NEW YORK, NY -- (Marketwired) -- 05/01/13 -- Apollo Commercial Real Estate Finance, Inc. (the "Company" or "ARI") (NYSE: ARI) today reported financial results for the quarter ended March 31, 2013.
First Quarter 2013 Highlights
•Generated $17.1 million of net interest income from the Company's $688 million investment portfolio, which had a current weighted average underwritten internal rate of return ("IRR") of approximately 12.9% and a levered weighted average underwritten IRR of approximately 14.2% at March 31, 2013; •Closed three loan transactions totaling $103 million; •Received a $2.5 million yield maintenance payment in connection with the repayment of two mezzanine loans totaling $50 million; •Amended the Company's repurchase facility with JPMorgan Chase Bank, N.A. (the "JPMorgan Facility") to extend the term for two years; •Amended the Company's master repurchase agreement with Wells Fargo Bank, N.A. (the "Wells Facility") to reduce the interest rate on commercial mortgage backed securities ("CMBS") borrowings; and •Completed an underwritten public offering of 8,805,000 shares of common stock at a price of $16.90 per share, raising net proceeds of $148.4 million.
"ARI experienced a strong start in 2013 from both a capital deployment and a capital formation perspective," said Stuart Rothstein, Chief Executive Officer of the Company. "The Company continues to identify compelling, value-added investment opportunities with attractive risk-adjusted returns and our investment pipeline is robust. Importantly, the credit quality of ARI's existing portfolio remains stable. We are actively engaged in deploying the equity from the first quarter capital raise into new commercial real estate debt investments that will expand and diversify ARI's portfolio."
First Quarter 2013 Operating Results
The Company reported Operating Earnings (a non-GAAP financial measure as defined below) of $12.0 million, or $0.39 per share, for the three months ended March 31, 2013, as compared to Operating Earnings of $8.8 million, or $0.42 per share, for the three months ended March 31, 2012. Net income available to common stockholders for the three months ended March 31, 2013 was $10.1 million, or $0.33 per share, as compared to net income available to common stockholders of $9.1 million, or $0.43 per share, for the three months ended March 31, 2012.
First Quarter Investment and Portfolio Activity
New Investments - During the first quarter of 2013, ARI closed three transactions totaling $103 million. The transactions include the following:
•$60 million mezzanine loan commitment ($49 million of which has been funded) secured by a pledge of preferred equity interests in the owner of a to-be-developed 352,624 net saleable square foot, 57-story, 146-unit condominium tower located in the TriBeCa neighborhood of New York City. When fully funded and based upon the current rate and pricing of presales of units, the Company's loan basis is expected to represent an underwritten loan-to-net sellout of approximately 48%. The mezzanine loan has been underwritten to generate an IRR of approximately 16%;
•$18 million mezzanine loan secured by a pledge of the equity interests in the owner of two buildings in midtown Manhattan. The buildings contain a total of 181,637 rentable square feet that is being converted into 215 multifamily rental units. The mezzanine loan has an appraised loan to value ("LTV") of approximately 60% and has been underwritten to generate an IRR of approximately 13%; and
•$25 million mezzanine loan secured by a pledge of the equity interests in the owner of a portfolio of four hotels totaling 1,231 keys located in Rochester, Minnesota. The mezzanine loan has an appraised LTV of approximately 69% and has been underwritten to generate an IRR of approximately 12%.
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