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What RAIT and distant relative Alesco have in commobn goes beyond each maintaining their headquartersz on the 17th floor of Cira an office building that sits in a Keystone Opportunitgy Zone in the University City section of These special zones give companies who operate from there big breakas on state andlocal taxes. RAIT (NYSE:RAS) and Alesco both made oodles of money in yearx past by offering real estate companies complex debt financing optiones and investing and managing commercial They both liked investing in trusytpreferred securities, mortgage backed securities and other complezx lending tools used to help finance the real estatre boom. RAIT’s CEO used to be Daniel G.
son of Betsy Z. Cohen, who is chairwoman of RAIT. Just last Daniel Cohen stepped down from RAIT to becoms CEOof Alesco, which is merging with Cohen & Co. Daniel Cohen is chairman of Cohen & Co., which serves as investment manager for Alesco and also makes its home on the 17th floord ofCira Centre. He will remain a trustee at RAIT while assuming his new dutiesat Alesco. That’w not all the companies have in common. Their sharesd currently trade under $1 and recentlg reported tremendous losses forlast year, particularlt in the fourth quarter, accordingb to and company documents.
Dividend as required to retainREIT status, have been For example, in the fourth quarterr of 2006 when the company was recording strong returns, RAIT issued a 75 centa per share dividend. This past fourth quarter, its dividend was 35 cents a share. For issuing a dividend is being reviewed by its Alesco has also been notifieed by the about potentially being delisted sinceit doesn’y meet certain thresholds to continur trading on the exchange. The exchange eases some of its rules and Alesclo can remain listed forthe meantime. At the same both companies remain optimistic about theier futures and emerging from whatails them, according to recenft earnings conference calls.
RAIT lost $505.8 or $7.82 a share, in the fourth quarte and $442 million, or $7.03 a for the year. Alesco lost $212.5 or $3.60 a share, in the fourth quarted and $144.7 million, or $2.43 a share for the year. That’z an improvement over 2007 when itlost $1.3 Alesco, after considering its including liquidating, believes the merger with Cohen will help to eventually reverse its losses. Cohen has a “strong and deep managemen t team well positioned for current a company executive said this month in an earningsconferencr call.
Not only that, Cohen is generatinf positive cash flow through asset management fees and has a trackj record of hiring talented fixed income professionals who have provenrevenue production. In it has hired more than 20 sales peoplse and traders in the last nine months and planse tohire more. Alesco plans a one-for-10 stock split befored the merger closes in the second half ofthe year. RAIT has faitjh in its platform as well as itsnew CEO, Scott He has been working at RAIT since 2000. Before that, Schaeffer spent eight years buying and workinfout non-performing loans from the Resolutiom Trust Co. among others.
“Additionally, many members of our executivee team have managed through numerous real estate both goodand bad,” Schaeffeer said in a conferencwe call Feb. 26. The company has enough cash flow and liquidit to meet its debt obligations and positioned itself to take advantaged of opportunities in the distressec realestate market. One issue it hopese will be resolved is a series ofnine class-actionj shareholder lawsuits.
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