NorthStar Realty Finance Announces Definitive Agreement to Acquire €1.1 Billion Pan European Class A Office Portfolio

Dec 23, 2014, 07:41 ET from NorthStar Realty Finance Corp.

NEW YORK, Dec. 23, 2014 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) ("NorthStar Realty") today announced that it has entered into a definitive agreement to acquire a €1.1 billion European office portfolio (the "Portfolio") in cooperation with Cale Street Partners.  The Portfolio is comprised of 11 Class A office properties located across gateway cities in seven of Europe's top markets: London, UK; Paris, France; Hamburg, Germany; Milan, Italy; Brussels, Belgium; Amsterdam and Rotterdam, Netherlands; and Gothenburg, Sweden. The Portfolio consists of 186,299 square meters (2 million square feet) with a well-diversified mix of market leading tenants.     

Portfolio Highlights:

  • The Portfolio includes trophy office buildings such as Condor House and Portman Square House in London, Issy-les-Moulineaux in Paris and Maastoren in Rotterdam.
  • The Portfolio has an average age of only eight years and is currently 93% leased with a weighted average remaining lease term of 6 years and with periodic rent reviews.
  • Credit tenants and "Big Four" professional service firms such as BNP Paribas, Cushman & Wakefield, Chartis Europe, AIG, Barclays, Invesco UK, Ernst & Young and Deloitte represent approximately 66% of in-place rents.
  • Approximately 50% of the Portfolio by rent is derived from properties located in London and Paris.
  • NorthStar Realty expects to earn an initial leveraged yield of approximately 13%, based on estimated year-one NOI.

NorthStar Realty's Chairman and Chief Executive Officer, David Hamamoto, commented, "We are extremely pleased to announce this differentiated and rare portfolio acquisition.  The size and execution complexity of this transaction, spanning seven countries and three currencies, demonstrates the strength of our investment platform.  While our base case assumption is that we retain these high quality assets as we expect rents to grow and cap rates to compress in the coming years, we believe the optionality of this portfolio is very valuable, both from an asset level standpoint and from a corporate standpoint given the quality and scale of the portfolio."

Cale Street Partners, a real estate finance and investment firm backed by flexible sovereign wealth capital, will provide certain financing for the acquisition of the portfolio and assisted in sourcing the transaction.

About NorthStar Realty Finance Corp.

NorthStar Realty Finance Corp. is a diversified commercial real estate company that is organized as a REIT.  NorthStar Realty is managed by an affiliate of NorthStar Asset Management Group Inc. (NYSE: NSAM), a global asset management firm. For more information about NorthStar Realty Finance Corp., please visit www.nrfc.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" 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 performance of the Portfolio, the credit of the tenants, NorthStar Realty's ability to close on the Portfolio on the terms anticipated, or at all, NorthStar Realty's ability to obtain financing on favorable terms, or at all, NorthStar Realty's ability to realize estimated NOI and leveraged yield, the ability to realize any optionality of the Portfolio, the growth and compression of cap rates and NorthStar Realty's ability to expand in Europe. Additional factors that could cause actual results to differ materially from those in the forward-looking statements are specified in NorthStar Realty's Annual Report on Form 10-K for the year ended December 31, 2013 and its other filings with the Securities and Exchange Commission.

Any forward-looking statements contained herein speak only as of the date of this press release. NorthStar Realty expressly disclaims any obligation to publicly release 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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