NorthStar RealEstate Income II Inc. entered into a membership interest and note salepurchase agreement with NorthStar Realty Finance LP, whereby it will acquire 100%of the membership interests in PE Investments-T CAM2 LLC.
PE Investments-T CAM2 is a Delaware limited liability company,which owns a diversified portfolio of limited partnership or similar equity interestsin 41 real estate private equity funds managed by 20 sponsors with an aggregatereported net asset value of approximately $344.3 million as of March 31.
Under the agreement, NorthStar Real Estate Income II will purchasethe portfolio at a price equal to 92.25% of the net asset value as of the recorddate for about $273.1 million, of which $68.3 million is payable at closing and$204.9 million is payable Dec. 31. NorthStar Real Estate Income II will also assume$44.4 million of deferred purchase price obligations to third parties, from whomNorthStar Realty Finance had originally acquired certain of the assets, and willagree to indemnify NorthStar Realty Finance in connection with its continuing guaranteeof the payment of the deferred obligations.
NorthStar Real Estate Income II will receive all distributionsof cash flow and return of capital attributable to the interests in the portfoliofrom and after March 31. The company is also obligated to fund all additional capitalcontributions made from and after that date for each acquired interest. AlthoughNorthStar Real Estate Income II's maximum future obligation for capital contributionsis approximately $105.9 million, it currently expects to fund significantly lessover the course of the investment. As of Aug. 25, the company is entitled to morethan $30.0 million of net distributions, with additional distributions expectedbefore closing.
The transaction is expected to close Sept. 15 and must closeon or before Sept. 30. The deal is subject to certain conditions, including obtainingthird-party consents.
NorthStar Realty Finance is an affiliate of a company managedby NorthStar Real Estate Income II's sponsor.