Commercial real estate CLO market grows; NorthStar plans $613 million real estate CLO deal

By Cristal Cody

Tupelo, Miss., Dec. 8 – The commercial real estate CLO market is showing signs of life with another deal in the pipeline before the year ends.

NorthStar Realty Finance Corp. is organizing a $612,978,000 CRE CLO offering.

In October, commercial real estate lender Hunt Mortgage Group announced that it plans to build a CLO platform and start issuing commercial real estate CLOs.

In August, Resource Capital Corp. priced the $312,937,000 static CRE CLO transaction, Resource Capital Corp. 2015-CRE4, Ltd.

NorthStar Realty Finance intends to price a $612,978,000 CRE CLO transaction via Deutsche Bank Securities, Inc. and Citigroup Global Markets Inc., according to a market source.

The NorthStar 2015-1/NorthStar 2015-1, LLC deal includes $319.51 million of class A floating-rate notes (Kroll: AAA); $29.88 million of class B floating-rate notes; $39.4 million of class C deferrable floating-rate notes; $39.4 million of class D deferrable floating-rate notes; $27.58 million of class E deferrable floating-rate notes; $30.64 million of class F deferrable floating-rate notes; $27.58 million of class G deferrable floating-rate notes and $98,108,000 of preferred shares.

The class F notes, class G notes and preferred shares will be purchased by NS Income II Holder 2015-1, LLC, an affiliate of the trust asset sellers, on the closing date.

NS Income II Administration Agent, LLC will act as administration agent.

NorthStar Realty Finance is a New York-based real estate investment trust that is managed by NorthStar Asset Management Group.

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