CT - Capital Trust

[Packer16]

This is transfer from a non-company thread.

 

Some top level numbers : BV= $3.94/share ($97.7m) yielding about 5% on a pre-tax basis from investments with $4.5b AUM generating about $5.3 m/yr EBIT from AM and servcing fees.  AM on an after-tax basis is about $0.51/share.  They also have $250 million in NOLs.  With a market cap of $78 million there is upside to the assets plus the possible Zell premium of providing assets to fully utilize the NOL (like he did with Covanta/Danielson Holding).  I have a started position at about $2.40 but may add more if some of my other positions approach FV.

 

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[CONeal]

"Turning to CT Legacy REIT, as we discussed on previous calls in connection with our March 2011 restructuring, we transferred substantially all of our directly held interest earning assets to a newly formed entity CT Legacy REIT, along with all of our remaining legacy liabilities.

 

At December 31st, CT Legacy REIT's portfolio of interest earning assets included 17 loans for the principle balance of $372 million, adjusted book balance of $237 million and a fair value of $213 million.

 

In addition, CT Legacy REIT held 14 securities with a principle balance of $143 million, adjusted book balance of $7 million and fair value excluding CDO residual interests of $2 million. Altogether, interest earning assets totaled $245 million of adjusted book balance.

 

Since its inception on March 31st, CT Legacy REIT has collected $269 million or 54% of the initial net book value of the legacy portfolio. The portfolio continues to perform as expected and despite the flurry of payoffs received thus far we do not anticipate similar activity in the near-term as the portfolio has been culled down to the more difficult and longer term assets.

 

During the same timeframe CT Legacy REIT has repaid $267 million of liabilities, representing 69% of the post restructuring balance, bringing total debt at year end to a $124 million."

 

From the q4 conference call. 

 

Still digging into this and there is alot of moving parts.  Not sure if I am understanding this correctly but they do expect some problems in 2014 - 2016 with the

[CONeal]

"Furthermore, as the portfolio matures over time, the asset base will become dominated by non-performing and troubled assets and the longer duration performing assets.

 

That said, the recovery is subject to material risks and is expected to occur in 2014 '15 and '16 and while the adjusted presentation is in market improvement to the consolidated GAAP presentation, it is important to keep in mind that these figures are not present values. "

[BargainValueHunter]

Q1 2012:

 

http://seekingalpha.com/news-article/2755041-capital-trust-reports-first-quarter-2012-results

 

    Operating Results:

        Consolidated assets were $605.6 million as of March 31, 2012 and consolidated liabilities were $588.6 million, resulting in total equity of $17.0 million.

        Significant decrease in consolidated assets and liabilities due to the Company's deconsolidation of its legacy portfolio. The deconsolidation of $785.9 million of assets and $845.0 million of liabilities resulted in a net gain on deconsolidation of $60.9 million.

        Consolidated net income was $66.6 million, or $2.91 per share ($2.74 per share on a diluted basis), for the quarter ended March 31, 2012.

        Adjusted assets were $101.2 million as of March 31, 2012, and adjusted liabilities were $23.0 million, resulting in adjusted shareholders' equity of $78.3 million. Based on 24.5 million shares outstanding (fully diluted basis) at quarter end, adjusted book value per share was $3.20.

        Cash of $37.2 million increased by $2.4 million due to a $1.2 million income tax refund, and $1.2 million of net operating cash flow and net cash flow from CTOPI.

        The Company's investment management platform generated $5.7 million of gross revenues during the quarter ($2.1 million of fees were eliminated in consolidation under GAAP).

 

Capital Trust, Inc.

 

    As of March 31, 2012, the Company's adjusted assets were comprised of:

        Unrestricted cash of $37.2 million.

        The Company's investment management and special servicing platform, operated through its subsidiary, CT Investment Management Co., LLC ("CTIMCO"). CTIMCO has assets under management of $5.0 billion with mandates including: (i) management of its public company parent, Capital Trust, Inc.; (ii) management of CT Legacy REIT; (iii) management of various private equity funds and separate accounts; (iv) collateral management of five commercial real estate CDOs; and (v) special servicing of securitized loan investments for both CTIMCO-managed vehicles and third parties.

        $9.6 million funded under its co-investment commitment to CT Opportunity Partners I, LP ($25.0 million commitment, of which $15.4 million remains unfunded).

        Equity interest in the CT Legacy REIT portfolio (52%) with an adjusted book value of $48.1 million. Net of its obligations under the secured notes and management incentive awards, the value of the Company's equity interest in the CT Legacy REIT portfolio is $30.1 million on an adjusted basis.

    The Company has no recourse liabilities.

[PlanMaestro]

10Q; http://www.sec.gov/Archives/edgar/data/1061630/000119380512000854/e609654_10q-ct.htm

 

Cash flow positive somewhere around $10M per year, half of market cap in cash, plus Legacy REIT upside. Seems to be doing good, waiting for another scare to buy: underestimated and forgotten.

[Packer16]

The NAV declined from about $6.04 per share ($100m in BV plus 1% of $4.5b AUM) to $5.33 per share ($78m in BV plus 1% of $5b AUM) with NOL upside still available ($100m) if assets are found to put into this vehicle by Zell.  Still a cheap stock with a growing AUM and declining NAV.

 

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[BargainValueHunter]

http://seekingalpha.com/article/575301-capital-trust-s-ceo-discusses-q1-2012-results-earnings-call-transcript

 

As of quarter end on this fair value basis, CT Legacy REIT had adjusted assets of $104 million. We own 100% of CT Legacy REIT’s Class A-1 shares, 14% of its Class A-2 shares, and 8% of its Class B shares resulting in an aggregate investment in CT Legacy REIT of $48 million on an adjusted basis.

 

Our interest in CT Legacy REIT, however, is further subject to our obligations under the related nonrecourse secured notes and management incentive awards plans. The secured notes have a $7.8 million face amount; however, they will require a cash repayment of $11.1 million in order to be satisfied. These notes are nonrecourse to CT and are secured solely by a portion of CT’s equity interest in the Class A common stock of CT Legacy REIT.

 

The management incentive awards provide for the participation in up to 6.75% of the net equity recovery of CT Legacy REIT. Net of these two obligations, CT’s adjusted book value in the CT Legacy REIT portfolio is $30 million, and as Steve mentioned, this recovery obviously remains subject to material risk.

 

In addition to CTIMCO and CT Legacy REIT, our adjusted assets as of March 31st included unrestricted cash of $37 million and our $10 million co-investment in CT Opportunity Partners 1.

[BargainValueHunter]

http://www.sacbee.com/2012/05/15/4492105/capital-trust-inc-explores-strategic.html

 

Capital Trust, Inc. (NYSE: CT) (the "Company") announced today that its Board of Directors (the "Board") has formed a Special Committee of the Board comprised of independent directors (the "Special Committee") to consider and explore strategic alternatives available to the Company in order to maximize shareholder value.  The Special Committee intends to undertake a thorough exploration of the full range of alternatives, including a possible sale of the Company and has retained Evercore Partners to serve as its financial advisor.

 

No decision has been made to engage in a transaction or transactions resulting from the Special Committee's exploration of strategic alternatives.  There can be no assurance that that the Special Committee or the Board will authorize the pursuit of any strategic alternative.  Moreover, there can be no assurance with respect to the terms or the timing of any transaction, or whether a transaction will ultimately result at all.

 

Up 12% intraday...

[HJ]

http://www.sec.gov/Archives/edgar/data/11544/000119312512245497/d357736dex995.htm

 

[Packer16]

The bid is low for the AM business ($25 to $30m) with $7.5 million in tangible equity or $20 million net for the AM business on $5b AUM is only 40bp.  If accepted WRB will get a steal.  I may write to management and state that we should get at least 1% of AUM or don't sell.  We don't need to sell.

 

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[HJ]

Does look pretty low.  But I've seen some circumstances where it's more about preserving jobs than pure economics.  the fact that the letter was addressed to Evercore says CT retained them tot sell.  There are quite a lot of fixed income management platform for sale these days (former CDO/CLO managers morphed hedge fund manager pretenders)  If it weren't for the permanent vehicle, they may very well not get a bid at all.

[BargainValueHunter]

...and boom goes the dynamite:

 

http://www.reuters.com/article/2012/09/27/us-capitaltrust-idUSBRE88Q1WH20120927?feedType=RSS&feedName=innovationNews&rpc=43

 

Blackstone Group LP (BX.N) has agreed to buy the investment unit of real estate finance company Capital Trust Inc (CT.N), whose chairman is real estate magnate Sam Zell, and to take an 18.2 percent stake in the company in a deal worth about $30 million, the companies said on Thursday.

 

Shares of Capital Trust rose 27 percent after hours following the joint statement after closing $3.13 on the New York Stock Exchange.

 

$50 million would have been a decent number.  :'(

[Packer16]

This price is no better than the WR Berkley offer.  I think HJ is right about job preservation and with WR Berley in the accepting group it is going to be a challenge to fight this.  I may move onto something with more upside.

 

 

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[PlanMaestro]

After the $2 per share cash div there may be some levered upside again?

 

http://finance.yahoo.com/news/capital-trust-closes-sale-investment-164400993.html