NorthStar Realty Reports 'Break-Out' Year, Q4

The company closed on a total of $939 million transactions; 32 financing and net lease arrangements and 51 real estate securities investments.

"Our fourth quarter 2006 financing volume represented another record for the company. Direct originations again represented a majority of our lending volume, with 73% of our fourth quarter commitments structured directly with customers, and 48% completed with repeat borrowers," says David Hamamoto, president and CEO in a statement. "Our larger balance sheet and increased flexibility in match funding attractive investments resulting from closing CDO VIII have enabled us to make larger capital commitments to high quality owners. Our average loan commitment was $21.0 million for the fourth quarter, compared to $17.4 million in our entire loan portfolio."

For 2006, AFFO was $62.6 million, a total that more than doubled 2005's AFFO of $21.5 million, per share that factors out to $1.32. Hamamoto says, "2006 was a break-out year for NorthStar Realty Finance by every metric. We made approximately $2.8 billion of financing commitments across our business, maintained a solid credit track record and grew our equity market capitalization from $367 million to $1.1 billion. Since going public in 2004, we have delivered over 30% annualized total returns to shareholders. During 2006, we also planted the seeds for an exciting future for the company." At the start of 2007, NorthStar has management of $4.9 billion worth of assets.

For the year ahead, NorthStar plans to continue expanding its business platform, forming new alliances and expanding into what Hamamoto calls "complimentary areas." Specifically, in Q2, "We expect to begin discussions with private capital sources and are targeting raising two funds this year totaling $550 million to $750 million of equity capital, including an up to 30% commitment from NorthStar who will also manage these funds. We believe that prospective asset management activities undertaken by us would be complementary to our existing skills, will generate a higher return on invested equity capital due to the fees generated, will provide more visibility to this component of our revenues, and will broaden our sources of capital."