Full Description

Arbor Realty Trust, Inc., incorporated in June 2003, is a specialized real estate finance company. The Company invests in a diversified portfolio of structured finance assets in the multi-family and commercial real estate markets. It invests primarily in real estate-related bridge and mezzanine loans, including junior participating interests in first mortgages, preferred and direct equity, and in limited cases, discounted mortgage notes and other real estate-related assets. The Company also invests in mortgage-related securities. It conducts all of its operations and investing activities through its operating partnership, Arbor Realty Limited Partnership, and its wholly owned subsidiaries.

The Company serves as the general partner of its operating partnership, and owns a 100% partnership interest in its operating partnership as of December 31, 2008. The Company is externally managed and advised by Arbor Commercial Mortgage, LLC (ACM), a national commercial real estate finance company, which specializes in debt and equity financing for multi-family and commercial real estate. ACM originates and services multi-family and commercial mortgage loans under Federal National Mortgage Association (Fannie Mae), Federal Housing Administration and conduit commercial lending programs.

Targeted Investments

The Company offers bridge financing products to borrowers who are seeking short-term capital to be used in an acquisition of property. The bridge loans the Company makes range in size from $1 million to $75 million and are predominantly secured by first mortgage liens on the property. The Company offers junior participation financing in the form of junior participating interest in the senior debt. Its junior participation loans range in size from $1 million to $60 million and have terms of up to 10 years. 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 Company holds a majority of its mezzanine loans through subsidiaries of its operating partnership that are pass-through entities for tax purposes or taxable subsidiary corporations. It provides financing by making preferred equity investments in entities that directly or indirectly own real property. The Company has and may, invest in certificates issued by the Government National Mortgage Association (Ginnie Mae), Fannie Mae, or the Federal Home Loan Mortgage Association (Freddie Mac), that are collateralized by whole pools of residential or commercial, fixed or adjustable rate mortgage loans. It invests in securities, such as the common stock of a commercial real estate specialty finance company.

Structured Finance Investments

The Company owns a diversified portfolio of structured finance investments consisting primarily of real estate-related bridge, junior participation interests in first mortgages, and mezzanine loans, as well as preferred equity investments and mortgage-related securities. At December 31, 2008, it had 136 loans and investments in its portfolio, totaling $2.3 billion. These loans and investments were for 73 multi-family properties, 26 office properties, 13 hotel properties, 12 land properties, seven commercial properties, three condominium properties and two retail properties.