NEW YORK, March 6, 2013 /PRNewswire/ -- NorthStar Real Estate Income Trust, Inc. (NorthStar Income) funded $121.0 million into a joint venture that acquired interests in real estate private equity funds (Fund Interests). The joint venture completed the initial closing of approximately 37% of the Fund Interests and anticipates closing the majority of the remaining Fund Interests in the first quarter of 2013.
NorthStar Income also directly originated a $91.0 million senior loan secured by a 23-building industrial business park totaling 727,679 square feet located outside of Los Angeles in Santa Fe Springs, California and a two-building office complex totaling 123,675 square feet located near San Diego in Sorrento Mesa, California. The property is currently 89% leased and occupied by 85 tenants including major tenants such as Los Angeles County and Wells Fargo Bank. The proceeds of the senior loan were used to partially refinance the property and to fund reserves for tenant improvements and leasing commissions. The senior loan has a leveraged current return on equity of 11.5%.
In addition, NorthStar Income recently purchased four commercial mortgage backed securities (CMBS) in a $1.2 billion securitization for $23.3 million. The CMBS have an unleveraged current return on equity of 13.3% with appreciation potential.
To date, NorthStar Income's portfolio consists of $893 million in principal commitments of commercial real estate investments, which as of today produced an overall weighted average leveraged expected current yield of approximately 14.3%. This yield does not reflect the fees and expenses of NorthStar Income and does not represent the distribution rate paid by the company to its investors.
About NorthStar Real Estate Income Trust, Inc. (NorthStar Income)
NorthStar Income is a REIT formed to originate, invest in, and manage a diversified portfolio of commercial real estate debt, commercial real estate securities and select commercial real estate equity investments. The portfolio will be diversified across a variety of underlying commercial property types and geographic locations and is secured primarily by U.S.-based collateral. For more information, visit www.northstarreit.com/income.
Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words like "seek," "believe," "will," and similar expressions. These statements are based on NorthStar Income'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 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's expectations include, but are not limited to, the closing of the remaining fund interests may not occur at the time or on the terms anticipated, if all, whether current and expected yields and returns will continue in the future, whether NorthStar Income will be able generate accretive yields for its stockholders, future value, income-producing ability, impact of any losses on cash flows and returns, market rental rates and property level cash flows, borrower's ability to renew existing leases on favorable terms, if at all, changes in economic conditions generally and the real estate and debt markets specifically, impact of local economics, availability of investment opportunities, availability of capital, ability to achieve targeted returns, generally accepted accounting principles and policies and rules applicable to REITs. Factors that could cause actual results to differ materially from those in the forward-looking statements are specified in NorthStar Income's Annual Report on Form 10-K for the year ended December 31, 2011 and its other filings with the Securities and Exchange Commission. Such forward-looking statements speak only as of the date of this press release. NorthStar Income 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.
SOURCE NorthStar Real Estate Income Trust, Inc.