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RAIT Financial Trust (RAS) |
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WIKI ANALYSIS
RAIT Financial Trust (RAS, formerly known as RAIT Investment Trust) is a real estate investment trust (REIT) that primarily engages in the lending aspects of the real estate business. RAS attempts to generate returns for shareholders by investing in the following asset classes 1) commercial mortgages and mezzanine loans 2) trust preferred securities, 3) residential mortgage loans 4) mortgage backed securities 5) real estate investments and preferred equity in entities that own real estate.
The company generates income for shareholders from interest and dividend income from its investment portfolio, origination fees, and asset management fees. The company's income is generated from net investment income, the difference between interest income on their investment portfolio and the cost of financing the portfolio. Most of the company's portfolio is financed through borrowings and securitizations. RAS uses warehouse agreements, CDOS, and lines of credit to finance the majority of its investments.
As of September 30, 2007, the company's investment portfolio stood at $12.3 billion, including $4.8 billion relating to trust preferred securities ("TruPS") and subordinated debentures $2.3 billion in commercial mortgages and mezzanine loans $4.2 billion in residential mortgages and mortgage-related receivables and $0.3 billion of other real estate related investments. The underlying property types of the company's real estate loans are broken down as follows: 51% multifamily, 25% office properties, 18% retail, 5% other assets, and 1% industrial.
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