|
|
|
|
|
Maryland
(State or Other Jurisdiction of
Incorporation or
Organization)
|
32-0468861
(IRS Employer
Identification No.)
|
Large accelerated filer
o
|
|
Accelerated filer
o
|
|
Non-accelerated filer
x
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
o
|
|
Index
|
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Page
|
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|
|
|
||
|
||
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||
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||
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||
|
||
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||
|
•
|
the effect of economic conditions, particularly in Europe, on the valuation of our investments and on the tenants of the real property that we own;
|
•
|
our rapid growth and relatively limited experience investing in Europe;
|
•
|
the ability of NorthStar Asset Management Group Inc., or NSAM or its successor company, if the pending merger is consummated, to scale its operations in Europe to effectively manage our company;
|
•
|
the unknown impact of the exit of the United Kingdom or one or more other countries from the European Union or the potential default of one or more counties in the European Union;
|
•
|
our ability to qualify and remain qualified as a real estate investment trust, or REIT;
|
•
|
adverse domestic or international economic conditions and the impact on the commercial real estate industry;
|
•
|
volatility, disruption or uncertainty in the financial markets;
|
•
|
access to debt and equity capital and our liquidity;
|
•
|
our substantial use of leverage and our ability to comply with the terms of our borrowing arrangements;
|
•
|
our ability to monetize our assets on favorable terms or at all;
|
•
|
our ability to obtain mortgage financing on our real estate portfolio on favorable terms or at all;
|
•
|
our ability to acquire attractive investment opportunities and the impact of competition for attractive investment opportunities;
|
•
|
the effects of being an externally-managed company, including our reliance on NSAM and its affiliates and sub-advisors/co-venturers and successors in providing management services to us, the payment of substantial base management and incentive fees to our manager, the allocation of investments by NSAM among us and NSAM’s other sponsored or managed companies and strategic vehicles and various conflicts of interest in our relationship with NSAM;
|
•
|
performance of our investments relative to our expectations and the impact on our actual return on invested equity, as well as the cash provided by these investments and available for distribution;
|
•
|
the impacts on our business as a result of NSAM’s announcement that it entered into a merger agreement with Colony Capital, Inc., or Colony and NorthStar Realty Finance Corp., or NorthStar Realty;
|
•
|
restrictions on our ability to engage in certain activities and the requirement that we may be required to access capital at inopportune times as a result of our borrowings;
|
•
|
our ability to make borrowings under our credit facility;
|
•
|
the impact of adverse conditions affecting office properties;
|
•
|
illiquidity of properties in our portfolio;
|
•
|
our ability to realize current and expected return over the life of our investments;
|
•
|
tenant defaults or bankruptcy;
|
•
|
any failure in our due diligence to identify all relevant facts in our underwriting process or otherwise;
|
•
|
the impact of terrorism or hostilities involving Europe;
|
•
|
our ability to manage our costs in line with our expectations and the impact on our cash available for distribution, or CAD, and net operating income, or NOI, of our properties;
|
•
|
environmental and regulatory requirements, compliance costs and liabilities relating to owning and operating properties in our portfolio and to our business in general;
|
•
|
effect of regulatory actions, litigation and contractual claims against us and our affiliates, including the potential settlement and litigation of such claims;
|
•
|
changes in European, international and domestic laws or regulations governing various aspects of our business;
|
•
|
future changes in foreign, federal, state and local tax law that may have an adverse impact on the cash flow and value of our investments;
|
•
|
our ability to effectively structure our investments in a tax efficient manner, including foreign, federal, state and local tax purposes;
|
•
|
the impact that a rise in future interest rates may have on our floating rate financing;
|
•
|
potential devaluation of foreign currencies, predominately the Euro, relative to the U.S. dollar due to quantitative easing in Europe and/or other factors which could cause the U.S. dollar value of our investments to decline;
|
•
|
general foreign exchange risk associated with properties located in European countries located outside of the Euro Area, including the United Kingdom and Sweden;
|
•
|
the loss of our exemption from the definition of an “investment company” under the Investment Company Act of 1940, as amended;
|
•
|
NSAM’s ability to hire and retain qualified personnel and potential changes to key personnel providing management services to us;
|
•
|
the lack of historical financial statements for properties we have acquired and may acquire in compliance with U.S. Securities and Exchange Commission, or SEC, requirements and U.S. generally accepted accounting principles, or U.S. GAAP, as well as the lack of familiarity of our tenants and third-party service providers with such requirements;
|
•
|
the potential failure to maintain effective internal controls and disclosure controls and procedures;
|
•
|
the historical combined consolidated financial statements included in this Quarterly Report on Form
10-Q
not providing an accurate indication of our performance in the future or reflecting what our financial position, results of operations or cash flow would have been had we operated as an independent public company during the periods presented;
|
•
|
our status as an emerging growth company; and
|
•
|
compliance with the rules governing REITs.
|
|
June 30, 2016 (Unaudited)
|
|
December 31,
2015 |
||||
Assets
|
|
|
|
||||
Operating real estate, gross
|
$
|
1,765,653
|
|
|
$
|
2,120,460
|
|
Less: accumulated depreciation
|
(48,615
|
)
|
|
(35,303
|
)
|
||
Operating real estate, net
|
1,717,038
|
|
|
2,085,157
|
|
||
Cash and cash equivalents
|
125,102
|
|
|
283,844
|
|
||
Restricted cash
|
13,913
|
|
|
20,871
|
|
||
Receivables, net of allowance of $399 and $115 as of June 30, 2016 and December 31, 2015, respectively
|
9,214
|
|
|
9,663
|
|
||
Unbilled rent receivable
|
8,418
|
|
|
5,869
|
|
||
Assets held for sale
|
299,953
|
|
|
6,094
|
|
||
Derivative assets, at fair value
|
11,672
|
|
|
23,792
|
|
||
Intangible assets, net
|
173,139
|
|
|
241,519
|
|
||
Other assets, net
|
9,817
|
|
|
6,241
|
|
||
Total assets
|
$
|
2,368,266
|
|
|
$
|
2,683,050
|
|
Liabilities
|
|
|
|
||||
Mortgage and other notes payable, net
|
$
|
1,377,584
|
|
|
$
|
1,424,610
|
|
Senior notes, net
|
109,233
|
|
|
333,798
|
|
||
Credit facility
|
58,642
|
|
|
—
|
|
||
Accounts payable and accrued expenses
|
27,678
|
|
|
39,964
|
|
||
Due to related party (refer to Note 5)
|
3,606
|
|
|
3,995
|
|
||
Derivative liabilities, at fair value
|
1,221
|
|
|
—
|
|
||
Intangible liabilities, net
|
36,075
|
|
|
40,718
|
|
||
Liabilities held for sale
|
10,565
|
|
|
—
|
|
||
Other liabilities
|
33,600
|
|
|
42,654
|
|
||
Total liabilities
|
1,658,204
|
|
|
1,885,739
|
|
||
Commitments and contingencies
|
|
|
|
||||
Redeemable non-controlling interest (refer to Note 8)
|
1,598
|
|
|
1,569
|
|
||
Equity
|
|
|
|
||||
NorthStar Realty Europe Corp. Stockholders’ Equity
|
|
|
|
||||
Preferred stock, $0.01 par value, 200,000,000 shares authorized, no shares issued and outstanding as of June 30, 2016 and December 31, 2015
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 60,418,459 and 59,325,730 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively
|
604
|
|
|
593
|
|
||
Additional paid-in capital
|
968,871
|
|
|
968,662
|
|
||
Retained earnings (accumulated deficit)
|
(266,915
|
)
|
|
(186,246
|
)
|
||
Accumulated other comprehensive income (loss)
|
(2,955
|
)
|
|
2,560
|
|
||
Total NorthStar Realty Europe Corp. stockholders’ equity
|
699,605
|
|
|
785,569
|
|
||
Non-controlling interests
|
8,859
|
|
|
10,173
|
|
||
Total equity
|
708,464
|
|
|
795,742
|
|
||
Total liabilities and equity
|
$
|
2,368,266
|
|
|
$
|
2,683,050
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
||||||||||||
|
2016
(1)
|
|
2015
(1)
|
|
2016
(1)
|
|
2015
(1)
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
$
|
33,990
|
|
|
$
|
28,344
|
|
|
$
|
68,823
|
|
|
$
|
29,853
|
|
|
Escalation income
|
5,908
|
|
|
3,213
|
|
|
11,998
|
|
|
3,890
|
|
|
||||
Other revenue
|
46
|
|
|
67
|
|
|
749
|
|
|
68
|
|
|
||||
Total revenues
|
39,944
|
|
|
31,624
|
|
|
81,570
|
|
|
33,811
|
|
|
||||
Expenses
|
|
|
|
|
|
|
|
|
||||||||
Properties - operating expenses
|
8,540
|
|
|
5,423
|
|
|
17,771
|
|
|
6,257
|
|
|
||||
Interest expense
|
11,641
|
|
|
6,072
|
|
|
24,183
|
|
|
6,824
|
|
|
||||
Transaction costs
|
1,652
|
|
|
79,120
|
|
|
2,483
|
|
|
88,124
|
|
|
||||
Impairment losses
|
27,468
|
|
|
—
|
|
|
27,468
|
|
|
—
|
|
|
||||
Management fee, related party
(2)
|
3,500
|
|
|
—
|
|
|
7,000
|
|
|
—
|
|
|
||||
Other expenses
|
3,041
|
|
|
2,799
|
|
|
6,731
|
|
|
2,799
|
|
|
||||
General and administrative expenses
|
1,502
|
|
|
306
|
|
|
2,978
|
|
|
1,234
|
|
|
||||
Compensation expense
|
3,766
|
|
|
—
|
|
|
7,034
|
|
|
—
|
|
|
||||
Depreciation and amortization
|
18,404
|
|
|
14,694
|
|
|
37,275
|
|
|
15,620
|
|
|
||||
Total expenses
|
79,514
|
|
|
108,414
|
|
|
132,923
|
|
|
120,858
|
|
|
||||
Other income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gain (loss) on investments and other (refer to Note 10)
|
383
|
|
|
3,629
|
|
|
(15,788
|
)
|
|
(2,402
|
)
|
|
||||
Realized gain (loss) on investments and other
|
5,398
|
|
|
41
|
|
|
3,368
|
|
|
35
|
|
|
||||
Income (loss) before income tax benefit (expense)
|
(33,789
|
)
|
|
(73,120
|
)
|
|
(63,773
|
)
|
|
(89,414
|
)
|
|
||||
Income tax benefit (expense)
|
(520
|
)
|
|
11,379
|
|
|
139
|
|
|
11,379
|
|
|
||||
Net income (loss)
|
(34,309
|
)
|
|
(61,741
|
)
|
|
(63,634
|
)
|
|
(78,035
|
)
|
|
||||
Net (income) loss attributable to non-controlling interests
|
400
|
|
|
30
|
|
|
743
|
|
|
61
|
|
|
||||
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders
|
$
|
(33,909
|
)
|
|
$
|
(61,711
|
)
|
|
$
|
(62,891
|
)
|
|
$
|
(77,974
|
)
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
$
|
(0.57
|
)
|
|
$
|
(0.98
|
)
|
(3)
|
$
|
(1.06
|
)
|
|
$
|
(1.24
|
)
|
(3)
|
Diluted
|
$
|
(0.57
|
)
|
|
$
|
(0.98
|
)
|
(3)
|
$
|
(1.06
|
)
|
|
$
|
(1.24
|
)
|
(3)
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
59,115,895
|
|
|
62,987,863
|
|
(3)
|
59,266,850
|
|
|
62,987,863
|
|
(3)
|
||||
Diluted
|
59,805,545
|
|
|
62,987,863
|
|
(3)
|
59,957,559
|
|
|
62,987,863
|
|
(3)
|
||||
Dividends per share of common stock
|
$
|
0.15
|
|
|
N/A
|
|
|
$
|
0.30
|
|
|
N/A
|
|
|
(1)
|
The combined consolidated financial statements for the
three
and
six months ended
June 30, 2016
represent the Company’s results of operations following the Spin-off on October 31, 2015. The combined consolidated financial statements for the
three
and
six months ended
June 30, 2015
represent: (i) the Company’s results of operations of the European Real Estate Business as if the transferred business was the business for the periods in which common control was present (refer to Notes 1 and 3); and (ii) an allocation of costs related to the Company. As a result, results of operations for the
three
and
six months ended
June 30, 2016
may not be comparable to the Company’s results of operations reported for the prior periods presented.
|
(2)
|
The Company began paying fees on November 1, 2015, in connection with the management agreement with NSAM (refer to Note 5).
|
(3)
|
Basic and diluted earnings per common share for the
three
and
six months ended
June 30, 2015
were calculated using the common stock distributed on November 1, 2015 in connection with the Spin-off (refer to Note 7).
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
$
|
(34,309
|
)
|
|
$
|
(61,741
|
)
|
|
$
|
(63,634
|
)
|
|
$
|
(78,035
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment, net
|
(32,363
|
)
|
|
34,620
|
|
|
(5,789
|
)
|
|
33,683
|
|
||||
Total other comprehensive income (loss)
|
(32,363
|
)
|
|
34,620
|
|
|
(5,789
|
)
|
|
33,683
|
|
||||
Comprehensive income (loss)
|
(66,672
|
)
|
|
(27,121
|
)
|
|
(69,423
|
)
|
|
(44,352
|
)
|
||||
Comprehensive (income) loss attributable to non-controlling interests
|
65
|
|
|
31
|
|
|
469
|
|
|
63
|
|
||||
Comprehensive income (loss) attributable to NorthStar Realty Europe Corp.
|
$
|
(66,607
|
)
|
|
$
|
(27,090
|
)
|
|
$
|
(68,954
|
)
|
|
$
|
(44,289
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(63,634
|
)
|
|
$
|
(78,035
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
37,275
|
|
|
15,620
|
|
||
Amortization of deferred financing costs
|
3,789
|
|
|
798
|
|
||
Amortization of equity-based compensation
|
6,517
|
|
|
—
|
|
||
Allowance for uncollectible accounts
|
287
|
|
|
—
|
|
||
Unrealized (gain) loss on investments and other
|
15,788
|
|
|
2,402
|
|
||
Realized (gain) loss on investments and other
|
(3,368
|
)
|
|
(35
|
)
|
||
Impairment losses
|
27,468
|
|
|
—
|
|
||
Amortization of capitalized above/below market leases
|
2,318
|
|
|
434
|
|
||
Straight line rental income
|
(3,825
|
)
|
|
(1,441
|
)
|
||
Deferred income taxes, net
|
(859
|
)
|
|
14,121
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Restricted cash
|
(4,142
|
)
|
|
(868
|
)
|
||
Receivables
|
(4,788
|
)
|
|
(3,036
|
)
|
||
Other assets
|
(691
|
)
|
|
17,153
|
|
||
Accounts payable and accrued expenses
|
(5,902
|
)
|
|
14,436
|
|
||
Due to related party
|
(389
|
)
|
|
—
|
|
||
Other liabilities
|
2,914
|
|
|
21,796
|
|
||
Net cash provided by (used in) operating activities
|
8,758
|
|
|
3,345
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Acquisition of operating real estate
|
—
|
|
|
(1,635,413
|
)
|
||
Improvements of operating real estate
|
(5,792
|
)
|
|
(705
|
)
|
||
Proceeds from sale of operating real estate
|
74,923
|
|
|
—
|
|
||
Other assets
|
(10,691
|
)
|
|
—
|
|
||
Changes in restricted cash
|
9,915
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
68,355
|
|
|
(1,636,118
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayment of mortgage and other notes payable
|
(32,088
|
)
|
|
—
|
|
||
Borrowings from credit facility
|
65,000
|
|
|
—
|
|
||
Borrowings from mortgage and other notes payable
|
—
|
|
|
938,698
|
|
||
Repayment of credit facility
|
(6,358
|
)
|
|
—
|
|
||
Payment of financing costs
|
(2,271
|
)
|
|
(714
|
)
|
||
Settlement of derivatives
|
(1,195
|
)
|
|
—
|
|
||
Purchase of derivative instruments
|
(380
|
)
|
|
(14,064
|
)
|
||
Repurchase of Senior Notes
|
(230,782
|
)
|
|
—
|
|
||
Tax withholding related to vesting of equity-based compensation
|
(113
|
)
|
|
—
|
|
||
Retirement of shares of common stock
|
(4,919
|
)
|
|
—
|
|
||
Dividends
|
(17,986
|
)
|
|
—
|
|
||
Net transactions with NorthStar Realty
|
—
|
|
|
745,264
|
|
||
Contributions from non-controlling interest
|
—
|
|
|
65
|
|
||
Net cash provided by (used in) financing activities
|
(231,092
|
)
|
|
1,669,249
|
|
||
Effect of foreign currency translation on cash and cash equivalents
|
(4,763
|
)
|
|
(2,888
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(158,742
|
)
|
|
33,588
|
|
||
Cash and cash equivalents—beginning of period
|
283,844
|
|
|
1,552
|
|
||
Cash and cash equivalents—end of period
|
$
|
125,102
|
|
|
$
|
35,140
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
||||
Reclassification of operating real estate to assets held for sale
|
$
|
276,513
|
|
|
$
|
—
|
|
Reclassification of intangible assets and liabilities of operating real estate to assets and liabilities held for sale
|
37,394
|
|
|
—
|
|
||
Reclassification of other assets and other liabilities to assets and liabilities held for sale
|
7,593
|
|
|
—
|
|
||
Reclassification related to measurement adjustments/other
|
5,628
|
|
|
—
|
|
||
Retirement of shares of common stock
|
1,351
|
|
|
—
|
|
||
Reallocation of interest in Operating Partnership
|
1,360
|
|
|
—
|
|
||
Reclassification from other assets to operating real estate
|
774
|
|
|
—
|
|
1.
|
Formation and Organization
|
2.
|
Summary of Significant Accounting Policies
|
|
June 30, 2016 (unaudited)
|
|
December 31, 2015
|
||||||||||||||||||||
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In-place lease
|
$
|
94,785
|
|
|
$
|
(24,803
|
)
|
|
$
|
69,982
|
|
|
$
|
121,004
|
|
|
$
|
(20,120
|
)
|
|
$
|
100,884
|
|
Above-market lease
|
40,421
|
|
|
(6,753
|
)
|
|
33,668
|
|
|
53,236
|
|
|
(5,806
|
)
|
|
47,430
|
|
||||||
Below-market ground lease
|
55,608
|
|
|
(669
|
)
|
|
54,939
|
|
|
70,971
|
|
|
(618
|
)
|
|
70,353
|
|
||||||
Goodwill
(1)
|
14,550
|
|
|
NA
|
|
|
14,550
|
|
|
22,852
|
|
|
NA
|
|
|
22,852
|
|
||||||
Total
|
$
|
205,364
|
|
|
$
|
(32,225
|
)
|
|
$
|
173,139
|
|
|
$
|
268,063
|
|
|
$
|
(26,544
|
)
|
|
$
|
241,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intangible liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Below-market lease
|
$
|
37,283
|
|
|
$
|
(6,251
|
)
|
|
$
|
31,032
|
|
|
$
|
40,213
|
|
|
$
|
(4,490
|
)
|
|
$
|
35,723
|
|
Above-market ground lease
|
5,109
|
|
|
(66
|
)
|
|
5,043
|
|
|
5,026
|
|
|
(31
|
)
|
|
4,995
|
|
||||||
Total
|
$
|
42,392
|
|
|
$
|
(6,317
|
)
|
|
$
|
36,075
|
|
|
$
|
45,239
|
|
|
$
|
(4,521
|
)
|
|
$
|
40,718
|
|
(1)
|
Represents goodwill associated with certain share-deal acquisitions of the New European Investments in exchange for the Company’s shares. The goodwill and a corresponding deferred tax liability is recorded at acquisition based on tax basis differences.
|
|
June 30, 2016 (Unaudited)
|
|
December 31, 2015
|
||||
Other assets:
|
|
|
|
||||
Prepaid expenses
|
$
|
4,032
|
|
|
$
|
—
|
|
Deferred lease costs
|
3,377
|
|
|
220
|
|
||
Deferred tax assets, net
|
1,011
|
|
|
3,041
|
|
||
Investment deposits and pending deal costs
|
—
|
|
|
2,007
|
|
||
Other
|
1,397
|
|
|
973
|
|
||
Total
|
$
|
9,817
|
|
|
$
|
6,241
|
|
|
|
|
|
||||
|
June 30, 2016 (Unaudited)
|
|
December 31, 2015
|
||||
Other liabilities:
|
|
|
|
||||
Deferred tax liabilities
|
$
|
11,274
|
|
|
$
|
22,026
|
|
Prepaid rent and unearned revenue
|
14,601
|
|
|
10,450
|
|
||
Tenant security deposits
|
4,817
|
|
|
4,953
|
|
||
Prepaid service charge reimbursement
|
2,201
|
|
|
1,988
|
|
||
Other
|
707
|
|
|
3,237
|
|
||
Total
|
$
|
33,600
|
|
|
$
|
42,654
|
|
3.
|
Operating Real Estate
|
|
|
June 30, 2016 (Unaudited)
|
|
December 31, 2015
|
||||
Land
|
|
$
|
399,828
|
|
|
$
|
456,703
|
|
Buildings and improvements
|
|
1,069,602
|
|
|
1,256,002
|
|
||
Building leasehold interests and improvements
|
|
232,565
|
|
|
334,970
|
|
||
Furniture, fixtures and equipment
|
|
244
|
|
|
218
|
|
||
Tenant improvements
|
|
63,414
|
|
|
72,567
|
|
||
Subtotal
|
|
1,765,653
|
|
|
2,120,460
|
|
||
Less: Accumulated depreciation
|
|
(48,615
|
)
|
|
(35,303
|
)
|
||
Operating real estate, net
|
|
$
|
1,717,038
|
|
|
$
|
2,085,157
|
|
|
|
|
|
Assets
|
|
|
||||||||||||||||||||||||
Description
(1)
|
|
Properties
|
|
Operating Real Estate, Net
|
|
Intangible Assets, Net
|
|
Other assets
|
|
Total
(2)
|
|
Intangible Liabilities, Net
|
|
Other Liabilities
|
|
Total
(2)(3)
|
||||||||||||||
Internos Portfolio
|
|
1
|
|
$
|
11,551
|
|
|
$
|
1,273
|
|
|
$
|
3,867
|
|
|
$
|
16,691
|
|
|
$
|
—
|
|
|
$
|
461
|
|
|
$
|
461
|
|
IVG Portfolio
|
|
3
|
|
43,504
|
|
|
5,733
|
|
|
7,391
|
|
|
56,628
|
|
|
3,787
|
|
|
1,571
|
|
|
5,358
|
|
|||||||
SEB Portfolio
|
|
3
|
|
215,849
|
|
|
3,580
|
|
|
1,523
|
|
|
220,952
|
|
|
1,639
|
|
|
3,107
|
|
|
4,746
|
|
|||||||
Deka Portfolio
|
|
1
|
|
5,610
|
|
|
72
|
|
|
—
|
|
|
5,682
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
|
8
|
|
$
|
276,514
|
|
|
$
|
10,658
|
|
|
$
|
12,781
|
|
|
$
|
299,953
|
|
|
$
|
5,426
|
|
|
$
|
5,139
|
|
|
$
|
10,565
|
|
(1)
|
The assets classified as held for sale will be sold on the open market as asset deals subject to standard industry terms and conditions. The assets contributed
$5.0 million
and
$5.2 million
of revenue and a pretax loss of
$31.8 million
and
$32.2 million
for the
three
and
six months ended
June 30, 2016
.
|
(2)
|
Represents operating real estate and intangible assets and liabilities, net of depreciation and amortization of
$2.0 million
.
|
(3)
|
Excludes the mortgage payable associated with these held for sale assets of
$63.5 million
.
|
4.
|
Borrowings
|
|
|
|
|
|
June 30, 2016 (Unaudited)
|
|
December 31, 2015
|
||||||||||||
|
Final
Maturity |
|
Contractual
Interest Rate (2) |
|
Principal
Amount |
|
Carrying
Value |
|
Principal
Amount |
|
Carrying
Value |
||||||||
Mortgage and other notes payable:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.K. Complex - Floating
|
Jan-20
|
|
GBP LIBOR + 1.75%
(3)
|
|
$
|
54,460
|
|
|
$
|
53,409
|
|
|
$
|
60,369
|
|
|
$
|
59,210
|
|
U.K. Complex - Fixed
|
Jan-20
|
|
8.325%
(3)
|
|
12,553
|
|
|
12,466
|
|
|
13,641
|
|
|
13,369
|
|
||||
Internos Portfolio
|
Dec-20
|
|
(4)
|
|
75,288
|
|
(7)
|
74,478
|
|
|
81,494
|
|
|
80,528
|
|
||||
IVG Portfolio
|
Dec-20
|
|
(4)
|
|
69,591
|
|
(7)
|
68,380
|
|
|
77,896
|
|
|
75,308
|
|
||||
Deka Portfolio
|
Dec-20
|
|
(4)
|
|
44,722
|
|
(7)
|
44,028
|
|
|
43,963
|
|
|
44,423
|
|
||||
SEB Portfolio
|
Apr-22
|
|
(5)
|
|
647,622
|
|
(7)
|
638,812
|
|
|
684,540
|
|
|
674,543
|
|
||||
SEB Portfolio - Preferred
|
Apr-60
|
|
(6)
|
|
117,700
|
|
(7)
|
117,339
|
|
|
115,604
|
|
|
115,219
|
|
||||
Trianon Tower
|
Jul-23
|
|
(8)
|
|
366,425
|
|
|
364,629
|
|
|
359,898
|
|
|
357,996
|
|
||||
Other - Preferred
|
Oct-45
|
|
(9)
|
|
6,497
|
|
|
4,043
|
|
|
6,691
|
|
|
4,014
|
|
||||
Total mortgage and other notes payable
|
|
|
|
|
1,394,858
|
|
|
1,377,584
|
|
|
1,444,096
|
|
|
1,424,610
|
|
||||
Senior Notes:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes
(10)
|
Dec-16
|
|
4.625%
|
|
109,460
|
|
|
109,233
|
|
|
340,000
|
|
|
333,798
|
|
||||
Credit Facility
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Credit Facility
|
May-17
(11)
|
|
LIBOR + 2.75%
|
|
58,642
|
|
|
58,642
|
|
|
—
|
|
|
—
|
|
||||
Grand Total
|
|
|
|
|
$
|
1,562,960
|
|
|
$
|
1,545,459
|
|
|
$
|
1,784,096
|
|
|
$
|
1,758,408
|
|
(1)
|
All borrowings are non-recourse and are interest-only through maturity, subject to compliance with covenants of the respective borrowing and denominated in the same currency as the assets securing the borrowing.
|
(2)
|
Refer to Note 10 for further disclosure regarding derivative instruments which are used to manage interest rate exposure.
|
(3)
|
In May 2016, the loan was syndicated and as such the margins on the floating and fixed interest rates were adjusted.
|
(4)
|
Represents cross-collateralized borrowings among the IVG Portfolio, Internos Portfolio and Deka Portfolio. Comprised of
$4.8 million
principal amount of floating rate borrowings at EURIBOR plus
2.7%
,
$102.0 million
principal amount of floating rate borrowings at EURIBOR plus
1.55%
,
$65.6 million
principal amount of floating rate borrowings at EURIBOR plus
1.65%
and
$17.2 million
of floating rate borrowings at GBP LIBOR plus
2.7%
.
|
(5)
|
Comprised of
$332.1 million
principal amount of floating rate borrowing at EURIBOR plus
1.8%
and
$254.1 million
of floating rate borrowing at GBP LIBOR plus
1.8%
.
|
(6)
|
Represents preferred equity certificates with a contractual interest rate of
3.0%
per annum through May 2019, which can be prepaid at that time without penalty in part or in full, which increases to EURIBOR plus
12.0%
through May 2022 and subsequently to EURIBOR plus
15.0%
through final maturity. Certain prepayments prior to May 2019 are subject to the payment of the unpaid coupon on outstanding principal amount through May 2019.
|
(7)
|
Prepayment provisions include a fee based on principal amount ranging from
0.25%
to
1.0%
through December 2019 for the Internos Portfolio, the IVG Portfolio and the Deka Portfolio borrowing and
0.5%
to
1.5%
through April 2019 for the SEB Portfolio borrowing.
|
(8)
|
In June 2016, the Company amended the contractual interest rate from EURIBOR plus
1.45%
to EURIBOR plus
1.30%
. In addition, a prepayment provision was added in the amendment to include a fee based on principal amount of
0.80%
through June 30, 2017,
0.60%
through June 30, 2018 and
0.30%
through June 30, 2019.
|
(9)
|
Includes assets associated preferred equity certificates each with a fixed contractual interest rate of
1.0%
per annum plus variable interest based on specified income levels associated to the German property companies of the IVG Portfolio, Deka Portfolio and Internos Portfolio, respectively, which can be prepaid at any time without penalty through final maturity, being
thirty
years from the issuance date.
|
(10)
|
The Company has the right to redeem the Senior Notes prior to maturity, in whole or in part from time to time, provided that no redemption in part results in the aggregate principal amount of the Senior Notes outstanding being reduced to less than
$100 million
. The cash redemption price is equal to the greater of: (i)
100%
of the principal amount of the Senior Notes; and (ii) the sum of the present values of the remaining scheduled payments of interest and principal of the Senior Notes discounted to such date of redemption on a semiannual basis at a rate of
0.5%
per annum.
|
(11)
|
Subject to
one
year extensions.
|
|
|
June 30, 2016 (Unaudited)
|
|
December 31, 2015
|
||||
Principal amount
|
|
$
|
1,562,960
|
|
|
$
|
1,784,096
|
|
Premium (discount), net
|
|
(456
|
)
|
|
(1,144
|
)
|
||
Deferred financing costs, net
(1)
|
|
(17,045
|
)
|
|
(24,544
|
)
|
||
Carrying value
|
|
$
|
1,545,459
|
|
|
$
|
1,758,408
|
|
(1)
|
Includes
$0.2 million
relating to the Senior Notes.
|
|
|
Total
|
|
Mortgage
and Other Notes Payable |
|
Senior Notes
|
|
Credit Facility
|
||||||||
July 1 to December 31, 2016
|
|
$
|
109,460
|
|
|
$
|
—
|
|
|
$
|
109,460
|
|
|
$
|
—
|
|
Years ending December 31:
|
|
—
|
|
|
|
|
|
|
|
|||||||
2017
|
|
58,642
|
|
|
—
|
|
|
—
|
|
|
58,642
|
|
||||
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2020
|
|
263,111
|
|
|
263,111
|
|
|
—
|
|
|
—
|
|
||||
Thereafter
|
|
1,131,747
|
|
|
1,131,747
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
1,562,960
|
|
|
$
|
1,394,858
|
|
|
$
|
109,460
|
|
|
$
|
58,642
|
|
•
|
any equity the Company issues in exchange or conversion of exchangeable or stock-settlable notes;
|
•
|
any other issuances by the Company of common equity, preferred equity or other forms of equity, including but not limited to LTIP Units in the Operating Partnership (excluding units issued to the Company and equity-based compensation, but including issuances related to an acquisition, investment, joint venture or partnership); and
|
•
|
cumulative cash available for distribution (“CAD”), if any, of the Company in excess of cumulative distributions paid on common stock, LTIP Units or other equity awards which began with our fiscal quarter ended March 31, 2016.
|
•
|
the product of: (a)
15.0%
and (b) the Company’s CAD before such incentive fee, divided by the weighted average shares outstanding for the calendar quarter, of any amount in excess of
$0.30
per share and up to
$0.36
per share; plus
|
•
|
the product of: (a)
25.0%
and (b) the Company’s CAD before such incentive fee, divided by the weighted average shares outstanding for the calendar quarter, of any amount in excess of
$0.36
per share;
|
•
|
multiplied by the Company’s weighted average shares outstanding for the calendar quarter.
|
6.
|
Compensation Expense
|
|
Six Months Ended June 30, 2016
|
|||||||||||
|
Restricted Stock
(1)
|
|
Common Units
|
|
Total Grants
|
|
Weighted
Average Grant Price |
|||||
December 31, 2015
|
45
|
|
|
692
|
|
|
737
|
|
|
$
|
24.03
|
|
New grants
|
1,625
|
|
|
—
|
|
|
1,625
|
|
|
9.28
|
|
|
Vesting of restricted stock
|
(137
|
)
|
|
—
|
|
|
(137
|
)
|
|
9.51
|
|
|
Forfeited or canceled grants
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|
22.40
|
|
|
June 30, 2016
|
1,533
|
|
|
688
|
|
|
2,221
|
|
|
$
|
14.14
|
|
(1)
|
Represents restricted stock included in common stock.
|
7.
|
Stockholders’ Equity
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to NorthStar Realty Europe Corp.
|
$
|
(33,909
|
)
|
|
$
|
(61,711
|
)
|
|
$
|
(62,891
|
)
|
|
$
|
(77,974
|
)
|
|
Net income (loss) attributable to Unit Holders non-controlling interest
|
(349
|
)
|
|
—
|
|
|
(700
|
)
|
|
—
|
|
|
||||
Net income (loss) attributable to common stockholders and Unit Holders
(1)
|
$
|
(34,258
|
)
|
|
$
|
(61,711
|
)
|
|
$
|
(63,591
|
)
|
|
$
|
(77,974
|
)
|
|
Denominator:
(2)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock
|
59,116
|
|
|
62,988
|
|
(3)
|
59,267
|
|
|
62,988
|
|
(3)
|
||||
Weighted average Unit Holders
(1)
|
690
|
|
|
—
|
|
|
691
|
|
|
—
|
|
|
||||
Weighted average shares of common stock and Unit Holders
(2)
|
59,806
|
|
|
62,988
|
|
(3)
|
59,958
|
|
|
62,988
|
|
(3)
|
||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.57
|
)
|
|
$
|
(0.98
|
)
|
(3)
|
$
|
(1.06
|
)
|
|
$
|
(1.24
|
)
|
(3)
|
Diluted
|
$
|
(0.57
|
)
|
|
$
|
(0.98
|
)
|
(3)
|
$
|
(1.06
|
)
|
|
$
|
(1.24
|
)
|
(3)
|
(1)
|
The EPS calculation takes into account Unit Holders, which receive non-forfeitable dividends from the date of grant, share equally in the Company’s net income (loss) and convert on a
one
-for-one basis into common stock.
|
(2)
|
Excludes the effect of restricted stock and RSUs outstanding that were not dilutive as of
June 30, 2016
. These instruments could potentially impact diluted EPS in future periods, depending on changes in the Company’s stock price and other factors.
|
(3)
|
Basic and diluted earnings per common share for the
three
and
six months ended
June 30, 2015
was calculated using the common stock issued in connection with the Spin-off and exclude the effect of any equity-based awards outstanding at that date that were not dilutive.
|
8.
|
Non-controlling Interests
|
9.
|
Fair Value
|
Level 1.
|
Quoted prices for identical assets or liabilities in an active market.
|
Level 2.
|
Financial assets and liabilities whose values are based on the following:
|
(a)
|
Quoted prices for similar assets or liabilities in active markets.
|
(b)
|
Quoted prices for identical or similar assets or liabilities in non-active markets.
|
(c)
|
Pricing models whose inputs are observable for substantially the full term of the asset or liability.
|
(d)
|
Pricing models whose inputs are derived principally from or corroborated by observable market data for substantially the full term of the asset or liability.
|
Level 3.
|
Prices or valuation techniques based on inputs that are both unobservable and significant to the overall fair value measurement.
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Principal/Notional
Amount |
|
Carrying
Value
|
|
Fair
Value |
|
Principal/Notional
Amount |
|
Carrying
Value
|
|
Fair
Value |
||||||||||||
Financial assets:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
$
|
1,304,338
|
|
|
$
|
11,672
|
|
|
$
|
11,672
|
|
|
$
|
1,583,569
|
|
|
$
|
23,792
|
|
|
$
|
23,792
|
|
Financial liabilities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage and other notes payable
|
$
|
1,394,858
|
|
|
$
|
1,377,584
|
|
|
$
|
1,377,584
|
|
|
$
|
1,444,096
|
|
|
$
|
1,424,610
|
|
|
$
|
1,424,610
|
|
Derivative liabilities
|
89,250
|
|
|
1,221
|
|
|
1,221
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Senior notes
|
109,460
|
|
|
109,233
|
|
|
108,242
|
|
|
340,000
|
|
|
333,798
|
|
|
327,330
|
|
||||||
Credit Facility
|
58,642
|
|
|
58,642
|
|
|
58,642
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
The fair value of other financial instruments not included in this table is estimated to approximate their carrying value.
|
10.
|
Risk Management and Derivative Activities
|
|
Number
|
|
Notional
Amount
|
|
Fair Value
Asset (Liability) |
|
Range of
Fixed GBP LIBOR / EURIBOR |
|
Range of Maturity
|
||||||
As of June 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate caps
|
5
|
|
|
|
$
|
1,287,668
|
|
|
$
|
9,826
|
|
|
(1)
|
|
October 2016 - July 2023
|
Foreign currency forwards
(2)
|
2
|
|
|
|
105,920
|
|
|
625
|
|
|
N/A
|
|
July 2016 - November 2017
|
||
Total
|
7
|
|
|
|
$
|
1,393,588
|
|
|
$
|
10,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
As of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest rate caps
|
6
|
|
|
|
$
|
1,429,216
|
|
|
$
|
23,375
|
|
|
(1)
|
|
April 2016 - July 2023
|
Foreign currency forwards
(2)
|
3
|
|
|
|
154,353
|
|
|
417
|
|
|
N/A
|
|
February 2016 - November 2017
|
||
Total
|
9
|
|
|
|
$
|
1,583,569
|
|
|
$
|
23,792
|
|
|
|
|
|
11.
|
Commitments and Contingencies
|
12.
|
Segment Reporting
|
•
|
Real Estate -
The European commercial real estate business is predominantly focused on office properties. The Company acquired its first real estate investment in September 2014.
|
•
|
Corporate
- The corporate segment includes corporate level interest expense, management fee and general and administrative expenses.
|
Statement of Operations:
|
|
|
|
|
|
||||||
Three Months Ended June 30, 2016
|
Real Estate
|
|
Corporate
|
|
Total
|
||||||
Rental income
|
$
|
33,990
|
|
|
$
|
—
|
|
|
$
|
33,990
|
|
Interest expense
|
8,691
|
|
(2)
|
2,950
|
|
(2)
|
11,641
|
|
|||
Income (loss) before income tax benefit (expense)
|
(21,748
|
)
|
|
(12,041
|
)
|
|
(33,789
|
)
|
|||
Income tax benefit (expense)
|
(520
|
)
|
|
—
|
|
|
(520
|
)
|
|||
Net income (loss)
|
(22,268
|
)
|
(1)
|
(12,041
|
)
|
|
(34,309
|
)
|
(1)
|
Primarily relates to depreciation and amortization expense of
$18.4 million
.
|
(2)
|
Includes
$0.8 million
and
$0.9 million
of amortization of deferred financing costs in the real estate and corporate segment, respectively.
|
Statement of Operations:
|
|
|
|
|
|
||||||
Three Months Ended June 30, 2015
|
Real Estate
|
|
Corporate
|
|
Total
|
||||||
Rental income
|
$
|
28,344
|
|
|
$
|
—
|
|
|
$
|
28,344
|
|
Interest expense
|
6,072
|
|
|
—
|
|
|
6,072
|
|
|||
Income (loss) before income tax benefit (expense)
|
(79,478
|
)
|
(1)
|
6,358
|
|
(2)
|
(73,120
|
)
|
|||
Income tax benefit (expense)
|
11,379
|
|
|
—
|
|
|
11,379
|
|
|||
Net income (loss)
|
(68,099
|
)
|
|
6,358
|
|
|
(61,741
|
)
|
(1)
|
Primarily relates to depreciation and amortization expense of
$14.7 million
.
|
(2)
|
Includes an allocation of general and administrative expense based on an estimate of expenses had the Company been run as an independent entity (refer to Note 2).
|
Statement of Operations:
|
|
|
|
|
|
||||||
Six Months Ended June 30, 2016
|
Real Estate
|
|
Corporate
|
|
Total
|
||||||
Rental income
|
$
|
68,823
|
|
|
$
|
—
|
|
|
$
|
68,823
|
|
Interest expense
|
17,117
|
|
(2)
|
7,066
|
|
(2)
|
24,183
|
|
|||
Income (loss) before income tax benefit (expense)
|
(31,544
|
)
|
|
(32,229
|
)
|
(3)
|
(63,773
|
)
|
|||
Income tax benefit (expense)
|
139
|
|
|
—
|
|
|
139
|
|
|||
Net income (loss)
|
(31,405
|
)
|
(1)
|
(32,229
|
)
|
|
(63,634
|
)
|
(1)
|
Primarily relates to depreciation and amortization expense of
$37.3 million
.
|
(2)
|
Includes
$1.7 million
and
$2.1 million
of amortization of deferred financing costs in the real estate and corporate segment, respectively.
|
(3)
|
Includes an allocation of general and administrative expenses from NSAM of
$0.1 million
.
|
Statement of Operations:
|
|
|
|
|
|
||||||
Six Months Ended June 30, 2015
|
Real Estate
|
|
Corporate
|
|
Total
|
||||||
Rental income
|
$
|
29,853
|
|
|
$
|
—
|
|
|
$
|
29,853
|
|
Interest expense
|
6,824
|
|
|
—
|
|
|
6,824
|
|
|||
Income (loss) before income tax benefit (expense)
|
(94,844
|
)
|
(1)
|
5,430
|
|
(2)
|
(89,414
|
)
|
|||
Income tax benefit (expense)
|
11,379
|
|
|
—
|
|
|
11,379
|
|
|||
Net income (loss)
|
(83,465
|
)
|
|
5,430
|
|
|
(78,035
|
)
|
(1)
|
Primarily relates to depreciation and amortization expense of
$15.6 million
.
|
(2)
|
Includes an allocation of general and administrative expense based on an estimate of expenses had the Company been run as an independent entity (refer to Note 2).
|
|
|
|
|
|
|
||||||
Total Assets
|
Real Estate
|
|
Corporate
|
|
Total
|
||||||
June 30, 2016
|
$
|
2,361,228
|
|
|
$
|
7,038
|
|
|
$
|
2,368,266
|
|
December 31, 2015
|
$
|
2,544,992
|
|
|
$
|
138,058
|
|
|
$
|
2,683,050
|
|
13.
|
Subsequent Events
|
(1)
|
Amount includes transaction costs incurred, deferred financing costs and other assets assumed and is translated using exchange rates as of
June 30, 2016
.
|
(2)
|
Based on contractual rentable area, located in many key European markets, including Frankfurt, Hamburg, Berlin, London, Paris, Amsterdam, Milan, Brussels and Madrid.
|
(3)
|
In-place rental income represents gross rent adjusted for vacancies based on the rent roll as of
June 30, 2016
.
|
|
|
Acquisition
|
|
|
|
|
|
|
|
|
|
Ownership
|
||
Portfolio
|
|
Date
|
|
Primary Core Location(s)
|
|
Property Type
|
|
Cost
(1)
|
|
Properties
|
|
Interest
(2)
|
||
U.K. Complex
|
|
Sept-14
|
|
United Kingdom
|
|
Multi-tenant office
|
|
$
|
77
|
|
|
1
|
|
93%
|
SEB Portfolio
|
|
Apr-15
|
|
Germany, United Kingdom, France
|
|
Multi-tenant office
|
|
953
|
|
|
8
|
|
95%
|
|
Internos Portfolio
|
|
Apr-15
|
|
Germany, France, Portugal
|
|
Office/Hotel/Industrial/Retail
|
|
179
|
|
|
9
|
|
95%
|
|
IVG Portfolio
|
|
Apr-15
|
|
Germany, United Kingdom, France
|
|
Multi-tenant office
|
|
156
|
|
|
12
|
|
95%
|
|
Deka Portfolio
|
|
Apr-15
|
|
Germany
|
|
Multi-tenant office
|
|
84
|
|
|
7
|
|
95%
|
|
Trianon Tower
|
|
Jul-15
|
|
Germany
|
|
Multi-tenant office
|
|
608
|
|
|
3
|
|
95%
|
|
Total
|
|
|
|
|
|
|
|
$
|
2,057
|
|
|
40
|
|
|
(1)
|
Amount includes transaction costs incurred, deferred financing costs and other assets assumed and is translated using exchange rates as of
June 30, 2016
.
|
(2)
|
We hold equity interests in these portfolios and are entitled to
100%
of net income (loss) based on the allocation formula, as set forth in the governing documents.
|
Significant tenants:
|
|
Industry
|
|
Square Meters
(1)
|
|
Weighted Average Lease Term (in years)
|
|
Percentage of In-Place Rental Income
|
DekaBank Deutsche Girozentrale
|
|
Finance
|
|
35,036
|
|
7.9
|
|
17%
|
BNP PARIBAS RE
|
|
Finance
|
|
15,406
|
|
3.6
|
|
8%
|
Deloitte Holding B.V.
|
|
Legal, Tax & Management Consultancy
|
|
23,683
|
|
3.4
|
|
6%
|
Cushman & Wakefield LLP
|
|
Utilities & Telecommunications
|
|
5,150
|
|
8.8
|
|
5%
|
BNP PARIBAS SA
|
|
Legal, Tax & Management Consultancy
|
|
11,235
|
|
4.8
|
|
4%
|
Deutsche Bundesbank
|
|
Finance
|
|
11,971
|
|
8.8
|
|
4%
|
Morgan Lewis & Bockius LLP
|
|
Legal, Tax & Management Consultancy
|
|
4,848
|
|
9.2
|
|
4%
|
Linklaters LLP
|
|
Legal, Tax & Management Consultancy
|
|
7,394
|
|
0.2
|
|
3%
|
PAREXEL International GmbH
|
|
Public Utilities & Telecommunications
|
|
18,254
|
|
18.0
|
|
3%
|
Moelis & Co UK LLP
|
|
Legal, Tax & Management Consultancy
|
|
3,366
|
|
8.8
|
|
2%
|
(1)
|
Based on contractual rentable area.
|
Country
|
|
Number of Properties
|
|
Square Meters
(1)
|
|
Weighted Average Lease Term (in years)
|
|
Percentage of In-Place Rental Income
|
|
Germany
|
|
15
|
|
166,045
|
|
|
7.5
|
|
40%
|
United Kingdom
|
|
5
|
|
46,520
|
|
|
7.6
|
|
24%
|
France
|
|
4
|
|
32,075
|
|
|
4.6
|
|
15%
|
Other
|
|
16
|
|
174,425
|
|
|
4.9
|
|
21%
|
Total
|
|
40
|
|
419,065
|
|
|
|
|
|
(1)
|
Based on contractual rentable area.
|
|
Three Months Ended June 30,
|
|
Increase
|
||||||||
|
2016
|
|
2015
|
|
(Decrease)
|
||||||
Revenues
|
|
|
|
|
|
||||||
Rental income
|
$
|
33,990
|
|
|
$
|
28,344
|
|
|
$
|
5,646
|
|
Escalation income
|
5,908
|
|
|
3,213
|
|
|
2,695
|
|
|||
Other revenue
|
46
|
|
|
67
|
|
|
(21
|
)
|
|||
Total revenues
|
39,944
|
|
|
31,624
|
|
|
8,320
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Properties - operating expenses
|
8,540
|
|
|
5,423
|
|
|
3,117
|
|
|||
Interest expense
|
11,641
|
|
|
6,072
|
|
|
5,569
|
|
|||
Transaction costs
|
1,652
|
|
|
79,120
|
|
|
(77,468
|
)
|
|||
Impairment losses
|
27,468
|
|
|
—
|
|
|
27,468
|
|
|||
Management fee, related party
|
3,500
|
|
|
—
|
|
|
3,500
|
|
|||
Other expenses
|
3,041
|
|
|
2,799
|
|
|
242
|
|
|||
General and administrative expenses
|
1,502
|
|
|
306
|
|
|
1,196
|
|
|||
Compensation expense
|
3,766
|
|
|
—
|
|
|
3,766
|
|
|||
Depreciation and amortization
|
18,404
|
|
|
14,694
|
|
|
3,710
|
|
|||
Total expenses
|
79,514
|
|
|
108,414
|
|
|
(28,900
|
)
|
|||
Other income (loss)
|
|
|
|
|
|
|
|||||
Unrealized gain (loss) on investments and other
|
383
|
|
|
3,629
|
|
|
(3,246
|
)
|
|||
Realized gain (loss) on investments and other
|
5,398
|
|
|
41
|
|
|
5,357
|
|
|||
Income (loss) before income tax benefit (expense)
|
(33,789
|
)
|
|
(73,120
|
)
|
|
39,331
|
|
|||
Income tax benefit (expense)
|
(520
|
)
|
|
11,379
|
|
|
(11,899
|
)
|
|||
Net income (loss)
|
$
|
(34,309
|
)
|
|
$
|
(61,741
|
)
|
|
$
|
27,432
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Change in fair value of:
|
|
|
|
|
||||
Derivatives, at fair value
|
|
|
|
|
||||
Interest rate caps
|
|
$
|
(3,391
|
)
|
|
$
|
1,833
|
|
Foreign currency forwards
|
|
4,638
|
|
|
(4,253
|
)
|
||
Foreign currency remeasurement
|
|
(88
|
)
|
|
6,049
|
|
||
Subtotal unrealized gain (loss)
|
|
1,159
|
|
|
3,629
|
|
||
Net cash payments on derivatives
|
|
(776
|
)
|
|
—
|
|
||
Total unrealized gain (loss) on investments and other
|
|
$
|
383
|
|
|
$
|
3,629
|
|
|
Six Months Ended
June 30, |
|
Increase
|
||||||||
|
2016
|
|
2015
|
|
(Decrease)
|
||||||
Revenues
|
|
|
|
|
|
||||||
Rental income
|
$
|
68,823
|
|
|
$
|
29,853
|
|
|
$
|
38,970
|
|
Escalation income
|
11,998
|
|
|
3,890
|
|
|
8,108
|
|
|||
Other revenue
|
749
|
|
|
68
|
|
|
681
|
|
|||
Total revenues
|
81,570
|
|
|
33,811
|
|
|
47,759
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Properties - operating expenses
|
17,771
|
|
|
6,257
|
|
|
11,514
|
|
|||
Interest expense
|
24,183
|
|
|
6,824
|
|
|
17,359
|
|
|||
Transaction costs
|
2,483
|
|
|
88,124
|
|
|
(85,641
|
)
|
|||
Impairment losses
|
27,468
|
|
|
—
|
|
|
27,468
|
|
|||
Management fee, related party
|
7,000
|
|
|
—
|
|
|
7,000
|
|
|||
Other expenses
|
6,731
|
|
|
2,799
|
|
|
3,932
|
|
|||
General and administrative expenses
|
2,978
|
|
|
1,234
|
|
|
1,744
|
|
|||
Compensation expense
|
7,034
|
|
|
—
|
|
|
7,034
|
|
|||
Depreciation and amortization
|
37,275
|
|
|
15,620
|
|
|
21,655
|
|
|||
Total expenses
|
132,923
|
|
|
120,858
|
|
|
12,065
|
|
|||
Other income (loss)
|
|
|
|
|
|
|
|||||
Unrealized gain (loss) on investments and other
|
(15,788
|
)
|
|
(2,402
|
)
|
|
(13,386
|
)
|
|||
Realized gain (loss) on investments and other
|
3,368
|
|
|
35
|
|
|
3,333
|
|
|||
Income (loss) before income tax benefit (expense)
|
(63,773
|
)
|
|
(89,414
|
)
|
|
25,641
|
|
|||
Income tax benefit (expense)
|
139
|
|
|
11,379
|
|
|
(11,240
|
)
|
|||
Net income (loss)
|
$
|
(63,634
|
)
|
|
$
|
(78,035
|
)
|
|
$
|
14,401
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Change in fair value of:
|
|
|
|
|
||||
Derivatives, at fair value:
|
|
|
|
|
||||
Interest rate caps
|
|
$
|
(14,175
|
)
|
|
$
|
1,755
|
|
Foreign currency forwards
|
|
207
|
|
|
(4,253
|
)
|
||
Foreign currency remeasurement
|
|
(626
|
)
|
|
96
|
|
||
Subtotal unrealized gain (loss)
|
|
(14,594
|
)
|
|
(2,402
|
)
|
||
Net cash payments on derivatives
|
|
(1,194
|
)
|
|
—
|
|
||
Total unrealized gain (loss) on investments and other
|
|
$
|
(15,788
|
)
|
|
$
|
(2,402
|
)
|
|
|
Six Months Ended
June 30, |
||||||
Cash flow provided by (used in):
|
|
2016
|
|
2015
|
||||
Operating activities
|
|
$
|
8,758
|
|
|
$
|
3,345
|
|
Investing activities
|
|
68,355
|
|
|
(1,636,118
|
)
|
||
Financing activities
|
|
(231,092
|
)
|
|
1,669,249
|
|
||
Effect of foreign currency translation on cash and cash equivalents
|
|
(4,763
|
)
|
|
(2,888
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
(158,742
|
)
|
|
$
|
33,588
|
|
•
|
any equity we issue in exchange or conversion of exchangeable or stock-settlable notes;
|
•
|
any other issuances by us of common equity, preferred equity or other forms of equity, including but not limited to limited partnership interests in the Operating Partnership, which are structured as profits interests, or LTIP units (excluding units issued to us and equity-based compensation, but including issuances related to an acquisition, investment, joint venture or partnership); and
|
•
|
cumulative CAD, if any, in excess of cumulative distributions paid on common stock, LTIP Units or other equity awards which began with our fiscal quarter ended March 31, 2016.
|
•
|
the product of: (a) 15% and (b) our CAD before such incentive fee, divided by the weighted average shares outstanding for the calendar quarter, of any amount in excess of $0.30 per share and up to $0.36 per share; plus
|
•
|
the product of: (a) 25% and (b) our CAD before such incentive fee, divided by the weighted average shares outstanding for the calendar quarter, of any amount in excess of $0.36 per share;
|
•
|
multiplied by our weighted average shares outstanding for the calendar quarter.
|
Net income (loss) attributable to common stockholders
|
$
|
(33,909
|
)
|
Non-controlling interests
|
(400
|
)
|
|
|
|
||
Adjustments:
|
|
||
Depreciation and amortization items
(1)
|
25,134
|
|
|
Impairment losses
|
27,468
|
|
|
Unrealized (gain) loss from fair value adjustments
(2)
|
(1,159
|
)
|
|
Realized (gain) loss on investments
(3)
|
(5,398
|
)
|
|
Transaction costs and other
(4)
|
1,623
|
|
|
CAD
|
$
|
13,359
|
|
(1)
|
Represents an adjustment to exclude depreciation and amortization of
$18.4 million
, amortization of above/below market leases of
$1.2 million
, amortization of deferred financing costs of
$2.0 million
and amortization of equity-based compensation of
$3.8 million
.
|
(2)
|
Excludes unrealized loss relating to cash payment on derivatives.
|
(3)
|
Represents an adjustment to exclude a
$7.8 million
net gain related to the sale of real estate investment and
$2.4 million
loss related to the write-off of the deferred financing costs associated with the repurchase of the Senior Notes.
|
(4)
|
Represents an adjustment to exclude
$1.6 million
of transaction costs.
|
Rental income
|
$
|
33,990
|
|
Escalation income
|
5,908
|
|
|
Other revenue
|
46
|
|
|
Total property and other revenues
|
39,944
|
|
|
Properties - operating expenses
|
8,540
|
|
|
Adjustments:
|
|
||
Amortization and other items
(1)
|
1,220
|
|
|
NOI
|
$
|
32,624
|
|
(1)
|
Primarily includes
$1.1 million
of amortization of above/below market rent.
|
(2)
|
The following table presents a reconciliation of NOI of our real estate segment to net income (loss) for the
three months ended June 30, 2016
(dollars in thousands):
|
NOI
|
$
|
32,624
|
|
Adjustments:
|
|
||
Interest expense
|
(8,691
|
)
|
|
Other expenses
|
(3,007
|
)
|
|
Depreciation and amortization
|
(18,404
|
)
|
|
Unrealized gain (loss) on investments and other
|
(3,400
|
)
|
|
Realized gain (loss) on investments and other
|
7,794
|
|
|
Other items
|
(27,443
|
)
|
|
Net income (loss) - Real estate segment
|
$
|
(20,527
|
)
|
Remaining segments
(i)
|
(13,782
|
)
|
|
Net income (loss)
|
$
|
(34,309
|
)
|
•
|
All of the rent payments under our leases are denominated in Euro or U.K. Pounds Sterling. A significant portion of our operating expenses and borrowings are also transacted in local currency. We report our results of operations and consolidated financial information in U.S. dollars. As a result, to the extent we are unable to fully hedge our exchange rate exposure, our results of operations as reported in U.S. dollars is impacted by fluctuations in the value of the local currencies in which we conduct our business.
|
•
|
While we seek to mitigate the risk of fluctuations in currency exchange rates by utilizing hedging strategies to reduce the impact of exchange rates fluctuations on our income, we do not employ any hedging techniques on our Euro or U.K. Pound Sterling denominated assets, which fully exposes our asset values to exchange rate risk.
|
Period
|
|
Total Number of Shares Repurchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
(1)
|
||||||
June 1- June 30
|
|
251,548
|
|
|
$
|
9.27
|
|
|
251,548
|
|
|
$
|
52,342,862
|
|
(1)
|
On November 24, 2015, we announced that our board of directors authorized the repurchase of up to $100 million of our outstanding common stock. The authorization expires on November 24, 2016, unless otherwise extended by our board of directors. There were no repurchases made during April and May 2016. Since announcement, we acquired
4.3 million
shares for
$48 million
, with
$52 million
remaining under the authorization.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||
June 1- June 30
(1)
|
|
246,354
|
|
|
$
|
9.26
|
|
|
N/A
|
|
N/A
|
(1)
|
All shares purchases were open market purchases made by NSAM. There were no purchases made by affiliated purchasers during April and May 2016.
|
Exhibit
Number
|
|
Description of Exhibit
|
|
2.1
|
|
|
Separation Agreement between NorthStar Realty Europe Corp. and NorthStar Realty Finance Corp. (incorporated by reference to Exhibit 10.2 to NorthStar Realty Europe’s Current Report on Form 8-K filed on November 2, 2015)
|
3.1
|
|
|
Articles of Amendment and Restatement of NorthStar Realty Europe Corp. (incorporated by reference to Exhibit 3.1 to NorthStar Realty Europe’s Current Report on Form 8-K filed on October 23, 2015)
|
3.2
|
|
|
Bylaws of NorthStar Realty Europe Corp. (incorporated by reference to Exhibit 3.2 to NorthStar Realty’s Europe’s Registration Statement on Form S-11 filed on October 9, 2015)
|
4.1
|
|
|
Indenture, dated as of July 1, 2015, by and among NorthStar Realty Europe Corp., NorthStar Realty Finance Corp., NorthStar Realty Finance Limited Partnership and Wilmington Trust, National Association. (incorporated by reference to Exhibit 4.1 to NorthStar Realty Europe’s Registration Statement on Form S-11 filed on August 19, 2015)
|
10.1
|
|
|
Credit Agreement, dated May 10, 2016, by and among NorthStar Realty Europe Limited Partnership, NorthStar Realty Europe Corp., Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Sole Lead Arranger and Sole Bookrunner
|
10.2
|
|
*
|
Second Amendment Agreement, dated June 21, 2016, by and among Geschäftshaus am Gendarmenmarkt GmbH and GMS Gebäudemanagement und Service GmbH as the Security Providers and Landesbank Hessen-Thüringen Girozentrale
|
31.1
|
|
*
|
Certification by the Chief Executive Officer pursuant to 17 CFR 240.13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
|
*
|
Certification by the Chief Financial Officer pursuant to 17 CFR 240.13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
|
*
|
Certification by the Chief Executive Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
|
*
|
Certification by the Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101
|
|
*
|
The following materials from the NorthStar Realty Europe Corp. Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Combined Consolidated Balance Sheets as of June 30, 2016 (unaudited) and December 31, 2015; (ii) Combined Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2016 and 2015; (iii) Combined Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and six months ended June 30, 2016 and 2015; (iv) Combined Consolidated Statements of Equity for the six months ended June 30, 2016 (unaudited) and year ended December 31, 2015; (v) Combined Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2016 and 2015; and (vi) Notes to Combined Consolidated Financial Statements (unaudited)
|
|
|
|
NorthStar Realty Europe Corp.
|
||
Date:
|
August 5, 2016
|
|
|
By:
|
/s/ MAHBOD NIA
|
|
|
|
|
|
Mahbod Nia
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ SCOTT A. BERRY
|
|
|
|
|
|
Scott A. Berry
|
|
|
|
|
|
Chief Financial Officer
|
|
Second Amendment Agreement of 21 June 2016 to the Loan Agreement in the amount of up to EUR 330,000,000 (originally dated 25 September 2014 and amended by an Amendment and Restatement Agreement dated 20 July 2015)
|
|
(1)
|
Geschäftshaus am Gendarmenmarkt GmbH
, c/o HauckSchuchardt, Niedenau 61-63, 60325 Frankfurt am Main, having its registered seat in Frankfurt am Main, registered in the commercial register of the local court of Frankfurt am Main under no. HRB 82647 (the “
Borrower
” or “
GaG
”);
|
(2)
|
GMS Gebäudemanagement und Service GmbH
, c/o HauckSchuchardt, Niedenau 61-63, 60325 Frankfurt am Main, having its registered seat in Frankfurt am Main, registered with the commercial register of the local court of Frankfurt am Main under no. HRB 36774 (“
GMS
”);
|
(3)
|
the parties listed in
Schedule 1 – Security Providers
hereto (the “
Security Providers
” and each a “
Security Provider
”);
|
(4)
|
Landesbank Hessen-Thüringen Girozentrale
, with business address at Neue Mainzer Str. 52-58, 60311 Frankfurt am Main (the “
Lender
”).
|
(A)
|
The Borrower and the Lender entered into a loan agreement in an amount of up to EUR 248,000,000 on 25 September 2014 (the “
Original Loan Agreement
”). The full loan amount available under the Original Loan Agreement was drawn by and paid to the Borrower in 2014.
|
(B)
|
According to an amendment and restatement agreement dated 20 July 2015 to the Original Loan Agreement and entered into between the Lender and the Borrower (the “
Amendment and Restatement Agreement
”), the Borrower and the Lender have agreed to (i) include in the Original Loan Agreement a new tranche in the amount of EUR 82,000,000 to be made available to the Borrower and (ii) to implement a number of other changes to the Original Loan Agreement which are, inter alia, to reflect the new shareholder structure and the increase in the overall loan amount to EUR 330,000,000. The Original Loan Agreement as amended and restated by the Amendment and Restatement Agreement is hereinafter referred to as the “
Existing Loan Agreement
”.
|
(C)
|
Pursuant to a letter dated 26 April 2016 (the “
Offer Letter
”), the Lender offered – subject to documentation – to reduce the Margin (as defined in the Existing Loan Agreement) provided that the Borrower agrees to a prepayment fee as further detailed in the Offer Letter. The Borrower has accepted such offer, and to document the changes set out in the Offer Letter, the Parties have agreed to amend the Existing Loan Agreement by this second amendment agreement (the “
Second
Amendment Agreement
”) as follows. The Existing Loan Agreement as amended by the Second Amendment Agreement is hereinafter referred to as the “
Amended Loan Agreement
”.
|
1.
|
Changes to the Existing Loan Agreement
|
1.1
|
Amendment to Section 1.4 of the Existing Loan Agreement
|
1.2
|
Amendment to Section 5.6 (Prepayment Fee) of the Existing Loan Agreement
|
a)
|
80 bps of the prepaid amount, if the prepayment is made within the first year following 30 June 2016;
|
b)
|
60 bps of the prepaid amount, if the prepayment is made within the second year following 30 June 2016;
|
c)
|
30 bps of the prepaid amount, if the prepayment is made within the third year following 30 June 2016.”
|
1.3
|
Amendment to Section 4.1 (Interest) of the Existing Loan Agreement
|
2.
|
Effective Date
|
2.1
|
The amendments made to the Existing Loan Agreement by the Second Amendment Agreement shall become effective with the beginning of the next Interest Period (which is to begin on 01 July 2016).
|
2.2
|
The Parties are in agreement that the amendments made to the Existing Loan Agreement by the Second Amendment Agreement do not change the nature, scope and identity of the claims outstanding under the Existing Loan Agreement. These claims continue to be outstanding under the Amended Loan Agreement but will be governed by the terms and conditions of the Amended Loan Agreement from the day specified above.
|
3.
|
Continued legal effect of the Security, Confirmation of Security Documents
|
3.1
|
The Parties are in agreement that any security granted in connection with the Original Loan Agreement or the Existing Loan Agreement, as the case may be, shall not be affected by the amendments made to the Existing Loan Agreement by the Second Amendment Agreement and that such security and in particular the agreements listed in
Schedule 2 – Security Documents
shall remain in full force and effect subject to the following paragraphs.
|
3.2
|
All references to the Original Loan Agreement or to the Existing Loan Agreement or to the term “Loan Agreement” in the Security Documents (as defined in the Existing Loan Agreement but excluding the Share Pledge Agreement) and the other Finance Documents (as defined in the Existing Loan Agreement) shall be a reference to the Existing Loan Agreement as amended by the Second Amendment Agreement (i.e. to the Amended Loan Agreement); references to Finance Documents shall incorporate a reference to the Existing Loan Agreement as amended by the Second Amendment Agreement (i.e. to the Amended Loan Agreement).
|
3.3
|
The entering into of the documents listed in Schedule 2 (other than the Share Pledge Agreement) is hereby confirmed (
bestätigt
). For the avoidance of doubt, such confirmation is made under implementation of the clarification set forth under Clause 3.2 above. The Borrower shall notify the Account Banks (as defined in the Account Pledge Agreement) of this confirmation of pledge.
|
3.4
|
The Parties to this Second Amendment Agreement hereby confirm their mutual understanding that the pledges created pursuant to the Share Pledge Agreement shall continue to exist and secure the payment of all claims (present and future, actual and contingent) of the Pledgee against the Borrower (including in its capacity as security provider) under or in connection with the Finance Documents (as defined in the Amended Loan Agreement), including, for the avoidance of doubt, the Amended Loan Agreement.
|
4.
|
Miscellaneous
|
4.1
|
The Second Amendment Agreement is a Finance Document (within the meaning of the Existing Loan Agreement and the Amended Loan Agreement).
|
4.2
|
Sections 21.1 (Applicable Law) to 21.4 (Enforceability), 21.8 (Waiver) of the Amended Loan Agreement shall apply correspondingly to the Second Amendment Agreement.
|
4.3
|
The Parties can enter into the Second Amendment Agreement also by exchanging signed copies by fax or as an electronic copy.
|
1.
|
Symbol I – T S.à r.l.
, a private limited liability company (
société à responsabilité limitée
) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 6A route de Trèves, Senningerberg, L-2633 Luxembourg, registered at the Luxembourg Register of Trade and Companies (
Registre de Commerce et des Sociétés de Luxembourg
) under number B 197720.
|
2.
|
Symbol II – T S.à r.l.
, a private limited liability company (
société à responsabilité limitée
) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 6A route de Trèves, Senningerberg, L-2633 Luxembourg, registered at the Luxembourg Register of Trade and Companies (
Registre de Commerce et des Sociétés de Luxembourg
) under number B 197726.
|
3.
|
Symbol III – T S.à r.l.
, a private limited liability company (
société à responsabilité limitée
) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 6A route de Trèves, Senningerberg, L-2633 Luxembourg, registered at the Luxembourg Register of Trade and Companies (
Registre de Commerce et des Sociétés de Luxembourg
) under number 197732.
|
4.
|
Symbol IV – T S.à r.l.
, a private limited liability company (
société à responsabilité limitée
) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 6A route de Trèves, Senningerberg, L-2633 Luxembourg, registered at the Luxembourg Register of Trade and Companies (
Registre de Commerce et des Sociétés de Luxembourg
) under number B 197738.
|
5.
|
Symbol V – T S.à r.l.
, a private limited liability company (
société à responsabilité limitée
) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 6A route de Trèves, Senningerberg, L-2633 Luxembourg, registered at the Luxembourg Register of Trade and Companies (
Registre de Commerce et des Sociétés de Luxembourg
) under number B 197753.
|
6.
|
Symbol Holdco C-T S.à r.l.
, a private limited liability company (
société à responsabilité limitée
) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 6A route de Trèves, Senningerberg, L-2633 Luxembourg, registered at the Luxembourg Register of Trade and Companies (
Registre de Commerce et des Sociétés de Luxembourg
) under number B 197687.
|
1.
|
Assignment of Claims under Insurance Agreements for Security Purposes (
Sicherungsabtretung von Ansprüchen aus Versicherungsverträgen
) between Geschäftshaus am Gendarmenmarkt GmbH as Assignor and Landesbank Hessen-Thüringen Girozentrale as Assignee, dated 21 July 2015
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2.
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Account Pledge Agreement (
Verpfändung von Bankkonten
) between Geschäftshaus am Gendarmenmarkt GmbH as Pledgor and Landesbank Hessen-Thüringen Girozentrale as Pledgee, dated 20 July 2015
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3.
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Subordination Agreement (
Rangrücktrittsvereinbarung
) between, inter alia, Geschäftshaus am Gendarmenmarkt GmbH as Borrower and Landesbank Hessen-Thüringen Girozentrale as Lender, dated 2 October 2014, to which Symbol I-T S.à r.l., Symbol II-T S.à r.l., Symbol III-T S.à r.l., Symbol IV-T S.à r.l., Symbol V-T S.à r.l. and Symbol Holdco C-T S.à r.l. acceded by way of declaration of subordination dated 20 July 2015
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4.
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Global Assignment of Claims for Security Purposes (
Sicherungsabtretung
) between Geschäftshaus am Gendarmenmarkt GmbH as Assignor and Landesbank Hessen-Thüringen Girozentrale as Assignee, dated 2 October 2014
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5.
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Assignment of Claims for Security Purposes (
Sicherungsabtretung – Gesellschafter
) between Symbol I-T S.à r.l., Symbol II-T S.à r.l., Symbol III-T S.à r.l., Symbol IV-T S.à r.l., Symbol V-T S.à r.l. and Symbol Holdco C-T S.à r.l. as Assignors, Landesbank Hessen-Thüringen Girozentrale as Assignee and Geschäftshaus am Gendarmenmarkt GmbH as Borrower, dated 20 July 2015
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6.
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Security Purpose Agreement relating to a Land Charge and Assignment Agreement of Claims to Return of a Land Charge (
Sicherungsvereinbarung für Grundschulden und Abtretung der Ansprüche auf Rückgewähr von Grundpfandrechten
) between Geschäftshaus am Gendarmenmarkt GmbH as Chargor and Landesbank Hessen-Thüringen Girozentrale as Chargee, dated 20 July 2015
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7.
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GmbH Share Pledge Agreement (
Verpfändung von Anteilen
) between Symbol I-T S.à r.l., Symbol II-T S.à r.l., Symbol III-T S.à r.l., Symbol IV-T S.à r.l., Symbol V-T S.à r.l. and Symbol Holdco C-T S.à r.l. as Pledgors, Geschäftshaus am Gendarmenmarkt GmbH and GEM Gebäudemanagement and Service GmbH as Companies and Landesbank Hessen-Thüringen Girozentrale as Pledgee, dated 20 July 2015 (Deed No. 652 of the notarial roll of Deeds for the year 2015 CW of the notary Dr. Christian Wicker with its office in Frankfurt am Main)
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8.
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(English Law) Deed of Assignment between Geschäftshaus am Gendarmenmarkt GmbH and Symbol Holdco C-T S.à r.l. as Assignors and Landesbank Hessen-Thüringen Girozentrale as Lender, dated 20 July 2015
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Geschäftshaus am Gendarmenmarkt GmbH:
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||||
Date:
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June 21, 2016
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Date:
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/s/ Jon Farkas
|
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Name:
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Jon Farkas
|
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Name:
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Position:
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Managing Director
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Position:
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||||
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||||
GMS Gebäudemanagement und Service GmbH:
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||||
Date:
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June 21, 2016
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Date:
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/s/ Jon Farkas
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Name:
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Jon Farkas
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Name:
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Position:
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Managing Director
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Position:
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||||
Symbol I–T S.à r.l.:
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||||
Date:
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June 21, 2016
|
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Date:
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/s/ Jon Farkas
|
|
|
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Name:
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Jon Farkas
|
|
Name:
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Position:
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Manager
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Position:
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||||
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||||
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Symbol II–T S.à r.l.:
|
||||
Date:
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June 21, 2016
|
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Date:
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|
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/s/ Jon Farkas
|
|
|
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Name:
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Jon Farkas
|
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Name:
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Position:
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Manager
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Position:
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|
||||
Symbol III–T S.à r.l.:
|
||||
Date:
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June 21, 2016
|
|
Date:
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|
|
/s/ Jon Farkas
|
|
|
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Name:
|
Jon Farkas
|
|
Name:
|
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Position:
|
Manager
|
|
Position:
|
|
|
||||
Symbol IV–T S.à r.l.:
|
||||
Date:
|
June 21, 2016
|
|
Date:
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|
|
/s/ Jon Farkas
|
|
|
|
Name:
|
Jon Farkas
|
|
Name:
|
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Position:
|
Manager
|
|
Position:
|
|
|
||||
|
||||
|
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|
Symbol V–T S.à r.l.:
|
||||
Date:
|
June 21, 2016
|
|
Date:
|
|
|
/s/ Jon Farkas
|
|
|
|
Name:
|
Jon Farkas
|
|
Name:
|
|
Position:
|
Manager
|
|
Position:
|
|
|
||||
Symbol HoldCo C–T S.à r.l.:
|
||||
Date:
|
June 21, 2016
|
|
Date:
|
|
|
/s/ Jon Farkas
|
|
|
|
Name:
|
Jon Farkas
|
|
Name:
|
|
Position:
|
Manager
|
|
Position:
|
|
|
||||
Landesbank Hessen-Thüringen Girozentrale:
|
||||
Date:
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21.06.2016
|
|
Date:
|
21.06.2016
|
|
/s/ Andre Hederer
|
|
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/s/ Carmen Hensler
|
Name:
|
Andre Hederer
|
|
Name:
|
Carmen Hensler
|
Position:
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Abteilungsdirektor
|
|
Position:
|
Credit Risk Management
|
|
1.
|
I have reviewed this
Quarterly
Report on Form
10-Q
of NorthStar Realty Europe Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
|
August 5, 2016
|
By:
|
/s/ MAHBOD NIA
|
|
|
|
|
Mahbod Nia
|
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this
Quarterly
Report on Form
10-Q
of NorthStar Realty Europe Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
|
August 5, 2016
|
By:
|
/s/ SCOTT A. BERRY
|
|
|
|
|
SCOTT A. BERRY
|
|
|
|
|
Chief Financial Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Date:
|
August 5, 2016
|
By:
|
/s/ MAHBOD NIA
|
|
|
|
|
Mahbod Nia
|
|
|
|
|
Chief Executive Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Date:
|
August 5, 2016
|
By:
|
/s/ SCOTT A. BERRY
|
|
|
|
|
Scott A. Berry
|
|
|
|
|
Chief Financial Officer
|