(Read more on the multifamily market.)
PHILADELPHIA-The first-quarter financial report from RAIT Financial Trust has shed light on the results of the merger between the former RAIT Investment Trust and Taberna Realty Finance Trust in December 2006. During its first quarter as a merged entity, net investment income reached $43 million, up from $15.4 million in the same quarter a year ago.
European transactions are seen as an important avenue of growth in coming quarters, said Daniel Cohen, CEO, during a conference call. In February the company closed on its first European CDO, which aggregated 600 million euros ($781.1 million US). Cohen said the company has realized $5.6 million in fees from the transaction so far. "Our goal is to do between six to eight CDOs this year," he stated." European business is growing and already profitable."
The locally based company's total originations of commercial real estate loans and trust preferred securities for the quarter reached $1.4 billion. Total assets under management were approximately $14 billion, compared with $11.9 billion on Dec. 31, 2006.
While the weight of asset classes in its own portfolio tilted a bit toward multifamily at the expense of office for the quarter, during the conference call, chairperson Betsey Cohen said it represented "a snapshot." Traditionally the portfolio contains about 40% each of multifamily and office, with another 15% in neighborhood retail. "We'll rebalance. We're not doing anything different, just more of it."
Asked about the company's subprime and homebuilder exposure, Daniel Cohen said, "Our subprime exposure is very, very limited and totals less than $13 million." Regarding investment in homebuilders, he added, "we look at all the companies we lend to, and our exposure there is amply covered. We don't expect any losses."
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