10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

Commission File Number: 001-36301

NORTHSTAR ASSET MANAGEMENT GROUP INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	46-4591526
(State or Other Jurisdiction of	(IRS Employer
Incorporation or Organization)	Identification No.)

399 Park Avenue, 18th Floor, New York, NY 10022

(Address of Principal Executive Offices, Including Zip Code)

(212) 547-2600

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý Accelerated filer o Non-accelerated filer o  (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o   No ý

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:

The Company has one class of common stock, $0.01 par value per share, 193,839,620 shares outstanding and one class of performance common stock, $0.01 par value per share, 4,213,156 shares outstanding, each as of May 7, 2015.

NORTHSTAR ASSET MANAGEMENT GROUP INC.

FORM 10-Q

TABLE OF CONTENTS

Index		Page
Part I.	Financial Information	5
Item 1.	Financial Statements	5
	Consolidated Balance Sheets as of March 31, 2015 (unaudited) and December 31, 2014	5
	Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2015 and 2014	6
	Consolidated Statements of Equity for the three months ended March 31, 2015 (unaudited) and year ended December 31, 2014	7
	Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2015 and 2014	8
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44
Part II.	Other Information	44
Item 1.	Legal Proceedings	44
Item 6.	Exhibits	45
Signatures		47

2

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q 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, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “believe,” “could,” “project,” “predict,” “continue,” “future” or other similar words or expressions. Forward-looking statements are not guarantees of performance and are based on certain assumptions, discuss future expectations, describe plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Such statements include, but are not limited to, those relating to the effects of the spin-off described in this Quarterly Report on Form 10-Q, our ability to effectively grow our business, our financing needs, the effects of our current asset management strategy, our management’s track record, our ability to manage credit risk and the assets of our Managed Companies (as defined below), our ability to source additional investment opportunities for our Managed Companies and our ability to obtain new Managed Companies and additional assets to manage. Our ability to predict results or the actual effect of plans or strategies is inherently uncertain, particularly given the economic environment. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements and you should not unduly rely on these statements. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from those forward-looking statements. These factors include, but are not limited to:

• risks inherent in a recently spun-off company, including those related to operating as an independent public company, the capital resources required to protect against business risks, legal risks and risks associated with the tax and accounting treatment of a spin-off transaction;

• our ability to realize the anticipated effective income tax rate following the spin-off;

• adverse domestic or international economic conditions and the impact of the commercial real estate industry on our Managed Companies;

• our ability to grow our business by raising capital for our existing Managed Companies and sponsoring new Managed Companies as well as our ability to otherwise continue to manage our Managed Companies in the future;

• our ability to effectively implement the business plans of, and the performance of, our Managed Companies;

• our ability to enter into, and grow our business through acquisitions, strategic investments and joint ventures;

• our ability to realize the anticipated benefits of our strategic investments and joint ventures;

• access to debt and equity capital and our liquidity;

• our use of leverage;

• changes in domestic or international laws or regulations governing various aspects of our business and our Managed Companies including the potential impact of rules recently proposed by the U.S. Department of Labor regarding fiduciary standards for brokers who are providing investment advice with respect to retirement plan assets and implementation of FINRA Rule 15-02 related to broker account statements;

• the impact of any conflicts of interest arising from our asset management activities;

• our ability to manage our costs in line with our expectations and the impact on our cash available for distribution;

• competition for qualified personnel and our ability to retain key personnel;

• the competitive nature of the asset management industry;

• the effectiveness of our portfolio management techniques and strategies;

• our ability to expand and successfully manage our operations internationally;

• whether we repurchase any shares of our common stock and the terms of those repurchases, if any;

• our ability to maintain our exclusion from the definition of an “investment company” under the Investment Company Act of 1940, as amended;

• our ability to maintain effective disclosure and internal controls;

• our historical financial information included in this Quarterly Report on Form 10-Q for periods prior to the six months ended December 31, 2014 not providing an accurate indication of our performance in the future or reflecting

3

what our financial position, results of operations or cash flows would have been had we operated as an independent public company during the periods presented; and

• the effect of regulatory or tax actions, litigation and contractual claims against us, our affiliates or our Managed Companies, including the potential settlement and litigation of such claims.

The foregoing list of factors is not exhaustive. All forward-looking statements included in this Quarterly Report on Form 10-Q are based on information available to us on the date hereof and we are under no duty to update any of the forward-looking statements after the date of this report to conform these statements to actual results.

Factors that could have a material adverse effect on our operations and future prospects are set forth in our filings with the United States Securities and Exchange Commission, or the SEC, included in Part I, Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 under the heading “Risk Factors.” The risk factors set forth in our filings with the SEC could cause our actual results to differ significantly from those contained in any forward-looking statement contained in this report.

4

PART I. Financial Information

Item 1.   Financial Statements

NORTHSTAR ASSET MANAGEMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

	March 31, 2015 (Unaudited)			December 31, 2014
Assets
Cash	$	53,623		$	109,199
Restricted cash	4,610			3,190
Receivables, related parties	84,019			77,626
Investments in unconsolidated ventures	93,066			54,480
Other assets	16,533			19,374
Total assets	$	251,851		$	263,869
Liabilities
Accounts payable and accrued expenses	$	24,161		$	49,116
Commission payable	5,125			12,164
Other liabilities	1,207			841
Total liabilities	30,493			62,121
Commitments and contingencies
Equity
NorthStar Asset Management Group Inc. Stockholders’ Equity
Performance common stock, $0.01 par value, 500,000,000 shares authorized, 4,213,156 and 3,738,314 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively	42			37
Preferred stock, $0.01 par value, 100,000,000 shares authorized, no shares issued and outstanding as of March 31, 2015 and December 31, 2014	—			—
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 193,850,102 and 192,947,856 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively	1,938			1,930
Additional paid-in capital	289,516			276,874
Retained earnings (accumulated deficit)	(75,057		)	(77,093		)
Total NorthStar Asset Management Group Inc. stockholders’ equity	216,439			201,748
Non-controlling interest	4,919			—
Total equity	221,358			201,748
Total liabilities and equity	$	251,851		$	263,869

Refer to accompanying notes to consolidated financial statements.

5

NORTHSTAR ASSET MANAGEMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share and Dividends Data)

(Unaudited)

	Three Months Ended March 31,(1)
	2015			2014
Revenues
Asset management and other fees, related parties (2)	$	61,379		$	8,669
Selling commission and dealer manager fees, related parties	29,923			14,548
Other income	400			121
Total revenues	91,702			23,338
Expenses
Commission expense (refer to Note 3)	27,695			13,560
Transaction costs	302			2,550
Other expense	711			30
General and administrative expenses
Salaries and related expense	12,145			7,936
Equity-based compensation expense	13,618			5,694
Other general and administrative expenses	6,105			1,873
Total general and administrative expenses	31,868			15,503
Total expenses	60,576			31,643
Unrealized gain (loss) on foreign exchange	(348		)	—
Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax (benefit) expense	30,778			(8,305		)
Equity in earnings (losses) of unconsolidated ventures	(870		)	—
Income (loss) before income tax (benefit) expense	29,908			(8,305		)
Income tax (benefit) expense	7,938			—
Net income (loss)	21,970			(8,305		)
Net (income) loss attributable to non-controlling interest	(202		)	—
Net income (loss) attributable to NorthStar Asset Management Group Inc. common stockholders	$	21,768		$	(8,305	)
Earnings (loss) per share:
Basic	$	0.11		$	(0.04	)
Diluted	$	0.11		$	(0.04	)
Weighted average number of shares:
Basic	189,541,166			187,815,614
Diluted	191,572,264			187,815,614
Dividends per share of common stock	$	0.10		N/A

______________________

(1) The consolidated financial statements for the three months ended March 31, 2015 represents the Company’s results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. The three months ended March 31, 2014 represents a carve out of revenues and expenses attributable to the Company related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months ended March 31, 2015 may not be comparable to the Company’s results of operations reported for the prior period presented.

(2) The Company began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty (refer to Note 1).

Refer to accompanying notes to consolidated financial statements.

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NORTHSTAR ASSET MANAGEMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars and Shares in Thousands)

	Performance Stock			Common Stock					Additional Paid-in Capital			Retained Earnings (Accumulated  Deficit)			Total NorthStar Stockholders’ Equity			Non-controlling Interest		Total Equity
	Shares	Amount		Shares		Amount
Balance as of December 31, 2013	—	$	—	—		$	—		$	105,498		$	(77,130	)	$	28,368		$	—	$	28,368
Capital contribution of NorthStar Realty	—	—		188,597		1,886			119,323			—			121,209			—		121,209
Amortization of equity-based compensation	—	—		—		—			51,519			—			51,519			—		51,519
Issuance of common stock to directors	—	—		38		—			—			—			—			—		—
Issuance of common stock related to transactions (refer to Note 4)	—	—		956		10			10,300			—			10,310			—		10,310
Issuance of common stock relating to equity-based compensation, net of forfeitures	—	—		827		8			(8		)	—			—			—		—
Settlement of RSUs to common stock (refer to Note 7)	—	—		3,030		31			(31		)	—			—			—		—
Settlement of RSUs to performance common stock (refer to Note 8)	3,738	37		—		—			(37		)	—			—			—		—
Dividends on common stock and equity-based awards (refer to Note 7)	—	—		—		—			—			(19,063		)	(19,063		)	—		(19,063		)
Tax withholding related to vesting of RSUs	—	—		(500	)	(5		)	(11,289		)	—			(11,294		)	—		(11,294		)
Excess tax benefit from equity-based compensation	—	—		—		—			1,599			—			1,599			—		1,599
Net income (loss)	—	—		—		—			—			19,100			19,100			—		19,100
Balance as of December 31, 2014	3,738	$	37	192,948		$	1,930		$	276,874		$	(77,093	)	$	201,748		$	—	$	201,748
Amortization of equity-based compensation	—	—		—		—			13,848			—			13,848			317		14,165
Issuance of common stock related to transactions (refer to Note 4)	—	—		208		2			4,505			—			4,507			—		4,507
Issuance of common stock relating to equity-based compensation, net of forfeitures	—	—		642		6			(6		)	—			—			—		—
Conversion of Deferred LTIP Units to LTIP Units and common stock, net	—	—		4		—			(4,400		)	—			(4,400		)	4,400		—
Issuance of performance common stock (refer to Note 8)	475	5		—		—			(5		)				—			—		—
Settlement of RSUs to common stock, net (refer to Note 7)	—	—		48		—			(1,130		)	—			(1,130		)	—		(1,130		)
Dividends on common stock and equity-based awards (refer to Note 7)	—	—		—		—			—			(19,732		)	(19,732		)	—		(19,732		)
Excess tax benefit from equity-based compensation	—	—		—		—			(170		)	—			(170		)	—		(170		)
Net income (loss)	—	—		—		—			—			21,768			21,768			202		21,970
Balance as of March 31, 2015 (unaudited)	4,213	$	42	193,850		$	1,938		$	289,516		$	(75,057	)	$	216,439		$	4,919	$	221,358

Refer to accompanying notes to consolidated financial statements.

7

NORTHSTAR ASSET MANAGEMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Three Months Ended March 31,
	2015			2014
Cash flows from operating activities:
Net income (loss)	$	21,970		$	(8,305	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in (earnings) losses of unconsolidated ventures	870			—
Accrued transaction costs	643			—
Depreciation and amortization expense	538			22
Amortization of equity-based compensation	13,488			5,694
Unrealized (gain) loss on foreign exchange	348			—
Deferred income tax, net	2,530			—
Change in assets and liabilities:
Restricted cash	(1,420		)	—
Receivables, related parties	(6,393		)	(4,177		)
Other assets	(585		)	(1,280		)
Other liabilities	366			—
Accounts payable and accrued expenses	(15,086		)	509
Commission payable	(7,471		)	1
Net cash provided by (used in) operating activities	9,798			(7,536		)
Cash flows from investing activities:
Investments in unconsolidated ventures	(35,631		)	—
Distribution from unconsolidated ventures	2,550			—
Net cash provided by (used in) investing activities	(33,081		)	—
Cash flows from financing activities:
Contribution from NorthStar Realty	—			9,577
Repurchase of shares related to stock compensation agreements related to tax withholding	(12,424		)	—
Dividends	(19,521		)	—
Net cash provided by (used in) financing activities	(31,945		)	9,577
Effect of foreign exchange rate changes on cash	(348		)	—
Net increase (decrease) in cash	(55,576		)	2,041
Cash - beginning of period	109,199			7,537
Cash - end of period	$	53,623		$	9,578
Supplemental disclosure of non-cash investing and financing activities:
Conversion of Deferred LTIP Units to LTIP Units	$	4,400		$	—
Issuance of common stock related to transactions (refer to Note 4)	4,507			—
Dividend payable related to RSUs	211			—
Accrued transaction costs relating to investments in unconsolidated ventures	145			—

Refer to accompanying notes to consolidated financial statements.

8

NORTHSTAR ASSET MANAGEMENT GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Business and Organization

NorthStar Asset Management Group Inc. (“NSAM” or the “Company”) is a global asset management firm focused on strategically managing real estate and other investment platforms in the United States and internationally. The Company commenced operations on July 1, 2014, upon the spin-off by NorthStar Realty Finance Corp. (“NorthStar Realty”) of its asset management business into a separate publicly-traded company, NSAM, a Delaware corporation. The spin-off was in the form of a tax-free distribution to NorthStar Realty’s common stockholders where each NorthStar Realty common stockholder received shares of the Company’s common stock on a one-for-one basis. At the same time, NorthStar Realty became externally managed by an affiliate of the Company through a management contract with an initial term of 20 years. NorthStar Realty continues to operate its commercial real estate debt origination business.

Certain of the Company’s affiliates also manage NorthStar Realty’s previously sponsored non-traded companies which raise money through the retail market, as well as any new non-traded company and any future sponsored company (referred to as the “Sponsored Companies” and together with NorthStar Realty, referred to as the “Managed Companies”).

The Company is organized to provide asset management and other services to the Managed Companies or any other companies it may sponsor in the future, both in the United States and internationally. The Managed Companies have historically invested in the commercial real estate (“CRE”) industry. The Company seeks to expand the scope of its asset management business beyond real estate into new asset classes and geographies by organically creating and managing additional investment vehicles or through acquisitions, strategic partnerships and joint ventures. To date, the Company has acquired an approximate 45%, as adjusted, interest in American Healthcare Investors LLC (the “AHI Interest”), an approximate 45% interest in Island Hospitality Management Inc. (the “Island Interest”) and an approximate 50% interest in Distributed Finance Corporation (“Distributed Finance”) (refer to Note 4).

The Company earns asset management, incentive and other fees, directly or indirectly, pursuant to management and other contracts and direct investments. In addition, the Company owns NorthStar Realty Securities, LLC (“NorthStar Securities”), a captive broker-dealer platform registered with the Securities and Exchange Commission (“SEC”) which raises capital in the retail market for the Sponsored Companies.

On March 13, 2015, the Company restructured by converting its current holding company into NSAM LP, a Delaware limited partnership and the operating partnership of the Company (the “Operating Partnership”). The Operating Partnership holds substantially all of the Company’s assets and the Company conducts its operations, directly or indirectly, through the Operating Partnership.

References to the historical asset management business of NorthStar Realty including assets, liabilities and results of operations relate to managing the Sponsored Companies, owning NorthStar Securities and operating its special servicing business and are generally referred to as those of the Company.

Proposed Spin-off of European Real Estate Business

On February 26, 2015, NorthStar Realty announced that its board of directors unanimously approved a plan to spin-off its European real estate business (the “NRF Proposed European Spin”) into a newly-formed publicly-traded real estate investment trust (“REIT”), NorthStar Realty Europe Corp. (“NRE”) expected to be listed on the New York Stock Exchange (“NYSE”). As of May 6, 2015, NorthStar Realty has acquired approximately $2.0 billion of European real estate (excluding NorthStar Realty’s European healthcare assets) comprised of 49 properties spanning across some of Europe’s top markets that will be contributed to NRE upon the completion of the NRF Proposed European Spin. The Company will manage NRE pursuant to a long-term management agreement, on substantially similar terms as the Company’s management agreement with NorthStar Realty. The NRF Proposed European Spin is expected to be completed in the second half of 2015.

All references herein to the Company refer to NorthStar Asset Management Group Inc. and its consolidated subsidiaries, unless the context otherwise requires.

2. Summary of Significant Accounting Policies

Basis of Quarterly Presentation

The accompanying unaudited consolidated financial statements and related notes of the Company are presented on a carve-out basis for the period prior to June 30, 2014 and have been prepared from the historical consolidated balance sheets, statements of operations and cash flow attributed to the historical asset management business of NorthStar Realty and in accordance with

9

NORTHSTAR ASSET MANAGEMENT GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the consolidated financial statements prepared under U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, which was filed with the SEC.

The consolidated financial statements for the three months ended March 31, 2015 represent the Company subsequent to the spin-off of NorthStar Realty’s historical asset management business of managing the Sponsored Companies, owning NorthStar Securities and operating its special servicing business. In connection with the spin-off, most of NorthStar Realty’s employees at the time of the spin-off became employees of the Company except for executive officers, employees engaged in NorthStar Realty’s loan origination business at the time of the spin-off and certain other employees that became co-employees of both the Company and NorthStar Realty. Therefore, subsequent to June 30, 2014, the Company generally incurs substantially all employee-related cash costs.

Periods prior to June 30, 2014 present a carve-out of NorthStar Realty’s historical financial information, including revenues and expenses allocated to the Company, related to NorthStar Realty’s historical asset management business. Expenses also included an allocation of indirect expenses from NorthStar Realty, including salaries, equity-based compensation and other general and administrative expenses (primarily occupancy and other cost) based on an estimate had NorthStar Realty’s historical asset management business been run as an independent entity. This allocation method was principally based on relative headcount and management’s knowledge of NorthStar Realty’s operations. Additionally, periods prior to June 30, 2014 did not reflect the management agreement the Company entered into with NorthStar Realty effective July 1, 2014.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries.

Variable Interest Entities

A variable interest entity (“VIE”) is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. The Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity.

The Company reassesses its initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events.

A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents has both the: (i) power to direct the activities that most significantly impact the VIE’s economic performance; and (ii) obligation to absorb the losses of the VIE or the right to receive the benefits from the VIE, which could be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE by considering qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of its investment; the obligation or likelihood for the Company or other interests to provide financial support; consideration of the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders and the similarity with and significance to the business activities of the Company and the other interests. The Company reassesses its determination of whether it is the primary beneficiary of a VIE each reporting period. Significant judgments related to these determinations include estimates about the current and future fair value and performance of investments held by these VIEs and general market conditions.

The Company evaluates the Managed Companies, investments in unconsolidated ventures and securitization financing transactions to which the Company is the special servicer to determine whether they are a VIE.

10

NORTHSTAR ASSET MANAGEMENT GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Voting Interest Entities

A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company does not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party.

The Company performs on-going reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework.

Investments in Unconsolidated Ventures

A non-controlling, unconsolidated ownership interest in an entity may be accounted for using the equity method, at fair value or the cost method.

Under the equity method, the investment is adjusted each period for capital contributions and distributions and its share of the entity’s net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in such governing documents.

The Company may account for an investment in an unconsolidated entity at fair value by electing the fair value option. The Company records the change in fair value for its share of the projected future cash flow of such investments from one period to another in equity in earnings (losses) from unconsolidated ventures in the consolidated statements of operations. Any change in fair value attributed to market related assumptions is considered unrealized gain (loss).

The Company may account for an investment that does not qualify for equity method accounting or for which the fair value option was not elected using the cost method if the Company determines the investment in the unconsolidated entity is insignificant. Under the cost method, equity in earnings is recorded as dividends are received to the extent they are not considered a return of capital, which is recorded as a reduction of cost of the investment.

Non-controlling Interest

A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to the Company. A non-controlling interest is required to be presented as a separate component of equity on the consolidated balance sheets and presented separately as net income (loss) and other comprehensive income (loss) (“OCI”) attributable to controlling and non-controlling interests. An allocation to a non-controlling interest may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in such governing documents.

Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that could affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates and assumptions.

Reclassifications

Certain prior period amounts have been reclassified in the consolidated financial statements to conform to current period presentation.

Restricted Cash

Restricted cash represents cash held by the Company’s foreign subsidiaries due to certain regulatory capital requirements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Other Assets and Accounts Payable and Accrued Expenses

The following tables present a summary of other assets and accounts payable and accrued expenses as of March 31, 2015 and December 31, 2014 (dollars in thousands):

	March 31, 2015 (Unaudited)		December 31, 2014(1)
Other assets:
Deferred tax asset	$	5,857	$	3,155
Furniture, fixtures and equipment, net	4,381		4,629
Prepaid expenses	3,019		2,279
Security deposits	2,399		2,232
Due from participating broker-dealers	432		1,965
Prepaid income taxes	—		3,538
Pending deal costs	—		1,045
Other	445		531
Total	$	16,533	$	19,374

__________________

(1) Includes fixed assets, tenant improvements and deposits related to leased offices that were transferred to the Company at the time of the spin-off on June 30, 2014.

	March 31, 2015 (Unaudited)		December 31, 2014
Accounts payable and accrued expenses:
Accrued bonus	$	10,083	$	25,911
Accrued transaction expense	4,562		5,205
Income tax payable	3,173		—
Accrued payroll	2,061		1,400
Accrued professional fees	2,655		740
Accrued equity-based compensation awards (refer to Note 7)	433		—
Accrued tax withholding (1)	—		11,938
Other	1,194		3,922
Total	$	24,161	$	49,116

__________________

(1) Represents withholding tax related to vesting and net settlement of restricted stock units.

Revenue Recognition

Asset Management and Other Fees

Asset management and other fees include asset management, incentive and other fees, such as acquisition and disposition fees, earned from the Managed Companies. Base asset management and other fees are recognized based on contractual terms specified in the underlying governing documents in the periods during which the related services are performed and the amounts have been contractually earned. Incentive fees and payments are recognized subject to the achievement of return hurdles in accordance with the respective terms set forth in the governing documents of the Managed Companies.

Selling Commission and Dealer Manager Fees and Commission Expense

Selling commission and dealer manager fees represent income earned by the Company for selling equity in the Sponsored Companies through NorthStar Securities. Selling commission and dealer manager fees and commission expense are accrued on a trade date basis. As of March 31, 2015, commission payable of $5.1 million includes $0.4 million due to NorthStar Securities employees.

Allowance for Doubtful Accounts

An allowance for a doubtful account is established when, in the opinion of the Company, a full recovery of a receivable becomes doubtful. A receivable is written off when it is no longer collectible and/or legally discharged. As of March 31, 2015 and December 31, 2014, there was no allowance for doubtful accounts.

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Equity-Based Compensation

The Company accounts for equity-based compensation awards, including awards granted to co-employees, using the fair value method, which requires an estimate of fair value of the award. Awards may be based on a variety of measures such as time, performance, market or a combination thereof. For time-based awards, fair value is determined based on the stock price on the grant date. The Company recognizes compensation expense over the vesting period on a straight-line basis. For performance-based awards, fair value is determined based on the stock price at the date of grant and an estimate of the probable achievement of such measure. The Company recognizes compensation expense over the requisite service period, net of estimated forfeitures, using the accelerated attribution expense method. For market-based measures, fair value is determined using a Monte Carlo analysis under a risk-neutral premise using a risk-free interest rate. The Company recognizes compensation expense, over the requisite service period, net of estimated forfeitures, on a straight-line basis.

For awards with a combination of performance or market measures, the Company estimates the fair value as if it were two separate awards. First, the Company estimates the probability of achieving the performance measure. If it is not probable the performance condition will be met, the Company records the compensation expense based on the fair value of the market measure, as described above. This expense is recorded even if the market-based measure is never met. If the performance-based measure is subsequently estimated to be achieved, the Company records compensation expense based on the performance-based measure. The Company would then record a cumulative catch-up adjustment for any additional compensation expense.

Equity-based compensation issued to non-employees is accounted for using the fair value of the award at the earlier of the performance commitment date or performance completion date. The awards are remeasured every quarter based on the stock price as of the end of the reporting period until such awards vest, if any.

Foreign Currency

Assets and liabilities denominated in non-U.S. dollar currencies are remeasured at the exchange rate prevailing on the reporting date and revenues and expenses are remeasured at the average exchange rate for the period. The Company’s functional currency of its non-U.S. denominated assets and liabilities is the U.S. dollar. Therefore, any gains or losses from the remeasurement of foreign currency to U.S. dollars are recognized in earnings.

Comprehensive Income (Loss)

The Company had no items of other comprehensive income (loss), so its comprehensive (loss) is the same as the net (loss) for all periods presented.

Earnings Per Share

The Company’s basic earnings per share (“EPS”) is calculated using the two-class method for each class of common stock and participating security as if all earnings had been distributed by dividing net income (loss) attributable to common stockholders by the weighted average number of common stock outstanding. Under the two-class method, net income is first reduced for distributions declared on all classes of participating securities to arrive at undistributed earnings. Under the two-class method, net loss is reduced for distributions declared on participating securities only if such security has the right to participate in the earnings of the entity and an objectively determinable contractual obligation to share in net losses of the entity. Diluted EPS includes restricted stock and the potential dilution that could occur if outstanding restricted stock units (“RSUs”), performance common stock or other contracts to issue common stock, assuming performance hurdles have been met, were converted to common stock, including limited partnership interests in the Operating Partnership which are structured as profits interests (“LTIP Units”) (refer to Note 7), where such exercise or conversion would result in a lower EPS. The dilutive effect of such RSUs and LTIP Units is calculated assuming all units are converted to common stock.

Income Taxes

Certain subsidiaries of the Company are subject to taxation by federal, state, local and foreign authorities for the periods presented. On March 13, 2015, the Company restructured by converting, under Delaware law, an existing limited liability company disregarded as separate from the Company for federal income tax purposes to a Delaware limited partnership and admitting as limited partners LTIP Unit Holders, forming the Company’s new Operating Partnership. The Operating Partnership is taxed as a partnership for federal income tax purposes and consequently, its items of income gain, loss, deduction and credit are passed through to, and included in, the taxable income of each of its partners including the Company. For the period prior to March 13, 2015, the Company and its U.S. subsidiaries will file consolidated federal income tax returns. Income taxes are accounted for by the asset/liability approach in accordance with U.S. GAAP. Deferred taxes, if any, represent the

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(Unaudited)

expected future tax consequences when the reported amounts of assets and liabilities are recovered or paid. Such amounts arise from differences between the financial reporting and tax bases of assets and liabilities and are adjusted for changes in tax laws and tax rates in the period which such changes are enacted. A provision for income tax represents the total of income taxes paid or payable for the current period, plus the change in deferred tax assets and liabilities.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting update requiring a company to recognize as revenue the amount of consideration it expects to be entitled to in connection with the transfer of promised goods or services to customers.  The accounting standard update will replace most of the existing revenue recognition guidance currently promulgated by U.S. GAAP.  In April 2015, the FASB proposed a one-year deferral of the effective date of the new revenue standard to January 1, 2018. The Company is in the process of evaluating the impact, if any, of the update on its consolidated financial positions, results of operations and financial statement and related disclosures.

In February 2015, the FASB issued updated guidance that changes the rules regarding consolidation. The pronouncement eliminates specialized guidance for limited partnerships and similar legal entities and removes the indefinite deferral for certain investment funds. The new guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

3. Management Agreements and Managed Companies

NorthStar Realty

Management Agreement

Upon completion of the spin-off, the Company entered into a management agreement with NorthStar Realty for an initial term of 20 years, which will be automatically renewed for additional 20-year terms each anniversary thereafter unless earlier terminated. As asset manager, the Company is responsible for NorthStar Realty’s day-to-day operations, subject to the supervision of the NorthStar Realty board of directors. Through its global network of subsidiaries and branch offices, the Company performs services and activities relating to, among other things, investments and financing, portfolio management and other administrative services, such as accounting and investor relations, to NorthStar Realty and its subsidiaries other than NorthStar Realty’s commercial real estate loan origination business. The management agreement with NorthStar Realty provides for a base management fee and incentive fee.

Base Management Fee

For the three months ended March 31, 2015, the Company earned $45.3 million related to the base management fee, which is recorded in receivable, related parties on the consolidated balance sheets. The management contract with NorthStar Realty commenced on July 1, 2014, and as such, there were no management fees earned for the three months ended March 31, 2014. The base management fee from NorthStar Realty will increase subsequent to March 31, 2015 by an amount equal to 1.5% per annum of the sum of:

• cumulative net proceeds of all future common equity and preferred equity issued by NorthStar Realty;

• equity issued by NorthStar Realty in exchange or conversion of exchangeable senior notes based on the stock price at the date of issuance;

• any other issuances by NorthStar Realty of common equity, preferred equity or other forms of equity, including but not limited to LTIP Units (excluding equity-based compensation, but including issuances related to an acquisition, investment, joint venture or partnership); and

• cumulative cash available for distribution (“CAD”) of NorthStar Realty in excess of cumulative distributions paid on common stock, LTIP units or other equity awards beginning the first full calendar quarter after the spin-off.

Additionally, NorthStar Realty’s equity interest in RXR Realty LLC (“RXR Realty”) and Aerium Group is structured so that the Company is entitled to the portion of distributable cash flow from each investment in excess of the $10.0 million minimum annual base amount.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Incentive Fee

For the three months ended March 31, 2015, the Company earned $2.9 million related to the incentive fee, which is recorded in receivable, related parties on the consolidated balance sheets. The incentive fee is calculated and payable quarterly in arrears in cash, equal to:

• the product of: (a) 15.0% and (b) CAD of NorthStar Realty before such incentive fee, divided by the weighted average shares outstanding of NorthStar Realty for the calendar quarter, when such amount is in excess of $0.39 per share of NorthStar Realty but less than $0.45 per share of NorthStar Realty; plus

• the product of: (a) 25.0% and (b) CAD of NorthStar Realty before such incentive fee, divided by the weighted average shares outstanding of NorthStar Realty for the calendar quarter, when such amount is equal to or in excess of $0.45 per share of NorthStar Realty;

• multiplied by the weighted average shares outstanding of NorthStar Realty for the calendar quarter.

In addition, the Company may also earn an incentive fee from NorthStar Realty’s healthcare investments in connection with the Company’s Healthcare Strategic Partnership (refer to Note 5).

Weighted average shares represents the number of shares of NorthStar Realty’s common stock, LTIP Units or other equity-based awards (with some exclusions), outstanding on a daily weighted average basis. With respect to the base management fee, all equity issuances are allocated on a daily weighted average basis during the fiscal quarter of issuance.

Furthermore, if NorthStar Realty were to spin-off any asset or business in the future, including the NRF Proposed European Spin, such entity would be managed by the Company on terms substantially similar to those set forth in the management agreement between the Company and NorthStar Realty. The management agreement further provides that the aggregate base management fee in place immediately after any future spin-off will not be less than the aggregate base management fee in place at NorthStar Realty immediately prior to such spin-off.

Payment of Costs and Expenses and Expense Allocation

NorthStar Realty is responsible for all of its direct costs and expenses and will reimburse the Company for costs and expenses incurred by the Company on its behalf. In addition to NorthStar Realty’s costs and expenses, following the spin-off, NorthStar Realty is obligated to reimburse the Company for additional costs and expenses incurred by the Company for an amount not to exceed the following: (i) 20.0% of the combined total of: (a) NorthStar Realty’s general and administrative expenses as reported in its consolidated financial statements excluding: (1) equity-based compensation expense, (2) non-recurring items, (3) fees payable to the Company under the terms of the management agreement and (4) any allocation of expenses from NorthStar Realty (“NorthStar Realty G&A”); and (b) the Company’s general and administrative expenses as reported in its consolidated financial statements, excluding equity-based compensation expense and adding back any costs or expenses allocated to any of the Managed Companies, less (ii) the NorthStar Realty G&A. For the three months ended March 31, 2015, the Company allocated $2.0 million to NorthStar Realty, which is recorded in receivables, related parties in the consolidated balance sheets. In addition, NorthStar Realty will pay directly or reimburse the Company for an allocable portion of any severance paid pursuant to any employment, consulting or similar service agreements in effect between the Company and any of its executives, employees or other service providers.

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(Unaudited)

Sponsored Companies

The following table presents a summary of the fee arrangements with the current Sponsored Companies:

	NorthStar	NorthStar	NorthStar	NorthStar/RXR
	Income	Healthcare	Income II	New York Metro(9)
Offering amount(1)	$1.1 billion	$1.8 billion(8)	$1.65 billion	$2.0 billion
Total raised through May 6, 2015 (2)	$1.2 billion	$1.2 billion	$560 million	(10)
Primary strategy	CRE Debt	Healthcare Equity and Debt	CRE Debt	New York City CRE Equity and Debt
Primary offering period	Completed July 2013	Ends February 2017(8)	Ends May 2016(11)	Ends February 2017(11)
Asset Management and Other Fees:
Asset management fees (3)	1.25% of assets	1.00% of assets	1.25% of assets	1.25% of assets
Acquisition fees (4)	1.00% of investment	2.25% for real estate properties 1.00% of other investments	1.00% of investment	2.25% for real estate properties 1.00% of other investments
Disposition fees (5)	1.00% of sales price	2.00% for real estate properties 1.00% of sales price for debt investments	1.00% of sales price	2.00% for real estate properties 1.00% of sales price for debt investments
Incentive payments (6)	15.00% of net cash flows after an 8.00% return	15.00% of net cash flows after a 6.75% return(7)	15.00% of net cash flows after a 7.00% return	15.00% of net cash flows after a 6.00% return

__________________

(1) Represents amount of shares registered to offer pursuant to each Sponsored Company’s public offering and includes the follow-on public offering of up to $700 million for NorthStar Healthcare.

(2) Includes capital raised through dividend reinvestment plans.

(3) Assets represent principal amount funded or allocated for debt investments originated or acquired and the cost of all other investments, including expenses and any financing attributable to such investments, less any principal received on debt and securities investments (or the Company’s proportionate share thereof in the case of an investment made in a joint venture).

(4) Calculated based on the amount funded or allocated by the Sponsored Companies to originate or acquire investments, including acquisition expenses and any financing attributable to such investments (or the proportionate share thereof in the case of an equity investment made through a joint venture).

(5) Calculated based on contractual sales price of each investment sold.

(6) The Company is entitled to receive distributions equal to 15% of net cash flow of the respective Sponsored Company, whether from continuing operations, repayment of loans, disposition of assets or otherwise, but only after stockholders have received, in the aggregate, cumulative distributions equal to their invested capital plus the respective cumulative, non-compounded annual pre-tax return (as noted in the table above) on such invested capital.

(7) The Healthcare Strategic Partnership is entitled to the incentive fees earned from managing NorthStar Healthcare, of which the Company earn its proportionate interest (refer to Note 5).

(8) NorthStar Healthcare successfully completed its public offering on February 2, 2015 by raising $1.1 billion in capital. The Company began raising capital for NorthStar Healthcare’s follow-on public offering at the end of February 2015.

(9) Any asset management and other fees incurred by NorthStar/RXR New York Metro will be shared between the Company and RXR Realty as co-sponsors.

(10) The Company expects to begin raising capital for NorthStar/RXR New York Metro in the second half of 2015.

(11) Offering period subject to extension as determined by the board of directors of each Sponsored Company.

For the three months endedMarch 31, 2015 and 2014, the Company earned $13.1 million and $8.7 million respectively, of asset management and other fees from the Sponsored Companies.

In addition to the Sponsored Companies described above, NorthStar Corporate Income, Inc. (“NorthStar Corporate”) confidentially submitted its registration statement on Form N-2 to the SEC in December 2014. NorthStar Corporate seeks to raise up to $1.0 billion in a public offering of common stock.  NorthStar Corporate is structured as a non-diversified, closed-end management investment company that intends to elect to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended.  NorthStar Corporate intends to engage OZ Institutional Credit Management LP (“OZ Credit Management”) an affiliate of Och-Ziff Capital Management Group, LLC (“Och-Ziff”), an alternative asset manager, to serve as the sub-advisor to manage NorthStar Corporate’s investments and oversee operations. Any asset management and other fees incurred by NorthStar Corporate will be shared between the Company and OZ Credit Management as co-sponsors. NorthStar Corporate intends to invest in senior and subordinate loans to middle-market companies.

Pursuant to each of the advisory agreements with the Company’s current Sponsored Companies, the Company may determine, in its sole discretion, to defer or waive, in whole or in part, certain asset management and other fees incurred. In considering

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

whether to defer or waive any such fees, the Company evaluates the specific facts and circumstances surrounding the incurrence of a particular fee and makes its decision on a case by case basis.

Distribution Support

NorthStar Realty committed to invest up to $10.0 million in each of the Sponsored Companies that are in their offering stage. In addition, consistent with its past practices, NorthStar Realty will commit up to $10.0 million for distribution support in any Sponsored Company that the Company may sponsor, up to a total of five new companies per year.

The distribution support agreement related to NorthStar/RXR New York Metro Income, Inc. (“NorthStar/RXR New York Metro”) is an obligation of both NorthStar Realty and RXR Realty, where each agreed to purchase up to an aggregate of $10.0 million in Class A common stock during the two-year period following commencement of the offering, with NorthStar Realty and RXR Realty agreeing to purchase 75% and 25% of any shares purchased, respectively.

Payment of Costs and Expenses and Expense Allocation

In addition, the Company is entitled to certain expense allocations for costs paid on behalf of its Sponsored Companies which include: (i) reimbursement for organization and offering costs such as professional fees and other costs associated with the formation and offering of the Sponsored Company; and (ii) reimbursement for direct and indirect operating costs such as certain salaries, equity-based compensation and professional and other costs associated with managing the operations of the Sponsored Company. The following table presents a summary of the expense arrangements with the current Sponsored Companies:

	NorthStar Income	NorthStar Healthcare	NorthStar Income II	NorthStar/RXR New York Metro
Organization and offering costs (1)	$11.0 million (2)	$22.5 million, or 1.5% of the proceeds expected to be raised from the offering  (4)	$24.8 million, or 1.5% of the proceeds expected to be raised from the offering (4)	$30.0 million, or 1.5% of the proceeds expected to be raised from the offering (4)
Operating costs (3)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.00% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)

__________________

(1) Represents reimbursement for organization and offering costs paid on behalf of the Sponsored Companies in connection with their respective offerings. The Company is facilitating the payment of organization and offering costs on behalf of the Sponsored Companies. The Company records these costs as receivables, related parties on its consolidated balance sheets until repaid. The Sponsored Companies record these costs as either advisory fees, related parties on their consolidated statements of operations or as a cost of capital in their consolidated statements of equity.

(2) Represents the total expense allocation for organization and offering costs through the end of the offering period in July 2013.

(3) Calculated based on the four preceding fiscal quarters not to exceed the greater of: (i) 2.0% of each Sponsored Company’s average invested assets; or (ii) 25.0% of each Sponsored Company’s net income determined without reduction for any additions to reserves for depreciation, loan losses or other similar non-cash reserves and excluding any gain from the sale of assets for that period.

(4) Excludes shares being offered pursuant to dividend reinvestment plans.

The following table presents receivables, related parties on the consolidated balance sheets as of March 31, 2015 and December 31, 2014 (dollars in thousands):

	March 31, 2015 (Unaudited)		December 31, 2014
NorthStar Realty fees (1)	$	43,381	$	47,414
Sponsored Companies:
Fees	1,313		245
Other receivables	38,051		29,319
Subtotal Sponsored Companies(2)	39,364		29,564
Other	1,274		648
Total (3)	$	84,019	$	77,626

________________________

(1) Represents the base management fee and incentive fee receivable and net direct costs and expenses due between the Company and NorthStar Realty.

(2) As of March 31, 2015 and December 31, 2014, the Company had unreimbursed costs from the Sponsored Companies of $38.1 million and $29.3 million respectively, recorded as receivables, related parties on the consolidated balance sheets.

(3) Subsequent to March 31, 2015, the Company received $51.3 million from the Managed Companies.

Selling Commission and Dealer Manager Fees and Commission Expense

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(Unaudited)

Selling commissions and dealer manager fees represents income earned by selling equity in Sponsored Companies through NorthStar Securities. Pursuant to dealer manager agreements between NorthStar Securities and the Sponsored Companies, the Company generally receives selling commissions of up to 7.0% of gross offering proceeds raised. The Company reallows all selling commissions earned to participating broker-dealers. In addition, the Company also generally receives a dealer manager fee of up to 3.0% of gross offering proceeds raised, a portion of which may be reallowed to participating broker-dealers. The Company earns net commission income through NorthStar Securities for selling equity in the Sponsored Companies, which is expected to cover the costs of the broker-dealer business. Commission expense represents fees to participating broker-dealers with whom the Company has selling agreements and commissions to employees of NorthStar Securities. For the three months endedMarch 31, 2015 and 2014, the Company reallowed $3.4 million and $1.7 million commission expense to NorthStar Securities employees, respectively.

The following table summarizes selling commission and dealer manager fees, commission expense and net commission income for the three months endedMarch 31, 2015 and 2014 (dollar in thousands):

	Three Months Ended March 31,
	2015		2014
Selling commission and dealer manager fees	$	29,923	$	14,548
Commission expense	27,695		13,560
Net commission income(1)	$	2,228	$	988

________________________

(1) Excludes direct expenses of NorthStar Securities.

Other

A subsidiary of the Company is a rated special servicer by Standard & Poor’s and Fitch Ratings and receives special servicing fees for services related to certain securitization transactions. For the three months ended March 31, 2015 and 2014, the Company earned $0.4 million and $0.1 million of special servicing fees.

4. Investments in Unconsolidated Ventures

The following is a description of the Company’s investments in unconsolidated ventures, all of which are accounted for under the equity method.

Distributed Finance

In June 2014, the Company acquired an interest in Distributed Finance, a marketplace finance platform, for $4.0 million. In addition to earning a proportionate share of net income, the Company will also earn a net 0.50% fee on any syndicated investments, a minimum base management fee of 1.0% and an incentive fee of 15.0% on contractually defined excess cash flows. As of March 31, 2015, the carrying value of the investment was $3.4 million. For the three months ended March 31, 2015, the Company recognized equity in losses of $0.2 million related to legal fees incurred by Distributed Finance.

AHI Interest

In December 2014, the Company acquired the AHI Interest in AHI Newco, LLC (“AHI Ventures”), a direct wholly-owned subsidiary of American Healthcare Investors LLC (“AHI”) for $57.5 million, consisting of $37.5 million in cash and $20.0 million of the Company’s common stock, subject to certain lock-up and vesting restrictions ($10.0 million of the Company's common stock vested immediately). The Company’s investment in AHI Ventures is structured as a joint venture between the Company, the principals of AHI and James F. Flaherty III. The members of AHI are entitled to receive certain distributions of operating cash flow and certain promote fees in accordance with the allocations set forth in the joint venture agreement. As of March 31, 2015, the carrying value of the investment was $47.6 million. For the three months ended March 31, 2015, the Company recognized in equity in earnings, operating income of $1.6 million, which includes $1.0 million of equity-based compensation expense and $2.3 million of depreciation and amortization expense.

Island Interest

In January 2015, the Company acquired the Island Interest in Island Hospitality Group Inc. (“Island”) through Island Hospitality Joint Venture, LLC (“Island Ventures”), a subsidiary of Island JV Members Inc. (“Island Members”) for $37.7 million, consisting of $33.2 million in cash and $4.5 million of the Company’s common stock, subject to certain lock-up and vesting restrictions. The Company’s investment in Island Ventures is structured as a joint venture between the Company and

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(Unaudited)

Island Members. The members of Island Ventures are entitled to receive certain distributions of operating cash flow and certain promote fees in accordance with the allocations set forth in the joint venture agreement. As of March 31, 2015, the carrying value of the investment was $42.0 million. From closing to March 31, 2015, the Company recognized in equity in earnings, operating income of $1.0 million.

5. Related Party Arrangements

NorthStar Realty

Investment Opportunities

Under the management agreement, NorthStar Realty agreed to make available to the Company for the benefit of the Managed Companies, including NorthStar Realty, all investment opportunities sourced by NorthStar Realty. The Company agreed to fairly allocate such opportunities among the Managed Companies, including NorthStar Realty, in accordance with an investment allocation policy. Pursuant to the management agreement, NorthStar Realty is entitled to fair and reasonable compensation for its services in connection with any loan origination opportunities sourced by it, which may include first mortgage loans, subordinate mortgage interests, mezzanine loans and preferred equity interests, in each case relating to commercial real estate.

The Company provides services with regard to such areas as payroll, human resources and employee benefits, financial systems management, treasury and cash management, accounts payable services, telecommunications services, information technology services, property management services, legal and accounting services and various other corporate services to NorthStar Realty as it relates to its loan origination business for commercial real estate debt.

Credit Agreement

In connection with the spin-off, the Company entered into a revolving credit agreement with NorthStar Realty pursuant to which NorthStar Realty makes available to the Company, on an “as available basis,” up to $250.0 million of financing with a maturity of June 30, 2019 at LIBOR plus 3.50%. The revolving credit facility is unsecured. The Company expects to use the proceeds for general corporate purposes, including potential future acquisitions. In addition, the Company may use the proceeds to acquire assets on behalf of the Managed Companies that the Company intends to allocate to such Managed Company but for which such Managed Company may not then have immediately available funds. The terms of the revolving credit facility contain various representations, warranties, covenants and conditions, including the condition that NorthStar Realty’s obligation to advance proceeds to the Company is dependent upon NorthStar Realty and its affiliates having at least $100.0 million of either unrestricted cash and cash equivalents or amounts available under committed lines of credit, after taking into account the amount the Company seeks to draw under the facility. As of March 31, 2015, the Company had no borrowings outstanding under the credit agreement.

Healthcare Strategic Joint Venture

In January 2014, the Company entered into a long-term strategic partnership with James F. Flaherty III, former Chief Executive Officer of HCP, Inc., focused on expanding the Company’s healthcare business into a preeminent healthcare platform (“Healthcare Strategic Partnership”). In connection with the partnership, Mr. Flaherty oversees and seeks to grow both NorthStar Realty’s healthcare real estate portfolio and the portfolio of NorthStar Healthcare. In connection with entering into the partnership, NorthStar Realty granted Mr. Flaherty certain RSUs, half of which became the Company’s RSUs as a result of NorthStar Realty’s reverse stock split and the spin-off (refer to Note 7). The Healthcare Strategic Partnership is entitled to incentive fees ranging from 20% to 25% above certain hurdles for new and existing healthcare real estate investments held by NorthStar Realty and NorthStar Healthcare. The partnership will also be entitled to any incentive fees earned from NorthStar Healthcare or any future healthcare non-traded vehicles sponsored by the Company, NorthStar Realty or any affiliates, as well as future healthcare non-traded vehicles sponsored by AHI Ventures. For the three months ended March 31, 2015 and 2014, the Company did not earn incentive fees related to the Healthcare Strategic Partnership. On February 2, 2015, in connection with the completion of NorthStar Healthcare’s initial primary offering, the Company issued 20,305 RSUs to Mr. Flaherty.

AHI Venture

In connection with the AHI Interest, AHI Ventures provides certain asset management, property management and other services to affiliates of the Company assisting in managing the current and future healthcare assets (excluding any joint venture assets) of NorthStar Realty and other Sponsored Companies, including the assets formerly owned by Griffin-American Healthcare REIT II, Inc. (“Griffin-American”) and its former operating partnership, Griffin-American Healthcare REIT II Holdings, LP (“Griffin-America OP portfolio”). AHI Ventures receives a base management fee of $0.6 million per year plus 0.50% of the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

equity invested by NorthStar Realty in future healthcare assets (excluding assets in the Griffin-American OP portfolio and other joint ventures) that AHI Ventures may manage. AHI Ventures may also participate in the incentive fees earned by the Company and its affiliates with respect to new and existing healthcare real estate investments held by NorthStar Realty and NorthStar Healthcare, including the Griffin-American OP portfolio, any future healthcare non-traded vehicles sponsored by the Company, NorthStar Realty or any affiliates, as well as any future healthcare non-traded vehicles sponsored by AHI Ventures.  AHI Ventures would also be entitled to additional base management fees should it manage assets on behalf of any other Managed Companies. AHI Ventures also intends to directly or indirectly sponsor, co-sponsor, form, register, market, advise, manage and/or operate investment vehicles that are intended to invest primarily in healthcare real estate assets. In addition, Mr. Flaherty acquired a 12.3% interest, as adjusted, in AHI Ventures.

Island Venture

Island is a leading, independent select service hotel management company that currently manages 149 hotel properties, representing $3.7 billion, of which 101 hotel properties are owned by NorthStar Realty. Island provides certain asset management, property management and other services to NorthStar Realty to assist in managing its hotel properties. Island receives a base management fee of 2.5% to 3.0% of the current monthly revenue of the NorthStar Realty hotel properties it manages for NorthStar Realty.

RXR Realty

In December 2013, NorthStar Realty entered into a strategic transaction with RXR Realty, the co-sponsor of NorthStar/RXR New York Metro. The investment in RXR Realty includes an approximate 30% equity interest. NorthStar Realty’s equity interest in RXR Realty is structured so that the Company is entitled to certain fees in connection with RXR Realty’s investment management business. 

6. Commitments and Contingencies

The Company may be involved in various litigation matters arising in the ordinary course of its business. Although the Company is unable to predict with certainty the eventual outcome of any litigation, in the opinion of management, the legal proceedings are not expected to have a material adverse effect on the Company’s financial position or results of operations.

7. Equity-Based Compensation

Impact of the Spin-off

NorthStar Realty issued equity-based awards to directors, officers, employees, consultants and advisors pursuant to the NorthStar Realty Finance Corp. 2004 Omnibus Stock Incentive Plan, as amended and restated (the “NorthStar Realty Stock Plan”), and the NorthStar Realty Executive Incentive Bonus Plan, as amended (the “NorthStar Realty Plan” and collectively the “NorthStar Realty Equity Plans”). In addition, the Company issued equity-based awards to directors, officers, employees, consultants and advisors pursuant to the NorthStar Asset Management Group Inc. 2014 Omnibus Stock Incentive Plan (the “NSAM Stock Plan”) and the NorthStar Asset Management Group Inc. Executive Incentive Bonus Plan (the “NSAM Bonus Plan” and collectively, with the NSAM Stock Plan, the “NSAM Plans”)

All of the vested and unvested equity-based awards granted by NorthStar Realty prior to the spin-off remained outstanding immediately following the spin-off with various adjustments made to these awards to reflect NorthStar Realty’s reverse stock split as well as the impact of the spin-off, as described below.

NorthStar Realty’s equity awards outstanding at the time of the spin-off, including LTIP Units converted to common shares in connection with NorthStar Realty’s internal corporate reorganization, were adjusted to an equal number of shares of the Company’s common stock or Deferred LTIP Units, as described below, but generally continue to remain, subject to the same vesting and other terms that applied prior to the spin-off. Vesting conditions for outstanding awards were adjusted to reflect the impact of the spin-off with respect to employment conditions for service-based awards and total stockholder return for performance-based awards. The shares of the Company’s common stock (representing LTIP Units previously issued by NorthStar Realty’s operating partnership prior to the spin-off) that remain subject to vesting after the spin-off, as well as grants of shares of the Company’s common stock subject to time-based vesting issued by the Company since the time of the spin-off, are herein referred to as restricted stock.

Deferred LTIP Units outstanding immediately prior to the spin-off were equity awards issued by NorthStar Realty representing the right to receive either LTIP Units in NorthStar Realty’s successor operating partnership or, if such LTIP Units were not available by March 13, 2015, shares of NorthStar Realty common stock (subject to the same vesting conditions). On March 13, 2015, all of the Company’s outstanding Deferred LTIP Units were generally settled in LTIP Units in the Operating Partnership, or shares of restricted stock, which remain subject to the same vesting conditions that applied to the Deferred LTIP Units.

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(Unaudited)

Following the spin-off, NorthStar Realty and the compensation committee of its board of directors (the “NorthStar Realty Compensation Committee”) continues to administer all awards issued under the NorthStar Realty Equity Plans but the Company is obligated to issue shares of the Company’s common stock or other equity awards of its subsidiaries or make cash payments in lieu thereof or with respect to dividend or distribution equivalent obligations to the extent required by such awards previously issued under the NorthStar Realty Equity Plans. These awards will continue to be governed by the NorthStar Realty Equity Plans, as applicable, and shares of the Company’s common stock issued pursuant to these awards will not be issued pursuant to, or reduce availability under the NorthStar Realty Equity Plans.

In connection with the spin-off, most of NorthStar Realty’s employees at the time of the spin-off became employees of the Company except for executive officers, employees engaged in NorthStar Realty’s loan origination business at the time of the spin-off and certain other employees that became co-employees of both the Company and NorthStar Realty.

The following summarizes the equity-based compensation plans and related expenses.

NorthStar Asset Management Plans

NSAM Stock Plan

In March 2014, the NorthStar Realty Compensation Committee approved the NSAM Stock Plan, which was subsequently adopted by the Company’s board of directors and approved by its sole stockholder at the time. The NSAM Stock Plan was administered by the NorthStar Realty Compensation Committee prior to the spin-off and is administered by the Company’s compensation committee following the spin-off. The NSAM Stock Plan provides flexibility to use various equity-based and cash incentive awards as compensation tools to motivate the Company’s workforce.

In anticipation of the spin-off, on April 3, 2014, the Company granted an aggregate of 6,230,529 RSUs to its executive officers pursuant to the NSAM Stock Plan. The RSUs vest over four years and are subject to the achievement of performance-based vesting conditions and continued employment. 40% of these RSUs are performance-based awards and were subject to the achievement of performance-based hurdles relating to CAD and capital raising of the Sponsored Companies, as well as continued employment through December 31, 2017 (“Performance RSUs”). 30% of these RSUs are market-based awards and are subject to the achievement of performance-based hurdles relating to the Company’s absolute total stockholder return and continued employment over a four-year period ended April 2, 2018 (“Absolute RSUs”). The remaining 30% of these RSUs are market-based awards and are subject to the achievement of performance-based hurdles based on the Company’s total stockholder return relative to the Russell 2000 Index and continued employment over a four-year period ended April 2, 2018 (“Relative RSUs”). With respect to these grants, the grant date fair value for the Performance RSUs, Absolute RSUs and Relative RSUs was $17.01, $10.22 and $16.21 per RSU, respectively. The grant date fair value was determined using a risk-free interest rate of 1.48%. In May 2014, the Company also granted an aggregate of 1,317,368 RSUs (net of forfeitures occurring prior to March 31, 2015) with substantially similar terms as the RSUs granted to executives in April 2014 to certain employees pursuant to the NSAM Stock Plan.  With respect to these grants, the grant date fair value for the Performance RSUs, Absolute RSUs and Relative RSUs was $16.80, $9.95 and $16.29 per RSU, respectively. The grant date fair value was determined using a risk-free interest rate of 1.29%. In December 2014, the Company determined that the performance hurdles relating to the Performance RSUs were met. On December 31, 2014, the Performance RSUs were settled in shares of the Company’s common stock, of which 25% were vested and the remainder (in the form of restricted stock) will vest in equal installments on December 31, 2015, 2016 and 2017, subject to continued employment.  On December 31, 2014, the Company retired 392,157 of the vested shares of common stock to satisfy the minimum statutory tax withholding requirements. The common stock retired to satisfy the withholding amounts was recorded as a reduction to additional paid-in capital with an offsetting payable recorded in accounts payable and accrued expenses.  On December 31, 2014, the Absolute RSUs and Relative RSUs related to the executives were settled in shares of performance common stock.  Upon vesting pursuant to the terms of the Absolute RSUs and Relative RSUs, shares of performance common stock will automatically convert into shares of common stock and the executive will be entitled to receive the distributions that would have been paid with respect to a share of common stock (for each share of performance common stock that vests) on or after the date the shares of performance common stock were initially issued.

NSAM Bonus Plan

In March 2014, the NorthStar Realty Compensation Committee approved the NSAM Bonus Plan, which was subsequently adopted by the Company’s board of directors and approved by its sole stockholder. The NSAM Bonus Plan establishes the general parameters of the Company’s incentive bonus program for its executive officers. Pursuant to the NSAM Bonus Plan, for each plan year, the administrator will establish two bonus pools (an annual cash bonus pool and a long-term bonus pool), award a bonus pool percentage(s) to each participant with respect to such bonus pools and establish performance goals, vesting

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(Unaudited)

requirements and other terms and conditions applicable to such bonuses. The NSAM Bonus Plan was administered by the NorthStar Realty Compensation Committee prior to the spin-off and is administered by the Company’s compensation committee following the spin-off. Prior to the spin-off, the NorthStar Realty Compensation Committee established bonus pools, awarded bonus pool percentages and established the performance goals, vesting requirements and other terms and conditions applicable to bonuses for 2014 under the NSAM Bonus Plan.

Pursuant to an employee matters agreement entered into in connection with the spin-off, NorthStar Realty agreed to make the cash portion of any incentive payment to the Company employees for services performed in 2014 through the date of the spin-off and as a result NorthStar Realty was responsible for paying approximately 50% of the 2014 annual cash and long-term bonuses earned under the NSAM Bonus Plan. Long-term bonuses for 2014 were paid in both Company and NorthStar Realty equity-based awards, subject to performance-based and time-based vesting conditions over the four-year performance period from January 1, 2014 through December 31, 2017. Approximately 31.65% of these long-term bonuses were subject to the achievement of performance-based hurdles relating to CAD and capital raising of the Sponsored Companies in 2014 to be paid in shares of the Company’s common stock that vest 25% on each of December 31, 2014, 2015, 2016 and 2017, subject to continued employment. 18.35% of these long-term bonuses are performance-based awards to be paid in shares of performance common stock that are subject to vesting based on the achievement of performance-based hurdles relating to the Company’s absolute total stockholder return and continued employment over a four-year period. The remaining approximately 50% of long-term bonuses are being paid by NorthStar Realty. 

In connection with the long-term bonuses for 2014, the Company determined that the performance hurdles for the approximately 31.65% of the long-term bonuses to be paid in shares of the Company’s common stock were met.  On December 31, 2014, the Company paid this portion of the long-term bonus by issuing 795,107 shares of common stock, of which 25% were vested and the remainder (in the form of restricted stock) will vest in equal installments on December 31, 2015, 2016 and 2017, subject to continued employment. The Company retired 108,198 of the vested shares of common stock to satisfy the minimum statutory withholding requirements. In connection with the remainder of the long-term bonus to be paid by the Company, in February 2015, the Company issued an aggregate of 474,842 shares of performance common stock to executives, which are subject to vesting based on the Company’s absolute total stockholder return and continued employment over the four-year period ending December 31, 2017. With respect to these grants, the grant date fair value was $21.16 per share, which was determined using a risk-free interest rate of 1.00%. Upon vesting, these shares of performance common stock will automatically convert into shares of common stock and the executives will be entitled to receive the distributions that would have been paid with respect to a share of common stock (for each share of performance common stock that vests) on or after January 1, 2015.  In February 2015, the Company also granted 642,882 restricted shares, net of forfeitures, to certain non-executive employees, subject to time based vesting conditions through January 29, 2018.

NorthStar Realty Equity Plans

In connection with the spin-off, the Company issued the following related to the NorthStar Realty Equity Plans that remain outstanding as of March 31, 2015: 220,902 shares of restricted common stock which remain subject to vesting; 1,127,696 LTIP Units (net of forfeitures), of which 781,042 remain subject to vesting; and 1,205,210 RSUs which remain subject to vesting based on performance and continued employment. On December 31, 2014, the performance hurdle for an incremental 762,898 of RSUs was met pursuant to NorthStar Realty’s bonus plan for 2011. To settle these RSUs, on January 1, 2015 the Company issued 49,149 shares of common stock, net of the minimum statutory tax withholding requirements and the Company issued 665,747 Deferred LTIP Units, which subsequently settled to LTIP Units with the creation of the Operating Partnership on March 13, 2015.

Other Issuances

Healthcare Strategic Joint Venture

In connection with entering into the Healthcare Strategic Partnership, NorthStar Realty granted Mr. Flaherty 500,000 RSUs on January 22, 2014, adjusted to reflect NorthStar Realty’s reverse stock split, which vest on January 22, 2019, unless certain conditions are met. In connection with the spin-off, the RSUs granted to Mr. Flaherty were adjusted to also relate to an equal number of shares of the Company’s common stock. The RSUs are entitled to dividend equivalents prior to vesting and may be settled either in shares of common stock of the Company or in cash at the option of the Company. Mr. Flaherty is also entitled to incremental grants of the Company’s common stock subject to certain conditions being met pursuant to a separate contractual arrangement entered into in connection with the Healthcare Strategic Partnership. On February 2, 2015, in connection with the completion of NorthStar Healthcare’s initial public offering and the services Mr. Flaherty provides to the Healthcare Strategic

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Partnership, the Company issued 20,305 incremental RSUs to Mr. Flaherty, which vest on the third anniversary of the grant date, unless certain conditions are met.

AHI

On December 8, 2014, the Company acquired an interest in AHI for $37.5 million in cash and $20.0 million of common stock, representing 956,462 shares. In connection with this acquisition, the Company required the seller to subject one-half of these shares to forfeiture conditions that lapse based on the continued service to AHI of its three principals, with forfeiture conditions with respect to 50% of these shares lapsing two years after the closing date of the Company’s acquisition and the remaining 50% lapsing five years after the closing date. As a result of this vesting arrangement, $10.0 million of common stock (or 478,231 shares) subject to this arrangement is treated as a contingent consideration arrangement tied to continued employment of the AHI principals as an incentive to remain as employees of AHI.  As such, this contingent consideration arrangement is accounted for separately as a compensatory arrangement with amortization of such equity award being recorded by the Company through equity in earnings.  The AHI principals are also entitled to incremental grants of the Company’s common stock subject to certain conditions being met pursuant to a separate contractual arrangement entered into in connection with the Company’s AHI investment. For the three months ended March 31, 2015, no incremental awards were issued. The Company will contribute $2.0 million in shares related to equity incentives for AHI’s employees for 2015 and 2016.

Summary

As of March 31, 2015, an aggregate of 26,358,957 shares of the Company’s common stock were reserved for the issuance of awards under the 2014 NSAM Plan, subject to equitable adjustment upon the occurrence of certain corporate events, provided that this number automatically increases each January 1st by 2% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31st.

Equity-based compensation expense for the three months endedMarch 31, 2014 includes an expense based on a carve-out attributed to the Company related to NorthStar Realty’s historical asset management business for the three months ended March 31, 2014. The allocation is based on an estimate had the Company’s asset management business been run as an independent entity and was determined principally based on relative head count and management’s knowledge of NorthStar Realty’s operations.

For the three months endedMarch 31, 2015, the Company recorded equity-based compensation expense of $13.6 million (including $0.1 million of dividends associated with non-employees). For the three months endedMarch 31, 2014, the Company was allocated $5.7 million of equity-based compensation expense related to the NorthStar Realty Equity Plans.

The following table presents a summary of LTIP Units and unvested restricted stock. The balance as of March 31, 2015 represents LTIP Units whether vested or not that are outstanding and unvested shares of restricted stock whether vested or not (grants in thousands):

	Three Months Ended March 31, 2015
	Restricted Stock		LTIP Units			Total Grants		Weighted Average Grant Price
Beginning Balance	4,104		1,135		(1)	5,239		$	22.12
New grants	649		666			1,315		23.62
Conversions	—		(7	)		(7	)	15.51
Vesting of restricted stock post-spin	(466	)	—			(466	)	13.95
Forfeited or canceled grants	(8	)	—			(8	)	17.85
Ending Balance/Weighted Average	4,279		1,794			6,073		$	23.09

___________________

(1) Represents Deferred LTIP Units that settled into LTIP Units on March 13, 2015.

As of March 31, 2015, equity-based compensation expense to be recognized over the remaining vesting period through April 2018 is $122.3 million, provided there are no forfeitures and excluding any mark-to-market adjustment.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

8. Stockholders’ Equity

Spin-off

In connection with the spin-off, NorthStar Realty distributed to its common stockholders all of the common stock of the Company in a pro rata distribution of one share of the Company common stock for each share of NorthStar Realty common stock.

Common Stock

In January 2015, in connection with the Island Interest, the Company issued 208,486 shares of common stock resulting in an increase to additional paid-in capital in 2015 of $4.5 million, subject to certain lock-up and vesting restrictions.

Performance Common Stock

The Company is currently authorized to issue 1.6 billion shares of capital stock, of which 500 million is designated as performance common stock, par value $.01 per share. In connection with the performance-based component of the 2014 long-term bonus to be paid by the Company, in February 2015, the Company issued an aggregate of 474,842 shares of performance common stock to executives.

Earnings Per Share

Basic and diluted earnings per share and the average number of common shares outstanding were calculated using the number of common stock outstanding immediately following the spin-off on June 30, 2014. The Company presents common shares issued in connection with the spin-off as if it had been outstanding for all periods presented, similar to a stock split. The following table presents EPS for the three months endedMarch 31, 2015 and 2014 (dollars and shares in thousands, except per share data):

	Three Months Ended March 31,
	2015			2014
Numerator:
Net income (loss)	$	21,768		$	(8,305	)
Earnings (loss) allocated to unvested participating securities	(832		)	—
Numerator for basic income per share	20,936			(8,305		)
Participating nonvested shares	832			—
Net income (loss) attributable to LTIP Units non-controlling interest	202			—
Numerator for diluted income per share	$	21,970		$	(8,305	)
Denominator:
Weighted average number of shares of common stock	189,541			187,816
Incremental diluted shares	2,031			—
Weighted average number of diluted shares(1)	191,572			187,816
Earnings (loss) per share:
Basic	$	0.11		$	(0.04	)
Diluted	$	0.11		$	(0.04	)

_______________________

(1) Diluted EPS excludes the effect of equity-based awards issued that were not dilutive for the periods presented. These instruments could potentially impact diluted EPS in future periods, depending on changes in the Company’s stock price and other factors.

Dividends

For the three months ended March 31, 2015, the Company declared a dividend on its common stock on February 25, 2015 of $0.10 per share, which was paid on March 13, 2015 to stockholders of record as of the close of business on March 9, 2015.

9. Non-controlling Interest

Operating Partnership

Non-controlling interest includes the aggregate LTIP Units held by limited partners (the “Unit Holders”) in the Operating Partnership. Net income (loss) attributable to the non-controlling interest is based on the weighted average Unit Holders’ ownership percentage of the Operating Partnership for the respective period. The issuance of additional common stock or LTIP Units changes the percentage ownership of both the Unit Holders and the Company. Since an LTIP Unit is generally redeemable

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

for cash or common stock at the option of the Company, it is deemed to be equivalent to common stock. Therefore, such transactions are treated as capital transactions and result in an allocation between stockholders’ equity and non-controlling interest on the accompanying consolidated balance sheets to account for the change in the ownership of the underlying equity in the Operating Partnership. In connection with the formation of the Operating Partnership, the Company recorded a non-controlling interest of $4.4 million related to LTIP Units. As of March 31, 2015, 1,793,443 LTIP units were outstanding, representing a 1.0% ownership and non-controlling interest in the Operating Partnership. Income attributable to the Operating Partnership non-controlling interest for the three months ended March 31, 2015 was $0.2 million.

10.     Income Taxes

Subsequent to the spin-off, the Company became subject to both domestic and international income tax, as such, there was no income tax (benefit) expense for the three months ended March 31, 2014. On March 13, 2015, the Company restructured by converting, under Delaware law, an existing limited liability company disregarded as separate from the Company for federal income tax purposes to a Delaware limited partnership and admitting as limited partners LTIP Unit Holders, forming the Company’s new Operating Partnership. The Operating Partnership is treated as a partnership for federal income tax purposes and consequently, its items of income gain, loss, deduction and credit are passed through to, and included in, the taxable income of each of its partners including the Company. For the period prior to March 13, 2015, the Company and its U.S. subsidiaries will file consolidated federal income tax returns.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Deferred income taxes reflect the net tax effects of temporary differences that may exist between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company’s net deferred tax asset is primarily comprised of future income tax deductions attributable to the vesting and exercise of certain equity compensation awards.

For the three months ended March 31, 2015, the Company incurred $7.9 million of income tax expense which is based on a full year estimated effective tax rate of approximately 27%. The Company operates internationally and domestically through multiple operating subsidiaries.  Each of the jurisdictions in which the Company operates has its own tax law and tax rate and the tax rate outside the United States may be lower than the U.S. federal statutory income tax rate.

11. Segment Reporting

The Company conducts its asset management business through the following five segments, which are based on how management reviews and manages its business:

• NorthStar Realty - Provide asset management and other services on a fee basis by managing NorthStar Realty’s day-to-day operations. The Company began earning fees from NorthStar Realty on July 1, 2014.

• Sponsored Companies - Provide asset management and other services on a fee basis by managing each Sponsored Company’s respective day-to-day operations.

• Broker-dealer - Raise capital in the retail market through NorthStar Securities and earn dealer manager fees from the Sponsored Companies.

• Direct Investments - Invest in strategic partnerships and joint ventures with third-parties with expertise in commercial real estate or other sectors and markets, where the Company benefits from the fee stream and potential incentive fee or promote.

• Corporate/Other - Includes corporate level general and administrative expenses, as well as special servicing on a fee basis in connection with certain securitization transactions.

The consolidated financial statements for the three months ended March 31, 2015 represent the Company subsequent to the spin-off of NorthStar Realty’s historical asset management business of managing the Sponsored Companies, owning NorthStar Securities and operating its special servicing business. Periods prior to June 30, 2014 present a carve-out of NorthStar Realty’s historical financial information including revenues and expenses allocated to the Company, related to NorthStar Realty’s historical asset management business. Expenses also included an allocation of indirect expenses from NorthStar Realty, including salaries, equity-based compensation and other general and administrative expenses (primarily occupancy and other costs) based on an estimate had NorthStar Realty’s historical asset management business been run as an independent entity. This allocation method was principally based on relative headcount and management’s knowledge of NorthStar Realty’s operations. Additionally, periods prior to June 30, 2014 did not reflect the management agreement the Company entered into with NorthStar Realty effective July 1, 2014.

The following tables present segment reporting for the three months ended March 31, 2015 and 2014 (dollars in thousands):

Statement of Operations:
Three months ended March 31, 2015	NorthStar Realty (1)		Sponsored Companies		Broker Dealer (2)			Direct Investments			Corporate/Other			Total
Asset management and other fees, related parties	$	48,251	$	13,128	$	—		$	—		$	—		$	61,379
Selling commission and dealer manager fees, related parties	—		—		29,923			—			—			29,923
Commission expense	—		—		27,695			—			—			27,695
Salaries and related expense	—		—		2,237			—			9,908			12,145
Equity-based compensation expense	—		—		—			—			13,618			13,618
Other general and administrative expenses	—		—		1,915			—			4,190			6,105
Equity in earnings (losses) of unconsolidated ventures	—		—		—			(870		)	—			(870		)
Income tax (benefit) expense	—		—		—			—			7,938			7,938
Net income (loss)	48,251		13,128		(1,965		)	(870		)	(36,574		)	21,970

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

(1) The Company began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty (refer to Note 3).

(2) Direct general and administrative expenses incurred by the broker dealer.

Statement of Operations:
Three months ended March 31, 2014	NorthStar Realty (1)		Sponsored Companies		Broker Dealer (2)			Corporate/Other			Total
Asset management and other fees, related parties	$	—	$	8,669	$	—		$	—		$	8,669
Selling commission and dealer manager fees, related parties	—		—		14,548			—			14,548
Commission expense	—		—		13,560			—			13,560
Salaries and related expense	—		—		1,863			6,073			7,936
Equity-based compensation expense	—		—		—			5,694			5,694
Other general and administrative expenses	—		—		1,762			111			1,873
Net income (loss)	—		8,669		(2,660		)	(14,314		)	(8,305		)

_______________

(1) The Company began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty (refer to Note 3).

(2) Direct general and administrative expenses incurred by the broker dealer.

The following table presents total assets by segment as of March 31, 2015 and December 31, 2014 (dollars in thousands):

Total Assets	NorthStar Realty (1)		Sponsored Companies (1)		Broker Dealer		Direct Investments		Corporate/Other		Total
March 31, 2015	$	53,069	$	22,029	$	12,183	$	95,615	$	68,955	$	251,851
December 31, 2014	$	60,909	$	27,147	$	17,868	$	54,480	$	103,465	$	263,869

__________________

(1) Primarily represents the receivable, related parties as of March 31, 2015 and December 31, 2014, respectively. Subsequent to March 31, 2015, the Company received $51.3 million of reimbursements from the Managed Companies.

12. Subsequent Events

Dividends

On May 5, 2015, the Company declared a dividend of $0.10 per share of common stock. The common stock dividend will be paid on May 22, 2015 to stockholders of record as of the close of business on May 18, 2015.

Share Buyback

In April 2015, the Company’s board of directors authorized the repurchase of up to $400 million of its outstanding common stock. The authorization will expire in twelve months, unless otherwise extended by the Company’s board of directors. The Company was in a black out period since establishment of the plan and consequently, as of May 8, 2015, the Company has not repurchased any shares.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included in Item 1. “Financial Statements” of this report. References to “NSAM,” “we,” “us” or “our” refer to NorthStar Asset Management Group Inc. and its subsidiaries unless the context specifically requires otherwise.

Introduction

We are a global asset management firm focused on strategically managing real estate and other investment platforms in the United States and internationally. We commenced operations on July 1, 2014 upon the spin-off by NorthStar Realty Finance Corp., or NorthStar Realty, of its asset management business into a separate publicly-traded company, NorthStar Asset Management Group Inc. (NYSE: NSAM), a Delaware corporation. The spin-off was in the form of a tax-free distribution to NorthStar Realty’s common stockholders where each NorthStar Realty common stockholder received shares of our common stock on a one-for-one basis. At the same time, NorthStar Realty became externally managed by our affiliate through a management contract with an initial term of 20 years. NorthStar Realty continues to operate its commercial real estate debt origination business. Most of NorthStar Realty’s employees at the time of the spin-off became our employees.

Certain of our affiliates also manage NorthStar Realty’s previously sponsored non-traded companies which raise money through the retail market, as well as any new non-traded company and any future sponsored company, referred to as our Sponsored Companies and together with NorthStar Realty, referred to as our Managed Companies.

We are organized to provide asset management and other services to our Managed Companies, both in the United States and internationally. Our Managed Companies have historically invested in the commercial real estate, or CRE, industry. We seek to expand the scope of our asset management business beyond real estate into new asset classes and geographies by organically creating and managing additional investment vehicles or through acquisitions, strategic partnerships and joint ventures.

We earn asset management, incentive and other fees, directly or indirectly, pursuant to management and other contracts and direct investments. In addition, we own NorthStar Realty Securities, LLC, or NorthStar Securities, a captive broker-dealer platform registered with the Securities and Exchange Commission, or SEC, which raises capital in the retail market for our Sponsored Companies.

As of March 31, 2015, we had $24 billion of assets under management, adjusted for commitments to acquire certain investments by our Managed Companies. In addition, we invested $99 million in direct investments that manage $8.3 billion across a variety of asset classes.

Proposed Spin-off of European Real Estate Business

On February 26, 2015, NorthStar Realty announced that its board of directors unanimously approved a plan to spin-off its European real estate business, or NRF Proposed European Spin into a newly-formed publicly-traded real estate investment trust, or REIT, NorthStar Realty Europe Corp., or NRE, expected to be listed on the New York Stock Exchange, or NYSE. As of May 6, 2015, NorthStar Realty has acquired approximately $2.0 billion of European real estate (excluding NorthStar Realty’s European healthcare assets) comprised of 49 properties spanning across some of Europe’s top markets that will be contributed to NRE upon the completion of the NRF Proposed European Spin. We will manage NRE pursuant to a long-term management agreement, on substantially similar terms as our management agreement with NorthStar Realty. The NRF Proposed European Spin is expected to be completed in the second half of 2015.

Summary of Business

Our primary business lines are as follows:

• NorthStar Realty - Provide asset management and other services on a fee basis by managing NorthStar Realty’s day-to-day operations. We began earning fees from NorthStar Realty on July 1, 2014.

• Sponsored Companies - Provide asset management and other services on a fee basis by managing each Sponsored Company’s respective day-to-day operations.

• Broker-dealer - Raise capital in the retail market through NorthStar Securities and earn dealer manager fees from our Sponsored Companies.

• Direct Investments - Invest in strategic partnerships and joint ventures with third-parties with expertise in commercial real estate or other sectors and markets, where we benefit from the fee stream and potential incentive fee or promote.

Our Business

Our primary business objective is to provide asset management and other services by managing NorthStar Realty and our Sponsored Companies, both in the United States and internationally. We earn asset management, incentive and other fees pursuant to management and other contracts and direct investments. Our growth will depend upon the ability of NorthStar

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Realty and our Sponsored Companies to grow by raising capital, which in turn is driven by their investment activities and overall performance. In addition, growth in our assets under management for our Sponsored Companies is impacted by the ability to raise capital in the retail market through our captive broker-dealer platform. Our Managed Companies have historically invested in the CRE industry and have demonstrated the ability to invest and create value through multiple real estate cycles and changing market conditions. We seek to further expand the scope of our asset management business beyond real estate organically by creating and managing additional investment vehicles. For instance, we confidentially submitted a registration statement with the SEC to co-manage a business development company, or BDC, with OZ InstitutionalCredit Management LP, or OZ Credit Management, an affiliate of Och-Ziff Capital Management Group, LLC, or Och-Ziff, that will invest in senior and subordinate loans to middle-market companies.

As we grow our business, as well as expand into new asset classes and geographies, we seek to enter into strategic partnerships and joint ventures with third parties with expertise in commercial real estate or other sectors and markets to augment our business operations while at the same time benefiting from fee streams generated by such strategic partnerships and joint ventures.

Our management team, located in the United States and internationally, has a proven track record in managing and growing our Managed Companies. We believe our in-place, long-duration fees, substantial growth prospects and scalable operating platform position us as an industry leading asset manager. We have the ability to maintain a competitive advantage through a combination of our deep industry relationships and access to market leading credit underwriting and capital markets expertise which enables us to manage credit risk as well as to structure and finance the assets of our Managed Companies efficiently. Our ability to identify opportunities across a broad spectrum of potential investments for our Managed Companies will continue to create complementary and overlapping sources of investment opportunities based on a common reliance on market fundamentals and application of similar underwriting and asset management skills as we seek to maximize stockholder value.

Assets of our Managed Companies grew significantly over the past several years driven by our ability to raise capital for NorthStar Realty and our Sponsored Companies and in turn effectively deploy such capital. The following table presents the assets of our Managed Companies as of March 31, 2015 and December 31, 2014 (dollars in thousands):

	March 31, 2015 (1)(2)				December 31, 2014
	Amount		Percentage		Amount		Percentage
NorthStar Realty	$	18,242,983	76.90	%	$	17,871,175	82.30	%
Sponsored Companies:
NorthStar Income	2,073,263		8.70	%	2,183,570		10.10	%
NorthStar Healthcare	2,523,759		10.60	%	1,097,729		5.10	%
NorthStar Income II	913,880		3.80	%	533,063		2.50	%
Subtotal Sponsored Companies	5,510,902		23.10	%	3,814,362		17.70	%
Total	$	23,753,885	100.00	%	$	21,685,537	100.00	%

__________________

(1) Adjusted for acquisitions and commitments to purchase through May 6, 2015.

(2) Based on investments reported by each Managed Company, except for NorthStar Realty which excludes NorthStar Healthcare’s proportionate interest in healthcare joint ventures.

To date, we also invested in the following businesses that have an aggregate of $8.3 billion assets under management:

• American Healthcare Investors LLC, or AHI, is a healthcare-focused real estate investment management firm;

• Island Hospitality Management Inc., or Island, is a leading, independent select service hotel management company; and

• Distributed Finance Corporation, or Distributed Finance, is a marketplace finance platform company.

In connection with these investments, we earn fees and may be entitled to certain incentive fees. In addition, AHI and Island provide certain asset management, property management and other services to us to assist in managing the current and future assets of our Managed Companies.

NorthStar Realty

NorthStar Realty is a diversified commercial real estate company with 84% of its total assets invested in real estate of which 77% is invested in direct real estate investments including healthcare, hotel, European, manufactured housing communities, net lease, multifamily and multi-tenant office properties. In addition, NorthStar Realty originates, structures, acquires and manages senior and subordinate debt investments and invests in CRE securities. NorthStar Realty has grown its business by raising capital and deploying such capital effectively. To date in 2015, NorthStar Realty issued aggregate capital of $1.3 billion (including the remaining shares available to be issued under NorthStar Realty’s forward sale agreement for net proceeds of $569 million). In 2014, NorthStar Realty issued aggregate net capital of $2.6 billion, including $1.3 billion from the issuance

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of common equity (including the remaining shares issued under a forward sale agreement in February 2015 for net proceeds of $122 million), $1.1 billion as part of the consideration for the merger of Griffin-American Healthcare REIT II, Inc., or Griffin-American, and $242 million from the issuance of preferred equity.

The management agreement with NorthStar Realty is for an initial term of 20 years and provides for a base management fee and incentive fee.

Base Management Fee

For the three months endedMarch 31, 2015, we earned $45 million related to the base management fee. The management contract with NorthStar Realty commenced on July 1, 2014, and as such, there were no management fees earned for the three months endedMarch 31, 2014. The base management fee from NorthStar Realty will increase subsequent to March 31, 2015 by an amount equal to 1.5% per annum of the sum of:

• cumulative net proceeds of all future common equity and preferred equity issued by NorthStar Realty;

• equity issued by NorthStar Realty in exchange or conversion of exchangeable senior notes based on the stock price at the date of issuance;

• any other issuances by NorthStar Realty of common equity, preferred equity or other forms of equity, including but not limited to limited partnership interests in the Operating Partnership which are structured as profits interests, or LTIP Units (excluding equity-based compensation, but including issuances related to an acquisition, investment, joint venture or partnership); and

• cumulative cash available for distribution, or CAD, of NorthStar Realty in excess of cumulative distributions paid on common stock, LTIP units or other equity awards beginning the first full calendar quarter after the spin-off.

Additionally, NorthStar Realty’s equity interest in RXR Realty LLC, or RXR Realty, and Aerium Group is structured so that we are entitled to the portion of distributable cash flow from each investment in excess of the $10 million minimum annual base amount.

As of May 6, 2015, the annual base management fee, including the remaining shares pursuant to the NorthStar Realty forward sale agreement is $200.5 million.

Incentive Fee

For the three months endedMarch 31, 2015, we earned $3 million related to the incentive fee. The incentive fee is calculated and payable quarterly in arrears in cash, equal to:

• the product of: (a) 15% and (b) CAD of NorthStar Realty before such incentive fee, divided by the weighted average shares outstanding of NorthStar Realty for the calendar quarter, when such amount is in excess of $0.39 per share of NorthStar Realty but less than $0.45 per share of NorthStar Realty; plus

• the product of: (a) 25% and (b) CAD of NorthStar Realty before such incentive fee, divided by the weighted average shares outstanding of NorthStar Realty for the calendar quarter, when such amount is equal to or in excess of $0.45 per share of NorthStar Realty;

• multiplied by the weighted average shares outstanding of NorthStar Realty for the calendar quarter.

In addition, we may also earn an incentive fee from NorthStar Realty’s healthcare investments in connection with our Healthcare Strategic Partnership (refer to Related Party Arrangements).

Weighted average shares represents the number of shares of NorthStar Realty’s common stock, LTIP Units or other equity-based awards (with some exclusions), outstanding on a daily weighted average basis. With respect to the base management fee, all equity issuances are allocated on a daily weighted average basis during the fiscal quarter of issuance.

Additional NorthStar Realty Management Agreement Terms

• 20-year initial term, which will be automatically renewed for additional 20-year terms each anniversary thereafter unless earlier terminated for “cause.”

• If NorthStar Realty were to spin-off any asset or business in the future, including the NRF Proposed European Spin, such entity would be managed by us on terms substantially similar to those set forth in the management agreement between us and NorthStar Realty. The management agreement further provides that the aggregate base management fee in place immediately after any future spin-off will not be less than the aggregate base management fee in place at NorthStar Realty immediately prior to such spin-off.

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Payment of Costs and Expenses and Expense Allocation

NorthStar Realty is responsible for all of its direct costs and expenses and will reimburse us for costs and expenses incurred by us on its behalf. In addition to NorthStar Realty’s costs and expenses, following the spin-off, NorthStar Realty is obligated to reimburse us for additional costs and expenses incurred by us for an amount not to exceed the following: (i) 20% of the combined total of: (a) NorthStar Realty’s general and administrative expenses as reported in its consolidated financial statements excluding: (1) equity-based compensation expense, (2) non-recurring items, (3) fees payable to us under the terms of the management agreement and (4) any allocation of expenses from NorthStar Realty, or NorthStar Realty G&A; and (b) our general and administrative expenses as reported in our consolidated financial statements, excluding equity-based compensation expense and adding back any costs or expenses allocated to any of our Managed Companies, less (ii) the NorthStar Realty G&A.

Sponsored Companies

We raise capital for certain of our Sponsored Companies through NorthStar Securities.

• NorthStar Real Estate Income Trust, Inc., or NorthStar Income - Our first Sponsored Company, NorthStar Income, successfully completed its public offering on July 1, 2013.

• NorthStar Healthcare Income, Inc., or NorthStar Healthcare - Our second Sponsored Company, NorthStar Healthcare, successfully completed its public offering on February 2, 2015 and began raising capital in a follow-on public offering at the end of February 2015.

• NorthStar Real Estate Income II, Inc., or NorthStar Income II - Our third Sponsored Company, NorthStar Income II, is currently raising capital.

• NorthStar/RXR New York Metro Income, Inc., or NorthStar/RXR New York Metro - Our fourth Sponsored Company, NorthStar/RXR New York Metro, expects to begin raising capital in the second half 2015.

• NorthStar Corporate Income, Inc., or NorthStar Corporate - Our fifth Sponsored Company, NorthStar Corporate, confidentially submitted its registration statement on Form N-2 to the SEC in December 2014. NorthStar Corporate seeks to raise up to $1 billion in a public offering of common stock.  NorthStar Corporate is structured as a non-diversified, closed-end management investment company that intends to elect to be regulated as a BDC under the Investment Company Act of 1940, as amended, or the Investment Company Act.  NorthStar Corporate intends to engage OZ Credit Management, an affiliate of Och-Ziff Capital Management, an alternative asset manager, to serve as the sub-advisor to manage NorthStar Corporate’s investments and oversee operations. Any asset management and other fees incurred by NorthStar Corporate will be shared between us and OZ Credit Management as co-sponsors. NorthStar Corporate intends to invest in senior and subordinate loans to middle-market companies.

The following table presents a summary of the fee arrangements with our current Sponsored Companies:

	NorthStar	NorthStar	NorthStar	NorthStar/RXR
	Income	Healthcare	Income II	New York Metro(9)
Offering amount(1)	$1.1 billion	$1.8 billion(8)	$1.65 billion	$2.0 billion
Total raised through May 6, 2015 (2)	$1.2 billion	$1.2 billion	$560 million	(10)
Primary strategy	CRE Debt	Healthcare Equity and Debt	CRE Debt	New York City CRE Equity and Debt
Primary offering period	Completed July 2013	Ends February 2017(8)	Ends May 2016(11)	Ends February 2017(11)
Asset Management and Other Fees:
Asset management fees(3)	1.25% of assets	1.00% of assets	1.25% of assets	1.25% of assets
Acquisition fees(4)	1.00% of investment	2.25% for real estate properties 1.00% of other investments	1.00% of investment	2.25% for real estate properties 1.00% of other investments
Disposition fees(5)	1.00% of sales price	2.00% for real estate properties 1.00% of sales price for debt investments	1.00% of sales price	2.00% for real estate properties 1.00% of sales price for debt investments
Incentive payments(6)	15.00% of net cash flows after an 8.00% return	15.00% of net cash flows after a 6.75% return(7)	15.00% of net cash flows after a 7.00% return	15.00% of net cash flows after a 6.00% return

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(1) Represents amount of shares registered to offer pursuant to each Sponsored Company’s public offering and includes the follow-on public offering of up to $700 million for NorthStar Healthcare.

(2) Includes capital raised through dividend reinvestment plans.

(3) Assets represent principal amount funded or allocated for debt investments originated or acquired and the cost of all other investments, including expenses and any financing attributable to such investments, less any principal received on debt and securities investments (or our proportionate share thereof in the case of an investment made in a joint venture).

(4) Calculated based on the amount funded or allocated by our Sponsored Companies to originate or acquire investments, including acquisition expenses and any financing attributable to such investments (or the proportionate share thereof in the case of an equity investment made through a joint venture).

(5) Calculated based on contractual sales price of each investment sold.

(6) We are entitled to receive distributions equal to 15% of net cash flow of the respective Sponsored Company, whether from continuing operations, repayment of loans, disposition of assets or otherwise, but only after stockholders have received, in the aggregate, cumulative distributions equal to their invested capital plus the respective cumulative, non-compounded annual pre-tax return (as noted in the table above) on such invested capital.

(7) The Healthcare Strategic Partnership (refer to Related Party Arrangements) is entitled to the incentive fees earned from managing NorthStar Healthcare, of which we earn our proportionate interest.

(8) NorthStar Healthcare successfully completed its public offering on February 2, 2015 by raising $1.1 billion in capital. We began raising capital for NorthStar Healthcare’s follow-on public offering at the end of February 2015.

(9) Any asset management and other fees incurred by NorthStar/RXR New York Metro will be shared between us and RXR Realty as co-sponsors.

(10) We expect to begin raising capital for NorthStar/RXR New York Metro in the second half of 2015.

(11) Offering period subject to extension as determined by the board of directors of each Sponsored Company.

Pursuant to each of the advisory agreements with our current Sponsored Companies, we may determine, in our sole discretion, to defer or waive, in whole or in part, certain asset management and other fees incurred. In considering whether to defer or waive any such fees, we evaluate the specific facts and circumstances surrounding the incurrence of a particular fee and make our decision on a case by case basis.

The following table presents a summary of our current Sponsored Companies and their capital raising activity for the three months endedMarch 31, 2015, year ended December 31, 2014 and from inception through May 6, 2015:

				Capital Raised (in thousands)(1)
				Three Months Ended		Year Ended		From inception through
	Primary Strategy	Offering Amount	Offering Period	March 31, 2015		December 31, 2014		May 6, 2015
NorthStar Income	CRE Debt	$1.1 billion	Completed July 2013	$	10,747	$	42,661	$	1,206,193
NorthStar Healthcare	Healthcare Equity and Debt	$1.8 billion(2)	Ends February 2017(2)	138,507		867,245		1,162,052
NorthStar Income II	CRE Debt	$1.65 billion	Ends May 2016(3)	179,463		280,296		560,196
NorthStar/RXR New York Metro	New York City CRE Equity and Debt	$2.0 billion	Ends February 2017(3)	—		—		—
NorthStar Corporate	Senior and subordinate loans to middle-market companies	$1.0 billion	(4)	—		—		—

__________________

(1) Includes capital raised through dividend reinvestment plans.

(2) NorthStar Healthcare successfully completed its public offering on February 2, 2015 by raising $1.1 billion in capital. We began raising capital for NorthStar Healthcare’s follow-on public offering at the end of February 2015.

(3) Offering period subject to extension as determined by the board of directors of each company.

(4) Offering period will commence upon its registration statement being declared effective by the SEC.

Distribution Support

NorthStar Realty committed to invest up to $10 million in each of our Sponsored Companies that are in their offering stage. In addition, consistent with its past practices, NorthStar Realty will commit up to $10 million for distribution support in any Sponsored Company that we may sponsor, up to a total of five new companies per year.

The distribution support agreement related to NorthStar/RXR New York Metro is an obligation of both NorthStar Realty and RXR Realty, where each agreed to purchase up to an aggregate of $10 million in Class A common stock during the two-year period following commencement of the offering, with NorthStar Realty and RXR Realty agreeing to purchase 75% and 25% of any shares purchased, respectively.

Payment of Costs and Expenses and Expense Allocation

In addition, we are entitled to certain expense allocations for costs paid on behalf of our Sponsored Companies which include: (i) reimbursement for organization and offering costs such as professional fees and other costs associated with the formation and offering of the Sponsored Company; and (ii) reimbursement for direct and indirect operating costs such as certain salaries, equity-based compensation and professional and other costs associated with managing the operations of the Sponsored Company. The following table presents a summary of the expense arrangements with our current Sponsored Companies:

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	NorthStar Income	NorthStar Healthcare	NorthStar Income II	NorthStar/RXR New York Metro
Organization and offering costs (1)	$11.0 million (2)	$22.5 million, or 1.5% of the proceeds expected to be raised from the offering  (4)	$24.8 million, or 1.5% of the proceeds expected to be raised from the offering (4)	$30.0 million, or 1.5% of the proceeds expected to be raised from the offering(4)
Operating costs (3)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.00% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)

__________________

(1) Represents reimbursement for organization and offering costs paid on behalf of our Sponsored Companies in connection with their respective offerings. We are facilitating the payment of organization and offering costs on behalf of our Sponsored Companies.

(2) Represents the total expense allocation for organization and offering costs through the end of the offering period in July 2013.

(3) Calculated based on the four preceding fiscal quarters not to exceed the greater of: (i) 2.0% of each Sponsored Company’s average invested assets; or (ii) 25.0% of each Sponsored Company’s net income determined without reduction for any additions to reserves for depreciation, loan losses or other similar non-cash reserves and excluding any gain from the sale of assets for that period.

(4) Excludes shares being offered pursuant to dividend reinvestment plans.

Sources of Operating Revenues and Cash Flows

We primarily generate revenue from asset management, incentive and other fee income pursuant to contractual arrangements with our Managed Companies. We also generate revenue from commission income from selling equity in our Sponsored Companies. Effective July 1, 2014, we began generating revenue from asset management, incentive and other fee income from NorthStar Realty in addition to our Sponsored Companies. Additionally, we record equity in earnings and receive distributions from our unconsolidated ventures.

Profitability and Performance Metrics

We calculate certain metrics to evaluate the profitability and performance of our business.

• CAD is a non-GAAP measure that provides investors and management with a meaningful indicator of operating performance (refer to “Non-GAAP Financial Measure” for a description of this metric); and

• Our ability to raise capital for our Managed Companies, which in turn grows the assets of our Managed Companies, is a driver of our ability to grow our fee income.

Outlook and Recent Trends

As an asset manager, we and the assets of our Managed Companies are impacted by general market and economic conditions. We have focused to date on strategically managing our real estate investments platform but we may determine to expand the breadth of our business. Historically, we have principally managed U.S. commercial real estate assets and have more recently expanded internationally. Consequently, we expect that global markets and economic conditions will have a greater impact on our business in the future.

Liquidity and capital started to become more available in early 2012 for the commercial real estate markets to stronger sponsors and both Wall Street and commercial banks began to more actively provide credit to real estate borrowers accelerating the pace of investment in real estate. In late 2012, in order to stimulate growth, several of the world’s largest central banks acted in a coordinated effort through massive injections of stimulus in the financial markets, which has facilitated keeping interest rates low since then.

A proxy for the liquidity in the commercial real estate market is non-agency commercial mortgage backed securities, or CMBS, issuance. Approximately $80 billion and $88 billion of non-agency CMBS was issued in the United States in 2013 and 2014, respectively, with industry experts currently predicting approximately $100 billion of non-agency CMBS issuance in 2015. In the first quarter 2015, approximately $25 billion of new CMBS issuance occurred in the United States keeping the market on pace for the current projection of $100 billion for 2015. We believe the U.S. economy is on a healthy growth path and that the U.S. Federal Reserve is on track to begin raising rates in 2015. However, there are concerns about low inflation in the United States, a stronger U.S. dollar, slow global growth and international market volatility. Many other global central banks are easing monetary conditions to combat their own problems with low inflation and slow growth.

The European economy has also been steadily recovering.  However, regional disparities continue to persist as economies recover at differing speeds. We believe that the European Central Bank’s €1.1 trillion “quantitative easing” program, along with historically low interest rates and the depreciation of the euro, has nonetheless created a compelling long-term investment environment in Europe.  Real estate transaction volume in Europe has continued to climb, with office transactions representing over one-third of the volume in 2014. As financial institutions continue to deleverage, we anticipate that there will be further opportunities to acquire portfolios and assets at an attractive long term basis.

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Valuations in the commercial real estate markets have generally improved since bottoming out in 2009. Robust investor demand in 2014 for commercial real estate increased transaction activity and prices as rent and vacancy fundamentals improved across most property sectors and are forecasted to continue to improve in 2015. However, global economic and political headwinds remain. For instance, global market instability and the risk that maturing commercial real estate debt may have difficulties being refinanced, among other factors, may continue to cause periodic volatility in the commercial real estate market for some time. It is currently estimated that approximately $1.4 trillion of commercial real estate debt in the United States will mature through 2018. While there is an increased supply of liquidity and improved fundamentals in the commercial real estate market, we still anticipate that certain of these loans will not be able to be refinanced, potentially inhibiting growth and contracting credit.

As an active asset manager in the retail capital raising industry, historically focusing on the non-traded sector, we actively monitor market fundamentals and trends. After showing resiliency during the economic downturn between 2007 and 2010, the non-traded sector experienced strong growth over recent years with approximately $16 billion of equity being raised for programs in this space in 2014 alone. We anticipate that capital raising in 2015 will remain strong as we monitor a variety oftrends in this industry including a number of regulatory changes like the implementation of FINRA 15-02 and the Department of Labor’s recent proposal on a fiduciary standard for retirement accounts.

Due to generally positive market dynamics and our expertise and industry relationships, we continue to see a robust pipeline of investment opportunities that have credit qualities and yield profiles that are consistent with our underwriting standards and that we believe offer the opportunity to meet or exceed our Managed Companies, targeted returns, thereby increasing our assets under management and fee income. We also believe the opportunity exists to accelerate our growth through accretive investments in third party asset managers. While we remain optimistic that we will continue to be able to generate and capitalize on an attractive pipeline of opportunities, there is no assurance that will be the case.

Financing Strategy

Our organizational documents do not limit our capacity to use leverage or the amount we may use. Our financing objective is to manage our capital structure effectively in order to provide sufficient capital to execute our business strategies and in turn create value for stockholders. We may seek to access a wide range of secured and unsecured debt and public and private equity capital sources to fund our investment activities and asset growth. We may borrow on a credit facility and from time to time use derivative instruments primarily to manage interest rate risk. We do not intend to use derivatives to speculate.

Portfolio Management

Credit risk management is our ability to manage our investments and investments of our Managed Companies in a manner that preserves capital and income and minimizes losses that would decrease income. Upon commencement of operations, we perform portfolio management on behalf of our Managed Companies. We maintain a comprehensive portfolio management process that generally includes day-to-day oversight by the portfolio management and servicing team, regular management meetings and an exhaustive quarterly credit review process. These processes are designed to enable management to evaluate and proactively identify asset-specific credit issues and trends on a portfolio-wide basis. Nevertheless, we cannot be certain that such review will identify all issues within the portfolios of our Managed Companies due to, among other things, adverse economic conditions or events adversely affecting specific assets; therefore, potential future losses at our Managed Companies may also stem from investments that are not identified during these credit reviews. We use many methods to actively manage the assets of our Managed Companies such as frequent re-underwriting and dialogue with borrowers/tenants/operators/partners and regular inspections of our Managed Companies’ collateral, modification to debt terms, taking title to collateral or selling assets when we can obtain a price that is attractive relative to its risk. In addition, we seek to utilize services of certain strategic partnerships and joint ventures with third parties with expertise in commercial real estate or other sectors and markets to assist our portfolio management of our Managed Companies. The portfolio management team, under the direction of the Investment Committee, uses many methods to actively manage our asset base to preserve our income and capital.

Critical Accounting Policies

Principles of Consolidation

Our consolidated financial statements include the accounts of NorthStar Asset Management Group Inc. and its consolidated subsidiaries.

Variable Interest Entities

A variable interest entity, or VIE, is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. We base the qualitative analysis on our review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity.

We reassess the initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events.

A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents has both the: (i) power to direct the activities that most significantly impact the VIE’s economic performance; and (ii) obligation to absorb the losses of the VIE or the right to receive the benefits from the VIE, which could be significant to the

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VIE. We determine whether we are the primary beneficiary of a VIE by considering qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of its investment; the obligation or likelihood for us or other interests to provide financial support; consideration of the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders and the similarity with and significance to our business activities and the other interests. We reassess the determination of whether we are the primary beneficiary of a VIE each reporting period. Significant judgments related to these determinations include estimates about the current and future fair value and performance of investments held by these VIEs and general market conditions.

We evaluate our Managed Companies, investments in unconsolidated ventures and securitization financing transactions to which we are the special servicer to determine whether they are a VIE.

Voting Interest Entities

A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If we have a majority voting interest in a voting interest entity, the entity will generally be consolidated. We do not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party.

We perform on-going reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework.

Investments in Unconsolidated Ventures

A non-controlling, unconsolidated ownership interest in an entity may be accounted for using the equity method, at fair value or the cost method.

Under the equity method, the investment is adjusted each period for capital contributions and distributions and its share of the entity’s net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in such governing documents.

We may account for an investment in an unconsolidated entity at fair value by electing the fair value option. We record the change in fair value for our share of the projected future cash flow of such investments from one period to another in equity in earnings (losses) from unconsolidated ventures in the consolidated statements of operations. Any change in fair value attributed to market related assumptions is considered unrealized gain (loss).

We may account for an investment that does not qualify for equity method accounting or for which the fair value option was not elected using the cost method if we determine the investment in the unconsolidated entity is insignificant. Under the cost method, equity in earnings is recorded as dividends are received to the extent they are not considered a return of capital, which is recorded as a reduction of cost of the investment.

Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that could affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates and assumptions.

Revenue Recognition

Asset Management and Other Fees

Asset management and other fees include asset management, incentive and other fees, such as acquisition and disposition fees, earned from our Managed Companies. Base asset management and other fees are recognized based on contractual terms specified in the underlying governing documents in the periods during which the related services are performed and the amounts have been contractually earned. Incentive fees and payments are recognized subject to the achievement of return hurdles in accordance with the respective terms set forth in the governing documents of our Managed Companies.

Selling Commission and Dealer Manager Fees and Commission Expense

Selling commission and dealer manager fees represent income earned by us for selling equity in our Sponsored Companies through NorthStar Securities. Selling commission and dealer manager fees and commission expense are accrued on a trade date basis.

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Equity-Based Compensation

We account for equity-based compensation awards, including awards granted to co-employees, using the fair value method, which requires an estimate of fair value of the award. Awards may be based on a variety of measures such as time, performance, market or a combination thereof. For time-based awards, fair value is determined based on the stock price on the grant date. We recognize compensation expense over the vesting period on a straight-line basis. For performance-based awards, fair value is determined based on the stock price at the date of grant and an estimate of the probable achievement of such measure. We recognize compensation expense over the requisite service period, net of estimated forfeitures, using the accelerated attribution expense method. For market-based measures, fair value is determined using a Monte Carlo analysis under a risk-neutral premise using a risk-free interest rate. We recognize compensation expense over the requisite service period, net of estimated forfeitures, on a straight-line basis. For awards with a combination of performance or market measures, we estimate the fair value as if it were two separate awards. First, we estimate the probability of achieving the performance measure. If it is not probable the performance condition will be met, we recognize the compensation expense based on the fair value of the market measure, as described above. This expense is recorded even if the market-based measure is never met. If the performance-based measure is subsequently estimated to be achieved, we record compensation expense based on the performance-based measure. We would then record a cumulative catch-up adjustment for any additional compensation expense.

Equity-based compensation issued to non-employees is accounted for using the fair value of the award at the earlier of the performance commitment date or performance completion date. The awards are remeasured every quarter based on the stock price as of the end of the reporting period until such awards vest, if any.

Income Taxes

Certain of our subsidiaries are subject to taxation by federal, state, local and foreign authorities for the periods presented. On March 13, 2015, we restructured by converting, under Delaware law, an existing limited liability company disregarded as separate from us for federal income tax purposes to a Delaware limited partnership and admitting as limited partners LTIP Unit Holders, forming our new operating partnership, or Operating Partnership. The Operating Partnership is taxed as a partnership for federal income tax purposes and consequently, its items of income gain, loss, deduction and credit are passed through to, and included in, the taxable income of each of its partners including us. For the period prior to March 13, 2015, we and our

U.S. subsidiaries will file consolidated federal income tax returns. Income taxes are accounted for by the asset/liability approach in accordance with U.S. GAAP. Deferred taxes, if any, represent the expected future tax consequences when the reported amounts of assets and liabilities are recovered or paid. Such amounts arise from differences between the financial reporting and tax bases of assets and liabilities and are adjusted for changes in tax laws and tax rates in the period which such changes are enacted. A provision for income tax represents the total of income taxes paid or payable for the current period, plus the change in deferred tax assets and liabilities.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, or FASB, issued an accounting update requiring a company to recognize as revenue the amount of consideration it expects to be entitled to in connection with the transfer of promised goods or services to customers.  The accounting standard update will replace most of the existing revenue recognition guidance currently promulgated by U.S. GAAP. In April 2015, the FASB proposed a one-year deferral of the effective date of the new revenue standard to January 1, 2018. We are in the process of evaluating the impact, if any, of the update on our consolidated financial positions, results of operations and financial statement.

In February 2015, the FASB issued updated guidance that changes the rules regarding consolidation. The pronouncement eliminates specialized guidance for limited partnerships and similar legal entities and removes the indefinite deferral for certain investment funds. The new guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, with early adoption permitted. We are currently assessing the impact of the guidance on our consolidated financial position, results of operations and financial statement disclosures.

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Results of Operations

Comparison of the Three Months EndedMarch 31, 2015 to March 31, 2014 (dollars in thousands):

The consolidated financial statements for the three months endedMarch 31, 2015 represent our results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. Our historical financial information for the three months endedMarch 31, 2014 represents a carve-out of revenues and expenses attributable to us related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months endedMarch 31, 2015 may not be comparable to our results of operations reported for the prior period presented. The following table represents our results of operations for the three months endedMarch 31, 2015 and 2014 (dollars in thousands):

	Three Months Ended March 31,						Increase (Decrease)
	2015			2014			Amount			%
Revenues
Asset management and other fees, related parties	$	61,379		$	8,669		$	52,710		608.0	%
Selling commission and dealer manager fees, related parties	29,923			14,548			15,375			105.7	%
Other income	400			121			279			230.6	%
Total revenues	91,702			23,338			68,364			292.9	%
Expenses
Commission expense	27,695			13,560			14,135			104.2	%
Transaction costs	302			2,550			(2,248		)	(88.2	)%
Other expense	711			30			681			NM
General and administrative expenses
Salaries and related expense	12,145			7,936			4,209			53.0	%
Equity-based compensation expense	13,618			5,694			7,924			139.2	%
Other general and administrative expenses	6,105			1,873			4,232			226.0	%
Total general and administrative expenses	31,868			15,503			16,365			105.6	%
Total expenses	60,576			31,643			28,933			91.4	%
Unrealized gain (loss) on foreign exchange	(348		)	—			(348		)	N/A
Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax (benefit) expense	30,778			(8,305		)	39,083			(470.6	)%
Equity in earnings (losses) of unconsolidated ventures	(870		)	—			(870		)	N/A
Income (loss) before income tax (benefit) expense	29,908			(8,305		)	38,213			(460.1	)%
Income tax (benefit) expense	7,938			—			7,938			N/A
Net income (loss)	$	21,970		$	(8,305	)	$	30,275		(364.5	)%

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Asset Management and Other Fees

Asset management and other fees are comprised of fees from our Managed Companies summarized as follows (dollars in thousands):

	Three Months Ended March 31,
	2015		2014
NorthStar Realty:
Base fee	$	45,308	N/A
Incentive fee	2,943		N/A
Subtotal NorthStar Realty	48,251		N/A		(1)
Sponsored Companies:
Asset management fees	10,788		5,207		(2)
Acquisition fees	1,069		3,287		(3)
Disposition fees	1,271		175		(4)
Subtotal Sponsored Companies	13,128		8,669
Total	$	61,379	$	8,669

__________________

(1) We began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty.

(2) The increase was driven by the growth in assets of our Sponsored Companies. As of March 31, 2015 and 2014, our Sponsored Companies held aggregate assets of $5.5 billion and $2.2 billion, respectively.

(3) The decrease was due to decreased new investment activity of our Sponsored Companies in the first quarter 2015 as compared to the same period in 2014.

(4) The increase was driven by increased repayments of debt investments from NorthStar Income and NorthStar Income II in 2015.

Selling Commission and Dealer Manager Fees

We earn net commission income through NorthStar Securities for selling equity in our Sponsored Companies.

Selling commission and dealer manager fees represent fees earned for selling equity in our Sponsored Companies through NorthStar Securities. Pursuant to dealer manager agreements between NorthStar Securities and our Sponsored Companies, we generally receive selling commissions of up to 7% of gross offering proceeds raised, which we reallow to participating broker-dealers. In addition, we also generally receive a dealer manager fee of up to 3% of gross offering proceeds raised, a portion of which is typically also reallowed to participating broker-dealers and paid to certain employees of NorthStar Securities. Selling commission increased due to higher capital raising activity for the three months endedMarch 31, 2015 as compared to the same period in 2014.

The following table presents equity raised by our Sponsored Companies for the periods presented (dollars in thousands):

	Three Months Ended March 31, (1)
	2015		2014
NorthStar Income	$	10,747	$	8,326	(2)
NorthStar Healthcare	138,507		101,732		(3)
NorthStar Income II	179,463		48,247		(4)
Total	$	328,717	$	158,305

_________________

(1) Includes capital raised through dividend reinvestment plans.

(2) NorthStar Income successfully completed its primary offering on July 1, 2013.

(3) Shortly after December 31, 2014, NorthStar Healthcare completed its initial primary offering and began raising capital for its follow-on offering at the end of the first quarter 2015.

(4) Capital raising pace at NorthStar Income II accelerated in the first quarter 2015.

Other Income

Other income primarily represents special servicing fees related to certain securitization transactions at the corporate level. We are a rated special servicer by Standard & Poor’s and Fitch Ratings and we receive special servicing fees for services related to certain securitization transactions. The increase is primarily the result of more services performed in 2015.

Expenses

Commission Expense

Commission expense represents fees to participating broker-dealers with whom we have selling agreements to raise capital for our Sponsored Companies and commissions to employees of NorthStar Securities. Commission income and expense both

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increased due to higher capital raising activity for the three months endedMarch 31, 2015 as compared to the same period in 2014.

Transaction Costs

For the three months ended March 31, 2015, transaction costs represent costs associated with the restructure of our holding company to include an operating partnership. For the three months ended March 31, 2014, transaction costs represent costs such as professional fees associated with the spin-off in 2014.

Other Expense

Other expense primarily represents depreciation expense and foreign exchange gain (loss) at the corporate level.

General and Administrative Expenses

General and administrative expenses are principally incurred at the corporate level except as it relates to direct compensation expense and other costs incurred at our broker-dealer, which is part of our broker-dealer segment.

General and administrative expenses increased$16.4 million primarily attributable to the following:

Salaries and related expense increased$4.2 million primarily due to most employees of NorthStar Realty becoming our employees upon the spin-off as well as hiring additional employees for increased activity, offset by an allocation to our Managed Companies.

Equity-based compensation expense increased$7.9 million primarily due to the prior period amount only representing an allocation of equity-based compensation expense related to NorthStar Realty’s historical asset management business. For the three months ended March 31, 2015, we recognized $13.6 million of equity-based compensation expense related to the NSAM Stock Plan (as defined below) of $10.2 million and NorthStar Realty Equity Plans (as defined below) of $3.4 million. For the three months ended March 31, 2014, we were allocated $5.7 million of equity-based compensation expense.

Other general and administrative expenses increased$4.2 million primarily due to the spin-off as the prior period amount only represented an allocation of other general and administrative expense related to NorthStar Realty’s historical asset management business.

Equity in earnings (losses) of unconsolidated ventures

Equity in earnings (losses) of unconsolidated ventures represents interests in two investments that we acquired in 2014 and one that we acquired in 2015. For the three months ended March 31, 2015, we recognized in equity in earnings, operating income of $2.4 million, which includes $1.0 million of equity-based compensation expense and $2.3 million of depreciation and amortization expense.

Income Tax (Benefit) Expense

Effective July 1, 2014, we are subject to both domestic and international income tax.

Liquidity and Capital Resources

Our capital sources may include cash flow provided from operating activities, primarily from management and other fee income paid to us from our Managed Companies, as well as borrowings and the issuance of common stock. In addition, in connection with the spin-off, we have available under a revolving credit agreement with NorthStar Realty up to $250 million of financing to us subject to certain conditions (refer to Related Party Arrangements). Our primary uses of liquidity include operating expenses, dividends and acquisitions of direct investments. On a quarterly basis, our board of directors determines an appropriate common stock dividend based upon numerous factors, including CAD, availability of existing cash balances, general economic conditions and economic conditions that more specifically impact our business or prospects. Future dividend levels are subject to adjustment based upon our evaluation of the factors described above, as well as other factors that our board of directors may, from time-to-time, deem relevant to consider when determining an appropriate common stock dividend.

In addition, in April 2015, our board of directors authorized the repurchase of up to $400 million of its outstanding common stock.  The authorization will expire in twelve months, unless otherwise extended by the Company’s board of directors. The Company was in a black out period since establishment of the plan and consequently, as of May 8, 2015, we have not repurchased any shares.

We expect that our cash flow from operating activities and available financing will be sufficient to satisfy our liquidity needs. As of March 31, 2015, we had a receivable, related parties balance primarily from our Managed Companies of $84 million, of which we received $51 million subsequent to March 31, 2015.

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We currently believe that our existing sources of funds should be adequate for the purposes of meeting our short-term liquidity needs. Unrestricted cash as of May 6, 2015, was approximately $93 million.

Cash Flows

The following presents a summary of our consolidated statements of cash flows for the three months endedMarch 31, 2015 and 2014 (dollars in thousands):

	Three Months Ended March 31,
Cash flow provided by (used in):	2015			2014
Operating activities	$	10,220		$	(7,536	)
Investing activities	(33,081		)	—
Financing activities	(32,367		)	9,577
Effect of foreign exchange rate changes on cash	(348		)	—
Net increase (decrease) in cash	$	(55,576	)	$	2,041

Three Months EndedMarch 31, 2015 Compared to March 31, 2014

Net cash provided by operating activities was $10 million for the three months endedMarch 31, 2015 compared to $8 million used in operating activities for the three months endedMarch 31, 2014. The increase was due to asset management and other fees from our Managed Companies, offset by the payment of bonuses. Three months ended March 31, 2015 excludes $51 million of fees received subsequent to March 31, 2015.

Net cash used in investing activities represents our direct investments, including the Island Interest for $36 million offset by distributions of $3 million.

Net cash used in financing activities was $32 million for the three months endedMarch 31, 2015 compared to $10 million provided by financing activities for the three months endedMarch 31, 2014. The decrease was primarily due to $20 million for the payment of dividends and $12 million for withholding tax related to vesting and net settlement of RSUs.

Off-Balance Sheet Arrangements

We have certain arrangements which do not meet the definition of off-balance sheet arrangements, but do have some of the characteristics of off-balance sheet arrangements such as our investments in asset management businesses. Refer to Note 4. “Investments in Unconsolidated Ventures” in Item 1. “Financial Statements” for a discussion of such unconsolidated ventures in our consolidated financial statements. Our exposure to loss is limited to the carrying value of our investment.

Related Party Arrangements

NorthStar Realty

Investment Opportunities

Under the management agreement, NorthStar Realty agreed to make available to us for the benefit of our Managed Companies, including NorthStar Realty, all investment opportunities sourced by NorthStar Realty. We agreed to fairly allocate such opportunities among our Managed Companies, including NorthStar Realty, in accordance with our investment allocation policy. Pursuant to the management agreement, NorthStar Realty is entitled to fair and reasonable compensation for its services in connection with any loan origination opportunities sourced by it, which may include first mortgage loans, subordinate mortgage interests, mezzanine loans and preferred equity interests, in each case relating to commercial real estate.

We provide services with regard to such areas as payroll, human resources and employee benefits, financial systems management, treasury and cash management, accounts payable services, telecommunications services, information technology services, property management services, legal and accounting services and various other corporate services to NorthStar Realty as it relates to its loan origination business for commercial real estate debt.

Credit Agreement

In connection with the spin-off, we entered into a revolving credit agreement with NorthStar Realty pursuant to which NorthStar Realty makes available to us, on an “as available basis,” up to $250 million of financing with a maturity of June 30, 2019 at LIBOR plus 3.50%. The revolving credit facility is unsecured. We expect to use the proceeds for general corporate purposes, including potential future acquisitions. In addition, we may use the proceeds to acquire assets on behalf of our Managed Companies that we intend to allocate to such Managed Company but for which such Managed Company may not then have immediately available funds. The terms of the revolving credit facility contain various representations, warranties, covenants and conditions, including the condition that NorthStar Realty’s obligation to advance proceeds to us is dependent upon NorthStar Realty and its affiliates having at least $100 million of either unrestricted cash and cash equivalents or amounts available under committed lines of credit, after taking into account the amount we seek to draw under the facility. As of March 31, 2015, we had no borrowings outstanding under the credit agreement.

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Healthcare Strategic Joint Venture

In January 2014, we entered into a long-term strategic partnership with James F. Flaherty III, former Chief Executive Officer of HCP, Inc., focused on expanding our healthcare business into a preeminent healthcare platform, or the Healthcare Strategic Partnership. In connection with the partnership, Mr. Flaherty oversees and seeks to grow both NorthStar Realty’s healthcare real estate portfolio and the portfolio of NorthStar Healthcare. In connection with entering into the partnership, NorthStar Realty granted Mr. Flaherty certain RSUs, half of which became our RSUs as a result of NorthStar Realty’s reverse stock split and the spin-off. The Healthcare Strategic Partnership is entitled to incentive fees ranging from 20% to 25% above certain hurdles for new and existing healthcare real estate investments held by NorthStar Realty and NorthStar Healthcare. The partnership will also be entitled to any incentive fees earned from NorthStar Healthcare or any future healthcare non-traded vehicles sponsored by us, NorthStar Realty or any affiliates, as well as future healthcare non-traded vehicles sponsored by AHI Ventures. For the three months ended March 31, 2015 and 2014, we did not earn incentive fees related to the Healthcare Strategic Partnership. On February 2, 2015, in connection with the completion of NorthStar Healthcare’s initial primary offering, we issued 20,305 RSUs to Mr. Flaherty.

AHI Venture

In connection with the AHI Interest, AHI Newco, LLC, or AHI Ventures, a direct wholly-owned subsidiary of AHI, provides certain asset management, property management and other services to our affiliates assisting in managing the current and future healthcare assets (excluding any joint venture assets) of NorthStar Realty and other Sponsored Companies, including the assets formerly owned by Griffin-American Healthcare REIT II, Inc., or Griffin-American, and its former operating partnership, Griffin-American Healthcare REIT II Holdings, LP, or Griffin-America OP portfolio. AHI Ventures receives a base management fee of $0.6 million per year plus 0.50% of the equity invested by NorthStar Realty in future healthcare assets (excluding assets in the Griffin-American OP portfolio and other joint ventures) that AHI Ventures may manage. AHI Ventures may also participate in the incentive fees earned by us and our affiliates with respect to new and existing healthcare real estate investments held by NorthStar Realty and NorthStar Healthcare, including the Griffin-American OP portfolio, any future healthcare non-traded vehicles sponsored by us, NorthStar Realty or any affiliates, as well as any future healthcare non-traded vehicles sponsored by AHI Ventures. AHI Ventures would also be entitled to additional base management fees should it manage assets on behalf of any other Managed Companies. AHI Ventures also intends to directly or indirectly sponsor, co-sponsor, form, register, market, advise, manage and/or operate investment vehicles that are intended to invest primarily in healthcare real estate assets. In addition, Mr. Flaherty acquired a 12% interest, as adjusted, in AHI Ventures.

Island Venture

Island is a leading, independent select service hotel management company that currently manages 149 hotel properties, representing $3.7 billion, of which 101 hotel properties are owned by NorthStar Realty. Island provides certain asset management, property management and other services to NorthStar Realty to assist in managing its hotel properties. Island receives a base management fee of 2.5% to 3.0% of the current monthly revenue of the NorthStar Realty hotel properties it manages for NorthStar Realty.

RXR Realty

In December 2013, NorthStar Realty entered into a strategic transaction with RXR Realty, the co-sponsor of NorthStar/RXR New York Metro. The investment in RXR Realty includes an approximate 30% equity interest. NorthStar Realty’s equity interest in RXR Realty is structured so that we are entitled to certain fees in connection with RXR Realty’s investment management business. 

Recent Developments

Dividends

On May 5, 2015, we declared a dividend of $0.10 per share of common stock. The common stock dividend will be paid on May 22, 2015 to stockholders of record as of the close of business on May 18, 2015.

Share Buyback

In April 2015, our board of directors authorized the repurchase of up to $400 million of our outstanding common stock. The authorization will expire in twelve months, unless otherwise extended by our board of directors. We were in a black out period since establishment of the plan and consequently, as of May 8, 2015, we have not repurchased any shares.

Non-GAAP Financial Measure

We believe that CAD provides investors and management with a meaningful indicator of operating performance. Management also uses CAD, among other measures, to evaluate profitability. In addition, the incentive fees to which we are entitled pursuant to our management agreement with NorthStar Realty are determined using NorthStar Realty’s CAD as a performance

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metric. We believe that CAD is useful because it adjusts net income (loss) for a variety of non-cash, one-time and certain non-recurring items.

We calculate CAD by subtracting from or adding to net income (loss) attributable to common stockholders, non-controlling interest attributable to the Operating Partnership, and the following items: equity-based compensation, depreciation related items, foreign currency gains (losses), straight-line rent, adjustments for joint ventures, deferred tax (benefit) expense related to timing differences that will not reverse in the current year and transaction and other costs. In future periods, such adjustments may include amortization of deferred financing costs, impairment on goodwill and other intangible assets and other one-time events pursuant to changes in U.S. GAAP and certain other non-recurring items. These items, if applicable, include any adjustments for unconsolidated ventures. Management also believes that quarterly distributions are principally based on operating performance and our board of directors includes CAD as one of several metrics it reviews to determine quarterly distributions to stockholders.

CAD should not be considered as an alternative to net income (loss) attributable to common stockholders, determined in accordance with U.S. GAAP, as an indicator of operating performance. In addition, our methodology for calculating CAD may differ from the methodologies used by other comparable companies when calculating the same or similar supplemental financial measures and may not be comparable with these companies.

The following table presents a reconciliation of CAD to net income (loss) attributable to common stockholders for the three months ended March 31, 2015 (dollars in thousands):

Net income (loss) attributable to common stockholders	$	21,768
Non-controlling interest attributable to the Operating Partnership	202
Adjustments:
Equity-based compensation(1)	13,618
Deferred tax (benefit) expense	(1,295		)
Adjustment related to joint ventures(2)	3,286
Other(3)	1,187
CAD	$	38,766

_______________

(1) Includes equity-based compensation expense related to grants of NorthStar Realty stock issued in years prior to July 1, 2014 that were split in

connection with the spin-off, one-time grants of our stock issued in connection with the spin-off and annual grants of our stock to certain employees.

(2) Includes $1.0 million of equity-based compensation expense and $2.3 million of depreciation and amortization expense related to an unconsolidated venture.

(3) Includes $0.5 million of depreciation and amortization expense, $0.1 million of straight-line rental expense, $0.3 million of transaction costs and $0.3 million of foreign currency related adjustments.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk is primarily related to our role providing asset management and other services to our Managed Companies, both in the United States and internationally, and its effect on the asset management, incentive and other fees we earn. Our exposure to market risk will increase as we expand into new asset classes and geographies, and as a result, we will seek to enter into strategic partnerships and joint ventures with third parties with expertise in commercial real estate or other sectors and markets to augment our business operations while at the same time benefiting from the fee streams generated by such strategic partnerships and joint ventures. Our asset management, incentive and other fees are primarily driven by the ability of our Managed Companies to grow by raising capital, which will in turn be driven by their investment activities, overall performance and various factors beyond our control, including but not limited to, monetary and fiscal policies, domestic and international economic conditions and political considerations. The effect of such risks on our asset management, incentive and other fee agreements vary based on the management contract with the respective Managed Company.

The NorthStar Realty management agreement consists of a base management fee which increases as equity is raised and an incentive fee which is based on the performance of NorthStar Realty using CAD as an operating metric. The base management fee currently represents the majority of the fee. The ability of NorthStar Realty to grow is dependent on access to the capital markets to raise equity and/or debt capital. To the extent that general capital markets activity slows down or comes to a halt (as was the case during the recession that began in 2008), NorthStar Realty may have difficulty growing. This risk is based on micro and macro-economic market factors including but not limited to disruptions in the equity and debt capital markets and institutional lending market, including the lack of access to capital or prohibitively high costs of obtaining or replacing capital. Despite recent improvements, the markets could suffer another severe downturn and another liquidity crisis could emerge.

Our Sponsored Companies’ ability to sell equity is highly dependent upon the market and the efforts of our broker-dealer, NorthStar Securities. The retail business has experienced rapid growth, is highly competitive and has faced increased scrutiny in recent years. The number of entrants in the retail market space has grown significantly over the last several years and as a result, we are subject to significant competition from these and other companies seeking to raise capital in this market. Additionally, as a result of increased scrutiny, and accompanying media attention and a rapidly changing regulatory environment, our retail businesses may face increased difficulties in raising capital in their offerings due to market perception. These factors may affect our ability to raise capital for our retail businesses and make investments on their behalf, both of which could materially adversely affect our asset management, incentive and other fee income and the net commission income generated by our broker-dealer.

To a lesser extent, we are indirectly exposed to credit risk through the performance of our Managed Companies and direct investments. Credit risk relates to the ability of the individual investments to perform, for instance the ability for the borrowers’ underlying debt or securities investments to make required interest and principal payments on scheduled due dates. We seek to manage credit risk through a comprehensive credit analysis prior to making an investment, actively monitoring our portfolio and the underlying credit quality, including subordination and diversification of our portfolio. Our analysis is based on a broad range of real estate, financial, economic and borrower-related factors which we believe are critical to the evaluation of credit risk inherent in a transaction.

Foreign Currency Exchange Rate Risk

We are subject to risks related to changes in foreign currency exchange rates as a result of our international operations. As a result, changes in exchange rates may either positively or negatively affect our consolidated revenues and expenses (as expressed in U.S. dollars). We may use several strategies to mitigate our exposure through a combination of foreign currency derivative instruments and use non-U.S. denominated borrowings, where appropriate.

Non-U.S. Operations

We conduct business internationally, with a current focus on Europe. We currently have foreign offices in the United Kingdom, Luxembourg and Bermuda. We are subject to various risks, including, social instability, changes in governmental policies or policies of central banks, tax laws and policies, expropriation, nationalization, unfavorable political and diplomatic developments and changes in legislation relating to non-U.S. ownership. As we continue to expand internationally, we will continue to focus on monitoring and managing these risk factors as they relate to specific international investments.

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Item 4.  Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, management conducted an evaluation as required under Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended, or Exchange Act, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures to disclose material information otherwise required to be set forth in the Company’s periodic reports.

Internal Control over Financial Reporting

Changes in internal control over financial reporting.

There have not been any changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II: Other Information

Item 1. Legal Proceedings

We may be involved in various litigation matters arising in the ordinary course of our business. Although we are unable to predict with certainty the eventual outcome of any litigation, in the opinion of management, any legal proceedings are not expected to have a material adverse effect on our financial position or results of operations.

44

Item 6.   Exhibits

(a) 3. Exhibit Index:

Exhibit Number	Description of Exhibit
3.1	Amended and Restated Certificate of Incorporation of NorthStar Asset Management Group Inc. (incorporated by reference to Exhibit 4.1 to NorthStar Asset Management Group Inc.’s Registration Statement on Form S-8 (File No. 333-197104))
3.2	Amended and Restated Bylaws of NorthStar Asset Management Group Inc. (incorporated by reference to Exhibit 4.2 to NorthStar Asset Management Group Inc.’s Registration Statement on Form S-8 (File No. 333-197104))
10.1	Asset Management Agreement, dated as of June 30, 2014, between NSAM J-NRF Ltd and NorthStar Realty Finance Corp. (incorporated by reference to Exhibit 10.1 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.2	Separation Agreement, dated as of June 30, 2014, between NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp. (incorporated by reference to Exhibit 10.2 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.3	Contribution Agreement, dated as of June 30, 2014, between NorthStar Asset Management Group Inc. and NRFC Sub-REIT Corp. (incorporated by reference to Exhibit 10.3 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.4	Loan Origination Services Agreement, dated as of June 30, 2014, between NSAM US LLC and NorthStar Realty Finance Corp. (incorporated by reference to Exhibit 10.4 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.5	Tax Disaffiliation Agreement, dated as of June 30, 2014, between NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp. (incorporated by reference to Exhibit 10.5 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.6	Employee Matters Agreement, dated as of June 30, 2014, between NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp. (incorporated by reference to Exhibit 10.6 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.7	Advisory Agreement, dated as of June 30, 2014, by and among NSAM J-NSI Ltd, NorthStar Real Estate Income Trust, Inc., NorthStar Real Estate Income Trust Operating Partnership, LP and NorthStar Asset Management Group Inc. (incorporated by reference to Exhibit 10.7 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.8	Advisory Agreement, dated as of June 30, 2014, by and among NSAM J-NSHC Ltd, NorthStar Healthcare Income, Inc., NorthStar Healthcare Income Operating Partnership, LP and NorthStar Asset Management Group Inc. (incorporated by reference to Exhibit 10.8 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.9	Advisory Agreement, dated as of June 30, 2014, by and among NSAM J- NSII Ltd, NorthStar Real Estate Income II, Inc., NorthStar Real Estate Income Operating Partnership II, LP and NorthStar Asset Management Group Inc. (incorporated by reference to Exhibit 10.9 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.10	Credit Agreement, dated as of June 30, 2014, by and between NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp. (incorporated by reference to Exhibit 10.10 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.11†	Executive Employment Agreement, dated as of June 30, 2014, by and between NorthStar Asset Management Group Inc. and David T. Hamamoto (incorporated by reference to Exhibit 10.11 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.12†	Executive Employment Agreement and Agreement with Foreign Executive Officer, dated as of June 30, 2014, by and between NorthStar Asset Management Group, Ltd and Daniel R. Gilbert (incorporated by reference to Exhibit 10.12 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.13†	Executive Employment Agreement, dated as of June 30, 2014, by and between NorthStar Asset Management Group Inc. and Albert Tylis (incorporated by reference to Exhibit 10.13 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.14†	Executive Employment Agreement, dated as of June 30, 2014, by and between NorthStar Asset Management Group Inc. and Debra A. Hess (incorporated by reference to Exhibit 10.14 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.15†	Executive Employment Agreement, dated as of June 30, 2014, by and between NorthStar Asset Management Group Inc. and Ronald J. Lieberman (incorporated by reference to Exhibit 10.15 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on July 1, 2014)
10.16†	NorthStar Asset Management Group Inc. 2014 Omnibus Stock Incentive Plan. (incorporated by reference to Exhibit 10.12 to Amendment No. 1 to NorthStar Asset Management Group Inc.’s Registration Statement on Form 10 (File No. 001-36301))
10.17†	NorthStar Asset Management Group Inc. Executive Incentive Bonus Plan. (incorporated by reference to Exhibit 10.13 to Amendment No. 1 to NorthStar Asset Management Group Inc.’s Registration Statement on Form 10 (File No. 001-36301))
10.18†	Form of Indemnification Agreement between NorthStar Asset Management Group Inc. and its directors and officers (incorporated by reference to Exhibit 10.20 to Amendment No. 3 to NorthStar Asset Management Group Inc.’s Registration Statement on Form 10 (File No. 001-36301))
10.19	Unit Purchase Agreement, dated as of November 5, 2014, by and among American Healthcare Investors LLC, HC AHI Holding Company, LLC, AHI Newco, LLC, Platform HealthCare Investor T-II, LLC, NorthStar Asset Management Group Inc. and Jeffrey T. Hanson, Danny Prosky and Mathieu B. Streiff (incorporated by reference to Exhibit 10.19 to NorthStar Asset Management Group Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014)
10.20	Amended and Restated Limited Liability Company Agreement of AHI Newco, LLC, dated as of December 8, 2014, by and among Platform Healthcare Investor T-II, LLC, American Healthcare Investors LLC, Flaherty Trust, NorthStar Asset Management Group Inc. and Jeffrey T. Hanson, Danny Prosky and Mathieu B. Streiff (incorporated by reference to Exhibit 10.20 to NorthStar Asset Management Group Inc.’s Annual Report on Form 10-K for the year ended December 31, 2014)
10.21	Unit Purchase Agreement, dated as of January 9, 2015, by and between Platform Hospitality Investor T-II, LLC and Island JV Member Inc. (incorporated by reference to Exhibit 10.1 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on January 15, 2015)

45

Exhibit Number	Description of Exhibit
10.22	Limited Liability Company Agreement of Island Hospitality Joint Venture, LLC, dated as of January 9, 2015, by and between Platform Hospitality Investor T-II, LLC and Island JV Member Inc. (incorporated by reference to Exhibit 10.2 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on January 15, 2015)
10.23	Agreement of Limited Partnership of NSAM LP, dated as of March 13, 2015, by and among NorthStar Asset Management Group Inc., as the General Partner and Limited Partner and the limited partners party thereto from time to time (incorporated by reference to Exhibit 10.1 to NorthStar Asset Management Group Inc.’s Current Report on Form 8-K filed on March 19, 2015)
31.1*	Certification by the Chief Executive Officer pursuant to 17 CFR 240.13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification by the Chief Financial Officer pursuant to 17 CFR 240.13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification by the Chief Executive Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification by the Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following materials from the NorthStar Asset Management Group Inc. Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2015 (unaudited) and December 31, 2014; (ii) Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2015 and 2014; (iii) Consolidated Statements of Equity for the three months ended March 31, 2015 (unaudited) and year ended December 31, 2014; (iv) Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2015 and 2014; and (v) Notes to Consolidated Financial Statements (unaudited)

† Denotes a management contract or compensatory plan or arrangement.

* Filed herewith.

46

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		NORTHSTAR ASSET MANAGEMENT GROUP INC.
Date:	May 11, 2015	By:	/s/ DAVID T. HAMAMOTO
				David T. Hamamoto
				Chairman and Chief Executive Officer
		By:	/s/ DEBRA A. HESS
				Debra A. Hess
				Chief Financial Officer

47

EX-31.1

EXHIBIT 31.1

CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER PURSUANT TO

17 CFR 240.13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David T. Hamamoto, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NorthStar Asset Management Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 11, 2015	By:	/s/ DAVID T. HAMAMOTO
			David T. Hamamoto
			Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION BY THE CHIEF FINANCIAL OFFICER PURSUANT TO

17 CFR 240.13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Debra A. Hess, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NorthStar Asset Management Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 11, 2015	By:	/s/ DEBRA A. HESS
			Debra A. Hess
			Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report on Form 10-Q of NorthStar Asset Management Group Inc. (the “Company”) for the quarterly period ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), David T. Hamamoto, as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 11, 2015	By:	/s/ DAVID T. HAMAMOTO
			David T. Hamamoto
			Chief Executive Officer

        This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

      A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION BY THE CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report on Form 10-Q of NorthStar Asset Management Group Inc. (the “Company”) for the quarterly period ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Debra A. Hess, as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of her knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 11, 2015	By:	/s/ DEBRA A. HESS
			Debra A. Hess
			Chief Financial Officer

        This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

      A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Related Party Arrangements - NorthStar Realty (Narrative) (Details) (Revolving Credit Facility, NorthStar Realty Finance Corporation, USD $)	3 Months Ended
	Mar. 31, 2015
Related Party Transaction [Line Items]
Borrowing capacity	$ 250,000,000
Financial covenant, unrestricted cash or cash equivalents amount	$ 100,000,000
LIBOR
Related Party Transaction [Line Items]
Basis spread on variable rate (percent)	3.50%

XML

Subsequent Events (Details) (USD $)	0 Months Ended	3 Months Ended	0 Months Ended
	Oct. 30, 2014	Mar. 31, 2015	May 05, 2015	Apr. 30, 2015
Subsequent Event [Line Items]
Dividends per share of common stock	$ 0.10	$ 0.10
Subsequent Event
Subsequent Event [Line Items]
Dividends per share of common stock			$ 0.10
Amount of outstanding common stock authorized to repurchase				$ 400,000,000

XML

Equity-Based Compensation - Summary of Deferred LTIP Units and Restricted Stock (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning Balance	5,239,000
New grants	1,315,000
Conversions	(7,000)
Vesting of restricted stock post-spin	(466,000)
Forfeited or canceled grants	(8,000)
Ending Balance	6,073,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning Balance, Weighted Average Grant Price	22.12
Grant date fair value	23.62
Conversions, Weighted Average Grant Price	15.51
Vesting of restricted stock post-spin, Weighted Average Grant Price	13.95
Forfeited or canceled grants, Weighted Average Grant Price	17.85
Ending Balance, Weighted Average Grant Price	23.09
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning Balance	4,104,000
New grants	649,000
Conversions	0
Vesting of restricted stock post-spin	(466,000)
Forfeited or canceled grants	(8,000)
Ending Balance	4,279,000
LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning Balance		1,135,000	[1]
New grants	666,000
Conversions	(7,000)
Vesting of restricted stock post-spin	0
Forfeited or canceled grants	0
Ending Balance	1,794,000	1,135,000	[1]

[1] Represents Deferred LTIP Units that settled into LTIP Units on March 13, 2015.

XML

Equity-Based Compensation - Other Issuances (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended	0 Months Ended
	Mar. 31, 2015	Dec. 08, 2014	Feb. 02, 2015	Jan. 22, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted in period	1,315,000
American Healthcare Investors, LLC
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cash paid to acquire business		$ 37.5
Percentage of shares subject to forfeiture conditions		50.00%
Cash and stock consideration		20.0
Number of shares		956,462
Number of principals for continued service		3
Lapsing period for first 50% of shares		2 years
Lapsing period for remaining 50% of shares		5 years
Contribution of equity incentives	2.0
American Healthcare Investors, LLC | Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cash and stock consideration		$ 10.0
Number of shares		478,231
Restricted Stock Units (RSUs) | Healthcare Strategic Joint Venture | Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted in period			20,305	500,000
Restricted Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted in period	649,000

XML

Management Agreements and Managed Companies - Related Party Receivables (Details) (USD $)	1 Months Ended
	May 08, 2015	Mar. 31, 2015		Dec. 31, 2014
Related Party Transaction [Line Items]
Related party receivables		$ 84,019,000	[1]	$ 77,626,000	[1]
Unreimbursed costs receivable		38,100,000		29,300,000
Subsequent Event
Related Party Transaction [Line Items]
Reimbursement revenue	51,300,000
NorthStar Realty Finance Corporation | Fees
Related Party Transaction [Line Items]
Related party receivables		43,381,000	[2]	47,414,000	[2]
Sponsored Companies
Related Party Transaction [Line Items]
Related party receivables		39,364,000	[3]	29,564,000	[3]
Sponsored Companies | Fees
Related Party Transaction [Line Items]
Related party receivables		1,313,000		245,000
Sponsored Companies | Other receivables
Related Party Transaction [Line Items]
Related party receivables		38,051,000		29,319,000
Other
Related Party Transaction [Line Items]
Related party receivables		$ 1,274,000		$ 648,000

[1] Subsequent to March 31, 2015, the Company received $51.3 million from the Managed Companies.

[2] Represents the base management fee and incentive fee receivable and net direct costs and expenses due between the Company and NorthStar Realty.

[3] As of March 31, 2015 and December 31, 2014, the Company had unreimbursed costs from the Sponsored Companies of $38.1 million and $29.3 million respectively, recorded as receivables, related parties on the consolidated balance sheets. (3)Subsequent to March 31, 2015, the Company received $51.3 million from

XML

Business and Organization (Details) (USD $) In Billions, unless otherwise specified	0 Months Ended	3 Months Ended
	Jun. 30, 2014	Mar. 31, 2015	May 08, 2015 property
Variable Interest Entity [Line Items]
Conversion rate of common stock	1
Length of management contract term	20 years	20 years
Subsequent Event
Variable Interest Entity [Line Items]
Value of European real estate portfolio acquired or committed to acquired			$ 2.0
Number of properties in European real estate portfolio acquired or committed to acquire			49
American Healthcare Investors, LLC
Variable Interest Entity [Line Items]
Ownership percentage		45.00%
Island Hospitality
Variable Interest Entity [Line Items]
Ownership percentage		45.00%
Distribution Finance Corporation
Variable Interest Entity [Line Items]
Ownership percentage		50.00%

XML

Stockholders' Equity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Numerator:
Net income (loss)	$ 21,768		$ (8,305)	[1]
Earnings (loss) allocated to unvested participating securities	(832)		0
Numerator for basic income per share	20,936		(8,305)
Participating nonvested shares	832		0
Net income (loss) attributable to LTIP Units non-controlling interest	202		0	[1]
Numerator for diluted income per share	$ 21,970		$ (8,305)
Denominator:
Weighted average number of shares of common stock	189,541,166		187,815,614	[1]
Incremental diluted shares	2,031,098		0
Weighted average number of diluted shares	191,572,264	[2]	187,815,614	[1],[2]
Earnings (loss) per share:
Basic (usd per share)	$ 0.11		$ (0.04)	[1]
Diluted (usd per share)	$ 0.11		$ (0.04)	[1]

[1] The consolidated financial statements for the three months ended March 31, 2015 represents the Company’s results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. The three months ended March 31, 2014 represents a carve out of revenues and expenses attributable to the Company related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months ended March 31, 2015 may not be comparable to the Company’s results of operations reported for the prior period presented.

[2] Diluted EPS excludes the effect of equity-based awards issued that were not dilutive for the periods presented. These instruments could potentially impact diluted EPS in future periods, depending on changes in the Company’s stock price and other factors.

XML

Related Party Arrangements - Island Venture (Narrative) (Details) (USD $) In Billions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Maximum | Island Hospitality | NorthStar Realty Finance Corporation
Related Party Transaction [Line Items]
Base management fee (percent)	3.00%
Island Hospitality
Related Party Transaction [Line Items]
Number of hotel properties	149
Assets under Management, Carrying Amount	3.7
Island Hospitality | NorthStar Realty Finance Corporation
Related Party Transaction [Line Items]
Number of hotel properties	101
Island Hospitality | Minimum | NorthStar Realty Finance Corporation
Related Party Transaction [Line Items]
Base management fee (percent)	2.50%

XML

Investments in Unconsolidated Ventures - AHI (Narrative) (Details) (USD $)	3 Months Ended			1 Months Ended
	Mar. 31, 2015	Mar. 31, 2014		Dec. 31, 2014
Investments in and Advances to Affiliates [Line Items]
Equity in earnings (losses) of unconsolidated ventures	$ (870,000)	$ 0	[1]
Equity-based compensation expense	13,618,000	5,694,000	[1]
American Healthcare Investors, LLC
Investments in and Advances to Affiliates [Line Items]
Cash and stock consideration				57,500,000
Cash paid to acquire business				37,500,000
Common stock consideration				20,000,000
Common stock consideration that vested immediately	10,000,000
Equity method investments	47,600,000
Equity in earnings (losses) of unconsolidated ventures	1,600,000
Equity-based compensation expense	1,000,000
Depreciation and amortization expense	$ 2,300,000

[1] The consolidated financial statements for the three months ended March 31, 2015 represents the Company’s results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. The three months ended March 31, 2014 represents a carve out of revenues and expenses attributable to the Company related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months ended March 31, 2015 may not be comparable to the Company’s results of operations reported for the prior period presented.

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2015
Income Tax Contingency [Line Items]
Income tax (benefit) expense	$ 7,938	$ 0
Forecast [Member]
Income Tax Contingency [Line Items]
Effective tax rate			27.00%

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Equity-Based Compensation - Summary (Narrative) (Details) (USD $)	3 Months Ended			0 Months Ended	1 Months Ended	0 Months Ended
	Mar. 31, 2015	Mar. 31, 2014		Jan. 01, 2015	Feb. 28, 2015	Dec. 08, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date fair value	$ 23.62
Equity-based compensation expense	$ 13,618,000	$ 5,694,000	[1]
Equity-based compensation expense not yet recognized	122,300,000
NorthStar Realty Finance Corporation | Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense		5,700,000
Common Stock | Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date fair value					$ 21.16
Aggregate shares reserved for future awards	26,358,957
Percent of increase in shares outstanding				2.00%
American Healthcare Investors, LLC
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares subject to forfeiture conditions						50.00%
Non Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	$ 100,000

[1] The consolidated financial statements for the three months ended March 31, 2015 represents the Company’s results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. The three months ended March 31, 2014 represents a carve out of revenues and expenses attributable to the Company related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months ended March 31, 2015 may not be comparable to the Company’s results of operations reported for the prior period presented.

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Management Agreements and Managed Companies

3 Months Ended

Mar. 31, 2015

Management Agreements [Abstract]

Management Agreements and Managed Companies

Management Agreements and Managed Companies

NorthStar Realty

Management Agreement

Upon completion of the spin-off, the Company entered into a management agreement with NorthStar Realty for an initial term of 20 years, which will be automatically renewed for additional 20-year terms each anniversary thereafter unless earlier terminated. As asset manager, the Company is responsible for NorthStar Realty’s day-to-day operations, subject to the supervision of the NorthStar Realty board of directors. Through its global network of subsidiaries and branch offices, the Company performs services and activities relating to, among other things, investments and financing, portfolio management and other administrative services, such as accounting and investor relations, to NorthStar Realty and its subsidiaries other than NorthStar Realty’s commercial real estate loan origination business. The management agreement with NorthStar Realty provides for a base management fee and incentive fee.

Base Management Fee

For the three months ended March 31, 2015, the Company earned $45.3 million related to the base management fee, which is recorded in receivable, related parties on the consolidated balance sheets. The management contract with NorthStar Realty commenced on July 1, 2014, and as such, there were no management fees earned for the three months ended March 31, 2014. The base management fee from NorthStar Realty will increase subsequent to March 31, 2015 by an amount equal to 1.5% per annum of the sum of:

• cumulative net proceeds of all future common equity and preferred equity issued by NorthStar Realty;

• equity issued by NorthStar Realty in exchange or conversion of exchangeable senior notes based on the stock price at the date of issuance;

• any other issuances by NorthStar Realty of common equity, preferred equity or other forms of equity, including but not limited to LTIP Units (excluding equity-based compensation, but including issuances related to an acquisition, investment, joint venture or partnership); and

• cumulative cash available for distribution (“CAD”) of NorthStar Realty in excess of cumulative distributions paid on common stock, LTIP units or other equity awards beginning the first full calendar quarter after the spin-off.

Additionally, NorthStar Realty’s equity interest in RXR Realty LLC (“RXR Realty”) and Aerium Group is structured so that the Company is entitled to the portion of distributable cash flow from each investment in excess of the $10.0 million minimum annual base amount.

Incentive Fee

For the three months ended March 31, 2015, the Company earned $2.9 million related to the incentive fee, which is recorded in receivable, related parties on the consolidated balance sheets. The incentive fee is calculated and payable quarterly in arrears in cash, equal to:

• the product of: (a) 15.0% and (b) CAD of NorthStar Realty before such incentive fee, divided by the weighted average shares outstanding of NorthStar Realty for the calendar quarter, when such amount is in excess of $0.39 per share of NorthStar Realty but less than $0.45 per share of NorthStar Realty; plus

• the product of: (a) 25.0% and (b) CAD of NorthStar Realty before such incentive fee, divided by the weighted average shares outstanding of NorthStar Realty for the calendar quarter, when such amount is equal to or in excess of $0.45 per share of NorthStar Realty;

• multiplied by the weighted average shares outstanding of NorthStar Realty for the calendar quarter.

In addition, the Company may also earn an incentive fee from NorthStar Realty’s healthcare investments in connection with the Company’s Healthcare Strategic Partnership (refer to Note 5).

Weighted average shares represents the number of shares of NorthStar Realty’s common stock, LTIP Units or other equity-based awards (with some exclusions), outstanding on a daily weighted average basis. With respect to the base management fee, all equity issuances are allocated on a daily weighted average basis during the fiscal quarter of issuance.

Furthermore, if NorthStar Realty were to spin-off any asset or business in the future, including the NRF Proposed European Spin, such entity would be managed by the Company on terms substantially similar to those set forth in the management agreement between the Company and NorthStar Realty. The management agreement further provides that the aggregate base management fee in place immediately after any future spin-off will not be less than the aggregate base management fee in place at NorthStar Realty immediately prior to such spin-off.

Payment of Costs and Expenses and Expense Allocation

NorthStar Realty is responsible for all of its direct costs and expenses and will reimburse the Company for costs and expenses incurred by the Company on its behalf. In addition to NorthStar Realty’s costs and expenses, following the spin-off, NorthStar Realty is obligated to reimburse the Company for additional costs and expenses incurred by the Company for an amount not to exceed the following: (i) 20.0% of the combined total of: (a) NorthStar Realty’s general and administrative expenses as reported in its consolidated financial statements excluding: (1) equity-based compensation expense, (2) non-recurring items, (3) fees payable to the Company under the terms of the management agreement and (4) any allocation of expenses from NorthStar Realty (“NorthStar Realty G&A”); and (b) the Company’s general and administrative expenses as reported in its consolidated financial statements, excluding equity-based compensation expense and adding back any costs or expenses allocated to any of the Managed Companies, less (ii) the NorthStar Realty G&A. For the three months ended March 31, 2015, the Company allocated $2.0 million to NorthStar Realty, which is recorded in receivables, related parties in the consolidated balance sheets. In addition, NorthStar Realty will pay directly or reimburse the Company for an allocable portion of any severance paid pursuant to any employment, consulting or similar service agreements in effect between the Company and any of its executives, employees or other service providers.

Sponsored Companies

The following table presents a summary of the fee arrangements with the current Sponsored Companies:

	NorthStar	NorthStar	NorthStar	NorthStar/RXR
	Income	Healthcare	Income II	New York Metro(9)
Offering amount(1)	$1.1 billion	$1.8 billion(8)	$1.65 billion	$2.0 billion
Total raised through May 6, 2015 (2)	$1.2 billion	$1.2 billion	$560 million	(10)
Primary strategy	CRE Debt	Healthcare Equity and Debt	CRE Debt	New York City CRE Equity and Debt
Primary offering period	Completed July 2013	Ends February 2017(8)	Ends May 2016(11)	Ends February 2017(11)
Asset Management and Other Fees:
Asset management fees (3)	1.25% of assets	1.00% of assets	1.25% of assets	1.25% of assets
Acquisition fees (4)	1.00% of investment	2.25% for real estate properties 1.00% of other investments	1.00% of investment	2.25% for real estate properties 1.00% of other investments
Disposition fees (5)	1.00% of sales price	2.00% for real estate properties 1.00% of sales price for debt investments	1.00% of sales price	2.00% for real estate properties 1.00% of sales price for debt investments
Incentive payments (6)	15.00% of net cash flows after an 8.00% return	15.00% of net cash flows after a 6.75% return(7)	15.00% of net cash flows after a 7.00% return	15.00% of net cash flows after a 6.00% return

__________________

(1) Represents amount of shares registered to offer pursuant to each Sponsored Company’s public offering and includes the follow-on public offering of up to $700 million for NorthStar Healthcare.

(2) Includes capital raised through dividend reinvestment plans.

(3) Assets represent principal amount funded or allocated for debt investments originated or acquired and the cost of all other investments, including expenses and any financing attributable to such investments, less any principal received on debt and securities investments (or the Company’s proportionate share thereof in the case of an investment made in a joint venture).

(4) Calculated based on the amount funded or allocated by the Sponsored Companies to originate or acquire investments, including acquisition expenses and any financing attributable to such investments (or the proportionate share thereof in the case of an equity investment made through a joint venture).

(5) Calculated based on contractual sales price of each investment sold.

(6) The Company is entitled to receive distributions equal to 15% of net cash flow of the respective Sponsored Company, whether from continuing operations, repayment of loans, disposition of assets or otherwise, but only after stockholders have received, in the aggregate, cumulative distributions equal to their invested capital plus the respective cumulative, non-compounded annual pre-tax return (as noted in the table above) on such invested capital.

(7) The Healthcare Strategic Partnership is entitled to the incentive fees earned from managing NorthStar Healthcare, of which the Company earn its proportionate interest (refer to Note 5).

(8) NorthStar Healthcare successfully completed its public offering on February 2, 2015 by raising $1.1 billion in capital. The Company began raising capital for NorthStar Healthcare’s follow-on public offering at the end of February 2015.

(9) Any asset management and other fees incurred by NorthStar/RXR New York Metro will be shared between the Company and RXR Realty as co-sponsors.

(10) The Company expects to begin raising capital for NorthStar/RXR New York Metro in the second half of 2015.

(11) Offering period subject to extension as determined by the board of directors of each Sponsored Company.

For the three months endedMarch 31, 2015 and 2014, the Company earned $13.1 million and $8.7 million respectively, of asset management and other fees from the Sponsored Companies.

In addition to the Sponsored Companies described above, NorthStar Corporate Income, Inc. (“NorthStar Corporate”) confidentially submitted its registration statement on Form N-2 to the SEC in December 2014. NorthStar Corporate seeks to raise up to $1.0 billion in a public offering of common stock.  NorthStar Corporate is structured as a non-diversified, closed-end management investment company that intends to elect to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended.  NorthStar Corporate intends to engage OZ Institutional Credit Management LP (“OZ Credit Management”) an affiliate of Och-Ziff Capital Management Group, LLC (“Och-Ziff”), an alternative asset manager, to serve as the sub-advisor to manage NorthStar Corporate’s investments and oversee operations. Any asset management and other fees incurred by NorthStar Corporate will be shared between the Company and OZ Credit Management as co-sponsors. NorthStar Corporate intends to invest in senior and subordinate loans to middle-market companies.

Pursuant to each of the advisory agreements with the Company’s current Sponsored Companies, the Company may determine, in its sole discretion, to defer or waive, in whole or in part, certain asset management and other fees incurred. In considering whether to defer or waive any such fees, the Company evaluates the specific facts and circumstances surrounding the incurrence of a particular fee and makes its decision on a case by case basis.

Distribution Support

NorthStar Realty committed to invest up to $10.0 million in each of the Sponsored Companies that are in their offering stage. In addition, consistent with its past practices, NorthStar Realty will commit up to $10.0 million for distribution support in any Sponsored Company that the Company may sponsor, up to a total of five new companies per year.

The distribution support agreement related to NorthStar/RXR New York Metro Income, Inc. (“NorthStar/RXR New York Metro”) is an obligation of both NorthStar Realty and RXR Realty, where each agreed to purchase up to an aggregate of $10.0 million in Class A common stock during the two-year period following commencement of the offering, with NorthStar Realty and RXR Realty agreeing to purchase 75% and 25% of any shares purchased, respectively.

Payment of Costs and Expenses and Expense Allocation

In addition, the Company is entitled to certain expense allocations for costs paid on behalf of its Sponsored Companies which include: (i) reimbursement for organization and offering costs such as professional fees and other costs associated with the formation and offering of the Sponsored Company; and (ii) reimbursement for direct and indirect operating costs such as certain salaries, equity-based compensation and professional and other costs associated with managing the operations of the Sponsored Company. The following table presents a summary of the expense arrangements with the current Sponsored Companies:

	NorthStar Income	NorthStar Healthcare	NorthStar Income II	NorthStar/RXR New York Metro
Organization and offering costs (1)	$11.0 million (2)	$22.5 million, or 1.5% of the proceeds expected to be raised from the offering  (4)	$24.8 million, or 1.5% of the proceeds expected to be raised from the offering (4)	$30.0 million, or 1.5% of the proceeds expected to be raised from the offering (4)
Operating costs (3)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.00% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)

__________________

(1) Represents reimbursement for organization and offering costs paid on behalf of the Sponsored Companies in connection with their respective offerings. The Company is facilitating the payment of organization and offering costs on behalf of the Sponsored Companies. The Company records these costs as receivables, related parties on its consolidated balance sheets until repaid. The Sponsored Companies record these costs as either advisory fees, related parties on their consolidated statements of operations or as a cost of capital in their consolidated statements of equity.

(2) Represents the total expense allocation for organization and offering costs through the end of the offering period in July 2013.

(3) Calculated based on the four preceding fiscal quarters not to exceed the greater of: (i) 2.0% of each Sponsored Company’s average invested assets; or (ii) 25.0% of each Sponsored Company’s net income determined without reduction for any additions to reserves for depreciation, loan losses or other similar non-cash reserves and excluding any gain from the sale of assets for that period.

(4) Excludes shares being offered pursuant to dividend reinvestment plans.

The following table presents receivables, related parties on the consolidated balance sheets as of March 31, 2015 and December 31, 2014 (dollars in thousands):

	March 31, 2015 (Unaudited)		December 31, 2014
NorthStar Realty fees (1)	$	43,381	$	47,414
Sponsored Companies:
Fees	1,313		245
Other receivables	38,051		29,319
Subtotal Sponsored Companies(2)	39,364		29,564
Other	1,274		648
Total (3)	$	84,019	$	77,626

________________________

(1) Represents the base management fee and incentive fee receivable and net direct costs and expenses due between the Company and NorthStar Realty.

(2) As of March 31, 2015 and December 31, 2014, the Company had unreimbursed costs from the Sponsored Companies of $38.1 million and $29.3 million respectively, recorded as receivables, related parties on the consolidated balance sheets.

(3) Subsequent to March 31, 2015, the Company received $51.3 million from the Managed Companies.

Selling Commission and Dealer Manager Fees and Commission Expense

Selling commissions and dealer manager fees represents income earned by selling equity in Sponsored Companies through NorthStar Securities. Pursuant to dealer manager agreements between NorthStar Securities and the Sponsored Companies, the Company generally receives selling commissions of up to 7.0% of gross offering proceeds raised. The Company reallows all selling commissions earned to participating broker-dealers. In addition, the Company also generally receives a dealer manager fee of up to 3.0% of gross offering proceeds raised, a portion of which may be reallowed to participating broker-dealers. The Company earns net commission income through NorthStar Securities for selling equity in the Sponsored Companies, which is expected to cover the costs of the broker-dealer business. Commission expense represents fees to participating broker-dealers with whom the Company has selling agreements and commissions to employees of NorthStar Securities. For the three months endedMarch 31, 2015 and 2014, the Company reallowed $3.4 million and $1.7 million commission expense to NorthStar Securities employees, respectively.

The following table summarizes selling commission and dealer manager fees, commission expense and net commission income for the three months endedMarch 31, 2015 and 2014 (dollar in thousands):

	Three Months Ended March 31,
	2015		2014
Selling commission and dealer manager fees	$	29,923	$	14,548
Commission expense	27,695		13,560
Net commission income(1)	$	2,228	$	988

________________________

(1) Excludes direct expenses of NorthStar Securities.

Other

A subsidiary of the Company is a rated special servicer by Standard & Poor’s and Fitch Ratings and receives special servicing fees for services related to certain securitization transactions. For the three months ended March 31, 2015 and 2014, the Company earned $0.4 million and $0.1 million of special servicing fees.

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Related Party Arrangements - RXR Realty (Narrative) (Details) (RXR Realty, NorthStar Realty Finance Corporation)	Dec. 31, 2013
RXR Realty | NorthStar Realty Finance Corporation
Related Party Transaction [Line Items]
Ownership percentage	30.00%

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Management Agreements and Managed Companies - NorthStar Realty (Narrative) (Details) (USD $)	0 Months Ended	3 Months Ended		0 Months Ended
	Jun. 30, 2014	Mar. 31, 2015	Mar. 31, 2014	Apr. 01, 2015
Related Party Transaction [Line Items]
Length of management contract term	20 years	20 years
Length of additional option on management contract		20 years
Base management fees		$ 45,300,000	$ 0
Additional annual base management fee		10,000,000
Incentive management fee		2,900,000
Expenses covered by NorthStar Realty		20.00%
Additional expenses covered by NorthStar Realty		$ 2,000,000
Range 1
Related Party Transaction [Line Items]
Incentive fee		15.00%
Range 2
Related Party Transaction [Line Items]
Incentive fee		25.00%
Incentive fee (usd per share)		$ 0.45
Minimum | Range 1
Related Party Transaction [Line Items]
Incentive fee (usd per share)		$ 0.39
Maximum | Range 1
Related Party Transaction [Line Items]
Incentive fee (usd per share)		$ 0.45
Subsequent Event
Related Party Transaction [Line Items]
Annual asset management fees (percent of assets)				1.50%

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Summary of Significant Accounting Policies - Narrative (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Commission payable	$ 5,125	$ 12,164
North Star Realty Securities LLC [Member]
Related Party Transaction [Line Items]
Commission payable	$ 400

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Equity-Based Compensation - NorthStar Asset Management Plans (Narrative) (Details) (USD $)	3 Months Ended	0 Months Ended		1 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Apr. 03, 2014	Dec. 31, 2014	May 31, 2014	Feb. 28, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted in period	1,315,000
Grant date fair value	$ 23.62
Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	4 years
Percent of RSUs subject to performance based hurdles	31.65%
Incentive Compensation Plan | NorthStar Realty Finance Corporation
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum long-term bonus and other compensation covered by NorthStar	50.00%
Number of Bonus Pools	2
Restricted Stock Units (RSUs) | Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted in period			6,230,529		1,317,368
Award vesting period			4 years
Percent of RSUs subject to performance based hurdles			40.00%
Percent of RSUs, subject to performance-based hurdles, total shareholder return			30.00%
Percent of RSUs subject to performance based hurdles, total shareholder return, Russell 2000 Index			30.00%
Risk free rate			1.48%	1.29%
Percent of vested RSUs		25.00%
Number of retired shares		392,157
Performance RSUs | Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date fair value			17.01	16.80
Absolute TSR RSUs | Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date fair value			10.22	9.95
Relative TSR RSUs | Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date fair value			16.21	16.29
Common Stock | Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	4 years
Percent of RSUs subject to performance based hurdles	31.65%
Grant date fair value						$ 21.16
Risk free rate						1.00%
Percent of vested performance shares		25.00%
Number of common shares issued		795,107				642,882
Number of retired shares		108,198
Performance Stock | Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of RSUs subject to performance based hurdles	18.35%
Employment period	4 years
Executive Officer | Restricted Stock Units (RSUs) | Omnibus Stock Incentive Plan | NorthStar Realty Finance Corporation
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted in period	1,205,210	762,898
Executive Officer | Performance Stock | Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, New Issues						474,842
Vesting period one | Common Stock | Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of vested performance shares	25.00%
Vesting period two | Common Stock | Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of vested performance shares	25.00%
Vesting period three | Common Stock | Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of vested performance shares	25.00%
Vesting period four | Common Stock | Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of vested performance shares	25.00%

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Management Agreements and Managed Companies - Summary of Fee Arrangements (Details) (USD $)	3 Months Ended		0 Months Ended
	Mar. 31, 2015		Apr. 01, 2015	May 06, 2015		Feb. 02, 2015
Related Party Transaction [Line Items]
Incentive payments (percent of net cash flows)	15.00%
Projected proceeds from public offering	$ 1,000,000,000.0
NorthStar Income
Related Party Transaction [Line Items]
Public offering	1,100,000,000	[1]
Annual asset management fees (percent of assets)	1.25%	[2]
Acquisition fees (percent of investment)	1.00%	[3]
Disposition fees (percent of sales price)	1.00%	[4]
Incentive payments (percent of net cash flows)	15.00%	[5]
Return on investment	8.00%	[5]
NorthStar Healthcare
Related Party Transaction [Line Items]
Public offering	1,800,000,000	[1],[6]
Follow-on public offering	700,000,000
Annual asset management fees (percent of assets)	1.00%	[2]
Acquisition fees (percent of investment)	1.00%	[3]
Acquisition fees (percent of real estate properties)	2.25%	[2]
Disposition fees (percent of sales price)	1.00%	[4]
Disposition fees (percent of real estate properties sales price)	2.00%	[4]
Incentive payments (percent of net cash flows)	15.00%	[5],[7]
Return on investment	6.75%	[5],[7]
NorthStar Income II
Related Party Transaction [Line Items]
Public offering	1,650,000,000	[1]
Annual asset management fees (percent of assets)	1.25%	[2]
Acquisition fees (percent of investment)	1.00%	[3]
Disposition fees (percent of sales price)	1.00%	[4]
Incentive payments (percent of net cash flows)	15.00%	[5]
Return on investment	7.00%	[5]
NorthStar/RXR New York Metro
Related Party Transaction [Line Items]
Public offering	2,000,000,000	[1],[8]
Annual asset management fees (percent of assets)	1.25%	[2],[8]
Acquisition fees (percent of investment)	1.00%	[3],[8]
Acquisition fees (percent of real estate properties)	2.25%	[2],[8]
Disposition fees (percent of sales price)	1.00%	[4],[8]
Disposition fees (percent of real estate properties sales price)	2.00%	[4],[8]
Incentive payments (percent of net cash flows)	15.00%	[5],[8]
Return on investment	6.00%	[5],[8]
Subsequent Event
Related Party Transaction [Line Items]
Annual asset management fees (percent of assets)			1.50%
Subsequent Event | NorthStar Income
Related Party Transaction [Line Items]
Follow-on public offering				1,200,000,000	[9]
Subsequent Event | NorthStar Healthcare
Related Party Transaction [Line Items]
Public offering						1,100,000,000
Follow-on public offering				1,200,000,000	[9]
Subsequent Event | NorthStar Income II
Related Party Transaction [Line Items]
Follow-on public offering				$ 560,000,000	[9]

[1] Represents amount of shares registered to offer pursuant to each Sponsored Company’s public offering and includes the follow-on public offering of up to $700 million for NorthStar Healthcare.

[2] Assets represent principal amount funded or allocated for debt investments originated or acquired and the cost of all other investments, including expenses and any financing attributable to such investments, less any principal received on debt and securities investments (or the Company’s proportionate share thereof in the case of an investment made in a joint venture).

[3] Calculated based on the amount funded or allocated by the Sponsored Companies to originate or acquire investments, including acquisition expenses and any financing attributable to such investments (or the proportionate share thereof in the case of an equity investment made through a joint venture).

[4] Calculated based on contractual sales price of each investment sold.

[5] The Company is entitled to receive distributions equal to 15% of net cash flow of the respective Sponsored Company, whether from continuing operations, repayment of loans, disposition of assets or otherwise, but only after stockholders have received, in the aggregate, cumulative distributions equal to their invested capital plus the respective cumulative, non-compounded annual pre-tax return (as noted in the table above) on such invested capital.

[6] NorthStar Healthcare successfully completed its public offering on February 2, 2015 by raising $1.1 billion in capital. The Company began raising capital for NorthStar Healthcare’s follow-on public offering at the end of February 2015

[7] The Healthcare Strategic Partnership is entitled to the incentive fees earned from managing NorthStar Healthcare, of which the Company earn its proportionate interest (refer to Note 5).

[8] Any asset management and other fees incurred by NorthStar/RXR New York Metro will be shared between the Company and RXR Realty as co-sponsors.

[9] Includes capital raised through dividend reinvestment plans.

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Management Agreements and Managed Companies - Sponsored Companies (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Related Party Transaction [Line Items]
Sponsor fees	$ 13,100,000	$ 8,700,000
Projected proceeds from public offering	1,000,000,000.0
NorthStar Realty Finance Corporation
Related Party Transaction [Line Items]
Commitment to invest in initial public offering	10,000,000.0
Commitment to invest as distribution support	10,000,000.0
Number of new sponsored companies per year	5
Class A Common Stock | NorthStar/RXR New York Metro
Related Party Transaction [Line Items]
Commitment to purchase common stock	$ 10,000,000.0
Commitment to purchase common stock period	2 years
Class A Common Stock | NorthStar Realty Finance Corporation
Related Party Transaction [Line Items]
Commitment to purchase common stock (percent)	75.00%
Class A Common Stock | RXR Realty
Related Party Transaction [Line Items]
Commitment to purchase common stock (percent)	25.00%

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Quarterly Presentation

The accompanying unaudited consolidated financial statements and related notes of the Company are presented on a carve-out basis for the period prior to June 30, 2014 and have been prepared from the historical consolidated balance sheets, statements of operations and cash flow attributed to the historical asset management business of NorthStar Realty and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the consolidated financial statements prepared under U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, which was filed with the SEC.

The consolidated financial statements for the three months ended March 31, 2015 represent the Company subsequent to the spin-off of NorthStar Realty’s historical asset management business of managing the Sponsored Companies, owning NorthStar Securities and operating its special servicing business. In connection with the spin-off, most of NorthStar Realty’s employees at the time of the spin-off became employees of the Company except for executive officers, employees engaged in NorthStar Realty’s loan origination business at the time of the spin-off and certain other employees that became co-employees of both the Company and NorthStar Realty. Therefore, subsequent to June 30, 2014, the Company generally incurs substantially all employee-related cash costs.

Periods prior to June 30, 2014 present a carve-out of NorthStar Realty’s historical financial information, including revenues and expenses allocated to the Company, related to NorthStar Realty’s historical asset management business. Expenses also included an allocation of indirect expenses from NorthStar Realty, including salaries, equity-based compensation and other general and administrative expenses (primarily occupancy and other cost) based on an estimate had NorthStar Realty’s historical asset management business been run as an independent entity. This allocation method was principally based on relative headcount and management’s knowledge of NorthStar Realty’s operations. Additionally, periods prior to June 30, 2014 did not reflect the management agreement the Company entered into with NorthStar Realty effective July 1, 2014.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries.

Variable Interest Entities

A variable interest entity (“VIE”) is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. The Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity.

The Company reassesses its initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events.

A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents has both the: (i) power to direct the activities that most significantly impact the VIE’s economic performance; and (ii) obligation to absorb the losses of the VIE or the right to receive the benefits from the VIE, which could be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE by considering qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of its investment; the obligation or likelihood for the Company or other interests to provide financial support; consideration of the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders and the similarity with and significance to the business activities of the Company and the other interests. The Company reassesses its determination of whether it is the primary beneficiary of a VIE each reporting period. Significant judgments related to these determinations include estimates about the current and future fair value and performance of investments held by these VIEs and general market conditions.

The Company evaluates the Managed Companies, investments in unconsolidated ventures and securitization financing transactions to which the Company is the special servicer to determine whether they are a VIE.

Voting Interest Entities

A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company does not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party.

The Company performs on-going reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework.

Investments in Unconsolidated Ventures

A non-controlling, unconsolidated ownership interest in an entity may be accounted for using the equity method, at fair value or the cost method.

Under the equity method, the investment is adjusted each period for capital contributions and distributions and its share of the entity’s net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in such governing documents.

The Company may account for an investment in an unconsolidated entity at fair value by electing the fair value option. The Company records the change in fair value for its share of the projected future cash flow of such investments from one period to another in equity in earnings (losses) from unconsolidated ventures in the consolidated statements of operations. Any change in fair value attributed to market related assumptions is considered unrealized gain (loss).

The Company may account for an investment that does not qualify for equity method accounting or for which the fair value option was not elected using the cost method if the Company determines the investment in the unconsolidated entity is insignificant. Under the cost method, equity in earnings is recorded as dividends are received to the extent they are not considered a return of capital, which is recorded as a reduction of cost of the investment.

Non-controlling Interest

A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to the Company. A non-controlling interest is required to be presented as a separate component of equity on the consolidated balance sheets and presented separately as net income (loss) and other comprehensive income (loss) (“OCI”) attributable to controlling and non-controlling interests. An allocation to a non-controlling interest may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in such governing documents.

Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that could affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates and assumptions.

Reclassifications

Certain prior period amounts have been reclassified in the consolidated financial statements to conform to current period presentation.

Restricted Cash

Restricted cash represents cash held by the Company’s foreign subsidiaries due to certain regulatory capital requirements.

Other Assets and Accounts Payable and Accrued Expenses

The following tables present a summary of other assets and accounts payable and accrued expenses as of March 31, 2015 and December 31, 2014 (dollars in thousands):

	March 31, 2015 (Unaudited)		December 31, 2014(1)
Other assets:
Deferred tax asset	$	5,857	$	3,155
Furniture, fixtures and equipment, net	4,381		4,629
Prepaid expenses	3,019		2,279
Security deposits	2,399		2,232
Due from participating broker-dealers	432		1,965
Prepaid income taxes	—		3,538
Pending deal costs	—		1,045
Other	445		531
Total	$	16,533	$	19,374

__________________

(1) Includes fixed assets, tenant improvements and deposits related to leased offices that were transferred to the Company at the time of the spin-off on June 30, 2014.

	March 31, 2015 (Unaudited)		December 31, 2014
Accounts payable and accrued expenses:
Accrued bonus	$	10,083	$	25,911
Accrued transaction expense	4,562		5,205
Income tax payable	3,173		—
Accrued payroll	2,061		1,400
Accrued professional fees	2,655		740
Accrued equity-based compensation awards (refer to Note 7)	433		—
Accrued tax withholding (1)	—		11,938
Other	1,194		3,922
Total	$	24,161	$	49,116

__________________

(1) Represents withholding tax related to vesting and net settlement of restricted stock units.

Revenue Recognition

Asset Management and Other Fees

Asset management and other fees include asset management, incentive and other fees, such as acquisition and disposition fees, earned from the Managed Companies. Base asset management and other fees are recognized based on contractual terms specified in the underlying governing documents in the periods during which the related services are performed and the amounts have been contractually earned. Incentive fees and payments are recognized subject to the achievement of return hurdles in accordance with the respective terms set forth in the governing documents of the Managed Companies.

Selling Commission and Dealer Manager Fees and Commission Expense

Selling commission and dealer manager fees represent income earned by the Company for selling equity in the Sponsored Companies through NorthStar Securities. Selling commission and dealer manager fees and commission expense are accrued on a trade date basis. As of March 31, 2015, commission payable of $5.1 million includes $0.4 million due to NorthStar Securities employees.

Allowance for Doubtful Accounts

An allowance for a doubtful account is established when, in the opinion of the Company, a full recovery of a receivable becomes doubtful. A receivable is written off when it is no longer collectible and/or legally discharged. As of March 31, 2015 and December 31, 2014, there was no allowance for doubtful accounts.

Equity-Based Compensation

The Company accounts for equity-based compensation awards, including awards granted to co-employees, using the fair value method, which requires an estimate of fair value of the award. Awards may be based on a variety of measures such as time, performance, market or a combination thereof. For time-based awards, fair value is determined based on the stock price on the grant date. The Company recognizes compensation expense over the vesting period on a straight-line basis. For performance-based awards, fair value is determined based on the stock price at the date of grant and an estimate of the probable achievement of such measure. The Company recognizes compensation expense over the requisite service period, net of estimated forfeitures, using the accelerated attribution expense method. For market-based measures, fair value is determined using a Monte Carlo analysis under a risk-neutral premise using a risk-free interest rate. The Company recognizes compensation expense, over the requisite service period, net of estimated forfeitures, on a straight-line basis.

For awards with a combination of performance or market measures, the Company estimates the fair value as if it were two separate awards. First, the Company estimates the probability of achieving the performance measure. If it is not probable the performance condition will be met, the Company records the compensation expense based on the fair value of the market measure, as described above. This expense is recorded even if the market-based measure is never met. If the performance-based measure is subsequently estimated to be achieved, the Company records compensation expense based on the performance-based measure. The Company would then record a cumulative catch-up adjustment for any additional compensation expense.

Equity-based compensation issued to non-employees is accounted for using the fair value of the award at the earlier of the performance commitment date or performance completion date. The awards are remeasured every quarter based on the stock price as of the end of the reporting period until such awards vest, if any.

Foreign Currency

Assets and liabilities denominated in non-U.S. dollar currencies are remeasured at the exchange rate prevailing on the reporting date and revenues and expenses are remeasured at the average exchange rate for the period. The Company’s functional currency of its non-U.S. denominated assets and liabilities is the U.S. dollar. Therefore, any gains or losses from the remeasurement of foreign currency to U.S. dollars are recognized in earnings.

Comprehensive Income (Loss)

The Company had no items of other comprehensive income (loss), so its comprehensive (loss) is the same as the net (loss) for all periods presented.

Earnings Per Share

The Company’s basic earnings per share (“EPS”) is calculated using the two-class method for each class of common stock and participating security as if all earnings had been distributed by dividing net income (loss) attributable to common stockholders by the weighted average number of common stock outstanding. Under the two-class method, net income is first reduced for distributions declared on all classes of participating securities to arrive at undistributed earnings. Under the two-class method, net loss is reduced for distributions declared on participating securities only if such security has the right to participate in the earnings of the entity and an objectively determinable contractual obligation to share in net losses of the entity. Diluted EPS includes restricted stock and the potential dilution that could occur if outstanding restricted stock units (“RSUs”), performance common stock or other contracts to issue common stock, assuming performance hurdles have been met, were converted to common stock, including limited partnership interests in the Operating Partnership which are structured as profits interests (“LTIP Units”) (refer to Note 7), where such exercise or conversion would result in a lower EPS. The dilutive effect of such RSUs and LTIP Units is calculated assuming all units are converted to common stock.

Income Taxes

Certain subsidiaries of the Company are subject to taxation by federal, state, local and foreign authorities for the periods presented. On March 13, 2015, the Company restructured by converting, under Delaware law, an existing limited liability company disregarded as separate from the Company for federal income tax purposes to a Delaware limited partnership and admitting as limited partners LTIP Unit Holders, forming the Company’s new Operating Partnership. The Operating Partnership is taxed as a partnership for federal income tax purposes and consequently, its items of income gain, loss, deduction and credit are passed through to, and included in, the taxable income of each of its partners including the Company. For the period prior to March 13, 2015, the Company and its U.S. subsidiaries will file consolidated federal income tax returns. Income taxes are accounted for by the asset/liability approach in accordance with U.S. GAAP. Deferred taxes, if any, represent the expected future tax consequences when the reported amounts of assets and liabilities are recovered or paid. Such amounts arise from differences between the financial reporting and tax bases of assets and liabilities and are adjusted for changes in tax laws and tax rates in the period which such changes are enacted. A provision for income tax represents the total of income taxes paid or payable for the current period, plus the change in deferred tax assets and liabilities.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting update requiring a company to recognize as revenue the amount of consideration it expects to be entitled to in connection with the transfer of promised goods or services to customers.  The accounting standard update will replace most of the existing revenue recognition guidance currently promulgated by U.S. GAAP.  In April 2015, the FASB proposed a one-year deferral of the effective date of the new revenue standard to January 1, 2018. The Company is in the process of evaluating the impact, if any, of the update on its consolidated financial positions, results of operations and financial statement and related disclosures.

In February 2015, the FASB issued updated guidance that changes the rules regarding consolidation. The pronouncement eliminates specialized guidance for limited partnerships and similar legal entities and removes the indefinite deferral for certain investment funds. The new guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

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Management Agreements and Managed Companies - Summary of Expense Arrangements (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Related Party Transaction [Line Items]
Operating Costs (percent of average invested assets)	2.00%
Operating Costs (percent of net income)	25.00%
NorthStar Income
Related Party Transaction [Line Items]
Organization and offering costs	11.0	[1],[2]
Operating Costs (percent of average invested assets)	2.00%	[3]
Operating Costs (percent of net income)	25.00%	[3]
NorthStar Healthcare
Related Party Transaction [Line Items]
Organization and offering costs	22.5	[1],[4]
Organization and offering costs (percent of proceeds expected to be raised)	1.50%	[1],[4]
Operating Costs (percent of average invested assets)	2.00%	[3]
Operating Costs (percent of net income)	25.00%	[3]
NorthStar Income II
Related Party Transaction [Line Items]
Organization and offering costs	24.8	[1],[4]
Organization and offering costs (percent of proceeds expected to be raised)	1.50%	[1],[4]
Operating Costs (percent of average invested assets)	2.00%	[3]
Operating Costs (percent of net income)	25.00%	[3]
NorthStar/RXR New York Metro
Related Party Transaction [Line Items]
Organization and offering costs	30.0	[1],[4]
Organization and offering costs (percent of proceeds expected to be raised)	1.50%	[1],[4]
Operating Costs (percent of average invested assets)	2.00%	[3]
Operating Costs (percent of net income)	25.00%	[3]

[1] Represents reimbursement for organization and offering costs paid on behalf of the Sponsored Companies in connection with their respective offerings. The Company is facilitating the payment of organization and offering costs on behalf of the Sponsored Companies. The Company records these costs as receivables, related parties on its consolidated balance sheets until repaid. The Sponsored Companies record these costs as either advisory fees, related parties on their consolidated statements of operations or as a cost of capital in their consolidated statements of equity.

[2] Represents the total expense allocation for organization and offering costs through the end of the offering period in July 2013.

[3] Calculated based on the four preceding fiscal quarters not to exceed the greater of: (i) 2.0% of each Sponsored Company’s average invested assets; or (ii) 25.0% of each Sponsored Company’s net income determined without reduction for any additions to reserves for depreciation, loan losses or other similar non-cash reserves and excluding any gain from the sale of assets for that period

[4] Excludes shares being offered pursuant to dividend reinvestment plans.

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Related Party Arrangements - Healthcare Strategic Joint Venture (Narrative) (Details)	0 Months Ended
	Feb. 02, 2015	Mar. 31, 2015
Minimum | Healthcare Strategic Partnership
Related Party Transaction [Line Items]
Incentive fee		20.00%
Maximum | Healthcare Strategic Partnership
Related Party Transaction [Line Items]
Incentive fee		25.00%
Subsequent Event | Restricted Stock Units (RSUs) | Mr. Flaherty
Related Party Transaction [Line Items]
Number of common shares issued	20,305

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Segment Reporting (Details) (USD $)	3 Months Ended				12 Months Ended		1 Months Ended
	Mar. 31, 2015 segment		Mar. 31, 2014		Dec. 31, 2014		May 08, 2015
Segment Reporting Information [Line Items]
Number of segments	5
Asset management and other fees, related parties	$ 61,379,000	[1]	$ 8,669,000	[1],[2]
Selling commission and dealer manager fees, related parties	29,923,000		14,548,000	[2]
Commission expense	27,695,000		13,560,000
Salaries and related expense	12,145,000		7,936,000	[2]
Equity-based compensation expense	13,618,000		5,694,000	[2]
Other general and administrative expenses	6,105,000		1,873,000	[2]
Equity in earnings (losses) of unconsolidated ventures	(870,000)		0	[2]
Income tax (benefit) expense	7,938,000		0
Net income (loss)	21,970,000		(8,305,000)	[2]	19,100,000
Total Assets by Segment
Total Assets	251,851,000				263,869,000
Subsequent Event
Total Assets by Segment
Reimbursement revenue							51,300,000
NorthStar Realty
Segment Reporting Information [Line Items]
Asset management and other fees, related parties	48,251,000	[3]	0	[3]
Selling commission and dealer manager fees, related parties	0	[3]	0	[3]
Commission expense	0	[3]	0	[3]
Salaries and related expense	0	[3]	0	[3]
Equity-based compensation expense	0	[3]	0	[3]
Other general and administrative expenses	0	[3]	0	[3]
Equity in earnings (losses) of unconsolidated ventures	0	[3]
Income tax (benefit) expense	0	[3]
Net income (loss)	48,251,000	[3]	0	[3]
Total Assets by Segment
Total Assets	53,069,000	[4]			60,909,000	[4]
Sponsored Companies
Segment Reporting Information [Line Items]
Asset management and other fees, related parties	13,128,000		8,669,000
Selling commission and dealer manager fees, related parties	0		0
Commission expense	0		0
Salaries and related expense	0		0
Equity-based compensation expense	0		0
Other general and administrative expenses	0		0
Equity in earnings (losses) of unconsolidated ventures	0
Income tax (benefit) expense	0
Net income (loss)	13,128,000		8,669,000
Total Assets by Segment
Total Assets	22,029,000	[4]			27,147,000	[4]
Broker Dealer
Segment Reporting Information [Line Items]
Asset management and other fees, related parties	0	[5]	0	[5]
Selling commission and dealer manager fees, related parties	29,923,000	[5]	14,548,000	[5]
Commission expense	27,695,000	[5]	13,560,000	[5]
Salaries and related expense	2,237,000	[5]	1,863,000	[5]
Equity-based compensation expense	0	[5]	0	[5]
Other general and administrative expenses	1,915,000	[5]	1,762,000	[5]
Equity in earnings (losses) of unconsolidated ventures	0	[5]
Income tax (benefit) expense	0	[5]
Net income (loss)	(1,965,000)	[5]	(2,660,000)	[5]
Total Assets by Segment
Total Assets	12,183,000				17,868,000
Direct Investments
Segment Reporting Information [Line Items]
Asset management and other fees, related parties	0
Selling commission and dealer manager fees, related parties	0
Commission expense	0
Salaries and related expense	0
Equity-based compensation expense	0
Other general and administrative expenses	0
Equity in earnings (losses) of unconsolidated ventures	(870,000)
Income tax (benefit) expense	0
Net income (loss)	(870,000)
Total Assets by Segment
Total Assets	95,615,000				54,480,000
Corporate/Other
Segment Reporting Information [Line Items]
Asset management and other fees, related parties	0		0
Selling commission and dealer manager fees, related parties	0		0
Commission expense	0		0
Salaries and related expense	9,908,000		6,073,000
Equity-based compensation expense	13,618,000		5,694,000
Other general and administrative expenses	4,190,000		111,000
Equity in earnings (losses) of unconsolidated ventures	0
Income tax (benefit) expense	7,938,000
Net income (loss)	(36,574,000)		(14,314,000)
Total Assets by Segment
Total Assets	$ 68,955,000				$ 103,465,000

[1] The Company began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty (refer to Note 1).

[2] The consolidated financial statements for the three months ended March 31, 2015 represents the Company’s results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. The three months ended March 31, 2014 represents a carve out of revenues and expenses attributable to the Company related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months ended March 31, 2015 may not be comparable to the Company’s results of operations reported for the prior period presented.

[3] The Company began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty (refer to Note 3).

[4] Primarily represents the receivable, related parties as of March 31, 2015 and December 31, 2014, respectively. Subsequent to March 31, 2015, the Company received $51.3 million of reimbursements from the Managed Companies.

[5] Direct general and administrative expenses incurred by the broker dealer.

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
Assets
Cash	$ 53,623		$ 109,199
Restricted cash	4,610		3,190
Receivables, related parties	84,019	[1]	77,626	[1]
Investments in unconsolidated ventures	93,066		54,480
Other assets	16,533		19,374	[2]
Total assets	251,851		263,869
Liabilities
Accounts payable and accrued expenses	24,161		49,116
Commission payable	5,125		12,164
Other liabilities	1,207		841
Total liabilities	30,493		62,121
Commitments and contingencies
Equity
Performance common stock, $0.01 par value, 500,000,000 shares authorized, 4,213,156 and 3,738,314 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively	42		37
Preferred stock, $0.01 par value, 100,000,000 shares authorized, no shares issued and outstanding as of March 31, 2015 and December 31, 2014	0		0
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 193,850,102 and 192,947,856 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively	1,938		1,930
Additional paid-in capital	289,516		276,874
Retained earnings (accumulated deficit)	(75,057)		(77,093)
Total NorthStar Asset Management Group Inc. stockholders’ equity	216,439		201,748
Non-controlling interest	4,919		0
Total equity	221,358		201,748
Total liabilities and equity	$ 251,851		$ 263,869

[1] Subsequent to March 31, 2015, the Company received $51.3 million from the Managed Companies.

[2] Includes fixed assets, tenant improvements and deposits related to leased offices that were transferred to the Company at the time of the spin-off on June 30, 2014.

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Equity-Based Compensation - NorthStar Realty Equity Plans (Narrative) (Details)	3 Months Ended	0 Months Ended	1 Months Ended	0 Months Ended
	Mar. 31, 2015	Apr. 03, 2014	May 31, 2014	Jan. 01, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted in period	1,315,000
Number of shares that met the performance hurdle	466,000
Restricted Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted in period	649,000
Number of shares that met the performance hurdle	466,000
Omnibus Stock Incentive Plan | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted in period		6,230,529	1,317,368
Omnibus Stock Incentive Plan | NorthStar Realty Finance Corporation | Restricted Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common shares issued	220,902			49,149
Omnibus Stock Incentive Plan | NorthStar Realty Finance Corporation | LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of LTIP shares that will be issued				665,747
Omnibus Stock Incentive Plan | NorthStar Realty Finance Corporation | Restricted Stock Units (RSUs) | Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted in period	1,205,210				762,898
Incentive Compensation Plan | NorthStar Realty Finance Corporation | LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
LTIP units issued	1,127,696
Number of units subject to vesting	781,042

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Cash Flows [Abstract]
Net income (loss)	$ 21,970	$ (8,305)	[1]
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in (earnings) losses of unconsolidated ventures	870	0	[1]
Accrued transaction costs	643	0
Depreciation and amortization expense	538	22
Amortization of equity-based compensation	13,488	5,694
Unrealized (gain) loss on foreign exchange	348	0
Deferred income tax, net	2,530	0
Change in assets and liabilities:
Restricted cash	(1,420)	0
Receivables, related parties	(6,393)	(4,177)
Other assets	(585)	(1,280)
Other liabilities	366	0
Accounts payable and accrued expenses	(15,086)	509
Commission payable	(7,471)	1
Net cash provided by (used in) operating activities	9,798	(7,536)
Cash flows from investing activities:
Investments in unconsolidated ventures	(35,631)	0
Distribution from unconsolidated ventures	2,550	0
Net cash provided by (used in) investing activities	(33,081)	0
Cash flows from financing activities:
Contribution from NorthStar Realty	0	9,577
Repurchase of shares related to stock compensation agreements related to tax withholding	(12,424)	0
Dividends	(19,521)	0
Net cash provided by (used in) financing activities	(31,945)	9,577
Effect of foreign exchange rate changes on cash	(348)	0
Net increase (decrease) in cash	(55,576)	2,041
Cash - beginning of period	109,199	7,537
Cash - end of period	53,623	9,578
Supplemental disclosure of non-cash investing and financing activities:
Conversion of Deferred LTIP Units to LTIP Units	4,400	0
Issuance of common stock related to transactions (refer to Note 4)	4,507	0
Dividend payable related to RSUs	211	0
Accrued transaction costs relating to investments in unconsolidated ventures	$ 145	$ 0

[1] The consolidated financial statements for the three months ended March 31, 2015 represents the Company’s results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. The three months ended March 31, 2014 represents a carve out of revenues and expenses attributable to the Company related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months ended March 31, 2015 may not be comparable to the Company’s results of operations reported for the prior period presented.

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Management Agreements and Managed Companies - Summary of Net Commission Income (Details) (USD $)	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Management Agreements [Abstract]
Service Fee, Related Party	$ 400,000		$ 100,000
Selling commission and dealer manager fees, related parties	29,923,000		14,548,000	[1]
Commission expense	27,695,000		13,560,000	[1]
Net commission income	$ 2,228,000	[2]	$ 988,000	[2]

[1] The consolidated financial statements for the three months ended March 31, 2015 represents the Company’s results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. The three months ended March 31, 2014 represents a carve out of revenues and expenses attributable to the Company related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months ended March 31, 2015 may not be comparable to the Company’s results of operations reported for the prior period presented.

[2] Excludes direct expenses of NorthStar Securities.

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Equity-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

Share-based Compensation [Abstract]

Summary of LTIP Units and Unvested Restricted Stock

The balance as of March 31, 2015 represents LTIP Units whether vested or not that are outstanding and unvested shares of restricted stock whether vested or not (grants in thousands):

	Three Months Ended March 31, 2015
	Restricted Stock		LTIP Units			Total Grants		Weighted Average Grant Price
Beginning Balance	4,104		1,135		(1)	5,239		$	22.12
New grants	649		666			1,315		23.62
Conversions	—		(7	)		(7	)	15.51
Vesting of restricted stock post-spin	(466	)	—			(466	)	13.95
Forfeited or canceled grants	(8	)	—			(8	)	17.85
Ending Balance/Weighted Average	4,279		1,794			6,073		$	23.09

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Investments in Unconsolidated Ventures - Distribution Finance (Narrative) (Details) (USD $)	3 Months Ended			0 Months Ended
	Mar. 31, 2015	Mar. 31, 2014		Jun. 30, 2014
Investments in and Advances to Affiliates [Line Items]
Equity in (earnings) losses of unconsolidated ventures	$ 870,000	$ 0	[1]
Distribution Finance Corporation
Investments in and Advances to Affiliates [Line Items]
Payments to Acquire Equity Method Investments				4,000,000
Fee on syndicated investments				0.50%
Incentive fee				15.00%
Equity method investments	3,400,000
Equity in (earnings) losses of unconsolidated ventures	$ 200,000
Distribution Finance Corporation | Minimum
Investments in and Advances to Affiliates [Line Items]
Annual asset management fees (percent of assets)				1.00%

[1] The consolidated financial statements for the three months ended March 31, 2015 represents the Company’s results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. The three months ended March 31, 2014 represents a carve out of revenues and expenses attributable to the Company related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months ended March 31, 2015 may not be comparable to the Company’s results of operations reported for the prior period presented.

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Schedule of segment reporting information

The following tables present segment reporting for the three months ended March 31, 2015 and 2014 (dollars in thousands):

Statement of Operations:
Three months ended March 31, 2015	NorthStar Realty (1)		Sponsored Companies		Broker Dealer (2)			Direct Investments			Corporate/Other			Total
Asset management and other fees, related parties	$	48,251	$	13,128	$	—		$	—		$	—		$	61,379
Selling commission and dealer manager fees, related parties	—		—		29,923			—			—			29,923
Commission expense	—		—		27,695			—			—			27,695
Salaries and related expense	—		—		2,237			—			9,908			12,145
Equity-based compensation expense	—		—		—			—			13,618			13,618
Other general and administrative expenses	—		—		1,915			—			4,190			6,105
Equity in earnings (losses) of unconsolidated ventures	—		—		—			(870		)	—			(870		)
Income tax (benefit) expense	—		—		—			—			7,938			7,938
Net income (loss)	48,251		13,128		(1,965		)	(870		)	(36,574		)	21,970

_______________    

(1) The Company began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty (refer to Note 3).

(2) Direct general and administrative expenses incurred by the broker dealer.

Statement of Operations:
Three months ended March 31, 2014	NorthStar Realty (1)		Sponsored Companies		Broker Dealer (2)			Corporate/Other			Total
Asset management and other fees, related parties	$	—	$	8,669	$	—		$	—		$	8,669
Selling commission and dealer manager fees, related parties	—		—		14,548			—			14,548
Commission expense	—		—		13,560			—			13,560
Salaries and related expense	—		—		1,863			6,073			7,936
Equity-based compensation expense	—		—		—			5,694			5,694
Other general and administrative expenses	—		—		1,762			111			1,873
Net income (loss)	—		8,669		(2,660		)	(14,314		)	(8,305		)

_______________

(1) The Company began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty (refer to Note 3).

(2) Direct general and administrative expenses incurred by the broker dealer.

The following table presents total assets by segment as of March 31, 2015 and December 31, 2014 (dollars in thousands):

Total Assets	NorthStar Realty (1)		Sponsored Companies (1)		Broker Dealer		Direct Investments		Corporate/Other		Total
March 31, 2015	$	53,069	$	22,029	$	12,183	$	95,615	$	68,955	$	251,851
December 31, 2014	$	60,909	$	27,147	$	17,868	$	54,480	$	103,465	$	263,869

__________________

(1) Primarily represents the receivable, related parties as of March 31, 2015 and December 31, 2014, respectively. Subsequent to March 31, 2015, the Company received $51.3 million of reimbursements from the Managed Companies.

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Business and Organization

3 Months Ended

Mar. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business and Organization

Business and Organization

NorthStar Asset Management Group Inc. (“NSAM” or the “Company”) is a global asset management firm focused on strategically managing real estate and other investment platforms in the United States and internationally. The Company commenced operations on July 1, 2014, upon the spin-off by NorthStar Realty Finance Corp. (“NorthStar Realty”) of its asset management business into a separate publicly-traded company, NSAM, a Delaware corporation. The spin-off was in the form of a tax-free distribution to NorthStar Realty’s common stockholders where each NorthStar Realty common stockholder received shares of the Company’s common stock on a one-for-one basis. At the same time, NorthStar Realty became externally managed by an affiliate of the Company through a management contract with an initial term of 20 years. NorthStar Realty continues to operate its commercial real estate debt origination business.

Certain of the Company’s affiliates also manage NorthStar Realty’s previously sponsored non-traded companies which raise money through the retail market, as well as any new non-traded company and any future sponsored company (referred to as the “Sponsored Companies” and together with NorthStar Realty, referred to as the “Managed Companies”).

The Company is organized to provide asset management and other services to the Managed Companies or any other companies it may sponsor in the future, both in the United States and internationally. The Managed Companies have historically invested in the commercial real estate (“CRE”) industry. The Company seeks to expand the scope of its asset management business beyond real estate into new asset classes and geographies by organically creating and managing additional investment vehicles or through acquisitions, strategic partnerships and joint ventures. To date, the Company has acquired an approximate 45%, as adjusted, interest in American Healthcare Investors LLC (the “AHI Interest”), an approximate 45% interest in Island Hospitality Management Inc. (the “Island Interest”) and an approximate 50% interest in Distributed Finance Corporation (“Distributed Finance”) (refer to Note 4).

The Company earns asset management, incentive and other fees, directly or indirectly, pursuant to management and other contracts and direct investments. In addition, the Company owns NorthStar Realty Securities, LLC (“NorthStar Securities”), a captive broker-dealer platform registered with the Securities and Exchange Commission (“SEC”) which raises capital in the retail market for the Sponsored Companies.

On March 13, 2015, the Company restructured by converting its current holding company into NSAM LP, a Delaware limited partnership and the operating partnership of the Company (the “Operating Partnership”). The Operating Partnership holds substantially all of the Company’s assets and the Company conducts its operations, directly or indirectly, through the Operating Partnership.

References to the historical asset management business of NorthStar Realty including assets, liabilities and results of operations relate to managing the Sponsored Companies, owning NorthStar Securities and operating its special servicing business and are generally referred to as those of the Company.

Proposed Spin-off of European Real Estate Business

On February 26, 2015, NorthStar Realty announced that its board of directors unanimously approved a plan to spin-off its European real estate business (the “NRF Proposed European Spin”) into a newly-formed publicly-traded real estate investment trust (“REIT”), NorthStar Realty Europe Corp. (“NRE”) expected to be listed on the New York Stock Exchange (“NYSE”). As of May 6, 2015, NorthStar Realty has acquired approximately $2.0 billion of European real estate (excluding NorthStar Realty’s European healthcare assets) comprised of 49 properties spanning across some of Europe’s top markets that will be contributed to NRE upon the completion of the NRF Proposed European Spin. The Company will manage NRE pursuant to a long-term management agreement, on substantially similar terms as the Company’s management agreement with NorthStar Realty. The NRF Proposed European Spin is expected to be completed in the second half of 2015.

All references herein to the Company refer to NorthStar Asset Management Group Inc. and its consolidated subsidiaries, unless the context otherwise requires.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	193,850,102	192,947,856
Common stock, shares outstanding	193,850,102	192,947,856
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Performance stock, par value (in dollars per share)	$ 0.01	$ 0.01
Performance stock, shares authorized	500,000,000	500,000,000
Performance stock, shares issued	4,213,156	3,738,314
Performance stock, shares outstanding	4,213,156	3,738,314

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Segment Reporting

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company conducts its asset management business through the following five segments, which are based on how management reviews and manages its business:

• NorthStar Realty - Provide asset management and other services on a fee basis by managing NorthStar Realty’s day-to-day operations. The Company began earning fees from NorthStar Realty on July 1, 2014.

• Sponsored Companies - Provide asset management and other services on a fee basis by managing each Sponsored Company’s respective day-to-day operations.

• Broker-dealer - Raise capital in the retail market through NorthStar Securities and earn dealer manager fees from the Sponsored Companies.

• Direct Investments - Invest in strategic partnerships and joint ventures with third-parties with expertise in commercial real estate or other sectors and markets, where the Company benefits from the fee stream and potential incentive fee or promote.

• Corporate/Other - Includes corporate level general and administrative expenses, as well as special servicing on a fee basis in connection with certain securitization transactions.

The consolidated financial statements for the three months ended March 31, 2015 represent the Company subsequent to the spin-off of NorthStar Realty’s historical asset management business of managing the Sponsored Companies, owning NorthStar Securities and operating its special servicing business. Periods prior to June 30, 2014 present a carve-out of NorthStar Realty’s historical financial information including revenues and expenses allocated to the Company, related to NorthStar Realty’s historical asset management business. Expenses also included an allocation of indirect expenses from NorthStar Realty, including salaries, equity-based compensation and other general and administrative expenses (primarily occupancy and other costs) based on an estimate had NorthStar Realty’s historical asset management business been run as an independent entity. This allocation method was principally based on relative headcount and management’s knowledge of NorthStar Realty’s operations. Additionally, periods prior to June 30, 2014 did not reflect the management agreement the Company entered into with NorthStar Realty effective July 1, 2014.

The following tables present segment reporting for the three months ended March 31, 2015 and 2014 (dollars in thousands):

Statement of Operations:
Three months ended March 31, 2015	NorthStar Realty (1)		Sponsored Companies		Broker Dealer (2)			Direct Investments			Corporate/Other			Total
Asset management and other fees, related parties	$	48,251	$	13,128	$	—		$	—		$	—		$	61,379
Selling commission and dealer manager fees, related parties	—		—		29,923			—			—			29,923
Commission expense	—		—		27,695			—			—			27,695
Salaries and related expense	—		—		2,237			—			9,908			12,145
Equity-based compensation expense	—		—		—			—			13,618			13,618
Other general and administrative expenses	—		—		1,915			—			4,190			6,105
Equity in earnings (losses) of unconsolidated ventures	—		—		—			(870		)	—			(870		)
Income tax (benefit) expense	—		—		—			—			7,938			7,938
Net income (loss)	48,251		13,128		(1,965		)	(870		)	(36,574		)	21,970

_______________    

(1) The Company began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty (refer to Note 3).

(2) Direct general and administrative expenses incurred by the broker dealer.

Statement of Operations:
Three months ended March 31, 2014	NorthStar Realty (1)		Sponsored Companies		Broker Dealer (2)			Corporate/Other			Total
Asset management and other fees, related parties	$	—	$	8,669	$	—		$	—		$	8,669
Selling commission and dealer manager fees, related parties	—		—		14,548			—			14,548
Commission expense	—		—		13,560			—			13,560
Salaries and related expense	—		—		1,863			6,073			7,936
Equity-based compensation expense	—		—		—			5,694			5,694
Other general and administrative expenses	—		—		1,762			111			1,873
Net income (loss)	—		8,669		(2,660		)	(14,314		)	(8,305		)

_______________

(1) The Company began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty (refer to Note 3).

(2) Direct general and administrative expenses incurred by the broker dealer.

The following table presents total assets by segment as of March 31, 2015 and December 31, 2014 (dollars in thousands):

Total Assets	NorthStar Realty (1)		Sponsored Companies (1)		Broker Dealer		Direct Investments		Corporate/Other		Total
March 31, 2015	$	53,069	$	22,029	$	12,183	$	95,615	$	68,955	$	251,851
December 31, 2014	$	60,909	$	27,147	$	17,868	$	54,480	$	103,465	$	263,869

__________________

(1) Primarily represents the receivable, related parties as of March 31, 2015 and December 31, 2014, respectively. Subsequent to March 31, 2015, the Company received $51.3 million of reimbursements from the Managed Companies.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 07, 2015
Document and Entity Information
Entity Registrant Name	NorthStar Asset Management Group Inc.
Entity Central Index Key	0001597503
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--03-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Share Outstanding		193,839,620
Amendment Flag	false
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No

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Subsequent Events

3 Months Ended

Mar. 31, 2015

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Dividends

On May 5, 2015, the Company declared a dividend of $0.10 per share of common stock. The common stock dividend will be paid on May 22, 2015 to stockholders of record as of the close of business on May 18, 2015.

Share Buyback

In April 2015, the Company’s board of directors authorized the repurchase of up to $400 million of its outstanding common stock. The authorization will expire in twelve months, unless otherwise extended by the Company’s board of directors. The Company was in a black out period since establishment of the plan and consequently, as of May 8, 2015, the Company has not repurchased any shares.

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Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Revenues
Asset management and other fees, related parties	$ 61,379	[1]	$ 8,669	[1],[2]
Selling commission and dealer manager fees, related parties	29,923		14,548	[2]
Other income	400		121	[2]
Total revenues	91,702		23,338	[2]
Expenses
Commission expense (refer to Note 3)	27,695		13,560	[2]
Transaction costs	302		2,550	[2]
Other expense	711		30	[2]
General and administrative expenses
Salaries and related expense	12,145		7,936	[2]
Equity-based compensation expense	13,618		5,694	[2]
Other general and administrative expenses	6,105		1,873	[2]
Total general and administrative expenses	31,868		15,503	[2]
Total expenses	60,576		31,643	[2]
Unrealized gain (loss) on foreign exchange	(348)		0
Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax (benefit) expense	30,778		(8,305)	[2]
Equity in earnings (losses) of unconsolidated ventures	(870)		0	[2]
Income (loss) before income tax (benefit) expense	29,908		(8,305)	[2]
Income tax (benefit) expense	7,938		0
Net income (loss)	21,970		(8,305)	[2]
Net (income) loss attributable to non-controlling interest	(202)		0	[2]
Net income (loss) attributable to NorthStar Asset Management Group Inc. common stockholders	$ 21,768		$ (8,305)	[2]
Earnings (loss) per share:
Net income (loss) per Basic (usd per share)	$ 0.11		$ (0.04)	[2]
Net income (loss) per Dilutive (usd per share)	$ 0.11		$ (0.04)	[2]
Weighted average number of shares:
Basic (shares)	189,541,166		187,815,614	[2]
Dilutive (shares)	191,572,264	[3]	187,815,614	[2],[3]
Dividends per share of common stock (usd per share)	$ 0.10

[1] The Company began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty (refer to Note 1).

[2] The consolidated financial statements for the three months ended March 31, 2015 represents the Company’s results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. The three months ended March 31, 2014 represents a carve out of revenues and expenses attributable to the Company related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months ended March 31, 2015 may not be comparable to the Company’s results of operations reported for the prior period presented.

[3] Diluted EPS excludes the effect of equity-based awards issued that were not dilutive for the periods presented. These instruments could potentially impact diluted EPS in future periods, depending on changes in the Company’s stock price and other factors.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company may be involved in various litigation matters arising in the ordinary course of its business. Although the Company is unable to predict with certainty the eventual outcome of any litigation, in the opinion of management, the legal proceedings are not expected to have a material adverse effect on the Company’s financial position or results of operations.

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Related Party Arrangements

3 Months Ended

Mar. 31, 2015

Related Party Transactions [Abstract]

Related Party Arrangements

Related Party Arrangements

NorthStar Realty

Investment Opportunities

Under the management agreement, NorthStar Realty agreed to make available to the Company for the benefit of the Managed Companies, including NorthStar Realty, all investment opportunities sourced by NorthStar Realty. The Company agreed to fairly allocate such opportunities among the Managed Companies, including NorthStar Realty, in accordance with an investment allocation policy. Pursuant to the management agreement, NorthStar Realty is entitled to fair and reasonable compensation for its services in connection with any loan origination opportunities sourced by it, which may include first mortgage loans, subordinate mortgage interests, mezzanine loans and preferred equity interests, in each case relating to commercial real estate.

The Company provides services with regard to such areas as payroll, human resources and employee benefits, financial systems management, treasury and cash management, accounts payable services, telecommunications services, information technology services, property management services, legal and accounting services and various other corporate services to NorthStar Realty as it relates to its loan origination business for commercial real estate debt.

Credit Agreement

In connection with the spin-off, the Company entered into a revolving credit agreement with NorthStar Realty pursuant to which NorthStar Realty makes available to the Company, on an “as available basis,” up to $250.0 million of financing with a maturity of June 30, 2019 at LIBOR plus 3.50%. The revolving credit facility is unsecured. The Company expects to use the proceeds for general corporate purposes, including potential future acquisitions. In addition, the Company may use the proceeds to acquire assets on behalf of the Managed Companies that the Company intends to allocate to such Managed Company but for which such Managed Company may not then have immediately available funds. The terms of the revolving credit facility contain various representations, warranties, covenants and conditions, including the condition that NorthStar Realty’s obligation to advance proceeds to the Company is dependent upon NorthStar Realty and its affiliates having at least $100.0 million of either unrestricted cash and cash equivalents or amounts available under committed lines of credit, after taking into account the amount the Company seeks to draw under the facility. As of March 31, 2015, the Company had no borrowings outstanding under the credit agreement.

Healthcare Strategic Joint Venture

In January 2014, the Company entered into a long-term strategic partnership with James F. Flaherty III, former Chief Executive Officer of HCP, Inc., focused on expanding the Company’s healthcare business into a preeminent healthcare platform (“Healthcare Strategic Partnership”). In connection with the partnership, Mr. Flaherty oversees and seeks to grow both NorthStar Realty’s healthcare real estate portfolio and the portfolio of NorthStar Healthcare. In connection with entering into the partnership, NorthStar Realty granted Mr. Flaherty certain RSUs, half of which became the Company’s RSUs as a result of NorthStar Realty’s reverse stock split and the spin-off (refer to Note 7). The Healthcare Strategic Partnership is entitled to incentive fees ranging from 20% to 25% above certain hurdles for new and existing healthcare real estate investments held by NorthStar Realty and NorthStar Healthcare. The partnership will also be entitled to any incentive fees earned from NorthStar Healthcare or any future healthcare non-traded vehicles sponsored by the Company, NorthStar Realty or any affiliates, as well as future healthcare non-traded vehicles sponsored by AHI Ventures. For the three months ended March 31, 2015 and 2014, the Company did not earn incentive fees related to the Healthcare Strategic Partnership. On February 2, 2015, in connection with the completion of NorthStar Healthcare’s initial primary offering, the Company issued 20,305 RSUs to Mr. Flaherty.

AHI Venture

In connection with the AHI Interest, AHI Ventures provides certain asset management, property management and other services to affiliates of the Company assisting in managing the current and future healthcare assets (excluding any joint venture assets) of NorthStar Realty and other Sponsored Companies, including the assets formerly owned by Griffin-American Healthcare REIT II, Inc. (“Griffin-American”) and its former operating partnership, Griffin-American Healthcare REIT II Holdings, LP (“Griffin-America OP portfolio”). AHI Ventures receives a base management fee of $0.6 million per year plus 0.50% of the equity invested by NorthStar Realty in future healthcare assets (excluding assets in the Griffin-American OP portfolio and other joint ventures) that AHI Ventures may manage. AHI Ventures may also participate in the incentive fees earned by the Company and its affiliates with respect to new and existing healthcare real estate investments held by NorthStar Realty and NorthStar Healthcare, including the Griffin-American OP portfolio, any future healthcare non-traded vehicles sponsored by the Company, NorthStar Realty or any affiliates, as well as any future healthcare non-traded vehicles sponsored by AHI Ventures.  AHI Ventures would also be entitled to additional base management fees should it manage assets on behalf of any other Managed Companies. AHI Ventures also intends to directly or indirectly sponsor, co-sponsor, form, register, market, advise, manage and/or operate investment vehicles that are intended to invest primarily in healthcare real estate assets. In addition, Mr. Flaherty acquired a 12.3% interest, as adjusted, in AHI Ventures.

Island Venture

Island is a leading, independent select service hotel management company that currently manages 149 hotel properties, representing $3.7 billion, of which 101 hotel properties are owned by NorthStar Realty. Island provides certain asset management, property management and other services to NorthStar Realty to assist in managing its hotel properties. Island receives a base management fee of 2.5% to 3.0% of the current monthly revenue of the NorthStar Realty hotel properties it manages for NorthStar Realty.

RXR Realty

In December 2013, NorthStar Realty entered into a strategic transaction with RXR Realty, the co-sponsor of NorthStar/RXR New York Metro. The investment in RXR Realty includes an approximate 30% equity interest. NorthStar Realty’s equity interest in RXR Realty is structured so that the Company is entitled to certain fees in connection with RXR Realty’s investment management business.

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2015

Stockholders' Equity Note Disclosure and Earnings Per Share Disclosure [Abstract]

Schedule of Earnings Per Share

The following table presents EPS for the three months endedMarch 31, 2015 and 2014 (dollars and shares in thousands, except per share data):

	Three Months Ended March 31,
	2015			2014
Numerator:
Net income (loss)	$	21,768		$	(8,305	)
Earnings (loss) allocated to unvested participating securities	(832		)	—
Numerator for basic income per share	20,936			(8,305		)
Participating nonvested shares	832			—
Net income (loss) attributable to LTIP Units non-controlling interest	202			—
Numerator for diluted income per share	$	21,970		$	(8,305	)
Denominator:
Weighted average number of shares of common stock	189,541			187,816
Incremental diluted shares	2,031			—
Weighted average number of diluted shares(1)	191,572			187,816
Earnings (loss) per share:
Basic	$	0.11		$	(0.04	)
Diluted	$	0.11		$	(0.04	)

_______________________

(1) Diluted EPS excludes the effect of equity-based awards issued that were not dilutive for the periods presented. These instruments could potentially impact diluted EPS in future periods, depending on changes in the Company’s stock price and other factors.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Basis of Quarterly Presentation

Basis of Quarterly Presentation

The accompanying unaudited consolidated financial statements and related notes of the Company are presented on a carve-out basis for the period prior to June 30, 2014 and have been prepared from the historical consolidated balance sheets, statements of operations and cash flow attributed to the historical asset management business of NorthStar Realty and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the consolidated financial statements prepared under U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, which was filed with the SEC.

The consolidated financial statements for the three months ended March 31, 2015 represent the Company subsequent to the spin-off of NorthStar Realty’s historical asset management business of managing the Sponsored Companies, owning NorthStar Securities and operating its special servicing business. In connection with the spin-off, most of NorthStar Realty’s employees at the time of the spin-off became employees of the Company except for executive officers, employees engaged in NorthStar Realty’s loan origination business at the time of the spin-off and certain other employees that became co-employees of both the Company and NorthStar Realty. Therefore, subsequent to June 30, 2014, the Company generally incurs substantially all employee-related cash costs.

Periods prior to June 30, 2014 present a carve-out of NorthStar Realty’s historical financial information, including revenues and expenses allocated to the Company, related to NorthStar Realty’s historical asset management business. Expenses also included an allocation of indirect expenses from NorthStar Realty, including salaries, equity-based compensation and other general and administrative expenses (primarily occupancy and other cost) based on an estimate had NorthStar Realty’s historical asset management business been run as an independent entity. This allocation method was principally based on relative headcount and management’s knowledge of NorthStar Realty’s operations. Additionally, periods prior to June 30, 2014 did not reflect the management agreement the Company entered into with NorthStar Realty effective July 1, 2014.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries.

Variable Interest Entities

A variable interest entity (“VIE”) is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. The Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity.

The Company reassesses its initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events.

A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents has both the: (i) power to direct the activities that most significantly impact the VIE’s economic performance; and (ii) obligation to absorb the losses of the VIE or the right to receive the benefits from the VIE, which could be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE by considering qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of its investment; the obligation or likelihood for the Company or other interests to provide financial support; consideration of the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders and the similarity with and significance to the business activities of the Company and the other interests. The Company reassesses its determination of whether it is the primary beneficiary of a VIE each reporting period. Significant judgments related to these determinations include estimates about the current and future fair value and performance of investments held by these VIEs and general market conditions.

The Company evaluates the Managed Companies, investments in unconsolidated ventures and securitization financing transactions to which the Company is the special servicer to determine whether they are a VIE.

Voting Interest Entities

A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company does not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party.

The Company performs on-going reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework.

Investments in Unconsolidated Ventures

A non-controlling, unconsolidated ownership interest in an entity may be accounted for using the equity method, at fair value or the cost method.

Under the equity method, the investment is adjusted each period for capital contributions and distributions and its share of the entity’s net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in such governing documents.

The Company may account for an investment in an unconsolidated entity at fair value by electing the fair value option. The Company records the change in fair value for its share of the projected future cash flow of such investments from one period to another in equity in earnings (losses) from unconsolidated ventures in the consolidated statements of operations. Any change in fair value attributed to market related assumptions is considered unrealized gain (loss).

The Company may account for an investment that does not qualify for equity method accounting or for which the fair value option was not elected using the cost method if the Company determines the investment in the unconsolidated entity is insignificant. Under the cost method, equity in earnings is recorded as dividends are received to the extent they are not considered a return of capital, which is recorded as a reduction of cost of the investment.

Non-controlling Interests

Non-controlling Interest

A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to the Company. A non-controlling interest is required to be presented as a separate component of equity on the consolidated balance sheets and presented separately as net income (loss) and other comprehensive income (loss) (“OCI”) attributable to controlling and non-controlling interests. An allocation to a non-controlling interest may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in such governing documents.

Estimates

Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that could affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates and assumptions.

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified in the consolidated financial statements to conform to current period presentation.

Restricted Cash

Restricted Cash

Restricted cash represents cash held by the Company’s foreign subsidiaries due to certain regulatory capital requirements.

Revenue Recognition

Revenue Recognition

Asset Management and Other Fees

Asset management and other fees include asset management, incentive and other fees, such as acquisition and disposition fees, earned from the Managed Companies. Base asset management and other fees are recognized based on contractual terms specified in the underlying governing documents in the periods during which the related services are performed and the amounts have been contractually earned. Incentive fees and payments are recognized subject to the achievement of return hurdles in accordance with the respective terms set forth in the governing documents of the Managed Companies.

Selling Commission and Dealer Manager Fees and Commission Expense

Selling commission and dealer manager fees represent income earned by the Company for selling equity in the Sponsored Companies through NorthStar Securities. Selling commission and dealer manager fees and commission expense are accrued on a trade date basis.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

An allowance for a doubtful account is established when, in the opinion of the Company, a full recovery of a receivable becomes doubtful. A receivable is written off when it is no longer collectible and/or legally discharged.

Equity-Based Compensation

Equity-Based Compensation

The Company accounts for equity-based compensation awards, including awards granted to co-employees, using the fair value method, which requires an estimate of fair value of the award. Awards may be based on a variety of measures such as time, performance, market or a combination thereof. For time-based awards, fair value is determined based on the stock price on the grant date. The Company recognizes compensation expense over the vesting period on a straight-line basis. For performance-based awards, fair value is determined based on the stock price at the date of grant and an estimate of the probable achievement of such measure. The Company recognizes compensation expense over the requisite service period, net of estimated forfeitures, using the accelerated attribution expense method. For market-based measures, fair value is determined using a Monte Carlo analysis under a risk-neutral premise using a risk-free interest rate. The Company recognizes compensation expense, over the requisite service period, net of estimated forfeitures, on a straight-line basis.

For awards with a combination of performance or market measures, the Company estimates the fair value as if it were two separate awards. First, the Company estimates the probability of achieving the performance measure. If it is not probable the performance condition will be met, the Company records the compensation expense based on the fair value of the market measure, as described above. This expense is recorded even if the market-based measure is never met. If the performance-based measure is subsequently estimated to be achieved, the Company records compensation expense based on the performance-based measure. The Company would then record a cumulative catch-up adjustment for any additional compensation expense.

Equity-based compensation issued to non-employees is accounted for using the fair value of the award at the earlier of the performance commitment date or performance completion date. The awards are remeasured every quarter based on the stock price as of the end of the reporting period until such awards vest, if any.

Foreign Currency

Foreign Currency

Assets and liabilities denominated in non-U.S. dollar currencies are remeasured at the exchange rate prevailing on the reporting date and revenues and expenses are remeasured at the average exchange rate for the period. The Company’s functional currency of its non-U.S. denominated assets and liabilities is the U.S. dollar. Therefore, any gains or losses from the remeasurement of foreign currency to U.S. dollars are recognized in earnings.

Comprehensive Income (Loss)

Comprehensive Income (Loss)

The Company had no items of other comprehensive income (loss), so its comprehensive (loss) is the same as the net (loss) for all periods presented.

Earnings Per Share

Earnings Per Share

The Company’s basic earnings per share (“EPS”) is calculated using the two-class method for each class of common stock and participating security as if all earnings had been distributed by dividing net income (loss) attributable to common stockholders by the weighted average number of common stock outstanding. Under the two-class method, net income is first reduced for distributions declared on all classes of participating securities to arrive at undistributed earnings. Under the two-class method, net loss is reduced for distributions declared on participating securities only if such security has the right to participate in the earnings of the entity and an objectively determinable contractual obligation to share in net losses of the entity. Diluted EPS includes restricted stock and the potential dilution that could occur if outstanding restricted stock units (“RSUs”), performance common stock or other contracts to issue common stock, assuming performance hurdles have been met, were converted to common stock, including limited partnership interests in the Operating Partnership which are structured as profits interests (“LTIP Units”) (refer to Note 7), where such exercise or conversion would result in a lower EPS. The dilutive effect of such RSUs and LTIP Units is calculated assuming all units are converted to common stock.

Income Taxes

Income Taxes

Certain subsidiaries of the Company are subject to taxation by federal, state, local and foreign authorities for the periods presented. On March 13, 2015, the Company restructured by converting, under Delaware law, an existing limited liability company disregarded as separate from the Company for federal income tax purposes to a Delaware limited partnership and admitting as limited partners LTIP Unit Holders, forming the Company’s new Operating Partnership. The Operating Partnership is taxed as a partnership for federal income tax purposes and consequently, its items of income gain, loss, deduction and credit are passed through to, and included in, the taxable income of each of its partners including the Company. For the period prior to March 13, 2015, the Company and its U.S. subsidiaries will file consolidated federal income tax returns. Income taxes are accounted for by the asset/liability approach in accordance with U.S. GAAP. Deferred taxes, if any, represent the expected future tax consequences when the reported amounts of assets and liabilities are recovered or paid. Such amounts arise from differences between the financial reporting and tax bases of assets and liabilities and are adjusted for changes in tax laws and tax rates in the period which such changes are enacted. A provision for income tax represents the total of income taxes paid or payable for the current period, plus the change in deferred tax assets and liabilities.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting update requiring a company to recognize as revenue the amount of consideration it expects to be entitled to in connection with the transfer of promised goods or services to customers.  The accounting standard update will replace most of the existing revenue recognition guidance currently promulgated by U.S. GAAP.  In April 2015, the FASB proposed a one-year deferral of the effective date of the new revenue standard to January 1, 2018. The Company is in the process of evaluating the impact, if any, of the update on its consolidated financial positions, results of operations and financial statement and related disclosures.

In February 2015, the FASB issued updated guidance that changes the rules regarding consolidation. The pronouncement eliminates specialized guidance for limited partnerships and similar legal entities and removes the indefinite deferral for certain investment funds. The new guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

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Non-controlling Interests

3 Months Ended

Mar. 31, 2015

Noncontrolling Interest [Abstract]

Non-controlling Interests

Non-controlling Interest

Operating Partnership

Non-controlling interest includes the aggregate LTIP Units held by limited partners (the “Unit Holders”) in the Operating Partnership. Net income (loss) attributable to the non-controlling interest is based on the weighted average Unit Holders’ ownership percentage of the Operating Partnership for the respective period. The issuance of additional common stock or LTIP Units changes the percentage ownership of both the Unit Holders and the Company. Since an LTIP Unit is generally redeemable for cash or common stock at the option of the Company, it is deemed to be equivalent to common stock. Therefore, such transactions are treated as capital transactions and result in an allocation between stockholders’ equity and non-controlling interest on the accompanying consolidated balance sheets to account for the change in the ownership of the underlying equity in the Operating Partnership. In connection with the formation of the Operating Partnership, the Company recorded a non-controlling interest of $4.4 million related to LTIP Units. As of March 31, 2015, 1,793,443 LTIP units were outstanding, representing a 1.0% ownership and non-controlling interest in the Operating Partnership. Income attributable to the Operating Partnership non-controlling interest for the three months ended March 31, 2015 was $0.2 million.

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Equity-Based Compensation

3 Months Ended

Mar. 31, 2015

Share-based Compensation [Abstract]

Equity-Based Compensation

Equity-Based Compensation

Impact of the Spin-off

NorthStar Realty issued equity-based awards to directors, officers, employees, consultants and advisors pursuant to the NorthStar Realty Finance Corp. 2004 Omnibus Stock Incentive Plan, as amended and restated (the “NorthStar Realty Stock Plan”), and the NorthStar Realty Executive Incentive Bonus Plan, as amended (the “NorthStar Realty Plan” and collectively the “NorthStar Realty Equity Plans”). In addition, the Company issued equity-based awards to directors, officers, employees, consultants and advisors pursuant to the NorthStar Asset Management Group Inc. 2014 Omnibus Stock Incentive Plan (the “NSAM Stock Plan”) and the NorthStar Asset Management Group Inc. Executive Incentive Bonus Plan (the “NSAM Bonus Plan” and collectively, with the NSAM Stock Plan, the “NSAM Plans”)

All of the vested and unvested equity-based awards granted by NorthStar Realty prior to the spin-off remained outstanding immediately following the spin-off with various adjustments made to these awards to reflect NorthStar Realty’s reverse stock split as well as the impact of the spin-off, as described below.

NorthStar Realty’s equity awards outstanding at the time of the spin-off, including LTIP Units converted to common shares in connection with NorthStar Realty’s internal corporate reorganization, were adjusted to an equal number of shares of the Company’s common stock or Deferred LTIP Units, as described below, but generally continue to remain, subject to the same vesting and other terms that applied prior to the spin-off. Vesting conditions for outstanding awards were adjusted to reflect the impact of the spin-off with respect to employment conditions for service-based awards and total stockholder return for performance-based awards. The shares of the Company’s common stock (representing LTIP Units previously issued by NorthStar Realty’s operating partnership prior to the spin-off) that remain subject to vesting after the spin-off, as well as grants of shares of the Company’s common stock subject to time-based vesting issued by the Company since the time of the spin-off, are herein referred to as restricted stock.

Deferred LTIP Units outstanding immediately prior to the spin-off were equity awards issued by NorthStar Realty representing the right to receive either LTIP Units in NorthStar Realty’s successor operating partnership or, if such LTIP Units were not available by March 13, 2015, shares of NorthStar Realty common stock (subject to the same vesting conditions). On March 13, 2015, all of the Company’s outstanding Deferred LTIP Units were generally settled in LTIP Units in the Operating Partnership, or shares of restricted stock, which remain subject to the same vesting conditions that applied to the Deferred LTIP Units.

Following the spin-off, NorthStar Realty and the compensation committee of its board of directors (the “NorthStar Realty Compensation Committee”) continues to administer all awards issued under the NorthStar Realty Equity Plans but the Company is obligated to issue shares of the Company’s common stock or other equity awards of its subsidiaries or make cash payments in lieu thereof or with respect to dividend or distribution equivalent obligations to the extent required by such awards previously issued under the NorthStar Realty Equity Plans. These awards will continue to be governed by the NorthStar Realty Equity Plans, as applicable, and shares of the Company’s common stock issued pursuant to these awards will not be issued pursuant to, or reduce availability under the NorthStar Realty Equity Plans.

In connection with the spin-off, most of NorthStar Realty’s employees at the time of the spin-off became employees of the Company except for executive officers, employees engaged in NorthStar Realty’s loan origination business at the time of the spin-off and certain other employees that became co-employees of both the Company and NorthStar Realty.

The following summarizes the equity-based compensation plans and related expenses.

NorthStar Asset Management Plans

NSAM Stock Plan

In March 2014, the NorthStar Realty Compensation Committee approved the NSAM Stock Plan, which was subsequently adopted by the Company’s board of directors and approved by its sole stockholder at the time. The NSAM Stock Plan was administered by the NorthStar Realty Compensation Committee prior to the spin-off and is administered by the Company’s compensation committee following the spin-off. The NSAM Stock Plan provides flexibility to use various equity-based and cash incentive awards as compensation tools to motivate the Company’s workforce.

In anticipation of the spin-off, on April 3, 2014, the Company granted an aggregate of 6,230,529 RSUs to its executive officers pursuant to the NSAM Stock Plan. The RSUs vest over four years and are subject to the achievement of performance-based vesting conditions and continued employment. 40% of these RSUs are performance-based awards and were subject to the achievement of performance-based hurdles relating to CAD and capital raising of the Sponsored Companies, as well as continued employment through December 31, 2017 (“Performance RSUs”). 30% of these RSUs are market-based awards and are subject to the achievement of performance-based hurdles relating to the Company’s absolute total stockholder return and continued employment over a four-year period ended April 2, 2018 (“Absolute RSUs”). The remaining 30% of these RSUs are market-based awards and are subject to the achievement of performance-based hurdles based on the Company’s total stockholder return relative to the Russell 2000 Index and continued employment over a four-year period ended April 2, 2018 (“Relative RSUs”). With respect to these grants, the grant date fair value for the Performance RSUs, Absolute RSUs and Relative RSUs was $17.01, $10.22 and $16.21 per RSU, respectively. The grant date fair value was determined using a risk-free interest rate of 1.48%. In May 2014, the Company also granted an aggregate of 1,317,368 RSUs (net of forfeitures occurring prior to March 31, 2015) with substantially similar terms as the RSUs granted to executives in April 2014 to certain employees pursuant to the NSAM Stock Plan.  With respect to these grants, the grant date fair value for the Performance RSUs, Absolute RSUs and Relative RSUs was $16.80, $9.95 and $16.29 per RSU, respectively. The grant date fair value was determined using a risk-free interest rate of 1.29%. In December 2014, the Company determined that the performance hurdles relating to the Performance RSUs were met. On December 31, 2014, the Performance RSUs were settled in shares of the Company’s common stock, of which 25% were vested and the remainder (in the form of restricted stock) will vest in equal installments on December 31, 2015, 2016 and 2017, subject to continued employment.  On December 31, 2014, the Company retired 392,157 of the vested shares of common stock to satisfy the minimum statutory tax withholding requirements. The common stock retired to satisfy the withholding amounts was recorded as a reduction to additional paid-in capital with an offsetting payable recorded in accounts payable and accrued expenses.  On December 31, 2014, the Absolute RSUs and Relative RSUs related to the executives were settled in shares of performance common stock.  Upon vesting pursuant to the terms of the Absolute RSUs and Relative RSUs, shares of performance common stock will automatically convert into shares of common stock and the executive will be entitled to receive the distributions that would have been paid with respect to a share of common stock (for each share of performance common stock that vests) on or after the date the shares of performance common stock were initially issued.

NSAM Bonus Plan

In March 2014, the NorthStar Realty Compensation Committee approved the NSAM Bonus Plan, which was subsequently adopted by the Company’s board of directors and approved by its sole stockholder. The NSAM Bonus Plan establishes the general parameters of the Company’s incentive bonus program for its executive officers. Pursuant to the NSAM Bonus Plan, for each plan year, the administrator will establish two bonus pools (an annual cash bonus pool and a long-term bonus pool), award a bonus pool percentage(s) to each participant with respect to such bonus pools and establish performance goals, vesting requirements and other terms and conditions applicable to such bonuses. The NSAM Bonus Plan was administered by the NorthStar Realty Compensation Committee prior to the spin-off and is administered by the Company’s compensation committee following the spin-off. Prior to the spin-off, the NorthStar Realty Compensation Committee established bonus pools, awarded bonus pool percentages and established the performance goals, vesting requirements and other terms and conditions applicable to bonuses for 2014 under the NSAM Bonus Plan.

Pursuant to an employee matters agreement entered into in connection with the spin-off, NorthStar Realty agreed to make the cash portion of any incentive payment to the Company employees for services performed in 2014 through the date of the spin-off and as a result NorthStar Realty was responsible for paying approximately 50% of the 2014 annual cash and long-term bonuses earned under the NSAM Bonus Plan. Long-term bonuses for 2014 were paid in both Company and NorthStar Realty equity-based awards, subject to performance-based and time-based vesting conditions over the four-year performance period from January 1, 2014 through December 31, 2017. Approximately 31.65% of these long-term bonuses were subject to the achievement of performance-based hurdles relating to CAD and capital raising of the Sponsored Companies in 2014 to be paid in shares of the Company’s common stock that vest 25% on each of December 31, 2014, 2015, 2016 and 2017, subject to continued employment. 18.35% of these long-term bonuses are performance-based awards to be paid in shares of performance common stock that are subject to vesting based on the achievement of performance-based hurdles relating to the Company’s absolute total stockholder return and continued employment over a four-year period. The remaining approximately 50% of long-term bonuses are being paid by NorthStar Realty. 

In connection with the long-term bonuses for 2014, the Company determined that the performance hurdles for the approximately 31.65% of the long-term bonuses to be paid in shares of the Company’s common stock were met.  On December 31, 2014, the Company paid this portion of the long-term bonus by issuing 795,107 shares of common stock, of which 25% were vested and the remainder (in the form of restricted stock) will vest in equal installments on December 31, 2015, 2016 and 2017, subject to continued employment. The Company retired 108,198 of the vested shares of common stock to satisfy the minimum statutory withholding requirements. In connection with the remainder of the long-term bonus to be paid by the Company, in February 2015, the Company issued an aggregate of 474,842 shares of performance common stock to executives, which are subject to vesting based on the Company’s absolute total stockholder return and continued employment over the four-year period ending December 31, 2017. With respect to these grants, the grant date fair value was $21.16 per share, which was determined using a risk-free interest rate of 1.00%. Upon vesting, these shares of performance common stock will automatically convert into shares of common stock and the executives will be entitled to receive the distributions that would have been paid with respect to a share of common stock (for each share of performance common stock that vests) on or after January 1, 2015.  In February 2015, the Company also granted 642,882 restricted shares, net of forfeitures, to certain non-executive employees, subject to time based vesting conditions through January 29, 2018.

NorthStar Realty Equity Plans

In connection with the spin-off, the Company issued the following related to the NorthStar Realty Equity Plans that remain outstanding as of March 31, 2015: 220,902 shares of restricted common stock which remain subject to vesting; 1,127,696 LTIP Units (net of forfeitures), of which 781,042 remain subject to vesting; and 1,205,210 RSUs which remain subject to vesting based on performance and continued employment. On December 31, 2014, the performance hurdle for an incremental 762,898 of RSUs was met pursuant to NorthStar Realty’s bonus plan for 2011. To settle these RSUs, on January 1, 2015 the Company issued 49,149 shares of common stock, net of the minimum statutory tax withholding requirements and the Company issued 665,747 Deferred LTIP Units, which subsequently settled to LTIP Units with the creation of the Operating Partnership on March 13, 2015.

Other Issuances

Healthcare Strategic Joint Venture

In connection with entering into the Healthcare Strategic Partnership, NorthStar Realty granted Mr. Flaherty 500,000 RSUs on January 22, 2014, adjusted to reflect NorthStar Realty’s reverse stock split, which vest on January 22, 2019, unless certain conditions are met. In connection with the spin-off, the RSUs granted to Mr. Flaherty were adjusted to also relate to an equal number of shares of the Company’s common stock. The RSUs are entitled to dividend equivalents prior to vesting and may be settled either in shares of common stock of the Company or in cash at the option of the Company. Mr. Flaherty is also entitled to incremental grants of the Company’s common stock subject to certain conditions being met pursuant to a separate contractual arrangement entered into in connection with the Healthcare Strategic Partnership. On February 2, 2015, in connection with the completion of NorthStar Healthcare’s initial public offering and the services Mr. Flaherty provides to the Healthcare Strategic Partnership, the Company issued 20,305 incremental RSUs to Mr. Flaherty, which vest on the third anniversary of the grant date, unless certain conditions are met.

AHI

On December 8, 2014, the Company acquired an interest in AHI for $37.5 million in cash and $20.0 million of common stock, representing 956,462 shares. In connection with this acquisition, the Company required the seller to subject one-half of these shares to forfeiture conditions that lapse based on the continued service to AHI of its three principals, with forfeiture conditions with respect to 50% of these shares lapsing two years after the closing date of the Company’s acquisition and the remaining 50% lapsing five years after the closing date. As a result of this vesting arrangement, $10.0 million of common stock (or 478,231 shares) subject to this arrangement is treated as a contingent consideration arrangement tied to continued employment of the AHI principals as an incentive to remain as employees of AHI.  As such, this contingent consideration arrangement is accounted for separately as a compensatory arrangement with amortization of such equity award being recorded by the Company through equity in earnings.  The AHI principals are also entitled to incremental grants of the Company’s common stock subject to certain conditions being met pursuant to a separate contractual arrangement entered into in connection with the Company’s AHI investment. For the three months ended March 31, 2015, no incremental awards were issued. The Company will contribute $2.0 million in shares related to equity incentives for AHI’s employees for 2015 and 2016.

Summary

As of March 31, 2015, an aggregate of 26,358,957 shares of the Company’s common stock were reserved for the issuance of awards under the 2014 NSAM Plan, subject to equitable adjustment upon the occurrence of certain corporate events, provided that this number automatically increases each January 1st by 2% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31st.

Equity-based compensation expense for the three months endedMarch 31, 2014 includes an expense based on a carve-out attributed to the Company related to NorthStar Realty’s historical asset management business for the three months ended March 31, 2014. The allocation is based on an estimate had the Company’s asset management business been run as an independent entity and was determined principally based on relative head count and management’s knowledge of NorthStar Realty’s operations.

For the three months endedMarch 31, 2015, the Company recorded equity-based compensation expense of $13.6 million (including $0.1 million of dividends associated with non-employees). For the three months endedMarch 31, 2014, the Company was allocated $5.7 million of equity-based compensation expense related to the NorthStar Realty Equity Plans.

The following table presents a summary of LTIP Units and unvested restricted stock. The balance as of March 31, 2015 represents LTIP Units whether vested or not that are outstanding and unvested shares of restricted stock whether vested or not (grants in thousands):

	Three Months Ended March 31, 2015
	Restricted Stock		LTIP Units			Total Grants		Weighted Average Grant Price
Beginning Balance	4,104		1,135		(1)	5,239		$	22.12
New grants	649		666			1,315		23.62
Conversions	—		(7	)		(7	)	15.51
Vesting of restricted stock post-spin	(466	)	—			(466	)	13.95
Forfeited or canceled grants	(8	)	—			(8	)	17.85
Ending Balance/Weighted Average	4,279		1,794			6,073		$	23.09

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(1) Represents Deferred LTIP Units that settled into LTIP Units on March 13, 2015.

As of March 31, 2015, equity-based compensation expense to be recognized over the remaining vesting period through April 2018 is $122.3 million, provided there are no forfeitures and excluding any mark-to-market adjustment.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2015

Stockholders' Equity Note Disclosure and Earnings Per Share Disclosure [Abstract]

Shareholders' Equity

Stockholders’ Equity

Spin-off

In connection with the spin-off, NorthStar Realty distributed to its common stockholders all of the common stock of the Company in a pro rata distribution of one share of the Company common stock for each share of NorthStar Realty common stock.

Common Stock

In January 2015, in connection with the Island Interest, the Company issued 208,486 shares of common stock resulting in an increase to additional paid-in capital in 2015 of $4.5 million, subject to certain lock-up and vesting restrictions.

Performance Common Stock

The Company is currently authorized to issue 1.6 billion shares of capital stock, of which 500 million is designated as performance common stock, par value $.01 per share. In connection with the performance-based component of the 2014 long-term bonus to be paid by the Company, in February 2015, the Company issued an aggregate of 474,842 shares of performance common stock to executives.

Earnings Per Share

Basic and diluted earnings per share and the average number of common shares outstanding were calculated using the number of common stock outstanding immediately following the spin-off on June 30, 2014. The Company presents common shares issued in connection with the spin-off as if it had been outstanding for all periods presented, similar to a stock split. The following table presents EPS for the three months endedMarch 31, 2015 and 2014 (dollars and shares in thousands, except per share data):

	Three Months Ended March 31,
	2015			2014
Numerator:
Net income (loss)	$	21,768		$	(8,305	)
Earnings (loss) allocated to unvested participating securities	(832		)	—
Numerator for basic income per share	20,936			(8,305		)
Participating nonvested shares	832			—
Net income (loss) attributable to LTIP Units non-controlling interest	202			—
Numerator for diluted income per share	$	21,970		$	(8,305	)
Denominator:
Weighted average number of shares of common stock	189,541			187,816
Incremental diluted shares	2,031			—
Weighted average number of diluted shares(1)	191,572			187,816
Earnings (loss) per share:
Basic	$	0.11		$	(0.04	)
Diluted	$	0.11		$	(0.04	)

_______________________

(1) Diluted EPS excludes the effect of equity-based awards issued that were not dilutive for the periods presented. These instruments could potentially impact diluted EPS in future periods, depending on changes in the Company’s stock price and other factors.

Dividends

For the three months ended March 31, 2015, the Company declared a dividend on its common stock on February 25, 2015 of $0.10 per share, which was paid on March 13, 2015 to stockholders of record as of the close of business on March 9, 2015.

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Income Taxes

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Subsequent to the spin-off, the Company became subject to both domestic and international income tax, as such, there was no income tax (benefit) expense for the three months ended March 31, 2014. On March 13, 2015, the Company restructured by converting, under Delaware law, an existing limited liability company disregarded as separate from the Company for federal income tax purposes to a Delaware limited partnership and admitting as limited partners LTIP Unit Holders, forming the Company’s new Operating Partnership. The Operating Partnership is treated as a partnership for federal income tax purposes and consequently, its items of income gain, loss, deduction and credit are passed through to, and included in, the taxable income of each of its partners including the Company. For the period prior to March 13, 2015, the Company and its U.S. subsidiaries will file consolidated federal income tax returns.

Deferred income taxes reflect the net tax effects of temporary differences that may exist between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company’s net deferred tax asset is primarily comprised of future income tax deductions attributable to the vesting and exercise of certain equity compensation awards.

For the three months ended March 31, 2015, the Company incurred $7.9 million of income tax expense which is based on a full year estimated effective tax rate of approximately 27%. The Company operates internationally and domestically through multiple operating subsidiaries.  Each of the jurisdictions in which the Company operates has its own tax law and tax rate and the tax rate outside the United States may be lower than the U.S. federal statutory income tax rate.

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Management Agreements and Managed Companies - Selling Commission and Dealer Manager Fees and Commission Expense (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Related Party Transaction [Line Items]
Selling commission as percentage of gross primary offering proceeds	7.00%
Dealer manager fee rate, percent of gross proceeds	3.00%
NorthStar Securities
Related Party Transaction [Line Items]
Reallowed commission expense	$ 3.4	$ 1.7

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Non-controlling Interests (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Noncontrolling Interest [Line Items]
Stockholders' Equity Attributable to Noncontrolling Interest	$ 4,400,000
Ownership and non-controlling interest (percent)	1.00%
Net (income) loss attributable to non-controlling interest	$ (202,000)	$ 0	[1]
Non-controlling Interest | Long Term Incentive Plan Units [Member]
Noncontrolling Interest [Line Items]
Shares, Outstanding	1,793,443

[1] The consolidated financial statements for the three months ended March 31, 2015 represents the Company’s results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. The three months ended March 31, 2014 represents a carve out of revenues and expenses attributable to the Company related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months ended March 31, 2015 may not be comparable to the Company’s results of operations reported for the prior period presented.

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Management Agreements and Managed Companies (Tables)

3 Months Ended

Mar. 31, 2015

Management Agreements [Abstract]

Schedule of Asset Management and Other Fees

Sponsored Companies

The following table presents a summary of the fee arrangements with the current Sponsored Companies:

	NorthStar	NorthStar	NorthStar	NorthStar/RXR
	Income	Healthcare	Income II	New York Metro(9)
Offering amount(1)	$1.1 billion	$1.8 billion(8)	$1.65 billion	$2.0 billion
Total raised through May 6, 2015 (2)	$1.2 billion	$1.2 billion	$560 million	(10)
Primary strategy	CRE Debt	Healthcare Equity and Debt	CRE Debt	New York City CRE Equity and Debt
Primary offering period	Completed July 2013	Ends February 2017(8)	Ends May 2016(11)	Ends February 2017(11)
Asset Management and Other Fees:
Asset management fees (3)	1.25% of assets	1.00% of assets	1.25% of assets	1.25% of assets
Acquisition fees (4)	1.00% of investment	2.25% for real estate properties 1.00% of other investments	1.00% of investment	2.25% for real estate properties 1.00% of other investments
Disposition fees (5)	1.00% of sales price	2.00% for real estate properties 1.00% of sales price for debt investments	1.00% of sales price	2.00% for real estate properties 1.00% of sales price for debt investments
Incentive payments (6)	15.00% of net cash flows after an 8.00% return	15.00% of net cash flows after a 6.75% return(7)	15.00% of net cash flows after a 7.00% return	15.00% of net cash flows after a 6.00% return

__________________

(1) Represents amount of shares registered to offer pursuant to each Sponsored Company’s public offering and includes the follow-on public offering of up to $700 million for NorthStar Healthcare.

(2) Includes capital raised through dividend reinvestment plans.

(3) Assets represent principal amount funded or allocated for debt investments originated or acquired and the cost of all other investments, including expenses and any financing attributable to such investments, less any principal received on debt and securities investments (or the Company’s proportionate share thereof in the case of an investment made in a joint venture).

(4) Calculated based on the amount funded or allocated by the Sponsored Companies to originate or acquire investments, including acquisition expenses and any financing attributable to such investments (or the proportionate share thereof in the case of an equity investment made through a joint venture).

(5) Calculated based on contractual sales price of each investment sold.

(6) The Company is entitled to receive distributions equal to 15% of net cash flow of the respective Sponsored Company, whether from continuing operations, repayment of loans, disposition of assets or otherwise, but only after stockholders have received, in the aggregate, cumulative distributions equal to their invested capital plus the respective cumulative, non-compounded annual pre-tax return (as noted in the table above) on such invested capital.

(7) The Healthcare Strategic Partnership is entitled to the incentive fees earned from managing NorthStar Healthcare, of which the Company earn its proportionate interest (refer to Note 5).

(8) NorthStar Healthcare successfully completed its public offering on February 2, 2015 by raising $1.1 billion in capital. The Company began raising capital for NorthStar Healthcare’s follow-on public offering at the end of February 2015.

(9) Any asset management and other fees incurred by NorthStar/RXR New York Metro will be shared between the Company and RXR Realty as co-sponsors.

(10) The Company expects to begin raising capital for NorthStar/RXR New York Metro in the second half of 2015.

(11) Offering period subject to extension as determined by the board of directors of eac

Schedule of Expense Arrangements with Sponsored Companies

The following table presents a summary of the expense arrangements with the current Sponsored Companies:

	NorthStar Income	NorthStar Healthcare	NorthStar Income II	NorthStar/RXR New York Metro
Organization and offering costs (1)	$11.0 million (2)	$22.5 million, or 1.5% of the proceeds expected to be raised from the offering  (4)	$24.8 million, or 1.5% of the proceeds expected to be raised from the offering (4)	$30.0 million, or 1.5% of the proceeds expected to be raised from the offering (4)
Operating costs (3)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.00% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)	Greater of 2.0% of its average invested assets or 25.0% of its net income (net of 1.25% asset management fee)

__________________

(1) Represents reimbursement for organization and offering costs paid on behalf of the Sponsored Companies in connection with their respective offerings. The Company is facilitating the payment of organization and offering costs on behalf of the Sponsored Companies. The Company records these costs as receivables, related parties on its consolidated balance sheets until repaid. The Sponsored Companies record these costs as either advisory fees, related parties on their consolidated statements of operations or as a cost of capital in their consolidated statements of equity.

(2) Represents the total expense allocation for organization and offering costs through the end of the offering period in July 2013.

(3) Calculated based on the four preceding fiscal quarters not to exceed the greater of: (i) 2.0% of each Sponsored Company’s average invested assets; or (ii) 25.0% of each Sponsored Company’s net income determined without reduction for any additions to reserves for depreciation, loan losses or other similar non-cash reserves and excluding any gain from the sale of assets for that period.

(4) Excludes shares being offered pursuant to dividend reinvestment plans.

Schedule of Related Party Receivables

The following table presents receivables, related parties on the consolidated balance sheets as of March 31, 2015 and December 31, 2014 (dollars in thousands):

	March 31, 2015 (Unaudited)		December 31, 2014
NorthStar Realty fees (1)	$	43,381	$	47,414
Sponsored Companies:
Fees	1,313		245
Other receivables	38,051		29,319
Subtotal Sponsored Companies(2)	39,364		29,564
Other	1,274		648
Total (3)	$	84,019	$	77,626

________________________

(1) Represents the base management fee and incentive fee receivable and net direct costs and expenses due between the Company and NorthStar Realty.

(2) As of March 31, 2015 and December 31, 2014, the Company had unreimbursed costs from the Sponsored Companies of $38.1 million and $29.3 million respectively, recorded as receivables, related parties on the consolidated balance sheets.

(3) Subsequent to March 31, 2015, the Company received $51.3 million from

Schedule of Net Commission Revenue

The following table summarizes selling commission and dealer manager fees, commission expense and net commission income for the three months endedMarch 31, 2015 and 2014 (dollar in thousands):

	Three Months Ended March 31,
	2015		2014
Selling commission and dealer manager fees	$	29,923	$	14,548
Commission expense	27,695		13,560
Net commission income(1)	$	2,228	$	988

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(1) Excludes direct expenses of NorthStar Securities.

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Summary of Significant Accounting Policies - Other assets and liabilities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Other Assets [Abstract]
Deferred tax asset	$ 5,857	$ 3,155	[1]
Furniture, fixtures and equipment, net	4,381	4,629	[1]
Prepaid expenses	3,019	2,279	[1]
Security deposits	2,399	2,232	[1]
Due from participating broker-dealers	432	1,965	[1]
Prepaid income taxes	0	3,538	[1]
Pending deal costs	0	1,045	[1]
Other	445	531	[1]
Total	$ 16,533	$ 19,374	[1]

[1] Includes fixed assets, tenant improvements and deposits related to leased offices that were transferred to the Company at the time of the spin-off on June 30, 2014.

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Stockholders' Equity (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended	3 Months Ended	1 Months Ended
	Oct. 30, 2014	Mar. 31, 2015	Jan. 31, 2015	Feb. 28, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of capital units authorized		1,600,000,000
Number of performance common shares authorized		500,000,000			500,000,000
Common stock, par value (in dollars per share)		$ 0.01			$ 0.01
Dividends per share of common stock	$ 0.10	$ 0.10
Common Stock | Island Hospitality
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common shares issued			208,486
Common Stock | Island Hospitality | Additional Paid-in Capital
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase to additional paid-in capital		$ 4.5
Performance Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of performance common shares authorized		500,000,000
Common stock, par value (in dollars per share)		$ 0.01
Performance Stock | Executive Officer | Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common shares issued				474,842

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Related Party Arrangements - AHI Venture (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Related Party Transaction [Line Items]
Base management fees	$ 45,300,000	$ 0
AHI Ventures | AHI Ventures
Related Party Transaction [Line Items]
Base management fees	$ 600,000
Ownership percentage	0.50%
Mr. Flaherty | AHI Ventures
Related Party Transaction [Line Items]
Ownership percentage	12.30%

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Consolidated Statements of Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Total NorthStar Stockholders’ Equity	Performance Stock	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit)	Non-controlling Interest
Beginning Balance at Dec. 31, 2013	$ 28,368	$ 28,368	$ 0	$ 0	$ 105,498	$ (77,130)	$ 0
Beginning Balance (shares) at Dec. 31, 2013			0	0
Increase (Decrease) in Stockholders' Equity
Capital contribution of NorthStar Realty (shares)				188,597,000
Capital contribution of NorthStar Realty	121,209	121,209		1,886	119,323
Amortization of equity-based compensation	51,519	51,519			51,519
Issuance of common stock to directors (shares)				38,000
Issuance of common stock to transactions (refer to Note 4) (shares)				956,000
Issuance of common stock related to transactions (refer to Note 4)	10,310	10,310		10	10,300
Issuance of common stock relating to equity-based compensation, net of forfeitures (shares)				827,000
Issuance of common stock relating to equity-based compensation, net of forfeitures				8	(8)
Settlement of RSUs to common stock (refer to Note 7) (shares)				3,030,000
Settlement of RSUs to common stock (refer to Note 7)				31	(31)
Settlement of RSUs to performance common stock (refer to Note 8)			3,738,000
Settlement of RSUs to performance common stock (refer to Note 8)			37		(37)
Dividends on common stock and equity-based awards (refer to Note 7)	(19,063)	(19,063)				(19,063)
Tax withholding related to vesting of RSUs (shares)				(500,000)
Tax withholding related to vesting of RSUs	(11,294)	(11,294)		(5)	(11,289)
Excess tax benefit from equity-based compensation	1,599	1,599			1,599
Net income (loss)	19,100	19,100				19,100
Ending Balance at Dec. 31, 2014	201,748	201,748	37	1,930	276,874	(77,093)	0
Ending Balance (shares) at Dec. 31, 2014			3,738,000	192,948,000
Increase (Decrease) in Stockholders' Equity
Amortization of equity-based compensation	14,165	13,848			13,848		317
Issuance of common stock to transactions (refer to Note 4) (shares)				208,000
Issuance of common stock related to transactions (refer to Note 4)	4,507	4,507		2	4,505
Issuance of common stock relating to equity-based compensation, net of forfeitures (shares)				642,000
Issuance of common stock relating to equity-based compensation, net of forfeitures				6	(6)
Settlement of RSUs to common stock (refer to Note 7) (shares)				48,000
Settlement of RSUs to common stock (refer to Note 7)	(1,130)	(1,130)			(1,130)
Settlement of RSUs to performance common stock (refer to Note 8)			475,000
Settlement of RSUs to performance common stock (refer to Note 8)			5		(5)
Dividends on common stock and equity-based awards (refer to Note 7)	(19,732)	(19,732)				(19,732)
Excess tax benefit from equity-based compensation	(170)	(170)			(170)
Net income (loss)	21,970	21,768				21,768	202
Conversion of Deferred LTIP Units to LTIP Units and common stock (shares)				4,000
Conversion of Deferred LTIP Units to LTIP Units and common stock, net		(4,400)			(4,400)		4,400
Ending Balance at Mar. 31, 2015	$ 221,358	$ 216,439	$ 42	$ 1,938	$ 289,516	$ (75,057)	$ 4,919
Ending Balance (shares) at Mar. 31, 2015			4,213,000	193,850,000

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Investments in Unconsolidated Ventures

3 Months Ended

Mar. 31, 2015

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Ventures

Investments in Unconsolidated Ventures

The following is a description of the Company’s investments in unconsolidated ventures, all of which are accounted for under the equity method.

Distributed Finance

In June 2014, the Company acquired an interest in Distributed Finance, a marketplace finance platform, for $4.0 million. In addition to earning a proportionate share of net income, the Company will also earn a net 0.50% fee on any syndicated investments, a minimum base management fee of 1.0% and an incentive fee of 15.0% on contractually defined excess cash flows. As of March 31, 2015, the carrying value of the investment was $3.4 million. For the three months ended March 31, 2015, the Company recognized equity in losses of $0.2 million related to legal fees incurred by Distributed Finance.

AHI Interest

In December 2014, the Company acquired the AHI Interest in AHI Newco, LLC (“AHI Ventures”), a direct wholly-owned subsidiary of American Healthcare Investors LLC (“AHI”) for $57.5 million, consisting of $37.5 million in cash and $20.0 million of the Company’s common stock, subject to certain lock-up and vesting restrictions ($10.0 million of the Company's common stock vested immediately). The Company’s investment in AHI Ventures is structured as a joint venture between the Company, the principals of AHI and James F. Flaherty III. The members of AHI are entitled to receive certain distributions of operating cash flow and certain promote fees in accordance with the allocations set forth in the joint venture agreement. As of March 31, 2015, the carrying value of the investment was $47.6 million. For the three months ended March 31, 2015, the Company recognized in equity in earnings, operating income of $1.6 million, which includes $1.0 million of equity-based compensation expense and $2.3 million of depreciation and amortization expense.

Island Interest

In January 2015, the Company acquired the Island Interest in Island Hospitality Group Inc. (“Island”) through Island Hospitality Joint Venture, LLC (“Island Ventures”), a subsidiary of Island JV Members Inc. (“Island Members”) for $37.7 million, consisting of $33.2 million in cash and $4.5 million of the Company’s common stock, subject to certain lock-up and vesting restrictions. The Company’s investment in Island Ventures is structured as a joint venture between the Company and Island Members. The members of Island Ventures are entitled to receive certain distributions of operating cash flow and certain promote fees in accordance with the allocations set forth in the joint venture agreement. As of March 31, 2015, the carrying value of the investment was $42.0 million. From closing to March 31, 2015, the Company recognized in equity in earnings, operating income of $1.0 million.

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Summary of Significant Accounting Policies - Accounts Payable and Accrued Expenses (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
Accounting Policies [Abstract]
Accrued bonus	$ 10,083		$ 25,911
Accrued transaction expense	4,562		5,205
Income tax payable	3,173		0
Accrued payroll	2,061		1,400
Accrued professional fees	2,655		740
Accrued equity-based compensation awards (refer to Note 7)	433		0
Accrued tax withholding	0	[1]	11,938	[1]
Other	1,194		3,922
Total	$ 24,161		$ 49,116

[1] Represents withholding tax related to vesting and net settlement of restricted stock units.

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Investments in Unconsolidated Ventures - Island Interest (Narrative) (Details) (USD $)	3 Months Ended			1 Months Ended	2 Months Ended
	Mar. 31, 2015	Mar. 31, 2014		Jan. 31, 2015	Mar. 31, 2015
Investments in and Advances to Affiliates [Line Items]
Equity in earnings (losses) of unconsolidated ventures	$ (870,000)	$ 0	[1]
Island Hospitality
Investments in and Advances to Affiliates [Line Items]
Consideration Transferred to Acquire Equity Method Investments				37,700,000
Payments to Acquire Equity Method Investments				33,200,000
Stock Issued				4,500,000
Equity method investments	42,000,000				42,000,000
Equity in earnings (losses) of unconsolidated ventures					$ 1,000,000

[1] The consolidated financial statements for the three months ended March 31, 2015 represents the Company’s results of operations following the spin-off of NorthStar Realty’s historical asset management business on June 30, 2014. The three months ended March 31, 2014 represents a carve out of revenues and expenses attributable to the Company related to NorthStar Realty’s historical asset management business. As a result, results of operations for the three months ended March 31, 2015 may not be comparable to the Company’s results of operations reported for the prior period presented.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Schedule of Noncurrent Assets

The following tables present a summary of other assets and accounts payable and accrued expenses as of March 31, 2015 and December 31, 2014 (dollars in thousands):

	March 31, 2015 (Unaudited)		December 31, 2014(1)
Other assets:
Deferred tax asset	$	5,857	$	3,155
Furniture, fixtures and equipment, net	4,381		4,629
Prepaid expenses	3,019		2,279
Security deposits	2,399		2,232
Due from participating broker-dealers	432		1,965
Prepaid income taxes	—		3,538
Pending deal costs	—		1,045
Other	445		531
Total	$	16,533	$	19,374

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(1) Includes fixed assets, tenant improvements and deposits related to leased offices that were transferred to the Company at the time of the spin-off on June 30, 2014.

Schedule of Accounts Payable and Accrued Liabilities

	March 31, 2015 (Unaudited)		December 31, 2014
Accounts payable and accrued expenses:
Accrued bonus	$	10,083	$	25,911
Accrued transaction expense	4,562		5,205
Income tax payable	3,173		—
Accrued payroll	2,061		1,400
Accrued professional fees	2,655		740
Accrued equity-based compensation awards (refer to Note 7)	433		—
Accrued tax withholding (1)	—		11,938
Other	1,194		3,922
Total	$	24,161	$	49,116

__________________

(1) Represents withholding tax related to vesting and net settlement of restricted stock units.