NorthStar Income II Commits Over $370 Million of Capital

NEW YORK, Oct. 6, 2016 /PRNewswire/ -- NorthStar Real Estate Income II, Inc. (NorthStar Income II) announced today that it recently closed on two significant portfolio transactions in which it committed approximately $370 million of equity capital, substantially investing all of the company's current investible capital.

Daniel R. Gilbert, chief executive officer and president, stated that "these two investments have tremendous diversification with exposure to 39 industrial net leased properties in one case and 41 institutional quality private equity real estate funds (PERE funds) in the other, which have varied exposure by asset type and geographic location. These are both institutional quality investments with strong cash flow that we believe will be accretive to our historical dividend and provide value growth."

US Industrial Portfolio

  • Through subsidiaries of its operating partnership, NorthStar Income II originated an approximately $98 million subordinate interest investment in a portfolio of 39 industrial real estate properties.
  • The industrial portfolio is currently 100% leased with an average remaining lease term of approximately 11 years containing over 6.0 million square feet located in 17 states.
  • The Sponsor of the industrial portfolio is a national operator with an industrial focus owning and managing over 24.0 million square feet of industrial real estate assets.

PE Investment

  • NorthStar Income II acquired a diversified portfolio of limited partnership or similar equity interests in 41 real estate private equity funds, managed by 20 institutional-quality real estate managers from a company managed by our sponsor.
  • The funds reported an aggregate net asset value (NAV) of approximately $344 million as of March 31, 2016 (the record date). NorthStar Income II acquired the PERE funds at a price equal to 92.25% of the record date NAV, or approximately $273 million. NorthStar Income II funded 25% of the purchase price at closing and will fund the remaining 75% on December 31, 2016.
  • The properties within the PERE funds are diversified by investment type, including mixed-use, multifamily, office and hotel properties located in 24 states and internationally.
  • At closing, NorthStar Income II received approximately $34 million in distributions of cash flow and return of capital generated by the fund portfolio from the record date through closing, which was netted against the amounts required to close the acquisition of the PERE funds

As of June 30, 2016, adjusted for acquisitions and commitment to purchase and sell through August 10, 2016, NorthStar Income II's $1.8 billion portfolio consists of 17 senior mortgage loans, four subordinate interest investments, one mezzanine loan, 24 real estate operating properties, three portfolios of real estate private equity funds and eight commercial mortgage-backed securities investments.

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