NorthStar Income II Announces Investment in Nashville High-Rise Project

NEW YORK, Aug. 13, 2014 /PRNewswire/ -- NorthStar Real Estate Income II, Inc. (NorthStar Income II) announced today that it originated a $24.9 million subordinate interest in a $97.8 million multifamily development project in Nashville, TN. The luxury high-rise rental property will be constructed in the vibrant South of Broadway (SoBro) submarket of downtown Nashville and is expected to be the only high-rise multifamily building completed in the area through 2017.

"This transaction represents additional progress in the evolution of NorthStar Income II's portfolio, adding a subordinate investment backed by a high-quality project to our existing portfolio," said Daniel R. Gilbert, chief executive officer and president. "We believe that our sponsor's expertise and ability to identify investments throughout the real estate capital structure will allow us to build a balanced portfolio in line with our business plan."

About the property:

• 32-story, 313-unit luxury rental building located in the SoBro submarket.
• Expected completion in 2016 and built to LEED Silver certification standards.
• Located in close proximity to major employment and entertainment centers.
• Class A building with 18,900 square feet of retail space and a 17,000 square-foot amenity deck.
• Conceptualized by three experienced developers who have collectively acquired or developed more than 1,000 units in the Nashville market.

About NorthStar Income II's investment:

• Amount: $24.9 million
• Rate: 14.0%, including a 1.0% accrual paid at redemption
• Term: 36 months
• Extension Options: Two one-year options, subject to certain performance tests and the payment of a fee equal to 0.25% of the subordinate interest

NorthStar Income II's portfolio consists of five senior mortgage loans and one subordinate interest with a combined principal amount of $227.8 million as of August 13, 2014.

About NorthStar Real Estate Income II, Inc.
NorthStar Income II is a public, non-traded real estate investment trust (REIT) sponsored by NorthStar Asset Management Group Inc. NorthStar Income II was formed to originate, acquire and asset manage a diversified portfolio of commercial real estate debt, select equity and securities investments.

This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "will," "may," "plans," "expects," "anticipates" or other similar words or expressions. These statements are based on NorthStar Income II's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward looking statements; NorthStar Income II can give no assurance that its expectations will be attained. Forward-looking statements are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying any forward-looking statements will not materialize or will vary significantly from actual results. Variations of assumptions and results may be material. Factors that could cause actual results to differ materially from NorthStar Income II's expectations include, but are not limited to, the ability of the project sponsors to successfully complete the property in line with their anticipated timing, budget and specifications, if at all, whether or not certain affiliates of the project sponsors guarantee completion of the property, the ability of the project sponsors to successfully lease the property upon completion; the ability of the borrower to comply with the terms, including financial and other covenants, of the agreement underlying the subordinate interest, whether the borrower determines to extend the term of the subordinate interest, changes in market rental rates for commercial and multifamily properties located in Nashville, Tennessee, whether additional high-rise multifamily buildings are completed in the area through 2017, whether NorthStar Income II benefits from its sponsor's expertise and ability to identify investments throughout the real estate capital structure, NorthStar Income II's ability to build a balanced portfolio in line with its business plan, future property values, the impact of any losses from NorthStar Income II's properties on cash flows and returns, property level cash flows, changes in economic conditions generally and the real estate and debt markets specifically, the availability of capital, the ability to achieve targeted returns, changes to generally accepted accounting principles, policies and rules applicable to REITs and the factors specified in in Part I, Item 1A of NorthStar Income II's Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as well as in NorthStar Income II's other filings with the Securities and Exchange Commission. The foregoing list of factors is not exhaustive. All forward-looking statements included in this release are based upon information available to NorthStar Income II on the date of this release and NorthStar Income II is under no duty to update any of the forward-looking statements after the date of this report to conform these statements to actual results.

SOURCE NorthStar Real Estate Income II, Inc.

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