Gramercy Capital Corp. (“Gramercy”) (NYSE: GKK) announced it closed today on GSMS 2007-GKK1, a resecuritization of $633.7 million of recently-acquired commercial mortgage-backed securities (“CMBS”). The securities issued consist of $633.7 million of bonds rated AAA through BBB-, plus non-investment grade bonds and equity, a portion of which was acquired by Gramercy. Bonds and equity retained by Gramercy have expected average lives ranging between 9.82 and 12.89 years, which are substantially longer in comparison to Gramercy’s transitional loan business. The CMBS assets collateralizing the Trust consist of securities ranging in rating from AA through BB-. By retaining a portion of the junior tranches in the transaction, Gramercy expects to generate excess returns based on seasoned collateral with superior credit and structural profiles than more recent vintages available in today’s secondary market.

The securities included in the transaction were selected, evaluated and acquired by Gramercy’s recently formed Real Estate Securities Group. This is Gramercy’s first structured finance transaction involving solely CMBS collateral. GKK Manager LLC, which is the external advisor to Gramercy Capital Corp, will serve as Collateral Administrator for GSMS 2007-GKK1. GKK Manager LLC is a majority-owned subsidiary of SL Green Realty Corp. (NYSE: SLG).

Hugh F. Hall, Chief Operating Officer of Gramercy Capital Corp., commented, “Gramercy’s ability to execute this transaction in today’s capital markets validates the strength of our platform and the high regard in which the market holds our new securities team. Gramercy’s transaction priced well, closed quickly, and provides attractive returns to our shareholders.”

The sole bookrunner and lead manager for the transaction was Goldman, Sachs & Co.

The offering of the securities referred to herein was made to certain initial purchasers pursuant to a transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The initial purchasers sold or offered the securities within the United States to qualified institutional buyers in accordance with Rule 144A under the Securities Act and outside the United States in accordance with Regulation S under the Securities Act.

This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities referred to herein in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. The securities will not be registered under the Securities Act or applicable state securities laws, and were offered by the initial purchasers only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the United States in accordance with Regulation S under the Securities Act. Unless so registered, the securities cannot be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

Company Profile

Gramercy Capital Corp. is a national commercial real estate specialty finance company that specializes in the direct origination and acquisition of first mortgage loans, subordinate mortgage participations, mezzanine loans, preferred equity, real estate securities, and net lease investments involving commercial properties throughout the United States. Gramercy is externally-managed by GKK Manager LLC, which is a majority-owned subsidiary of SL Green Realty Corp. (NYSE: SLG). Gramercy is headquartered in New York City and has a regional investment office in Los Angeles, California. To review Gramercy’s latest news releases and other corporate documents, please visit the Company’s website at www.gramercycapitalcorp.com or contact Investor Relations at 212-297-1017.

Posted: 05|25|07 at 7:57 am. Filed under: Finance News.