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Twentieth-Century Business Archives

Alison Mortgage Investment Trust - Lehman Brothers Collection

Alison Mortgage Investment Trust

List of Deals

The Alison Mortgage Investment Trust was established in October 1969. It was a real estate investment trust with an initial equity capitalization of approximately $17 million. The purpose of the trust was to invest in real estate with an emphasis on short-term and intermediate-term first mortgage and wrap-around loans. It also invested in development and land loans.

By 1973 the real estate investment portfolio of Alison had grown to $157 million, with a large portion of that funded by bonds and bank loans. The real estate holdings of the trust were nationwide, with Florida and Texas representing nearly half with $78 million in investments.

Alison was one of many real estate investment trusts (REITs) that were created in the late 1960s and early 1970s, grew quickly, and appeared to be quite successful. Alison, like most other REITs, began to experience difficulties in the mid-1970s as interest rates rose and loan defaults and foreclosures began to impact earnings. These problems were compounded by an economic recession and by overbuilding in areas of the country where Alison had invested heavily.

The first public report that Alison was experiencing problems was in January 1975 when Alison posted a fourth-quarter loss and deferred its dividend, attributing its problems to "significant cash-flow problems." Further bad news followed over the next couple of years as the company continued to report poor earnings. Alison, like other real estate trusts in the troubled REIT industry, attempted to restructure its debt but met strong resistance from many of its creditors. Alison stock was delisted from the New York Stock Exchange in 1977.

In 1978 the name of the trust was changed to First Newport Realty Investors and then to First Newport Corporation in 1979. In October 1980, after extensive debt restructuring, the company, which was now considerably smaller, was able to report a profit of $5.6 million for FY1980.

In August 1981 First Newport Corporation, which now described itself as a real estate company whose principal activities were concentrated in the operation of its hotels, was acquired by the commercial division of Coldwell Banker in a deal worth $23 million.

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