Gramercy Capital Corp. $3.3-billion acquisition November
Gramercy's president and CEO, Marc Holliday, said during Gramercy's Q1 2008 earnings' result conference call that "we are making these changes so that the leadership of Gramercy reflects the strategic focus of the company going forward and at a time when the loan division needs aggressive asset management and rigorous attention to credit quality." Holliday noted during the call, that in this challenging economic climate, it is difficult to be completely satisfied with earning's results; however he added that Gramercy has "done what it has set out to do."
[IMGCAP(2)]According to Gramercy, the acquisition transformed the firm into a $7.4 billion diversified enterprise with well-developed debt and equity investment platforms. The company's assets now include approximately 30.4 million sf with an aggregate value of approximately $3.5 billion, as well as $3.9 billion of debt investments and commercial real estate securities investments. Holliday added that the AFR transaction "was worth the effort as Gramercy has achieved its objective."
[IMGCAP(3)]Holiday adds that "these are tough times but we feel we are rising to the challenges that are being presented." In preparation for the combination of the two companies, Gramercy embarked on an intensive repositioning of the two entities, including the sale of 54 non-core assets, totaling $221.5 million prior to the merger closing on April 1, 2007. Post-closing, an additional 99 properties also deemed non-core for the new entity are actively being marketed for sale. According to Gramercy's conference call, in addition to a portfolio-wide restructuring and reorganization, Gramercy initiated operational shifts to optimize the transition of the newly configured company to continue to promote stable earnings growth and value creation for its shareholders.
Effective immediately, Hugh Hall has stepped down from his post as the firm's chief COO and from the board of directors to pursue other opportunities. Foley, who succeeds Hall, joined Gramercy as CFO when it was launched in 2004 after leaving his position as co-director of Goldman Sachs & Co.'s real estate mezzanine and high-yield lending programs. During Foley's tenure, Gramercy has evolved from a $187.5-million specialty finance company to a $7.4-billion company.
Roche succeeds Foley as CFO after serving Gramercy in an advisory role during the AFR acquisition process. With an impressive REIT and real estate background, according to Gramercy, Roche is suited to "guide the newly combined entity into its next phase of growth as an integrated commercial real estate finance and property investment company." Before joining Gramercy, from 2000 to 2007, Roche served as EVP & CFO at New Plan Excel Realty Trust. While at New Plan, Roche oversaw the issuance of $2 billion of debt and equity and facilitated acquisitions and dispositions of assets in excess of $5 billion and $700 million of redevelopment projects. Roche departed New Plan upon the closing of its sale to Australia's Centro Properties Group.
Other highlights from the call included Gramercy's funds from operations totaling $23.1 million or $0.66 per diluted share, for the quarter, which ended March 31, 2008. Gramercy generated total revenues of $86.1 million during the first quarter of 2008, an increase of $18 million, from $68.1 million during the same quarter of the prior year.
As far as investment activity goes, the firm originated three separate first mortgage investments during the first quarter with an aggregate unpaid principal balance of approximately $118.2 million, net, of unamortized fees and discounts. Gramercy's Real Estate Securities Group acquired a total of $43.4 million of AAA and AA rated fixed-rate commercial mortgage real estate securities during the quarter.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
