Gramercy Capital Corp. Reports First Quarter 2009 Results

NEW YORK--(Business Wire)--
Gramercy Capital Corp. (NYSE: GKK):

First Quarter Highlights

* For the quarter, generated funds from operations ("FFO") of $1.2 million, a
decrease of $22.8 million from the $24.0 million of FFO generated in the same
quarter of the previous year. On a diluted per common share basis, FFO was $0.02
and $0.69 for the first quarter of 2009 and 2008, respectively.
* For the quarter, the net loss to common stockholders was $27.3 million, or
$0.55 per diluted common share, a decrease of $50.4 million from net income of
$23.1 million, or $0.66 per diluted common share, for the same quarter in the
previous year. Depreciation expense increased to $27.5 million, as compared to
$1.1 million, in the prior year`s quarter. The increase in depreciation in 2009
is due to the increase in depreciable commercial real estate acquired in the
American Financial Realty Trust ("AFR") acquisition in April 2008.
* Resolved or substantially amended $268.2 million of the Company`s recourse
debt obligations, resulting in the elimination of substantially all of the
Company`s corporate-level covenants and the reduction of corporate recourse in
connection with the remaining facilities to not more than $10.0 million.
* Reduced the Company`s debt subject to mark-to-market provisions from $95.8
million as of December 31, 2008 to $18.7 million as of March 31, 2009.
* In April 2009, completed the internalization of the Company`s management. The
internalization was completed through the direct acquisition of its external
manager, GKK Manager LLC, which was previously a wholly-owned subsidiary of SL
Green Realty Corp. (NYSE:SLG). The consideration paid to SL Green in the
transaction was de minimis.
* Maintained approximately $182.5 million of liquidity at quarter end, a
decrease of $52.6 million from the $235.0 million of liquidity reported in the
prior quarter. Liquidity at March 31, 2009 included $83.2 million of cash and
cash equivalents and $99.3 million of restricted cash in the Company`s three
collateralized debt obligations ("CDOs").
* Closed on the sale of 24 properties with an aggregate sales price of
approximately $23.1 million, including five held for sale properties.
Approximately $22.0 million of debt related to these properties was repaid.
* Closed on the sale to a third party of the Company`s 49.75% interest in 55
Corporate Drive, Bridgewater, NJ for $230.0 million, generating cash proceeds to
the Company of approximately $17.2 million. The sale, which closed in January
2009, resulted in a reduction of the Company`s consolidated mortgage debt of
$94.5 million.
* Generated $19.5 million of loan repayments for Gramercy Finance. Reduced
unfunded commitments associated with existing loans by $8.2 million, to $61.6
million, from $69.8 million at December 31, 2008.
* Recorded a gross provision for possible loan losses of $52.8 million for the
quarter relating to ten separate loans, based on the Company`s quarterly review
of its loan portfolio. The Company`s reserve for possible loan losses at March
31, 2009 was $132.0 million in connection with 18 separate loans.
* Recorded an impairment charge of $84.4 million related to the mark-to-market
of debt investments re-designated as held for sale.

Summary

Gramercy Capital Corp. (NYSE: GKK) today reported funds from operations ("FFO")
of $1.2 million, or $0.02 per diluted common share, and a net loss to common
stockholders of $27.3 million, or $0.55 per diluted common share for the quarter
ended March 31, 2009. The Company generated total revenues of $164.2 million
during the first quarter, an increase of $83.8 million from the $80.4 million of
total revenues generated during the same quarter of the prior year.

At March 31, 2009, the Company owned 26.6 million rentable square feet of
commercial real estate in 36 states and the District of Columbia with an
aggregate book value of approximately $3.9 billion, in addition to $2.1 billion
of loan investments, $887.6 million of commercial mortgage-backed real estate
securities investments, and $667.3 million in other assets. As of March 31,
2009, approximately 52.5% of the Company`s assets were comprised of commercial
property, 27.6% of debt investments, 11.9% of commercial mortgage-backed real
estate securities and 8.0% of other assets.

Debt Restructuring

During the quarter, the Company resolved or substantially amended $268.2 million
of the Company`s recourse debt obligations, resulting in the elimination of
substantially all of the Company`s corporate-level covenants and the reduction
of corporate recourse in connection with the remaining facilities to not more
than $10.0 million. The Company`s secured and other debt was reduced by $242.4
million as compared to December 31, 2008, primarily from these restructurings.

March 31, 2009 December 31, 2008
Mortgage notes payable $1,771,512 $1,833,005
Mezzanine loan payable 573,464 580,462
Credit facilities --- 172,301
Term loan, credit facility and repurchase facility 79,601 95,897
Collateralized debt obligations 2,607,759 2,608,065
Junior Subordinated notes 150,000 ---
Other liabilities 15,000 ---
Deferrable interest debentures held by trusts that issued --- 150,000

trust preferred securities
Total $5,197,336 $5,439,730

The restructurings included:

* On January 30, 2009, the Company exchanged $150.0 million of its outstanding
trust preferred securities for $150.0 million of newly issued unsecured junior
subordinated notes of GKK Capital, LP, its operating partnership. The new notes
bear a fixed interest rate of 0.5% per annum for the period commencing January
30, 2009 and ending January 29, 2012, and a fixed interest rate of 7.5% per
annum thereafter through maturity on June 30, 2035, for an effective yield to
maturity of 6.6% as compared to 7.7% under the previously outstanding trust
preferred securities.
* On March 27, 2009, the Company settled its $9.5 million master repurchase
facility with JP Morgan Chase Bank, N.A. ("JP Morgan") by making a cash payment
of approximately $1.9 million and transferring the full ownership and control
of, and responsibility for, the related loan collateral to JP Morgan. The
Company recorded an impairment charge of $8.8 million in connection with this
collateral transfer.
* On March 31, 2009, the Company entered into an amendment and compromise
agreement with KeyBank National Association ("KeyBank") as administrative agent
for a group of lenders to settle and satisfy pre-existing loan obligations of
approximately $172.3 million at a discount for a current cash payment of $45.0
million and a maximum amount of up to $15.0 million from 50% of all cash
distributions received from certain junior tranches and preferred classes of
securities in the Company`s CDO`s beginning in the third quarter of 2009. The
Company recorded a gain on extinguishment of debt of $107.2 million pursuant to
this agreement. The $15.0 million potential cash distribution is non-interest
bearing and is recorded in other liabilities on the Company`s balance sheet as
of March 31, 2009.
* On April 7, 2009, the Company entered into an amendment with Wachovia Bank,
National Association ("Wachovia"), pursuant to which the maturity date of the
credit agreement was extended to March 31, 2011. The amendment also provided for
the elimination of all financial covenants, terminated Wachovia`s right to
impose future margin calls, reduced the recourse guarantee to an amount not more
than $10.0 million, and eliminated cross default provisions with respect to the
Company`s other indebtedness. The Company made a $13.0 million cash deposit and
provided additional collateral to support existing letters of credit issued by
Wachovia in connection with the mortgage debt obligations of certain of the
Company`s subsidiaries. The Company also agreed to forgo additional borrowings
under the facility and to attempt to divest certain loan investments in future
quarters to further de-lever the credit facility. At March 31, 2009 the Company
re-designated four of these investments with a carrying value of $85.6 million
to held-for-sale and recorded an impairment charge of $21.5 million.
* On April 7, 2009, the Company entered into an amendment to the restated master
repurchase agreement and amended guaranty with Goldman Sachs Mortgage Company
("Goldman"), pursuant to which all financial covenants in the repurchase
agreement and the amended guaranty were eliminated and the cross default
provisions with respect to the Company`s other indebtedness were eliminated. In
addition, certain other provisions of the repurchase agreement and the amended
guaranty were amended or deleted, including the elimination of the existing
recourse liability and a relaxation of certain affirmative and negative
covenants. The Company made a cash payment to Goldman in the amount of $4.0
million to reduce the borrowings under the repurchase agreement.

Internalization

In April 2009, the Company completed the internalization of Gramercy's
management. The internalization was completed through the direct acquisition of
its external manager, GKK Manager LLC, which was previously a wholly-owned
subsidiary of SL Green Realty Corp. (NYSE:SLG). The consideration paid to SL
Green in the transaction was de minimis. The internalization transformed the
Company into a self-managed integrated commercial real estate finance and
property investment company. Upon completion of the internalization, the
management and incentive fees payable by Gramercy to its external manager were
eliminated and the Company added 77 former employees of the external manager as
its employees. The Company recorded an expense of $2.8 million for costs
incurred related to the acquisition.

Gramercy Realty

Gramercy Realty`s portfolio consists of office buildings and bank branches
serving primarily investment-grade rated financial institutions. During the
quarter, Gramercy Realty sold 24 properties, including five Held for Sale
properties designated at the time of the AFR merger, for an aggregate sales
price of approximately $23.1 million. During the quarter, 18 new leases totaling
32,046 net rentable square feet commenced. Gramercy Realty finished the quarter
at 88.5% occupancy. Gramercy Realty`s operating property portfolio as of March
31, 2009 is summarized below:

Number of Properties Rentable Square Occupancy
Feet
Portfolio At At At At At At
3/31/09 12/31/08 3/31/09 12/31/08 3/31/09 12/31/08
Core 647 644 20,053,620 20,747,772 96.3% 96.0%
Value - Add 210 222 4,598,848 4,721,333 66.7% 701%
Subtotal 857 866 24,652,468 25,469,105 90.8% 91.2%
Held for Sale 88 103 1,917,001 1,337,709 59.8% 42.1%
Total (1) (2) 945 969 26,569,469 26,806,814 88.5% 88.7%

(1) Excludes two legacy Gramercy joint venture net leased properties totaling of
530,000 net rentable square feet.
(2) Citizens JV (76 properties totaling 380,000 square feet) is not included in
the above table

Gramercy Realty`s top five tenants by percentage of base rent as of March 31,
2009 were:

Tenants/Financial Institutions Credit Number of Rentable % of

Rating
Locations
Sq. Ft.
Rentable

(1)
Sq. Ft.

1. Bank of America, N.A. A+ 375 12,517,258 47.1%
2. Wachovia Bank, National Association (2) AA 144 4,857,027 18.3%
3. Regions Financial Corporation (3) A 77 689,181 2.6%
4. Citizens Financial Group, Inc. (4) AA- 9 267,585 1.0%
5. General Services Administration (GSA) AAA 5 226,308 0.9%
Total 610 18,557,359 69.9%

(1) All ratings from Fitch Ratings LP.
(2) Acquired by Wells Fargo Corp.
(3) Individual lease agreements with tenants that are unrated subsidiaries of
Regions Financial Corporation, including Regions Bank and AmSouth Bank.
(4) Individual lease agreements with tenants that are unrated subsidiaries of
Citizens Financial Group Inc., including RBS Citizens, N.A. and Citizens Bank of
Pennsylvania. Citizens Financial Group Inc. is a wholly-owned subsidiary of Royal
Bank of Scotland Group PLC.

Gramercy Finance

As of March 31, 2009, debt investments owned by Gramercy Finance had a carrying
value of approximately $2.1 billion, net of loan loss reserves, impairments,
unamortized fees and discounts totaling $226.4 million, and had associated
unfunded commitments of $61.6 million. Commercial mortgage-backed real estate
securities investments had a carrying value of $887.6 million as of March 31,
2009, net of unamortized fees and discounts of $44.2 million. Approximately
92.0% of Gramercy Finance`s commercial mortgage-backed real estate securities
investments are rated AAA by at least one rating agency, and all are funded for
term in Gramercy`s three CDOs.

The aggregate carrying values, allocated by investment type, and weighted
average yields of Gramercy Finance`s debt and commercial mortgage-backed real
estate securities investments as of March 31, 2009 were:

Debt Percentage Fixed Rate: Floating

Investments
Effective
Rate:

($ in
Yield
Effective

millions)
Spread
Whole Loans - floating rate $1,154.9 55.9% - 422 bps
Whole Loans - fixed rate $178.9 8.6% 7.14% -
Subordinate Mortgage $80.3 3.9% - 242 bps

Interests - floating rate
Subordinate Mortgage $63.5 3.1% 9.16% -

Interests - fixed rate
Mezzanine Loans - $340.4 16.4% - 646 bps

floating rate
Mezzanine Loans - $237.1 11.4% 10.11% -

fixed rate
Preferred Equity - fixed rate $12.0 0.6% 10.22% -
Subtotal $2,067.1 100.0% 8.91% 455 bps
Commercial mortgage- $71.9 8.2% - 987 bps

backed real estate securities

- floating rate
Commercial mortgage- $815.7 91.8% 6.25% -

backed real estate securities

- fixed rate
Subtotal $887.6 100.0% 6.25% 987 bps
Total $2,954.7 100.0% 7.25% 479 bps

Note: Weighted
Average
Effective Yield
and Weighted
Average
Effective Spread
calculations
include loans
classified as
Non-Performing.
The schedule
includes Non
-Performing
loans classified
as Whole Loans -
Floating Rate of
approximately
$103.4 million
with an
effective spread
of 625 basis
points and Non
-Performing
loans classified
as Whole Loans -
Fixed Rate of
approximately
$56.8 million
with an
effective yield
of 7.67%.

Asset yields for fixed rate and floating rate debt investments as of March 31,
2009 were 8.9% and 30-day LIBOR plus 455 basis points, respectively, compared to
9.0% and 30-day LIBOR plus 480 basis points, respectively, in the previous
quarter. First mortgage loans remain the majority of Gramercy Finance`s debt
portfolio, standing at 64.5% at March 31, 2009, compared to 63.9% in the
previous quarter. The weighted average remaining term of Gramercy Finance`s debt
investment portfolio was 1.8 years, unchanged from the prior quarter, and the
weighted average remaining term of Gramercy Finance`s combined debt and real
estate securities portfolio increased to 3.6 years from 3.3 years for the prior
quarter. Approximately $1.0 billion, or 49.0%, of the Company`s loan portfolio
matures during the remainder of 2009 and the Company expects that substantially
all loans that qualify will elect to extend their maturity. Of the $1.0 billion
of debt maturing in 2009, $656.8 million have the option to extend if the
extension tests are met.

The Company recorded a gross provision for possible loan losses of $52.8 million
for the quarter, relating to ten separate loans based on the quarterly review of
its loan portfolio. The Company`s reserve for possible loan losses at March 31,
2009 was $132.0 million in connection with 18 separate loans. The Company
incurred charge-offs totaling $9.8 million due to realized losses on two loans.
The Company recorded an impairment charge of $84.4 million related to debt
investments designated as held for sale. Of the impairment, $21.5 million
related to debt investments re-designated as held for sale in connection with
the Wachovia restructuring, $54.1 million related to other debt investments with
a carrying value of $142.4 million designated as held for sale, and $8.8 million
related to collateral transferred in connection with the JP Morgan repurchase
facility.

At March 31, 2009, Gramercy Finance had seven non-performing loans with a
carrying value of $160.2 million, net of associated valuation allowances of
$118.5 million, as compared to a carrying value of $164.8 million, net of
associated loan loss reserves of $67.0 million at December 31, 2008. At
quarter-end, six loans with an aggregate carrying value of $151.9 million, net
of associated loan loss reserves of $27.3 million, were classified as
sub-performing, as compared to five loans with an aggregate carrying value of
$216.6 million at December 31, 2009.

Investment Activity

During the quarter, Gramercy Finance acquired $ 22.5 million par value of
AAA-rated commercial mortgage-backed real estate securities as follows:

Debt Investments Percentage Fixed Rate:

($ in millions)
Effective Yield
Commercial mortgage-backed real estate $15.6 100.0% 11.3%

securities - fixed rate

Gramercy Realty made no acquisitions during the first quarter.

Operating Results

For the first quarter, Gramercy Realty`s rental revenues totaled $78.0 million,
and related operating expense reimbursements aggregated $30.1 million, as
compared to the prior quarter`s rental revenues of $76.4 million and related
operating expense reimbursements of $29.9 million.

Gramercy Finance`s debt investments generated investment income of $52.9 million
for the first quarter, including yield maintenance and prepayment penalties, as
compared to $59.5 million for the prior quarter.

Interest expense of $65.4 million for the first quarter reflects interest
expense on $2.6 billion of investment-grade, long-term notes issued by our three
wholly-owned CDOs, $2.3 billion of mortgage notes payable, and $79.6 million of
other debt.

Management and incentive fees earned by affiliates of SL Green totaled $5.7
million for the quarter.

Marketing, general and administrative expense was $6.0 million, an increase of
$0.4 million from $5.6 million in the fourth quarter of the prior year.

Liquidity and Funding

Liquidity at March 31, 2009 was $182.5 million, a decrease of $52.6 million from
the $235.0 million of liquidity reported in the prior quarter. The Company`s
liquidity at March 31, 2009 included $83.2 million of cash and cash equivalents
and $99.3 million of cash in its three CDOs. The decrease in liquidity as
compared to the prior quarter was primarily attributable to cash payments made
in connection with the debt restructurings with KeyBank , Wachovia, Goldman, and
JP Morgan.

Loan prepayments, partial repayments, and scheduled amortization payments were
$19.5 million during the quarter. Unfunded commitments associated with existing
loans declined to $61.6 million from $69.8 million as December 31, 2008.
Additionally, the Company sold 24 properties acquired from AFR for an aggregate
gross sales price of approximately $23.1 million.

Dividends

In 2009, the Company is restricted from paying distributions on its common and
preferred stock under the terms of its $150.0 million junior subordinated
debenture, other than distributions required to maintain REIT qualification to
the extent the Company is required to make distributions in 2009. Beginning with
the third quarter of 2008, our board of directors elected not to pay a dividend
on our common stock, which for the second quarter of 2008 was $0.63 per share.
Beginning with the fourth quarter of 2008, our board of directors also elected
not to pay the Series A preferred stock dividend of $0.50781 per share. The
preferred stock dividend has been accrued for as of March 31, 2009. Our board of
directors will revisit the dividend policy in 2010. If required, the Company may
elect to pay dividends to satisfy its REIT distribution requirements on its
common stock in cash or a combination of cash and shares of common stock as
permitted under federal income tax laws.

Company Profile

Gramercy Capital Corp. is a self-managed integrated commercial real estate
finance and property investment company whose Gramercy Finance division focuses
on the direct origination and acquisition of whole loans, subordinate interests
in whole loans, mezzanine loans, preferred equity, commercial mortgage-backed
securities and other real estate securities, and whose Gramercy Realty division
targets commercial properties net leased primarily to financial institutions and
affiliated users throughout the United States. Gramercy is headquartered in New
York City, and has regional investment and portfolio management offices in Los
Angeles, California, Jenkintown, Pennsylvania, and Charlotte, North Carolina.

Conference Call

The Company will host a conference call and audio web cast on May 12, 2009 at
2.00 p.m. EDT to discuss the first quarter financial results.

The live call will be webcast in listen-only mode on Gramercy`s web site at
www.gramercycapitalcorp.com and on Thomson`s StreetEvents Network. The
presentation may also be accessed by dialing 800-901-5259 Domestic or
617-786-4514 International, using pass code Gramercy.

A replay of the call will be available from May 12, 2009 5:00 p.m. through, May
21, 2009 by dialing 888-286-8010 Domestic or 617-801-6888 International, using
pass code 49769389.

To review Gramercy's latest news releases and other corporate documents, please
visit Gramercy`s website at www.gramercycapitalcorp.com or contact Investor
Relations at 212-297-1000.

Disclaimer

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 in this press release. A reconciliation of each
non-GAAP financial measure and the comparable GAAP financial measure (net income
(loss)) can be found on page 16 of this release.

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 the success or failure of our efforts to
implement our current business strategy, the strength of the commercial finance
and real estate property markets, and the banking industry specifically,
competitive market conditions, unanticipated administrative costs, general and
local economic conditions, interest rates, capital and credit market conditions,
bankruptcies and defaults of borrowers or tenants in ourproperties or properties
securing the Company's debt investments, the Company`s ability to operate as an
internally-managed company, difficulties encountered in integrating the
Company`s former externalmanager into the Company, the resolution of the
Company`s non-performing and sub-performing assets, compliance with financial
covenants, maintenance of liquidity needs, management changes, compliance with
over-collateralization and interest coverage tests in the Company`s CDOs, and
other factors including those listed in the Company`s Annual Report on Form 10-K
and in the Company`s Quarterly Reports on Form 10-Q, which are beyond the
Company's control. The Company undertakes no obligation to publicly update or
revise any of the forward-looking information. For further information, please
refer to the Company's filings with the Securities and Exchange Commission.

Selected Financial Data
Gramercy Capital Corp.

Consolidated Statements of Income

(Unaudited, amounts in thousands, except share and per share data)

Three Months Ended
March 31,
2009 2008
Revenues
Rental Revenue $79,716 $1,788
Investment income 52,934 74,595
Operating expense reimbursements 30,060 ---
Gain on sales and other income 1,485 4,013
Total revenues 164,195 80,396

Operating Expenses
Other property operating expenses 19,355 ---
Utilities 9,952 ---
Real estate taxes 9,567 ---
Ground rent and leasehold obligations 4,427 ---
Direct billable expenses 2,163 ---
Total operating expenses 45,464 ---
Net operating income 118,731 80,396

Other expenses:
Interest expense 65,352 40,068
Management fees 5,672 7,145
Incentive fee --- 2,496
Depreciation and amortization 27,463 1,117
Marketing, general and administrative 5,958 2,804
Business acquisition costs 2,826 ---
Impairment on loans held for sale 84,428 ---
Provision for loan loss 52,771 8,000
Total expenses 244,470 61,630

Income (loss) from continuing operations before equity (125,739) 18,766

in net income of unconsolidated joint ventures
Equity in net income from unconsolidated joint 2,212 3,323

ventures
Income (loss) from continuing operations before (123,527) 22,089

provision for taxes, gain on extinguishment of debt,

and discontinued operations

Gain on extinguishment of debt 107,229 3,690
Provision for taxes (2,267) (11)
Net income (loss) from continuing operations (18,565) 25,768
Net loss from discontinued operations (6,370) (297)

Net income (loss) (24,935) 25,471
Net loss attributable to non-controlling interests (20) ---
Net income (loss) attributable to Gramercy Capital (24,955) 25,471

Corp.
Accrued preferred stock dividends (2,336) (2,336)
Net income (loss) available to common stockholders $(27,291) $23,135

Three Months Ended
March 31,
2009 2008

Basic earnings per share:
Net income (loss) from continuing operations, after $(0.42) $0.67

preferred stock dividends
Net loss from discontinued operations (0.13) (0.01)
Net income (loss) available to common stockholders $(0.55) $0.66

Diluted earnings per share:
Net income (loss) from continuing operations, after $(0.42) $0.67

preferred stock dividends
Net loss from discontinued operations (0.13) (0.01)
Net income (loss) available to common stockholders $(0.55) $0.66

Dividends per common share --- $0.63

Basic weighted average common shares outstanding 49,860 34,854
Diluted weighted average common shares and 50,030 35,015

common share equivalents outstanding

Gramercy Capital Corp.

Consolidated Balance Sheets

(Unaudited amounts in thousands, except share and per share data)

March 31, December 31,
2009 2008
Assets
Real estate investments, at cost
Land $904,196 $891,500
Building and improvements 2,414,527 2,441,839
Less: accumulated depreciation (61,493) (47,071)
Total real estate investments, net 3,257,230 3,286,268

Cash and cash equivalents 83,199 136,828
Restricted cash 233,140 234,781
Pledged government securities, net 100,483 101,576
Loans and other lending investments, net 1,914,606 2,213,473
Commercial mortgage-backed real estate securities 887,585 869,973
Investment in joint ventures 99,433 96,777
Assets held for sale, net 261,554 189,922
Tenant and other receivables, net 27,005 28,129
Accrued interest 23,392 25,447
Acquired lease assets, net of accumulated amortization of 499,652 536,212
$44,851 and

$30,760
Deferred costs, net of accumulated amortization of $32,361 47,016 53,248
and $26,451
Other assets 53,669 48,322
Total assets $7,487,964 $7,820,956

Liabilities and Stockholders` Equity:
Mortgage notes payable $1,771,512 $1,833,005
Mezzanine loan payable 573,464 580,462
Credit facilities --- 172,301
Term loan, credit facility and repurchase facility 79,601 95,897
Collateralized debt obligations 2,607,759 2,608,065
Junior subordinated notes 150,000 ---
Total secured and other debt 5,182,336 5,289,730

Accounts payable and accrued expenses 74,378 88,437
Management and incentive fees payable 1,972 979
Dividends payable 4,661 2,325
Accrued interest payable 8,004 8,167
Deferred revenue 99,683 98,693
Below-market lease liabilities, net of accumulated 845,769 846,351
amortization of $74,639 and $53,369
Leasehold interests, net of accumulated amortization of 20,361 21,051
$2,872 and $2,182
Liabilities related to assets held for sale 60,372 110,543
Derivative instruments, at fair value 206,529 157,776
Other liabilities 27,394 14,471
Deferrable interest debentures held by trusts that issued --- 150,000
trust preferred

securities
Total liabilities 6,531,459 6,788,523

Commitments and contingencies --- ---

March 31, December 31,
2009 2008

Stockholders` Equity:
Common stock, par value $0.001, 100,000,000 shares 50 50
authorized,

49,863,831 and 49,852,243 shares issued and outstanding at
March 31,

2009 and December 31, 2008, respectively
Series A cumulative redeemable preferred stock, par value 111,205 111,205
$0.001,

liquidation preference $115,000, 4,600,000 shares
authorized,

4,600,000 shares issued and outstanding at March 31, 2009
and

December 31, 2008, respectively
Additional paid-in-capital 1,078,109 1,077,983
Accumulated other comprehensive income (209,522) (160,739)
(Accumulated Deficit) retained earnings (26,069) 1,222
Total Gramercy Capital Corp. stockholders` equity 953,773 1,029,721
Non-controlling interests 2,732 2,712
Total Equity 956,505 1,032,433
Total liabilities and stockholders` equity $7,487,964 $7,820,956

FFO for the three months ended March 31, 2009 and 2008 are as follows (amounts
in thousands):

Gramercy Capital Corp.

Reconciliation of Non-GAAP Financial Measures

(amounts in thousands, except per share data)

For the Three Months Ended
2009 2008
Net Income (loss) from continuing operations $(27,291) $23,135
Add:
Depreciation and amortization 30,698 4,589
FFO adjustment for unconsolidated joint ventures 1,173 186
Less:
Non real estate depreciation and amortization (2,989) (3,877)
Gain on Sale (358) ---
Funds from operations $ 1,233 $24,033

Funds from operations per share - basic $0.02 $0.69
Funds from operations per share - diluted $0.02 $0.69

Gramercy Capital Corp.
Jon W. Clark, 212-297-1000
Chief Financial Officer
or
Laura Godfrey Guttman, 212-297-1000
Investor Relations

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