NorthStar REIT Prices $531.5 Mln Non-recourse, Floating-rate CMBS Transaction

(RTTNews) - NorthStar Realty Finance Corp. (NRF) announced that NorthStar Real Estate Income Trust, Inc., its first sponsored non-traded REIT, successfully priced a $531.5 million non-recourse, floating-rate CMBS transaction at a weighted average coupon of LIBOR + 2.68%.

The company said that the CMBS transaction will initially be collateralized by $425.2 million of commercial real estate loans with the flexibility to contribute up to $106.3 million of additional commercial real estate loans within six months of closing. A total of $382.7 million of investment grade bonds will be issued, representing an advance rate of approximately 72%. The CMBS transaction is expected to close by the end of August.

As part of the CMBS transaction, NorthStar will contribute senior participations of originated commercial real estate loans, including an interest in the leasehold mortgage on the Milford Plaza hotel, and will retain $124.4 million of participations in these loans. NorthStar said it expects to earn a yield of approximately 13% on its Retained Interests, inclusive of fees and estimated transaction expenses. NorthStar, together with NorthStar Income, will retain an aggregate 35% ownership interest in the Milford Plaza hotel and retail component of the hotel.