January 19, 2018 | James Sprow | Blue Vault
Worm eye view shot of businessmen handshaking
The recent merger between NorthStar Real Estate Income Trust, Inc. ("NorthStar I") and NorthStar Real Estate Income II, Inc. ("NorthStar II") has been approved by the shareholders. The merger will result in the formation of Colony NorthStar Credit Real Estate, Inc. ("CLNC"), creating a publicly traded REIT managed by Colony NorthStar.
Approvals and Liquidation
At special meetings held on January 18, the majority of NorthStar I and NorthStar II shareholders voted in favor of the proposed merger, with approximately 94% and 93% of the votes cast respectively. In addition, NorthStar I stockholders approved a charter amendment allowing for the liquidation of remaining assets in connection with the merger.
Creating a Powerhouse
The merger combines the assets of NorthStar I and NorthStar II, along with a portfolio worth an estimated $1.6 billion contributed by Colony NorthStar. This consolidation is expected to create a publicly traded REIT with a total of $5.2 billion in assets and equity valued at $3.3 billion.
NorthStar REIT and NorthStar REIT II Merger
Timeline and Conversion
The merger is set to close on or about January 31, 2018. As a result of the merger, each outstanding share of NorthStar I common stock will be converted into 0.3532 shares of CLNC Class A common stock, while each outstanding share of NorthStar II Class A and Class T common stock will be converted into 0.3511 shares of CLNC common stock. Fractional shares will be cashed out.
Listing on the NYSE
After the merger, Colony NorthStar Credit Real Estate intends to pursue a listing on the New York Stock Exchange (NYSE) instead of an initial public offering. If approved, the common stock will be listed under the ticker symbol "CLNC" and is expected to begin trading on or about February 1, 2018.
Impressive Performance
As of September 30, 2017, NorthStar I had total assets of $2.44 billion, including operating real estate, debt, and securities. It closed its offering in July 2013 after raising $1.1 billion, with a Q3 2017 distribution rate of 7.00% annualized and a most recent NAV per share of $9.92 as of December 31, 2016.
As of September 30, 2017, NorthStar II had total assets of $1.81 billion, consisting of 24 properties, CRE loans, private equity, and CMBS. Its offering closed in November 2016 after raising $1.14 billion, with Class A common stock distributions at a rate of 7.00% annualized and a most recent NAV per share of $9.26 as of September 30, 2016.
Learn more about Colony NorthStar, Inc. on the Blue Vault Sponsor Focus page.
