True, the story was muddled and convoluted with Tabernas, constant markups and markdowns that flowed through the income statement. Also, the SEC settlement doesn't look so nice even though the indiscretions were years ago.
RAS story is cleaner and easier going forward. Just like IRT story is easy to understand.
I'm not certain that Rait 1&2 are providing below market financing to rait's properties. When looking at IRT, they charged themselves full interest. LTV at the time might have been attractive, however.
I think that just freed up $40 million of cash as the warehouse line for bridge loans provides only a 60% advance rate.
Davis, if you don't mind, can you ask:
1. Are all $500 million of rait 1 & 2 bonds owned by RAS eliminated in consolidation? If Rait 1&2 were deconsolidated, would RAS show them as assets owned, and have $500 million more of equity (except some was bought at discounts, so those would be at cost, I assume)?
2. How will Rait raise additional capital this year, if they decide to?
3. Why are they only upgrading only on of their retail malls at this time?
4. Do they still plan to buy more retail properties?
I remember you posting before the last meeting. I hope our mb can come up with 20-30 good questions. And, yes asking them and posting answers to them is a real service.
My post was made with a smile & a wink;-)
All the more reason the sale must go through. RAS only lost two employees to the sec. If they find a few gems that are willing to move to Philly and Chicago that would be good for all. There probably should be a few keepers among the bunch.
IRT has no employees. IRT has a management contract with RAS. Also, the properties themselves are managed by Rait Residntial (Jupiter Properties) under contract, not by IRT employees, since there are no IRT employees. There is only an IRT board of directors.
After losing two senior employees to the SEC settlement, will RAS use the merger withTSRE as an opportunity to pick up several seasoned real estate people? It's probably a hard market to pick up talented seasoned people and with this merger RAS might get a few quickly. Plus, with IRT growing so rapidly and plans for even more growth, this might be just what the doctor ordered.
Looks like it will go through. There is a big termination fee heading IRT's way if TSRE backs out. Plus, reading the documents, TSRE will fire most non-property located employees after the deal. If I'm an employee of tsre I have one foot out the door already.
Agreed, but the foreigners don't know the names of the secondary and tertiary cities IRT is investing in. They know nyc, Washington, la, Chicago, and maybe one or two more. Also, More inclined to buy in California or FL.......sunny states with big growth over the past 50 years.