Investment Approach


Market Opportunity

We believe the current commercial real estate (CRE) environment presents attractive opportunities. NorthStar Capital intends to primarily invest in CRE and real estate-related debt, direct investments in CRE properties, indirect investments through private equity funds and joint ventures. While NorthStar Capital may invest in CRE equity, its primary focus is to originate, acquire and manage a diversified portfolio of CRE debt investments.

Skilled CRE lenders, such as NorthStar, may be well positioned to take advantage of the impact of increased regulation to traditional lenders, specifically banks, in the midst of growing demand. NorthStar Capital seeks to capitalize on these dynamics by providing borrowers, operators and partners with a single access point for well-structured debt and equity capital secured by quality assets.

Expanding Investment Landscape

We believe the CRE market remains healthy and current fundamentals support continued opportunities to make debt and equity investments. According to data from Real Capital Analytics, CRE transaction volume has increased steadily since the financial crisis. We anticipate sustained property transaction volume, which may create meaningful new financing and acquisition opportunities.



Pending Maturities Continue to Fuel Demand

We believe CRE loan maturities over the next five years should continue to fuel demand for refinancing capital and provide significant investment opportunities for CRE lenders. On average, approximately $455 billion of CRE debt will mature annually through 2018 (or approximately $1.25 billion a day on average), with approximately $2.07 trillion scheduled to mature through 2020.2




Void of Traditional Lenders

Following the recent economic downturn, traditional lenders face enhanced regulatory challenges, including increased capital requirements, leverage limitations and new risk retention rules. We believe these regulations may further restrict the capabilities of banks and other traditional lenders, likely limiting their participation in the lending and securities markets. As a result, alternative sources of capital like NorthStar Capital may benefit from a reduction in competition and an overall improved pricing structure.




Improving CRE Fundamentals

We believe strong CRE fundamentals may provide additional opportunities for portfolio appreciation and current income by targeting direct and indirect CRE equity investments. NorthStar Capital’s investment strategy will utilize a relative value approach to optimize risk adjusted returns and diversify its portfolio by purchasing properties and borrowing efficiently to finance those acquisitions. As CRE markets continue to improve, we believe direct CRE ownership may complement NorthStar Capital’s CRE debt focused strategy and optimize its ability to generate current income while also participating in potential property value appreciation.




1) Source: Real Capital Analytics, December 31, 2015. Based on independent reports of properties and portfolios $5 million and greater. 2) Source: Barclays Capital, Barclays Capital U.S. Securitization Research: CMBS Outlook 2015; Compiled using data from U.S. Federal Reserve Board, FDIC and Barclays Capital. Total originations data — Commercial Mortgage Bankers Association Annual Origination Volume Summations 2002-2015. Mortgage Bankers Origination Index estimates quarterly origination volume, which was extrapolated against actual historical originations. 3) Source: Commercial Mortgage Bankers Association Annual Origination Volume Summations 2012-2015. 4) Source: NorthStar Management, NCREIF Property Index Trends.


NorthStar Real Estate Capital Income Master Fund (NorthStar Capital) is a master fund in a master/feeder structure, which pools investor capital raised through its feeder funds, NorthStar Real Estate Capital Income Fund, NorthStar Real Estate Capital Income Fund-T and NorthStar Real Estate Capital Income Fund-ADV (each a Fund, and together the Funds). Each Fund invests substantially all of its assets in NorthStar Capital. Investors in a Fund are purchasing shares of a feeder fund, not NorthStar Capital. The investment results of each of the Funds are directly dependent on the investment results of NorthStar Capital, which seeks to execute the investment strategies described in each Fund’s prospectus. An investment in a Fund involves a high degree of risk and may be considered speculative as well as illiquid and a prospective investor should invest only if they can sustain a complete loss of their investment. Fund shares are not listed on any securities exchange and it is not anticipated that a secondary market will develop. NorthStar Capital and the Funds are recently organized companies and have limited operating history.

This website is neither an offer to sell nor a solicitation of an offer to buy securities. An offering is made only by the applicable Fund prospectus. This material must be read in conjunction with the applicable Fund’s prospectus in order to fully understand all of the implications and risks of the offering of securities to which the prospectus relates. Before investing, investors are advised to carefully read and consider the investment objectives, risks, charges and expenses of NorthStar Capital and the Fund in which they are considering an investment. Each Fund’s prospectus contains this and other information about the Fund. Investors may obtain a copy of a Fund’s prospectus by clicking the link above or by calling 877.940.8777. No offering is made except pursuant to a registration statement declared effective by the U.S. Securities and Exchange Commission (the SEC). Neither the SEC nor any state securities regulator has approved or disapproved of the Funds’ common shares, determined if a prospectus is truthful or complete or passed on or endorsed the merits of the Funds’ offerings. Any representation to the contrary is a criminal offense. NorthStar Securities, LLC is the exclusive wholesale marketing agent for the Funds. ALPS Distributors, Inc., member FINRA, is the distributor of the Funds. NorthStar Securities, LLC and ALPS Distributors, Inc. are not affiliated. NorthStar Securities, LLC is doing business as NorthStar BD Securities, LLC (DE) in the following states: FL, GA, TX and WA.

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