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                                                                    EXHIBIT 10.7

                                PAIRING AGREEMENT

         THIS PAIRING AGREEMENT (this "Agreement") is made and entered into as
of July 1, 2003, by and among Arbor Realty Trust, Inc., a Maryland corporation
(the "REIT"), Arbor Commercial Mortgage, LLC, a New York limited liability
company ("ACM"), Arbor Realty LPOP, Inc., a Delaware corporation ("LP"), Arbor
Realty GPOP, Inc., a Delaware corporation ("GP"), and Arbor Realty Limited
Partnership, a Delaware limited partnership (the "OP").

         WHEREAS, concurrently with the execution of this Agreement, the REIT
will file Articles Supplementary (the "Articles Supplementary") to its charter
(as supplemented by the Articles Supplementary, the "REIT Charter") with the
State Department of Assessments and Taxation of Maryland whereby the REIT will
reclassify and designate 5,000,000 shares of its Preferred Stock as shares of
Special Voting Preferred Stock, par value $0.01 per share (the "Special Voting
Stock");

         WHEREAS, concurrently with the execution of this Agreement, ACM and the
OP are entering into a Contribution Agreement pursuant to which ACM will
transfer certain assets and related liabilities to the OP and, in exchange
therefor, the OP will issue to ACM (i) 3,146,724 operating partnership units of
the OP (the "Initial OP Units") and (ii) 629,345 warrants (the "ACM Warrants"),
which entitle the holders to purchase additional operating partnership units of
the OP (the "Warrant OP Units" and, together with the Initial OP Units, the
"Paired Common Units");

         WHEREAS, concurrently with the issuance of the Initial OP Units, the
REIT will issue to ACM 3,146,724 shares of Special Voting Stock and, upon the
exercise of each ACM Warrant, the REIT will issue to the holder thereof a number
of shares of Special Voting Stock equal to the number of Warrant OP Units issued
by the OP in connection with the exercise of such ACM Warrant;

         WHEREAS, the REIT Charter provides that the REIT shall not issue or
agree to issue any shares of Special Voting Stock unless effective provision has
been made for the simultaneous issuance by the OP of the same number of
operating partnership units of the OP, and for the pairing of such shares of
Special Voting Stock and operating partnership units;

         WHEREAS, the OP and the REIT wish to enter into this Agreement for the
purpose of further effectuating the pairing of shares of Special Voting Stock
and the

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Paired Common Units (the "Pairing"), including the establishment of the
terms and conditions which will govern the issuance and the transfer of the
shares of Special Voting Stock and the Paired Common Units.

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements contained herein, the parties hereto agree as follows:

1.       Transfer of Shares. Commencing on the date hereof and continuing until
         such time as this Agreement shall have been terminated in the manner
         provided herein:

         a.       No share of Special Voting Stock shall be transferable, and no
                  such share shall be transferred on the stock transfer books of
                  the REIT, unless a simultaneous transfer is made by the same
                  transferor to the same transferee of the same number of Paired
                  Common Units.

         b.       No Paired Common Unit shall be transferable, and no Paired
                  Common Unit shall be transferred on the books of the OP,
                  unless a simultaneous transfer is made by the same transferor
                  to the same transferee of the same number of shares of Special
                  Voting Stock.

         c.       Notwithstanding anything to the contrary contained herein,
                  upon any acquisition by the OP, the LP, the GP or the REIT of
                  any Paired Common Units and any shares of Special Voting Stock
                  (whether pursuant to Section 8.6 of the OP Agreement or
                  otherwise), all restrictions on transfer set forth in this
                  Agreement with respect to such Paired Common Units so acquired
                  shall terminate, and any Paired Common Units acquired by the
                  OP, the LP, the GP or the REIT may be transferred without
                  regard to the restrictions set forth in this Agreement. The
                  shares of Special Voting Stock shall be redeemed and cancelled
                  in accordance with the terms of the Articles Supplementary.

         d.       In the event that any shares of Special Voting Stock are
                  transferred to a trust pursuant to the provisions of Section
                  7.2(b) of the REIT Charter, all of the Paired Common Units
                  paired with such shares shall be

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                  automatically transferred to such trust concurrently therewith
                  and shall be subject to all the provisions of Section 7.3 of
                  the REIT Charter to the same extent that the attached shares
                  of Special Voting Stock are so subject.

2.       Issuance of Securities. Commencing on the date hereof and continuing
         until such time as this Agreement shall have been terminated in the
         manner provided herein:

         a.       The REIT shall not issue or agree to issue any shares of
                  Special Voting Stock to any person unless effective provision
                  has been made for the simultaneous issuance or transfer to the
                  same person of the same number of Paired Common Units and for
                  the pairing of such shares of Special Voting Stock and Paired
                  Common Units.

         b.       The OP shall not issue or agree to issue any Paired Common
                  Units to any person unless effective provision has been made
                  for the simultaneous issuance or transfer to the same person
                  of the same number of shares of Special Voting Stock and for
                  the pairing of such Paired Common Units and shares of Special
                  Voting Stock.

         c.       Upon the issuance by the REIT of a share of Special Voting
                  Stock to any person, the REIT shall contribute any cash
                  proceeds or other consideration received from the issuance of
                  such share (the "Per Share REIT Consideration") to the LP,
                  which, in turn, shall contribute such Per Share REIT
                  Consideration to the OP in exchange for one Class A Preferred
                  Unit of the OP (a "Preferred Unit").

3.       Stock Certificates. Commencing on the date hereof and continuing until
         such time as this Agreement shall have been terminated in the manner
         provided herein:

         a.       Each certificate which is issued representing shares of
                  Special Voting Stock shall be printed "back-to-back" with a
                  certificate evidencing the

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                  same number of Paired Common Units and shall bear a
                  conspicuous legend (on the face thereof) referring to the
                  restrictions on transfer set forth in Section 5 of the
                  Articles Supplementary and this Agreement.

         b.       Each certificate which is issued evidencing Paired Common
                  Units shall be printed "back-to-back" with a certificate
                  representing the same number of shares of Special Voting Stock
                  and shall bear a conspicuous legend (on the face thereof)
                  referring to the restrictions on transfer set forth in this
                  Agreement.

4.       Redemption by the OP or Acquisition by the REIT of Paired Common Units.
         Commencing on the date hereof and continuing until such time as this
         Agreement shall have been terminated in the manner provided herein:

         a.       Prior to the redemption of any shares of Special Voting Stock
                  pursuant to Section 8 of the Articles Supplementary (the
                  "Shares"):

                  i.       The OP shall redeem a number of Preferred Units equal
                           to the number of Shares for $.01 in cash per
                           Preferred Unit pursuant to Section 4.11 of the
                           partnership agreement of the OP, which amount shall
                           be paid in its entirety in immediately available
                           funds to the LP (the "LP Payment").

                  ii.      Immediately following the completion of the LP
                           Payment, the LP shall distribute the proceeds of such
                           LP Payment to the REIT in immediately available
                           funds, which amount shall be set aside by the REIT,
                           separate and apart from its other funds, to redeem
                           the Shares pursuant to Section 8 of the Articles
                           Supplementary.

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         b.       All shares of Special Voting Stock redeemed by the REIT
                  pursuant to Section 8 of the Articles Supplementary shall be
                  cancelled automatically and shall become authorized but
                  unissued shares of Special Voting Stock in accordance with the
                  Articles Supplementary, and all certificates representing such
                  shares held by the OP shall be delivered to the REIT for
                  cancellation promptly following the effectiveness of such
                  redemption.

5.       Stock Dividends, Reclassifications, etc. Commencing on the date hereof
         and continuing until such time as this Agreement shall have been
         terminated in the manner provided herein:

         a.       The REIT shall not (i) declare or pay any dividend in respect
                  of the outstanding shares of Special Voting Stock consisting
                  in whole or in part of shares of Special Voting Stock, or (ii)
                  subdivide, combine or otherwise reclassify the outstanding
                  shares of Special Voting Stock.

         b.       The OP shall not (i) declare or pay any dividend in respect of
                  the outstanding Paired Common Units consisting in whole or in
                  part of operating partnership units paired with shares of
                  Special Voting Stock, or (ii) subdivide, combine or otherwise
                  reclassify the outstanding Paired Common Units.

6.       Termination. This Agreement and the Pairing may be terminated by mutual
         consent of the REIT, GP, LP and the OP.

7.       Transfers. No Transfer of shares of Special Voting Stock or the Paired
         Common Units paired thereto may be made to any person, unless in each
         case prior to such Transfer any such transferee agrees in writing to be
         bound by the terms and conditions of this Agreement pursuant to a
         supplementary agreement reasonably satisfactory in form and substance
         to the REIT and the OP. For purposes of this Section 7, the term
         "Transfer" shall mean any direct or indirect sale, assignment,
         mortgage, transfer, pledge, gift, hypothecation or other disposition or
         transfer of, or any act creating a trust (voting or otherwise) with
         respect to shares of Special Voting Stock or the Paired Common

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         Units paired thereto.

8.       No Restrictions on Issuances of Unpaired OP Units. This Agreement shall
         not be deemed to impose any restrictions or limitations on the ability
         of the OP to issue operating partnership units (other than the Paired
         Common Units or Preferred Units) that are not paired to shares of
         Special Voting Stock.

9.       Amendment. This Agreement may be amended by the parties hereto by
         action taken or authorized by the Board of Directors of the REIT, LP
         and GP. This Agreement may not be amended except by an instrument in
         writing signed on behalf of each of the REIT, LP, GP and the OP.

10.      Counterparts. This Agreement may be executed in counterparts, and each
         such counterpart hereof shall be deemed to be an original instrument,
         but all such counterparts together shall constitute but one agreement.

11.      Governing Law. This Agreement shall be governed by, and construed in
         accordance with, the laws of the State of Maryland.

12.      Entire Agreement. This Agreement contains the entire understanding and
         agreement between the parties with respect to its subject matter, and
         any and all conflicting or inconsistent discussions, agreements,
         promises, representations and statements, if any, between the parties
         or their representatives that are not incorporated in this Agreement
         shall be merged into this Agreement.

13.      Headings. The various section headings are inserted for the purposes of
         reference only and shall not affect the meaning or interpretation of
         this Agreement or any provision hereof.

14.      Severability. The provisions of this Agreement shall be severable, and
         any invalidity, unenforceability or illegality of any provision or
         provisions of this Agreement shall not affect any other provision or
         provisions of this Agreement, and each term and provision of this
         Agreement shall be construed to be

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         valid and enforceable to the full extent permitted by law.

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         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the date first written above.

                               ARBOR REALTY TRUST, INC.

                               By: /s/ Frederick C. Herbst
                                   ---------------------------------------------
                                   Name: Frederick C. Herbst
                                   Title: Chief Financial Officer, Treasurer
                                          and Secretary

                               ARBOR REALTY LIMITED PARTNERSHIP

                               By: Arbor Realty GPOP, Inc., its general
                                        partner

                                        By: /s/ Frederick C. Herbst
                                            ------------------------------------
                                            Name: Frederick C. Herbst
                                            Title: Secretary and Treasurer

                               ARBOR COMMERCIAL MORTGAGE, LLC

                               By: /s/ Frederick C. Herbst
                                   ---------------------------------------------
                                   Name: Frederick C. Herbst
                                   Title: Chief Financial Officer

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                               ARBOR REALTY LPOP, INC.

                               By: /s/ Frederick C. Herbst
                                   ---------------------------------------------
                                   Name: Frederick C. Herbst
                                   Title: Secretary and Treasurer

                               ARBOR REALTY GPOP, INC.

                               By: /s/ Frederick C. Herbst
                                   ---------------------------------------------
                                   Name: Frederick C. Herbst
                                   Title: Secretary and Treasurer

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