Rait Financial Trust (RAS) 8-K This document and the related presentation may contain forward-looking statements within the meaning of the Private Securities Litigation

1

RAIT Financial Trust

Investor Presentation

May 2013

Exhibit 99.1

2

Forward Looking Statements &

Non-GAAP Financial Measures

This document and the related presentation may contain forward-looking statements within the meaning of the Private Securities Litigation

Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about RAIT Financial Trust’s (“RAIT”) plans,

objectives, expectations and intentions with respect to future operations, products, dividends, cash from investments and services and other

statements that are not historical facts. Forward-looking statements are sometimes identified by the words “may”, “will”, “should”, “potential”,

“predict”, “continue”, “project”, “guide”, or other similar words or expressions.  These forward-looking statements are based upon the current

beliefs

and

expectations

of

RAIT's

management

and

are

inherently

subject

to

significant

business,

economic

and

competitive

uncertainties

and contingencies, many of which are difficult to predict and generally not within RAIT’s control. In addition, these forward-looking statements

are subject to assumptions with respect to future business strategies and decisions that are subject to change. RAIT does not guarantee that

the assumptions underlying such forward looking statements are free from errors. Actual results may differ materially from the anticipated

results discussed in these forward-looking statements.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations

expressed in the forward-looking statements: the risk factors and other disclosure contained in filings by RAIT with the Securities and

Exchange Commission (“SEC”), including, without limitation, RAIT’s most recent annual and quarterly reports filed with SEC. RAIT’s SEC filings

are available on RAIT’s website at www.raitft.com.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. All

subsequent written and oral forward-looking statements attributable to RAIT or any person acting on its behalf are expressly qualified in their

entirety by the cautionary statements contained or referred to in this document and the related presentation. Except to the extent required by

applicable law or regulation, RAIT undertakes no obligation to update these forward-looking statements to reflect events or circumstances

after

the

date

of

this

presentation

or

to

reflect

the

occurrence

of

unanticipated

events.

This document and the related presentation may contain non-U.S. generally accepted accounting principles (“GAAP”) financial measures.  A

reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure is included in this document

and/or RAIT’s most recent annual and quarterly reports. 

This presentation is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of

RAIT

or

Independence

Realty

Trust,

Inc.

(“IRT”)

,

a

RAIT

sponsored

and

managed

multifamily

equity

REIT.

This

document

and

the

related

presentation

may

discuss

an

offering

of

common

stock

by

IRT.

A

registration

statement

relating

to

these

securities

has

been

filed

with

the

SEC

but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration

statement becomes effective.

A copy of the registration statement may be obtained by contacting RAIT’s investor relations at the contact

information

in

our

most

recent

press

release

and

is

available

on

the

SEC’s

website

at

www.SEC.gov.

Forward

Looking

Statements,

Non-

GAAP

Financial

Measures

&

Securities

Offering

Disclaimers

3

RAIT Financial Trust (“RAIT”) (NYSE: RAS), is a multi-strategy commercial real estate company

organized as an internally-managed REIT with $3.7 billion of assets under management

RAIT’s IPO -

January 1998

Focus on delivering strong-risk adjusted returns

Scalable, “in-house”, commercial real estate platform with over 380 employees

Offices –

Philadelphia, New York, Chicago, Charlotte, Minneapolis

RAIT funded $94.9 million of loans in the quarter ended March 31, 2013 consisting of $69.4

million conduit loans, $20.8 million bridge loans and a $4.7 million mezzanine loan

No corporate, unsecured, recourse debt maturities until April 2016

Increased quarterly common dividend to $0.12 for the first quarter 2013 –

a 20% increase from

the fourth quarter 2012 and a 100% increase over the last five quarters

Seasoned executive team with strong real estate equity and debt experience

As of March 31, 2013

About RAIT

4

COMMERCIAL REAL ESTATE

OWNER & OPERATOR

-

Maximize value over time

-

Hedges against inflation

-

Adds stability to the asset mix

COMMERICAL REAL ESTATE

LENDER

-

Significant lending opportunity

-

One-source financing option to

middle market: originate,

underwrite, close & service

commercial real estate loans

ASSET & PROPERTY MANAGER

-

Full service property

management capabilities

-

Asset Manager: S&P &

Morningstar rated primary and

special loan servicer

Commercial Real Estate Platform

$3.7 Billion Assets Under

Management

Multi-

Strategy Business Approach

As of March 31, 2013

5

The lending opportunity

Over

$1.5

trillion

of

CRE

debt

is

expected

to

mature

through

2018

(1)

Limited competition for small balance conduit loans and short term transitional loans

Increasing CMBS activity: $32.4 billion issued through May 3, 2013 & market expects to end 2013

with around $65 billion of issuance, approximately a 35% increase over the $48 billion issued in

2012

(2)

Equity gap drives bridge and mezzanine lending opportunities

RAIT’s goal

Capitalize on lending opportunity utilizing existing, scalable platform and internal expertise to

originate and underwrite bridge, mezzanine and conduit loans of $5 million to $30 million on multi-

family, office, retail and light industrial properties

RAIT’s competitive advantage: uniquely positioned to deliver a one-source financing option to our

borrowers

Active credit and risk management

(1)

Morgan Stanley (January 2011), Bloomberg LP, Foresight Analytics, Trepp and Intex 

(2)

Commercial Mortgage Alert

Commercial Real Estate Lender

6

Funding

Warehouse providers

Barclays –

conduit loans

Citibank –

conduit loans

Credit Suisse AG –

bridge loans

RAIT’s balance sheet

Loan types

Conduit loans –

for sale loans: stable properties, 5 to 10 yr, fixed rate, approximate

coupon range 3.75%-5.00%

Bridge loans –

balance sheet loans: transitional properties, 3 to 5 yr, floating rate over

libor,

origination

&

exit

fee,

approximate

coupon

range:

5.75%

-

8%

with

floors

Mezzanine loans –

balance sheet loans: stable properties, floating rate, origination & exit

fees, approximate coupon: 10%+

Commercial Real Estate Lender

7

Pipeline

Growing pipeline of potential opportunities

$180 million of loans under application as of May 2, 2013

Loan fundings & sales

Loan Fundings

($ in millions)

Q1 2013

FY 2012

Conduit Loans

69.4

$      

119.3

$   

Bridge Loans

20.8

$      

240.8

$   

Mezzanine Loans

4.7

$         

15.4

$     

Total Fundings

94.9

$      

375.5

$   

Conduit Loans Sales

($ in millions)

Q1 2013

FY 2012

Sale amount

41.4

$      

97.9

$     

Fee income from loan sales

3.1

$         

6.2

$        

Commercial Real Estate Lender

As of March 31, 2013

8

By Property Type

(1)

By Geographic Region

(1)

Improved credit performance of the loan portfolio

As of March 31, 2013 unless otherwise Indicated ($ in 000s)

Office

42%

Multi-family

24%

Retail

28%

Other

6%

Central

33%

Mid Atlantic

29%

Southeast

13%

West

16%

Northeast

9%

CRE Loan Portfolio Statistics

(1)  Based on book value at 3/31/2013.

Book Value

Weighted-

Average

Coupon

Range of Maturities

Number of

Loans

Key Statistics

Q1 2013

Q4 2012

Commercial Real Estate (CRE) Loans

Non-accrual loans

$68,257

$69,08

Commercial mortgages

$755,824

6.4%

May 2013 to Apr. 2023

58

      % change

(1.2%)

Mezzanine loans

270,132

9.3%

May 2013 to Nov. 2038

82

Reserve for losses

26,206

30,40

Preferred equity interests

63,744

9.7%

Mar. 2014 to Aug. 2025

15

      % change

(14%)

Total CRE Loans

$1,089,700

7.3%

155

Provision for losses

500

50

Other loans

34,957

4.6%

May 2013 to Oct. 2016

2

      % change

0%

Total investments in loans

$1,124,657

7.2%

157

9

Directly owned real estate portfolio

Strategy to maximize value over time through increasing occupancy and higher rental rates

Provides stability to asset mix and hedges against inflation

$1.0 billion of CRE properties at March 31, 2013

Portfolio is internally managed by seasoned property management professionals

4% average effective rent growth in multi-family portfolio from March 31, 2012 to March 31,

2013

Opportunistically acquire properties

Acquire well located apartment buildings in secondary markets via Independence Realty Trust,

Inc.

IRT acquired Runaway Bay apartments in Indianapolis, Indiana (October 2012)

»

192

garden

style

apartments;

$15.8

million

acquisition

at

a

6.9%

cap

rate;

$10.2

million

first

mortgage

at

3.59%; expected 15% year one return on equity

Utilize broker-network & relationships; off-market transactions

Commercial Real Estate Owner

10

(a)

Based on book value of properties owned as of  March 31, 2013.

.

Directly Owned Commercial Real Estate Portfolio

Statistics

Office

26%

Multi-family

61%

Retail

8%

Other

5%

Central

32%

West

34%

Southeast

29%

Mid-Atlantic

5%

Investments

in

Real

Estate

Property

Types

(a)

Investments

in

Real

Estate

Geographic

U.S.

Regions

(a)

11

Net Real Estate Operating Income

Average Effective Rent

(a)

Investments

in Real 

Estate

Quantity

Number of

Properties

Average Physical Occupancy

3/31/2013

12/31/2012

Multi-family real estate properties

$615,059

8,206 units

34

92.6%

90.0%

Office real estate properties

273,570

2,015,524 sq. ft.

11

70.3%

72.8%

Retail real estate properties

83,018

1,422,572 sq. ft.

4

68.9%

73.2%

Parcels of land

48,100

21.92 acres

10

–

–

Total

$1,019,747

59

85.9%

85.1%

(a)

Based on properties owned as of  March 31, 2013.

(b)

Average effective rent is rent  per unit per month.

(c)

Average effective rent is rent per square foot per year.

Improved Occupancy and Net Operating Income

Q1 2013

Q1 2012

Rental income

$27,169

$24,831

Real estate operating expenses

14,410

13,797

Net Real Estate Operating Income

$12,759

$11,034

NOI growth

16%

Average Occupancy

85.9%

85.0%

As of March 31, 2013 unless otherwise Indicated ($ in 000s)

Property Type

Q1 2013

Q1 2012

% Variance

Multi-family

(b)

$720

$691

4%

Office

(c)

18.91

21.53

-12%

Retail

(c)

11.95

10.59

13%

Directly Owned Commercial Real Estate Portfolio

Statistics

12

Asset management

Management fees

Manage approximately $2 billion of commercial real estate loans and $1.6 billion

of U.S. real estate debt securities

S&P & Morningstar rated primary and special CRE loan servicer

Property management

Property management fees –

RAIT, IRT and 3

rd

party opportunities

Jupiter Communities  -

Multi-family focused

49 properties –

10,649 units

CRP Commercial Services -

Office focused

2.7 million square feet

Independence

Realty

Trust,

Inc.

–

RAIT

sponsored

&

managed

multi-family

equity

REIT

Transition to an underwritten public offering

Externally managed by RAIT affiliate

Asset and Property Manager

As of March 31, 2013

13

Operating Income –

2 year History

Strong operating income growth

14

$0.06

$0.06

$0.06

$0.08

$0.08

$0.09

$0.10

$0.12

$-

$0.02

$0.04

$0.06

$0.08

$0.10

$0.12

$0.14

RAS Common Dividend History -

2 year history

RAS Dividend

RAS Dividend History –

2 Year History

Stable and steady dividend growth

15

(1)

Constitutes forward-looking information.  Actual full 2013 projected cash received from investments and each individual line item presented herein could vary significantly

from the projections presented.  The above projections assume: RAIT does not raise any other capital; Investment portfolios do not experience significant loan repayments;

RAIT increases the amount of loan originations and conduit loan sales from historical levels; RAIT’s property portfolio performs at historical levels; RAIT continues to receive

its securitization collateral management and property management

fees; and RAIT’s sponsored companies experience growth in their investment portfolios by the end of the

period covered.

2013 Projected Cash Received from Investments

(1)

($'s in millions, except per share amounts)

2013

Projected In-flows

$  182 -

$203

Less: CRE and Property level interest costs

(52)

Less: Corporate interest and preferred dividends

(34)

Less: General and administrative costs

(33)

-

(34)

Net cash flow available to common shareholders

$63

$84

Per Share

$ 0.93

$  1.23

16

RAIT will continue to focus on:

Growth & stability through a multi-strategy approach

Utilizing RAIT’s core, integrated, real estate platform and management expertise to generate

appropriate risk-adjusted returns by originating, underwriting and managing commercial real

estate loans

Growing cash flow through accretive capital deployment

Focus on conduit and transitional loans

Continue to actively manage credit risk

Effectively manage RAIT’s portfolio of owned real estate to deliver increasing rental and

occupancy rates while managing operating costs

Leveraging RAIT’s capabilities to grow fee income and assets under management

Maintaining a strong pipeline of investment opportunities

Delivering stable and growing dividends

RAIT Highlights

17

Appendix

18

No unsecured, recourse debt maturities until April 2016

(1)

Does not include $15.9 million of secured debt on RAIT’s CMBS and commercial mortgage facilities. 

(2)

Assumes full exercise of holders’

7.0% convertible senior notes redemption right in April 2016. 

(3)

Includes

senior

secured

notes

issued

by

us

with

an

aggregate

principal

amount

equal

to

$92,000

with

a

weighted

average

coupon

of

7.0%,

which

are

eliminated

in

consolidation

$-

$-

$-

$122,608

$46,000

$23,000

$23,000

$-

$43,771

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

2013 (1)

2014

2015

2016 (2)

2017 (3)

2018 (3)

2019 (3)

2020

Thereafter

Unsecured Recourse Debt Maturities and Redemption Dates

(in 000s)

Unsecured Recourse Debt Summary

As of March 31, 2013

19

Adjusted Book Value

(1)

(1)

Management

views

adjusted

book

value

as

a

useful

and

appropriate

supplement

to

shareholders’

equity

and

book

value

per

share.

The

measure

serves

as

an

additional

measure

of

our

value

because it facilitates evaluation of us without the effects of various items that we are required to record in accordance with GAAP but which have limited economic impact on our

business.

Those adjustments primarily reflect the effect of consolidated securitizations where we do not currently receive cash flows on our retained interests, accumulated depreciation and

amortization, the valuation of long-term derivative instruments and a valuation of our recurring collateral and property management fees.  Adjusted book value is a non-GAAP financial

measurement,

and

does

not

purport

to

be

an

alternative

to

reported

shareholders’

equity,

determined

in

accordance

with

GAAP,

as

a

measure

of

book

value.

Adjusted

book

value

should

be

reviewed

in

connection

with

shareholders’

equity

as

set

forth

in

our

consolidated

balance

sheets,

to

help

analyze

our

value

to

investors.

Adjusted

book

value

may

be

defined

in

various

ways

throughout the REIT industry. Investors should consider these differences when comparing our adjusted book value to that of other REITs.

(2)

Based on 60,758,957 common shares outstanding as of March 31, 2013.

(3)

Based

on

3,749,288

Series

A

preferred

shares,

2,288,465

Series

B

preferred

shares,

and

1,640,100

Series

C

preferred

shares

outstanding

as

of

March

31,

2013,

all

of

which

have

a

liquidation preference of $25.00 per share. 

As of March 31, 2013

Amount

Per Share (2)

Total shareholders’ equity .........................................................................................................................

$

764,978

$

12.59

Liquidation value of preferred shares characterized as equity (3)

...............................................

(191,946)

(3.16)

Book value ..................................................................................................................................................

573,032

9.43

Adjustments:

Taberna VIII and Taberna IX securitizations

...................................................................................

(406,898)

(6.70)

RAIT I and RAIT II derivative liabilities .............................................................................................

62,144

1.02

Change in fair value for warrants and investor SARs .....................................................................

10,673

0.18

Accumulated depreciation and amortization ..................................................................................

123,499

2.03

Valuation of recurring collateral and property management fees .................................................

19,180

0.32

Total adjustments ......................................................................................................................................

(191,402)

(3.15)

Adjusted book value ...................................................................................................................................

$

381,630

$

6.28

Adjusted Book Value

(1)

(All $ in 000s except per share numbers)

20

(1)

We believe that funds from operations, or FFO, and adjusted funds from operations, or AFFO, each of which are non-GAAP measures, are additional appropriate measures of the operating

performance of a REIT and us in particular. We compute FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, as net

income or loss allocated to common shares (computed in accordance with GAAP), excluding real estate-related depreciation and amortization expense, gains or losses on sales of real estate

and the cumulative effect of changes in accounting principles.  AFFO is a computation made by analysts and investors to measure a real estate company's cash flow generated by operations. 

We calculate AFFO by adding to or subtracting from FFO: change in fair value of financial instruments; gains or losses on debt extinguishment; capital expenditures, net of any direct financing

associated with those capital expenditures; straight-line rental effects; amortization of various deferred items and intangible assets; and share-based compensation. Our calculation of AFFO

differs from the methodology used for calculating AFFO by certain other REITs and, accordingly, our AFFO may not be comparable to AFFO reported by other REITs. Our management utilizes FFO

and AFFO as measures of our operating performance, and believes they are also useful to investors, because they facilitate an understanding of our operating performance after adjustment for

certain

non-cash

items,

such

as

real

estate

depreciation,

share-based

compensation

and

various

other

items

required

by

GAAP

that

may

not

necessarily

be

indicative

of

current

operating

performance and that may not accurately compare our operating performance between periods. Furthermore, although FFO, AFFO and other supplemental performance measures are defined

in various ways throughout the REIT industry, we also believe that FFO and AFFO may provide us and our investors with an additional useful measure to compare our financial performance to

certain

other

REITs.

Neither

FFO

nor

AFFO

is

equivalent

to

net

income

or

cash

generated

from

operating

activities

determined

in

accordance

with

U.S.

GAAP.

Furthermore,

FFO

and

AFFO

do

no

t represent amounts available for management's discretionary use

because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties.

Neither FFO nor AFFO should be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flow from operating activities as a

measure of our liquidity.

References

to

“we”,

“us”,

and

“our”

refer

to

RAIT

Financial

Trust

and

its

subsidiaries.

(2)

Based on 60,363,153 weighted-average shares outstanding-diluted for the three-month period ended March 31, 2013.

(3)

Based on 44,150,924 weighted-average shares outstanding-diluted for the three-month period ended March 31, 2012.

For the Three-Month

Period Ended

March 31, 2013 

For the Three-Month

Period Ended

March 31, 2012 

Amount 

Per Share (1) 

Amount 

Per Share (2) 

Funds From Operations:

Net income (loss) allocable to common shares .........................................................

$

(90,532)

$

(1.50

$

(107,019

$

(2.42)

Adjustments:

Real estate depreciation and amortization ....................................................

7,973

0.13

7,459

0.17

(Gains) losses on the sale of real estate

........................................................

0

0.00

0

0.00

Funds From Operations ...............................................................................................

$

(82,559)

$

(1.37

$

(99,560

$

(2.25)

Adjusted Funds From Operations:

Funds From Operations ...............................................................................................

$

(82,559)

$

(1.37

$

(99,560

$

(2.25)

Adjustments:

Change in fair value of financial instruments .................................................

99,757

1.65

108,923

2.48

(Gains) losses on debt extinguishment

..........................................................

0

0.00

(1,574

(0.04)

Capital expenditures, net of direct financing ..................................................

(172)

0.00

(248

(0.01)

Straight-line rental adjustments ......................................................................

(288)

0.00

(306

(0.01)

Amortization of deferred items and intangible assets ...................................

1,133

0.02

1,526

0.03

Share-based compensation............................................................................

723

0.01

557

0.01

Adjusted Funds From Operations...............................................................................

$

18,594

$

0.31

$

9,318

$

0.21

Adjusted Funds from Operations

(1)

(All $ in 000s except per share numbers)

21

RAIT Income Statement

(All $ in 000s except per share numbers)

22

RAIT Balance Sheet

(All $ in 000s except per share numbers)