Originations

Pennsylvania Real Estate Investment Trust, Philadelphia, is acquiring Crown American Realty Trust, Johnstown, Pa., in a merger that is expected to position PREIT as a major mid-Atlantic shopping mall REIT.PREIT is paying an acquisition price of 0.3589 PREIT common shares for each Crown share, PREIT said. The price includes a $20 million termination fee payable to either PREIT or Crown if the merger is not completed "in certain specified circumstances." PREIT also expects to assume Crown's mortgage debt of $619.1 million. Following the completion of the merger, and a previously announced transaction with Rouse, PREIT said it will own interests in 54 retail properties with 33.5 million square feet in 12 states, with approximately 82% of the portfolio located in the mid-Atlantic region. The company is also expanding its board of trustees by two members with the addition of Mark Pasquerilla, Crown's chairman and chief executive officer, and another member of Crown's current board of trustees. The REITs can be found online at http://www.preit.com and http://www.crownam.com.

The Market Composite Index, an overall measure of mortgage applications, jumped to 1417.8 on a seasonally adjusted basis during the week ended May 9 from 1246.6 the week before, while the Refinance Index rose above the 7000 level, according to the Mortgage Bankers Association of America's Weekly Mortgage Applications Survey.On an unadjusted basis, applications were up 13.3% on the week and 155.0% from the level recorded a year earlier. On a seasonally adjusted basis, the Purchase Index declined slightly from a record high of 416.0 to 415.2, and the Refinance Index surged from 6077.8 to 7250.0. Refinancings represented 72.4% of total applications, up from 68.7% the previous week, while adjustable-rate mortgages accounted for 12.7%. The average contract interest rate for 30-year fixed-rate mortgages fell from 5.53% to a survey-record low of 5.27%, and points (including the origination fee) decreased from 1.50 to 1.43 for loans with 80% loan-to-value ratios, the MBA reported. The MBA can be found online at http://www.mbaa.org.

Total existing-home sales -- including condominiums and co-operatives -- set a new record in the first quarter, reaching a seasonally adjusted annual rate of 6.68 million, according to the National Association of Realtors.Resales in the first quarter rose in 34 states from levels recorded a year earlier, and in 14 of those states the sales were up by double-digit rates, the NAR reported. The record resales rate of 6.68 million units was 2.2% higher than the 6.54 million rate recorded a year earlier. The previous record, a seasonally adjusted annual rate of 6.59 million resales, was set in the fourth quarter of 2002. The biggest year-over-year gains were recorded in Nevada, where the resale rate was up 28.5%; Hawaii, up 28.2%; and South Dakota, up 20.1%. The NAR can be found on the Internet at http://realtor.org.

Commercial Net Lease Realty Inc., an equity real estate investment trust based in Orlando, Fla., has increased its $200 million unsecured credit facility to $225 million and extended its maturity to May 2006.In addition, the facility's interest rate was reduced to 100 basis points over the London interbank offered rate, the REIT said. The facility also contains a competitive bid option for up to 50% of the amount. Wachovia Securities was the sole lead arranger and book manager of the facility. The REIT can be found online at http://www.cnlreit.com.

LNR Property Corp., a Miami Beach-based real estate investment, finance, and management company, has announced the promotions of several key officers.Ronald Schrager, 41, president of LNR's Real Estate Finance and Servicing Division, has been named chief operating officer of LNR. Robert Cherry, 40, who has been responsible for acquiring and financing LNR's commercial mortgage-backed securities and high-yield real estate debt investments for the past eight years, has been named chief investment officer. David Team, 43, who has managed LNR's Western regional commercial property operations for the past nine years, has been named president of the company's U.S. Commercial Property Group. And Mark Griffith, 46, who has managed LNR's Eastern regional commercial property operations for the past nine years, has been relocated to London and named president of the company's European operations. LNR can be found online at http://www.lnrproperty.com.

Neighborhood Gold, Provo, Utah, the marketer of downpayment assistance grants by The Buyers Fund, has announced the approval of the gift program by Washington Mutual.Effective immediately, the gift funds can be used toward the downpayment or closing costs on Federal Housing Administration and Department of Veterans Affairs loans made by WaMu. The funds were approved for use in WaMu's retail branches and its wholesale and correspondent divisions, Neighborhood Gold said. The Buyers Fund can be found online at http://www.thebuyersfund.com.

Washington Mutual Inc., Seattle, has announced that it is expanding and strengthening its community-related activity through a newly created Community and External Affairs Division.WaMu said the new division, which will be headed by Benson Porter, will coordinate the activity of previously decentralized divisions, including Community Lending and Investment; Community Development Resources; Community Performance Resources; Government Relations; and Corporate and Employee Giving. Kerry Killinger, WaMu's chairman, president, and chief executive officer, said the new division is "integral to our long-term business strategy." He said it will help the company focus its efforts on delivering resources where they are most needed, in local neighborhoods, through WaMu's more than 2,500 consumer banking, mortgage lending, commercial banking, consumer finance, and financial services offices. WaMu can be found online at http://www.wamu.com.

Fitch Ratings has expressed concerns about the loans in several floating-rate transactions based on their "alarming real estate fundamentals" and high leverage.The rating agency said the loans are often secured by properties that are in transition or approaching stabilization. Such assets present great rating challenges, Fitch said, because of the current economic environment at the property management level. "The acceptance of imputed revenue and related value at securitization can push investment-grade leverage points in floating-rate transactions beyond appropriate levels," said Joseph Kelly, a Fitch director. The rating agency has seen an increased loss rate for liquidated loans and has had to either downgrade or place on Rating Watch most of the lowest-rated classes in seven of nine floating-rate deals since last year. All of these downgrades were attributed to "unforeseen real market issues," Fitch said.

CitiFinancial, New York, has entered into a partnership with the National Training and Information Center that will set lending standards for the subprime mortgage company.As part of the agreement, CitiFinancial and NTIC have agreed to regularly review the progress of CitiFinancial's real estate lending initiatives and work together to encourage the adoption of similar practices by other lenders. CitiFinancial will focus on a multistage foreclosure review process and implement a review-and-repair program for the victims of abusive practices in cities served by NTIC and its affiliates. CitiFinancial, suffering from some fallout from its acquisition of Associates First Capital, had already adopted many changes to its practices, including the elimination of single-premium credit insurance, a three-point cap on retail production, and a redesign of credit insurance sales practices in its retail branches. NTIC is a Chicago-based group that serves as a resource center for grassroots and neighborhood groups. Among its affiliates is National People's Action.

The National Organization of African Americans in Housing has announced a partnership with AmeriDream Inc., Gaithersburg, Md., to pursue activities aimed at boosting minority homeownership nationwide.NOAAH sponsors a Certified Homebuyer Preparation Network initiative that works with mortgage lenders, insurers, investors, and educators to help deliver prime-priced home loans to underserved communities. AmeriDream's Downpayment Gift Program has provided downpayment gifts to more than 100,000 low- and moderate-income individuals and families. The organizations said they hope the partnership will make them more effective in their efforts to close the gap in homeownership rates between minorities and low-income groups and the national average. AmeriDream can be found online at http://www.ameridream.org.

The Dallas-based National Hispanic Mortgage Bankers & Brokers Association has entered into an alliance with the Credit Network of Framingham, Mass., to increase the availability of Spanish-language credit reports.According to the association, there is "a huge demand for technology that makes it easier for Spanish-speaking homebuyers to get credit," and most credit reporting providers do not offer the service in Spanish. The alliance aims to help bring more Hispanics to the housing market by assisting lenders in attracting more such consumers, which -- according to the 2000 census -- are the largest and fastest-growing minority group in the country.

Grubb & Ellis Co., Northbrook, Ill., has announced an agreement under which an entity affiliated with its chairman, C. Michael Kojaian, will acquire the company's outstanding $32 million senior credit facility.The terms of the agreement were not disclosed. The company also announced that another affiliated entity, Kojaian Funding LLC, recently provided Grubb & Ellis with $4 million of working capital. "The acquisition of the company's senior credit facility, coupled with the subordinated loan, strengthens and solidifies our capital structure and should allow Grubb & Ellis to take advantage of market opportunities," said Mr. Kojaian, who is also the controlling stockholder of the company. Grubb & Ellis can be found online at http://www.grubb-ellis.com.

Federal Realty Investment Trust, Rockville, Md., has agreed to sell approximately 2.81 million common shares of beneficial interest in a public offering underwritten by Wachovia Securities.The real estate investment trust said it expects the sale to generate net proceeds of approximately $85.7 million. The proceeds, along with borrowings under Federal Realty's revolving credit facility, will be used to redeem the REIT's 7.95% series A cumulative redeemable preferred shares. The company can be found online at http://www.federalrealty.com.

Wells Fargo & Co., San Francisco, has claimed victory for the bank and its mortgage subsidiary over the California Department of Corporations.Judge Garland Burrell Jr. of the Federal District Court in Sacramento ruled that the Office of the Comptroller of the Currency has the sole right to regulate national banks and their subsidiaries and that federal law supersedes state law. The dispute between the state and Wells Fargo stems from the question of when a lender can start charging interest. "As we've said time and time again over the past several months, charging interest beginning when a loan is made to the borrower is just common sense," said Wells Fargo chairman and chief executive Richard Kovacevich. ".... That is the fair and most practical way to do it. Forty-nine other states and our regulators all agree." A spokesman for the Department of Corporations said the regulator is required by the state constitution to appeal the ruling because only an appellate court ruling can stop it from seeking regulatory authority. The spokesman said the department's quarrel is not with when Wells Fargo started charging interest, but with the fact that the company touted its California licenses in its marketing while it was in violation of the state statute. It is that Wells Fargo allegedly misled consumers, not the law's provisions on charging interest, that is the issue for the department, he said.

NovaStar Financial Inc., Kansas City, Mo., has priced a public offering of 525,000 shares of common stock at $44.25 per share.The lead manager of the offering is JMP Securities LLC, and the co-manager is Flagstone Securities LLC. NovaStar said it has granted the underwriters a 30-day option to buy up to an additional 78,750 shares to cover any overallotments. The company, a real estate investment trust, can be found online at http://www.novastaris.com.

Kimco Realty Corp., New Hyde Park, N.Y., has completed the sale of 7.0 million depositary shares, each representing a one-tenth interest in a share of the company's 6.65% class F cumulative redeemable preferred stock.The depositary shares, priced at $25, entitle holders to a 6.65% cumulative dividend ($1.6625 per year) and are not convertible into common stock, Kimco said. They are redeemable at par at the option of the company on and after June 5, 2008. Kimco said it will use the proceeds to redeem all 2.0 million outstanding depositary shares of the company's 8 1/2% class B cumulative redeemable preferred stock and all 4.0 million outstanding depositary shares of its 8 3/8% class C cumulative redeemable preferred stock at the redemption price of $25 per share plus accrued and unpaid dividends. Kimco, a real estate investment trust that specializes in shopping centers, can be found online at http://www.kimcorealty.com.

Starwood Hotels & Resorts Worldwide Inc., White Plains, N.Y., has announced an agreement to sell $300 million in aggregate principal amount of convertible senior notes due 2023 in a private placement.The offering will include an option to the initial purchasers to acquire up to an additional $60 million in principal amount of the notes, the company said. The notes will be convertible into shares of Starwood's stock at $50 per share, which represents an 83.96% premium on the closing price of Starwood's stock on May 8. The company can be found online at http://www.starwood.com.

A Michigan court has clarified its ruling on the Simon/Westfield takeover case, declaring that the management of Taubman Centers cannot vote its entire 33.6% block of shares in Taubman without getting permission from the majority of disinterested shareholders.Taubman's management intends to appeal the decision, and still contends that it has prevailed over Simon based on some minor points. The Bloomfield Hills, Mich.-based Taubman has reported a net loss of $7.1 million ($0.14 per share) in the first quarter, up from a net loss of $2.3 million ($0.05 per share) a year earlier. In a related teleconference, Robert S. Taubman, chairman and chief executive officer of Taubman Centers, said he expects the real estate investment trust's funds from operations for the year to be in the range of $1.80-$1.84 per share, excluding the costs associated with fending off the Simon/Westfield "hostile offer." He said their takeover strategy from the beginning has been "to throw everything against the wall and hope that something sticks," adding that "something has stuck, for the moment." Mr. Taubman refused to take any questions relating to the takeover during the teleconference.

CNL Hospitality Properties Inc., Orlando, Fla., and RFS Hotel Investors Inc., Memphis, have announced an agreement under which a wholly owned subsidiary of CNL will acquire RFS for a total consideration of approximately $687.6 million.The total price includes approximately $383 million in cash and the assumption of total debt of $304.6 million. After the acquisition, CNL will be the nation's fifth-largest hospitality real estate investment trust, based on assets and number of hotels, the companies said. "The acquisition of RFS is a compelling strategic opportunity," said Thomas J. Hutchison III, CNL's chief executive officer. "The RFS portfolio brings CNL and our investors strong, dependable cash flow, enhanced scale, and brand and geographic diversification." The REITs can be found online at http://www.cnlonline.com and http://www.rfshotel.com.

Sunrise Assisted Living, McLean, Va., has announced that it is selling a senior-living portfolio for $345 million and 16 Sunrise joint venture communities for $219 million.The $564 million sale, involving 44 properties, will generate cash proceeds of $167 million, Sunrise said. The company expects to use the proceeds partly to fund its share repurchase program and for general corporate purposes. The communities are being sold to "investment entities" advised by Macquarie Capital Partners, a real estate investment banking company, Sunrise said. The buyer will acquire a 90% stake in the ventures, while Sunrise, with a 10% stake, will continue to operate the communities under long-term management agreements. Sunrise said it expects to realize total income of $55 million for the sale of a 90% interest on the properties, which are located in 13 states and have a total resident capacity of 3,428.