American Financial Realty Trust Closes on $180 Million Refinancing Transaction With Babson Capital Management LLC

JENKINTOWN, Pa., Dec. 22 /PRNewswire-FirstCall/ -- American Financial Realty Trust , a real estate investment trust focused on acquiring and leasing properties occupied by financial institutions, today announced it has completed the refinancing of the mortgage debt on its Dana Commercial Credit portfolio of office properties. The refinancing extended the term of the mortgage from approximately five years to twelve years with an increase in the debt balance from approximately $162 million to the new refinance amount of $180 million secured at a fixed rate of 5.61%. The financing substantially reduced annual debt amortization which will reduce the Company's use of short term borrowings over the initial remaining five years of the old debt. This reduction in short-term borrowings on a floating rate basis, which are currently rising, compensates for nearly one-half of the additional cost resulting from a higher interest rate on the new debt (157 basis points). There was no penalty incurred as a result of the early retirement of debt.

Babson Capital Management LLC placed 100% of the refinancing on behalf of its parent, Massachusetts Mutual Life Insurance Company, for 13 properties acquired by AFR from Dana Commercial Credit in 2003. The properties are primarily occupied by Bank of America, N.A. The transaction was arranged by the New York office of Holliday Fenoglio Fowler. The new loan is collateralized by these 13 properties, which comprise approximately 3.7 million rentable square feet in the southeastern United States and Washington, D.C. The financing also extends AFR's overall average length of debt from 11.5 to 11.9 years, as the Company continues to execute its strategy of match funding its long-term leases with long-term fixed rate debt. Exclusive of the Company's short-term debt related to a pooling of assets for a securitization to be executed in the second quarter of 2006, the average term of long-term rate debt is 12.4 years.

"Completion of the refinancing of this portfolio is consistent with our announced refinancing strategy, which is focused on extending the term of existing debt, while selectively reducing or eliminating amortization requirements, and increasing internally generated cash flow ($20.5 million)," commented Dave Nettina, chief financial officer at American Financial. "The improvement of our debt structure provides cash for acquisitions, capital improvements and dividend coverage. It enables us to reduce our use of short- term financing by the amount of amortization savings, while leveraging the asset at roughly 50% (based on appraised value)." Mr. Nettina added, "We were particularly impressed with Babson Capital's professional team and its ability to close quickly on a geographically diverse portfolio of properties that are subject to a complex lease structure. The term and structure of this financing provides AFR more flexibility at a lower cost of funds than otherwise available in the securitized marketplace. It was a pleasure working with Babson Capital and we look forward to doing additional financings with them."

"We were pleased to provide the refinancing solution for AFR," said John Doan, Managing Director and head of Babson Capital's Real Estate Finance Group office in Washington, D.C. "This was our first transaction with AFR, a company recognized for the high quality of its underlying lease income stream and its successful use of debt to efficiently match fund those income streams on a stable and long-term basis, and we look forward to working with them again in future transactions."

About American Financial Realty Trust

American Financial Realty Trust is a self-administered, self-managed real estate investment trust that acquires properties from, and leases properties to, regulated financial institutions. The Company owns and manages its assets primarily under long-term triple net and bond net leases with banks. The Company is traded on the New York Stock Exchange under the ticker symbol AFR.

For more information on American Financial Realty Trust, visit the Company's website at http://www.afrt.com/ .

About Babson Capital Management LLC

Babson Capital manages over $97* billion for institutional and retail investors in the U.S. and abroad, as well as high net worth individuals and family offices. The firm offers a wide range of relative return, absolute return, co-investing, financing and customized mandates utilizing equity, fixed-income and derivative instruments. Based in Boston and Springfield, Massachusetts, the firm has six additional offices in the U.S. and an indirect subsidiary, Babson Capital Europe Limited, in London. Babson Capital is a member of the MassMutual Financial Group. Website: http://www.babsoncapital.com/

* Assets include Babson Capital Management LLC and its subsidiary Babson Capital Europe Limited as of Sept. 30, 2005.

About Holliday Fenoglio Fowler, L.P.

Holliday Fenoglio Fowler, L.P. ("HFF") is a leading intermediary of debt and equity capital to the commercial real estate sector. Through seventeen offices nationwide, the firm provides debt placement, structured finance, investment sale, loan servicing, equity raising and note sale services to leading owners, operators, and capital providers in the income property sector nationwide.

Forward-Looking Statements

Certain statements in this press release constitute forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words "expects," "anticipates," "estimates," "intends," "believes" and similar expressions that do not relate to historical information. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks and uncertainties which are, in some cases, beyond the Company's control and could materially affect actual results, performance or achievements. These risks and uncertainties include the risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, and include, without limitation, changes in general economic conditions and the extent of any tenant bankruptcies and insolvencies; the Company's ability to maintain and increase occupancy; the Company's ability to timely lease or re- lease space at anticipated net effective rents; the cost and availability of debt and equity financing; and the Company's ability to acquire and dispose of certain of its assets from time to time on acceptable terms. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.