Arbor explained the cut in the dividend thusly:
This [third quarter] dividend represents the estimated balance needed to distribute 100% of the Company's taxable income for 2008. Taxable income is expected to be less than the Company originally anticipated, primarily due to tax differences associated with certain of the Company's unconsolidated equity investments.
In recent years, the Company has paid out more than 100% of taxable income and, where possible, the Company has sought to maintain a consistent and recurring dividend. For 2008 and for the immediate future, the Company expects to limit dividends to 100% of taxable income. This decision reflects the continued difficult economic environment and the need to focus on capital retention.
All eyes now turn to competitors like Capital Trust (CT) and Anthracite Capital (AHR), who have already declared their third-quarter dividends. Will these two mighty players in the commercial mREIT arena see their dividends decimated in the fourth quarter of 2008?