Non-traded REIT, North Star Real Estate Income II (NorthStar Income II), which specializes in commercial real estate debt, securities, and equity investments, recently originated a $144 million senior loan.
Secured by a portfolio of 28 commercial properties in Woodbury, New York, NorthStar Income II funded $132 million of the loan with proceeds from its ongoing initial public offering and an advance under its secured credit facility with Deutsche Bank AG, Cayman Islands Branch.
NorthStar Income II intends to fund the remaining $12 million over the next 24 months.
Situated 30 miles east of New York City in a Long Island submarket, the portfolio consists of mostly Class A and B office spaces occupied by 150 tenants in a variety of industries. The borrower plans to use the loan to fund tenant improvements, leasing commissions, and capital investments to the portfolio.
The borrower is an affiliate of an institutional real estate fund managed by RXR Realty LLC, a leading real estate owner, manager and developer in the New York metropolitan area.
NorthStar Income II’s sponsor, NorthStar Asset Management Group (NSAM), announced in December 2013 a strategic $340 million investment in RXR Realty. In addition, NSAM and RXR Realty have initiated co-sponsoring a $2 billion non-traded REIT, NorthStar/RXR RealtyMetro Income, which will invest in the New York metropolitan area.
“We are very pleased to announce the closing of this investment by NorthStar Income II, which is secured by quality real estate assets owned by one of the New York metro area’s top real estate investors,” commented Daniel R. Gilbert, chief executive officer and president. “Our relationships with investors such as RXR Realty, with extensive local market knowledge and experience, allow us to deliver compelling opportunities that will continue to differentiate our platform and lead to positive results over the long-term,” he added.
As of October 22, 2014, NorthStar Income II’s portfolio consisted of six senior mortgage loans with a combined principal amount of $347 million and one subordinate interest totaling $24.9 million.