Centerline Capital Group. Corporate Overview

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Charity Aileen Jacobs
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1 Centerline Capital Group Corporate Overview

2 This presentation contains forward-looking statements. These forward-looking statements are not historical facts, but rather our beliefs and expectations and are based on our current expectations, estimates, projections, beliefs and assumptions about Centerline Holding Company and Centerline Capital Group (collectively, our Company ) and industry. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates" and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Some of these risks include, among other things: adverse changes in real estate markets; competition with other companies; interest rate fluctuations; general economic and business conditions; environmental/safety requirements; changes in applicable laws and regulations; our tax treatment, the tax treatment of our subsidiaries and the tax treatment of our investments; risk of default associated with the mortgage revenue bonds and other securities held by us or our subsidiaries; risks associated with providing credit intermediation; risk of loss under mortgage banking loss sharing agreements; risk of loss from direct and indirect investments in CMBS; the risk that relationships with key investors and developers may not continue; our ability to generate fee income may not continue; and risks related to the form and structure of our financing arrangements. These risks and uncertainties are described in the section captioned Risk Factors in Centerline Holding Company s Annual Report on Form 10-K for the year ended December 31, 2006, that Centerline Holding Company filed with the SEC on March We caution you not to place undue reliance on these forward-looking statements, which reflects the Company s view only as of the respective dates specified in this presentation incorporated by reference. 2

3 Executive Summary A full-service real estate investment and finance company with $16 Billion in AUM We match the users of capital with the providers of capital Parent Company, Centerline Holding Company, is listed on the New York Stock Exchange (Ticker: CHC) 9.1% Dividend Yield; 1.2x Price/Book 3

4 Business Strategy Premier Capital Provider to Real Estate Developers and Owners Premier Real Estate Fund Manager Fully-integrated Real Estate Platform and Capital Markets Expertise 4

5 Company Structure 5

Investment Strategy Buy Originations Origination Fees Acquisition Fees Securitization Fees Interest Income Guarantee Fees Fix Special Servicing

6 Investment Strategy Buy Originations Origination Fees Acquisition Fees Securitization Fees Interest Income Guarantee Fees Fix Special Servicing Special Servicing Fees Resolution Fees Watch Surveillance Loan Servicing Fees Asset Management Fees Incentive Fees Assumption/Modification Fees 6

7 Executive Management Team Name Title Years in Industry Years with Centerline (1) Marc D. Schnitzer CEO & President Leonard W. Cotton Vice Chairman Robert L. Levy Chief Financial Officer 20 6 Donald J. Meyer Chief Investment Officer 34 5 J. Larry Duggins Executive Managing Director, Commercial Real Estate Daryl J. Carter Executive Managing Director, Commercial Real Estate Andrew J. Weil Executive Managing Director, Affordable Housing Nicholas A.G. Mumford Executive Managing Director, Credit Risk Products 18 1 Christopher G. Crouch Senior Managing Director, Asset Management 33 6 Average Years: (1) Includes predecessor entities 7

8 Centerline Competitive Advantages 34-year track record through varied real estate and economic cycles (1) Originations sourced through Direct relationships with over 875 real estate developers and owners Strategic relationships with major Wall Street investment banks Life-of-loan relationship originate, underwrite, service, asset manage, refinance/disposition Proprietary technology which provides real-time data on over 13,000 commercial and multifamily properties Special Servicing rated Strong from S&P and 1 from Fitch (both the highest ratings) (1) Includes predecessor entities 8

9 Growth Initiatives Evolution into a full-service, diversified asset manager Collateralized Loan Obligation (CLO) business for syndicated bank loans Distressed debt funds Urban equity funds Portfolio refinancing opportunities over 2,200 loans with an UPB of $13B mature in our CMBS portfolio in the next 4 years 9

10 Financial Overview

11 Key Financial Metrics Structure Share Price Annualized dividend per share Dividend yield CAD payout ratio Return on equity Debt to total assets Weighted average cost of debt Interest Coverage Price/CAD ratio Price/book ratio Fixed-Rate Capital/Total Capital (%) Statutory Trust $18.43 (1) $ % (1) 84% (2) 10% (3,4) 56.6% (5) 4.87% (5) 1.4x (5) 11.0x (3,7) 1.2x (7) 70.9% (5) (1) At May 4, 2007 (2) Based upon our current annualized dividend per share and our projected 2007 CAD per share (3) Based on trailing twelve month CAD ended March 31, 2007 (4) Based on trailing twelve-month average equity ended March 31, 2007 (5) At March 31, 2007 (6) YTD at March 31, 2007 (7) Based upon May 4, 2007 share price of $18.43; Book value at March 31,

12 Assets Under Management Direct Assets Under Management Affordable Housing Tax-Exempt Revenue Bonds LIHTC Funds Commercial Real Estate CMBS Funds High-yield Debt Funds (CRESS/AMAC) Joint Venture Equity Funds (CUC) Subtotal - Direct Assets Under Management Loan Servicing Portfolio Asset Management Servicing Portfolio Named Special Servicer Subtotal Loan Servicing Portfolio Total Assets Under Management and Servicing (1) $2,812,140,000 $8,532,347,000 $3,572,999,000 $958,309,000 $137,498,000 $16,013,293,000 $20,792,000,000 $78,377,218,000 $99,169,218,000 $115,182,511,000 (1) As of March 31,

13 Revenue Drivers Affordable Housing Low-Income Housing Tax-Credit Equity Funds Upfront/Acquisition Fees 3.25% - 5% Asset Management Fees 25 bps 50 bps per year or 3% - 5% upfront Upfront Fees Spread (1) Tax-Exempt Mortgage Bonds 2.0% 237 bps (1) As of March 31, 2007; Spread between weighted average yield on portfolio and weighted average cost of bond securitizations 13

14 Revenue Drivers Commercial Real Estate Base Management Fees Incentive Management Fees Origination/Securitization Fees CMBS Funds 1.0% - 1.5% 15% - 20% of returns above a return hurdle NA Direct Loan Funds 1.0% - 2.0% 15% - 20% of returns above a return hurdle NA Preferred Equity Funds 1.0% - 1.5% 10% - 25% of returns above a return hurdle NA Mortgage Origination NA NA bps 14

15 Revenue Drivers Asset Management Primary Servicing Special Servicing Base Fees 5-50 bps 20 30bps of loan balance when loan enters special servicing Liquidation Fees NA 1.0% of loan balance upon resolution Assumption/Modification Fees NA 0.5% - 1.0%; split between Special Servicer and Master Servicer 15

16 Revenue Drivers Credit Risk Products Credit Default Swaps Fees Tax-Exempt Bond Securitization 0.40% % LIHTC Equity Fund 5.0%- 6.0% Primary/Third Party 1.00% % 16

17 Why Invest in Centerline Experienced Management Team Credible Growth Story 9.1% Dividend Yield 17

18 Appendix

19 Commercial Mortgage Finance and Investment Company Comparables Mortgage REIT Public Trading Comparables As of May 4, 2007 As of 05/04/2007 (1) (1) (2) (2) (2) (2) Credit Metrics Book Val. Market % off 52W LTM PE P / FFO P / AFFO (CAD) AV/ EBITDA (3) Price / ROE Equity / Debt / (4) Price of Equity Value High Low Tot. Ret E 2008E E 2008E E 2008E 2007E 2008E Div. Yield Book MRQ LTG Assets Debt + Equity Company $ $MM $MM % % % x x x x x x x x x x x % x % % % % Centerline (CHC) ,066 (15.7) NA NA NA NA NA NA NA NA Residential Real Estate Municipal Mortgage & Equity, LLC (MuniMae) (MMA) (5) ,055 (15.2) NA NA NA NA NA NA NA NA NA KKR Financial Corporation (KFN) ,723 2,165 (11.1) NA NA NA NA NA Commercial Real Estate Finance Capital Trust (CT) (17.8) NA NA NA NA NA NA NA NA Gramercy (GKK) (11.4) NA NA NA NA istar Financial Inc. (SFI) ,987 5,960 (10.1) NA NA NA JER Investors Trust Inc. (JRT) (15.8) NA NA NA NA NA NA Newcastle (NCT) ,002 1,378 (10.0) NA NA NA (6) RAIT Financial Trust (RAS) ,196 1,840 (24.4) NA Mean Median Maximum Minimum Source SNL, FactSet, Morgan Stanley Given the numerous sub-components and businesses in the mortgage finance space, investors have certain multiples they focus on depending on the business line. Other multiples may not be used nor analyzed (hence the NA s above) Companies like Centerline require a variety of multiples given their numerous lines of business 1. Values do not include conversion of OP units 2. FFO, AFFO, CAD and EBITDA estimates from consensus SNL estimates. CT FFO was calculated as EPS plus depreciation and amortization 3. Dividend yield pulled from Factset, calculated as annual dividends / common shares 4. Calculated as debt outstanding / debt outstanding + book value of common equity 5. MMA is in the process of restating results. Multiples are affected as MMA has not filed since March Balance sheet consolidation has not yet occurred following a recent merger so some data is skewed 19

20 Current Ratings Corporate Ratings/Term Loan and Revolver Ratings Standard & Poor s BB Moody s Investor Services Ba3 Equity Issuer Trust Ratings Entity A2 (Moody s) Series A preferred stock A3 (Moody s) Series B preferred stock Baa1 (Moody s) Centerline Servicing, Inc. Primary Servicing CPS2 (Fitch); Above Average (Standard & Poor s) Multifamily Housing Revenue Bond Servicer Above Average (Standard & Poor s) Special Servicing 1 (Fitch); Strong (Standard & Poor s) CDO Asset Manager 1 (Fitch) Centerline Financial, LLC Senior Debt AAA/Aaa (Standard & Poor s/moody s) Mezzanine Debt A+/A1 (Standard & Poor s/moody s) 20

Group. Corporate Overview

Group. Corporate Overview Centerline Capital Group Corporate Overview This presentation contains forward-looking statements. These forward-looking statements are not historical facts, but rather our beliefs and expectations and