Cap Trust to Elect REIT Status

Capital Trust Inc., New York, has announced that it will elect to be taxed as a real estate investment trust for the current year and that it has modified its investment management venture with Citigroup Inc.The company said it will seek shareholder approval of certain charter amendments consistent with its REIT election and of a proposed one-for-three reverse stock split. Capital Trust cited various steps it has already taken to qualify as a REIT. Stichting Pensioenfonds ABP, a Netherlands-based pension fund, has purchased 1.5 million shares of common stock from Capital Trust's largest shareholders to address ownership concentration issues, Capital Trust said. In addition, the company has organized all its investment management activities into CT Investment Management Co., which will operate as a taxable REIT subsidiary of Capital Trust. The company also settled certain interest rate hedge liabilities and wrote off certain deferred tax assets. Capital Trust said it expects to report a loss of approximately $14 million for the fourth quarter and of approximately $10 million for 2002. Regarding its venture with Citigroup, the company said it has acquired warrants to purchase 8.5 million shares of Capital Trust's common stock from Citi affiliates.