NorthStar Realty Finance Announces Closing of €1.1 Billion Pan-European Class A Office Portfolio

NEW YORK, April 2, 2015 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) ("NorthStar Realty") today announced that it has closed the acquisition of a €1.1 billion pan-European office portfolio (the "Portfolio") that NorthStar Realty entered into an agreement to acquire in 2014.  The Portfolio is comprised of 11 Class A office properties located across gateway cities in seven of Europe's top markets: London, UK; Paris, France; Hamburg, Germany; Milan, Italy; Brussels, Belgium; Amsterdam and Rotterdam, Netherlands; and Gothenburg, Sweden. The Portfolio is approximately 186,000 square meters and benefits from a well-diversified mix of market leading tenants.

NorthStar Realty financed the acquisition with €530 million of seven year senior mortgages, denominated primarily in the local currencies of the respective properties, with a current weighted average interest rate of approximately 1.8%.

NorthStar Realty's Chairman and Chief Executive Officer, David Hamamoto, commented, "We are extremely pleased to expand NorthStar Realty's footprint in the European real estate markets with the acquisition of these high-quality properties.  We believe our ability to execute on a multi-currency, pan-European acquisition of this size provided us with advantageous pricing that is considerably below the portfolio's intrinsic value. As evidence, we have received unsolicited bids for portions of this portfolio at significant premiums to our allocated purchase price, including in one instance greater than a 30% premium to our allocated purchase price, representing an approximately 4% cap rate based on in-place NOI."

David Hamamoto continued, "Furthermore, we are excited about the proposed spin-off of NorthStar Realty's European business, which will include this portfolio and an additional approximately €450 million portfolio that we expect to close next week. We believe NorthStar Realty Europe Corp. will be positioned for robust growth with a substantial and highly attractive pipeline of investment opportunities."

About NorthStar Realty Finance Corp.

NorthStar Realty Finance Corp. is a diversified commercial real estate company that is organized as a REIT.  NorthStar Realty is managed by an affiliate of NorthStar Asset Management Group Inc. (NYSE: NSAM), a global asset management firm. For more information about NorthStar Realty Finance Corp., please visit www.nrfc.com.

European REIT Spin-off

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 listed on the NYSE and potentially in Europe. 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.

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" 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, NorthStar Realty's ability to expand in Europe; our ability to complete the spin-off of our European real estate business, which we announced we are exploring on February 26, 2015; the risk relating to the spin-off of our European real estate business and operating our existing company and our European real estate business as separate companies; our ability to realize the benefits of the spin-off, including cap rate compression; the growth prospects of our business, including our European real estate business; whether NorthStar Realty Europe is well positioned for robust growth; ability to achieve and maintain robust and attractive pipelines of investment opportunities; ability to obtain and execute on multi-currency, pan-European acquisitions of significant size; the impact of changes in the weighted average interest rate on the senior mortgages up to the strike prices of interest rate caps; whether we achieved advantageous pricing in connection with the acquisition of the Portfolio and whether we will be able to do so with respect to any properties in the future; whether unsolicited bids, which are non-binding, will result in any transaction on the terms presented, or at all; the resulting effects of becoming an externally managed company, including the payment of substantial fees to our manager, NorthStar Asset Management Group Inc. (NSAM), the allocation of investments by our manager among us and our manager's other managed companies, and various conflicts of interest in our relationship with NSAM. Additional factors that could cause actual results to differ materially from those in the forward-looking statements are specified in NorthStar Realty's Annual Report on Form 10-K for the year ended December 31, 2014 and its other filings with the Securities and Exchange Commission.

Any forward-looking statements contained herein speak only as of the date of this press release. NorthStar Realty expressly disclaims any obligation to publicly release 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.

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SOURCE NorthStar Realty Finance Corp.