NorthStar Realty Finance Announces First Closing of NorthStar Real Estate Securities Opportunity Fund 
NEW YORK, NY (REIT Media) July 9, 2007 - NorthStar Realty Finance Corp. (NYSE:NRF) today announced that on July 5, 2007 it closed on $109.0 million of commitments for NorthStar Real Estate Securities Opportunity Fund, an investment vehicle in which NorthStar intends to prospectively conduct its real estate securities investment business.
NorthStar is the manager and general partner of the fund. NorthStar will typically receive base management fees ranging from 1.0% to 2.0% per annum on third party capital, and is entitled to annual incentive management fees ranging from 20% of the increase in the fund's net asset value to 25% of the increase in net asset value in excess of an 8.0% return. Base and incentive fees vary depending on the investor capital lockup periods.
As part of the initial closing, NorthStar sold to the fund its interests in two synthetic commercial real estate CDOs, its equity interest in its most recent real estate securities CDO - CDO 9, the deposits relating to its off- balance sheet warehouse facility and an equity interest in a third-party securitization. NorthStar received approximately $35.6 million of cash proceeds from the initial closing and retained a 25.7% interest in the fund. NorthStar is targeting NorthStar and third party commitments totaling $250 million and has committed to maintain a minimum investment equal to 25% of the fund's capital beginning in April 2008.
David T. Hamamoto, NorthStar's president and chief executive officer commented, "This closing represents an important beginning to our strategy of increasing fee-based revenues and returns on our invested capital and diversifying our funding sources. We are on track with our plans to close on two funds this year, and expect to have subsequent closings on the securities fund through the remainder of 2007, as well as expect to complete the first closing of the previously-announced loan fund by the end of this year."
About NorthStar Realty Finance Corp.
NorthStar Realty Finance Corp. is an internally managed REIT that primarily originates and invests in commercial real estate debt, real estate securities and net lease properties. For more information about NorthStar Realty Finance Corp., please visit http://www.nrfc.com.
This release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, among others, statements regarding the closings of commitments on the funds and are indicated by words or phrases such as "expects", "intends", "targets", and similar expressions. Forward-looking statements are only not guarantees of performance. They are based on beliefs and assumptions of our management, which in turn are based on currently available information. These forward-looking statements involve known and unknown risks, uncertainties and other facts that could cause the actual events to be materially different from such forward looking statements. Many of these factors are beyond our ability to control or predict. Such risks and uncertainties include the closing of additional capital in the securities fund and the closing of commitments on the loan fund, which are both subject to numerous conditions and uncertainties. These forward-looking statements are made only as of the date hereof, and we disclaim any obligation to update or revise the information contained in any such forward-looking statements, whether as a result of new information, future events or otherwise. We are also subject to other risks, including those described under the heading "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2006, which are specifically incorporated by reference into this press release. Readers are cautioned not to place undue reliance on these forward looking statements.
Source: NorthStar Realty Finance Corp.
Share It: 
Bookmark It: 
Jul.09.2007. 07:30
This article hasn't been commented yet.
* = required field