ABR could have been a bit clearer in yesterday's news release, but things got clearer in this AM's conference call, as well as reading the original propsectus.
Essentially, ABR partially financed the purchase of 450 W 33rd in December 2003, putting up $ 45 million in loans. Since then, ABR seems to have increased the loans slightly (or maybe I missed a piece of the original loan). In return, ABR gets 12% on the loan, and also got an equity kicker on the loan, giving it 24% (somehow this has now increased to 29%) of the deal. I assume, but did not verify, that the equity piece was just a part of the gain rather than a piece of the entire equity. Now, only 3 years later, the building gets sold, ABR still has the $ 45 million loan (on the cc, they said they're not sure if the buyer will pay it off or leave it in place. Considering the interest rate, I suspect the buyer will pay it off). Then , ABR gets somewhere around $ 80 million as its equity kicker. Even after the otrageous management fee (25% of the equity kicker), the deal will increase book value by about $ 60 million. The deal is tax deferred, so there won't be any distributions made on account of the gain.
Since ABR's market cap is only $ 550 million, this deal is pretty big. In addition, someone on the cc mentioned a rumor that ABR had a piece of an adjacent building and asked if there would be another similar announcement in the near future. ABR declined to comment. So I guess the equity kicker on ABR's old deals are pretty valuable.