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): August 2, 2012

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 (see General Instruction A.2. below):

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

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

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

¨ 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 August 2, 2012, Capital Trust, Inc. (the “Company”) issued a press release reporting the financial results for its fiscal quarter ended June 30, 2012. 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 August 2, 2012, the Company held a conference call to discuss the financial results of the Company for its fiscal quarter ended June 30, 2012. 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 August 2, 2012
99.2	Transcript from fiscal quarter ended June 30, 2012 earnings conference call held on August 2, 2012

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: August 8, 2012

Exhibit Index

Exhibit Number	Description
99.1	Press release dated August 2, 2012
99.2	Transcript from fiscal quarter ended June 30, 2012 earnings conference call held on August 2, 2012

EX-99.1

Exhibit 99.1

Contact: Douglas Armer

      (212) 655-0220

Capital Trust Reports Second Quarter 2012 Results

NEW YORK, NY – August 1, 2012 – Capital Trust, Inc. (NYSE: CT) today reported results for the quarter ended June 30, 2012.

• Operating Results:

• Consolidated assets were $584.2 million as of June 30, 2012 and consolidated liabilities were $562.0 million, resulting in total equity of $22.2 million.

• Consolidated net income was $2.3 million, or $0.10 per share ($0.09 per share on a diluted basis), for the quarter ended June 30, 2012.

• Adjusted assets were $103.4 million as of June 30, 2012, and adjusted liabilities were $23.6 million, resulting in adjusted shareholders’ equity of $79.8 million. Based on 24.8 million shares outstanding (fully diluted basis) at quarter end, adjusted book value per share was $3.21.

• Cash of $34.6 million decreased by $2.6 million due to a $2.8 million co-investment in CT High Grade II and $2.0 million of income tax payments. This was offset by net operating cash flow of $1.4 million, and $733,000 of net cash flow from CTOPI.

• The Company’s investment management platform generated $5.0 million of gross revenues during the quarter ($2.0 million of fees were eliminated in consolidation under GAAP).

Capital Trust, Inc.

• As of June 30, 2012, the Company’s adjusted assets were comprised of:

• Unrestricted cash of $34.6 million.

• Equity interests in the CT Legacy REIT portfolio (52%) with an adjusted book value of $48.9 million. Net of its obligations under the secured notes and management incentive awards, the value of the Company’s equity interest in the CT Legacy REIT portfolio is $30.7 million on an adjusted basis.

• The Company’s investment management and special servicing platform, operated through its subsidiary, CT Investment Management Co., LLC (“CTIMCO”). CTIMCO has assets under management of $4.8 billion with mandates including: (i) management of its public company parent, Capital Trust, Inc.; (ii) management of CT Legacy REIT; (iii) management of various private equity funds and separate accounts; (iv) collateral management of five commercial real estate CDOs; and (v) special servicing of securitized loan investments for both CTIMCO-managed vehicles and third parties.

• A co-investment in CT Opportunity Partners I, LP with an adjusted book value of $11.5 million ($25.0 million commitment, of which a net $10.5 million is funded to date).

• A new co-investment in CT High Grade Partners II with an adjusted book value of $2.8 million ($2.9 million commitment, of which a net $2.4 million is funded to date).

• The Company has no recourse liabilities.

CT Legacy REIT

In connection with its March 2011 restructuring, the Company transferred substantially all of its directly held interest earning assets to CT Legacy REIT, and either transferred or extinguished all of its recourse liabilities. CT Legacy REIT is owned 52% by the Company, 24% by an affiliate of its former mezzanine loan lender, and 24% by the Company’s former lenders under its extinguished senior credit facility. In addition, CT Legacy REIT issued a subordinate class of common stock to the Company’s former junior subordinated noteholders. The Company manages CT Legacy REIT as a liquidating portfolio.

As a result of the February 2012 refinancing of CT Legacy REIT’s mezzanine loan, the Company is no longer considered the GAAP primary beneficiary, and therefore has ceased consolidation, of CT Legacy Assets, a wholly-owned subsidiary of CT Legacy REIT. CT Legacy Assets owns all of CT Legacy REIT’s assets, other than cash, and is the borrower under its repurchase facility. As a result, the Company’s consolidated financial statements no longer include the assets and liabilities of CT Legacy Assets, but show instead a net investment in the CT Legacy Asset portfolio, as well as the cash balance at CT Legacy REIT. The following information primarily relates to the CT Legacy Asset portfolio, which is no longer included in the Company’s consolidated financial statements.

• Assets:

• Cash of $15.4 million as of June 30, 2012.

• Asset repayments of $299.4 million since the Company’s March 2011 restructuring, representing 60.0% of the initial net book value of the CT Legacy REIT portfolio.

• 17 loans with a principal balance of $344.6 million, book balance of $209.2 million, and fair value of $185.5 million as of June 30, 2012.

• No impairment activity during the quarter (total impairments in the portfolio of $132.3 million against five loans).

• 13 securities with a principal balance of $139.4 million, book balance of $8.3 million, and fair value (excluding CT CDO III) of $1.7 million as of June 30, 2012.

• No impairment activity during the quarter (total credit impairments in the securities portfolio of $131.2 million against 11 securities).

Page 2 of 7

• Liabilities:

• Only remaining liability is its $96.0 million JP Morgan repurchase facility. The facility matures in December 2014, carries a rate of LIBOR+6.00% as of June 30, 2012, and has paydown hurdles and associated potential rate increases going forward.

• Repayment of $291.7 million, or 75%, of CT Legacy REIT’s debt obligations since the Company’s March 2011 restructuring.

CT Investment Management Co., LLC

All of the Company’s investment management activities are conducted through its wholly-owned, investment management subsidiary, CTIMCO. CTIMCO is headquartered in New York, employs all 29 of the Company’s employees, and is operated as a taxable subsidiary. Since its inception, CTIMCO has originated approximately $12.0 billion of commercial real estate debt and related investments and has raised over $3.5 billion of private equity capital, as well as over $10 billion of public and private debt capital. CTIMCO currently manages approximately $4.8 billion of assets including its public company parent, CT Legacy REIT, five commercial real estate CDOs, three private equity funds, and one separate account. In addition, CTIMCO is an approved special servicer by all three rating agencies and is the named special servicer on $2.3 billion of loans.

• The investment management platform earned $5.0 million of gross revenues during the quarter, and $10.7 million year-to-date ($2.0 million and $4.1 million of fees were eliminated in consolidation under GAAP, respectively).

• CTIMCO is currently investing CT Opportunity Partners I, a fund with $539.9 million of total equity commitments of which $312.5 million remains undrawn.

• CTIMCO is also currently investing under its CT High Grade Mezzanine mandate, which was re-opened in May 2011 to invest on a non-discretionary basis. During the quarter, CTIMCO originated one new $10.0 million investment for this mandate.

• CTIMCO continues to manage CT High Grade Partners II, which has $552.0 million of invested capital

Adjusted Balance Sheet and Operating Results

The consolidated financial statements of the Company include five consolidated securitization vehicles which are all non-recourse, as well as assets and liabilities related to loan participations sold which did not qualify as sales under accounting principles generally accepted in the United States (“GAAP”). This has resulted in a presentation of gross assets and liabilities, provisions/impairments, and operations being recorded in excess of the Company’s economic interests in such entities.

Page 3 of 7

The Company’s adjusted balance sheet (i) eliminates loan participations sold, and (ii) deconsolidates securitization vehicles which are presented gross in accordance with GAAP, and shows instead the Company’s cash investment in these non-recourse entities, adjusted for losses expected or incurred. Due to the non-recourse nature of these entities, the Company’s investment amount cannot be less than zero on a cash basis. Also, the adjusted balance sheet separately shows the Company’s financial position from that of CT Legacy REIT.

The Company’s adjusted balance sheet is not an alternative or substitute for its consolidated balance sheet prepared in accordance with GAAP as a measure of its financial position. Rather, the Company believes that its adjusted balance sheet provides meaningful information to consider, in addition to its consolidated balance sheet prepared in accordance with GAAP, because it helps the Company evaluate its financial position without the effects of certain transactions and GAAP adjustments that are not necessarily indicative of the Company’s current investment portfolio, capitalization, or shareholders’ equity.

The Company’s adjusted balance sheet should not be viewed as an alternative measure of shareholders’ equity, and the Company may not prepare its adjusted balance sheet in the same manner as other companies that use a similarly titled measure.

Page 4 of 7

Adjusted Balance Sheet as of June 30, 2012
(in thousands, except per share data)							Adjusted Balance Sheet
	Consolidated GAAP Capital Trust, Inc.			Adjustments  (1)(2)(3)(4)			CT Legacy REIT		Capital Trust, Inc.
Assets
Cash and cash equivalents	$	34,604		$	—		$	—	$	34,604
Loans receivable, net		1,619			(1,619	)		—		—
Equity investments in unconsolidated subsidiaries		17,978			(3,660	)		—		14,318
Investment in CT Legacy REIT		—			48,883			—		48,883
Deferred income taxes		2,727			—			—		2,727
Prepaid expenses and other assets		2,207			625			—		2,832
Subtotal		59,135			44,229			—		103,364
Assets of Consolidated Entities
CT Legacy REIT
Restricted cash		15,433			—			15,433		—
Investment in CT Legacy Asset, at fair value		90,700			—			90,700		—
Subtotal		106,133			—			106,133		—
Assets of consolidated securitization vehicles		418,969			(418,969	)		—		—
Total/adjusted assets	$	584,237		($	374,740	)	$	106,133	$	103,364
Liabilities & Shareholders’ Equity
Accounts payable, accrued expenses and other liabilities	$	12,320		$	225		$	—	$	12,545
Secured notes		8,176			2,883			—		11,059
Participations sold		1,619			(1,619	)		—		—
Subtotal		22,115			1,489			—		23,604
Non-Recourse Liabilities of Consolidated Entities
CT Legacy REIT
Accounts payable, accrued expenses and other liabilities		—			625			625		—
Subtotal		—			625			625		—
Liabilities of consolidated securitization vehicles		539,882			(539,882	)		—		—
Total/adjusted liabilities		561,997			(537,768	)		625		23,604
Total/adjusted equity		(34,385	)		219,653			105,508		79,760
Noncontrolling interests		56,625			(56,625	)		—		—
Total/adjusted liabilities and shareholders’ equity	$	584,237		($	374,740	)	$	106,133	$	103,364
Capital Trust, Inc. book value/adjusted book value per share:
Basic	($	1.48	)						$	3.44
Diluted	($	1.48	)						$	3.21

(1) All securitization vehicles have been deconsolidated and reported at the Company’s cash investment amount, adjusted for current losses relative to its equity investment in each vehicle. Due to the non-recourse nature of these entities, the Company’s investment cannot be less than zero on a cash basis. See note 7 to the Company’s financial statements contained in the Form 10-Q, filed on August 1, 2012, for discussion of consolidated securitization vehicles.

(2) Loan participations which have been sold to third-parties, and did not qualify for sale accounting, have been eliminated. See Note 3 to the Company’s financial statements contained in the Form 10-Q, filed on August 1, 2012, for discussion of loan participations sold.

(3) Incentive allocations to CTIMCO from the Company’s investment management vehicles have been excluded from its adjusted balance sheet. These incentive allocations will only be paid to CTIMCO in the future contingent on the ultimate performance of such vehicles.

(4) Liabilities under the Company’s secured notes and the management incentive awards, the payments of which are linked to its gross recovery from CT Legacy REIT, have been adjusted to reflect what would be paid in a liquidation of CT Legacy REIT based on its adjusted balance sheet as of June 30, 2012.

Page 5 of 7

Capital Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

Three and Six Months Ended June 30, 2012 and 2011

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Income from loans and other investments:
Interest and related income	$	6,763		$	32,554		$	21,479		$	69,545
Less: Interest and related expenses		5,413			32,296			28,754			58,543
Income from loans and other investments, net		1,350			258			(7,275	)		11,002
Other revenues:
Management fees from affiliates		1,610			1,595			3,195			3,174
Servicing fees		1,365			438			3,385			748
Total other revenues		2,975			2,033			6,580			3,922
Other expenses:
General and administrative		4,740			4,649			9,052			14,928
Total other expenses		4,740			4,649			9,052			14,928
Total other-than-temporary impairments of securities		—			—			—			(4,933	)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		—			—			(160	)		(3,271	)
Net impairments recognized in earnings		—			—			(160	)		(8,204	)
Recovery of provision for loan losses		—			8,088			8			17,249
Valuation allowance on loans held-for-sale		—			(224	)		—			(224	)
Gain on extinguishment of debt		—			937			—			250,976
Fair value adjustment on investment in CT Legacy Assets		3,704			—			7,657			—
Gain on deconsolidation of subsidiary		—			—			146,380			—
Income from equity investments		205			842			901			1,797
Income before income taxes		3,494			7,285			145,039			261,590
Income tax provision		143			1,061			1,066			1,450
Net income	$	3,351		$	6,224		$	143,973		$	260,140
Less: Net income attributable to noncontrolling interests		(1,068	)		(8,069	)		(75,137	)		(7,400	)
Net income (loss) attributable to Capital Trust, Inc.	$	2,283		($	1,845	)	$	68,836		$	252,740
Per share information:
Net income (loss) per share of common stock:
Basic	$	0.10		($	0.08	)	$	3.01		$	11.19
Diluted	$	0.09		($	0.08	)	$	2.83		$	10.52
Weighted average shares of common stock outstanding:
Basic		22,893,522			22,723,146			22,865,819			22,580,143
Diluted		24,426,857			22,723,146			24,353,388			24,024,222

******

Page 6 of 7

The Company will conduct a management conference call at 10:00 a.m. Eastern Time on Thursday, August 2, 2012 to discuss second quarter 2012 results. Interested parties can access the call toll free by dialing (800) 895-4790 or 785-424-1071 for international participants. The conference ID is “CAPITAL.” A recorded replay will be available from noon on August 2, 2012 through midnight on Thursday, August 16, 2012. The replay call number is 800-695-0974 or 402-220-1459 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 performance of the Company’s investments, the timing of collections, its capability to repay indebtedness as it comes due, competition for servicing and investment management assignments, its ability to originate investments, the availability of capital and the Company’s tax status, 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 fully integrated, self-managed 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, investing both for its balance sheet and for third party vehicles. 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 7 of 7

EX-99.2

Exhibit 99.2

Capital Trust, Inc.

August 2, 2012

10:00 am ET

Page 1

Capital Trust Management Conference Call

August 2, 2012

10:00 am ET

Operator:	Hello and welcome to the Capital Trust’s Second Quarter 2012 Results Conference Call. Before we begin, please be advised that the forward-looking statements contained on this conference call are subject to certain risks and uncertainties, including but not limited to the performance of the Company’s investments, the timing of collections, its capability to repay indebtedness as it comes due, competition for servicing and investment management assignments, its ability to originate investments, the availability of capital, and the Company’s tax status, 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 question-and-answer session following the conclusion of this presentation. At that time, I will provide instructions for submitting a question to management. I will now turn the call over to Stephen Plavin, CEO of Capital Trust.
Stephen 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 filed our 10-Q and announced our results for the second quarter. Following my remarks Geoff will take you through the quarterly results and also discuss our Adjusted Balance Sheet.
	Created in connection with the March 2011 restructuring, CT Legacy REIT holds most of our former balance sheet investments and our ownership interest in it is our largest asset. Our management of Legacy REIT is focused on maximizing the recovery for all stakeholders, the largest of which are the Capital Trust shareholders.

Capital Trust, Inc.

August 2, 2012

10:00 am ET

Page 2

After generating almost $300MM of paydowns in the first year of Legacy REIT, there were no repayments during the quarter. Although there are very significant credit challenges remaining in Legacy REIT, performance remained consistent with our expectations and we do expect repayment activity to pick up again in 2013 as more underlying loans reach final maturity.

During the quarter, we made a 3 million dollar co-investment in CT High Grade II, an investment vehicle with a single institutional account that has $552 million dollars of invested equity capital. Also during the quarter, we purchased $10MM of CMBS for CT High Grade Mezzanine which now has $249MM of investments. We continue to like the high grade strategy of making and buying low LTV subordinate loans and expect our investment activity to increase in coming quarters.

The investment mandate for CT Opportunity Partners I- achieving a 15% return on commercial real estate debt investments- is more difficult in the current low rate environment. We continue to avoid taking opportunistic equity-like risks for a capped debt return. We made a small, one million dollar purchase of debt related to an existing investment during the quarter and a $20 million dollar investment post quarter-end

In CT Investment Management Co, or CTIMCO, our wholly-owned investment management subsidiary, we had $5.0 million of revenue prior to GAAP eliminations in the second quarter. CTIMCO maintains strong capabilities in a wide array of activities: lending, investing, asset management, capital raising, special servicing and operating its public company parent. Our special servicing business is very active as many of the five-year, peak-of-the-market loans where we are named special servicer matured this year and require restructuring. We have a strong capability in working out large, structured floating rate loans with securitized senior mortgages and multiple tranches of subordinate debt.

Capital Trust, Inc.

August 2, 2012

10:00 am ET

Page 3

We believe that 2012 will be a good vintage for commercial real estate debt and that, in general, real estate fundamentals will improve from current levels. We expect sale and recapitalization activity to increase as more high loan-to-value financings reach truly final maturity, more lenders are forced to reduce portfolios because of regulatory pressure, and the terms of new transactions improve for sellers due to lenders’ and buyers’ motivation to deploy capital and find yield. The completion of the markdown process – there are still $65 billion of loans in CMBS special servicing alone – along with increasing loan maturities will generate opportunities for those investors best positioned in the market.

The strength of our platform has generated significant interest from firms interested in initiating or expanding their direct investment activities in commercial mortgage debt via a transaction with CT and/or CTIMCO. To help further develop and evaluate this interest and in order to maximize shareholder value, we formed a special committee of the Board of Directors, engaged Evercore Partners and, on May 15, announced that we were exploring strategic alternatives.

As a matter of policy, the Company will not comment or provide the market with updates as to the status of our exploration of strategic alternatives until such time, if ever, that it enters into a definitive agreement for a completed transaction or is otherwise required to make an announcement. As such, we will not take any questions regarding this topic in the Q and A.

And with that, I will turn it over to Geoff.

Capital Trust, Inc.

August 2, 2012

10:00 am ET

Page 4

Geoff Jervis:	Thank you, Steve and good morning everyone. As Steve mentioned, last night we reported our earnings for the second quarter of 2012 and filed our 10-Q.
	Consolidated GAAP net income for the quarter was $2.3 million, or $0.09 per share on a diluted basis. If we exclude the impact of the CT Legacy Asset deconsolidation from Q1’s numbers, these results were generally consistent with the first quarter.
	At quarter end, total consolidated assets on the balance sheet stood at $584 million and total consolidated liabilities were $562 million, resulting in total GAAP equity of $22 million. While still not an ideal picture of our economic position, the clarity of our GAAP balance sheet continues to improve.
	As we have discussed on previous calls, we report our adjusted balance sheet (and provide a detailed description of the adjustments) in both the earnings press release we filed last night and also in the MD&A section of our 10-Q. We believe that our adjusted balance sheet allows investors to better understand the economic condition of the Company.
	Despite its complex GAAP financial statements, CT’s business is straightforward. Our primary line of business, commercial real estate debt investment management, is executed through our CTIMCO investment management and special servicing platform with $4.8 billion of assets under management from mandates that include: (i) management of Capital Trust, (ii) management of CT Legacy REIT, (iii) management of our private equity funds and separate accounts, (iv) collateral management of commercial real estate CDOs, and (v) special servicing of securitized loan investments for both CTIMCO-managed vehicles and third parties.

Capital Trust, Inc.

August 2, 2012

10:00 am ET

Page 5

The Company’s largest asset is its investment in CT Legacy REIT. As of quarter-end, on a fair value basis, CT Legacy REIT had adjusted assets and equity of roughly $106 million. We own 100% of CT Legacy REIT’s class A-1 shares, 14% of its class A-2 shares, and 8% of its class B shares resulting in an aggregate investment in CT Legacy REIT of $49 million on an adjusted basis.

Our interest in CT Legacy REIT, however, is subject to our obligations under the related non-recourse secured notes and management incentive awards plan. The secured notes have a $7 million face amount; however they will require a cash repayment of $11 million in order to be satisfied. These notes are non-recourse to CT, and are secured solely by a portion of CT’s equity interests in the class A common stock of CT Legacy REIT. The management incentive awards provide for the participation in up to 6.75% of the net equity recovery of CT Legacy REIT. Net of these two obligations, CT’s adjusted book value in the CT Legacy REIT portfolio is $31 million. As Steve mentioned, this recovery remains subject to material risk.

In addition to CTIMCO and CT Legacy REIT, our adjusted assets as of June 30th included unrestricted cash of $35 million, an $11 million co-investment in CT Opportunity Partners I, and our new $3 million co-investment in CT High Grade II. In the aggregate, our adjusted assets stood at $103 million as of quarter-end.

We have no recourse debt, and our adjusted liabilities of $24 million are primarily comprised of the aforementioned secured notes and the management incentive awards plan – both related exclusively to our interest in CT Legacy REIT.

Adjusted shareholders’ equity was $80 million at quarter-end, and, on a fully diluted basis, book value per share was $3.21.

Cash income for the period was $1.4 million, and $2.2 million year-to-date. Our total cash balance decreased by $3 million quarter to quarter, almost exclusively due to our making a $3 million co-investment in CT High Grade II.

Capital Trust, Inc.

August 2, 2012

10:00 am ET

Page 6

Turning to our investment management business:

All of our investment management activities are conducted through CTIMCO, our wholly-owned, taxable investment management subsidiary.

Our investment management platform earned $5 million of gross revenues during the quarter, continuing to be a positive cash flow business.

During the quarter we made one investment in CT Opportunity Partners and, subsequent to quarter end, we originated an additional investment. We do not anticipate material additional investments in this fund as its investment period ends in September. CTIMCO’s other active private equity business line, the “High Grade” business, as we refer to it, is investing on a non-discretionary, separate account basis with the CT High Grade I investor. We invested $10 million during the second quarter and are currently working on additional opportunities.

Turning to CT Legacy REIT:

As we discussed on previous calls, in connection with our March 2011 restructuring, we transferred substantially all of our directly held interest earning assets to a newly formed entity, CT Legacy REIT, along with all of our remaining legacy liabilities.

At June 30th, CT Legacy REIT’s portfolio of interest earning assets included 17 loans with a principal balance of $345 million, book balance of $209 million, and fair value of $185 million. In addition, CT Legacy REIT held 13 securities with a principal balance of $139 million, book balance of $8 million, and fair value (excluding CDO residual interests) of $2 million.

Capital Trust, Inc.

August 2, 2012

10:00 am ET

Page 7

	Since its inception on March 2011, CT Legacy REIT has collected $299 million or 60% of the initial net book value of the legacy portfolio. The portfolio continues to perform as expected and, despite the flurry of payoffs received last year, we did not experience similar activity in the first half of 2012 as the portfolio has been culled down to the more difficult and longer term assets.
	During the same timeframe, CT Legacy REIT has repaid $292 million of liabilities, representing 75% of their post-restructuring balance, bringing total debt at quarter end to $96 million.
	In February 2012, the Company refinanced CT Legacy REIT’s JP Morgan repurchase facility and its mezzanine loan with a single, new repurchase facility with JP Morgan. The facility matures in December 2014, carries a rate of LIBOR+6.00% as of June 30, 2012, and has paydown hurdles and associated potential rate increases going forward.
	At June 30th, adjusted shareholders’ equity at CT Legacy REIT was $106 million. As I mentioned previously, this translates to a $49 million investment at CT on an adjusted basis, or $31 million net of our obligations under the related secured notes and management incentive awards plan.
	And with that, I will turn it back to Steve.
Stephen Plavin:	Thanks, Geoff. Leo, can you open the call for Q&A, please?
Operator:	Absolutely. If you’d like to ask a question, please press *1 now on your touchtone telephone. To withdraw yourself from the queue, you may press the # key. Once again, press *1 if you’d like to ask a question. One moment while we queue. It appears that we have no questions but once again, if you’d like to ask a question, press *1 now on your touchtone telephone. It appears that we have no questions at this time.
Stephen Plavin:	Thank you, everyone. We appreciate your interest. We look forward to reporting to you next quarter.
Operator:	This concludes our conference for today. You may now disconnect your lines, and everyone have a great day.

END