NorthStar Realty Finance Announces Definitive Agreement to Acquire $1.1 Billion Hotel Portfolio

NEW YORK, Sept. 18, 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 hotel portfolio (the "Portfolio") from Inland American Real Estate Trust. The Portfolio is comprised of 52 upscale extended stay and select service hotels with approximately 7,000 rooms.  Inclusive of this portfolio and an additional approximately $700 million hotel portfolio that NorthStar Realty expects to close this month, NorthStar Realty will have an approximately $3.2 billion hotel portfolio consisting of 159 hotels and over 20,000 rooms.

NorthStar Realty is acquiring the Portfolio in a joint venture with Chatham Lodging Trust ("Chatham", NYSE: CLDT) where NorthStar Realty will have an approximate 90% ownership interest in the Portfolio and Chatham will own an approximate 10% minority interest.  Island Hospitality is expected to manage a substantial majority of the hotels in the Portfolio.

NorthStar Realty's Chairman and Chief Executive Officer, David Hamamoto, commented, "We are excited about the continued expansion of our portfolio of extended stay and limited service hotels and the deepening of our relationship with Chatham and Island Hospitality. This portfolio is expected to generate strong risk-adjusted returns for our shareholders and provides NorthStar Realty with substantial optionality, scale and diversification in a sector that we strongly believe will continue to benefit meaningfully from a growing economy."

Portfolio Highlights  

• NorthStar Realty expects to obtain non-recourse financing for approximately 70-75% of the purchase price (including costs) and earn an initial mid-teens cash-on-cash yield, based on estimated year-one NOI.  
• The Portfolio is predominately affiliated with the Marriott (63%) and Hilton (32%) brands; NorthStar Realty's entire hotel portfolio, pro-forma for the acquisition of the Portfolio, is 74% affiliated with the Marriott brand and 17% affiliated with the Hilton brand.
• The Portfolio is geographically diverse and located across 21 states, including Texas (19%), New Jersey (13%), New York (10%) and North Carolina (10%).

About NorthStar Realty Finance Corp.

NorthStar Realty Finance Corp. is a diversified commercial real estate investment 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 and NorthStar Realty's hotel portfolio generally, NorthStar Realty's ability to close on the Portfolio on the terms anticipated, or at all, NorthStar Realty's ability to obtain financing for approximately 70-75% of the purchase price on favorable terms, or at all, NorthStar Realty's ability to source and complete additional transactions in hotels through the joint venture, the ability of the third party property operators to successfully manage the hotels in the Portfolio, NorthStar Realty's ability to achieve strong current and overall returns on its hotel portfolio, the scalability of NorthStar Realty's hotel platform, the ability to realize estimated NOI, whether acquisition of the Portfolio will provide NorthStar Realty with substantial optionality, scale and diversification and NorthStar Realty's ability to maximize shareholder value. 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.