RAIT Financial Trust | Understand Stock

No Longer Reporting

The company has not filed an annual or quarterly report since its Q2 FY2019 10-Q, filed Nov 7, 2019. Its latest SEC filing is a 15-12B from Mar 27, 2020.

The sections below describe the company as of the FY2018 annual report.

What Did They Do?

Manages commercial real estate loans and properties, serving commercial property borrowers and tenants in office and retail buildings.

How Did They Make Money?

Borrowers pay interest on commercial mortgage and mezzanine loans and preferred equity, tenants pay rent on office and retail properties, and third parties pay asset- and property-management fees. Loan interest accrues over the investment term; management fees are earned when services are provided.

FY2018 revenue

Who Were Their Customers?

RAIT sought direct lending relationships with commercial property borrowers; tenants rented its office and retail properties. It also provided asset-management services to investment portfolios and property management to third parties.

Did Revenues Turn Into Profits?

No. It lost $123.5M in FY2018.

Operating income, FY2018

−138% of revenue

▼ −20% (Loss) vs FY2017 (−$85.1M, −85%)

Net income, FY2018

−251% of revenue

▼ −19% (Loss) vs FY2017 (−$151.8M, −152%)

How Were They Changing?

Since the FY2018 annual report

Latest quarter: Q2 FY2019, the three months to Jun 30, 2019

Revenue: ▼ −65%; vs $16.6M in Q2 FY2018
Net income: ▲ Now profitable; vs −$57M in Q2 FY2018

Mar 27, 2020 Liquidation plan took effect, canceling RAIT securities RAIT had no ongoing business operations except those needed to wind up its affairs and distribute assets.
Jan 31, 2020 Bankruptcy court confirmed a plan canceling common and preferred shares The plan provided no recovery for holders of those shares and continued the debtors for winding down and distributing assets.
Dec 26, 2019 Sold subsidiaries and assets to CF RFP Holdings The sale included substantially all operating assets and closed for $172.8 million, including $40.2 million of cash retained by RAIT.

Shrank. Revenue fell 79% in 4 years, from $238.2M in FY2014 to $49.3M in FY2018, about 33% a year.

From new lending to asset runoff The older report describes originating a range of loans and investing across lending and property ownership. The latest report says loan originations are suspended, while RAIT sells owned properties and continues servicing and managing its existing loan portfolio.

Reduced property-management services The older report describes property-management services across apartment, office and retail businesses. The latest report says RAIT sold its retail property manager subsidiary and had provided property-management services to third parties before the sale.