THE CURRENT OPPORTUNITY

• During the real estate boom of 2002-2006, commercial real estate owners used as much cheap debt as possible to develop, purchase or refinance properties. Many of those loans were securitized into pools of mortgages called commercial mortgage-backed securities (CMBS) and because of declining prices and a weakened economy, many borrowers find themselves in default.
  
  
• There have been 349 Bank Failures from January 2008 through the 1st quarter of 2011. Because banks are carrying non-performing, under-performing or equity deficient loans they are under tremendous pressure from regulators to raise capital.
  
  
• Values of the Real Estate is below the loan documents agreements ie: Loan to Value in 2007 was 70%, with current Values the loan is running at 35% LTV this creates a situation for the bank and the borrower.  The rules of the banking industry make it difficult to directly give a reduction to the borrower a bid process and marketing has to be done to determine the price.
  
  
• We buy at a price that we can get the borrower reset and that we can pay for the cost of the capital we bring in.
  
  
• Fortress identifies and applies a seasoned underwriting process to determine each purchase with the appropriate exit strategies.