THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Gramercy Capital Corp. (GKK)

4/17/2006 Proxy Information

Stephen L. Green has served as Chairman of SL Green Realty Corp. since 1997 and is a full-time executive officer. SL Green Realty controls 25% of the company stock.

Management Agreement

In connection with our initial public offering in April 2004, we entered into a Management Agreement with our Manager, which provides for an initial term through December 2007 with automatic one-year extension options and subject to certain termination rights. We pay our Manager an annual management fee equal to 1.75% of our gross stockholders’ equity, which is defined as the aggregate gross proceeds from sales of our operating partnership’s common and preferred equity capital, inclusive of the aggregate gross proceeds from the sales of trust preferred securities and from the sales of any securities we issue that do not constitute indebtedness on our financial statements in accordance with generally accepted accounting principles. We realized expenses to the Manager under the Management Agreement of an aggregate of approximately $6,337,000 for the year ended December 31, 2005 and approximately $1,349,000 for the period from April 12, 2004 (formation) through December 31, 2004.

At December 31, 2005, the majority of the Class B limited partner interests were owned by our Manager and SL Green Operating Partnership, L.P. Interests were also held by certain officers and employees of SL Green, including some of whom are among our executive officers, which interests are subject to performance thresholds. To provide an incentive for our Manager to enhance the value of our common stock, the holders of the Class B limited partner interests of the Operating Partnership are entitled to an incentive return equal to 25% of the amount by which funds from operations (as defined in the partnership agreement of the Operating Partnership) plus certain accounting gains exceed the product of our weighted average stockholders’ equity (as defined in the partnership agreement of the Operating Partnership) multiplied by 9.5% (divided by 4 to adjust for quarterly calculations). We will record any distributions on the Class B limited partner interests as an incentive distribution expense in the period when earned and when payments of such amounts has become probable and reasonably estimable in accordance with the partnership agreement. We realized approximately $2,276,000 of incentive distribution expense for the year ended December 31, 2005 and $0 for the period from April 12, 2004 (formation) through December 31, 2004.

Asset Servicing Agreement and Outsourcing Agreement

We are obligated to reimburse our Manager for its costs incurred under an Asset Servicing Agreement between our Manager and an affiliate of SL Green Operating Partnership, L.P. and a separate Outsourcing Agreement between our Manager and SL Green Operating Partnership, L.P. The Asset Servicing Agreement provides for an annual fee payable to SL Green Operating Partnership, L.P. by us of 0.15% of the carrying value of our investments, which amount SL Green Operating Partnership, L.P. has agreed to reduce for certain investments and which fee may be further reduced by SL Green Operating Partnership, L.P. for fees paid directly to outside servicers by us. The Outsourcing Agreement currently provides for an annual fee of $1.28 million per year, increasing 3% annually over the prior year. For the year ended December 31, 2005 and the period from April 12, 2004 (formation) through December 31, 2004, we realized expense of an aggregate of $1,266,000 and $521,000, respectively, to our Manager under the Outsourcing Agreement. For the year ended December 31, 2005 and the period from April 12, 2004 (formation) through December 31, 2004, we realized expenses of an aggregate of $1,037,000 and $95,000 to our Manager under the Asset Servicing Agreement, respectively.

Collateral Management Agreement

In connection with the closing of our collateral debt obligation in July 2005, Gramercy Real Estate CDO 2005-1, Ltd., as issuer, entered into a Collateral Management Agreement with our Manager. Pursuant to the Collateral Management Agreement, the Manager has agreed to provide certain advisory and administrative services in relation to the collateral debt securities and other eligible investments securing the collateral debt obligation notes. The Collateral Management Agreement provides for a senior collateral management fee, payable quarterly in accordance with the priority of payments as set forth in the indenture, equal to 0.15% per annum of the net outstanding portfolio balance, and an additional subordinate collateral management fee, payable quarterly in accordance with the priority of payments as set forth in the indenture, equal to 0.25% per annum of the net outstanding portfolio balance. Net outstanding portfolio balance is the sum of the (i) aggregate principal balance of the collateral debt securities, excluding defaulted securities, (ii) aggregate principal balance of all principal proceeds held as cash and eligible investments in certain accounts, and (iii) with respect to the defaulted securities, the calculation amount of such defaulted securities. As compensation for the performance of its obligations as collateral manager, our Board of Directors has allocated to our Manager the portion of the subordinate collateral management fee paid on securities not held by us. The senior collateral management fee and balance of the subordinate collateral management fee is allocated to us. For the year ended December 31, 2005 we realized expense of $944,000 to the Manager under the collateral management agreement.

Private Placement Transaction

In connection with the 5,500,000 shares of common stock that were sold on December 3, 2004 and settled on December 31, 2004 and January 3, 2005 in a private placement, we agreed to pay the Manager a fee of $1,000,000 as compensation for financial advisory, structuring and costs incurred on our behalf. This fee was recorded as a reduction in the proceeds of the private placement. Apart from legal fees and stock clearing charges totaling $245,000, no other fees were paid by us to an investment bank, broker/dealer or other financial advisor in connection with the private placement, resulting in total costs of 1.3% of total gross proceeds.

One Madison Avenue

On April 29, 2005, we closed on a $57,503,000 initial investment in a joint venture with SL Green to acquire, own and operate the South Building located at One Madison Avenue, New York, New York, or the Property. The joint venture, which was created to acquire, own and operate the Property, is owned 45% by a wholly-owned subsidiary of us and 55% by a wholly-owned subsidiary of SL Green. The joint venture interests are pari passu. Also on April 29, 2005, the joint venture completed the acquisition of the Property from Metropolitan Life Insurance Company for the purchase price of approximately $802,800,000 plus closing costs, financed in part through a $690,000,000 first mortgage loan on the Property. The Property comprises approximately 1.2 million square feet and is almost entirely net leased to CS, pursuant to a lease with a 15-year remaining term.

Leases

We executed a lease commencing on May 1, 2005 with SLG Graybar Sublease LLC, an affiliate of SL Green, for our corporate offices at 420 Lexington Avenue, New York, New York. The lease is for approximately five thousand square feet with an option to lease an additional approximately two thousand square feet, carries a term of ten years, and includes rents on the entire seven thousand square feet of approximately $249,000 per annum for year one rising to $315,000 per annum in year ten. For the year ended December 31, 2005 we paid $90,000 under this lease.

Messenger Services

Bright Star Couriers LLC provides messenger services to us. Bright Star is owned by Gary Green, a son of Stephen L. Green, Chairman of our Board of Directors. The aggregate amount of fees paid by us for such services for the year ended December 31, 2005 was approximately $3,000, and less than $1,000 for the period from April 12, 2004 (formation) through December 31, 2004.

SL Green Operating Partnership, L.P. Interests in Gramercy Investments

SL Green Operating Partnership, L.P. has invested $75,000,000 and $6,100,000 in preferred equity interests that are subordinate to two of our investments with book values of $29,026,000 and $6,441,000 respectively, as of December 31, 2005. SL Green Operating Partnership, L.P. had invested $75,000,000 in a preferred equity interest that was subordinate to our investment with a book value of $68,879,000 as of December 31, 2004.

On July 14, 2005, we closed on the purchase from an SL Green affiliate of a $40,000,000 mezzanine loan which bears interest at 11.20%. As part of that sale, the seller retained an interest-only participation. We have determined that the yield on our mezzanine loan after giving effect to the interest-only participation retained by the seller is at market. The mezzanine loan is secured by the equity interests in an office property in New York, New York.

Purchases of Common Stock

In connection with our incorporation, a subsidiary of SL Green purchased 500,000 shares of our common stock for $200,000, or $0.40 per share, as our initial capitalization. The purchase price represented the estimated fair value of such shares at the time of formation. On August 2, 2004, SL Green purchased 3,125,000 shares, or 25% of the shares sold in our initial public offering, at $15.00 per share. SL Green also has the right to purchase 25% of any shares of stock sold in future offerings. On December 31, 2004 and January 3, 2005, we completed the private offering and sale of common stock pursuant to purchase and sale agreements we entered into on December 3, 2004. Various institutional investors directly acquired 4,225,000 shares of common stock and an additional 1,275,000 shares of common stock were sold to SL Green Operating Partnership, L.P., an affiliate of SL Green Realty Corp. pursuant to its contractual right to choose to maintain a 25% ownership interest in our outstanding shares of common stock.

On September 14, 2005, we sold 3,833,333 shares of common stock, at a price of $25.80 per share, under our $350 million shelf registration statement declared effective in August 2005. A total of 2,875,000 shares were sold through a public offering and an additional 958,333 shares were sold to SL Green Operating Partnership, L.P. pursuant to its contractual right to choose to maintain a 25% ownership interest in our outstanding shares of common stock.

Registration Rights Agreement

We entered into a Registration Rights Agreement with each of the purchasers in the private placement transaction mentioned above whereby we agreed to file a registration statement with the SEC no later than August 31, 2005, covering the shares we sold in the private placement. We entered into an Amended and Restated Registration Rights Agreement with SL Green Operating Partnership, L.P. whereby we agreed to file a registration statement with the SEC no later than August 31, 2005, covering the shares we sold in the private placement. On August 31, 2005, we filed a registration statement relating to such shares.

Origination Agreement

We entered into an Origination Agreement with SL Green that is effective during the term of the Management Agreement. Pursuant to this agreement, SL Green will not originate, acquire or participate in fixed income investments in the United States, subject to certain conditions and exclusions described below. Fixed income investments include debt obligations or interests in debt obligations bearing a fixed-rate of return and collateralized by real property or interests in real property. SL Green has also agreed not to acquire, originate or participate in preferred equity investments which bear a fixed-rate of return in the United States, unless we have determined not to pursue that opportunity.

Under the agreement, SL Green will retain the following rights:

(a) to retain any fixed income investments and/or preferred equity investments it owns or has committed to own on the date the offering closes;

(b) to originate fixed income investments or acquire interests in fixed income investments and/or preferred equity investments in connection with the sale of any real estate or real estate-related assets or fixed income investments it currently owns or owns at any future time, in part or whole, directly or indirectly;

(c) to originate or acquire fixed income and/or preferred equity investments that provide a rate of return tied to the cash flow, appreciation or both of the underlying real property or interests in real property;

(d) to modify or refinance any portion of the investments in item (a), (b) or (c) above including, but not limited to, changes in principal, rate of return, maturity or redemption date, lien priority, return priority and/or borrower; and

(e) to originate, acquire or participate in any distressed debt, where there is a payment default, an acceleration, bankruptcy or foreclosure, when a default is highly likely because the loan-to-value ratio is over 100% or when the debt service exceeds the available cash flow from the property on both a current and projected basis.

We have agreed that we will not:

Š acquire real property in metropolitan New York and Washington, D.C. (except by foreclosure or similar conveyance) resulting from a fixed income investment;

Š originate or acquire investments described in (c) above or distressed debt, in each case located in metropolitan New York or Washington, D.C.; and

Š originate or acquire participations in any investments described in item (b) or (d) above.

We have also agreed that, when we acquire direct or indirect ownership interests in property in metropolitan New York or Washington D.C. by foreclosure or similar conveyance, SL Green will have the right to purchase the property at a price equal to our unpaid asset balance on the date we foreclosed or acquired the asset, plus interest at the last stated contract (non-default) rate and, to the extent payable by the borrower under the initial documentation evidencing the property, legal costs incurred by us directly related to the conveyance and the fee, if any, due upon the repayment or prepayment of the investment which is commonly referred to as an “exit fee” (but not including default interest, late charges, prepayment penalties, extension fees or other premiums of any kind) through the date of SL Green’s purchase (this amount is called “Par Value”). If we seek to sell the asset and receive a bona fide third party offer to acquire the asset for cash that we desire to accept, SL Green may purchase the asset at the lower of the Par Value or the third party’s offer price. If the asset is not sold within one year, SL Green has the right to purchase the property at its appraised value. The appraised value will be determined as follows: we and SL Green will each select an appraiser. Each appraiser will appraise the property. The two appraisers will jointly select a third appraiser, who will then choose one of the two appraisals as the final appraised value. These rights may make it more difficult to sell such assets because third parties may not want to incur the expense and effort to bid on assets when they perceive that SL Green may acquire them at the lower of the same terms proposed by the third party or Par Value. As a result, we may not receive the same value on the sale of such assets as we might receive from an independent third party submitting an offer through a competitive bidding process.

SL Green has a right of first refusal to acquire any distressed debt that we decide to sell.

Under this agreement, we also agreed to sell to SL Green 25% of the shares sold in our initial public offering. No underwriting discount or commission was paid in connection with the shares sold to SL Green. We have also agreed that, during the term of this origination agreement, SL Green will have the right to purchase 25% of the shares in any future offering of common stock, at the same price as other purchasers, in order to maintain its percentage ownership interest in us after our initial public offering. This right will also apply to issuances of units in our operating partnership.

In the event the Management Agreement is terminated for cause by us or if neither SL Green nor any of its affiliates shall be the managing member of our Manager, then the non-compete provisions in the Origination Agreement will survive such termination for a period of one year with respect only to potential investments by us as to which our Manager has commenced due diligence.