Business and Organization

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. Business and Organization

Gramercy Property Trust Inc., or the Company, is a fully-integrated, self-managed commercial real estate investment company focused on acquiring and managing income-producing office and industrial properties net leased to high quality tenants in major markets throughout the United States. The Company also operates an asset management business that manages for third-parties, including the Company’s joint venture partners, commercial real estate assets throughout the United States primarily leased to financial institutions and affiliated users.

The Company was founded in 2004 as a specialty finance REIT focused on originating and acquiring loans and securities related to commercial and multifamily properties. In July 2012, following a strategic review, the Company’s board of directors announced a repositioning of the Company as an equity REIT focused on acquiring and managing income producing net leased real estate. To reflect this transformation, in April 2013 the Company changed its name from Gramercy Capital Corp. to Gramercy Property Trust Inc. and began trading on the New York Stock Exchange under the new symbol GPT.

The Company seeks to acquire high quality net leased properties and construct a diversified portfolio that generates stable, predictable cash flows and protects investor capital over a long investment horizon. The Company approaches the net lease market as a value investor, looking to identify and acquire net leased properties that the Company believes offer the most attractive risk adjusted returns throughout market cycles. The Company focuses primarily on office and industrial properties in target markets with strong demographic and economic growth potential. The Company’s goal is to grow its existing portfolio through the selective acquisition and become the pre-eminent owner of net leased commercial office and industrial properties.

As of June 30, 2013, the Company owns, either directly or in joint venture, a portfolio of 105 income producing net leased office and industrial properties with 96% occupancy. Tenants include Bank of America, N.A., Nestlé Waters, Federal Express, Con-Way Freight, Phillips Electronics, Five Below, Inc. and others. As of that date, the Company’s asset management business, which operates under the name Gramercy Asset Management, manages for third-parties approximately $1,500,000 of commercial real estate assets.

During the three months ended June 30, 2013, the Company acquired 11 properties aggregating approximately 650,000 square feet for a total purchase price of approximately $111,200. During the six months ended June 30, 2013, the Company acquired 14 properties aggregating approximately 1,600,000 square feet for a total purchase price of approximately $158,220.

On March 15, 2013, the Company disposed of its Gramercy Finance segment and exited the commercial real estate finance business. The disposal was completed pursuant to a sale and purchase agreement to transfer the collateral management and sub-special servicing agreements for the Company’s three Collateralized Debt Obligations, or the CDOs, to CWCapital Investments LLC, or CWCapital, for proceeds of $6,291 in cash, after expenses. The Company retained its non-investment grade subordinate bonds, preferred shares, and ordinary shares, or the Retained CDO Bonds, in the CDOs, which may allow the Company to recoup additional proceeds over the remaining life of the CDOs based upon resolution of underlying assets within the CDOs. However, there is no guarantee that the Company will realize any proceeds from the Retained CDO Bonds or what the timing of these proceeds might be. The carrying value of the Retained CDO Bonds as of June 30, 2013 is $7,645. In February 2013, the Company also sold a portfolio of repurchased notes previously issued by two of its three CDOs, generating cash proceeds of $34,381. In addition, the Company expects to receive additional cash proceeds for past CDO servicing advances when specific assets within the CDOs are liquidated. The carrying value of the receivable for servicing advance reimbursements as of June 30, 2013 is $14,604, including accrued interest at the prime rate of 3.25%. On March 15, 2013, the Company deconsolidated the assets and liabilities of Gramercy Finance from the Company’s Condensed Consolidated Financial Statements and recognized a gain on the disposal of $389,140 within discontinued operations. For a further discussion regarding the disposal of the Gramercy Finance segment see Note 3 “Dispositions and Assets Held-for-Sale”.

The Company has elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code, and generally will not be subject to U.S. federal income taxes to the extent it distributes its taxable income, if any, to its stockholders. In the past the Company has established, and may in the future establish taxable REIT subsidiaries, or TRSs, to effectuate various taxable transactions. Those TRSs would incur U.S. federal, state and local taxes on the taxable income from their activities. The Company’s Asset Management business is conducted in a TRS and substantially all of the provision for taxes on the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) is related to this business.