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NorthStar Realty Finance Originates $255 Million Loan

Stocks in this article: NRF

NEW YORK, May 1, 2013 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) ("NorthStar") today announced the origination of a $255 million loan ("Loan") secured by a leasehold mortgage in the recently renovated, 1,331 room Milford Plaza hotel located at the epicenter of Times Square, New York City. NorthStar originated $166 million of the Loan and one of NorthStar's sponsored non-traded REITs, NorthStar Real Estate Income Trust, Inc. ("NorthStar Income"), originated the remaining $89 million of the Loan. The $255 million Loan was financed with $130 million from credit facilities with Deutsche Bank AG, pro-rata between NorthStar and NorthStar Income. 

NorthStar expects to earn an initial current yield of 12.5% on its $81 million of invested equity and as part of the Loan NorthStar and NorthStar Income, on a pro-rata basis, will have a 35% ownership interest in the Milford Plaza hotel and the retail component of the hotel. The current sponsor, a joint venture between Highgate Hotels, an experienced hotel owner and operator that manages over 8,500 hotel rooms in New York City, and real estate private equity firm Rockpoint Group, retained the remaining 65% ownership interest in the hotel and retail. NorthStar intends to ultimately securitize an interest in the senior portion of the $255 million Loan.

David Hamamoto, chairman and chief executive officer, commented "This transaction exemplifies our ability to offer highly specialized, complete capital solutions on transactions with significant size and complexity by leveraging our relationships, sophisticated investment team and capital markets expertise. This loan provides the sponsors a creative financing solution, while also providing us an attractive current return that could be further enhanced in a securitization and potential upside through an ownership interest in a historic hotel located in one of the best hotel submarkets in the world."

About NorthStar Realty Finance Corp.

NorthStar Realty Finance Corp. is a diversified commercial real estate investment and asset management company that is organized as an internally managed REIT. For more information about NorthStar Realty Finance Corp., please visit www.nrfc.com .

Safe Harbor Statement

Certain items in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words like "will," "expect," "intend," "could," "anticipates," "potential" and similar expressions. These statements are based on management'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 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's expectations include, but are not limited to, those described in the documents NorthStar has filed with the United States Securities and Exchange Commission as well as whether NorthStar will achieve its expected initial current yield on its invested equity, whether NorthStar will be able to securitize an interest in the senior portion of the loan on favorable terms, if at all, whether NorthStar will be able to continue to offer highly specialized, complete capital solutions on transactions with significant size and whether NorthStar will be able to enhance its return through a securitization or its ownership interest in the hotel and the retail component. NorthStar expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

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