Arbor Looks to Fixed-Rate Environment

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UNIONDALE, NY-Arbor Realty Trust will focus its efforts on increasing the amount of fixed-rate transactions it does. Ivan Kaufman, chairman and chief executive officer, says that over the last several quarters, the firm has taken various steps to enhance long-term franchise value despite an increasingly competitive market.

“There is an abundance of capital that has increased the competitive landscape,” Kaufman said during the company’s third-quarter conference call. “Our pipeline is good.”

Kaufman said that looking to the long-term value of the franchise, the REIT sees opportunity through increasing the number of fixed-rates transactions. Currently they account for 20% of all deals. “It is our intent to increase our percentage. Transactions are at a lower risk. There is pressure in the short-term, but it’s better in the long run. It offers greater stability going forward, particularly if interest rates increase. “

The REIT reported net income for the third quarter ended Sept. 30 of $8.5 million, compared to net income for the same time period a year ago of $7.6 million. Net income for the first nine months of this year was $41.0 million compared to net income for the nine months ended Sept. 30, 2004 of $16.5 million.

During the third quarter, Arbor originated 16 loans and investments totaling $303 million, the highest quarterly loan volume in Arbor’s history. Of this volume, $77 million was from a loan originally scheduled to close last quarter and $226 million represented new originations.

Total revenues for the quarter ended Sept. 30, 2005 were $27.1 million, an increase of 61% from the third quarter of 2004. Eight loans with an outstanding balance of approximately $160 million were paid off prior to their scheduled maturities. Of this amount, $156 million were loans on properties that were either sold or refinanced outside of Arbor and $4 million was concurrent with an Arbor refinance.