NorthStar Income II Originates $64.0 Million Senior Loan

Dec 17, 2015, 08:30 ET from NorthStar Real Estate Income II, Inc.

NEW YORK, Dec. 17, 2015 /PRNewswire/ -- NorthStar Real Estate Income II, Inc. (NorthStar Income II) announced today that it originated a $64.0 million senior loan secured by a 302-room full-service hotel located in Englewood, Colorado.

Investment highlights include:

  • Located south of Denver's technology center in close proximity to various major corporate offices;
  • Property contains over 340,000 square feet, including over 50,000 square feet of indoor and outdoor meeting space; and
  • An additional $13.3 million (approximately $44,000 per room) in capital expenditures and property improvements are planned in connection with a franchise agreement with a nationally-recognized hospitality brand.

The borrower is an affiliate of a joint venture between a Denver-based hotel owner and operator, an experienced real estate private equity firm and an investment manager.

"We are pleased to announce NorthStar Income II's latest investment within the hospitality industry," said Daniel R. Gilbert, chief executive officer and president. "NorthStar Income II has extensive expertise in this sector through our sponsor, NorthStar Asset Management Group Inc. (NSAM). One of NSAM's managed companies owns a $3.4 billion, 167-hotel portfolio comprised of over 22,000 rooms located throughout the United States. In addition, NorthStar Income II benefits from NSAM's 45% interest in Island Hospitality Management LLC, a leading hotel management company that has long-standing relationships with major franchisors including Marriott, Hilton, Hyatt and Starwood. This senior loan demonstrates our commitment to deploying capital in quality investments as we continue to build NorthStar Income II's portfolio across asset classes and geographic locations."

As of September 30, 2015, adjusted for acquisitions and commitment to purchase through November 10, 2015 and this $64.0 million senior loan, NorthStar Income II's $1.3 billion portfolio consists of 17 CRE debt investments with a combined principal amount of $799.1 million, two real estate equity investments with a total cost of $464.3 million, two portfolios of real estate private equity funds interests with a carrying value of approximately $60.4 million and two commercial mortgage-backed securities investments totaling $19.0 million.

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 effectively manage the Property securing the Senior Loan; the ability of the borrower to comply with the terms, including financial and other covenants, of the loan agreement; the borrower's ability to complete planned capital expenditures and property improvements to the Property; whether the borrower is able to satisfy the terms of its franchise agreement with a nationally-recognized hospitality brand; whether the borrower determines to extend the Senior Loan; NSAM's expertise in the hotel industry, including its interest in Island Hospitality Management, and whether it will benefit NorthStar Income II; the ability of NorthStar Income II's advisor to source investments; the diversification of NorthStar Income II's portfolio; NorthStar Income II's ability to deploy capital; NorthStar Income II's ability to finance the Senior Loan with a third party loan; changes in market demand and rental rates for commercial properties located in Englewood, Colorado; future property values; the impact of any losses from NorthStar Income II's investments on cash flow and returns; 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.