NorthStar Realty Finance Corp. (NRF, Financial) filed Quarterly Report for the period ended 2010-03-31.
Northstar Realty Finance Corp. has a market cap of $348.5 million; its shares were traded at around $4.64 with and P/S ratio of 1.3. The dividend yield of Northstar Realty Finance Corp. stocks is 8.7%.NRF is in the portfolios of Jim Simons of Renaissance Technologies LLC, Kenneth Fisher of Fisher Asset Management, LLC.
As of March 31, 2010, approximately $3.5 billion of our collateralized debt obligations 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 with a net book value of approximately $450.6 million financed on a bank term loan with an outstanding balance of $326.7 million at March 31, 2010. On October 28, 2009, we completed a three-year extension of this bank term loan and we repaid approximately $52.5 million of the outstanding balance by using uninvested cash contained within our CDO financings. The bank debt requires six semi-annual amortization payments of $15 million, representing aggregate paydowns totaling $90 million over its term. Approximately $826.9 million of our funded loan commitments have their initial maturity date during the remainder of 2010; however, most of the loans contain extension options of at least one year (many subject to performance criteria). We also expect that a majority of the $306.0 million of loans having final maturities during the remainder of 2010 will have their maturities extended beyond 2010 with the expectation that future periods will have more attractive economic conditions and cheaper debt capital. It is therefore difficult to estimate how much capital, if any, will be generated in our CDO financings from loan repayments during the remainder of 2010 to create availability to further amortize the bank loan.
In April 2010, NorthStar sold a $13.9 million first mortgage loan backed by land collateral located in New York, NY for approximately $8.5 million. The mortgage was a NPL and in prior periods NorthStar had recorded $6.3 million of loan loss reserves for this asset. In April 2010 NorthStar also sold a $39.1 million mezzanine loan backed by a portfolio of hotel properties for approximately $32.1 million. NorthStar had recorded $7.0 million of loan loss reserves for this asset. During April 2010 NorthStar also foreclosed on an $18.0 million first mortgage loan backed by office collateral located in Philadelphia, PA. NorthStar had in prior periods recorded $8.8 million of loan loss reserves for this asset.
For the three months ended March 31, 2010, we modified the contractual interest rates of loans as part of restructuring or extension negotiations and, in some cases, we discontinued the recognition of income for interest accrual rates in excess of the stated cash pay rates. In the aggregate, these changes, as well as loans which were non-performing during the quarter, resulted in an approximate $2.9 million reduction to interest income ($12.2 million on an annualized basis).
We own a $92.5 million pari passu participation in a $498.6 million first mortgage that is secured by a retail/entertainment complex located in East Rutherford, NJ (the "NJ Loan"). The NJ Loan was most recently modified as of March 31, 2010 and the maturity date of the NJ Loan was extended to August 2010 to provide the borrower additional time to seek new capital for the project. There can be no assurance that the borrower will be successful in attracting the capital necessary for the project and that the NJ Loan will not default in the future. If the NJ Loan were to default, we may lose a substantial amount of our investment, which could have a material adverse effect on our business and operations.
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Northstar Realty Finance Corp. has a market cap of $348.5 million; its shares were traded at around $4.64 with and P/S ratio of 1.3. The dividend yield of Northstar Realty Finance Corp. stocks is 8.7%.NRF is in the portfolios of Jim Simons of Renaissance Technologies LLC, Kenneth Fisher of Fisher Asset Management, LLC.
Highlight of Business Operations:
Despite these conditions, REITs have collectively raised nearly $30 billion of debt and equity capital, and the Morgan Stanley REIT Index returned approximately 28.6% for 2009 and approximately 20% year-to-date through April 26, 2010. In addition, three newly-formed REITs with a real estate debt focus raised approximately $1.5 billion of capital in 2009. 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. More recently, U.S. economic conditions appear to be improving (based on GDP growth), however, the unemployment rate remains high indicating a low rate of business expansion, which drives commercial real estate cash flows. Commercial real estate tends to lag economic recoveries and we expect commercial real estate fundamentals to continue to deteriorate through 2010.As of March 31, 2010, approximately $3.5 billion of our collateralized debt obligations 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 with a net book value of approximately $450.6 million financed on a bank term loan with an outstanding balance of $326.7 million at March 31, 2010. On October 28, 2009, we completed a three-year extension of this bank term loan and we repaid approximately $52.5 million of the outstanding balance by using uninvested cash contained within our CDO financings. The bank debt requires six semi-annual amortization payments of $15 million, representing aggregate paydowns totaling $90 million over its term. Approximately $826.9 million of our funded loan commitments have their initial maturity date during the remainder of 2010; however, most of the loans contain extension options of at least one year (many subject to performance criteria). We also expect that a majority of the $306.0 million of loans having final maturities during the remainder of 2010 will have their maturities extended beyond 2010 with the expectation that future periods will have more attractive economic conditions and cheaper debt capital. It is therefore difficult to estimate how much capital, if any, will be generated in our CDO financings from loan repayments during the remainder of 2010 to create availability to further amortize the bank loan.
In April 2010, NorthStar sold a $13.9 million first mortgage loan backed by land collateral located in New York, NY for approximately $8.5 million. The mortgage was a NPL and in prior periods NorthStar had recorded $6.3 million of loan loss reserves for this asset. In April 2010 NorthStar also sold a $39.1 million mezzanine loan backed by a portfolio of hotel properties for approximately $32.1 million. NorthStar had recorded $7.0 million of loan loss reserves for this asset. During April 2010 NorthStar also foreclosed on an $18.0 million first mortgage loan backed by office collateral located in Philadelphia, PA. NorthStar had in prior periods recorded $8.8 million of loan loss reserves for this asset.
For the three months ended March 31, 2010, we modified the contractual interest rates of loans as part of restructuring or extension negotiations and, in some cases, we discontinued the recognition of income for interest accrual rates in excess of the stated cash pay rates. In the aggregate, these changes, as well as loans which were non-performing during the quarter, resulted in an approximate $2.9 million reduction to interest income ($12.2 million on an annualized basis).
We own a $92.5 million pari passu participation in a $498.6 million first mortgage that is secured by a retail/entertainment complex located in East Rutherford, NJ (the "NJ Loan"). The NJ Loan was most recently modified as of March 31, 2010 and the maturity date of the NJ Loan was extended to August 2010 to provide the borrower additional time to seek new capital for the project. There can be no assurance that the borrower will be successful in attracting the capital necessary for the project and that the NJ Loan will not default in the future. If the NJ Loan were to default, we may lose a substantial amount of our investment, which could have a material adverse effect on our business and operations.
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