UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
May 2, 2011
May 2, 2011
NorthStar Real Estate Income Trust, Inc.
(Exact Name of Registrant as Specified in Charter)
Maryland (State or Other Jurisdiction of Incorporation) |
333-157688 (Commission File Number) |
26-4141646 (IRS Employer Identification No.) |
399 Park Avenue, 18th Floor, New York, New York 10022
(Address of Principal Executive Offices) (Zip Code)
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code: (212) 547-2600
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions (see
General Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01 Other Events
On May 2, 2011, NorthStar Real Estate Investment Trust, Inc. (the Company), through a subsidiary,
directly originated a senior mortgage loan in the amount of $15.1 million with a 75% loan-to-cost
ratio (the Senior Loan) to a third party (the Borrower). The Company funded the Senior Loan
origination with proceeds from its ongoing initial public offering. The Borrower used the proceeds
from the Senior Loan to acquire a five building office complex, totaling 199,442 square feet, in San
Mateo, CA (the Property). The purchase price paid by the Borrower for the Property was
approximately 60% less than the purchase price paid for the Property by its previous owner in 2007.
The Senior Loan bears interest at a floating rate of 400 basis points over the one-month London
Interbank Offered Rate (the LIBOR Rate), but at no point
shall the LIBOR Rate be less than 4.0%.
The initial term of the Senior Loan is 36 months (the Initial Term), with two one-year extension
options available to the Borrower. The Senior Loan may be prepaid during the first 24 months,
provided that the Borrower pays the remaining interest due on the Senior Loan through the Initial
Term. Between months 25 and 30, the Senior Loan is subject to a
prepayment fee equal to 2.0% of the amount being prepaid. Between months 31 and 36, the Senior Loan
is subject to a prepayment fee equal to 1.0% of the amount being prepaid.
Although the current occupancy at the Property is approximately 53% and the current cash flows do
not cover debt service, the loan is structured with interest reserves to cover approximately 15
months of interest shortfall as well as other reserves for tenant improvements, leasing commissions
and capital expenditures that the Company believes will provide sufficient time and capital to increase
occupancy and cash flow so as to adequately cover debt service in the future.
The loan-to-cost ratio is the amount loaned by the Company to the Borrower over the total cost to
the Borrower to fund the acquisition of the Property, including closing costs, escrows and
applicable reserves on the date the Company originated the loan.
Safe Harbor Statement
Certain items in this Current Report on Form 8-K may constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by
words like anticipate, believe, plan, hope, goal, expect, future, intend, will,
could and should, and similar expressions. These statements are based on the Companys current
expectations and beliefs and are subject to a number of trends and uncertainties that could cause
actual results to differ materially from those described in the forward-looking statements; the
Company can give no assurance that its expectations will be attained. Forward-looking statements
are necessarily speculative in nature, and it can be expected that some or all of the assumptions
underlying any forward-looking statements will not materialize or will vary significantly from
actual results. Variations of assumptions and results may be material. Factors that could cause
actual results to differ materially from the Companys expectations include, but are not limited
to, the ability of the Borrower to increase occupancy and cash flows at the Property, future value,
income-producing ability, impact of any losses on cash flows and returns, market rental rates and
property-level cash flows, changes in economic conditions generally and the real estate and bond
markets specifically, availability of capital, ability to achieve targeted returns, generally
accepted accounting principles and policies and rules applicable to REITs. Factors that could
cause actual results to differ materially from those in the
forward-looking statements are specified in the Companys Annual Report on Form 10-K for the year ended December 31, 2010 and its
other filings with the Securities and Exchange Commission. Such forward-looking statements speak
only as of the date of this Current Report on Form 8-K. The Company expressly disclaims any
obligation to release publicly 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.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NORTHSTAR REAL ESTATE INCOME TRUST, INC. |
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Date: May 4, 2011 | By: | /s/ Albert tylis | ||
Albert Tylis | ||||
Chief Operating Officer, General Counsel and Secretary | ||||