NorthStar Realty Finance orginates $255 million loan for the Milford Plaza hotel; Financed with $130 million from credit facilities with Deutsche Bank AG

NorthStar Realty Finance Corp. has originated a $255 million loan secured by a leasehold mortgage in the recently renovated, 1,331 room Milford Plaza hotel located in Times Sq. NorthStar originated $166 million of the loan and one of NorthStar's sponsored non-traded REITs, NorthStar Real Estate Income Trust, Inc., originated the remaining $89 million of the loan. The $255 million loan was financed with $130 million from credit facilities with Deutsche Bank AG, pro-rata between NorthStar and NorthStar Income. NorthStar expects to earn an initial current yield of 12.5% on its $81 million of invested equity and as part of the Loan NorthStar and NorthStar Income, on a pro-rata basis, will have a 35% ownership interest in the Milford Plaza hotel and the retail component of the hotel. The current sponsor, a joint venture between Highgate Hotels, an experienced hotel owner and operator that manages over 8,500 hotel rooms in New York City, and real estate private equity firm Rockpoint Group, retained the remaining 65% ownership interest in the hotel and retail. NorthStar intends to ultimately securitize an interest in the senior portion of the $255 million loan. David Hamamoto, chairman and chief executive officer, said, "This transaction exemplifies our ability to offer highly specialized, complete capital solutions on transactions with significant size and complexity by leveraging our relationships, sophisticated investment team and capital markets expertise. This loan provides the sponsors a creative financing solution, while also providing us an attractive current return that could be further enhanced in a securitization and potential upside through an ownership interest in a historic hotel located in one of the best hotel submarkets in the world."