Shareholders of NorthStar Real Estate Income Trust Inc. and NorthStar Real Estate Income II Inc., two publicly registered non-traded REITs, approved the previously announced merger proposal at their respective special meetings held on January 18th.
NorthStar Real Estate Income Trust (NorthStar I) and NorthStar Real Estate Income II (NorthStar II) and a select portfolio of Colony NorthStar assets and liabilities will combine in an all-stock combination transaction to create a combined company named Colony NorthStar Credit Real Estate Inc., a commercial real estate credit REIT with approximately $5.1 billion in assets and $3.3 billion in equity value. The merger is expected to close at the end of the month.
Approximately 94 percent and 93 percent of the votes cast by NorthStar I and NorthStar II stockholders, respectively, were in favor of the merger proposal.
As a result of the merger, each outstanding share of NorthStar I common stock will be converted into the right to receive 0.3532 shares of Colony NorthStar Credit Class A common stock, and each outstanding share of NorthStar II Class A and Class T common stock will be converted into the right to receive 0.3511 shares of common stock. No fractional shares will be issued, and stockholders will receive cash in lieu of fractional shares.
It is currently expected that Colony NorthStar Credit will pursue a listing on the New York Stock Exchange, rather than an initial public offering. The company plans to list under the ticker symbol “CLNC” around February 1, 2018.
Colony NorthStar resulted from the January 2017 merger between Colony Capital Inc., NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp. Colony NorthStar has $57 billion in assets under management and manages capital on behalf of its stockholders, as well as institutional and retail investors in private funds, non-traded and traded real estate investment trusts and registered investment companies.
NorthStar Real Estate Income was formed to invest in real estate debt, select equity and securities investments predominantly in the United States. The company raised more than $1.1 billion in an offering that was declared effective by the SEC in July 2010. As of the third quarter 2017, the company’s portfolio was comprised of 15 investments totaling nearly $2.2 billion.
NorthStar Real Estate Income II raised $1.1 billion in investor equity before closing its offering in November 2016 and oversaw a $1.6 billion portfolio of 23 investments as of the third quarter 2017, according to Summit Investment Research.