RAIT Financial Trust Sells and Divests Seven Properties Totaling $124.7 Million During Fourth Quarter of 2017
11 January 2018 - 9:15PM
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 five properties for an aggregate purchase
price of approximately $110.4 million and divested an additional
two properties with an aggregate net carrying value of
approximately $14.3 million during the fourth quarter of 2017. RAIT
expects these transactions to result in a reduction of related
indebtedness by approximately $128.3 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.
During 2017, consistent with this strategy, RAIT sold or divested
approximately $399.3 million of its property portfolio and reduced
related indebtedness by approximately $356.2 million. During 2016
and 2017, RAIT sold or divested $737.2 million of its property
portfolio and reduced related indebtedness by approximately $652.0
million.
The properties sold by RAIT during the fourth quarter of 2017
were two parcels of land in Daytona Beach, Florida, an office
property in Scottsdale, Arizona, a retail property located in Round
Rock, Texas, an office property in Milwaukee, Wisconsin and an
office property in Charlotte, North Carolina. RAIT used
approximately $90.8 million of the gross proceeds received from
these sales to repay related indebtedness, pay transaction costs
and for other items. RAIT received net cash proceeds of
approximately $5.7 million related to these sales.
The properties divested by RAIT during the fourth quarter of
2017 were two industrial properties in Westmoreland, Pennsylvania
and Marysville, Ohio. These properties had a net carrying value of
approximately $14.3 million and related debt of $39.9 million. As
previously disclosed, these divestitures completed RAIT’s
divestiture of an industrial portfolio which RAIT expects to result
in RAIT recognizing a non-cash gain of approximately $25.0 million
during the fourth quarter of 2017.
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,” “expect,” or other similar words or terms.
Such forward-looking statements include, but are not limited to,
statements regarding RAIT’s strategy of transforming RAIT into a
more focused and cost-efficient business concentrated on its core
commercial real estate lending activities 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 strategies and expectations and are not
a representation that such strategies 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,
strategies or predictions of the future expressed or implied by
such forward-looking statements. These risks, uncertainties and
contingencies include, but are not limited to, the effect of the
announcement of RAIT’s review of, or any implementation of,
strategic and financial alternatives on RAIT’s business, including
its financial and operating results and its employees, capital
sources and customers; whether any expressions of interest received
by RAIT or discussions RAIT has engaged in relating to RAIT’s
strategic and financial alternatives will result in any transaction
or the timing or nature of any such transaction; whether RAIT will
be able to continue to implement its strategy to transition RAIT to
a more lender focused, simpler, and more cost-efficient business
model; whether RAIT will be able to continue to divest RAIT’s
legacy real estate owned portfolio and existing property management
operations and the majority of RAIT’s non-lending assets and repay
any related debt; final accounting determinations on gains or
losses realized in the event properties are sold or divested 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
divestiture of RAIT’s industrial portfolio; whether RAIT will have
any legal obligations on the non-recourse debt related to this
portfolio 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 Trust ContactAndres Viroslav,
215-207-2100aviroslav@rait.com