NorthStar Realty Finance Corp. (NRF, Financial) filed Quarterly Report for the period ended 2009-09-30.
NorthStar Realty Finance Corp. is an internally-managed REIT that makes fixed income structured finance and net lease investments in commercial real estate assets. NorthStar Realty's business consists of three core business lines: subordinate real estate debt real estate securities and net lease properties. Northstar Realty Finance Corp. has a market cap of $236.6 million; its shares were traded at around $3.46 with a P/E ratio of 7.9 and P/S ratio of 0.6. The dividend yield of Northstar Realty Finance Corp. stocks is 11.6%.
Despite negative macroeconomic and lending conditions continuing through the third quarter 2009, the public equity and corporate debt markets for real estate-owning REITs have performed extremely well for the first nine months this year. Year-to-date, the REIT market has raised nearly $17 billion of equity and approximately $10 billion of corporate debt. In addition, several newly-formed and externally advised REITs with a commercial real estate debt focus have raised approximately $1.5 billion of capital. Notwithstanding the ability of the public REIT market to raise capital, this market is very small relative to the size of the estimated $1.5 trillion commercial real estate finance market and we expect commercial real estate fundamentals to continue to deteriorate into 2010.
Approximately $4.0 billion of our collateralized debt obligations, also referred to as our term debt transaction liabilities (including the off-balance sheet and on-balance sheet term debt transaction financings) currently permit reinvestment of capital proceeds which means when the underlying assets repay we are able to reinvest the proceeds in new assets without having to repay the liabilities. We also have assets financed on a bank term loan with an outstanding balance of $383.2 million at September 30, 2009. On October 28, 2009, we completed a three-year extension of this debt and we repaid approximately $52.5 million of the outstanding balance by using uninvested cash contained within our term debt transactions. The bank debt requires six semi-annual amortization payments of $15 million, representing aggregate paydowns totaling $90 million over its term. Approximately $343.9 million of our funded loan commitments have their initial maturity date in the remainder of 2009; however, most of the loans contain extension options of at least nine months (many subject to performance criteria). It is therefore difficult to estimate how much capital, if any, from initial maturities or prepayments will be generated in our term debt transactions from loan repayments during 2009 to create availability to further amortize the bank loan.
Interest income for the three months ended September 30, 2009 totaled $34.3 million, representing a decrease of $15.5 million, or 31%, compared to $49.8 million for the three months ended September 30, 2008. The decrease consisted of a $19.6 million decrease attributable to an approximately 308 basis points lower average one-month LIBOR rate during the third quarter 2009 compared to third quarter 2008 and lower spreads on modified loans. The decrease was partially offset by a net increase to interest income of approximately $4.1 million resulting from the origination and acquisition of commercial real estate debt and commercial real estate securities with a net book value of $394.7 million subsequent to September 30, 2008 offset by approximately $341.4 million of investment dispositions and repayments during 2008.
Interest income from related parties for the three months ended September 30, 2009 totaled $4.2 million, representing an increase of $0.8 million, or 24%, compared to $3.4 million for the three months ended September 30, 2008. The increase is attributable to securities purchases within our non-consolidated term debt financings in which we own the non-investment grade note classes. We are
Rental and escalation income for the three months ended September 30, 2009 totaled $28.0 million, representing a decrease of $1.0 million, or 3%, compared to $29.0 million for
Read the The complete ReportNRF is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC.
NorthStar Realty Finance Corp. is an internally-managed REIT that makes fixed income structured finance and net lease investments in commercial real estate assets. NorthStar Realty's business consists of three core business lines: subordinate real estate debt real estate securities and net lease properties. Northstar Realty Finance Corp. has a market cap of $236.6 million; its shares were traded at around $3.46 with a P/E ratio of 7.9 and P/S ratio of 0.6. The dividend yield of Northstar Realty Finance Corp. stocks is 11.6%.
Highlight of Business Operations:
In February 2009, the U.S. Government ratified a nearly $800 billion economic stimulus package and in March announced the Public-Private Investment Program, or PPIP, to introduce up to $1 trillion of leverage into the financial system to purchase and finance high quality securities, including CMBS, and to acquire "legacy" loans from banks. The goal of the PPIP is to draw private capital into the market by providing government equity co-investment and attractive public financing, and the CMBS market initially responded positively to the announcement with credit spreads for the highest quality securities decreasing by several hundred basis points after the program's announcement. We, as well as a reported nearly 100 other potential PPIP managers filed an application with the U.S. Government to be one of its approved fund managers, but NorthStar was not one of the initial handful selected.Despite negative macroeconomic and lending conditions continuing through the third quarter 2009, the public equity and corporate debt markets for real estate-owning REITs have performed extremely well for the first nine months this year. Year-to-date, the REIT market has raised nearly $17 billion of equity and approximately $10 billion of corporate debt. In addition, several newly-formed and externally advised REITs with a commercial real estate debt focus have raised approximately $1.5 billion of capital. Notwithstanding the ability of the public REIT market to raise capital, this market is very small relative to the size of the estimated $1.5 trillion commercial real estate finance market and we expect commercial real estate fundamentals to continue to deteriorate into 2010.
Approximately $4.0 billion of our collateralized debt obligations, also referred to as our term debt transaction liabilities (including the off-balance sheet and on-balance sheet term debt transaction financings) currently permit reinvestment of capital proceeds which means when the underlying assets repay we are able to reinvest the proceeds in new assets without having to repay the liabilities. We also have assets financed on a bank term loan with an outstanding balance of $383.2 million at September 30, 2009. On October 28, 2009, we completed a three-year extension of this debt and we repaid approximately $52.5 million of the outstanding balance by using uninvested cash contained within our term debt transactions. The bank debt requires six semi-annual amortization payments of $15 million, representing aggregate paydowns totaling $90 million over its term. Approximately $343.9 million of our funded loan commitments have their initial maturity date in the remainder of 2009; however, most of the loans contain extension options of at least nine months (many subject to performance criteria). It is therefore difficult to estimate how much capital, if any, from initial maturities or prepayments will be generated in our term debt transactions from loan repayments during 2009 to create availability to further amortize the bank loan.
Interest income for the three months ended September 30, 2009 totaled $34.3 million, representing a decrease of $15.5 million, or 31%, compared to $49.8 million for the three months ended September 30, 2008. The decrease consisted of a $19.6 million decrease attributable to an approximately 308 basis points lower average one-month LIBOR rate during the third quarter 2009 compared to third quarter 2008 and lower spreads on modified loans. The decrease was partially offset by a net increase to interest income of approximately $4.1 million resulting from the origination and acquisition of commercial real estate debt and commercial real estate securities with a net book value of $394.7 million subsequent to September 30, 2008 offset by approximately $341.4 million of investment dispositions and repayments during 2008.
Interest income from related parties for the three months ended September 30, 2009 totaled $4.2 million, representing an increase of $0.8 million, or 24%, compared to $3.4 million for the three months ended September 30, 2008. The increase is attributable to securities purchases within our non-consolidated term debt financings in which we own the non-investment grade note classes. We are
Rental and escalation income for the three months ended September 30, 2009 totaled $28.0 million, representing a decrease of $1.0 million, or 3%, compared to $29.0 million for
Read the The complete ReportNRF is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC.
