Rait Financial Trust (RAS) 8-K RAIT Investment Trust Announces Fourth Quarter and Fiscal 2005 Earnings

RAIT Investment Trust Announces Fourth Quarter and Fiscal 2005 Earnings

PHILADELPHIA, PA — February 9, 2006 — RAIT Investment Trust (“RAIT”) (NYSE: RAS)

2005 Financial Highlights

– Total assets at December 31, 2005 increased 40.5% from total assets at December 31, 2004

– Total revenues for the year ended December 31, 2005 increased 29.5% over the year ended December 31, 2004

– Net income available to common shareholders for the year ended December 31, 2005 increased 11.6% over the year ended December 31, 2004

RAIT reported net income available to common shareholders for the three months ended December 31, 2005 of $18.1 million, or net income per common share diluted of $0.64 based on 28.1 million weighted average common shares diluted, as compared to net income available to common shareholders of $16.2 million, or net income per common share diluted of $0.63 based on 25.7 million weighted average common shares diluted, for the three months ended December 31, 2004. Total revenues for the three months ended December 31, 2005 were $30.0 million as compared to $24.1 million for the three months ended December 31, 2004.

RAIT reported net income available to common shareholders for the year ended December 31, 2005 of $68.0 million, or net income per common share diluted of $2.57 based on 26.4 million weighted average common shares diluted, as compared to net income available to common shareholders of $60.9 million, or net income per common share diluted of $2.48 based on 24.6 million weighted average common shares diluted, for the year ended December 31, 2004. Total revenues for the year ended December 31, 2005 were $110.6 million as compared to $85.4 million for the year ended December 31, 2004.

Balance Sheet Summary
At December 31, 2005, RAIT’s total assets were $1.0 billion (including $714.4 million of real estate loans, net, $40.6 million of unconsolidated real estate interests, $77.1 million of consolidated real estate interests and $71.0 million of a consolidated real estate interest held for sale). At December 31, 2004, RAIT’s total assets were $729.5 million (including $491.3 million of real estate loans, net, $44.0 million of unconsolidated real estate interests, $76.5 million of consolidated real estate interests and $66.3 million of a consolidated real estate interest held for sale). At December 31, 2005, RAIT’s indebtedness secured by real estate (the sum of senior indebtedness relating to loans, long-term debt secured by consolidated real estate interests and liabilities underlying consolidated real estate interest held for sale) was $130.5 million, and there was a $262.4 million aggregate balance outstanding under RAIT’s lines of credit. At December 31, 2004, RAIT’s indebtedness secured by real estate was $116.8 million, and there was a $49.0 million aggregate balance outstanding under RAIT’s secured lines of credit. RAIT’s total shareholders’ equity was $609.2 million at December 31, 2005 and $541.7 million at December 31, 2004. Total common shares outstanding were 27,914,517 at December 31, 2005 and 25,579,948 at December 31, 2004.

Dividend Summary
On December 30, 2005, RAIT paid a fourth quarter dividend of $0.61 per common share to shareholders of record on December 22, 2005. Including this fourth quarter dividend, RAIT has declared a regular quarterly cash dividend of at least $0.60 per common share during each of the past fourteen quarters. On December 30, 2005, RAIT paid a fourth quarter dividend of $0.484375 per preferred share relating to RAIT’s 7.75% Series A Cumulative Redeemable Preferred Shares and a fourth quarter dividend of $0.5234375 per share on RAIT’s 8.375% Series B Cumulative Redeemable Preferred Shares to shareholders of record on December 1, 2005.

Conference Call Webcast
Interested parties can access the LIVE webcast of RAIT’s Quarterly Earnings Conference Call at 2:30 PM EST on Thursday, February 9, 2006 by clicking on the Webcast link on RAIT’s homepage at www.raitinvestmenttrust.com. For those who are not available to listen to the live broadcast, the replay of the webcast will be available following the live call on RAIT’s investor relations website and telephonically until Thursday, February 16, 2006 by dialing 888-286-8010, access code 46531960.

About RAIT Investment Trust
RAIT Investment Trust (NYSE:RAS), a real estate investment trust, is a specialty finance company focused on the commercial real estate industry. RAIT provides structured financing to owners of real estate, including senior and mezzanine lending and preferred equity investments. RAIT also acquires real estate for its own account. For more information, please visit www.raitinvestmenttrust.com or call Investor Relations at 215-861-7900. If you would like to be added to RAIT’s distribution list to receive news, updates and announcements, please visit www.raitinvestmenttrust.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding RAIT Investment Trust’s business which are not historical facts are “forward-looking statements” that involve risks and uncertainties. For discussion of such risks and uncertainties, which could cause actual results to differ materially from those contained in the forward looking statement, see RAIT’s filings with the Securities and Exchange Commission, including Registration Statement No. 333-103618 under the section entitled “Risk Factors”, the Form 10-K for the year ended December 31, 2004 and the most recent filed quarterly report on Form 10-Q. RAIT does not undertake to update forward-looking statements in this press release or with respect to matters described herein.

RAIT Investment Trust Contact
Andres Viroslav
215-861-7923
aviroslav@raitinvestmenttrust.com

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RAIT INVESTMENT TRUST
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

	For the three months						For the year
	ended December 31,						ended December 31,
	2005			2004			2005			2004
REVENUES
Interest income	$	21,253,855		$	17,461,081		$	80,727,929		$	60,985,829
Rental income		4,161,061			4,391,079			16,759,713			14,225,614
Fee income and other		3,055,191			1,503,265			7,043,634			6,727,795
Investment income		1,525,378			724,314			6,021,826			3,420,317
Total revenues		29,995,485			24,079,739			110,553,102			85,359,555
COSTS AND EXPENSES
Interest		4,879,531			1,756,269			14,486,498			6,943,272
Property operating expenses		2,474,206			2,471,193			9,457,450			7,364,659
Salaries and related benefits		1,252,761			1,096,232			5,116,953			4,570,183
General and administrative		1,169,193			709,929			4,212,224			4,173,924
Depreciation and amortization		491,016			501,159			2,000,982			1,640,230
Total costs and expenses		10,266,707			6,534,782			35,274,107			24,692,268
Net income before minority interest	$	19,728,778		$	17,544,957		$	75,278,995		$	60,667,287
Minority interest		(10,956	)		(12,082	)		(33,420	)		(29,756	)
Net income before gain on sale of consolidated real estate interest, loss on sale of unconsolidated real estate interest and gain on involuntary conversion	$	19,717,822		$	17,532,875		$	75,245,575		$	60,637,531
Gain on sale of consolidated real estate interest		—			—			—			2,402,639
Loss on sale of unconsolidated real estate interest		(198,162	)		—			(198,162	)		—
Gain on involuntary conversion		—			782,742			—			1,282,742
							��
Net income from continuing operations	$	19,519,660		$	18,315,617		$	75,047,413		$	64,322,912
Net income from discontinued operations (1)		1,063,376			367,565			2,979,639			1,834,637
Net income	$	20,583,036		$	18,683,182		$	78,027,052		$	66,157,549
Dividends attributed to preferred shares		2,518,955			2,455,402			10,075,820			5,279,152
Net income available to common shareholders	$	18,064,081		$	16,227,780		$	67,951,232		$	60,878,397
Net income from continuing operations per common share basic	$	0.61		$	0.63		$	2.48		$	2.42
Net income from discontinued operations per common share basic (1)		0.04			0.01			0.11			0.07
Net income per common share basic	$	0.65		$	0.64		$	2.59		$	2.49
Weighted average common shares basic		27,892,821			25,547,930			26,235,168			24,404,168
Net income from continuing operations per common share diluted	$	0.60		$	0.62		$	2.46		$	2.41
Net income from discontinued operations per common share diluted (1)		0.04			0.01			0.11			0.07
Net income per common share diluted	$	0.64		$	0.63		$	2.57		$	2.48
Weighted average common shares diluted		28,068,587			25,733,322			26,419,693			24,572,076

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RAIT INVESTMENT TRUST
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2005			2004
ASSETS
Cash and cash equivalents	$	71,633,945		$	10,978,597
Restricted cash		20,892,402			22,947,888
Tenant escrows		166,383			211,905
Accrued interest receivable		13,127,801			9,728,674
Real estate loans, net		714,428,071			491,281,473
Unconsolidated real estate interests		40,625,713			44,016,457
Consolidated real estate interests		77,052,010			76,523,620
Consolidated real estate interest held for sale (1)		70,956,345			66,265,163
Furniture, fixtures and equipment, net		590,834			639,582
Prepaid expenses and other assets		14,223,923			6,017,962
Goodwill		887,143			887,143
Total assets	$	1,024,584,570		$	729,498,464
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts payable and accrued liabilities	$	3,489,996		$	2,761,447
Accrued interest payable		2,300,874			239,379
Tenant security deposits		225,287			207,299
Borrowers’ escrows		15,981,762			18,326,863
Senior indebtedness relating to loans		66,500,540			51,305,120
Long-term debt secured by consolidated real estate interests		22,174,179			22,602,820
Liabilities underlying consolidated real estate interest held for sale (1)		41,817,463			42,868,031
Unsecured line of credit		240,000,000			—
Secured lines of credit		22,400,000			49,000,000
Total liabilities	$	414,890,101		$	187,310,959
Minority interest		459,684			477,564
Shareholders’ equity:
Preferred shares, $.01 par value; 25,000,000 shares authorized;
7.75% Series A cumulative redeemable preferred shares, liquidation preference $25.00 per share; 2,760,000 issued and outstanding		27,600			27,600
8.375% Series B cumulative redeemable preferred shares, liquidation preference $25.00 per share; 2,258,300 issued and outstanding		22,583			22,583
Common shares, $.01 par value; 200,000,000 shares authorized; 27,914,517 and 25,579,948 shares, respectively, issued and outstanding		278,991			255,799
Additional paid-in-capital		603,130,311			540,627,203
Retained earnings		6,250,150			1,900,274
Loans for stock options exercised		(263,647	)		(506,302	)
Deferred compensation		(211,203	)		(617,216	)
Total shareholders’ equity		609,234,785			541,709,941
Total liabilities and shareholders’ equity	$	1,024,584,570		$	729,498,464

(1) As of October 3, 2005, we classified as “held for sale” a consolidated real estate interest consisting of a building in Philadelphia, Pennsylvania with 456,000 square feet of office/retail space. Consequently, the results attributable to this interest have been reclassified for all periods presented to “discontinued operations” in accordance with generally accepted accounting principles.

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