Simultaneously with the execution of the purchase agreement, a Company affiliate and a Garrison affiliate funded as co-lenders an approximately $39.0 million mezzanine loan to certain affiliates of KBS. The loan is secured by cash collateral of $6.0 million and pledges of borrowers’ equity interests in certain entities owning various real estate assets and is guaranteed by KBS. The proceeds of the loan were used by KBS to extinguish certain loans held by third party lenders that were secured by, among other things, pledges of the membership interests being acquired by the joint venture.The loan had a 1% origination fee, bears interest at 10% per annum and has a stated maturity of April 1, 2013. The loan is deemed matured upon the joint venture’s purchase of the portfolio, and any outstanding loan balance will be applied as a credit against the purchase price at closing. The Company has also agreed that, effective upon the joint venture’s acquisition of the portfolio, the base management fee paid by KBS to a Company affiliate to manage the former Gramercy Realty portfolio will be reduced from $12.0 million to $9.0 million per year.
Gramercy Capital Corp. Announces Formation Of Joint Venture With Garrison Investment Group To Purchase A Portfolio Of Office Buildings Primarily Leased To Bank Of America, N.A.
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