SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 30, 2001
RAIT Investment Trust
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(Exact name of registrant as specified in its charter)
Maryland 1-14760 23-2919819
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(State of incorporation (Commission (I.R.S. Employer
or organization) File Number) Identification No.)
1818 Walnut Street, 28th Floor, Philadelphia, PA 19103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including are code (215) 861-7900
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Item 5 Other Events and Regulation FD Disclosure
Earnings Announcement. We have announced our earnings for the second
quarter of 2001. A copy of the form of announcement is set forth in Exhibit 99.1
hereto, which is incorporated by reference in this Item 5. This incorporation by
reference, however, excludes our web site, to which we refer in the press
release.
Recent Investments and Commitments. On March 28, 2001, we completed a
public offering of 2,800,000 shares. Following that offering, we have made, or
committed to make, the eight loans described below.
In June 2001, we committed to provide $2.0 million of first mortgage
financing to a limited liability company that has agreed to acquire a 152 unit
apartment complex in Horseheads, New York for $2.3 million. We anticipate that
the transaction will close early in our third fiscal quarter.
In June 2001, we provided $7.0 million of mezzanine financing to a
limited liability company in connection with its acquisition of a hotel
property in Coral Gables, Florida for $24.4 million. The acquisition also was
financed by a $16.3 million first mortgage loan from a third party. Our loan is
secured by a pledge of 100% of the membership interests of the borrower, a
pledge of 100% of the membership interests of the non-member manager of the
borrower and a conditional assignment of the management agreements with Omni
Hotels Management Corporation, the current manager of the property.
In June 2001, we provided $1.6 million of financing in connection with
the borrower's acquisition of a loan from Resource America, Inc. with respect to
an 81 unit apartment complex in Middletown, Connecticut. Our loan is secured by
a collateral assignment of all of the underlying documents evidencing the loan
acquired from Resource America, including assignment of the first mortgage
encumbering the property.
In June 2001, we provided $7.5 million of financing with respect to a
residential real property located in Naples, Florida with an appraised value of
$20.0 million. Our loan is to a limited liability company and is guaranteed by
the members of the borrower. The guaranty is secured by a first priority
mortgage on the residential real property. We are currently negotiating with
Commerce Bank to sell a $5.0 million participation interest in the financing. We
cannot assure you, however, that an interest ultimately will be sold to Commerce
Bank, or as to the size of any interest we finally may sell.
In June 2001, we provided $5.5 million of mezzanine financing in
connection with a limited partnership's acquisition of a 516 unit apartment
building in Philadelphia, Pennsylvania for $19.0 million, including closing
costs. The acquisition also was financed by a $13.5 million first mortgage loan
from a third party. Our financing was in the form of a loan to the sole limited
partner of the acquiring partnership, which contributed the funds to the
acquiring partnership. To secure our loan, the partners of the acquiring
partnership pledged all of their ownership interest in the acquiring partnership
to us. Through a subsidiary, we also own 50% of, and are the managing member of,
the general partner of the acquiring partnership. In addition, we are the
non-member manager of the general partner of the borrower, which is the sole
limited partner of the acquiring partnership. Further, Brandywine Construction &
Management, Inc., an affiliate of Resource America, provides management services
to the property.
In April 2001, we made a $9.1 million loan, secured by a first lien
mortgage on an office complex located in Willow Grove, Pennsylvania, and a
pledge of the equity interests of the borrower. We simultaneously entered into a
master lease agreement with the borrower under which we leased the premises for
a term of 29 years and 11 months and were given all rights to operate and lease
the property. The monthly rent under the master lease is equal to the debt
service payment on the loan plus approximately $10,000. The monthly net
operating income from the property is approximately $86,000. Although we do not
own the premises, we are the manager of the borrower's general partner, with all
rights to control the borrower. As part of this transaction, we received a
purchase option to purchase the limited partnership interests in the borrower
for fair market value upon the death of the last to die of the limited partners.
Approximately 20% of the property is operated as short-term office space.
Because REITs are subject to restrictions with respect to the income derived
from operating short-term office space, we subleased this portion of the office
complex to a subsidiary of Brandywine Construction & Management for an annual
rent of $410,000.
Also in April 2001, we made an $8.6 million loan, secured by a first
lien mortgage on an office complex located in Cherry Hill, New Jersey and a
pledge of the equity interests of the borrowers. We entered into a master lease
agreement with the borrowers to lease the property for a term of 40 years. The
monthly rent under the master lease is equal to the debt service payment on the
loan plus approximately $10,000. The monthly net operating income from the
property is approximately $76,000. We are the manager of the borrowers with all
rights to control the borrowers. We received a purchase option from the members
of the sole member of the borrowers to purchase their membership interests for
fair market value upon the death of the last to die of the members.
Approximately 15% of the property is operated as short-term office space.
Therefore, we subleased this portion of the office complex to a subsidiary of
Brandywine Construction & Management for an annual rent of $242,000.
In March, 2001, we provided $3.2 million of mezzanine financing in
connection with a limited liability company's acquisition of and construction of
leasehold and other capital improvements to a 184,000 square foot office
building in Voorhees, New Jersey. The total cost of the acquisition and
improvements was approximately $19.7 million. The project was also financed by a
$15.1 million first mortgage loan from a third party. Our loan is secured by a
pledge of 100% of the membership interests in the borrower. As additional
security, the borrower granted to us an option to purchase the property, for
which a memorandum of purchase option was recorded. The loan is further secured
by an assignment of the management agreement with The Arden Group, Inc., the
current manager of the property.
Item 7 Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1-Form of news release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RAIT INVESTMENT TRUST
By: /s/ Ellen J. DiStefano
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Ellen J. DiStefano
Chief Financial Officer