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MANN

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TM

AUGUST 20 06

REPORT

THE PEOPLE BEHIND THE DEALS IN THE NY REAL ESTATE SCENE

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Titan Capital

DAVID SAFERSTEIN AND IRA SAFERSTEIN | IN THIS ISSUE |

CONTROL TFS EAST INC. | CEILING SOLUTIONS | RMB PROPERTIES LLC

KRETH COMMUNICATIONS | TREELINE COMPANIES | MILLER & PARTNERS GRUBB & ELLIS CONSULTING SERVICES COMPANY | BROWN R AYSMAN/ ROSS & COHEN LLP

Titan Capital

lending firm

Providing Strength And Speed In Lending

The Bridgeport Port Authority was having a problem. An autonomous government agency in Connecticut, it oversees the Bridgeport­Port Jefferson Ferry and charges the ferry a small tariff on the fares. However, the ferry operators were suing the Port Authority over the tariffs' constitutionality. The Port Authority engaged legal counsel, needed loans to pay the fees, and approached several banks ­ which turned them down. The Port Authority came to Titan Capital, which fashioned the needed loan, fast. Another Titan client was Mystic Tank Lines, whose green oildelivery trucks are a familiar sight in New York City. What was unfamiliar, to Mystic, was its new financial difficulty: a victim of insurance fraud, its insurance was gone and the company was faced with a claim. Mystic, paying out of its own pocket, had gone into bankruptcy. To get out, they turned to Titan Capital. Titan structured an innovative bridge loan for Mystic based on real estate the company owned. Titan's solution helped Mystic continue to meet its obligations and keep its trucks rolling. These are just two of many examples of the financial solutions that have helped build Titan Capital, Inc. ­ a nationally recognized full-service direct lender ­ into a major player in the commercial lending field. They're also reasons, says the firm's president, Ira E. Saferstein, "why we say that Titan offers the strength of an institutional lender with the flexibility and speed of a private lender." Enjoying a reputation for fast service, surety of execution, and the highest ethical standards, Titan Capital closed more than $350 million in lending arrangements last year. "We lend on all types of real estate assets, depending on their quality," says Ira. "We're certainly faster than the major banks. If you call them up and say `I need a loan,' the request will go through their system. Then it will be a while before an appraiser arrives, another month before the underwriter makes a decision, and still another month before the loan committee passes on it. At Titan, it's different. When someone calls Titan for a loan, either I will go look at the property myself or my partner, David, will ­ first-hand and fast. We'll talk it over and make a decision quickly. If it's a `go,' we can then expedite the thirdparty appraisal process. Over the past year, we've closed some 100 loans. That's two or three a week -- which demonstrates our speed once we see something we like." Formed in 1988, Titan lends for a variety of purposes including acquisition financing, partnership buyouts, gap/bridge financing, mortgage acquisitions, quick closings, rehab and construction

loans, debt restructuring, and many more. Headquartered in Westport, Connecticut, with a satellite office in Miami, the firm to date has closed more than 800 loans, totaling more than one billion dollars. Ira Saferstein brings a strong financial background to Titan. A graduate of the University of Pennsylvania, with dual degrees in finance and mechanical engineering, he worked for such firms as Merrill Lynch, Morgan Stanley, Kidder Peabody, and Salomon Smith Barney before becoming affiliated with Ellington Capital Management. With his Ellington partners, and with their access to large-bank capital, Ira pursued his idea for developing an institutionalized bridge lending business ­ "one strong enough," he explains, "to borrow from large money-center banks and enable us to get terrific warehouse lines of credit against our portfolio. I think we really changed the nature of the bridgelending business. Many people have since copied our model." In 2000, Ira bought out his partners at Ellington and formed Titan Capital. David Saferstein, with his own background in finance ­ he owned a proprietary derivatives trading company ­ joined Titan two years ago. Why do borrowers come to a bridge lender? Ira offers an example: "Let's say a good friend comes to you with a building to sell. It's worth $1.5 million, but he needs to close the deal quickly because he's moving to Florida in two weeks. He offers it to you for a million but you only have $200,000 in cash. You go to the bank and they look at you like you're crazy, and it's sixty days minimum. You could take a partner, but then you'd have him for life. You come to Titan. We simply charge a small premium to the bank, and you have the money quickly. You pay us for six months or a year. During that time, you're able to shop around at the banks. You get a great loan ­ and you own the building outright." Another reason, Ira suggests, "is that you may have filed for bankruptcy three years ago and a bank won't lend you money right now. Here again, we'll assess the situation and look for a creative solution that will permit us to advance the money." One such solution was for a non-profit institution in Brooklyn, the Bais Yaakov School for Jewish Girls. "The school was planning to sell its building and relocate at the end of the school year," David recounts. "Meanwhile, it needed a loan for expenses. There was a lien on its property and banks turned them down. Titan Capital, as counselor to the school, steered it into bankruptcy; then, working through the bankruptcy court system, we were able to lend the school $8 million through a

debtor-in-possession loan. We paid off their creditors on their behalf, and we became the senior secured first mortgage. Just recently, someone bid $13 million for the property. They are going to be able to pay us off and it looks like a happy ending for everyone." "In still another example," says Ira, "a woman with four town houses in Harlem came to us. The buildings, on the north side of Central Park, were shells. The floors had collapsed into the basement, the houses hadn't been worked on or lived in for 25 years, and the insides were covered with probably ten feet of dirt and dust. At the same time, property values there had skyrocketed, and the land and the houses, even in their bad condition, were worth probably several million dollars. The woman wanted to renovate the houses and build rental units, but she couldn't get a bank loan to do it. We lent her several million dollars ­ and now she's built out 24 studio apartments that she'll be renting." Titan's capital originates from several sources. "The firm has warehouse lines with a number of large institutions where we package our loans together and they have a cross-collateralized

pool of our loans," explains Ira. "Sometimes we split a loan with a bank, on a `one off' basis, where the bank assumes the first part of the loan ­ and is first to be repaid ­ and Titan takes the junior position, at a higher rate. "Our own money is in every loan," says Ira. "Our banks like that, and our investors like that. And we keep our word. When we commit to do a loan, we move ahead and we fund it. A good deal of our business is through referrals and repeat clients. People trust us," he says, "and they come back to us." By Peter Haas Ira E. Saferstein, President Titan Capital Inc. 191 Post Road West Westport, CT 06880 Tel: 203-221-2750 Fax: 203-221-2751 E-Mail [email protected]

Commercial lending can be a bit restrictive

With over in commercial real estate loans closed just last year, you can rely on Titan Capital to break the bonds of traditional lending. Our in-house team of highly skilled financial specialists means we are able to solve even your most complex problems with unmatched creativity, speed and flexibility. Turn to Titan Capital to unlock your potential.

$350 million

Bankruptcy Workout - Mystic Tank Lines When Mystic Tank Lines needed help with their bankruptcy exit strategy, they turned to Titan Capital. That's because they knew we would structure a loan designed specifically to meet their needs. And we did. Our innovative solutions helped them fund all their obligations and keep their highly visible green trucks rolling. Just put our creative and flexible financial solutions to the test, and you'll see for yourself what Titan Capital can do.

TIT AN

CAPIT AL

Yeah, We did that deal

Connecticut · New York · Miami 203-221-2750 www.titancapital.com

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