“This is an extremely efficient transaction for NorthStar Income II and not only provides us with non-recourse, match-term, non-mark-to-market financing for our debt investments, but also allows us to recycle borrowing capacity on our credit facilities,” commented Daniel R. Gilbert, chief executive officer and president. “NorthStar has been a market leader in securitization financing transactions, having executed over $2.9 billion in similar debt financings across its managed companies since 2004, and we continue to utilize these structures with a goal of benefiting our shareholders.”

An affiliate of NorthStar Income II will retain the non-investment grade securities and equity interests in the transaction equal to $90.3 million in the aggregate, and an affiliate of NorthStar Income will retain approximately $15.0 million of junior participations in the collateral it contributed. NorthStar Income II expects to earn a gross yield of approximately 12% on its invested equity. Net proceeds from the transaction will be used by NorthStar Income II to, among other things, repay certain credit facilities, which will generally create new availability under those facilities to finance and enhance the returns of future mortgage loan investments.

The securities are being offered inside the United States to persons who are both (1) (a) “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933, as amended (the Securities Act), or (b) solely with respect to securities issued in definitive form, institutional “accredited investors” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act, and (2) “qualified purchasers” as defined in Section 2(a)(51) of the Investment Company Act of 1940, as amended. The securities are also being offered outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act. The securities have not been registered under the Securities Act or any state or foreign securities laws and may not be offered or sold in the United Statesabsent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy the securities.

As of June 30, 2016, adjusted for acquisitions and commitment to purchase and sell through August 10, 2016, NorthStar Income II’s $1.8 billion portfolio consists of 17 senior mortgage loans, four subordinate interest investments, one mezzanine loan, 24 real estate operating portfolios, three portfolios of real estate private equity funds and eight commercial mortgage-backed securities investments.

About NorthStar Real Estate Income II, Inc.
NorthStar Income II is a public, non-traded REIT sponsored by NorthStar Asset Management Group Inc. NorthStar Income II was formed to originate, acquire and asset manage a diversified portfolio of commercial real estate debt, select equity and securities investments.

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “will,” “may,” “plans,” “intends,” “expects” or other similar words or expressions. These statements are based on NorthStar Income II’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward looking statements; NorthStar Income II can give no assurance that its expectations will be attained. Forward-looking statements are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying any forward-looking statements will not materialize or will vary significantly from actual results. Variations of assumptions and results may be material. Factors that could cause actual results to differ materially from NorthStar Income II’s expectations include, but are not limited to, the transaction not closing on the terms anticipated, or at all, the timing of any such closing, the ability of the underlying borrowers to repay the loans and/or the timing of the underlying loans being repaid; the duration of the transaction; the ability to earn the approximate 12% expected gross yield on invested equity in the transaction; the increased potential for loss associated with holding non-investment grade securities and equity interests in the securitization; whether the transaction will be extremely efficient for NorthStar Income II; whether the net proceeds from the transaction will be used for the intended purposes; the ability to utilize the additional capacity in credit facilities resulting from the transaction to finance new loan investments and enhance returns on future mortgage loan investments; whether NorthStar Income II, or any current or future managed company of NorthStar Income II’s sponsor, will continue to utilize these structures, including whether such structures will benefit our shareholders; changes in market demand and rental rates for commercial properties; future property values; the impact of any losses from NorthStar Income II’s investments on cash flow and returns; changes in economic conditions generally and the real estate and debt markets specifically; availability of capital; the ability to achieve targeted returns; changes to generally accepted accounting principles; policies and rules applicable to REITs and the factors specified in in Part I, Item 1A of NorthStar Income II’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015and in Part II, Item 1A of NorthStar Income II’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, as well as in NorthStar Income II’s other filings with the Securities and Exchange Commission. The foregoing list of factors is not exhaustive. All forward-looking statements included in this press release are based upon information available to NorthStar Income II on the date of this release and NorthStar Income II is under no duty to update any of the forward-looking statements after the date of this release to conform these statements to actual results.

SOURCE NorthStar Real Estate Income II, Inc.

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