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Gramercy Capital Corp. Reports First Quarter 2012 Financial Results

The Company’s business is organized into two complementary business segments supported by a corporate balance sheet with a strong liquidity position and no recourse debt obligations.

The Company’s commercial real estate finance business, which operates under the name Gramercy Finance, focuses on the direct origination, acquisition and portfolio management of whole loans, bridge loans, subordinate interests in whole loans, mezzanine loans, preferred equity, CMBS and other real estate related securities.

The Company’s property management and investment business, which operates under the name Gramercy Realty, focuses on third party property management and, to a lesser extent, the ownership and management of commercial properties leased primarily to regulated financial institutions and affiliated users throughout the United States.

A summary of the Company’s GAAP financial position and operations by business segment and consolidated as of March 31, 2012 is as follows:

             
Corporate Finance Realty Intercompany

Eliminations

Consolidated
Real estate investments, net $ - $ 52,084 $ 33,293 $ - $ 85,377
Cash and cash equivalents 186,338 - - - 186,338
Loans and other lending investments and
commercial mortgage-backed securities - 1,925,916 - (30,502 ) 1,895,414
Repurchased collateralized debt obligation bonds 49,230 - - (49,230 ) -
Other assets   -     132,311     4,739     1,029     138,079  
Total assets $ 235,568   $ 2,110,311   $ 38,032   $ (78,703 ) $ 2,305,208  
 
Collateralized debt obligations $ - $ 2,451,814 $ 29,017 $ (78,247 ) $ 2,402,584
Derivative instruments - 176,665 - - 176,665
Dividends payable 25,066 - - - 25,066
Other liabilities   -     15,276     8,998     (456 )   23,818  
Total liabilities   25,066     2,643,755     38,015     (78,703 )   2,628,133  
Equity - preferred stock 85,235 - - - 85,235
Equity - common stock   125,267     (533,444 )   17     -     (408,160 )
Total equity   210,502     (533,444 )   17     -     (322,925 )
Total liabilities and equity $ 235,568   $ 2,110,311   $ 38,032   $ (78,703 ) $ 2,305,208  
 
Revenues:
Net interest income $ 3,436 $ 15,154 $ (379 ) $ - $ 18,211
Management fees - 3,355 8,313 (3,355 ) 8,313
Rental and reimbursement revenues - 764 927 - 1,691
Other revenue (1)   -     2,421     -     -     2,421  
Total revenues   3,436     21,694     8,861     (3,355 )   30,636  
Expenses:
Property operating expenses - 4,086 6,420 - 10,506
Impairment and loan losses - 23,613 - - 23,613
Management, general and administrative 6,701 3,355 - (3,355 ) 6,701
Depreciation and amortization   -     111     207     -     318  
Total expenses   6,701     31,165     6,627     (3,355 )   41,138  
Loss from continuing operations before
provision for taxes, gain on extinguishment
of debt, and discontinued operations $ (3,265 ) $ (9,471 ) $ 2,234   $ -   $ (10,502 )

 

(1)   Includes equity in net income from joint venture.

The Company’s GAAP book value per common share is negative $(7.99) per share, or $(408.2) million at March 31, 2012. Of the negative book value, approximately $(533.4) million or $(10.44) per common share is attributable to the Company’s commercial real estate finance business. While the assets and liabilities in the CDOs are consolidated on the Company’s books for GAAP purposes, the Company’s exposure to loss is limited to its investment in each CDO. The negative book value of the commercial real estate finance business is primarily attributable to impairments and mark-to-market adjustments made to the loan and CMBS investments financed in the CDOs in excess of the Company’s equity investment in each CDO. Due to the non-recourse nature of the CDOs, ultimately, any loss in excess of the CDO liabilities outstanding will not be realized by the Company.

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