PlanMaestro Posted September 28, 2012 Author Share Posted September 28, 2012 Investor presentation for today's conference call http://files.shareholder.com/downloads/GKK/2090686985x0x602631/6a9cbafd-efdc-40e7-b9b2-4403aad5145c/GKK_Investor_Presentation_-_FINAL.pdf Excess cash flow from 3 CDOs stopped and collecting management fees only. Balance sheet ex-CDOs liquid and valuable. Link to comment Share on other sites More sharing options...
heth247 Posted September 28, 2012 Share Posted September 28, 2012 Plan, I still don't see why is it good to abandon 2006 for now and how can they replace its income in the near future. What really makes 2006 struggling? It didn't fail in 2009, why now? Investor presentation for today's conference call http://files.shareholder.com/downloads/GKK/2090686985x0x602631/6a9cbafd-efdc-40e7-b9b2-4403aad5145c/GKK_Investor_Presentation_-_FINAL.pdf Excess cash flow from 3 CDOs stopped and collecting management fees only. Balance sheet ex-CDOs liquid and valuable. Link to comment Share on other sites More sharing options...
heth247 Posted September 28, 2012 Share Posted September 28, 2012 In today's conference call, Ben mentioned that they are going to sell these two properties (Chicago and Charlotte). Thanks for the links and the efforts. Cant make complete sense of them but are these the 2003/2004 securitization docs from the original acquisition? Does that mean there is existing debt that they are assuming on this portfolio? That doesnt seem to line-up with the press release about new financing, although I guess they could pre-pay and refinance and/or not close for 6-9 mos until debt matures or is freely pre-payable. They filed some docs on the deal today. Towards the middle of exhibit 2.1, there looks like a list of the BBD1 collateral. There appears to be one building in Chicago, 231 South LaSalle, and one building in Charlotte, 525 North Tryon. Those are the only two where Seller is obtaining tenant estoppels so guessing they may be only buildings of material size (and without BAC as the only material tenant). Random sample of some locations revealed mostly branches/backoffices. Curious if you see anything differently there. http://www.sec.gov/Archives/edgar/data/1287701/000114420412047691/v322135_ex2-1.htm Link to comment Share on other sites More sharing options...
PlanMaestro Posted October 4, 2012 Author Share Posted October 4, 2012 http://www.globest.com/news/12_451/newyork/office/Blackstone-Leads-JV-on-Recap-of-SoCal-Office-Portfolio-325711.html http://pymnts.com/news/businesswire-feed/2012/october/04/sl-green-announces-recapitalization-of-large-west-coast-office-portfolio-20121004005162/ http://www.sec.gov/Archives/edgar/data/37008/000119380512001659/e610125_ex99-1.htm Link to comment Share on other sites More sharing options...
Olmsted Posted November 8, 2012 Share Posted November 8, 2012 Can't fault the new team for inaction! Some of this is old news (the BAC portfolio), some new to me. Unfortunately it looks like the CDOs are all turned off now, and they're trying to dispose of them. Announced the acquisition of a 115-property office portfolio, or the Bank of America Portfolio, from an affiliate of KBS Real Estate Investment Trust, Inc., or KBS, in a joint venture with an affiliate of Garrison Investment Group, for a purchase price of $470.0 million in cash plus the issuance of six million shares of the Company’s common stock, valued at $15.0 million at the execution date of the purchase agreement. The acquisition is expected to close at the end of November 2012. Entered into a contract to acquire two Class A industrial properties located near Indianapolis, Indiana totaling approximately 540,000 square feet for a purchase price of approximately $27.2 million. Entered into a letter of intent to buy a portfolio of industrial buildings totaling approximately 1,000,000 square feet. The initial cap rate is expected to be in excess of 8.5%. However, there is no assurance that the transaction will be consummated on the terms described or at all. Engaged Wells Fargo Securities LLC to assist in the potential sale of CDO management contracts, CDO securities and CDO equity. Invested $19.0 million in the origination of the KBS mezzanine loan which KBS will pay off with the proceeds of the Bank of America Portfolio acquisition. The KBS mezzanine loan accounted for the decrease in unrestricted corporate cash of $175.2 million at quarter end, as compared to approximately $192.6 million reported in the prior quarter. Link to comment Share on other sites More sharing options...
PlanMaestro Posted November 8, 2012 Author Share Posted November 8, 2012 Can't fault the new team for inaction! Some of this is old news (the BAC portfolio), some new to me. Unfortunately it looks like the CDOs are all turned off now, and they're trying to dispose of them. Yep, the new team is in too much of a hurry to get to their clean NNN endgame for my taste. Still cheap and safe, but w/o the option value in the CDOs is not my best idea at the moment. That is the great advantage of a good balance sheet in a turnaround, even if all optionality runs into problems, you can land on your feet and still can revisit it later. PS: Is this just math I do as an owner of GKK to make me feel better or is this real? Link to comment Share on other sites More sharing options...
Olmsted Posted November 8, 2012 Share Posted November 8, 2012 Yep, the new team is in to much of hurry for my taste to get to their clean NNN endgame. Still cheap and safe, but w/o the option value in the CDOs is not my best idea at the moment. That is the great advantage of a good balance sheet in a turnaround, even if all optionality runs into problems, you can land on your feet and still can revisit it later. PS: Is this just math I do as an owner of GKK to make me feel better or is this real? I was thinking about the same. Clearly this has not worked out as hoped. And that is disappointing. But, still up on the position - which speaks to the margin of safety that was embedded and the value of that philosophy. Link to comment Share on other sites More sharing options...
heth247 Posted November 8, 2012 Share Posted November 8, 2012 Plan, Do you know which loan in 2006 defaulted? a 9% drop in OC test is really surprising to me. Link to comment Share on other sites More sharing options...
heth247 Posted November 8, 2012 Share Posted November 8, 2012 Is it because of the mezz loan in California portfolio converted? "The investment in the joint venture is held in the Company’s CDOs and had a carrying value of $10.4 million as of September 30, 2012. " Link to comment Share on other sites More sharing options...
PlanMaestro Posted November 8, 2012 Author Share Posted November 8, 2012 Is it because of the mezz loan in California portfolio converted? "The investment in the joint venture is held in the Companys CDOs and had a carrying value of $10.4 million as of September 30, 2012. " In great part, yes. Link to comment Share on other sites More sharing options...
heth247 Posted November 8, 2012 Share Posted November 8, 2012 But wasn't SLG expect to recoup all their original investment from the conversion? Or is GKK the only one who is getting a hair cut on this deal? Link to comment Share on other sites More sharing options...
PlanMaestro Posted November 8, 2012 Author Share Posted November 8, 2012 But wasn't SLG expect to recoup all their original investment from the conversion? Or is GKK the only one who is getting a hair cut on this deal? I am still missing info on this, from what I've read it SEEMS they will recoup a lot (needs confirmation). Though, they still have to take a write-down for OC purposes. Will see. Link to comment Share on other sites More sharing options...
Olmsted Posted November 10, 2012 Share Posted November 10, 2012 Conference call transcript out. CEO sounds quite positive in general. I hope he's not blowing smoke with his CDO sale comments. Given how guarded he was previously, the optimism may be legitimate. Also good comments about how investing the cash is proceeding more rapidly than anticipated. To review the plan in its very simplest terms, it’s clean up the legacy issues and reduce costs, number one. Number two, invest cash for recurring FFO and number three, simplify the story with greater focus on a net lease investment company story going forward. In terms of the CDO sale, we, as you saw in the press release, have engaged Wells Fargo to market the CDO management business. We’ve received very strong interest and – from a number of very good legitimate buyers who know this business well. It’s more creative to them than our having a standalone dedicated team and so we’ve been very pleased with the strong interest. And I think there are a couple of reasons there’s strong interest. The CDO market in a general way is coming back in the sense that new CLOs are being done. North Star announced that they have completed a new CLO. There is appetite for re-securitized paper and companies again that’s a scale business, companies that have scale in that business are the best owners of these types of assets. So, but we benefit from what’s happening in that market indirectly in my view based upon – and the way it shows up as the strong interest we’re getting in the CDO management business. Our hope is the transaction will be completed this year and I think that the investors will be pleased with the results of that transaction. As with any transaction, it’s not over till it’s over, but we are pleased with how it’s going. We’ve seen very strong interest and I think the investors will be pleased at the point that we can announce something assuming we get to that point which is no small feat. These are very complicated assets to sell and the team here is working very hard on that. Kevin Tracey - Oberon Hi. Thanks for taking my questions. I guess first of all, I think in the operational review call, you said – you made a comment that you didn’t think the cash proceeds from the sales of your CDO interest would be very meaningful. But I guess, the comments today there being a lot of demand or a lot of interest in those assets as well as you made a comment that you think investors will be pleased, I guess, is that – has your view changed since your comment since your operational review call? Gordon DuGan Yeah, I’d say my view has changed. I think that based on the interest we’re getting as well as some remodeling that we’ve done of those cash flows, I think I was probably too guarded about that before and we do – that does reflect a change of view. I think that they’re very, very difficult instruments to value. As I’m sure all investors are fully aware, but yeah, it does reflect a more optimistic view on the value of that business. Link to comment Share on other sites More sharing options...
PlanMaestro Posted November 10, 2012 Author Share Posted November 10, 2012 Was reading the transcript too. It looks like they are very advanced in the process of selling the CDOs. As I said on twitter… conflicted. Link to comment Share on other sites More sharing options...
heth247 Posted November 10, 2012 Share Posted November 10, 2012 As one of GKK's investor, how much of the sale would please you guys? I am hoping that they get at least $50M.... Link to comment Share on other sites More sharing options...
PlanMaestro Posted November 20, 2012 Author Share Posted November 20, 2012 LaSalle is part of the portfolio they are buying from KBS. Gangs of New York buying up downtown market http://www.chicagobusiness.com/article/20121110/ISSUE01/311109980/gangs-of-new-york-buying-up-downtown-market Mr. Karasick, of New York-based real estate investment firm 601 W Cos., is a veteran of such high-profile real estate transactions. In 2005, for example, he sold the Bank of America Center in San Francisco for $1.05 billion. He did not return calls requesting comment. In contrast, Mr. Silberberg, of Nanuet, N.Y.-based Berkley Properties LLC, is a relative newcomer to such wheeling and dealing. In 2010, Berkley paid nearly $72.3 million for 180 N. LaSalle St., in what was then the firm's biggest acquisition. Mr. Silberberg declines to comment on Pru Plaza but says he has invested with Mr. Karasick for at least 15 years. The group also includes Victor Gerstein, a partner in a New York law firm. The trio is part of a venture that has agreed to buy the Bank of America Building, 231 S. LaSalle St., from New York-based Gramercy Capital Corp. for $97 million, sources say. Mr. Silberberg, also an attorney, declines to comment about that deal but praises his compatriots. Link to comment Share on other sites More sharing options...
Olmsted Posted November 28, 2012 Share Posted November 28, 2012 Closed on the Indianapolis industrial park: http://ir.gramercycapitalcorp.com/releasedetail.cfm?ReleaseID=723517 Link to comment Share on other sites More sharing options...
PlanMaestro Posted November 28, 2012 Author Share Posted November 28, 2012 DuGan Guides Gramercy’s Strategic Overhaul http://www.reit.com/Videos/DuGan-Guides-Gramercys-Strategic-Overhaul.aspx Link to comment Share on other sites More sharing options...
heth247 Posted November 29, 2012 Share Posted November 29, 2012 DuGan Guides Gramercy’s Strategic Overhaul http://www.reit.com/Videos/DuGan-Guides-Gramercys-Strategic-Overhaul.aspx Sounds like he is focusing on selling the CDOs. Hope he can get a good price for us! Plan, what do you make of the $27M all-cash deal they just closed? Why didn't they borrow? Link to comment Share on other sites More sharing options...
PlanMaestro Posted November 29, 2012 Author Share Posted November 29, 2012 Why didn't they borrow? It seems to me they haven't disclosed capital structure. Link to comment Share on other sites More sharing options...
heth247 Posted November 29, 2012 Share Posted November 29, 2012 It seems to me they haven't disclosed capital structure. On conference call, Gordon talked about 8.4% cap rate and 3-4% borrowing rate for this transaction. But yesterday's PR did not mention anything about that. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted December 4, 2012 Share Posted December 4, 2012 http://www.bizjournals.com/charlotte/blog/morning-edition/2012/12/parkway-properties-to-buy-charlotte.html?ana=yfcpc Parkway (NYSE:PKY) is an Orlando, Fla.-based firm that recently snapped up the NASCAR Plaza and Hearst Tower buildings in uptown. The Charlotte Business Journal reported last month the company was in talks to buy 525 North Tryon, formerly known as the Odell building, currently owned by a joint venture between Gramercy Capital Corp. and an affiliate of Garrison Investment Group. Link to comment Share on other sites More sharing options...
heth247 Posted December 4, 2012 Share Posted December 4, 2012 Looks like GuGan is delivering!. The Chicago one sold for $97M and this one sold for $47M, so total is $144M, reducing the original $485M portfolio to $341M. I believe they were targeting $350M, per their latest 8k for the NREITs presentation. http://www.bizjournals.com/charlotte/blog/morning-edition/2012/12/parkway-properties-to-buy-charlotte.html?ana=yfcpc Parkway (NYSE:PKY) is an Orlando, Fla.-based firm that recently snapped up the NASCAR Plaza and Hearst Tower buildings in uptown. The Charlotte Business Journal reported last month the company was in talks to buy 525 North Tryon, formerly known as the Odell building, currently owned by a joint venture between Gramercy Capital Corp. and an affiliate of Garrison Investment Group. Link to comment Share on other sites More sharing options...
PlanMaestro Posted December 4, 2012 Author Share Posted December 4, 2012 Yes he is! Why he can't slow down a bit … damn. Looks like GuGan is delivering!. The Chicago one sold for $97M and this one sold for $47M, so total is $144M, reducing the original $485M portfolio to $341M. I believe they were targeting $350M, per their latest 8k for the NREITs presentation. Link to comment Share on other sites More sharing options...
PlanMaestro Posted December 6, 2012 Author Share Posted December 6, 2012 13G Weiss Asset Management, 300,723 shares of Preferred Stock http://www.sec.gov/Archives/edgar/data/1287701/000135755012000019/ep027043pfd13g6dec2012.txt Link to comment Share on other sites More sharing options...
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