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| Maryland                                                                                                                                                                                 |   |  20-2287134                              |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|
| (State      or other  jurisdictionof      incorporation or organization)                                                                                                       |   | (I.R.S.      EmployerIdentification      No.) |
|  712      5th      Avenue, 10th      FloorNew York,      NY                     |   |   10019                             |
| (Address      of principal executive offices)                                                                                                                                            |   | (Zip      Code)                               |
| Registrant’s      telephone number, including area code:   212-506-3870                                                                                                  |   |                                          |
|                                                                                                                                                                                     |   |                                          |
| Securities      registered pursuant to Section 12(b) of theAct:                                                                                                                          |

| Title of each class                |   | Name of each exchange on which      registered |
|------------------------------------|--------|------------------------------------------------|
| Common      Stock, $.001 par value |   | New      York Stock Exchange (NYSE)            |

| Large accelerated filer    ¨           | Accelerated      filer                                x |
|-----------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Non-accelerated filer           ¨ | Smaller reporting      company              ¨                                                                                                |

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INDEX TO ANNUAL REPORT

|          |      | Page                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------------|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| PART      I   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|          |      | Forward-Looking    Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  3 |
|          | Item 1:   | Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  3 |
|          | Item 1A:  | Risk Factors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  16 |
|          | Item 1B:  | Unresolved Staff Comments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  37 |
|          | Item 2:   | Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  37 |
|          | Item 3:   | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  37 |
|          | Item 4:   | Submission of Matters to a Vote of Security      Holders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  37 |
| PART      II  |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|          | Item 5:   | Market for Registrant's Common Equity, Related Stockholder      Matters and Issuer Purchases of Equity Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  38 |
|          | Item 6:   | Selected Financial Data                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  40 |
|          | Item 7:   | Management’s      Discussion and Analysis of Financial Condition and Results      of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  41 |
|          | Item 7A:  | Quantitative and Qualitative Disclosures About Market      Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  80 |
|          | Item 8:   | Financial Statements and Supplementary    Data                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  82 |
|          | Item 9:   | Changes      in and Disagreements with Accountants on Accounting and Financial      Disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  121 |
|          | Item 9A:  | Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  121 |
|          | Item 9B:  | Other      Information                                                                                                          |  123 |
| PART      III |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|          | Item 10:  | Directors and Executive Officers of the      Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  123 |
|          | Item 11:  | Executive Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  128 |
|          | Item 12:  | Security      Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  135 |
|          | Item 13:  | Certain Relationships and Related      Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  137 |
|          | Item 14:  | Principal Accounting Fees and Services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  149 |
| PART      IV  |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|          | Item 15:  | Exhibits and Financial Statement    Schedules                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  140 |
| SIGNATURES    |  142 |

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FORWARD-LOOKING STATEMENTS

|   | · | the      factors described in this report, including those set forth under the      sections captioned “Risk Factors” and  “Business;” |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes      in our industry, interest rates, the debt securities markets, real estate      markets or the general economy; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | increased      rates of default and/or decreased recovery rates on our      investments; |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | availability,      terms and deployment of capital; |
|--------|--------|-----------------------------------------------------|

|   | · | availability      of qualified personnel; |
|--------|--------|-------------------------------------------|

|   | · | changes      in governmental regulations, tax rates and similar  matters; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | changes      in our business strategy; |
|--------|--------|----------------------------------------|

|   | · | availability      of investment opportunities in commercial real estate-related and      commercial finance assets; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | the      degree and nature of ourcompetition; |
|--------|--------|-----------------------------------------------|

|   | · | the      adequacy of our cash reserves and working capital;  and |
|--------|--------|------------------------------------------------------------------|

|   | · | the      timing of cash flows, if any, from our  investments. |
|--------|--------|---------------------------------------------------------------|

ITEM 1.

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| Asset      Class                                  | Principal      Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Commercial      real estate-related assets        | ·       First mortgage loans, which we refer to as whole loans·       First priority interests in first mortgage real estate loans, which      we refer to as A notes·       Subordinated interests in first mortgage real estate loans, which      we refer to as B notes·       Mezzanine debt related to commercial real estate that is senior to      the borrower’s equity position but subordinated to other third-party      financing·       Commercial mortgage-backed securities, which we refer to as      CMBS                                                                                                               |
| Commercial      finance assets                    | ·       Senior secured corporate loans, which we refer to as bank      loans·       Other asset-backed securities, which we refer to as other ABS,      backed principally by small business and bank loans and, to a lesser      extent, by consumer receivables·       Equipment leases and notes, principally small- and middle-ticket      commercial direct financing leases and notes·       Trust preferred securities of financial institutions·       Debt tranches of collateralized debt obligations, which we refer to      as CDOs·       Private equity investments, principally issued by financial      institutions |
| Residential      real estate-related assets  | ·       Residential mortgage-backed securities, which we refer to as      ABS-RMBS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

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|                                                  |   | Amortized      cost |      |   | Estimated      fair      value (1) |   |      | Percent      of portfolio |   |   | Weighted      average      coupon |   |
|-------------------------------------------------------|--------|---------------------|-----------|--------|------------------------------------|--------|-----------|---------------------------|--------|--------|-----------------------------------|--------|
| Loans      Held for Investment                        |   |                |      |   |                               |   |      |                      |   |   |                              |   |
| Commercial real estate      loans                     |   |                |      |   |                               |   |      |                      |   |   |                              |   |
| Mezzanineloans                                        |   | $                   | 223,162   |   |                               | $      | 221,555   |                      |   |   | 11.8%                             |   |   |   | 7.80% |   |
| B notes                                               |   |                | 89,577    |   |                               |   | 89,353    |                      |   |   |        4.8%                  |   |   |   | 7.67% |   |
| Whole loans                                           |   |                | 528,718   |   |                               |   | 527,396   |                      |   |   | 28.1%                             |   |   |   | 7.99% |   |
| Bank loans                                            |   |                | 931,101   |   |                               |   | 874,736   |                      |   |   | 46.7%                             |   |   |   | 7.24% |   |
|                                                  |   |                | 1,772,558 |   |                               |   | 1,713,040 |                      |   |   | 91.4%                             |   |   |   |   |   |
| Investments      in Available-for-Sale Securities     |   |                |      |   |                               |   |      |                      |   |   |                              |   |   |   |   |   |
| CMBS                                                  |   |                | 82,373    |   |                               |   | 64,564    |                      |   |   |        3.4%                  |   |   |   | 6.03% |   |
| Other ABS                                             |   |                | 5,665     |   |                               |   | 900       |                      |   |   |   0.1%                       |   |   |   | 6.33% |   |
|                                                  |   |                | 88,038    |   |                               |   | 65,464    |                      |   |   |        3.5%                  |   |   |   |   |   |
| Investments      in direct financing leases and notes |   |                | 95,323    |   |                               |   | 95,030    |                      |   |   |   5.1%                       |   |   |   | 9.43% |   |
| Total portfolio/weighted      average                 |   | $                   | 1,955,919 |   |                               | $      | 1,873,534 |                      |   |   | 100.0%                            |   |   |   | 7.58% |   |

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| (1) | The      fair value of our investments represents our management’s estimate of the      price that a willing buyer would pay a willing seller for such      assets.  Management bases this estimate on the underlying      interest rates and credit spreads for fixed-rate securities and, to the      extent available, quoted marketprices. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (1) | All      other is made up of the following industries (by    percentage): |
|-----|---------------------------------------------------------------------------|

|   | Building      and real estate                                                   | 3.29% |
|--------|---------------------------------------------------------------------------------|-------|
|   | Personal,      food and miscellaneous services                                  | 2.98% |
|   | Automobile                                                                      | 2.63% |
|   | Finance                                                                         | 2.57% |
|   | Leisure,      amusement, motion pictures, entertainment                         | 2.45% |
|   | Containers,      packaging and glass                                            | 2.22% |
|   | Aerospace      and defense                                                      | 2.14% |
|   | Personal      and non durable consumer products (mfg. only)                     | 2.07% |
|   | CDO                                                                             | 2.03% |
|   | Ecological                                                                      | 1.97% |
|   | Textiles      and leather                                                       | 0.88% |
|   | Personal      and nondurable consumer products                                  | 0.87% |
|   | Electronics                                                                     | 0.72% |
|   | Personal      transportation                                                    | 0.64% |
|   | Cargo      transport                                                            | 0.45% |
|   | Farming      and agriculture                                                    | 0.36% |
|   | Insurance                                                                       | 0.34% |
|   | Machinery      (non-agriculture, non-construction, non-electronic)              | 0.33% |
|   | Packaging      and forest products                                              | 0.28% |
|   | Home      and office furnishings, housewares and durable consumer      products | 0.23% |
|   | Mining,      steel, iron and non-precious metals                                | 0.21% |
|   | Diversified      natural resource, precious metals and minerals                 | 0.09% |

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|   | · | general      office equipment, such as office machinery, furniture and telephone and      computer systems; |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | medical      and dental practices and equipment for diagnostic and treatment      use; |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | energy      and climate control systems; |
|--------|--------|------------------------------------------|

|   | · | industrial      equipment, including manufacturing, material handling and electronic      diagnostic systems; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

|   | · | agricultural      equipment and facilities. |
|--------|--------|---------------------------------------------|

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|   | · | A      monthly base management fee equal to 1/12th of the amount of our equity      multiplied by 1.50%.  Under the management agreement, ‘‘equity’’      is equal to the net proceeds from any issuance of shares of common stock      less offering related costs, plus or minus our retained earnings      (excluding non-cash equity compensation incurred in current or prior      periods) less any amounts we have paid for common stock      repurchases.  The calculation is adjusted for one-time events      due to changes in generally accepted accounting principles in the United      States, which we refer to as GAAP, as well as other non-cash charges, upon      approval of our independentdirectors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Incentive      compensation based on the product of (i) 25% of the dollar amount by      which, (A) our net income (determined in accordance with GAAP) per common      share (before non-cash equity compensation expense and incentive      compensation), but after the base management fee, for a quarter (based on      the weighted average number of shares outstanding) exceeds, (B) an amount      equal to (1) the weighted average share price of shares of common stock in      our offerings, multiplied by, (2) the greater of (a) 2.00% or (b) 0.50%      plus one-fourth of the Ten Year Treasury rate (as defined in the      management agreement) for such quarter, multiplied by, (ii) the weighted      average number of common shares outstanding for the      quarter.  The calculation may be adjusted for one-time events      due to changes in GAAP as well as other non-cash charges upon approval of      our independent directors. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Reimbursement      of out-of-pocket expenses and certain other costs incurred by the Manager      that relate directly to us and ouroperations. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | if      such shares are traded on a securities exchange, at the average of the      closing prices of the shares on such exchange over the thirty day period      ending three days prior to the issuance of such  shares; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if      such shares are actively traded over-the-counter, at the average of the      closing bid or sales price as applicable over the thirty day period ending      three days prior to the issuance of such shares;  and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if      there is no active market for such shares, at the fair market value as      reasonably determined in good faith by our board of    directors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      Manager’s continued material breach of any provision of the management      agreement following a period of 30 days after written notice      thereof; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      Manager’s fraud, misappropriation of funds, or embezzlement against      us; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | the      Manager’s gross negligence in the performance of its duties under the      management agreement; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | the      bankruptcy or insolvency of the Manager, or the filing of a voluntary      bankruptcy petition by the Manager; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | the      dissolution of the Manager; and |
|--------|--------|------------------------------------------|

|   | · | a      change of control (as defined in the management agreement) of the Manager      if a majority of our independent directors determines, at any point during      the 18 months following the change of control, that the change of control      was detrimental to the ability of the Manager to perform its duties in      substantially the same manner conducted before the change of      control. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM 1A.

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|   | · | the      cash provided by our operating activities will not be sufficient to meet      required payments of principal andinterest, |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      cost of financing will increase relative to the income from the assets      financed, reducing the income we have available to pay distributions,      and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      investments may have maturities that differ from the maturities of the      related financing and, consequently, the risk that the terms of any      refinancing we obtain will not be as favorable as the terms of existing      financing. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Trust      preferred securities, which are issued by a special purpose trust,      typically are collateralized by a junior subordinated debenture of the      financial institution and that institution’s guarantee, and thus are      subordinate and junior in right of payment to most of the financial      institution’s other debt. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Trust      preferred securities often will permit the financial institution to defer      interest payments on its junior subordinated debenture, deferring dividend      payments by the trust on the trust preferred securities, for specified      periods. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | If      trust preferred securities are collateralized by junior subordinated      debentures issued by the financial institution’s holding company, dividend      payments may be affected by regulatory limitations on the amount of      dividends, other distributions or loans a financial institution can make      to its holding company, which typically are the holding company’s      principal sources of funds for meeting its obligations, including its      obligations under the junior subordinated  debentures. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Available      interest rate hedges may not correspond directly with the interest rate      risk against which we seekprotection. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      duration of the hedge may not match the duration of the related      liability. |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | Interest      rate hedging can be expensive, particularly during periods of rising and      volatile interest rates.  Hedging costs may include structuring      and legal fees and fees payable to hedge counterparties to execute the      hedge transaction. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Losses      on a hedge position may reduce the cash available to make distributions to      stockholders, and may exceed the amounts invested in the hedge      position. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      amount of income that a REIT may earn from hedging transactions, other      than through a TRS, is limited by federal tax provisions governing      REITs. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      credit quality of the party owing money on the hedge may be downgraded to      such an extent that it impairs our ability to sell or assign our side of      the hedging transaction. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      party owing money in the hedging transaction may default on its obligation      to pay. |
|--------|--------|--------------------------------------------------------------------------------------------------|

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|   | · | tenant      mix, success of tenant businesses and property management      decisions, |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | property      location and condition, |
|--------|--------|---------------------------------------|

|   | · | competition      from comparable types ofproperties, |
|--------|--------|------------------------------------------------------|

|   | · | changes      in laws that increase operating expense or limit rents that may be      charged, |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | any      need to address environmental contamination at the    property, |
|--------|--------|--------------------------------------------------------------------------|

|   | · | the      occurrence of any uninsured casualty at the  property, |
|--------|--------|-----------------------------------------------------------------|

|   | · | changes      in national, regional or local economic conditions and/or specific      industry segments, |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | declines      in regional or local real estatevalues, |
|--------|--------|-------------------------------------------------------|

|   | · | declines      in regional or local rental or occupancyrates, |
|--------|--------|--------------------------------------------------------------|

|   | · | increases      in interest rates, real estate tax rates and other operating      expenses, |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | transitional      nature of a property being converted to an alternate  use; |
|--------|--------|------------------------------------------------------------------------------|

|   | · | increases      in costs of construction material; |
|--------|--------|---------------------------------------------------|

|   | · | changes      in governmental rules, regulations and fiscal policies, including      environmental legislation, and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | acts      of God, terrorism, social unrest and civil  disturbances. |
|--------|--------|---------------------------------------------------------------------|

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|   | · | There are ownership limits and      restrictions on transferability and ownership in our      charter.  For purposes of assisting us in maintaining our      REIT qualification under the Internal Revenue Code, our charter generally      prohibits any person from beneficially or constructively owning more than      9.8% in value or number of shares, whichever is more restrictive, of any      class or series of our outstanding capital stock.  This      restriction may: |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | discourage      a tender offer or other transactions or a change in the composition of our      board of directors or control that might involve a premium price for our      shares or otherwise be in the best interests of our stockholders;      or |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | result      in shares issued or transferred in violation of such restrictions being      automatically transferred to a trust for a charitable beneficiary,      resulting in the forfeiture of thoseshares. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our charter permits our board      of directors to issue stock with terms that may discourage a third party      from acquiring us.  Our board of directors may amend our      charter without stockholder approval to increase the total number of      authorized shares of stock or the number of shares of any class or series      and issue common or preferred stock having preferences, conversion or      other rights, voting powers, restrictions, limitations as to      distributions, qualifications, or terms or conditions of redemption as      determined by our board.  Thus, our board could authorize the      issuance of stock with terms and conditions that could have the effect of      discouraging a takeover or other transaction in which holders of some or a      majority of our shares might receive a premium for their shares over the      then-prevailing market price. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our charter and bylaws contain      other possible anti-takeover provisions.  Our charter and      bylaws contain other provisions that may have the effect of delaying or      preventing a change in control of us or the removal of existing directors      and, as a result, could prevent our stockholders from being paid a premium      for their common stock over the then-prevailing market    price. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | any      person who beneficially owns ten percent or more of the voting power of      the corporation’s shares; or |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | an      affiliate or associate of the corporation who, at any time within the      two-year period before the date in question, was the beneficial owner of      ten percent or more of the voting power of the then outstanding voting      stock of the corporation. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 80%      of the votes entitled to be cast by holders of outstanding shares of      voting stock of the corporation;and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | two-thirds      of the votes entitled to be cast by holders of voting stock of the      corporation other than shares held by the interested stockholder with whom      or with whose affiliate the business combination is to be effected or held      by an affiliate or associate of the interested  stockholder. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | actual      receipt of an improper benefit or profit in money, property or services;      or |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | a      final judgment based upon a finding of active and deliberate dishonesty by      the director or officer that was material to the cause of action      adjudicated. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | 85%      of our ordinary income for thatyear; |
|--------|--------|-----------------------------------------------|

|   | · | 95%      of our capital gain net income for that year;  and |
|--------|--------|-------------------------------------------------------------|

|   | · | 100%      our undistributed taxable income from prior  years. |
|--------|--------|---------------------------------------------------------------|

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ITEM 1B.
 

ITEM 2.
 

ITEM 3.

ITEM 4. 

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ITEM 5.

|                |   | High   |   |   | Low    |   |   | DividendsDeclared |   |
|---------------------|--------|--------|--------|--------|--------|--------|--------|-------------------|--------|
| Fiscal      2007    |   |   |   |   |   |   |   |              |   |
| Fourth      Quarter |   | $      | 12.49  |   |   | $      | 8.14   |              |   | $ | 0.41 | (1) |
| Third      Quarter  |   | $      | 14.20  |   |   | $      | 7.50   |              |   | $ | 0.41 |   |
| Second      Quarter |   | $      | 16.85  |   |   | $      | 13.98  |              |   | $ | 0.41 |   |
| First      Quarter  |   | $      | 18.78  |   |   | $      | 14.67  |              |   | $ | 0.39 |   |
| Fiscal      2006    |   |   |   |   |   |   |   |              |   |   |   |   |
| Fourth      Quarter |   | $      | 17.73  |   |   | $      | 15.09  |              |   | $ | 0.43 | (2) |
| Third      Quarter  |   | $      | 15.67  |   |   | $      | 12.01  |              |   | $ | 0.37 |   |
| Second      Quarter |   | $      | 14.23  |   |   | $      | 12.00  |              |   | $ | 0.36 |   |
| First      Quarter  |   | $      | 14.79  |   |   | $      | 13.67  |              |   | $ | 0.33 |   |

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| (1) | We      distributed a regular dividend ($0.41) payable on January 14, 2008, for      stockholders of record on December 31,2007. |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

| (2) | We      distributed a regular dividend ($0.38) and a special dividend ($0.05),      payable on January 4, 2007, for stockholders of record on December 15,      2006. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM6. 

|                                                                                                               |   | As      of and for the Year Ended |       |   | As      of and for thePeriod      fromMarch      8, 2005(Date      Operations Commenced) to |   |
|--------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|------------|--------|---------------------------------------------------------------------------------------------|--------|
|                                                                                                               |   | December      31,                 |       |   | December      31,                                                                           |   |
|                                                                                                               |   | 2007                              |       |   | 2006                                                                                        |   |   | 2005 |   |
| Consolidated      Statement of Operations Data                                                                     |   |                              |       |   |                                                                                        |   |   |   |   |
| REVENUES                                                                                                           |   |                              |       |   |                                                                                        |   |   |   |   |
| Net interest      income:                                                                                          |   |                              |       |   |                                                                                        |   |   |   |   |
| Interestincome                                                                                                     |   | $                                 | 176,995    |   |                                                                                        | $      | 137,075 |   |   | $ | 61,387 |   |
| Interest    expense                                                                                                |   |                              | 121,564    |   |                                                                                        |   | 101,851 |   |   |   | 43,062 |   |
| Net interest    income                                                                                             |   |                              | 55,431     |   |                                                                                        |   | 35,224 |   |   |   | 18,325 |   |
|                                                                                                               |   |                              |       |   |                                                                                        |   |   |   |   |   |   |   |
| OPERATING      EXPENSES                                                                                            |   |                              |       |   |                                                                                        |   |   |   |   |   |   |   |
| Management fees – related      party                                                                         |   |                              | 6,554      |   |                                                                                        |   | 4,838 |   |   |   | 3,012 |   |
| Equity compensation − related      party                                                                     |   |                              | 1,565      |   |                                                                                        |   | 2,432 |   |   |   | 2,709 |   |
| Professional      services                                                                                         |   |                              | 2,911      |   |                                                                                        |   | 1,881 |   |   |   | 580 |   |
| Insurance                                                                                                          |   |                              | 466        |   |                                                                                        |   | 498 |   |   |   | 395 |   |
| General and      administrative                                                                                    |   |                              | 1,581      |   |                                                                                        |   | 1,428 |   |   |   | 1,032 |   |
| Income tax    expense                                                                                              |   |                              | 338        |   |                                                                                        |   | 67 |   |   |   | − |   |
| Total operating      expenses                                                                                      |   |                              | 13,415     |   |                                                                                        |   | 11,144 |   |   |   | 7,728 |   |
|                                                                                                               |   |                              |       |   |                                                                                        |   |   |   |   |   |   |   |
| NET      OPERATING INCOME                                                                                          |   |                              | 42,016     |   |                                                                                        |   | 24,080 |   |   |   | 10,597 |   |
|                                                                                                               |   |                              |       |   |                                                                                        |   |   |   |   |   |   |   |
| OTHER      (EXPENSES) REVENUES                                                                                     |   |                              |       |   |                                                                                        |   |   |   |   |   |   |   |
| Net realized (losses) gains on      investments                                                                    |   |                              | (15,098    | )      |                                                                                        |   | (8,627 | ) |   |   | 311 |   |
| Gain on      deconsolidation                                                                                       |   |                              | 14,259     |   |                                                                                        |   | − |   |   |   | − |   |
| Provision for loan and lease      losses                                                                           |   |                              | (6,211     | )      |                                                                                        |   | − |   |   |   | − |   |
| Asset    impairments                                                                                               |   |                              | (26,277    | )      |                                                                                        |   | − |   |   |   | − |   |
| Other income                                                                                                       |   |                              | 201        |   |                                                                                        |   | 153 |   |   |   | − |   |
| Total other (loss)      revenue                                                                                    |   |                              | (33,126    | )      |                                                                                        |   | (8,474 | ) |   |   | 311 |   |
| NET      INCOME                                                                                                    |   | $                                 | 8,890      |   |                                                                                        | $      | 15,606 |   |   | $ | 10,908 |   |
|                                                                                                               |   |                              |       |   |                                                                                        |   |   |   |   |   |   |   |
| Consolidated      Balance Sheet Data:                                                                              |   |                              |       |   |                                                                                        |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                     |   | $                                 | 6,029      |   |                                                                                        | $      | 5,354 |   |   | $ | 17,729 |   |
| Restricted      cash                                                                                               |   |                              | 119,482    |   |                                                                                        |   | 30,721 |   |   |   | 23,592 |   |
| Available-for-sale      securities, pledged as collateral, at fair value                                           |   |                              | 65,464     |   |                                                                                        |   | 420,997 |   |   |   | 1,362,392 |   |
| Available-for-sale      securities, at fair value                                                                  |   |                              | −    |   |                                                                                        |   | − |   |   |   | 28,285 |   |
| Loans,      net of allowances of $5.9 million, $0 and $0                                                           |   |                              | 1,766,639  |   |                                                                                        |   | 1,240,288 |   |   |   | 569,873 |   |
| Direct      financing leases and notes, net of allowances of $0.3million,$0 and $0 and net of unearned      income |   |                              | 95,030     |   |                                                                                        |   | 88,970 |   |   |   | 23,317 |   |
| Total      assets                                                                                                  |   |                              | 2,072,148  |   |                                                                                        |   | 1,802,829 |   |   |   | 2,045,547 |   |
| Borrowings                                                                                                         |   |                              | 1,760,969  |   |                                                                                        |   | 1,463,853 |   |   |   | 1,833,645 |   |
| Total      liabilities                                                                                             |   |                              | 1,800,542  |   |                                                                                        |   | 1,485,278 |   |   |   | 1,850,214 |   |
| Total      stockholders’ equity                                                                              |   |                              | 271,606    |   |                                                                                        |   | 317,551 |   |   |   | 195,333 |   |
|                                                                                                               |   |                              |       |   |                                                                                        |   |   |   |   |   |   |   |
| Per      Share Data:                                                                                               |   |                              |       |   |                                                                                        |   |   |   |   |   |   |   |
| Dividends      declared per common share                                                                           |   | $                                 | 1.62       |   |                                                                                        | $      | 1.49 |   |   | $ | 0.86 |   |
|                                                                                                               |   |                              |       |   |                                                                                        |   |   |   |   |   |   |   |
| Net      income per share − basic                                                                            |   | $                                 | 0.36       |   |                                                                                        | $      | 0.89 |   |   | $ | 0.71 |   |
| Net      income per share − diluted                                                                          |   | $                                 | 0.36       |   |                                                                                        | $      | 0.87 |   |   | $ | 0.71 |   |
| Weighted      average number of shares outstanding − basic                                                   |   |                              | 24,610,468 |   |                                                                                        |   | 17,538,273 |   |   |   | 15,333,334 |   |
| Weighted      average number of shares outstanding – diluted                                                 |   |                              | 24,860,184 |   |                                                                                        |   | 17,881,355 |   |   |   | 15,405,714 |   |

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ITEM 7.

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Back to Index

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | As      of and for the Years Ended |    |   | As      of and for the Period from March 8, 2005 (Date Operations Commenced)      to |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|---------|--------|--------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | December      31,                  |    |   | December      31,                                                                    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 2007                               |    |   | 2006                                                                                 |   |   | 2005 |   |
| Interest      income:                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                               |    |   |                                                                                 |   |   |   |   |
| Interest income from      loans:                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                               |    |   |                                                                                 |   |   |   |   |
| Bank      loans                                                                                                                     |   | $                                  | 70,183  |   |                                                                                 | $      | 42,526 |   |   | $ | 11,903 |   |
| Commercial real estate      loans                                                                                                   |   |                               | 67,895  |   |                                                                                 |   | 28,062 |   |   |   | 2,759 |   |
| Total interest income from      loans                                                                                                              |   |                               | 138,078 |   |                                                                                 |   | 70,588 |   |   |   | 14,662 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                               |    |   |                                                                                 |   |   |   |   |   |   |   |
| Interest income from securities      available for sale:                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                               |    |   |                                                                                 |   |   |   |   |   |   |   |
| Agency      RMBS                                                                                                                    |   |                               | − |   |                                                                                 |   | 28,825 |   |   |   | 31,134 |   |
| Non-agency      RMBS                                                                                                                |   |                               | 21,837  |   |                                                                                 |   | 24,102 |   |   |   | 11,142 |   |
| CMBS                                                                                                                                |   |                               | 1,394   |   |                                                                                 |   | 1,590 |   |   |   | 1,110 |   |
| CMBS-private      placement                                                                                                         |   |                               | 4,082   |   |                                                                                 |   | 87 |   |   |   | − |   |
| Other                                                                                                                               |   |                               | 1,496   |   |                                                                                 |   | 1,414 |   |   |   | 811 |   |
| Private      equity                                                                                                                 |   |                               | − |   |                                                                                 |   | 30 |   |   |   | 50 |   |
| Total interest income from      securities available-for-sale                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                               | 28,809  |   |                                                                                 |   | 56,048 |   |   |   | 44,247 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                               |    |   |                                                                                 |   |   |   |   |   |   |   |
| Leasing                                                                                                                   |   |                               | 7,553   |   |                                                                                 |   | 5,259 |   |   |   | 578 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                               |    |   |                                                                                 |   |   |   |   |   |   |   |
| Interest income –      other:                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                               |    |   |                                                                                 |   |   |   |   |   |   |   |
| Interest rate swap      agreements                                                                                                  |   |                               | − |   |                                                                                 |   | 3,755 |   |   |   | − |   |
| Temporary investment in      over-night repurchase agreements                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                               | 2,555   |   |                                                                                 |   | 1,424 |   |   |   | 1,900 |   |
| Total interest income –      other                                                                                                                          |   |                               | 2,555   |   |                                                                                 |   | 5,179 |   |   |   | 1,900 |   |
| Total      interest      income                                                                            |   | $                                  | 176,995 |   |                                                                                 | $      | 137,074 |   |   | $ | 61,387 |   |

|                                                                                            |   | Weighted      Average            |   |   | Weighted      Average              |   |    | Weighted      Average              |   |
|-------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|------------------------------------|--------|---------|------------------------------------|--------|
|                                                                                            |   | Rate                             |   |   | Balance                            |   |    | Rate                               |   |   | Balance |   |   | Rate |   |   | Balance |   |
|                                                                                            |   | Year      EndedDecember      31, |   |   | Period      EndedDecember      31, |   |    | Period      EndedDecember      31, |   |
|                                                                                            |   | 2007      (1)                    |   |   | 2007                               |   |    | 2006      (1)                      |   |   | 2006 |   |   | 2005      (1) |   |   | 2005 |   |
| Interest      income:                                                                           |   |                             |   |   |                               |   |    |                               |   |   |   |   |   |   |   |   |   |   |
| Interest income from      loans:                                                                |   |                             |   |   |                               |   |    |                               |   |   |   |   |   |   |   |   |   |   |
| Bank loans                                                                                      |   |                             | 7.42%  |   |                               | $      | 911,514 |                               |   |   |        7.41% | % |   | $ | 565,414 |   |   |   | 6.06% |   |   | $ | 565,414 |   |
| Commercial real estate      loans                                                               |   |                             | 8.58%  |   |                               | $      | 781,954 |                               |   |   |        8.55% | % |   | $ | 325,301 |   |   |   | 6.90% |   |   | $ | 325,301 |   |
|                                                                                            |   |                             |   |   |                               |   |    |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income from securities      available      for sale:                                   |   |                             |   |   |                               |   |    |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Agency RMBS                                                                                     |   |                             | N/A    |   |                               | $      | − |                               |   |   |        4.60% | % |   | $ | 621,299 |   |   |   | 4.50% |   |   | $ | 867,388 |   |
| Non-agency RMBS                                                                                 |   |                             | 7.09%  |   |                               | $      | 303,960 |                               |   |   |        6.76% | % |   | $ | 344,969 |   |   |   | 5.27% |   |   | $ | 251,940 |   |
| CMBS                                                                                            |   |                             | 5.67%  |   |                               | $      | 24,549  |                               |   |   |        5.65% | % |   | $ | 27,274 |   |   |   | 5.57% |   |   | $ | 24,598 |   |
| CMBS-private      placement                                                                     |   |                             | 6.45%  |   |                               | $      | 61,952  |                               |   |   |        5.46% | % |   | $ | 1,564 |   |   |   | 5.25% |   |   | $ | 19,118 |   |
| Other                                                                                           |   |                             | 6.96%  |   |                               | $      | 21,094  |                               |   |   |        6.69% | % |   | $ | 21,232 |   |   |   | N/A |   |   | $ | − |   |
| Private equity                                                                                  |   |                             | N/A    |   |                               | $      | − |                               |   |   | 16.42% | % |   | $ | 170 |   |   |   | 6.29% |   |   | $ | 923 |   |
|                                                                                            |   |                             |   |   |                               |   |    |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Leasing                                                                                         |   |                             | 8.71%  |   |                               | $      | 85,092  |                               |   |   | 8.57% | % |   | $ | 62,612 |   |   |   | 9.44% |   |   | $ | 7,625 |   |
|                                                                                            |   |                             |   |   |                               |   |    |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income –      other:                                                             |   |                             |   |   |                               |   |    |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swap      agreements                                                              |   |                             | N/A    |   |                               | $      | − |                               |   |   | 0.78% | % |   | $ | 511,639 |   |   |   | 0.78% |   |   | $ | 511,639 |   |
| Temporary investment in      over-night          repurchase      agreements |   |                             | N/A    |   |                               | $      | − |                               |   |   | N/A |   |   | $ | − |   |   |   | N/A |   |   | $ | − |   |

----

| (1) | Certain      one-time items reflected in interest income have been excluded in      calculating the weighted average rate, since they are not indicative of      expected future results. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | an      increase of $346.1 million in the weighted average balance of loans      primarily from the accumulation of investments by our third bank loan CDO,      Apidos Cinco CDO, which closed on May 30, 2007 and had $331.2 million of      assets at December 31, 2007.  In addition, 2007 reflects a full      year of income for Apidos CDO III which closed on May 9, 2006 while the      prior year reflects only a partial year of income.  Apidos CDO      III had $270.9 million in assets at December 31,  2007. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      increase of $456.7 million in the weighted average balance of loans      primarily from the accumulation of investments by our second CRE CDO,      Resource Real Estate Funding 2007-1, or RREF 2007-1, which closed on June      26, 2007 and had $463.0 million of assets at December 31,      2007.  In addition, 2007 reflects a full year of income for      Resource Real Estate Funding 2006-1, or RREF 2006-1, which closed on      August 10, 2006 while the prior year reflects only a partial year of      income.  RREF 2006-1 had $291.7 million in assets at December      31, 2007; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      $505,000 acceleration of loan origination fees as a result of loan sales      that are included as part of interest income for the year ended December      31, 2007.  There was no such acceleration of fees for the year      ended December 31, 2006. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      sale of $125.4 million of our agency ABS-RMBS portfolio in January 2006      and the sale of the remaining $753.1 million of these securities in      September 2006.  This portfolio had generated $28.8 million of      interest income for the year ended December 31, 2006.  As a      result of the sale, we generated no agency ABS-RMBS interest income during      the year ended December 31, 2007; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      non-agency ABS-RMBS contributed $21.8 million of interest income for the      year ended December 31, 2007, as compared to $24.1 million for the year      ended December 31, 2006, a decrease of $2.3 million (9%) primarily due to      the deconsolidation of Ischus CDO II on November 13, 2007 which came as a      result of the sale of a 10% portion of our equity ownership, a      reconsideration event in accordance with FIN 46-R;  and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | our      CMBS contributed $1.4 million of interest income for the year ended      December 31, 2007, as compared to $1.6 million for the year ended December      31, 2006, a decrease of $196,000 (12%) for the year ended December 31,      2006 primarily due to the deconsolidation of Ischus CDO II on November 13,      2007. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      CMBS-private placement portfolio contributed $4.1 million of interest      income for the year ended December 31, 2007, as compared to $87,000 for      the year ended December 31, 2006, an increase of $4.0 million (4,592%) due      to the accumulation of securities in this portfolio beginning in December      2006. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      increase of $22.4 million in the weighted average balance of leases      primarily from the addition of leases we funded following the closing of      our secured term credit facility in March 2006;  and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      increase in the weighted average interest rate on these leases to 8.71%      for the year ended December 31, 2007 from 8.57% for the year ended      December 31, 2006. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | The      acquisition of $433.7 million of bank loans (net of sales of $91.0      million) during the year ended December 31, 2005, which were held for the      entire year ended December 31,2006. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      acquisition of $366.1 million of bank loans (net of sales of $128.5      million) since December 31, 2005. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | An      increase in the weighted average interest rate on these loans to 7.41% for      the year ended December 31, 2006 from 6.06% for the period ended December      31, 2005 due primarily to the increase in the London Interbank Offered      Rate, or LIBOR. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      acquisition of $454.3 million of commercial real estate loans (net of      principal payments of $55.2 million) during the year ended December 31,      2006. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      increase of the weighted average interest rate on these loans to 8.44% for      the year ended December 31, 2006 from 6.90% for the period ended December      31, 2005 due primarily to the increase in interest rates earned      on assets acquire during 2006. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      acquisition of $348.2 million of ABS-RMBS (net of sales of $3.0 million)      during the period ended December 31, 2005, which was held for the entire      year ended December 31, 2006,respectively. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An      increase in the weighted average interest rate on these securities to      6.76% for the year ended December 31, 2006 from 5.27% for the period ended      December 31, 2005 due primarily to the increase in  LIBOR. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      acquisition of $28.0 million of CMBS during the period ended December 31,      2005, which were held for the entire year ended December 31,      2006. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An      increase in the weighted average interest rate on these securities to      5.65% for the year ended December 31, 2006 from 5.57% for the period ended      December 31, 2005 due primarily to the increase in  LIBOR. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | The      acquisition of $23.1 million of ABS (net of sales of $5.5 million) during      the period ended December 31, 2005, which were held for the entire year      ended December 31, 2006. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An      increase in the weighted average interest rate on these securities to      6.70% for the year ended December 31, 2006 from 5.25% for the period ended      December 31, 2005 due primarily to the increase in  LIBOR. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                |   | As      of and for the Years Ended |    |   | As      of and for the Period from March 8, 2005 (Date Operations Commenced)      to |   |
|-------------------------------------|--------|------------------------------------|---------|--------|--------------------------------------------------------------------------------------|--------|
|                                |   | December      31,                  |    |   | December      31,                                                                    |   |
|                                |   | 2007                               |    |   | 2006                                                                                 |   |   | 2005 |   |
| Interest      expense:              |   |                               |    |   |                                                                                 |   |   |   |   |
| Bank loans                          |   | $                                  | 52,466  |   |                                                                                 | $      | 30,903 |   |   | $ | 8,149 |   |
| Commercial real estate      loans   |   |                               | 37,184  |   |                                                                                 |   | 14,436 |   |   |   | 1,090 |   |
| Agency RMBS                         |   |                               | − |   |                                                                                 |   | 28,607 |   |   |   | 23,256 |   |
| Non-agency / CMBS /      ABS        |   |                               | 19,794  |   |                                                                                 |   | 21,666 |   |   |   | 10,003 |   |
| CMBS – private      placement |   |                               | 1,223   |   |                                                                                 |   | 83 |   |   |   | − |   |
| Leasing                             |   |                               | 5,595   |   |                                                                                 |   | 3,659 |   |   |   | − |   |
| General                             |   |                               | 5,302   |   |                                                                                 |   | 2,497 |   |   |   | 564 |   |
| Total      interest expense         |   | $                                  | 121,564 |   |                                                                                 | $      | 101,851 |   |   | $ | 43,062 |   |

|                                |   | Weighted      Average            |   |   | Weighted      Average            |   |    | Weighted      Average              |   |
|-------------------------------------|--------|----------------------------------|--------|--------|----------------------------------|--------|---------|------------------------------------|--------|
|                                |   | Rate                             |   |   | Balance                          |   |    | Rate                               |   |   | Balance |   |   | Rate |   |   | Balance |   |
|                                |   | Year      EndedDecember      31, |   |   | Year      EndedDecember      31, |   |    | Period      EndedDecember      31, |   |
|                                |   | 2007      (1)                    |   |   | 2007                             |   |    | 2006      (1)                      |   |   | 2006 |   |   | 2005      (1) |   |   | 2005 |   |
| Interest      expense:              |   |                             |   |   |                             |   |    |                               |   |   |   |   |   |   |   |   |   |   |
| Bank loans                          |   |                             | 5.96%  |   |                             | $      | 868,345 |                               |   |   | 5.61% |   |   | $ | 535,894 |   |   |   | 4.18% |   |   | $ | 234,701 |   |
| Commercial real estate      loans   |   |                             | 6.29%  |   |                             | $      | 582,173 |                               |   |   | 6.42% |   |   | $ | 224,844 |   |   |   | 5.15% |   |   | $ | 25,406 |   |
| Agency RMBS                         |   |                             | N/A    |   |                             |   | N/A     |                               |   |   | 5.01% |   |   | $ | 560,269 |   |   |   | 3.49% |   |   | $ | 810,868 |   |
| Non-agency / CMBS /      ABS        |   |                             | 5.93%  |   |                             | $      | 326,458 |                               |   |   | 5.69% |   |   | $ | 376,000 |   |   |   | 4.26% |   |   | $ | 282,646 |   |
| CMBS – private      placement |   |                             | 5.84%  |   |                             | $      | 20,571  |                               |   |   | 5.40% |   |   | $ | 1,519 |   |   |   | N/A |   |   |   | N/A |   |
| Leasing                             |   |                             | 6.68%  |   |                             | $      | 83,405  |                               |   |   | 6.51% |   |   | $ | 57,214 |   |   |   | N/A |   |   |   | N/A |   |
| General                             |   |                             | 9.91%  |   |                             | $      | 51,981  |                               |   |   | 9.52% |   |   | $ | 24,916 |   |   |   | 0.09% |   |   | $ | 709,997 |   |

----

| (1) | Certain      one-time items reflected in interest expense have been excluded in      calculating the weighted average rate, since they are not indicative of      expected future results. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      increase of $332.5 million in the weighted average balance of debt      primarily related to the accumulation of investments by, and the closing      of our third bank loan CDO, Apidos Cinco CDO, which closed on May 30, 2007      and issued $322.0 of debt.  In addition, the current year      reflects a full year of interest expense for Apidos CDO III which issued      $262.5 million of debt and closed on May 9, 2006.  The prior      year reflected only eight months of such interest  expense. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      weighted average rate on the debt related to bank loans increased to 5.82%      for the year ended December 31, 2007, from 5.46% for the year ended      December 31, 2006 due primarily to the increase in  LIBOR. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | We      amortized $1.2 million of deferred debt issuance costs related to our CDO      financings for the year ended December 31, 2007, compared to $785,000 for      the year ended December 31, 2006.  This increase resulted      primarily from the addition of Apidos Cinco CDO and a full year of      deferred debt issuance cost amortization for Apidos CDO    III. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An      increase of $357.3 million in the weighted average balance of debt      primarily from the accumulation of investments of our second CRE CDO, RREF      2007-1 which closed on June 26, 2007 and issued $348.9 million of debt at      that time.  In addition, the current year reflects a full year      of interest expense for RREF 2006-1 which closed on August 10, 2006 and      issued $265.5 million in debt, while the prior year reflects only five      months of such interest expense. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      amortized $1.4 million of deferred debt issuance costs related to our CDOs      and repurchase facility financings for the year ended December 31, 2007,      compared to $376,000 for the year ended December 31, 2006 due to primarily      a full year of expense from RREF 2006-1, six months of expense from RREF      2007-1 and the closing costs of our three year term facility that closed      in April 2007. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Agency      ABS-RMBS generated $28.6 million in interest expense for the year ended      December 31, 2006.  No such expense was incurred for the year      ended December 31, 2007 since we sold our agency ABS-RMBS portfolio in      January and September 2006 and repaid the related  debt. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | ABS-RMBS,      CMBS and other asset-backed securities were pooled and financed by Ischus      CDO II.  Interest expense related to these obligations was $19.8      million for the year ended December 31, 2007, as compared to $21.7 million      for the year ended December 31, 2006, a decrease of $1.9 million      (9%).  This decrease resulted primarily from the deconsolidation      of Ischus CDO II on November 13, 2007 as a result of the sale of a 10%      portion of our equity ownership, a reconsideration event In accordance      with FIN 46-R. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | As      a result of the continued acquisitions of bank loans after the closing of      Apidos CDO I, we financed our second bank loan CDO (Apidos CDO III) in May      2006.  Apidos CDO III issued $262.5 million of senior notes into      several classes with rates ranging from three-month LIBOR plus 0.26% to      three-month LIBOR plus 4.25%.  We used the Apidos CDO III      proceeds to repay borrowings under a warehouse facility which had a      balance at the time of repayment of $222.6 million.  The      weighted average interest rate on the senior notes was 5.58% for the year      ended December 31, 2006 as compared to 4.24% for the period ended December      31, 2005 on the warehouse facility which began accumulating assets in July      2005. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      August 2005, Apidos CDO I issued $321.5 million of senior notes consisting      of several classes with rates ranging from three-month LIBOR plus 0.26% to      a fixed rate of 9.25%.  The Apidos CDO I financing proceeds were      used to repay borrowings under a related warehouse facility, which had a      balance at the time of repayment of $219.8 million.  The      weighted average interest rate on the senior notes was 5.47% for the year      ended December 31, 2006 as compared to 4.08% on the warehouse facility and      senior notes for the period ended December 31,  2005. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      weighted average balance of debt related to bank loans increased by $301.2      million to $535.9 million in the year ended December 31, 2006 from $234.7      million for the period ended December 31,2005. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      amortized $785,000 of deferred debt issuance costs related to the CDO      financings for the year ended December 31, 2006 and $213,000 for the      period ended December 31, 2005.  This increase resulted from the      addition of Apidos CDO III and a full year of deferred debt issuance costs      amortization for Apidos CDO I. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      closed our first commercial real estate loan CDO, Resource Real Estate      Funding CDO 2006-1 in August 2006.  Resource Real Estate Funding      CDO 2006-1 issued $308.7 million of senior notes at par consisting of      several classes with rates ranging from one month LIBOR plus 0.32% to      one-month LIBOR plus 3.75%.  Prior to August 10, 2006, we      financed these commercial real estate loans primarily with repurchase      agreements.  The Resource Real Estate Funding CDO 2006-1      financing proceeds were used to repay a majority of these repurchase      agreements, which had a balance at August 10, 2006 of $189.6      million.  The weighted average interest rate on the repurchase      agreements was 6.07% for the period from January 1, 2006 to August 10,      2006 and was 6.17% on the senior notes from August 10, 2006 through      December 31, 2006. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      financed the growth of our commercial real estate loan portfolio after the      closing of Resource Real Estate Funding CDO 2006-1 primarily through      repurchase agreements.  We had weighted average balances of      $224.8 million and $25.4 million of repurchase agreements outstanding at      each of December 31, 2006 and2005. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | We      had a weighted average interest rate of 6.42% for the year ended December      31, 2006 as compared to 5.15% for the period ended December 31, 2005 due      primarily to changes in LIBOR and increased spreads on repurchase      agreements. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      amortized $233,000 of deferred debt issuance costs related to Resource      Real Estate Funding CDO 2006-1 for the year ended December 31,      2006.  No such costs were incurred during the period ended      December 31, 2005. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      weighted average interest rate on these repurchase agreement obligations      increased to 5.01% for the year ended December 31, 2006 from 3.49% for the      period ended December 31, 2005 due primarily to increases in      LIBOR. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      increase in rates was partially offset by a decrease in the average      balance of our repurchase agreements financing our agency ABS-RMBS      portfolio.  Our average repurchase obligations during the year      ended December 31, 2006 was $560.3 million as compared with $810.9 million      for the period ended December 31, 2005 due to the partial sale of our      agency ABS-RMBS portfolio in January 2006 and the subsequent sale of our      remaining agency ABS-RMBS in September2006. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      weighted average interest rate on the senior notes issued by Ischus CDO II      was 5.69% for the year ended December 31, 2006 as compared to 4.26% on the      warehouse facility and senior notes for the period ended December 31,      2005. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      July 2005, Ischus CDO II issued $376.0 million of senior notes consisting      of several classes with rates ranging from one-month LIBOR plus 0.27% to      one-month LIBOR plus 2.85%.  The Ischus CDO II proceeds were      used to repay borrowings under a related warehouse facility, which had a      balance at the time of repayment of $317.8 million and a weighted-average      balance of $282.6 million during the period ended December 31,      2005. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      amortized $591,000 of deferred debt issuance costs related to the Ischus      CDO II financing for the year ended December 31, 2006 as compared with      $248,000 for the period ended December 31,2005. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An      increase of $2.1 million in interest expense on our unsecured junior      subordinated debentures held by unconsolidated trusts that issued trust      preferred securities which were not issued until May 2006 and September      2006, respectively. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | An      increase in interest expense on our credit facility of $320,000 which was      not entered into until December2005. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|                                           |   | Years      EndedDecember      31, |   |   | Period      from March 8, 2005 (Date Operations Commenced) toDecember      31, |   |
|------------------------------------------------|--------|-----------------------------------|--------|--------|--------------------------------------------------------------------------------|--------|
|                                           |   | 2007                              |   |   | 2006                                                                           |   |   | 2005 |   |
| Non-investment      expenses:                  |   |                              |   |   |                                                                           |   |   |   |   |
| Management fees - related      party           |   | $                                 | 6,554  |   |                                                                           | $      | 4,838 |   |   | $ | 3,012 |   |
| Equity compensation – related      party |   |                              | 1,565  |   |                                                                           |   | 2,432 |   |   |   | 2,709 |   |
| Professional      services                     |   |                              | 2,911  |   |                                                                           |   | 1,881 |   |   |   | 580 |   |
| Insurance                                      |   |                              | 466    |   |                                                                           |   | 498 |   |   |   | 395 |   |
| General and      administrative                |   |                              | 1,581  |   |                                                                           |   | 1,428 |   |   |   | 1,032 |   |
| Income tax    expense                          |   |                              | 338    |   |                                                                           |   | 67 |   |   |   | − |   |
| Total      non-investment expenses             |   | $                                 | 13,415 |   |                                                                           | $      | 11,144 |   |   | $ | 7,728 |   |

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|   | · | Increase      of $391,000 in audit and tax fees for the year ended December 31, 2007 due      to the timing of when the services were performed and    billed. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase      of $151,000 in LEAF servicing expense for the year ended December 31, 2007      due to the increase in managed assets in the year ended December 31,      2007. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase      of $135,000 in fees associated with our Sarbanes-Oxley compliance for the      year ended December 31, 2007. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase      of $170,000 in trustee fees with respect to our CDOs and increases of      $71,000 in agreed-upon procedures fees to independent audit firms for the      year ended December 31, 2007 due to two CDO vehicles closing subsequent to      December 31, 2006.  There were no such fees for the year ended      December 31, 2006. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase      of $117,000 in legal fees due to our having been subject to a full year of      reporting obligations under the Securities Exchange Act of      1934. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase      of $203,000 in rating agency and other fees with respect to our CDOs for      the year ended December 31, 2007 due to two CDO vehicles closing      subsequent to December 31, 2006.  There were no such fees for      the year ended December 31, 2006. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase      of $172,000 in director’s fees for the year ended December 31, 2007 due to      the new fees paid to members of the investment committee who approve all      investments in commercial real estatemortgages. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase      of $66,000 in bad debt expense for the year ended December 31, 2007      related to several assets in our bank loan portfolio.  There was      no such expense for the year ended December 31,  2006. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase      of $126,000 in other general and administrative expenses including bank      fees related to cost of servicing our commercial real estate portfolio,      printing fees for our first proxy filing, dues and subscriptions, and      travel due to our growing portfolio for the year ended December 31,      2007. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                         |   | Years      EndedDecember      31, |    |   | Period      from March 8, 2005 (Date Operations Commenced) to December    31, |   |
|----------------------------------------------|--------|-----------------------------------|---------|--------|-------------------------------------------------------------------------------|--------|
|                                         |   | 2007                              |    |   | 2006                                                                          |   |   | 2005 |   |
| Other      (expenses) revenues               |   |                              |    |   |                                                                          |   |   |   |   |
| Net realized (loss) gain on      investments |   | $                                 | (15,098 | )      |                                                                          | $      | (8,627 | ) |   | $ | 311 |   |
| Gain on deconsolidation of      VIE          |   |                              | 14,259  |   |                                                                          |   | − |   |   |   | − |   |
| Provision for loan and lease      losses     |   |                              | (6,211  | )      |                                                                          |   | − |   |   |   | − |   |
| Asset    impairments                         |   |                              | (26,277 | )      |                                                                          |   | − |   |   |   | − |   |
| Other income                                 |   |                              | 201     |   |                                                                          |   | 154 |   |   |   | − |   |
| Total      (expenses) revenues               |   | $                                 | (33,126 | )      |                                                                          | $      | (8,473 | ) |   | $ | 311 |   |

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|                                                                                                                                                                                                                                                                     |   | Amortized      cost |      |   | Dollar      price |   |               | Estimated      fair value |   |   | Dollar      price |   |   | Estimated      fair value less amortized cost |   |   | Dollar      price |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|-----------|--------|-------------------|--------|--------------------|---------------------------|--------|--------|-------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------|--------|
| December      31, 2007                                                                                                                                                                                                                                                   |   |                |      |   |              |   |               |                      |   |   |              |   |   |                                          |   |   |              |   |
| Floating      rate                                                                                                                                                                                                                                                       |   |                |      |   |              |   |               |                      |   |   |              |   |   |                                          |   |   |              |   |
| CMBS-private      placement                                                                                                                                                                                                                                              |   | $                   | 54,132    |   |              |   |        93.40% |                      |   | $      | 41,524            |   |   |                                          | 71.65% |   |              | $      | (12,608 | ) |   |   | -21.75% |   |
| Other      ABS                                                   |   |                | 5,665     |   |              |   |        94.42% |                      |   |   | 900               |   |   |                                          | 15.00% |   |              |   | (4,765 | ) |   |   | -79.42% |   |
| B      notes (1)                                                 |   |                | 33,570    |   |              |   | 100.10%            |                      |   |   | 33,486            |   |   |                                          | 99.85% |   |              |   | (84 | ) |   |   |        -0.25% |   |
| Mezzanine      loans (1)                                         |   |                | 141,894   |   |              |   | 100.09%            |                      |   |   | 141,539           |   |   |                                          | 99.83% |   |              |   | (355 | ) |   |   |        -0.26% |   |
| Whole      loans (1)                                             |   |                | 430,776   |   |              |   |        99.35% |                      |   |   | 429,699           |   |   |                                          | 99.10% |   |              |   | (1,077 | ) |   |   |        -0.25% |   |
| Bank      loans (2)                                              |   |                | 931,101   |   |              |   | 100.00%            |                      |   |   | 874,736           |   |   |                                          | 93.95% |   |              |   | (56,365 | ) |   |   |        -6.05% |   |
| Total floating      rate                                                   |   | $                   | 1,597,138 |   |              |   |        99.58% |                      |   | $      | 1,521,884         |   |   |                                          | 94.88% |   |              | $      | (75.254 | ) |   |   |        -4.69% |   |
| Fixed      rate                                                                                                                                                                                                                                                          |   |                |      |   |              |   |               |                      |   |   |              |   |   |                                          |   |   |              |   |   |   |   |   |   |   |
| CMBS      – private placement                                                                                                                                                                                                                                      |   | $                   | 28,241    |   |              |   |        98.95% |                      |   | $      | 23,040            |   |   |                                          | 80.73% |   |              | $      | (5,201 | ) |   |   | -18.22% |   |
| B      notes (1)                                                 |   |                | 56,007    |   |              |   | 100.17%            |                      |   |   | 55,867            |   |   |                                          | 99.92% |   |              |   | (140 | ) |   |   |        -0.25% |   |
| Mezzanine      loans (1)                                         |   |                | 81,268    |   |              |   |        94.69% |                      |   |   | 80,016            |   |   |                                          | 93.23% |   |              |   | (1,252 | ) |   |   |        -1.46% |   |
| Whole      loans (1)                                             |   |                | 97,942    |   |              |   |        99.24% |                      |   |   | 97,697            |   |   |                                          | 98.99% |   |              |   | (245 | ) |   |   |        -0.25% |   |
| Equipment      leases and notes (3)                                                                                                                                                                                                                                      |   |                | 95,323    |   |              |   | 100.00%            |                      |   |   | 95,030            |   |   |                                          | 99.69% |   |              |   | (293 | ) |   |   |        -0.31% |   |
| Total fixed      rate                                                      |   | $                   | 358,781   |   |              |   |        98.49% |                      |   | $      | 351,650           |   |   |                                          | 96.53% |   |              | $      | (7,131 | ) |   |   |        -1.96% |   |
| Grand      total                                                                          |   | $                   | 1.955,919 |   |              |   |        99.37% |                      |   | $      | 1,873,534         |   |   |                                          | 95.19% |   |              | $      | (82,385 | ) |   |   |        -4.18% |   |

----

| (1) | Estimated      fair value of B notes, mezzanine loans and whole loans includes a      provision for loan losses of $3.2 million at December 31,      2007. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Estimated      fair value includes a $2.7 million provision for loan losses at December      31, 2007. |
|-----|--------------------------------------------------------------------------------------------------------|

| (3) | Estimated      fair value includes a $293,000 provision for lease losses at December      31, 2007. |
|-----|----------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                 |   | Amortized      cost |      |   | Dollar      price |   |               | Estimated      fair value |   |   | Dollar      price |   |   | Estimated      fair value less amortized cost |               |   | Dollar      price |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|-----------|--------|-------------------|--------|--------------------|---------------------------|--------|--------|-------------------|--------|--------|-----------------------------------------------|--------------------|--------|-------------------|--------|
| December      31, 2006                                                                                                                                                                                                                                               |   |                |      |   |              |   |               |                      |   |   |              |   |   |                                          |               |   |              |   |
| Floating      rate                                                                                                                                                                                                                                                   |   |                |      |   |              |   |               |                      |   |   |              |   |   |                                          |               |   |              |   |
| ABS-RMBS                                                     |   | $                   | 342,496   |   |              |   |        99.22% |                      |   | $      | 336,968           |   |   |                                          |        97.62% |   |              | $      | (5,528 | ) |   |   | -1.60% |   |
| CMBS                                                         |   |                | 401       |   |              |   | 100.00%            |                      |   |   | 406               |   |   |                                          | 101.25%            |   |              |   | 5 |   |   |   |        1.25% |   |
| CMBS-private      placement                                                                                                                                                                                                                                          |   |                | 30,055    |   |              |   | 100.00%            |                      |   |   | 30,055            |   |   |                                          | 100.00%            |   |              |   | − |   |   |   |        0.00% |   |
| Other      ABS                                               |   |                | 17,539    |   |              |   |        99.87% |                      |   |   | 17,669            |   |   |                                          | 100.61%            |   |              |   | 130 |   |   |   |        0.74% |   |
| A      notes                                                 |   |                | 42,515    |   |              |   | 100.04%            |                      |   |   | 42,515            |   |   |                                          | 100.04%            |   |              |   | − |   |   |   |        0.00% |   |
| B      notes                                                 |   |                | 147,196   |   |              |   | 100.03%            |                      |   |   | 147,196           |   |   |                                          | 100.03%            |   |              |   | − |   |   |   |        0.00% |   |
| Mezzanine      loans                                         |   |                | 105,288   |   |              |   | 100.07%            |                      |   |   | 105,288           |   |   |                                          | 100.07%            |   |              |   | − |   |   |   |        0.00% |   |
| Whole      loans                                             |   |                | 190,768   |   |              |   |        99.06% |                      |   |   | 190,768           |   |   |                                          |        99.06% |   |              |   | − |   |   |   |        0.00% |   |
| Bank      loans                                              |   |                | 613,981   |   |              |   | 100.15%            |                      |   |   | 613,540           |   |   |                                          | 100.08%            |   |              |   | (441 | ) |   |   | -0.07% |   |
| Total floating      rate                                               |   | $                   | 1,490,239 |   |              |   |        99.77% |                      |   | $      | 1,484,405         |   |   |                                          |        99.38% |   |              | $      | (5,834 | ) |   |   | -0.39% |   |
| Fixed      rate                                                                                                                                                                                                                                                      |   |                |      |   |              |   |               |                      |   |   |              |   |   |                                          |               |   |              |   |   |   |   |   |   |   |
| ABS-RMBS                                                     |   | $                   | 6,000     |   |              |   | 100.00%            |                      |   | $      | 5,880             |   |   |                                          |        98.00% |   |              | $      | (120 | ) |   |   | -2.00% |   |
| CMBS                                                         |   |                | 27,550    |   |              |   |        98.77% |                      |   |   | 27,031            |   |   |                                          |        96.91% |   |              |   | (519 | ) |   |   | -1.86% |   |
| Other      ABS                                               |   |                | 2,987     |   |              |   |        99.97% |                      |   |   | 2,988             |   |   |                                          | 100.00%            |   |              |   | 1 |   |   |   |        0.03% |   |
| B      notes                                                 |   |                | 56,390    |   |              |   | 100.22%            |                      |   |   | 56,390            |   |   |                                          | 100.22%            |   |              |   | − |   |   |   |        0.00% |   |
| Mezzanine      loans                                         |   |                | 83,901    |   |              |   |        94.06% |                      |   |   | 83,901            |   |   |                                          |        94.06% |   |              |   | − |   |   |   |        0.00% |   |
| Bank      loans                                              |   |                | 249       |   |              |   | 100.00%            |                      |   |   | 249               |   |   |                                          | 100.00%            |   |              |   | − |   |   |   |        0.00% |   |
| Equipment      leases and notes                                                                                                                                                                                                                                      |   |                | 88,970    |   |              |   | 100.00%            |                      |   |   | 88,970            |   |   |                                          | 100.00%            |   |              |   | − |   |   |   |        0.00% |   |
| Total fixed      rate                                                  |   | $                   | 266,047   |   |              |   |        97.97% |                      |   | $      | 265,409           |   |   |                                          |        97.73% |   |              | $      | (638 | ) |   |   | -0.24% |   |
| Grand      total                                                                      |   | $                   | 1,756,286 |   |              |   |        99.49% |                      |   | $      | 1,749,814         |   |   |                                          |        99.12% |   |              | $      | (6,472 | ) |   |   | -0.37% |   |

|                         |   | December      31,2006 |    |
|------------------------------|--------|-----------------------|---------|
| ABS-RMBS,      gross         |   | $                     | 351,194 |   |
| Unamortized      discount    |   |                  | (2,823  | ) |
| Unamortized      premium     |   |                  | 125     |   |
| Amortized cost               |   |                  | 348,496 |   |
| Gross      unrealized gains  |   |                  | 913     |   |
| Gross      unrealized losses |   |                  | (6,561  | ) |
| Estimated fair      value    |   | $                     | 342,848 |   |
| Percent of    total          |   |                  | 100.0   | % |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | December      31, 2006 |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Amortized      cost    |    |   | Dollar      price |   |
| Moody’s      ratings category:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                   |    |   |   |   |
| A1      through      A3                                                                                                              |   | $                      | 42,163  |   |   |   | 100.18% |   |
| Baa1      through      Baa3                                                                                                          |   |                   | 279,641 |   |   |   |        99.88% |   |
| Ba1      through      Ba3                                                                                                            |   |                   | 26,692  |   |   |   |        91.68% |   |
| Total                                                                                                                                               |   | $                      | 348,496 |   |   |   |        99.23% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                   |    |   |   |   |   |   |
| S&P      ratings category:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   |    |   |   |   |   |   |
| A+      through      A-                                                                                                              |   | $                      | 58,749  |   |   |   |        99.65% |   |
| BBB+      through      BBB-                                                                                                          |   |                   | 266,555 |   |   |   |        99.14% |   |
| BB+      through      BB-                                                                                                            |   |                   | 2,192   |   |   |   |        92.68% |   |
| No      rating      provided                                                                                                         |   |                   | 21,000  |   |   |   | 100.00% |   |
| Total                                                                                                                                               |   | $                      | 348,496 |   |   |   |        99.23% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                   |    |   |   |   |   |   |
| Weighted      average rating      factor                                                                                             |   |                   | 412     |   |   |   |   |   |
| Weighted      average original FICO (1)                                                                                              |   |                   | 636     |   |   |   |   |   |
| Weighted      average original LTV (1)                                                                                               |   |                   | 80.58%  |   |   |   |   |   |

----

| (1) | Weighted      average reflects 100.0% at December 31, 2006 of the RMBS in our      portfolio. |
|-----|-----------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | December      31, 2006 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | Amortized      cost    |   |   | Dollar      price |   |
| Moody’s      ratings category:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                   |   |   |   |   |
| Baa1      through      Baa3                                                                                                         |   | $                      | 27,951 |   |   |   | 98.79% |   |
| Total                                                                                                                                              |   | $                      | 27,951 |   |   |   | 98.79% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                   |   |   |   |   |   |   |
| S&P      ratings category:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                   |   |   |   |   |   |   |
| BBB+      through      BBB-                                                                                                         |   | $                      | 12,183 |   |   |   | 99.10% |   |
| No      rating      provided                                                                                                        |   |                   | 15,768 |   |   |   | 98.55% |   |
| Total                                                                                                                                              |   | $                      | 27,951 |   |   |   | 98.79% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                   |   |   |   |   |   |   |
| Weighted      average rating factor (1)                                                                                             |   |                   | 346    |   |   |   |   |   |

----

| (1) | Weighted      average rating factor is the quantitative equivalent of Moody’s      traditional rating categories and used by Moody’s in its credit      enhancement calculation for securitization  transactions. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                 |   | December      31, 2007 |   |   | December      31, 2006 |   |
|--------------------------------------|--------|------------------------|--------|--------|------------------------|--------|
|                                 |   | Amortized      Cost    |   |   | Dollar      Price      |   |   | Amortized      Cost |   |   | Dollar      Price |   |
| Moody’s      Ratings Category: |   |                   |   |   |                   |   |   |   |   |   |   |   |
| Aaa                                  |   | $                      | 10,000 |   |                   |   | 100.00% |   |   | $ | 30,055 |   |   |   | 100.00%     |   |
| Baa1      through Baa3               |   |                   | 65,377 |   |                   |   | 94.07% |   |   |   | − |   |   |   | N/A |   |
| Ba1      through Ba3                 |   |                   | 6,996  |   |                   |   | 99.94% |   |   |   | − |   |   |   | N/A |   |
| Total                                |   | $                      | 82,373 |   |                   |   | 95.23% |   |   | $ | 30,055 |   |   |   | 100.00%       |   |
|                                 |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| S&P      Ratings Category:       |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
|                                 |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| AAA                                  |   | $                      | 10,000 |   |                   |   | 100.00% |   |   | $ | 30,055 |   |   |   | 100.00%       |   |
| BBB+      through BBB-               |   |                   | 72,373 |   |                   |   | 94.61% |   |   |   | − |   |   |   | N/A |   |
| Total                                |   | $                      | 82,373 |   |                   |   |                 95.23% |   |   | $ | 30,055 |   |   |   | 100.00%       |   |
|                                 |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average rating factor  |   |                   | 497    |   |                   |   |   |   |   |   | 1 |   |   |   |   |   |

|                                 |   | December      31, 2007 |    |   | December      31, 2006 |   |
|--------------------------------------|--------|------------------------|---------|--------|------------------------|--------|
|                                 |   | Amortized      cost    |    |   | Dollar      price      |   |   | Amortized      cost |   |   | Dollar      price |   |
| Moody’s      ratings category: |   |                   |    |   |                   |   |   |   |   |   |   |   |
| Baa1      through Baa3               |   | $                      | 5,665   |   |                   |   | 94.42% |   |   | $ | 20,526 |   |   |   |        99.89% |   |
| Total                                |   | $                      | 5,665   |   |                   |   | 94.42% |   |   | $ | 20,526 |   |   |   |         99.89% |   |
|                                 |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| S&P      ratings category:       |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| BBB+      through BBB-               |   | $                      | 5,665   |   |                   |   | 94.42% |   |   | $ | 18,765 |   |   |   |         99.08% |   |
| No      rating provided              |   |                   | − |   |                   |   | N/A |   |   |   | 1,761 |   |   |   | 100.00% |   |
| Total                                |   | $                      | 5,665   |   |                   |   | 94.42% |   |   | $ | 20,526 |   |   |   |         99.89% |   |
|                                 |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average rating factor  |   |                   | 610     |   |                   |   |   |   |   |   | 396 |   |   |   |   |   |

----

Back to Index

| Description                         |   | Quantity |   |   | Amortized      Cost |   | ContractedInterest      Rates | Maturity      Dates |
|-------------------------------------|--------|----------|--------|--------|---------------------|--------|-------------------------------|---------------------|
| December 31,      2007:             |   |     |   |   |                |   |                          |                |
| Whole      loans, floating rate     |   |     | 28     |   |                | $      | 430,776                       |                | LIBOR      plus 1.50% to LIBOR plus 4.25% | May      2008 toJuly      2010 |
| Whole      loans, fixed rate        |   |     | 7      |   |                |   | 97,942                        |                | 6.98%      to 8.57% | May      2009 toAugust      2012 |
| B      notes, floating rate         |   |     | 3      |   |                |   | 33,570                        |                | LIBOR      plus 2.50% to LIBOR plus 3.01% | March      2008 toOctober      2008 |
| B      notes, fixed rate            |   |     | 3      |   |                |   | 56,007                        |                | 7.00%      to 8.68% | July      2011 toJuly      2016 |
| Mezzanine      loans, floating rate |   |     | 11     |   |                |   | 141,894                       |                | LIBOR      plus 2.15% to LIBOR plus 3.45% | February      2008 toMay      2009 |
| Mezzanine      loans, fixed rate    |   |     | 7      |   |                |   | 81,268                        |                | 5.78%      to 11.00% | October      2009 toSeptember      2016 |
| Total (1)                           |   |     | 59     |   |                | $      | 841,457                       |                |   |   |
|                                |   |     |   |   |                |   |                          |                |   |   |
| December 31,      2006:             |   |     |   |   |                |   |                          |                |   |   |
| Whole      loans, floating rate     |   |     | 9      |   |                | $      | 190,768                       |                | LIBOR      plus 2.50% to LIBOR plus 3.65% | August      2007 toJanuary      2010 |
| A      notes, floating rate         |   |     | 2      |   |                |   | 42,515                        |                | LIBOR      plus 1.25% to LIBOR plus 1.35% | January      2008 toApril      2008 |
| B      notes, floating rate         |   |     | 10     |   |                |   | 147,196                       |                | LIBOR      plus 1.90% to LIBOR plus 6.25% | April      2007 toOctober      2008 |
| B      notes, fixed rate            |   |     | 3      |   |                |   | 56,390                        |                | 7.00%      to 8.68% | July      2011 toJuly      2016 |
| Mezzanine      loans, floating rate |   |     | 7      |   |                |   | 105,288                       |                | LIBOR      plus 2.20% to LIBOR plus 4.50% | August      2007 toOctober      2008 |
| Mezzanine      loans, fixed rate    |   |     | 8      |   |                |   | 83,901                        |                | 5.78%      to 11.00% | August      2007 toSeptember      2016 |
| Total                               |   |     | 39     |   |                | $      | 626,058                       |                |   |   |

----

| (1) | The      total does not include a provision for loan losses of $3.2 million      recorded as of December 31, 2007. |
|-----|--------------------------------------------------------------------------------------------------------------------|

----

Back to Index

|                                 |   | December      31, 2007 |    |   | December      31, 2006 |   |
|--------------------------------------|--------|------------------------|---------|--------|------------------------|--------|
|                                 |   | Amortized      cost    |    |   | Dollar      price      |   |   | Amortized      cost |   |   | Dollar      price |   |
| Moody’s      ratings category: |   |                   |    |   |                   |   |   |   |   |   |   |   |
| Baa1      through Baa3               |   | $                      | 5,914   |   |                   |   |        98.65% |   |   | $ | 3,500 |   |   |   | 100.00% |   |
| Ba1      through Ba3                 |   |                   | 500,417 |   |                   |   | 100.02% |   |   |   | 218,941 |   |   |   | 100.09% |   |
| B1      through B3                   |   |                   | 386,589 |   |                   |   | 100.01% |   |   |   | 385,560 |   |   |   | 100.15% |   |
| Caa1      through Caa3               |   |                   | 20,380  |   |                   |   | 100.20% |   |   |   | 3,722 |   |   |   | 100.00% |   |
| Ca                                   |   |                   | 1,000   |   |                   |   | 100.00% |   |   |   | − |   |   |   |              −% |   |
| No      rating provided              |   |                   | 16,800  |   |                   |   |        99.44% |   |   |   | 2,507 |   |   |   | 100.28% |   |
| Total                                |   | $                      | 931,100 |   |                   |   | 100.00% |   |   | $ | 614,230 |   |   |   | 100.13% |   |
|                                 |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| S&P      ratings category:       |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| BBB+      through BBB-               |   | $                      | 14,819  |   |                   |   | 100.15% |   |   | $ | 8,490 |   |   |   | 100.00% |   |
| BB+      through BB-                 |   |                   | 433,624 |   |                   |   | 100.00% |   |   |   | 241,012 |   |   |   | 100.13% |   |
| B+      through B-                   |   |                   | 405,780 |   |                   |   | 100.06% |   |   |   | 350,262 |   |   |   | 100.13% |   |
| CCC+      through CCC-               |   |                   | 4,207   |   |                   |   | 100.00% |   |   |   | 10,193 |   |   |   | 100.05% |   |
| No      rating provided              |   |                   | 72,670  |   |                   |   |        99.59% |   |   |   | 4,273 |   |   |   | 100.16% |   |
| Total                                |   | $                      | 931,100 |   |                   |   | 100.00% |   |   | $ | 614,230 |   |   |   | 100.13% |   |
|                                 |   |                   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average rating factor  |   |                   | 2,000   |   |                   |   |   |   |   |   | 2,131 |   |   |   |   |   |

|                         |   | December      31, |   |
|------------------------------|--------|-------------------|--------|
|                         |   | 2007              |   |   | 2006 |   |
| Direct      financing leases |   | $                 | 28,880 |   |   | $ | 30,270 |   |
| Notes      receivable        |   |              | 66,150 |   |   |   | 58,700 |   |
| Total                        |   | $                 | 95,030 | (1) |   | $ | 88,970 |   |

----

| (1) | Includes      a $293,000 provision for leaselosses. |
|-----|-----------------------------------------------------|

----

Back to Index

|                    | Benchmark      rate |   | Notional      value |    |   | Strike      rate |   | Effective      date | Maturity      date |     | Fair      value |   |
|-------------------------|---------------------|--------|---------------------|---------|--------|------------------|--------|---------------------|--------------------|----------|-----------------|--------|
| Interest      rate swap | 1      month LIBOR  |   | $                   | 53,325  |   |             |   | 5.53%               |               | 07/27/06 | 05/25/16        |   | $ | (3,477 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 12,750  |   |             |   | 5.27%               |               | 07/25/07 | 08/06/12        |   |   | (702 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 12,965  |   |             |   | 4.63%               |               | 12/04/06 | 07/01/11        |   |   | (348 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 28,000  |   |             |   | 5.10%               |               | 05/24/07 | 06/05/10        |   |   | (934 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 12,675  |   |             |   | 5.52%               |               | 06/12/07 | 07/05/10        |   |   | (540 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 1,880   |   |             |   | 5.68%               |               | 07/13/07 | 03/12/17        |   |   | (166 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 15,235  |   |             |   | 5.34%               |               | 06/08/07 | 02/25/10        |   |   | (541 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 10,435  |   |             |   | 5.32%               |               | 06/08/07 | 05/25/09        |   |   | (227 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 12,150  |   |             |   | 5.44%               |               | 06/08/07 | 03/25/12        |   |   | (723 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 7,000   |   |             |   | 5.34%               |               | 06/08/07 | 02/25/10        |   |   | (249 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 83,080  |   |             |   | 5.58%               |               | 06/08/07 | 04/25/17        |   |   | (6,948 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 1,726   |   |             |   | 5.65%               |               | 06/28/07 | 07/15/17        |   |   | (149 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 1,681   |   |             |   | 5.72%               |               | 07/09/07 | 10/01/16        |   |   | (151 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 3,850   |   |             |   | 5.65%               |               | 07/19/07 | 07/15/17        |   |   | (332 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 4,023   |   |             |   | 5.41%               |               | 08/07/07 | 07/25/17        |   |   | (271 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 22,919  |   |             |   | 5.32%               |               | 03/30/06 | 09/22/15        |   |   | (706 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 10,001  |   |             |   | 5.31%               |               | 03/30/06 | 11/23/09        |   |   | (119 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 6,873   |   |             |   | 5.41%               |               | 05/26/06 | 08/22/12        |   |   | (164 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 4,034   |   |             |   | 5.43%               |               | 05/26/06 | 04/22/13        |   |   | (139 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 3,681   |   |             |   | 5.72%               |               | 06/28/06 | 06/22/16        |   |   | (175 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 1,511   |   |             |   | 5.52%               |               | 07/27/06 | 07/22/11        |   |   | (31 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 3,243   |   |             |   | 5.54%               |               | 07/27/06 | 09/23/13        |   |   | (133 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 5,550   |   |             |   | 5.25%               |               | 08/18/06 | 07/22/16        |   |   | (218 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 4,334   |   |             |   | 5.06%               |               | 09/28/06 | 08/22/16        |   |   | (128 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 2,339   |   |             |   | 4.97%               |               | 12/22/06 | 12/23/13        |   |   | (65 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 3,384   |   |             |   | 5.22%               |               | 01/19/07 | 11/22/16        |   |   | (115 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 2,285   |   |             |   | 5.05%               |               | 04/23/07 | 09/22/11        |   |   | (40 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 3,173   |   |             |   | 5.42%               |               | 07/25/07 | 04/24/17        |   |   | (121 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 8,535   |   |             |   | 4.53%               |               | 11/29/07 | 10/23/17        |   |   | (88 | ) |
| Interest      rate swap | 1      month LIBOR  |   |                | 5,291   |   |             |   | 4.40%               |               | 12/26/07 | 11/22/17        |   |   | (40 | ) |
| Total                   |                |   | $                   | 347,928 |   |             |   | 5.36%               |               |     |            |   | $ | (18,040 | ) |

----

Back to Index

|   | · | In      June 2007, we closed Resource Real Estate Funding CDO 2007-1, a $500.0      million CDO transaction that provided financing for commercial real estate      loans.  The investments held by Resource Real Estate Funding CDO      2007-1 collateralized $390.0 million of senior notes issued by the CDO      vehicle, of which RCC Real Estate, Inc., or RCC Real Estate, purchased      100% of the class H senior notes, class K senior notes, class L senior      notes and class M senior notes for $68.0 million.  In addition,      Resource Real Estate Funding 2007-1 CDO Investor, LLC, a subsidiary of RCC      Real Estate, purchased a $41.3 million equity interest representing 100%      of the outstanding preference shares.  At December 31, 2007, the      notes issued to outside investors had a weighted average borrowing rate of      5.49%. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      May 2007, we closed Apidos Cinco CDO, a $350.0 million CDO transaction      that provided financing for bank loans.  The investments held by      Apidos Cinco CDO collateralized $322.0 million of senior notes issued by      the CDO vehicle, of which RCC Commercial Inc., or RCC Commercial,      purchased a $28.0 million equity interest representing 100% of the      outstanding preference shares.  At December 31, 2007, the notes      issued to outside investors had a weighted average borrowing rate of      5.38%. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      August 2006, we closed Resource Real Estate Funding CDO 2006-1, a $345.0      million CDO transaction that provided financing for commercial real estate      loans.  The investments held by Resource Real Estate Funding CDO      2006-1 collateralized $308.7 million of senior notes issued by the CDO      vehicle, of which RCC Real Estate, Inc., or RCC Real Estate, purchased      100% of the class J senior notes and class K senior notes for $43.1      million.  At December 31, 2007, the notes issued to outside      investors had a weighted average borrowing rate of  5.69%. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      May 2006, we closed Apidos CDO III, a $285.5 million CDO transaction that      provided financing for bank loans.  The investments held by      Apidos CDO III collateralized $262.5 million of senior notes issued by the      CDO vehicle.  At December 31, 2007, the notes issued to outside      investors had a weighted average borrowing rate of  5.59%. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      August 2005, we closed Apidos CDO I, a $350.0 million CDO transaction that      provided financing for bank loans.  The investments held by      Apidos CDO I collateralize $321.5 million of senior notes issued by the      CDO vehicle, of which RCC Commercial purchased $23.0 million equity      interest representing 100% of the outstanding preference      shares.  At December 31, 2007, the notes issued to outside      investors had a weighted average borrowing rate of  5.47%. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | In      July 2005, we closed Ischus CDO II, a $403.0 million CDO transaction that      provided financing for MBS and other asset-backed.  The      investments held by Ischus CDO II collateralize $376.0 million of senior      notes issued by the CDO vehicle, of which RCC Commercial purchased $28.5      million equity interest representing 100% of the outstanding preference      shares.  At November 13, 2007, we sold 10% of our equity      interest and are no longer deemed to be the primary      beneficiary.  Our remaining investment at December 31, 2007 was      $257,000.  As a result, we deconsolidated Ischus CDO II at that      date. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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|                                                                                           |   | Years      EndedDecember      31, |    |   | Period      from March      8, 2005 (Date Operations Commenced) toDecember      31, |   |
|------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|--------|-------------------------------------------------------------------------------------|--------|
|                                                                                           |   | 2007                              |    |   | 2006                                                                                |   |   | 2005 |   |
| Net      income                                                                                |   | $                                 | 8,890   |   |                                                                                | $      | 15,606 |   |   | $ | 10,908 |   |
|                                                                                           |   |                              |    |   |                                                                                |   |   |   |   |   |   |   |
| Adjustments:                                                                                   |   |                              |    |   |                                                                                |   |   |   |   |   |   |   |
| Share-based compensation to      related parties                                               |   |                              | (500    | )      |                                                                                |   | 368 |   |   |   | 2,709 |   |
| Incentive management fee expense      to related party paid      in shares                     |   |                              | − |   |                                                                                |   | 371 |   |   |   | 86 |   |
| Capital carryover      (utilization)/losses from the sale of securities                        |   |                              | (49     | )      |                                                                                |   | 11,624 |   |   |   | − |   |
| Net unrealized loss on the      deconsolidation of ABS-RMBS      portfolio                     |   |                              | 1,317   |   |                                                                                |   | − |   |   |   | − |   |
| Asset impairments related to      ABS-RMBS portfolio                                           |   |                              | 26,277  |   |                                                                                |   | − |   |   |   | − |   |
| Provision for loan and lease      losses                                                       |   |                              | 3,153   |   |                                                                                |   | − |   |   |   | − |   |
| Net book to tax adjustment for the      inclusion of ourtaxable foreign REIT      subsidiaries |   |                              | 3,432   |   |                                                                                |   | 121 |   |   |   | (876 | ) |
| Other net book to tax      adjustments                                                         |   |                              | (110    | )      |                                                                                |   | (152 | ) |   |   | (157 | ) |
| Estimated      REIT taxable income                                                             |   | $                                 | 42,410  |   |                                                                                | $      | 27,938 |   |   | $ | 12,670 |   |

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|   | · | cash      and cash equivalents of $11.7 million, $6.9 million of restricted cash in      margin call accounts and $3.4 million of restricted cash related to our      leasing portfolio; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | capital      available for reinvestment in our five CDOs of $75.1 million, which is      made up of $45.0 million of restricted cash and $30.1 million of      availability to finance future funding commitments on commercial real      estate loans; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | financing      available under existing borrowing facilities of $14.8 million, comprised      of $5.6 million of available cash from our three year non-recourse secured      financing facility and $9.2 million of unused capacity under our unsecured      revolving credit facility.  We also have $227.9 million of      unused capacity under our repurchase facilities, which are, however,      subject to approval of individual repurchase transactions by the      repurchase counterparties. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Natixis,      in its sole discretion, will purchase assets from us, and will transfer      those assets back to us at a particular date or on  demand; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      maximum amount of outstanding repurchase transactions is $150.0      million; |
|--------|--------|----------------------------------------------------------------------------------------|

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|   | · | each      repurchase transaction will be entered into by agreement between the      parties specifying the terms of the transaction, including identification      of the assets subject to the transaction, sale price, repurchase price,      rate, term and margin maintenance requirements;  and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we      must cover margin deficits by depositing cash or other assets acceptable      to Natixis, in its discretion, if the value of the sold assets falls      bellow the value of the money paid forthem. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we      fail to repurchase securities, we fail to pay any margin deficits or we      fail to make any other payment after we reach an agreement with respect to      a particular transaction; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      act of insolvency has occurred; |
|--------|--------|-----------------------------------------|

|   | · | we      admit in writing our inability, or our intention not to pay our debts as      they become due; |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | any      of the purchased assets cease to be owned free and clear of adverse      claims, or, should the transaction be characterized as a secured      refinancing, Natixis no longer has first priority in the purchased      assets; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we      fail to pay any amount owed toNatixis; |
|--------|--------|------------------------------------------------|

|   | · | any      governmental or regulatory authority takes any action materially adverse      to our business operations; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | we      experience a change of control or an act of insolvency  ; |
|--------|--------|-------------------------------------------------------------------|

|   | · | there      is a breach of the covenants in the guarantee  agreement; |
|--------|--------|----------------------------------------------------------------------|

|   | · | a      final non-appealable judgment is entered against us in an amount greater      than $100,000 for RCC Real Estate SPE 3, LLC or $5,000,000 against us;      and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we      default or fail to perform under any agreement we are a party to, without      cure, with a value of greater than $1,000,000 or more which permits the      acceleration of obligations in thatamount. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | maintain      tangible net worth greater than or equal to $250.0  million; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | maintain      liquid assets with a market value of $10.0 million;  and |
|--------|--------|------------------------------------------------------------------------|

|   | · | maintain      a total ratio of consolidated indebtedness to consolidated tangible net      worth not to exceed 90%. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | Bear,      Stearns International Limited, in its sole discretion, will purchase      assets from us, and will transfer those assets back to us at a particular      date or on demand; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      maximum aggregate amount of outstanding repurchase transactions is $150.0      million; |
|--------|--------|--------------------------------------------------------------------------------------------------|

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|   | · | each      repurchase transaction will be entered into by agreement between the      parties specifying the terms of the transaction, including identification      of the assets subject to the transaction, sale price, repurchase price,      rate, term and margin maintenance requirements;  and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we      have guaranteed RCC Real Estate’s obligations under the repurchase      agreement to a maximum of $150.0million; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | if      we control the servicing of the purchased assets, we must service the      assets for the benefit of Bear, Stearns International    Limited. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Bear,      Stearns International Limited is not granted a first priority security      interest in the assets; |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | · | we      fail to repurchase securities, we fail to pay any price differential or we      fail to make any other payment after we reach an agreement with respect to      a particular transaction; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | any      governmental or regulatory authority takes any action materially adverse      to our business operations; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | Bear,      Stearns International Limited determines, in good  faith, |
|--------|--------|----------------------------------------------------------------------|

|   | - | that      there has been a material adverse change in our corporate structure,      financial condition orcreditworthiness; |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------|

|   | - | that      we will not meet or we have breached any of our obligations;      or |
|--------|---|--------------------------------------------------------------------------------|

|   | - | that      a material adverse change in our financial condition may occur due to      pending legal actions; |
|--------|---|-------------------------------------------------------------------------------------------------------------|

|   | · | we      have commenced a proceeding, or had a proceeding commenced against us,      under any bankruptcy, insolvency, reorganization or similar      laws; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we      make a general assignment for the benefit of  creditors; |
|--------|--------|------------------------------------------------------------------|

|   | · | we      admit in writing our inability to pay our debts as they become      due; |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | we      have commenced a proceeding, or had a proceeding commenced against us,      under the provisions of the Securities Investor Protection Act of 1970,      which we consent to or do not timely contest and which results in the      entry of an order for relief, or is not dismissed within 15      days; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      final judgment is rendered against us in an amount greater than $1.0      million and remains undischarged or unpaid for 90  days; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we      have defaulted or failed to perform under any other note, indenture, loan,      guaranty, swap agreement or any other contract to which we are a party      which results in: |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | a      final judgment involving the failure to pay an obligation in excess of      $1.0 million or |
|--------|---|----------------------------------------------------------------------------------------------------|

|   | - | a      final judgment permitting the acceleration of the maturity of obligations      in excess of $1.0 million by any other party to or beneficiary of such      note, indenture, loan, guaranty, swap agreement or any other contract;      or |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we      breach any representation, covenant or condition, fail to perform, admit      inability to perform or state our intention not to perform our obligations      under the repurchase agreement or in respect to any repurchase      transaction. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | permit      our net worth at any time to be less than the sum of 80% of our net worth      on the date of the agreement and 75% of the amount received by us in      respect of any equity issuance after the date of the      agreement; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | permit      our net worth to decline by more than 15% in any calendar quarter or more      than 30% during any trailing consecutive twelve month    period; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | permit      our ratio of total liabilities to net worth to exceed 14:1;    or |
|--------|--------|-------------------------------------------------------------------------------|

|   | · | permit      our consolidated net income, determined in accordance with GAAP, to be      less than $1.00 during the period of any four consecutive calendar      months. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      parties may from time to time enter into repurchase      transactions.  The agreement for a repurchase transaction may be      oral or in writing.  None of the master repurchase agreements      specifies a maximum amount for repurchase transactions with      us. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Each      repurchase transaction will be entered into by agreement between the      parties specifying the terms of the transaction, including identification      of the assets subject to the transaction, sale price, repurchase price,      rate, term and margin maintenancerequirements. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      must cover margin deficits by depositing cash or additional securities      reasonably acceptable to our counterparty with it, but have the option to      obtain payment from our counterparty of the amount by which the market      value of the securities subject to a transaction exceeds the applicable      margin amount for the transaction, either in cash or by delivery of      securities. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      are entitled to receive all income paid on or with respect to the      securities subject to a transaction, provided that the counterparty may      apply income received to reduce our repurchase  price. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | we      fail to transfer or our counterparty fails to purchase securities after we      reach an agreement with respect to a particular    transaction. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | either      party fails to comply with the margin and margin repayment      requirements. |
|--------|---|-------------------------------------------------------------------------------------------|

|   | - | the      counterparty fails to pay to us or credit us with income from the      securities subject to atransaction. |
|--------|---|---------------------------------------------------------------------------------------------------------------------|

|   | - | either      party commences a proceeding or has a proceeding commenced against it,      under any bankruptcy, insolvency or similar laws;  or |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | either      party shall admit its inability to, or intention not to, perform any of      its obligations under the master repurchase  agreement. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | our      net asset value declines 20% on a monthly basis, 30% on a quarterly basis,      40% on an annual basis, or 50% or more from the highest net asset value      since the inception of the repurchaseagreement; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we      fail to maintain a minimum net asset value of $100.0    million; |
|--------|--------|--------------------------------------------------------------------------|

|   | · | the      Manager ceases to be our manager; |
|--------|--------|--------------------------------------------|

|   | · | we      fail to qualify as a REIT; or |
|--------|--------|---------------------------------------|

|   | · | we      fail to deliver specified documents, including financial statements or      financial information due annually, quarterly or monthly, or an estimate      of net asset values. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Pricing      Level |   | Total      Leverage Ratio                                             |   | Adjusted      LIBOR Rate + |   | Base      Rate + |
|--------------------|--------|-----------------------------------------------------------------------|--------|----------------------------|--------|------------------|
| I                  |   | Less      than 7.00:1.00                                              |   | 1.50%                      |   | 0.50%            |
| II                 |   | Greater      than or equal to 7.00:1.00,but      less than 8.00:1.00  |   | 1.75%                      |   | 0.75%            |
| III                |   | Greater      than or equal to 8.00:1.00,but      less than 9.00:1.00  |   | 2.00%                      |   | 1.00%            |
| IV                 |   | Greater      than or equal to 9.00:1.00,but      less than 10.00:1.00 |   | 2.25%                      |   | 1.25%            |
| V                  |   | Greater      than or equal to 10.00:1.00                              |   | 2.50%                      |   | 1.50%            |

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|   | · | Pool      A—one-month LIBOR plus 1.10%; or |
|--------|--------|--------------------------------------------------|

|   | · | Pool      B—one-month LIBOR plus 0.80%. |
|--------|--------|-----------------------------------------------|

|   | · | a      bankruptcy event occurs involving any of us, Resource TRS, Resource      Capital Funding, the originator or theservicer; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | · | any      representation or warranty was false or  incorrect; |
|--------|--------|--------------------------------------------------------------|

|   | · | Resource      Capital Funding or the servicer fails to perform any term, covenant or      agreement under the agreement or any ancillary agreement in any material      respect; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Resource      Capital Funding, Resource TRS or we fail to pay any principal of or      premium or interest on any of the debt under the agreement in an amount in      excess of $10.0 million when the same becomes due and    payable; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Resource      Capital Funding or the servicer suffer any material adverse change to its      financial condition; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

|   | · | the      lender fails to have a valid, perfected, first priority security interest      in the pledged assets except for certain de minimus      exceptions; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      change of control of us, Resource TRS, Resource Capital Funding, the      servicer or the originator occurs; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | the      facility amount (as calculated under the agreement) exceeds certain      financial tests set forth in the agreement;or |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | · | Resource      America’s tangible net worth falls below a formula defined in the      agreement. |
|--------|--------|-------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                             |   | Contractual      commitments(dollars      in thousands) |      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                                             |   | Payments      due by period                             |      |
|                                                                                                                                                                                                                                                                                                                                                                                                             |   | Total                                                   |      |   | Less      than 1 year |   |   | 1 –      3 years |   |   | 3 –      5 years |   |   | More      than 5 years |   |
| Repurchase      agreements (1)                                                                                                                    |   | $                                                       | 116,423   |   |   | $ | 116,423 |   |   | $ | − |   |   | $ | − |   |   | $ | − |   |
| CDOs                                                                                                                                              |   |                                                    | 1,501,259 |   |   |   | − |   |   |   | − |   |   |   | − |   |   |   | 1,501,259 |   |
| Secured      term      facility                                                                                                                   |   |                                                    | 91,739    |   |   |   | − |   |   |   | 91,739 |   |   |   | − |   |   |   | − |   |
| Junior      subordinated debentures held byunconsolidated trusts that      issued trustpreferred      securities                                                 |   |                                                    | 51,548    |   |   |   | − |   |   |   | − |   |   |   | − |   |   |   | 51,548 |   |
| Base      management fees (2)                                                                                                                     |   |                                                    | 4,938     |   |   |   | 4,938 |   |   |   | − |   |   |   | − |   |   |   | − |   |
| Total                                                                                                                                             |   | $                                                       | 1,765,907 |   |   | $ | 121,361 |   |   | $ | 91,739 |   |   | $ | − |   |   | $ | 1,552,807 |   |

----

| (1) | Includes      accrued interest of $253,000. |
|-----|---------------------------------------------|

| (2) | Calculated      only for the next 12 months based on our current equity, as defined in our      management agreement. |
|-----|-----------------------------------------------------------------------------------------------------------------------|

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|                                              |   | Year      EndedDecember      31,2007 |    |
|---------------------------------------------------|--------|--------------------------------------|---------|
| Allowance      for loan loss at December 31, 2006 |   | $                                    | − |   |
| Reserve charged to      expense                   |   |                                 | 5,918   |   |
| Loans    charged-off                              |   |                                 | − |   |
| Recoveries                                        |   |                                 | − |   |
| Allowance      for loan loss at December 31, 2007 |   |                                 | 5,918   |   |

|                                               |   | Year      EndedDecember      31,2007 |    |
|----------------------------------------------------|--------|--------------------------------------|---------|
| Allowance      for lease loss at December 31, 2006 |   | $                                    | − |   |
| Reserve charged to      expense                    |   |                                 | 293     |   |
| Loans    charged-off                               |   |                                 | − |   |
| Recoveries                                         |   |                                 | − |   |
| Allowance      for lease loss at December 31, 2007 |   |                                 | 293     |   |

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ITEM 7A

|                                         |   | December      31, 2007                        |    |
|----------------------------------------------|--------|-----------------------------------------------|---------|
|                                         |   | Interest      rates fall 100basis      points |    |   | Unchanged |   |   | Interest      rates rise 100basis      points |   |
| CMBS      – private placement (1)      |   |                                          |    |   |   |   |   |   |   |
| Fair value                                   |   | $                                             | 28,756  |   |   | $ | 27,154 |   |   | $ | 11,519 |   |
| Change in fair    value                      |   | $                                             | 1,602   |   |   | $ | − |   |   | $ | (15,635 | ) |
| Change as a percent of fair      value       |   |                                          | 5.90    | % |   |   | − |   |   |   | 57.58 | % |
|                                         |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Repurchase      and warehouse agreements (2) |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Fair value                                   |   | $                                             | 207,908 |   |   | $ | 207,908 |   |   | $ | 207,908 |   |
| Change in fair    value                      |   | $                                             | − |   |   | $ | − |   |   | $ | − |   |
| Change as a percent of fair      value       |   |                                          | − |   |   |   | − |   |   |   | − |   |
|                                         |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Hedging      instruments                     |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Fair value                                   |   | $                                             | (33,731 | ) |   | $ | (18,040 | ) |   | $ | (3,234 | ) |
| Change in fair    value                      |   | $                                             | (15,691 | ) |   | $ | − |   |   | $ | 14,806 |   |
| Change as a percent of fair      value       |   |                                          | N/M     |   |   |   | − |   |   |   | N/M |   |

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|                                         |   | December      31, 2006                        |    |
|----------------------------------------------|--------|-----------------------------------------------|---------|
|                                         |   | Interest      rates fall 100basis      points |    |   | Unchanged |   |   | Interest      rates rise 100basis      points |   |
| ABS-RMBS,      CMBS and other ABS(1)         |   |                                          |    |   |   |   |   |   |   |
| Fair value                                   |   | $                                             | 37,962  |   |   | $ | 35,900 |   |   | $ | 34,036 |   |
| Change in fair    value                      |   | $                                             | 2,062   |   |   | $ | − |   |   | $ | (1,864 | ) |
| Change as a percent of fair      value       |   |                                          | 5.74    | % |   |   | − |   |   |   | 5.19 | % |
|                                         |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Repurchase      and warehouse agreements (2) |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Fair value                                   |   | $                                             | 205,130 |   |   | $ | 205,130 |   |   | $ | 205,130 |   |
| Change in fair    value                      |   | $                                             | − |   |   | $ | − |   |   | $ | − |   |
| Change as a percent of fair      value       |   |                                          | − |   |   |   | − |   |   |   | − |   |
|                                         |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Hedging      instruments                     |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Fair value                                   |   | $                                             | (14,493 | ) |   | $ | (2,904 | ) |   | $ | 7,144 |   |
| Change in fair    value                      |   | $                                             | (11,589 | ) |   | $ | − |   |   | $ | 10,048 |   |
| Change as a percent of fair      value       |   |                                          | N/M     |   |   |   | − |   |   |   | N/M |   |

----

| (1) | Includes      the fair value of available-for-sale investments that are sensitive to      interest rate changes. |
|-----|------------------------------------------------------------------------------------------------------------------|

| (2) | The      fair value of the repurchase agreements and warehouse agreements would not      change materially due to the short-term nature of these      instruments. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | monitoring      and adjusting, if necessary, the reset index and interest rate related to      our mortgage-backed securities and our  borrowings; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | attempting      to structure our borrowing agreements for our CMBS to have a range of      different maturities, terms, amortizations and interest rate adjustment      periods; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | using      derivatives, financial futures, swaps, options, caps, floors and forward      sales, to adjust the interest rate sensitivity of our fixed-rate      commercial real estate mortgages and CMBS and our    borrowing. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM 8. 

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|                                                                                                                                                                                                      |   | December      31, |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                                                                                                                                                      |   | 2007              |      |   | 2006 |   |
| ASSETS                                                                                                                                                                                                    |   |              |      |   |   |   |
| Cash and cash      equivalents                                                                                                                                                                            |   | $                 | 6,029     |   |   | $ | 5,354 |   |
| Restricted cash                                                                                                                                                                                           |   |              | 119,482   |   |   |   | 32,731 |   |
| Investment securities      available-for-sale, pledged as collateral, at fair value                                                                                                                       |   |              | 65,464    |   |   |   | 420,997 |   |
| Loans, pledged as collateral and      net of allowances of $5.9 million and $0                                                                                                                            |   |              | 1,766,639 |   |   |   | 1,240,288 |   |
| Direct financing leases and      notes, pledged as collateral and net of allowance of$0.3 million and $0 and net of      unearned income                                                                  |   |              | 95,030    |   |   |   | 88,970 |   |
| Investments in unconsolidated      entities                                                                                                                                                               |   |              | 1,805     |   |   |   | 1,548 |   |
| Interest    receivable                                                                                                                                                                                    |   |              | 11,965    |   |   |   | 8,839 |   |
| Principal paydown      receivables                                                                                                                                                                        |   |              | 836       |   |   |   | 503 |   |
| Other assets                                                                                                                                                                                              |   |              | 4,898     |   |   |   | 3,599 |   |
| Total assets                                                                                                                                                                                              |   | $                 | 2,072,148 |   |   | $ | 1,802,829 |   |
| LIABILITIES                                                                                                                                                                                               |   |              |      |   |   |   |   |   |
| Borrowings                                                                                                                                                                                                |   | $                 | 1,760,969 |   |   | $ | 1,463,853 |   |
| Distribution    payable                                                                                                                                                                                   |   |              | 10,366    |   |   |   | 7,663 |   |
| Accrued interest      expense                                                                                                                                                                             |   |              | 7,209     |   |   |   | 6,523 |   |
| Derivatives, at fair      value                                                                                                                                                                           |   |              | 18,040    |   |   |   | 2,904 |   |
| Accounts payable and other      liabilities                                                                                                                                                               |   |              | 3,958     |   |   |   | 4,335 |   |
| Total    liabilities                                                                                                                                                                                      |   |              | 1,800,542 |   |   |   | 1,485,278 |   |
| STOCKHOLDERS’      EQUITY                                                                                                                                                                           |   |              |      |   |   |   |   |   |
| Preferred stock, par value      $0.001:  100,000,000 shares authorized;no shares issued and      outstanding                                                                                    |   |              | −   |   |   |   | - |   |
| Common stock, par value      $0.001:  500,000,000 shares authorized;25,103,532 and 23,821,434      shares issued and outstanding(including 581,493 and 234,224      unvested restricted shares) |   |              | 25        |   |   |   | 24 |   |
| Additional paid-in      capital                                                                                                                                                                           |   |              | 355,205   |   |   |   | 341,400 |   |
| Deferred equity      compensation                                                                                                                                                                         |   |              | −   |   |   |   | (1,072 | ) |
| Accumulated other comprehensive      loss                                                                                                                                                                 |   |              | (38,323   | ) |   |   | (9,279 | ) |
| Distributions in excess of      earnings                                                                                                                                                                  |   |              | (45,301   | ) |   |   | (13,522 | ) |
| Total stockholders’      equity                                                                                                                                                                     |   |              | 271,606   |   |   |   | 317,551 |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                     |   | $                 | 2,072,148 |   |   | $ | 1,802,829 |   |

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|                                                                   |   | December      31,2007 |       |   | December      31,2006 |   |       | Period      from March 8, 2005 (Date Operations Commenced) toDecember      31,2005 |   |
|------------------------------------------------------------------------|--------|-----------------------|------------|--------|-----------------------|--------|------------|------------------------------------------------------------------------------------|--------|
| REVENUES                                                               |   |                  |       |   |                  |   |       |                                                                               |   |
| Loans                                                                  |   | $                     | 138,078    |   |                  | $      | 70,588     |                                                                               |   | $ | 14,662 |   |
| Securities                                                             |   |                  | 28,810     |   |                  |   | 56,048     |                                                                               |   |   | 44,247 |   |
| Leases                                                                 |   |                  | 7,553      |   |                  |   | 5,259      |                                                                               |   |   | 578 |   |
| Interest income –      other                                     |   |                  | 2,554      |   |                  |   | 5,180      |                                                                               |   |   | 1,900 |   |
| Interestincome                                                         |   |                  | 176,995    |   |                  |   | 137,075    |                                                                               |   |   | 61,387 |   |
| Interest expense                                                       |   |                  | 121,564    |   |                  |   | 101,851    |                                                                               |   |   | 43,062 |   |
| Net interest    income                                                 |   |                  | 55,431     |   |                  |   | 35,224     |                                                                               |   |   | 18,325 |   |
|                                                                   |   |                  |       |   |                  |   |       |                                                                               |   |   |   |   |
| OPERATING      EXPENSES                                                |   |                  |       |   |                  |   |       |                                                                               |   |   |   |   |
| Management fees - related      party                                   |   |                  | 6,554      |   |                  |   | 4,838      |                                                                               |   |   | 3,012 |   |
| Equity compensation – related      party                         |   |                  | 1,565      |   |                  |   | 2,432      |                                                                               |   |   | 2,709 |   |
| Professional      services                                             |   |                  | 2,911      |   |                  |   | 1,881      |                                                                               |   |   | 580 |   |
| Insurance                                                              |   |                  | 466        |   |                  |   | 498        |                                                                               |   |   | 395 |   |
| General and      administrative                                        |   |                  | 1,581      |   |                  |   | 1,428      |                                                                               |   |   | 1,032 |   |
| Income tax    expense                                                  |   |                  | 338        |   |                  |   | 67         |                                                                               |   |   | − |   |
| Total operating      expenses                                          |   |                  | 13,415     |   |                  |   | 11,144     |                                                                               |   |   | 7,728 |   |
|                                                                   |   |                  |       |   |                  |   |       |                                                                               |   |   |   |   |
| NET      OPERATING INCOME                                              |   |                  | 42,016     |   |                  |   | 24,080     |                                                                               |   |   | 10,597 |   |
|                                                                   |   |                  |       |   |                  |   |       |                                                                               |   |   |   |   |
| OTHER      (EXPENSES) REVENUES                                         |   |                  |       |   |                  |   |       |                                                                               |   |   |   |   |
| Net realized (losses) gains on      sales of investments               |   |                  | (15,098    | )      |                  |   | (8,627     | )                                                                                  |   |   | 311 |   |
| Gain on deconsolidation of      VIE                                    |   |                  | 14,259     |   |                  |   | −    |                                                                               |   |   | − |   |
| Provision for loan and lease      losses                               |   |                  | (6,211     | )      |                  |   | −    |                                                                               |   |   | − |   |
| Asset    impairments                                                   |   |                  | (26,277    | )      |                  |   | −    |                                                                               |   |   | − |   |
| Other income                                                           |   |                  | 201        |   |                  |   | 153        |                                                                               |   |   | − |   |
| Total (expenses)      revenue                                          |   |                  | (33,126    | )      |                  |   | (8,474     | )                                                                                  |   |   | 311 |   |
|                                                                   |   |                  |       |   |                  |   |       |                                                                               |   |   |   |   |
| NET      INCOME                                                        |   | $                     | 8,890      |   |                  | $      | 15,606     |                                                                               |   | $ | 10,908 |   |
|                                                                   |   |                  |       |   |                  |   |       |                                                                               |   |   |   |   |
| NET      INCOME PER SHARE – BASIC                                |   | $                     | 0.36       |   |                  | $      | 0.89       |                                                                               |   | $ | 0.71 |   |
|                                                                   |   |                  |       |   |                  |   |       |                                                                               |   |   |   |   |
| NET      INCOME PER SHARE – DILUTED                              |   | $                     | 0.36       |   |                  | $      | 0.87       |                                                                               |   | $ | 0.71 |   |
|                                                                   |   |                  |       |   |                  |   |       |                                                                               |   |   |   |   |
| WEIGHTED      AVERAGE NUMBER OF SHARESOUTSTANDING –      BASIC   |   |                  | 24,610,468 |   |                  |   | 17,538,273 |                                                                               |   |   | 15,333,334 |   |
|                                                                   |   |                  |       |   |                  |   |       |                                                                               |   |   |   |   |
| WEIGHTED      AVERAGE NUMBER OF SHARESOUTSTANDING –      DILUTED |   |                  | 24,860,184 |   |                  |   | 17,881,355 |                                                                               |   |   | 15,405,714 |   |
|                                                                   |   |                  |       |   |                  |   |       |                                                                               |   |   |   |   |
| DIVIDENDS      DECLARED PER SHARE                                      |   | $                     | 1.62       |   |                  | $      | 1.49       |                                                                               |   | $ | 0.86 |   |

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|                                                                      |   | Shares |       |   | Amount |   |    | Additional      Paid-In Capital |   |   | DeferredEquityCompensation |   |   | AccumulatedOther      Comprehensive Loss |    |   | Retained      Earnings |   |    | Distributions      in Excess of Earnings |   |   | Treasury      Shares |   |   | Total      Stockholders’ Equity |    |   | Comprehensive      Loss |   |
|---------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|---------|---------------------------------|--------|--------|----------------------------|--------|--------|------------------------------------------|---------|--------|------------------------|--------|---------|------------------------------------------|--------|--------|----------------------|--------|--------|---------------------------------------|---------|--------|-------------------------|--------|
| Common      shares issued                                                 |   |   | 15,333,334 |   |   | $      | 15      |                            |   | $      | 215,310                    |   |   | $                                        | − |   |                   | $      | − |                                     |   |   | −              |   |   | $                                     | − |   |                    | $      | − |   |   | $ | 215,325 |   |   | $ | − |   |
| Offering      costs                                                       |   |   | −    |   |   |   | − |                            |   |   | (541                       | )      |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | (541 | ) |   |   | − |   |
| Stock      based compensation                                             |   |   | 349,000    |   |   |   | 1       |                            |   |   | 5,392                      |   |   |                                     | (5,393  | )      |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | − |   |   |   | − |   |
| Amortization      of stock based        compensation            |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | 2,709   |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | 2,709 |   |   |   | − |   |
| Net      income                                                           |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | 10,908               |   |   |                                  | − |   |                    |   | − |   |   |   | 10,908 |   |   |   | 10,908 |   |
| Available-for-sale      securities,   fair      value adjustment     |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | (22,357 | )                                        |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | (22,357 | ) |   |   | (22,357 | ) |
| Designated      derivatives, fair  value        adjustment |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | 2,776   |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | 2,776 |   |   |   | 2,776 |   |
| Distributions      on common stock                                        |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | (10,908              | )      |   |                                  | (2,579  | )      |                    |   | − |   |   |   | (13,487 | ) |   |   |   |   |
| Comprehensive      loss                                                   |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | − |   |   | $ | (8,673 | ) |
| Balance,      December 31, 2005                                           |   |   | 15,682,334 |   |   |   | 16      |                            |   |   | 220,161                    |   |   |                                     | (2,684  | )      |                   |   | (19,581 | )                                        |   |   | −              |   |   |                                  | (2,579  | )      |                    |   | − |   |   |   | 195,333 |   |   |   |   |   |
| Net      proceeds from common stock        offerings                 |   |   | 8,120,800  |   |   |   | 8       |                            |   |   | 123,213                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | 123,221 |   |   |   | − |   |
| Offering      costs                                                       |   |   | −    |   |   |   | − |                            |   |   | (2,988                     | )      |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | (2,988 | ) |   |   | − |   |
| Stock      based compensation                                             |   |   | 18,300     |   |   |   | − |                            |   |   | 254                        |   |   |                                     | (60     | )      |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | 194 |   |   |   | − |   |
| Stock      based compensation, fair       value adjustment           |   |   | −    |   |   |   | − |                            |   |   | 760                        |   |   |                                     | (760    | )      |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | − |   |   |   | − |   |
| Amortization      of stock based        compensation                 |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | 2,432   |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | 2,432 |   |   |   | − |   |
| Net      income                                                           |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | 15,606               |   |   |                                  | − |   |                    |   | − |   |   |   | 15,606 |   |   |   | 15,606 |   |
| Available-for-sale      securities, fair        value adjustment     |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | 16,325  |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | 16,325 |   |   |   | 16,325 |   |
| Designated      derivatives, fair  value        adjustment |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | (6,023  | )                                        |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | (6,023 | ) |   |   | (6,023 | ) |
| Distributions      on common stock                                        |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | (15,606              | )      |   |                                  | (10,943 | )      |                    |   | − |   |   |   | (26,549 | ) |   |   | − |   |
| Comprehensive      income                                                 |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | − |   |   | $ | 25,908 |   |
| Balance,      December 31, 2006                                           |   |   | 23,821,434 |   |   |   | 24      |                            |   |   | 341,400                    |   |   |                                     | (1,072  | )      |                   |   | (9,279  | )                                        |   |   | −              |   |   |                                  | (13,522 | )      |                    |   | − |   |   |   | 317,551 |   |   |   |   |   |
| Net      proceeds from common stock        offerings                 |   |   | 650,000    |   |   |   | 1       |                            |   |   | 10,134                     |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | 10,135 |   |   |   | − |   |
| Offering      costs                                                       |   |   | −    |   |   |   | − |                            |   |   | (406                       | )      |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | (406 | ) |   |   | − |   |
| Reclassification      of deferred equity        compensation         |   |   | −    |   |   |   | − |                            |   |   | (1,072                     | )      |   |                                     | 1,072   |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | − |   |   |   | − |   |
| Stock      based compensation                                             |   |   | 526,448    |   |   |   | − |                            |   |   | 723                        |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | 723 |   |   |   | − |   |
| Stock      based compensation, fair       value adjustment           |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | − |   |   |   | − |   |
| Exercise      of common stock warrants                                    |   |   | 375,547    |   |   |   | − |                            |   |   | 5,632                      |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | 5,632 |   |   |   | − |   |
| Amortization      of stock based        compensation                 |   |   | −    |   |   |   | − |                            |   |   | 1,565                      |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | 1,565 |   |   |   | − |   |
| Repurchase      and retirement of    treasury      shares       |   |   | (263,000   | )      |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | (2,771 | ) |   |   | (2,771 | ) |   |   |   |   |
| Forfeiture      of unvested stock                                         |   |   | (6,897     | )      |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | − |   |   |   |   |   |
| Net      income                                                           |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | 8,890                |   |   |                                  | − |   |                    |   | − |   |   |   | 8,890 |   |   |   | 8,890 |   |
| Available-for-sale      securities, fair       value adjustment      |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | (16,544 | )                                        |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | (16,544 | ) |   |   | (16,544 | ) |
| Designated      derivatives, fair  value        adjustment |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | (12,500 | )                                        |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | (12,500 | ) |   |   | (12,500 | ) |
| Distributions      on common stock                                        |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | (8,890               | )      |   |                                  | (31,779 | )      |                    |   | − |   |   |   | (40,669 | ) |   |   |   |   |
| Comprehensive      loss                                                   |   |   | −    |   |   |   | − |                            |   |   | −                    |   |   |                                     | − |   |                   |   | − |                                     |   |   | −              |   |   |                                  | − |   |                    |   | − |   |   |   | − |   |   | $ | (20,154 | ) |
| Balance,      December 31, 2007                                           |   |   | 25,103,532 |   |   | $      | 25      |                            |   | $      | 357,976                    |   |   | $                                        | − |   |                   | $      | (38,323 | )                                        |   | $      | −              |   |   | $                                     | (45,301 | )      |                    | $      | (2,771 | ) |   | $ | 271,606 |   |   |   |   |   |

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|                                                                                                 |   | December      31, |       |   | Period      fromMarch      8, 2005(Date      Operations Commenced) toDecember      31, |   |
|------------------------------------------------------------------------------------------------------|--------|-------------------|------------|--------|----------------------------------------------------------------------------------------|--------|
|                                                                                                 |   | 2007              |       |   | 2006                                                                                   |   |   | 2005 |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES:                                                           |   |              |       |   |                                                                                   |   |   |   |   |
| Net income                                                                                           |   | $                 | 8,890      |   |                                                                                   | $      | 15,606 |   |   | $ | 10,908 |   |
| Adjustments to reconcile net      income to net cash provided by(used in) operating      activities: |   |              |       |   |                                                                                   |   |   |   |   |   |   |   |
| Depreciation and      amortization                                                                   |   |              | 793        |   |                                                                                   |   | 399 |   |   |   | 5 |   |
| Amortization of premium      (discount) on investments                                               |   |              | (1,034     | )      |                                                                                   |   | (709 | ) |   |   | (362 | ) |
| Amortization of discount on      notes                                                               |   |              | 83         |   |                                                                                   |   | 4 |   |   |   | − |   |
| Amortization of debt issuance      costs                                                             |   |              | 2,681      |   |                                                                                   |   | 1,608 |   |   |   | 461 |   |
| Amortization of stock-based      compensation                                                        |   |              | 1,565      |   |                                                                                   |   | 2,432 |   |   |   | 2,709 |   |
| Non-cash incentive compensation      to the Manager                                                  |   |              | 774        |   |                                                                                   |   | 280 |   |   |   | 86 |   |
| Gain on deconsolidation of      VIEs                                                                 |   |              | (14,259    | )      |                                                                                   |   | − |   |   |   | − |   |
| Net realized gain on derivative      instruments                                                     |   |              | (174       | )      |                                                                                   |   | (3,449 | ) |   |   | − |   |
| Net realized losses (gains) on      investments                                                      |   |              | 15,098     |   |                                                                                   |   | 11,201 |   |   |   | (311 | ) |
| Asset    impairments                                                                                 |   |              | 26,278     |   |                                                                                   |   | − |   |   |   | − |   |
| Provision for loan and lease      losses                                                             |   |              | 6,211      |   |                                                                                   |   | − |   |   |   | − |   |
| Changes in operating assets and      liabilities:                                                    |   |              |       |   |                                                                                   |   |   |   |   |   |   |   |
| Increase in restricted      cash                                                                     |   |              | (16,775    | )      |                                                                                   |   | (15,894 | ) |   |   | (12,288 | ) |
| Increase (decrease) in      interest receivable,net of purchased      interest                       |   |              | (4,881     | )      |                                                                                   |   | 332 |   |   |   | (9,339 | ) |
| Increase in accounts      receivable                                                                 |   |              | (511       | )      |                                                                                   |   | (303 | ) |   |   | − |   |
| Increase (decrease) in      principal paydowns receivable                                            |   |              | (333       | )      |                                                                                   |   | 5,301 |   |   |   | (5,805 | ) |
| (Decrease) increase in      management and incentive fee payable                                     |   |              | (647       | )      |                                                                                   |   | 417 |   |   |   | 810 |   |
| Increase in security      deposits                                                                   |   |              | 134        |   |                                                                                   |   | 725 |   |   |   | − |   |
| Increase in accounts payable      and accrued liabilities                                            |   |              | 54         |   |                                                                                   |   | 1,698 |   |   |   | 501 |   |
| Increase (decrease) in accrued      interest expense                                                 |   |              | 993        |   |                                                                                   |   | (4,774 | ) |   |   | 11,595 |   |
| Increase in other      assets                                                                        |   |              | (1,562     | )      |                                                                                   |   | (2,002 | ) |   |   | (1,365 | ) |
| Net cash provided by (used in)      operating activities                                             |   |              | 23,378     |   |                                                                                   |   | 12,872 |   |   |   | (2,395 | ) |
| CASH      FLOWS FROM INVESTING ACTIVITIES:                                                           |   |              |       |   |                                                                                   |   |   |   |   |   |   |   |
| Restricted cash                                                                                      |   |              | (71,930    | )      |                                                                                   |   | 7,279 |   |   |   | (11,829 | ) |
| Purchase of securities      available-for-sale                                                       |   |              | (87,378    | )      |                                                                                   |   | (40,147 | ) |   |   | (1,557,752 | ) |
| Principal payments on securities      available-for-sale                                             |   |              | 11,333     |   |                                                                                   |   | 129,900 |   |   |   | 136,688 |   |
| Proceeds from sale of securities      available-for-sale                                             |   |              | 29,867     |   |                                                                                   |   | 884,772 |   |   |   | 8,483 |   |
| Distribution from unconsolidated      entities                                                       |   |              | 517        |   |                                                                                   |   | − |   |   |   | − |   |
| Purchase of loans                                                                                    |   |              | (1,296,938 | )      |                                                                                   |   | (1,067,068 | ) |   |   | (633,359 | ) |
| Principal payments received on      loans                                                            |   |              | 572,046    |   |                                                                                   |   | 205,546 |   |   |   | 35,130 |   |
| Proceeds from sale of      loans                                                                     |   |              | 183,455    |   |                                                                                   |   | 128,498 |   |   |   | 91,023 |   |
| Purchase of direct financing      leases and notes                                                   |   |              | (38,735    | )      |                                                                                   |   | (106,742 | ) |   |   | (25,097 | ) |
| Principal payments received on      direct financing leases and notes                                |   |              | 26,366     |   |                                                                                   |   | 24,634 |   |   |   | 1,780 |   |
| Proceeds from sale of direct      financing leases and notes                                         |   |              | 6,378      |   |                                                                                   |   | 17,261 |   |   |   | − |   |
| Purchase of property and      equipment                                                              |   |              | −    |   |                                                                                   |   | (6 | ) |   |   | (5 | ) |
| Net cash used in (provided by)      investing activities                                             |   |              | (665,019   | )      |                                                                                   |   | 183,927 |   |   |   | (1,954,938 | ) |

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|                                                                                                  |   | December      31, |     |   | Period      fromMarch      8, 2005(Date      Operations Commenced) toDecember      31, |   |
|-------------------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|----------------------------------------------------------------------------------------|--------|
|                                                                                                  |   | 2007              |     |   | 2006                                                                                   |   |   | 2005 |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:                                                            |   |              |     |   |                                                                                   |   |   |   |   |
| Net proceeds from issuances of      common stock (net of offering costsof $406, $2,988 and      $541) |   |              | 15,362   |   |                                                                                   |   | 120,232 |   |   |   | 214,784 |   |
| Repurchase of common      stock                                                                       |   |              | (2,771   | )      |                                                                                   |   | − |   |   |   | − |   |
| Proceeds from      borrowings:                                                                        |   |              |     |   |                                                                                   |   |   |   |   |   |   |   |
| Repurchase    agreements                                                                              |   |              | 464,137  |   |                                                                                   |   | 7,170,093 |   |   |   | 8,446,739 |   |
| Collateralized debt      obligations                                                                  |   |              | 674,653  |   |                                                                                   |   | 527,980 |   |   |   | 697,500 |   |
| Unsecured revolving credit      facility                                                              |   |              | 10,000   |   |                                                                                   |   | 25,500 |   |   |   | 15,000 |   |
| Secured term    facility                                                                              |   |              | 30,077   |   |                                                                                   |   | 112,887 |   |   |   | − |   |
| Payments on      borrowings:                                                                          |   |              |     |   |                                                                                   |   |   |   |   |   |   |   |
| Repurchase    agreements                                                                              |   |              | (468,102 | )      |                                                                                   |   | (8,116,131 | ) |   |   | (7,380,566 | ) |
| Collateralized debt      obligations                                                                  |   |              | (993     | )      |                                                                                   |   | − |   |   |   | − |   |
| Unsecured revolving credit      facility                                                              |   |              | (10,000  | )      |                                                                                   |   | (40,500 | ) |   |   | − |   |
| Secured term    facility                                                                              |   |              | (23,011  | )      |                                                                                   |   | (28,214 | ) |   |   | − |   |
| Issuance of Trust Preferred      Securities                                                           |   |              | −  |   |                                                                                   |   | 50,000 |   |   |   | − |   |
| Settlement of derivative      instruments                                                             |   |              | 2,581    |   |                                                                                   |   | 3,335 |   |   |   | − |   |
| Payment of debt issuance      costs                                                                   |   |              | (11,651  | )      |                                                                                   |   | (9,825 | ) |   |   | (10,554 | ) |
| Distributions paid on common      stock                                                               |   |              | (37,966  | )      |                                                                                   |   | (24,531 | ) |   |   | (7,841 | ) |
| Net cash provided by (used in)      financing activities                                              |   |              | 642,316  |   |                                                                                   |   | (209,174 | ) |   |   | 1,975,062 |   |
| NET      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                             |   |              | 675      |   |                                                                                   |   | (12,375 | ) |   |   | 17,729 |   |
| CASH      AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                 |   |              | 5,354    |   |                                                                                   |   | 17,729 |   |   |   | − |   |
| CASH      AND CASH EQUIVALENTS AT END OF PERIOD                                                       |   | $                 | 6,029    |   |                                                                                   | $      | 5,354 |   |   | $ | 17,729 |   |
|                                                                                                  |   |              |     |   |                                                                                   |   |   |   |   |   |   |   |
| NON-CASH      INVESTING AND FINANCING ACTIVITIES:                                                     |   |              |     |   |                                                                                   |   |   |   |   |   |   |   |
| Distributions on common stock      declared but not paid                                              |   | $                 | 10,366   |   |                                                                                   | $      | 7,663 |   |   | $ | 5,646 |   |
| Issuance of restricted      stock                                                                     |   | $                 | 6,650    |   |                                                                                   | $      | − |   |   | $ | 5,175 |   |
| Purchase of loans on warehouse      line                                                              |   | $                 | (311,069 | )      |                                                                                   | $      | (222,577 | ) |   | $ | (537,672 | ) |
| Proceeds from warehouse      line                                                                     |   | $                 | 311,069  |   |                                                                                   | $      | 222,577 |   |   | $ | 537,672 |   |
| SUPPLEMENTAL      DISCLOSURE:                                                                         |   |              |     |   |                                                                                   |   |   |   |   |   |   |   |
| Interest expense paid in      cash                                                                    |   | $                 | 136,683  |   |                                                                                   | $      | 137,748 |   |   | $ | 46,268 |   |
| Income taxes paid in      cash                                                                        |   | $                 | 90       |   |                                                                                   | $      | − |   |   | $ | − |   |

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|   | · | RCC      Real Estate, Inc. (“RCC Real Estate”) holds real estate investments,      including commercial real estate loans.  RCC Real Estate owns      100% of the equity of the followingentities: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Resource      Real Estate Funding CDO 2006-1 (“RREF 2006-1”), a Cayman Islands limited      liability company and qualified real estate investment trust (“REIT”)      subsidiary (“QRS”).  RREF 2006-1 was established to complete a      collateralized debt obligation (“CDO”) issuance secured by a portfolio of      commercial real estate loans and commercial mortgage-backed      securities. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Resource      Real Estate Funding CDO 2007-1 (“RREF 2007-1”), a Cayman Islands limited      liability company and QRS.  RREF 2007-1 was established to      complete a CDO issuance secured by a portfolio of commercial real estate      loans and      commercial mortgage-backed securities. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | RCC      Commercial, Inc. (“RCC Commercial”) holds bank loan investments and real      estate investments, including commercial and residential real      estate-related securities.  RCC Commercial owns 100% of the      equity of the following entities: |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Apidos      CDO I, Ltd. (“Apidos CDO I”), a Cayman Islands limited liability company      and taxable REIT subsidiary (“TRS”).  Apidos CDO I was      established to complete a CDO secured by a portfolio of bank      loans. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Apidos      CDO III, Ltd. (“Apidos CDO III”), a Cayman Islands limited liability      company and TRS.  Apidos CDO III was established to complete a      CDO secured by a portfolio of bankloans. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Apidos      Cinco CDO, Ltd. (“Apidos Cinco CDO”), a Cayman Islands limited liability      company and TRS.  Apidos Cinco CDO was established to complete a      CDO secured by a portfolio of bankloans. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Resource      TRS, Inc. (“Resource TRS”), the Company's directly-owned TRS, holds all      the Company’s direct financing leases and  notes. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                              |   | Year      EndedDecember      31,2007 |    |
|---------------------------------------------------|--------|--------------------------------------|---------|
| Allowance      for loan loss at December 31, 2006 |   | $                                    | − |   |
| Reserve charged to      expense                   |   |                                 | 5,918   |   |
| Loans    charged-off                              |   |                                 | − |   |
| Recoveries                                        |   |                                 | − |   |
| Allowance      for loan loss at December 31, 2007 |   |                                 | 5,918   |   |

|                                               |   | Year      EndedDecember      31,2007 |    |
|----------------------------------------------------|--------|--------------------------------------|---------|
| Allowance      for lease loss at December 31, 2006 |   | $                                    | − |   |
| Reserve charged to      expense                    |   |                                 | 293     |   |
| Loans    charged-off                               |   |                                 | − |   |
| Recoveries                                         |   |                                 | − |   |
| Allowance      for lease loss at December 31, 2007 |   |                                 | 293     |   |

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|                                           |   | December      31, 2007 |    |
|------------------------------------------------|--------|------------------------|---------|
| Write-down      of Investment in Ischus CDO II |   |                   |    |
| Original    investment                         |   | $                      | 27,000  |   |
| Cumulative cash      distributions             |   |                   | (10,697 | ) |
| Net basis                                      |   |                   | 16,303  |   |
| Investment valuation at time of      sale      |   |                   | (722    | ) |
| Write-down of      investment                  |   | $                      | 15,581  |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | November      13, 2007 |     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|----------|
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                   |     |
| Available-for-sale securities,      pledged                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                      | 214,769  |   |
| Restricted cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                   | 1,954    |   |
| Interest    receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                   | 1,747    |   |
| Other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                   | 191      |   |
| Total assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                      | 218,661  |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                   |     |   |
| Borrowings                                                                                                                                              |   | $                      | 370,688  |   |
| Accrued interest and other      payables                                                                                                                |   |                   | 414      |   |
| Other comprehensive      loss                                                                                                                           |   |                   | (154,486 | ) |
| RCC investment at date of      deconsolidation                                                                                                          |   |                   | 16,304   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                   | 232,920  |   |
| Gain on deconsolidation of      VIE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                   | (14,259  | ) |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $                      | 218,661  |   |

|                                         |   | December      31,2007 |    |   | December      31,2006 |   |    | Period      from March 8, 2005 (Date Operations Commenced) toDecember      31,2005 |   |
|----------------------------------------------|--------|-----------------------|---------|--------|-----------------------|--------|---------|------------------------------------------------------------------------------------|--------|
| REVENUES                                     |   |                  |    |   |                  |   |    |                                                                               |   |
| Securities                                   |   | $                     | 24,463  |   |                  | $      | 27,189  |                                                                               |   | $ | 9,252 |   |
| Interest income –      other           |   |                  | 134     |   |                  |   | 86      |                                                                               |   |   | 100 |   |
| Total interest      income                   |   |                  | 24,597  |   |                  |   | 27,275  |                                                                               |   |   | 9,352 |   |
| Interest expense                             |   |                  | 19,688  |   |                  |   | 21,666  |                                                                               |   |   | 7,161 |   |
| Net interest      income                     |   |                  | 4,909   |   |                  |   | 5,609   |                                                                               |   |   | 2,191 |   |
|                                         |   |                  |    |   |                  |   |    |                                                                               |   |   |   |   |
| OPERATING      EXPENSES                      |   |                  |    |   |                  |   |    |                                                                               |   |   |   |   |
| Professional      services                   |   |                  | 138     |   |                  |   | 228     |                                                                               |   |   | 97 |   |
| General and      administrative              |   |                  | 83      |   |                  |   | 99      |                                                                               |   |   | 45 |   |
| Total operating      expenses                |   |                  | 221     |   |                  |   | 327     |                                                                               |   |   | 142 |   |
|                                         |   |                  |    |   |                  |   |    |                                                                               |   |   |   |   |
| NET      OPERATING INCOME                    |   |                  | 4,688   |   |                  |   | 5,282   |                                                                               |   |   | 2,049 |   |
|                                         |   |                  |    |   |                  |   |    |                                                                               |   |   |   |   |
| OTHER      (EXPENSES) REVENUES               |   |                  |    |   |                  |   |    |                                                                               |   |   |   |   |
| Net realized gain (loss) on      investments |   |                  | 47      |   |                  |   | (47     | )                                                                                  |   |   | − |   |
| Asset    impairments                         |   |                  | (26,277 | )      |                  |   | − |                                                                               |   |   | − |   |
| Total expenses                               |   |                  | (26,230 | )      |                  |   | (47     | )                                                                                  |   |   | − |   |
|                                         |   |                  |    |   |                  |   |    |                                                                               |   |   |   |   |
| NET      (LOSS) INCOME                       |   | $                     | (21,542 | )      |                  | $      | 5,235   |                                                                               |   | $ | 2,049 |   |

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|                                              |   | Amortized      Cost |    |   | Unrealized      Gains |   |    | Unrealized      Losses |   |   | Estimated      Fair Value (1) |   |
|---------------------------------------------------|--------|---------------------|---------|--------|-----------------------|--------|---------|------------------------|--------|--------|-------------------------------|--------|
| December 31,      2007:                           |   |                |    |   |                  |   |    |                   |   |   |                          |   |
| Commercial      mortgage-backed private placement |   | $                   | 82,373  |   |                  | $      | − |                   |   | $      | (17,809                       | )      |   | $ | 64,564 |   |
| Other      asset-backed                           |   |                | 5,665   |   |                  |   | − |                   |   |   | (4,765                        | )      |   |   | 900 |   |
| Total                                             |   | $                   | 88,038  |   |                  | $      | − |                   |   | $      | (22,574                       | )      |   | $ | 65,464 |   |
| December 31,      2006:                           |   |                |    |   |                  |   |    |                   |   |   |                          |   |   |   |   |   |
| ABS-RMBS                                          |   | $                   | 348,496 |   |                  | $      | 913     |                   |   | $      | (6,561                        | )      |   | $ | 342,848 |   |
| Commercial      mortgage-backed                   |   |                | 27,951  |   |                  |   | 23      |                   |   |   | (536                          | )      |   |   | 27,438 |   |
| Commercial      mortgage-backed private placement |   |                | 30,055  |   |                  |   | − |                   |   |   | −                       |   |   |   | 30,055 |   |
| Other      asset-backed                           |   |                | 20,526  |   |                  |   | 130     |                   |   |   | −                       |   |   |   | 20,656 |   |
| Total                                             |   | $                   | 427,028 |   |                  | $      | 1,066   |                   |   | $      | (7,097                        | )      |   | $ | 420,997 |   |

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| (1) | As      of December 31, 2007 and 2006, all securities were pledged as collateral      security under related financings. |
|-----|--------------------------------------------------------------------------------------------------------------------------|

| Weighted      Average Life                                                                                                                                                                                                                                                                                                                                                                                       |   | Fair      Value |    |   | Amortized      Cost |   |    | Weighted      Average Coupon |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|---------|--------|---------------------|--------|---------|------------------------------|--------|
| December      31, 2007:                                                                                                                                                                                                                                                                                                                                                                                          |   |            |    |   |                |   |    |                         |   |
| Less than one      year                                                                    |   | $               | 11,908  |   |                | $      | 12,824  |                         |   |   | 6.15% |   |
| Greater than one year and less      than five years                                                                                                                                                                                                                                                                                                                                                              |   |            | 19,042  |   |                |   | 21,589  |                         |   |   | 6.16% |   |
| Greater than five      years                                                               |   |            | 34,514  |   |                |   | 53,625  |                         |   |   | 5.85% |   |
| Total                                                                                                |   | $               | 65,464  |   |                | $      | 88,038  |                         |   |   | 5.96% |   |
| December      31, 2006:                                                                                                                                                                                                                                                                                                                                                                                          |   |            |    |   |                |   |    |                         |   |   |   |   |
| Less than one      year                                                                    |   | $               | − |   |                | $      | − |                         |   |   |          −% |   |
| Greater than one year and less      than five years                                                                                                                                                                                                                                                                                                                                                              |   |            | 378,057 |   |                |   | 383,700 |                         |   |   | 6.78% |   |
| Greater than five      years                                                               |   |            | 42,940  |   |                |   | 43,328  |                         |   |   | 6.15% |   |
| Total                                                                                                |   | $               | 420,997 |   |                | $      | 427,028 |                         |   |   | 6.71% |   |

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|                                                                                                                                                                                                                                            |   | Less      than 12 Months |    |   | More      than 12 Months     |   |    | Total           |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|--------|------------------------------|--------|---------|-----------------|--------|
|                                                                                                                                                                                                                                            |   | Fair      Value          |    |   | Gross      Unrealized Losses |   |    | Fair      Value |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |   | Gross      Unrealized Losses |   |
| December      31,      2007:                                                                                                                                                                                                                    |   |                     |    |   |                         |   |    |            |   |   |   |   |   |   |   |   |   |   |
| Commercial      mortgage-backed private      placement                                                                                                                                                                                          |   | $                        | 64,564  |   |                         | $      | (17,809 | )               |   | $ | − |   |   | $ | − |   |   | $ | 64,564 |   |   | $ | (17,809 | ) |
| Other      asset-backed                                     |   |                     | 900     |   |                         |   | (4,765  | )               |   |   | − |   |   |   | − |   |   |   | 900 |   |   |   | (4,765 | ) |
| Total temporarilyimpaired    securities                                                                                                                                                                                                         |   | $                        | 65,464  |   |                         | $      | (22,574 | )               |   | $ | − |   |   | $ | − |   |   | $ | 65,464 |   |   | $ | (22,574 | ) |
| December 31,      2006:                                                                                                                                                                                                                         |   |                     |    |   |                         |   |    |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ABS-RMBS                                                    |   | $                        | 143,948 |   |                         | $      | (2,580  | )               |   | $ | 86,712 |   |   | $ | (3,981 | ) |   | $ | 230,660 |   |   | $ | (6,561 | ) |
| Commercial      mortgage-backed                                       |   |                     | − |   |                         |   | − |            |   |   | 19,132 |   |   |   | (536 | ) |   |   | 19,132 |   |   |   | (536 | ) |
| Total temporarily      impairedsecurities                                            |   | $                        | 143,948 |   |                         | $      | (2,580  | )               |   | $ | 105,844 |   |   | $ | (4,517 | ) |   | $ | 249,792 |   |   | $ | (7,097 | ) |

|   | · | the      length of time the market value has been less than amortized      cost; |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | the      Company’s intent and ability to hold the security for a period of time      sufficient to allow for any anticipated recovery in market      value; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      severity of the impairment; |
|--------|--------|--------------------------------------|

|   | · | the      expected loss of the security as generated by third party software;      and |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | credit      ratings from the rating agencies. |
|--------|--------|-----------------------------------------------|

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| Loan      Description                                                                                                                                                                                                                                                                                                                                                                                |   | Principal |      |   | Unamortized(Discount)Premium |   |    | CarryingValue      (1) |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|------------------------------|--------|---------|------------------------|--------|
| December 31,      2007:                                                                                                                                                                                                                                                                                                                                                                              |   |      |      |   |                         |   |    |                   |   |
| Bank      loans                                                                          |   | $         | 931,107   |   |                         | $      | (6      | )                      |   | $ | 931,101 |   |
| Commercial real estate      loans:                                                                                                                                                                                                                                                                                                                                                                   |   |      |      |   |                         |   |    |                   |   |   |   |   |
| Whole      loans                                                                                        |   |      | 532,277   |   |                         |   | (3,559  | )                      |   |   | 528,718 |   |
| B      notes                                                                                            |   |      | 89,448    |   |                         |   | 129     |                   |   |   | 89,577 |   |
| Mezzanine      loans                                                                                    |   |      | 227,597   |   |                         |   | (4,435  | )                      |   |   | 223,162 |   |
| Total commercial real estate      loans                                                                                                                                                                                                                                                                                                                                                              |   |      | 849,322   |   |                         |   | (7,865  | )                      |   |   | 841,457 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                 |   |      | 1,780,429 |   |                         |   | (7,871  | )                      |   |   | 1,772,558 |   |
| Allowance for loan      loss                                                             |   |      | (5,919    | )      |                         |   | − |                   |   |   | (5,919 | ) |
| Total                                                                                                             |   | $         | 1,774,510 |   |                         | $      | (7,871  | )                      |   | $ | 1,766,639 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                 |   |      |      |   |                         |   |    |                   |   |   |   |   |
| December 31,      2006:                                                                                                                                                                                                                                                                                                                                                                              |   |      |      |   |                         |   |    |                   |   |   |   |   |
| Bank      loans                                                                          |   | $         | 613,322   |   |                         | $      | 908     |                   |   | $ | 614,230 |   |
| Commercial real estate      loans:                                                                                                                                                                                                                                                                                                                                                                   |   |      |      |   |                         |   |    |                   |   |   |   |   |
| Whole      loans                                                                                        |   |      | 190,768   |   |                         |   | − |                   |   |   | 190,768 |   |
| A      notes                                                                                            |   |      | 42,515    |   |                         |   | − |                   |   |   | 42,515 |   |
| B      notes                                                                                            |   |      | 203,553   |   |                         |   | 33      |                   |   |   | 203,586 |   |
| Mezzanine      loans                                                                                    |   |      | 194,776   |   |                         |   | (5,587  | )                      |   |   | 189,189 |   |
| Total commercial real estate      loans                                                                                                                                                                                                                                                                                                                                                              |   |      | 631,612   |   |                         |   | (5,554  | )                      |   |   | 626,058 |   |
| Total                                                                                                                            |   | $         | 1,244,934 |   |                         | $      | (4,646  | )                      |   | $ | 1,240,288 |   |

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| (1) | Substantially      all loans are pledged as collateral under various borrowings at December      31, 2007 and December 31, 2006. |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

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| Description                         |   | Quantity |   |   | Amortized      Cost |   | ContractedInterest      Rates |  Maturity      Dates |
|-------------------------------------|--------|----------|--------|--------|---------------------|--------|-------------------------------|---------------------------|
| December 31,      2007:             |   |     |   |   |                |   |                          |                      |
| Whole      loans, floating rate     |   |     | 28     |   |                | $      | 430,776                       |                      | LIBOR      plus 1.50% to LIBOR plus 4.25% | May      2008 toJuly      2010 |
| Whole      loans, fixed rate        |   |     | 7      |   |                |   | 97,942                        |                      | 6.98%      to 8.57% | May      2009 toAugust      2012 |
| B      notes, floating rate         |   |     | 3      |   |                |   | 33,570                        |                      | LIBOR      plus 2.50% to LIBOR plus 3.01% | March      2008 toOctober      2008 |
| B      notes, fixed rate            |   |     | 3      |   |                |   | 56,007                        |                      | 7.00%      to 8.68% | July      2011 toJuly      2016 |
| Mezzanine      loans, floating rate |   |     | 11     |   |                |   | 141,894                       |                      | LIBOR      plus 2.15% to LIBOR plus 3.45% | February      2008 toMay      2009 |
| Mezzanine      loans, fixed rate    |   |     | 7      |   |                |   | 81,268                        |                      | 5.78%      to 11.00% | October      2009 toSeptember      2016 |
| Total                               |   |     | 59     |   |                | $      | 841,457                       |                      |   |   |
|                                |   |     |   |   |                |   |                          |                      |   |   |
| December 31,      2006:             |   |     |   |   |                |   |                          |                      |   |   |
| Whole      loans, floating rate     |   |     | 9      |   |                | $      | 190,768                       |                      | LIBOR      plus 2.50% to LIBOR plus 3.65% | August      2007 toJanuary      2010 |
| A      notes, floating rate         |   |     | 2      |   |                |   | 42,515                        |                      | LIBOR      plus 1.25% to LIBOR plus 1.35% | January      2008 toApril      2008 |
| B      notes, floating rate         |   |     | 10     |   |                |   | 147,196                       |                      | LIBOR      plus 1.90% to LIBOR plus 6.25% | April      2007 toOctober      2008 |
| B      notes, fixed rate            |   |     | 3      |   |                |   | 56,390                        |                      | 7.00%      to 8.68% | July      2011 toJuly      2016 |
| Mezzanine      loans, floating rate |   |     | 7      |   |                |   | 105,288                       |                      | LIBOR      plus 2.20% to LIBOR plus 4.50% | August      2007 toOctober      2008 |
| Mezzanine      loans, fixed rate    |   |     | 8      |   |                |   | 83,901                        |                      | 5.78%      to 11.00% | August      2007 toSeptember      2016 |
| Total                               |   |     | 39     |   |                | $      | 626,058                       |                      |   |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | December      31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 2007              |   |   | 2006 |   |
| Direct      financing leases, net of unearned      income                                                                                     |   | $                 | 28,880 |   |   | $ | 30,270 |   |
| Notes      receivable                                                                                                                         |   |              | 66,150 |   |   |   | 58,700 |   |
| Total                                                                                                                                                        |   | $                 | 95,030 | (1) |   | $ | 88,970 |   |

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| (1) | Includes      $293,000 provision for leaselosses. |
|-----|---------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | December      31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2007              |   |   | 2006 |   |
| Total      future minimum lease      payments                                                                                     |   | $                 | 34,009 |   |   | $ | 36,008 |   |
| Unguaranteed      residual                                                                                                        |   |              | 21     |   |   |   | − |   |
| Unearned      income                                                                                                              |   |              | (5,150 | ) |   |   | (5,738 | ) |
| Total                                                                                                                                            |   | $                 | 28,880 |   |   | $ | 30,270 |   |

| Years      EndingDecember      31, |   | DirectFinancing      Leases |   |   | Notes  |   |   | Total  |   |
|------------------------------------|--------|-----------------------------|--------|--------|--------|--------|--------|--------|--------|
| 2008                               |   | $                           | 10,820 |   |   | $      | 12,687 |   |   | $ | 23,507 |   |
| 2009                               |   |                        | 8,486  |   |   |   | 12,171 |   |   |   | 20,657 |   |
| 2010                               |   |                        | 7,775  |   |   |   | 11,412 |   |   |   | 19,187 |   |
| 2011                               |   |                        | 3,962  |   |   |   | 9,661  |   |   |   | 13,623 |   |
| 2012                               |   |                        | 2,188  |   |   |   | 8,883  |   |   |   | 11,071 |   |
| Thereafter                         |   |                        | 778    |   |   |   | 11,336 |   |   |   | 12,114 |   |
|                               |   | $                           | 34,009 |   |   | $      | 66,150 |   |   | $ | 100,159 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                       |   | Outstanding      Borrowings |      |   | Weighted      Average Borrowing Rate |   | Weighted      Average Remaining Maturity |   | Value      of Collateral       |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|-----------|--------|--------------------------------------|--------|------------------------------------------|--------|--------------------------------|--------|
| December 31,      2007:                                                                                                                                                                                                                                                                                                                                                                    |   |                        |      |   |                                 |   |                                     |   |                           |   |
| Repurchase      Agreements (1)                                                                |   | $                           | 116,423   |   |                                 |   | 6.33%                                    |   | 18.5      days                 |   | $ | 190,914 |   |
| RREF      CDO 2006-1 Senior Notes (2)                                                                                                                                                                                                                                                                                                                                                      |   |                        | 260,510   |   |                                 |   | 5.69%                                    |   | 38.6      years                |   |   | 282,849 |   |
| RREF      CDO 2007-1 Senior Notes (3)                                                                                                                                                                                                                                                                                                                                                      |   |                        | 345,986   |   |                                 |   | 5.49%                                    |   | 38.8      years                |   |   | 444,715 |   |
| Apidos      CDO I Senior Notes (4)                                                            |   |                        | 317,882   |   |                                 |   | 5.47%                                    |   | 9.6      years                 |   |   | 309,495 |   |
| Apidos      CDO III Senior Notes (5)                                                          |   |                        | 259,178   |   |                                 |   | 5.59%                                    |   | 12.5      years                |   |   | 253,427 |   |
| Apidos      Cinco CDO Senior Notes (6)                                                                                                                                                                                                                                                                                                                                                     |   |                        | 317,703   |   |                                 |   | 5.38%                                    |   | 12.4      years                |   |   | 311,813 |   |
| Secured      Term      Facility                                                               |   |                        | 91,739    |   |                                 |   | 6.82%                                    |   | 2.3      years                 |   |   | 95,030 |   |
| Unsecured      Junior Subordinated Debentures (7)                                                                                                                                                                                                                                                                                                                                          |   |                        | 51,548    |   |                                 |   | 8.86%                                    |   | 28.7 years                     |   |   | − |   |
| Total                                                                                         |   | $                           | 1,760,969 |   |                                 |   | 5.73%                                    |   | 20.1 years                     |   | $ | 1,888,243 |   |
| December 31,      2006:                                                                                                                                                                                                                                                                                                                                                                    |   |                        |      |   |                                 |   |                                     |   |                           |   |   |   |   |
| Repurchase      Agreements (1)                                                                |   | $                           | 120,457   |   |                                 |   | 6.18%                                    |   |    16      days |   | $ | 149,439 |   |
| RREF      CDO 2006-1 Senior Notes (2)                                                                                                                                                                                                                                                                                                                                                      |   |                        | 259,902   |   |                                 |   | 6.17%                                    |   | 39.6      years                |   |   | 334,682 |   |
| Apidos      CDO I Senior Notes (4)                                                            |   |                        | 317,353   |   |                                 |   | 5.83%                                    |   | 10.6      years                |   |   | 339,858 |   |
| Apidos      CDO III Senior Notes (5)                                                          |   |                        | 258,761   |   |                                 |   | 5.81%                                    |   | 13.5      years                |   |   | 273,932 |   |
| Ischus      CDO II Senior Notes (8)                                                           |   |                        | 371,159   |   |                                 |   | 5.83%                                    |   | 33.6      years                |   |   | 390,942 |   |
| Secured      Term      Facility                                                               |   |                        | 84,673    |   |                                 |   | 6.33%                                    |   | 3.25      years                |   |   | 88,970 |   |
| Unsecured      Junior Subordinated Debentures (7)                                                                                                                                                                                                                                                                                                                                          |   |                        | 51,548    |   |                                 |   | 9.32%                                    |   | 29.7 years                     |   |   | − |   |
| Total                                                                                         |   | $                           | 1,463,853 |   |                                 |   | 6.07%                                    |   | 21.5 years                     |   | $ | 1,577,823 |   |

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| (1)   | For      December 31, 2007, collateral consists of available-for-sale securities      with a fair value of $34.2 million and loans of $156.7      million.  For December 31, 2006, collateral consists of      available-for-sale securities with a fair value of $30.1 million and loans      of $119.4 million. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Amount      represents principal outstanding of $265.5 million less unamortized      issuance costs of $5.0 and $5.6 million as of December 31, 2007 and 2006,      respectively.  This CDO transaction closed in August      2006. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Amount      represents principal outstanding of $352.7 million less unamortized      issuance costs of $6.7 million as of December 31, 2007.  This      CDO transaction closed in June2007. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Amount      represents principal outstanding of $321.5 million less unamortized      issuance costs of $3.6 million and $4.1 million as of December 31, 2007      and 2006, respectively. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Amount      represents principal outstanding of $262.5 million less unamortized      issuance costs of $3.3 million and $3.7 million as of December 31,      2006. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | Amount      represents principal outstanding of $322.0 million less unamortized      issuance costs of $4.3 million as of December 31, 2007.  This      CDO transaction closed in May 2007. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7)   | Amount      represents junior subordinated debentures issued to Resource Capital Trust      I and RCC Trust II in May 2006 and September 2006,      respectively. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)   | Amount      represents principal outstanding of $376.0 million less unamortized      issuance costs of $4.8 million as of December 31,  2006. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Amount      atRisk      (1) |   |   | Weighted      Average Maturity in Days |   |          | Weighted      Average Interest Rate |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|----------------------------------------|--------|---------------|-------------------------------------|--------|
| December 31,      2007:                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                        |   |   |                                   |   |          |                                |   |
| Natixis      Real Estate Capital      Inc.                                                                   |   | $                           | 58,155 |   |                                   |   | 18            |                                |   |   | 6.42% |   |
| Credit      Suisse Securities (USA)      LLC                                                                 |   | $                           | 15,626 |   |                                   |   | 25            |                                |   |   | 5.91% |   |
| J.P.      Morgan Securities,      Inc.                                                                       |   | $                           | 886    |   |                                   |   |        9 |                                |   |   | 5.63% |   |
| Bear,      Stearns International      Limited                                                                |   | $                           | 1,170  |   |                                   |   | 15            |                                |   |   | 6.22% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                        |   |   |                                   |   |          |                                |   |   |   |   |
| December 31,      2006:                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                        |   |   |                                   |   |          |                                |   |   |   |   |
| Credit      Suisse Securities (USA)      LLC                                                                 |   | $                           | 863    |   |                                   |   | 11            |                                |   |   | 5.40% |   |
| Bear,      Stearns International      Limited                                                                |   | $                           | 15,538 |   |                                   |   | 17            |                                |   |   | 6.43% |   |
| Column      Financial Inc, a subsidiary ofCredit Suisse Securities (USA)      LLC.                                                                                                                                                                                                                                                                                                                                                      |   | $                           | 13,262 |   |                                   |   | 18            |                                |   |   | 6.42% |   |

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| (1) | Equal      to the estimated fair value of securities or loans sold, plus accrued      interest income, minus the sum of repurchase agreement liabilities plus      accrued interest expense. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                         |   | Manager |     |   | Non-Employee      Directors |   |    | Non-Employees |   |   | Total   |   |
|----------------------------------------------|--------|---------|----------|--------|-----------------------------|--------|---------|---------------|--------|--------|---------|--------|
| Unvested      shares as of December 31, 2006 |   |    | 230,000  |   |                        |   | 4,224   |          |   |   | − |   |   |   | 234,224 |   |
| Issued                                       |   |    | −  |   |                        |   | 4,404   |          |   |   | 474,541 |   |   |   | 478,945 |   |
| Vested                                       |   |    | (115,000 | )      |                        |   | (4,224  | )             |   |   | (5,555  | )      |   |   | (124,779 | ) |
| Forfeited                                    |   |    | (1,668   | )      |                        |   | − |          |   |   | (5,229  | )      |   |   | (6,897 | ) |
| Unvested      shares as of December 31, 2007 |   |    | 113,332  |   |                        |   | 4,404   |          |   |   | 463,757 |   |   |   | 581,493 |   |

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|                                     |   | Number      of Options |    |   | Weighted      Average Exercise Price |   |    | Weighted      Average Remaining Contractual Term (in years) |   |   | Aggregate      Intrinsic Value (in thousands) |   |
|------------------------------------------|--------|------------------------|---------|--------|--------------------------------------|--------|---------|-------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|
| Outstanding      as of January 1, 2007   |   |                   | 651,666 |   |                                 | $      | 15.00   |                                                        |   |   |                                          |   |   |   |
| Granted                                  |   |                   | 65,000  |   |                                 |   | 14.88   |                                                        |   |   |                                          |   |   |   |
| Exercised                                |   |                   | − |   |                                 |   | − |                                                        |   |   |                                          |   |   |   |
| Forfeited                                |   |                   | (76,500 | )      |                                 |   | 15.00   |                                                        |   |   |                                          |   |   |   |
| Outstanding      as of December 31, 2007 |   |                   | 640,166 |   |                                 | $      | 14.99   |                                                        |   |   | 7                                             |   |   | $ | 161 |   |
| Exercisable      at December 31, 2007    |   |                   | 192,444 |   |                                 | $      | 15.00   |                                                        |   |   | 7                                             |   |   | $ | 48 |   |

| Unvested      Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Options |     |   | Weighted      Average Grant DateFair      Value |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|----------|--------|-------------------------------------------------|--------|
| Unvested      at January 1,      2007                                                                                         |   |    | 434,444  |   |                                            | $      | 15.00 |   |
| Granted                                                                                                                       |   |    | 65,000   |   |                                            | $      | 14.88 |   |
| Vested                                                                                                                        |   |    | (217,222 | )      |                                            | $      | 15.00 |   |
| Forfeited                                                                                                                     |   |    | (76,500  | )      |                                            | $      | 15.00 |   |
| Unvested      at December 31,      2007                                                                                       |   |    | 205,722  |   |                                            | $      | 14.97 |   |

| Vested Options                      |   | Number      of Options |    |   | Weighted      Average Exercise Price |   | Weighted      Average Remaining Contractual Term (in years) |   | Aggregate      Intrinsic Value (in thousands) |
|-------------------------------------|--------|------------------------|---------|--------|--------------------------------------|--------|-------------------------------------------------------------|--------|-----------------------------------------------|
| Vested      as of January 1, 2007   |   |                   | 217,222 |   |                                 | $      | 15.00                                                       |   |                                          |   |   |
| Vested                              |   |                   | 217,222 |   |                                 |   | 15.00                                                       |   |                                          |   |   |
| Exercised                           |   |                   | − |   |                                 |   | −                                                     |   |                                          |   |   |
| Forfeited                           |   |                   | (76,500 | )      |                                 |   | 15.00                                                       |   |                                          |   |   |
| Vested      as of December 31, 2007 |   |                   | 357,944 |   |                                 | $      | 15.00                                                       |   | 7                                             |   | $       301 |

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|                |   | As      ofDecember      31, 2007 |              |   | As      ofDecember      31, 2006 |   |              | As      ofDecember      31, 2005 |   |
|---------------------|--------|----------------------------------|-------------------|--------|----------------------------------|--------|-------------------|----------------------------------|--------|
| Expected      life  |   | 7      years                     |              |   | 8      years                     |   |              | 10      years                    |   |
| Discount      rate  |   |                             |        3.97% |   |                             |   |        4.78% |                             |   |   |        4.61% |   |
| Volatility          |   |                             | 42.84%            |   |                             |   | 20.91%            |                             |   |   | 20.11% |   |
| Dividend      yield |   |                             | 17.62%            |   |                             |   |        9.73% |                             |   |   | 12.00% |   |

|                                           |   | December      31,2007 |   |   | December      31,2006 |   |   | Period      from March 8, 2005 (Date Operations Commenced) toDecember      31,2005 |   |
|------------------------------------------------|--------|-----------------------|--------|--------|-----------------------|--------|--------|------------------------------------------------------------------------------------|--------|
|                                           |   |                  |   |   |                  |   |   |                                                                               |   |
| Options      granted to Manager                |   | $                     | (91    | )      |                  | $      | 371    |                                                                               |   | $ | 79 |   |
| Restricted      shares granted to Manager      |   |                  | 1,582  |   |                  |   | 2,001  |                                                                               |   |   | 2,581 |   |
| Restricted      shares granted to non-employee |   |                  | 74     |   |                  |   | 60     |                                                                               |   |   | 49 |   |
| Total      equity compensation expense         |   | $                     | 1,565  |   |                  | $      | 2,432  |                                                                               |   | $ | 2,709 |   |

|                                                                    |   | December      31, |       |   | Period      from March 8, 2005 (Date Operations Commenced) to December    31, |   |
|-------------------------------------------------------------------------|--------|-------------------|------------|--------|-------------------------------------------------------------------------------|--------|
|                                                                    |   | 2007              |       |   | 2006                                                                          |   |   | 2005 |   |
| Basic:                                                                  |   |              |       |   |                                                                          |   |   |   |   |
| Net income                                                              |   | $                 | 8,890      |   |                                                                          | $      | 15,606 |   |   | $ | 10,908 |   |
| Weighted average number of shares      outstanding                      |   |              | 24,610,468 |   |                                                                          |   | 17,538,273 |   |   |   | 15,333,334 |   |
| Basic net income per      share                                         |   | $                 | 0.36       |   |                                                                          | $      | 0.89 |   |   | $ | 0.71 |   |
|                                                                    |   |              |       |   |                                                                          |   |   |   |   |   |   |   |
| Diluted:                                                                |   |              |       |   |                                                                          |   |   |   |   |   |   |   |
| Net income                                                              |   | $                 | 8,890      |   |                                                                          | $      | 15,606 |   |   | $ | 10,908 |   |
|                                                                    |   |              |       |   |                                                                          |   |   |   |   |   |   |   |
| Weighted average number of shares      outstanding                      |   |              | 24,610,468 |   |                                                                          |   | 17,538,273 |   |   |   | 15,333,334 |   |
| Additional shares due to assumed      conversion of dilutiveinstruments |   |              | 249,716    |   |                                                                          |   | 343,082 |   |   |   | 72,380 |   |
| Adjusted weighted-average number      of common sharesoutstanding       |   |              | 24,860,184 |   |                                                                          |   | 17,881,355 |   |   |   | 15,405,714 |   |
| Diluted net income per      share                                       |   | $                 | 0.36       |   |                                                                          | $      | 0.87 |   |   | $ | 0.71 |   |

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|   | · | A      monthly base management fee equal to 1/12th of the amount of the Company’s      equity multiplied by 1.50%.  Under the Management Agreement,      ‘‘equity’’ is equal to the net proceeds from any issuance of shares of      common stock less other offering related costs plus or minus the Company’s      retained earnings (excluding non-cash equity compensation incurred in      current or prior periods) less any amounts the Company paid for common      stock repurchases.  The calculation may be adjusted for one-time      events due to changes in GAAP as well as other non-cash charges, upon      approval of the independent directors of the  Company. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Incentive      compensation calculated as follows: (i) 25% of the dollar amount by which,      (A) the Company’s net income (determined in accordance with GAAP) per      common share (before non-cash equity compensation expense and incentive      compensation) for a quarter (based on the weighted average number of      shares outstanding) exceeds, (B) an amount equal to (1) the weighted      average share price of shares of common stock in the offerings of the      Company, multiplied by, (2) the greater of (A) 2.00% or (B) 0.50% plus      one-fourth of the Ten Year Treasury rate as defined in the Management      Agreement for such quarter, multiplied by, (ii) the weighted average      number of common shares outstanding for the quarter.  The      calculation may be adjusted for one-time events due to changes in GAAP as      well as other non-cash charges upon approval of the independent directors      of the Company. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Reimbursement      of out-of-pocket expenses and certain other costs incurred by the Manager      that relate directly to the Company and its  operations. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if      such shares are traded on a securities exchange, at the average of the      closing prices of the shares on such exchange over the thirty day period      ending three days prior to the issuance of such  shares; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if      such shares are actively traded over-the-counter, at the average of the      closing bid or sales price as applicable over the thirty day period ending      three days prior to the issuance of such shares;  and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if      there is no active market for such shares, the value shall be the fair      market value thereof, as reasonably determined in good faith by the board      of directors of the Company. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | unsatisfactory      performance; and/or |
|--------|--------|-----------------------------------------|

|   | · | unfair      compensation payable to the Manager where fair compensation cannot be      agreed upon by the Company (pursuant to a vote of two-thirds of the      independent directors) and theManager. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | March      31                              |   |   | June      30 |   |   | September      30 |   |   | December      31 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|--------|--------------|--------|--------|-------------------|--------|--------|------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | (unaudited)                                |   |   | (unaudited)  |   |   | (unaudited)       |   |   | (unaudited)      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | (in      thousands, except per share data) |   |
| Year ended December      31, 2007                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                       |   |   |         |   |   |              |   |   |             |   |
| Interest      income                                                                                              |   | $                                          | 40,010 |   |         | $      | 43,826 |              |   | $      | 48,791           |   |   | $ | 44,541 |   |
| Interest      expense                                                                                             |   |                                       | 26,789 |   |         |   | 30,222 |              |   |   | 34,266           |   |   |   | 30,460 |   |
| Net      interest      income                                                                                     |   | $                                          | 13,221 |   |         | $      | 13,604 |              |   | $      | 14,525           |   |   | $ | 14,081 |   |
| Net      income      (loss)                                                                                       |   | $                                          | 9,439  |   |         | $      | 9,836  |              |   | $      | (13,915          | )      |   | $ | 3,530 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                       |   |   |         |   |   |              |   |   |             |   |   |   |   |   |
| Net      income (loss) per share −      basic                                                               |   | $                                          | 0.39   |   |         | $      | 0.40   |              |   | $      | (0.56            | )      |   | $ | 0.14 |   |
| Net      income (loss) per share − diluted                                                                                                                                                                                                                                                                                                                                                                                        |   | $                                          | 0.38   |   |         | $      | 0.39   |              |   | $      | (0.56            | )      |   | $ | 0.14 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                       |   |   |         |   |   |              |   |   |             |   |   |   |   |   |
| Year ended December      31, 2006                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                       |   |   |         |   |   |              |   |   |             |   |   |   |   |   |
| Interest      income                                                                                              |   | $                                          | 29,433 |   |         | $      | 34,895 |              |   | $      | 39,423           |   |   | $ | 33,323 |   |
| Interest      expense                                                                                             |   |                                       | 21,202 |   |         |   | 26,519 |              |   |   | 30,855           |   |   |   | 23,275 |   |
| Net      interest      income                                                                                     |   | $                                          | 8,231  |   |         | $      | 8,376  |              |   | $      | 8,568            |   |   | $ | 10,048 |   |
| Net      income      (loss)                                                                                       |   | $                                          | 5,150  |   |         | $      | 6,065  |              |   | $      | (2,401           | )      |   | $ | 6,792 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                       |   |   |         |   |   |              |   |   |             |   |   |   |   |   |
| Net      income (loss) per share −      basic                                                               |   | $                                          | 0.31   |   |         | $      | 0.35   |              |   | $      | (0.14            | )      |   | $ | 0.37 |   |
| Net      income (loss) per share − diluted                                                                                                                                                                                                                                                                                                                                                                                        |   | $                                          | 0.31   |   |         | $      | 0.34   |              |   | $      | (0.14            | )      |   | $ | 0.36 |   |

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ITEM 9. 

ITEM 9A.
 

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ITEM  9B.    

ITEM 10.

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ITEM11. 

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| ·   | Loan Origination. For each      measurement period, the loan origination volume generated by Mr. Bloom and      his colleagues in Resource America’s Los Angeles office, which we refer to      as Mr. Bloom’s team, must be equal to or greater than 90% of the loan      origination volume generated by Mr. Bloom’s team for the previous 12-month      period.  Resource America may waive the loan origination      performance criteria, if in its reasonable discretion, reaching such      levels could not be reasonably achieved notwithstanding Mr. Bloom’s team’s      best efforts.  Our Compensation Committee along with Resource      America’s Compensation Committee will exercise this      discretion. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Portfolio      Diversity. The loans      generated by Mr. Bloom’s team during the measurement period must conform      to the diversity and loan type standards set forth in the investment      parameters of the commercial real estate CDOs managed on our      behalf. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pricing.  The      gross weighted average spread on loans generated by Mr. Bloom’s team      during the measurement period must be not less than 250 bps over the      applicable index.  Resource America may exclude certain loans      from this calculation and/or may waive the pricing provision for the      measurement period in its entirety. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Credit Quality. There shall have      been no principal losses during the measurement period on any loan      originated by Mr. Bloom’s team and no greater than 10% of the loans      originated by Mr. Bloom’s team (measured by principal balance) shall have      been in default during such measurementperiod. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Mr.      J. Cohen was awarded 0 options and 87,158 shares of restricted stock for      fiscal 2007, as compared to 100,000 options and 33,333 shares of      restricted stock for fiscal 2006. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Mr.      Bryant was awarded 0 options and 4,183 shares of restricted stock for      fiscal 2007, as compared to 10,000 options and 0 shares of restricted      stock for fiscal 2006. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Mr.      Bloom was awarded 0 options and 181,621 shares of restricted stock for      fiscal 2007, as compared to 100,000 options and 1,666 shares of restricted      stock for fiscal 2006.  See “—Elements of Our Compensation      Program--Supplemental Incentive Arrangements with David      Bloom.” |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  Name      and Principal Position                               |   |  Year |   | Salary ($) |    |   | Bonus ($) |   |    | Stock Awards ($)(2) |   |   | OptionAwards ($)(3) |   |   | All      Other Compen-sation ($) |    |   | Total      ($) |   |
|----------------------------------------------------------------------|--------|------------|--------|-----------------|---------|--------|----------------|--------|---------|---------------------|--------|--------|---------------------|--------|--------|----------------------------------|---------|--------|----------------|--------|
| Jonathan      Z. Cohen                                               |   | 2007       |   |            | − |   |           |   | − |                |   |   | 538,860             |   |   |                             | (14,449 | )      |           |   | − |   |   |   | 524,411 |   |
| Chief      Executive Officer, President and Director                 |   | 2006       |   |            | − |   |           |   | − |                |   |   | 773,309             |   |   |                             | 107,611 |   |           |   | − |   |   |   | 880,920 |   |
|                                                                 |   |       |   |            |    |   |           |   |    |                |   |   |                |   |   |                             |    |   |           |   |   |   |   |   |   |   |
| David      J. Bryant                                                 |   | 2007       |   |            | 240,000 | (1)    |           |   | 120,000 | (1)                 |   |   | 25,862              |   |   |                             | (1,445  | )      |           |   | 47,978 | (4) |   |   | 432,395 |   |
| Chief      Financial Officer, Chief Accounting Officer and Treasurer |   | 2006       |   |            | 122,769 | (1)    |           |   | − | (1)                 |   |   | −             |   |   |                             | 10,761  |   |           |   | − |   |   |   | 133,530 |   |
|                                                                 |   |       |   |            |    |   |           |   |    |                |   |   |                |   |   |                             |    |   |           |   |   |   |   |   |   |   |
| David      E. Bloom                                                  |   | 2007       |   |            | − |   |           |   | − |                |   |   | 205,803             |   |   |                             | (14,449 | )      |           |   | − |   |   |   | 191,354 |   |
| Senior      Vice President—Real Estate Investments             |   | 2006       |   |            | − |   |           |   | − |                |   |   | 38,662              |   |   |                             | 107,611 |   |           |   | − |   |   |   | 146,273 |   |

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| (1) | Mr.      Bryant joined us as our Chief Financial Officer, Chief Accounting Officer      and Treasurer on June 28, 2006.  Mr. Bryant’s salary and bonus      were paid by Resource America.  We do not reimburse Resource      America for any part of Mr. Bryant’s salary or  bonus. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The      dollar value of stock awards represents the dollar amount recognized for      financial statement reporting purposes.  For financial statement      purposes, we are required to value these shares under EITF 96-18 because      neither the Manager, nor our Named Executive Officers are employees of our      company.  See Item 7, “Management’s Discussion and Analysis of      Financial Condition and Results of Operations – Critical Accounting      Policies - Stock Based Compensation” and Note 11 to our consolidated      financial statements for an explanation of the assumptions for this      valuation.  These values were net income for us in 2007 due to      stock revaluation which we are required to do quarterly until the shares      vest under EITF 96-18 because neither the Manager nor the grantees are      employees of ours. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The      dollar value of option awards represents the dollar amount recognized for      financial statement reporting purposes.  For financial statement      purposes, we are required to value these options under EITF 96-18 because      neither the Manager nor our Named Executive Officers are employees of our      company.  See Item 7, “Management’s Discussion and Analysis of      Financial Condition and Results of Operations – Stock Based Compensation”      for a more detailed discussion.  In valuing options awarded to      Messrs. J. Cohen, Bryant, and Bloom at $0.27 per option, we used the      Black-Scholes option pricing model to estimate the weighted average fair      value of each option granted with weighted average assumptions for (a)      expected dividend yield of 17.6%, (b) risk-free interest rate of 3.9%, (c)      expected volatility of 42.8%, and (d) an expected life of 7.0      years. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Represents      awards of Resource America restricted stock earned during 2007, valued at      the closing price of Resource America common stock on the date of the      grant in January 2007. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Restricted      stock awards; and |
|--------|--------|-----------------------------------|

|   | · | Multi-year      performance-based stock awards |
|--------|--------|------------------------------------------------|

|                                                                |   |            |   | Estimated      future payouts under equity incentive plan awards |                                                                   |   |            |   |    |             |   |
|---------------------------------------------------------------------|--------|-----------------|--------|------------------------------------------------------------------|------------------------------------------------------------------------|--------|-----------------|--------|---------|------------------|--------|
| Name                                                                |   | Grant      date |   | Threshold      (#)                                               |                                                                   |   | Target      (#) |   |    | Maximum      (#) |   |   | All      other stock awards: number of shares ofstock      (#) |   |   | Grant      date fair value of stock awards ($)(1) |   |
| Jonathan      Z. Cohen                                              |   |            |   |                                                             |                                                                   |   |            |   |    |             |   |   |   |   |   |   |   |
| Our      restricted stock - 2005 Plan                               |   | 01/05/07        |   |                                                             | −                                                                |   |            |   | − |             |   |   | − |   |   |   | 87,158 |   |   |   | 1,499,989 |   |
|                                                                |   |            |   |                                                             |                                                                   |   |            |   |    |             |   |   |   |   |   |   |   |   |   |   |   |   |
| David      J. Bryant                                                |   |            |   |                                                             |                                                                   |   |            |   |    |             |   |   |   |   |   |   |   |   |   |   |   |   |
| Resource      Americarestrictedstock                                |   | 01/03/07        |   |                                                             | −                                                                |   |            |   | − |             |   |   | − |   |   |   |   1,846 |   |   |   |          47,978 |   |
| Our      restricted stock      - 2005 Plan                     |   | 01/05/07        |   |                                                             | −                                                                |   |            |   | − |             |   |   | − |   |   |   |   4,183 |   |   |   |          71,989 |   |
|                                                                |   |            |   |                                                             |                                                                   |   |            |   |    |             |   |   |   |   |   |   |   |   |   |   |   |   |
| David      E. Bloom                                                 |   |            |   |                                                             |                                                                   |   |            |   |    |             |   |   |   |   |   |   |   |   |   |   |   |   |
| Our      restricted stock – 2005 Plan                         |   | 01/05/07        |   |                                                             | −                                                                |   |            |   | − |             |   |   | − |   |   |   | 11,621 |   |   |   |         199,997 |   |
| Our      restricted stock – 2005 Plan                         |   | 10/31/07        |   |                                                             | −                                                                |   |            |   | − |             |   |   | − |   |   |   | 50,000 |   |   |   |         516,000 |   |
| Our      restricted stock – 2007 Plan                         |   | 12/26/07        |   |                                                             | −                                                                |   |            |   | − |             |   |   | − |   |   |   | 60,000 |   |   |   |         669,600 |   |
| Performance-based      stock      awards (2)      – 2007 Plan |   | 12/26/07        |   |                                                             |                     −(3) |   |            |   | 60,000  |             |   |   | 60,000 |   |   |   | − |   |   |   |         669,600 |   |

----

| (1) | Based      on the closing price of our stock on the respective grant date with the      exception of Mr. Bryant’s Resource America stock grant which was valued      based on the closing price of Resource America’s stock on the respective      grant date. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Represents      performance based restricted stock awards under our 2007 Omnibus Equity      Compensation Plan that vest based on the achievement of pre-determined      objective performance goals over a multi-year performance      period.  Refer to “Compensation Discussion and Analysis” for      additional information. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Grant      provides, however, that if performance is largely but not entirely met we      will reasonably endeavor to take substantial performance into account and      determine an appropriate award tomake. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                   |   | Option      Awards                                                      |   | Stock      Awards |                                                                      |
|------------------------|--------|-------------------------------------------------------------------------|--------|-------------------|---------------------------------------------------------------------------|
|                   |   |                                                                         |   |              |                                                                           |   |   | Equity      Incentive Plan Awards: Number of Securities Underlying Unexercised      Unearned Options (#) |   |   | Option      Exercise Price($) |   | Option      Expiration Date |   | Number of      Shares or Units of Stock That Have Not Vested    (#) |   |   | Market      Value of Shares or Units of Stock That Have Not Vested ($)      (1) |   |   | Equity Incent-ive      Plan Awards: Number of Unearned Shares, Units or Other Rights That Have      Not Vested (#) |   |   | Equity      Incentive Plan Awards: Market or Payout Value of Unearned Shares,      Units or Other Rights That Have Not Vested ($) (1) |   |
|  Name             |   | Number of Securities Underlying      Unexercised Options (#)Exercisable |   |              | Number of Securities Underlying      Unexercised Options (#)Unexercisable |   |
|                   |   |                                                                    |   |              |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Jonathan      Z. Cohen |   |                                                                    | 33,333 |              |                                                                      |   | 66,667 | (2) |   |   | − |   |   | $ | 15.00 |   | 3/7/15 |   |   | 142,714 |   |   |   | 1,328,667 |   |   |   | − |   |   |   | − |   |
|                   |   |                                                                    |   |              |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| David      J. Bryant   |   |                                                                    | 3,333  |              |                                                                      |   | 6,667 | (3) |   |   | − |   |   | $ | 15.00 |   | 3/7/15 |   |   | 4,183 |   |   |   | 38,944 |   |   |   | − |   |   |   | − |   |
|                   |   |                                                                    |   |              |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,846 | (5) |   |   | 27,081 | (5) |   |   |   |   |   |   |   |   |
|                   |   |                                                                    |   |              |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| David      E. Bloom    |   |                                                                    | 33,333 |              |                                                                      |   | 66,667 | (2) |   |   | − |   |   | $ | 15.00 |   | 3/7/15 |   |   | 118,845 |   |   |   | 1,106,447 |   |   |   | 60,000 | (4) |   |   | 558,600 |   |

----

| (1) | Based      on the closing price of $9.31, our stock price on December 31,      2007. |
|-----|--------------------------------------------------------------------------------------|

| (2) | Represents      options to purchase our stock that vest 50% on each of May 17, 2008 and      May 17, 2009. |
|-----|------------------------------------------------------------------------------------------------------------|

| (3) | Represents      options to purchase our stock that vest 50% on each of June 28, 2008 and      June 28, 2009. |
|-----|--------------------------------------------------------------------------------------------------------------|

| (4) | Represents      performance based restricted stock awards under our 2007 Omnibus Equity      Compensation Plan that vest based on the achievement of pre-determined      objective performance goals over a multi-year performance      period.  Refer to “Compensation Discussion and Analysis” for      additional information. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Represents      shares of Resource America stock based on the closing price of $14.67,      Resource America’s stock price on December 31,  2007. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                   |   | Stock      Awards                             |    |
|------------------------|--------|-----------------------------------------------|---------|
| Name                   |   | Number      of Shares Acquired on Vesting (#) |    |   | Value      Realized on Vesting ($) (1) |   |
|                   |   |                                          |    |   |   |   |
| Jonathan      Z. Cohen |   |                                          | 44,444  |   |   |   | 747,881 |   |
|                   |   |                                          |    |   |   |   |   |   |
| David      J. Bryant   |   |                                          | − |   |   |   | − |   |
|                   |   |                                          |    |   |   |   |   |   |
| David      E. Bloom    |   |                                          | 7,776   |   |   |   | 89,091 |   |

----

|   | (1) | Represents      market value of our common stock on vesting  date. |
|--------|-----|--------------------------------------------------------------------|

| Name                            |   | Fees      Earned or Paid in Cash ($) |    |   | Stock      Awards ($) (1) |   |    | Total      ($) |   |
|---------------------------------|--------|--------------------------------------|---------|--------|---------------------------|--------|---------|----------------|--------|
|                            |   |                                 |    |   |                      |   |    |           |   |
| Walter      T. Beach (2)        |   |                                 | 93,750  |   |                      |   | 14,997  |           |   |   | 108,747 |   |
|                            |   |                                 |    |   |                      |   |    |           |   |   |   |   |
| William      B. Hart            |   |                                 | 43,750  |   |                      |   | 14,997  |           |   |   | 58,747 |   |
|                            |   |                                 |    |   |                      |   |    |           |   |   |   |   |
| Murray      S. Levin            |   |                                 | 43,750  |   |                      |   | 14,997  |           |   |   | 58,747 |   |
|                            |   |                                 |    |   |                      |   |    |           |   |   |   |   |
| P.      Sherrill Neff           |   |                                 | 43,750  |   |                      |   | 14,997  |           |   |   | 58,747 |   |
|                            |   |                                 |    |   |                      |   |    |           |   |   |   |   |
| Gary      Ickowicz (2)      (3) |   |                                 | 90,833  |   |                      |   | 13,748  |           |   |   | 104,581 |   |
|                            |   |                                 |    |   |                      |   |    |           |   |   |   |   |
| Edward      E. Cohen            |   |                                 | − |   |                      |   | − |           |   |   | − |   |
|                            |   |                                 |    |   |                      |   |    |           |   |   |   |   |
| Jonathan      Z. Cohen          |   |                                 | − |   |                      |   | − |           |   |   | − |   |

----

| (1) | Dollar      value represents the amount recognized for financial statement reporting      purposes with respect to 2007.  For Messrs. Beach, Hart, Levin      and Neff represents 1,056 restricted shares granted March 8, 2006 ($14,995      grant date fair value) which vested March 8, 2007 and 897 restricted      shares granted March 8, 2007 ($14,998 grant date fair value) which vested      on March 8, 2008; and for Mr. Ickowicz, represents 816 restricted shares      granted February 1, 2007 ($14,998 grant date fair value) which vested on      February 1, 2008. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Messrs.      Beach and Ickowicz are members of our investment  committee. |
|-----|---------------------------------------------------------------------------|

| (3) | Mr.      Ickowicz joined the board of directors in February  2007. |
|-----|--------------------------------------------------------------------|

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ITEM12.  

|                                                                      |   | Shares owned |      |   | Percentage(1) |   |
|---------------------------------------------------------------------------|--------|-------------------|-----------|--------|---------------|--------|
| Executive      officers and directors: (2)                                |   |              |      |   |          |   |
| Edward      E. Cohen (3)                                                  |   |              | 277,787   |   |          |   | 1.10 | % |
| Jonathan      Z. Cohen (3)                                                |   |              | 429,492   |   |          |   | 1.70 | % |
| Walter      T. Beach (4)(5)                                               |   |              | 1,068,182 |   |          |   | 4.23 | % |
| William      B. Hart (5)                                                  |   |              | 17,803    |   |          |   | * |   |
| Gary      Ickowicz (5)                                                    |   |              | 3,077     |   |          |   | * |   |
| Murray      S. Levin (5)                                                  |   |              | 11,203    |   |          |   | * |   |
| P.      Sherrill Neff (5)                                                 |   |              | 16,803    |   |          |   | * |   |
| Jeffrey      D. Blomstrom (3)                                             |   |              | 42,579    |   |          |   | * |   |
| David      E. Bloom (3)                                                   |   |              | 192,945   |   |          |   | * |   |
| David      J. Bryant (3)                                                  |   |              | 32,000    |   |          |   | * |   |
| Steven      J. Kessler (3)                                                |   |              | 29,976    |   |          |   | * |   |
| All      executive officers and directors as a group    (11 persons) |   |              | 2,121,847 |   |          |   | 8.35 | % |
|                                                                      |   |              |      |   |          |   |   |   |
| Owners      of 5% or more of outstanding shares: (6)                      |   |              |      |   |          |   |   |   |
| Resource      America, Inc. (7)                                           |   |              | 2,062,588 |   |          |   | 8.13 | % |
| Leon      G. Cooperman (8)                                                |   |              | 3,637,833 |   |          |   | 14.40 | % |

----

|        (1) | Includes      59,903 shares of common stock issuable upon exercise of warrants which      vested on January 13, 2007 and 84,998 shares of common stock issuable upon      exercise of stock options. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        (2) | The      address for all of our executive officers and directors is c/o Resource      Capital Corp., 712 Fifth Avenue, 10th Floor, New York, New York      10019. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        (3) | Includes      restricted stock awards granted to certain officers and directors as      follows:  (i) on January 3, 2006: Mr. Blomstrom – 1,666 shares;      Mr. Bloom – 1,666 shares; and Mr. J. Cohen – 33,333 shares; all these      shares vest 33.33% per year, (ii) on January 5, 2007: Mr. Blomstrom –      14,526 shares; Mr. Bloom – 11,621 shares; Mr. Bryant – 4,183 shares; and      Mr. J. Cohen – 87,158 shares; all these shares vest 33.33% on January 5,      2008 and 8.33% quarterly thereafter, (iii) on October 30, 2007: 50,000      shares to Mr. Bloom; these shares vest quarterly through December 31,      2009; (iv) on December 26, 2007: 60,000 shares to Mr. Bloom; these shares      vest 15% on June 30, 2008, 15% on June 30, 2009 and 70% on December 31,      2010; and (v) on January 14, 2008: Mr. Blomstrom – 10,787 shares; Mr.      Bloom – 18,878 shares; Mr. Bryant – 13,484 shares; Mr. E. Cohen – 10,787      shares; and Mr. Kessler – 5,393 shares.  Each such person has      the right to receive distributions on and vote, but not to transfer, such      shares.   |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        (4) | Includes      (i) 1,047,045 shares purchased by Beach Asset Management, LLC, Beach      Investment Counsel, Inc. and/or Beach Investment Management, LLC,      investment management firms for which Mr. Beach is a principal and      possesses investment and/or voting power over the shares and      (ii) 14,434 shares of common stock issuable upon exercise of the      warrants which vested on January 13, 2007.  The address for      these investment management firms is Five Tower Bridge, 300 Barr Harbor      Drive, Suite 220, West Conshohocken, Pennsylvania  19428. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        (5) | Includes      (i) 3,750 shares of restricted stock issued to each of Messrs. Beach,      Hart, Levin and Neff on March 8, 2008 which vest on March 8, 2009, and      (ii) 2,261 shares of restricted stock issued to Mr. Ickowicz on February      1, 2008 which vest on February 1, 2009.  Each non-employee      director has the right to receive distributions on and vote, but not to      transfer, such shares. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        (6) | The      addresses for our 5% or more holders are as follows: Resource America,      Inc.: 1845 Walnut Street, Suite 1000, Philadelphia, Pennsylvania 19103;      and Omega Advisors, Inc.: 88 Pine Street, Wall Street Plaza, 31st      Floor, New York, New York 10005. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|        (7) | Includes (i)      921 shares of restricted stock granted to the Manager in connection with      our March 2005 private placement that the Manager has not allocated to its      employees, (ii) 100,000 shares purchased by the Manager in our      initial public offering, (iii) 900,000 shares purchased by Resource      Capital Investor in our March 2005 private placement, (iv) 900,000      shares purchased by Resource Capital Investor in our initial public      offering, (v) 61,579 shares transferred to the Manager as incentive      compensation pursuant to the terms of its management agreement with us and      (vi) 100,088 shares of common stock issuable upon exercise of the      warrants which vested on January 13,2007. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        (8) | This      information is based on a Schedule 13G/A filed with the SEC on February 6,      2008.  Leon G. Cooperman has or shares voting and/or investment      power over these shares.  Under the terms of a limited waiver      granted to Omega Advisors Inc., of which Mr. Cooperman is President and      majority stockholder, with respect to ownership limitations in our      declaration of trust, Omega Advisors may be prohibited from exercising a      majority of these warrants without first disposing of other shares of our      common stock.  See “Description of Capital Stock and      Warrants—Restrictions on Ownership and  Transfer.” |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                           |   | (a)                                                                                                       |      |   | (b)                                                                                  |   | (c)                                                                                                                                                      |
|------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|-----------|--------|--------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| Plan      category                                                                             |   | Number      of securities to be issued upon exercise of outstanding      options,warrants      and rights |      |   | Weighted-average      exercise price of outstanding options,warrants      and rights |   | Number      of securities remaining available for future issuance under equity      compensation plans excluding securities reflected in column      (a) |
| Equity      compensation plans approved          by      security holders: |   |                                                                                                      |      |   |                                                                                 |   |                                                                                                                                                     |
| Options                                                                                        |   |                                                                                                      | 640,166   |   |                                                                                 | $      | 14.99                                                                                                                                                    |   |   |
| Restricted      shares                                                                         |   |                                                                                                      | 581,493   |   |                                                                                 |   | N/A                                                                                                                                                      |   |   |
| Total                                                                                          |   |                                                                                                      | 1,221,659 |   |                                                                                 |   |                                                                                                                                                     |   | 1,807,895(1)      (2) |

----

| (1)   | Upon      the July 2006 hiring of certain significant employees of the Manager, we      agreed to pay up to 100,000 shares of restricted stock and 100,000 options      to purchase restricted stock upon the achievement of certain performance      thresholds, the first of which was met in June 2007 and, as a result,      60,000 shares of restricted stock and 60,000 options to purchase      restricted stock were issued at that time.  As of December 31,      2007, 40,000 shares of restricted stock and 40,000 options to purchase      restricted stock are unissued.  These shares and options to      purchase restricted stock, which have been reserved for future issuance      under the plans, have been deducted from the number of securities      remaining available for future issuance.  See Item 8, “Financial      Statements and Supplementary Data” at Note 11 for a more detailed      discussion. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | We      agreed to award certain personnel up to 180,000 shares of restricted stock      upon the achievement of certain performance thresholds.  These      shares, which have been reserved for future issuance under the plans, have      been deducted from the number of securities remaining available for future      issuance. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM13. 

leases back to LEAF Financial for $5.1 million,their book value.

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|   | · | which      investment program has been seeking investments for the longest period of      time; |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | whether      the investment program has the cash required for the      investment; |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | whether      the amount of debt to be incurred with respect to the investment is      acceptable for the investmentprogram; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | the      effect the investment will have on the investment program’s cash      flow; |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | whether      the investment would further diversify, or unduly concentrate, the      investment program’s investments in a particular lessee, class or type of      equipment, location or industry;and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | whether      the term of the investment is within the term of the investment      program. |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | We      will not be permitted to invest in any investment fund or CDO structured,      co-structured or managed by the Manager or Resource America other than      those structured, co-structured or managed on our behalf.  The      Manager and Resource America will not receive duplicate management fees      from any such investment fund or CDO to the extent we invest in      it. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      will not be permitted to purchase investments from, or sell investments      to, the Manager or Resource America, except that we may purchase      investments originated by those entities within 60 days before our      investment. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM14.      PRINCIPAL ACCOUNTING FEES ANDSERVICES

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ITEM15. 

|   | (a) | The      following documents are filed as part of this Annual Report on Form      10-K: |
|--------|-----|-----------------------------------------------------------------------------------------|

|   | 1. | Financial      Statements |
|--------|----|---------------------------|

|   | 2. | Financial      Statement Schedules |
|--------|----|------------------------------------|

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|   | 3. | Exhibits |
|--------|----|----------|

|   | Exhibit      No.  | Description                                                                                                                                                                                                                       |
|--------|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |        3.1   | Restated      Certificate of Incorporation of Resource Capital Corp. (1)                                                                                                                                                          |
|   |        3.2   | Amended      and Restated Bylaws of Resource Capital Corp. (1)                                                                                                                                                                    |
|   |        4.1   | Form      of Certificate for Common Stock for Resource Capital Corp. (1)                                                                                                                                                          |
|   |        4.2   | Junior      Subordinated indenture between Resource Capital Corp. and Wells Fargo      Bank, N.A., as Trustee, dated May 25, 2006. (3)                                                                                            |
|   |        4.3   | Amended      and Restated Trust Agreement among Resource Capital Corp., Wells Fargo      Bank, N.A., Wells Fargo Delaware Trust Company and the Administrative      Trustees named therein, dated May 25, 2006. (3)               |
|   |        4.4   | Junior      Subordinated Note due 2036 in the principal amount of $25,774,000, dated      May 25, 2006. (3)                                                                                                                       |
|   |        4.5   | Junior      Subordinated Indenture between Resource Capital Corp. and Wells Fargo      Bank, N.A., as Trustee, dated September 29, 2006. (4)                                                                                      |
|   |        4.6   | Amended      and Restated Trust Agreement among Resource Capital Corp., Wells Fargo      Bank, N.A., Wells Fargo Delaware Trust Company and the Administrative      Trustees named therein, dated September 29, 2006. (4)         |
|   |        4.7   | Junior      Subordinated Note due 2036 in the principal amount of $25,774,000, dated      September 29, 2006. (4)                                                                                                                 |
|   | 10.1              | Registration      Rights Agreement among Resource Capital Corp. and Credit Suisse Securities      (USA) LLC for the benefit of certain holders of the common stock of      Resource Capital Corp., dated as of March 8, 2005. (1) |
|   | 10.2              | Management      Agreement between Resource Capital Corp., Resource Capital Manager, Inc.      and Resource America, Inc. dated as of March 8, 2005.  (1)                                                                |
|   | 10.3              | 2005      Stock Incentive Plan (1)                                                                                                                                                                                                |
|   | 10.4              | Form      of Stock Award Agreement (1)                                                                                                                                                                                            |
|   | 10.5              | Form      of Stock Option Agreement (1)                                                                                                                                                                                           |
|   | 10.6              | Form      of Warrant to Purchase Common Stock (1)                                                                                                                                                                                 |
|   |        10.7a | Master      Repurchase Agreement between RCC Real Estate SPE 3, LLC and Natixis Real      Estate Capital. (2)                                                                                                                     |
|   |        10.7b | Guaranty      made by Resource Capital Corp. as guarantor, in favor of Natixis Real      Estate Capital, Inc., dated April 20, 2007. (2)                                                                                          |
|   | 21.1              | List of Subsidiaries of Resource Capital      Corp.                                                                                                                                                                               |
|   | 23.1              | Consent of Grant Thornton LLP                                                                                                                                                                                                     |
|   | 31.1              | Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief      Executive Officer.                                                                                                                                                      |
|   | 31.2              | Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief      Financial Officer.                                                                                                                                                      |
|   | 32.1              | Certification of Chief Executive Officer pursuant to      Section 1350 of Chapter 63 of Title 18 of the United States      Code.                                                                                                  |
|   | 32.2              | Certification of Chief Financial Officer pursuant to      Section 1350 of Chapter 63 of Title 18 of the United States      Code.                                                                                                  |

----

| (1) | Filed      previously as an exhibit to the Company’s registration statement on Form      S-11, Registration No. 333-126517. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (2) | Filed      previously as an exhibit to the Company’s Current Report on Form 8-K filed      on April 23, 2007. |
|-----|---------------------------------------------------------------------------------------------------------------------|

| (3) | Filed      previously as an exhibit to the Company’s quarterly report on Form 10-Q      for the quarter ended June 30,2006. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (4) | Filed      previously as an exhibit to the Company’s quarterly report on Form 10-Q      for the quarter ended September 30,2006. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|

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SIGNATURES

| /s/      Edward E. Cohen   | Chairman      of the Board                           | March      17, 2008 |
|----------------------------|------------------------------------------------------|---------------------|
| EDWARD      E. COHEN       |                                                 |                |
|                       |                                                 |                |
| /s/      Jonathan Z. Cohen | Director,      President and Chief Executive Officer | March      17, 2008 |
| JONATHAN      Z. COHEN     |                                                 |                |
|                       |                                                 |                |
| /s/      Walter T. Beach   | Director                                             | March      17, 2008 |
| WALTER      T. BEACH       |                                                 |                |
|                       |                                                 |                |
| /s/      William B. Hart   | Director                                             | March      17, 2008 |
| WILLIAM      B. HART       |                                                 |                |
|                       |                                                 |                |
| /s/      Gary Ickowicz     | Director                                             | March      17, 2008 |
| GARY      ICKOWICZ         |                                                 |                |
|                       |                                                 |                |
| /s/      Murray S. Levin   | Director                                             | March      17, 2008 |
| MURRAY      S. LEVIN       |                                                 |                |
|                       |                                                 |                |
| /s/      P. Sherrill Neff  | Director                                             | March      17, 2008 |
| P.      SHERRILL NEFF      |                                                 |                |
|                       |                                                 |                |
| /s/      David J. Bryant   | Chief      Financial Officer,                        | March      17, 2008 |
| DAVID      J. BRYANT       | Chief      Accounting Officer and Treasurer          |                |
|                       |                                                 |                |
|                       |                                                 |                |

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|                                 |   | Balance      at beginning of period |    |   | Charge      to expense |   |   | Write-offs |   |   | Balance      at end of period |   |
|--------------------------------------|--------|-------------------------------------|---------|--------|------------------------|--------|--------|------------|--------|--------|-------------------------------|--------|
| Year Ended December      31, 2007    |   |                                |    |   |                   |   |   |       |   |   |                          |   |
| Allowance      for doubtful accounts |   | $                                   | − |   |                   | $      | 6,211  |       |   | $      | −                       |   |   | $ | 6,211 |   |

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