Exhibit 10.5

GUARANTY

THIS GUARANTY (this “ Agreement ” or “ Guaranty ”), made as of April 1, 2008, by GRAMERCY CAPITAL CORP. , a Maryland corporation, having an address at 420 Lexington Avenue, New York, New York 10170 (the “ Guarantor ”), to DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH , a branch of a foreign banking institution, having an address at 60 Wall Street, 10th Floor, New York, New York 10005 as agent and initial lender (in such capacity together with its successors in such capacity, the “ Agent ”).

W I T N E S S E T H:

WHEREAS, pursuant to that certain Loan Agreement dated as of July 18, 2003 (the “ Original Closing Date ”), by and among (i) First States Investors DB I, LLC (the “ Original Holding Company Borrower ”), (ii) various of the wholly-owned subsidiary entities of Original Holding Company Borrower which own Property (individually or collectively, as applicable, the “ Original Property-Owning Borrower ”,  and together with the Original Holding Company Borrower, the “ Original Borrower ”), the Agent on behalf of the lenders and LaSalle Bank National Association, as collateral agent, as amended by that certain First Amendment to Loan Agreement, dated August 9, 2004, that certain Second Amendment to Loan Agreement, dated September 30, 2004, and that certain Third Amendment to Loan Agreement, dated September 30, 2005 (together, the “ Original Loan Agreement ”), the Original Holding Company Borrower and the Original Property-Owning Borrower obtained a series of loan advances (collectively, the “ Original Loan ”) from Agent to provide financing for portions of the acquisition cost of certain properties that the Original Holding Company Borrower and various of the Original Property-Owning Borrowers acquired;

WHEREAS, on the Original Closing Date American Financial Realty Trust, a Maryland real estate investment trust (“ AFRT ”) and First States Group, L.P., (“ FSG ”, together with AFRT, the “ Original Guarantor ”), executed that certain Guaranty of Non-Recourse Obligations (the “ Original Guaranty ”) for the benefit of Agent;

WHEREAS, Gramercy Capital Corp., a Maryland corporation, has entered into a definitive merger agreement to acquire American Financial Realty Trust, which would result in the loan under the Original Loan Agreement being due and payable;

WHEREAS, Gramercy Capital Corp., a Maryland corporation, has requested that the Agent amend and restate the Original Loan Agreement and those certain other loan documents that evidence the Original Loan;

WHEREAS, contemporaneously with the execution and delivery hereof (i) First States Investors DB I, L.P., a Delaware limited partnership, and First States Investors DB I B, L.P., a Delaware limited partnership (collectively, the “ Holding Company Borrower ”), and each wholly-owned subsidiary entity of Holding Company Borrower listed on Schedule I attached hereto (individually or collectively, as applicable, a “ Current Property-Owning Borrower ” and, together with the Holding Company Borrower, the “ Maker ”), has executed and delivered to Agent, as payee, that certain Amended and Restated Promissory Note, dated the date hereof (the  “ Note ”), in the maximum principal face amount of One Hundred Million Dollars ($100,000,000)

(the “ Loan Amount ”) in evidence of the loan being continued this day by Agent to Borrower (the “ Loan ”), and (ii) Holding Company Borrower and Current Property-Owning Borrower (collectively, with each wholly-owned subsidiary entity of Holding Company Borrower that owns a Property and from time to time joins the Loan Agreement as an additional Borrower after the date hereof, the “ Borrower ”); LaSalle Bank National Association, as collateral agent; and Agent, as agent and initial lender, have executed and delivered that certain Amended and Restated Loan Agreement (as may be amended and restated after the date hereof, the “ Loan Agreement ”), of even date herewith, pursuant to which the Loan is being continued (capitalized terms used but not defined herein shall have the meanings ascribed to them in the Loan Agreement);

WHEREAS, each Current Property-Owning Borrower and Future Property-Owning Borrower shall, pursuant to the Loan Agreement, grant to Agent a Mortgage/Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (collectively, the “ Mortgages ”), with respect to the Property in order to secure the Note; and

WHEREAS, Guarantor directly or indirectly owns a substantial interest in the Borrower and shall derive a substantial economic benefit from the making of the Loan by Agent to Borrower; and

WHEREAS, as a condition precedent to the continuing of the Loan and making any future advances in accordance with the Loan Agreement, Borrower has agreed to procure and deliver to Agent this Agreement; and

WHEREAS, Agent has declined to continue the Loan, and make any future advance in accordance with the Loan Agreement, unless this Agreement is duly executed by Guarantor and delivered to Agent.

NOW, THEREFORE, in consideration for, and as an inducement to, Agent’s continuing the Loan and agreeing to make future advances in accordance with the Loan Agreement, and for other good and valuable consideration the legal sufficiency of which and receipt thereof are hereby acknowledged, and notwithstanding any provision to the contrary contained in the Loan Agreement, the Note, the Mortgages or any of the other Loan Documents, including without limitation, any “non-recourse” provision of any such documents, Agent and Guarantor do hereby agree as follows:

1.             Guarantor on behalf of itself and its successor and assigns, does hereby absolutely, unconditionally, irrevocably and personally: (i) guaranty to Agent payment and performance of all of the obligations, representations, covenants, warranties and liabilities of Borrower under the Loan Agreement and Loan Documents, (ii) guaranty to Agent payment on each Payment Date, commencing on the April, 2008, Payment Date through and including the March, 2009, Payment Date, an amount, if any, equal to the positive difference (not less than zero (0)) between (x) $541,666.67 and (y) the amount applied to repay the outstanding Principal Indebtedness on such Payment Date pursuant to the eighth (8th) clause of Section 3.12(b) of the Loan Agreement; and (iii) agrees to reimburse Agent for, and hold Agent harmless from and against, any and all losses, damages, claims, expenses, deficiencies, liabilities and costs (including, without limitation, reasonable attorneys’ fees and disbursements) incurred, suffered

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or sustained by Agent and/or its successors and assigns as a result of or arising out of, in connection with or resulting from, the enforcement of this Agreement against Guarantor (the obligations of Guarantor under clauses “i”, “ii” and “iii” above being referred to hereinafter, collectively, as “ Guarantor’s Obligation ”).

2.             Guarantor shall not permit with respect to itself (and its Subsidiaries on a combined basis) any of the following to be breached, as determined quarterly on a combined basis in conformity with GAAP:

(a)      Minimum Tangible Net Worth .  Tangible Net Worth shall not be less than $400,000,000, plus seventy-five percent (75%) of the net proceeds from equity offerings completed after the date hereof;

(b)      Minimum Debt to Book Equity .  The outstanding Indebtedness shall not exceed 85% of the Total Asset Value;

(c)      Minimum Liquidity . The sum of cash and Marketable Securities held shall not be less than $15,000,000 in aggregate;

(e)      Minimum Fixed Charge Coverage .  The Fixed Charge Coverage Ratio shall not be less than 1.30:1.

For purposes of this Paragraph 2 , the following terms shall have the following respective meanings:

“ Capital Lease ”, as applied to any Person, means any lease of any property (whether real, personal or mixed) by that Person or entity as lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person or entity.

 “ Consolidated EBITDA ” means, for any Person for any period, an amount equal to: (a) Consolidated Net Income for such period; plus (b) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period; (ii) the provision for federal, state, local and foreign income taxes payable by such Person and its Subsidiaries for such period; (iii) depreciation and amortization expense deducted in determining such Consolidated Net Income; and (iv) other non-recurring expenses reducing such Consolidated Net Income which do not represent a cash item in such period or any future period; minus (c) the following to the extent included in calculating such Consolidated Net Income: (i) federal, state, local and foreign income tax credits of such person and its Subsidiaries for such period; and (ii) all non-cash items increasing Consolidate Net Income for such period.

“ Consolidated Interest Charges ” means, for any Person for any period, the sum of: (i) all interest, premium payments, debt discount, fees, charges and related expenses of such Person in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance  with GAAP, and (b) the portion of rent expense of such Person with respect to such period under Capital Leases that is treated as interest in accordance with GAAP.

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“ Consolidated Net Income ” means, for any Person for any period, consolidated net income of such Person (excluding gains and extraordinary losses) for that period, as determined in accordance with GAAP.

 “ Fixed Charge Coverage Ratio ” means for any Person for any period, the ratio of Consolidated EBITDA for such Person to Fixed Charges for such period.

“Fixed Charges ” means, for any Person, for any period: (a) debt service for such Person for such period excluding capitalized interest to the extent capitalized interest is paid out of a dedicated interest reserve account sufficient to cover such payments for such period; plus (b) restricted payments with respect to preferred stock or other preferred equity interests issued by such Person required to be paid regardless of available cash during such period.

“ GAAP ” means with respect to the financial statements or other financial information of any Person, generally accepted accounting principles in the United States which are in effect from time to time.

“ Indebtedness ” means, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (c) indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such person; (e) Capital Leases of such Person; and (f) indebtedness of others guaranteed by such Person.

“ Lien ” means any mortgage, lien, encumbrance, charge or other security interest, whether arising under contract, by operation of law, judicial process or otherwise.

“ Marketable Securities ” means any of the following:

98% of the market value of negotiable debt obligations issued by the U.S. Treasury Department having a remaining maturity of less than 1 year; or

95% of the market value of negotiable debt obligations issued by the U.S. Treasury Department having a remaining maturity of 1-10 years; or

90% of the market value of negotiable debt obligations issued by the U.S. Treasury Department having a remaining maturity of more than 10 years; or

90% of the market value of single-class mortgage participation certificates (“ FHLMC Certificates ”) in book-entry form backed by single-family residential mortgage loans, the full and

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timely payment of interest at the applicable certificate rate and the ultimate collection of principal of which are guaranteed by the Federal Home Loan Mortgage Corporation (excluding Real Estate Mortgage Investment Conduit (“ REMIC “) or other multi-class pass-through certificates, collateralized mortgage obligations, pass-through certificates backed by adjustable rate mortgages, securities paying interest or principal only and similar derivative securities); or

90% of the market value of single-class mortgage pass-through certificates (“ FNMA Certificates ”) in book-entry form backed by single-family residential mortgage loans, the full and timely payment of interest at the applicable certificate rate and ultimate collection of principal of which are guaranteed by the Federal National Mortgage Association (excluding REMIC or other multi-class pass-through certificates, pass-through certificates backed by adjustable rate mortgages collateralized mortgage obligations, securities paying interest or principal only and similar derivative securities); or

90% of the market value of single-class fully modified pass-through certificates (“ GNMA Certificates ” in book-entry form backed by single-family residential mortgage loans, the full and timely payment of principal and interest of which is guaranteed by the Government National Mortgage Association (excluding REMIC or other multi-class pass-through certificates, collateralized mortgage obligations, pass-through certificates backed by adjustable rate mortgages, securities paying interest or principal only and similar derivatives securities); or

85% of all actively and regularly traded investment-grade residential mortgage-backed securities; or

such other collateral as Guarantor and Agent may agree, with such valuation percentage applied thereto as Agent, in its sole but reasonable discretion acting in good faith shall deem appropriate.

“ Person ” means an individual, partnership, corporation, joint stock company, trust or unincorporated organization or a governmental agency or political subdivision thereof.

“ Subsidiary ” means as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

“ Tangible Net Worth ” means, as of a particular date, (i) all amounts that would be included under capital on a balance sheet of Guarantor and its consolidated Subsidiaries at such date, determined in accordance with GAAP, less (ii)  the sum of (A) amounts owing to the Borrower from affiliates and (B) intangible assets of the Guarantor and its consolidated Subsidiaries.

“ Total Asset Value ” means the total value of assets owned by the Guarantor.

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3.             It is agreed that the obligations of Guarantor hereunder shall be primary and this Agreement shall be enforceable against Guarantor and its successors and assigns without the necessity for any suit or proceeding of any kind or nature whatsoever brought by Agent against Borrower or its respective successors or assigns or any other party or against any security for the payment of the Guarantor’s Obligation and without the necessity of any notice of non-payment or non-observance or of any notice of acceptance of this Agreement or of any notice of demand to which Guarantor might otherwise be entitled (including, without limitation, diligence, presentment, notice of maturity, extension of time, protest, notice of dishonor or default, change in nature or form of the Guarantor’s Obligation, acceptance of further security, release of further security, imposition or agreement arrived at as to the amount of or the terms of the Guarantor’s Obligation, notice of adverse change in Borrower’s financial condition and any other fact that might materially increase the risk to Guarantor), all of which Guarantor hereby expressly waives. Guarantor hereby expressly agrees that the validity of this Agreement and the obligations of Guarantor hereunder shall in no way be terminated, affected, diminished, modified or impaired by reason of the assertion of or the failure to assert by Agent against Borrower, or its successors or assigns, any of the rights or remedies reserved to Agent pursuant to the provisions of the Loan Agreement, the Note, the Mortgages or any other Loan Documents.

4.             Guarantor waives, and covenants and agrees that it wi