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                                                                   Exhibit 10.32

   SalomonSmithBarney
A member of citigroup

    February 24, 2003

    American Financial Realty Trust
    1725 The Fairway
    Jenkintown, PA 19046

    Attention:   Nicholas S. Schorsch
                 President and Chief Executive Officer

    Ladies and Gentlemen:

    Salomon Smith Barney Inc. ("Salomon Smith Barney") is pleased to confirm our
    appointment by American Financial Realty Trust ("AFRT" or the "Company") to
    serve as a structuring and corporate advisor to AFRT with respect to its
    anticipated initial public offering or private placement (the "Offering").

    1.   In connection with its engagement hereunder, Salomon Smith Barney
         shall:

         a)   review the business and operations of the Company and its
              historical and projected financial condition;

         b)   provide strategic advice with respect to capital raising,
              including advice, in cooperation with the Co-Book-runners (as
              defined below), in connection with the preparation of an offering
              memorandum (the "Memorandum") and other related documentation
              (together with the Memorandum, the "Offering Materials")
              describing the Company and the terms of the Offering;

         c)   advise the Company with respect to the strategy to be formulated
              by the Company and the Co-Book-runners for marketing the common
              shares in the Offering;

         d)   advise the Company with respect to its financial structuring and
              corporate strategy;

         e)   provide such other investment banking services as are customary
              for similar transactions and as may be mutually agreed upon by
              the Company and Salomon Smith Barney;

         f)   agree, if requested by the Company, to be named in a mutually
              agreeable place within any prospectus or offering memorandum used
              in the Offering as a financial advisor to the Company;

         g)   SSB and Citicorp North America, Inc. (collectively "Citi/SSB")
              agree to use good faith efforts to arrange a Senior Secured Credit
              Facility (the "Facility") of at least $150 million, on a best
              efforts basis, and to provide a commitment for up to $40 million
              of the Facility. The foregoing is not a commitment and any

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         commitment would be subject to (i) Citi/SSB's satisfaction with the
         results of its due diligence, and (ii) final credit approval by
         Citi/SSB for its financing under the Facility.

2.   Notwithstanding anything to the contrary contained herein,

     a)  Salomon Smith Barney acknowledges that the Company has engaged
         Friedman, Billings, Ramsey & Co., Inc. ("FBR") and Banc of America
         Securities LLC ("BAS" and, together with FBR, the "Co-Book-runners") as
         the co-lead, exclusive co-book-running managers of the Offering, and
         under this engagement the Co-Book-runners have agreed (i) to jointly
         arrange for a road show presentation to prospective investors and
         participating underwriters' salespeople, (ii) to select co-managers
         with the participation of the Company, (iii) to determine the members
         of the underwriting syndicate (including economic fee splits between
         such members) and the allocation of the underwritten securities among
         them for resale to the public, and (iv) in the case of FBR, to have
         sole responsibility for stabilization of the common shares in the
         Offering. The Company expects that the Co-Book-runners' duties will
         include, but are not limited to, (a) advising the Company with respect
         to the preparation and drafting of the registration statement and the
         prospectus contained therein relating to the Offering, (b) the actual
         marketing of the Company's common shares in the Offering, including
         without limitation organizing, scheduling, arranging and preparing
         materials relating to a road show, (c) taking orders and allocating
         shares to fill orders in the Offering, (d) settling the Offering and
         (e) undertaking such other duties and responsibilities as are
         customarily undertaken by the book-running managing underwriters in an
         initial public offering of securities.

     b)  Salomon Smith Barney agrees that, in connection with SSB's advisory
         services hereunder, it will not contact any accounts for the purpose of
         marketing or distributing the Company's common shares in the Offering,
         and it will not be present on or otherwise participate in any manner
         whatsoever, directly or indirectly, in, or otherwise advise the Company
         with respect to, any discussions or negotiations between the Company
         and the Co-Book-runners regarding proposed modifications to the
         underwriting agreement between the Company and the underwriters in the
         Offering.

3.   As compensation for Salomon Smith Barney's services hereunder, the Company
     hereby agrees to pay Salomon Smith Barney an advising fee (the "Advising
     Fee") of (a) $1,500,000, if the gross proceeds, excluding piggybacks and
     underwriter discounts, from the Offering are less than $500,000,000 or (b)
     $2,000,000, if the gross proceeds, excluding piggybacks and underwriter
     discounts, from the Offering equal or exceed $500,000,000, payable in cash
     as follows:

     a)  $1,000,000 payable upon SSB entering into a commitment agreement to
         establish the Facility on terms acceptable to the Company;

     b)  the balance of the Advising Fee shall be paid upon consummation of the
         Offering.

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          Notwithstanding anything contained herein to the contrary, in the
          event that Salomon Smith Barney participates in the Offering as an
          underwriter, this Advising Fee Agreement will be terminated and the
          Company and Salomon Smith Barney will execute a separate underwriting
          agreement under new terms and conditions.

     4.   Whether or not the Offering is consummated, the Company agrees to
          reimburse Salomon Smith Barney, upon request, for all its reasonable
          out-of-pocket expenses incurred in connection herewith (including,
          without limitation, fees and expenses of its legal counsel and any
          expenses relating to due diligence investigations, if applicable) up
          to a maximum amount of $25,000 in the aggregate; provided, however,
          that any individual expense in excess of $5,000 must be approved in
          writing by the Company or else the Company shall not provide
          reimbursement for the amount in excess of $5,000.

     5.   Salomon Smith Barney's engagement hereunder will commence on the date
          hereof and will continue until the earliest of the consummation of the
          Offering, the termination of the Offering and nine months after the
          date hereof, unless: (i) Citi/SSB has extended credit to the Company,
          then the engagement shall continue until the Offering is consummated
          or the maturity of the Facility or (ii) extended or terminated by
          mutual written consent; provided, however, that no such expiration or
          termination shall affect the indemnification, contribution and
          confidentiality obligations of the Company, the right of Salomon Smith
          Barney to receive any fees payable hereunder or fees that have accrued
          prior to such termination.

     6.   The Company and Salomon Smith Barney have entered into a separate
          letter agreement, dated the date hereof, providing for the
          indemnification of Salomon Smith Barney in connection with Salomon
          Smith Barney's engagement hereunder, the terms of which are
          incorporated into this agreement in their entirety.

     7.   The Company recognizes and confirms that Salomon Smith Barney in
          acting pursuant to this engagement will be using publicly available
          information and information in reports and other materials provided by
          others, including, without limitation, information provided by or on
          behalf of the Company and that Salomon Smith Barney does not assume
          responsibility for and may rely, without independent verification on
          the accuracy and completeness of any such information. The Company
          agrees to furnish or cause to be furnished to Salomon Smith Barney all
          necessary or appropriate information for use in its engagement and
          hereby warrants that any information relating to the Company or the
          Offering that is furnished to SSB by or on the behalf of the Company
          will be true and correct in all material respects and not misleading.
          The Company agrees that any information or advice rendered by Salomon
          Smith Barney or any of or representatives in connection with this
          engagement is for the confidential use of the Company only in its
          evaluation of the Offering and the Company will not, and will not
          permit any third party to, use it for any other purpose or disclose or
          otherwise refer to such advice or information, or to Salomon Smith
          Barney, in any manner without our prior written consent.

     8.   The Company should be aware that Salomon Smith Barney and/or its
          affiliates may be providing or in the future provide financial or
          other services to other parties with conflicting interests. However,
          consistent with our long-standing policy to hold in confidence the
          affairs of our customers, we will not use confidential information
          obtained from the Company except in connection with our services to,
          and relationship with, the

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              Company, nor will we use on the Company's behalf any confidential
              information obtained from any other customer. The Company hereby
              consents to Salomon Smith Barney's future communications with BAS
              and FBR with respect to Offering. The Company hereby agrees that
              Salomon Smith Barney and/or an affiliate thereof, including,
              without limitation, Citigroup Inc., will have the right to
              purchase the Company's securities for its own account and that any
              such purchase will not constitute a conflict of interest for
              purposes of Salomon Smith Barney's engagement hereunder.

         9.   Salomon Smith Barney may, at our own expense, place announcements
              or advertisements in financial newspapers and journals describing
              our services hereunder, provided that all announcements,
              advertisements, etc. are first approved by the Company and counsel
              of the Company. The Company shall have the right to have any such
              announcements or advertisements relating to the Offering reviewed
              by FBR and BAS.

         10.  This agreement is governed by the laws of the State of New York,
              U.S.A. without regard to conflicts of law principles. The Company
              and Salomon Smith Barney agree to waive trial by jury in any
              action, proceeding or counterclaim brought by or on behalf of
              either party with respect to any matter whatsoever relating to or
              arising out of any actual or proposed transaction or the
              engagement of or performance by Salomon Smith Barney hereunder.
              With respect to all matters relating to this agreement, the
              Company hereby irrevocably (a) submits to the non-exclusive
              jurisdiction of any New York State or Federal Court sitting in the
              State of New York, County of New York, U.S.A.; (b) agrees that all
              claims related hereto may be heard and determined in such courts;
              (c) waives the defense of an inconvenient forum; (d) agrees that a
              final judgment of such courts shall be conclusive and may be
              enforced in another jurisdiction by suit on the judgment or in
              any other manner provided by law; and (e) waives any immunity
              (sovereign or otherwise) from jurisdiction or any court or from
              any legal process that it or its properties or assets has or may
              acquire.

         11.  The Company acknowledges that Salomon Smith Barney is acting as an
              independent contractor in connection with its engagement hereunder
              and not in any other capacity including as a fiduciary. Salomon
              Smith Barney may render the services hereunder through any of its
              affiliates as it deems appropriate. Neither this engagement nor
              the delivery of any advice in connection with this engagement is
              intended to confer rights upon any persons not a party hereto
              (including security holders, employees or creditors of the
              Company) as against Salomon Smith Barney or our affiliates or
              their respective directors, officers, agents and employees.

         12.  Salomon Smith Barney acknowledges that its engagement and fees
              hereunder are required to be disclosed in the prospectus for any
              public Offering under Item 508(e) of Regulation S-K of the
              Securities Act of 1933, as amended, and in the application of the
              managing underwriters in any public Offering to the National
              Association of Securities Dealers, Inc. (the "NASD") under Rule
              2710 of the NASD's Conduct Rules.

         13.  This agreement contains the entire agreement between us and
              supersedes all prior understandings, whether written or oral. This
              agreement may be executed in counterparts. This agreement may not
              be amended except in writing signed by all parties hereto.

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We look forward to working with you on this important transaction. Please
confirm that the foregoing is in accordance with your understanding of our
agreement by signing and returning to us a copy of this letter.

Very truly yours,

SALOMON SMITH BARNEY INC.

By /s/ Paul Ingrassia
  --------------------------------------
       Paul Ingrassia
       Managing Director
       Real Estate & Lodging Group

Accepted and agreed to as of the date set forth above:

AMERICAN FINANCIAL REALTY TRUST

By /s/ Sonya A. Hoffman
  --------------------------------------
       Sonya A. Hoffman
       Senior Vice President

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February 24, 2003

SALOMON SMITH BARNEY INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013

Ladies and Gentlemen:

        In connection with the engagement by letter agreement of even date of
Salomon Smith Barney Inc. ("SSB") to assist us with the Offering, including
modifications of future additions to such engagement and related activities
prior to the date of this agreement (the "engagement"), we agree that we will
indemnify and hold harmless you and your affiliates and their respective
directors, officers, agents and employees and each other person controlling you
or any of your affiliates (collectively, the "indemnified parties"), to the full
extent lawful, from and against any losses, expenses, claims or proceedings
(collectively, "losses") (i) related to or arising out of (A) oral or written
information provided by us, our employees or our other agents, which information
either we or you provide to any actual or potential buyers, sellers, investors
or offerees, or (B) any other action or failure to act by us, our directors,
officers, agents or employees or by you or any indemnified party at our request
or with our consent, or (ii) otherwise related to or arising out of the
engagement or any transaction or conduct in connection therewith, except that
this clause (ii) shall not apply with respect to any losses that are finally
judicially determined to have resulted primarily from the gross negligence or
willful misconduct of such indemnified party.

        In the event that the foregoing indemnity is unavailable to any
indemnified party for any reason, we agree to contribute to any losses related
to or arising out of the engagement or any transaction or conduct in connection
therewith as follows. With respect to such losses referred to in clause (i) of
the preceding paragraph, each of us shall contribute in such proportion as is
appropriate to reflect the relative benefits received (or anticipated to be
received) by you, on the one hand, and by us and our security holders, on the
other hand, from the actual or proposed transaction arising in connection with
the engagement. With respect to any other losses, and for losses referred to in
clause (i) of the preceding paragraph if the allocation provided by the
immediately preceding sentence is unavailable for any reason, each of us shall
contribute in such proportion as is appropriate to reflect not only the relative
benefits as set forth above, but also the relative fault of each of us in
connection with the statements, omissions or other conduct that resulted in such
losses, as well as any other relevant equitable considerations. Benefits
received (or anticipated to be received) by us and our security holders shall be
deemed to be equal to the aggregate cash consideration and value of securities
or any other property payable, issuable, exchangeable or transferable in such
transaction or proposed transaction, and benefits received by you shall be
deemed to be equal to the compensation paid by us to you in connection with the
engagement (exclusive of amounts paid for reimbursement of expenses or paid
under this agreement). Relative fault shall be determined by reference to, among
other things, whether any alleged untrue statement or omission or any other
alleged conduct relates to information provided by us or other conduct by us (or
our employees or other agents), on the one hand, or by you, on the other hand.
You and we agree that it would not be just and equitable if contribution were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to above.
Notwithstanding anything to the contrary above, in no event shall you be
responsible for any amounts in excess of the amount of the compensation actually
paid by us to you in connection with the engagement (exclusive of amounts paid
for reimbursement of expenses or paid under this agreement).

        We agree that we will not, without prior written consent of SSB, settle
any pending or threatened claim or proceeding related to or arising out of the
engagement or any actual or proposed transactions or other conduct in connection
therewith (whether or not you or any indemnified party is a party to such claim
or proceeding) unless such settlement includes a provision unconditionally
releasing you and each other indemnified party from, and holding all such
persons harmless against, all liability in respect of claims by

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any releasing party related to or arising out of the engagement or any
transactions or conduct in connection therewith. We will also promptly reimburse
each indemnified party for all expenses (including counsel fees and expenses) as
they are incurred by such indemnified party in connection with investigating,
preparing for, defending, or providing evidence in, any pending or threatened
claim or proceeding related to or arising out of the engagement or any actual or
proposed transaction or other conduct in connection therewith or otherwise in
respect of which indemnification or contribution may be sought hereunder
(whether or not you or any indemnified party is a party to such claim or
proceeding) or in enforcing this agreement.

     We further agree that no indemnified party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to us or any of
our affiliates, creditors or security holders for or in connection with the
engagement or any actual or proposed transactions or other conduct in connection
therewith except for losses incurred by us that are finally judicially
determined to have resulted primarily from the gross negligence or willful
misconduct of such indemnified party.

     The foregoing agreement is in addition to any rights you may have at common
law or otherwise and shall be binding on and inure to the benefit of any
successors, assigns, and personal representatives of us and each indemnified
party. This agreement is governed by the laws of the State of New York, without
regard to such state's rules concerning conflicts of laws. Solely for purposes
of enforcing this agreement, we hereby consent to personal jurisdiction, service
of process and venue in any court in which any claim or proceeding that is
subject to this agreement is brought against you. Any right to trial by jury
with respect to any claim or proceeding related to or arising out of the
engagement, or any transaction or conduct in connection therewith or this
agreement is waived. This agreement shall remain in full force and effect
notwithstanding the completion or termination of the engagement.

                                        Very truly yours,

                                        AMERICAN FINANCIAL REALTY TRUST




                                        By:  /s/ Sonya A. Huffman
                                             -------------------------------
                                                 Sonya A. Huffman
                                                 Senior Vice President


Agreed:

SALOMON SMITH BARNEY INC.



By:  /s/ Paul Ingrassia
     ---------------------------------
         Paul Ingrassia
         Managing Director
         Real Estate & Lodging Group