STAMFORD, CT—Land and Buildings InvestmentManagement's Jonathan Litt has"straightforward" advice for NorthStar Asset ManagementGroup and NorthStar Realty Finance: getback together. NSAM, which was spun off from NRF a year and a halfago, earlier this month announced that it would explore strategicalternatives and had hired Goldman Sachs as itsfinancial advisor.
Calling NSAM "materially undervalued," an assessment itschairman likely would agree with, the Land and Buildings founderand CIO says there are "numerous paths to unlock that value." In aletter to David Hamomoto, NSAM's executivechairman, Litt writes, "Since the grand experiment of spinning offNSAM from NRF in the summer of 2014, the shares of both companieshave fallen over 50% from their highs.
"Externally managed REITs, such as NRF, have historicallystruggled to gain institutional investor support given themisaligned incentives between the manager and the REIT," hecontinues. Accordingly, Litt writes, "An NSAM/NRF recombinationappears to us to be the right thing to do and the right time to doit for all NRF and NSAM shareholders."
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
