From the Wires
CBRE Realty Finance, Inc. Announces Third Quarter 2008 Results
Financial Results and Other Significant Events:
Nov. 4, 2008 07:30 AM
HARTFORD, Conn., Nov. 4 /PRNewswire-FirstCall/ -- CBRE Realty Finance,
Inc. (NYSE: CBF) today reported results for the third quarter ended September
30, 2008.
CBRE Realty Finance reported third quarter net loss of ($55.5) million, or
($1.81) per diluted common share, including an $8.5 million unrealized gain
related to the mark-to-market impact of certain assets and liabilities due to
the application of SFAS 159.
Adjusted funds from operations ("AFFO") for the third quarter of 2008,
which exclude the results of discontinued operations and any impact from the
application of SFAS 159, was ($59.6) million, or ($1.95) per diluted common
share.
Kenneth J. Witkin, president and chief executive officer, commented, "As
we continue to navigate through one of the most difficult credit environments
in history, we are continuing to proactively manage our portfolio and preserve
liquidity. These unprecedented market conditions continue to put pressure on
our portfolio as is evident by this quarter's results. We will continue to be
transparent with our portfolio and make difficult decisions as necessary."
(Page 1)
Internalization
As announced in prior quarters, Goldman Sachs was engaged to evaluate a
range of strategic and operational initiatives to enhance stockholder value
that included a possible sale of the Company, merger or other business
combination, capital investment and/or other strategic alternatives. After
exploring each of these alternatives, the Company's Board of Directors and
management believe that at this time it is in the best interest of the
stockholders to internalize management.
It has been mutually determined by the Company and CB Richard Ellis Group,
Inc. (NYSE: CBG) that the management agreement between the Company and CBRE
Realty Finance Management, LLC (the "Manager"), an indirect subsidiary of CB
Richard Ellis, will not be renewed when it expires on December 31, 2008. No
termination fee will be paid on the expiration of the contract. At this time,
the Company, in coordination with CB Richard Ellis, is taking the necessary
actions and obtaining the approvals to ensure a smooth transition. In
addition, as a result of the internalization and the License Agreement
currently in place between the Company and CB Richard Ellis, the Company will
change its name to Realty Finance Corporation and cease using the mark "CBRE."
"We believe that becoming an internally managed company is the right
decision," said Mr. Witkin. "We have the depth and resources to fulfill the
full range of functions needed to operate as an internally managed company. We
appreciate the sponsorship and support of CB Richard Ellis. We have a good
relationship with CB Richard Ellis and going forward we expect to continue to
do business with them as well as with other commercial real estate firms."
In contemplation with the internalization, Michael J. Melody and David P.
Marks have agreed to resign from the Board effective today.
Commenting on the resignations of Messrs. Melody and Marks, Mr. Witkin
said, "Mike and David have served on our Board of Directors since 2005 and
have each provided invaluable counsel and insight in their time at CBRE Realty
Finance. On behalf of the entire team, I would like to thank them both for
their efforts on our Board."
NYSE Compliance
The Company was notified by the New York Stock Exchange ("NYSE") on
October 22, 2008 that it was not in compliance with the NYSE listing standard
requiring a listed common stock to maintain a minimum average closing price of
$1.00 per share for 30 consecutive trading days. The Company is at risk to
fall below the minimum market capitalization standard which requires the
Company to maintain a 30 trading-day average market capitalization of at least
$25 million. Given the recent stock price, the Company may fall below the
minimum market capitalization standard as early as the close of market today
and would be permanently delisted from the NYSE at a date to be announced. If
delisted, the trading of the Company's stock would move to the OTC Bulletin
Board ("OTCBB"). The OTCBB is an electronic, regulated quotation service that
displays real-time quotes, last-sale prices, and volume information for
over-the-counter equity securities issued by companies that are subject to
periodic filing requirements with the SEC or other regulatory authority. A
move to the OTCBB will not affect the Company's business operations and will
not change its SEC reporting requirements.
(Page 2)
Liquidity and Funding
At September 30, 2008, the Company had $18.7 million of cash and cash
equivalents available and $54.5 million of restricted cash. The restricted
cash is comprised primarily of $34.6 million of escrow reserve requirements
related to tenant improvements and leasing reserves on a number of the
Company's first mortgage loans and $7.1 million of cash available within its
CDOs for reinvestment. In addition, within its second CDO, the Company had
available $30.8 million of its $75 million revolving facility specifically
designated to fund future financing commitments on its existing loan
portfolio. This undrawn capacity covers substantially all of the Company's
future commitments on its loan portfolio.
The Company has entered into a contract to sell one of its joint venture
interests for $17.5 million which is anticipated to close in the fourth
quarter of 2008. This contract is subject to certain contingencies, including
the receipt of certain approvals. As a result, there can be no assurance that
this transaction will close on time or at all.
Loan and CMBS prepayments, sales, and amortization payments totaled $4.4
million during the third quarter of 2008.
The Company's loan and CMBS investments are either unlevered or are
match-funded and term financed through its issuance of $1.36 billion of
long-term CDO bonds. The weighted average financing costs of these facilities
is approximately 44.4 basis points over the applicable LIBOR benchmarks with
reinvestment periods remaining of 2.5 years in its first CDO and 3.5 years in
its second CDO.
Operating Results
Loan and CMBS investments generated investment income of $24.5 million and
net investment income of $5.4 million for the third quarter compared to $25.1
million and $4.5 million in the second quarter of 2008 respectively. Net
investment income represents investment income from the Company's loan and
CMBS investments, less interest expense on the Company's borrowings related to
these investments. Interest expense on borrowings related to the Company's
loan and CMBS investments was $19.1 million for the third quarter 2008
compared to $20.6 million in the previous quarter and reflects interest
expense on $1.36 billion of investment grade notes issued by the Company's two
CDOs, borrowings under the secured warehouse repurchase facility and $50.0
million of trust preferred securities.
At September 30, 2008, the Company's debt-to-book equity ratio was 4.1x
compared to 3.6x at June 30, 2008.
Investment Portfolio
As of September 30, 2008, the Company's investment portfolio of
approximately $1.4 billion in assets consisted of the following:
Carrying Number of Percent Weighted Average
Value Invest- of Total ----------------
Investment (000s) ments Investments Coupon Yield
--------------------------------------------------------------------------
Whole loans $855,156 39 55.8% 6.53% 6.34%
B Notes 218,401 11 14.3% 7.55% 7.88%
Mezzanine loans 260,934 13 17.0% 9.24% 8.94%
CMBS 155,934 67 10.2% 5.86% 7.22%
Joint venture investments 41,391 8 2.7% N/A N/A
-----------------------------
Total investments before
loan loss reserve 1,531,816 138 100.0%
Loan loss reserve (122,402)
==========
Total investments, net $1,409,414
Note: CMBS shown net of ($142,506) of unrealized fair value marks.
(Page 3)
The investment portfolio decreased by $94.8 million since June 30, 2008.
The reduction is primarily comprised of $43.6 million of loan loss reserves
recognized during the quarter, $17.7 million of joint venture impairments
recognized during the quarter, including an impairment of $2.8 million on a
joint venture classified as discontinued operations, and $31.2 million in
unrealized fair value marks on the CMBS portfolio.
Loan Portfolio
The Company's loan portfolio (whole loans, B Notes, mezzanine loans) is
comprised solely of commercial real estate with no sub-prime exposure.
At September 30, 2008, the Company's loan portfolio totaled $1.33 billion
and consisted of 47.1 percent floating rate and 52.9 percent fixed rate loans,
with a weighted average maturity of 2.4 years. The loan portfolio has a
weighted average loan-to-value ratio of 70.8 percent compared to 69.2 percent
in the previous quarter and is comprised of 69.3 percent first mortgages and
30.7 percent structured debt. The Company's loan portfolio has loans scheduled
to mature without extension options totaling $2.1 million in 2008 and $27.9
million in 2009.
At September 30, 2008, the Company had five loans totaling $127.3 million
with a carrying value of $7.0 million that are non-performing. The
non-performing assets represent 8.1 percent of total assets. Details of the
non-performing loans are as follows:
A $42.8 million B-Note had a maturity default on December 1, 2007 and is
secured by a class A parcel of land in New York City that is intended to be
developed into a mixed use retail and residential site. The B-Note was
originally due on October 1, 2007 and was extended for 60 days with the
sponsor funding an additional $150.0 million of cash equity. Interest on the
loan has been paid through December 31, 2007 at the contractual rate. As of
September 30, 2008, the Company initiated foreclosure proceedings on the
collateral of the loan. Given the current financial markets and the inability
to refinance the loan in the near term, the Company has recorded a loan loss
reserve to cover its entire position.
A $40.0 million mezzanine loan had a maturity default on February 9, 2008
and is collateralized by four class A office properties located in New York
City. The sponsor of this investment is also the sponsor of the $42.8 million
B-Note investment discussed above. The borrower and lending group for the
properties reached a consensual sale agreement that will allow the properties
to be sold in an orderly fashion. Agreements for the sale of the underlying
collateral have been executed and no proceeds will remain after satisfaction
of senior debt obligations. The Company has recorded a loan loss reserve to
cover its entire position.
A $25.0 million mezzanine loan secured by an interest in an apartment
complex in New York City. The borrower did not pay October's debt service and
has requested significant modifications of the outstanding loans against the
property. Based on the current financial markets and the uncertainty regarding
a restructuring, the Company has recorded a loan loss reserve to cover its
entire position.
A $12.0 million whole loan with a carrying value of $7.0 million is
secured by a class B office property located in a suburb of Chicago, Illinois.
As of September 30, 2008, the Company has commenced foreclosure proceedings
and expects to obtain possession of the property.
A $7.5 million bridge loan secured by development rights to build an
office building in the Washington, DC area. The borrower is in the process of
completing predevelopment activities and obtaining necessary regulatory
approvals to start construction. As of September 30, 2008, the loan has been
extended until April 2009, with interest deferred. Given the uncertainty in
the current financial markets regarding the ability to obtain construction
financing, the Company has recorded a loan loss reserve to cover its entire
position.
(Page 4)
At September 30, 2008, the Company had four loans totaling $41.0 million
with a carrying value of $38.4 million that are on its watch list. During the
third quarter 2008, the Company added one loan totaling $17.4 million with a
carrying value of $17.4 million to its watch list. The watch list assets
represent 2.6 percent of total assets. Details of the loan added to the watch
list during the third quarter are as follows:
A $17.4 million mezzanine loan for a specialty retail development located
in Tennessee. The development is currently under construction. The Company's
loan as well as the senior construction loan matures in December 2008. The
borrower and lenders are currently negotiating a restructuring. No reserve
has been recorded on this investment.
At September 30, 2008, the Company's total loan loss reserves were $122.4
million, or 8.0 percent of total investments, relating to the Company's
non-performing and watch list loans totaling $168.3 million.
CMBS Portfolio
At September 30, 2008, the Company's CMBS portfolio had a carrying value
of $155.9 million. The average vintage of the underlying collateral is 44.0
months with 63.2 percent of the portfolio rated investment grade. The
underlying loan delinquency of the portfolio is 0.26 percent compared to the
market average of 0.69 percent. The entire CMBS portfolio is term financed
within the Company's two CDOs. For more details on the Company's CMBS
portfolio, please refer to the tables on page 11 of this release.
Joint Venture Investment Portfolio
At September 30, 2008, the Company had $77.9 million invested in eight
joint venture equity investments with a carrying value of $41.4 million. The
Company continues to explore opportunities to monetize or exit these
investments.
Dividends
On September 24, 2008, the Company announced that its Board of Directors
declared a cash dividend of $0.05 per share, payable with respect to the
quarter ended September 30, 2008. The dividend was paid on October 17, 2008 to
stockholders of record as of the close of business on September 30, 2008. The
Board of Directors will continually reevaluate operating results, REIT
qualification requirements, available tax losses, economic conditions, capital
requirements, liquidity, retention of capital and other operating trends when
determining future dividends.
Conference Call Details
CBRE Realty Finance will host a conference call on November 4, 2008, at
9:00 a.m. Eastern Time to discuss third quarter 2008 financial results. The
call can be accessed live by dialing 800-922-0755, conference ID 71164531, or
by visiting the Company's website at http://www.cbrerealtyfinance.com.
Investors may access a replay by dialing 800-642-1687, conference ID
71164531, which will be available through November 11, 2008. The webcast
replay will also be archived in the "Investor Relations" section of the
Company's website.
About CBRE Realty Finance, Inc.
CBRE Realty Finance, Inc. is a commercial real estate specialty finance
company primarily focused on originating, acquiring, investing in, financing
and managing a diversified portfolio of commercial real estate-related loans
and securities. CBRE Realty Finance has elected to qualify to be taxed as a
real estate investment trust, or REIT, for federal income tax purposes. CBRE
Realty Finance is externally managed and advised by CBRE Realty Finance
Management, LLC, an indirect subsidiary of CB Richard Ellis Group, Inc. and a
direct subsidiary of CBRE/Melody & Company. For more information on the
Company, please visit the Company's website at
http://www.cbrerealtyfinance.com.
(Page 5)
Non-GAAP Financial Measures
During the quarterly 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, such as FFO, and AFFO in this press
release. A reconciliation of each non-GAAP financial measure and the
comparable GAAP financial measure (net income) can be found on page 10 of this
release.
Funds from Operations ("FFO") and Adjusted Funds From Operations ("AFFO")
are non-GAAP financial measures, which are widely recognized measures of REIT
performance. The Company computes FFO in accordance with standards established
by the National Association of Real Estate Investment Trusts ("NAREIT"), which
may not be comparable to FFO reported by other REITs that do not compute FFO
in accordance with the NAREIT definition, or that interpret the NAREIT
definition differently than the Company does. The revised White Paper on FFO
approved by the Board of Governors of NAREIT in April 2002 defines FFO as net
income (loss) (computed in accordance with GAAP), excluding gains (or losses)
from debt restructuring and sales of properties, plus real estate depreciation
and amortization and after adjustments for unconsolidated/uncombined
partnerships and joint ventures. The Company presents FFO and AFFO because it
considers them important supplemental measures of its operating performance
and believes that they are frequently used by securities analysts, investors
and other interested parties in the evaluation of REITs. The Company also uses
FFO and AFFO as one of several criteria to determine performance-based equity
bonuses for members of the Company's senior management team. FFO and AFFO are
intended to exclude GAAP historical cost depreciation and amortization of real
estate and related assets, which assumes that the value of real estate assets
diminishes ratably over time. Historically, however, real estate values have
risen or fallen with market conditions. Because FFO and AFFO exclude
depreciation and amortization unique to real estate, gains and losses from
property dispositions and extraordinary items, it provides a performance
measure that, when compared year over year, reflects the impact to operations
from trends in occupancy rates, rental rates, operating costs, interest costs,
providing perspective not immediately apparent from net income. The Company
considers gains and losses on the sale of debt investments to be a normal part
of its recurring operations and therefore does not exclude such gains and
losses while arriving at FFO.
AFFO is a computation often made by REIT industry analysts and investors
to measure a real estate company's cash flow generated from operations. The
Company believes that AFFO is helpful to investors as a measure of its
liquidity position because, along with cash generated from operating
activities, this measure provides investors with an understanding of its
ability to pay dividends. In addition, because this measure is commonly used
in the REIT industry, the Company's use of AFFO may assist investors in
comparing its liquidity position with that of other REITs. Further, it is the
financial measure upon which incentive compensation payable under the
Company's management agreement is payable.
The Company calculates AFFO by subtracting from or adding to FFO:
-- normalized recurring expenditures that are capitalized by us and then
amortized, but which are necessary to maintain the Company's properties
and revenue stream, e.g., leasing commissions and tenant improvement
allowances;
-- an adjustment to reverse the effects of straight-lining of rents and
fair value lease revenue under SFAS 141;
-- the amortization or accrual of various deferred costs including
intangible assets and equity based compensation;
-- unrealized gains or losses on derivative transactions and financial
instruments including the impact from the adoption of, and continuing
application of, SFAS 159; and
-- results from discontinued operations.
(Page 6)
The Company's calculation of AFFO differs from the methodology used for
calculating AFFO by certain other REITs and, accordingly, may not be
comparable to such other REITs.
Neither FFO nor AFFO represent cash generated from operating activities or
net income in accordance with GAAP and should not be considered as an
alternative to net income (determined in accordance with GAAP), as a measure
of liquidity, nor is it indicative of funds available to fund the Company's
cash needs, including the Company's ability to make cash distributions. The
Company urges investors to carefully review the GAAP financial information
included as part of the Company's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, and quarterly earnings releases.
Forward-Looking Information
This press release contains forward-looking statements based upon the
Company's beliefs, assumptions and expectations of its future performance,
taking into account all information currently available. These beliefs,
assumptions and expectations can change as a result of many possible events or
factors, not all of which are known to the Company or are within its control.
If a change occurs, the Company's business, financial condition, liquidity and
results of operations may vary materially from those expressed in its forward-
looking statements. The factors that could cause actual results to vary from
the Company's forward-looking statements include the Company's future
operating results, its business operations and prospects, general volatility
of the securities market in which the Company invests and the market prices of
its common stock, the effect of trading on the OTCBB, the Company's ability to
begin making investments in the future, availability, terms and deployment of
short-term and long-term capital, availability of qualified personnel, changes
in the industry, interest rates, the debt securities, credit and capital
markets, the general economy or the commercial finance and real estate markets
specifically, performance and financial condition of borrowers and corporate
customers, increased prepayments of the mortgage and other loans underlying
the Company's investments, the status of the class action lawsuit, the
potential derivative shareholder claim and any future litigation that may
arise, the ultimate resolution of the Company's five non-performing loans
totaling $127.3 million and the Company's four Watch List loans totaling $41.0
million, the monetization of the Company's joint venture investments, the
receipt of any required CDO bondholder approval in connection with the
internalization, effects of internalizing management, and other factors, which
are beyond the Company's control. The Company undertakes no obligation to
publicly update or revise any of the forward-looking statements. For further
information, please refer to the Company's filings with the Securities and
Exchange Commission.
(Page 7)
CBRE Realty Finance, Inc.
Consolidated Statements of Income
(Unaudited)
(Amounts in thousands, except per share and share data)
For the For the For the For the
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September September September September
30, 2008 30, 2007 30, 2008 30, 2007
----------- ------------ ----------- -----------
Revenues:
Investment income $24,478 $38,287 $77,469 $93,516
Property operating
income 1,098 1,045 3,285 2,986
Other income 181 561 824 3,599
----------- ------------ ----------- -----------
Total revenues 25,757 39,893 81,578 100,101
----------- ------------ ----------- -----------
Expenses:
Interest expense 20,366 26,841 62,914 67,043
Management fees 1,140 1,911 4,229 6,001
Property operating
expenses 814 805 2,335 2,046
Other general and
administrative
(including $38,
($328), $861 and $696,
respectively of 3,933 1,766 13,362 6,603
stock-based
compensation)
Depreciation and
amortization 224 248 742 1,125
Loss on impairment of
long-lived assets 5,966 - 5,966 7,764
Provision for loan
losses 43,602 - 102,752 -
----------- ------------ ----------- -----------
Total expenses 76,045 31,571 192,300 90,582
----------- ------------ ----------- -----------
Loss on sale of
investment - (213) (2,021) (500)
Gains (losses) on
financial instruments 7,234 (1,516) 87,299 (1,570)
----------- ------------ ----------- -----------
Income (loss) from
continuing operations
before equity in net
income of unconsolidated
joint ventures,
minority interest,
and discontinued
operations (43,054) 6,593 (25,444) 7,449
Equity in net loss of
unconsolidated joint
ventures (9,935) (941) (14,846) (4,451)
----------- ------------ ----------- -----------
Income (loss) from
continuing operations
before minority
interest and
discontinued
operations (52,989) 5,652 (40,290) 2,998
Minority interest (463) (30) (508) (110)
----------- ------------ ----------- -----------
Income (loss) from
continuing operations (52,526) 5,682 (39,782) 3,108
Discontinued Operations:
Operating results from
discontinued
operations (172) (912) (2,993) (1,322)
Loss on impairment of
long-lived assets (2,825) (54,729) (2,825) (54,729)
Gain on sale of
investment - - 6,780 -
----------- ------------ ----------- -----------
Income (loss) from
discontinued
operations (2,997) (55,641) 962 (56,051)
----------- ------------ ----------- -----------
Net loss $(55,523) $(49,959) $(38,820) $(52,943)
=========== ============ =========== ===========
Weighted-average shares
outstanding:
Basic weighted-
average common
shares outstanding 30,631,061 30,377,704 30,515,093 30,252,514
=========== ============ =========== ===========
Diluted weighted-
average common
shares and common
share equivalents
outstanding 30,631,061 30,377,704 30,515,093 30,252,514
=========== ============ =========== ===========
Basic and diluted earnings
per share:
Income (loss) from
continuing operations $(1.71) $0.19 $(1.30) $0.10
Income (loss) from
discontinued
operations (0.10) (1.83) 0.03 (1.85)
----------- ------------ ----------- -----------
Net loss $(1.81) $(1.64) $(1.27) $(1.75)
=========== ============ =========== ===========
Dividends per common share $0.05 $0.17 $0.30 $0.59
----------- ------------ ----------- -----------
(Page 8)
CBRE Realty Finance, Inc.
Consolidated Balance Sheets
(Amounts in thousands, except share data)
September 30, 2008 December 31, 2007
(Unaudited) (Audited)
------------------ -----------------
Assets:
Cash & cash equivalents $18,732 $25,954
Restricted cash 54,477 137,004
Loans and other lending
investments, net ($7,000 and
$75,129 at fair value,
respectively) 1,212,089 1,362,054
Commercial mortgage-backed
securities, at fair value 155,934 236,134
Real estate, net 27,247 65,495
Investment in unconsolidated joint
ventures 38,073 53,145
Derivative assets, at fair value 71 125
Accrued interest 6,972 9,304
Other assets 23,144 25,658
Assets held for sale 29,289 154,426
----------- -----------
Total assets $1,566,028 $2,069,299
=========== ===========
Liabilities and Stockholders' Equity:
Liabilities:
Collateralized debt obligations
($214,866 and $0 at fair value,
respectively) $1,039,866 $1,339,500
Repurchase obligations - 144,183
Mortgage notes payable 54,964 54,899
Note payable 19,850 21,736
Derivative liabilities, at fair value 44,723 40,403
Management fee payable 319 566
Dividends payable 1,543 6,493
Accounts payable and accrued expenses 10,365 8,439
Other liabilities 34,056 39,732
Junior subordinated deferrable interest
debentures held by trusts that issued
trust preferred securities, ($13,980
and $0 at fair value, respectively) 13,980 50,000
Liabilities held for sale 152 149,869
----------- -----------
Total liabilities 1,219,818 1,855,820
----------- -----------
Commitments and contingencies - -
Minority interest 160 663
Stockholders' Equity:
Preferred stock, par value $.01
per share: 50,000,0000 shares
authorized; no shares issued or
outstanding at - -
September 30, 2008 and December
31, 2007, respectively
Common stock, par value $.01 per
share: 100,000,000 shares
authorized; 30,863,100 and
30,920,225 309 309
shares issued and outstanding at
September 30, 2008 and December
31, 2007 respectively
Additional paid-in capital 423,136 422,275
Accumulated other comprehensive
loss (39,673) (106,406)
Accumulated deficit (37,722) (103,362)
----------- -----------
Total stockholders' equity 346,050 212,816
----------- -----------
Total liabilities and
stockholders' equity $1,566,028 $2,069,299
----------- -----------
(Page 9)
CBRE Realty Finance, Inc.
Funds From Operations and Adjusted Funds From
Operations
(Unaudited, amounts in thousands, except per
share and share data)
For the Three For the Three
Months Ended Months Ended
September 30, 2008 September 30, 2007
------------------ ------------------
Funds from operations:
$(55,523) $(49,959)
Gain (loss) from sale of
property - discontinued
operations - -
Real estate depreciation and
amortization:
Consolidated partnerships 168 238
Unconsolidated ventures 1,254 2,082
Discontinued operations 162 341
----------- -----------
Funds from operations $(53,939) $(47,298)
Adjusted funds from operations:
Amortization of deferred stock-
based compensation 38 (328)
Straight-line rental income -
unconsolidated ventures 433 (103)
Unrealized (gain) loss on
financial instruments (8,544) 35
Unrealized (gain) loss on
financial instruments
unconsolidated ventures (291) -
Fair value lease revenue (SFAS
141) - -
Fair value lease revenue (SFAS
141) - unconsolidated ventures (163) (397)
Operating results from
discontinued operations 2,835 55,300
----------- -----------
$(59,631) $7,209
=========== ===========
Weighted-average shares of common
stock outstanding:
Basic 30,631,061 30,377,704
=========== ===========
Diluted 30,631,061 30,377,704
=========== ===========
FFO share of common stock:
Basic $(1.76) $(1.56)
=========== ===========
Diluted $(1.76) $(1.56)
=========== ===========
AFFO share of common stock:
Basic $(1.95) $0.24
=========== ===========
Diluted $(1.95) $0.24
=========== ===========
CBRE Realty Finance, Inc.
Funds From Operations and Adjusted Funds From
Operations
(Unaudited, amounts in thousands, except per
share and share data)
For the Nine For the Nine
Months Ended Months Ended
September 30, 2008 September 30, 2007
------------------ ------------------
Funds from operations:
$(38,820) $(52,943)
Gain (loss) from sale of
property - discontinued
operations (6,780) -
Real estate depreciation and
amortization:
Consolidated partnerships 528 1,045
Unconsolidated ventures 4,669 7,607
Discontinued operations 476 721
---------- ----------
Funds from operations $(39,927) $(43,570)
Adjusted funds from operations:
Amortization of deferred stock-
based compensation 861 696
Straight-line rental income -
unconsolidated ventures (597) (438)
Unrealized (gain) loss on
financial instruments (88,609) 89
Unrealized (gain) loss on
financial instruments
unconsolidated ventures 126 -
Fair value lease revenue (SFAS
141) - (11)
Fair value lease revenue (SFAS
141) - unconsolidated ventures (489) (806)
Operating results from
discontinued operations 5,342 55,330
----------- -----------
$(123,293) $11,290
=========== ===========
Weighted-average shares of common
stock outstanding:
Basic 30,515,093 30,252,514
=========== ===========
Diluted 30,515,093 30,252,514
=========== ===========
FFO share of common stock:
Basic $(1.31) $(1.44)
=========== ===========
Diluted $(1.31) $(1.44)
=========== ===========
AFFO share of common stock:
Basic $(4.04) $0.37
=========== ===========
Diluted $(4.04) $0.37
=========== ===========
(Page 10)
CMBS Portfolio by Credit Ratings
Market % of Cumulative
Security Description Value (000s) Total %
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CMBS Class A or better $6,152 3.9% 3.9%
CMBS Class BBB 92,407 59.3% 63.2%
CMBS Class BB 40,760 26.1% 89.3%
CMBS Class B 14,851 9.5% 98.9%
CMBS Class NR 1,764 1.1% 100.0%
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Total securities available-for-sale $155,934 100.0%
CMBS Portfolio by Vintage
Market % of Cumulative
Security Description Value (000s) Total %
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CMBS 1998 Vintage $6,720 4.3% 4.3%
CMBS 2000 Vintage 8,466 5.4% 9.7%
CMBS 2001 Vintage 7,292 4.7% 14.4%
CMBS 2002 Vintage 8,176 5.2% 19.7%
CMBS 2005 Vintage 41,578 26.7% 46.3%
CMBS 2006 Vintage 69,608 44.6% 91.0%
CMBS 2007 Vintage 14,094 9.0% 100.0%
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Total securities available-for-sale $155,934 100.0%
(Page 11)
SOURCE CBRE Realty Finance, Inc.
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