Arbor Realty Trust, Inc. operates as a specialized real estate finance company that invests in a diversified portfolio of structured finance assets in the multifamily and commercial real estate markets. The company invests primarily in real estate-related bridge and mezzanine loans, including junior participating interests in first mortgages, preferred and direct equity. The company conducts substantially all of its operations and investing activities through its operating partnership, Arbor Realty Limited Partnership, and its subsidiaries. It serves as the general partner of its operating partnership, and owns a 100% partnership interest in its operating partnership as of December 31, 2015. Strategy The key elements of the company's strategy are to provide customized financing; execute transactions rapidly; manage credit quality; use its manager's relationships with existing borrowers; and leverage the experience of executive officers, its manager and its employees. Targeted Investments The company pursues lending and investment opportunities with property owners and developers who need interim financing until permanent financing could be obtained. It primarily targets transactions where it has competitive advantages, particularly its lower cost structure and in-house underwriting capabilities. The company’s structured finance investments generally have maturities of two to five years depending on type, have extension options when appropriate, and generally require a balloon payment of principal at maturity. Borrowers in the market for these types of loans include, but are not limited to, owners or developers seeking either to acquire or refurbish real estate or to pay down debt and reposition a property for permanent financing. The company’s investment program emphasizes various general categories of real estate-related activities. Bridge Financing The company offers bridge financing products to borrowers who are typically seeking short-term capital to be used in an acquisition of property. The borrower has usually identified an undervalued asset that has been under managed and/or is located in a recovering market. The bridge loans it make typically range in size from $5 million to $30 million, have terms of up to five years, and are predominantly secured by first mortgage liens on the property. At December 31, 2015 the company's target interest rate range is generally 5% to 6% over 30-day LIBOR. Mezzanine Financing The company offers mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower's equity in a transaction. The mezzanine loans it make typically range in size from $1 million to $10 million and have terms of up to ten years. At December 31, 2015 its target interest rate is generally 12% to 14%. The company holds a majority of its mezzanine loans through subsidiaries of its operating partnership that are pass-through entities for tax purposes. Junior Participation Financing The company offers junior participation financing in the form of a junior participating interest in the senior debt. Junior participation financings have the same obligations, collateral and borrower as the senior debt. The junior participation interest is subordinated to the senior debt by virtue of a contractual agreement between the senior debt lender and the junior participating interest lender. The junior participation loans it makes typically range in size from $1 million to $10 million and have terms of up to 10 years. At December 31, 2015 its target interest rate is generally 12% to 14%. Preferred Equity Investments The company provides financing by making preferred equity investments in entities that directly or indirectly own real property. In cases where the terms of a first mortgage prohibit additional liens on the ownership entity, investments structured as preferred equity in the entity owning the property serve as viable financing substitutes. With preferred equity investments, the company typically becomes a member in the ownership entity. The preferred equity investments it makes typically range in size from $1 mi
arbor realty trust inc
(ABR:New York Consolidated)
333 Earle Ovington Boulevard
Uniondale, NY 11553
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