Last Call: Gramercy Capital falls after analyst note

The real estate investment trust's stock lost $1.29, or 6.1 percent, to $19.71 in afternoon trading.

In a client note, Wachovia Capital Markets analyst Jim Shanahan said he doesn't expect shares to trade above $22 in next 12 months.

"Although we believe 2008 could bring about a better investment environment, poor sentiment and increasing credit costs keep us on the sidelines," Shanahan wrote.

He maintained a "Market Perform" rating on the stock and said he believes going forward, the lender will be able to capitalize on its relationship with office REIT SL Green Realty Corp. to drive deal flow.

The research note was released after the company reported its first-quarter funds from operations, which exceeded Wall Street's estimate by one penny. Its results rose on higher investment income and rental revenues.

The company also said Thursday that its chief operating officer left the company and would be replaced by Robert R. Foley, who previously served as chief financial officer. The company hired John B. Roche to take over as CFO. Roche was CFO at New Plan Excel Realty from 2000 to 2007 and advised Gramercy on its recent acquisition of American Financial Realty Trust.