NorthStar Income II Purchases Senior Mortgage Loan for 93% of the Current Outstanding Principal Amount

Feb 22, 2016, 08:00 ET from NorthStar Real Estate Income II, Inc.

NEW YORK, Feb. 22, 2016 /PRNewswire/ -- NorthStar Real Estate Income II, Inc. (NorthStar Income II) announced today that it purchased a senior mortgage loan with a total commitment of up to $21.1 million for $16.9 million, representing 93% of the current outstanding principal amount of $18.2 million. The loan is secured by a 59,257 square foot retail property located in San Diego, California.

Investment highlights include:

  • Located in close proximity to several densely populated communities, primary interstate highways and the corporate headquarters of a large U.S. company;
  • Currently occupied by a diverse array of national and local retailers; and
  • $3.0 million (approximately $50 per square foot) from future funding commitments is planned for capital expenditures, tenant improvements and leasing commissions over the term of the loan.

The borrower is an affiliate of an experienced developer, owner and operator of retail commercial real estate spanning more than 25 million square feet of retail properties, with over 30 years of experience.

"The purchase of this debt investment at a significant discount to the original loan amount demonstrates our sponsor's discipline in its investment approach," said Daniel R. Gilbert, chief executive officer and president. "NorthStar invests shareholders' capital based on the results of our proven underwriting process and not by market pressures. Our ability to opportunistically capitalize on strong risk/return investments provides NorthStar with a diverse pipeline of opportunities across our target asset classes from a variety of sources."

As of February 5, 2016, NorthStar Income II's $1.5 billion portfolio consists of 18 senior mortgage loans, two real estate equity investment portfolios, three subordinate interest investments, two portfolios of real estate private equity funds and three commercial mortgage-backed securities investments.

About NorthStar Real Estate Income II, Inc.
NorthStar Income II is a public, non-traded REIT sponsored by NorthStar Asset Management Group. 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," "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 comply with the terms, including financial and other covenants, of the loan agreement, the ability of the borrower or its affiliates to manage the Property effectively, the occupancy of the Property, whether the borrower determines to extend the Senior Loan, whether NorthStar Income II will fund the additional $3 million for capital expenditures, NorthStar Income II's ability to finance the Senior Loan on a credit facility in the future, changes in market rates for commercial properties located in San Diego, California, 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, 2014, 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 press release are based upon information available to NorthStar Income II on the date of this press release and NorthStar Income II is under no duty to update any of the forward-looking statements after the date of this press release to conform these statements to actual results.

 

SOURCE NorthStar Real Estate Income II, Inc.