NEW YORK, June 15, 2015 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) ("NorthStar Realty") today announced that it has entered into a definitive agreement to acquire a Class A office tower (the "Tower") located in Frankfurt, Germany for €540 million. The Tower is one of the tallest buildings in Germany and is approximately 68,600 square meters, 98.5% occupied and has a weighted average lease term of approximately eight years with two tenants rated "AAA" and "A" comprising over 70% of gross rents.
NorthStar Realty expects to earn an initial current yield of approximately 8.0% on its approximately €250 million of invested equity. The Tower is expected to be contributed to NorthStar Realty Europe Corp. ("NRE") at the time of the spin-off from NorthStar Realty. After the completion of this acquisition, NRE will have an aggregate $2.6 billion portfolio, at cost, of high-quality European real estate investments.
NorthStar Realty's Chairman and Chief Executive Officer, David Hamamoto, commented, "We are extremely pleased with the addition of this iconic office tower to our fast growing pan-European portfolio. This transaction emphasizes NorthStar Asset Management Group's strong global business platform and ability to be nimble and dynamic, where speed of execution played a crucial role in the acquisition."
Mr. Hamamoto continued, "We believe this prominent office tower will be a great addition to NRE given its strong fundamentals, including being one of a very limited number of buildings in Frankfurt with greater than 40 floors, which demand premium rents in the market."
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. 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 complete the acquisition of the Tower under the terms contemplated, or at all, including the amount of its invested equity in the acquisition; the ability to achieve the expected current yield on the Tower; the strength of NSAM's global business platform and NSAM's ability to source and consummate attractive investment opportunities on NorthStar Realty's behalf, both domestically and internationally; NorthStar Realty's ability to complete the proposed spin-off of NRE within the timeframe contemplated or at all; the strength of the Tower's fundamentals and whether the contribution of the Tower to NRE will be a great addition to NRE's expected portfolio; the size and quality of the portfolio of European real estate investments to be contributed to NRE; the ability of the Tower to demand substantial premium rents in the market; and the allocation of investments by NSAM among NorthStar Realty and NSAM's other managed companies, and various conflicts of interest in NorthStar Realty's 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.