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RAIT Suffers $244M Loss in Q3

PHILADELPHIA-Still reeling from the turbulent residential mortgage and homebuilder markets, the REIT tightens its belt and explores new programs.

By Marita Thomas | Updated on November 06, 2007

PHILADELPHIA-RAIT Financial Trust posted a $243.6-million loss in the third quarter of this year, compared with a profit of $18.4 million in the same quarter a year ago. The culprits are borrowers in the residential mortgage and homebuilder sectors , which have been hard hit by the current credit-market turbulence and caused RAIT nearly $343 million in impairments in the recent quarter.

Despite the loss, revenue rose to $56 million, up from $26.5 million in the prior-year quarter. The locally based REIT paid down $700 million of short-term borrowing during the quarter in a measure Daniel Cohen, CEO, called “prudent to retain some adjusted earnings.”

The company had $176.6 million of available cash, $441 million of restricted cash, and $81 million of unused capacity under commercial bank facilities on Sept. 30. “We have resumed lending in fourth quarter,” Cohen said during a conference call, adding, “we anticipate slower growth, but growth.” He also said the company continues to monitor its borrowers carefully.

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