RAIT Financial Trust Sells & Divests Thirteen Properties Totaling $128.6 Million Since the Second Quarter & Completes Repurch...
October 18 2017 - 8:30AM
Business Wire
RAIT continues making progress reducing its
commercial property portfolio as part of its strategic transition
to concentrate primarily on its commercial lending business
RAIT Financial Trust (NYSE: RAS) (“RAIT”) today announced that
it has completed sales of 6 properties for an aggregate purchase
price of approximately $88.4 million and divested an additional 7
properties with an aggregate net carrying value of approximately
$40.2 million during the period beginning July 1, 2017 through
October 16, 2017, totaling $128.6 million. RAIT expects these
transactions to result in a reduction of related indebtedness by
approximately $110.4 million. These sales and divestitures align
with RAIT’s previously announced strategy of transforming RAIT into
a more focused and cost-efficient business concentrated on its core
commercial real estate lending activities. Since the beginning of
2017 through October 16, 2017, consistent with this strategy, RAIT
has sold or divested approximately $339.8 million of its property
portfolio and reduced related indebtedness by approximately $275.9
million. Since January 1, 2016 through October 16, 2017, RAIT has
sold or divested $677.7 million of its property portfolio and
reduced related indebtedness by $571.8 million.
The properties sold by RAIT in this period were a multi-family
property located in Jackson, Mississippi, the last remaining parcel
of a two-parcel retail property in Nashville, Tennessee, two office
properties in Woodlawn, Maryland and Scottsdale, Arizona and two
parcels of land in Daytona Beach, Florida. RAIT used approximately
$68.5 million of these gross proceeds to repay related
indebtedness, pay transaction costs and for other items. RAIT
received aggregate net cash proceeds of approximately $8.1 million
related to these sales.
The properties divested by RAIT in this period were five
industrial properties in Fort Wayne, Indiana, Wichita, Kansas, Palm
Bay, Florida and Columbus, Ohio and two office properties in Fort
Wayne and South Bend, Indiana. These properties had a net
carrying value of approximately $40.2 million. RAIT derecognized
these net assets and extinguished related debt of $37.3
million.
In addition, as previously disclosed, RAIT expects to recognize
a $5.5 million gain in RAIT’s fourth quarter 2017 financial results
related to the purchase by RAIT for $20.5 million of common share
purchase warrants (the “Warrants”) and common share appreciation
rights (the “SARs”) issued by RAIT to an investor pursuant to the
exercise of a put right by that investor. RAIT had classified both
Warrants and SARs as liabilities and included their combined fair
value in RAIT’s liabilities. This gain would represent the excess
of this fair value over the purchase price.
About RAIT Financial Trust
RAIT Financial Trust is an internally-managed real estate
investment trust focused on providing debt financing options to
owners of commercial real estate throughout the United States. For
more information, please visit www.rait.com or call Investor
Relations at 215.207.2100.
Forward-Looking Statements
This press release may contain certain forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Such forward-looking statements can generally
be identified by our use of forward-looking terminology such as
“strategy,” “transform,” “plan,” “should,” “expect,” “intend,”
“anticipate,” “estimate,” “believe,” “seek,” or other similar words
or terms. Such forward-looking statements include, but are not
limited to, statements regarding RAIT’s initiatives to further
simplify its business to focus on its commercial real estate
lending business, reduce costs, reduce indebtedness and enhance
value and returns for shareholders, RAIT’s actions taken or
contemplated to enhance its long-term prospects and create value
for its shareholders and RAIT’s expectations as to the financial
impact of the transactions described. Such forward-looking
statements are based upon RAIT’s historical performance and its
current plans, estimates and expectations and are not a
representation that such plans, estimates, or expectations will be
achieved. Such statements are subject to known and unknown risks,
uncertainties and contingencies that may cause actual results to
differ materially from the expectations, intentions, beliefs,
plans, estimates or predictions of the future expressed or implied
by such forward-looking statements. These risks, uncertainties and
contingencies include, but are not limited to, RAIT’s ability to
continue to sell properties and satisfy the related debt, RAIT’s
ability to transition to a more focused, cost-efficient and lower
leverage business, final accounting determinations on gains or
losses realized in the event properties are sold for prices that
differ from their carrying value or if property valuations are
adjusted in the process of revaluating properties when they are
characterized as held for sale, final accounting determinations on
the amount of gain recognized from the repurchase of the Warrants
and SARs and what such gain will relate to and other factors
described in RAIT’s Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q and in other filings with the SEC. RAIT undertakes no
obligation to update these forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events, except as may be required by
law.
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RAIT Financial TrustAndres Viroslav,
215-207-2100aviroslav@rait.com