Company Information

3

Forward-Looking Statements

5

Earnings Release Text

6

Financial Highlights

10

Balance Sheets

     Consolidated by quarter

11

Statements of Operations, FFO & CORE FFO

     Consolidated

12

     Consolidated – Trailing 5 Quarters

13

Fee and Other Income

14

EBITDA and Coverage Ratios

15

Portfolio Data:

    Lending

16

    Real Estate Summary

17

    Real Estate Properties, Changes in the portfolio

18

    Real Estate Properties at September 30, 2016

19

Indebtedness Overview

20

Definitions

21

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

September 30, 2016

June 30,

2016

March 31, 2016

December 31,

2015

September 30,

2015

Common:

Share Price, period end

$

3.38

$

3.13

$

3.14

$

2.70

$

4.96

Share Price, high

$

3.40

$

3.39

$

3.23

$

5.45

$

6.24

Share Price, low

$

2.88

$

2.73

$

1.85

$

2.25

$

4.77

Dividends declared

$

0.09

$

0.09

$

0.09

$

0.09

$

0.18

Dividend yield, period end

10.7

%

11.5

%

11.5

%

13.3

%

14.5

%

Common shares outstanding

92,174,644

92,185,242

91,870,571

91,586,767

90,898,034

Weighted Average common shares, basic

91,200,387

91,190,583

91,018,160

90,642,318

87,110,958

Weighted Average common shares, diluted

91,200,387

91,190,583

91,018,160

90,842,752

87,110,958

Preferred:

Series A

Shares outstanding

5,344,353

5,306,084

5,306,084

5,306,084

5,306,084

Share price, period end

$

20.34

$

19.55

$

17.50

$

18.15

$

18.19

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

9.5

%

9.9

%

11.1

%

10.7

%

10.7

%

Series B

Shares outstanding

2,340,969

2,340,969

2,340,969

2,340,969

2,340,969

Share price, period end

$

21.76

$

19.97

$

17.94

$

18.98

$

19.06

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

9.6

%

10.5

%

11.7

%

11.0

%

11.0

%

Series C

Shares outstanding

1,640,425

1,640,425

1,640,425

1,640,425

1,640,425

Share price, period end

$

22.93

$

21.27

$

18.20

$

19.70

$

20.14

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

9.7

%

10.4

%

12.2

%

11.3

%

11.0

%

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

%

8.50

%

7.50

%

-

RAIT entered into an agreement with Independence Realty Trust, Inc. (“IRT”) to sell IRT’s external advisor and RAIT’s multi-family property management business to IRT for $43.0 million.  Additionally, as part of the agreement, RAIT sold its IRT stock ownership position to IRT generating $62.2 million in gross proceeds.

-

RAIT sold twelve properties totaling $191.8 million for the nine-months ended September 30, 2016, excluding IRT property sales, and four properties for $125.9 million during the quarter ended September 30, 2016.  RAIT generated $24.0 million in GAAP gains and $15.1 million of net proceeds for the nine-month period ended September 30, 2016, excluding IRT’s property sales.

-

RAIT’s indebtedness, based on principal amount, declined by $440.0 million during the nine-month period ended September 30, 2016.

-

GAAP Earnings (loss) per share of $0.00 for the quarter ended September 30, 2016 compared to earnings (loss) per share of ($0.07) for the quarter ended September 30, 2015.  GAAP Earnings (loss) per share of ($0.28) for the nine-months ended September 30, 2016 compared to earnings (loss) per share of $0.06 for the nine-months ended September 30, 2015.

-

Cash Available for Distribution (“CAD”) per share of $0.12 for the quarter ended September 30, 2016 compared to $0.20 for the quarter ended September 30, 2015.  CAD per share of $0.37 for the nine-months ended September 30, 2016 compared to $0.59 for the nine-months ended September 30, 2015.

-

RAIT declared a third quarter dividend of $0.09 per common share on September 19, 2016.

-

RAIT originated $25.6 million of loans during the quarter ended September 30, 2016 consisting of two floating-rate bridge loans.  RAIT originated $89.2 million of loans during the nine months ended September 30, 2016 consisting of $75.4 million of floating-rate bridge loans and $13.8 million of fixed-rate conduit loans.

-

RAIT sold $13.8 million of conduit loans during the quarter ended September 30, 2016 which generated fee income of $0.3 million.

-

CRE loan repayments were $133.2 million for the quarter ended September 30, 2016 and $308.2 million for the nine-months ended September 30, 2016.

-

As of September 30, 2016, RAIT’s investments in real estate were $965.4 million comprised of $333.4 million of office properties, $284.5 million of multi-family properties, $123.4 million of retail properties, $93.5 million of industrial properties, $80 million of properties in re-development and $50.6 million of land.  

-

During the quarter ended September 30, 2016, RAIT sold four apartment communities for $125.9 million which generated an $18.3 million GAAP gain.   The proceeds from the sales were used to reduce debt and the sales generated $15.1 million of net proceeds to RAIT.

-

RAIT reported an $18.9 million asset impairment for the quarter ended September 30, 2016. Approximately $10 million of the impairment represents RAIT’s exposure in an $85.8 million industrial portfolio. The balance of the impairment pertains to three real estate assets that are expected to be sold.

-

Total assets under management of $5.1 billion at September 30, 2016 from $5.9 billion at December 31, 2015.

-

RAIT’s property management companies managed 16,960 apartment units and 17.4 million square feet of office and retail space at September 30, 2016.

-

RAIT generated $3.2 million and $9.2 million in asset and property management fees and incentive fees through its external management of IRT during the quarter and nine-months ended September 30, 2016, respectively.

-

RAIT generated $1.9 million and $6.3 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 nine-months ended September 30, 2016, respectively.

-

On September 19, 2016, the Board declared a third quarter 2016 cash dividend on RAIT’s common shares of $0.09 per common share. The dividend was paid on October 31, 2016 to holders of record on October 7, 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 were paid on September 30, 2016 to holders of record on September 1, 2016.

-

On November 2, 2016, the Board declared a fourth 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 January 3, 2017 to holders of record on December 1, 2016.

2016 Projected Net Income

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

Net income (loss) available to common shares

$16,089

-

$27,236

Earnings (loss) per share

$0.18

-

$0.30

2016 Projected CAD

Net income (loss) available to common shares

$16,089

-

$27,236

Adjustments:

Depreciation and amortization

45,596

-

45,596

Real estate (gains) losses

(52,489)

-

(59,989)

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

33,043

-

33,043

CAD

$42,239

-

$45,886

CAD per share

$0.46

-

$0.50

(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

September 30,

2016

June 30,

2016

March 31,

2016

December 31,

2015

September 30,   2015

OPERATING DATA:

Lending:

Investments in loans

$

1,373,615

$

1,495,343

$

1,612,632

$

1,623,583

$

1,588,097

Gross loan production

$

25,550

$

23,185

$

40,475

$

321,837

$

237,674

CMBS income

$

305

$

(260

)

$

171

$

1,135

$

434

CMBS loans sold

$

13,800

$

21,377

$

-

$

85,430

$

116,251

Average CMBS Gain on Sale (points)

2.2

(1.2

)

(a)

-

1.3

0.4

Real estate portfolio:

Gross real estate investments

$

965,362

$

1,095,024

$

1,130,295

$

1,145,630

$

1,047,439

Property income

$

29,614

$

29,665

$

30,055

$

29,756

$

29,968

Operating expenses

$

14,635

$

14,327

$

14,848

$

14,922

$

14,991

Net operating income

$

14,979

$

15,338

$

15,207

$

14,834

$

14,977

NOI margin

50.6

%

51.7

%

50.6

%

49.9

%

50.0

%

EARNINGS & DIVIDENDS:

Earnings (loss)  per share from continuing operations - diluted

$

(0.02

)

$

(0.15

)

$

(0.22

)

$

(0.02

)

$

(0.11

)

Earnings (loss) per share from discontinued operations - diluted

$

0.02

$

0.07

$

0.02

$

0.04

$

0.04

Earnings (loss) per share -- diluted

$

-

$

(0.08

)

$

(0.20

)

$

0.02

$

(0.07

)

FFO per share

$

0.12

$

(0.04

)

$

(0.03

)

$

(0.07

)

$

0.03

CAD per share

$

0.12

$

0.12

$

0.14

$

0.19

$

0.20

Dividends per share

$

0.09

$

0.09

$

0.09

$

0.09

$

0.18

CAD payout ratio

75.0

%

75.0

%

64.3

%

47.4

%

90.0

%

CAPITALIZATION AND COVERAGE RATIOS:

Recourse/Non-Recourse Debt:

Recourse

$

509,938

$

479,608

$

509,466

$

484,764

$

576,557

Non-Recourse

1,441,510

1,620,777

1,830,841

1,914,711

1,648,412

Total Recourse/Non-Recourse debt

1,951,448

2,100,385

2,340,307

2,399,475

2,224,969

Preferred shares (par)

333,144

332,187

332,187

332,187

332,187

Common shares (market capitalization)

311,550

288,540

288,474

247,284

450,854

Noncontrolling interests, at carrying value (b)

5,386

1,792

2,782

3,948

4,727

Total capitalization

$

2,601,528

$

2,722,904

$

2,963,750

$

2,982,894

$

3,012,737

Total Liabilities/Total Gross Assets

74.9

%

75.7

%

77.3

%

77.4

%

76.7

%

Total Liabilities + Preferred/Total Gross Assets

83.0

%

83.4

%

84.6

%

84.5

%

84.2

%

Interest Coverage

1.79

x

1.82

x

1.84

x

1.93

x

1.80

x

Interest + Preferred Coverage

1.41

x

1.46

x

1.49

x

1.54

x

1.41

x

OTHER KEY BENCHMARKS:

Total Assets Under Management (AUM)

$

5,128,101

$

5,491,448

$

5,854,824

$

5,923,601

$

5,820,702

Total Gross Assets

$

4,118,215

$

4,275,086

$

4,551,613

$

4,634,035

$

4,461,691

(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)

Excludes IRT.

($'s in 000's)

As of

September 30,

2016

June 30,

2016

March 31,

2015

December 31,

2015

September 30,

2015

Assets

Investments in loans:

Investment in loans

$

1,373,615

$

1,495,343

$

1,612,632

$

1,623,583

$

1,588,097

Allowance for loan losses

(18,655

)

(18,237

)

(18,165

)

(17,097

)

(14,646

)

Investments in loans, net

1,354,960

1,477,106

1,594,467

1,606,486

1,573,451

Investments in real estate:

Investments in real estate at cost

965,362

1,095,024

1,130,295

1,145,630

1,047,439

Accumulated depreciation

(156,613

)

(164,037

)

(164,999

)

(158,688

)

(153,277

)

Investments in real estate, net

808,749

930,987

965,296

986,942

894,162

Investments in securities, at fair value

—

—

—

—

—

Cash and cash equivalents

36,019

38,726

72,425

87,581

75,708

Restricted cash

229,957

152,650

193,151

207,599

151,870

Accrued interest receivable

41,603

42,139

49,987

47,343

56,249

Other assets

81,546

64,385

70,580

67,566

70,839

Intangible assets, net

23,165

25,668

26,679

28,864

31,629

Assets of discontinued operations

1,306,532

1,308,403

1,345,185

1,383,547

1,402,922

Total assets

$

3,882,531

$

4,040,064

$

4,317,770

$

4,415,928

$

4,256,830

Liabilities and Equity

Indebtedness, net

$

1,975,863

$

2,124,906

$

2,364,902

$

2,399,475

$

2,224,969

Accrued interest payable

10,464

10,401

11,985

8,595

13,190

Accounts payable and accrued expenses

20,082

16,328

15,785

22,557

23,692

Derivative liabilities

1,748

2,809

4,181

4,727

8,960

Borrowers' escrows, dividends payable and other liabilities

168,692

176,789

197,967

197,908

183,619

Liabilities of discontinued operations

906,225

903,907

923,352

952,530

969,469

Total liabilities

3,083,074

3,235,140

3,518,172

3,585,792

3,423,899

Series D preferred stock

90,728

88,861

87,085

85,395

83,787

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

2,766

2,756

2,748

2,727

Additional paid in capital

2,090,210

2,088,781

2,087,913

2,087,137

2,082,695

Accumulated other comprehensive income (loss)

(112

)

(972

)

(2,434

)

(4,699

)

(8,022

)

Retained earnings (deficit)

(1,731,141

)

(1,722,936

)

(1,707,143

)

(1,680,751

)

(1,674,412

)

Total shareholders' equity

361,816

367,732

381,185

404,528

403,081

Noncontrolling interests - continuing operations

5,386

1,792

2,782

3,948

4,727

Noncontrolling interests - discontinued operations

341,527

346,539

328,546

336,265

341,336

Total noncontrolling interests

346,913

348,331

331,328

340,213

346,063

Total equity

708,729

716,063

712,513

744,741

749,144

Total liabilities and equity

$

3,882,531

$

4,040,064

$

4,317,770

$

4,415,928

$

4,256,830

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

Three Months Ended September 30,

Nine Months Ended September 30,

2016

2015

2016

2015

Revenue:

Net interest margin

Investment interest income

$

20,189

$

24,468

$

69,510

$

71,823

Investment interest expense

(8,512

)

(8,021

)

(26,957

)

(22,517

)

Net interest margin

11,677

16,447

42,553

49,306

Property income

29,614

29,968

89,335

94,401

Fee and other income

1,946

2,537

5,974

14,760

Total revenue

43,237

48,952

137,862

158,467

Expenses:

Interest expense

13,298

14,723

43,135

46,259

Real estate operating expenses

14,635

14,991

43,810

47,804

Compensation expenses

6,245

5,541

17,367

15,648

General and administrative expenses

3,708

3,769

12,007

12,762

Acquisition and integration expenses

197

153

376

1,392

Provision for loan losses

1,533

1,850

4,202

5,850

Depreciation and amortization expense

11,466

10,482

39,273

34,622

Total expenses

51,082

51,509

160,170

164,337

Operating Income

(7,845

)

(2,557

)

(22,308

)

(5,870

)

Other income (expense)

(70

)

(398

)

30

(1,035

)

Gains (loss) on assets

18,194

7,430

23,811

24,711

Asset impairment

(18,872

)

(7,250

)

(26,658

)

(7,250

)

Gain (loss) on debt extinguishment

(6

)

—

998

—

Change in fair value of financial instruments

(1,375

)

620

(7,055

)

13,466

Income (loss) before taxes

(9,974

)

(2,155

)

(31,182

)

24,022

Income tax benefit (provision)

15,302

(23

)

18,051

(1,320

)

Income from continuing operations

5,328

(2,178

)

(13,131

)

22,702

Discontinued operations:

Income (loss) from discontinued operations

4,112

27,004

38,473

28,831

Net income (loss)

9,440

24,826

25,342

51,533

Income allocated to preferred shares

(8,715

)

(8,303

)

(25,850

)

(24,383

)

(Income) loss allocated to noncontrolling interests

(729

)

(23,055

)

(24,920

)

(21,823

)

Net income (loss) available to common shares

$

(4

)

$

(6,532

)

$

(25,428

)

$

5,327

Amount attributable to common shares:

Net income (loss) available to common shares from continuing operations

$

(2,048

)

$

(10,009

)

$

(35,526

)

$

24

Net income (loss) available to common shares from discontinued operations

2,044

3,477

10,098

5,303

Net income (loss) available to common shares

$

(4

)

$

(6,532

)

$

(25,428

)

$

5,327

EPS - Basic:

Earnings (loss) per share from continuing operations

$

(0.02

)

$

(0.11

)

$

(0.39

)

$

—

Earnings (loss) per share from discontinued operations

0.02

0.04

0.11

0.06

Earnings Per Share - Basic

$

-

$

(0.07

)

(0.28

)

0.06

EPS - Diluted:

Earnings (loss) per share from continuing operations

$

(0.02

)

$

(0.11

)

$

(0.39

)

$

—

Earnings (loss) per share from discontinued operations

0.02

0.04

0.11

0.06

Earnings Per Share - Diluted

$

-

$

(0.07

)

(0.28

)

0.06

Weighted-average shares outstanding - Basic

91,201,784

87,110,958