NorthStar Income Originates $89 Million Senior Loan on New York City Hotel

NEW YORK, May 1, 2013 /PRNewswire/ -- NorthStar Real Estate Income Trust, Inc. (NorthStar Income) and NorthStar Realty Finance Corp. (the Sponsor) directly originated a $255 million participating senior loan secured by a leasehold mortgage in the recently renovated 1,331 room Milford Plaza hotel located at the epicenter of Times Square, New York City. NorthStar Income originated $89 million of the loan and the Sponsor originated the remaining $166 million of the loan on a pari passu basis. The $255 million loan was financed with $130 million from credit facilities with Deutsche Bank AG, pro-rata between NorthStar Income and the Sponsor. 

The Milford Plaza hotel is within walking distance to the Broadway theater district, retail and more than 31 million square feet of office space (a small component of the larger 230 million square foot midtown office submarket).

NorthStar Income's current leveraged return on invested equity is 12.5%, inclusive of fees, and in connection with the loan, NorthStar Income and the Sponsor, on a pro-rata basis, will have a 35% ownership interest in the leasehold interest in the Milford Plaza hotel and the associated fee retail component. NorthStar Income and the Sponsor intend to ultimately securitize an interest in a portion of the $255 million loan.

Daniel R. Gilbert, chief executive officer and president, commented "This loan demonstrates NorthStar Income's ability to provide comprehensive capital solutions on large and complex transactions by leveraging our Sponsor's deep relationships, proven investment team and sophisticated capital markets experience."

To date, NorthStar Income's portfolio consists of $968 million in principal commitments of predominantly commercial real estate debt investments, which as of today produced an overall weighted average leveraged expected current yield of approximately 15%. 

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, securities and select 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.

The overall weighted average leveraged expected current yield of approximately 15% does not reflect the fees and expenses of NorthStar Income and does not represent the distribution rate paid by NorthStar Income to its investors. 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, whether NorthStar Income will be able to securitize an interest in a portion of the loan on favorable terms, if at all, whether NorthStar Income will be able to enhance its return through a securitization or its ownership interest in the Milford Plaza hotel and the fee retail component associated with the Property, whether the Sponsor will continue to be able to provide comprehensive capital solutions on large and complex transactions, future value, income-producing ability, impact of any losses on cash flows and returns, market rental rates and property level cash flows, 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, 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. 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.