Finance CMBS
KKR Financial Sells Interest in REIT, Gets Out of Mortgage Business
April 1, 2008
By: Dees Stribling, Contributing Correspondent

KKR Financial Holdings L.L.C., an affiliate of buyout firm Kohlberg Kravis Roberts & Co. specializing in debt investments, has agreed to sell a controlling interest in its real estate investment trust, KKR Financial Corp.

At the same time, the company agreed to relinquish mortgage-backed securities to creditors who hold about $3.5 billion in its commercial paper.

KKR Financial Corp. holds a portfolio consisting of residential mortgage loans and mortgage-backed securities, corporate loans and debt securities, commercial real estate loans and debt securities, and other asset-backed securities. Upon the closing of the REIT's sale to Rock Capital 2 L.L.C., probably in the second quarter of this year, the entity will have completed its conversion to a limited liability company. KKR declined to specify the precise terms of the sale.

When KKR Financial was formed, it was set up as a REIT and initially invested about 35 percent of its equity capital in RMBS. KKR Financial Corp. began converting to a limited liability company structure last May, and at that time discontinued investing in mortgage-related investments. In August of 2007, the company wrote off its entire investment exposure to mortgage-related investments to the tune of about $243.7 million.

The move to sell its REIT came as part of a larger exit strategy from mortgage-related businesses for KKR Financial Holdings. KKR has also struck an agreement with holders of $3.5 billion worth of its commercial paper, issued by the two asset-backed conduits sponsored by KKR Financial Corp. The agreement provides for the noteholders to receive the collateral in the facilities in exchange for terminating the outstanding notes without default.


 
Recent CMBS Headlines
Margolin Joins Arbor Commercial as Director
June 18, 2008
Arbor Commercial Mortgage announces the appointment of Peter Margolin to director in the firm's Chicago, Ill office.
Finance Groups Doubt SEC Plan to Tag CMBS Pools
June 13, 2008
Proposed changes to bond ratings are raising the hackles of real estate finance groups, which worry that the Security and Exchange Commission’s new rules would slow the recovery of the CMBS market.
CMSA Study Finds CMBS Market Turning Around
June 10, 2008
The economy may remain difficult, but the commercial mortgage-backed securities market has turned the corner. That was the determination of Jun Han, who performed an extensive study of the CMBS market for the Commercial Mortgage Securities Association. Han released the white paper and discussed his findings during a press conference at the organization’s annual convention yesterday.
 

 

$8.9B Penn Gaming Merger Crumbles
July 03, 2008
By Barbra Murray, Contributing Editor After spending the last few months attaining all the requisite approvals from various gaming commissions and boards, Penn National Gaming has put the kibosh on its proposed $8.9 billion merger with PNG Acquisition Company Inc.,...

Colonial Properties Trust Sells 5 Apartment Communities for $82M
July 03, 2008
By Gail Kalinoski, Contributing Editor Colonial Properties Trust, a multi-family-focused REIT, is continuing its plan to dispose of older assets by selling five apartment communities in two transactions for a total of $81.8 million. The buyer or buyers were not...

H&R Sells 11 in Canada
July 03, 2008
By Thomas Peretti, Contributing Correspondent -- H&R Real Estate Investment Trust has announced the completion of the sale of eleven retail properties. The firm netted approximately $72 million from the transaction. The company expects approximately a $9 million return on...

LA Developer Partners with Vegas Officials for Museum, Hotel Redevelopment
July 03, 2008
By Tonie Auer, Southwest Correspondent -- Less than a year after entering the Las Vegas market with the acquisition of the Lady Luck Hotel and Casino, Los Angeles-based CIM Group won a deal with the city to develop land adjacent...

Lightstone Acquires Interests in 20 Outlet Centers in $456M Deal
July 02, 2008
By Barbra Murray, Contributing Editor Lightstone Value Plus REIT will soon have a stake in 20 factory outlet centers, now that it has signed on purchase from 22.54 to 25 percent interests in the properties from affiliates of Arbor Mortgage...

How to K.I.S.S Problems Goodbye
June 27, 2008
By Mike Myatt, Chief Strategy Officer, N2growth --Keep It Simple Stupid. One of the most effective ways to order your world is to simplify everything you encounter. The problem is that keeping it simple often becomes very difficult when our...

Does Appearance Matter?
June 20, 2008
By Mike Myatt, Chief Strategy Officer, N2growth --So, do appearances really matter? They shouldn't, but the reality is that they most certainly do. As the old saying goes, "you only get one chance to make a first impression," and often...

Recognizing the Need for Change
June 13, 2008
By Mike Myatt, Chief Strategy Officer, N2growth --Since the title of today's column is "Recognizing the Need for Change," I'm going to switch things up a bit and ask you to answer a question posed by me. I first warned...

How to Reduce Employee Turnover
June 06, 2008
By Mike Myatt, Chief Strategy Officer, N2growth --Few things in business are as costly and disruptive as unknowingly having the proverbial revolving door for employees to exit from. While there are many secondary and tertiary items that can influence an...

How To Delegate for Success
May 30, 2008
By Mike Myatt, Chief Strategy Officer, N2growth --If you desire to become a top CEO it will be essential for you to master the art of leveraging down. Think of any top performing CEO and you'll find that to the...