NorthStar Realty Finance Announces Closing of Strategic $340 Million Investment in RXR Realty

NEW YORK, Dec. 23, 2013 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) ("NorthStar") today announced the closing of a strategic $340 million investment (the "Investment") in RXR Realty ("RXR"), a leading real estate operating and investment management company focused on the New York City Tri-State area.  The Investment includes a combination of corporate debt, preferred equity and common stock in RXR which provides NorthStar with an approximately 30% ownership interest in RXR.  

RXR was formed in 2007 by the former management team of Reckson Associates Realty Corp. ("Reckson") after it sold Reckson to SL Green Realty in January 2007 for $6.5 billion, generating a 715% total return to Reckson's shareholders since its IPO in 1995.  Since its formation RXR has raised over $3 billion of institutional capital and accumulated interests in $6.5 billion of assets comprised of 108 operating properties and approximately 20 million square feet.  RXR began reinvesting in the Manhattan market in 2009 and has been one of the most prolific investors assembling a portfolio of trophy assets that include 75 Rockefeller Plaza, 237 Park Avenue 340 Madison Avenue, 450 Lexington Avenue, 620 Avenue of the Americas, The Starrett Lehigh Building and 1330 Avenue of the Americas.   

NorthStar's Chairman and Chief Executive Officer, David Hamamoto, commented, "We are very pleased to partner with such a high caliber, successful and well-known organization like RXR.  Given RXR management's track record in both the public and private markets, its high quality real estate portfolio and its growing asset management business, they are a perfect fit for NorthStar, both in terms of further diversifying NorthStar's asset base with trophy properties in New York City, and growing NorthStar's asset management business." 

Mr. Hamamoto continued, "In connection with the recently announced planned spin-off of NorthStar Asset Management, we will be evaluating alternatives for including NorthStar's portion of RXR's asset management business as part of the assets that NorthStar Asset Management will receive in the spin-off.  This transaction with RXR is the first of many opportunities that we hope to execute on as we begin to scale our asset management business."

RXR's Chairman and Chief Executive Officer, Scott Rechler, commented, "We are extremely excited to partner with the dynamic and high quality team at NorthStar. We believe that NorthStar's strong balance sheet, deal flow and capital raising capabilities will enable us to more effectively execute our investment strategy in the New York Metropolitan area." 

Mr. Rechler continued, "NorthStar is the ideal strategic partner for RXR to continue executing on our expansion plans and, in turn, we believe our growth will substantially boost NorthStar's rapidly growing asset management business."   

As part of the Investment, NorthStar and RXR intend to immediately begin working together on raising capital through NorthStar's distribution network to complement the activities of RXR's current investment vehicles and future funds.  NorthStar Asset Management will be entitled to 50% of the asset management fees from any capital raised through its distribution network and will be entitled to additional asset management fees through its proportionate ownership interest in RXR.

About NorthStar Realty Finance Corp.

NorthStar Realty Finance Corp. ("NorthStar") is a diversified commercial real estate investment and asset management company that is organized as a REIT. NorthStar recently announced a plan to spin-off its asset management business into a separate public company.  For more information about NorthStar, please visit www.nrfc.com.

About RXR Realty

RXR Realty LLC ("RXR") is a vertically integrated, private real estate company with expertise in investment management, property management, development, design, construction, leasing and financing.  RXR's core growth strategy is focused on New York City and the surrounding tri-state area markets.  RXR Realty is one of the largest owners, managers, and developers in the Tri-State Area with interests in approximately $6.5 billion of assets, comprised of 108 operating properties containing approximately 20.0 million square feet.  For more information about RXR, visit www.rxrrealty.com.

Forward Looking Statements

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," "expect," "proposed," "intend," "continue" or other similar words or expressions.  Forward‑looking statements are not guarantees of performance and are based on certain assumptions, discuss future expectations, describe plans and strategies, contain projections of results of operations or of financial condition or state other forward‑looking information. Such statements include, but are not limited to, the total return that we are able to generate to our stockholders; our ability to realize the benefits of the strategic investment with RXR;  the ability to replicate RXR's track record; our ability to diversify our asset base and source trophy properties in New York City through our strategic investment in RXR; our ability to complete future transactions with RXR;  our ability to complete the spin-off of our asset management business, including a portion of asset management fees generated by RXR; the scalability of our asset management business; the timing of, and our ability to, complete any capital raising with RXR, including capital raising through our distribution network and the actual management fee income derived from such capital raising; the growth prospects of our and RXR's respective businesses, including our asset management business; our deal flow; and our future cash available for distribution.  Factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 and its other filings with the Securities and Exchange Commission.

Such forward-looking statements speak only as of the date of this press release. The Company 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 Realty Finance Corp.



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