Apollo Commercial Real Estate Finance, Inc. Closes Two Mezzanine Loans Totaling
NEW YORK, NY -- (Marketwire) -- 02/04/13 -- Apollo Commercial Real
Estate Finance, Inc. (the "Company" or "ARI") (NYSE: ARI) today
announced the closing of two mezzanine financing transactions
totaling $43 million. The first investment was an $18 million
mezzanine loan secured by a pledge of the equity interests in the
owner of two buildings in midtown Manhattan that will be converted
into 215 multifamily rental units and the second investment was a $25
million mezzanine loan secured by a pledge of the equity interests in
the owner of a portfolio of four hotels totaling 1,231 keys located
in Rochester, Minnesota. Since the beginning of 2013, ARI has
announced the closing of $183 million of new investments which have
been underwritten to generate a weighted average IRR of 13%(1).
In addition, today ARI also announced a two year extension to the
Company's master repurchase facility with JPMorgan Chase Bank, N.A.
(the "JPMorgan Facility") as well as the repayment of two mezzanine
loans secured by the equity interests in the owner of a portfolio of
retail shopping centers totaling $50 million.
Mezzanine Loan for New York City Multifamily Conversion
provided an $18 million mezzanine loan secured by a pledge of the
equity interests in the owner of two buildings in midtown Manhattan.
The buildings contain a total of 181,637 rentable square feet that is
being converted into 215 multifamily rental units. The mezzanine loan
is part of a $90 million, three-year (two-year initial term with one
one-year extension option) interest-only, floating rate financing
comprised of the mezzanine loan and a $72 million first mortgage
loan. At the time of ARI's investment, the interest rate on the
mezzanine loan was LIBOR+10.0% and will increase to LIBOR+11.0% as
certain mortgage funding hurdles are met. ARI received a 1.0%
transaction fee at closing. When the first mortgage loan is fully
funded, the mezzanine loan will have an appraised loan-to-value of
approximately 60% and has been underwritten to generate an IRR of
Mezzanine Loan for Rochester, Minnesota Hotel Portfolio
provided a $25 million mezzanine loan secured by a pledge of the
sts in the owner of a portfolio of four hotels totaling
1,231 keys located in Rochester, Minnesota. The hotels are within
walking distance of the Mayo Clinic, an internationally renowned
health care facility that treats over one million patients annually
from around the world. The mezzanine loan is part of a $145 million
five-year, fixed rate loan, comprised of a $120 million first
mortgage loan and the mezzanine loan, which was provided in
connection with the acquisition of the portfolio. The interest rate
on the mezzanine loan is 11.0%. The mezzanine loan has an appraised
loan-to-value of approximately 69% and has been underwritten to
generate an IRR of approximately 12%(1).
Amendment to JPMorgan Facility
The Company amended its JPMorgan
Facility to extend the term for two years (one year initial term with
a one year extension option). Pricing on the JPMorgan Facility will
remain at LIBOR+2.5% and ARI will pay a 0.5% fee for the first year
and a 0.25% extension fee for the second year. The Company primarily
uses the JPMorgan Facility to finance ARI's first mortgage loan
Repayment of Mezzanine Loans
The Company received principal
repayment on two mezzanine loans totaling $50 million secured by the
equity interests in the owner of a portfolio of retail shopping
centers located throughout the United States. In connection with the
repayment, the Company received a yield maintenance payment totaling
$2.5 million. With the yield maintenance payment, the Company
realized a 15% IRR(1) on its mezzanine loan investment.
(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 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. With respect to the mezzanine
loan for the New York City Multifamily Conversion, the IRR
calculation assumes certain projections with respect to the timing of
the funding of the senior loan. 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.
Press spacebar to pause and continue. Press esc to stop.