As filed with the Securities and Exchange Commission on June 24, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) June 16, 1998
CAPITAL TRUST
(Exact name of registrant as specified in its charter)
California 1-8063 94-6181186
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
605 Third Avenue, 26th Floor
New York, New York 10016
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(Address of principal executive offices) (Zip Code)
(212) 655-0220
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
ITEM 2. Acquisition or Disposition of Assets
On June 16, 1998, the Registrant originated and funded a $50 million,
eleven-year mezzanine loan (the "Loan") to the affiliated entities that own the
commercial office buildings located at 805 Third Avenue and 3 East 54th Street
in New York, New York (collectively, the "Properties"). The Properties, which
contain approximately 875,000 square feet, are approximately 92% occupied. The
Loan is secured by a pledge of the ownership interests in the entities that own
the Properties (the "Pledge") and by a second mortgage. Upon the achievement of
certain events, including the securitization of the first mortgage encumbering
the Properties, the second mortgage will be released and the Loan secured by the
Pledge will be reduced by an amount to be determined in exchange for a preferred
equity investment in the entity which owns each of the Properties in an amount
equal to the amount of the reduction in the Loan.
The Loan, which matures on July 11, 2009, bears interest at a fixed
rate of interest for the first ten years and bears interest at a specified rate
over LIBOR for its last year. Prepayment is not permitted during the first five
years of the Loan; however, prepayment is permitted during the period of the
sixty-first (61st) month through the one hundred- fourteenth (114th) month of
the Loan with reimbursement for Swap (defined below) unwind costs, and without
premium or penalty for the remainder of the term.
The Loan was funded with existing cash and funds borrowed under one of
the Registrant's credit facilities. Simultaneous with the origination of the
Loan, the Registrant entered into an interest rate swap agreement (the "Swap")
with a commercial bank pursuant to which it will receive interest at LIBOR on
the notional amount of the Swap in exchange for fixed interest payments for the
first ten years of the term of the Loan.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CAPITAL TRUST
(Registrant)
Date: June 24, 1998 By: /s/ Edward L. Shugrue III
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Name: Edward L. Shugrue III
Title: Chief Financial Officer