NorthStar RealtyFinance Corp. has inked a deal to sell its manufactured housing communitiesfor $2.04 billion and is expected to net roughly $620 million from the transaction.
NorthStar expects to generate an internal rate of return of roughly20.3% on its invested equity from the sale, which materialized subsequent to theclose of the first quarter and is expected to close in the second half of the year.
The company outlined the deal, along with a handful of othersignificant asset sales, in its May 10 first-quarter earnings release. On May 6,NorthStar Realty and Colony CapitalInc. said they had entered into exclusive negotiations with NorthStarAsset Management based on their proposal that the companies conducta tri-party, all-stock "at the market" business combination based on historicaltrading prices.
During the quarter, NorthStar Realty sold its interest in a $900million portfolio of senior housing assets, netting proceeds of roughly $150 millionto the company, representing an IRR of roughly 10.0% on its invested equity.
The company also entered into definitive agreements to sell 10multifamily properties for net proceeds of about $86 million. The expected grossprice is $307 million, with $210 million of mortgage financing in place. NorthStarRealty expects to generate an IRR of roughly 17.6% on its invested equity.
NorthStar said it is also in talks with an institutional investorregarding the purchase of a joint-venture interest in its health care real estateportfolio that could generate $500 million in liquidity for the company. Separately,NorthStar engaged an adviser on the sale of a portion of its medical office buildingportfolio.
Additionally, NorthStar sold and received repayment during thequarter of certain commercial real estate loans, generating net proceeds of $192million and an IRR of roughly 13.8% on its invested equity.
NorthStar also sold during the quarter certain real estate securitiesfor net proceeds of $54 million and an IRR of approximately 26.4% on its investedequity.
Subsequent to quarter-end, NorthStar Realty sold and receivedrepayment of certain commercial real estate loans, generating net proceeds of $116million and an IRR of approximately 11.0% on its invested equity, the company said.
In the private equity realm, NorthStar during the quarter soldits interest in one of its portfolios of real estate private equity funds, generatingnet proceeds of $184 million and an IRR of roughly 17.3%, relieving the companyof substantially all the $243 million in deferred purchase price funding obligations.
NorthStar Realty noted that it continues to evaluate additionalsales and/or accelerated repayments of its commercial real estate loans and securities,as well as sales of portfolios of its real estate private equity fund investments.