CDO entities. At December 31, 2009, the seven VIEs were recorded as securities with a carrying value of $78.5 million, and, at March 31, 2009, these seven VIEs were carried as $2.82 billion of loans and $2.79 billion of securitized debt obligations. As of March 31, 2010, the Company’s consolidated balance sheet includes an aggregate $3.8 billion of assets and $3.9 billion of liabilities related to 11 consolidated VIEs.

• Portfolio Performance:

• At quarter end, the Company’s loan portfolio consisted of 141 assets with an aggregate net book value of $3.9 billion. During the first quarter, performance-related activity included:

• $52.2 million of provisions for loan losses recorded on six loans.

• Five loans with an aggregate outstanding principal balance of $109.1 million added to the watch list.

• The Company’s securities portfolio was comprised of 65 securities with an aggregate net book value of $599.4 million. During the first quarter, performance-related activity included:

• $36.0 million of impairments recorded on five securities

• One security with a book value of $19.6 million was added to the Company’s watch list.

Page 1 of 10

• Originations/Repayments/Dispositions:

• During the quarter, the Company originated two new investments ($35.9 million) for its investment management vehicles and did not originate any new balance sheet investments.

• Full and partial repayments during the first quarter totaled $45.3 million, and fundings pursuant to previously existing loan commitments totaled $185,000.

• Recourse Debt Obligations:

• At quarter end, the Company had reduced the aggregate outstanding principal balance under its three repurchase agreements by $134.8 million from the amount outstanding as of completion of the March 2009 debt restructuring, $5.5 million of which occurred during the first quarter. This repayment allowed the Company to qualify for the maturity date extension of its repurchase agreements and its senior credit facility to March 2011.

Balance Sheet

Total assets were $4.6 billion at March 31, 2010. The Company’s Interest Earning Assets, defined as Loans receivable and Securities on the Company’s balance sheet, are summarized below:

Interest Earning Assets

• Interest earning assets totaled $4.4 billion at March 31, 2010 and had a weighted average yield of 3.13%.

• $3.8 billion (86%) of the portfolio was comprised of loan investments with a weighted average yield of 2.55%.

• $599.4 million (14%) of the portfolio was comprised of securities investments with a weighted average yield of 6.88%.

At quarter end, total loan-specific reserves were $648.0 million against 27 loans. 14 of the loans against which the Company booked reserves were non-performing and 13 of the loans were performing. The Company does not accrue interest on loans against which it has provisions.

As of March 31, 2010, 26 loans with an aggregate book balance of $991.0 million were categorized as watch list loans. Watch list loans are performing loans (with no credit loss provisions) that the Company aggressively monitors and manages due to increased risk of potential future non-performance and/or loss.

As of March 31, 2010, impairments in the securities portfolio totaled $78.2 million against 12 bonds; 13 securities with an aggregate book value of $99.6 million were identified as watch list securities. Watch list securities are securities (with no credit impairments) that the Company aggressively monitors and manages due to increased risk of potential future impairments and/or loss.

Page 2 of 10

At March 31, 2010, the Company had two equity investments in unconsolidated subsidiaries with an aggregate book value of $2.7 million. Both investments are co-investments in funds sponsored and managed by the Company.

Interest Bearing Liabilities

On March 16, 2009, the Company entered into a restructuring of substantially all of its recourse liabilities. Terms of the debt restructuring are detailed in the Company’s SEC filings.

The book value of the Company’s Interest Bearing Liabilities totaled $4.5 billion at March 31, 2010 and were comprised of non-recourse securitized debt obligations ($3.9 billion, 85% of total), repurchase obligations ($444.7 million, 10%), borrowings under a senior credit facility ($99.0 million, 2%) and junior subordinated notes ($129.1 million, 3%). At quarter end, the Company’s $4.5 billion of Interest Bearing Liabilities carried a weighted average cash cost of 1.38% and a weighted average all-in cost of 1.59%.

During 2009 and continuing into 2010, CMBS downgrades and loan non-performance caused cash flow to the retained classes of the Company’s CDOs to be either wholly or partially redirected to amortize the balances of the senior bondholders in these CDOs. As of quarter end, the Company currently receives cash collateral management fees from all four of its CDOs but cash interest payments and dividends from only one (CDO III).

Other Items

At March 31, 2010, the Company’s GAAP shareholders’ deficit was $(290.6) million. Based on 22.4 million shares outstanding (fully diluted basis) at quarter end, book value per share was $(12.99).

GAAP shareholders’ equity declined by $121.4 million during the quarter primarily due to (i) a $41.8 million negative adjustment to equity upon the adoption of new accounting guidance requiring the consolidation of seven VIEs, (ii) a $52.2 million provision for loan losses and (iii) $36.0 million of impairments of securities. This was offset by $8.6 million in net income from operations (which excluded provisions for loan losses and impairments of securities).

In light of the credit reserve activity at the Company, and available tax-basis net operating losses from prior periods, it is not expected that the Company will have taxable income for 2010 and, therefore, will likely not be required to pay a dividend under REIT rules. Furthermore, any dividend payment is subject to the terms of the debt restructuring and would be payable, to the maximum extent possible, in stock (in lieu of cash).

Current and prospective sources of liquidity, as of March 31, 2010, include unrestricted cash ($26.0 million), net operating cash flow, as well as principal payments and asset disposition proceeds. Prospective uses of liquidity include operating expenses, interest expense, unfunded loan commitments ($4.7 million), capital commitments to the Company’s managed funds ($17.8 million) and debt repayments.

Page 3 of 10

Investment Management

All of the Company’s investment management activities are conducted through its wholly-owned, taxable, investment management subsidiary, CT Investment Management Co., LLC (“CTIMCO”). At March 31, 2010, CTIMCO managed five private equity funds and one separate account with total investments of $1.3 billion and undeployed equity commitments of approximately $737.5 million.

Three of these funds and the separate account have ended their investment periods and are liquidating in the ordinary course of business. The other funds, CT Opportunity Partners I (“CTOPI”) and CT High Grade Partners II (“High Grade II”), are currently investing and capitalized with $540 million and $667 million of total equity commitments, respectively. Capital Trust, Inc. has committed to invest $25.0 million as a limited partner in CTOPI, of which $7.2 million has already been funded and $17.8 million remains undrawn. The Company does not have a co-investment in High Grade II.

Revenues from third party investment management fees totaled $3.0 million in the first quarter of 2010. In addition to managing its parent, Capital Trust, Inc., and its third party private equity mandates, CTIMCO is the collateral manager for all four of the Company’s CDOs and two additional CDOs in which the Company is an investor. CTIMCO is also the named special servicer on $2.6 billion of loans.

Page 4 of 10

Comparison of Results of Operations: Three Months Ended March 31, 2010 vs. March 31, 2009
(in thousands, except per share data)

	2010			2009			$ / % Change			% Change
Income from loans and other investments:
Interest and related income	$	39,970		$	33,239		$	6,731			20.3	%
Less: Interest and related expenses		31,252			21,268			9,984			46.9	%
Income from loans and other investments, net		8,718			11,971			(3,253	)		(27.2	%)
Other revenues:
Management fees from affiliates		3,016			2,879			137			4.8	%
Servicing fees		1,511			1,179			332			28.2	%
Other interest income		8			128			(120	)		(93.8	%)
Total other revenues		4,535			4,186			349			8.3	%
Other expenses:
General and administrative		4,736			8,457			(3,721	)		(44.0	%)
Depreciation and amortization		6			7			(1	)		(14.3	%)
Total other expenses		4,742			8,464			(3,722	)		(44.0	%)
Total other-than-temporary impairments of securities		(35,987	)		(14,646	)		(21,341	)		145.7	%
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		16,164			5,624			10,540			187.4	%
Impairment of real estate held-for-sale		—			(1,333	)		1,333			(100.0	%)
Net impairments recognized in earnings		(19,823	)		(10,355	)		(9,468	)		N/A
Provision for loan losses		(52,217	)		(58,763	)		6,546			(11.1	%)
Valuation allowance on loans held-for-sale		—			(10,363	)		10,363			(100.0	%)
Income (loss) from equity investments		370			(1,766	)		2,136			N/A
Loss before income taxes		(63,159	)		(73,554	)		10,395			(14.1	%)
Income tax provision (benefit)		293			(408	)		701			N/A
Net loss		($63,452	)		($73,146	)	$	9,694			(13.3	%)
Net loss per share — diluted		($2.84	)		($3.28	)	$	0.44			(13.4	%)
Dividend per share	$	0.00		$	0.00		$	0.00			N/A
Average LIBOR		0.23	%		0.46	%		(0.23	%)		(49.4	%)

Income from loans and other investments, net

As discussed above, recent accounting guidance has required the Company to consolidate additional entities beginning January 1, 2010. As a result, an increase in interest earning assets of $2.0 billion from March 31, 2009 to March 31, 2010 resulted in a material increase in interest income for the first quarter of 2010 compared to the first quarter of 2009. Similarly, an increase in interest bearing liabilities of $2.6 billion resulted in a material increase in interest expense for the first quarter of 2010 compared to the first quarter of 2009. In addition, an increase in non-performing loans and a decrease in average LIBOR contributed to a decrease in net interest income during the first quarter of 2010 compared to the first quarter of 2009.

Management fees from affiliates

Base management fees from the Company’s investment management business increased by $137,000, or 5%, during the first quarter of 2010 compared to first quarter of 2009. The increase was attributed primarily to an increase of $139,000 in fees from CT High Grade II due to additional investment activity.

Page 5 of 10

Servicing fees

Servicing fees increased $332,000 in the first quarter of 2010 compared to the first quarter of 2009. Servicing fees in both periods were primarily one-time fees for modifications to loans for which CTIMCO is named special servicer.

General and administrative expenses

General and administrative expenses include personnel costs, operating expenses, professional fees and, for the first quarter of 2010, costs associated with newly consolidated VIEs. Total general and administrative expenses decreased $3.7 million, or 44%, between the first quarter of 2009 and the first quarter of 2010. The decrease in 2010 was primarily due to $3.1 million of restructuring costs incurred in the first quarter of 2009. Personnel costs, including stock-based compensation, also decreased $651,000 relative to the first quarter of 2009. This decrease was offset by $465,000 of additional expenses in the first quarter of 2010 from newly consolidated entities.

Net impairments recognized in earnings

During the first quarter of 2010, the Company recorded a gross other-than-temporary impairment of $36.0 million on five securities that had an adverse change in cash flow expectations. Of this amount, $16.2 million (the amount considered fair value adjustments in excess of credit impairment) was included in other comprehensive income, resulting in a net $19.8 million impairment (the amount considered credit impairment) included in earnings. During the first quarter of 2009, the Company similarly recorded a gross other-than-temporary impairment of $14.6 million on six securities, of which $5.6 million (the amount considered fair value adjustments in excess of credit impairment) was included in other comprehensive income, and $9.0 million (the amount considered credit impairment) was included in earnings. In the first quarter of 2009, the Company also recorded an other-than-temporary impairment of $1.3 million on real estate held-for-sale.

Provision for loan losses

During the first quarter of 2010, the Company recorded an aggregate $52.2 million provision for loan losses against six loans, including $25.2 million on five loans in consolidated VIEs. During the first quarter of 2009, the Company recorded an aggregate $58.8 million provision for loan losses against eight loans, including $42.1 million on six loans in consolidated VIEs.

Valuation allowance on loans held-for-sale

During the first quarter of 2010, the Company did not record any valuation allowance against loans classified as held-for-sale. During the first quarter of 2009, a $10.4 million valuation allowance was recorded against two loans that are classified as held-for-sale to reflect these assets at fair value.

Page 6 of 10

Income (Loss) from equity investments

The income from equity investments during the first quarter of 2010 resulted primarily from the Company’s $372,000 share of income from CTOPI, primarily due to fair value adjustments on the underlying investments. The loss from equity investments during the first quarter of 2009 resulted primarily from the Company’s share of losses at both CTOPI, $1.6 million, and Fund III, $205,000. The loss recorded in 2009 with respect to CTOPI was also primarily due to fair value adjustments on the underlying investments.

Income tax provision (benefit)

During the first quarter of 2010 the Company recorded an income tax provision of $293,000 which was primarily due to GAAP-to-tax differences for stock-based compensation to the Company’s employees. During the first quarter of 2009, the Company received $408,000 in tax refunds that were recorded as an offset to income tax expense.

Dividends

The Company did not pay any dividends in the first quarter of 2010 or 2009.

Page 7 of 10

******

The Company will conduct a management conference call at 10:00 a.m. Eastern Time on Wednesday, May 5, 2010 to discuss first quarter 2010 results. Interested parties can access the call toll free by dialing (800) 894-5910 or 785-424-1052 for international participants. The conference ID is “CAPITAL.” A recorded replay will be available from noon on Wednesday, May 5, 2010 through midnight on Wednesday, May 19, 2010. The replay call number is (800) 283-8486 or (402) 220-0869 for international callers.

Forward-Looking Statements

This news release contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to future financial results and business prospects. The forward-looking statements contained in this news release are subject to certain risks and uncertainties including, but not limited to, the success of the Company’s debt restructuring and its ability to meet the amortization required thereby, demands on liquidity, the impact of the current turmoil in the financial markets, the continued deterioration in the commercial real estate market, the continued credit performance of the Company’s loan and CMBS investments, its asset/liability mix, the effectiveness of the Company’s hedging strategy and the rate of repayment of the Company’s portfolio assets and the impact of these events on the Company’s cash flow, as well as other risks indicated from time to time in the Company’s Form 10-K and Form 10-Q filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events or circumstances.

About Capital Trust

Capital Trust, Inc. is a real estate finance and investment management company that specializes in credit sensitive structured financial products. To date, the Company’s investment programs have focused primarily on loans and securities backed by commercial real estate assets, and the Company has executed its business both as a balance sheet investor and as an investment manager. Capital Trust is a real estate investment trust traded on the New York Stock Exchange under the symbol “CT.” The Company is headquartered in New York City.

Page 8 of 10

Capital Trust, Inc. and Subsidiaries
Consolidated Balance Sheets
March 31, 2010 and December 31, 2009
(in thousands except per share data)

	March 31,			December 31,
	2010			2009
	(unaudited)
Assets
Cash and cash equivalents	$	26,004		$	27,954
Securities held-to-maturity		17,501			17,332
Loans receivable, net		739,150			766,745
Equity investments in unconsolidated subsidiaries		2,721			2,351
Accrued interest receivable		2,587			3,274
Deferred income taxes		1,711			2,032
Prepaid expenses and other assets		7,649			8,391
Subtotal		797,323			828,079
Assets of Consolidated Variable Interest Entities (“VIEs”)
Securities held-to-maturity		581,939			697,864
Loans receivable, net		3,188,364			391,499
Loans held-for-sale		—			17,548
Accrued interest receivable and other assets		4,358			1,645
Subtotal		3,774,661			1,108,556
Total assets	$	4,571,984		$	1,936,635
Liabilities & Shareholders’ Deficit
Liabilities:
Accounts payable and accrued expenses	$	5,081		$	8,228
Repurchase obligations		444,725			450,137
Senior credit facility		98,922			99,188
Junior subordinated notes		129,089			128,077
Participations sold		288,827			289,144
Interest rate hedge liabilities		4,130			4,184
Subtotal		970,774			978,958
Non-Recourse Liabilities of Consolidated VIEs
Accounts payable and accrued expenses		3,479			1,798
Securitized debt obligations		3,859,850			1,098,280
Interest rate hedge liabilities		28,515			26,766
Subtotal		3,891,844			1,126,844
Total liabilities		4,862,618			2,105,802
Shareholders’ deficit:
Class A common stock $0.01 par value 100,000 shares authorized, 21,834 and 21,796 shares issued and outstanding as of March 31, 2010 and December 31, 2009, respectively (“class A common stock”)		218			218
Restricted class A common stock $0.01 par value, 66 and 79 shares issued and outstanding as of March 31, 2010 and December 31, 2009, respectively (“restricted class A common stock” and together with class A common stock, “common stock”)		1			1
Additional paid-in capital		559,195			559,145
Accumulated other comprehensive loss		(51,585	)		(39,135	)
Accumulated deficit		(798,463	)		(689,396	)
Total shareholders’ deficit		(290,634	)		(169,167	)
Total liabilities and shareholders’ deficit	$	4,571,984		$	1,936,635

Page 9 of 10

Capital Trust, Inc. and Subsidiaries
Consolidated Statements of Operations
Three Months Ended March 31, 2010 and 2009
(in thousands, except share and per share data)
(unaudited)

	Three Months Ended
	March 31,
	2010			2009
Income from loans and other investments:
Interest and related income	$	39,970		$	33,239
Less: Interest and related expenses		31,252			21,268
Income from loans and other investments, net		8,718			11,971
Other revenues:
Management fees from affiliates		3,016			2,879
Servicing fees		1,511			1,179
Other interest income		8			128
Total other revenues		4,535			4,186
Other expenses:
General and administrative		4,736			8,457
Depreciation and amortization		6			7
Total other expenses		4,742			8,464
Total other-than-temporary impairments of securities		(35,987	)		(14,646	)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		16,164			5,624
Impairment of real estate held-for-sale		—			(1,333	)
Net impairments recognized in earnings		(19,823	)		(10,355	)
Provision for loan losses		(52,217	)		(58,763	)
Valuation allowance on loans held-for-sale		—			(10,363	)
Income (loss) from equity investments		370			(1,766	)
Loss before income taxes		(63,159	)		(73,554	)
Income tax provision (benefit)		293			(408	)
Net loss	$	(63,452	)	$	(73,146	)
Per share information:
Net loss per share of common stock:
Basic	$	(2.84	)	$	(3.28	)
Diluted	$	(2.84	)	$	(3.28	)
Weighted average shares of common stock outstanding:
Basic		22,335,540			22,304,887
Diluted		22,335,540			22,304,887
Dividends declared per share of common stock	$	—		$	—

Page 10 of 10

EX-99.2

Exhibit 99.2

Capital Trust Q1 ‘10 Earnings Call
May 5, 2010
10:00 AM ET

Operator:	Hello and welcome to the Capital Trust first quarter 2010 results conference call. Before we begin, please be advised that the forward-looking statements contained in this news release are subject to certain risks and uncertainties including, but not limited to, the success of the Company’s debt restructuring, the continued credit performance of the Company’s loan and CMBS investments, its asset/liability mix, the effectiveness of the Company’s hedging strategy, the rate of repayment of the Company’s portfolio assets and the impact of these events on the Company’s cash flow, as well as other risks indicated from time to time in the Company’s Form 10-K and Form 10-Q filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events or circumstances. There will be a Q&A session following the conclusion of today’s presentation. At that time, I will provide instructions for submitting a question to management. I will now turn the call over to Mr. Steve Plavin, CEO of Capital Trust. Please go ahead sir.
Steve Plavin:	Thank you. Good morning everyone. Thank you for joining us and for your interest in Capital Trust.
	With me are Geoff Jervis, our Chief Financial Officer and Tom Ruffing our Chief Credit Officer and Head of Asset Management.
	Last night we reported our results for the first quarter and filed our 10Q. CT reported a net loss of $63.5 million or $2.84 per share. The losses were largely the result of loan loss provisions and impairments totaling $72 million. Geoff will run you through the detailed numbers, but weak property level performance was the primary driver behind the increase in provisions and impairments.

During the quarter we also added five loans totaling $109 million and one security with a book value of $20 million to our loan and security watchlists.

We adopted new accounting guidance in the first quarter which required that we consolidate seven previously unconsolidated CMBS and CDO trusts. Securities that had a carrying value of $79 million at year-end are now accounted for as newly consolidated loans totaling $2.8 billion on our March 31, 2010 balance sheet. Our total assets were $4.6 billion dollars at quarter-end versus $1.9 billion at year-end — a $2.7 billion increase in total assets without any new balance sheet investments having been made during the quarter.

As a result of our newly consolidated loans, the magnitude of our surveillance, quarterly asset review and compliance has significantly increased. Our finance, accounting and asset management groups have risen to the challenge of the new accounting regime and again demonstrated why they are the best in class.

Despite considerable uncertainty in the overall economy, lenders and investors are beginning to return to commercial real estate. Pricing for high quality buildings, loans and securities continues to trend upward. Investors are coming off the sidelines and re-entering the market concerned that the best investment opportunities may soon be in the past. The supply of capital, at least temporarily, exceeds the availability of investment opportunities and that is reflected in asset pricing.

Yet, industry-wide, loan delinquencies continue to rise and property cash flows remain under intense pressure. The recovery in hotel revenue is at an early stage and improvement in office building leasing has not taken hold in most markets. Very significant cash flow recovery remains necessary for most loans originated in 2006 and 2007 despite improvements in cap rates and market liquidity. There are many loan workouts still to come as final maturity dates approach in 2011 and 2012.

	Our first quarter results continue to reflect the challenges of loans and securities originated at or near the peak of the market. We expect challenging conditions to persist for the next several quarters as commercial property performance typically lags the general economy.
	Before I turn it over to Geoff, I did want to note that one of the founders of CT, Craig Hatkoff, resigned from the Board of Capital Trust last week and I wanted to thank him for his many years of service and contributions to CT. We do not plan to replace Craig on the Board.
	And with that, I will turn it over to Geoff to run you through the first quarter financials.
Geoffrey Jervis:	Thank you Steve and good morning everyone.
	As Steve mentioned, last night we reported results for the first quarter, recording a net loss of $63 million or $2.84 per share.
	The net loss for the quarter was primarily the result of $72 million of reserves and impairments that we took against our loan and security portfolios, offset in part by income from operations.
	Specifically, we recorded credit loss provisions of $52 million against six loans and net credit-related impairments of $20 million on five securities.
	Exclusive of credit provisions and impairments, operating income was $8.6 million or 38 cents per share during the period. The primary component of this quarter’s operating income was,

•   Net interest margin of $8.7 million, down $1.1 million from last quarter and $3.3 million from the first quarter of 2009, with the reduction due to asset level non performance, loan and security repayments, lower LIBOR and impacts from our new consolidation regime as we are now consolidating additional variable interest entities or VIEs — an accounting change that I will discuss later

...other components of operating income were.

•   Other revenues of $4.5 million, up $1.4 million from the prior period, as we continued to grow our fee revenue at CT Investment Management Co, or CTIMCO.

•   Other expenses of $4.7 million, up $1.0 million from the prior quarter, due primarily to expenses related at newly consolidated VIEs,

•   $370,000 income from equity investments, as we picked up changes, primarily non cash, in the capital accounts at two of our private equity funds in which we have co-investments, and

•   A $293,000 provision for income taxes related to the operations of CTIMCO, a taxable subsidiary.

It is important to note that CT’s liabilities include required amortization provisions, in addition to those related to principal repayments. In the first quarter, we redirected over $8.0 million of income to our CDOs and repurchase agreements through net interest margin sweeps and other arrangements and paid $1.25 million of scheduled amortization on our senior credit facility.

Turning to the investment management business, our wholly owned subsidiary, CTIMCO, recorded total third party revenues of $4.5 million for the quarter. In addition to managing its parent, Capital Trust, CTIMCO operates 6 third party private equity vehicles, two of which, CT Opportunity Partners I and CT High Grade Partners II, are currently investing and have over $738 million of uncalled equity capital available for investment. CTIMCO also earns revenue as a CDO collateral manager, and as a special servicer. During the quarter, special servicing fees were $1.5 million, up $1.3 million from the previous quarter as we continued to grow our third party business.

Over to the balance sheet,

•   This quarter, you will notice that our balance sheet now has a materially different presentation than in the past. Specifically, the company’s assets and liabilities are segregated into those held directly and those representing the assets and liabilities of certain CMBS and CDO trusts, or variable interest entities (referred to as VIEs), that we are required to consolidate. Effective January 1st, in accordance with new accounting guidance (known as FAS 167), we consolidated seven additional CMBS and CDO trusts that were previously accounted for at our amortized cost, on a net basis, as securities. At year-end, these seven trusts were carried, as securities, at $79 million, and at March 31, 2010 the $79 million security position was eliminated and replaced with $2.82 billion of loans and securitized debt obligations of $2.79 billion. In the past, the only VIEs that we consolidated were the 4 CDOs that were issued by CT. Now, with the consolidation of the 7 new VIEs, our total VIE assets were $3.77 billion and our total VIE liabilities were $3.89 billion at March 31st.

•   Starting at the top of the balance sheet, Cash at quarter end was $26 million, down $2 million from year-end. Changes in cash resulted from the Company’s cash flow from operations being less than the amount necessary to make all of our net interest income sweep and other

      amortization payments to our various lenders. Under the terms of our March debt restructuring, our only “financial” covenant requires maintenance of a minimum cash balance of $5 million, a test that we complied with this quarter. Cash represents the primary source of CT’s liquidity and is earmarked to meet the Company’s unfunded commitments that include $5 million on its loan portfolio and $18 million to its private equity fund co-investments.

•   At quarter end, our Securities portfolio was comprised of 65 securities with a total net book value of $599 million (7 securities with a carrying value of $17.5 million being held directly and the balance being in VIEs). At year end, our Securities portfolio was carried at $715 million and the reductions in the balance from year end are attributable to a $79 million reduction due to the reclassification of the 7 VIEs that we now consolidate, $4 million of paydowns and $36 million of impairments. In total, we have 12 impaired securities in the portfolio with total gross book value of $92 million and total impairments of $78 million. In addition, we have 13 securities with a total book value of $100 million on our watch list.

•   Over to Loans, at quarter end, we held 141 loans with a total carrying value of $3.9 billion. Excluding the consolidation of $2.8 billion of loans in the seven CMBS and CDO trusts I mentioned earlier, significant activity included reserves of $52 million and full and partial repayments of $24 million. In total, the Company has 27 loans totaling $875 million of gross book value with recorded reserves of $648 million. The Company’s loan watch list is comprised of performing loans of concern that do not carry credit reserves, included 26 loans with a total book balance of $991 million. Looking only at the directly held portfolio, the Company held 35 loans with a carrying value of $739 million and the reserve activity on this portfolio was $27 million for the quarter with 9 total watchlist loans with a carrying value of $245 million.

•   In the loans held for sale account, there was no balance at quarter end as we completed the sale of our one $18 million loan that was previously classified as held-for-sale.

•   Equity investments in unconsolidated subsidiaries reflects our co- investments in certain of our investment management funds. The balance is comprised of a small remaining position in CT Mezzanine Partners III, and our $25 million co-investment in CT Opportunity Partners I, of which we have funded $7.2 million to date. Differences between our fundings and the carrying value of this account are almost exclusively due to the pick up of non cash fair value adjustments at the fund. The fund carries its assets and liabilities at fair value, as opposed to amortized cost, with periodic changes in these values flowing though the fund’s income statement — changes that we pick up under the equity method of accounting.

•   On the liability side, we continued to reduce borrowings under our repurchase agreements, with total outstanding balances at quarter end of $445 million, down $6 million from year-end (and down approximately $135 million since the closing of the restructuring). As a result, on March 1st, we made the final payment necessary to qualify for the one-year extension provided for under our March 2009 restructuring, extending the maturity of all our repurchase obligations to March 2011.

•   Our senior credit facility balance declined slightly, as mandatory amortization payments exceeded capitalized interest provisions. This facility was also restructured in March of last year in order to be co- terminus with the repurchase agreements. As a result, the facility maturity date automatically extended to March 2011 when we extended the repurchase facilities.

•   Our junior subordinated notes, also restructured in 2009, continue to accrete to their restructured face balance of $144 million. These debentures carry an interest rate of 1% through 2012, reverting back to their prior coupon schedule thereafter until maturity in 2036.

	•   Looking at our securitized debt, this account represents the liabilities of our consolidated VIEs, our 4 CT CDOs and the 7 newly consolidated trusts. During the quarter, this account increased by $2.8 billion as a result of the consolidation, offset in part by a reduction of $28 million from repayments due to the application of collateral principal proceeds and interest income redirection.
	•   Interest rate hedge liabilities increased by $2 million from quarter to quarter with the change in value picked up as a decrease to equity.
	•   Finally, our shareholders equity account ended the quarter at a deficit of $291 million, a decrease of $121 million from year-end — driven by a one time adjustment of $42 million in conjunction with the adoption of FAS 167 (an adjustment that will reverse itself over time), and $88 million of loan and security impairments...offset in part by net operating income of $8.6 million... and...on a per share basis, book value per share stood at negative $12.99 at March 31st.
	With that, I will turn it back to Steve.
Steve Plavin:	Thank you and we’d like at this point to open it up to any questions.
Operator:	If you would like to ask a question, please press the “star” then “one” on your touchtone phone. You may withdraw your question at any time by pressing the “pound” key. Once again to ask a question press the “star” and “one” on your touchtone phone and we’ll pause for a moment to allow questions to enter the queue. Our first question comes from the side of Alan Adams, a private investor.
Alan Adams:	Good morning. I’ve taken an interest in the company and I was wondering, one, who is responsible for responding to investor relations questions on the Internet or if there’s a better way to communicate with the company? And two, if you’re satisfied as management with the performance to-date and what adjustments are being made to maybe improve the stock price? I know there’s been a bump recently.

Geoffrey Jervis:	I’ll answer the first question. I’m responsible for — this is Geoff Jervis. I’m responsible for the investor inquiries and if you are having any issue getting responses from our website, my apologies and please, just email again. We’ll make sure to be more diligent on those inquiries.
Steve Plavin:	Again in regard to your second question, we are disappointed with the performance that we have achieved, we are very actively and aggressively managing our existing portfolio of assets to try and maximize those recoveries, to do everything that we can do to improve the performance of the portfolio and the company going forward.
Alan Adams:	Thank you.
Operator:	Once again if you’d like to ask a question please press the “star” then “one” on your touchtone phone. Our next question comes from the side of J.F. Fanger with Dean.
J.F. Fanger:	Is there any stated reason for [Craig] Hatkoff resigning from the Board? And what financial arrangements have you made with him with respect to his retirement?
Steve Plavin:	There are no financial arrangements made with him with respect to his resignation and he resigned for personal reasons.
Operator:	And at this time, it seems we have no additional questions.
Steve Plavin:	Thank you everyone
Operator:	That concludes today’s conference. You may disconnect at this time.
	END