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Northstar Realty Finance Corp. beats by $0.04
Feb 27 2014, 07:33 ET
Northstar Realty Finance Corp. (NRF): Q4 AFFO of $0.32 beats by $0.04.
http://seekingalpha.com/news/1596203-northstar-realty-finance-corp-beats-by-0_04?isDirectRoadblock=false&source=email_rt_mc_readmore
Grand slam NRF home run on Northstar!
NorthStar Realty Finance Declares Fourth Quarter Common Stock Dividend
NorthStar Realty Finance Corp has added a news release to its Investor Relations website.
Title: NorthStar Realty Finance Declares Fourth Quarter Common Stock Dividend
Date(s): 26-Feb-2014 4:06 PM
For a complete listing of our news releases, please click here
NEW YORK, Feb. 26, 2014 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) ("NorthStar") today announced that its Board of Directors has declared a cash dividend of $0.25 per share of common stock, payable with respect to the quarter ended December 31, 2013, representing a 19% increase over the prior quarter and a 150% increase over the last ten quarters. The dividend is expected to be paid on March 14, 2014 to shareholders of record as of the close of business on March 10, 2014. NorthStar's common shares will begin trading ex-dividend on March 6, 2014.
About NorthStar Realty Finance Corp.
NorthStar Realty Finance Corp. is a diversified commercial real estate investment and asset management company that is organized as a REIT. NorthStar recently announced a plan to spin-off its asset management business into a separate public company. For more information about NorthStar, please visit www.nrfc.com.
SOURCE NorthStar Realty Finance Corp.
Investor Relations, Joseph Calabrese, 212-827-3772
Hang out here going down short, up long! Very confident on this one. I'm not letting my shares go easy on this short drop after massive gain.
A little dilution coming but NRF will go up from here with in the next few months.
Would not surprise me to see next divvy increase also....
Hello Easy:
Just listened to the firm's webcast. Own 1 share of NRF now, you'll own 1 sh. each of the two firms after spin. I think I got that right....
Great firm PR on an otherwise down day. I bought a chunk of this a while ago. It doubled. I sold for the cost and threw that into RAS (now up 11%). So this NRF is now free shares in a real sense. Stocks can be fun...up what, 18% in a day. cool.
- p
Just hanging around getting richer NRF going up! Wow Santa Claus rally kicking in early for me this year.
Hopefully some other NRF long shareholders as well?
I bought this stock around $2.85 awhile back and loaded up, glad I did.
Anyone out there? Happy New Year early!
NorthStar Realty Finance announces plan to spin-off Asset Management Business into a separate publicly traded company in a tax-free transaction
NEW YORK, Dec. 10, 2013 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) ("NRF") today announced that its Board of Directors unanimously approved a plan to spin-off its asset management business into a separate publicly traded company in the form of a tax-free distribution. The distribution is expected to be completed in the second quarter of 2014 and will be comprised of common stock in NorthStar Asset Management Corp. ("NorthStar Asset Management"), a newly formed company expected to be listed on the New York Stock Exchange.
In connection with the proposed spin-off, NorthStar Asset Management will enter into a 20-year management contract to manage NRF. NorthStar Asset Management will also manage NRF's non-traded REIT business and own its broker-dealer platform.
NorthStar Chairman and Chief Executive Officer, David Hamamoto commented, "We are constantly searching for ways to maximize shareholder value. This transaction represents a fully aligned, long-term opportunity to unlock value for NRF shareholders through the creation of a leading asset-manager. NorthStar Asset Management will have a scalable operating platform with limited capital needs and a proven ability to grow."
Mr. Hamamoto continued, "This unique transaction crystalizes the value of NRF and its platform, and allows our shareholders to be the beneficiaries of a long-term contract to manage a diversified public company, a rapidly growing non-traded REIT platform and a broker-dealer."
NorthStar Asset Management and Management Contract
NorthStar Asset Management will be led by the current NRF management team, which has a proven track record in managing and growing NRF and its non-traded REIT platform. The company's in place, long-duration and high margin revenue streams, together with substantial growth prospects, position it as an industry leading asset manager.
In connection with the proposed spin-off, the 20-year management contract that NorthStar Asset Management will enter into with NRF will provide for (i) an annual base management fee of $90 million, (ii) an additional annual base management fee equal to 1.5% of the cumulative "equity" raised at NRF after December 10, 2013, and (iii) incentive fees to be determined as follows:
•15% incentive fee payable when cash available for distribution at NRF ("CAD") exceeds $0.78 per share (equivalent to a 12% yield on September 30, 2013 adjusted book value of $6.46 per share); and
•25% incentive fee payable when CAD exceeds $0.90 per share (equivalent to a 14% yield on September 30, 2013 adjusted book value of $6.46 per share).
Investor Information and Conference Call
An investor presentation discussing the proposed transaction is available in the investor relations section of NorthStar's website. NorthStar will hold a conference call to discuss the proposed transaction on December 11, 2013, at 10:00 a.m. Eastern time. The call will be webcast live over the Internet from NorthStar's website, www.nrfc.com, and will be archived on the Company's website. The call can also be accessed live over the phone by dialing 800-762-8779, or for international callers, by dialing 480-629-9771.
A replay of the call will be available one hour after the call through December 18, 2013 by 800-406-7325 or, for international callers, 303-590-3030, using pass code 4655898.
Advisors
UBS Investment Bank is serving as financial advisor to NorthStar Realty Finance Corp., Sullivan & Cromwell LLP is serving as legal advisor and Kramer, Levin, Naftalis & Frankel LLP and Hunton & Williams LLP are serving as tax advisors to NorthStar Realty Finance Corp.
About NorthStar Realty Finance Corp.
NorthStar Realty Finance Corp. is a diversified commercial real estate investment and asset management company that is organized as an internally managed REIT. 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," "proposed", 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, our ability to complete the spin-off of our asset management business; the risk relating to the spin-off of our asset management business and operating our existing company and our asset management business as separate companies; our ability to realize the benefits of the spin-off, including the tax-free nature of the transaction; the impact of taxation of the asset management business as a stand-alone company; the growth prospects of our business, including our asset management business and non-traded REIT platform; our future cash available for distribution; the scalability of our investment platform; and the size and timing of offerings or capital raises and actual management fee income derived from the non-traded REITs we sponsor and advise. Factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company'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. The Company 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 Realty Finance Corp.
SOURCE NorthStar Realty Finance Corp.
Investor Relations, Joe Calabrese, (212) 827-3772
http://phx.corporate-ir.net/phoenix.zhtml?c=185725&p=irol-newsArticle&ID=1883687&highlight=
NRF Upcoming Dividends (correction)
Payable 11/15/2013
Amount/Share $0.21
Ex-Date 11/06/2013
Record 11/11/2013
Declaration 10/30/2013
The SA article was inaccurate..sorry.. and I was excited! lol
still a nice 9% yield..
3rd Quarter Ending September 2013
Earnings Whisper ®: N/A
Consensus Estimate: $0.32
Surprise Expectation 1:
Release Date: [confirmed] 11/1/2013
Before Open
Expected Time 2: 7:30 AM ET
Conference Call: 10:00 AM ET
http://www.earningswhispers.com/stocks.asp?symbol=NRF
Holy "Beasting" DIVI increase Batman!
Northstar Realty Finance Corp. declares $0.54688 dividend
Northstar Realty Finance Corp. (NRF) declares $0.54688/share quarterly dividend, 173.4% increase from prior dividend of $0.20.
Forward yield 23.41%
Payable Nov. 15; for shareholders of record Nov. 11; ex-div Nov. 6.
http://seekingalpha.com/currents/post/1370642?source=email_rt_mc_readmore
KBW starts coverage of Northstar with a Buy
Northstar Realty Finance (NRF) is initiated with a Buy rating and $11.50 price target at KBW.
Relatively speaking, the company has breezed through the REIT selloff as its assets tend to be more credit, rather than rate-sensitive.
http://seekingalpha.com/currents/post/1285532?source=email_rt_mc_readmore
NorthStar prices secondary at $9.60 each
NorthStar Realty Finance (NRF) prices its 35M share secondary at $9.60 each. The sale adds nearly 19% to the share count (previously 188M). The greenshoe option could add another 5.25M shares. Stock's off 3% premarket to $9.59. (PR)
http://seekingalpha.com/currents/post/1196292?source=email_rt_mc_readmore
Northstar Realty Finance Corp. declares $0.20 dividend
Northstar Realty Finance Corp. (NRF) declares $0.20/share quarterly dividend,5.26% increase from prior dividend of $0.19. Forward yield 8.16%. Payable Aug. 16 For shareholders of record Aug. 12 Ex-div Aug. 8
http://seekingalpha.com/currents/post/1180902?source=email_rt_mc_readmore
Thanks ECole!
Investor-Forum Transcript
This one is a very insightful read..
Read here
FWIW - taking a small position here at recent lows.
If you're not familiar with this beast.. good overlay and read here.. NRF rocks!
A Sustainable And Growing 8% Yield Is Driving NorthStar Realty Finance's Outperformance
There is a fair amount of market skepticism when it comes to mREITs. Many have paid dividends in excess of the sustainable magnitude, which temporarily props up the stock price and erodes book value, leading to the eventual crash. Northstar Realty Finance (NRF), however, offers a sustainable and growing 7.99% yield. In this article we will analyze Northstar's fundamentals and demonstrate its cash flows to be sufficient to sustain the dividend. We will then examine its recent and planned activity to show tremendous growth potential. The buy thesis will then be completed with valuation analysis and addressing the counterarguments.
Dividend sustainability
In a previous article, in which we examined the dividend history of the legacy commercial mREITs, we revealed that NRF was the only one to pay a dividend through the entirety of the Great Recession.
(click to enlarge)
While this history is a nice framework from which to make an argument, it is not self sufficient. Past performance has no bearing on the current viability of an investment. Instead, we must demonstrate sufficient CAD going forward to sustain and raise the dividend.
The income statement
(click to enlarge)
NRF's first quarter revenue was $58.938mm from interest income and $60.888mm divided between rental revenues, commissions, and advisory fees. Taking out expenses this netted $23.739mm income from operations. One may note that this equates to only $0.126 per share, which is not enough to support the $0.19 distributions per quarter. However, income from operations does not tell the whole story.
Standard GAAP accounting shows net income attributable to NRF common shareholders of $36.622 or $0.20 per diluted share, which would be sufficient to cover this dividend. This also fails to represent their true income.
The GAAP accounting includes $13.585mm of unrealized gains, which does not influence cashflow and is arguably not a repeatable gain. For more accurate, repeatable earnings, we must exclude unrealized gains. Additionally, GAAP counted $15.074mm of depreciation as an expense. Many real estate properties, such as the healthcare and office properties making up a large portion of NRF's portfolio, do not lose value when properly maintained. Thus, this expense is accounting only and not reflective of repeatable earnings. Once we make these changes to more fully reflect repeatable earnings, NRF's quarterly earnings are $38.111mm or $0.2025 per share.
The repeatable earnings are sufficient to cover the dividend.
While sufficiently large repeatable earnings afford paying out dividends without a loss, there could still be issues when it comes to having the liquid resources for distribution. For this analysis, we must look at CAD. The graph below represents NRF's gross CAD projection and displays where it would come from.
(click to enlarge)
After taking away scheduled cash expenses, it leaves $0.91-$0.99/share.
(click to enlarge)
This would equate to a CAD payout ratio of 77%-83%. While NRF's internal management has been fairly honest with shareholders in the past, projections can be wrong. Let us dig deeper into certain aspects of its cash flows to verify the probability of this projection.
Real estate cash flows are quite easy to predict as it is mostly net profits from triple net leases. I find no fault with this number.
The cash flows from CDOs and other financial endeavors have set payout schedules and should also be accurate so long as nothing goes wrong. However, delinquency could substantially decrease the cash flow. While the economy is improving and delinquency risk has been reduced, it must be recognized as a potential source of missing on the estimate.
On the cash flow, there are numerous items pertaining to collection of management fees. Specifically, that from Northstar Income, Northstar Income II and Northstar Healthcare. These are non-traded REITs managed by the team internalized by NRF. Consequently, these fees contribute to cash flows available to NRF shareholders. Notice in the graph above how there is a deep blue and light blue portion on these bars. The deep blue represents the low end of the projection with the light blue showing the potential. I expect all 3 of these to fill the entirety of the maximum potential, and here is why.
The fees collected by NRF are directly related to the AUM of the non-traded REITs. 2013 has been a record setting year for fund raising and NRF's fundraising arm has been very successful. I believe the success of their fee collection revenues offsets some of the unaccounted for delinquency risk in the projection, making it overall an accurate figure. In addition to 2013 gains, NRF is continuing to open up new non-traded REITs so this revenue source may continue to grow.
Thus far, we have demonstrated NRF's dividend to be fully covered by both sustainable earnings and CAD. While a secure dividend is nice, NRF has increased it substantially each of the past 7 quarters and it would be of interest to shareholders to know if this pattern can continue. I believe that NRF is well positioned to continue raising its dividend and the substantiation of this claim will be shown in the next section.
NRF's Growth Prospects
Northstar has been busy this year with over $1.5B already invested at high rates of return.
(click to enlarge)
Note that the expected current yield is not reflective of the cap rate, but rather the ROE. Thus, it includes the leveraged portion of the investment.
Verifying growth
Such vast investment at such accretive rates is a rare find. The chart above referred to three types of transactions: Opportunistic, Real Estate Portfolio and CRE loans. Let us go over the specific transactions so as to verify the plausibility of actually achieving these returns and to measure the risk.
Opportunistic:
On February 15th, NRF along with one of its non-traded REITs, acquired partial LP interests in 45 real estate private equity funds for $400mm. $282mm of this price was contributed by NRF and the other $118mm by its non-traded REIT and the interest is split accordingly. The funds have an NAV of $789mm as reported on 6/30/12.
NRF earns 85% of the fund's distributions until it has received 1.5X its investment. Once NRF, together with its non-traded REIT receive $600mm the Class B partner from which NRF acquired its interest will begin getting 85% of the distributions until it recovers its initial cost. After that point, distributions are split between NRF and the Class B partner 51%/49% respectively.
This deal was opportunistic with a distressed seller, so NRF got the better end of the deal. It comes with a superb return as NRF is expected to glean over $50mm already in 2013. Further, the downside is minimized by NRF's preferred liquidation portion of $432mm of the fund's $789mm NAV.
CRE originated loan:
For $255mm, together with its non-traded REIT, NRF acquired a 35% ownership interest in Millford Plaza. This hotel has 1,331 rooms and is superbly located on Times Square. The other 65% of the hotel is owned by Rockpoint Group and Highgate Hotels, which operates the hotel.
NRF's portion of the $255mm is $166mm, with Northstar Income contributing the other $89mm. The investment has an initial return on equity of 12.5% annually but is subject to change with the hotel market. Both Smith Travel Research and PKF Hospitality suggest that RevPAR will continue to rise through 2014 and that minimal new supply will increase the profitability of hotels. I suspect that Millford Plaza will perform well as it has an irreplaceable location and sufficient size to host major conferences.
Real Estate Portfolio:
On April 8th, NRF closed on the acquisition of a manufactured housing portfolio consisting of 71 communities with 17,000 pad rental sites for $865mm, or an ROE around 14%. $640mm of this purchase price was funded with 10-year non-recourse mortgages at 4.02%.
Manufactured housing tends to be a reliable source of income and the fact that the mortgages are long term, fixed rate and non-recourse makes the overall transactions very low risk for such a high return.
Each of these transactions seems to have oversized reward relative to the risk and the chance of Northstar actually realizing its growth potential seems strong. Now that we have verified the sources of growth, let us take a look at its magnitude.
Scope of opportunity
A weighted average rate of return of 17% on $677mm of invested equity could generate around $115mm additional earnings annually. With today's share count of 198mm, that equates to over $0.58 per share. Given last year's CAD of $0.74, this represents potential year over year growth of over 78%. If NRF were to realize these extra earnings and keep the same payout ratio, it would cause a dividend raise of $0.46 annually to $1.22.
I believe that this illustrates the scope of opportunity. NRF could maintain its current trading multiple and appreciate 78% for total returns of around 88% over the next year (if the dividend increase happens linearly over the year).
Valuation
Over the past 52 weeks, NRF has vastly outperformed the market.
(click to enlarge)
However, it remains cheap relative to its Q1 annualized earnings with a price to earnings of 11.8. The value is even deeper when compared to projected 2013 CAD of $0.91-$0.99. Using the midpoint, this translates to a CAD multiple of only 10. If we take into consideration that its accretive acquisitions took place part way through the year, it is clear that pro-forma earnings are even stronger.
Why does NRF trade at a discount?
Well, I attribute the low trading multiple to the market's false association of NRF with other mREITs.
While NRF is classified as an mREIT, it is only about 1/3rd financial. The diversification provided by its asset management and real estate equity branches substantially reduces the risks typically associated with mREITs. The false association of NRF as an mREIT causes it to trade at mREIT multiples while it should trade somewhere between that of mREITs and equity REITs.
I believe that as it continues to grow its dividend, investors will become more trusting of its stability and its market price will rise accordingly. When this slight multiple appreciation is combined with the strong earnings growth potential, it could vastly outperform the market.
Counter-Arguments, Risks and Concerns
Many investors prefer to buy at or below book value. This principle tends to be more strongly enforced for mREITs than it is for equity REITs, so NRF's price to book of 1.8 can be quite a deterrent. I would like to address this concern by showing that NRF's stated book value is not reflective of its intrinsic value. Specifically, the carrying value of some of its securities is beneath the actual value.
In NRF's 10-Q it details their accounting procedures.
"The Company classifies its CRE securities investments as available for sale on the acquisition date, which are carried at fair value. The Company has generally elected to apply the fair value option of accounting for its CRE securities investments. For those CRE securities for which the fair value option of accounting was elected, any unrealized gains (losses) from any change in fair value is recorded in unrealized gains (losses) on investments."
(click to enlarge)
NRF's CRE securities are carried at only $1.7B despite a principal value of $2.4B. The portion of this discount that is attributable to delinquencies SHOULD be accounted for when calculating intrinsic value, but the portion of the discount consequent to mark-to-market SHOULD NOT. We can therefore conclude that the actual value of NRF's securities portfolio is somewhere between $1.7B and $2.4B.
In addition to the CRE securities, NRF's CRE debt investments are carried below their true value.
Continued from the 10-Q
"CRE debt investments are generally intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan fees, discounts, premiums and unfunded commitments. CRE debt investments that are deemed to be impaired are carried at amortized cost less a loan loss reserve, if deemed appropriate, which approximates fair value."
(click to enlarge)
While these only contribute $1.79B to the accounted book value, they will generate $2.3B principal return when held to maturity. Clearly, the true value of these investments is higher than that reflected in the book value.
While the price to book of NRF is 1.8, which is high, the price to intrinsic value is less severe.
An additional concern when investing in NRF is the fairly high leverage. While the reported debt to equity of 2.30 may not seem high, that is including a plethora of preferreds as equity. Given the senior position of preferreds over common in the capital stack, these should not be counted as equity from the shareholder's perspective. NRF's real debt to equity is quite a bit higher.
The bottom line
Northstar Realty Finance represents an excellent risk adjusted opportunity. The large yield is sustainable by both earnings and CAD. Expect continued dividend raises as the tremendous 2013 acquisition volume kicks in. Between multiple expansion as NRF's diversification is recognized and tremendous earnings growth, it could substantially outperform.
Disclosure: 2nd Market Capital and its affiliated accounts are long NRF. I am personally long NRF. This article is for informational purposes only. It is not a recommendation to buy or sell any security and is strictly the opinion of the writer.
http://seekingalpha.com/article/1448201-a-sustainable-and-growing-8-yield-is-driving-northstar-realty-finance-s-outperformance?source=email_rt_article_readmore
Northstar Realty Finance Corp. (NRF) declares $0.19/share quarterly dividend, in line with previous. Forward yield 7.64%. For shareholders of record May 13. Payable May 17. Ex-div date May 09. (PR)
http://seekingalpha.com/currents/post/997471?source=email_rt_mc_readmore
9:12 AM NorthStar Realty Finance (NRF) stays busy, originating a $255M loan secured by a mortgage on the recently-renovated Milford Plaza hotel in Times Square. NorthStar expects an initial current yield of 12.5% on its $81M of invested capital and will have a 35% equity interest in the hotel and its retail component. The company also hopes to earn a few dollars securitizing its interest in the senior portion of the loan. (PR)
http://seekingalpha.com/currents/post/986801?source=email_rt_mc_readmore
It's been a BEAST! Double in under a year and a nice divy
$10.00 in AH right now
~ Monday! $NRF ~ Earnings posted, pending or coming soon! In Charts and Links Below!
~ $NRF ~ Earnings expected on Monday *
Want more like this? Search Keyword: MACMONEY >>> http://tinyurl.com/MACMONEY <<<
One or more of many earnings sites has alerted this security has or will be posting earnings on or around the day of this message.
http://stockcharts.com/h-sc/ui?s=NRF&p=D&b=3&g=0&id=p88783918276&a=237480049
http://stockcharts.com/h-sc/ui?s=NRF&p=W&b=3&g=0&id=p54550695994
~ Google Finance: http://www.google.com/finance?q=NRF
~ Google Fin Options: hhttp://www.google.com/finance/option_chain?q=NRF#
~ Yahoo! Finance ~ Stats: http://finance.yahoo.com/q/ks?s=NRF+Key+Statistics
~ Yahoo! Finance ~ Profile: http://finance.yahoo.com/q/pr?s=NRF
Finviz: http://finviz.com/quote.ashx?t=NRF
~ BusyStock: http://busystock.com/i.php?s=NRF&v=2
<<<<<< http://www.earningswhispers.com/stocks.asp?symbol=NRF >>>>>>
http://investorshub.advfn.com/boards/post_prvt.aspx?user=251916
*If the earnings date is in error please ignore error. I do my best.
NRF A press release with fourth quarter and fiscal year 2011 financial results is scheduled to be issued before the market open on February 17, 2012.
NRF from Motley Fool
Written in the (five) stars?
For example, 94.7% of the 623 members who've rated NorthStar Realty have a bullish opinion of the stock. Just last month, one of those Fools, jdmballm, explained why the real estate finance company was a real steal:
How is a stock that is still paying a $0.40 dividend and have a P/E of less than 1 not on everybody's radar? Because it's a REIT and all of them are going to go bankrupt right? Wrong.
Including yesterday's double-digit pop, shares of NorthStar are already up 48% since that call.
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