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NorthStar’s Non-Traded REITs Take in $329 Million During Q1

NorthStar Asset Management Group (NSAM), sponsor of non-traded direct investments, recently announced its first quarter results. Publicly-traded NSAM trades on the New York Stock Exchange using the same abbreviation, “NSAM”, for its ticker.

The sponsor released its financials on May 8th and at that time had raised $456 million year-to-date. During the first quarter, NSAM took in $329 million in equity capital across its non-traded real estate investment trusts (REITs).

David T. Hamamoto, Chairman and Chief Executive Officer, commented, “NSAM began 2015 with continued substantial growth in our fee earning asset base with $1.3 billion of common equity raised at NorthStar Realty and over $450 million of capital raised in our non-traded REITs, bringing total equity raised to $4.4 billion in just ten months since our listing.”

Hamamoto, while satisfied with overall Q1 financial results, suggests to shareholders of NSAM common stock that the second quarter will be better.

He said, “While we are pleased with our capital raising and with our pipeline of external growth initiatives, NSAM’s first quarter CAD (cash available for distribution) does not reflect the full earnings power of our business. Based only on capital raised to date and investments of managed companies already closed or in execution, we expect second quarter fees from our managed companies to be approximately $30 million higher than in the first quarter. Furthermore, Griffin-American Healthcare REIT III, Inc. had un-invested cash of over $1 billion at the end of the first quarter, and NSAM will receive its proportionate share of all fees generated through its 45% ownership interest in its co-sponsor, American Healthcare Investors, LLC.”

Q1 CAD was $38.8 million or $.20 per share. Net income to common stockholders was $21.8 million or $.11 per diluted share.

New Investment Offerings on the Way

During the quarter the registration statement for the $2 billion initial public offering by NorthStar/RXR New York Metro, a non-traded REIT focused on commercial real estate in the NYC area, was declared effective by the SEC.

Additionally, NSAM plans to bring a new investment offering to market in the near future.

Hamamoto added, “I am also pleased to announce that we anticipate filing in the next few months a registration statement for a new $3.0 billion closed-end credit fund co-sponsored with Och-Ziff Capital Management Group, LLC. We believe that our product offerings and managed vehicles are in their infancy and look forward to substantial growth in the months and years ahead.”

In late 2014, NSAM submitted its initial registration statement for the $1.0 billion NorthStar Corporate Income BDC, a public, non-traded business development company, which is also co-sponsored with Och-Ziff Capital.

Currently, NSAM has three active offerings available; NorthStar Real Estate Income II, NorthStar Healthcare Income, and NorthStar/RXR New York Metro Income.