NorthStar Completes $370M in Portfolio Transactions

The deals involved 39 industrial real estate assets and 41 institutional-quality, private equity funds.

By Keith Loria, Contributing Editor

Norwalk, Conn., data center—NorthStar Income II originated a $41 million senior loan for the property in 2014
Norwalk, Conn., data center—NorthStar Income II originated a $41 million senior loan for the property in 2014

New YorkNorthStar Real Estate Income II Inc. has invested $370 million in two significant portfolio transactions—a portfolio of 39 industrial real estate properties and a portfolio of 41 institutional-quality private equity real estate funds.

“These two investments have tremendous diversification with exposure to 39 industrial net leased properties in one case and 41 institutional quality private equity real estate funds in the other, which have varied exposure by asset type and geographic location,” Daniel Gilbert, NorthStar Income II president & CEO, said in a prepared release. “These are both institutional quality investments with strong cash flow that we believe will be accretive to our historical dividend and provide value growth.”

Through subsidiaries of its operating partnership, NorthStar Income II originated an approximately $98 million subordinate interest investment in a portfolio of 39 industrial real estate properties, which are currently 100 percent leased with an average remaining lease term of nearly 11 years.

Combined, the properties totaled more than six million square feet and are located in 17 states.

The sponsor of the portfolio is a national operator with an industrial focus, owning and managing more than 24 million square feet of industrial real estate assets.

The company also acquired a diversified portfolio of limited partnership or similar equity interests in 41 real estate private equity funds, managed by 20 institutional-quality real estate managers, for approximately $273 million. The funds reported an aggregate net asset value of roughly $344 million as of March 31.

The properties within the PERE funds are diversified by investment type, including mixed-use, multifamily, office and hotel properties located in 24 states and internationally.

With the deals, the company has substantially invested all of its current investible capital.

NorthStar Income II’s $1.8 billion portfolio consists of 17 senior mortgage loans, four subordinate interest investments, one mezzanine loan, 24 real estate operating properties, three portfolios of real estate private equity funds and eight commercial mortgage-backed securities investments.

Image courtesy of NorthStar Real Estate Income II