Gramercy Capital Corp. Announces an Agreement to Sell its Collateral Management Agreements for its Collateralized Debt

  Gramercy Capital Corp. Announces an Agreement to Sell its Collateral
  Management Agreements for its Collateralized Debt Obligations (“CDOs”) to
  CWCapital and Retain the Equity in its CDOs

Business Wire

NEW YORK -- January 31, 2013

Gramercy Capital Corp. (NYSE: GKK) announced today the execution of a
definitive agreement to transfer the collateral management and sub-special
servicing agreements for its three Collateralized Debt Obligations, CDO
2005-1, CDO 2006-1 and CDO 2007-1, to CWCapital Investments LLC (“CWCapital”)
for approximately $9.9 million, less adjustments and closing costs.

The Company will retain its equity interests in the three CDOs, which will
provide the Company with the potential to recoup additional proceeds over the
remaining life of the CDOs based upon resolution of underlying assets within
the CDOs. Subject to customary closing conditions, the transfer is expected to
close in March 2013.

The Company intends to liquidate its CDO bond portfolio. The Company also
expects to receive additional cash proceeds for past CDO servicing advances of
approximately $14.0 million when specific assets within the CDOs are
liquidated.

The summary of the transaction is as follows:
                                       
                              Amount                Timing
        Collateral
        Management            $9.9 million          45 days
        Agreements
        CDO Equity            Retained              Liquidation of CDOs
        CDO Bonds             $32.0 million         30-90 days
        CDO Advances          $14.0 million         Majority expected within
                                                    6-9 months
                                                    

The transaction achieves a number of important objectives:

  *It maximizes the value of the servicing business through the sale to a
    large platform that has significant scale;
  *It greatly simplifies the going-forward business and significantly reduces
    the Company’s ongoing MG&A expenses through elimination of CDO related
    personnel costs and servicing advance requirements;
  *It unlocks in excess of $50.0 million in liquidity currently invested in
    the CDO business; and
  *It allows the Company to retain potential future upside in the equity in
    the three CDOs.

Gordon F. DuGan, Chief Executive Officer of Gramercy Capital Corp., commented,
“This sale is a significant milestone in the transformation of Gramercy into a
pure-play equity REIT. We are pleased to reach this agreement with CWCapital,
a world-class real estate organization. With this transaction, we expect to
achieve a number of important goals including an expected increase in
corporate liquidity, a significant reduction in going-forward expenses, and a
simplification of the balance sheet. We are very well positioned to continue
our focus on creating durable, high-quality income from net lease assets
throughout the United States.”

About Gramercy Capital Corp.

Gramercy Capital Corp. is a self-managed, integrated commercial real estate
investment and asset management company. The Company owns, directly or in
joint venture, a portfolio of 115 office and industrial buildings totaling
approximately 4.9 million square feet, net leased on a long-term basis to
tenants, including Bank of America, Nestlé Waters, Philips Electronics and
others. The Company’s Gramercy Realty division currently manages approximately
$1.2 billion of commercial properties leased primarily to regulated financial
institutions and affiliated users throughout the United States. The Gramercy
Finance division manages approximately $1.7 billion of whole loans, bridge
loans, subordinate interests in whole loans, mezzanine loans, preferred
equity, commercial mortgage-backed securities and other real estate securities
which are financed through three non-recourse CDOs. The Company is
headquartered in New York City and has regional investment and portfolio
management offices in Jenkintown, Pennsylvania, Charlotte, North Carolina, and
St. Louis, Missouri.

To review the Company’s latest news releases and other corporate documents,
please visit the Company's website at www.gkk.com or contact Investor
Relations at 212-297-1000.

About CWCapital Investments LLC

CWCapital and its affiliate CWCapital Asset Management are wholly owned
subsidiaries of CW Financial Services LLC. CWCapital manages or acts as
disposition consultant on 23 CRE-CDO transactions and is based in Bethesda,
Maryland. Also based in Bethesda is CWCapital Asset Management the special
servicing platform. CWCapital Asset Management is one of the largest special
servicers in the Unites States. CWCapital Asset Management is the named
special servicer on 155 CMBS transactions backed by an approximate $140
billion of commercial mortgage loans as well as $5 billion in non-securitized
loans for institutional clients (totaling approximately 12,600 loans). In
recognition of its demonstrated skill and performance, the platform has been
awarded the rating of CSS1- by Fitch Ratings, as well as the highest ranking
of Strong by Standard & Poor’s.

Forward-Looking Information

This press release contains forward-looking information based upon the
Company's current best judgment and expectations. Actual results could vary
from those presented herein. The risks and uncertainties associated with
forward-looking information in this release include, but are not limited to,
factors that are beyond the Company's control, including the closing of the
transfer of the collateral management and sub-special servicing agreements,
the subsequent sale of the CDO bond portfolio, the return of the CDO
protective advances, the resolution of underlying assets within the CDOs and
the receipt of any proceeds from its CDO equity, CWCapital’s ability to manage
and service the assets within the CDOs, the Company’s ability to simplify its
balance sheet and reduce going forward expenses, the implementation of the
Company’s new business strategy, the integration of the Company’s new
management team, the results of the operational review and those factors
listed in the Company's Annual Report on Form 10-K and in the Company's
Quarterly Reports on Form 10-Q. The Company undertakes no obligation to update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. For further information, please refer
to the Company's filings with the SEC.

(GKK-EN)

Contact:

Gramercy Capital Corp.
Jon W. Clark, 212-297-1000
Chief Financial Officer
or
Emily Pai, 212-297-1000
Investor Relations
 
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