NorthStar RXR | Presentations
LEADING THE WAY
IN NEW YORK
REAL ESTATE
INVESTING
RXR Realty
NY Regional Office
Securities Offered by NorthStar Securities, LLC Member FINRA/SIPC
DISCLOSURES
This sales and advertising presentation is neither an offer to sell nor a solicitation of an offer to buy securities. An offering is
made only by the prospectus. This presentation must be read in conjunction with the prospectus in order to fully
understand all of the implications and risks of the offering of securities to which the prospectus relates. A copy of
the prospectus must be made available to you in connection with any offering. No offering is made except by a
prospectus filed with the Department of Law of the State of New York. Neither the Securities and Exchange Commission, the
Attorney General of the State of New York nor any other state securities regulator has approved or disapproved of our
common stock, determined if the prospectus is truthful or complete or passed on or endorsed the merits of this offering. Any
representation to the contrary is a criminal offense.
This presentation includes forward-looking statements that can be identified by the use of words such as “will,” “may,”
“should,” “intend,” “believe,” “expect,” “could,” “target,” or other comparable terminology. Statements concerning projections,
future performance, cash flows and any other guidance on present or future periods constitute forward-looking statements.
Forward-looking statements involve significant risks and uncertainties and you should not unduly rely on these statements.
You should be aware that a number of important factors, including, but not limited to, the factors described in the Risk Factors
below and in our filings with the Securities and Exchange Commission, could cause our actual results to differ materially from
those in these forward-looking statements. The statements made herein are as of the date hereof and we undertake no
obligation to update these statements except as may be required by applicable securities laws.
Securities offered through NorthStar Securities, LLC, member FINRA/SIPC, an affiliate and dealer manager for
NorthStar/RXR New York Metro Real Estate, Inc. (NorthStar/RXR). NorthStar Securities, LLC is doing business as NorthStar
BD Securities, LLC (DE) in the following states: FL, GA, TX and WA.
RISK FACTORS
Consider the following risks before making an investment in NorthStar/RXR:
•
We have no operating history and there is no assurance that we will achieve our investment objectives; the prior
performance of our sponsors and their affiliated entities may not predict our future results.
•
No public market currently exists for our shares; therefore, it will be difficult to sell your shares. If you are able to sell
your shares, you would likely have to sell them at a substantial loss.
•
This is a “blind pool” offering and you will not have an opportunity to evaluate the investments we make subsequent to
the date you subscribe for shares.
•
We depend on our advisor and its affiliates, as well as our sub-advisor and its affiliates, to select our investments and
conduct our operations. We will pay substantial fees and expenses to our advisor, sub-advisor and their affiliates which
will reduce cash available for investment and distribution. These fees were not determined on an arm’s length basis.
These fees increase your risk of loss.
•
Our investments may be adversely affected by economic cycles and risks inherent to the New York metropolitan area,
especially New York City, and to risks inherent in geographic concentration.
•
We expect to acquire more than a majority of our investments through joint venture arrangements with RXR Value
Added Fund III, an affiliate of RXR Realty. We may also enter into joint ventures or other co-ownership arrangements
with other third parties. Such investments may involve risks not otherwise present with other investments.
•
We expect to use leverage in connection with our investments, which increases the risk of loss associated with our
investments.
•
Our tenants may not be able to make lease payments and our borrowers may not be able to make debt service
payments to us due to changes in economic conditions, regulatory requirements and other factors.
•
There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other
than cash flow from operations, including offering proceeds, borrowings or sales of assets and distributions may exceed
earnings which may reduce an investor’s overall return. We have not established a limit on the amount of proceeds we
may use 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. There is no guarantee of any return and
you may lose a part or all of your investment. Distributions to the Class T Shares will be reduced by the payment of the
distribution fee.
RISK FACTORS
Consider the following risks before making an investment in NorthStar/RXR:
•
Our executive officers and other key investment professionals of our sponsors and their affiliates who perform services
for us on behalf of our advisor and sub-advisor face conflicts of interest, including time constraints, allocation of
investment opportunities and significant conflicts created by compensation arrangements with us and other affiliates of
our sponsors.
•
If we only raise the minimum offering amount, or are unable to raise substantial funds, we will be limited in the number
and type of investments we can make and the value of your investment in the offering will fluctuate with the
performance of the specific assets we acquire.
•
Diversification does not eliminate risk and does not assure better performance.
•
We may change our targeted investments or investment policies without stockholder consent.
•
The offering prices of our Class A Shares, Class T Shares and Class I Shares were not established on an independent
basis, therefore, the offering prices will not accurately represent the value of our assets, as they were arbitrarily
determined, and the actual value of your investment may be substantially less.
•
Our charter does not require our board of directors to seek stockholder approval to liquidate our assets by a specified
date, nor does our charter require our board of directors to list our shares for trading by a specified date.
•
If we fail to qualify as a REIT for federal income tax purposes, our cash available for distribution and the value of our
shares could materially decrease.
•
If we terminate our agreement with our advisor, we may be required to pay significant fees to an affiliate of our
sponsors, which will reduce the cash available for distribution to you.
•
The other risks set forth in our prospectus and our filings with the Securities and Exchange Commission.
Investment Opportunity
NorthStar/RXR is intended for investors seeking:
Exposure to a dynamic New York Metropolitan
(Metro) commercial real estate market.
Potential for capital appreciation and
risk-adjusted returns.
Current income through monthly distributions.*
5
*There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other than cash flow from
operations, including offering proceeds, borrowings or sales of assets and distributions may exceed earnings, which may reduce an investor’s
overall return. As with any real estate investment, there are various risks including but not limited to: unfavorable market conditions, loss of principal and
limited liquidity. NorthStar/RXR may change its targeted investments or investment policies without stockholder consent. NorthStar/RXR’s investments
may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in geographic
concentrations. Because of this concentration, any adverse situation that disproportionately affects the New York metro area, including a worsening of
economy, would have a magnified adverse effect on our portfolio.
Leveraging The “Power of Local”
NorthStar/RXR’s Competitive Advantage
Established relationships with owners, tenants, brokers, government
representatives and local municipalities
Demonstrated value creation over multiple real estate cycles
Strong understanding of current trends and paths of growth in the
New York Metro area
Access to off market transactions
Extensive underwriting and local market knowledge
Ability to structure complex transactions
6
NorthStar/RXR’s investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and
to risks inherent in geographic concentrations. The performance of its co-sponsors, Colony NorthStar and RXR Realty is not indicative of the performance
of NorthStar/RXR.
NorthStar/RXR’s Investment Strategy
Concentrate on high-quality, well located commercial real
estate (CRE) throughout the New York metro area with
strong cash flow and/or value-add opportunities.
Focus on office, mixed-used and multifamily properties.
Complement our equity strategy with debt investments.
7
We may change our investment objectives, policies and strategy at any time without stockholder consent. Diversification does not eliminate risk and does
not assure better performance. NorthStar/RXR’s investments may be adversely affected by economic cycles and risks inherent to the New York metro
area, especially New York City and to risks inherent in geographic concentrations. Because of this concentration, any adverse situation that
disproportionately affects the New York metro area, including a worsening of economy, would have a magnified adverse effect on our portfolio.
Investing in Emerging Sub-Markets
The push of higher prices and the pull of new lifestyles
has fueled an urban renaissance across New York Metro.
Leverage RXR Realty’s “Power of Local” experience to invest
in the growing opportunities in these emerging sub-markets.
RXR Realty has the experience to recognize early trends
and patterns of growth.
8
We may change our investment objectives, policies and strategy at any time without stockholder consent. NorthStar/RXR’s investments may be
adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in geographic
concentrations. The performance of Colony NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR.
Why Invest in the New York Metro Area?
NorthStar/RXR’s investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to
risks inherent in geographic concentrations. The performance of Colony NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR. We
may change our investment objectives, policies and strategy at any time without shareholder consent. Sources: 1) U.S. Census Bureau, 2015 estimate 2) City
9 of New York, Commitment Plan. 3) Colliers International Manhattan Office Market Report Q4 2016. 4) www.ceo.com, States with Most Fortune 500
Companies, September, 2013. 5) NYC & Company, January 2017.
Largest Domestic Office Market
With 506 million square feet of office space, New York City’s office market is larger
than the next four U.S. office markets combined.
Size of Domestic Office Markets Ranked by Square Footage
10
Source: Colliers International, Office Market Outlook Q3 2016
Population is at an All-Time High
The New York Metro population is at an all-time high with 8.6 million residents
which may drive additional demand for office space, housing and retail services.
New York Metro Population Growth (1970-2015)
11 Source: US Census Bureau, 2015 estimate
All-Time High Employment
New York City employment is at an all-time high, which we believe will drive
increases in office occupancy and rental rates.
Employment Growth in New York City Since 1970
12
Source: New York State Department of Labor Statistics as of December 31, 2016
The Ultimate Resilient City
New York City has recovered 255% of jobs lost during the recent economic crisis.
New York City’s historical ability to bounce back after economic disruptions suggests
it may weather future downturns better than other major American cities.
Jobs Recovered Since Trough As A Percentage Of Jobs Lost
13
Source: Cushman & Wakefield, Manhattan Office Market, April 2014
Record 60.3 Million Visitors in 2016
Visitation to New York City has risen 38% in the last decade, which may further
strengthen the New York metro’s economy and real estate fundamentals.
New York City Visitors Over Last Decade
14
Source: NYC & Company, January 2017
Significant Infrastructure Investment
An estimated $30 billion of construction on transportation infrastructure is planned
by 2019. By improving the transportation infrastructure, New York Metro is better
able to accommodate its growing population and visitors and provide greater
access to underutilized, under-developed areas of the city.
New York City Municipal Capital Commitments
15
Source: City of New York, CBRE, Manhattan Market Discussion, April 2014
Strong, Diverse Economy
Unlike other economic hubs, New York is a desired location for a vast array of
industries leading to higher tenant diversification and decreased dependency on a
particular sector.
New York Industries by Sector
16
Source: Bureau of Labor Statistics, April 2017
Constrained Supply
New York City’s supply of commercial office space is aging, with little inventory added
in recent years. We believe this imbalance between supply and demand may create
favorable conditions for owners, operators and developers of office real estate.
Total Inventory of Commercial Office Space in Manhattan
17
Source: Colliers International, Manhattan Office Construction Report, Q4 2016
Creating Value Through Institutional Expertise
Colony NorthStar, Inc. (Colony NorthStar; NYSE: CLNS)
and RXR Realty LLC have partnered to form a strategic
relationship to co-sponsor NorthStar/RXR.
We believe Colony NorthStar’s successful experience running
public companies and other non-traded investment vehicles
combined with RXR Realty’s extensive New York market
expertise may provide considerable competitive advantages.
18
The performance of Colony NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR. Colony NorthStar, RXR Realty and
NorthStar/RXR are separate companies. An investor purchasing shares in NorthStar/RXR’s public offering is making an investment in NorthStar/RXR, not
in Colony NorthStar or RXR Realty.
Co-Sponsor Overview | Colony NorthStar
Colony NorthStar a leading global real estate and investment management
firm focused on strategically managing real estate and other investment
platforms in the United States and internationally.
$56
BILLION
ASSETS UNDER
MANAGEMENT1
PRUDENT & DISCIPLINED INVESTMENT PROCESS
L E A D I N G G L O B A L R E A L E S TAT E A N D
INVESTMENT MANAGEMENT FIRM
SPONSOR OF ALTERNATIVE INVESTMENT PROGRAMS PROVIDING RETAIL INVESTORS
ACCESS TO A BROAD RANGE OF INSTITUTIONAL-QUALITY INVESTMENTS
19
The performance of Colony NorthStar is not indicative of the performance of NorthStar/RXR. Colony NorthStar and NorthStar/RXR are separate
companies. An investor purchasing shares in NorthStar/RXR’s public offering is making an investment in NorthStar/RXR, not in Colony NorthStar.
1) Represents balance sheet and third-party AUM as of June 30, 2017. Third party AUM represents capital invested alongside balance sheet, but excludes
private equity and retail company interests, which are included in Investment Management AUM.
Co-Sponsor Overview | RXR Realty
RXR Realty is a premier New York-based real estate owner, manager and
developer and is comprised of members of the former senior management
and operating team of Reckson Associates, a NYSE-listed REIT.
$15.7
BILLION
ASSETS UNDER
MANAGEMENT1
LOCAL MARKET KNOWLEDGE
& INSIDER RELATIONSHIPS
22.1
Million
Square Feet¹
under management
4 5 0 - P E R S O N V E R T I C A L LY I N T E G R AT E D
R E A L E S TAT E O W N E R A N D O P E R AT O R
One of the most adept participants in New York
commercial real estate with long-standing relationships
20
$6.3 BILLION
EQUITY RAISED
SINCE 2009 THROUGH
INSTITUTIONAL FUNDS
The performance of RXR Realty is not indicative of the performance of NorthStar/RXR. RXR Realty and NorthStar/RXR are separate
companies. An investor purchasing shares in NorthStar/RXR’s public offering is making an investment in NorthStar/RXR, not in RXR Realty.
1) As of June 30, 2017. Gross estimated asset value compiled by RXR Realty in accordance with company fair value measurement policy and is
comprised of capital invested by RXR and its partners as well as leverage.
Manhattan’s Top Landlords (by square feet)
Rank
21
Landlord
Office RSF (in millions)
1
SL Green Realty Corp.
22.6
2
Vornado Realty Trust
20.2
3
Brookfield Properties
20.0
4
RXR Realty
16.2
5
Silverstein Properties
13.1
6
Durst Organization
12.1
7
Boston Properties
11.5
8
Tishman Speyer Properties
10.1
9
Rudin Management Company
10.3
10
Paramount Group
8.6
1) SL Green Realty Corp. Form 10Q for the period ending March 31, 2017. 2) Vornado Realty Trust Form 10Q for the period ending March 31, 2017.
3) www.brookfieldofficeproperties.com as of as of May 10, 2017. 4) www.rxrrealty.com as of May 10, 2017. 5) www.silversteinproperties.com as of as of May 10,
2017. 6) www.durst.org as of as of May 10, 2017. 7) Boston Properties, Inc. Form 10Q for the period ending March 31, 2017. 8) www.tishmanspeyer.com as of
May 10, 2017. 9) www.rudin.com as of November 17, 2016. 10) Paramount Group, Inc. Form 10Q for the period ending March 31, 2017. This is for illustrative
purposes only. There is no guarantee that RXR Realty will continue to rank among top Manhattan landlords and/or own the same amount of square footage in the
future. The performance of its co-sponsors NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR.
Experienced New York Investment Team
Name
Years
Relevant Background
• Chief Executive Officer and Chairman of RXR Realty
28
• CEO, President, COO and Chairman of Reckson Associates Realty Corp. (NYSE: RA)
• Board and Committee Member Participation: Real Estate Board of New York, member; Real
Estate Roundtable, Co-Chair of its Political Action Committee; Co-founder and former
member of the Board of American Campus Communities, Inc. (NYSE: ACC)
Scott Rechler
• President and Chief Financial Officer, RXR Realty
• President and CFO of Reckson Associates Realty Corp. (NYSE: RA)
32
• Board and Committee Member Participation: Long Island Association (LIA), Vice Chairman of
the Board, member of Executive Committee; Diocese of Rockville Center Pension Plan,
investment committee; Catholic Foundation of Diocese of Rockville Center, Chairman of the
Board; Real Estate Roundtable, member
Michael Maturo
• Vice Chairman, General Counsel and Secretary of RXR Realty
24
• Board and Committee Member Participation: American Bar Association, member; Real Estate
Board of New York, member; National Association of Real Estate Investment Trusts, member
• Member of the American Bar Association and admitted to the Bar for the State of New York
Jason Barnett
22
The RXR Realty leadership team featured here is not employed by the issuer, NorthStar/RXR New York Metro Real Estate, Inc. The members of the
RXR Realty leadership team face conflicts of interest relating to their obligations to other RXR Realty affiliated entities.
NorthStar/RXR Offering Details
Co-Sponsors
Colony NorthStar, Inc. and
RXR Realty LLC
Distribution Schedule¹
Monthly
Investment Focus
New York Metro Real Estate
Minimum Investment
$4,000 Taxable and
Tax-Deferred Investment
Offering Type
Public, Non-Traded
REIT
Expected Term²
5 to 8 Years
Investor Suitability³
Net worth of at least $250,000 or gross annual income of at least
$70,000 and a net worth of at least $70,0004
23
1) There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other than cash flow from operations,
including offering proceeds, borrowings or sales of assets, which may reduce an investor’s overall return. 2) There are no assurances that the program will ever
complete a liquidity event. 3) AL, CA, IA, KS, KY, MA, ME, MO, NE, NV, NJ, NM, ND, OH, OR , PA, TN and VT impose more stringent suitability requirements.
Please review the prospectus prior to investing or recommending that clients invest. NorthStar/RXR is not available to residents of PA. 4) Net worth does not
include home, furnishings and personal automobiles.
Investment Highlight – Acquisition
Investment Summary
Acquired an indirect minority interest in an
office building located in Midtown Manhattan
as part of a $1.65 billion transaction sourced
by RXR Realty, NorthStar/RXR’s co-sponsor
and affiliate of its sub-advisor.
• Purchase Price:
$4,400,000¹
• Acquisition Date:
May 2016/Dec 2016
• Location:
Midtown Manhattan
• Square Feet:
1.8 million²
• Property Type:
Class-A Office
• Year Built/Renovated: 1960/2006
1285 Avenue of the Americas
1) NorthStar/RXR participated in the transaction with an investor group led by RXR Real Estate Value Added Fund - Fund III LP, an institutional real estate private
equity fund sponsored by RXR Realty, LLC, as well as other institutional third party real estate investors and high net worth individuals by acquiring an indirect
minority interest for a purchase price of approximately $1.9 million in May 2016. NorthStar/RXR completed a $2.5 million follow-on investment in December 2016
using proceeds from the offering, for a total investment amount of approximately $4.4 million. 2) Includes 25,000 square feet of retail space and approximately
24 84,000 of below-grade square footage. NorthStar/RXR owns an indirect minority interest in the property depicted in the photos. All information provided is as of the
acquisition date unless otherwise noted and we undertake no duty to update such information.
Why Invest in NorthStar/RXR
RXR Realty has significant experience investing in New York on
behalf of institutional investors.
The New York Metro commercial real estate market has historically
been one of the strongest and most diverse in the world.1
Positive population, tourism and employment trends in the New York
metro support a dynamic and growing real estate market.
Combining core property investments with value-added opportunities
may create a balanced portfolio that seeks to deliver capital
appreciation, cash flow* and risk-adjusted returns.
25
*There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other than cash flow from
operations, including offering proceeds, borrowings or sales of assets, which may reduce an investor’s overall return. As with any real estate
investment, there are various risks including but not limited to: unfavorable market conditions, loss of principal and limited liquidity. NorthStar/RXR’s
investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in
geographic concentrations. Because of this concentration, any adverse situation that disproportionately affects the New York metro area, including a
worsening of economy, would have a magnified adverse effect on our portfolio. The performance of Colony NorthStar and RXR Realty is not indicative of the
performance of NorthStar/RXR. Colony NorthStar, RXR Realty and NorthStar/RXR are separate companies. 1) JLL, New York Office Outlook, Q4 2014.
NOT
ALL
REITS
FOR MORE INFORMATION
ARE CREATED
Contact your Financial Advisor
and ask for a
EQUAL
client investor kit.
Speaker Name
www.NorthStarSecurities.com/RXR
Title | Sales Desk 877.940.8777
This investment is not suitable for all investors.
Please consult the prospectus for suitability standards by investor's state of residence.
IN NEW YORK
REAL ESTATE
INVESTING
RXR Realty
NY Regional Office
Securities Offered by NorthStar Securities, LLC Member FINRA/SIPC
DISCLOSURES
This sales and advertising presentation is neither an offer to sell nor a solicitation of an offer to buy securities. An offering is
made only by the prospectus. This presentation must be read in conjunction with the prospectus in order to fully
understand all of the implications and risks of the offering of securities to which the prospectus relates. A copy of
the prospectus must be made available to you in connection with any offering. No offering is made except by a
prospectus filed with the Department of Law of the State of New York. Neither the Securities and Exchange Commission, the
Attorney General of the State of New York nor any other state securities regulator has approved or disapproved of our
common stock, determined if the prospectus is truthful or complete or passed on or endorsed the merits of this offering. Any
representation to the contrary is a criminal offense.
This presentation includes forward-looking statements that can be identified by the use of words such as “will,” “may,”
“should,” “intend,” “believe,” “expect,” “could,” “target,” or other comparable terminology. Statements concerning projections,
future performance, cash flows and any other guidance on present or future periods constitute forward-looking statements.
Forward-looking statements involve significant risks and uncertainties and you should not unduly rely on these statements.
You should be aware that a number of important factors, including, but not limited to, the factors described in the Risk Factors
below and in our filings with the Securities and Exchange Commission, could cause our actual results to differ materially from
those in these forward-looking statements. The statements made herein are as of the date hereof and we undertake no
obligation to update these statements except as may be required by applicable securities laws.
Securities offered through NorthStar Securities, LLC, member FINRA/SIPC, an affiliate and dealer manager for
NorthStar/RXR New York Metro Real Estate, Inc. (NorthStar/RXR). NorthStar Securities, LLC is doing business as NorthStar
BD Securities, LLC (DE) in the following states: FL, GA, TX and WA.
RISK FACTORS
Consider the following risks before making an investment in NorthStar/RXR:
•
We have no operating history and there is no assurance that we will achieve our investment objectives; the prior
performance of our sponsors and their affiliated entities may not predict our future results.
•
No public market currently exists for our shares; therefore, it will be difficult to sell your shares. If you are able to sell
your shares, you would likely have to sell them at a substantial loss.
•
This is a “blind pool” offering and you will not have an opportunity to evaluate the investments we make subsequent to
the date you subscribe for shares.
•
We depend on our advisor and its affiliates, as well as our sub-advisor and its affiliates, to select our investments and
conduct our operations. We will pay substantial fees and expenses to our advisor, sub-advisor and their affiliates which
will reduce cash available for investment and distribution. These fees were not determined on an arm’s length basis.
These fees increase your risk of loss.
•
Our investments may be adversely affected by economic cycles and risks inherent to the New York metropolitan area,
especially New York City, and to risks inherent in geographic concentration.
•
We expect to acquire more than a majority of our investments through joint venture arrangements with RXR Value
Added Fund III, an affiliate of RXR Realty. We may also enter into joint ventures or other co-ownership arrangements
with other third parties. Such investments may involve risks not otherwise present with other investments.
•
We expect to use leverage in connection with our investments, which increases the risk of loss associated with our
investments.
•
Our tenants may not be able to make lease payments and our borrowers may not be able to make debt service
payments to us due to changes in economic conditions, regulatory requirements and other factors.
•
There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other
than cash flow from operations, including offering proceeds, borrowings or sales of assets and distributions may exceed
earnings which may reduce an investor’s overall return. We have not established a limit on the amount of proceeds we
may use 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. There is no guarantee of any return and
you may lose a part or all of your investment. Distributions to the Class T Shares will be reduced by the payment of the
distribution fee.
RISK FACTORS
Consider the following risks before making an investment in NorthStar/RXR:
•
Our executive officers and other key investment professionals of our sponsors and their affiliates who perform services
for us on behalf of our advisor and sub-advisor face conflicts of interest, including time constraints, allocation of
investment opportunities and significant conflicts created by compensation arrangements with us and other affiliates of
our sponsors.
•
If we only raise the minimum offering amount, or are unable to raise substantial funds, we will be limited in the number
and type of investments we can make and the value of your investment in the offering will fluctuate with the
performance of the specific assets we acquire.
•
Diversification does not eliminate risk and does not assure better performance.
•
We may change our targeted investments or investment policies without stockholder consent.
•
The offering prices of our Class A Shares, Class T Shares and Class I Shares were not established on an independent
basis, therefore, the offering prices will not accurately represent the value of our assets, as they were arbitrarily
determined, and the actual value of your investment may be substantially less.
•
Our charter does not require our board of directors to seek stockholder approval to liquidate our assets by a specified
date, nor does our charter require our board of directors to list our shares for trading by a specified date.
•
If we fail to qualify as a REIT for federal income tax purposes, our cash available for distribution and the value of our
shares could materially decrease.
•
If we terminate our agreement with our advisor, we may be required to pay significant fees to an affiliate of our
sponsors, which will reduce the cash available for distribution to you.
•
The other risks set forth in our prospectus and our filings with the Securities and Exchange Commission.
Investment Opportunity
NorthStar/RXR is intended for investors seeking:
Exposure to a dynamic New York Metropolitan
(Metro) commercial real estate market.
Potential for capital appreciation and
risk-adjusted returns.
Current income through monthly distributions.*
5
*There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other than cash flow from
operations, including offering proceeds, borrowings or sales of assets and distributions may exceed earnings, which may reduce an investor’s
overall return. As with any real estate investment, there are various risks including but not limited to: unfavorable market conditions, loss of principal and
limited liquidity. NorthStar/RXR may change its targeted investments or investment policies without stockholder consent. NorthStar/RXR’s investments
may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in geographic
concentrations. Because of this concentration, any adverse situation that disproportionately affects the New York metro area, including a worsening of
economy, would have a magnified adverse effect on our portfolio.
Leveraging The “Power of Local”
NorthStar/RXR’s Competitive Advantage
Established relationships with owners, tenants, brokers, government
representatives and local municipalities
Demonstrated value creation over multiple real estate cycles
Strong understanding of current trends and paths of growth in the
New York Metro area
Access to off market transactions
Extensive underwriting and local market knowledge
Ability to structure complex transactions
6
NorthStar/RXR’s investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and
to risks inherent in geographic concentrations. The performance of its co-sponsors, Colony NorthStar and RXR Realty is not indicative of the performance
of NorthStar/RXR.
NorthStar/RXR’s Investment Strategy
Concentrate on high-quality, well located commercial real
estate (CRE) throughout the New York metro area with
strong cash flow and/or value-add opportunities.
Focus on office, mixed-used and multifamily properties.
Complement our equity strategy with debt investments.
7
We may change our investment objectives, policies and strategy at any time without stockholder consent. Diversification does not eliminate risk and does
not assure better performance. NorthStar/RXR’s investments may be adversely affected by economic cycles and risks inherent to the New York metro
area, especially New York City and to risks inherent in geographic concentrations. Because of this concentration, any adverse situation that
disproportionately affects the New York metro area, including a worsening of economy, would have a magnified adverse effect on our portfolio.
Investing in Emerging Sub-Markets
The push of higher prices and the pull of new lifestyles
has fueled an urban renaissance across New York Metro.
Leverage RXR Realty’s “Power of Local” experience to invest
in the growing opportunities in these emerging sub-markets.
RXR Realty has the experience to recognize early trends
and patterns of growth.
8
We may change our investment objectives, policies and strategy at any time without stockholder consent. NorthStar/RXR’s investments may be
adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in geographic
concentrations. The performance of Colony NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR.
Why Invest in the New York Metro Area?
NorthStar/RXR’s investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to
risks inherent in geographic concentrations. The performance of Colony NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR. We
may change our investment objectives, policies and strategy at any time without shareholder consent. Sources: 1) U.S. Census Bureau, 2015 estimate 2) City
9 of New York, Commitment Plan. 3) Colliers International Manhattan Office Market Report Q4 2016. 4) www.ceo.com, States with Most Fortune 500
Companies, September, 2013. 5) NYC & Company, January 2017.
Largest Domestic Office Market
With 506 million square feet of office space, New York City’s office market is larger
than the next four U.S. office markets combined.
Size of Domestic Office Markets Ranked by Square Footage
10
Source: Colliers International, Office Market Outlook Q3 2016
Population is at an All-Time High
The New York Metro population is at an all-time high with 8.6 million residents
which may drive additional demand for office space, housing and retail services.
New York Metro Population Growth (1970-2015)
11 Source: US Census Bureau, 2015 estimate
All-Time High Employment
New York City employment is at an all-time high, which we believe will drive
increases in office occupancy and rental rates.
Employment Growth in New York City Since 1970
12
Source: New York State Department of Labor Statistics as of December 31, 2016
The Ultimate Resilient City
New York City has recovered 255% of jobs lost during the recent economic crisis.
New York City’s historical ability to bounce back after economic disruptions suggests
it may weather future downturns better than other major American cities.
Jobs Recovered Since Trough As A Percentage Of Jobs Lost
13
Source: Cushman & Wakefield, Manhattan Office Market, April 2014
Record 60.3 Million Visitors in 2016
Visitation to New York City has risen 38% in the last decade, which may further
strengthen the New York metro’s economy and real estate fundamentals.
New York City Visitors Over Last Decade
14
Source: NYC & Company, January 2017
Significant Infrastructure Investment
An estimated $30 billion of construction on transportation infrastructure is planned
by 2019. By improving the transportation infrastructure, New York Metro is better
able to accommodate its growing population and visitors and provide greater
access to underutilized, under-developed areas of the city.
New York City Municipal Capital Commitments
15
Source: City of New York, CBRE, Manhattan Market Discussion, April 2014
Strong, Diverse Economy
Unlike other economic hubs, New York is a desired location for a vast array of
industries leading to higher tenant diversification and decreased dependency on a
particular sector.
New York Industries by Sector
16
Source: Bureau of Labor Statistics, April 2017
Constrained Supply
New York City’s supply of commercial office space is aging, with little inventory added
in recent years. We believe this imbalance between supply and demand may create
favorable conditions for owners, operators and developers of office real estate.
Total Inventory of Commercial Office Space in Manhattan
17
Source: Colliers International, Manhattan Office Construction Report, Q4 2016
Creating Value Through Institutional Expertise
Colony NorthStar, Inc. (Colony NorthStar; NYSE: CLNS)
and RXR Realty LLC have partnered to form a strategic
relationship to co-sponsor NorthStar/RXR.
We believe Colony NorthStar’s successful experience running
public companies and other non-traded investment vehicles
combined with RXR Realty’s extensive New York market
expertise may provide considerable competitive advantages.
18
The performance of Colony NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR. Colony NorthStar, RXR Realty and
NorthStar/RXR are separate companies. An investor purchasing shares in NorthStar/RXR’s public offering is making an investment in NorthStar/RXR, not
in Colony NorthStar or RXR Realty.
Co-Sponsor Overview | Colony NorthStar
Colony NorthStar a leading global real estate and investment management
firm focused on strategically managing real estate and other investment
platforms in the United States and internationally.
$56
BILLION
ASSETS UNDER
MANAGEMENT1
PRUDENT & DISCIPLINED INVESTMENT PROCESS
L E A D I N G G L O B A L R E A L E S TAT E A N D
INVESTMENT MANAGEMENT FIRM
SPONSOR OF ALTERNATIVE INVESTMENT PROGRAMS PROVIDING RETAIL INVESTORS
ACCESS TO A BROAD RANGE OF INSTITUTIONAL-QUALITY INVESTMENTS
19
The performance of Colony NorthStar is not indicative of the performance of NorthStar/RXR. Colony NorthStar and NorthStar/RXR are separate
companies. An investor purchasing shares in NorthStar/RXR’s public offering is making an investment in NorthStar/RXR, not in Colony NorthStar.
1) Represents balance sheet and third-party AUM as of June 30, 2017. Third party AUM represents capital invested alongside balance sheet, but excludes
private equity and retail company interests, which are included in Investment Management AUM.
Co-Sponsor Overview | RXR Realty
RXR Realty is a premier New York-based real estate owner, manager and
developer and is comprised of members of the former senior management
and operating team of Reckson Associates, a NYSE-listed REIT.
$15.7
BILLION
ASSETS UNDER
MANAGEMENT1
LOCAL MARKET KNOWLEDGE
& INSIDER RELATIONSHIPS
22.1
Million
Square Feet¹
under management
4 5 0 - P E R S O N V E R T I C A L LY I N T E G R AT E D
R E A L E S TAT E O W N E R A N D O P E R AT O R
One of the most adept participants in New York
commercial real estate with long-standing relationships
20
$6.3 BILLION
EQUITY RAISED
SINCE 2009 THROUGH
INSTITUTIONAL FUNDS
The performance of RXR Realty is not indicative of the performance of NorthStar/RXR. RXR Realty and NorthStar/RXR are separate
companies. An investor purchasing shares in NorthStar/RXR’s public offering is making an investment in NorthStar/RXR, not in RXR Realty.
1) As of June 30, 2017. Gross estimated asset value compiled by RXR Realty in accordance with company fair value measurement policy and is
comprised of capital invested by RXR and its partners as well as leverage.
Manhattan’s Top Landlords (by square feet)
Rank
21
Landlord
Office RSF (in millions)
1
SL Green Realty Corp.
22.6
2
Vornado Realty Trust
20.2
3
Brookfield Properties
20.0
4
RXR Realty
16.2
5
Silverstein Properties
13.1
6
Durst Organization
12.1
7
Boston Properties
11.5
8
Tishman Speyer Properties
10.1
9
Rudin Management Company
10.3
10
Paramount Group
8.6
1) SL Green Realty Corp. Form 10Q for the period ending March 31, 2017. 2) Vornado Realty Trust Form 10Q for the period ending March 31, 2017.
3) www.brookfieldofficeproperties.com as of as of May 10, 2017. 4) www.rxrrealty.com as of May 10, 2017. 5) www.silversteinproperties.com as of as of May 10,
2017. 6) www.durst.org as of as of May 10, 2017. 7) Boston Properties, Inc. Form 10Q for the period ending March 31, 2017. 8) www.tishmanspeyer.com as of
May 10, 2017. 9) www.rudin.com as of November 17, 2016. 10) Paramount Group, Inc. Form 10Q for the period ending March 31, 2017. This is for illustrative
purposes only. There is no guarantee that RXR Realty will continue to rank among top Manhattan landlords and/or own the same amount of square footage in the
future. The performance of its co-sponsors NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR.
Experienced New York Investment Team
Name
Years
Relevant Background
• Chief Executive Officer and Chairman of RXR Realty
28
• CEO, President, COO and Chairman of Reckson Associates Realty Corp. (NYSE: RA)
• Board and Committee Member Participation: Real Estate Board of New York, member; Real
Estate Roundtable, Co-Chair of its Political Action Committee; Co-founder and former
member of the Board of American Campus Communities, Inc. (NYSE: ACC)
Scott Rechler
• President and Chief Financial Officer, RXR Realty
• President and CFO of Reckson Associates Realty Corp. (NYSE: RA)
32
• Board and Committee Member Participation: Long Island Association (LIA), Vice Chairman of
the Board, member of Executive Committee; Diocese of Rockville Center Pension Plan,
investment committee; Catholic Foundation of Diocese of Rockville Center, Chairman of the
Board; Real Estate Roundtable, member
Michael Maturo
• Vice Chairman, General Counsel and Secretary of RXR Realty
24
• Board and Committee Member Participation: American Bar Association, member; Real Estate
Board of New York, member; National Association of Real Estate Investment Trusts, member
• Member of the American Bar Association and admitted to the Bar for the State of New York
Jason Barnett
22
The RXR Realty leadership team featured here is not employed by the issuer, NorthStar/RXR New York Metro Real Estate, Inc. The members of the
RXR Realty leadership team face conflicts of interest relating to their obligations to other RXR Realty affiliated entities.
NorthStar/RXR Offering Details
Co-Sponsors
Colony NorthStar, Inc. and
RXR Realty LLC
Distribution Schedule¹
Monthly
Investment Focus
New York Metro Real Estate
Minimum Investment
$4,000 Taxable and
Tax-Deferred Investment
Offering Type
Public, Non-Traded
REIT
Expected Term²
5 to 8 Years
Investor Suitability³
Net worth of at least $250,000 or gross annual income of at least
$70,000 and a net worth of at least $70,0004
23
1) There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other than cash flow from operations,
including offering proceeds, borrowings or sales of assets, which may reduce an investor’s overall return. 2) There are no assurances that the program will ever
complete a liquidity event. 3) AL, CA, IA, KS, KY, MA, ME, MO, NE, NV, NJ, NM, ND, OH, OR , PA, TN and VT impose more stringent suitability requirements.
Please review the prospectus prior to investing or recommending that clients invest. NorthStar/RXR is not available to residents of PA. 4) Net worth does not
include home, furnishings and personal automobiles.
Investment Highlight – Acquisition
Investment Summary
Acquired an indirect minority interest in an
office building located in Midtown Manhattan
as part of a $1.65 billion transaction sourced
by RXR Realty, NorthStar/RXR’s co-sponsor
and affiliate of its sub-advisor.
• Purchase Price:
$4,400,000¹
• Acquisition Date:
May 2016/Dec 2016
• Location:
Midtown Manhattan
• Square Feet:
1.8 million²
• Property Type:
Class-A Office
• Year Built/Renovated: 1960/2006
1285 Avenue of the Americas
1) NorthStar/RXR participated in the transaction with an investor group led by RXR Real Estate Value Added Fund - Fund III LP, an institutional real estate private
equity fund sponsored by RXR Realty, LLC, as well as other institutional third party real estate investors and high net worth individuals by acquiring an indirect
minority interest for a purchase price of approximately $1.9 million in May 2016. NorthStar/RXR completed a $2.5 million follow-on investment in December 2016
using proceeds from the offering, for a total investment amount of approximately $4.4 million. 2) Includes 25,000 square feet of retail space and approximately
24 84,000 of below-grade square footage. NorthStar/RXR owns an indirect minority interest in the property depicted in the photos. All information provided is as of the
acquisition date unless otherwise noted and we undertake no duty to update such information.
Why Invest in NorthStar/RXR
RXR Realty has significant experience investing in New York on
behalf of institutional investors.
The New York Metro commercial real estate market has historically
been one of the strongest and most diverse in the world.1
Positive population, tourism and employment trends in the New York
metro support a dynamic and growing real estate market.
Combining core property investments with value-added opportunities
may create a balanced portfolio that seeks to deliver capital
appreciation, cash flow* and risk-adjusted returns.
25
*There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other than cash flow from
operations, including offering proceeds, borrowings or sales of assets, which may reduce an investor’s overall return. As with any real estate
investment, there are various risks including but not limited to: unfavorable market conditions, loss of principal and limited liquidity. NorthStar/RXR’s
investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in
geographic concentrations. Because of this concentration, any adverse situation that disproportionately affects the New York metro area, including a
worsening of economy, would have a magnified adverse effect on our portfolio. The performance of Colony NorthStar and RXR Realty is not indicative of the
performance of NorthStar/RXR. Colony NorthStar, RXR Realty and NorthStar/RXR are separate companies. 1) JLL, New York Office Outlook, Q4 2014.
NOT
ALL
REITS
FOR MORE INFORMATION
ARE CREATED
Contact your Financial Advisor
and ask for a
EQUAL
client investor kit.
Speaker Name
www.NorthStarSecurities.com/RXR
Title | Sales Desk 877.940.8777
This investment is not suitable for all investors.
Please consult the prospectus for suitability standards by investor's state of residence.