Third Quarter Highlights: - Net loss attributable to Arbor Realty
Trust, Inc. of $44.1 million, or $1.74 per diluted common share -
FFO loss of $44.0 million, or $1.73 per diluted common share(1) -
Adjusted book value per share $13.21, GAAP book value per share
$8.70 (1) - Restructured $373.9 million of short-term debt -
Amended $18.7 million of trust preferred securities - Reduced
warehouse and term debt by $51.2 million - Recorded a $10.7 million
gain from exchange of remaining Prime interest - Generated gains on
early extinguishment of debt of $6.3 million - Recorded $53 million
of loan loss reserves and impairment on an equity investment -
Recorded a $5 million impairment from a real estate owned asset -
Amended management agreement with external manager UNIONDALE, N.Y.,
Nov. 6 /PRNewswire-FirstCall/ -- Arbor Realty Trust, Inc.
(NYSE:ABR), a real estate investment trust focused on the business
of investing in real estate related bridge and mezzanine loans,
preferred and direct equity investments, mortgage-related
securities and other real estate related assets, today announced
financial results for the third quarter ended September 30, 2009.
Arbor reported a net loss attributable to Arbor Realty Trust, Inc.
for the quarter of $44.1 million, or $1.74 per diluted common
share, compared to net income attributable to Arbor Realty Trust,
Inc. for the quarter ended September 30, 2008 of $2.6 million, or
$0.10 per diluted common share. Funds from operations ("FFO") for
the quarter was a loss of $44.0 million, or $1.73 per diluted
common share, compared to FFO income for the quarter ended
September 30, 2008 of $3.1 million, or $0.12 per diluted common
share.(1) Net loss attributable to Arbor Realty Trust, Inc. for the
nine months ended September 30, 2009 was $96.9 million, or $3.83
per diluted common share, compared to net income attributable to
Arbor Realty Trust, Inc. for the nine months ended September 30,
2008 of $27.0 million, or $1.27 per diluted common share. FFO for
the nine months ended September 30, 2009 was a loss of $95.8
million, or $3.79 per diluted common share, compared to FFO income
for the nine months ended September 30, 2008 of $32.9 million, or
$1.33 per diluted common share.(1) As previously disclosed, in
August 2009, the Company transferred its remaining 7.5% interest in
Prime Outlets, at a value of $8.5 million, in exchange for
preferred and common operating partnership units of Lightstone
Value Plus REIT L.P. The Company owned its 7.5% interest through a
50% non-controlling interest in an unconsolidated joint venture,
which had a 15% interest in Prime Outlets. In connection with this
transaction, through the unconsolidated joint venture, Arbor
borrowed $7.7 million from Lightstone Value Plus Real Estate
Investment Trust, Inc, which is secured by the preferred and common
operating partnership units and has an eight year term. After five
years, the preferred units may be redeemed by Lightstone Value Plus
REIT L.P. for cash and the loan would become due upon such
redemption. The preferred operating partnership units yield 4.63%
and the loan bears interest at a rate of 4%. The Company also
received a broker fee of $2.2 million related to this transaction.
The Company received $9.9 million in cash and recorded, in its
third quarter 2009 financial statements, a net investment of $0.9
million in this unconsolidated joint venture and income from equity
affiliates of $10.7 million related to this transaction. During the
third quarter of 2009, the Company purchased, at a discount,
approximately $7.9 million of investment grade rated bonds
originally issued by two of the Company's three CDO issuing
entities. The Company recorded a net gain on early extinguishment
of debt of $6.3 million related to these transactions. The
purchases were reflected on the Company's balance sheet as a
reduction of the corresponding outstanding debt totaling $7.9
million. The net balance in the loan and investment portfolio,
excluding loan loss reserves, was $2.2 billion at September 30,
2009, compared to $2.2 billion at June 30, 2009. The average
balance of the loan and investment portfolio, excluding loan loss
reserves, during the third quarter of 2009 was $2.2 billion and the
average yield on these assets for the quarter was 5.36%, compared
to $2.3 billion and 5.41% for the second quarter of 2009. At
September 30, 2009 and June 30, 2009, the balance of debt financing
on the loan and investment portfolio was $1.8 billion. The average
balance of debt financing on the loan and investment portfolio
during the third quarter of 2009 was $1.8 billion and the average
cost of these borrowings was 4.49%, compared to $1.9 billion and
4.45% for the second quarter of 2009. In addition, the third
quarter of 2009 included $1.7 million of interest expense for a
change in the market value of certain interest rate swaps in
accordance with GAAP, as compared to $2.6 million of interest
expense in the second quarter of 2009. Excluding the effect of
these swaps, the average cost of borrowings for the third quarter
of 2009 was 4.12%, as compared to 3.90% for the second quarter of
2009. As previously disclosed, on August 6, 2009, the Company
amended its management agreement with Arbor Commercial Mortgage,
LLC, the Company's external manager. The amendment was negotiated
by a special committee of the Company's Board of Directors,
consisting solely of independent directors, and was approved by all
of the independent directors. JMP Securities LLC served as
financial advisor to the special committee and Skadden, Arps,
Slate, Meagher & Flom LLP served as its special counsel. The
significant amendments were as follows: -- The previous base
management fee structure, which was calculated as a percentage of
the Company's equity, has been replaced with an arrangement whereby
the Company will reimburse the manager for its actual costs
incurred in managing the Company's business based on the parties'
agreement in advance on an annual budget with subsequent quarterly
true-ups to actual costs. This change was adopted retroactively to
January 1, 2009 and the Company estimates the 2009 base management
fee will be approximately $8 million. Concurrent with this change,
all future origination fees on investments will be retained by the
Company as opposed to the manager earning up to the first one
percent of all origination fees in the previous agreement. In
addition, the Company made a $3 million payment to the manager in
consideration of expenses incurred by the manager in 2008 in
managing the Company's business and certain other services. -- The
percentage hurdle for the incentive fee will be applied on a per
share basis to the greater of $10.00 and the average gross proceeds
per share, whereas the previous management agreement provided for
such percentage hurdle to be applied only to the average gross
proceeds per share. In addition, only 60% of any loan loss and
other reserve recoveries will be eligible to be included in the
incentive fee calculation, which will be spread over a three year
period, whereas the previous management agreement did not limit the
inclusion of such recoveries in the incentive fee calculation. --
The amended management agreement will allow the Company to
consider, from time to time, the payment of additional incentive
fees to the manager for accomplishing certain specified corporate
objectives. In the third quarter, the Company made a $4.1 million
payment to the manager in consideration of the successful
restructuring of approximately $373.9 million of financing with
Wachovia Bank, National Association ("Wachovia"), along with all of
its trust preferred securities. -- The amended management agreement
modifies and simplifies the provisions related to the termination
of the agreement and any related fees payable in such instances,
including for internalization, with a termination fee of $10
million, rather than a multiple of base and incentive fees as
previously existed. -- The amended management agreement will remain
in effect until December 31, 2010, and will be renewed
automatically for successive one-year terms thereafter. As a
result, for the third quarter 2009, the Company recorded management
fee expense of $6.1 million, as compared to $6.3 million for the
second quarter of 2009. Financing Activity As previously disclosed,
in July 2009, the Company announced the restructuring of its three
financing facilities with Wachovia totaling $373.9 million. The
amendments included a three year extension, the virtual elimination
of all margin call provisions relating to collateral value as long
as required term loan reductions are met, significantly reduced
covenants, quarter and semi-annual paydown requirements subject to
certain conditions and an overall average increase in interest rate
spread over LIBOR of approximately 180 basis points. In addition,
the Company's CEO and Chairman, Ivan Kaufman, is required to remain
an officer or director of the Company for the term of the
facilities. Annual dividends are limited to 100% of taxable income
to common shareholders and are required to be paid in the form of
the Company's stock to the maximum extent permissible (currently
90%) unless the term loan facility balance is reduced to $210
million, the working capital facility is reduced to $30 million and
the Company maintains $35 million of minimum liquidity. Lastly, the
Company agreed to pay a 1% commitment fee and issue 1.0 million
warrants at an average strike price of $4.00 which expire in July
2015. Subsequent to the closing of this restructuring, the Company
reduced the balance of these facilities by $38.3 million during the
third quarter. At September 30, 2009, these facilities had an
outstanding balance of $335.6 million. As previously disclosed, in
July 2009, the Company amended its remaining $18.7 million of trust
preferred securities that were not exchanged as part of the May
2009 trust preferred restructuring transaction. The Company amended
the $18.7 million of junior subordinated notes to $20.9 million of
unsecured junior subordinated notes, representing 112% of the
original face amount. The terms of this transaction were similar to
the May 2009 exchange. As of September 30, 2009, Arbor's financing
facilities for its loan and investment portfolio totaled
approximately $1.8 billion and borrowings outstanding under such
facilities were $1.8 billion. During the quarter, the Company
reduced its outstanding warehouse and term debt outstanding
balances by approximately $51.2 million through a combination of
loan payoffs, assets being moved into the Company's CDO vehicles,
and the monetization of certain investments. The Company is subject
to various financial covenants and restrictions by each of the
Company's CDO and credit facilities. Based on the unaudited
financial statements in this release, the Company believes that it
was in compliance with all credit facility financial covenants and
restrictions as of September 30, 2009. Portfolio Activity During
the quarter, Arbor originated one new mezzanine loan totaling $2
million. During the quarter, three loans paid off with an
outstanding balance of approximately $16 million, including a $0.3
million loss on the payoff of one loan and three loans had paydowns
and reductions totaling approximately $23 million, of which $15
million were charge-offs against loan loss reserves on the
restructuring of two loans. In addition, eight loans were either
refinanced or modified with Arbor totaling $215 million, of which
two loans totaling approximately $83 million were scheduled to
repay during the quarter. Additionally, 15 loans totaling
approximately $369 million were extended during the quarter in
accordance with the extension options of the corresponding loan
agreements. At September 30, 2009, the loan and investment
portfolio unpaid principal balance, excluding loan loss reserves,
was $2.2 billion, with a weighted average current interest pay rate
of 5.15%. At the same date, advances on financing facilities
pertaining to the loan and investment portfolio totaled
approximately $1.8 billion, with a weighted average interest rate
of 3.87% excluding financing costs, interest rate swap costs and
changes in the market value of certain interest rate swaps. As of
September 30, 2009, Arbor's loan portfolio consisted of 35%
fixed-rate and 65% variable rate loans. In August 2009, the Company
foreclosed on a property in which the Company has a $9.9 million
bridge loan for which a $4.3 million provision for loan loss was
established, of which $1.8 million was recorded in the third
quarter of 2009. As of September 30, 2009, the Company recorded
this investment on its balance sheet as real estate owned at fair
value, which included the $4.3 million provision, and recorded a
net loss from operations of less than $0.1 million for the quarter.
During the third quarter of 2009, the Company mutually agreed with
a first mortgage lender to appoint a receiver to operate one of the
Company's real estate owned investments. As a result, this
investment was reclassified from real estate owned, net to real
estate held-for-sale at a fair value of $41.4 million, resulting in
a $4.9 million impairment charge during the quarter. In addition,
property operating income and expenses for current and prior
periods, as well as the impairment charge, were reclassified to
discontinued operations. During the third quarter of 2009, the
Company recorded $51.0 million in loan loss reserves related to 22
loans with a carrying value of approximately $381.9 million, before
loan loss reserves. The loan loss reserves were the result of the
Company's regular quarterly risk rating review process, which is
based on several factors including current market conditions, real
estate values and the operating status of each property. At
September 30, 2009, the Company's total loan loss reserves were
$252.8 million relating to 28 loans with an aggregate carrying
value before reserves of approximately $563.9 million. In addition,
during the third quarter of 2009, the Company recorded a $1.9
million impairment, in accordance with GAAP, related to one of its
equity affiliates, which was reflected on the Company's statement
of operations as a loss from equity affiliates. GAAP accounting
standards require that these investments are evaluated periodically
to determine whether a decline in their value is
other-than-temporary. The Company had nine non-performing loans
with a carrying value of approximately $96.9 million, net of
related loan loss reserves of $101.0 million as of September 30,
2009, compared to nine non-performing loans with a carrying value
of approximately $188.4 million, net of related loan loss reserves
of $97.2 million as of June 30, 2009. Income recognition on these
loans has been suspended and will resume when the loans become
contractually current and performance has recommenced. Dividend
Under the terms of the Company's debt restructurings, annual
dividends are limited to 100% of taxable income to common
shareholders and are required to be paid in the form of the
Company's stock to the maximum extent permissible (currently 90%),
with the balance payable in cash. The Company will be permitted to
pay 100% of taxable income in cash if certain conditions are met,
as previously disclosed. Based on the continued difficult economic
environment, the Board of Directors and the Company have elected
not to pay a common stock dividend for the quarter ended September
30, 2009. Equity Participation Interests Attached as an exhibit to
this press release is a schedule of certain data pertaining to the
Company's investments with equity participation interests. There
were no new loans and investments originated during the quarter
with equity participation interests. Earnings Conference Call
Management will host a conference call today at 10:00 a.m. ET. A
live webcast of the conference call will be available online at
http://www.arborrealtytrust.com/. Web participants are encouraged
to go to Arbor's Web site at least 15 minutes prior to the start of
the call to register, download and install any necessary audio
software. Listening to the webcast requires speakers and
RealPlayer(TM) software, downloadable without charge at
http://www.real.com/. Those without Web access should access the
call telephonically at least ten minutes prior to the conference
call. The dial-in numbers are (866) 730-5766 for domestic callers
and (857) 350-1590 for international callers. The participant
passcode for both is 56153294. After the live webcast, the call
will remain available on Arbor's Web site,
http://www.arborrealtytrust.com/ through December 6, 2009. In
addition, a telephonic replay of the call will be available until
November 13, 2009. The replay dial-in number is (888) 286-8010 for
domestic callers and (617) 801-6888 for international callers.
Please use passcode: 66450203. About Arbor Realty Trust, Inc. Arbor
Realty Trust, Inc. is a real estate investment trust, which invests
in a diversified portfolio of multi-family and commercial real
estate related bridge and mezzanine loans, preferred equity
investments, mortgage related securities and other real estate
related assets. Arbor commenced operations in July 2003 and
conducts substantially all of its operations through its operating
partnership, Arbor Realty Limited Partnership and its subsidiaries.
Arbor is externally managed and advised by Arbor Commercial
Mortgage, LLC, a national commercial real estate finance company
operating through 11 offices in the US that specializes in debt and
equity financing for multi-family and commercial real estate. Safe
Harbor Statement Certain items in this press release may constitute
forward-looking statements within the meaning of the "safe harbor"
provisions 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. Arbor can give no
assurance that its expectations will be attained. Factors that
could cause actual results to differ materially from Arbor's
expectations include, but are not limited to, continued ability to
source new investments, changes in interest rates and/or credit
spreads, changes in the real estate markets, and other risks
detailed in Arbor's Annual Report on Form 10-K for the year ended
December 31, 2008 and its other reports filed with the SEC. Such
forward-looking statements speak only as of the date of this press
release. Arbor expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in Arbor's
expectations with regard thereto or change in events, conditions,
or circumstances on which any such statement is based. Non-GAAP
Financial Measures During the quarterly earnings conference call,
the Company may discuss non-GAAP financial measures as defined by
SEC Regulation G. In addition, the Company has used non-GAAP
financial measures in this press release. A supplemental schedule
of each non-GAAP financial measure and the comparable GAAP
financial measure can be found at the end of this release. (1) See
attached supplemental schedule of non-GAAP financial measures.
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) Quarter Ended Nine Months Ended September
30, September 30, ------------- ------------- 2009 2008 2009 2008
---- ---- ---- ---- Revenue: Interest income $30,416,621
$51,423,427 $92,604,628 $158,708,921 Property operating income
385,112 - 576,324 - Other income 1,857 17,208 800,517 66,530 -----
------ ------- ------ Total revenue 30,803,590 51,440,635
93,981,469 158,775,451 ---------- ---------- ---------- -----------
Expenses: Interest expense 20,797,420 28,198,310 61,039,357
87,359,731 Employee compensation and benefits 2,136,499 1,906,843
8,038,394 6,570,188 Selling and administrative 4,092,293 2,581,132
8,856,214 6,741,446 Property operating expenses 608,450 - 933,773 -
Depreciation and amortization 26,037 - 26,037 -
Other-than-temporary impairment 29,395 12,747,306 411,525
12,747,306 Provision for loan losses 51,000,000 3,000,000
141,500,000 8,000,000 Loss on restructured loans 300,000 -
33,127,749 - Management fee - related party 6,136,170 (1,217,148)
13,136,170 3,516,124 --------- ---------- ---------- ---------
Total expenses 85,126,264 47,216,443 267,069,219 124,934,795
---------- ---------- ----------- ----------- (Loss) income from
continuing operations before gain on exchange of profits interest,
gain on extinguishment of debt, loss on termination of swaps and
income (loss) from equity affiliates (54,322,674) 4,224,192
(173,087,750) 33,840,656 Gain on exchange of profits interest - -
55,988,411 - Gain on extinguishment of debt 6,348,128 - 54,080,118
- Loss on termination of swaps - - (8,729,408) - Income (loss) from
equity affiliates 8,856,060 (1,606,505) (1,300,958) (2,168,505)
--------- ---------- ---------- ---------- Net (loss) income from
continuing operations (39,118,486) 2,617,687 (73,049,587)
31,672,151 ----------- --------- ----------- ---------- Loss on
impairment of real estate held-for-sale (4,898,295) - (4,898,295) -
Loss on operations of real estate held-for-sale (59,487) (219,634)
(377,042) (390,547) ------- -------- -------- -------- Loss from
discontinued operations (4,957,782) (219,634) (5,275,337) (390,547)
---------- -------- ---------- -------- Net (loss) income
(44,076,268) 2,398,053 (78,324,924) 31,281,604 Net income (loss)
attributable to noncontrolling interest 58,694 (177,833) 18,620,771
4,272,921 ------ -------- ---------- --------- Net (loss) income
attributable to Arbor Realty Trust, Inc. $(44,134,962) $2,575,886
$(96,945,695) $27,008,683 ============ ========== ============
=========== Basic (loss) earnings per common share: Net (loss)
income from continuing operations, net of noncontrolling interest
$(1.54) $0.11 $(3.62) $1.31 Loss from discontinued operations
(0.20) (0.01) (0.21) (0.02) ----- ----- ----- ----- Net (loss)
income attributable to Arbor Realty Trust, Inc. $(1.74) $0.10
$(3.83) $1.29 ====== ===== ====== ===== Diluted (loss) earnings per
common share: Net (loss) income from continuing operations, net of
noncontrolling interest $(1.54) $0.11 $(3.62) $1.29 Loss from
discontinued operations (0.20) (0.01) (0.21) (0.02) ----- -----
----- ----- Net (loss) income attributable to Arbor Realty Trust,
Inc. $(1.74) $0.10 $(3.83) $1.27 ====== ===== ====== =====
Dividends declared per common share $- $0.62 $- $1.86 == ===== ==
===== Weighted average number of shares of common stock
outstanding: Basic 25,387,410 24,990,710 25,288,692 22,166,518
========== ========== ========== ========== Diluted 25,387,410
24,990,710 25,288,692 24,706,174 ========== ========== ==========
========== ARBOR REALTY TRUST, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS September 30, December 31, 2009 2008 ---- ----
(Unaudited) (Audited) Assets: Cash and cash equivalents $27,264,044
$832,041 Restricted cash 39,705,681 93,219,133 Loans and
investments, net 1,847,707,068 2,181,683,619 Available-for-sale
securities, at fair value 117,579 529,104 Securities
held-to-maturity, net 68,547,038 58,244,348 Investment in equity
affiliates 64,766,344 29,310,953 Real estate owned, net 8,411,013
46,478,994 Real estate held-for-sale, net 41,440,000 - Due from
related party - 2,933,344 Prepaid management fee - related party
26,340,397 26,340,397 Other assets 67,584,433 139,664,556
---------- ----------- Total assets $2,191,883,597 $2,579,236,489
============== ============== Liabilities and Equity: Repurchase
agreements $3,308,333 $60,727,789 Collateralized debt obligations
1,102,576,530 1,152,289,000 Junior subordinated notes to subsidiary
trust issuing preferred securities 259,328,815 276,055,000 Notes
payable 392,078,566 518,435,437 Notes payable-related party -
4,200,000 Mortgage note payable - held-for-sale 41,440,000
41,440,000 Due to related party 863,927 993,192 Due to borrowers
4,971,483 32,330,603 Deferred revenue 77,123,133 77,123,133 Other
liabilities 87,245,401 134,647,667 ---------- ----------- Total
liabilities 1,968,936,188 2,298,241,821 ------------- -------------
Commitments and contingencies - - Equity: Arbor Realty Trust, Inc.
stockholders' equity: Preferred stock, $0.01 par value: 100,000,000
shares authorized; no shares issued or outstanding - - Common
stock, $0.01 par value: 500,000,000 shares authorized; 25,666,810
shares issued, 25,387,410 shares outstanding at September 30, 2009
and 25,421,810 shares issued, 25,142,410 shares outstanding at
December 31, 2008 256,668 254,218 Additional paid-in capital
450,376,782 447,321,186 Treasury stock, at cost - 279,400 shares
(7,023,361) (7,023,361) Accumulated deficit (159,892,614)
(62,939,722) Accumulated other comprehensive loss (62,768,226)
(96,606,672) ----------- ----------- Total Arbor Realty Trust, Inc.
Stockholders' equity 220,949,249 281,005,649 -----------
----------- Noncontrolling interest in consolidated entity
1,998,160 (10,981) --------- ------- Total equity 222,947,409
280,994,668 ----------- ----------- Total liabilities and equity
$2,191,883,597 $2,579,236,489 ============== ============== ARBOR
REALTY TRUST, INC. AND SUBSIDIARIES SUPPLEMENTAL SCHEDULE OF
NON-GAAP FINANCIAL MEASURES - Continued (Unaudited) September 30,
2009 ------------------ GAAP Arbor Realty Trust, Inc. Stockholders'
Equity $220,949,249 Add: 450 West 33rd Street transaction -
deferred revenue 77,123,133 Unrealized loss on derivative
instruments 56,459,914 Subtract: 450 West 33rd Street transaction -
prepaid management fee (19,047,949) ----------- Adjusted Arbor
Realty Trust, Inc. Stockholders' Equity $335,484,347 ============
Adjusted book value per share $13.21 ====== GAAP book value per
share $8.70 ===== Common shares outstanding 25,387,410 ==========
Given the magnitude and the deferral structure of the 450 West 33rd
Street transaction combined with the change in the fair value of
certain derivative instruments, Arbor has elected to report
adjusted book value per share for the affected period to currently
reflect the future impact of the 450 West 33rd Street transaction
on the company's financial condition as well as the evaluation of
Arbor without the effects of unrealized losses from certain of the
Company's derivative instruments. Management considers this
non-GAAP financial measure to be an effective indicator, for both
management and investors, of Arbor's financial performance. Arbor's
management does not advocate that investors consider this non-GAAP
financial measure in isolation from, or as a substitute for,
financial information prepared in accordance with GAAP. ARBOR
REALTY TRUST, INC. AND SUBSIDIARIES SUPPLEMENTAL SCHEDULE OF
NON-GAAP FINANCIAL MEASURES - Continued (Unaudited) Quarter Ended
Nine Months Ended September 30, September 30, -------------
------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net (loss)
income attributable to Arbor Realty Trust, Inc., GAAP basis
$(44,134,962) $2,575,886 $(96,945,695) $27,008,683 Add:
Noncontrolling interest in operating partnership - - - 4,450,754
Depreciation - real estate owned 120,878 256,370 686,922 427,283
Depreciation - investment in equity affiliates - 217,821 419,923
968,353 - ------- ------- ------- Funds from operations ("FFO")
$(44,014,084) $3,050,077 $(95,838,850) $32,855,073 ============
========== ============ =========== Diluted FFO per common share
$(1.73) $0.12 $(3.79) $1.33 ====== ===== ====== ===== Diluted
weighted average shares outstanding 25,387,410 24,990,710
25,288,692 24,706,174 ========== ========== ========== ==========
Arbor is presenting funds from operations, or FFO, because
management believes it to be an important supplemental measure of
the Company's operating performance in that it is frequently used
by analysts, investors and other parties in the evaluation of real
estate investment trusts (REITs). The revised White Paper on FFO
approved by the Board of Governors of the National Association of
Real Estate Investment Trusts, or NAREIT, in April 2002 defines FFO
as net income (loss) attributable to Arbor Realty Trust, Inc.
(computed in accordance with generally accepted accounting
principles (GAAP)), excluding gains (losses) from sales of
depreciated real properties, plus real estate related depreciation
and amortization and after adjustments for unconsolidated
partnerships and joint ventures. The Company considers gains and
losses on the sales of undepreciated real estate investments to be
a normal part of its recurring operating activities in accordance
with GAAP and should not be excluded when calculating FFO. To date,
the Company has not sold any previously depreciated operating
properties, which would be excluded from the FFO calculation.
Losses from discontinued operations are not excluded when
calculating FFO. FFO is not intended to be an indication of our
cash flow from operating activities (determined in accordance with
GAAP) or a measure of our liquidity, nor is it entirely indicative
of funding our cash needs, including our ability to make cash
distributions. Arbor's calculation of FFO may be different from the
calculation used by other companies and, therefore, comparability
may be limited. Arbor Realty Trust, Inc. Summary of Equity and
Profit Interests (all dollar amounts in thousands) Unaudited
Initial ART Current Approximate Investment Investment Cash Equity
Square Name Amount Date Investment Profit % Footage ---- ------
---- ---------- -------- ------- 80 Evergreen $384 3Q03 $201 12.50%
77,680 930 Flushing 1,126 3Q03 291 12.50% 304,080 450 W. 33rd St
1,500 4Q03 1,137 0.58%(1) 1,746,734 Toy Building 10,000 2Q05 5,720
10.00% 320,000 Homewood Mtn Resort - 2Q06 - 25.60% 1,224(3)
Richland Terrace Apartments - 3Q06 - 25.00% 342,152 Ashley Court
Apartments - 3Q06 - 25.00% 177,892 Nottingham Village - 1Q07 -
25.00% 285,900 Extended Stay Hotel Portfolio 115,000 (5) 2Q07
115,000 16.17% 684(4) Alpine Meadows 13,220 3Q07 13,220 39.00%
2,163(3) St. John's Development 500 4Q07 1,884 50.00% 23(3)
Windrush Village Apartments - 2Q08 445 25.00% 221,726 Current
Property Debt Balance Name Type Location on Property Comments ----
---- -------- ----------- -------- 80 Evergreen Warehouse Brooklyn,
NY $5,000 Property refinanced June 2008 930 Flushing Warehouse
Brooklyn, NY 24,448 Property refinanced July 2005 450 W. 33rd St
Office New York City 517,000 Toy Building Conversion New York City
343,400(2) Condo conversion - investment held in Taxable REIT
Subsidiary ("TRS") Homewood Mtn Resort Land Homewood, CA 114,157
Profits interest held in TRS Richland Terrace Apartments Multi
Family Columbia, SC 8,964 Ashley Court Apartments Multi Family Fort
Wayne, IN 5,452 Nottingham Village Multi Family Indianapolis, IN
6,626 Extended Stay Hotel Portfolio Hotel Multistate 7,400,000
Preferred return of 12% on equity Alpine Meadows Land Alpine
Meadows, 30,500 Preferred return CA of 18% on equity St. John's
Development Land Jacksonville, FL 25,000 Windrush Village
Apartments Multi Family Tallahassee, FL 12,800 (1) Represents
approximately 29% of the 2% retained interest in the property. In
addition, Arbor has approximately 29% of a 50% interest in the
property's air rights. (2) Debt balance represents anticipated debt
financing required to complete condominium conversion project. (3)
Amount represents approximate acreage of property. (4) Amount
represents approximately 684 properties in 44 states and Canada
with approximately 76,000 rooms. (5) As of September 30, 2009, the
outstanding balance of this investment was $14.3 million. Contacts:
Investors: Arbor Realty Trust, Inc. Stephanie Carrington / Amy
Glynn Paul Elenio, Chief Financial Officer The Ruth Group
516-506-4422 646-536-7023 Media: Bonnie Habyan, SVP of Marketing
516-506-4615 DATASOURCE: Arbor Realty Trust, Inc. CONTACT: Arbor
Realty Trust, Inc.: Paul Elenio, Chief Financial Officer,
+1-516-506-4422, , or Media: Bonnie Habyan, SVP of Marketing,
+1-516-506-4615, ; or Investors: Stephanie Carrington, , or Amy
Glynn, , both of The Ruth Group, +1-646-536-7023 Web Site:
http://www.arborrealtytrust.com/
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