RAIT Acquires Non-Traded Public REIT - Analyst Blog

RAIT Financial Trust (RAS), a real estate investment trust (REIT), has recently acquired Empire American Realty Trust, Inc., a non-traded public REIT. The acquisition is part of the long-term strategy of the company to manage and finance commercial real estate assets with capital raised in the non-traded public REIT market.

RAIT Financial Trust paid approximately $2.3 million for the purchase of Empire American Realty Trust and some of its affiliated entities. At the same time, the company appointed Martel Day and a highly regarded sales management team to make its non-traded REIT platform available to independent financial advisors and their clients. Martel Day has over 25 years of experience in raising capital in the independent broker dealer community and is the President of the Investment Program Association, the industry trade group that advocates the importance of direct investments in a diversified portfolio. Consequently, the company expects to strengthen its position in the non-traded public REIT sector.

RAIT Financial Trust manages and invests in a portfolio of real estate related assets and provides a comprehensive set of debt financing options to the real estate industry. The company recognizes interest income from investments in commercial mortgages, mezzanine loans and other securities on a yield-to-maturity basis.

RAIT Financial Trust also generates income from tenant rent and other tenant-related activities at its consolidated real estate properties. In addition, RAIT Financial Trust generates fee and other income through various subsidiaries by providing asset management services and advisory services to its customers.

We presently have a ‘Neutral' rating on RAIT Financial Trust, which currently has a Zacks #3 Rank that translates into a short-term ‘Hold' recommendation indicating that the stock is expected to perform in line with the overall U.S. equity market for the next 1–3 months. We also have a ‘Neutral' recommendation and a Zacks #3 Rank for Newcastle Investment Corp. (NCT), a competitor of RAIT Financial Trust.

 
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