NorthStar Income II Originates $144.0 Million Senior Loan

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NorthStar Income II announced that it originated a $144.0 million senior loan secured by a portfolio of 28 commercial office properties located in the Long Island suburban market of Woodbury, New York, in close proximity to New York City.

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We are very pleased to announce the closing of this investment by NorthStar Income II, which is secured by quality real estate assets owned by one of the New York metro area’s top real estate investors.

NorthStar Real Estate Income II, Inc. (NorthStar Income II) announced that it originated a $144.0 million senior loan secured by a portfolio of 28 commercial office properties located in the Long Island suburban market of Woodbury, New York, in close proximity to New York City. NorthStar Income II funded $132.0 million at closing and expects to fund the remaining $12.0 million over the next 24 months, subject to the satisfaction of certain conditions by the borrower.

About the investment:

  • The portfolio securing the loan is comprised of more than 1.4 million square feet of primarily Class A and B office space located in close proximity to major roadways.
  • The portfolio is well diversified, with over 150 tenants across various industries.
  • The Woodbury, New York market is approximately 30 miles east of New York City and exhibits strong economic and demographic trends, including strengthening office rents.
  • The borrower is an institutional real estate fund managed by RXR Realty LLC, a leading, highly experienced New York real estate owner, manager and developer with $7.5 billion in assets under management encompassing approximately 18.3 million square feet of commercial real estate, including approximately 5.7 million square feet in Long Island, as of June 30, 2014.
  • The loan’s initial term is 24 months, with up to 36 months of extension options available to the borrower.
  • The investment was financed through one of NorthStar Income II’s secured credit facilities.

“We are very pleased to announce the closing of this investment by NorthStar Income II, which is secured by quality real estate assets owned by one of the New York metro area’s top real estate investors,” said Daniel R. Gilbert, chief executive officer and president. “Our relationships with investors such as RXR Realty, with extensive local market knowledge and experience, allow us to deliver compelling opportunities that will continue to differentiate our platform and lead to positive results over the long-term.”

In December 2013, NorthStar Realty Finance Corp., a publicly traded, diversified commercial real estate company that is externally managed by NorthStar Asset Management Group Inc. (NSAM), announced a strategic $340.0 million investment in RXR Realty. NSAM and RXR Realty plan to co-sponsor NorthStar/RXR New York Metro Income, Inc., a $2.0 billion public, non-traded real estate investment trust (REIT) that will invest in commercial real estate located in the New York metropolitan area.

With a significant presence in the New York region, RXR Realty has established a franchise uniquely positioned to provide the highest quality real estate and premier services. The company’s infrastructure, depth of management and financial strength ensure a significant competitive advantage across its markets, defining its position as a leading real estate owner, manager and developer in the Tri-State New York area.

NorthStar Income II's portfolio consists of six senior mortgage loans with a combined principal amount of $347.0 million and one subordinate interest totaling $24.9 million, as of October 22, 2014.

About NorthStar Real Estate Income II, Inc.
NorthStar Income II is a public, non-traded REIT sponsored by NSAM. NorthStar Income II was formed to originate, acquire and asset manage a diversified portfolio of commercial real estate debt, select equity and securities investments.

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “will,” “may,” “plans,” “expects”, “intends” or other similar words or expressions. These statements are based on NorthStar Income II’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward looking statements; NorthStar Income II can give no assurance that its expectations will be attained. Forward-looking statements are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying any forward-looking statements will not materialize or will vary significantly from actual results. Variations of assumptions and results may be material. Factors that could cause actual results to differ materially from NorthStar Income II’s expectations include, but are not limited to, the ability of the borrower to effectively manage the portfolio securing the loan, the ability of the borrower to comply with the terms, including financial and other covenants, of the loan agreement, whether the borrower determines to extend the loan, changes in market rates for commercial properties located in Woodbury, New York, whether NorthStar Income II’s relationships with investors such as RXR Realty produce compelling opportunities that will continue to differentiate NorthStar Income II’s platform and lead to positive results over the long-term, the ability of NSAM and RXR Realty to successfully co-sponsor a $2.0 billion public, non-traded real estate investment trust that will invest in commercial real estate located in the New York metropolitan area, future property values, the impact of any losses from NorthStar Income II's investments on cash flow and returns, property level cash flow, changes in economic conditions generally and the real estate and debt markets specifically, availability of capital, the ability to achieve targeted returns, changes to generally accepted accounting principles, policies and rules applicable to REITs and the factors specified in in Part I, Item 1A of NorthStar Income II’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as well as in NorthStar Income II’s other filings with the Securities and Exchange Commission. The foregoing list of factors is not exhaustive. All forward-looking statements included in this release are based upon information available to NorthStar Income II on the date of this release and NorthStar Income II is under no duty to update any of the forward-looking statements after the date of this release to conform these statements to actual results.

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Ryan Hoffman
NorthStar Asset Management Group
+1 (720) 897-4881
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