JER Investors Trust Inc. (NYSE:JRT)
Industry: Financial
JER Investors Trust Inc. is a specialty finance company. The Company is managed and advised by JER Commercial Debt Advisors LLC, an affiliate of J.E. Robert Company. It has invested in commercial mortgage backed securities (CMBS), mezzanine loans and B-Note participations in mortgage loans. It is organized and conducts the operations to qualify as a real estate investment trust (REIT). The Company broadly diversifies its portfolio by asset type, tenant, tenant industry, location and servicer. The Company's investment program focuses on the real estate products, which include CMBS; mezzanine loans; B-Notes; bridge loans; preferred equity; loans to real estate companies; mortgage loans, and net-leased real estate assets. Various types of real property will serve as the underlying collateral for JER Investors Trust Inc.'s investments, including retail property, offices, industrial properties, apartments, condominiums and hotels. Many of these asset classes may also be suitable investments for JER Fund III or other existing or future investment entities controlled by J.E. Robert Company and its affiliates. Mortgage loans that it originates will be sourced through direct relationships with owners and operators of real estate. The Company has invested approximately $411.1 million (on a cost basis and net of dispositions) in commercial real estate debt securities and loans. CMBS JER Investors Trust Inc. invests in CMBS, which are typically pass-through certificates created by the securitization of a single mortgage loan or a pool of mortgage loans that are collateralized by commercial real estate properties. J.E. Robert Company is a special servicer and has been engaged as special servicer or asset manager on over 30 securitized transactions. The total par value at issuance of the underlying loans has exceeded $15 billion. Through June 30, 2005, the Company has invested $340 million in 10 different CMBS transactions, including eight newly issued conduit securitizations. Mezzanine Loans JER Investors Trust Inc. originates and invests in mezzanine loans (including mezzanine construction loans) to owners of real properties that are encumbered by first lien mortgages, in which case its mezzanine loans generally will be secured by junior liens on the subject properties and/or by liens on the partnership or membership interests in the borrower's property-owning subsidiary. Subject to negotiated contractual restrictions, the mezzanine lender generally has the right, following foreclosure, to become the sole indirect owner of the property subject to the lien of the primary mortgagor. Mezzanine debt can also be either junior or senior, denoting the particular leverage strip that may apply. The mezzanine loan investments require the payment of current interest, which reduces its reliance on the residual value of the underlying property. The Company's mezzanine loans may also have prepayment lockouts, origination fees, deferred interest, penalties, minimum profit hurdles and other mechanisms. As of June 30, 2005, it had invested in five mezzanine loan transactions. In February 2005, the Company acquired an $11.5 million mezzanine loan. B-Notes JER Investors Trust Inc. invests in B-Notes generated from structured transactions that may or may not have been rated by a recognized rating agency. These are junior participations in a first mortgage loan on a single property or group of related properties. The senior participation is known as an A-Note. Although a B-Note may be evidenced by its own promissory note, it shares a single borrower and mortgage with the A-Note and is secured by the same collateral. B-Note lenders have the same obligations, collateral and borrower as the A-Note lender, but in most instances are contractually limited in rights and remedies in the event of a default. B-Notes share certain credit characteristics with subordinated CMBS, in that both reflect an interest in a first mortgage and are subject to more credit risk with respect to the underlying mortgage collateral than the corresponding se
As Of: 10/07 00:00 ET
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