Company Information

3

Forward-Looking Statements

5

Earnings Release Text

6

Financial Highlights

9

Balance Sheets

     Consolidated by quarter

10

     Consolidating, by segment

11

Statements of Operations, FFO & CORE FFO

     Consolidated

12

     Consolidated – Trailing 5 Quarters

13

     Consolidating, by segment

14

Fee and Other Income

15

EBITDA and Coverage Ratios

16

Portfolio Data:

    Lending

17

    Real Estate Summary

18

    Real Estate Properties, Changes in the portfolio

19

    Real Estate Properties at June 30, 2016

20

Indebtedness Overview

21

Definitions

22

Corporate Headquarters

Two Logan Square

100 N. 18^th Street, 23^rd Floor

Philadelphia, Pa 19103

215.207.2100

Trading Symbol

NYSE: “RAS”

Investor Relations Contact

Andres Viroslav

Two Logan Square

100 N. 18^th Street, 23^rd Floor

Philadelphia, Pa 19103

215.207.2100

For the Three Months Ended

June 30,         2016

March 31, 2016

December 31,

2015

September 30,

2015

June 30,

2015

Common:

Share Price, period end

$

3.13

$

3.14

$

2.70

$

4.96

$

6.11

Share Price, high

$

3.39

$

3.23

$

5.45

$

6.24

$

7.08

Share Price, low

$

2.73

$

1.85

$

2.25

$

4.77

$

6.04

Dividends declared

$

0.09

$

0.09

$

0.09

$

0.18

$

0.18

Dividend yield, period end

11.5

%

11.5

%

13.3

%

14.5

%

11.8

%

Common shares outstanding

92,185,242

91,870,571

91,586,767

90,898,034

82,895,723

Weighted Average common shares, basic

91,190,583

91,018,160

90,642,318

87,110,958

82,150,475

Weighted Average common shares, diluted

91,190,583

91,018,160

90,842,752

87,110,958

89,268,462

Preferred:

Series A

Shares outstanding

5,306,084

5,306,084

5,306,084

5,306,084

5,303,591

Share price, period end

$

19.55

$

17.50

$

18.15

$

18.19

22.34

Par, per share

$

25.00

$

25.00

$

25.00

$

25.00

$

25.00

Dividend

$

0.484375

$

0.484375

$

0.484375

$

0.484375

$

0.484375

Yield

9.9

%

11.1

%

10.7

%

10.7

%

8.7

%

Series B

Shares outstanding

2,340,969

2,340,969

2,340,969

2,340,969

2,325,626

Share price, period end

$

19.97

$

17.94

$

18.98

$

19.06

$

22.92

Par, per share

$

25.00

$

25.00

$

25.00

$

25.00

$

25.00

Dividend

$

0.5234375

$

0.5234375

$

0.5234375

$

0.5234375

$

0.5234375

Yield

10.5

%

11.7

%

11.0

%

11.0

%

9.1

%

Series C

Shares outstanding

1,640,425

1,640,425

1,640,425

1,640,425

1,640,100

Share price, period end

$

21.27

$

18.20

$

19.70

$

20.14

$

24.15

Par, per share

$

25.00

$

25.00

$

25.00

$

25.00

$

25.00

Dividend

$

0.5546875

$

0.5546875

$

0.5546875

$

0.5546875

$

0.5546875

Yield

10.4

%

12.2

%

11.3

%

11.0

%

9.2

%

Series D (not publicly traded)

Shares outstanding

4,000,000

4,000,000

4,000,000

4,000,000

4,000,000

Par, per share

$

25.00

$

25.00

$

25.00

$

25.00

$

25.00

Coupon

8.50

%

8.50

%

8.50

%

7.50

%

7.50

%

-

As part of RAIT’s capital recycling and debt reduction plan, RAIT sold six properties for $49.2 million during the quarter ended June 30, 2016 and eight properties totaling $65.9 million for the six-months ended June 30, 2016.

-

RAIT’s indebtedness, based on principal amount, declined by $247.1 million, comprised of $34.5 million of recourse indebtedness and $212.6 million of non-recourse indebtedness, during the quarter ended June 30, 2016 from March 31, 2016.

-

GAAP Earnings (loss) per share of ($0.08) for the quarter ended June 30, 2016 compared to earnings (loss) per share of $0.22 for the quarter ended June 30, 2015.  GAAP Earnings (loss) per share of ($0.28) for the six months ended June 30, 2016 compared to earnings (loss) per share of $0.14 for the six months ended June 30, 2015.

-

Cash Available for Distribution (“CAD”) per share of $0.12 for the quarter ended June 30, 2016 compared to $0.21 for the quarter ended June 30, 2015.  CAD per share of $0.26 for the six months ended June 30, 2016 compared to $0.39 for the six-months ended June 30, 2015.

-

RAIT originated $23.2 million of loans during the quarter ended June 30, 2016 and $63.7 million of loans for the six-months ended June 30, 2016.

-

RAIT declared a second quarter dividend of $0.09 per common share on June 15, 2016.

-

RAIT originated $23.2 million of loans during the quarter ended June 30, 2016 consisting of $5.0 million of fixed-rate conduit loans and $18.2 million of floating-rate bridge loans.  RAIT originated $63.7 million of loans during the six months ended June 30, 2016 consisting of $13.8 million of fixed-rate conduit loans and $49.9 million of floating-rate bridge loans.

-

CRE loan repayments were $119.9 million for the quarter ended June 30, 2016 and $175.0 million for the six-months ended June 30, 2016.

-

As of June 30, 2016, RAIT’s investments in real estate were $2.2 billion which includes $1.3 billion of multi-family properties owned by Independence Realty Trust, Inc. (“IRT”) (NYSE MKT: IRT).  IRT is externally advised by RAIT and is a consolidated RAIT entity. IRT is a REIT focused on owning multifamily properties. At June 30, 2016, RAIT owned 15.4% of IRT’s outstanding common stock.

-

During the quarter ended June 30, 2016, RAIT sold six properties, consisting of five apartment communities and one parcel of land, for $49.2 million which generated a $5.9 million GAAP gain.   The proceeds from the sales were used to reduce debt. During the quarter ended June 30, 2016, IRT sold two apartment communities for $70.0 million and also used the proceeds to reduce debt.

-

During the quarter ended June 30, 2016, RAIT converted one loan secured by two industrial properties and two office properties, respectively, into ownership of those properties. Those properties had an aggregate carrying value of $18.4 million.

-

RAIT reported a $3.9 million asset impairment for the quarter ended June 30, 2016.

-

Total assets under management of $5.5 billion at June 30, 2016 from $5.9 billion at December 31, 2015.

-

RAIT’s property management companies managed 17,954 apartment units and 19.4 million square feet of office and retail space at June 30, 2016.

-

RAIT generated $3.1 million and $6.0 million in asset and property management fees and incentive fees through its external management of IRT during the quarter and six-months ended June 30, 2016, respectively.

-

RAIT generated $2.4 million and $4.4 million of property management and leasing fees primarily through its retail property manager subsidiary and through services provided by its multi-family property manager subsidiary to unaffiliated properties during the quarter and six-months ended June 30, 2016, respectively.

-

On June 15, 2016, RAIT’s Board of Trustees (the “Board”) declared a second quarter 2016 cash dividend on RAIT’s common shares of $0.09 per common share. The dividend was paid on July 29, 2016 to holders of record on July 8, 2016.

-

On May 19, 2016, the Board declared a second quarter 2016 cash dividend of $0.484375 per share on RAIT’s 7.75% Series A Cumulative Redeemable Preferred Shares, $0.5234375 per share on RAIT’s 8.375% Series B Cumulative Redeemable Preferred Shares and $0.5546875 per share on RAIT’s 8.875% Series C Cumulative Redeemable Preferred Shares. The dividends were paid on June 30, 2016 to holders of record on June 1, 2016.

-

On July 27, 2016, the Board declared a third quarter 2016 cash dividend of $0.484375 per share on RAIT’s 7.75% Series A Cumulative Redeemable Preferred Shares, $0.5234375 per share on RAIT’s 8.375% Series B Cumulative Redeemable Preferred Shares and $0.5546875 per share on RAIT’s 8.875% Series C Cumulative Redeemable Preferred Shares. The dividends will be paid on September 30, 2016 to holders of record on September 1, 2016.

2016 Projected Net Income 

2016 Projected Net Income and CAD⁽¹⁾⁽²⁾

Net income (loss) available to common shares

$(32,472)

-

$(25,683)

Earnings (loss) per share

$(0.30)

-

$(0.23)

2016 Projected CAD

Net income (loss) available to common shares

$(32,472)

-

$(25,683)

Adjustments:

Depreciation and amortization

89,738

-

89,738

Real estate (gains) losses

(57,881)

-

(57,881)

Other items, including deferred fees, stock compensation, and noncontrolling interest allocation of certain adjustments

44,244

-

44,244

CAD

$43,628

-

$50,417

CAD per share

$0.48

-

$0.55

(1)

See Schedule VI for our definition of CAD.

(2)

Constitutes forward-looking information.  Actual full 2016 CAD could vary significantly from the projections presented.  CAD may fluctuate based upon a variety of factors, including those described in “Forward Looking Statements” below.  Our estimate is based on the following key operating assumptions during 2016:

-

Gross loan originations of $200 million.

-

No CMBS gain on sale profits.

-

Loan repayments totaling $350 million.

($'s in 000's)

For the Three Months Ended

June 30,

2016

March 31,

2016

December 31,

2015

September 30,        2015

June 30,

2015

OPERATING DATA:

Lending:

Investments in loans

$

1,495,343

$

1,612,632

$

1,623,583

$

1,588,097

$

1,506,542

Gross loan production

$

23,185

$

40,475

$

321,837

$

237,674

$

218,613

CMBS income

$

(260

)

$

171

$

1,135

$

434

$

3,681

CMBS loans sold

$

21,377

$

-

$

85,430

$

116,251

$

130,401

Average CMBS Gain on Sale (points)

(1.2

)

(a)

-

1.3

0.4

2.8

Real estate portfolio: (b)

Gross real estate investments

$

2,409,139

$

2,487,634

$

2,517,645

$

2,448,331

$

1,783,888

Property income

$

67,898

$

68,722

$

69,464

$

55,459

$

55,534

Operating expenses

$

29,950

$

30,706

$

31,013

$

26,081

$

26,630

Net operating income

$

37,948

$

38,016

$

38,451

$

29,378

$

28,904

NOI margin

55.9

%

55.3

%

55.4

%

53.0

%

52.0

%

EARNINGS & DIVIDENDS:

Earnings (loss) per share -- diluted

$

(0.08

)

$

(0.20

)

$

0.02

$

(0.07

)

$

0.22

FFO per share

$

(0.08

)

$

(0.07

)

$

(0.08

)

$

(0.05

)

$

0.15

CAD per share

$

0.12

$

0.14

$

0.19

$

0.20

$

0.21

Dividends per share

$

0.09

$

0.09

$

0.09

$

0.18

$

0.18

CAD payout ratio

75.0

%

64.3

%

47.4

%

90.0

%

85.7

%

CAPITALIZATION AND COVERAGE RATIOS:

Recourse/Non-Recourse Debt:

Recourse

$

479,608

$

509,466

$

484,764

$

576,557

$

486,326

Non-Recourse (b)

2,501,130

2,733,169

2,843,318

2,593,618

2,150,085

Total Recourse/Non-Recourse debt

2,980,738

3,242,635

3,328,082

3,170,175

2,636,411

Preferred shares (par)

332,187

332,187

332,187

332,187

331,733

Common shares (market capitalization)

288,540

288,474

247,284

450,854

506,493

Noncontrolling interests, at carrying value (b)

348,331

331,328

340,213

346,063

204,034

Total capitalization

$

3,949,795

$

4,194,624

$

4,247,766

$

4,299,279

$

3,678,671

Total Liabilities/Total Gross Assets

75.7

%

77.3

%

77.4

%

76.7

%

77.0

%

Total Liabilities + Preferred/Total Gross Assets

83.4

%

84.6

%

84.5

%

84.2

%

85.9

%

Interest Coverage

1.83

x

1.85

x

1.94

x

1.81

x

2.12

x

Interest + Preferred Coverage

1.46

x

1.49

x

1.55

x

1.42

x

1.63

x

OTHER KEY BENCHMARKS:

Total Assets Under Management (AUM)

$

5,491,448

$

5,854,824

$

5,923,601

$

5,820,702

$

4,764,259

Total Gross Assets

$

4,275,086

$

4,551,613

$

4,634,035

$

4,461,691

$

3,744,699

(a)

During the second quarter of 2016, we sold $21.4 million of CMBS loans at a loss on sale.  Including the net interest margin we earned on these loans since their origination, we had a net gain of $49, or 0.2 points.

(b)

Includes IRT.

($'s in 000's)

As of

June 30,

2016

March 31,

2016

December 31,

2015

September 30,

2015

June 30,

2015

Assets

Investments in loans:

Investment in loans

$

1,495,343

$

1,612,632

$

1,623,583

$

1,588,097

$

1,506,542

Allowance for loan losses

(18,237

)

(18,165

)

(17,097

)

(14,646

)

(12,796

)

Investments in loans, net

1,477,106

1,594,467

1,606,486

1,573,451

1,493,746

Investments in real estate:

Investments in real estate at cost

2,409,139

2,487,634

2,517,645

2,448,331

1,783,888

Accumulated depreciation

(209,096

)

(209,421

)

(198,326

)

(188,581

)

(178,572

)

Investments in real estate, net

2,200,043

2,278,213

2,319,319

2,259,750

1,605,316

Cash and cash equivalents

66,885

94,569

125,886

92,652

104,772

Restricted cash

159,429

200,166

213,012

159,200

179,878

Accrued interest receivable

42,139

49,987

47,343

56,249

56,844

Other assets

68,794

73,670

71,207

76,222

77,708

Intangible assets, net

25,668

26,698

32,675

39,306

32,195

Total assets

$

4,040,064

$

4,317,770

$

4,415,928

$

4,256,830

$

3,550,459

Liabilities and Equity

Indebtedness, net

$

3,005,259

$

3,267,230

$

3,328,082

$

3,170,175

$

2,636,411

Accrued interest payable

11,102

13,160

9,834

13,748

11,042

Accounts payable and accrued expenses

32,483

29,989

39,672

42,219

52,728

Derivative liabilities

3,972

4,181

4,727

8,960

12,154

Borrowers' escrows, dividends payable and other liabilities

182,324

203,612

203,477

188,797

172,621

Total liabilities

3,235,140

3,518,172

3,585,792

3,423,899

2,884,956

Series D preferred stock

88,861

87,085

85,395

83,787

82,513

Equity:

Shareholders' Equity:

7.75% Series A Preferred shares

53

53

53

53

53

8.375% Series B Preferred shares

23

23

23

23

23

8.875% Series C Preferred shares

17

17

17

17

17

Common shares, $0.03 par value per share

2,766

2,756

2,748

2,727

2,487

Additional paid in capital

2,088,781

2,087,913

2,087,137

2,082,695

2,039,594

Accumulated other comprehensive income (loss)

(972

)

(2,434

)

(4,699

)

(8,022

)

(11,605

)

Retained earnings (deficit)

(1,722,936

)

(1,707,143

)

(1,680,751

)

(1,674,412

)

(1,651,613

)

Total shareholders' equity

367,732

381,185

404,528

403,081

378,956

Noncontrolling Interests

348,331

331,328

340,213

346,063

204,034

Total equity

716,063

712,513

744,741

749,144

582,990

Total liabilities and equity

$

4,040,064

$

4,317,770

$

4,415,928

$

4,256,830

$

3,550,459

($'s in 000's)

As of June 30, 2016

RAIT

IRT

Corporate / Eliminations

Consolidated

Assets

Investments in loans:

Investment in loans

$

1,495,343

$

-

$

-

$

1,495,343

Allowance for loan losses

(18,237

)

-

-

(18,237

)

Investments in loans, net

1,477,106

-

-

1,477,106

Investments in real estate:

Investments in real estate at cost

1,095,024

1,314,115

-

2,409,139

Accumulated depreciation

(164,037

)

(45,059

)

-

(209,096

)

Investments in real estate, net

930,987

1,269,056

-

2,200,043

Investment in IRT

55,583

-

(55,583

)

-

Cash and cash equivalents

38,834

28,051

-

66,885

Restricted cash

152,650

6,779

-

159,429

Accrued interest receivable

42,139

-

-

42,139

Other assets

65,245

3,985

(436

)

68,794

Intangible assets, net

25,668

-

-

25,668

Total assets

$

2,788,212

$

1,307,871

$

(56,019

)

$

4,040,064

Liabilities and Equity

Indebtedness, net

$

2,124,971

$

880,288

$

-

$

3,005,259

Accrued interest payable

10,401

701

-

11,102

Accounts payable and accrued expenses

14,676

17,807

-

32,483

Derivative liabilities

2,809

1,163

-

3,972

Borrowers' escrows, dividends payable and other liabilities

176,796

5,964

(436

)

182,324

Total liabilities

2,329,653

905,923

(436

)

3,235,140

Series D preferred stock

88,861

-

-

88,861

Equity:

Shareholders' Equity:

7.75% Series A Preferred shares

53

-

-

53

8.375% Series B Preferred shares

23

-

-

23

8.875% Series C Preferred shares

17

-

-

17

Common shares, $0.03 par value per share

2,766

475

(475

)

2,766

Additional paid in capital

2,088,781

380,532

(380,532

)

2,088,781

Accumulated other comprehensive income (loss)

(972

)

(1,195

)

1,195

(972

)

Retained earnings (deficit)

(1,722,936

)

(2,601

)

2,601

(1,722,936

)

Total shareholders' equity

367,732

377,211

(377,211

)

367,732

Noncontrolling Interests

1,966

24,737

321,628

348,331

Total equity

369,698

401,948

(55,583

)

716,063

Total liabilities and equity

$

2,788,212

$

1,307,871

$

(56,019

)

$

4,040,064

($'s in 000's, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2016

2015

2016

2015

Revenue:

Net interest margin

Investment interest income

$

23,519

$

24,107

$

49,321

$

47,355

Investment interest expense

(9,125

)

(7,582

)

(18,445

)

(14,496

)

Net interest margin

14,394

16,525

30,876

32,859

Property income

67,898

55,534

136,620

108,808

Fee and other income

2,775

7,629

5,627

13,223

Total revenue

85,067

79,688

173,123

154,890

Expenses:

Interest expense

22,890

19,673

48,472

39,356

Real estate operating expenses

29,950

26,630

60,656

51,907

Compensation expenses

7,922

6,568

14,997

12,676

General and administrative expenses

5,585

5,065

10,648

10,465

Acquisition and integration expenses

229

985

498

1,942

Provision for loan losses

1,344

2,000

2,669

4,000

Depreciation and amortization expense

22,806

17,007

47,082

36,031

Total expenses

90,726

77,928