Acquisitions, Dispositions, Leasing and Financing Activities

12 Months Ended

Dec. 31, 2012

Acquisitions, Dispositions, Leasing and Financing Activities [Abstract]

Acquisitions, Dispositions, Leasing and Financing Activities

4. Acquisition, Disposition, Leasing and Financing Activities

Operating Properties

Operating Properties - Acquisition Activities

Waterford Place Apartments – On April 17, 2012 the Trust acquired for a cash purchase price of approximately $21,473,000 a 320 unit class A multi-family property situated on 27.9 acres in the Germantown/Collierville submarket of Memphis, Tennessee commonly referred to as Waterford Place. The property, which had been foreclosed on by the mortgage lender in May 2011, was constructed in 2001 and was 87% occupied at acquisition. Costs incurred to complete the acquisition have been expensed as incurred.

Cerritos – On October 4, 2012 the Trust purchased from an affiliate of FUR Advisors for $75,000 (the affiliate’s cost) a 100% membership interest in the entity that holds fee simple title to a nine story, 187,000 square foot, 53% occupied, Class B office building located 20 miles south of Los Angeles in Cerritos, California. In addition, the Trust funded a $1,500,000 leasing reserve and a $264,000 loan restructuring fee as part of the transaction. Concurrently with the acquisition of the property, the Trust entered into a modification agreement with the first mortgage lender pursuant to which the loan was split into a $23,000,000 non-recourse A Note and a $14,500,000 non-recourse B Note. The A Note bears interest at 5.0691% per annum and requires monthly payments of interest only. The B Note bears interest at 6.6996% per annum and requires monthly payments of approximately $12,000 with the balance of the interest accruing. In connection with the modification, after payment of required monthly debt service on the A Note and the B Note, the Trust is entitled to receive from property cash flow a 9.0% return on any additional funding to the property (including the $1,500,000 leasing reserve). With respect to a capital transaction, all net proceeds go first to satisfy the A Note, second to the Trust until it receives a return of its additional funding to the property plus its 9.0% return thereon, third 50-50 to the Trust and the first mortgage lender until the principal amount of the B Note and accrued interest thereon is fully satisfied and fourth to the Trust. The loan modification agreement provides for a participation feature whereby the B Note can be fully satisfied with proceeds from the sale of the property, after the Trust receives its 9.0% priority return of capital, during a specified time period as defined in the loan modification document. The property is currently 77% leased.

Lake Brandt - On November 2, 2012 a wholly-owned subsidiary of the Trust acquired for a purchase price of $17,500,000 a 284 unit multi-family property located in Greensboro, North Carolina. The purchase price consisted of approximately $3,900,000 of cash and the assumption of $13,600,000 of indebtedness. The assumed debt is a non-recourse mortgage loan which bears interest at 6.22% per annum, matures on August 1, 2016 and requires payments of interest only.

The fair value of the assets and liabilities of the acquired properties was calculated by an independent third party valuation firm and reviewed by management. The methodology used by the Trust for purposes of allocating the fair value of the acquired properties to tangible and intangible assets and liabilities is discussed in Note 2.

The following table summarizes the allocation of the aggregate purchase price of Waterford Place, Cerritos and Lake Brandt at their respective dates of acquisition (in thousands):

	Waterford Place		Cerritos			Lake Brandt			Total
Land	$	3,080	$	4,115		$	1,961		$	9,156
Building		15,085		14,944			15,368			45,397
Other improvements		2,121		427			828			3,376
Fixtures and equipment		279		—			286			565
Tenant improvements		—		894			—			894
Working capital assumed		—		1,688			—			1,688
Lease intangibles		908		2,913			664			4,485
Above market lease intangibles		—		641			—			641
Below market lease intangibles		—		(54	)		—			(54	)
Total fair value of asset acquired		21,473		25,568			19,107			66,148
Less indebtedness assumed		—		(23,000	)		(13,600	)		(36,600	)
Above market debt adjustment assumed		—		(1,085	)		(1,607	)		(2,692	)
Net assets acquired	$	21,473	$	1,483		$	3,900		$	26,856

Intangible assets acquired and intangible liabilities assumed for Waterford Place, Cerritos and Lake Brandt consisted of the following (in thousands):

	Carrying Value			Weighted Average Amortization Period (years)
Intangible assets:
In place lease intangibles	$	2,872			2.5
Above market lease intangibles		641			5.0
Tenant relationship value		1,260			10.0
Lease commissions, legal and marketing fees		353			5.0
Total	$	5,126			5.6
Intangible liabilities:
Below market lease intangibles	$	(54	)		5.0

Waterford Place contributed approximately $2,245,000 of revenue and a loss of approximately $676,000 to the Trust for the period from April 17, 2012 through December 31, 2012. Cerritos contributed approximately $576,000 of revenue and a loss of approximately $420,000 to the Trust for the period from October 4, 2012 through December 31, 2012. Lake Brandt contributed approximately $388,000 of revenue and a loss of approximately $252,000 to the Trust for the period from November 2, 2012 through December 31, 2012.

The accompanying unaudited pro forma information for the years ended December 31, 2012 and 2011 is presented as if the acquisition of (i) Waterford Place on April 17, 2012, (ii) Cerritos on October 4, 2012 and (iii) Lake Brandt on November 2, 2012, had occurred on January 1, 2011. This unaudited pro forma information is based upon the historical consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto. This unaudited pro forma information does not purport to represent what the actual results of operations of the Trust would have been had the above occurred, nor do they purport to predict the results of operations of future periods.

Pro forma (unaudited) (In thousands, except for per share data)	For the year ended December 31,
	2012		2011
Total revenue	$	77,091	$	76,049
Income from continuing operations		24,738		8,299
Net income attributable to Winthrop Realty Trust		24,918		8,140
Per common share data - basic		0.47		0.23
Per common share data - diluted		0.47		0.23

Deer Valley Operating Property – Non-Controlling Interest - On March 29, 2012 the Trust purchased the 3.5% non-controlling ownership interest of the consolidated joint venture, WRT-DV LLC, for $400,000 paid in cash. The Trust now owns 100% of WRT-DV LLC which holds title to the operating property located in Deer Valley, Arizona. The Trust accounted for the purchase of the 3.5% interest as an equity transaction recording the differences in the carrying value of the acquired non-controlling interest and the purchase price as a reduction in paid-in capital.

One East Erie Operating Property – Non-Controlling Interest - On June 1, 2012 the Trust purchased from Marc Realty its 20% non-controlling interest in the consolidated joint venture, FT-Ontario Holdings LLC (“One East Erie”), for $5,850,000. The property contains 126,000 square feet of retail and office space consisting of the first six floors in a mixed use building together with 208 parking spaces located at One East Erie, Chicago, Illinois. As a result of this transaction, the Trust now owns 100% of One East Erie. The Trust accounted for the purchase as an equity transaction recording the difference in the $363,000 carrying value of the acquired non-controlling interest and the purchase price as a $5,487,000 reduction in paid-in capital.

Houston, Texas Operating Property – Non-Controlling Interest – During the fourth quarter of 2012, a wholly-owned subsidiary of the Trust conducted a tender offer to acquire additional limited partner units in 5400 Westheimer Holding LP (“Westheimer”). Westheimer is a consolidated entity which holds title to a 614,000 square foot office property located in Houston, Texas. In connection with the tender offer the Trust acquired an additional 5.5 limited partner units representing 22% of Westheimer for a purchase price of $1,650,000 ($300,000 per unit) paid in cash. The units were acquired effective November 30, 2012. As a result of this transaction, the Trust now owns 30% of Westheimer. The Trust accounted for the purchase as an equity transaction recording the difference in the carrying value of the acquired non-controlling interest as a $1,162,000 increase in paid-in capital.

Operating Property Acquisitions through our Equity Investments

Sullivan Center – Equity Investment Operating Property – On February 3, 2012 the Trust entered into a joint venture arrangement with Elad Canada Inc. (“Elad”) pursuant to which two joint venture entities, WRT-Elad Lender LP and WRT-Elad Equity LP (collectively “WRT-Elad”), were formed to acquire for approximately $128,000,000 an existing $140,300,000 first mortgage loan and accrued interest of $6,886,000 (the “Prior Mortgage Loan”). The Prior Mortgage Loan was secured by the 942,000 square foot, office and retail property located at One South State Street in downtown Chicago, Illinois (“Sullivan Center”). Concurrently, the loan was restructured into a $100,000,000 non-recourse mortgage loan provided by a third party lender, a $47,458,000 mezzanine loan made to One South State Street Investors, L.L.C. (“OSSS”) and held by WRT-Elad and a 65% future profits participation in favor of WRT-Elad in OSSS. The Trust contributed a total of $24,201,000 for a 50% interest in WRT-Elad which consolidates the operations of OSSS.

Mentor Building –Equity Investment Operating Property - On May 10, 2012 the Trust acquired for $300,000 a 20% interest in the entity which owns the Mentor Building located in Chicago, Illinois. The interest was purchased from a third party member and the Trust simultaneously made a $200,000 capital contribution to acquire an additional interest in the entity which resulted in a 49.9% aggregate equity investment for $500,000.

Vintage Housing Holdings LLC – Equity Investment and Preferred Equity Investment - On June 1, 2012 the Trust contributed an additional $5,500,000 to the Vintage Housing Holdings LLC (“VHH”) equity investment platform consisting of $1,500,000 in common equity and $4,000,000 in preferred equity with a 12% return. In connection with the transaction, VHH acquired a general partner interest and development fees relating to a residential development project referred to as Vintage at Urban Center, a tax credit apartment community in Lynwood, Washington with a proposed village development of 395 multi-family rental units and 4,000 square feet of retail space.

On November 8, 2012 the Trust made an additional $750,000 preferred equity investment in VHH which entitles it to a 12% return. The contribution was used by VHH to acquire the general partner interest in a residential development project referred to as Quilceda Creek, a tax credit apartment community in Marysville, Washington with a proposed development of 204 residential units.

701 Seventh Avenue – Equity Investment Operating Property – On October 16, 2012 the Trust entered into a joint venture to acquire and redevelop a 120,000 square foot property and associated air rights located at 701 Seventh Avenue in New York City. The property is on the northeast corner of Seventh Avenue and 47 ^th Street in Times Square. The proposed redevelopment will include an expansion of the retail space to approximately 80,000 square feet, installation of an approximately 22,000 square foot state of the art LED sign, and potential development of a hotel. The Trust made an initial contribution of $28,971,000 on a preferred equity basis to acquire a 60.9% interest in the venture. The Trust has committed to invest up to $68,000,000 on a preferred equity basis. The Trust is entitled to a 12% preferred return of which 8% is to be paid currently with the remaining 4% accruing.

Wateridge Pavilion – Equity Investment Operating Property – On December 21, 2012 the Trust entered into a venture with a third party pursuant to which the venture acquired for $9,200,000 a 62,152 square foot class B office building located in Sorrento Mesa (San Diego), California. The Trust contributed a total of $7,522,000 of which $6,000,000 is a preferred equity investment which entitles the Trust to a 12% priority return of which 8% is to be paid from operating cash flow and the remaining 4% will be accrued. The additional $1,522,000 was contributed for a 50% common equity interest in the venture.

Operating Property Disposition Activity

Churchill – Operating Property - On May 14, 2012 the Trust sold the portion of the Churchill, Pennsylvania property that was not leased to Westinghouse for $914,000. No gain or loss was recognized as a result of this transaction, and it resulted in a $632,000 reduction of the basis in the Churchill property by the net proceeds received. The Trust agreed to provide financing to the buyer to cover property operating expenses. At closing, the Trust provided $324,000 of financing to cover buyer’s expenses and real estate taxes due. An additional $179,000 was advanced in each of August 2012 and November 2012 directly to the taxing authority to cover real estate taxes due on the sold parcel. At December 31, 2012 the total loan outstanding was $683,000. The loan is interest only and bears interest at LIBOR + 3.75%, matures on June 1, 2015 and is collateralized by the property.

Memphis (Kroger) - Operating Property – The Kroger Co., a tenant which net leased 100% of the space of the Trust’s Memphis, Tennessee retail property, vacated the building in October 2011 but continued to pay rent as contractually required. On September 28, 2012, the Kroger Co. terminated its lease and paid a cancellation fee of $600,000. On the same date, the Trust sold the Memphis property for $600,000. The transaction resulted in a loss from discontinued operations of approximately $50,000.

Indianapolis (Circle Tower) - Operating Property - On September 28, 2012 the Trust sold its Indianapolis, Indiana property referred to as Circle Tower for approximately $6,300,000. Proceeds of the sale were used to satisfy the $4,655,000 first mortgage on the property. The sale resulted in a gain to the Trust of approximately $945,000. The Trust paid $574,000 in defeasance costs in relation to the satisfaction of the debt in conjunction with the sale which has been recorded as interest expense.

Operating Property Dispositions through our Equity Investments

Marc Realty – Sale of Equity Investment Operating Properties – During 2012 the Trust sold its equity investments in six of its Marc Realty joint ventures to Marc Realty, the Trust’s joint venture partner. Transactions are as follows:

• On March 1, 2012 the Trust sold its 50% interest in the property located at 3701 Algonquin Road, Rolling Meadow, Illinois for $250,000, which approximated its carrying value.

• On May 31, 2012 the Trust sold its 50% equity interests in River Road LLC (Des Plains, Illinois), Salt Creek LLC (Schaumburg, Illinois) and 900 Ridgebrook LLC (Northbrook, Illinois) for $1,000,000, $0 and $1,100,000, respectively. The Trust recognized an aggregate $16,000 gain on the transaction which is reflected in equity earnings.

• On May 31, 2012 the Trust sold its 50% equity interest in Michigan 30 LLC (Chicago, Illinois) for $10,300,000. The purchase price was financed with a $6,550,000 secured promissory note which bears interest at 10% per annum, requires payments of interest only and matures on May 31, 2015. This note was fully satisfied on August 3, 2012. The Trust recognized a loss of approximately $95,000 on the transaction which is reflected in equity earnings.

• On January 1, 2012 the Trust restructured its investment in Michigan 180 LLC (Chicago, Illinois) and reclassified the investment from loans receivable and preferred equity to an equity investment. On November 30, 2012 the Trust sold this 70% equity investment for $7,200,000. The purchase price was paid $2,000,000 in cash and the remainder was financed with a $5,200,000 secured promissory note which bears interest at 8.25% per annum, requires monthly payments of interest only and matures on December 1, 2015.

Operating Property Financing Activity

Waterford Place - Operating Property - On July 19, 2012 the Trust obtained a $13,500,000 non-recourse first mortgage loan secured by its 320 Unit Class A multi-family Memphis, Tennessee (Waterford Place) property that was acquired on April 17, 2012. The loan bears interest at LIBOR plus 2.5% per annum with a LIBOR floor of 0.5%, requires monthly payments of principal and interest and matures on August 1, 2014, subject to two, one-year extensions. On the same date the Trust purchased an interest rate cap which caps LIBOR at 0.5%. The loan will have an outstanding balance at the initial maturity date of $12,928,000.

Newbury Apartments – Operating Property – On October 2, 2012 the Trust refinanced the first mortgage debt on its 180 unit multi-family property located in Meriden, Connecticut. The new loan is non-recourse to the Trust, has a principal amount of $21,000,000, bears interest at a fixed rate of 3.95% per annum and matures on October 2, 2022. The loan requires payments of interest only for the first 24 months and then payments of principal and interest for the remaining term. After repayments on the existing debt and settlement expenses the Trust received net proceeds of approximately $7,308,000.

701 Arboretum – Operating Property - On October 2, 2012 the Trust fully satisfied its mortgage loan payable of $1,657,000 collateralized by its Lisle, Illinois property referred to as 701 Arboretum.

223 West Jackson - Equity Investment - On July 2, 2012 the Trust contributed $3,524,000 to its unconsolidated joint venture investment property located at 223 West Jackson in Chicago, Illinois. The joint venture partner, Marc Realty, also made a contribution of $3,524,000. The proceeds were used to pay off the existing first mortgage loan collateralized by the property. On September 25, 2012 the joint venture obtained a $9,500,000 non-recourse first mortgage on the property. As a result of the financing the Trust and Marc Realty each received a return of capital cash distribution of $3,524,000.

Operating Property Leasing Activity

Westheimer - On September 17, 2012, 5400 Westheimer Limited Partnership, a partially owned consolidated entity of the Trust, executed a lease amendment with the existing net lease tenant, Spectra Energy, which leases the entire 614,000 square foot premises. The initial lease was signed in 2004 and was scheduled to expire April 30, 2018. The new lease extends the lease through April 30, 2026. The Westheimer property is encumbered by a mortgage with a maturity date of April 2016. Negotiated annual lease payments on the modified lease remain unchanged ($7,974,000 to $8,255,000 annually) through the maturity date of the mortgage debt, then the base rate decreases to $4,260,000 annually, subject to annual increases thereafter up to $5,478,000 annually.

Crossroads I – On September 5, 2012 the Trust executed a lease with Hitachi Data Systems for 53,000 square feet of the Crossroads I office property located in Englewood, Colorado. The lease has a ten year term commencing in March 2013 at market rates. As a result of leasing activity the Crossroads I property is 90% leased at December 31, 2012.

Loans

Loan Asset Acquisition Activities

Mentor Building – Loan Asset - On March 6, 2012 the Trust acquired at par a first mortgage loan for $2,521,000. The loan bore interest at 7.5% per annum, required monthly payments of principal and interest and matured on September 10, 2012. The loan is collateralized by a 6,571 square foot retail condominium building known as the Mentor Building located in Chicago, Illinois which is adjacent to the Sullivan Center property held by our WRT-Elad joint venture. On May 10, 2012, the Trust modified the terms of the loan increasing the interest rate to 10% per annum, required payments of interest only and extended the maturity date to September 10, 2017.

Broward Financial Center – Loan Asset - On May 23, 2012 the Trust acquired for approximately $42,800,000 a matured first mortgage loan with a face value of $42,098,000 collateralized by a 326,000 square-foot commercial building located at 500 East Broward Boulevard, Ft. Lauderdale, Florida, containing approximately 47,000 square feet of retail space and 279,000 square feet of office space. Following the acquisition of this loan, the Trust entered into a modification with the borrower pursuant to which the maturity date was extended until October 15, 2012, the interest rate was increased to 9.836% per annum and the borrower made a payment of approximately $12,800,000, which reduced the outstanding principal balance of the loan to $30,000,000. The loan was repaid in full on October 9, 2012.

B-Note Portfolio Acquisition – On September 27, 2012 the Trust acquired for approximately $20,696,000 a portfolio of four performing B-Note loan assets with an aggregate par value of approximately $25,725,000. The loans are collateralized by four separate office and retail assets located in California and Hawaii as follows:

• Burbank Centre – The Trust acquired for $9,000,000 a performing B Note with a face value of $10,000,000 collateralized by a 421,990 square foot Class A office building located in Burbank, California that is currently 100% leased to Walt Disney Company affiliates with leases expiring in 2014 and 2017. The loan bears interest at 5.897% per annum, requires monthly payments of interest only and matures in April 2017. The B Note is subordinate to $135,000,000 of senior financing. On January 25, 2013 the Trust sold this loan to an affiliate of the borrower for $9,000,000. No gain or loss was recognized in connection with this sale.

• Pinnacle II – The Trust acquired for approximately $4,631,000 a performing B Note with a face value of $5,145,000 collateralized by a 230,000 square foot Class A office building located in Burbank, California that is currently 100% leased to Warner Brothers through 2021. The loan bears interest at 6.313% per annum, requires monthly payments of principal and interest, and matures in September 2016. This B Note is subordinate to $84,701,000 of senior financing. The Trust is accreting the discount on the loan into income.

• The Shops at Wailea – The Trust acquired for approximately $5,154,000 a performing B Note with a face value of $7,719,000 collateralized by 166,000 square feet of premier shopping and dining establishments, with more than 70 boutiques, shops, restaurants and galleries located on the island of Maui, Hawaii. The property is 97% leased. The loan bears interest at 6.15% per annum, requires monthly payments of principal and interest, and matures in April 2017. This B Note is subordinate to $108,055,000 of senior financing. The Trust is accreting the discount on the loan into income.

• Poipu Shopping Village – The Trust acquired for approximately $1,911,000 a performing B Note with a face value of $2,861,000 collateralized by 40,800 square feet of retail space on the island of Kauai, Hawaii. The property is 97% leased. The loan bears interest at 6.618% per annum, requires monthly payments of principal and interest and matures in January 2017. This B Note is subordinate to $28,856,000 of senior financing. The Trust is accreting the discount on the loan into income.

1515 Market Street – Loan Asset – On December 12, 2012 the Trust acquired for $58,650,000 a $70,000,000 non-performing first mortgage loan collateralized by a 20 story, 514,000 square foot office building located in Philadelphia, Pennsylvania. The loan was in maturity default and was accruing interest at the default rate of 10.83% per annum.

On February 1, 2013 in lieu of foreclosing, the Trust restructured the loan to increase the outstanding principal balance to $71,629,000 (which included accrued and unpaid interest and expenses and an additional advance of $925,000), adjust the interest rate to be the greater of 7.5% per annum or LIBOR plus 6.5%, extend the maturity date to February 1, 2016 and provide for a 40% participation in all capital event proceeds. In addition, the Trust acquired for $10,000 an indirect 49% interest in the property and became the general partner of the property owner. As a result of the restructuring, the Trust expects to consolidate the joint venture and is in the process of formulating the aggregate purchase price allocation.

Loan Asset Originations

Fenway Shea – Loan Asset - On April 5, 2012 the Trust originated a $2,250,000 first mortgage loan which bears interest at 12% per annum and matures on April 5, 2014, with one, one-year extension right. An origination fee of 1% of the principal amount or $22,500 was paid to the Trust at closing. The loan requires monthly payments of interest only with a balloon payment due at maturity. The loan is collateralized by a 45,655 square foot, two-story multi-tenant office building located at 4545 East Shea Boulevard, Phoenix, Arizona.

127 West 25^th Street – Loan Asset - On May 14, 2012 the Trust originated a $9,000,000 mezzanine loan collateralized by 100% of the member interests in the entity that holds title to the 104,000 square foot, 12-story building located at 127 West 25th Street, Manhattan, New York. An origination fee of 1% of the principal amount or $90,000 and commitment fees totaling $591,500 were paid to the Trust. The loan bears interest at a rate equal to the greater of 14% per annum or LIBOR plus 10%, requires payment of principal and interest and matures on April 30, 2015. The loan is subordinate to a mortgage loan of $35,180,000 which bears interest at a rate of 4.5% per annum and requires payments of interest only. This loan was paid off at par on March 1, 2013.

Queensridge Towers – Loan Asset – On November 15, 2012 the Trust originated a $40,000,000 first mortgage loan collateralized by 67 luxury condominium units at Queensridge Towers located in Las Vegas, Nevada. An origination fee of 1% of the principal amount or $400,000 was paid to the Trust at closing. The loan bears interest at LIBOR plus 11.5% with a LIBOR floor of 0.5%, requires monthly payments of interest only and matures on November 15, 2014, subject to one twelve month extension. Principal payments are required to be made based on predetermined release prices upon the sale of the individual units. During 2012 the Trust received aggregate principal payments of $1,230,000 on this loan.

Simultaneously with the loan origination, the Trust obtained a $25,000,000 loan from KeyBank National Association (“KeyBank”) which is collateralized by the Queensridge Towers loan. The KeyBank loan bears interest at LIBOR plus 4%, requires monthly payments of interest only and is co-terminus with the Queensridge Towers loan. Principal payments are required to be made in accordance with principal payments received on the Queensridge Towers loan. As such, during 2012 the Trust made aggregate principal payments of $1,230,000. In addition, the Trust paid KeyBank a $250,000 origination fee. The KeyBank loan is recourse to the Trust and the Operating Partnership, and is classified as a secured financing on the Consolidated Balance Sheet.

Loan Asset Repayment Activity

160 Spear Street – Loan Asset - On May 9, 2012 the Trust’s 160 Spear loans receivable with a par value of $19,645,000 were paid off at par by the borrower. The Trust’s outstanding investment in these loans prior to payoff was $8,054,000.

Magazine - Loan Asset - On May 9, 2012 the Trust’s Magazine loan receivable with a par value of $20,000,000 was paid off at par by the borrower. The Trust’s outstanding investment in this loan prior to payoff was $17,525,000.

Loan Asset Activity through our Equity Investments

Southern California Office Portfolio – Equity Investment Loan Asset– On January 6, 2012 the Trust’s venture that holds the $117,900,000 C Note in a $798,000,000 first mortgage encumbering a 4,500,000 square foot 31 property office portfolio in southern California (the “SoCal Loan”), obtained a $40,000,000 recourse repurchase facility (the “Facility”) with an affiliate of Blackstone Real Estate Debt Strategies. The Facility bore interest at LIBOR plus 11% per annum with a LIBOR floor of 1%. The SoCal Loan venture received net proceeds of approximately $38,100,000 after origination fees, interest reserves and closing expenses, which was distributed entirely to the Trust in partial redemption of its interest in the SoCal Loan venture resulting in a decrease in the Trust’s ownership interest from approximately 73% to approximately 56%.

On April 6, 2012 WRT-SoCal Lender LLC (“SoCal Lender”), a consolidated joint venture that holds an interest in the SoCal Loan venture, amended and restated its operating agreement to allow for the admission of IX SoCal Holdings LP (“Starwood”) as a member. Starwood contributed $3,500,000 for a 10.2178% interest in SoCal Lender. The Trust received a special distribution from SoCal Lender equal to Starwood’s contribution. As a result, the Trust owned a 50.2% effective interest in the SoCal Loan investment on a fully-diluted basis.

On September 28, 2012 SoCal Loan received a loan payoff at par by the borrower. After repayment of the related repurchase agreement, the Trust received $38,407,000 in cash proceeds. The loan payoff generated $20,927,000 in accretion income of which the Trust’s allocable share was $10,505,000.

Stamford Portfolio – Equity Investment Loan Asset – On February 17, 2012 the Trust invested $8,036,000 and acquired a 20% interest in a venture with Mack-Cali Realty Corporation that acquired for $40,000,000 a senior mezzanine loan with a face value of $50,000,000. The venture’s investment is subordinate to $400,000,000 in senior debt. The loan provides for a credit to the borrower of up to $3,000,000 of any principal proceeds above $47,000,000. The loan bears interest at LIBOR plus 3.25% per annum and matures on August 6, 2013, subject to one one-year extension. The loan is collateralized by the equity interests in a seven building portfolio containing 1,670,000 square feet of Class A office space and 106 residential rental units totaling 70,500 square feet, all located in the Stamford, Connecticut Central Business District.

RE CDO Management - Additional Equity Investment – During March 2012 the Trust and its joint venture partner in RE CDO Management LLC (“RE CDO”) each contributed $550,000 to the joint venture. RE CDO acquired a 5.52% interest in (i) a first priority mortgage loan collateralized by land located in Las Vegas, Nevada (the “Land”), which loan bears interest at LIBOR plus 40% with a current pay rate of 7.5% and the balance accruing and compounding and which had an outstanding balance of $18,218,000 at March 30, 2012, (ii) a second priority mortgage loan collateralized by the Land which bears interest at 10% per annum, all of which accrues, and which had an outstanding balance of $32,177,000 at March 30, 2012 and (iii) a 5.52% membership interest in the entity that was formed to acquire the Land.

10 Metrotech – Equity Investment Loan Asset - On April 18, 2012 the Trust funded $75,000 for a 33.33% interest in a joint venture (“10 Metrotech JV”). A portion of these funds were used to acquire from Sorin Real Estate CDO IV Ltd. a $21,000,000, B Participation in the whole loan secured by a 364,968 square foot, seven story, Class B/C office building on a 0.58 acre land parcel in Brooklyn, New York referred to as 10 Metrotech. On August 6, 2012 10 Metrotech JV acquired the $39,300,000 senior participation in the loan secured by 10 Metrotech for $32,500,000. As a result of these transactions, 10 Metrotech JV now holds the entire mortgage loan. Following consummation of the acquisition, 10 Metrotech JV entered into a forbearance agreement with the borrower pursuant to which, among other things, (i) the interest rate on the loan was increased to 9%, (ii) the principal amount of the loan was reset to $40,000,000 and (iii) 10 Metrotech JV agreed to forbear from foreclosing on the property pursuant to the current maturity default for two years, subject to any further defaults by the borrower.

Concord - Additional Equity Investment - On May 1, 2012 the Trust acquired from Lexington Realty Trust its 33.33% interest in both Concord Debt Holdings LLC (“Concord”) and CDH CDO LLC (“CDH CDO”) and its 50% interest in the collateral manager of Concord Real Estate CDO 2006-1, Ltd. for an aggregate purchase price of $7,000,000. As a result, the Trust now holds a 66.67% interest in both Concord and CDH CDO and 100% of the economics of the collateral manager. This transaction did not result in a change of control. In the event of a sale of our interest in CDH CDO or our interest in the collateral manager, additional proceeds may be payable to Lexington Realty Trust if the sales price exceeds the purchase price paid by the Trust.

Riverside – Equity Investment Loan Asset - On September 18, 2012 the Trust’s 50% owned joint venture WRT-ROIC Riverside LLC, which held an investment in a loan collateralized by Riverside Plaza retail property received a loan pay off at par by the borrower. The Trust received $7,800,000 in cash proceeds from the loan which was originally purchased at par. No gain or loss was recognized by the Trust upon the repayment of the loan.

REIT Securities Activity

During the first half of 2012 the Trust acquired an additional 1,054,686 shares of common stock in Cedar Realty Trust, Inc. (“Cedar”) for an aggregate purchase price of approximately $5,038,000. Accordingly, as of June 30, 2012 the Trust held 6,250,716 shares of common stock in Cedar representing 8.70% of Cedar’s total outstanding common stock. On October 18, 2012 the Trust sold approximately 52% of its holdings of Cedar in a block sale for net proceeds of approximately $17,160,000. As of December 31, 2012 the Trust held 3,000,716 shares of common stock of Cedar.

Also during 2012 the Trust sold all of its remaining REIT preferred share holdings and received net proceeds of $4,302,000.