Northstar Finance Corp (NRF)

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Northstar Realty Finance reports Q1 results

May 8 2015, 08:04 ET | About: Northstar Realty Financ... (NRF) | By: Mohit Manghnani, SA News Editor

Northstar Realty Finance (NYSE:NRF): Q1 EPS of -$0.10
Revenue of $402.9M (+474.8% Y/Y)
Press Release

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NorthStar Realty Finance Announces First Quarter 2015 Results
Fri May 8, 2015 8:00 AM|PR Newswire | About: NRF

NEW YORK, May 8, 2015 /PRNewswire/ --

First Quarter 2015 Highlights
•Cash available for distribution ("CAD") of $0.44 per share.
•First quarter 2015 cash dividend of $0.40 per common share.
•Announced spin-off of NorthStar Realty's European commercial real estate business into a separate publicly-traded REIT.
•Subsequent to the first quarter 2015, NorthStar Realty (NRF) acquired an approximately ¬1.1 billion pan-European office portfolio and an approximately ¬500 million pan-European predominately office portfolio.

NorthStar Realty Finance Corp. today announced its results for the first quarter ended March 31, 2015.

First Quarter 2015 Results

NorthStar Realty reported CAD for the first quarter 2015 of $136.5 million, or $0.44 per share. Net (loss) to common stockholders for the first quarter 2015 was $(31.6) million, or $(0.10) per diluted share.

For more information and a reconciliation of CAD to net income (loss) to common stockholders, please refer to the tables on the following pages.

David T. Hamamoto, chairman and chief executive officer, commented, "NorthStar Realty is off to a strong start in 2015, including completing the acquisition of approximately $2 billion of high quality, pan-European predominantly office properties. The proposed spin-off of our European real estate business into a separate publicly-traded REIT remains on track for completion during the second half of 2015. In addition, we continue to have an active pipeline of diversified CRE investments that are expected to generate durable cash flows and build long-term value for our shareholders."

Mr. Hamamoto added, "Currently, approximately 84% of our investments are comprised of directly and indirectly owned commercial real estate and we were pleased with the recent change of our 'GICS' code to an equity REIT, which is another step in the direction of further broadening our institutional shareholder base. We believe NorthStar Realty is exceptionally well positioned for the future and we remain committed to exploring all alternatives for creating shareholder value."

Investments

Europe
•Subsequent to the first quarter 2015, NorthStar Realty acquired an approximately ¬1.1 billion pan-European office portfolio (the "SEB Portfolio"). The SEB Portfolio is comprised of 11 Class A office properties located across gateway cities in seven of Europe's top markets: London, U.K.; Paris, France; Hamburg, Germany; Milan, Italy; Brussels, Belgium; Amsterdam and Rotterdam, Netherlands and Gothenburg, Sweden.
•Subsequent to the first quarter 2015, NorthStar Realty acquired an approximately ¬500 million pan-European predominately office portfolio (the "Trias Portfolio") located across eight European countries including the U.K., Germany, France, Belgium, Netherlands, Spain, Portugal and Italy.
• NorthStar Realty expects to earn an initial weighted average current yield of approximately 8.5% on its approximately ¬800 million of invested equity in the SEB and Trias Portfolios, including expected incremental financing and other proceeds.

Healthcare Real Estate
•Subsequent to the first quarter 2015, NorthStar Realty entered into an agreement to acquire an $875 million healthcare real estate portfolio consisting of 32 independent living facilities. The agreement is structured as a joint venture owned 60% by NorthStar Realty and 40% by NorthStar Healthcare Income. NorthStar Realty expects to earn an initial current yield of approximately 11% on its approximately $150 million of invested equity.

Hotel Real Estate
• NorthStar Realty entered into an agreement to acquire a $170 million hotel portfolio consisting of nine upscale extended stay and premium branded select service hotels containing over 1,000 rooms that are in key New England markets located in New Hampshire and Massachusetts. NorthStar Realty expects to earn an initial current yield of approximately 17% on its approximately $44 million of invested equity.

Multi-tenant Office Real Estate
•During the first quarter 2015, NorthStar Realty acquired an aggregate $95 million portfolio of seven multi-tenant office properties located in Denver, Colorado and Thousand Oaks, California. NorthStar Realty expects to earn an initial current yield of approximately 15% on its $28 million of invested equity.

NorthStar Realty Total Assets
•Assets as of March 31, 2015 totaled approximately $19.3 billion, including assets of deconsolidated CDOs and investments that NorthStar Realty acquired or committed to acquire subsequent to the first quarter 2015.
•Approximately 84% of the $19.3 billion of total assets are comprised of direct and indirect ownership interests in real estate, or approximately 82% excluding the European real estate assets expected to be contributed to NRE (as discussed below).

Supplemental Disclosure
•Please refer to the supplemental presentation that will be posted on NorthStar Realty's website, www.nrfc.com, which provides substantial additional details regarding NorthStar Realty's investments.

Liquidity, Financing and Capital Markets Highlights

Common Equity
•During the first quarter 2015, NorthStar Realty issued 7.0 million shares of its common stock through the September 2014 forward sale agreement and received net proceeds of $122 million.
•In March 2015, NorthStar Realty issued 12.0 million shares of its common stock, at a public offering price of $18.65 per share and received net proceeds of $217 million. In connection with the common offering, NorthStar Realty entered into a new forward sale agreement (the "Forward Sale Agreement") with an affiliate of Deutsche Bank Securities Inc. (the "Forward Purchaser"), under which the Forward Purchaser sold 57 million shares of NorthStar Realty's common stock. NorthStar Realty issued 12.3 million shares of its common stock through the Forward Sale Agreement and received net proceeds of $216 million.
•During the first quarter 2015, NorthStar Realty issued 1.4 million shares of common stock in connection with the exchange of $11.7 million principal amount of 5.375% exchangeable senior notes due 2033.
•Subsequent to the first quarter 2015, NorthStar Realty issued 12.5 million shares of its common stock under the Forward Sale Agreement and received net proceeds of $221 million. As of May 6, 2015, 32.3 million shares of common stock remain available for issuance through the Forward Sale Agreement for aggregate net proceeds of $569 million.

Corporate Related
•On February 26, 2015, NorthStar Realty announced that its board of directors unanimously approved a plan to spin-off its European real estate business into a newly-formed publicly-traded REIT, NorthStar Realty Europe Corp., or NRE, expected to be initially listed on the NYSE (NYX). Currently, NorthStar Realty has acquired approximately $2 billion of European real estate (excluding European healthcare assets) comprised of 49 properties spanning across some of Europe's top markets that will be contributed to NRE upon the completion of the proposed European spin-off. An affiliate of NorthStar Asset Management Group Inc. (NYSE: NSAM) will manage NRE pursuant to a long-term management agreement substantially consistent with NorthStar Realty's existing management agreement with NSAM. The proposed spin-off is expected to be completed in the second half of 2015. For further details related to the spin-off, please refer to the Investor Presentation posted on NorthStar Realty's website, www.nrfc.com.
•Effective close of business on April 30, 2015, NorthStar Realty Finance's Global Industry Classification Standard (GICS) code was reclassified from "Mortgage REIT" to "Diversified REIT".

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