Colony Capital Sells NorthStar Reality Europe

October 1, 2019 | Investments, News, Real Estate

The deal allows Tom Barrack’s shop to shift corporate focus to digital real estate and infrastructure deals

Colony Capital had a busy week. Not long after the firm announced the sale of Colony Industrial to Blackstone Group, the firm followed up on another deal. This time, the firm has sold the NorthStar Realty Europe (NRE), a REIT, to AXA Investment Managers – Real Assets. The firm and announced plans to sell NorthStar on July 3, 2019. Shareholders of NRE approved the deal last week.

The New Colony Capital

The company sold Colony Industrial for $5.9 billion. This NRE deal will now bring total liquidity for redeployment at $7.5 billion. Colony Capital has been working to generate liquidity to shift its businesses to digital real estate and infrastructure.

Meanwhile, terms of the NRE transaction brought Colony $64.6 million in a lump sum incentive. It also had a termination fee payment and $96 million for its 11% ownership position in NRE. This represented a premium of approximately $22 million, or 30%, above Colony’s cost basis.

“The Colony team led by Mahbod Nia has done a tremendous job in stewarding NRE’s high-quality European assets and managing a very challenging process which has concluded with a win for all parties,” said Thomas J. Barrack, Jr., Chairman and CEO of Colony, in a statement.

“The closing of this transaction represents another great milestone of accomplishment for our strategy to arbitrage public and private markets, and simplify our story and balance sheet, and we plan on using the proceeds from this transaction to continue to right-size our capital structure and invest in digital growth businesses as we transform into the leading operator, investment manager, and capital provider in the digital infrastructure industry.”


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