JER Investors Trust Inc. Announces Fourth Quarter 2007 and Full Year Results

MCLEAN, Va.--(Business Wire)--
JER Investors Trust Inc. (NYSE:JRT) today reported results for the
quarter and year ended December 31, 2007:

Fourth Quarter Highlights:

-- Liquidity: At December 31, 2007, we had $94.3 million in
aggregate cash, consisting of $87.6 million in unrestricted
cash plus an additional $6.7 million of restricted cash. As of
March 28, 2008, we had $14.8 million of cash which includes
$1.1 million of restricted cash. Including the impact of the
pending sale of our remaining interest in the Charter School
Joint Venture (the "Joint Venture") and required additional
principal paydowns on our repurchase agreements, our pro-forma
cash balance will be approximately $42 million.

-- Credit Performance: As of December 31, 2007, delinquency rates
on collateral for our CMBS portfolio in which we own the
first-loss position remain at low levels with a 60 day
delinquency rate of approximately 27 basis points. Overall,
CMBS portfolio cash flow projections generally continue to be
in line with original underwriting. However, due to projected
declines in discounted cash flows on four different CMBS
investments, we recorded non-cash impairment charges of $3.6
million on CMBS investments during the three months ended
December 31, 2007. There were no delinquencies, impairment
charges or loss reserves established related to real estate
loans and assets during the three and twelve months ended
December 31, 2007.

-- Operating Results: Generated a net loss of $7.4 million, or
$0.28 per diluted share, and net income of $23.1 million, or
$0.90 per diluted share for the three and twelve months ended
December 31, 2007, respectively. The results for the three and
twelve months ended December 31, 2007 include non-cash charges
related to unrealized mark to market losses on loans held for
sale, CMBS impairment and hedge ineffectiveness totaling $17.8
million and $18.7 million, respectively, compared to $0.3
million and $0.7 million for the same periods in 2006. As of
December 31, 2007, we have classified $221.6 million of real
estate loans as held for sale in order to provide potential
additional liquidity, if necessary, and have marked such loans
to market resulting in an unrealized loss of $13.9 million
during the three and twelve months ended December 31, 2007.

-- Adjusted Funds from Operations: Generated Adjusted Funds from
Operations ("AFFO") of $10.9 million, or $0.43 per diluted
share, and $43.0 million, or $1.67 per diluted share, for the
three and twelve months ended December 31, 2007, respectively.
AFFO excludes the impact on operating results of depreciation
of real estate assets and non-cash charges related to CMBS
impairment, unrealized mark to market losses on loans held for
sale and hedge ineffectiveness. At the end of this earnings
release is a reconciliation of GAAP net income (loss) to AFFO.

-- Dividends: Declared fourth quarter 2007 regular cash dividend
of $0.45 per share of common stock and a special cash dividend
of $0.65 per share of common stock.

-- Stockholders' Equity: Stockholders' equity at December 31,
2007 is $10.8 million compared to $370.0 million at December
31, 2006. The decline is primarily due to changes in the
estimated fair values of our CMBS investments resulting from
significant widening of spreads. Approximately 80% of such
CMBS investments have previously been financed using
"match-funded" collateralized debt obligations (or CDOs), and
such related CDO liabilities are not subject to mark-to-market
"margin call" requirements. In addition, based on current GAAP
requirements, such CDO liabilities are currently not carried
at fair value on our balance sheet and, instead, are carried
at our cost basis. We have elected the fair value option
pursuant to SFAS No. 159 effective January 1, 2008 for all
financial assets and liabilities related to our CDOs. The
impact of adopting SFAS No. 159 is expected to increase
stockholders' equity by approximately $246 million to
approximately $257 million or $9.92 per share as of January 1,
2008. Additionally, if all assets and liabilities were carried
at fair value at December 31, 2007, we estimate that
stockholders' equity would increase to approximately $287
million or $11.09 per share. At the end of this earnings
release is a proforma calculation of the December 31, 2007
Balance Sheet and Stockholders' Equity based upon our adoption
of SFAS No. 159 effective January 1, 2008 as well as a
proforma calculation of the December 31, 2007 fair value
Balance Sheet and Stockholders' Equity.

-- JER US Debt Fund: In December 2007, we and an affiliate of our
manager ("JER Fund IV"), along with the California Public
Employees Retirement System ("CalPERS") formed a $220 million
fund that invests in commercial real estate debt related
investments. We and an affiliate of our manager each committed
$10 million of capital to the fund and act as co-manager of
the fund.

-- Subsequent Events:

-- In January 2008, we paid dividends declared in December
2007 of $28.4 million or $1.10/share.

-- In March 2008, we executed a definitive purchase and sale
agreement with an outside buyer to sell our remaining
interest in the Joint Venture which owns twelve net leased
real estate assets and expect the sale to be completed in
early April 2008 with expected net cash proceeds of
approximately $39.5 million. However, there are no
assurances that the transaction will be completed on the
terms agreed to, or at all.

-- During March 2008, we amended and extended the maturity of
Goldman Sachs repurchase agreement. As part of the
extension, we will pay down this facility by approximately
$11.9 million during April 2008. Furthermore, in March
2008, the Liquid Funding facility was replaced by a new
repurchase agreement facility with Bear Stearns
International, Ltd ("Bear Stearns") that provides
borrowing capacity of $25.0 million and matures on
September 12, 2008.

Operating Results

Net loss was $7.4 million, or $0.28 per diluted share, for the
three months ended December 31, 2007, compared to net income of $9.2
million, or $0.36 per diluted share, for the three months ended
December 31, 2006. Net income was $23.1 million, or $0.90 per diluted
share, for the twelve months ended December 31, 2007, compared to
$31.7 million, or $1.23 per diluted share, for the twelve months ended
December 31, 2006. AFFO was $10.9 million, or $0.43 per diluted share,
for the three months ended December 31, 2007, compared to $9.6
million, or $0.37 per diluted share, for the three months ended
December 31, 2006. AFFO was $43.0 million, or $1.67 per diluted share,
for the twelve months ended December 31, 2007, compared to $32.5
million, or $1.26 per diluted share, for the twelve months ended
December 31, 2006. At the end of this earnings release is a
reconciliation of GAAP net income (loss) to AFFO for the three and
twelve months ended December 31, 2007, 2006 and 2005.

Total revenues were $34.4 million and $134.6 million for the three
and twelve months ended December 31, 2007, respectively, compared to
$26.8 million and $74.0 million for the three and twelve months ended
December 31, 2006, respectively. The increase in revenues is due to
increased revenue-generating investment balances, on average.

Interest expense for the three and twelve months ended December
31, 2007 was $19.9 million and $76.0 million, respectively, compared
to $13.3 million and $26.7 million for the three and twelve months
ended December 31, 2006, respectively. The increase in interest
expense is primarily related to the second collateralized debt
obligation offering (or CDO II) completed by us in October 2006, as
well as increased average balances outstanding on repurchase
agreements and our April 2007 issuance of trust preferred securities.

Total management fees were $1.8 million and $8.2 million for the
three and twelve months ended December 31, 2007, respectively,
compared to $1.9 million and $7.6 million for the three and twelve
months ended December 31, 2006, respectively. Base management fees
were $1.8 million and $1.9 million for the three months ended December
31, 2007 and 2006, respectively. Base management fees were $7.3
million and $7.6 million for the twelve months ended December 31, 2007
and 2006, respectively. We incurred incentive management fees of $0.8
million during the twelve months ended December 31, 2007. There were
no incentive fees incurred during the three months ending December 31,
2007 and the three and twelve months ended December 31, 2006.

General and administrative expenses were $1.9 million and $7.6
million for the three and twelve months ended December 31, 2007,
respectively, compared to $2.0 million and $7.3 million for the three
and twelve months ended December 31, 2006, respectively. The increase
in general and administrative expenses for the twelve months ended
December 31, 2007 compared to the same period in 2006 is primarily due
to increased collateral administration fees related to CDO II
(affiliate expense), legal fees and other professional services. These
increases were offset, in part, by a decrease in due diligence
expenses due to a change in the composition of acquisitions and the
impact of seller credits.

We recorded non-cash impairment charges of $3.6 million and $4.4
million, respectively, for the three and twelve months ended December
31, 2007 on our CMBS investments. For the three and twelve months
ended December 31, 2006, we recorded non-cash impairment charges of
$0.3 million and $0.7 million, respectively, on our CMBS investments.
The fourth quarter 2007 non-cash impairment charges are the results of
projected declines of $1.8 million in the net present value of future
cash flows on four CMBS bonds. We also incurred a non-cash hedge
ineffectiveness charge of $0.4 million during the three and twelve
months ended December 31, 2007 while no hedge ineffectiveness was
recorded during the three and twelve months ended December 31, 2006.

We have classified seven real estate loans not held as collateral
by CDO I and CDO II as held for sale as of December 31, 2007 and may
seek to sell any or all of these seven real estate loans in order to
provide us with potential additional sources of liquidity, if
necessary. As a result, we now carry these loans at the lower of cost
or estimated market value, on an individual loan basis, resulting in
an unrealized loss of $13.9 million during the three and twelve months
ended December 31, 2007. These loans had a face amount of $237.9
million with an unamortized cost basis of $235.5 million, an estimated
fair value of $221.6 million and outstanding borrowings against such
loans of $165.8 million as of December 31, 2007.

JER US Debt Co-Investment Vehicle

On December 11, 2007, we and JER Fund IV closed a new $220 million
private equity fund known as the JER US Debt Co-Investment Vehicle,
L.P. (the "US Debt Fund"). The US Debt Fund is co-managed by JRT and
JER Fund IV. CalPERS agreed to invest $200 million in the US Debt
Fund, and we and JER Fund IV will each invest $10 million in the US
Debt Fund. The US Debt Fund can invest in loans secured, directly or
indirectly, by real estate, including, B-Notes, mezzanine loans and
whole mortgage loans and also in preferred equity, CMBS and CMBS
related products (collectively, "Targeted Investments").
Non-performing loans and single family residential mortgages and
related securities are outside the scope of Targeted Investments. We
and JER Fund IV will each receive management fees and a percentage of
aggregate profits earned and distributed by the US Debt Fund.

The US Debt Fund's Limited Partnership Agreement prohibits us from
investing in Targeted Investments until the earlier of (i) April 11,
2008 or (ii) the date at which 90% of the US Debt Fund's committed
capital has been invested or otherwise committed. In addition, if the
US Debt Fund is not fully invested by April 11, 2008, then for up to
the next eight months or until 90% of the US Debt Fund's committed
capital has been invested or otherwise committed, we and/or JER Fund
IV will be permitted to share targeted investments on a 50%-50%
pari-passu basis.

Investment Activity

On October 30, 2007, we sold a 50% interest in our twelve net
leased assets for $39.2 million. The sale resulted in no gain or loss.
We also received principal repayments of $14.8 million related to 3
real estate loan investments during the quarter ended December 31,
2007.

Since raising our initial equity capital in June 2004 through
December 31, 2007, we have closed 55 investments, comprised of CMBS,
real estate loans, real estate assets and investments in the US Debt
Fund totaling approximately $2.0 billion. In addition, through
December 31, 2007 the Company has sold assets or received principal
payments on investments aggregating approximately $431.1 million.

The Company's investments as of December 31, 2007 consist of:

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*T
Carrying Weighted
Value Average Yield
Amortized at ----------------
Cost at December
December 31, % of Total Loss No
31, 2007 2007 Investments Adjusted Loss
---------- -------- ------------ --------- -----
($ in millions) (based on amortized cost)
------------------- ----------------------------

CMBS $ 997.9 $ 717.4 64.4% 8.7% 11.0%
Real estate loans,
held to maturity 274.7 274.7 17.7% 7.9% 7.9%
Real estate loans,
held for sale 235.5 221.6 15.2% 7.1% 7.1%
Investments in
unconsolidated joint
ventures
Real estate assets 39.6 39.6 2.6% 14.2% 14.2%
US Debt Fund 1.2 1.2 0.1% N/A N/A
---------- -------- ------------ --------- -----
Total $ 1,548.9 $1,254.6 100.0% 8.4% 12.3%
========== ======== ============ ========= =====
*T

"Loss Adjusted" yields reflect the impact of estimated future
losses on underlying collateral for our CMBS investments and are the
basis on which we record interest income on such investments in our
GAAP financial statements in accordance with guidance provided by
Emerging Issues Task Force ("EITF") 99-20, "Recognition of Interest
Income and Impairment on Purchased and Retained Beneficial Interests
in Securitized Financial Assets." "No Loss" yields represent the
contractual estimated return on our CMBS investments in the event that
no losses are ever realized on the underlying collateral, and is not
the yield used to recognize income in accordance with GAAP. The "Loss
Adjusted" or GAAP yield on our CMBS investments is approximately 230
basis points less than the "No Loss" yield because the "Loss Adjusted"
yield takes into consideration estimated future losses on underlying
collateral for our CMBS investments and the impact of such losses on
the future cash flows we expect to receive on such CMBS investments.

Although we have the intent and ability to hold our CMBS
investments to maturity, in accordance with GAAP, the Company's CMBS
investments are classified as available for sale. As such, absent
impairment, changes in the estimated market value of such CMBS
investments are reflected as changes to accumulated other
comprehensive income (loss) and affects stockholders' equity. As of
December 31, 2007, the Company's CMBS investment portfolio was in a
net unrealized loss position of approximately $280.4 million compared
to a net unrealized gain position of $6.1 million as of December 31,
2006. The unrealized loss position as of December 31, 2007 is
primarily driven by the significant widening of spreads for CMBS
investments which principally occurred over the second half of 2007.

The Company's objective is to "match-fund" its long-term assets
with long term, non-recourse, non margin callable, committed
financing. With respect to the Company's CMBS investments and, more
specifically with respect to the unrealized loss of $280.4 million at
December 31, 2007, the following table provides a breakdown of such
unrealized losses by financing source as of December 31, 2007 (amounts
in millions):

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Estimated Unrealized
Fair Amortized Gain
Value Cost (Loss)
--------- --------- ----------
CMBS, financed by CDO I or CDO II $ 562,056 $ 788,047 $(225,991)
CMBS, not financed by CDO's 155,384 209,840 (54,456)
--------- --------- ----------
Total $ 717,440 $ 997,887 $(280,447)
========= ========= ==========
*T

Note: CDO I represents the collateralized debt obligation
completed in the quarter ended December 31, 2005. CDO II represents
the CDO completed in quarter ended December 31, 2006.

Approximately 81% of the total $280.4 million in unrealized losses
are on assets contributed to CDO I or CDO II (the "CDOs"). The CDOs
are non-recourse to the Company and are not subject to "margin calls"
based on mark-to-market fair value determinations of the underlying
collateral. Assuming such CMBS investments are held to maturity, the
Company generally expects that such unrealized losses on CMBS
investments will reverse over time, absent adverse changes in the
amount and timing of actual or projected losses on underlying
collateral versus losses that are currently projected and reflected in
our "Loss Adjusted," or GAAP yield.

Stockholders' Equity

At December 31, 2007, our GAAP book value per share was $0.42,
compared to $14.36 at December 31, 2006. The decline is primarily due
to changes in the estimated fair value of our CMBS investments
resulting from widening of spreads, offset, in part, by lower
applicable interest rates, including United States Treasury rates and
swap rates, as well as decreases in the value of interest rate swaps
due to decreases in swap rates and dividends declared in excess of
GAAP net income.

Based on GAAP requirements currently applicable to us, we
currently carry our CMBS investments and interest rate swaps at fair
value in our GAAP financial statements. However, we are currently
precluded from carrying our other financial assets or liabilities at
fair value in our GAAP financial statements. We will adopt SFAS No.
159 on January 1, 2008 for all financial assets and liabilities
related to our CDOs. The impact of adopting SFAS No. 159 is expected
to increase stockholders' equity by approximately $246 million to
approximately $257 million or $9.92 per share as of January 1, 2008
primarily as a result of marking our CDO liabilities to fair value. At
the end of this earnings release is a proforma calculation of the
December 31, 2007 Balance Sheet and Stockholders' Equity based upon
our adoption of SFAS No. 159 effective January 1, 2008.

If we were to mark all of our assets and liabilities to market as
of December 31, 2007, we estimate that our stockholders' equity would
approximate $287 million or $11.09 per share. At the end of this
earnings release is a proforma calculation of the December 31, 2007
fair value Balance and Stockholders' Equity.

Credit Quality and Continued Focus on Commercial Real Estate

We continue to focus our business activities on debt securities
and loans collateralized by commercial real estate assets. We have no
investments in single family residential loans or residential mortgage
backed securities, including no investments in "sub prime" residential
loans or "sub prime" residential mortgage backed securities. However,
at December 31, 2007, we continued to have one $7.2 million mezzanine
real estate loan collateralized by garden-style apartments located in
Florida that have been converted to for-sale condominiums. As of March
28, 2008, the balance of this loan has been paid down to approximately
$3.2 million.

For our 26 CMBS investments as of December 31, 2007, the
performance of the underlying collateral in aggregate has generally
remained consistent with our original underwriting. In addition, there
are no existing delinquencies or monetary defaults on any of our 16
real estate loans and our 50% ownership interest in the joint venture
that owns 12 real estate assets. An impairment charge of $3.6 million
was taken during the three months ended December 31, 2007 related to
four CMBS investments with an amortized cost basis of $11.7 million
where the net present value of projected future cash flows on a
combined basis decreased by approximately $1.8 million.

During the three months ended December 31, 2007, we received
repayments on real estate loans totaling $14.8 million. Subsequent to
December 31, 2007 and through March 28, 2008, we received additional
repayments on real estate loans totaling $4.1 million.

For our 26 CMBS investments, 21 are investments in conduit
issuances between 2004 and 2007 in which we own the first-loss
position. For the 21 first-loss CMBS positions which are
collateralized by approximately 3,500 loans with an aggregate
outstanding balance of approximately $48 billion, the 60 day
delinquency rate based on the most recent remittance reports as of
December 31, 2007 was 27 basis points. Including transfers in and
loans returned to the master servicer subsequent to December 31, 2007,
there are currently 21 loans totaling approximately $226 million that
are being managed by the Special Servicer, which is an affiliate of
the J.E Robert Company. Of the $226 million of loan balances in
special servicing, four loans totaling $51 million are current, one
loan totaling $5 million has been foreclosed upon and 16 loans
totaling $169 million are delinquent and are in monetary default. The
$174 million balance of the 17 loans that are either delinquent or
have been foreclosed upon represent approximately 36 basis points of
the total loan balance collateralizing the 21 first-loss CMBS
investments.

Based on the evaluation of the collateral properties underlying
the CMBS investments and giving consideration to the workout status of
the respective loans, we have incorporated estimates of future loan
loss assumptions from the underlying collateral into the cash flow
projections for such CMBS investments.

Borrowings / Liquidity

At December 31, 2007, we had $87.6 million in unrestricted cash
plus an additional $6.7 million of restricted cash. As of March 28,
2008, unrestricted cash decreased $73.9 million to $13.7 million
primarily as a result of payment of the fourth quarter 2007 dividends
totaling $28.4 million and margin calls of $65.8 related to our
repurchase agreements offset, in part, by decreases in restricted cash
balances, real estate loan repayments, and operating cash flow
aggregating $20.3 million. Including the impact of the pending sale of
our remaining interest in the Joint Venture and the additional pay
downs on our repurchase agreements, our proforma cash balance will be
approximately $42 million.

With respect to liabilities, at December 31, 2007, total
liabilities were $1.4 billion. The individual components of our
liabilities are described as follows:

-- $974.6 million (or 71.4% of total liabilities) represents
borrowings in the form of long term, "match-funded" debt
relating to our two collateralized debt obligation offerings,
CDO I and CDO II. CDO I and CDO II are not subject to "margin
calls" based on mark-to-market fair value determinations of
the underlying collateral, have maturities tied specifically
to actual repayments of underlying collateral and are
generally non-recourse to the Company.

-- $261.9 million (or 19.2% of total liabilities) represents
borrowings under short-term repurchase facilities with three
separate lenders. These facilities are generally subject to
"margin calls" based on mark-to-market fair value
determinations of the underlying collateral, and contain
certain recourse provisions to us. As of March 28, 2008 and
December 31, 2007, repurchase agreement borrowings consisted
of the following:

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Amount
--------------------------------
March 28, 2008 December 31, 2007
-------------- -----------------
Secured by CMBS
Bear Stearns/ Liquid Funding $ 18.0 $ 77.4
JPMorgan 35.3 18.7
Secured by real estate loans
Goldman Sachs 142.8 165.8
-------------- -----------------
$ 196.1 $ 261.9
============== =================
*T

-- $61.9 million (or 4.5% of total liabilities) represents
borrowings in the form of unsecured junior subordinated
debentures. These debentures are not subject to "margin calls"
based on mark-to-market fair value determinations of
underlying collateral but are fully recourse to us. These
debentures have a maturity date of April 2037 and are
outstanding in connection with our issuance of $60 million
trust preferred securities.

-- $34.2 million (or 2.5% of total liabilities) was in the form
of dividends declared but not paid to common shareholders,
trade payables, amounts due to affiliates and other
liabilities.

-- $32.9 million (or 2.4%) represents the fair value of our
pay-fixed interest rate swaps related to our CDO's ($21.8
million) and our existing and future anticipated floating rate
indebtedness ($11.1 million).

At December 31, 2007, the ratio of total liabilities to
stockholders equity was 126.4x compared to 2.7x as of December 31,
2006. Excluding the impact of the accumulated other comprehensive
income (loss) component of stockholders' equity, or Adjusted
Stockholders' Equity (a non-GAAP measure), the ratio of total
liabilities to Adjusted Stockholders' Equity was 4.2x and 2.7x at
December 31, 2007 and 2006, respectively. We believe Adjusted
Stockholders' Equity is a meaningful measure as certain of the
financial covenants within our repurchase agreements use Adjusted
Stockholders' Equity as a measure of our leverage. In addition, based
on our adoption of SFAS No. 159 effective January 1, 2008, our
pro-forma December 31, 2007 ratio of total liabilities to stockholders
equity was 4.3x. At the end of this earnings release is a
reconciliation of stockholders' equity determined in accordance with
GAAP to Adjusted Stockholders' Equity, a proforma calculation of the
December 31, 2007 Balance Sheet and Stockholders' Equity based upon
our intended adoption of SFAS No. 159 effective January 1, 2008 as
well as the December 31, 2007 fair value Balance Sheet and
Stockholders' Equity.

Dividends

The Board of Directors approved a regular cash dividend of $0.45
per common share and a special cash dividend of $0.65 per common share
for the three months ended December 31, 2007. The dividends were paid
on January 30, 2008 to common stockholders of record on December 28,
2007.

2008 Outlook

In 2008, we will continue to focus our efforts on maintaining
liquidity, monitoring and managing credit risk, and if excess
liquidity is available, targeting investments that will generate the
highest risk adjusted returns. Maintaining liquidity may require us to
sell assets which could result in lower future revenues or result in
realized losses. In addition, we expect that our GAAP earnings will be
increasingly volatile primarily as a result of our adoption of SFAS
159 for which we will begin to reflect changes in the market values of
our financial assets and liabilities related to our CDO's through the
income statement, potential additional hedge ineffectiveness driven by
continued disruptions in the debt capital markets, and the potential
for CMBS impairment charges under EITF 99-20 resulting from reductions
in the projected cash flows related to individual CMBS investments,
and other than temporary impairment charges on our CMBS driven by the
duration and severity of our unrealized losses, among other factors.
As a result, going forward, we will report AFFO as a measure of our
operating performance as we believe it is a meaningful measure of our
operating results and cash flows.

About JER Investors Trust Inc.

JER Investors Trust Inc. is a New York Stock Exchange listed
specialty finance company that originates and acquires commercial real
estate structured finance products. The Company's target investments
include commercial mortgage backed securities, mezzanine loans and
B-Note participations in mortgage loans, commercial mortgage loans and
net leased real estate investments. JER Investors Trust Inc. is
organized and conducts its operations so as to qualify as a real
estate investment trust ("REIT") for federal income tax purposes. For
more information regarding JER Investors Trust Inc. and to be added to
our e-mail distribution list, please visit www.jer.com.

Conference Call

Management will host an earnings conference call on Monday, March
31, 2008 at 11 A.M. eastern daylight time. A copy of the earnings
release will be posted to the Investor Resources section of the JER
Investors Trust Inc. website provided below. All interested parties
are welcome to participate on the live call. You can access the
conference call by dialing (800) 591-6923 (from within the U.S.) or
(617) 614-4907 (from outside of the U.S.) ten minutes prior to the
scheduled start of the call; please reference passcode "44861852."

A webcast of the conference call will be available to the public
on a listen-only basis at www.jer.com. A replay of the earnings call
will be available until April 21, 2008 by dialing (888) 286-8010 (from
within the U.S.) or (617) 801-6888 (from outside of the U.S.); please
reference passcode "60302794."

Non-GAAP Financial Measures

During the quarterly conference call, we may discuss non-GAAP
financial measures as defined by SEC Regulation G. In addition, we
have used non-GAAP financial measures, in particular Adjusted Funds
from Operations, or AFFO, Adjusted Stockholders' Equity as well as
pro-forma stockholders' equity reflecting the adoption of SFAS No. 159
and a fair value balance sheet in this press release. Reconciliations
of AFFO, Adjusted Stockholders' Equity, the SFAS No. 159 pro-forma
balance sheet and the fair value balance sheet and the comparable GAAP
financial measure (net income, assets and liabilities and
stockholders' equity, as applicable) can be found at the end of this
earnings release.

Forward-Looking Statements

Certain items in this press release may constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on management's current
expectations and beliefs and are subject to a number of trends and
uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. JER Investors
Trust can give no assurance that its expectations will be attained.
Factors that could cause actual results to differ materially from JER
Investors Trust's expectations include, but are not limited to,
changes in the real estate and bond markets, our continued ability to
source and fund new investments, and other risks detailed from time to
time in JER Investors Trust's SEC reports. Such forward-looking
statements speak only as of the date of this press release. JER
Investors Trust expressly disclaims any obligation to release publicly
any updates or revisions to any forward-looking statements contained
herein to reflect any change in JER Investors Trust's expectations
with regard thereto or change in events, conditions or circumstances
on which any statement is based.

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JER INVESTORS TRUST INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

December 31, December 31,
2007 2006
------------ ------------

ASSETS
Cash and cash equivalents $ 87,556 $ 143,443
Restricted cash 6,687 83,085
CMBS, at fair value 717,440 790,203
Real estate loans, held for long-term
investment 274,734 287,845
Real estate loans, held for sale, at fair
value 221,599 -
Real estate assets, net - 38,740
Investments in unconsolidated joint
ventures 40,764 -
Accrued interest receivable 10,415 8,241
Due from affiliate 199 146
Interest rate swap agreements, at fair
value - 1,136
Deferred financing fees, net 14,454 14,684
Other assets 2,333 438

------------ ------------
Total Assets $ 1,376,181 $ 1,367,961
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Notes payable $ 974,578 $ 974,578
Repurchase agreements 261,864 -
Junior subordinated debentures 61,860 -
Interest rate swap agreements, at fair
value 32,881 -
Accounts payable and accrued expenses 921 939
Dividends payable 28,391 18,523
Due to affiliate 1,195 2,110
Other liabilities 3,693 1,830

------------ ------------
Total Liabilities 1,365,383 997,980

Stockholders' Equity:
Common stock, $0.01 par value, 100,000,000
shares authorized, 25,901,035 and
25,757,035 shares issued and outstanding,
respectively 259 258
Additional paid-in capital 392,270 391,872
Cumulative dividends paid/declared (132,186) (69,250)
Cumulative earnings 68,437 45,374
Accumulated other comprehensive income
(loss) (317,982) 1,727

------------ ------------
Total Stockholders' Equity 10,798 369,981
------------ ------------
Total Liabilities and Stockholders'
Equity $ 1,376,181 $ 1,367,961
============ ============
*T

-0-
*T
JER INVESTORS TRUST INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)

For the Year Ended December 31,
--------------------------------------
2007 2006 2005
------------ ------------ ------------
REVENUES
Interest income from CMBS $ 80,884 $ 50,771 $ 23,979
Interest income from real
estate loans 41,008 16,827 11,286
Interest income from cash and
cash equivalents 5,569 6,259 1,056
Lease income from real estate
assets 6,408 153 -
Equity in earnings of
unconsolidated joint ventures 753 - -
Other income 19 - 97
------------ ------------ ------------
Total Revenues 134,641 74,010 36,418

EXPENSES
Interest expense 75,984 26,662 5,926
Management fees, affiliate 7,331 7,631 5,604
Incentive fees, affiliate 826 - -
Depreciation and amortization
of real estate assets 1,128 23 -
General and administrative 7,648 7,262 4,512
------------ ------------ ------------
Total Expenses 92,917 41,578 16,042

INCOME BEFORE OTHER GAINS
(LOSSES) 41,724 32,432 20,376

OTHER GAINS (LOSSES)
Loss on sales of assets, net - - (821)
Unrealized loss on real estate
loans held for sale (13,866) - -
Unrealized loss on impairment
of CMBS (4,434) (719) -
Unrealized gain (loss) due to
hedge ineffectiveness, net (361) - 5

------------ ------------ ------------
NET INCOME $ 23,063 $ 31,713 $ 19,560
============ ============ ============

Net earnings per share:
Basic $ 0.90 $ 1.23 $ 1.08
============ ============ ============

Diluted $ 0.90 $ 1.23 $ 1.08
============ ============ ============

Weighted average shares of
common stock outstanding:
Basic 25,700,884 25,686,377 18,123,087
============ ============ ============

Diluted 25,722,811 25,699,484 18,124,365
============ ============ ============

Dividends declared per common
share $ 2.44 $ 1.81 $ 1.18
============ ============ ============
*T

-0-
*T
JER INVESTORS TRUST INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(unaudited)

For the Three Months Ended December 31,
---------------------------------------
2007 2006 2005
------------- ------------ ------------
REVENUES
Interest income from CMBS $ 21,568 $ 16,840 $ 8,315
Interest income from real
estate loans 10,327 6,658 3,460
Interest income from cash and
cash equivalents 873 3,164 980
Lease income from real estate
assets 886 153 -
Equity in earnings of
unconsolidated joint
ventures 753 - -
Other income 19 - -
------------- ------------ ------------
Total Revenues 34,426 26,815 12,755

EXPENSES
Interest expense $ 19,926 13,301 2,619
Management fees, affiliate 1,780 1,889 1,922
Incentive fees, affiliate - - -
Depreciation of real estate
assets 304 23 -
General and administrative 1,936 1,997 1,187
------------- ------------ ------------
Total Expenses 23,946 17,210 5,728

INCOME BEFORE OTHER GAINS
(LOSSES) 10,480 9,605 7,027

OTHER GAINS (LOSSES)
Unrealized loss on real
estate loans held for sale (13,866) - -
Unrealized loss on impairment
of CMBS (3,622) (374) -
Unrealized gain (loss) due to
hedge ineffectiveness, net (361) - (3)

------------- ------------ ------------
NET INCOME (LOSS) $ (7,369) $ 9,231 $ 7,024
============= ============ ============

Net earnings (loss) per share:
Basic $ (0.28) $ 0.36 $ 0.28
============= ============ ============

Diluted $ (0.28) $ 0.36 $ 0.28
============= ============ ============

Weighted average shares of
common stock outstanding:
Basic 25,708,035 25,686,377 18,123,087
============= ============ ============

Diluted 25,718,374 25,699,484 18,124,365
============= ============ ============

Dividends declared per common
share $ 1.10 $ 0.72 $ 0.33
============= ============ ============
*T

-0-
*T
JER INVESTORS TRUST INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands)

Common Stock Additional Cumulative Cumulative
------------- Paid-in Dividends Earnings
Shares Amount Capital Paid/Declared (Losses)
------ ------ ---------- -------------- ----------
Balance at December
31, 2004 11,845 $ 118 $ 165,147 $ - $ (5,899)

Comprehensive
income:
Net income 19,560
Fair value
adjustment for
effective cash
flow hedges
Amortization of
swap termination
costs
Unrealized (losses)
on securities
available-for-sale
Total comprehensive
income (loss)

Dividends declared (22,698)
Shares issued, net
of offering costs 13,832 139 226,249
Stock based
compensation-
restricted share
awards 10 - 157
Stock based
compensation-
stock options
------ ------ ---------- -------------- ----------
Balance at December
31, 2005 25,687 $ 257 $ 391,553 $ (22,698) $ 13,661
------ ------ ---------- -------------- ----------

Comprehensive
income:
Net income 31,713
Fair value
adjustment for
effective cash
flow hedges
Realized loss on
swap terminations,
net of
amortization
Unrealized (losses)
on securities
available-for-sale
Total comprehensive
income (loss)

Dividends declared (46,552)
Stock based
compensation-
restricted share
awards 70 1 296
Stock based
compensation-
stock options 23
------ ------ ---------- -------------- ----------
Balance at December
31, 2006 25,757 $ 258 $ 391,872 $ (69,250) $ 45,374
------ ------ ---------- -------------- ----------

Comprehensive
income:
Net income 23,063
Fair value
adjustment for
effective cash
flow hedges
Amortization of
swap termination
costs
Unrealized (losses)
on securities
available-for-sale
Total comprehensive
income (loss)

Dividends declared (62,936)
Stock based
compensation-
restricted share
awards 144 1 404
Stock based
compensation-
stock options (6)
------ ------ ---------- -------------- ----------

Balance at December
31, 2007 25,901 $ 259 $ 392,270 $ (132,186) $ 68,437
====== ====== ========== ============== ==========

Accumulated
Other
Comprehensive
Income (Loss) Total
-------------- ----------
Balance at December
31, 2004 $ (577) $ 158,789

Comprehensive
income:
Net income 19,560
Fair value
adjustment for
effective cash
flow hedges 160 160
Amortization of
swap termination
costs (10) (10)
Unrealized (losses)
on securities
available-for-sale (1,776) (1,776)
----------
Total comprehensive
income (loss) $ 17,934

Dividends declared (22,698)
Shares issued, net
of offering costs 226,388
Stock based
compensation-
restricted share
awards 157
Stock based
compensation-
stock options -
-------------- ----------
Balance at December
31, 2005 $ (2,203) $ 380,570
-------------- ----------

Comprehensive
income:
Net income 31,713
Fair value
adjustment for
effective cash
flow hedges 1,783 1,783
Realized loss on
swap terminations,
net of
amortization (6,034) (6,034)
Unrealized (losses)
on securities
available-for-sale 8,181 8,181
----------
Total comprehensive
income (loss) $ 35,643

Dividends declared (46,552)
Stock based
compensation-
restricted share
awards 297
Stock based
compensation-
stock options 23
-------------- ----------
Balance at December
31, 2006 $ 1,727 $ 369,981
-------------- ----------

Comprehensive
income:
Net income 23,063
Fair value
adjustment for
effective cash
flow hedges (33,656) (33,656)
Amortization of
swap termination
costs 456 456
Unrealized (losses)
on securities
available-for-sale (286,509) (286,509)
----------
Total comprehensive
income (loss) $(296,646)

Dividends declared (62,936)
Stock based
compensation-
restricted share
awards 405
Stock based
compensation-
stock options (6)
-------------- ----------

Balance at December
31, 2007 $ (317,982) $ 10,798
============== ==========
*T

-0-
*T
JER INVESTORS TRUST INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

For the Year Ended December 31,
2007 2006 2005
---------- ---------- ----------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 23,063 $ 31,713 $ 19,560
Adjustments to reconcile net income
to net cash provided by operating
activities:
Amortization of original issue
discount 2,680 556 434
Amortization of debt issuance
costs 1,995 828 497
Amortization (accretion) of swap
termination (income) costs 456 80 (7)
Depreciation and amortization on
real estate assets 1,128 23 -
Losses on sales of investments - - 990
Unrealized loss on impairment of
CMBS 4,434 719 -
Unrealized loss on real estate
loans held for sale 13,866 - -
Equity in earnings from
unconsolidated joint ventures (753) - -
Distributions from unconsolidated
joint ventures 338 - -
Straight line rental income (1,918) (47) -
Capitalized interest on
originated mezzanine loans - (1,204) (3,592)
Compensation expense related to
stock awards 399 320 157
Unrealized (gains)losses on
interest rate derivatives due to
hedge ineffectiveness 361 - (5)
Changes in assets and
liabilities:
(Increase) decrease in other
assets 30 (36) (253)
Increase in accrued interest
receivable (2,174) (4,230) (2,742)
Increase (decrease) in due
to/from affiliates, net (968) 414 1,041
Increase in accounts payable
and accrued expenses and other
liabilities 1,844 993 731

---------- ---------- ----------
Net cash provided by
operating activities 44,781 30,129 16,811
---------- ---------- ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of CMBS (221,480) (366,461) (340,036)
Purchase/origination of real estate
loans (413,048) (266,436) (99,975)
Purchase of real estate assets (38,749) (38,763) -
Investment in unconsolidated joint
ventures (1,183) - -
(Increase) decrease in restricted
cash, net 76,398 (82,977) (108)
Proceeds from sale of CMBS - - 87,111
Proceeds from repayment/sale of
real estate loans 191,203 61,542 51,843
Proceeds from sale of interest in
real estate assets 39,160 - -
---------- ---------- ----------
Net cash used in investing
activities (367,699) (693,095) (301,165)
---------- ---------- ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common
stock, net of offering costs - - 226,388
Dividends paid (53,068) (36,506) (14,221)
Proceeds from issuance of junior
subordinated debentures 61,860 - -
Purchase of common equity in JERIT
TS Statutory Trust I (1,860) - -
Proceeds from repurchase agreements 544,016 344,667 458,388
Repayment of repurchase agreements (282,152) (344,667) (497,588)
Proceeds from collateralized debt
obligations - 708,323 266,255
Payment of financing costs (1,765) (11,001) (4,912)
(Payment) proceeds on termination
of interest rate swaps - (6,113) 573
---------- ---------- ----------
Net cash provided by
financing activities 267,031 654,703 434,883
---------- ---------- ----------

Net (decrease) increase in cash and
cash equivalents (55,887) (8,263) 150,529

Cash and cash equivalents at
beginning of period 143,443 151,706 1,177

---------- ---------- ----------
Cash and cash equivalents at end of
period $ 87,556 $ 143,443 $ 151,706
========== ========== ==========

Supplemental Disclosures of Cash Flow
Information
Cash paid for interest $ 73,168 $ 25,873 $ 5,472
========== ========== ==========
Dividends declared but not paid $ 28,391 $ 18,523 $ 8,477
========== ========== ==========
*T

-0-
*T

1. Adjusted Funds from Operations
----------------------------------------------------------------------

JER INVESTORS TRUST INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
(in thousands, except share and per share data)

For the Year Ended
December 31,
-------------------------
2007 2006 2005
-------- ------- --------

Net income available to common stockholders $23,063 $31,713 $19,560
Add:
Depreciation on real estate assets 1,128 23 -
Depreciation from unconsolidated joint
ventures 163 - -
Unrealized losses on impairment of CMBS 4,434 719 -
Unrealized gain (loss) due to hedge
ineffectiveness, net 361 - (5)
Unrealized loss on real estate loans held
for sale 13,866 - -
-------- ------- --------
Adjusted Funds from Operations (AFFO) $43,015 $32,455 $19,555
======== ======= ========

AFFO per share:
Basic $ 1.67 $ 1.26 $ 1.08
======== ======= ========

Diluted $ 1.67 $ 1.26 $ 1.08
======== ======= ========

For the Three Months
Ended December 31,
-------------------------
2007 2006 2005
-------- ------- --------

Net income (loss) available to common
stockholders $(7,369) $ 9,231 $ 7,024
Add:
Depreciation on real estate assets 304 23 -
Depreciation from unconsolidated joint
ventures 163 - -
Unrealized losses on impairment of CMBS 3,622 374 -
Unrealized gain (loss) due to hedge
ineffectiveness 361 - 3
Unrealized loss on real estate loans held
for sale 13,866 - -
-------- ------- --------
Adjusted Funds from Operations (AFFO) $10,947 $ 9,628 $ 7,027
======== ======= ========

AFFO per share:
Basic $ 0.43 $ 0.37 $ 0.39
======== ======= ========

Diluted $ 0.43 $ 0.37 $ 0.39
======== ======= ========
*T

-0-
*T

2. Adjusted Stockholders' Equity
----------------------------------------------------------------------

JER INVESTORS TRUST INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
(in thousands, except ratios)

As of
-----------------------------------
December 31, 2007 December 31, 2006
----------------- -----------------
Stockholders' equity $ 10,798 $ 369,981

Less:
Accumulated other comprehensive
income (loss) 317,982 (1,727)
----------------- -----------------
Adjusted Stockholders' Equity $ 328,780 $ 368,254
================= =================

Total liabilities $ 1,365,383 $ 997,980
----------------- -----------------

Ratio of total liabilities to
Adjusted Stockholders' Equity 4.2x 2.7x
================= =================
*T

-0-
*T

3. Proforma Balance Sheet and Stockholders Equity Based Upon Adoption
of SFAS No. 159 Applied to All Financial Assets and Liabilities
Related to our Collateralized Debt Obligations
----------------------------------------------------------------------

JER INVESTORS TRUST INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
(In thousands, except share and per share data)

Proforma
December 31, Proforma December 31,
2007 Adjustments 2007
------------ ----------- ------------

ASSETS
Cash and cash equivalents $ 87,556 $ - $ 87,556
Restricted cash 6,687 - 6,687
CMBS, at fair value 717,440 - 717,440
Real estate loans, held for
long-term investment 274,734 (9,311) 265,423
Real estate loans, held for
sale 221,599 - 221,599
Investments in unconsolidated
joint ventures 40,764 - 40,764
Accrued interest receivable 10,415 - 10,415
Due from affiliate 199 - 199
Deferred financing fees, net 14,454 (13,011) 1,443
Other assets 2,333 - 2,333
------------ ----------- ------------
Total Assets $ 1,376,181 $ (22,322) $ 1,353,859
============ =========== ============

LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Notes payable $ 974,578 $ (268,401) $ 706,177
Repurchase agreements 261,864 - 261,864
Junior subordinated
debentures 61,860 - 61,860
Interest rate swap
agreements, at fair value 32,881 - 32,881
Accounts payable and accrued
expenses 921 - 921
Dividends payable 28,391 - 28,391
Due to affiliate 1,195 - 1,195
Other liabilities 3,693 - 3,693
------------ ----------- ------------
Total Liabilities 1,365,383 (268,401) 1,096,982

Stockholders' Equity:
Common stock, $0.01 par
value, 100,000,000 shares
authorized, 25,901,035 and
25,757,035 shares issued and
outstanding, respectively 259 - 259
Additional paid-in capital 392,270 - 392,270
Cumulative dividends
paid/declared (132,186) - (132,186)
Cumulative earnings 68,437 20,088 88,525
Accumulated other
comprehensive income (loss) (317,982) 225,991 (91,991)
------------ ----------- ------------
Total Stockholders' Equity 10,798 246,079 256,877
------------ ----------- ------------
Total Liabilities and
Stockholders' Equity $ 1,376,181 $ (22,322) $ 1,353,859
============ =========== ============

Ratio of Total Liabilities to
Stockholders Equity 126.4x 4.3x
============ ============
*T

-0-
*T

4. Fair Value Balance Sheet and Stockholders Equity Based Upon Fair
Value of All Financial Assets and Liabilities
----------------------------------------------------------------------

JER INVESTORS TRUST INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)
(In thousands, except share and per share data)

Proforma
December 31, Proforma December 31,
2007 Adjustments 2007
------------ ----------- ------------

ASSETS
Cash and cash equivalents $ 87,556 $ - $ 87,556
Restricted cash 6,687 - 6,687
CMBS, at fair value 717,440 - 717,440
Real estate loans, held for
long-term investment 274,734 (9,311) 265,423
Real estate loans, held for
sale 221,599 193 221,792
Investments in unconsolidated
joint ventures 40,764 - 40,764
Accrued interest receivable 10,415 - 10,415
Due from affiliate 199 - 199
Deferred financing fees, net 14,454 (14,454) -
Other assets 2,333 - 2,333
------------ ----------- ------------
Total Assets $ 1,376,181 $ (23,572) $ 1,352,609
============ =========== ============

LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Notes payable $ 974,578 $ (268,401) $ 706,177
Repurchase agreements 261,864 - 261,864
Junior subordinated
debentures 61,860 (31,595) 30,265
Interest rate swap
agreements, at fair value 32,881 - 32,881
Accounts payable and accrued
expenses 921 - 921
Dividends payable 28,391 - 28,391
Due to affiliate 1,195 - 1,195
Other liabilities 3,693 - 3,693
------------ ----------- ------------
Total Liabilities 1,365,383 (299,996) 1,065,387

Stockholders' Equity:
Common stock, $0.01 par
value, 100,000,000 shares
authorized, 25,901,035 and
25,757,035 shares issued and
outstanding, respectively 259 - 259
Additional paid-in capital 392,270 - 392,270
Cumulative dividends
paid/declared (132,186) - (132,186)
Cumulative earnings 68,437 (4,023) 64,414
Accumulated other
comprehensive income (loss) (317,982) 280,447 (37,535)
------------ ----------- ------------
Total Stockholders' Equity 10,798 276,424 287,222
------------ ----------- ------------
Total Liabilities and
Stockholders' Equity $ 1,376,181 $ (23,572) $ 1,352,609
============ =========== ============

Ratio of Total Liabilities to
Stockholders Equity 126.4x 3.7x
============ ============
*T

JER Investors Trust Inc.
J. Michael McGillis, Chief Financial Officer
703-714-8182

Copyright Business Wire 2008