$7b in transactions gives Carlton a record-setting year

Real Estate Weekly, Feb 1, 2006

Building on its record breaking year in 2004, the Carlton Group exceeded that in 2005, closing over $7 billion in equity, debt, loan sale, and principal transactions in 2005.

The full service real estate investment bank saw a huge increase in its equity advisory business, and has become one of the country's leading advisors and authorities in raising overseas, high net worth investors and institutional equity for real estate transactions.

Carlton has carved a niche as one of the best equity and debt sources for complex, high-leverage deals.

According to Chairman Howard L. Michaels, Carlton's success comes from the firm's "superior capital relationships, strong analytical abilities, and tremendous work ethic, which leads to swift executions."

Michaels continues to grow his reputation as one of the nation's leading deal makers for large trophy deals, which in 2005 included the $1.7 billion recapitalization of the GM Building in Midtown Manhattan, $1.3 billion condominium conversions of Manhattan House and River Terrace, and $805 million for the condominium conversion and credit lease financing of One Madison Avenue.

Carlton's primary services include equity and debt placement, loan sale advisory, investment sales, hospitality financing, and principal acquisitions through Carlton Strategic Ventures. Certain highlights from 2005 include:

* Growth Of The Equity Recapitalization And Acquisition Program--Real estate owners and operators took advantage of Carlton's expertise and access to the abundance of cheap capital in the marketplace to replace expensive capital partners, refine their business objectives and "cash out" on the appreciation of their investments.

Carlton arranged the $1.7 billion recapitalization of the GM Building in Manhattan, $219 million for the preferred equity recapitalization of the Starrett-Lehigh Building in the Chelsea neighborhood in Manhattan, and $87 million for the equity recapitalization of 111 Sutter Street in the Financial District of San Francisco amongst numerous other transactions.

* Over $3 Billion Of Condominium Financing Transactions--Carlton was at the forefront of the condominium trend in 2005, helping to finance over $3 billion of exclusive ground-up development and condo conversion projects. Some noteworthy deals in 2005 included: $825 million in joint venture equity and debt for the condominium conversion of Manhattan House, a 500+ residential complex located on the Upper East Side of Manhattan, one of the largest apartment trades in United States history, $805 million in joint venture equity and credit lease acquisition financing for the condominium conversion and credit lease financing of One Madison Avenue, and $440 million in acquisition financing for the condominium conversion of River Terrace, a 400+ unit all-market rate complex on Manhattan's Upper East Side.

Additionally, Carlton closed over half a billion in condominium conversion, land acquisition and development financing deals in other markets around the country, including hot areas such as South Florida, Las Vegas, and Atlanta.

* Increased Prominence For The Carlton Hospitality Group (CHG)--Coinciding with the boom in the hospitality financing business, the Carlton Hospitality Group saw increased activity in its hospitality business from 2004, as the industry is back in growth mode after the tourism slowdown of the previous years. This was an active year for CHG, with over a billion dollars in deals, which included several high-profile hospitality deals including: $575 million for the equity recapitalization of the Morgans Hotel portfolio, which includes some of the most well-known boutique hotels in the country (Morgans, Hudson, Royalton, Delano, and Mondrian Hotels) located in New York, South Beach, and Los Angeles, $108 million for the acquisition and condo conversion of the Villa Luisa Hotel in South Beach into the South of 5th condominiums, $200 million assignment for the Cardel Hotel Fund, which will be used to acquire and reposition hospitality assets in the Sun Belt, and $75 million for the acquisition of land for a condominium hotel development in the fashionable SOHO district of Manhattan.

* Financing Of Large Commercial Trophy Assets--Clients continue to come to Carlton with large debt and equity assignments due to its' impressive record of delivering the needed financing along with swift execution. This year, Carlton closed approximately $2 billion of senior, mezzanine, and equity financing on some of the most desirable office assets in the largest markets around the country.