Apollo Commercial Real Estate Finance, Inc. Closes Two First Mortgage Loan Transactions Totaling $170.0 Million
December 08 2016 - 8:30AM
Business Wire
Apollo Commercial Real Estate Finance, Inc. (the “Company” or
“ARI”) (NYSE:ARI) today announced the Company closed two first
mortgage loan transactions totaling $170.0 million. ARI also
announced the Company received approximately $48.3 million from the
repayment of a first mortgage loan secured by a newly constructed
condominium development in Bethesda, Maryland. Year-to-date, ARI’s
capital commitments and deployment total approximately $1.27
billion, including additional fundings for previously closed
loans.
Investment Activity
ARI closed a $105.0 million first mortgage loan secured by a
419,190 square foot office building located in the Midtown West
submarket of New York City. The floating rate loan is part of a
$220.0 million financing consisting of ARI’s $105.0 million first
mortgage loan and a pari passu $115.0 million first mortgage loan.
The loan has an eighteen month initial term with one six-month
extension option and an appraised loan-to-value (“LTV”) of
approximately 67%. The loan has been underwritten to generate a
levered internal rate of return (“IRR”)(1) of approximately
16%.
ARI closed a $65.0 million first mortgage loan ($60.3 million of
which was funded at closing) secured by two retail buildings
occupying an entire city block in the Harlem submarket of New York
City. The floating rate loan has an eighteen month initial term
with one six-month extension option and an LTV of approximately
54%. The loan has been underwritten to generate a levered IRR(1) of
approximately 16%.
Commenting on the transactions, Scott Weiner, the Chief
Investment Officer of ARI’s manager, said: “New York City continues
to be one of the strongest, most liquid markets in the world for
commercial real estate investment. Both of these well-structured
first mortgage transactions are with well-capitalized, top-quality
sponsors and we believe will provide ARI with attractive,
risk-adjusted returns.”
About Apollo Commercial Real Estate Finance, Inc.
Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) is a real
estate investment trust that primarily originates, invests in,
acquires and manages performing commercial real estate first
mortgage loans, subordinate financings, commercial mortgage-backed
securities and other commercial real estate-related debt
investments. The Company is externally managed and advised by
ACREFI Management, LLC, a Delaware limited liability company and an
indirect subsidiary of Apollo Global Management, LLC, a leading
global alternative investment manager with approximately $189
billion of assets under management as of September 30, 2016.
Additional information can be found on the Company's website at
www.apolloreit.com.
(1) The underwritten IRR for the investment shown above reflects
the returns underwritten by ACREFI Management, LLC, the Company’s
external manager, taking into account leverage and calculated on a
weighted average basis assuming no dispositions, early prepayments
or defaults but assuming that extension options are exercised and
that the cost of borrowings remains constant over the remaining
term. IRR is the annualized effective compounded return rate that
accounts for the time-value of money and represents the rate of
return on an investment over a holding period expressed as a
percentage of the investment. It is the discount rate that makes
the net present value of all cash outflows (the costs of
investment) equal to the net present value of cash inflows (returns
on investment). It is derived from the negative and positive cash
flows resulting from or produced by each transaction (or for a
transaction involving more than one investment, cash flows
resulting from or produced by each of the investments), whether
positive, such as investment returns, or negative, such as
transaction expenses or other costs of investment, taking into
account the dates on which such cash flows occurred or are expected
to occur, and compounding interest accordingly. There can be no
assurance that the actual IRR will equal the underwritten IRR
presented above. See “Item 1A—Risk Factors—The Company may not
achieve its underwritten internal rate of return on its investments
which may lead to future returns that may be significantly lower
than anticipated” included in the Company’s Annual Report on Form
10-K for the year ended December 31, 2015 for a discussion of
some of the factors that could adversely impact the returns
received by the Company from its investments over time.
Forward-Looking Statements
Certain statements contained in this press release constitute
forward-looking statements as such term is defined in Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and such statements
are intended to be covered by the safe harbor provided by the same.
Forward-looking statements are subject to substantial risks and
uncertainties, many of which are difficult to predict and are
generally beyond the Company's control. These forward-looking
statements include information about possible or assumed future
results of the Company's business, financial condition, liquidity,
results of operations, plans and objectives. When used in this
release, the words "believe," "expect," "anticipate," "estimate,"
"plan," "continue," "intend," "should," "may" or similar
expressions are intended to identify forward-looking statements.
Statements regarding the following subjects, among others, may be
forward-looking: the return on equity; the yield on investments;
the ability to borrow to finance assets; and risks associated with
investing in real estate assets, including changes in business
conditions and the general economy. For a further list and
description of such risks and uncertainties, see the reports filed
by the Company with the Securities and Exchange Commission. The
forward-looking statements, and other risks, uncertainties and
factors are based on the Company's beliefs, assumptions and
expectations of its future performance, taking into account all
information currently available to the Company. Forward-looking
statements are not predictions of future events. The Company
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
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version on businesswire.com: http://www.businesswire.com/news/home/20161208005132/en/
For Apollo Commercial Real Estate Finance, Inc.:Hilary Ginsberg,
212-822-0767
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