[LEDGEWOOD LAW FIRM LETTERHEAD]
May 1, 2002
RAIT Investment Trust
1818 Market Street - 28th Floor
Philadelphia, PA 19103
RAIT Investment Trust
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Qualification as
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Real Estate Investment Trust
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Ladies and Gentlemen:
We have acted as counsel to RAIT Investment Trust, a Maryland real
estate investment trust (the "Company") in connection with the offer and sale by
the Company of 1,000,000 common shares of beneficial interest (the "Shares"),
par value $.01 per share (the "Common Shares"), as set forth in the Company's
Registration Statement, as amended, Registration No. 333-69422 (the
"Registration Statement"), the prospectus dated November 2, 2001 included as a
part of the Registration Statement (the "Base Prospectus") and the Company's
Prospectus Supplement dated April 25, 2002 (the "Prospectus Supplement," and
together with the Base Prospectus, the "Prospectus"). You have requested our
opinion regarding certain U.S. federal income tax matters.
The Company conducts its operations through RAIT Partnership, L.P., a
Delaware limited partnership (the "Operating Partnership"), which owns
substantially all of the Company's assets. The sole general partner of the
Operating Partnership is RAIT General, Inc. (the "General Partner"), and the
sole limited partner of the Operating Partnership is RAIT Limited, Inc. (the
"Limited Partner"). The Company owns all of the stock of each of those
corporations. As of December 31, 2001, the Operating Partnership had interests
in a portfolio of 36 loans (the "Loans") and in five real properties (two
through direct ownership, the other three through an interest in the
pass-through entities that own the properties) (the "Equity Interests"). The
Operating Partnership controls certain assets through ownership of partnership
interests, membership interests and stock ownership as set forth on Schedule A
hereto. All of the partnerships and limited liability companies on Schedule A
are collectively referred to as the "Partnerships;" all of the corporations on
Schedule A are collectively referred to as the "Corporations."
RAIT Investment Trust
May 1, 2002
Page 2
In connection with the opinions rendered below, we have examined the
following:
1. the Company's Amended and Restated Declaration of Trust
("Declaration of Trust") and bylaws ("Bylaws"), as amended
through the date hereof;
2. the Registration Statement and the Prospectus, as the same
have been amended through the date hereof;
3. the organizational documents of each of the Partnerships and
Corporations;
4. documents evidencing the Loans;
5. documents evidencing the Equity Interests;
6. such other documents as we have deemed necessary or
appropriate for purposes of this opinion.
In connection with the opinions rendered below, we have assumed
generally that:
1. Each of the documents referred to above has been duly
authorized, executed and delivered; is authentic, if an original, or is
accurate, if a copy; and has not been amended.
2. During the taxable years ended December 31, 1998, 1999, 2000
and 2001 and subsequent taxable years, the Company, the Partnerships and the
Corporations have operated and will continue to operate in such a manner that
makes and will continue to make the representations contained in certificates,
dated the date hereof and executed by duly appointed officers of the Company
(the "Officer's Certificates"), true for such years.
3. Neither the Company nor the Operating Partnership will make
any amendments to their organizational documents after the date of this opinion
that would affect the Company's qualification as a real estate investment trust
(a "REIT") for any taxable year.
RAIT Investment Trust
May 1, 2002
Page 3
4. No action will be taken by the Company, the Partnerships or
the Corporations after the date hereof that would have the effect of altering
the facts upon which the opinions set forth below are based.
In connection with the opinions rendered below, we also have relied
upon the correctness of the representations contained in the Officer's
Certificates. Where such factual representations contained in the Officer's
Certificates involve the terms defined in the Internal Revenue Code of 1986, as
amended (the "Code"), the Treasury regulations thereunder (the "Regulations"),
published rulings of the Internal Revenue Service (the "Service"), or other
relevant authority, we have explained such terms to both the Company's and the
Operating Partnership's representatives and are satisfied that such
representatives understand the terms and are capable of making such factual
representations.
Based solely on the documents and assumptions set forth above, the
representations set forth in the Officer's Certificates, the discussion in the
Prospectus Supplement and Base Prospectus under the captions "Federal Income Tax
Consequences of Our Status as a REIT" and "Supplemental Federal Income Tax
Consequences of Our Status as a REIT," respectively (which are incorporated
herein by reference), and without further investigation, we are of the opinion
that:
(a) the Company qualified to be taxed as a REIT pursuant to
sections 856 through 860 of the Code for its taxable years
ended December 31, 1998 through December 31, 2001, and the
Company's organization and current and proposed method of
operation will enable it to continue to qualify as a REIT for
its taxable year ending December 31, 2002, and in the future;
and
(b) the description of the law and the legal conclusions contained
in the Base Prospectus under the caption "Federal Income Tax
Consequences of Our Status as a REIT" and in the Prospectus
Supplement under the caption "Supplemental Federal Income Tax
Consequences of Our Status as a REIT" are correct in all
material respects, and the discussion thereunder fairly
summarizes the federal income tax considerations that are
likely to be material to a holder of the Common Shares.
RAIT Investment Trust
May 1, 2002
Page 4
Except as described herein, we have performed no further due diligence
and have made no efforts to verify the accuracy and genuineness of the documents
and assumptions set forth above, or the representations set forth in the
Officer's Certificates. We will not review on a continuing basis the Company's
nor the Operating Partnership's compliance with the documents or assumptions set
forth above, or the representations set forth in the Officer's Certificates.
Accordingly, no assurance can be given that the actual results of the Company's
or Operating Partnership's operations for its 2002 and subsequent taxable years
will satisfy the requirements for qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the Code and
the Regulations, published administrative interpretations thereof, and published
court decisions. The Service has not issued Regulations or administrative
interpretations with respect to various provisions of the Code relating to REIT
qualification. No assurance can be given that the law will not change in a way
that will prevent the Company from qualifying as a REIT.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name as it appears under the
caption "Legal Opinions." In giving this consent, we do not admit that we are in
the category of persons whose consent is required by Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations promulgated thereunder by
the SEC.
The foregoing opinions are limited to the U.S. federal income tax
matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
other country, or any state or locality. We undertake no obligation to update
the opinions expressed herein after the date of this letter. This opinion letter
is solely for the information and use of the addressee, and it may not be
distributed, relied upon for any purpose by any other person, quoted in whole or
in part or otherwise reproduced in any document, or filed with any governmental
agency without our express written consent.
Very truly yours,
/s/ Ledgewood Law Firm, P.C.
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Ledgewood Law Firm, P.C.
Schedule "A"
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a) DP Associates, LLC (Maryland)
b) OSEB GP, Inc. (Delaware)
c) RAIT 54, Inc. (Delaware)
d) RAIT Abbots GP, Inc. (Delaware)
e) RAIT Abbotts Limited Partnership (Delaware)
f) RAIT C Street Manager, Inc. (Delaware)
g) RAIT C Street Manager II, Inc. (Delaware)
h) RAIT Capital Corp. (Delaware)
i) RAIT Executive Mews Manager I, Inc. (Delaware)
j) RAIT Executive Mews Manager II, Inc. (Delaware)
k) RAIT Executive Mews Manager III, Inc. (Delaware)
l) RAIT Highland Club, Inc. (Delaware)
m) RAIT Highland Club, LLC (Delaware)
n) RAIT Rohrerstown, L.P. (Pennsylvania)
o) RAIT SLH, Inc. (Pennsylvania)
p) RAIT SLH, L.P. (Pennsylvania)
q) RAIT St. Ives Manager, Inc. (Delaware)
r) RAIT Venetian Bridges, LLC (Delaware)
s) RAIT Ventures, LLC (Delaware)
t) REM-Cherry Hill, LLC (New Jersey)
u) REM-Willow Grove, Inc. (Pennsylvania)
v) REM-Willow Grove, L.P. (Pennsylvania)
w) Resource Properties XXXVII, Inc. (Delaware)
x) Resource Properties XLV, Inc. (Delaware)
y) SL Bonds, Inc. (Delaware)
z) SLH Apartments, Inc. (Delaware)
aa) St. Ives GP, LLC. (Delaware)
bb) St. Ives Owner, L.P. (Pennsylvania)
cc) RAIT Investment Trust (Maryland and Pennsylvania)
dd) RAIT General, Inc. (Maryland and Pennsylvania)
ee) RAIT Limited, Inc. (Maryland and Pennsylvania)
ff) RAIT Partnership, L.P. (Delaware and Pennsylvania)