Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 10, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | NorthStar Real Estate Income II, Inc. | |
Entity Central Index Key | 1,564,657 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Share Outstanding | 70,659,889 | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Cash | $ 72,783 | $ 41,640 |
Restricted cash | 46,687 | 29,915 |
Real estate debt investments, net | 639,837 | 500,113 |
Operating real estate, net | 317,288 | 0 |
Investments in private equity funds, at fair value | 39,285 | 0 |
Receivables, net | 4,489 | 3,152 |
Deferred costs and other assets, net | 3,517 | 1,598 |
Total assets | 1,123,886 | 576,418 |
Liabilities | ||
Credit facilities | 277,563 | 277,863 |
Mortgage notes payable | 250,000 | 0 |
Due to related party | 1,622 | 493 |
Accounts payable and accrued expenses | 2,369 | 292 |
Escrow deposits payable | 33,855 | 29,915 |
Distribution payable | 3,603 | 1,713 |
Other liabilities | 476 | 0 |
Total liabilities | $ 569,488 | $ 310,276 |
Commitments and contingencies | ||
NorthStar Real Estate Income II, Inc. Stockholders’ Equity | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of June 30, 2015 and December 31, 2014 | $ 0 | $ 0 |
Common stock, $0.01 par value, 400,000,000 shares authorized, 65,336,104 and 30,965,208 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | 653 | 310 |
Additional paid-in capital | 580,335 | 273,151 |
Retained earnings (accumulated deficit) | (26,592) | (7,321) |
Total NorthStar Real Estate Income II, Inc. stockholders’ equity | 554,396 | 266,140 |
Non-controlling interests | 2 | 2 |
Total equity | 554,398 | 266,142 |
Total liabilities and equity | $ 1,123,886 | $ 576,418 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 65,336,104 | 30,965,208 |
Common stock, shares outstanding | 65,336,104 | 30,965,208 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net interest income | ||||
Interest income | $ 7,602 | $ 1,922 | $ 15,067 | $ 2,564 |
Interest expense | 1,950 | 621 | 3,923 | 769 |
Net interest income | 5,652 | 1,301 | 11,144 | 1,795 |
Rental and other income | 943 | 0 | 943 | 0 |
Total property and other revenues | 943 | 0 | 943 | 0 |
Expenses | ||||
Asset management and other fees - related party | 5,223 | 442 | 7,330 | 583 |
Mortgage notes interest expense | 362 | 0 | 362 | 0 |
Transaction costs | 4,759 | 0 | 5,106 | 0 |
Property operating expenses | 225 | 0 | 225 | 0 |
General and administrative expenses | 1,862 | 488 | 3,122 | 777 |
Depreciation expense | 212 | 0 | 212 | 0 |
Total expenses | 12,643 | 930 | 16,357 | 1,360 |
Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax benefit (expense) | (6,048) | 371 | (4,270) | 435 |
Equity in earnings (losses) of unconsolidated ventures | 1,559 | 0 | 1,692 | 0 |
Income tax benefit (expense) | (163) | 0 | (169) | 0 |
Net income (loss) | (4,652) | 371 | (2,747) | 435 |
Net (income) loss attributable to non-controlling interests | 0 | 0 | 0 | 0 |
Net income (loss) attributable to NorthStar Real Estate Income II, Inc. common stockholders | $ (4,652) | $ 371 | $ (2,747) | $ 435 |
Net income (loss) per share of common stock, basic/diluted | $ (0.08) | $ 0.04 | $ (0.06) | $ 0.06 |
Weighted average number of shares of common stock outstanding, basic/diluted | 57,542 | 10,534 | 47,870 | 7,840 |
Distributions declared per share of common stock | $ 0.18 | $ 0.18 | $ 0.35 | $ 0.35 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (4,652) | $ 371 | $ (2,747) | $ 435 |
Comprehensive income (loss) | (4,652) | 371 | (2,747) | 435 |
Comprehensive (income) loss attributable to non-controlling interests | 0 | 0 | 0 | 0 |
Comprehensive income (loss) attributable to NorthStar Real Estate Income II, Inc. | $ (4,652) | $ 371 | $ (2,747) | $ 435 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Total Company’s Stockholders’ Equity | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Non-controlling Interests | |
Beginning Balance (shares) at Dec. 31, 2013 | 2,832,000 | ||||||
Beginning Balance at Dec. 31, 2013 | $ 24,788 | $ 24,786 | $ 28 | $ 24,945 | $ (187) | $ 2 | |
Increase (Decrease) in Stockholder's Equity | |||||||
Net proceeds from issuance of common stock (shares) | 27,707,000 | ||||||
Net proceeds from issuance of common stock | 244,472 | 244,472 | $ 278 | 244,194 | |||
Issuance and amortization of equity-based compensation (shares) | 8,000 | ||||||
Issuance and amortization of equity-based compensation | 43 | 43 | 43 | ||||
Distributions declared | (10,317) | (10,317) | (10,317) | ||||
Proceeds from distribution reinvestment plan (shares) | 424,000 | ||||||
Proceeds from distribution reinvestment plan | 4,029 | 4,029 | $ 4 | 4,025 | |||
Shares redeemed for cash (shares) | (6,000) | ||||||
Shares redeemed for cash | (56) | (56) | (56) | ||||
Net income (loss) | $ 3,183 | 3,183 | 3,183 | ||||
Ending Balance (shares) at Dec. 31, 2014 | 30,965,208 | 30,965,000 | |||||
Ending Balance at Dec. 31, 2014 | $ 266,142 | 266,140 | $ 310 | 273,151 | (7,321) | 2 | |
Increase (Decrease) in Stockholder's Equity | |||||||
Net proceeds from issuance of common stock (shares) | 33,753,000 | ||||||
Net proceeds from issuance of common stock | 301,767 | 301,767 | $ 337 | 301,430 | |||
Issuance and amortization of equity-based compensation (shares) | 11,000 | ||||||
Issuance and amortization of equity-based compensation | 35 | 35 | 35 | ||||
Distributions declared | (16,524) | [1] | (16,524) | (16,524) | |||
Proceeds from distribution reinvestment plan (shares) | 724,000 | ||||||
Proceeds from distribution reinvestment plan | 6,878 | 6,878 | $ 7 | 6,871 | |||
Shares redeemed for cash (shares) | (117,000) | ||||||
Shares redeemed for cash | (1,153) | (1,153) | $ (1) | (1,152) | |||
Net income (loss) | $ (2,747) | (2,747) | (2,747) | 0 | |||
Ending Balance (shares) at Jun. 30, 2015 | 65,336,104 | 65,336,000 | |||||
Ending Balance at Jun. 30, 2015 | $ 554,398 | $ 554,396 | $ 653 | $ 580,335 | $ (26,592) | $ 2 | |
[1] | Represents distributions declared for the period, even though such distributions are actually paid to stockholders the month following such period. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (2,747) | $ 435 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Equity in (earnings) losses of PE Investments | (1,692) | 0 |
Amortization of equity-based compensation | 35 | 17 |
Amortization of deferred financing costs | 212 | 63 |
Amortization of fees on investments | 408 | 76 |
Depreciation expense | 212 | 0 |
Distributions from PE Investments | 1,692 | 0 |
Straight line rental income | (19) | 0 |
Deferred income tax expense | 100 | 0 |
Changes in assets and liabilities: | ||
Restricted cash | (644) | 0 |
Receivables, net | (185) | (321) |
Deferred costs and other assets, net | (738) | 0 |
Due to related party | (320) | (1,144) |
Accounts payable and accrued expenses | 2,077 | 0 |
Other liabilities | 376 | 87 |
Net cash provided by (used in) operating activities | (1,233) | (787) |
Cash flows from investing activities: | ||
Acquisition of real estate debt investments, net (refer to Note 7) | 0 | (14,050) |
Origination of real estate debt investments, net | (166,819) | (126,406) |
Repayment on real estate debt investments | 27,527 | 0 |
Acquisition of operating real estate | (317,500) | 0 |
Investment in PE Investments | (45,421) | 0 |
Distributions from PE Investments | 6,136 | 0 |
Change in restricted cash | (12,188) | 0 |
Net cash provided by (used in) investing activities | (508,265) | (140,456) |
Cash flows from financing activities: | ||
Borrowings from credit facilities | 12,600 | 98,425 |
Repayment on credit facility | (12,900) | (4,200) |
Borrowings from mortgage notes | 250,000 | 0 |
Net proceeds from issuance of common stock | 301,181 | 95,067 |
Net proceeds from issuance of common stock, related party | 62 | 220 |
Shares redeemed for cash | (1,153) | 0 |
Distributions paid on common stock | (14,634) | (2,089) |
Proceeds from distribution reinvestment plan | 6,878 | 946 |
Payment of deferred financing costs | (1,393) | (12) |
Net cash provided by (used in) financing activities | 540,641 | 188,357 |
Net increase (decrease) in cash | 31,143 | 47,114 |
Cash - beginning of period | 41,640 | 7,279 |
Cash - end of period | 72,783 | 54,393 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Accrued cost of capital | 869 | 151 |
Subscriptions receivable, gross | 2,669 | 1,510 |
Distribution payable | 3,603 | 725 |
Escrow deposits payable | 3,940 | 1,048 |
Accrued acquisition fees | $ 840 | $ 0 |
Business and Organization
Business and Organization | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and Organization NorthStar Real Estate Income II, Inc. (the “Company”) was formed to originate, acquire and asset manage a diversified portfolio of commercial real estate (“CRE”) debt, select equity and securities investments predominantly in the United States. CRE debt investments may include first mortgage loans, subordinate mortgage and mezzanine loans and participations in such loans and preferred equity interests. Real estate equity investments include the Company’s direct ownership in properties, and may be structurally senior to a third-party partner’s equity and indirect interests in real estate through real estate private equity funds (“PE Investments”). CRE securities may primarily consist of commercial mortgage-backed securities (“CMBS”) and may include unsecured real estate investment trust (“REIT”) debt, collateralized debt obligation (“CDO”) notes and other securities. The Company may also invest internationally. In addition, the Company may own investments through a joint venture. The Company was formed in December 2012 as a Maryland corporation and commenced operations in September 2013. The Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), commencing with the taxable year ended December 31, 2013. The Company conducts its operations so as to continue to qualify as a REIT for U.S. federal income tax purposes. The Company is externally managed and has no employees. Prior to June 30, 2014, the Company was managed by an affiliate of NorthStar Realty Finance Corp. (NYSE: NRF) (“NorthStar Realty”). Effective June 30, 2014, NorthStar Realty spun-off its asset management business into a separate publicly traded company, NorthStar Asset Management Group Inc. (NYSE: NSAM) (the “Sponsor”). The Sponsor and its affiliates provide asset management and other services to the Company, NorthStar Realty, other sponsored public non-traded companies and any other companies the Sponsor and its affiliates may manage in the future (collectively, the “NSAM Managed Companies”), both in the United States and internationally. Concurrent with the spin-off, affiliates of the Sponsor entered into a new advisory agreement with the Company and each of the other NSAM Managed Companies. Pursuant to the Company’s advisory agreement, NSAM J-NSII Ltd, an affiliate of the Sponsor (the “Advisor”), agreed to manage the day-to-day operations of the Company on terms substantially similar to those set forth in the Company’s prior advisory agreement with NS Real Estate Income Advisor II, LLC (the “Prior Advisor”). References to the “Prior Advisor” herein refer to the services performed by and fees paid and accrued to the Prior Advisor during the period prior to June 30, 2014. The spin-off of NorthStar Realty’s asset management business had no impact on the Company’s operations. Substantially all of the Company’s business is conducted through NorthStar Real Estate Income Operating Partnership II, LP (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership. The limited partners of the Operating Partnership are the Prior Advisor and NorthStar Real Estate Income OP Holdings II, LLC (the “Special Unit Holder”), each an affiliate of the Sponsor. The Prior Advisor invested $1,000 in the Operating Partnership in exchange for common units and the Special Unit Holder invested $1,000 in the Operating Partnership and was issued a separate class of limited partnership units (the “Special Units”), which are collectively recorded as non-controlling interests on the consolidated balance sheets as of June 30, 2015 and December 31, 2014 . As the Company accepts subscriptions for shares, it contributes substantially all of the net proceeds from its continuous, public offering to the Operating Partnership as a capital contribution. As of June 30, 2015 , the Company’s limited partnership interest in the Operating Partnership was 99.97% . The Company’s charter authorizes the issuance of up to 400,000,000 shares of common stock with a par value of $0.01 per share and up to 50,000,000 shares of preferred stock with a par value of $0.01 per share. The board of directors of the Company is authorized to amend its charter, without the approval of the stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. On December 18, 2012, as part of its formation, the Company issued 22,223 shares of common stock to NorthStar Realty for $0.2 million . On May 6, 2013, the Company’s registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) was declared effective. The Company is offering a maximum of 165,789,474 shares of common stock, excluding the initial shares, in a continuous, public offering, of which up to 150,000,000 shares are being offered pursuant to its primary offering (the “Primary Offering”) to the public and up to 15,789,474 shares are being offered pursuant to its distribution reinvestment plan (the “DRP”), which are herein collectively referred to as the Offering. The Company reserves the right to reallocate shares of its common stock being offered between the Primary Offering and the DRP. The Company retained NorthStar Securities, LLC (the “Dealer Manager”), formerly a subsidiary of NorthStar Realty that became a subsidiary of the Sponsor upon completion of the spin-off, to serve as the dealer manager for the Primary Offering. The Dealer Manager is responsible for marketing the shares being offered pursuant to the Primary Offering. On September 18, 2013, the Company commenced operations by satisfying the minimum offering requirement in its Primary Offering as a result of NorthStar Realty purchasing 222,223 shares of common stock for $2.0 million . From inception through August 10, 2015 , the Company raised total gross proceeds of $705.7 million . In March 2015 , the Company’s board of directors determined to extend the Offering for one year to May 2016 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Quarterly Presentation The accompanying unaudited consolidated financial statements and related notes of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the consolidated financial statements prepared under U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 , which was filed with the SEC. Principles of Consolidation The consolidated financial statements include the accounts of the Company, the Operating Partnership and their consolidated subsidiaries. The Company consolidates variable interest entities (“VIE”), if any, where the Company is the primary beneficiary and voting interest entities which are generally majority owned or otherwise controlled by the Company. All significant intercompany balances are eliminated in consolidation. Variable Interest Entities A VIE is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. The Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity. The Company reassesses its initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events. A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents has both the: (i) power to direct the activities that most significantly impact the VIE’s economic performance; and (ii) obligation to absorb the losses of the VIE or the right to receive the benefits from the VIE, which could be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE by considering qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of its investment; the obligation or likelihood for the Company or other interests to provide financial support; consideration of the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders and the similarity with and significance to the business activities of the Company and the other interests. The Company reassesses its determination of whether it is the primary beneficiary of a VIE each reporting period. Significant judgments related to these determinations include estimates about the current and future fair value and performance of investments held by these VIEs and general market conditions. The Company evaluates its investments and financings, including investments in unconsolidated ventures and securitization financing transactions, if any, to determine whether they are a VIE. The Company analyzes new investments and financings, as well as reconsideration events for existing investments and financings, which vary depending on type of investment. Voting Interest Entities A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company does not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party. The Company performs on-going reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework. Investments in Private Equity Funds A non-controlling, unconsolidated ownership interest in an entity may be accounted for using the equity method, at fair value or the cost method. Under the equity method, the investment is adjusted each period for capital contributions and distributions and its share of the entity’s net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of preferred returns and allocation formulas, if any, as described in such governing documents. The Company may account for an investment in an unconsolidated entity at fair value by electing the fair value option. The Company elected the fair value option for PE Investments. The Company records the change in fair value for its share of the projected future cash flow of such investments from one period to another in equity in earnings (losses) of unconsolidated ventures in the consolidated statements of operations. Any change in fair value attributed to market related assumptions is considered unrealized gain (loss). The Company may account for an investment that does not qualify for equity method accounting or for which the fair value option was not elected using the cost method if the Company determines the investment in the unconsolidated entity is insignificant. Under the cost method, equity in earnings is recorded as dividends are received to the extent they are not considered a return of capital, which is recorded as a reduction of cost of the investment. Non-controlling Interests A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to the Company. A non-controlling interest is required to be presented as a separate component of equity on the consolidated balance sheets and presented separately as net income (loss) and comprehensive income (loss) attributable to controlling and non-controlling interests. An allocation to a non-controlling interest may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in such governing documents. Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that could affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates and assumptions. Reclassifications Certain prior period amounts have been reclassified in the consolidated financial statements to conform to current period presentation. Comprehensive Income (Loss) The Company reports consolidated comprehensive income (loss) in separate statements following the consolidated statements of operations. Comprehensive income (loss) is defined as the change in equity resulting from net income (loss) and other comprehensive income (loss) (“OCI”). Restricted Cash Restricted cash consists of amounts related to loan origination (escrow deposits) and operating real estate (escrows for taxes, insurance, capital expenditures and payments required under certain lease agreements). Real Estate Debt Investments CRE debt investments are generally intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan fees, premium, discount and unfunded commitments. CRE debt investments that are deemed to be impaired are carried at amortized cost less a loan loss reserve, if deemed appropriate, which approximates fair value. CRE debt investments where the Company does not have the intent to hold the loan for the foreseeable future or until its expected payoff are classified as held for sale and recorded at the lower of cost or estimated value. Operating Real Estate Operating real estate is carried at historical cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their useful life. The Company follows the purchase method for an acquisition of operating real estate, where the purchase price is allocated to tangible assets such as land, building, tenant and land improvements and other identified intangibles. Costs directly related to an acquisition deemed to be a business combination are expensed and included in transaction costs in the consolidated statements of operations. Real Estate Securities The Company classifies its CRE securities investments as available for sale on the acquisition date, which are carried at fair value. Unrealized gains (losses) are recorded as a component of accumulated OCI in the consolidated statements of equity. However, the Company may elect the fair value option for certain of its available for sale securities, and as a result, any unrealized gains (losses) on such securities are recorded in unrealized gain (loss) on investments and other in the consolidated statements of operations. Acquisition Fees and Expenses The total of all acquisition fees and expenses for an investment, including acquisition fees to the Advisor, cannot exceed, in the aggregate, 6.0% of the contract purchase price of such investment unless such excess is approved by a majority of the directors, including independent directors. For the six months ended June 30, 2015 , total acquisition fees and expenses did not exceed the allowed limit for any investment. An acquisition fee incurred related to an equity investment will generally be expensed as incurred. An acquisition fee paid to the Advisor related to the acquisition of an equity or debt investment in an unconsolidated joint venture is included in investments in unconsolidated ventures on the consolidated balance sheets. An acquisition fee paid to the Advisor related to the origination or acquisition of debt investments is included in debt investments, net on the consolidated balance sheets and is amortized to interest income over the life of the investment using the effective interest method. The Company records as an expense certain acquisition costs and fees associated with transactions deemed to be business combinations in which it consolidates the asset and capitalizes these costs for transactions deemed to be acquisitions of an asset, including an equity investment. Revenue Recognition Real Estate Debt Investments Interest income is recognized on an accrual basis and any related premium, discount, origination costs and fees are amortized over the life of the investment using the effective interest method. The amortization is reflected as an adjustment to interest income in the consolidated statements of operations. The amortization of a premium or accretion of a discount is discontinued if such loan is reclassified to held for sale. Operating Real Estate Rental and other income from operating real estate is derived from the leasing of space to various types of tenants. The leases are for fixed terms of varying length and generally provide for annual rentals and expense reimbursements to be paid in monthly installments. Rental income from leases is recognized on a straight-line basis over the term of the respective leases. The excess of rent recognized over the amount contractually due pursuant to the underlying leases is included in receivables on the consolidated balance sheets. Real Estate Securities Interest income is recognized using the effective interest method with any premium or discount amortized or accreted through earnings based on expected cash flow through the expected maturity date of the security. Changes to expected cash flow may result in a change to the yield which is then applied retrospectively for high-credit quality securities that cannot be prepaid or otherwise settled in such a way that the holder would not recover substantially all of the investment or prospectively for all other securities to recognize interest income. Credit Losses and Impairment on Investments Real Estate Debt Investments Loans are considered impaired when, based on current information and events, it is probable that the Company will not be able to collect principal and interest amounts due according to the contractual terms. The Company assesses the credit quality of the portfolio and adequacy of loan loss reserves on a quarterly basis or more frequently as necessary. Significant judgment of the Company is required in this analysis. The Company considers the estimated net recoverable value of the loan as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the quality and financial condition of the borrower and the competitive situation of the area where the underlying collateral is located. Because this determination is based on projections of future economic events, which are inherently subjective, the amount ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the loan, a loan loss reserve is recorded with a corresponding charge to provision for loan losses. The loan loss reserve for each loan is maintained at a level that is determined to be adequate by management to absorb probable losses. Income recognition is suspended for a loan at the earlier of the date at which payments become 90 -days past due or when, in the opinion of the Company, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired loan is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired loan is not in doubt, contractual interest is recorded as interest income when received, under the cash basis method until an accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. A loan is written off when it is no longer realizable and/or legally discharged. As of June 30, 2015 , the Company did not have any impaired CRE debt investments. Operating Real Estate The Company’s real estate portfolio is reviewed on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value of its operating real estate may be impaired or that its carrying value may not be recoverable. A property’s value is considered impaired if the Company’s estimate of the aggregate expected future undiscounted cash flow generated by the property is less than the carrying value. In conducting this review, the Company considers U.S. macroeconomic factors, real estate sector conditions and asset specific and other factors. To the extent an impairment has occurred, the loss is measured as the excess of the carrying value of the property over the estimated fair value and recorded in impairment on operating real estate in the consolidated statements of operations. An allowance for a doubtful account for a tenant receivable is established based on a periodic review of aged receivables resulting from estimated losses due to the inability of tenants to make required rent and other payments contractually due. Additionally, the Company establishes, on a current basis, an allowance for future tenant credit losses on unbilled rent receivable based on an evaluation of the collectability of such amounts. Real Estate Securities CRE securities for which the fair value option is elected are not evaluated for other-than-temporary impairment (“OTTI”) as any change in fair value is recorded in the consolidated statements of operations. Realized losses on such securities are reclassified to realized gain (loss) on investments and other as losses occur. CRE securities for which the fair value option is not elected are evaluated for OTTI quarterly. Impairment of a security is considered to be other-than-temporary when: (i) the holder has the intent to sell the impaired security; (ii) it is more likely than not the holder will be required to sell the security; or (iii) the holder does not expect to recover the entire amortized cost of the security. When a CRE security has been deemed to be other-than-temporarily impaired due to (i) or (ii), the security is written down to its fair value and an OTTI is recognized in the consolidated statements of operations. In the case of (iii), the security is written down to its fair value and the amount of OTTI is then bifurcated into: (a) the amount related to expected credit losses; and (b) the amount related to fair value adjustments in excess of expected credit losses. The portion of OTTI related to expected credit losses is recognized in the consolidated statements of operations. The remaining OTTI related to the valuation adjustment is recognized as a component of accumulated OCI in the consolidated statements of equity. The portion of OTTI recognized through earnings is accreted back to the amortized cost basis of the security through interest income, while amounts recognized through OCI are amortized over the life of the security with no impact on earnings. CRE securities which are not high-credit quality are considered to have an OTTI if the security has an unrealized loss and there has been an adverse change in expected cash flow. The amount of OTTI is then bifurcated as discussed above. Organization and Offering Costs The Advisor, or its affiliates, is entitled to receive reimbursement for costs paid on behalf of the Company in connection with the Offering. The Company is obligated to reimburse the Advisor for organization and offering costs to the extent the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15.0% of gross offering proceeds from the Offering. The Advisor does not expect reimbursable organization and offering costs to exceed $24.8 million , or 1.5% of the total proceeds available to be raised from the Offering. The Company records organization and offering costs each period based upon an allocation determined by the expectation of total organization and offering costs to be reimbursed. Organization costs are recorded as an expense in general and administrative expenses in the consolidated statements of operations and offering costs are recorded as a reduction to equity. Income Taxes The Company elected to be taxed as a REIT and to comply with the related provisions of the Internal Revenue Code beginning in its taxable year ended December 31, 2013. Accordingly, the Company will generally not be subject to U.S. federal income tax to the extent of its distributions to stockholders as long as certain asset, income and share ownership tests are met. To maintain its qualification as a REIT, the Company must annually distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. The Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company believes that all of the criteria to maintain the Company’s REIT qualification have been met for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods. The Company made a joint election to treat a subsidiary as a taxable REIT subsidiary (“TRS”) which may be subject to U.S. federal, state and local income taxes. In general, a TRS of the Company may perform non-customary services for tenants, hold assets that the REIT cannot hold directly and may engage in most real estate or non-real estate-related business. Current and deferred taxes are recorded on the portion of earnings (losses) recognized by the Company with respect to its interest in taxable REIT subsidiaries. Deferred income tax assets and liabilities are calculated based on temporary differences between the Company’s U.S. GAAP consolidated financial statements and the federal, state and local tax basis of assets and liabilities as of the consolidated balance sheet date. The Company evaluates the realizability of its deferred tax assets (e.g., net operating loss and capital loss carryforwards) and recognizes a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers estimates of expected future taxable income, existing and projected book/tax differences, tax planning strategies available and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. Changes in estimate of deferred tax asset realizability, if any, are included in provision for income tax expense included in income tax benefit (expense) in the consolidated statements of operations. For the three and six months ended June 30, 2015 , the Company recorded income tax expense of $0.2 million . Other Refer to Note 2 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 for further disclosure of the Company’s significant accounting policies. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting update requiring a company to recognize as revenue the amount of consideration it expects to be entitled to in connection with the transfer of promised goods or services to customers. The accounting standard update will replace most of the existing revenue recognition guidance currently promulgated by U.S. GAAP. In July 2015, the FASB decided to delay the effective date of the new revenue standard by one year. The effective date of the new revenue standard for the Company will be January 1, 2018. The Company is in the process of evaluating the impact, if any, of the update on its consolidated financial position, results of operations and financial statement disclosures. In February 2015, the FASB issued updated guidance that changes the rules regarding consolidation. The pronouncement eliminates specialized guidance for limited partnerships and similar legal entities and removes the indefinite deferral for certain investment funds. The new guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures. In April 2015, the FASB issued an accounting update changing the presentation of financing costs in financial statements. Under the new guidance, an entity would present these costs in the balance sheet as a direct deduction from the related liability rather than as an asset. Amortization of the costs would continue to be reported as interest expense. The new guidance is effective for annual periods and interim periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures. |
Real Estate Debt Investments
Real Estate Debt Investments | 6 Months Ended |
Jun. 30, 2015 | |
Mortgage Loans on Real Estate [Abstract] | |
Real Estate Debt Investments | Real Estate Debt Investments The following table presents CRE debt investments as of June 30, 2015 (dollars in thousands): Weighted Average Floating Rate as % of Principal Amount Asset type: Number Principal Amount (1) Carrying Value (2) Allocation by Investment Type (3) Fixed Spread (4) Total Unleveraged First mortgage loans 13 $ 646,073 $ 619,549 96.3 % — 5.33 % 5.37 % 100.0 % Subordinate interests 1 24,863 20,288 3.7 % 14.00 % — 14.17 % — Total/Weighted average 14 $ 670,936 $ 639,837 100.0 % 14.00 % 5.33 % 5.65 % 96.3 % __________________________________________________________ (1) Includes future funding commitments of $28.3 million for first mortgage loans and $4.6 million for subordinate interests. (2) Certain CRE debt investments serve as collateral for financing transactions, including carrying value of $473.9 million for Term Loan Facilities (refer to Note 6). The remainder is unleveraged. (3) Based on principal amount. (4) Includes a fixed minimum LIBOR rate (“LIBOR floor”), as applicable. As of June 30, 2015 , the Company had $ 521.6 million principal amount of floating-rate loans subject to a LIBOR floor with the weighted average LIBOR floor of 0.24% . For the six months ended June 30, 2015 , adjusted for acquisitions and commitments to purchase through August 10, 2015 , the Company’s investment activity included six loans with an aggregate principal amount of $177.4 million , including a future funding commitment in a first mortgage loan. The following table presents CRE debt investments as of December 31, 2014 (dollars in thousands): Weighted Average Floating Rate as % of Principal Amount Asset type: Number Principal Amount (1) Carrying Value (2) Allocation by Investment Type (3) Fixed Spread (4) Total Unleveraged First mortgage loans 9 $ 508,200 $ 479,825 95.3 % — 5.67 % 5.71 % 100.0 % Subordinate interests 1 24,863 20,288 4.7 % 14.00 % — 14.17 % — Total/Weighted average 10 $ 533,063 $ 500,113 100.0 % 14.00 % 5.67 % 6.05 % 95.3 % __________________________________________________________ (1) Includes future funding commitments of $29.8 million for first mortgage loans and $4.6 million for subordinate interests. (2) Certain CRE debt investments serve as collateral for financing transactions, including carrying value of $479.8 million for Term Loan Facilities (refer to Note 6). The remainder is unleveraged. (3) Based on principal amount. (4) Includes a fixed minimum LIBOR floor, as applicable. As of December 31, 2014 , the Company had $403.4 million principal amount of floating-rate loans subject to a LIBOR floor with the weighted average LIBOR floor of 0.23% . The following table presents maturities of CRE debt investments based on principal amount, which includes future funding commitments, as of June 30, 2015 (dollars in thousands): Initial Maturity Maturity Including Extensions (1) July 1 to December 31, 2015 $ — $ — Years Ending December 31: 2016 217,173 — 2017 291,313 — 2018 144,450 — 2019 — 508,486 Thereafter 18,000 162,450 Total $ 670,936 $ 670,936 ____________________________________________________________ (1) Assumes that all debt with extension options will qualify for extension at such maturity according to the conditions set forth in the governing documents. As of June 30, 2015 , the weighted average maturity, including extensions, of CRE debt investments was 4.3 years. Credit Quality Monitoring CRE debt investments are typically loans secured by direct senior priority liens on real estate properties or by interests in entities that directly own real estate properties, which serve as the primary source of cash for the payment of principal and interest. The Company evaluates its debt investments at least quarterly and differentiates the relative credit quality principally based on: (i) whether the borrower is currently paying contractual debt service in accordance with its contractual terms; and (ii) whether the Company believes the borrower will be able to perform under its contractual terms in the future, as well as the Company’s expectations as to the ultimate recovery of principal at maturity. The Company categorizes a debt investment for which it expects to receive full payment of contractual principal and interest payments as “performing.” The Company will categorize a weaker credit quality debt investment that is currently performing, but for which it believes future collection of all or some portion of principal and interest is in doubt, into a category called “performing with a loan loss reserve.” The Company will categorize a weaker credit quality debt investment that is not performing, which the Company defines as a loan in maturity default and/or past due at least 90 days on its contractual debt service payments, as a non-performing loan (“NPL”). The Company’s definition of an NPL may differ from that of other companies that track NPLs. As of June 30, 2015 , all CRE debt investments were performing in accordance with the contractual terms of their governing documents and were categorized as performing loans. For the six months ended June 30, 2015 , three debt investments each contributed more than 10% of interest income. |
Operating Real Estate
Operating Real Estate | 6 Months Ended |
Jun. 30, 2015 | |
Real Estate [Abstract] | |
Operating Real Estate | Operating Real Estate The following table presents operating real estate, net as of June 30, 2015 (dollars in thousands): June 30, 2015 (Unaudited) Land $ 63,500 Buildings 254,000 Subtotal 317,500 Less: Accumulated depreciation (212 ) Operating real estate, net $ 317,288 Real Estate Acquisitions The following table summarizes the Company’s real estate acquisitions for the six months ended June 30, 2015 (dollars in thousands): Acquisition Date Type Purchase Price (1) Properties State Financing Equity Ownership Interest Transaction Costs June 19, 2015 Industrial $ 332,501 22 Various $ 250,000 $ 80,933 100.0% $ 4,639 ____________________________________________________________ (1) Includes all deferred costs, escrows and reserves. The following table presents unaudited consolidated pro forma results of operations based on the Company’s historical financial statements and adjusted for the acquisitions during the six months ended June 30, 2015 that were significant, as if they occurred on January 1, 2014. The unaudited pro forma amounts were prepared for comparative purposes only and are not indicative of what actual consolidated results of operations of the Company would have been, nor are they indicative of the consolidated results of operations in the future and exclude transaction costs (dollars in thousands, expect per share): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Pro forma total revenues $ 15,069 $ 8,735 $ 29,673 $ 17,025 Pro forma net income (loss) attributable to NorthStar Real Estate Income II, Inc. common stockholders 3,993 688 6,766 2,071 Pro forma net income (loss) per share of common stock, basic/diluted $ 0.07 $ 0.07 $ 0.14 $ 0.26 The Company estimated the fair value of the assets and liabilities for real estate acquired at the date of acquisition. The following table presents the preliminary allocation of purchase price of the operating real estate assets acquired and liabilities assumed or issued (including financing entered into contemporaneous with the acquisition) for acquisitions during 2015 that continue to be subject to refinement upon receipt of all information (dollars in thousands): Assets: Land $ 63,500 Buildings 254,000 Other assets acquired (1) 15,001 Total assets acquired $ 332,501 Liabilities: Mortgage notes payable $ 250,000 Other liabilities assumed (2) 1,568 Total liabilities 251,568 Total equity 80,933 Total liabilities and equity $ 332,501 ____________________________________________________________ (1) Primarily includes deferred costs, escrows and reserves, as applicable. (2) Primarily includes prepaid rent and accrued expenses. From acquisition through June 30, 2015 , the Company recorded aggregate revenue and net loss of $0.9 million and $4.5 million , respectively, related to these acquisitions. Net loss is primarily related to transaction costs and depreciation. |
Investments in Private Equity F
Investments in Private Equity Funds | 6 Months Ended |
Jun. 30, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Private Equity Funds | Investments in Private Equity Funds The following is a description of investments in private equity funds that own PE Investments through direct investments (“PE Investment I”), which is recorded as an investment in private equity funds at fair value on the consolidated balance sheets. The Company elected the fair value option for PE Investments. As a result, the Company records equity in earnings (losses) based on the change in fair value for its share of the projected future cash flow from one period to another. The Company evaluates whether disclosure of summarized financial statement information is required for any individually significant investment. The Company determined there was one significant investment with respect to PE Investments as of June 30, 2015 . Summarized financial data for such unconsolidated joint ventures for the three months ended March 31, 2015, which is the most recent financial information available from the underlying funds, included net investment loss of $167,749 , realized losses of $25,753 and unrealized gains of $151,398 . However, the Company records equity in earnings (losses) based on the change in fair value for its share of the projected cash flow from one period to another and not based on such summarized financial data. During the six months ended June 30, 2015, the Company acquired limited partnership interests (“fund interests”) in six private equity funds for $45.0 million based on a NAV of $50.2 million as of September 30, 2014, which are reported in investments in private equity funds, at fair value on the consolidated balance sheet. The following tables summarize the Company’s PE Investments as of June 30, 2015 (dollars in thousands): PE Investment Initial Closing Date NAV Reference Date (1) Number of Funds Purchase Price Expected Future Contributions (2) PE Investment I March 20, 2015 September 30, 2014 6 $ 45,045 $ 2,614 ________________________________________________________ (1) Represents the net asset value (“NAV”) date on which the Company agreed to acquire the PE Investment. (2) Represents the estimated amount of expected future contributions to funds as of June 30, 2015 . Carrying Value Three Months Ended June 30, 2015 Period Ended June 30, 2015 (1) PE Investment June 30, 2015 Equity in Earnings Distributions Contributions Equity in Earnings Distributions Contributions PE Investment I $ 39,285 $ 1,559 $ 1,041 $ 51 $ 1,692 $ 7,828 $ 377 _________________________________________________________ (1) Represents activity from the initial closing date of March 20, 2015 through June 30, 2015 . |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings The following table presents borrowings as of June 30, 2015 and December 31, 2014 (dollars in thousands): June 30, 2015 December 31, 2014 Recourse vs. Non-Recourse Final Maturity Contractual Interest Rate Principal Amount Carrying Value Principal Amount Carrying Value Mortgage notes payable Industrial Non-recourse Jul-25 4.31% $ 250,000 $ 250,000 $ — $ — Subtotal mortgage notes payable 250,000 250,000 — — Term Loan Facilities Loan Facility 1 Partial Recourse Oct-17 (1) 2.69% (2) 81,325 81,325 94,225 94,225 Loan Facility 2 Partial Recourse Jul-19 (3) 2.76% (2) 183,638 183,638 183,638 183,638 Loan Facility 3 Partial Recourse Jun-18 (4) 2.44% (2) 12,600 12,600 — — Subtotal Term Loan Facilities 277,563 277,563 277,863 277,863 Total $ 527,563 $ 527,563 $ 277,863 $ 277,863 _______________________________________________ (1) The initial maturity of Loan Facility 1 is October 2016, with a one -year extension available at the Company’s option, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents. (2) The contractual interest rate depends upon asset type and characteristic and ranges from one-month LIBOR plus 2.25% to 2.75% . Represents the weighted average as of June 30, 2015 . (3) The initial maturity of Loan Facility 2 is July 2015, with four one -year extensions available at the Company’s option, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents. In July 2015, the Company exercised the first one-year extension. (4) The initial maturity of Loan Facility 3 is June 2018, with one -year extensions available at the Company’s option, which are subject to the approval of the global financial institution. Term Loan Facilities In October 2013, the Company, through a subsidiary, entered into a credit facility agreement with a global financial institution (“Loan Facility 1”), which provides up to $100.0 million to finance first mortgage loans and senior loan participations secured by commercial real estate. In July 2014, the Company entered into a credit facility agreement with a global financial institution (“Loan Facility 2”), which provides up to $100.0 million to finance first mortgage loans and senior loan participations secured by commercial real estate. In September 2014, the Company amended the terms of Loan Facility 2, increasing the total potential borrowing capacity from $100.0 million to up to $200.0 million . All other terms governing Loan Facility 2 remained substantially the same. In June 2015, the Company entered into a credit facility agreement with a global financial institution (“Loan Facility 3”), which provides up to $200.0 million to finance first mortgage loans and senior loan participations secured by commercial real estate. The Company agreed to guaranty certain obligations under Loan Facility 1, Loan Facility 2 and Loan Facility 3 (collectively, “Term Loan Facilities”). The Term Loan Facilities contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of this type. More specifically, for Loan Facility 1, the Company must maintain at least $3.75 million and as much as $15.0 million in unrestricted cash, depending on the amount drawn at all times during the term of Loan Facility 1. More specifically, for Loan Facility 2, the Company must maintain (i) total equity of the greater of $100.0 million and the product of the then-current maximum amount (as defined in the Loan Facility 2 agreement) and 1.5; (ii) minimum liquidity of the greater of $10.0 million and 10% of the maximum amount (as defined in the Loan Facility 2 agreement); and (iii) a ratio of total borrowings to total equity of not greater than 250% at all times during the term of Loan Facility 2. More specifically, for Loan Facility 3, the Company must maintain: (i) total equity of the greater of $250.0 million and the product of the then-current maximum amount (as defined in the Loan Facility 3 agreement) and 1.5; (ii) minimum liquidity of the greater of $10.0 million and 10% of the maximum amount (as defined in the Loan Facility 3 agreement); and (iii) a ratio of total borrowings to total equity of not greater than 250% at all times during the term of Loan Facility 3. As of June 30, 2015 , the Company had $473.9 million carrying value of CRE debt investments financed with $277.6 million under the Term Loan Facilities. The Term Loan Facilities act as revolving loan facilities that can be paid down as assets are repaid or sold and re-drawn upon for new investments. As of June 30, 2015 , the Company was in compliance with all of its financial covenants under the Term Loan Facilities. |
Related Party Arrangements
Related Party Arrangements | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | Related Party Arrangements Advisor In connection with the completion of NorthStar Realty’s spin-off of its asset management business into the Sponsor, on June 30, 2014, the Company entered into a new advisory agreement with the Advisor, an affiliate of the Sponsor, on terms substantially similar to those set forth in the prior advisory agreement, and terminated the advisory agreement with the Prior Advisor. In June 2015, the advisory agreement was renewed for an additional one-year term commencing on June 30, 2015 , with terms identical to those in effect through June 30, 2015 . For periods prior to June 30, 2014, the information below regarding fees and reimbursements incurred and accrued but not yet paid relates to the Prior Advisor. Subject to certain restrictions and limitations, the Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying, originating, acquiring and asset managing investments on behalf of the Company. The Advisor may delegate certain of its obligations to affiliated entities, which may be organized under the laws of the United States or foreign jurisdictions. References to the Advisor include the Advisor and any such affiliated entities. For such services, to the extent permitted by law and regulations, the Advisor receives fees and reimbursement from the Company. Below is a description and table of the fees and reimbursements incurred to the Advisor. Fees to Advisor Asset Management Fee The Advisor, or its affiliates, receives a monthly asset management fee equal to one-twelfth of 1.25% of the sum of the amount funded or allocated for CRE investments, including expenses and any financing attributable to such investments, less any principal received on debt and securities investments (or the proportionate share thereof in the case of an investment made through a joint venture). Acquisition Fee The Advisor, or its affiliates, also receives an acquisition fee equal to 1.0% of the amount funded or allocated by the Company to originate or acquire investments, including acquisition costs and any financing attributable to such investments (or the proportionate share thereof in the case of an investment made through a joint venture). An acquisition fee paid to the Advisor related to the origination or acquisition of CRE debt investments is included in CRE debt investments, net on the consolidated balance sheets and is amortized to interest income over the life of the investment using the effective interest method. An acquisition fee incurred related to an equity investment will generally be expensed as incurred. An acquisition fee paid to the Advisor related to the acquisition of an equity or debt investment in an unconsolidated joint venture is included in investments in unconsolidated ventures on the consolidated balance sheets. Disposition Fee For substantial assistance in connection with the sale of investments and based on the services provided, the Advisor, or its affiliates, receives a disposition fee up to 1.0% of the contract sales price of each CRE investment sold. The Company does not pay a disposition fee upon the maturity, prepayment, workout, modification or extension of a CRE debt investment unless there is a corresponding fee paid by the borrower, in which case the disposition fee is the lesser of: (i) 1.0% of the principal amount of the CRE debt investment prior to such transaction; or (ii) the amount of the fee paid by the borrower in connection with such transaction. If the Company takes ownership of a property as a result of a workout or foreclosure of a CRE debt investment, the Company will pay a disposition fee upon the sale of such property. A disposition fee from the sale of a CRE investment is generally expensed and included in asset management and other fees - related party in the Company’s consolidated statements of operations. A disposition fee for a CRE debt investment incurred in a transaction other than a sale is included in CRE debt investments, net on the consolidated balance sheets and is amortized to interest income over the life of the investment using the effective interest method. Reimbursements to Advisor Operating Costs The Advisor, or its affiliates, is entitled to receive reimbursement for direct and indirect operating costs incurred by the Advisor in connection with administrative services provided to the Company. The Advisor allocates, in good faith, indirect costs to the Company related to the Advisor’s and its affiliates’ employees, occupancy and other general and administrative costs and expenses in accordance with the terms of, and subject to the limitations contained in, the advisory agreement with the Advisor. The indirect costs include the Company’s allocable share of the Advisor’s compensation and benefit costs associated with dedicated or partially dedicated personnel who spend all or a portion of their time managing the Company’s affairs, based upon the percentage of time devoted by such personnel to the Company’s affairs. The indirect costs also include rental and occupancy, technology, office supplies and other general and administrative costs and expenses. However, there is no reimbursement for personnel costs related to executive officers and other personnel involved in activities for which the Advisor receives an acquisition fee or a disposition fee. The Advisor allocates these costs to the Company relative to its and its affiliates’ other managed companies in good faith and has reviewed the allocation with the Company’s board of directors, including its independent directors. The Advisor will update the board of directors on a quarterly basis of any material changes to the expense allocation and will provide a detailed review to the board of directors, at least annually, and as otherwise requested by the board of directors. The Company reimburses the Advisor quarterly for operating costs (including the asset management fee) based on a calculation for the four preceding fiscal quarters not to exceed the greater of: (i) 2.0% of its average invested assets; or (ii) 25.0% of its net income determined without reduction for any additions to reserves for depreciation, loan losses or other similar non-cash reserves and excluding any gain from the sale of assets for that period. Notwithstanding the above, the Company may reimburse the Advisor for expenses in excess of this limitation if a majority of the Company’s independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. The Company calculates the expense reimbursement quarterly based upon the trailing twelve -month period. Organization and Offering Costs The Advisor, or its affiliates, is entitled to receive reimbursement for organization and offering costs paid on behalf of the Company in connection with the Offering. The Company is obligated to reimburse the Advisor, or its affiliates, as applicable, for organization and offering costs to the extent the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15.0% of gross proceeds from the Offering. The Advisor does not expect reimbursable organization and offering costs, excluding selling commissions and dealer manager fees, to exceed $24.8 million , or 1.5% of the total proceeds available to be raised from the Offering. The Company shall not reimburse the Advisor for any organization and offering costs that the Company’s independent directors determine are not fair and commercially reasonable to the Company. Dealer Manager Selling Commissions and Dealer Manager Fees Pursuant to a dealer manager agreement, the Company pays the Dealer Manager, selling commissions of up to 7.0% of gross proceeds from the Primary Offering, all of which are reallowed to participating broker-dealers. In addition, the Company pays the Dealer Manager a dealer manager fee of up to 3.0% of gross proceeds from the Primary Offering, a portion of which is typically reallowed to participating broker-dealers and paid to certain employees of the Dealer Manager. No selling commissions or dealer manager fees are paid for sales pursuant to the DRP. Summary of Fees and Reimbursements The following table presents the fees and reimbursements incurred to the Advisor and the Dealer Manager for the three and six months ended June 30, 2015 and 2014 and the amount due to related party as of June 30, 2015 and December 31, 2014 (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, Due to Related Party as of Type of Fee or Reimbursement Financial Statement Location 2015 2014 2015 2014 June 30, 2015 December 31, 2014 Fees to Advisor Asset management Asset management and other fees - related party $ 2,001 $ 442 $ 3,709 $ 583 $ 4 $ — Acquisition (1) Real estate debt investments, net / Asset management and other fees- related party 4,456 225 5,275 1,407 840 — Disposition (1) Real estate debt investments, net 20 — 275 — — — Reimbursements to Advisor Operating costs (3) General and administrative expenses 1,705 286 2,824 520 137 — Organization General and administrative expenses 49 145 106 181 32 25 Offering Cost of capital (2) 927 2,933 2,010 3,617 609 468 Selling commissions / Dealer manager fees Cost of capital (2) 15,637 6,206 33,171 10,952 — — Total $ 1,622 $ 493 _________________________________________________ (1) Acquisition/disposition fees incurred to the Advisor related to CRE debt investments are generally offset by origination/exit fees paid to the Company by borrowers if such fees are required from the borrower. Acquisition fees related to equity investments are included in asset management and other fees - related party in the consolidated statements of operations. The Advisor may determine to defer fees or seek reimbursement. (2) Cost of capital is included in net proceeds from issuance of common stock in the Company’s consolidated statements of equity. (3) As of June 30, 2015 , the Advisor has incurred unreimbursed operating costs on behalf of the Company of $8.7 million , that remain eligible to allocate to the Company. NorthStar Realty Purchase of Common Stock Pursuant to the distribution support agreement (the “Distribution Support Agreement”), NorthStar Realty committed to purchase up to an aggregate of $10.0 million in shares of the Company’s common stock at a price of $9.00 per share if cash distributions exceed modified funds from operations (as computed in accordance with the definition established by the Investment Program Association and adjusted for certain items) to provide additional funds to support distributions to stockholders. In September 2013, NorthStar Realty purchased 222,223 shares of the Company’s common stock for $2.0 million under the Distribution Support Agreement to satisfy the minimum offering requirement, which reduced the total commitment. As of June 30, 2015 , including the purchase of shares to satisfy the minimum offering requirement, NorthStar Realty purchased 348,854 shares of the Company’s common stock for $3.1 million with $6.9 million remaining outstanding under such commitment. In March 2015, the board of directors of the Company amended and restated the Distribution Support Agreement to, among other things, extend the term of the Distribution Support Agreement for one year to May 2016. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation The Company adopted a long-term incentive plan, as amended (the “Plan”), which it may use to attract and retain qualified officers, directors, employees and consultants, as well as an independent directors compensation plan, which is a component of the Plan. Pursuant to the Plan, as of June 30, 2015 , the Company’s independent directors were granted a total of 33,000 shares of restricted common stock for an aggregate $330,000 . The restricted stock granted prior to 2015 generally vests quarterly over four years and the restricted stock granted in 2015 generally vests quarterly over two years. However, the stock will become fully vested on the earlier occurrence of: (i) the termination of the independent director’s service as a director due to his or her death or disability; or (ii) a change in control of the Company. The Company recognized equity-based compensation expense of $14,792 and $9,000 for the three months ended June 30, 2015 and 2014 , respectively, and $34,675 and $17,438 for the six months ended June 30, 2015 and 2014 , respectively, related to the issuance of restricted stock to the independent directors, which was recorded in general and administrative expenses in the consolidated statements of operations. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock from Primary Offering For the six months ended June 30, 2015 , the Company issued 33.8 million shares of common stock generating gross proceeds of $336.9 million . For the year ended December 31, 2014 , the Company issued 27.7 million shares of common stock generating gross proceeds of $276.3 million . From inception through June 30, 2015 , the Company issued 64.3 million shares of common stock, generating gross proceeds of $640.8 million . Distribution Reinvestment Plan The Company adopted a DRP through which common stockholders may elect to reinvest an amount equal to the distributions declared on their shares in additional shares of the Company’s common stock in lieu of receiving cash distributions. The initial purchase price per share pursuant to the DRP is $9.50 . Once the Company establishes an estimated value per share, shares issued pursuant to the DRP will be priced at 95.0% of the estimated value per share of the Company’s common stock, as determined by the Advisor or another firm chosen for that purpose. Pursuant to amended Rules 2310 and 2340 of the Financial Industry Regulatory Authority Inc., the Company expects to establish an estimated value per share by November 2015. No selling commissions or dealer manager fees are paid on shares issued pursuant to the DRP. Once established, the Company will disclose the per share estimated value in an annual report. The board of directors of the Company may amend, suspend or terminate the DRP for any reason upon ten -days’ notice to participants, except that the Company may not amend the DRP to eliminate a participant’s ability to withdraw from the DRP. For the six months ended June 30, 2015 , the Company issued 724,062 shares of common stock totaling $6.9 million of gross offering proceeds pursuant to the DRP. For the year ended December 31, 2014 , the Company issued 424,111 shares of common stock totaling $4.0 million of gross offering proceeds pursuant to the DRP. From inception through June 30, 2015 , the Company issued 1,150,378 shares of common stock totaling $10.9 million of gross offering proceeds pursuant to the DRP. Distributions Distributions to stockholders are declared quarterly by the board of directors of the Company and are paid monthly based on a daily amount of $0.001917808 per share, which is equivalent to an annualized distribution amount of $0.70 per share of the Company’s common stock. Distributions are generally paid to stockholders on the first business day of the month following the month for which the distribution has accrued. The following table presents distributions declared for the six months ended June 30, 2015 (dollars in thousands): Distributions (1) Period Cash DRP Total January $ 1,038 $ 892 $ 1,930 February 1,057 910 1,967 March 1,405 1,222 2,627 April 1,562 1,417 2,979 May 1,777 1,641 3,418 June 1,870 1,733 3,603 Total $ 8,709 $ 7,815 $ 16,524 ________________________________________________ (1) Represents distributions declared for the period, even though such distributions are actually paid to stockholders the month following such period. Share Repurchase Program The Company adopted a share repurchase program that may enable stockholders to sell their shares to the Company in limited circumstances (the “Share Repurchase Program”). The Company may not repurchase shares unless a stockholder has held shares for one year. However, the Company may repurchase shares held less than one year in connection with a stockholder’s death or qualifying disability. The Company is not obligated to repurchase shares under the Share Repurchase Program. The Company may amend, suspend or terminate the Share Repurchase Program at its discretion at any time, subject to certain notice requirements. For the six months ended June 30, 2015 , the Company repurchased 116,767 shares totaling $1.2 million pursuant to the Share Repurchase Program. For the year ended December 31, 2014 , the Company repurchased an immaterial amount of shares pursuant to the Share Repurchase Program. The Company funds repurchase requests received during a quarter with proceeds set aside for that purpose which are not expected to exceed proceeds received from its DRP. As of June 30, 2015 , there were no unfulfilled repurchase requests. |
Non-controlling Interests
Non-controlling Interests | 6 Months Ended |
Jun. 30, 2015 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | Non-controlling Interests Operating Partnership Non-controlling interests include the aggregate limited partnership interests in the Operating Partnership held by limited partners, other than the Company. Income (loss) attributable to the non-controlling interests is based on the limited partners’ ownership percentage of the Operating Partnership. Income (loss) allocated to the Operating Partnership non-controlling interests for the three and six months ended June 30, 2015 and 2014 was an immaterial amount. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair Value Measurement The fair value of financial instruments is categorized based on the priority of the inputs to the valuation technique and categorized into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows: Level 1. Quoted prices for identical assets or liabilities in an active market. Level 2. Financial assets and liabilities whose values are based on the following: a) Quoted prices for similar assets or liabilities in active markets. b) Quoted prices for identical or similar assets or liabilities in non-active markets. c) Pricing models whose inputs are observable for substantially the full term of the asset or liability. d) Pricing models whose inputs are derived principally from or corroborated by observable market data for substantially the full term of the asset or liability. Level 3. Prices or valuation techniques based on inputs that are both unobservable and significant to the overall fair value measurement. Determination of Fair Value The following is a description of the valuation techniques used to measure fair value of assets accounted for at fair value on a recurring basis and the general classification of these instruments pursuant to the fair value hierarchy. PE Investments The Company accounts for PE Investments at fair value which is determined based on a valuation model using assumptions for the timing and amount of expected future cash flow for income and realization events for the underlying assets in the funds and discount rate. This fair value measurement is generally based on unobservable inputs and, as such, is classified as Level 3 of the fair value hierarchy. The Company is not using the NAV (practical expedient) of the underlying funds for purposes of determining fair value. Fair Value Hierarchy Financial assets recorded at fair value on a recurring basis are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table presents financial assets that were accounted for at fair value on a recurring basis as of June 30, 2015 by level within the fair value hierarchy (dollars in thousands): June 30, 2015 Level 1 Level 2 Level 3 Total Assets: PE Investments, at fair value $ — $ — $ 39,285 $ 39,285 The following table presents additional information about PE Investments which are measured at fair value on a recurring basis as of June 30, 2015 for which the Company has used Level 3 inputs to determine fair value (dollars in thousands): Six Months Ended June 30, 2015 Beginning balance $ — Purchases/contributions 45,421 Distributions (7,828 ) Equity in earnings 1,692 Ending balance $ 39,285 For the six months ended June 30, 2015 , the Company used a discounted cash flow model to quantify Level 3 fair value measurements on a recurring basis. The key unobservable inputs used in this analysis included a discount rate of 15% and timing and amount of expected future cash flow. As of June 30, 2015 and December 31, 2014 , the Company had no financial assets and liabilities that were accounted for at fair value on a non-recurring basis. Fair Value Option The Company may elect the fair value option for certain of its financial assets or liabilities due to the nature of the instrument. In the case of PE Investments, the Company elected the fair value option because management believes it is a more useful presentation for such investments. The Company determined recording the PE Investments based on the change in fair value of projected future cash flow from one period to another better represents the underlying economics of the respective investment. Fair Value of Financial Instruments U.S. GAAP requires disclosure of fair value about all financial instruments. The following disclosure of estimated fair value of financial instruments was determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value. The following table presents the principal amount, carrying value and fair value of certain financial assets and liabilities as of June 30, 2015 and December 31, 2014 (dollars in thousands): June 30, 2015 December 31, 2014 Principal Amount Carrying Value Fair Value Principal Amount Carrying Value Fair Value Financial assets: (1) Real estate debt investments, net $ 638,094 (2) $ 639,837 $ 667,755 $ 498,677 (2) $ 500,113 $ 519,934 Financial liabilities: (1) Credit facilities $ 277,563 $ 277,563 $ 277,563 $ 277,863 $ 277,863 $ 277,863 Mortgage notes payable $ 250,000 $ 250,000 $ 249,775 $ — $ — $ — _____________________________ (1) The fair value of other financial instruments not included in this table is estimated to approximate their carrying value. (2) As of June 30, 2015 and December 31, 2014 , excludes future funding commitments of $32.9 million and $34.4 million , respectively. Disclosure about fair value of financial instruments is based on pertinent information available to management as of the reporting date. Although management is not aware of any factors that would significantly affect fair value, such amounts have not been comprehensively revalued for purposes of these consolidated financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein. Real Estate Debt Investments For CRE debt investments, fair value was approximated by comparing the current yield to the estimated yield for newly originated loans with similar credit risk or the market yield at which a third party might expect to purchase such investment. Fair value was determined assuming fully-extended maturities regardless of structural or economic tests required to achieve such extended maturities. These fair value measurements of CRE debt are generally based on unobservable inputs and, as such, are classified as Level 3 of the fair value hierarchy. Credit Facilities The Company has amounts outstanding under Term Loan Facilities. The Term Loan Facilities bear floating rates of interest. As of the reporting date, the Company believes the carrying value approximates fair value. This fair value measurement is based on observable inputs, and as such, is classified as Level 2 of the fair value hierarchy. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company currently conducts its business through the following three segments, which are based on how management reviews and manages its business: • Commercial Real Estate Debt - Focused on originating, acquiring and asset managing CRE debt investments including first mortgage loans, subordinate interests and mezzanine loans and participations in such loans, as well as preferred equity interests. • Select Commercial Real Estate Equity - Focused on direct and indirect ownership in real estate and select real estate assets that may be structurally senior to a third-party partner’s equity and indirect interests in real estate through PE Investments since the underlying collateral in the funds is primarily real estate. • Corporate - The corporate segment includes corporate level asset management and other fees - related party and general and administrative expenses. The Company may also invest in CRE debt investments and equity investments indirectly through joint ventures. The Company primarily generates revenue from net interest income on the CRE debt portfolio and equity in earnings of unconsolidated ventures. The Company’s income is primarily derived through the difference between revenue and the cost at which the Company is able to finance its investments. The Company may also acquire investments which generate attractive returns without any leverage. The following tables present segment reporting for the three and six months ended June 30, 2015 and 2014 (dollars in thousands): Three months ended June 30, 2015 Real Estate Debt Real Estate Equity Corporate Total Net interest income $ 5,642 $ 2 $ 8 $ 5,652 Rental and other income — 943 — 943 Asset management and other fees - related party — — 5,223 5,223 Mortgage notes interest expense — 362 — 362 Transaction costs — 4,759 — 4,759 Property operating expenses — 225 — 225 General and administrative expenses 91 — 1,771 1,862 Depreciation expense — 212 — 212 Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax benefit (expense) 5,551 (4,613 ) (6,986 ) (6,048 ) Equity in earnings (losses) of unconsolidated ventures — 1,559 — 1,559 Income tax benefit (expense) — (163 ) — (163 ) Net income (loss) $ 5,551 $ (3,217 ) $ (6,986 ) $ (4,652 ) Three months ended June 30, 2014 Real Estate Debt Corporate Total Net interest income $ 1,301 $ — $ 1,301 Asset management and other fees - related party — 442 442 General and administrative expenses 18 470 488 Income (loss) before equity in earnings (losses) of unconsolidated ventures 1,283 (912 ) 371 Net income (loss) $ 1,283 $ (912 ) $ 371 Six months ended June 30, 2015 Real Estate Debt Real Estate Equity Corporate Total Net interest income $ 11,134 $ 2 $ 8 $ 11,144 Rental and other income — 943 — 943 Asset management and other fees - related party — — 7,330 7,330 Mortgage notes interest expense — 362 — 362 Transaction costs — 5,106 — 5,106 Property operating expenses — 225 — 225 General and administrative expenses 154 — 2,968 3,122 Depreciation expense — 212 — 212 Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax benefit (expense) 10,980 (4,960 ) (10,290 ) (4,270 ) Equity in earnings (losses) of unconsolidated ventures — 1,692 — 1,692 Income tax benefit (expense) — (169 ) — (169 ) Net income (loss) $ 10,980 $ (3,437 ) $ (10,290 ) $ (2,747 ) Six months ended June 30, 2014 Real Estate Debt Corporate Total Net interest income $ 1,795 $ — $ 1,795 Asset management and other fees - related party — 583 583 General and administrative expenses 21 756 777 Income (loss) before equity in earnings (losses) of unconsolidated ventures 1,774 (1,339 ) 435 Net income (loss) $ 1,774 $ (1,339 ) $ 435 The following table presents total assets by segment as of June 30, 2015 and December 31, 2014 (dollars in thousands): Total Assets Real Estate Debt Real Estate Equity Corporate (1) Total June 30, 2015 $ 693,921 $ 372,433 $ 57,532 $ 1,123,886 December 31, 2014 $ 549,398 $ — $ 27,020 $ 576,418 __________________________________________________ (1) Includes cash, unallocated receivables and deferred costs and other assets, net. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Common Stock from Primary Offering For the period from July 1, 2015 through August 10, 2015 , the Company issued 5.0 million shares of common stock pursuant to its Primary Offering generating gross proceeds of $50.1 million . From inception through August 10, 2015 , the Company issued 69.3 million shares of common stock pursuant to its Primary Offering generating gross proceeds of $691.0 million . Distribution Reinvestment Plan For the period from July 1, 2015 through August 10, 2015 , the Company issued 384,433 shares of common stock pursuant to the DRP raising proceeds of $3.7 million . As of August 10, 2015 , 14.3 million shares were available to be issued pursuant to the DRP. Distributions On August 11, 2015, the board of directors of the Company approved a daily cash distribution of $0.001917808 per share of common stock for each of the three months ended December 31, 2015 . Distributions are generally paid to stockholders on the first business day of the month following the month for which the distribution was accrued. NorthStar Realty Purchase of Common Stock On August 11, 2015, the Company’s board of directors approved the sale of 83,782 shares of the Company’s common stock for $754,035 to NorthStar Realty, pursuant to the Distribution Support Agreement. Share Repurchases From July 1, 2015 through August 10, 2015 , the Company repurchased 78,941 shares for a total of $0.8 million or a weighted average price of $9.89 per share under the Share Repurchase Program that enables stockholders to sell their shares to the Company in certain circumstances, including death or a qualifying disability. The Company funds repurchase requests received during a quarter with proceeds set aside for that purpose which are not expected to exceed proceeds received from its DRP. New Investments Canyon Park Joint Venture In July 2015, the Company, together with SteelWave LLC (“SteelWave”), entered into an agreement to acquire a $126.7 million office portfolio, consisting of one Class B+ office and one Class A flex office buildings through a joint venture which will be owned 95% by the Company and 5% by SteelWave. In July 2015, the Company and SteelWave funded a non-refundable deposit of $4.0 million . Private Equity Investment In August 2015, the Company committed to acquire fund interests in three private equity funds for $23.3 million based on a NAV of $29.3 million as of December 31, 2014. The Company paid an initial amount of $9.4 million and will pay the remaining $13.9 million , or 50% of the purchase price, the deferred amount, within 12 months of the applicable closing date of each fund interest. Debt Investments In August 2015, the Company originated a $12.0 million first mortgage loan secured by a hotel property located in Wisconsin Dells, Wisconsin. The loan bears interest at 4.95% plus LIBOR. There can be no assurance that the Company will complete the transactions that are under contract described above on the terms contemplated or at all. New Borrowings In July 2015, three first mortgage CRE debt investments totaling $105.2 million were financed with Loan Facility 1 and Loan Facility 3 with $15.9 million and $61.6 million drawn from each facility, respectively. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Quarterly Presentation | The accompanying unaudited consolidated financial statements and related notes of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the consolidated financial statements prepared under U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 , which was filed with the SEC. |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company, the Operating Partnership and their consolidated subsidiaries. The Company consolidates variable interest entities (“VIE”), if any, where the Company is the primary beneficiary and voting interest entities which are generally majority owned or otherwise controlled by the Company. All significant intercompany balances are eliminated in consolidation. Variable Interest Entities A VIE is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. The Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity. The Company reassesses its initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events. A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents has both the: (i) power to direct the activities that most significantly impact the VIE’s economic performance; and (ii) obligation to absorb the losses of the VIE or the right to receive the benefits from the VIE, which could be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE by considering qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of its investment; the obligation or likelihood for the Company or other interests to provide financial support; consideration of the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders and the similarity with and significance to the business activities of the Company and the other interests. The Company reassesses its determination of whether it is the primary beneficiary of a VIE each reporting period. Significant judgments related to these determinations include estimates about the current and future fair value and performance of investments held by these VIEs and general market conditions. The Company evaluates its investments and financings, including investments in unconsolidated ventures and securitization financing transactions, if any, to determine whether they are a VIE. The Company analyzes new investments and financings, as well as reconsideration events for existing investments and financings, which vary depending on type of investment. Voting Interest Entities A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company does not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party. The Company performs on-going reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework. Investments in Private Equity Funds A non-controlling, unconsolidated ownership interest in an entity may be accounted for using the equity method, at fair value or the cost method. Under the equity method, the investment is adjusted each period for capital contributions and distributions and its share of the entity’s net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of preferred returns and allocation formulas, if any, as described in such governing documents. The Company may account for an investment in an unconsolidated entity at fair value by electing the fair value option. The Company elected the fair value option for PE Investments. The Company records the change in fair value for its share of the projected future cash flow of such investments from one period to another in equity in earnings (losses) of unconsolidated ventures in the consolidated statements of operations. Any change in fair value attributed to market related assumptions is considered unrealized gain (loss). The Company may account for an investment that does not qualify for equity method accounting or for which the fair value option was not elected using the cost method if the Company determines the investment in the unconsolidated entity is insignificant. Under the cost method, equity in earnings is recorded as dividends are received to the extent they are not considered a return of capital, which is recorded as a reduction of cost of the investment. Non-controlling Interests A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to the Company. A non-controlling interest is required to be presented as a separate component of equity on the consolidated balance sheets and presented separately as net income (loss) and comprehensive income (loss) attributable to controlling and non-controlling interests. An allocation to a non-controlling interest may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in such governing documents. |
Estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that could affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates and assumptions. |
Reclassifications | Certain prior period amounts have been reclassified in the consolidated financial statements to conform to current period presentation. |
Comprehensive Income (Loss) | The Company reports consolidated comprehensive income (loss) in separate statements following the consolidated statements of operations. Comprehensive income (loss) is defined as the change in equity resulting from net income (loss) and other comprehensive income (loss) (“OCI”). |
Restricted Cash | Restricted cash consists of amounts related to loan origination (escrow deposits) and operating real estate (escrows for taxes, insurance, capital expenditures and payments required under certain lease agreements). |
Real Estate Debt Investments | CRE debt investments are generally intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan fees, premium, discount and unfunded commitments. CRE debt investments that are deemed to be impaired are carried at amortized cost less a loan loss reserve, if deemed appropriate, which approximates fair value. CRE debt investments where the Company does not have the intent to hold the loan for the foreseeable future or until its expected payoff are classified as held for sale and recorded at the lower of cost or estimated value. |
Operating Real Estate | Operating real estate is carried at historical cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their useful life. The Company follows the purchase method for an acquisition of operating real estate, where the purchase price is allocated to tangible assets such as land, building, tenant and land improvements and other identified intangibles. Costs directly related to an acquisition deemed to be a business combination are expensed and included in transaction costs in the consolidated statements of operations. |
Real Estate Securities | The Company classifies its CRE securities investments as available for sale on the acquisition date, which are carried at fair value. Unrealized gains (losses) are recorded as a component of accumulated OCI in the consolidated statements of equity. However, the Company may elect the fair value option for certain of its available for sale securities, and as a result, any unrealized gains (losses) on such securities are recorded in unrealized gain (loss) on investments and other in the consolidated statements of operations. |
Acquisition Fees and Expenses | The total of all acquisition fees and expenses for an investment, including acquisition fees to the Advisor, cannot exceed, in the aggregate, 6.0% of the contract purchase price of such investment unless such excess is approved by a majority of the directors, including independent directors. For the six months ended June 30, 2015 , total acquisition fees and expenses did not exceed the allowed limit for any investment. An acquisition fee incurred related to an equity investment will generally be expensed as incurred. An acquisition fee paid to the Advisor related to the acquisition of an equity or debt investment in an unconsolidated joint venture is included in investments in unconsolidated ventures on the consolidated balance sheets. An acquisition fee paid to the Advisor related to the origination or acquisition of debt investments is included in debt investments, net on the consolidated balance sheets and is amortized to interest income over the life of the investment using the effective interest method. The Company records as an expense certain acquisition costs and fees associated with transactions deemed to be business combinations in which it consolidates the asset and capitalizes these costs for transactions deemed to be acquisitions of an asset, including an equity investment. |
Revenue Recognition | Real Estate Debt Investments Interest income is recognized on an accrual basis and any related premium, discount, origination costs and fees are amortized over the life of the investment using the effective interest method. The amortization is reflected as an adjustment to interest income in the consolidated statements of operations. The amortization of a premium or accretion of a discount is discontinued if such loan is reclassified to held for sale. Operating Real Estate Rental and other income from operating real estate is derived from the leasing of space to various types of tenants. The leases are for fixed terms of varying length and generally provide for annual rentals and expense reimbursements to be paid in monthly installments. Rental income from leases is recognized on a straight-line basis over the term of the respective leases. The excess of rent recognized over the amount contractually due pursuant to the underlying leases is included in receivables on the consolidated balance sheets. Real Estate Securities Interest income is recognized using the effective interest method with any premium or discount amortized or accreted through earnings based on expected cash flow through the expected maturity date of the security. Changes to expected cash flow may result in a change to the yield which is then applied retrospectively for high-credit quality securities that cannot be prepaid or otherwise settled in such a way that the holder would not recover substantially all of the investment or prospectively for all other securities to recognize interest income. |
Credit Losses and Impairment on Investments | Real Estate Debt Investments Loans are considered impaired when, based on current information and events, it is probable that the Company will not be able to collect principal and interest amounts due according to the contractual terms. The Company assesses the credit quality of the portfolio and adequacy of loan loss reserves on a quarterly basis or more frequently as necessary. Significant judgment of the Company is required in this analysis. The Company considers the estimated net recoverable value of the loan as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the quality and financial condition of the borrower and the competitive situation of the area where the underlying collateral is located. Because this determination is based on projections of future economic events, which are inherently subjective, the amount ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the loan, a loan loss reserve is recorded with a corresponding charge to provision for loan losses. The loan loss reserve for each loan is maintained at a level that is determined to be adequate by management to absorb probable losses. Income recognition is suspended for a loan at the earlier of the date at which payments become 90 -days past due or when, in the opinion of the Company, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired loan is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired loan is not in doubt, contractual interest is recorded as interest income when received, under the cash basis method until an accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. A loan is written off when it is no longer realizable and/or legally discharged. As of June 30, 2015 , the Company did not have any impaired CRE debt investments. Operating Real Estate The Company’s real estate portfolio is reviewed on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value of its operating real estate may be impaired or that its carrying value may not be recoverable. A property’s value is considered impaired if the Company’s estimate of the aggregate expected future undiscounted cash flow generated by the property is less than the carrying value. In conducting this review, the Company considers U.S. macroeconomic factors, real estate sector conditions and asset specific and other factors. To the extent an impairment has occurred, the loss is measured as the excess of the carrying value of the property over the estimated fair value and recorded in impairment on operating real estate in the consolidated statements of operations. An allowance for a doubtful account for a tenant receivable is established based on a periodic review of aged receivables resulting from estimated losses due to the inability of tenants to make required rent and other payments contractually due. Additionally, the Company establishes, on a current basis, an allowance for future tenant credit losses on unbilled rent receivable based on an evaluation of the collectability of such amounts. Real Estate Securities CRE securities for which the fair value option is elected are not evaluated for other-than-temporary impairment (“OTTI”) as any change in fair value is recorded in the consolidated statements of operations. Realized losses on such securities are reclassified to realized gain (loss) on investments and other as losses occur. CRE securities for which the fair value option is not elected are evaluated for OTTI quarterly. Impairment of a security is considered to be other-than-temporary when: (i) the holder has the intent to sell the impaired security; (ii) it is more likely than not the holder will be required to sell the security; or (iii) the holder does not expect to recover the entire amortized cost of the security. When a CRE security has been deemed to be other-than-temporarily impaired due to (i) or (ii), the security is written down to its fair value and an OTTI is recognized in the consolidated statements of operations. In the case of (iii), the security is written down to its fair value and the amount of OTTI is then bifurcated into: (a) the amount related to expected credit losses; and (b) the amount related to fair value adjustments in excess of expected credit losses. The portion of OTTI related to expected credit losses is recognized in the consolidated statements of operations. The remaining OTTI related to the valuation adjustment is recognized as a component of accumulated OCI in the consolidated statements of equity. The portion of OTTI recognized through earnings is accreted back to the amortized cost basis of the security through interest income, while amounts recognized through OCI are amortized over the life of the security with no impact on earnings. CRE securities which are not high-credit quality are considered to have an OTTI if the security has an unrealized loss and there has been an adverse change in expected cash flow. The amount of OTTI is then bifurcated as discussed above. |
Organization and Offering Costs | The Advisor, or its affiliates, is entitled to receive reimbursement for costs paid on behalf of the Company in connection with the Offering. The Company is obligated to reimburse the Advisor for organization and offering costs to the extent the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15.0% of gross offering proceeds from the Offering. The Advisor does not expect reimbursable organization and offering costs to exceed $24.8 million , or 1.5% of the total proceeds available to be raised from the Offering. The Company records organization and offering costs each period based upon an allocation determined by the expectation of total organization and offering costs to be reimbursed. Organization costs are recorded as an expense in general and administrative expenses in the consolidated statements of operations and offering costs are recorded as a reduction to equity. |
Income Taxes | The Company elected to be taxed as a REIT and to comply with the related provisions of the Internal Revenue Code beginning in its taxable year ended December 31, 2013. Accordingly, the Company will generally not be subject to U.S. federal income tax to the extent of its distributions to stockholders as long as certain asset, income and share ownership tests are met. To maintain its qualification as a REIT, the Company must annually distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. The Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company believes that all of the criteria to maintain the Company’s REIT qualification have been met for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods. The Company made a joint election to treat a subsidiary as a taxable REIT subsidiary (“TRS”) which may be subject to U.S. federal, state and local income taxes. In general, a TRS of the Company may perform non-customary services for tenants, hold assets that the REIT cannot hold directly and may engage in most real estate or non-real estate-related business. Current and deferred taxes are recorded on the portion of earnings (losses) recognized by the Company with respect to its interest in taxable REIT subsidiaries. Deferred income tax assets and liabilities are calculated based on temporary differences between the Company’s U.S. GAAP consolidated financial statements and the federal, state and local tax basis of assets and liabilities as of the consolidated balance sheet date. The Company evaluates the realizability of its deferred tax assets (e.g., net operating loss and capital loss carryforwards) and recognizes a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers estimates of expected future taxable income, existing and projected book/tax differences, tax planning strategies available and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. Changes in estimate of deferred tax asset realizability, if any, are included in provision for income tax expense included in income tax benefit (expense) in the consolidated statements of operations. For the three and six months ended June 30, 2015 , the Company recorded income tax expense of $0.2 million |
Recent Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting update requiring a company to recognize as revenue the amount of consideration it expects to be entitled to in connection with the transfer of promised goods or services to customers. The accounting standard update will replace most of the existing revenue recognition guidance currently promulgated by U.S. GAAP. In July 2015, the FASB decided to delay the effective date of the new revenue standard by one year. The effective date of the new revenue standard for the Company will be January 1, 2018. The Company is in the process of evaluating the impact, if any, of the update on its consolidated financial position, results of operations and financial statement disclosures. In February 2015, the FASB issued updated guidance that changes the rules regarding consolidation. The pronouncement eliminates specialized guidance for limited partnerships and similar legal entities and removes the indefinite deferral for certain investment funds. The new guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures. In April 2015, the FASB issued an accounting update changing the presentation of financing costs in financial statements. Under the new guidance, an entity would present these costs in the balance sheet as a direct deduction from the related liability rather than as an asset. Amortization of the costs would continue to be reported as interest expense. The new guidance is effective for annual periods and interim periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures. |
Real Estate Debt Investments (T
Real Estate Debt Investments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Mortgage Loans on Real Estate [Abstract] | |
Schedule of Mortgage Loans on Real Estate | The following table presents CRE debt investments as of December 31, 2014 (dollars in thousands): Weighted Average Floating Rate as % of Principal Amount Asset type: Number Principal Amount (1) Carrying Value (2) Allocation by Investment Type (3) Fixed Spread (4) Total Unleveraged First mortgage loans 9 $ 508,200 $ 479,825 95.3 % — 5.67 % 5.71 % 100.0 % Subordinate interests 1 24,863 20,288 4.7 % 14.00 % — 14.17 % — Total/Weighted average 10 $ 533,063 $ 500,113 100.0 % 14.00 % 5.67 % 6.05 % 95.3 % __________________________________________________________ (1) Includes future funding commitments of $29.8 million for first mortgage loans and $4.6 million for subordinate interests. (2) Certain CRE debt investments serve as collateral for financing transactions, including carrying value of $479.8 million for Term Loan Facilities (refer to Note 6). The remainder is unleveraged. (3) Based on principal amount. (4) Includes a fixed minimum LIBOR floor, as applicable. As of December 31, 2014 , the Company had $403.4 million principal amount of floating-rate loans subject to a LIBOR floor with the weighted average LIBOR floor of 0.23% . The following table presents CRE debt investments as of June 30, 2015 (dollars in thousands): Weighted Average Floating Rate as % of Principal Amount Asset type: Number Principal Amount (1) Carrying Value (2) Allocation by Investment Type (3) Fixed Spread (4) Total Unleveraged First mortgage loans 13 $ 646,073 $ 619,549 96.3 % — 5.33 % 5.37 % 100.0 % Subordinate interests 1 24,863 20,288 3.7 % 14.00 % — 14.17 % — Total/Weighted average 14 $ 670,936 $ 639,837 100.0 % 14.00 % 5.33 % 5.65 % 96.3 % __________________________________________________________ (1) Includes future funding commitments of $28.3 million for first mortgage loans and $4.6 million for subordinate interests. (2) Certain CRE debt investments serve as collateral for financing transactions, including carrying value of $473.9 million for Term Loan Facilities (refer to Note 6). The remainder is unleveraged. (3) Based on principal amount. (4) Includes a fixed minimum LIBOR rate (“LIBOR floor”), as applicable. As of June 30, 2015 , the Company had $ 521.6 million principal amount of floating-rate loans subject to a LIBOR floor with the weighted average LIBOR floor of 0.24% . |
Schedule of Mortgage Loans, Fiscal Maturity | The following table presents maturities of CRE debt investments based on principal amount, which includes future funding commitments, as of June 30, 2015 (dollars in thousands): Initial Maturity Maturity Including Extensions (1) July 1 to December 31, 2015 $ — $ — Years Ending December 31: 2016 217,173 — 2017 291,313 — 2018 144,450 — 2019 — 508,486 Thereafter 18,000 162,450 Total $ 670,936 $ 670,936 ____________________________________________________________ (1) Assumes that all debt with extension options will qualify for extension at such maturity according to the conditions set forth in the governing documents. |
Operating Real Estate (Tables)
Operating Real Estate (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Real Estate [Abstract] | |
Schedule of Operating Real Estate, Net | The following table presents operating real estate, net as of June 30, 2015 (dollars in thousands): June 30, 2015 (Unaudited) Land $ 63,500 Buildings 254,000 Subtotal 317,500 Less: Accumulated depreciation (212 ) Operating real estate, net $ 317,288 |
Schedule of Real Estate Acquisitions | The following table summarizes the Company’s real estate acquisitions for the six months ended June 30, 2015 (dollars in thousands): Acquisition Date Type Purchase Price (1) Properties State Financing Equity Ownership Interest Transaction Costs June 19, 2015 Industrial $ 332,501 22 Various $ 250,000 $ 80,933 100.0% $ 4,639 ____________________________________________________________ (1) Includes all deferred costs, escrows and reserves. |
Schedule of Unaudited Pro Forma Amounts | The unaudited pro forma amounts were prepared for comparative purposes only and are not indicative of what actual consolidated results of operations of the Company would have been, nor are they indicative of the consolidated results of operations in the future and exclude transaction costs (dollars in thousands, expect per share): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Pro forma total revenues $ 15,069 $ 8,735 $ 29,673 $ 17,025 Pro forma net income (loss) attributable to NorthStar Real Estate Income II, Inc. common stockholders 3,993 688 6,766 2,071 Pro forma net income (loss) per share of common stock, basic/diluted $ 0.07 $ 0.07 $ 0.14 $ 0.26 |
Schedule of Real Estate Assets Acquired and Liabilities Assumed | The following table presents the preliminary allocation of purchase price of the operating real estate assets acquired and liabilities assumed or issued (including financing entered into contemporaneous with the acquisition) for acquisitions during 2015 that continue to be subject to refinement upon receipt of all information (dollars in thousands): Assets: Land $ 63,500 Buildings 254,000 Other assets acquired (1) 15,001 Total assets acquired $ 332,501 Liabilities: Mortgage notes payable $ 250,000 Other liabilities assumed (2) 1,568 Total liabilities 251,568 Total equity 80,933 Total liabilities and equity $ 332,501 ____________________________________________________________ (1) Primarily includes deferred costs, escrows and reserves, as applicable. (2) Primarily includes prepaid rent and accrued expenses. |
Investments in Private Equity24
Investments in Private Equity Funds (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Private Equity Investments | The following tables summarize the Company’s PE Investments as of June 30, 2015 (dollars in thousands): PE Investment Initial Closing Date NAV Reference Date (1) Number of Funds Purchase Price Expected Future Contributions (2) PE Investment I March 20, 2015 September 30, 2014 6 $ 45,045 $ 2,614 ________________________________________________________ (1) Represents the net asset value (“NAV”) date on which the Company agreed to acquire the PE Investment. (2) Represents the estimated amount of expected future contributions to funds as of June 30, 2015 . Carrying Value Three Months Ended June 30, 2015 Period Ended June 30, 2015 (1) PE Investment June 30, 2015 Equity in Earnings Distributions Contributions Equity in Earnings Distributions Contributions PE Investment I $ 39,285 $ 1,559 $ 1,041 $ 51 $ 1,692 $ 7,828 $ 377 _________________________________________________________ (1) Represents activity from the initial closing date of March 20, 2015 through June 30, 2015 . |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table presents borrowings as of June 30, 2015 and December 31, 2014 (dollars in thousands): June 30, 2015 December 31, 2014 Recourse vs. Non-Recourse Final Maturity Contractual Interest Rate Principal Amount Carrying Value Principal Amount Carrying Value Mortgage notes payable Industrial Non-recourse Jul-25 4.31% $ 250,000 $ 250,000 $ — $ — Subtotal mortgage notes payable 250,000 250,000 — — Term Loan Facilities Loan Facility 1 Partial Recourse Oct-17 (1) 2.69% (2) 81,325 81,325 94,225 94,225 Loan Facility 2 Partial Recourse Jul-19 (3) 2.76% (2) 183,638 183,638 183,638 183,638 Loan Facility 3 Partial Recourse Jun-18 (4) 2.44% (2) 12,600 12,600 — — Subtotal Term Loan Facilities 277,563 277,563 277,863 277,863 Total $ 527,563 $ 527,563 $ 277,863 $ 277,863 _______________________________________________ (1) The initial maturity of Loan Facility 1 is October 2016, with a one -year extension available at the Company’s option, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents. (2) The contractual interest rate depends upon asset type and characteristic and ranges from one-month LIBOR plus 2.25% to 2.75% . Represents the weighted average as of June 30, 2015 . (3) The initial maturity of Loan Facility 2 is July 2015, with four one -year extensions available at the Company’s option, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents. In July 2015, the Company exercised the first one-year extension. (4) The initial maturity of Loan Facility 3 is June 2018, with one -year extensions available at the Company’s option, which are subject to the approval of the global financial institution. |
Related Party Arrangements (Tab
Related Party Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table presents the fees and reimbursements incurred to the Advisor and the Dealer Manager for the three and six months ended June 30, 2015 and 2014 and the amount due to related party as of June 30, 2015 and December 31, 2014 (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, Due to Related Party as of Type of Fee or Reimbursement Financial Statement Location 2015 2014 2015 2014 June 30, 2015 December 31, 2014 Fees to Advisor Asset management Asset management and other fees - related party $ 2,001 $ 442 $ 3,709 $ 583 $ 4 $ — Acquisition (1) Real estate debt investments, net / Asset management and other fees- related party 4,456 225 5,275 1,407 840 — Disposition (1) Real estate debt investments, net 20 — 275 — — — Reimbursements to Advisor Operating costs (3) General and administrative expenses 1,705 286 2,824 520 137 — Organization General and administrative expenses 49 145 106 181 32 25 Offering Cost of capital (2) 927 2,933 2,010 3,617 609 468 Selling commissions / Dealer manager fees Cost of capital (2) 15,637 6,206 33,171 10,952 — — Total $ 1,622 $ 493 _________________________________________________ (1) Acquisition/disposition fees incurred to the Advisor related to CRE debt investments are generally offset by origination/exit fees paid to the Company by borrowers if such fees are required from the borrower. Acquisition fees related to equity investments are included in asset management and other fees - related party in the consolidated statements of operations. The Advisor may determine to defer fees or seek reimbursement. (2) Cost of capital is included in net proceeds from issuance of common stock in the Company’s consolidated statements of equity. (3) As of June 30, 2015 , the Advisor has incurred unreimbursed operating costs on behalf of the Company of $8.7 million , that remain eligible to allocate to the Company. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Dividends Declared | The following table presents distributions declared for the six months ended June 30, 2015 (dollars in thousands): Distributions (1) Period Cash DRP Total January $ 1,038 $ 892 $ 1,930 February 1,057 910 1,967 March 1,405 1,222 2,627 April 1,562 1,417 2,979 May 1,777 1,641 3,418 June 1,870 1,733 3,603 Total $ 8,709 $ 7,815 $ 16,524 ________________________________________________ (1) Represents distributions declared for the period, even though such distributions are actually paid to stockholders the month following such period. |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Assets Measured on Recurring Basis | The following table presents financial assets that were accounted for at fair value on a recurring basis as of June 30, 2015 by level within the fair value hierarchy (dollars in thousands): June 30, 2015 Level 1 Level 2 Level 3 Total Assets: PE Investments, at fair value $ — $ — $ 39,285 $ 39,285 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents additional information about PE Investments which are measured at fair value on a recurring basis as of June 30, 2015 for which the Company has used Level 3 inputs to determine fair value (dollars in thousands): Six Months Ended June 30, 2015 Beginning balance $ — Purchases/contributions 45,421 Distributions (7,828 ) Equity in earnings 1,692 Ending balance $ 39,285 |
Fair Value by Balance Sheet Grouping | The following table presents the principal amount, carrying value and fair value of certain financial assets and liabilities as of June 30, 2015 and December 31, 2014 (dollars in thousands): June 30, 2015 December 31, 2014 Principal Amount Carrying Value Fair Value Principal Amount Carrying Value Fair Value Financial assets: (1) Real estate debt investments, net $ 638,094 (2) $ 639,837 $ 667,755 $ 498,677 (2) $ 500,113 $ 519,934 Financial liabilities: (1) Credit facilities $ 277,563 $ 277,563 $ 277,563 $ 277,863 $ 277,863 $ 277,863 Mortgage notes payable $ 250,000 $ 250,000 $ 249,775 $ — $ — $ — _____________________________ (1) The fair value of other financial instruments not included in this table is estimated to approximate their carrying value. (2) As of June 30, 2015 and December 31, 2014 , excludes future funding commitments of $32.9 million and $34.4 million , respectively. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables present segment reporting for the three and six months ended June 30, 2015 and 2014 (dollars in thousands): Three months ended June 30, 2015 Real Estate Debt Real Estate Equity Corporate Total Net interest income $ 5,642 $ 2 $ 8 $ 5,652 Rental and other income — 943 — 943 Asset management and other fees - related party — — 5,223 5,223 Mortgage notes interest expense — 362 — 362 Transaction costs — 4,759 — 4,759 Property operating expenses — 225 — 225 General and administrative expenses 91 — 1,771 1,862 Depreciation expense — 212 — 212 Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax benefit (expense) 5,551 (4,613 ) (6,986 ) (6,048 ) Equity in earnings (losses) of unconsolidated ventures — 1,559 — 1,559 Income tax benefit (expense) — (163 ) — (163 ) Net income (loss) $ 5,551 $ (3,217 ) $ (6,986 ) $ (4,652 ) Three months ended June 30, 2014 Real Estate Debt Corporate Total Net interest income $ 1,301 $ — $ 1,301 Asset management and other fees - related party — 442 442 General and administrative expenses 18 470 488 Income (loss) before equity in earnings (losses) of unconsolidated ventures 1,283 (912 ) 371 Net income (loss) $ 1,283 $ (912 ) $ 371 Six months ended June 30, 2015 Real Estate Debt Real Estate Equity Corporate Total Net interest income $ 11,134 $ 2 $ 8 $ 11,144 Rental and other income — 943 — 943 Asset management and other fees - related party — — 7,330 7,330 Mortgage notes interest expense — 362 — 362 Transaction costs — 5,106 — 5,106 Property operating expenses — 225 — 225 General and administrative expenses 154 — 2,968 3,122 Depreciation expense — 212 — 212 Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax benefit (expense) 10,980 (4,960 ) (10,290 ) (4,270 ) Equity in earnings (losses) of unconsolidated ventures — 1,692 — 1,692 Income tax benefit (expense) — (169 ) — (169 ) Net income (loss) $ 10,980 $ (3,437 ) $ (10,290 ) $ (2,747 ) Six months ended June 30, 2014 Real Estate Debt Corporate Total Net interest income $ 1,795 $ — $ 1,795 Asset management and other fees - related party — 583 583 General and administrative expenses 21 756 777 Income (loss) before equity in earnings (losses) of unconsolidated ventures 1,774 (1,339 ) 435 Net income (loss) $ 1,774 $ (1,339 ) $ 435 The following table presents total assets by segment as of June 30, 2015 and December 31, 2014 (dollars in thousands): Total Assets Real Estate Debt Real Estate Equity Corporate (1) Total June 30, 2015 $ 693,921 $ 372,433 $ 57,532 $ 1,123,886 December 31, 2014 $ 549,398 $ — $ 27,020 $ 576,418 __________________________________________________ (1) Includes cash, unallocated receivables and deferred costs and other assets, net. |
Business and Organization (Deta
Business and Organization (Details) - USD ($) | Sep. 18, 2013 | May. 06, 2013 | Dec. 18, 2012 | Mar. 31, 2015 | Sep. 30, 2013 | Jun. 30, 2015 | Dec. 31, 2014 | Aug. 10, 2015 |
Business and Organization | ||||||||
Limited partnership interest in the operating partnership (percent) | 99.97% | |||||||
Common stock, shares authorized | 400,000,000 | 400,000,000 | ||||||
Common stock, par value per share | $ 0.01 | $ 0.01 | ||||||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | ||||||
Preferred stock, par value per share | $ 0.01 | $ 0.01 | ||||||
Number of shares of common stock issued | 22,223 | |||||||
Proceeds from issuance of common stock | $ 200,000 | $ 301,767,000 | $ 244,472,000 | |||||
Common shares filed in a registration statement with SEC, for issuance pursuant to the primary offering | 150,000,000 | |||||||
Common shares filed in a registration statement with SEC, for issuance pursuant to DRP | 15,789,474 | |||||||
Extension to share offering period | 1 year | |||||||
Subsequent Event | ||||||||
Business and Organization | ||||||||
Proceeds from issuance of common stock | $ 705,700,000 | |||||||
Sponsor | ||||||||
Business and Organization | ||||||||
Number of shares of common stock issued | 222,223 | 222,223 | 348,854 | |||||
Proceeds from issuance of common stock | $ 2,000,000 | $ 2,000,000 | $ 3,100,000 | |||||
Maximum | ||||||||
Business and Organization | ||||||||
Common shares filed in a registration statement with SEC, for issuance pursuant to offering | 165,789,474 | |||||||
Advisor | ||||||||
Business and Organization | ||||||||
Non-controlling interest investment in operating partnership | 1,000 | 1,000 | ||||||
Special Unit Holder | ||||||||
Business and Organization | ||||||||
Non-controlling interest investment in operating partnership | $ 1,000 | $ 1,000 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Related Party Transaction [Line Items] | ||||
Percent of contract purchase price (percent) | 6.00% | |||
Number of days past due for suspension of income recognition | 90 days | |||
Income Taxes | ||||
Income tax expense | $ 163 | $ 0 | $ 169 | $ 0 |
Advisor | Maximum | Organization and Offering Costs | ||||
Organization and Offering Costs | ||||
Percentage of gross offering proceeds from primary offering, reimbursable as organization and offering costs | 15.00% | |||
Expected reimbursable organization and offering costs, excluding selling commissions and dealer manager fee | $ 24,800 | |||
Expected reimbursable organization and offering costs, excluding selling commissions and dealer manager fee, as a percentage of total proceeds available to be raised from the primary offering | 1.50% |
Real Estate Debt Investments -
Real Estate Debt Investments - CRE Debt Investments (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015USD ($)loan | Dec. 31, 2014USD ($)loan | |||
Mortgage Loans on Real Estate [Line Items] | ||||
Carrying Value | $ 639,837 | $ 500,113 | ||
Future funding commitments | $ 32,900 | $ 34,400 | ||
LIBOR | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Variable rate floor | 0.24% | 0.23% | ||
Secured Term Loans | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Carrying value for certain CRE debt investments serving as collateral | $ 473,900 | $ 479,800 | ||
Subordinate Interests | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Number of loans | loan | 1 | 1 | ||
Principal Amount | $ 24,863 | [1] | $ 24,863 | [2] |
Carrying Value | $ 20,288 | [3] | $ 20,288 | [4] |
Allocation by Investment Type | 3.70% | [5] | 4.70% | [6] |
Fixed Rate | 14.00% | 14.00% | ||
Floating Rate as % of Principal Amount | 0.00% | 0.00% | ||
Future funding commitments | $ 4,600 | $ 4,600 | ||
Subordinate Interests | Weighted Average | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Spread over LIBOR | 0.00% | [7] | 0.00% | [8] |
Total Unleveraged Current Yield | 14.17% | 14.17% | ||
Real estate debt investments, net | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Number of loans | loan | 14 | 10 | ||
Principal Amount | $ 670,936 | [1] | $ 533,063 | [2] |
Carrying Value | $ 639,837 | [3] | $ 500,113 | [4] |
Allocation by Investment Type | 100.00% | [5] | 100.00% | [6] |
Fixed Rate | 14.00% | 14.00% | ||
Floating Rate as % of Principal Amount | 96.30% | 95.30% | ||
Real estate debt investments, net | Weighted Average | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Spread over LIBOR | 5.33% | [7] | 5.67% | [8] |
Total Unleveraged Current Yield | 5.65% | 6.05% | ||
First mortgage loan | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Number of loans | loan | 13 | 9 | ||
Principal Amount | $ 646,073 | [1] | $ 508,200 | [2] |
Carrying Value | $ 619,549 | [3] | $ 479,825 | [4] |
Allocation by Investment Type | 96.30% | [5] | 95.30% | [6] |
Fixed Rate | 0.00% | 0.00% | ||
Floating Rate as % of Principal Amount | 100.00% | 100.00% | ||
Future funding commitments | $ 28,300 | $ 29,800 | ||
First mortgage loan | Weighted Average | ||||
Mortgage Loans on Real Estate [Line Items] | ||||
Principal Amount | $ 521,600 | $ 403,400 | ||
Spread over LIBOR | 5.33% | [7] | 5.67% | [8] |
Total Unleveraged Current Yield | 5.37% | 5.71% | ||
[1] | Includes future funding commitments of $28.3 million for first mortgage loans and $4.6 million for subordinate interests. | |||
[2] | Includes future funding commitments of $29.8 million for first mortgage loans and $4.6 million for subordinate interests. | |||
[3] | Certain CRE debt investments serve as collateral for financing transactions, including carrying value of $473.9 million for Term Loan Facilities (refer to Note 6). The remainder is unleveraged. | |||
[4] | Certain CRE debt investments serve as collateral for financing transactions, including carrying value of $479.8 million for Term Loan Facilities (refer to Note 6). The remainder is unleveraged. | |||
[5] | Based on principal amount. | |||
[6] | Based on principal amount. | |||
[7] | Includes a fixed minimum LIBOR rate (“LIBOR floor”), as applicable. As of June 30, 2015, the Company had $521.6 million principal amount of floating-rate loans subject to a LIBOR floor with the weighted average LIBOR floor of 0.24%. | |||
[8] | Includes a fixed minimum LIBOR floor, as applicable. As of December 31, 2014, the Company had $403.4 million principal amount of floating-rate loans subject to a LIBOR floor with the weighted average LIBOR floor of 0.23%. |
Real Estate Debt Investments (N
Real Estate Debt Investments (Narrative) (Details) $ in Millions | 6 Months Ended | 7 Months Ended |
Jun. 30, 2015investment | Aug. 10, 2015USD ($)loan | |
Subsequent Event [Line Items] | ||
Weighted average maturity, including extensions, of CRE debt investments | 4 years 3 months 18 days | |
Number of days past contractual debt service payments loan categorized as a weaker credit quality debt investment | 90 days | |
Number of loans contributing to more than 10% of interest income | investment | 3 | |
Percent of interest income contributed by CRE debt investment | 10.00% | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of loans | loan | 6 | |
Principal amount | $ 177.4 |
Real Estate Debt Investments 34
Real Estate Debt Investments - Maturities of CRE Debt Investments (Details) $ in Thousands | Jun. 30, 2015USD ($) | |
Initial Maturity | ||
Mortgage Loans on Real Estate [Line Items] | ||
July 1 to December 31, 2015 | $ 0 | |
2,016 | 217,173 | |
2,017 | 291,313 | |
2,018 | 144,450 | |
2,019 | 0 | |
Thereafter | 18,000 | |
Total | 670,936 | |
Maturity Including Extensions | ||
Mortgage Loans on Real Estate [Line Items] | ||
July 1 to December 31, 2015 | [1] | 0 |
2,016 | [1] | 0 |
2,017 | [1] | 0 |
2,018 | [1] | 0 |
2,019 | [1] | 508,486 |
Thereafter | [1] | 162,450 |
Total | [1] | $ 670,936 |
[1] | Assumes that all debt with extension options will qualify for extension at such maturity according to the conditions set forth in the governing documents. |
Operating Real Estate (Details)
Operating Real Estate (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Real Estate [Abstract] | ||
Land | $ 63,500 | |
Buildings | 254,000 | |
Subtotal | 317,500 | |
Less: Accumulated depreciation | (212) | |
Operating real estate, net | $ 317,288 | $ 0 |
Operating Real Estate - Real Es
Operating Real Estate - Real Estate Acquisitions (Details) - Jun. 30, 2015 $ in Thousands | USD ($)property | |
Real Estate [Abstract] | ||
Purchase Price | [1] | $ 332,501 |
Properties | property | 22 | |
Financing | $ 250,000 | |
Equity | $ 80,933 | |
Ownership Interest | 100.00% | |
Transaction Costs | $ 4,639 | |
[1] | Includes all deferred costs, escrows and reserves. |
Operating Real Estate - Pro For
Operating Real Estate - Pro Forma Amounts (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Real Estate [Abstract] | ||||
Pro forma total revenues | $ 15,069 | $ 8,735 | $ 29,673 | $ 17,025 |
Pro forma net income (loss) attributable to NorthStar Real Estate Income II, Inc. common stockholders | $ 3,993 | $ 688 | $ 6,766 | $ 2,071 |
Pro forma net income (loss) per share of common stock, basic/diluted | $ 0.07 | $ 0.07 | $ 0.14 | $ 0.26 |
Operating Real Estate - Prelimi
Operating Real Estate - Preliminary Allocation of Purchase Price (Details) $ in Thousands | Jun. 30, 2015USD ($) | |
Real Estate [Abstract] | ||
Land | $ 63,500 | |
Buildings | 254,000 | |
Other assets acquired | [1] | 15,001 |
Total assets acquired | 332,501 | |
Mortgage notes payable | 250,000 | |
Other liabilities assumed | [2] | 1,568 |
Total liabilities | 251,568 | |
Total equity | 80,933 | |
Total liabilities and equity | $ 332,501 | |
[1] | Primarily includes deferred costs, escrows and reserves, as applicable. | |
[2] | Primarily includes prepaid rent and accrued expenses. |
Operating Real Estate - Narrati
Operating Real Estate - Narrative (Details) $ in Millions | Jun. 30, 2015USD ($) |
Real Estate [Abstract] | |
Aggregate revenue from acquisitions | $ 0.9 |
Acquisition net loss related to transaction costs and depreciation | $ 4.5 |
Investments in Private Equity40
Investments in Private Equity Funds (Narrative) (Details) | 6 Months Ended | ||
Jun. 30, 2015USD ($)fundinvestment | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||
Number of significant investments with respect to PE Investments | investment | 1 | ||
Aggregate reported NAV | $ 39,285,000 | $ 0 | |
PE Investment [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Net investment loss | 167,749 | ||
Realized losses | 25,753 | ||
Unrealized gains | $ 151,398 | ||
Number of private equity funds | fund | 6 | ||
Purchase price | $ 45,045,000 | ||
Aggregate reported NAV | $ 39,285,000 | $ 50,200,000 |
Investments in Private Equity41
Investments in Private Equity Funds (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2015USD ($)fund | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)fund | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | |||
Schedule of Equity Method Investments [Line Items] | ||||||||
Carrying Value | $ 39,285 | $ 39,285 | $ 0 | |||||
Equity in Earnings | $ 1,559 | $ 0 | 1,692 | $ 0 | ||||
Distributions | 6,136 | 0 | ||||||
Contributions | $ 45,421 | $ 0 | ||||||
PE Investment [Member] | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Number of Funds | fund | 6 | 6 | ||||||
Purchase Price | $ 45,045 | $ 45,045 | ||||||
Expected Future Contributions | [1] | 2,614 | 2,614 | |||||
Carrying Value | 39,285 | 39,285 | $ 50,200 | |||||
Equity in Earnings | 1,559 | 1,692 | [2] | |||||
Distributions | 1,041 | 7,828 | [2] | |||||
Contributions | $ 51 | $ 377 | [2] | |||||
[1] | Represents the estimated amount of expected future contributions to funds as of June 30, 2015. | |||||||
[2] | Represents activity from the initial closing date of March 20, 2015 through June 30, 2015. |
Borrowings - Summary of Borrowi
Borrowings - Summary of Borrowings (Details) | 6 Months Ended | ||
Jun. 30, 2015USD ($)extension | Dec. 31, 2014USD ($) | ||
Line of Credit Facility [Line Items] | |||
Principal Amount | $ 527,563,000 | $ 277,863,000 | |
Carrying Value | $ 527,563,000 | 277,863,000 | |
Minimum | LIBOR | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (percent) | 2.25% | ||
Maximum | LIBOR | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (percent) | 2.75% | ||
Term Loan Facilities | |||
Line of Credit Facility [Line Items] | |||
Carrying Value | $ 473,900,000 | ||
Mortgage notes payable | |||
Line of Credit Facility [Line Items] | |||
Principal Amount | 250,000,000 | 0 | |
Carrying Value | $ 250,000,000 | 0 | |
Mortgage notes payable | Industrial | |||
Line of Credit Facility [Line Items] | |||
Contractual Interest Rate | 4.31% | ||
Principal Amount | $ 250,000,000 | 0 | |
Carrying Value | 250,000,000 | 0 | |
Line of Credit | Term Loan Facilities | |||
Line of Credit Facility [Line Items] | |||
Principal Amount | 277,563,000 | 277,863,000 | |
Carrying Value | $ 277,563,000 | $ 277,863,000 | |
Line of Credit | Loan Facility 1 | Term Loan Facilities | |||
Line of Credit Facility [Line Items] | |||
Contractual Interest Rate | [1] | 2.69% | 2.69% |
Principal Amount | $ 81,325,000 | $ 94,225,000 | |
Carrying Value | $ 81,325,000 | $ 94,225,000 | |
Initial maturity date, optional extension period | 1 year | ||
Line of Credit | Loan Facility 2 | Term Loan Facilities | |||
Line of Credit Facility [Line Items] | |||
Contractual Interest Rate | [1] | 2.76% | 2.76% |
Principal Amount | $ 183,638,000 | $ 183,638,000 | |
Carrying Value | $ 183,638,000 | 183,638,000 | |
Initial maturity date, optional extension period | 1 year | ||
Number of optional extensions to initial maturity date | extension | 4 | ||
Line of Credit | Loan Facility 3 | Term Loan Facilities | |||
Line of Credit Facility [Line Items] | |||
Contractual Interest Rate | [1] | 2.44% | |
Principal Amount | $ 12,600,000 | 0 | |
Carrying Value | $ 12,600,000 | $ 0 | |
Initial maturity date, optional extension period | 1 year | ||
[1] | The contractual interest rate depends upon asset type and characteristic and ranges from one-month LIBOR plus 2.25% to 2.75%. Represents the weighted average as of June 30, 2015. |
Borrowings (Narrative) (Details
Borrowings (Narrative) (Details) - USD ($) | Jun. 30, 2015 | Jun. 05, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jul. 31, 2014 | Oct. 31, 2013 |
Line of Credit Facility [Line Items] | ||||||
Carrying value | $ 527,563,000 | $ 277,863,000 | ||||
Term Loan Facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Carrying value | 473,900,000 | |||||
Collateral for secured borrowings | 277,600,000 | |||||
Term Loan Facilities | Loan Facility 1 | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Asset restrictions, unrestricted cash balance | $ 3,750,000 | |||||
Term Loan Facilities | Loan Facility 1 | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Asset restrictions, unrestricted cash balance | 15,000,000 | |||||
Term Loan Facilities | Loan Facility 2 | ||||||
Line of Credit Facility [Line Items] | ||||||
Minimum total equity | $ 100,000,000 | |||||
Percent of maximum equity | 10.00% | |||||
Term Loan Facilities | Loan Facility 2 | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Asset restrictions, unrestricted cash balance | $ 10,000,000 | |||||
Ratio of borrowings to equity | 250.00% | |||||
Term Loan Facilities | Loan Facility 3 | ||||||
Line of Credit Facility [Line Items] | ||||||
Minimum total equity | 250,000,000 | |||||
Percent of maximum equity | 10.00% | |||||
Term Loan Facilities | Loan Facility 3 | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Asset restrictions, unrestricted cash balance | $ 10,000,000 | |||||
Ratio of borrowings to equity | 250.00% | |||||
Term Loan Facilities | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Carrying value | 277,563,000 | 277,863,000 | ||||
Term Loan Facilities | Line of Credit | Loan Facility 1 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility | $ 100,000,000 | |||||
Carrying value | 81,325,000 | 94,225,000 | ||||
Term Loan Facilities | Line of Credit | Loan Facility 2 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility | $ 200,000,000 | 100,000,000 | ||||
Principal amount | $ 100,000,000 | |||||
Carrying value | 183,638,000 | 183,638,000 | ||||
Term Loan Facilities | Line of Credit | Loan Facility 3 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility | 200,000,000 | |||||
Carrying value | $ 12,600,000 | $ 0 |
Related Party Arrangements - Fe
Related Party Arrangements - Fees to Advisor (Narrative) (Details) - Advisor | 6 Months Ended |
Jun. 30, 2015 | |
Asset Management Fee | |
Related Party Transaction [Line Items] | |
Asset management fee monthly factor | 8.33% |
Annual asset management fee rate | 1.25% |
Monthly management fee | 10.42% |
Acquisition Fee | |
Related Party Transaction [Line Items] | |
Maximum acquisition fee as a percentage of principal amount funded to originate investments, including acquisition expenses and any financing attributable to the investment | 1.00% |
Disposition Fee | |
Related Party Transaction [Line Items] | |
Maximum disposition fee as a percentage of contract sales price of CRE investment sold | 1.00% |
Disposition fee as a percentage of the principal amount of the loan or CRE debt investment prior to the specified transaction | 1.00% |
Related Party Arrangements - Re
Related Party Arrangements - Reimbursements to Advisor (Narrative) (Details) - 6 months ended Jun. 30, 2015 - Advisor | USD ($)Quarter |
Operating Costs | |
Related Party Transaction [Line Items] | |
Reimbursement of personnel costs related to officers and personnel involved in activities for which other fees is received | $ 0 |
Number of fiscal quarters | Quarter | 4 |
Reimbursement expense period | 12 months |
Maximum | Operating Costs | |
Related Party Transaction [Line Items] | |
Percentage of average invested assets reimbursable as operating costs | 2.00% |
Percentage of net income, without reduction for any additions to reserves for depreciation, loan losses or other similar non-cash reserves and excluding any gain from the sale of the company's assets, considered for reimbursement of operating costs | 25.00% |
Maximum | Organization and Offering Costs | |
Related Party Transaction [Line Items] | |
Percentage of gross offering proceeds from primary offering, reimbursable as organization and offering costs | 15.00% |
Expected reimbursable organization and offering costs, excluding selling commissions and dealer manager fee | $ 24,800,000 |
Expected reimbursable organization and offering costs, excluding selling commissions and dealer manager fee, as a percentage of total proceeds available to be raised from the primary offering | 1.50% |
Related Party Arrangements - De
Related Party Arrangements - Dealer Manager - Selling Commissions and Dealer Manager Fees (Narrative) (Details) - Selling Commissions Or Dealer Manager Fees | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transaction [Line Items] | |
Dealer manager fee as a percentage of gross offering proceeds from the primary offering | 3.00% |
Maximum | |
Related Party Transaction [Line Items] | |
Selling commissions as a percentage of gross offering proceeds from the primary offering | 7.00% |
Related Party Arrangements - Su
Related Party Arrangements - Summary of Fees and Reimbursements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | ||
Related Party Transaction [Line Items] | ||||||
Due to related party | $ 1,622 | $ 1,622 | $ 493 | |||
Asset management and other fees - related party | Advisor | Asset Management Fee | ||||||
Related Party Transaction [Line Items] | ||||||
Fees and reimbursements | 2,001 | $ 442 | 3,709 | $ 583 | ||
Due to related party | 4 | 4 | 0 | |||
Real estate debt investments, net | Advisor | Acquisition Fee | ||||||
Related Party Transaction [Line Items] | ||||||
Fees and reimbursements | [1] | 4,456 | 225 | 5,275 | 1,407 | |
Due to related party | [1] | 840 | 840 | 0 | ||
Real estate debt investments, net | Advisor | Disposition Fee | ||||||
Related Party Transaction [Line Items] | ||||||
Fees and reimbursements | [1] | 20 | 0 | 275 | 0 | |
Due to related party | [1] | 0 | 0 | 0 | ||
General and administrative expenses | Advisor | Operating Costs | ||||||
Related Party Transaction [Line Items] | ||||||
Fees and reimbursements | [2] | 1,705 | 286 | 2,824 | 520 | |
Due to related party | [2] | 137 | 137 | 0 | ||
General and administrative expenses | Advisor | Organization Costs | ||||||
Related Party Transaction [Line Items] | ||||||
Fees and reimbursements | 49 | 145 | 106 | 181 | ||
Due to related party | 32 | 32 | 25 | |||
Cost of capital | Advisor | Offering Costs | ||||||
Related Party Transaction [Line Items] | ||||||
Fees and reimbursements | [3] | 927 | 2,933 | 2,010 | 3,617 | |
Due to related party | [3] | 609 | 609 | 468 | ||
Cost of capital | Selling Commissions Or Dealer Manager Fees | Selling Commissions Or Dealer Manager Fees | ||||||
Related Party Transaction [Line Items] | ||||||
Fees and reimbursements | [3] | 15,637 | $ 6,206 | 33,171 | $ 10,952 | |
Due to related party | [3] | $ 0 | $ 0 | $ 0 | ||
[1] | Acquisition/disposition fees incurred to the Advisor related to CRE debt investments are generally offset by origination/exit fees paid to the Company by borrowers if such fees are required from the borrower. Acquisition fees related to equity investments are included in asset management and other fees - related party in the consolidated statements of operations. The Advisor may determine to defer fees or seek reimbursement. | |||||
[2] | Based on principal amount. | |||||
[3] | Cost of capital is included in net proceeds from issuance of common stock in the Company’s consolidated statements of equity. |
Related Party Arrangements - No
Related Party Arrangements - NorthStar Realty Purchase of Common Stock (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 18, 2013 | Dec. 18, 2012 | Sep. 30, 2013 | Jun. 30, 2015 | Dec. 31, 2014 |
Related Party Transaction [Line Items] | |||||
Number of shares of common stock issued | 22,223 | ||||
Proceeds from issuance of common stock | $ 200 | $ 301,767 | $ 244,472 | ||
Term of extension for Distribution Support Agreement | 1 year | ||||
DRP | NorthStar Realty Finance Corporation | |||||
Related Party Transaction [Line Items] | |||||
Common stock outstanding | $ 6,900 | ||||
Sponsor | |||||
Related Party Transaction [Line Items] | |||||
Price per share | $ 9 | ||||
Number of shares of common stock issued | 222,223 | 222,223 | 348,854 | ||
Proceeds from issuance of common stock | $ 2,000 | $ 2,000 | $ 3,100 | ||
Maximum | Sponsor | |||||
Related Party Transaction [Line Items] | |||||
Value of shares of common stock committed to be purchased | $ 10,000 |
Equity-Based Compensation (Deta
Equity-Based Compensation (Details) - Restricted stock - USD ($) | Dec. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Equity-based compensation | |||||
Number of shares granted to independent directors | 33,000 | 33,000 | |||
Aggregate value for common shares granted to independent directors | $ 330,000 | $ 330,000 | |||
Period of cumulative performance goals considered under plan | 4 years | 2 years | |||
Equity-based compensation expense | $ 14,792 | $ 9,000 | $ 34,675 | $ 17,438 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock from Primary Offering (Narrative) (Details) - USD ($) $ in Thousands | Dec. 18, 2012 | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2015 |
Class of Stock [Line Items] | ||||
Number of shares of common stock issued | 22,223 | |||
Proceeds from issuance of common stock | $ 200 | $ 301,767 | $ 244,472 | |
Offering Proceeds | ||||
Class of Stock [Line Items] | ||||
Number of shares of common stock issued | 33,800,000 | 27,700,000 | 64,300,000 | |
Proceeds from issuance of common stock | $ 336,900 | $ 276,300 | $ 640,800 |
Stockholders' Equity - Distribu
Stockholders' Equity - Distribution Reinvestment Plan (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | 31 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | |
Class of Stock [Line Items] | |||
Proceeds from distribution reinvestment plan | $ 6,878 | $ 4,029 | |
DRP | |||
Class of Stock [Line Items] | |||
Initial purchase price per share under the DRP (in dollars per share) | $ 9.50 | ||
Percentage of estimated value per share of common stock | 95.00% | ||
Notice period served by board of directors to amend or terminate distribution reinvestment plan | 10 days | ||
Proceeds from distribution reinvestment plan (shares) | 724,062 | 424,111 | 1,150,378 |
Proceeds from distribution reinvestment plan | $ 6,900 | $ 4,000 | $ 10,900 |
Stockholders' Equity - Distri52
Stockholders' Equity - Distributions (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2015$ / shares | |
Equity [Abstract] | |
Common stock dividend declared based on daily amount per share | $ 0.001917808 |
Annualized distribution (in dollars per share) | $ 0.7 |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividends Declared (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||
Jun. 30, 2015 | May. 31, 2015 | Apr. 30, 2015 | Mar. 31, 2015 | Feb. 28, 2015 | Jan. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |||||||||
Equity [Abstract] | ||||||||||||||||
Cash | [1] | $ 1,870 | $ 1,777 | $ 1,562 | $ 1,405 | $ 1,057 | $ 1,038 | $ 8,709 | ||||||||
DRP | [1] | 1,733 | 1,641 | 1,417 | 1,222 | 910 | 892 | 7,815 | ||||||||
Total | $ 3,603 | [1] | $ 3,418 | [1] | $ 2,979 | [1] | $ 2,627 | [1] | $ 1,967 | [1] | $ 1,930 | [1] | $ 16,524 | [1] | $ 10,317 | |
[1] | Represents distributions declared for the period, even though such distributions are actually paid to stockholders the month following such period. |
Stockholders' Equity - Share Re
Stockholders' Equity - Share Repurchase Program (Narrative) (Details) - 6 months ended Jun. 30, 2015 - USD ($) $ in Millions | Total |
Equity [Abstract] | |
Period of shares required for repurchase | 1 year |
Number of shares repurchased during period | 116,767 |
Shares repurchased during period | $ 1.2 |
Fair Value - Assets Measured on
Fair Value - Assets Measured on Recurring Basis (Details) - Recurring $ in Thousands | Jun. 30, 2015USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PE Investments, at fair value | $ 39,285 |
Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PE Investments, at fair value | 0 |
Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PE Investments, at fair value | 0 |
Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PE Investments, at fair value | $ 39,285 |
Fair Value - Level 3 Rollforwar
Fair Value - Level 3 Rollforward (Details) - 6 months ended Jun. 30, 2015 - Level 3 - USD ($) $ in Thousands | Total |
Recurring | Private Equity Investments | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 0 |
Purchases/contributions | 45,421 |
Distributions | (7,828) |
Equity in earnings | 1,692 |
Ending balance | $ 39,285 |
Income Approach Valuation Technique [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Discount rate | 14.75% |
Fair Value - Financial Assets a
Fair Value - Financial Assets and Liabilities (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Real estate debt investments, net | $ 639,837,000 | $ 500,113,000 | |
Credit facilities | 277,563,000 | 277,863,000 | |
Mortgage notes payable | 250,000,000 | 0 | |
Future funding commitments | 32,900,000 | 34,400,000 | |
Principal Amount | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Real estate debt investments, net | [1],[2] | 638,094,000 | 498,677,000 |
Credit facilities | [2] | 277,563,000 | 277,863,000 |
Mortgage notes payable | [2] | 250,000,000 | 0 |
Carrying Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Real estate debt investments, net | [2] | 639,837,000 | 500,113,000 |
Credit facilities | [2] | 277,563,000 | 277,863,000 |
Mortgage notes payable | [2] | 250,000,000 | 0 |
Fair Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Real estate debt investments, net | [2] | 667,755,000 | 519,934,000 |
Credit facilities | [2] | 277,563,000 | 277,863,000 |
Mortgage notes payable | [2] | $ 249,775,000 | $ 0 |
[1] | As of June 30, 2015 and December 31, 2014, excludes future funding commitments of $32.9 million and $34.4 million, respectively. | ||
[2] | The fair value of other financial instruments not included in this table is estimated to approximate their carrying value. |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | ||
Segment Reporting [Abstract] | ||||||
Number of operating segments | segment | 3 | |||||
Segment Reporting Information [Line Items] | ||||||
Net interest income | $ 5,652 | $ 1,301 | $ 11,144 | $ 1,795 | ||
Rental and other income | 943 | 943 | ||||
Asset management and other fees - related party | 5,223 | 442 | 7,330 | 583 | ||
Mortgage notes interest expense | 362 | 362 | ||||
Transaction costs | 4,759 | 5,106 | ||||
Property operating expenses | 225 | 225 | ||||
General and administrative expenses | 1,862 | 488 | 3,122 | 777 | ||
Depreciation expense | 212 | 0 | 212 | 0 | ||
Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax benefit (expense) | (6,048) | 371 | (4,270) | 435 | ||
Equity in earnings (losses) of unconsolidated ventures | 1,559 | 0 | 1,692 | 0 | ||
Income tax benefit (expense) | (163) | 0 | (169) | 0 | ||
Net income (loss) | (4,652) | 371 | (2,747) | 435 | $ 3,183 | |
Assets | 1,123,886 | 1,123,886 | 576,418 | |||
Real Estate Debt | ||||||
Segment Reporting Information [Line Items] | ||||||
Net interest income | 5,642 | 1,301 | 11,134 | 1,795 | ||
Rental and other income | 0 | 0 | ||||
Asset management and other fees - related party | 0 | 0 | 0 | 0 | ||
Mortgage notes interest expense | 0 | 0 | ||||
Transaction costs | 0 | 0 | ||||
Property operating expenses | 0 | 0 | ||||
General and administrative expenses | 91 | 18 | 154 | 21 | ||
Depreciation expense | 0 | 0 | ||||
Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax benefit (expense) | 5,551 | 1,283 | 10,980 | 1,774 | ||
Equity in earnings (losses) of unconsolidated ventures | 0 | 0 | ||||
Income tax benefit (expense) | 0 | 0 | ||||
Net income (loss) | 5,551 | 1,283 | 10,980 | 1,774 | ||
Assets | 693,921 | 693,921 | 549,398 | |||
Real Estate Equity | ||||||
Segment Reporting Information [Line Items] | ||||||
Net interest income | 2 | 2 | ||||
Rental and other income | 943 | 943 | ||||
Asset management and other fees - related party | 0 | 0 | ||||
Mortgage notes interest expense | 362 | 362 | ||||
Transaction costs | 4,759 | 5,106 | ||||
Property operating expenses | 225 | 225 | ||||
General and administrative expenses | 0 | 0 | ||||
Depreciation expense | 212 | 212 | ||||
Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax benefit (expense) | (4,613) | (4,960) | ||||
Equity in earnings (losses) of unconsolidated ventures | 1,559 | 1,692 | ||||
Income tax benefit (expense) | (163) | (169) | ||||
Net income (loss) | (3,217) | (3,437) | ||||
Assets | 372,433 | 372,433 | 0 | |||
Corporate | ||||||
Segment Reporting Information [Line Items] | ||||||
Net interest income | 8 | 0 | 8 | 0 | ||
Rental and other income | 0 | 0 | ||||
Asset management and other fees - related party | 5,223 | 442 | 7,330 | 583 | ||
Mortgage notes interest expense | 0 | 0 | ||||
Transaction costs | 0 | 0 | ||||
Property operating expenses | 0 | 0 | ||||
General and administrative expenses | 1,771 | 470 | 2,968 | 756 | ||
Depreciation expense | 0 | 0 | ||||
Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax benefit (expense) | (6,986) | (912) | (10,290) | (1,339) | ||
Equity in earnings (losses) of unconsolidated ventures | 0 | 0 | ||||
Income tax benefit (expense) | 0 | 0 | ||||
Net income (loss) | (6,986) | $ (912) | (10,290) | $ (1,339) | ||
Assets | [1] | $ 57,532 | $ 57,532 | $ 27,020 | ||
[1] | Includes cash, unallocated receivables and deferred costs and other assets, net. |
Subsequent Events - Common Stoc
Subsequent Events - Common Stock from Primary Offering (Details) - USD ($) $ in Millions | Dec. 18, 2012 | Aug. 10, 2015 | Aug. 10, 2015 |
Subsequent Event [Line Items] | |||
Number of shares of common stock issued | 22,223 | ||
Subsequent Event | Total Third Party Equity Issuances Proceeds | |||
Subsequent Event [Line Items] | |||
Number of shares of common stock issued | 5,000,000 | 69,300,000 | |
Gross proceeds of common stock issued | $ 50.1 | $ 691 |
Subsequent Events - Distributio
Subsequent Events - Distribution Reinvestment Plan (Details) - USD ($) $ in Millions | Aug. 10, 2015 | Dec. 18, 2012 | Aug. 10, 2015 |
Subsequent Event [Line Items] | |||
Number of shares of common stock issued | 22,223 | ||
Dividend Reinvestment Plan | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of shares of common stock issued | 14,300,000 | 384,433 | |
Gross proceeds of common stock issued | $ 3.7 |
Subsequent Events - Distribut61
Subsequent Events - Distributions (Details) - $ / shares | Aug. 11, 2015 | Jun. 30, 2015 |
Subsequent Event [Line Items] | ||
Common stock dividend declared based on daily amount per share | $ 0.001917808 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Common stock dividend declared based on daily amount per share | $ 0.001917808 |
Subsequent Events - NorthStar R
Subsequent Events - NorthStar Realty Purchase of Common Stock (Details) - USD ($) | Aug. 11, 2015 | Dec. 18, 2012 | Jun. 30, 2015 | Dec. 31, 2014 | Aug. 10, 2015 |
Subsequent Event [Line Items] | |||||
Number of shares of common stock issued | 22,223 | ||||
Proceeds from issuance of common stock | $ 200,000 | $ 301,767,000 | $ 244,472,000 | ||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Proceeds from issuance of common stock | $ 705,700,000 | ||||
Sponsor | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Number of shares of common stock issued | 83,782 | ||||
Proceeds from issuance of common stock | $ 754,035 |
Subsequent Events - Share Repur
Subsequent Events - Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended |
Aug. 10, 2015 | Jun. 30, 2015 | |
Subsequent Event [Line Items] | ||
Number of shares repurchased during period | 116,767 | |
Shares repurchased during period | $ 1.2 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of shares repurchased during period | 78,941 | |
Shares repurchased during period | $ 0.8 | |
Weighted average price of shares repurchased | $ 9.89 |
Subsequent Events - New Investm
Subsequent Events - New Investments (Narrative) (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Aug. 31, 2015USD ($)fund | Jul. 31, 2015USD ($)office | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Aug. 10, 2015USD ($) | |||
Subsequent Event [Line Items] | ||||||||
Initial amount paid for fund interests | $ 45,421 | $ 0 | ||||||
Private Equity | ||||||||
Subsequent Event [Line Items] | ||||||||
Net asset value of fund interests committed to acquire | $ 29,300 | |||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Principal amount | $ 177,400 | |||||||
Subsequent Event | Private Equity | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of private equity funds committed to acquire | fund | 3 | |||||||
Fund interest committed to acquire | $ 23,300 | |||||||
Initial amount paid for fund interests | 9,400 | |||||||
Deferred investment amount | $ 13,900 | |||||||
Percent of purchase price deferred | 50.00% | |||||||
Length of time from closing date to pay deferred investment amount | 12 months | |||||||
Subsequent Event | Canyon Park Joint Venture | ||||||||
Subsequent Event [Line Items] | ||||||||
Agreement to acquire office portfolio | $ 126,700 | |||||||
Number of Class B plus offices acquired | office | 1 | |||||||
Number of Class A flex offices acquired | office | 1 | |||||||
Ownership interest | 95.00% | |||||||
Non-refundable deposit | $ 4,000 | |||||||
Subsequent Event | Canyon Park Joint Venture | SteelWave | ||||||||
Subsequent Event [Line Items] | ||||||||
Ownership interest | 5.00% | |||||||
First Mortgage | ||||||||
Subsequent Event [Line Items] | ||||||||
Principal amount | $ 646,073 | [1] | $ 508,200 | [2] | ||||
Interest rate | 0.00% | 0.00% | ||||||
First Mortgage | Subsequent Event | Wisconsin Dells Hotel | ||||||||
Subsequent Event [Line Items] | ||||||||
Principal amount | $ 12,000 | |||||||
Interest rate | 4.95% | |||||||
[1] | Includes future funding commitments of $28.3 million for first mortgage loans and $4.6 million for subordinate interests. | |||||||
[2] | Includes future funding commitments of $29.8 million for first mortgage loans and $4.6 million for subordinate interests. |
Subsequent Events - New Borrowi
Subsequent Events - New Borrowings (Details) | 1 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended |
Jul. 31, 2015USD ($)loan | Jun. 30, 2015USD ($)loan | Aug. 10, 2015loan | Dec. 31, 2014USD ($)loan | |
Subsequent Event [Line Items] | ||||
Principal amount | $ 527,563,000 | $ 277,863,000 | ||
Amount drawn from each facility | $ 527,563,000 | $ 277,863,000 | ||
First Mortgage | ||||
Subsequent Event [Line Items] | ||||
Number of loans | loan | 13 | 9 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Number of loans | loan | 6 | |||
Subsequent Event | First Mortgage | ||||
Subsequent Event [Line Items] | ||||
Number of loans | loan | 3 | |||
Term Loan Facilities | ||||
Subsequent Event [Line Items] | ||||
Amount drawn from each facility | $ 473,900,000 | |||
Line of Credit | Term Loan Facilities | ||||
Subsequent Event [Line Items] | ||||
Principal amount | 277,563,000 | $ 277,863,000 | ||
Amount drawn from each facility | 277,563,000 | 277,863,000 | ||
Line of Credit | Term Loan Facilities | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Principal amount | $ 105,200,000 | |||
Line of Credit | Loan Facility 1 | Term Loan Facilities | ||||
Subsequent Event [Line Items] | ||||
Principal amount | 81,325,000 | 94,225,000 | ||
Amount drawn from each facility | 81,325,000 | 94,225,000 | ||
Line of Credit | Loan Facility 1 | Term Loan Facilities | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Amount drawn from each facility | 15,900,000 | |||
Line of Credit | Loan Facility 3 | Term Loan Facilities | ||||
Subsequent Event [Line Items] | ||||
Principal amount | 12,600,000 | 0 | ||
Amount drawn from each facility | $ 12,600,000 | $ 0 | ||
Line of Credit | Loan Facility 3 | Term Loan Facilities | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Amount drawn from each facility | $ 61,600,000 |