Joe E. Robert Jr., the Washington area real estate mogul and philanthropist, has lots of friends.

So when he decided last year to start a real estate investment trust, many of the initial investors were friends of Robert and of Freidman, Billings, Ramsey Group Inc., the Arlington firm that does investment banking work for Robert and his real estate empire.

Friends like talk show hosts Oprah Winfrey and Laura Ingraham, Ringling Bros. and Barnum & Bailey circus owner Kenneth Feld, America Online co-founder James V. Kimsey and Douglas H. McCorkindale, chairman of Gannett Co.

In a private stock offering, those people and a couple of hundred others could buy stock in JER Investors Trust Inc. for $15 a share.

A year later, Robert opened JER Investors to the general public in an initial public offering, selling stock to anybody who wanted to buy it for $17.75 a share.

The share prices alone show there's a big difference between being an ordinary investor and being connected.

The difference is that investors who paid $17.75 a share during JER Trust's initial public offering last summer have lost money on their stock, which had slipped to $16.49 by the close of Friday's trading.

Investors who got in on the private placement at $14.95 a share are sitting on $15 million-plus in paper profits that they will soon be able to cash in.

JER Investors recently filed paperwork to register the privately sold stock in a secondary offering, allowing it to be traded on the New York Stock Exchange with the shares that were sold to the public.

When the new shares hit the market, JER Trust's stock price could fall further. That often happens when large new blocks of stock become available for purchase, although sometimes the market swallows additional shares without a hiccup.

JER doesn't have any choice about registering the private placement stock for sale. It promised to do so when investors bought the stock. But selling additional shares when your stock is already slipping is not a way to make those who already hold publicly traded shares happy.

There's nothing illegal, improper or even unusual about what's gone on at JER Investors Trust, but it gives Washington investors a close-to-home reminder of how the world works.

Like other real estate investment trusts, JER Investors pays 90 percent of its taxable income as dividends for investors, which qualifies it for special federal tax treatment. But JER Investors is not like most REITs, which buy office buildings, stores, warehouses or apartments. It is a "mortgage REIT." Instead of owning buildings, it owns loans that were used to finance buildings.

That's considerably oversimplified, because these days commercial real estate finance is a lot more complicated than making a down payment and taking out a mortgage for the rest of the price of a building. Today mortgages are sliced into layers. Some layers pay their holders before those holding other layers and therefore are considered less risky investments. The mortgage slices last in line to be paid are very high risk.

Investing in such arcane "commercial mortgage-backed securities" is a highly specialized craft, and the J.E. Robert Cos. have a reputation for being very good at it.

The McLean organization is among the world's major players in real estate finance. Except for the REIT, the business is privately owned, mostly by Robert.

Robert, 53, has not only done well in real estate finance. He also has become one of the Washington area's most visible philanthropists, best known for Fight Night, a boxing bash that annually raises major money for children's charities.

With his philanthropic and business activities, Roberts has built a classic network of connections. Some can be seen in the list of more than 200 people who were early investors in the REIT.

Winfrey, the most prominent name on the list, apparently knows Robert through Quincy Jones, the music producer who is another of his friends.

Whatever the connection, Robert was reportedly among the guests at Winfrey's 50th-birthday bash. And the documents filed by JER Investors show that she bought 287,500 shares in the private placement -- a $4.3 million investment. Winfrey, whose purchase was made through a trust, was not available for comment, her staff said.

With the stock up about $1.50 a share, Winfrey is ahead by about $430,000 -- not a lot of money if you're one of America's richest women.

In fact, as Gannett's McCorkindale commented, "the stock hasn't done very much." McCorkindale said he knows Robert but got into the private placement on the recommendation of FBR, which helps him with his personal investments.

Investors who put money into some other local companies a year before their public offerings have doubled their money and in some cases multiplied their investment many times.

Even people involved with the JER deal say early investors did not get all that much of a price break over public investors, considering that they got in a full year before the IPO.

Other investors who were called for comment declined to discuss the secondary offering on the record, as did JER officials.

Selling stock privately before a company goes public has become common. It can be a way to raise early capital and get a business rolling, creating a track record that will attract later investors.

What was unusual about the JER private placement was its large size. Typically, such transactions are for a few million shares or a few million dollars. In JER's case, the company sold 13.8 million shares and raised $172 million -- almost as much as the 14 million-share IPO that raised $213 million more.

To sell that many shares for the private placement, the investment bankers at FBR recruited more than 200 investors, ranging from big names and big institutions to small players who put up as little as $7,500.

Major buyers included Goldman Sachs & Co. and affiliates of the Franklin, Oz, Pennant and Hunter mutual fund families.

Among the small investors were former Securities and Exchange Commission member J. Carter Beese Jr., former White House aide Craig L. Fuller, former Washington Post financial columnist James K. Glassman, Washington businessman Robert Haft and his wife Mary, and businesswoman LuAnn Bennett, the wife of Rep. James P. Moran Jr. (D-Va.).

All the shares sold in the private placement are being registered for sale, but that doesn't mean the investors are going to rush to sell them.

How many shares are sold will be a valuable clue for people who consider insider selling an important indicator of a company's prospects. "Buy when insiders are buying, sell when they're selling," is an old Wall Street axiom.

So far even Joe Robert's friends haven't gotten rich on their stock in JER Investors Trust. If they stick with it, that will suggest they consider the stock a solid long-term investment, not just a get-in-early-and-get-out gambit.

Jerry Knight's e-mail is

Oprah Winfrey is about $430,000 ahead with her stock in JER Investors. Circus owner Kenneth Feld also was an early investor in Joe E. Robert Jr.'s trust.