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After Looking at Options, RAIT Financial Trust Exiting CRE Lending Business

REIT Concludes Strategic Review without a Clear Plan Going Forward
February 21, 2018
A year after announcing a new initiative to refocus on its core middle-market CRE lending business, RAIT Financial Trust (NYSE: RAS) now says it plans to exit the business altogether.

The Philadelphia-based REIT today announced its decision after concluding a review of strategic and financial alternatives - a review that apparently yielded little.

"At this time, the board has determined that this review did not identify a suitable strategic or financial transaction with another counterparty that was preferable to the steps being reported today," RAIT reported.

The REIT's stock lost half its value in trading this morning -- dropping 23 cents a share. A year ago, the stock was trading at more than $3.50/share.

RAIT’s management and legal and financial advisors determined after the review that it should take steps to increase its liquidity. The steps it is considering include ceasing its lending business; cutting costs in its other operating businesses; selling off its property portfolio; and hiring a new a financial advisor.

For its most recent nine-month reporting period ended Sept. 30, 2017, RAIT originated $375.3 million in loans and had already sold or divested $339.8 million of its properties. It still owns 21 properties with a gross carrying amount of $336 million, with the largest portions being office and retail properties respectively.

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