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EXCLUSIVE - Trump financier Ladder Capital explores sale - sources
December 2, 2016 / 5:36 PM / a year ago

EXCLUSIVE - Trump financier Ladder Capital explores sale - sources

(Reuters) - Ladder Capital Corp, a real estate investment trust which has bankrolled much of U.S. President-elect Donald Trump’s property development, is exploring the possibility of a sale, according to people familiar with the matter.

U.S. President-elect Donald Trump speaks at a rally as part of their "USA Thank You Tour 2016" in Cincinnati, Ohio, December 1, 2016 . REUTERS/William Philpott

The move comes as Ladder grapples with new regulations making selling on mortgages more difficult. Founded in 2008, it has been one of the key lenders that Trump has turned to after his relations with major Wall Street banks soured following some of his business bankruptcies in the 1990s.

Ladder is working with investment bank Citigroup Inc on a sale process, sources said, cautioning there is no certainty of a deal.

The sources asked not to be identified because the deliberations are confidential. Ladder did not immediately respond to requests for comment and Citigroup declined to comment.

Ladder shares jumped up 6.1 percent at $15.13 in afternoon trading on the news, giving the company a market capitalization of around $1.7 billion.

New York-based Ladder had about $6.2 billion of assets on its balance sheet as of September, $2.4 billion of which were commercial real estate loans and $2.7 billion of which were commercial real estate-related securities.

It has helped finance many of Trump’s famous Manhattan properties, including Trump Tower on Fifth Avenue and the Trump Building on Wall Street.

Starting this month, lenders such as Ladder that repackage and sell their loans as mortgage-backed securities are required to keep a portion of them on their books. Many of them are scrambling to meet these new capital requirements.

Ladder is seen well positioned to handle a potential interest rate rise because it has $1.4 billion of floating-rate securities and $1.2 billion of interest rate hedges on its balance sheet, according to a note by independent real estate investment trust analyst Brad Thomas.

Mortgage-focused real estate investment trusts have mushroomed since the 2008 financial crisis, as stricter regulations on traditional financial institutions opened up opportunities for new types of lenders to enter the market.

Ladder Capital went public in 2014, and converted to a real estate investment trust in 2015.

Editing by Alistair Bell

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