CBRE Realty Finance Inc., a real-estate investment trust that makes and invests in commercial-property loans, said it is considering strategic "initiatives" after posting a fourth-quarter loss partly due to bad loans tied to developer Harry Macklowe, the Wall Street Journal reports.
The company, which has lost more than 70% of its market value since its initial public offering in October 2006, said it had hired Goldman Sachs Group Inc. to help explore "a wide range of strategic and operational initiatives." CBRE Realty declined to elaborate but in similar situations options have included possible sales of businesses or equity infusions.
The company's single-largest shareholder, Arbor Realty Trust Inc., in August offered $8 a share to acquire it, but was rebuffed.
The Hartford, Conn., company, an affiliate of property services firm CB Richard Ellis Group Inc., recorded a fourth-quarter loss of $17.8 million, or 59 cents a share, compared with year-ago profit of $3.55 million, or 12 cents a share. The latest results were dragged down by a $19.7 million loan-loss reserve. The company attributed $19.2 million of that to its $82.8 million of loans made to properties owned by Mr. Macklowe. It booked no such reserve in the year-ago period.
CBRE Realty, which disclosed new detail about its loans to Mr. Macklowe yesterday, said it has made him two loans, both of which are considered non-performing, bringing its total nonperforming loans to $94.8 million, or 4.6% of its total assets.
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