What is a real estate investment trust, or REIT? What is an “UPREIT”? Why should I invest in CRE investments?

vi QUESTIONS AND ANSWERS ABOUT OUR OFFERING The following questions and answers about our offering highlight material information regarding us and our offering that may not otherwise be addressed in the “Prospectus Summary” section of this prospectus. You should read this entire prospectus, including the section entitled “Risk Factors,” before deciding to purchase shares of our common stock. Q: What is NorthStar Real Estate Income II, Inc.? A: We are a Maryland corporation formed to originate, acquire and asset manage a diversified portfolio of commercial real estate, or CRE, debt, equity and securities investments. As of December 31, 2015, adjusted for acquisitions, originations and certain repayments through April 13, 2016, our 1.3 billion portfolio consists of 19 CRE debt investments with a combined principal amount of 673.6 million, two real estate equity investments with a total cost of 467.0 million, two PE investments with a carrying value of approximately 50.2 million and five CMBS purchases totaling 90.1 million. The use of the terms “NorthStar Income II,” our “company,” “we,” “us” or “our” in this prospectus refer to NorthStar Real Estate Income II, Inc. and its consolidated subsidiaries, unless the context indicates otherwise. Q: Who might benefit from an investment in our shares of common stock? A: An investment in our shares may be beneficial for you if you: i meet the minimum suitability standards described in this prospectus; ii seek to diversify your personal portfolio with a REIT investment focused on CRE debt, equity and securities investments; iii seek to receive current income; iv seek to preserve capital; and v are able to hold your investment for at least five years following the completion of our offering stage or for longer, consistent with our liquidity strategy. See “Description of Capital Stock—Liquidity Events.” On the other hand, we caution persons who require liquidity, guaranteed income or who seek a short-term investment, that an investment in our shares will not meet those needs. Q: What are the major risks of investing in CRE debt, equity and securities investments and in us? A: We commenced operations in December 2012 and have limited operating history and our advisor on whom we will depend to select our investments and conduct our operations is also recently-formed. As of December 31, 2015, adjusted for acquisitions, originations and certain repayments through April 13, 2016, our 1.3 billion portfolio consists of 19 CRE debt investments with a combined principal amount of 673.6 million, two real estate equity investments with a total cost of 467.0 million, two PE investments with a carrying value of approximately 50.2 million and five CMBS purchases totaling 90.1 million; however, we have not yet acquired or identified a significant portion of the investments that we may make and you will not have an opportunity to evaluate our future investments before we make them. Collateral securing CRE debt and securities may lose its value and we may lose some or all of the principal we invest in CRE debt and securities and our borrowers and tenants may not be able to make debt service or lease payments. In addition, our organizational documents permit us to pay distributions from any source, including from borrowings, sale of assets and offering proceeds or we may make distributions in the form of taxable stock dividends. We have not established a limit on the amount of proceeds we may use to fund distributions. We have paid the majority of the cash distributions declared through December 31, 2015 using offering proceeds and may continue to pay distributions from sources other than our cash flow from operations. Until the proceeds from our offering are fully invested and otherwise during the course of our existence, we may not generate sufficient cash flow from operations to fund distributions. If we pay distributions from sources other than our cash flow from operations, we will have less cash available for investments and your overall return may be reduced. You should carefully review the “Risk Factors” section of this prospectus which contains a detailed discussion of the material risks that you should consider before you invest in shares of our common stock. Q: What is a real estate investment trust, or REIT? A: In general, a REIT is an entity that: • combines the capital of many investors to acquire or provide financing for a diversified portfolio of real estate investments under professional management, some of which may focus on a particular property type or geographic location; • is able to qualify as a “real estate investment trust” for U.S. federal income tax purposes and is therefore generally not subject to federal corporate income taxes on its net income that is distributed, which substantially eliminates the “double taxation” treatment i.e., taxation at both the corporate and stockholder levels that generally results from investments in a corporation; and • pays distributions to investors of at least 90 of its annual ordinary taxable income. vii • In this prospectus, we refer to an entity that qualifies and elects to be taxed as a REIT for U.S. federal income tax purposes as a REIT. We believe that we have qualified as a REIT for U.S. federal income tax purposes commencing with our taxable year that ended on December 31, 2013 and we intend to continue to operate in a manner so that we continue to qualify as a REIT. Q: What is an “UPREIT”? A: We currently own and plan to continue to own substantially all of our assets and conduct our operations, directly or indirectly, through a limited partnership called NorthStar Real Estate Income Operating Partnership II, LP, or our operating partnership. We refer to partnership interests and special partnership interests in our operating partnership, respectively, as common units and special units. We are the sole general partner of our operating partnership. Because we conduct substantially all of our operations through an operating partnership, we are organized as an umbrella partnership real estate investment trust, or “UPREIT.” Q: Why should I invest in CRE investments? A: Allocating some portion of your investment portfolio to CRE may provide you with portfolio diversification, reduction of overall risk, a hedge against inflation and attractive risk-adjusted returns. For these reasons, institutional investors like pension funds and endowments have embraced CRE as a significant asset class for purposes of asset allocations within their investment portfolios. According to survey data published by Preqin in 2016, private pension plans in the United States planned to increase their allocation to real estate assets from an average of 7.9 to 9.9, while public pension plans planned to increase their allocation to real estate from an average of 9.0 to 10.1. In addition, 95 of institutional investors planned to maintain or increase their allocation to real estate investments in the future. Individual investors can also benefit by adding a real estate component to their investment portfolios. You and your financial advisor should determine whether investing in real estate would benefit your investment portfolio. Q: Why should I invest specifically in a company that is focused on CRE debt, equity and securities investments? A: We believe that the market for CRE lending, including investments in CRE debt, equity and securities investments continues to be very compelling from a riskreturn perspective. As a CRE lender, we favor a strategy weighted toward targeting debt or securities investments which maximize current income, with significant subordinate capital and downside structural protections. We believe that our lending-focused investment strategy, combined with the experience and expertise of our advisor’s management team, will provide opportunities to: i originate loans with attractive current returns and strong structural features directly with borrowers, thereby taking advantage of market conditions in order to seek the best risk-return dynamic for our stockholders; ii make other select CRE equity investments to participate in potential market and property upside; and iii purchase CRE debt and securities from third parties, in some instances at discounts to their face amounts or par value. We believe the combination of these strategies and the application of prudent leverage to our CRE investments may also allow us to: i realize appreciation opportunities in the portfolio; and ii diversify our capital and enhance returns. Q: What is the experience of our sponsor?