Edgar Filing: CENTERLINE HOLDING CO

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

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CENTERLINE HOLDING COMPANY
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CENTERLINE HOLDING COMPANY

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

December 13, 2012

October 30, 2012

To the holders of common shares and special preferred voting shares (collectively, “shareholders”) of Centerline Holding Company:

NOTICE IS HEREBY GIVEN THAT the 2012 annual meeting of the holders of the common shares of beneficial interest of Centerline Holding Company (the “Company”) and the holders of special preferred voting shares of the Company will be held on Thursday, December 13, 2012 at 10:00 a.m. Eastern Time.

We are pleased that this year’s annual meeting will be a completely “virtual meeting” of shareholders, that is, you may participate by means of remote communication. You will be able to attend the annual meeting, vote and submit your questions during the annual meeting via live webcast by visiting www.virtualshareholdermeeting.com/centerline12. Prior to the annual meeting, you will be able to vote at www.proxyvote.com. In the alternative, you may also submit a proxy by telephone or by mailing in the enclosed proxy card. To submit a proxy on the Internet, log on to the Internet and go to http://www.proxyvote.com, and follow the directions outlined on the secure website. To submit a proxy by telephone, call toll-free 1-800-690-6903, and follow the instructions provided by the recorded message. Even if you plan to attend the virtual annual meeting, we urge you to return your proxy card or submit a proxy by telephone or the Internet to ensure the representation of your shares at the annual meeting. The annual meeting will be held for the following purposes:

(1)

The election of two trustees to our board of trustees (“Board”) for a term of three years to expire in 2015 or his earlier removal or resignation and until his successor is elected and qualified;

(2)

The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2012; and

(3)

The transaction of such other business as may properly come before the meeting.

Our Board recommends a vote “FOR” each of the proposals. The accompanying proxy statement contains additional information and should be carefully reviewed by shareholders.

Our Board has fixed the close of business on Thursday, October 18, 2012 as the record date for the determination of shareholders entitled to notice of and to vote at the annual meeting and any adjournment or postponement thereof. The Company will be using the “Notice and Access” (“Notice of Internet Availability”) method of providing proxy materials to you via the Internet. The Company believes that this process should provide you with a convenient and quick way to access your proxy materials and vote your shares, while allowing us to conserve natural resources and reduce the costs of printing and distributing the proxy materials. On or about October 30, 2012, we will mail to our shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy statement and our 2011 annual report and vote electronically via the Internet. The Notice also contains instructions on how to receive a paper copy of your proxy materials and how to attend the virtual annual meeting.

By Order of the Board of Trustees

Robert L. Levy

President and Chief Operating Officer

SHAREHOLDERS, WHETHER OR NOT THEY EXPECT TO ATTEND THE VIRTUAL MEETING, ARE REQUESTED TO VOTE THEIR SHARES ELECTRONICALLY VIA THE INTERNET OR BY TELEPHONE OR BY COMPLETING AND RETURNING THE PROXY CARD IF YOU REQUESTED PAPER PROXY MATERIALS. VOTING INSTRUCTIONS ARE PROVIDED IN THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS, OR, IF YOU REQUESTED PRINTED MATERIALS, THE INSTRUCTIONS ARE PRINTED ON YOUR PROXY CARD AND INCLUDED IN THE ACCOMPANYING PROXY STATEMENT. ANY PERSON GIVING A PROXY HAS THE POWER TO REVOKE IT AT ANY TIME PRIOR TO THE MEETING, AND SHAREHOLDERS WHO ATTEND THE MEETING MAY WITHDRAW THEIR PROXIES AND VOTE DURING THE MEETING. IT IS IMPORTANT THAT YOU VOTE YOUR COMMON SHARES OR SPECIAL PREFERRED VOTING SHARES. YOUR FAILURE TO PROMPTLY VOTE YOUR SHARES INCREASES THE OPERATING COSTS OF YOUR INVESTMENT. YOU ARE CORDIALLY INVITED TO ATTEND THE VIRTUAL MEETING VIA LIVE WEBCAST BY VISITING WWW.VIRTUALSHAREHOLDERMEETING.COM/CENTERLINE12, BUT YOU SHOULD SUBMIT A PROXY BY INTERNET, PHONE OR MAIL PRIOR TO THE MEETING WHETHER OR NOT YOU PLAN TO ATTEND.

TABLE OF CONTENTS

	Page

INTERNET AVAILABILITY OF PROXY MATERIALS	1

ATTENDING THE ANNUAL MEETING	1

QUESTIONS	1

PROXY STATEMENT	2

PROPOSALS BEFORE THE MEETING	4

TRUSTEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	7

EXECUTIVE COMPENSATION	16

TRUSTEE COMPENSATION	17

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	18

TRANSACTIONS WITH RELATED PERSONS AND CERTAIN CONTROL PERSONS	22

ACCOUNTING AND AUDIT INFORMATION	28

EXPENSES OF SOLICITATION	30

VOTING PROCEDURES	31

SHAREHOLDER PROPOSALS	33

ANNUAL REPORT ON FORM 10-K	33

OTHER BUSINESS	33

INTERNET AVAILABILITY OF PROXY MATERIALS

We are furnishing proxy materials to our shareholders primarily via the Internet. On or about October 30, 2012, we will most of our shareholders a Notice of Internet Availability containing instructions on how to access our proxy materials, including our proxy statement and our annual report (Notice & Access). The Notice of Internet Availability also instructs you on how to vote via the Internet. Other shareholders, in accordance with their prior requests, received e-mail notification of how to access our proxy materials and vote via the Internet, or have been mailed paper copies of our proxy materials and a proxy card or voting form.

Internet distribution of our proxy materials is designed to expedite receipt by shareholders, lower the cost of the annual meeting, and conserve natural resources. However, if you would prefer to receive paper copies of proxy materials, please follow the instructions included in the Notice of Internet Availability. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials via e-mail unless you elect otherwise.

ATTENDING THE ANNUAL MEETING

It is our pleasure to invite you to attend our 2012 annual meeting of shareholders on Thursday, December 13, 2012. We are very pleased that this year’s annual meeting will be a virtual meeting of shareholders, which will be conducted via live webcast. We believe that holding a virtual annual meeting will expand access, as any of our shareholders anywhere in the world can attend the meeting and any non-shareholder can listen to the webcast. At the same time, holding a virtual meeting should reduce the cost to us of conducting our annual meeting.

Attending and participating via the Internet

Webcast starts at 10:00 a.m. Eastern Time.

Shareholders may vote (be sure to have your 12-Digit Control Number to enter the annual meeting) and submit questions while attending the meeting via the Internet.

Instructions on how to attend and participate via the Internet, including how to demonstrate proof of share ownership, are posted at www.proxyvote.com.

You may directly link to the virtual shareholder forum and virtual shareholder meeting at www.virtualshareholdermeeting.com/centerline12.

Anyone can view the annual meeting of shareholders live via the Internet at www.centerline.com.

QUESTIONS

For questions regarding		Contact

Annual meeting		Centerline Investor Relations, 800-831-4826

Share ownership for registered holders		Computershare Investor Services, LLC
		www.computershare.com/contactus
		(800) 730-6001 (within the U.S. and Canada) or
		(781) 575-2879 (outside the U.S. and Canada)

Share ownership for beneficial holders		Please contact your broker, bank, or other nominee.

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CENTERLINE HOLDING COMPANY

100 Church Street

NEW YORK, NEW YORK 10007

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

The accompanying form of proxy is solicited on behalf of the board of trustees (the “Board”) of Centerline Holding Company (which we refer to as “Centerline,” the “Company,” “we,” “our” or “us”) for use at the annual meeting of the holders (“shareholders”) of our common shares of beneficial interest (“Common Shares”) and special preferred voting shares (“Special Preferred Voting Shares”) to be held on Thursday, December 13, 2012 at 10:00 a.m. (Eastern Time). You can attend the annual meeting online by visiting www.virtualshareholdermeeting.com/centerline12. The Notice of Internet Availability of Proxy Materials (the “Notice”), which will be mailed on or about October 30, 2012, will instruct you as to how you may access and review all of the proxy materials on the Internet. The Notice also instructs you as to how you may submit your proxy on the Internet. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting such materials in the Notice. Any request to receive proxy materials by mail or email will remain in effect until you revoke it. We mail to our shareholders of record at the close of business on October 30, 2012 the Notice containing instructions on how to access our proxy statement and our 2011 annual report and vote electronically via the Internet. The Notice also contains instructions on how to receive a paper copy of your proxy materials. Our executive offices are located at 100 Church Street, New York, New York 10007 (telephone: (212) 317-5700). Important Notice Regarding the Availability of Proxy Materials for the annual meeting of shareholders to be held on Thursday, December 13, 2012 — This proxy statement and the Company’s 2011 Annual Report to shareholders are available at www.proxyvote.com and at www.centerline.com in the “Investor Relations” section.

Common Shares and Special Preferred Voting Shares represented by properly executed proxy cards received by us at or prior to the annual meeting will be voted according to the instructions you indicate on the proxy card.

Our Board recommends a vote “FOR” each of the proposals.

As of October 18, 2012, our outstanding voting shares consisted of approximately 349,165,831 Common Shares and 11,867,236 Special Preferred Voting Shares. Each Common Share and each Special Preferred Voting Share is entitled to one vote on all matters that may come before the annual meeting. Also as of such date, our outstanding non-voting shares consist of 320,291 Series A Convertible Community Reinvestment Act Preferred Shares (the “Series A CRA Shares”), which may be exchanged for 320,291 Common Shares. In addition, there are outstanding 11,867,236 special common units of one of our subsidiaries, Centerline Capital Company, LLC (“Special Common Units”/”SCUs”), which may, in our discretion, be exchanged for 11,867,236 Common Shares (in which event an equal number of Special Preferred Voting Shares will be retired).

You may revoke your proxy and reclaim your right to vote:

by submitting a later-dated proxy either by Internet or telephone by following the instructions on your proxy or voting card;

electronically during the annual meeting at www.virtualshareholdermeeting.com/centerline12 when you enter your 12-Digit Control Number;

by submitting a later-dated written proxy to the address shown on your proxy or voting card; or

if you are a holder of record, by (i) delivering by mail to our secretary at or prior to the annual meeting an instrument revoking your proxy or (ii) delivering a subsequently dated proxy with respect to the same Common Shares or Special Preferred Voting Shares to our Board at or prior to the annual meeting.

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If you are a shareholder of record, any written notice revoking a proxy or any subsequently-dated proxy card that you wish to send to Centerline, must be delivered at or prior to the annual meeting to Centerline Holding Company, 100 Church Street, New York, New York 10007, Attention: Board of Trustees.

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PROPOSALS BEFORE THE MEETING

Proposal #1: Election of Trustee

At the annual meeting, two trustees are to be elected, each for a three-year term expiring in 2015 or his earlier removal or resignation and until his respective successor is elected and qualified. Each of our nominees is currently a trustee of the Company. Our Board is organized into three classes, each with three-year terms, so only approximately one-third of its members stand for election each year. Trustees are elected by a plurality of the votes cast (assuming the presence of a quorum consisting of a majority of holders of our Common Shares and Special Preferred Voting Shares (together as a single class), whether present through participation in the virtual meeting by means of remote communication or by proxy).

The Board has adopted independence standards for Trustees that conform to the independence standards of the New York Stock Exchange (“NYSE”). The Board has affirmatively determined that Mr. Loverd, who is a nominee for election at the annual meeting, is independent in accordance with these standards.

Our Board considered transactions, relationships, and arrangements between the trustee or members of his immediate family and the Company and its subsidiaries and affiliates. Our Board has no reason to believe that either nominee will be unable or unwilling to continue to serve as a trustee if elected. However, in the event that either of the nominees should be unable or unwilling to serve, the Common Shares and the Special Preferred Voting Shares represented by proxies received will be voted for another nominee selected by our Board. Each of the nominees listed below have consented to being named as a Trustee nominee in this proxy statement. Our Board recommends a vote “FOR” each of the listed nominees.

The following tables set forth information with respect to each of the nominees nominated to serve as a trustee for a term to expire in 2015.

Name of Trustee/ Nominee for Election	Age	Principal Occupation

Robert L. Loverd	70	Robert L. Loverd is a managing trustee (independent trustee) and Chairman of the Company. Mr. Loverd is the former Group Chief Financial Officer and a Founding Partner of MC European Capital (Holdings), a London investment banking and securities firm, which was established in 1995 and substantially sold in 2000. From 1979-1994, Mr. Loverd was a managing director and held various positions in New York and London in the Investment Banking Department of Credit Suisse First Boston. Prior to that, Mr. Loverd was a shareholder in the International Investment Banking Department of Kidder, Peabody & Co. Incorporated. Mr. Loverd is a member of the Board of Directors of Harbus Investors. Mr. Loverd received a Bachelor of Arts degree from Princeton University and a Master’s in Business Administration from Harvard Business School. Mr. Loverd is the Chairman of the Board, the chairman of our compensation committee and a member of our nominating and governance committee our audit committee and our finance committee.

Trustee Qualifications: Robert L. Loverd

Leadership and Financial Experience: former group chief financial officer and founding partner of an international investment banking and securities firm, held various industry leadership positions in the investment banking department of a global financial company.

Industry Experience: member of board of director of Harbus Investors.

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Name of Trustee/ Nominee for Election	Age	Principal Occupation

Robert L. Levy	47	Robert L. Levy is a managing trustee and President and Chief Operating Officer of the Company. Mr. Levy was appointed as our President and Chief Operating Officer in April 2010 and also served as Chief Financial Officer from 2006 to April 2012. He directs the day-to-day operations of the Company and is also responsible for overseeing all of the Company’s business and operations. Mr. Levy joined the Company in November of 2001 as the Director of Capital Markets. From 1998 through 2001, he was a Vice President in the Real Estate Equity Research and Investment Banking Departments at Robertson Stephens, an investment banking firm in San Francisco. Prior to 1998, Mr. Levy was employed by Prudential Securities in the Real Estate Equity Research Group and at the Prudential Realty Group, the real estate investment arm of the Prudential Insurance Company. He received his Master’s in Business Administration from the Leonard N. Stern School of Business at New York University and his Bachelor of Arts from Northwestern University.

Trustee Qualifications: Robert L. Levy

Leadership and Financial Experience: current president and chief operating officer and former chief financial officer of the Company; he also served as a director of capital markets of the Company and a vice president in the real estate equity research and investment banking departments at a boutique investment bank.

Industry Experience: several years of experience in real estate equity research and real estate investment.

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Proposal #2: Ratification of Appointment of Independent Auditor

The audit committee has selected Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2012, and the Board has directed that the selection of the independent registered public accounting firm be submitted for ratification by the shareholders at the annual meeting.

Shareholder ratification of the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm is not required by the Company’s trust agreement, bylaws or otherwise. However, the Board is submitting the selection of Deloitte & Touche LLP to the shareholders for ratification as a matter of what it considers to be good corporate practice. If the shareholders fail to ratify the selection, the audit committee of the Board in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the audit committee determines that such a change would be in the best interests of the Company.

Representatives of Deloitte & Touche LLP are expected to be present at the annual meeting, will have the opportunity to make a statement at the annual meeting if they desire to do so, and are expected to be available to respond to appropriate questions during the annual meeting.

Our Board recommends a vote “FOR” Proposal #2

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TRUSTEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our Board directs the management of the business of Centerline but retains Centerline Capital Group LLC (“CCG”) to manage our day-to-day affairs. See “Centerline Advisors” below.

In addition, in connection with our restructuring in March 2010 (the “March 2010 Restructuring”), the Company and CCG entered into an advisory agreement, dated as of March 5, 2010 (the “Island Advisory Agreement”), with Island Centerline Manager LLC, an entity owned and operated by a subsidiary of Island Capital Group LLC (“Island Capital”).

Meetings and Attendance

During 2011, our Board held 7 meetings, the audit committee held 5 meetings, the compensation committee held 11 meetings, the nominating and governance committee held 1 meeting, the oversight committee held 3 meetings, the independent members held 2 meetings, and the finance committee held 7 meetings. The average attendance in the aggregate of the total number of Board and committee meetings for incumbent trustees was 99%, and no trustee attended fewer than 95% of the aggregate of all meetings of our Board and applicable committee meetings on which he served.

Centerline does not have a formal policy requiring trustees to be present at annual meetings, although we do encourage their attendance. Four out of our five trustees attended the 2011 annual meeting in person or by dialing into our virtual meeting.

Trustees and Executive Officers

As of the date of this proxy statement, the Board consists of five members.

As of the date of this proxy statement, our trustees and executive officers are as follows:

Name	Age	Offices Held	Independence	Year First Became Officer/Trustee	Term Expires

Jerome Y. Halperin	82	Managing Trustee	Independent	2003	2014
Robert L. Loverd	70	Managing Trustee, Chairman	Independent	2003	2012
Robert A. Meister	71	Managing Trustee	Independent	2003	2013
Thomas W. White	74	Managing Trustee	Independent	2000	2014
Robert L. Levy	47	President and Chief Operating Officer	Non Independent	2006	2012
Michael P. Larsen	33	Chief Financial Officer	Not applicable	2012	Not applicable
Michael J. Curran	65	Senior Managing Director	Not applicable	2010	Not applicable
William T. Hyman	55	Senior Managing Director	Not applicable	2011	Not applicable
Michael Riechman	40	Senior Managing Director	Not applicable	2011	Not applicable
Philip A. Melton	45	Senior Managing Director	Not applicable	2011	Not applicable
Katherine B. Schnur	49	Senior Managing Director	Not applicable	2011	Not applicable

Biographical information with respect to Mr. Loverd and Mr. Levy is set forth under “PROPOSALS BEFORE THE MEETING; Proposal # 1: Election of Trustees” above.

Jerome Y. Halperin is a managing trustee (independent trustee) of Centerline. Mr. Halperin is a retired partner of PricewaterhouseCoopers, LLP (“PricewaterhouseCoopers”), the international accounting firm, where he spent 39 years in varied positions. Prior to his retirement in 1994, Mr. Halperin’s final position at PricewaterhouseCoopers was Chairman of the international actuarial, benefits and compensation services group, and a vice chairman of the firm. After his retirement from PricewaterhouseCoopers, from September, 1994 to January, 1999 Mr. Halperin was the president of the Detroit Investment Fund, a private investment fund established to stimulate economic growth in the city of Detroit. Currently, Mr. Halperin is a consultant on various real estate projects. He serves on the board of directors of several charitable organizations and was the Chairman of the Michigan Tax Forms Revisions Committee, a position he was appointed to by the Governor of the State of Michigan. Mr. Halperin is the co-author of “Tax Planning for Real Estate Transactions”. Mr. Halperin received a Bachelor of Business Administration from the University of Michigan and a Juris Doctor from Harvard Law School. Mr. Halperin is the chairman of our audit committee and is a member of our finance committee.

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Trustee Qualifications:

Financial and Industry Experience: former partner and chairman at large international accounting firm and former president at private investment fund.

Leadership Experience: member of the board of directors of several charitable organizations, former chairman of Michigan Tax Forms Revisions Committee; co-authored Tax Planning for Real Estate Transactions.

Robert A. Meister is the Emeritus Vice Chairman and a consultant to the Aon Group, Inc. (“Aon”), an insurance brokerage, risk consulting, reinsurance and employee benefits company and a subsidiary of Aon Corporation, and has served in this position since 2010. He served as Vice Chairman of Aon from 1991through December 2009. Prior to Aon, Mr. Meister was the Vice Chairman and a Director of Sedgwick James from 1985–1991 and the Vice Chairman of Alexander & Alexander from 1975–1985. Mr. Meister is a member of the board of directors of Ramco-Gershenson Properties (NYSE: RPT) and serves on the company’s compensation committee. Mr. Meister also served on the board of directors of Universal Health Services (NYSE: UHS) and the company’s compensation committee from 2004 to 2008. Mr. Meister has served on the board of directors of several charitable organizations. Mr. Meister received a Bachelor of Science degree in Business Administration from Pennsylvania State University. Mr. Meister is the chairman of our nominating and governance committee and is a member of our compensation committee.

Trustee Qualifications:

Financial and Industry Experience: current vice chairman of an insurance brokerage, risk consulting, reinsurance and employee benefits company and held leadership positions at various insurance brokerage firms.

Leadership Experience: member of the board of directors of several companies and charitable organizations.

Thomas W. White is a managing trustee (independent trustee) of the Company. Mr. White retired as a Senior Vice President of Fannie Mae in the multifamily activities department in 2001, where he was responsible for the development and implementation of policies and procedures for all Fannie Mae multifamily programs, including the delegated underwriting and servicing program, prior approval program and negotiated swap and negotiated cash purchases product lines. He was also responsible for asset management of multifamily loans in a portfolio of mortgage-backed securities. Prior to joining Fannie Mae in November 1987, Mr. White served as an investment banker with Bear Stearns, Inc. He was also the executive vice president of the National Council of State Housing Agencies and chief underwriter for the Michigan State Housing Development Authority. Mr. White also served as a state legislator in the state of Michigan. Mr. White serves on the Board of Directors of Enterprise Community Investment, Inc. Mr. White is the chairman of our finance committee and a member of our nominating and governance committee and our audit committee.

Trustee Qualifications:

Leadership and Financial Experience: former senior vice president of Fannie Mae; he also served as an investment banker at an international bank.

Industry Experience: served various positions at state housing and development authorities and as a former state legislator in the state of Michigan.

Other Executive Officers of CCG

Michael J. Curran is a Senior Managing Director of CCG. He leads the Asset Management Group, which comprises the Performing Assets, Special Servicing and Construction Risk Management divisions. Mr. Curran is also a member of the Centerline Executive Committee responsible for strategic planning and growth initiatives. He joined Centerline in 2010 after many years in real estate advisory positions, most recently at Kalorama Realty Capital. At Kalorama Realty Capital he served as a senior advisor providing operational and strategic advice regarding client sourcing, capital raising and overall business strategy. He was principal and chief operating officer at Crossbeam Capital, where he oversaw the operations of the firm, portfolio management, investor relations and helped that firm raise a $145-million fund for the development and acquisition of multifamily housing properties. Prior to Crossbeam Capital, he was president and chief executive officer of The Enterprise Social Investment Corporation (ESIC), a national for-profit subsidiary of the Enterprise Foundation, where he specialized in the financing and development of market-rate and affordable housing, and managed a housing portfolio of 900 properties valued at over $4 billion. Mr. Curran spent over 14 years with MetLife Insurance Company earlier in his real estate finance career, where he led a team that originated new investments. As Regional Director at MetLife, he and his team originated a new investment portfolio in excess of $1.8 billion. Mr. Curran received the Bachelor of Arts from Bellarmine University, a Juris Doctor degree from the University of Louisville School of Law, and a Masters degree in Public Administration from Harvard University John F. Kennedy School of Government.

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William T. Hyman is a Senior Managing Director of CCG, and leads its Mortgage Banking Group. Mr. Hyman is responsible for overseeing Centerline financing activities sponsored by Government Sponsored Enterprises (GSE) for conventional multifamily properties. He has been with Centerline or its predecessor companies since 1988, following the acquisition of PW Funding (an independent mortgage banking subsidiary of Centerline), where he was co-president, by Centerline. At PW Funding, Mr. Hyman served as executive vice president and managed loan production operations for its mortgage banking platform as chief underwriter and head of the credit department for Fannie Mae Delegated Underwriting and Servicing lending activity. Prior to his tenure with PW Funding and Centerline, he served as a vice president with L.F. Rothschild and Co., marketing and executing private placements and initial public offerings. Before that he was in the public finance investment banking division of PaineWebber Inc. Mr. Hyman earned the Master of Business Administration from Washington University in St. Louis and the Bachelor of Arts from Yale University.

Michael P. Larsen was appointed to the office of Chief Financial Officer of Centerline in April of 2012. Mr. Larsen is also the Treasurer and Director of Corporate Finance and Capital Markets of CCG. In this capacity, Mr. Larsen is responsible for all cash management operations, debt management, corporate capital raising, budgeting and management reporting. He also is responsible for coordinating new business development initiatives for Centerline LLC. Mr. Larsen serves as a managing director of Centerline LLC and is a member of Centerline LLC’s Affordable Housing Investment Committee. Prior to being named Treasurer in 2009, Mr. Larsen worked for five years in Centerline LLC’s Capital Markets and Corporate Finance groups. Mr. Larsen joined Centerline LLC in 2002 as a member of the Affordable Underwriting team where he was responsible for completing underwriting and real estate analysis for more than $800 million in low-income housing tax credit equity investments and affordable bond-financed multifamily assets. Prior to joining Centerline LLC, Mr. Larsen was an analyst within Arthur Andersen’s Real Estate Consulting and Structured Finance group, where he was responsible for underwriting and investment analysis of a wide range of commercial real estate assets and performed due diligence for structured asset backed securities. Mr. Larsen earned a Master of Business Administration from Columbia University and a B.A. in Economics and Urban Studies from The University of Pennsylvania.

Philip A. Melton is a Senior Managing Director in the Affordable Housing Debt division of the Affordable Housing Group of CCG. Mr. Melton joined CCG in May 2011 to lead and expand the production efforts within the affordable housing lending platform. The CCG lending platform includes Fannie Mae, Freddie Mac, and FHA executions as well as affiliated executions for conduit and bridge lending for multifamily housing financing. Mr. Melton has more than 15 years of real estate lending experience, which includes commercial and multifamily assets involving construction, bridge, permanent loan, and tax-exempt bond financing. Prior to joining CCG, Mr. Melton served in leadership roles at Grandbridge Real Estate Capital, L.L.C. from 2003 to May 2011, including leading the Affordable Housing platform for over eight years and leading the FHA platform for the past 17 months prior to joining CCG. Prior to Grandbridge, Mr. Melton worked for a number of national lenders in the Affordable Housing market as well as working as an investment banker for a regional financial institution in the Southeast. Mr. Melton has been involved with over $1.5B in real estate financings in his career including taxable and tax-exempt financings. Mr. Melton graduated with a Bachelor of Science in Economics from the University of New Orleans.

Michael Riechman is a Senior Managing Director and head of the Affordable Housing Equity division at CCG. Mr. Riechman joined CCG in September 2011 and is based in Charlotte, North Carolina. He serves on the firm’s Executive Management team and has national responsibility for growing CCG’s affordable equity business. Mr. Riechman leads a team of 25 specialists throughout the United States who focus on acquisitions, dispositions, underwriting, and fund originations. CCG’s platform is recognized as an industry leader in the Affordable Housing arena. Mr. Riechman joined CCG from RBC Capital Markets in Charlotte, North Carolina where he spent eight years, most recently as Managing Director responsible for tax credit investments. At RBC Capital he was a member of the executive management team and served on the investment committee. There he led the tax credit investment group that included: originations and syndications, investments, pricing and structuring. Prior to RBC Capital, Mr. Riechman was at Fannie Mae in Washington, DC where he held several key positions in the American Communities Fund. Before Fannie Mae, Mr. Riechman was with the Reznick Group of Bethesda, Maryland and the Miller Valentine Group in Dayton, Ohio. Mr. Riechman earned a BBA in accounting from University of Cincinnati and an MBA from American University.

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Katherine B. Schnur is a Senior Managing Director of CCG, and heads the Operations and Human Resources departments in the Corporate Group. Ms. Schnur has been with Centerline since 1988, joining one of its predecessor companies in the loan servicing department. At Centerline, Ms. Schnur has held the title of Senior Vice President in the Loan Administration, Closing, and Underwriting departments, in addition to serving as Chief Operating Officer and Managing Director of the mortgage banking division. Ms. Schnur has been an active member of the Mortgage Bankers Association of America, and was a select member of its inaugural class of “Future Leaders” in 1997. She also holds the SPHR accreditation in human resources. Ms. Schnur earned the Bachelor of Arts in Psychology and Economics from Lafayette College in Pennsylvania.

Committees of the Board

Our Board has standing audit, compensation, nominating and governance and finance committees. The functions of each committee are detailed below, and the committee charters for the audit, compensation and nominating and governance committees are available on our website at http://www.centerline.com in the “Investor Relations” section (under “Corporate Governance”). Please note that the information on our website is not incorporated by reference in this proxy statement.

Audit Committee

We have a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The audit committee’s duties include the periodic review of our financial statements and meetings with our independent registered public accounting firm. The ongoing administration of our Corporate Governance Guidelines and Code of Business Conduct and Ethics is overseen by the audit committee. The audit committee must have at least three members and be comprised solely of independent trustees. The audit committee is currently comprised of Mr. Halperin (chair), Mr. White and Mr. Loverd. Our Board has determined that all three committee members are independent within the meaning of the listing standards of the NYSE. We continue to adhere to the independence standards for audit committees applicable to companies listed on the NYSE even though our shares are no longer listed on the NYSE. In addition, our Board has determined that Mr. Halperin is qualified as an audit committee financial expert within the meaning of the SEC rules and regulations. The Audit Committee held 5 meetings during the year ended December 31, 2011.

Compensation Committee

The compensation committee’s duties include the determination of the compensation of our named executive officers, the administration of the Company’s 1997 Amended and Restated Incentive Share Plan (the “1997 Plan”) and the Company’s 2007 Incentive Share Plan (the “2007 Plan”) (collectively, the “Incentive Share Plans”) and the review and approval of any material employment agreements and severance agreements. The compensation committee must have at least two members and be comprised solely of independent trustees. The compensation committee held 11 meetings during the year ended December 31, 2011. The compensation committee is currently comprised of Mr. Loverd (chair) and Mr. Meister. The Board has determined that each of the forgoing trustees is independent within the meaning of the listing standards of the NYSE. We continue to adhere to the NYSE standards for independence even though our shares are no longer traded on the NYSE.

The primary purpose of the compensation committee is to conduct reviews of the Company’s general executive compensation policies and strategies and to oversee and evaluate the Company’s overall compensation structure and programs. Direct responsibilities include, but are not limited to:

evaluating and approving goals and objectives relevant to the compensation of the Company’s principal executive officer, which in our case is the President, and other executive officers and evaluating the performance of the executives in light of those goals and objectives;

determining the compensation of the Company’s President and other executive officers;

reviewing and approving any “material” compensation packages of the Company’s non-executive officers and employees;

evaluating and approving all grants of equity-based compensation to executive officers; and

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reviewing performance-based and equity-based incentive plans for the President and other executive officers and reviewing other benefit programs presented to the compensation committee by the President.

The role of the President is to provide reviews and recommendations for the compensation committee’s consideration and to manage the Company’s executive compensation programs, policies and governance. The President’s direct responsibilities include reviewing the effectiveness of the Company’s compensation programs, including competitiveness and alignment with the Company’s objectives, and recommending compensation awards for our named executive officers other than the President.

From time to time, the compensation committee may delegate decision making to the President and other executives if compensation determinations are within specified thresholds (with the reasonable expectation of being no more than $500,000) established by the compensation committee. In addition, under the compensation programs approved by the compensation committee, certain awards may be made by the President. The compensation committee, on the other hand, must approve all employment agreements and termination agreements.

Company management retained FPL Advisory Group (the “Outside Consultant”) as its compensation consultant in 2010 and 2011 to assist in the development of 2011 and 2012 compensation levels. FPL was asked by the Company to address the following objectives: (i) benchmark compensation levels for executives and non-producer employees, (ii) design an annual incentive plan that aligns employee and Company interest, and (iii) provide counsel to the Company as it develops long term incentives for the Company’s executive team. Management presented its recommendations on executive and overall compensation to the compensation committee during 2011 in part based on data provided by the Outside Consultant, and those recommendations were accepted by the compensation committee in approving executive compensation decisions.

Nominating and Governance Committee

The nominating and governance committee must have at least three members and be comprised solely of independent trustees. The nominating and governance committee is currently comprised of Mr. Meister (chair), Mr. White and Mr. Loverd, each of whom the Board has determined is independent within the meaning of the listing standards of the NYSE. The nominating and governance committee held 1 meeting during the year ended December 31, 2011.

The nominating and governance committee’s duties include recommending to the Board for its approval (subject to the conditions set forth below) the trustee nominees for election at any annual or special meeting of our shareholders and overseeing our compliance with legal and regulatory requirements pertaining to corporate governance, including the corporate governance listing requirements of the NYSE. In evaluating a candidate for trustee, the committee considers factors that are in the best interests of the Company and our shareholders, including:

(i)

business and/or technical experience and expertise relevant to the needs of the Company;

(ii)

leadership;

(iii)

diversity;

(iv)

ability to represent our shareholders; and

(v)

the independence and expertise standards mandated by the SEC rules and regulations, the listing standards of the NYSE and any applicable federal or state law, rule or regulation.

The nominating and governance committee has not had to identify potential nominees recently. However, it is expected that the nominating and governance committee would use its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm.

The nominating and governance committee recommended (and our Board approved) the nomination of Mr. Loverd and Mr. Levy to the Board for a three year term. With respect to the selection of Mr. Loverd and Mr. Levy as trustee nominees at the annual meeting, the nominating and governance committee recommended our Board nominate each of Mr. Loverd and Mr. Levy.

The nominating and governance committee approved, on behalf of our Board, a set of Corporate Governance Guidelines and a Code of Business Conduct and Ethics for Centerline that applies to our named executive officers and all other employees. The ongoing administration of these two policies is overseen by the audit committee.

The nominating and governance committee’s duties also include reviewing, monitoring and approving any transaction by the Company in which a trustee or officer has a direct or indirect personal interest, overseeing our relationship with Island Capital Group and its affiliates.

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Shareholder Trustee Nominations. Pursuant to our by-laws, any shareholder entitled to vote at the annual meeting may submit a nomination for a trustee. Nominations by a shareholder must be given in a timely fashion and notice of the nomination must be given in writing to our Board. To be timely, a shareholder’s notice must be delivered to the Board at our principal executive offices not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, or if we have not previously held an annual meeting, notice by a shareholder to be timely may be delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made. Such shareholder’s notice must set forth (i) as to each person whom the shareholder proposes to nominate for election or reelection as a managing trustee, all information relating to such person that is required to be disclosed in solicitations of proxies for election of managing trustees, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a managing trustee if elected), and (ii) as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made, (y) the name and address of such shareholder, as they appear on the Company's books, and of such beneficial owner and (z) the number of shares of each class of beneficial interests of the Company which are owned beneficially and of record by such shareholder and such beneficial owner. In the event that the number of managing trustees to be elected to the Board is increased and there is no public announcement naming all of the nominees for managing trustee or specifying the size of the increased Board made by us at least 70 days prior to the first anniversary of the preceding year’s annual meeting, a shareholder’s notice will also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is delivered to the Board at our principal offices not later than the close of business on the tenth day following the day on which we first made such public announcement.

The nominating and governance committee will evaluate shareholder nominees using the same criteria as for other candidates.

Board Diversity. Centerline does not have a policy regarding the consideration of diversity in identifying nominees for trustees. In identifying trustee nominees, the nominating and governance committee does not seek diversity, per se, instead, the nominating and governance committee looks for individuals who have very high integrity, business savvy, with a diversity of experience and ideas and a deep genuine interest in the Company.

Independent Trustee Vacancies. If there is any vacancy for independent trustees, replacement independent trustees will be nominated by the nominating and governance committee and subject to the approval of the trustees. The vacancy will be filled by a majority vote of the trustees electing a nominated replacement independent trustee. All trustees have the right to recommend to the nominating and governance committee for its consideration their choices for the replacement independent trustee nominees. If there is no remaining independent trustee, any such vacancies will be filled by a majority of the remaining managing trustees. We continue to adhere to the NYSE listing requirement that we have a majority of independent trustees even though our shares are no longer traded on the NYSE.

Finance Committee

The finance committee is currently comprised of Mr. White (chair), Mr. Loverd and Mr. Halperin. The finance committee held 7 meetings during the year ended December 31, 2011. The finance committee’s duties include:

overseeing and approving the development of the Company’s finance policies and strategies, including the Company’s investment and capital markets policies and strategies;

reviewing and approving investment transactions and capital markets transactions (including issuances of debt and equity);

reviewing the annual capital plan of the Company and its subsidiaries;

making recommendations to management regarding improvements to the Company’s investment policies and capital markets policies;

determining, approving and monitoring delegations of authority to the management of the Company to execute investment or capital markets transactions;

reviewing capital markets strategies and determining whether such capital markets strategies should be brought to the Board for approval;

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monitoring the performance of the Company’s investment strategies and capital markets strategies, including hedging strategies and transactions; and

overseeing such other matters as the Board deems appropriate and in the best interest of the Company.

Executive Sessions of Trustees and Oversight Committee

Executive Sessions. Executive sessions or meetings of independent trustees without management present are held as appropriate. During these sessions, the independent trustees may review matters such as strategic issues, progress with respect to the operating plan and variances therefrom, significant personnel matters, compensation issues, management succession issues as well as regulatory and legal issues. From time to time, the principal executive officer may be invited to join the executive session for a general discussion of relevant subjects. In 2011, the independent trustees met in executive session 2 times.

Oversight Committee. In 2009, our independent trustees established on oversight committee which oversaw the Company’s negotiations with Island Capital in connection with the March 2010 Restructuring. The oversight committee has continued in the role of monitor of the Company’s restructuring and its relationship with Island Capital. The oversight committee is a special committee of the Board of temporary duration. The oversight committee met 3 times during 2011.

Board Leadership Structure

Mr. Loverd served as the Company’s lead independent trustee (the “Lead Trustee”) until June 2010 when he was appointed the Chairman of the Board. As Lead Trustee, Mr. Loverd coordinated the activities of the other independent trustees and performed such other duties and responsibilities as the Board might have determined. Upon accepting the position as Chairman, Mr. Loverd relinquished his title as Lead Trustee, but he will continue, in his position as Chairman, to coordinate the activities of the other independent trustees and perform such other duties and responsibilities as the Board may determine. He will continue to call and preside at executive sessions of the independent trustees, functioning as principal liaison on Board-wide issues between the independent trustees and the President, and participating in the flow of information to the Board.

Risk Oversight

The entire Board and each of its committees are involved in overseeing risk associated with the Company. The Board and the audit committee monitor the Company’s financial and regulatory risk through regular reviews with management and internal and external auditors and other advisors. In its periodic meetings with the internal auditors and the independent accountants, the audit committee discusses the scope and plan for the internal audit and includes management in its review of accounting and financial controls and assessment of business risks. The Board and the nominating and governance committee monitor the Company’s corporate governance policies and procedures by regular review with management. The Board and the compensation committee monitor officer succession and the Company’s compensation policies and related risks by regular reviews with management. The Board and the finance committee monitor risks related to the Company’s investment and capital markets policies and strategies.

Communication with Trustees

You may communicate directly with the Chairman, the chairs of the committees of our Board or any or all members of our Board by sending correspondence to our secretary at: Centerline Holding Company, 100 Church Street, New York, New York 10007, Attention: Secretary. The sender should indicate in the address whether it is intended for the entire Board, the independent trustees as a group, or to an individual trustee. Each communication intended for the Board or independent trustees received by the Secretary will be promptly forwarded to the intended recipients in accordance with the sender’s instructions.

Trustee Independence

Our Board has adopted a formal set of Categorical Standards for Determining Trustee Independence (the “Categorical Standards”) with respect to the determination of trustee independence. In accordance with these Categorical Standards, a trustee must be determined to have no material relationship with Centerline other than as a trustee. The Categorical Standards specify the criteria by which the independence of our trustees will be determined, including strict guidelines for trustees and their immediate families with respect to past employment or affiliation with the Company or its independent registered public accounting firm. The Categorical Standards also limit commercial relationships of all trustees with the Company. All trustees are required to deal at arm’s length with the Company and its subsidiaries and to disclose any circumstance that might be perceived as a conflict of interest. These Categorical Standards were adopted when our Common Shares were listed on the NYSE, and they meet the listing standards of the NYSE. We continue to adhere to the NYSE standards even though our shares are no longer traded on the NYSE.

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In accordance with these Categorical Standards, the Board undertook its annual review of trustee independence. During this review, the Board considered transactions and relationships between each trustee or any member of his or her immediate family (or any entity of which a trustee or an immediate family member is an executive officer, general partner or significant equity holder) and the Company and its subsidiaries and affiliates. The Board also considered whether there were any transactions or relationships between trustees or any member of their immediate family (or any entity of which a trustee or an immediate family member is an executive officer, general partner or significant equity holder). As provided in the Categorical Standards, the purpose of this review was to determine whether any such relationships or transactions existed that were inconsistent with a determination that the trustee is independent.

As a result of this review, the Board affirmatively determined that Mr. Halperin, Mr. Loverd, Mr. Meister and Mr. White are independent of the Company and its management under the criteria set forth in the Categorical Standards. In making these determinations, the Board considered that, in the ordinary course of business, transactions may occur between the Company and its subsidiaries and the trustees, or companies or institutions at which some of our trustees are or have been officers. In each case, the amount of transactions from these companies in each of the last three years did not exceed the thresholds set forth in the Categorical Standards.

Other Corporate Governance Initiatives

We have adopted a Code of Business Conduct and Ethics as defined under the rules of the SEC that applies to our trustees and employees.

We regularly monitor developments in the area of corporate governance and continue to enhance our corporate governance structure based upon a review of new developments and recommended best practices. Our corporate governance materials, including our Categorical Standards, Corporate Governance Guidelines, Code of Business Conduct and Ethics, Whistle Blower Policy (which is incorporated in our Code of Business Conduct and Ethics) and charters for the audit, compensation, and nominating and governance committees may be found on our website at http://www.centerline.com in the “Investor Relations” section (under “Corporate Governance”). Please note that the information on our website is not incorporated by reference in this proxy statement. Copies of these materials are also available to shareholders upon written request to our President, Centerline Holding Company, 100 Church Street, New York, New York 10007.

Centerline Advisors

CCG Executive Officers

As of the date of this proxy statement, the executive officers of CCG were:

Name	Age	Office

Robert L. Levy	47	President and Chief Operating Officer

Michael J. Curran	65	Senior Managing Director, Head of Asset Management Group

William T. Hyman	55	Senior Managing Director, Head of Mortgage Banking Group

Michael P. Larsen	33	Chief Financial Officer

Philip A. Melton	45	Senior Managing Director, Head of Affordable Housing Debt

Michael Riechman	40	Senior Managing Director, Head of Affordable Housing Equity

Katherine B. Schnur	49	Senior Managing Director, Head of Operations

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Biographical information with respect to Mr. Levy, Mr. Curran, Mr. Hyman, Mr. Larsen, Mr. Melton, Mr. Riechman and Ms. Schnur may be found under “-Trustees and Executive Officers” above.

Island Advisor

In March 2010, we entered into an advisory agreement with Island Centerline Manager LLC (the “Island Advisor”), an entity owned and operated by a subsidiary of Island Capital. For additional information regarding this agreement, please see “Transactions With Related Persons and Certain Control Persons—Additional Transactions with Certain 5% Beneficial Owners—Island Advisory Agreement.”

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and trustees, and persons who own more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. These persons are required by regulation of the SEC to furnish us with copies of all Section 16(a) forms they file.

Based solely on our review of Forms 3, 4 and 5 and amendments thereto available to us and other information obtained from our trustees, officers and certain 10% stockholders or otherwise available to us, we believe that no trustee, officer or beneficial owner of more than 10% of our Common Shares failed to file on a timely basis a report required pursuant to Section 16(a) of the Exchange Act with respect to 2011.

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EXECUTIVE COMPENSATION

Summary Compensation Table

As required by the rules of the SEC, the table below summarizes the total compensation for the fiscal years ended December 31, 2011 and 2010 paid or earned by our principal executive officer and each of our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at the end of 2011 (our “named executive officers”). None of our named executive officers has an employment agreement with Centerline or its affiliates.

Name and Principal Position	Year	Salary ($)		Bonus ($)⁽¹⁾		Stock Awards ($)		Option Awards ($)		Non- Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)⁽²⁾		Total ($)

Robert L. Levy	2011	$	400,000	$	1,000,000	$	—	$	—	$	—	$	—	$	27,085	$	1,427,085
President, Chief Operating Officer and Chief Financial Officer	2010	$	400,000	$	800,000	$	—	$	—	$	—	$	—	$	127,139	$	1,327,139

Michael Riechman	2011	$	91,154	$	1,000,000	$	—	$	—	$	—	$	—	$	3,339	$	1,094,492
Senior Managing Director

William T. Hyman	2011	$	300,000	$	350,000	$	—	$	—	$	—	$	—	$	8,575	$	658,575
Senior Managing Director

⁽¹⁾

Mr. Levy’s 2011 bonus was paid in the following installments: $500,000 on March 16, 2012, $250,000 on June 8, 2012, and $250,000 on September 14, 2012. Mr. Riechman’s 2011 bonus was paid in the following installments: $300,000 on September 16, 2011 and $700,000 on March 2, 2012. Mr. Hyman’s 2011 bonus was paid in the following installments: $175,000 on March 16, 2012, $87,500 on June 8, 2012, and $87,500 on September 14, 2012.

⁽²⁾

The amount shown in the “All Other Compensation” column reflects for each named executive officer:

Name	Year	Employment Agreement Termination Consideration		401(k) Matching Contributions		Long-term Disability and Other Insurance Benefits		Automobile or Transportation Allowances		Total

Robert L. Levy	2011	$	—	$	8,575	$	510	$	18,000	$	27,085
	2010	$	100,000	$	8,575	$	564	$	18,000	$	127,139

Michael Riechman	2011	$	—	$	3,339	$	—	$	—	$	3,339

William T. Hyman	2011	$	—	$	8,575	$	—	$	—	$	8,575

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Outstanding Equity Awards at Fiscal Year End

None of our named executive officers held any outstanding equity awards as of December 31, 2011.

Potential Payments Upon Termination or Change of Control

None of our named executive officers are entitled to receive payments on termination of employment or change of control of the Company.

TRUSTEE COMPENSATION

The Company uses cash compensation to attract and retain qualified candidates to serve on the Board, although trustees have the option of receiving all or a portion of their compensation in either Common Shares, cash or a combination thereof. In setting trustee compensation, the Company considers the significant amount of time that trustees expend in fulfilling their duties to the Company as well as the skill level required by the Company of members of the Board.

Compensation Paid to Board Members

During 2011, each of our independent trustees received annual compensation at the rate of $80,000. Mr. Loverd was paid an additional annual fee of $40,000 in consideration for his service as Chairman of the Board. In addition, the independent trustees received annual compensation for service on committees of the Board as set forth in the chart below.

Committee	Chair		Member

Audit	$	25,000	$	15,000
Compensation	$	20,000	$	12,000
Nominating and Governance	$	15,000	$	10,000
Finance	$	10,000	$	7,000
Oversight	$	35,000	$	35,000

Trustee compensation is currently payable in cash and/or Common Shares having an aggregate value, based on the fair market value at the date of issuance. All of the trustees have elected to receive 100% of their compensation in cash.

Trustee Summary Compensation Table

The table below summarizes the compensation paid by the Company to trustees for the fiscal year ended December 31, 2011.

Name⁽¹⁾	Fees Earned or Paid in Cash ($)		Shares Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)

Jerome Y. Halperin	$	147,000	$	—	$	—	$	—	$	—	$	—	$	147,000
Robert L. Loverd	$	207,000	$	—	$	—	$	—	$	—	$	—	$	207,000
Robert A. Meister	$	142,000	$	—	$	—	$	—	$	—	$	—	$	142,000
Thomas W. White	$	150,000	$	—	$	—	$	—	$	—	$	—	$	150,000

⁽¹⁾

Mr. Levy is not included in this table as he is a non-independent trustee and thus receives no compensation for his services as trustee. The compensation of Mr. Levy as employee of the Company is shown in the Summary Compensation Table above.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

In each of the next two tables, the amounts and percentages of shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities with respect to which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Except as otherwise indicated in the footnotes to the tables, each of the beneficial owners listed has, to our knowledge, sole voting and investment power with respect to the indicated shares.

The amounts and percentages reported in the “Number of Voting Shares” and the “Voting Ownership Percentage” columns in each of the following two tables represent the Common Shares and the Special Preferred Voting Shares beneficially owned by each person. The Special Preferred Voting Shares are entitled to vote, on a one-for-one basis, on all matters subject to a vote of the holders of our Common Shares, but the Special Preferred Voting Shares are not convertible into our Common Shares. Each owner of Special Preferred Voting Shares also owns a like number of Special Common Units (“SCUs”) issued by Centerline Capital Company, LLC, one of our affiliates. Each holder of SCUs has the right to exchange all or a portion of their SCUs for cash and to receive cash for any accrued but unpaid distributions for the quarterly period in which the exchange occurs. We may instead exchange SCUs for Common Shares on a one-for-one basis. However, a holder of SCUs is not deemed to beneficially own any Common Shares relating to their SCUs because SCUs may be exchanged for Common Shares only at our discretion.

For the purposes of the following two tables, except as noted otherwise in the footnotes to the tables, the terms below are defined as follows:

“Total Common Shares” consist of 349,165,831 shares outstanding as of October 18, 2012 but exclude our non-voting shares of 320,291 Series A CRA Preferred Shares, which are convertible into 320,291 Common Shares;

“Special Preferred Voting Shares” consist of 11,867,236 shares of our Special Preferred Voting Shares outstanding as of October 18, 2012.

The following table provides information as of October 18, 2012 with respect to the persons who beneficially own more than 5% of our outstanding Common Shares in accordance with SEC rules, as well as the Voting Ownership Percentage (as defined in footnote (2)), the number of voting shares and the voting ownership percentage for each such person. In accordance with SEC rules, some of the Common Shares listed in the table below are deemed to be owned by more than one person (please refer to the footnotes to the table below). The information in the table below relating to C3 Initial Assets LLC, Related Special Assets LLC, Stephen M. Ross, Jeff T. Blau, Bruce A. Beal and Wells Fargo & Company, other than information with respect to the percentages of their beneficial ownership and voting ownership percentages, has been derived from the latest Schedule 13D and 13G filings made by such persons.

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Name and Address⁽¹⁴⁾	Amount and Nature of Beneficial Ownership of Common Shares			Percent of Common Shares Beneficially Owned⁽¹⁾			Amount and Nature of Beneficial Ownership of Special Preferred Voting Shares			Number of Voting Shares⁽²⁾		Voting Ownership Percentage⁽²⁾⁽³⁾

C3 Initial Assets LLC 717 Fifth Avenue New York, NY 10022		139,663,545	⁽⁴⁾		40.0	%		—			139,663,545		38.7	%
Andrew L. Farkas 717 Fifth Avenue New York, NY 10022		139,671,499	⁽⁵⁾		40.0	%		—			139,671,499		38.7	%
Related Special Assets LLC 60 Columbus Circle New York, NY 10023		33,654,639	⁽⁶⁾		8.8	%		—			33,654,369		8.5	%
Stephen M. Ross 60 Columbus Circle New York, NY 10023		34,532,969	⁽⁷⁾		9.0	%		10,194,400	⁽⁸⁾		44,727,369		11.3	%
Jeff T. Blau 60 Columbus Circle New York, NY 10023		33,915,324	⁽⁹⁾		8.9	%		10,234,400	⁽¹⁰⁾		44,149,724		11.2	%
Bruce A. Beal 60 Columbus Circle New York, NY 10023		33,663,824	⁽¹¹⁾		8.8	%		10,194,400	⁽⁸⁾		43,858,224		11.1	%
Bank of America Corporation 100 N. Tryon Street Charlotte, NC 28255		30,896,490	⁽¹²⁾		8.8	%		—			30,896,490		8.6	%
Wells Fargo & Company 420 Montgomery Street San Francisco, CA 94163		27,813,625	⁽¹³⁾		8.0	%		—			27,813,625		7.7	%
Natixis Financial Products LLC 9 West 57th Street New York, NY 10019		17,784,150	⁽¹⁴⁾		5.1	%		—			17,784,150		4.9	%

^*	Less than 1% of the outstanding Common Shares.

⁽¹⁾	Calculated in accordance with SEC Rule 13d-3.
⁽²⁾	With respect to Related Special Assets LLC, Stephen M. Ross, Jeff T. Blau and Bruce A. Beal, the “Number of Voting Shares” and the “Voting Ownership Percentage” assumes the exercise of an option held by Related Special Assets LLC to purchase 33,654,639 Common Shares from C-III Capital Partners LLC, an affiliate of C3 Initial Assets LLC (the “Option”).
⁽³⁾	Based on (i) Total Common Shares and (ii) Special Preferred Voting Shares.
⁽⁴⁾	C3 Initial Assets LLC shares voting and dispositive power with respect to such shares with C-III Capital Partners LLC, Island C-III Manager LLC, Anubis Advisors LLC, Island Capital Group LLC and Andrew L. Farkas.
⁽⁵⁾	Includes direct beneficial ownership of 7,954 Common Shares and shared voting and dispositive power with respect to 139,663,545 Common Shares with C3 Initial Assets LLC, C-III Capital Partners LLC, Island C-III Manager LLC, Anubis Advisors LLC, and Island Capital Group LLC.
⁽⁶⁾	Related Special Assets LLC owns the Option to purchase 33,654,639 Common Shares. Mr. Ross shares voting and dispositive power with respect to such shares with Mr. Blau and Bruce A. Beal, as the terms of Related Special Assets’ operating agreement require that its investment and voting decisions must be unanimously approved by a committee of three persons, currently consisting of Mr. Ross, Mr. Blau and Mr. Beal.
⁽⁷⁾	Includes direct beneficial ownership of 877,645 Common Shares, indirect beneficial ownership of 33,654,639 Common Shares that could be acquired upon the exercise of the Option, and indirect beneficial ownership of 685 Common Shares owned by Related General II, L.P. (Related General II, L.P. is owned by The Related Companies L.P. (“TRCLP”). Mr. Ross owns approximately 62% of TRCLP, Mr. Blau owns approximately 18% of TRCLP, and Mr. Beal owns approximately 10% of TRCLP).
⁽⁸⁾	Includes indirect voting and dispositive power with respect to 10,194,400 Special Preferred Voting Shares held directly by Related General II, L.P.
⁽⁹⁾	Includes direct beneficial ownership of 260,000 Common Shares, indirect beneficial ownership of 33,654,639 Common Shares that could be acquired upon the exercise of the Option, and indirect beneficial ownership of 685 Common Shares owned by Related General II, L.P.
⁽¹⁰⁾	Includes direct voting and dispositive power with respect to 40,000 Special Preferred Voting Shares held directly by Mr. Blau and indirect voting and dispositive power with respect to 10,194,400 Special Preferred Voting Shares held directly by Related General II, L.P.
⁽¹¹⁾	Includes direct beneficial ownership of 8,500 Common Shares, indirect beneficial ownership of 33,654,639 Common Shares that could be acquired upon the exercise of the Option, and indirect beneficial ownership of 685 Common Shares owned by Related General II, L.P.
⁽¹²⁾	Includes indirect beneficial ownership of 24,523,020 Common Shares held by Bank of America, N.A., 3,283,755 Common Shares held by FIA Card Services, N.A., and 3,089,715 Common Shares held by Merrill Lynch Community Development Company, LLC.

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⁽¹³⁾	Includes indirect beneficial ownership of 24,717,720 Common Shares held by Wells Fargo Community Development Corporation, and in aggregate 3,095,905 Common Shares held by Wells Fargo Bank, N.A. and Wells Fargo Advisors, LLC.
⁽¹⁴⁾	Shares voting and dispositive power with respect to such shares with Natixis North America LLC.

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The following table provides information as of October 18, 2012 with respect to the beneficial ownership of our Common Shares in accordance with Rule 13d-3, as well as the number of voting shares and the voting ownership percentage for each of our trustees, each of our named executive officers and our trustees, and executive officers as a group. None of our trustees or executive officers owns Special Preferred Voting shares.

Name and Title	Amount and Nature of Beneficial Ownership of Common Shares		Percent of Common Shares Beneficially Owned⁽¹⁾
Robert L. Levy Managing Trustee, President and Chief Operating Officer		258,292		*

Jerome Y. Halperin Managing Trustee (independent trustee)		50,604		*

Robert L. Loverd Managing Trustee (independent trustee)		64,664		*

Robert A. Meister Managing Trustee (independent trustee)		51,535		*

Thomas W. White Managing Trustee (independent trustee)		21,372		*

William T. Hyman Senior Managing Director		137,580		*

Michael Riechman Senior Managing Director		—		0

All Executive Officers and Trustees of the Company as a group (11 persons)		810,378		*

Less than 1% of the outstanding Common Shares.

⁽¹⁾

Calculated in accordance with Rule 13d-3.

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TRANSACTIONS WITH RELATED PERSONS AND CERTAIN CONTROL PERSONS

Since January 1, 2010, we had certain relationships with our CCG manager, the Island Advisor, and certain other related parties as detailed below.

Advisory and Servicing Agreement with Centerline Capital Group LLC

We and our subsidiaries operate our day-to-day activities utilizing the services and advice provided by our subsidiary, CCG, subject to the supervision and review of our Board and our subsidiaries’ board of trustees (or directors), as applicable. Although our Board and our subsidiaries’ board of trustees (or directors) have continuing exclusive authority over the respective entity’s management, affairs and disposition of assets, our Board and our subsidiaries’ board of trustees (or directors), as applicable, have delegated to CCG the power and duty to perform all of the asset management and investment services required to run our day-to-day operations.

Under the Amended and Restated and Novation of Management Agreement, dated as of July 29, 2010, by and among CCG and Centerline Affordable Housing Advisors LLC (the “Amended and Restated Management Agreement”), CCG is entitled to receive reimbursement of all costs incurred by CCG in performing services for us plus an amount equal to a market-based percentage, as jointly determined from time to time by us and CCG. The Amended and Restated Management Agreement has a term of five years and may be terminated:

with or without cause by CCG at any time, or

ii.

for cause by us at any time without penalty, and each upon 60 days’ prior written notice to the non-terminating party.

Under the Amended and Restated Management Agreement, CCG will operate solely our day-to-day activities and will work with and support the Island Advisor, subject to the supervision and review of our Board and our subsidiaries’ board of trustees (or directors), as applicable.

March 2010 Restructuring

On March 5, 2010, our Board approved and Centerline entered into a series of transactions with, among others:

affiliates of Island Capital, including Island Advisor, with which we have the Island Advisory Agreement, and C3 Initial Assets LLC, which beneficially owns approximately of 40% of our Common Shares; .

affiliates of Bank of America Corporation, including Bank of America, N.A., which affiliates beneficially own approximately 8.6% of our Common Shares;

affiliates of The Related Companies L.P. (“TRCLP”), certain of which beneficially own approximately 8.8% of our Common Shares;

affiliates of Wells Fargo & Company, which affiliates beneficially own approximately 8.0% of our Common Shares; and

Natixis Financial Products, LLC, which beneficially owns approximately 5.1% of our Common Shares

See “—Additional Transactions with Certain 5% Beneficial Owners” below for additional information regarding our relationships with these entities.

Sale of Commercial Real Estate Assets

The Company sold certain assets within the Company’s Commercial Real Estate group and the subsidiary that constituted the Company’s Portfolio Management group to C-III Capital Partners LLC, a subsidiary of Island Capital (“C-III”). The assets sold include:

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The Company’s co-investment, management interests in and loans receivable from the Commercial Mortgage-Backed Securities (“CMBS”) Fund II and CMBS Fund III and High-Yield Debt Fund Partnerships;

The Company’s CMBS and retained CMBS certificate investments;

The Company’s loan to American Mortgage Acceptance Company (“AMAC”) and the Company’s co-investment and management interests in Centerline Urban Capital LLC (“CUC”);

The member interest of the Company’s Centerline Servicing LLC subsidiary (f/k/a Centerline Servicing Inc. subsidiary and n/k/a C-III Asset Management LLC);

The Company’s rights and obligations under collateral management agreements with respect to (1) two collateralized debt obligations (“CDOs”) in which the High-Yield Debt Fund Partnership invests and (2) AMAC’s CDO; and

Servicing assets with respect to CMBS re-securitization transactions.

In connection with the March 2010 Restructuring, the Board created the Series A Shares, a new class of shares of beneficial interest in the Company. The Company adopted, upon approval of the Board, a certificate of designation creating 19,860,212 Series A Shares, not all of which were issued in connection with the March 2010 Restructuring. Each Series A Share was the equivalent of 15 Common Shares, on an as-converted basis, as to both voting and economic rights, but did not have any liquidation preferences or preferential dividend rights. Each outstanding Series A Shares automatically converted to 15 Common Shares on October 6, 2010 when the shareholders adopted amendments to our Trust Agreement increasing the number of our outstanding Common Shares and implementing the forward split.

Proceeds of the March 2010 Restructuring, including the sale and share issuance detailed above, totaled $110.0 million, and were comprised of:

$50.0 million in cash, including $33.9 million paid to us, $3.0 million of cash paid to third parties on the Company’s behalf, $3.1 million withheld by purchaser relating to certain assumed liabilities and $10.0 million placed in escrow; and

C-III’s assumption of $60.0 million of debt from the Company’s Term Loan and Revolving Credit Facility.

Amendment to Credit Agreement in Connection with March 2010 Restructuring and Subsequent Waivers

On March 5, 2010, the Centerline and CCG amended and restated their obligations under their revolving credit and term loan agreement (the “Prior Credit Agreement”) by entering into a Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of March 5, 2010 (as subsequently amended, the “Credit Agreement”) with the lenders, including, Bank of America, N.A. and for which Bank of America, N.A. serves as administrative agent. Prior to the Amended Credit Agreement with the lenders, the Company amended the Prior Credit Agreement to extend the maturity date of the Term Loan. In February 2010, the Company repaid the term loan portion of the Prior Credit Agreement (a total of approximately $2.6 million). The terms of the Company’s new Credit Agreement include the following changes from the previous facility:

The termed-out portion of the Company’s revolving credit facility ($208.0 million at December 31, 2009) under the Prior Credit Agreement was reduced by $70.5 million from the following sources:

$60.0 million assumed by C-III;

$5.0 million assumed by an affiliate of TRCLP (see “—Equity Restructuring—The Related Companies L.P.” below); and

$5.5 million the Company repaid at the time of the March 2010 Restructuring.

The remaining balance of the termed-out portion of the Revolving Credit Facility ($137.5 million) is now a term loan (“Term Loan”) which matures in March 2017 with an interest rate of 3.0% over either the prime rate or LIBOR (at the Company’s election). There were no scheduled repayments until December 2011, at which time we began repaying $2.98 million in principal per quarter until maturity, at which time the remaining principal is due;

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The revolving credit facility (the “Revolving Credit Facility”) portion of the Credit Agreement has a total capacity of $37.0 million. The Revolving Credit Facility matures in March 2015 and bears interest at 3.00% over either the prime rate or LIBOR at our election (which currently is LIBOR). Initially, the Revolving Credit Facility could be used for low income housing tax credit (“LIHTC”) property investments and working capital.

The facility has customary financial covenants, but excludes certain provisions that had been in the previous facility such as required asset sales and repayments based on specific cash flow streams. The Credit Agreement has the following customary financial covenants:

minimum ratio of consolidated EBITDA to fixed charges, which became effective for us as of June 30, 2011; and

maximum ratio of funded debt to consolidated EBITDA, which became effective for us as of June 30, 2012.

The Credit Agreement contains restrictions on distributions. Under the Credit Agreement, we generally are not permitted to make any distributions or redeem or purchase any of our shares, including Series A Convertible Reinvestment Act Preferred Shares (“Convertible CRA Shares”), except in certain circumstances, such as distributions to the holders of preferred shares of Equity Issuer, a subsidiary of the Company, if and to the extent that such distributions are made solely out of funds received from Freddie Mac as contemplated by a specified transaction.

Equity Restructuring

As part of the March 2010 Restructuring, the Centerline issued a total of 19.3 million Series A Shares, a new class of our securities (the “Series A Shares”). Most of the shares that had been included in Centerline’s classification of “Redeemable Securities” and most of the shares included in “Convertible CRA Shares” were exchanged for, or amended or reclassified into, 14.1 million Series A Shares, including shares held by affiliates of Bank of America Corporation and Wells Fargo & Company. In connection with the sale of assets detailed above, C3 Initial Assets LLC purchased 4.1 million of Series A Shares from Centerline. In connection with restructuring of our credit intermediation agreements, we issued 1.2 million Series A Shares to Natixis Financial Products, LLC, which currently beneficially owns approximately 5.1% of our Common Shares.

C3 Initial Assets LLC also purchased from Related Special Assets LLC the 5.2 million Series A Shares that Related Special Assets LLC received upon amendment and reclassification of its redeemable securities (included in the 14.1 million Series A Shares noted above).

Each new Series A Share was equivalent to 15 Common Shares on an as-converted basis as to both voting and economic rights. The Series A Shares automatically converted into Common Shares upon the approval by our shareholders at our 2010 annual meeting of an amendment to our trust agreement to increase the number of authorized shares of beneficial interest from 160,000,000 to 800,000,000 (the “Trust Amendment”).

Relationships with AMAC

Through the Company’s subsidiaries, the Company managed the operations of AMAC, a publicly-traded REIT, and originated loans on its behalf. The Company invested in AMAC and loaned amounts to assist in its growth and to refinance debt as necessary to protect the Company’s invested interests and the cash flow streams the Company’s management contract generated. The Company wrote down most of the amounts invested due to the impact of the economy on AMAC’s operations. The Company sold the loan as part of the March 2010 Restructuring, but the Company continued to manage it until its bankruptcy filing.

One of the Company’s executives, Mr. Levy, served as chief executive officer, chief financial officer and a managing trustee for AMAC.

In addition, the Company owned 0.6 million of AMAC’s common shares (6.9% of the class) and 0.3 million shares of AMAC’s 7.25% Series A Cumulative Convertible Preferred Shares.

The Company also extended a revolving credit facility to AMAC, with a maximum capacity of $80.0 million.

Prior to the March 2010 Restructuring, the Company served as the collateral manager for AMAC’s $400.0 million CDO and serviced all of the loans in AMAC’s investment portfolio, performing all primary and special servicing functions. Pursuant to the servicing agreement, the Company received fees from AMAC based on the dollar amount of loans the Company serviced. Since the Company collected these fees prior to any amounts being remitted to AMAC, the Company continued to recognize these fees as income, through the date of the March 2010 Restructuring.

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In March 2010, the Company sold the loan and the collateral management contract, but the Company continued to manage AMAC until its bankruptcy plan was approved on January 13, 2011.

On April 26, 2010, AMAC filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (Case No. 10-12196).

Prior to the March 2010 Restructuring, Centerline Real Estate Special Situations Mortgage Fund LLC (“CRESS”), a fund managed by Centerline, entered into a co-investment agreement with AMAC whereby both participated in investment opportunities originated by the Company’s subsidiaries and that met mutual investment criteria. The Company’s ownership interest in CRESS was sold to Island Capital in connection with the March 2010 Restructuring.

On January 13, 2011, the bankruptcy court entered a final order approving AMAC’s plan of reorganization. The plan terminated AMAC’s outstanding common and preferred shares and resulted in the issuance of new equity to an affiliate of the Island Advisor.

The Related Companies L.P.

Investments made by the funds and other entities the Company manages (including AMAC) included investments in properties developed by TRCLP, a company controlled by the Company’s former Chairman Stephen Ross, if they met the investment criteria of those entities, subject to the Company’s underwriting standards. The Company considered these investments for the Company’s managed entities based on the Company’s long standing business relationship with TRCLP and the alignment of their development portfolio with the investment objectives of the Company’s managed entities.

In March 2010, Related Special Assets LLC, an affiliate of TRCLP, in its capacity as the holder of 10,843,492 (approximately 97%) of our 11.0% Cumulative Convertible Preferred Shares, Series A-1 (the “11.0% Preferred Shares”) consented to (i) the amendment and restatement of the certificate of designation of the 11.0% Preferred Shares (the “11.0% COD”) to, among other things, (x) reduce the dividend rate payable to Related Special Assets LLC from 11% to 9.5% and (y) increase the conversion price of the 11.0% Preferred Shares held by Related Special Assets LLC to effectuate the settlement of certain litigation and then (ii) the reclassification of the 11.0% Preferred Shares into Series A Shares by means of an amendment to the amended and restated 11.0% COD that amended the amended and restated 11.0% COD in its entirety as provided in the certificate of designation of the Series A Shares.

In connection with the transactions, all of the 11.0% Preferred Shares were converted to Series A Shares on a pro rata basis, based on the original issuance price paid for such 11.0% Preferred Shares, and TRCLP then sold the Series A Shares which it held to C3 Initial Assets LLC. In addition, in connection with the March 2010 Restructuring, an affiliate of TRCLP incurred $5.0 million of the debt under the Prior Credit Agreement in connection with a consulting and advisory agreement the Company entered into with the TRCLP affiliate. See “Additional Transactions with Certain 5% Beneficial Owners—The Related Companies L.P.” below.

Other Affiliated Transactions

Fund Advances Related to Tax Credit Property Partnerships, Net

Fund advances related to tax credit property partnerships represent monies we loaned to certain Tax Credit Fund Partnerships to allow them to provide financial support to tax credit property partnerships in which they invest. We expect the Tax Credit Fund Partnerships will repay those loans from the release of reserves, proceeds from asset sales and other operating sources. Fund advances we made (net of reserves) were $15.6 million and $15.0 million in 2011 and 2010, respectively and $58.1 million during the six-months ended June 30, 2012. In connection with the restructuring of certain credit intermediation agreements in 2010, certain of these fund advances were contributed to our Guaranteed Holdings LLC and Centerline Financial Holdings LLC subsidiaries.

Other

Substantially all fund origination revenues in the Affordable Housing Equity segment are received from Tax Credit Fund Partnerships we have originated and manage, many of which comprise the partnerships that we consolidate. While our affiliates hold equity interests in the investment funds’ general partner and/or managing member/advisor, we have no direct investments in these entities and we do not guarantee their obligations. We have agreements with these entities to provide ongoing services on behalf of the general partners and/or managing members/advisors and we receive all fee income to which these entities are entitled.

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Additional Transactions with Certain 5% Beneficial Owners

Island Advisory Agreement

In connection with the March 2010 Restructuring, Centerline and CCG entered into the Island Advisory Agreement, with the Island Advisor, an entity owned and operated by a subsidiary of Island Capital and an affiliate of C3 Initial Assets LLC. The agreement provides for an initial five year term and, subject to a fairness review of advisory fees, for successive one year renewal terms. Pursuant to the agreement:

the Island Advisor provides strategic and general advisory services to us;

we paid the Island Advisor a one-time $5,000,000 for procedure review fees over a 12 month period from the date of the agreement for certain fund management review services,

we paid the Island Advisor a base management fees of $4,112,000 and $5,000,000 during 2010 and 2011, respectively, and $2,500,000 during the six months ended June 30, 2012; and

during the remaining term of the Island Advisory Agreement, we are obligated to pay the Island Advisor a $5.0 million annual base advisory fee and an annual incentive fee if certain EBITDA thresholds (as defined in the agreement) are met.

The agreement provides each party with various rights of termination, which in our case under certain circumstances would require the payment of a termination fee in an amount equal to three times the base and incentive fee earned during the previous year.

The Related Companies L.P.

A subsidiary of TRCLP earned fees of $5.9 million in each of 2010 and 2011 and $3.2 million for the six-months ended June 30, 2012 for performing property management services for various properties held in Tax Credit Fund Partnerships we manage.

In addition, another affiliate of TRCLP entered into a loan agreement with our lenders (the “TRCLP Loan Agreement”) pursuant to which it assumed, in 2010, $5.0 million of our debt that was outstanding under our Term Loan and Revolving Credit Facility (the “TRCLP Indebtedness”) in connection with CCG’s entering into a consulting and advisory agreement with the TRCLP affiliate (the “TRCLP Consultant”).

Pursuant to the consulting and advisory agreement, the TRCLP Consultant performs certain consulting and advisory services in consideration for which CCG granted the TRCLP Consultant, among other things, certain rights of first refusal and first offer with respect to the transfer of real property owned by a tax credit property partnership controlled by CCG as well as the transfer of equity interests in tax credit property partnerships and agreed to pay the TRCLP Consultant certain fees and expenses. The fee payable by CCG to the TRCLP Consultant is payable quarterly in an amount equal to the interest incurred on the TRCLP Indebtedness for such quarter, which is LIBOR plus 3.00%. The consulting and advisory agreement has a three-year term and automatically renews for one year terms unless CCG provides timely written notice of non-renewal to the TRCLP Consultant.

The consulting and advisory agreement is terminable by CCG and the TRCLP Consultant by mutual consent as specified in the consulting and advisory agreement. If the consulting and advisory agreement is terminated by CCG due to a change of control of the Company, CCG is obligated to pay the TRCLP Consultant a termination fee in the amount of the fair market value of the TRCLP Consultant’s remaining rights under the consulting and advisory agreement determined in accordance with procedures specified in the agreement. If the consulting and advisory agreement is terminated by CCG because the TRCLP Consultant or any of its affiliates engaged in a specified competitive business, the Company or CCG would assume all obligations under the TRCLP Loan Agreement and indemnify the TRCLP Consultant and its affiliates for any loss, cost and expense incurred from and after the date of such assumption.

If CCG and the TRCLP Consultant mutually agree to terminate the consulting and advisory agreement, each party (and certain of their respective affiliates) would be obligated to pay 50% of the outstanding obligations under the TRCLP Indebtedness. If the TRCLP Consultant terminates the consulting and advisory agreement by prior written notice to CCG absent a continuing default by CCG, the TRCLP Consultant and certain of its affiliates would be obligated to pay the outstanding obligations under the TRCLP Loan Agreement. If the TRCLP Consultant terminates the consulting and advisory agreement in the event of a continuing default under the agreement by CCG, the Company and CCG would be jointly and severally obligated to pay the outstanding obligations under the TRCLP Loan Agreement. If CCG terminates the consulting and advisory agreement in the event of a continuing default under the agreement by the TRCLP Consultant or in the event the TRCLP Consultant has not reasonably performed its duties under the agreement, the TRCLP Consultant and certain of its affiliates would be jointly and severally obligated to pay the outstanding obligations under the TRCLP Loan Agreement. If CCG terminates the consulting and advisory agreement in the event of a change in control of the Company or in the event the TRCLP Consultant or any of its affiliates enters into specified competitive businesses, the Company and CCG would be jointly and severally obligated to pay the outstanding obligations under the TRCLP Loan Agreement.

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The $5.0 million of debt assumed by TRCLP was recorded as an extinguishment of debt for which we deferred a $5.0 million gain. The deferred gain will be recognized into income over the life of the consulting agreement. As of June 30, 2012, the unrecognized balance was $4.97 million.

Natixis Financial Products LLC

Natixis Financial Products LLC (“Natixis”) beneficially owns 5.1% of our outstanding Common Shares as shown on the table set forth under the heading “Securities Ownership of Certain Beneficial Owners and Management.” We are partners with an affiliate of Natixis in two isolated special purpose entities, Centerline Financial Holdings LLC (“CFin Holdings”) and its subsidiary, Centerline Financial LLC (“Centerline Financial”), that provide credit intermediations to facilitate specified rates of return on some of the Tax Credit funds we originated. Given current market conditions, the immediate outlook is for no new business to be carried out by our Credit Risk Products Group. In addition, due to the downgrade of Centerline Financial’s rating during the second and third quarters of 2010, Centerline Financial has been and continues to be prohibited from providing any new credit intermediations.

C3 Initial Assets LLC

Affiliates in our Mortgage Banking segment enter into arrangements from time to time to refer mortgage banking and other financing business to, or to obtain referrals of mortgage banking and other financial business from, C3 Initial Assets LLC, which beneficially owns 40.0% of our Common Shares as shown on the table set forth under the heading “Securities Ownership of Certain Beneficial Owners and Management.” The following table summarizes referral fees paid to and received from C3 Initial Assets LLC for periods specified:

	Year Ended 12/31/10		Year Ended 12/31/11		Six Months Ended 6/30/12

Payments from Centerline and its affiliates to C3 Initial Assets LLC		$0		$1.3 million		$565,000

Payment received by Centerline and its affiliates from C3 Initial Assets LLC		$0		$26,000		$81,000

Bank of America Corporation

We have entered into various agreements with affiliates of Bank of America Corporation (collectively, “BOA”) pursuant to which BOA provides Centerline with (i) a term loan and a revolving credit facility, (ii) a mortgage banking warehousing facility, and (iii) cash management services. BOA also invests in LIHTC funds sponsored by us. Wells Fargo & Company provides us with cash management services and invests in LIHTC funds sponsored by us.

Lock-Up Agreements

In connection with the March 2010 Restructuring, the Company entered into lock-up agreements with TRCLP, Wells Fargo Bank, NA, Bank of America, NA, and Natixis pursuant to which they agreed to certain transfer and other restrictions with respect to their Centerline equity interests until March 2013.

Arrangements with Executive Officers

Mr. Levy holds equity interests in certain entities with respect to which the Company will serve and may in the future serve, as the non-equity manager and be entitled to receive economic benefits related to such equity ownership.

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ACCOUNTING AND AUDIT INFORMATION

Audit Committee Report*

The audit committee assists the Board in fulfilling its oversight responsibilities with respect to the integrity of the Company’s financial statements. The audit committee of our Board has issued the following report with respect to our audited financial statements for the year ended December 31, 2011:

The audit committee has reviewed and discussed with our management our 2011 audited financial statements. The audit committee also reviewed management’s report on its assessment of the effectiveness of internal control over financial reporting as of December 31, 2011.

The audit committee has discussed with Deloitte & Touche LLP (our independent registered public accounting firm) the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

The audit committee has received the written disclosures and letter from Deloitte & Touche LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte & Touche LLP’s communications with the audit committee concerning independence, and has discussed with Deloitte & Touche LLP its independence from us. The audit committee has concluded that the independent registered public accounting firm is independent of Centerline and its subsidiaries.

The audit committee has discussed significant accounting policies applied by Centerline in our financial statements. The audit committee met separately with the independent registered public accounting firm, with and without management, to discuss the results of their examination and their observations and recommendations.

Based on the review and discussions referred to above, the audit committee recommended to our Board that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2011.

Submitted by the audit committee of our Board:

	Jerome Y. Halperin — Chairman
	Robert L. Loverd
	Thomas W. White

^* The material in this report is not “solicitation material,” is not deemed filed with the Securities and Exchange Commission, and is not incorporated by reference in any filing of the company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filing.

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Fees Paid to Independent Registered Public Accounting Firm

The following table presents fees for professional audit services rendered by Deloitte and Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte”) for the audit of our financial statements for the years ended December 31, 2011 and December 31, 2010, and fees for other services rendered by Deloitte during those periods.

	2011		2010

Audit Fees^(a)	$	2,015,000	$	3,165,820
Audit-Related Fees		—		—
Tax Fees^(b)		313,227		98,880
All Other Fees		—		—
Total	$	2,328,227	$	3,264,700

^(a)

Fees for audit services billed for 2011 and 2010 consisted of the audit of our annual financial statements and reviews of our quarterly financial statements.

^(b)

Tax fees for 2011 and 2010 consisted of fees billed for professional services for tax compliance, tax advice and tax planning.

All audit-related services, tax services and other services were pre-approved by the audit committee, which concluded that the provision of those services by Deloitte was compatible with the maintenance of Deloitte’s independence in the conduct of its auditing functions.

Policy on Pre-Approval of Independent Registered Public Accounting Firm Services

The audit committee is responsible for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. The audit committee has established a policy regarding pre-approval of all audit and non-audit services provided by our independent registered public accounting firm.

On an on-going basis, management communicates specific projects and categories of service for which the advance approval of the audit committee is requested. The audit committee reviews these requests and advises management if the audit committee approves the engagement of the independent registered public accounting firm. The audit committee may also delegate the ability to pre-approve audit and permitted non-audit services to one or more of its members, provided that any pre-approvals are reported to the audit committee at its next regularly scheduled meeting.

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EXPENSES OF SOLICITATION

We will bear the costs of soliciting proxies for the annual meeting. Brokers and nominees should forward soliciting materials to the beneficial owners of the Common Shares and Special Preferred Voting Shares held of record by such person, and we will reimburse them for their reasonable forwarding expenses. In addition to the use of the mail, proxies may be solicited by our trustees and officers or officers and employees of CCG by personal interview or telephone.

Other than as set forth above, neither we nor any other person acting on our behalf has retained any other person to make solicitations or recommendations to shareholders with respect to the proposals submitted to the shareholders for consideration at the annual meeting.

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VOTING PROCEDURES

General

A representative of Paul Hastings LLP (the “Inspector”) has been appointed the inspector of elections. The Inspector will count all votes cast, by those participating in the virtual meeting by means of remote communication or by submission of a properly executed proxy, received at or prior to the annual meeting.

Abstentions and “broker non-votes” (nominees holding Common Shares for beneficial owners who have not voted on a specific matter) will be treated as present for purposes of determining whether a quorum is present at the annual meeting. Abstentions and broker non-votes are not treated as votes cast in the election of trustees or Proposal #2 (Ratification of the Appointment of Independent Registered Public Accounting Firm) and thus are not the equivalent of votes against a nominee or against such ratification.

Voting

You may vote by completing, signing and mailing the enclosed proxy card in the enclosed return envelope. In the alternative, you may also submit a proxy by telephone or on the Internet by following the instructions on the enclosed proxy card. To submit a proxy on the Internet, log on to the Internet and go to http://www.proxyvote.com, and follow the directions outlined on the secure website. To submit a proxy by telephone, call toll-free 1-800-690-6903 and follow the instructions provided by the recorded message. You may also attend the meeting via live webcast at www.virtualshareholdermeeting.com/centerline12, and vote your shares at the virtual meeting. You will need the 12-Digent Control Number located on your proxy card, notice and voting instruction form to enter www.proxyvote.com to vote and www.virtualshareholdermeeting.com/centerline12 to attend the annual meeting. If you plan to attend the annual meeting by means of remote communication, we urge you to return your proxy card or submit a proxy by telephone or the Internet prior to the meeting to assure the representation of your shares at the annual meeting.

Revocation

You may revoke your proxy and reclaim your right to vote:

by submitting a later-dated proxy either by Internet or telephone by following the instructions on your proxy or voting card;

electronically during the annual meeting at www.virtualshareholdermeeting.com/centerline12 when you enter your 12-Digit Control Number;

by submitting a later-dated written proxy to the address shown on your proxy or voting card; or

Record Date

Only holders of our Common Shares and Special Preferred Voting Shares of record at the close of business on October 18, 2012 are entitled to receive notice of, and to vote at, the virtual annual meeting, or any adjournment or postponement thereof. On October 18, 2012, there were approximately 349,165,831 Common Shares outstanding and 11,867,236 Special Preferred Voting Shares outstanding. Each Common Share and Special Preferred Voting Share is entitled to one vote on all matters that may come before the annual meeting. All votes are exercisable by those participating in the virtual meeting by means of remote communication or by properly executed proxy, on all matters which properly come before the annual meeting (or any postponement or adjournment thereof).

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Shareholders Sharing the Same Last Name and Address

To reduce the expense of delivering duplicate proxy materials to shareholders who may have more than one account holding Centerline shares but who share the same address, we have adopted a procedure approved by the SEC called “householding”. Under this procedure, certain shareholders of record who have the same address and last name, and who do not participate in electronic delivery of proxy materials, will receive only one copy of our Notice of Internet Availability of Proxy Materials and, as applicable, any additional proxy materials that are delivered until such time as one or more of these shareholders notifies us that they want to receive separate copies. This procedure reduces duplicate mailings and saves printing costs and postage fees, as well as natural resources. Shareholders who participate in householding will continue to have access to and utilize separate proxy voting instructions.

If you receive a single set of proxy materials as a result of householding, and you would like to have separate copies of our Notice of Internet Availability of Proxy Materials, annual report, or proxy statement mailed to you, please submit a request to Broadridge, either by calling toll-free at 1-800-542-1061, or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. They will remove you from the householding program within 30 days of your response, following which you will receive an individual copy of our proxy materials. However, please note that if you want to receive a paper proxy or voting instruction form or other proxy materials for purposes of this year’s annual meeting, follow the instructions included in the Notice of Internet Availability that was sent to you. You can also contact our Investor Relations department at (212) 588-2077, if you received multiple copies of the annual meeting materials and would prefer to receive a single copy in the future, or if you would like to opt out of householding for future mailings.

Quorum; Adjournments

For purposes of the annual meeting, the presence, by those participating in the virtual meeting by means of remote communication or by proxy, of shareholders entitled to cast a majority of all votes entitled to be cast at the annual meeting will constitute a quorum. The annual meeting may be adjourned for the purpose of obtaining a quorum or additional proxies or votes, or for any other purpose; and, at any subsequent reconvening of the annual meeting, all proxies will be voted in the same manner as such proxies would have been voted at the original convening of the annual meeting, except for any proxies which have theretofore effectively been revoked or withdrawn, notwithstanding that they may have been effectively voted on the same day for any other matter at a previous meeting.

Vote Required

The affirmative vote of a plurality of the votes entitled to be cast, and actually cast, by shareholders participating in the virtual annual meeting by means of remote communication or by proxy (vote by Internet, by phone, by mail), and entitled to vote at the annual meeting at which a quorum is present is required for the election of the trustee nominees. The affirmative vote of a majority of votes cast voting either by means of remote communication or by proxy at the annual meeting at which a quorum is present is required to approve the ratification of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2012. The affirmative vote by the shareholders entitled to vote at the annual meeting, participating in the annual meeting by means of remote communication or by proxy, by a majority in voting power thereof, is required, if necessary, to approve the extension of the solicitation period and the adjournment of the annual meeting for purposes of approving the proposals before the shareholders.

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SHAREHOLDER PROPOSALS

If you wish to submit a stockholder proposal pursuant to Rule 14a-8 under the Exchange Act for inclusion in our proxy statement and proxy card for our 2013 annual meeting of stockholders, you must submit the proposal to our secretary no later than July 2, 2013. However, if the date of Centerline’s 2013 annual meeting is changed by more than 30 days from the date of the this year's annual meeting, then the deadline is a reasonable time before the we begin to print and send our proxy materials.

In addition, under our bylaws, you intend to nominate a candidate for election to the Board or to propose any business at our 2013 annual meeting, other than proposals presented under Rule 14a-8, you must comply with our bylaws, which currently require that you provide written notice of such nomination or new business no earlier than September 14, 2013 and no later than October 14, 2013 to our Board at our principal executive officers; provided, however, if the 2013 annual meeting is advanced by more than 30 days or delayed by more than 60 days from December 13, 2013 (the first anniversary of the 2012 annual meeting), notice by a shareholder to be timely must be delivered not earlier than the 90th day prior to the 2013 annual meeting and not later than the close of business on the 60th day prior to the 2013 annual meeting or the 10th day following the day on which public announcement of the 2013 annual meeting is first made. For additional requirements, stockholders should refer to our bylaws, Article II, Section 12, “Nominations and Shareholder Business,” a current copy of which may be obtained from our secretary.

ANNUAL REPORT ON FORM 10-K

Upon written request by any shareholder entitled to vote at the meeting, we will furnish that person without charge a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, which is filed with the SEC, including the financial statements and schedules thereto. Requests should be addressed to Investor Relations at Centerline Holding Company, 100 Church Street, New York, New York 10007.

OTHER BUSINESS

Our Board does not know of any other matters to be brought before the annual meeting except those set forth in the notice thereof. If other business is properly presented for consideration at the annual meeting, it is intended that the proxies will be voted by the persons named therein in accordance with their judgment on such matters.

It is important that your Common Shares and/or Special Preferred Voting Shares be represented at the annual meeting. If you are unable to attend the virtual annual meeting via the webcast, please complete, date, sign and return the enclosed stamped, self-addressed proxy card or submit a proxy on the Internet at http://www.proxyvote.com, or submit a proxy by telephone by calling toll free 1-800-690-6903 prior to the virtual meeting. Your failure to do so will increase the costs of operating Centerline and decrease the return on your investment.

	By Order of the Board of Trustees


	Robert L. Levy
	President, Chief Financial Officer and Chief Operating Officer

October 30, 2012

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