Apollo Commercial Real Estate Finance, Inc. Provides $140 Million of
Financing for Two Manhattan Residential Properties
NEW YORK, NY -- (Marketwire) -- 01/11/13 -- Apollo Commercial Real
Estate Finance, Inc. (the "Company" or "ARI") (NYSE: ARI) today
announced the closing of two financing transactions totaling $140
million in committed capital for two separate New York City
residential properties. With these closings, ARI's investment
activity over the past twelve months totaled $274 million of
committed equity for $324 million of commercial real estate debt
investments with a weighted average underwritten internal rate of
return ("IRR") of approximately 13%(1).
"We believe these investments demonstrate ARI's ability to
effectively underwrite and structure complex transactions while
generating attractive, risk adjusted returns," said Scott Weiner,
Chief Investment Officer of the Company's Manager. "New York City
continues to be one of the strongest residential markets in the
country and new supply is being absorbed quickly. Both of these
transactions have solid, well-capitalized sponsorship and will
further enhance ARI's growing commercial real estate debt portfolio."
Whole Loan for New York City Condominium Conversion
provided an $80 million whole loan commitment for a condominium
conversion located in the TriBeCa neighborhood of New York City. At
closing, the Company funded a $45 million first mortgage loan and
$0.4 million of a $35 million mezzanine loan, the balance of which
will be funded throughout the conversion process. The property will
have 66 units with approximately 96,000 net salable square feet and
approximately 3,000 square feet of ground floor retail space. The
whole loan has an initial term of two years with two 12-month
extension options, subject to additional project completion hurdles.
The interest rate on the whole loan is LIBOR+8.5% with a LIBOR floor
of 0.5%. ARI received a 1.0% origination fee and will receive a 1.0%
exit fee on the fully funded balance of the loan. When fully funded,
ARI's loan basis will represent an underwritten loan-to-net sellout
of approximately 55%. The whole loan has been underwritten to
generate an unlevered IRR of approximately 11%(1).
Mezzanine Loan for New York City Condominium Development
provided a $60 million mezzanine loan commitment secured by a pledge
of preferred equity interests in the owner of a to-be-developed
352,624 net saleable square foot, 57-story, 146-unit condominium
tower also located in the TriBeCa neighborhood of New York City. The
Company provided $46 million of financing at closing and will provide
an additional $14 million within the next six months. The mezzanine
loan will receive an interest rate of 13.25% and has a 1.0%
origination fee and a 1.0% exit fee on the fully funded balance of
the loan. When fully funded, the Company's loan basis will represent
an underwritten loan-to-net sellout of approximately 54%. The
mezzanine loan has a term of 54 months with one extension option of
12-months and has been underwritten to generate an IRR of
"Since raising over $207 million of capital through our preferred and
common stock offerings in the third and fourth quarter of last year,
the Company has closed over $200 million of new investments and
financing commitments with a weighted average underwritten IRR of
approximately 13%(1)," said Stuart Rothstein, Chief Executive Officer
of the Company. "As we look ahead to 2013, ARI's pipeline remains
robust and we expect to build upon the momentum we have generated to
further expand our debt portfolio."
(1) The IRRs for the investments detailed in this press release
reflect the returns underwritten by ACREFI Management, LLC, the
Company's external manager. The IRRs for the New York City
condominium conversion investment and the New York City condominium
development investment are calculated using the Company's external
manager's underwritten assumptions regarding the estimates of the
timing and magnitude of future fundings for the remaining commitments
and associated loan repayments, as well as assuming no defaults. All
other IRRs are calculated on a weighted average basis assuming no
dispositions, early prepayments or defaults but assume extensions as
well as the cost of borrowings and derivative instruments under the
Company's master repurchase agreement with Wells Fargo Bank, N.A.
There can be no assurance the actual IRRs will equal the underwritten
IRRs shown in this press release. See "Risk Factors" in the reports
filed by the Company with the Securities and Exchange Commission for
a discussion of some of the factors that could adversely impact the
returns received by the Company from its investments over time.
About Apollo Commercial Real Estate Finance, Inc.
Real Estate Finance, Inc. (NYSE: ARI) is a commercial mortgage real
estate investment trust that primarily originates, invests in,
acquires and manages senior performing commercial real estate
mortgage loans, commercial mortgage-backed securities and other
commercial real estate-related debt investments throughout the U.S.
The Company is externally managed and advised by ACREFI Management,
LLC, a Delaware limited liability company and an indirect subsidiary
of Apollo Global Management, LLC, a leading global alternative
investment manager with $110 billion of assets under management at
September 30, 2012.
Additional information can be found on the Company's website at
Certain statements contained in this
press release constitute forward-looking statements as such term is
defined in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and
such statements are intended to be covered by the safe harbor
provided by the same. Forward-looking statements are subject to
substantial risks and uncertainties, many of which are difficult to
predict and are generally beyond the Company's control. These
forward-looking statements include information about possible or
assumed future results of the Company's business, financial
condition, liquidity, results of operations, plans and objectives.
When used in this release, the words "believe," "expect,"
"anticipate," "estimate," "plan," "continue," "intend," "should,"
"may" or similar expressions, are intended to identify
forward-looking statements. Statements regarding the following
subjects, among others, may be forward-looking: the return on equity;
the yield on investments; the ability to borrow to finance assets;
and risks associated with investing in real estate assets, including
changes in business conditions and the general economy. For a further
list and description of such risks and uncertainties, see the reports
filed by the Company with the Securities and Exchange Commission. The
forward-looking statements, and other risks, uncertainties and
factors are based on the Company's beliefs, assumptions and
expectations of its future performance, taking into account all
information currently available to the Company. Forward-looking
statements are not predictions of future events. The Company
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
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