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 September 30, 2015

Commission File Number: 333-200617

NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC.

(Exact Name of Registrant as Specified in its Charter)



Maryland	46-5183321
(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 o	Accelerated filer o	Non-accelerated filer ý (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 two classes of common stock, $0.01 par value per share, 22,223 Class A shares outstanding and no Class T shares outstanding as of November 11, 2015.

NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC.

FORM 10-Q

TABLE OF CONTENTS



Index		Page

Part I.	Financial Information	5
Item 1.	Financial Statements	5
	Consolidated Balance Sheets as of September 30, 2015 (unaudited) and December 31, 2014	5
	Consolidated Statements of Equity as of September 30, 2015 (unaudited) and December 31, 2014	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
Part II.	Other Information	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 6.	Exhibits	27
Signatures		28

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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 our ability to successfully complete our continuous, public offering, our ability to pay distributions to our stockholders, our reliance on our advisor entities and our sponsors, the operating performance of our investments, our financing needs, the effects of our current strategies and investment activities and our ability to effectively deploy capital. 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:


•	adverse economic conditions and the impact on the commercial real estate industry;


•	our ability to successfully complete a continuous, public offering;


•	our ability to deploy capital quickly and successfully and achieve a diversified portfolio consistent with our target asset classes;


•	our dependence on the resources and personnel of our advisor entities, our sponsor and their affiliates, including our advisor entities ability to source and close on attractive investment opportunities on our behalf;


•	the performance of our advisor entities, our co-sponsor and their affiliates;


•	our liquidity and access to capital;


•	our use of leverage;


•	our ability to make distributions to our stockholders;


•	the lack of a public trading market for our shares;


•	the effect of economic conditions on the valuation of our investments;


•	the effect of paying distributions to our stockholders from sources other than cash flow provided by operations;


•	our advisor entities and its affiliates’ ability to attract and retain sufficient personnel to support our growth and operations;


•	the impact of market and other conditions influencing the availability of equity and debt investments and performance of our investments relative to our expectations and the impact on our actual return on invested equity, as well as the cash provided by these investments;


•	changes in our business or investment strategy;


•	the impact of economic conditions on the tenants of the real property that we own as well as on borrowers of the debt we originate and acquire and the mortgage loans underlying the mortgage backed securities in which we invest;


•	changes in the value of our portfolio;


•	our ability to realize current and expected returns over the life of our investments;


•	any failure in our advisor entities and its affiliates’ due diligence to identify relevant facts during our underwriting process or otherwise;


•	illiquidity of properties or debt investments in our portfolio;


•	our ability to finance our assets on terms that are acceptable to us, if at all.

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•	environmental compliance costs and liabilities;


•	increased rates of loss or default and decreased recovery on our investments;


•	the degree and nature of our competition;


•	the effectiveness of our advisor and sub-advisor’s risk and portfolio management systems;


•	failure to maintain effective internal controls and disclosure controls and procedures;


•	regulatory requirements with respect to our business and the related cost of compliance;


•	legislative and regulatory changes, including changes to laws governing the taxation of real estate investment trusts, or REITs, and changes to laws affecting non-traded REITs and alternative investments generally;


•	our ability to qualify and maintain our qualification as a REIT for federal income tax purposes and limitations imposed on our business by our status as a REIT;


•	the loss of our exemption from registration under the Investment Company Act of 1940, as amended;


•	availability of opportunities to acquire equity, debt and securities investments;


•	general volatility in capital markets and economies and the New York metropolitan economy specifically;


•	the adequacy of our cash reserves and working capital;


•	our ability to raise capital in light of certain regulatory changes, including amendments to NASD Rule 2340 and FINRA Rule 2310 and the U.S. Department of Labor’s recent proposal on a fiduciary standard for fiduciary standard for retirement accounts; and


•	other risks associated with investing in our targeted investments, including changes in our industry, interest rates, the securities markets, the general economy or the capital markets and real estate markets specifically.

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 including the “Risk Factors” section of our Registration Statement on Form S-11 (File No. 333-200617). The risk factors set forth in the Risk Factors section could cause our actual results to differ significantly from those contained in any forward-looking statement contained in this report.

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PART I. Financial Information

Item 1. Financial Statements

NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC.

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS



	September 30, 2015 (unaudited)		December 31, 2014
Assets
Cash	$	201,007	$	201,007
Total assets	$	201,007	$	201,007

Equity
NorthStar/RXR New York Metro Real Estate, Inc. Stockholders’ Equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized as of September 30, 2015 and no shares authorized as of December 31, 2014, no shares issued and outstanding as of September 30, 2015 and December 31, 2014	$	—	$	—
Common stock, $0.01 par value, 400,000,000 shares authorized as of September 30, 2015 and 200,000 shares authorized as of December 31, 2014, 22,223 shares issued and outstanding as of September 30, 2015 and December 31, 2014	222		222
Additional paid-in capital	199,785		199,785
Total NorthStar/RXR New York Metro Real Estate, Inc. stockholders’ equity	200,007		200,007
Non-controlling interests	1,000		1,000
Total equity	$	201,007	$	201,007

Refer to accompanying notes to consolidated financial statements.

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NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF EQUITY



	Common Stock			Additional Paid-in Capital		Total Company’s Stockholders’ Equity		Non-controlling Interests		Total Equity
	Shares	Amount		Additional Paid-in Capital		Total Company’s Stockholders’ Equity		Non-controlling Interests		Total Equity
Balance as of December 31, 2014	22,223	$	222	$	199,785	$	200,007	$	1,000	$	201,007

Balance as of September 30, 2015 (unaudited)	22,223	$	222	$	199,785	$	200,007	$	1,000	$	201,007

Refer to accompanying notes to consolidated financial statements.

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NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


1.	Business and Organization

NorthStar/RXR New York Metro Real Estate, Inc. (the “Company”), formerly known as NorthStar/RXR New York Metro Income, Inc., refer to Note 7 Subsequent Events - Name Change, was formed to acquire a high-quality commercial real estate (“CRE”) portfolio concentrated in the New York metropolitan area and, in particular New York City, with a focus on office, mixed-use properties and a lesser emphasis on multifamily properties. The Company intends to complement this strategy by originating and acquiring: (i) CRE debt including, subordinate loans and participations in such loans and preferred equity interests; and (ii) joint ventures and partnership interests in CRE related investments. The Company was formed on March 21, 2014 as a Maryland corporation and intends to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), beginning with the taxable year ended December 31 of the year in which the Company satisfies the minimum offering requirement.

The Company is externally managed by NSAM J-NS/RXR Ltd (the “Advisor”), a subsidiary of the Company’s co-sponsor NorthStar Asset Management Group Inc. (NYSE: NSAM). NSAM provides asset management and other services to NorthStar Realty Finance Corp. (NYSE: NRF) (“NorthStar Realty”), NSAM’s sponsored non-traded companies, as well as any future sponsored companies, including funds, joint ventures and partnerships both in the United States and internationally. The Company is sub-advised by RXR NTR Sub-Advisor LLC (the “Sub-Advisor”), a Delaware limited liability company and a subsidiary of the Company’s co-sponsor, RXR Realty LLC (“RXR” or “RXR Realty”). RXR is a leading real estate owner, manager and developer in the New York metropolitan area. The Advisor and Sub-Advisor are collectively referred to as the Advisor Entities. The Company, the Advisor and the Sub-Advisor have entered into a sub-advisory agreement delegating certain investment responsibilities of the Advisor to the Sub-Advisor. NSAM and RXR are collectively referred to as the Co-Sponsors. The Company’s dealer manager for the offering, NorthStar Securities, LLC (the “Dealer Manager”) is an affiliate of the Advisor and a subsidiary of NSAM.

Substantially all business of the Company will be conducted through NorthStar/RXR Operating Partnership, LP (the “Operating Partnership”). The Company is the sole general partner and a limited partner of the Operating Partnership. NorthStar/RXR NTR OP Holdings LLC (the “Special Unit Holder”) (a joint venture between the Co-Sponsors) has invested $1,000 in the Operating Partnership and has been issued a separate class of limited partnership units (the “Special Units”), which is recorded as non-controlling interests on the consolidated balance sheets. As the Company accepts subscriptions for shares, it will transfer substantially all of the net proceeds from the continuous, public offering to the Operating Partnership as a capital contribution.

The Company’s charter authorizes the issuance of up to 400,000,000 shares of common stock with a par value of $0.01 per share and up to 50,000,000 shares of preferred stock with a par value of $0.01 per share. The board of directors of the Company is authorized to amend its charter, without the approval of the stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue.

On March 28, 2014, the Company issued 16,667 shares of common stock to NorthStar Realty and 5,556 shares of common stock to a subsidiary of RXR for $0.2 million. On February 9, 2015, the Company’s registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) was declared effective to offer a minimum of 200,000 shares and a maximum of 201,052,632 shares of common stock in a continuous, public offering, of which up to 180,000,000 shares can be offered pursuant to its primary offering (the “Primary Offering”) and up to 21,052,632 shares can be offered pursuant to its distribution reinvestment plan (the “DRP”), which are herein collectively referred to as the Offering. At that time, the Company retained the Dealer Manager for the Primary Offering who will be responsible for marketing the shares being offered pursuant to the Primary Offering. The board of directors of the Company has the right to reallocate shares between the Primary Offering and the DRP.

As of September 30, 2015, the Company had not begun issuing shares in its Primary Offering and neither the Company nor the Operating Partnership had acquired or committed to make any investments.


2.	Summary of Significant Accounting Policies

Basis of Quarterly Presentation

The accompanying unaudited consolidated financial statements and related notes of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting

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NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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. The Company did not have operations for the nine months ended September 30, 2015 and 2014, and therefore does not present consolidated statements of operations or consolidated statements of cash flows for the applicable periods. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position have been included and are of a normal and recurring nature.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and the Operating Partnership, which is majority-owned and controlled by the Company. There were no intercompany balances as of September 30, 2015 and December 31, 2014.

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.

Cash

The Company considers all highly-liquid investments with a remaining maturity date of three months or less to be cash. Cash, including amounts restricted, may at times exceed the Federal Deposit Insurance Corporation deposit insurance limit of $250,000 per institution. The Company mitigates credit risk by placing cash with major financial institutions.

Operating Real Estate

The Company will follow the purchase method for an acquisition of operating real estate, where the purchase price is allocated to tangible assets such as land, building, furniture and fixtures, improvements and other identified intangibles. Major replacements and betterments which improve or extend the life of the asset will be capitalized and depreciated over their useful life. Ordinary repairs and maintenance will be expensed as incurred. Operating real estate will be carried at historical cost less accumulated depreciation. Operating real estate will be depreciated using the straight-line method over the estimated useful life of the assets. Construction costs incurred in connection with the Company’s investments will be capitalized and included in operating real estate, net on the consolidated balance sheets. Construction or redevelopment in progress will not be depreciated until the development is substantially completed. Costs directly related to an acquisition deemed to be a business combination will be expensed and included in transaction costs in the consolidated statements of operations. The Company will evaluate whether a real estate acquisition constitutes a business and whether business combination accounting is appropriate.

Real Estate Debt Investments

CRE debt investments are generally intended to be held to maturity and, accordingly, will be carried at cost, net of unamortized loan fees, premium, discount and unfunded commitments. CRE debt investments that are deemed to be impaired will be carried at amortized cost less a loan loss reserve, if deemed appropriate, which approximates fair value. CRE debt investments where the Company does not have the intent to hold the loan for the foreseeable future or until its expected payoff will be classified as held for sale and recorded at the lower of cost or estimated value.

Real Estate Securities

The Company will classify its CRE securities investments as available for sale on the acquisition date, which will be carried at fair value. Unrealized gains (losses) will be recorded as a component of accumulated other comprehensive income (“OCI”) in the consolidated statements of equity. However, the Company may elect the fair value option for certain of its available for sale securities, and as a result, any unrealized gains (losses) on such securities will be recorded in unrealized gain (loss) on investments and other in the consolidated statements of operations.

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NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Revenue Recognition

Operating Real Estate

Rental and escalation income from operating real estate will be derived from the leasing of space to various types of tenants. The leases will be for fixed terms of varying length and will generally provide for annual rentals to be paid in monthly installments. Rental income from leases will be recognized on a straight-line basis over the term of the respective leases.

Real Estate Debt Investments

Interest income will be recognized on an accrual basis and any related premium, discount, origination costs and fees will be amortized over the life of the investment using the effective interest method. The amortization will be reflected as an adjustment to interest income in the consolidated statements of operations. The amortization of a premium or accretion of a discount will be discontinued if such loan is reclassified to held for sale.

Real Estate Securities

Interest income will be recognized using the effective interest method with any premium or discount amortized or accreted through earnings based on expected cash flow through the expected maturity date of the security. Changes to expected cash flow may result in a change to the yield which is then applied retrospectively for high-credit quality securities that cannot be prepaid or otherwise settled in such a way that the holder would not recover substantially all of the investment or prospectively for all other securities to recognize interest income.

Credit Losses and Impairment on Investments

Operating Real Estate

The Company’s real estate portfolio will be reviewed on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value of its operating real estate may be impaired or that its carrying value may not be recoverable. A property’s value will be considered impaired if the Company’s estimate of the aggregate expected future undiscounted cash flow generated by the property is less than the carrying value. In conducting this review, the Company will consider U.S. macroeconomic factors, real estate sector, asset specific conditions and other factors. To the extent an impairment has occurred, the loss will be measured as the excess of the carrying value of the property over the estimated fair value and recorded in impairment on operating real estate in the consolidated statements of operations.

An allowance for a doubtful account for a tenant receivable will be established based on a periodic review of aged receivables resulting from estimated losses due to the inability of tenants to make required rent and other payments contractually due. Additionally, the Company will establish, on a current basis, an allowance for future tenant credit losses on unbilled rent receivable based on an evaluation of the collectability of such amounts.

Real Estate Debt Investments

Loans will be considered impaired when, based on current information and events, it is probable that the Company will not be able to collect principal and interest amounts due according to the contractual terms. The Company will assess the credit quality of the portfolio and adequacy of loan loss reserves on a quarterly basis, or more frequently as necessary. Significant judgment of the Company will be required in this analysis. The Company will consider the estimated net recoverable value of the loan as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the quality and financial condition of the borrower and the competitive situation of the area where the underlying collateral is located. Because this determination will be based on projections of future economic events, which are inherently subjective, the amount ultimately realized may differ materially from the carrying value as of the balance sheets date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the loan, a loan loss reserve will be recorded with a corresponding charge to provision for loan losses. The loan loss reserve for each loan will be maintained at a level that is determined to be adequate by management to absorb probable losses.

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NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Income recognition will be suspended for a loan at the earlier of the date at which payments become 90-days past due or when, in the opinion of the Company, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired loan is in doubt, all payments will be applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired loan is not in doubt, contractual interest will be recorded as interest income when received, under the cash basis method until an accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. A loan will be written off when it is no longer realizable and/or legally discharged.

Real Estate Securities

CRE securities for which the fair value option is elected are not evaluated for other-than-temporary impairment (“OTTI”) as any change in fair value is recorded in the consolidated statements of operations. Realized losses on such securities are reclassified to realized gain (loss) on investments and other as losses occur.

CRE securities for which the fair value option is not elected will be evaluated for OTTI quarterly. Impairment of a security is considered to be other-than-temporary when: (i) the holder has the intent to sell the impaired security; (ii) it is more likely than not the holder will be required to sell the security; or (iii) the holder does not expect to recover the entire amortized cost of the security. When a CRE security has been deemed to be other-than-temporarily impaired due to (i) or (ii), the security is written down to its fair value and an OTTI is recognized in the consolidated statements of operations. In the case of (iii), the security is written down to its fair value and the amount of OTTI is then bifurcated into: (a) the amount related to expected credit losses; and (b) the amount related to fair value adjustments in excess of expected credit losses. The portion of OTTI related to expected credit losses will be recognized in the consolidated statements of operations. The remaining OTTI related to the valuation adjustment will be recognized as a component of accumulated OCI in the consolidated statements of equity. The portion of OTTI recognized through earnings will be accreted back to the amortized cost basis of the security through interest income, while amounts recognized through OCI are amortized over the life of the security with no impact on earnings. CRE securities which are not high-credit quality will be considered to have an OTTI if the security has an unrealized loss and there has been an adverse change in expected cash flow. The amount of OTTI is then bifurcated as discussed above.

Fair Value Measurement

The fair value of financial instruments is categorized based on the priority of the inputs to the valuation technique and categorized into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Financial assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:


Level 1.	Quoted prices for identical assets or liabilities in an active market.


Level 2.	Financial assets and liabilities whose values are based on the following:


a)	Quoted prices for similar assets or liabilities in active markets.


b)	Quoted prices for identical or similar assets or liabilities in non-active markets.


c)	Pricing models whose inputs are observable for substantially the full term of the asset or liability.


d)	Pricing models whose inputs are derived principally from or corroborated by observable market data for substantially the full term of the asset or liability.


Level 3.	Prices or valuation techniques based on inputs that are both unobservable and significant to the overall fair value measurement.

U.S. GAAP requires disclosure of fair value about all financial instruments. As of September 30, 2015 and December 31, 2014, the Company’s only financial instrument was cash and its fair value was estimated to approximate its carrying amount.

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NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Equity Based Compensation

The Company adopted a long-term incentive plan (the “Plan”), which it may use to attract and retain qualified officers, directors, employees and consultants, as well as an independent directors compensation plan, which is a component of the Plan. The Company currently intends to issue awards only to its independent directors under the Plan. The Company will account for its equity-based compensation awards using the fair value method, which requires an estimate of fair value of the award at the time of grant. All fixed equity-based awards to directors, which have no vesting conditions other than time of service, will be amortized to compensation expense over the award’s vesting period on a straight-line basis. Equity-based compensation will be recorded in general and administrative expenses in the consolidated statements of operations.

Income Taxes

The Company intends to elect to be taxed as a REIT under the Internal Revenue Code and intends to operate as such, commencing with the taxable year in which the Company satisfies the minimum offering requirement. The Company expects to have little or no taxable income prior to electing REIT status. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to its stockholders (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with U.S. GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes qualifying dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company intends to organize and operate in such a manner as to qualify for treatment as a REIT.


3.	Related Party Arrangements

NSAM J-NS/RXR Ltd. and RXR NTR Sub-Advisor LLC

Subject to certain restrictions and limitations, the Advisor Entities are responsible for managing the Company’s affairs on a day-to-day basis and for identifying, acquiring, originating and asset managing investments on behalf of the Company. The Advisor Entities may delegate certain of their obligations to affiliated entities, which may be organized under the laws of the United States or foreign jurisdictions. For such services, to the extent permitted by law and regulations, the Advisor Entities will receive fees and reimbursements from the Company, of which the Sub-Advisor generally will receive 50% of all fees and up to 25% of all reimbursements.

The Company will pay the Sub-Advisor, or its affiliates, development, leasing, property management and construction related service fees that are usual and customary for owners and operators in the geographic area of the property.

Fees to Advisor Entities

Asset Management Fee

The Advisor Entities, or their affiliates, will receive a monthly asset management fee equal to one-twelfth of 1.25% of the sum of the amount funded or allocated for CRE investments, including expenses and any financing attributable to such investments, less any principal received on debt and securities investments (or the proportionate share thereof in the case of an investment made through a joint venture).

Acquisition Fee

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NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

origination or acquisition of CRE debt investments will be included in debt investments, net on the consolidated balance sheets and will be amortized to interest income over the life of the investment using the effective interest method. The Company records as an expense certain acquisition costs and fees associated with transactions deemed to be business combinations in which it consolidates the asset and capitalizes the costs for transactions deemed to be acquisitions of an asset, including an equity investment.

Disposition Fee

For substantial assistance in connection with the sale of investments and based on the services provided, the Advisor Entities, or their affiliates, will receive a disposition fee equal to 2.0% of the contract sales price of each property sold and 1.0% of the contract sales price of each CRE debt investment sold or syndicated. The Company will not pay a disposition fee upon the maturity, prepayment, workout, modification or extension of a CRE debt investment unless there is a corresponding fee paid by the borrower, in which case the disposition fee is the lesser of: (i) 1.0% of the principal amount of the CRE debt investment prior to such transaction; or (ii) the amount of the fee paid by the borrower in connection with such transaction. If the Company takes ownership of a property as a result of a workout or foreclosure of a CRE debt investment, the Company will pay a disposition fee upon the sale of such property. A disposition fee from the sale of an investment is generally expensed and will be included in asset management and other fees - related party in the Company’s consolidated statements of operations. A disposition fee for a CRE debt investment incurred in a transaction other than a sale will be included in CRE debt investments, net on the consolidated balance sheets and will be amortized to interest income over the life of the investment using the effective interest method.

Reimbursements to Advisor Entities

Operating Costs

The Advisor Entities, or their affiliates, are entitled to receive reimbursement for direct and indirect operating costs incurred by the Advisor Entities in connection with administrative services provided to the Company. The Advisor Entities allocate, in good faith, indirect costs to the Company related to the Advisor Entities and their affiliates’ employees, occupancy and other general and administrative costs and expenses in accordance with the terms of, and subject to the limitations contained in, the advisory agreement with the Advisor Entities. The indirect costs include the Company’s allocable share of the Advisor Entities compensation and benefit costs associated with dedicated or partially dedicated personnel who spend all or a portion of their time managing the Company’s affairs, based upon the percentage of time devoted by such personnel to the Company’s affairs. The indirect costs also include rental and occupancy, technology, office supplies and other general and administrative costs and expenses. However, there will be no reimbursement for personnel costs related to executive officers and other personnel involved in activities for which the Advisor Entities receive an acquisition fee or a disposition fee. The Advisor Entities allocate these costs to the Company relative to its and its affiliates’ other managed companies in good faith and has reviewed the allocation with the Company’s board of directors, including its independent directors. The Advisor Entities will update the board of directors on a quarterly basis of any material changes to the expense allocation and will provide a detailed review to the board of directors, at least annually, and as otherwise requested by the board of directors. The Company will reimburse the Advisor Entities quarterly for operating costs (including the asset management fee) based on a calculation for the four preceding fiscal quarters not to exceed the greater of: (i) 2.0% of its average invested assets; or (ii) 25.0% of its 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. Notwithstanding the above, the Company may reimburse the Advisor Entities for expenses in excess of this limitation if a majority of the Company’s independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. The Company will calculate the expense reimbursement quarterly based upon the trailing twelve-month period.

Organization and Offering Costs

The Advisor Entities, or their affiliates, will be entitled to receive reimbursement for organization and offering costs paid on behalf of the Company in connection with the Offering. The Company will be obligated to reimburse the Advisor Entities, or their affiliates, as applicable, for organization and offering costs to the extent the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15% of gross proceeds from the Offering. The Advisor Entities do not expect reimbursable organization and offering costs, excluding selling commissions and dealer manager fees, to exceed $30.0 million, or 1.5% of the total proceeds available to be raised from the Offering. The Company shall not reimburse the Advisor Entities for any organization and offering costs that the Company’s independent directors determine are not fair and commercially reasonable to the Company. The Company will record organization and offering costs each period based on an allocation of expected total organization and offering costs to be reimbursed. Organization costs will be recorded in general

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NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

and administrative expenses in the consolidated statements of operations and offering costs will be recorded as a reduction to equity.

NorthStar Securities, LLC

Selling Commissions and Dealer Manager Fees

Pursuant to a dealer manager agreement, the Company will pay the Dealer Manager, an affiliate of the Sponsor, selling commissions, all of which will be reallowed to participating broker-dealers. In addition, the Company will pay the Dealer Manager a dealer manager fee, a portion of which is typically reallowed to participating broker-dealers and paid to certain employees of the Dealer Manager, refer to Note 7 Subsequent Events - Reclassification of Shares and Related Amendments. No selling commissions or dealer manager fees will be paid for sales pursuant to the DRP. As of September 30, 2015, no selling commissions or dealer manager fees were paid pursuant to the dealer manager agreement.

Distribution Support Agreement

Pursuant to a distribution support agreement, NorthStar Realty and RXR agreed to purchase 75% and 25%, respectively, of any shares, up to an aggregate of $10.0 million in shares of the Company’s common stock (which will include any shares NorthStar Realty and RXR may purchase in order to satisfy the minimum offering requirement) in certain circumstances in order to provide additional funds to support distributions to stockholders, if necessary.

NorthStar Realty and RXR

In December 2013, NorthStar Realty entered into a strategic transaction with RXR. The investment in RXR Realty includes an approximate 27% equity interest. NorthStar Realty’s equity interest in RXR Realty is structured so that NSAM may be entitled to certain fees in connection with RXR’s investment management business.


4.	Equity-Based Compensation

The Company adopted the Plan, which it may use to attract and retain qualified officers, directors, employees and consultants, as well as an independent directors compensation plan, which is a component of the Plan. The Company currently intends to issue awards only to its independent directors under the Plan. The Company will account for its equity-based compensation awards using the fair value method, which requires an estimate of fair value of the award at the time of grant. All fixed equity-based awards to directors, which have no vesting conditions other than time of service, will be amortized to compensation expense over the award’s vesting period on a straight-line basis. Equity-based compensation will be recorded in general and administrative expenses in the consolidated statements of operations. Each of the Company’s three independent directors will be granted 5,000 shares of restricted stock upon the Company raising the minimum amount of $2.0 million in gross offering proceeds.


5.	Stockholders’ Equity

Common Stock

As of September 30, 2015 and December 31, 2014, the Company had 22,223 shares outstanding.

Distribution Reinvestment Plan

The Company adopted a DRP through which common stockholders may elect to reinvest an amount equal to the distributions declared on their shares in additional shares of the Company’s common stock in lieu of receiving cash distributions. The initial purchase price per share pursuant to the DRP is $9.50. Once the Company establishes an estimated value per share, shares issued pursuant to the DRP will be priced at 95.0% of the estimated value per share of the Company’s common stock, as determined by the Advisor Entities or another firm chosen for that purpose. Pursuant to amended FINRA Rule 2310 which is expected to be effective in 2016, the Company expects to establish an estimated value per share from and after 150 days following the second anniversary of breaking escrow in the offering and annually thereafter. No selling commissions or dealer manager fees are paid on shares issued pursuant to the DRP. The board of directors of the Company may amend, suspend or terminate the DRP for any reason upon ten-days’ notice to participants, except that the Company may not amend the DRP to eliminate a participant’s ability to withdraw from the DRP.

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NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Share Repurchase Program

The Company adopted a share repurchase program that may enable stockholders to sell their shares to the Company in limited circumstances (the “Share Repurchase Program”). The Company may not repurchase shares unless a stockholder has held shares for one year. However, the Company may repurchase shares held less than one year in connection with a stockholder’s death or disability (as disability is defined in the Internal Revenue Code) and after receiving written notice from the stockholder or the stockholder’s estate. The Company is not obligated to repurchase shares under the Share Repurchase Program. The Company may amend, suspend or terminate the Share Repurchase Program at its discretion at any time, subject to certain notice requirements.


6.	Non-controlling Interests

Operating Partnership

Non-controlling interests include the aggregate limited partnership interests in the Operating Partnership held by limited partners, other than the Company. Income (loss) attributable to the non-controlling interests will be based on the limited partners’ ownership percentage of the Operating Partnership. The Special Unit Holder has invested $1,000 in the Operating Partnership and has been issued Special Units, which is recorded as non-controlling interests on the consolidated balance sheets as of September 30, 2015 and December 31, 2014.


7.	Subsequent Events

Reclassification of Shares and Related Amendments

On October 6, 2015, the Company filed a post-effective amendment to its registration statement in order to offer Class A shares and Class T shares of common stock (the “Class A Shares” and “Class T Shares”, respectively). In connection with the offering of Class T Shares and reclassification of the Company’s shares of common stock into Class A Shares and Class T Shares, on November 3, 2015, the Company filed articles of amendment and restatement (the “Second Articles of Amendment and Restatement”) with the state of Maryland. The terms of the Class A Shares are identical to the shares of common stock issued prior to November 3, 2015. The SEC declared the post-effective amendment effective on November 12, 2015, at which time the Company began offering for sale in its Primary Offering up to $1,800,000,000 in shares of common stock at a price of $10.11 per Class A Share and $9.55 per Class T Share. The following table presents the differences in fees and selling commissions between the classes of the Company’s common stock:



	Class A			Class T
Initial Offering Price	$	10.11		$	9.55
Selling Commission (per share)	7.00		%	2.00		%
Dealer Manager Fee (per share)	3.00		%	2.75		%
Annual Distribution Fee (per share)	None			1.00		%

The distribution fee is calculated on outstanding Class T Shares issued in the Primary Offering in an amount equal to 1.0% per annum of the gross offering price per share (or, if the Company is no longer offering shares in a public offering, the most recent gross offering price per share or the estimated per share value of Class T Shares, if any has been disclosed). The Company will cease paying distribution fees with respect to each Class T Share on the earliest to occur of the following: (i) a listing of shares of the Company’s common stock on a national securities exchange; (ii) such Class T Share is no longer outstanding; (iii) the dealer manager’s determination that total underwriting compensation from all sources, including dealer manager fees, selling commissions, distribution fees and any other underwriting compensation paid to participating broker dealers with respect to all Class A Shares and Class T Shares would be in excess of 10% of the gross proceeds of the Primary Offering; or (iv) the end of the month in which the transfer agent, on the Company’s behalf, determines that total underwriting compensation with respect to the Class T primary shares held by a stockholder within his or her particular account, including dealer manager fees, selling commissions, and distribution fees, would be in excess of 10% of the total gross offering price at the time of the investment in the Class T Shares held in such account.

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NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Other than the differing fees, as described above, the Class A Shares and Class T Shares have identical rights and privileges, such as identical voting rights.

In connection with the foregoing, effective November 12, 2015, the Company has amended its dealer manager agreement, the participating dealer agreement, and the distribution support agreement. In addition, the Company has amended its DRP to enable participating stockholders to automatically reinvest in additional shares of the same class at a price equal to $9.81 per Class A Share and $9.27 per Class T Share until the Company establishes an estimated value per share. Once the Company establishes an estimate value per share, shares issued pursuant to the DRP will be reinvested at a price equal to 97% of the estimated per share value for such class of shares. The Company has also amended the Share Repurchase Program. Pursuant to the amended Share Repurchase Program, shares will be repurchased at a price equal to customer account statement value as determined in accordance with FINRA Rule 15-02.

Name Change

The Company’s Second Articles of Amendment and Restatement also provide for the change of the name of the Company from NorthStar/RXR New York Metro Income, Inc. to NorthStar/RXR New York Metro Real Estate, Inc., which emphasizes the Company’s primary focus on office, mixed use and multifamily real estate equity investments concentrated in the New York metropolitan area. The change of the Company’s name was effective as of November 3, 2015, the date of the filing of the Company’s Second Articles of Amendment and Restatement.

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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 “we,” “us” or “our” refer to NorthStar/RXR New York Metro Real Estate, Inc. and its subsidiaries unless the context specifically requires otherwise.

Introduction

We were formed to acquire a high-quality commercial real estate, or CRE, portfolio concentrated in the New York metropolitan area and, in particular New York City, with a focus on office, mixed-use properties and a lesser emphasis on multifamily properties. We intend to complement this strategy by originating and acquiring: (i) CRE debt including, subordinate loans and participations in such loans and preferred equity interests; and (ii) joint ventures and partnership interests in CRE related investments. We were formed on March 21, 2014 as a Maryland corporation and intend to qualify as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, beginning with the taxable year ended December 31 of the year in which we satisfy the minimum offering requirement.

We are externally managed by NSAM J-NS/RXR Ltd, or our Advisor, a subsidiary of our co-sponsor NorthStar Asset Management Group Inc. (NYSE: NSAM). NSAM provides asset management and other services to NorthStar Realty Finance Corp. (NYSE: NRF), or NorthStar Realty, NSAM’s sponsored non-traded companies, as well as any future sponsored companies, including funds, joint ventures and partnerships both in the United States and internationally. As of September 30, 2015, NSAM has an aggregate of $38.0 billion of assets under management, adjusted for commitments to acquire certain investments by NSAM and NSAM managed companies. We are sub-advised by RXR NTR Sub-Advisor LLC, or our Sub-Advisor, a Delaware limited liability company and a subsidiary of our co-sponsor, RXR Realty LLC, or RXR or RXR Realty. RXR is a leading real estate owner, manager and developer in the New York metropolitan area. As of September 30, 2015, RXR’s operating platform managed 88 commercial real estate properties and investments containing 23.1 million square feet with an aggregate gross asset value of $12.2 billion. In addition, RXR has a residential development pipeline of approximately 3,000 units. Our Advisor and Sub-Advisor are collectively referred to as our Advisor Entities. Our Advisor and our Sub-Advisor entered into a sub-advisory agreement delegating certain investment responsibilities of our Advisor to our Sub-Advisor. NSAM and RXR are collectively referred to as our Co-Sponsors. Our dealer manager for the offering, NorthStar Securities, LLC, or our Dealer Manager, is an affiliate of our Advisor and a subsidiary of NSAM.

Our primary investment types are as follows:

•

Commercial Real Estate Equity - Our CRE equity investments will primarily be high-quality commercial real estate concentrated in the New York metropolitan area with a focus on office and mixed use properties and a lesser emphasis on multifamily properties. These investments may include direct and indirect ownership in real estate and real estate assets that may or may not be structurally senior to a third-party partner’s equity.


•	Commercial Real Estate Debt - Our CRE debt investments may include subordinate loans and participations in such loans and preferred equity interests.


•	Commercial Real Estate Securities - Our CRE securities investments may include commercial mortgage-backed securities, or CMBS, backed by real estate in the New York metropolitan area and may include collateralized debt obligation, or, CDO, notes and other securities.

We believe that our targeted investment types are complementary to each other due to their overlapping sources of investment opportunities, common reliance on real estate fundamentals and ability to apply similar portfolio management and servicing skills to maximize value and to protect capital.

We registered to offer up to $1,800,000,000 in shares pursuant to our primary offering, or our Primary Offering, to the public. Our shares of common stock may be offered in any combination of the two classes of shares of our common stock: Class A shares and Class T shares, or our Class A Shares and Class T Shares, respectively. The offering price for the shares in the Primary Offering is $10.11 per Class A Share and $9.55 per Class T Share. We are also offering up to $200,000,000 in any combination of Class A Shares and Class T Shares pursuant to our distribution reinvestment plan, or our DRP, at a purchase price of $9.81 per Class A Share and $9.27 per Class T Share, refer to Recent Developments - Reclassification of Shares and Related Amendments. Our Primary Offering and our DRP are herein collectively referred to as our Offering. Our Dealer Manager will be responsible for marketing the shares being offered pursuant to our Primary Offering.

The Securities and Exchange Commission, or SEC, declared our initial registration statement effective on February 9, 2015 and our amended registration statement effective November 12, 2015.

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Outlook and Recent Trends

The New York metropolitan area remains one of the strongest markets for CRE investing in the United States. The combination of institutional and foreign investor interest and expanding growth in the media and technology sectors continues to support robust transaction volume and valuations. During the nine months ended September 30, 2015, 430 institutional real estate transactions totaling over $42.5 billion closed in New York City, the highest year-to-date total since 2007. In addition, overall Manhattan office vacancies have reached their lowest levels since 2008, indicating that demand for commercial and other space in the region remains strong. Office leasing activity remains strong as well, although large corporate headquarter relocations are not likely to be as common as smaller leases from startups, which scale up gradually prior to taking larger spaces. For example, while there were 30 office leases over 100,000 square feet in Manhattan just in the third quarter of 2014, there have been only 18 such transactions year-to-date through October 2015.

Underlying this strong real estate market is a diverse and dynamic economy, as the New York metropolitan area continues to attract leading media, high-tech and creative companies, in addition to traditional corporate and financial services firms. In 2014, technology, advertising and media companies accounted for the largest share of new leasing activity in the area, outpacing both financial and legal services firms. Leasing activity in the third quarter 2015 was also driven primarily by such firms, which accounted for 36% of the total square footage leased. While office rents and occupancy rates within Manhattan remain strong, emerging areas in the outer boroughs and outlying suburbs will also present compelling investment opportunities as companies seek lower-cost alternatives to more expensive markets.

New York City’s growing economy has drawn new residents to the area, with New York City’s population reaching an all-time high of approximately 8.5 million residents as of July 2014, with more recent college graduates than any other major metropolitan area in the United States. New York City’s employment growth has outperformed the national average for each of the past five years, illustrating the area’s competitive advantage for companies and as a residential choice relative to other markets. New York City tourism, which is a key driver of local economic activity, has also increased 42% since 2003. The New York metropolitan area’s real estate market stands to benefit from these developments, with strong real estate fundamentals and demographics driving increased demand for both commercial and residential space.

On a macro level, we believe the U.S. economy as a whole is on a healthy growth path and as a result the U.S. Federal Reserve should begin raising rates over the next several quarters, a sign that economic growth and employment are achieving targeted levels. The New York metropolitan area has been a direct beneficiary of these positive macroeconomic trends. Companies recognize the importance of having a presence in this market to tap its attractive workforce and gain exposure for their global brands. This has resulted in New York City hitting an all-time high in total employment, recording approximately 4.2 million jobs through September 2015, recovering over 380% of the jobs lost during the recent credit crisis and subsequent recession from December 2007 to June 2009. More impressively, New York was able to achieve this at a time when the financial service sector, its traditional economic engine, underperformed. This highlights the growing diversity of the New York economy, including the continued expansion of the media and technology sectors.

Overall valuations in the CRE markets continue to improve since bottoming out in 2009. Robust investor demand in 2014 and 2015 for CRE assets increased transaction activity and prices as rent and vacancy improved across most property sectors and are forecasted to continue to improve in 2016. However, global economic, financial and political headwinds remain. For instance, global market instability and the risk that maturing CRE debt may have difficulties being refinanced, among other factors, may continue to cause periodic volatility in the CRE markets for some time. These maturing loans could negatively impact CRE lending markets and slow overall transaction volumes. In addition, 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 low inflation and slow growth, which may have negative effects to their markets and beyond over the long-term. A changing New York City political landscape may also negatively impact the ability to effectively conduct our business and the macroeconomic conditions discussed above may also impact the creditworthiness of our tenants, operators, borrowers and us, which could result in the inability to meet the terms of leases and borrowings while additionally impacting the implementation of redevelopment and repositioning strategies.

Large investments in office construction, including approximately 9.3 million square feet of office space currently under construction as of the third quarter 2015, may negatively impact future occupancy levels and market rental rates. A low interest rate environment has contributed to increased demand for high-quality real estate assets in desirable markets as investors search for both yield and safety. A near-term interest rate increase may reverse these trends. In addition, international market volatility, including in the euro area, may impact international demand for CRE assets in the New York metropolitan area and depress overall CRE liquidity and valuations. All these factors and uncertainties could adversely impact our ability to implement our investment objectives.

Finally, after showing considerable 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 raised for programs in this space in 2014

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alone. Although capital raising has decreased in 2015, with total sales through September 2015 down 38% from 2014 levels, we anticipate that sales will remain strong as we monitor a variety of trends in this industry. Regulatory changes like the implementation of FINRA 15-02 and the U.S. Department of Labor’s recent proposal on a fiduciary standard for retirement accounts, for example, may impede capital formation and overall sales in the sector. However, due to generally positive market dynamics for New York metro area real estate investing, and our Advisor Entities and their affiliates’ 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 targeted returns. 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 this will be the case.

Our Strategy

Our primary business objectives are to acquire and originate real estate-related investments that we expect will generate attractive risk-adjusted returns, stable cash flow for distributions and provide downside protection to our stockholders. Some of our investments may be considered transitional in nature because the owner or borrower may have a business plan to improve the collateral and, as a result we may require the borrower to fund interest or other reserves, whether through loan proceeds or otherwise, to support debt service payments and capital expenditures. We will also require the owner or borrower and possibly a guarantor, to refill these reserves should they become deficient during the applicable period for any reason. We will also seek to realize growth in the value of our real estate equity investments through appreciation and/or by timing their sale to maximize value. We believe that our Advisor Entities have a platform that derives a potential competitive advantage from the combination of deep industry relationships, market leading CRE credit underwriting and capital markets expertise which enables us to manage credit risk across our investments as well as to structure and finance our assets efficiently. We believe that our targeted investment types are complementary to each other due to their overlapping sources of investment opportunities, common reliance on CRE fundamentals and ability to apply similar portfolio management and servicing skills to maximize value and to protect capital. We will use the net proceeds from our Offering and other financing sources to carry out our primary business objectives of originating and acquiring real estate-related investments.

Financing Strategy

We will use asset-level financing as part of our investment strategy and we seek to match-fund our assets and liabilities by having similar lease terms or maturities and like-kind interest rate benchmarks (fixed or floating) to manage refinancing and interest rate risk and utilize non-recourse liabilities whenever possible. Our Advisor Entities are responsible for managing such financing and interest rate risk on our behalf. We intend to pursue a variety of financing arrangements such as mortgage notes, credit facilities, securitization financing transactions and other term borrowings. We will seek and prefer long-term, non-recourse financing, including non mark-to-market financing that may be available through securitization. We may, as circumstances warrant, need to use some level of recourse financing.

Although we will have a limitation on the maximum leverage for our portfolio, which approximates 75% of the aggregate cost of our investments, including cash and excluding indirect leverage held through our unconsolidated joint venture investments, before deducting loan loss reserves, other non-cash reserves and depreciation, we do not have a targeted debt-to-equity ratio on an asset-by-asset basis, as we believe the appropriate leverage for the particular assets we finance depends on the specific credit characteristics of each asset. We will use leverage for the sole purpose of financing our investments and diversifying our equity and we will not employ leverage to speculate on changes in interest rates. We also will seek assignable financing when available. Once we have fully invested the proceeds of our Offering, we expect that our financing may approximate 50% of the cost of our investments, excluding indirect leverage held through our unconsolidated joint venture investments, although it may exceed this level during our organization and offering stage.

Borrowing levels for commercial real estate investments may change depending upon the nature of the assets and the related financing. Our financing strategy for our real estate will typically use long-term, non-recourse mortgage loans. Our financing strategy for our debt and securities investments will be dependent on our ability to obtain match-funded borrowings at rates that provide a positive net spread, generally using credit facilities and securitization financing transactions.

Portfolio Management

Our Advisor Entities 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. For our joint venture investments, we intend to rely on affiliates of our Sub-Advisor to provide certain asset management, property management and/or other services in managing our joint investments. Nevertheless, we

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cannot be certain that our Advisor Entities review will identify all issues within our portfolio due to, among other things, adverse economic conditions or events adversely affecting specific assets; therefore, potential future losses may also stem from investments that are not identified during these credit reviews. Our Advisor Entities, under the direction of the Investment Committee, use many methods to actively manage our asset base to preserve our income and capital. Credit risk management is the ability of our Advisor Entities to manage our assets in a manner that preserves principal/cost and income and minimizes credit losses that could decrease income and portfolio value. For real estate equity and CRE debt investments, frequent re-underwriting and dialogue with borrowers/partners and regular inspections of our collateral and owned properties have proven to be an effective process for identifying issues early. During the quarterly credit review, or more frequently as necessary, investments are put on highly-monitored status and identified for possible loan loss reserves/asset impairment, as appropriate, based upon several factors, including missed or late contractual payments, significant declines in collateral performance and other data which may indicate a potential issue in our ability to recover our invested capital from an investment. Our Advisor Entities use an experienced portfolio management and servicing team that monitors these factors on our behalf.

Our investments will be reviewed on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value of our investments may be impaired or that its carrying value may not be recoverable. In conducting these reviews, we consider macroeconomic factors, including real estate sector conditions, together with asset and market specific circumstances among other factors.

Each of our CRE debt investments will be secured by commercial real estate collateral and requires customized portfolio management and servicing strategies for dealing with potential credit situations. The complexity of each situation depends on many factors, including the number of properties, the type of property, macro and local market conditions impacting supply/demand, cash flow and the financial condition of our collateral and our borrowers’/operators’ ability to further support the collateral. Further, some of our investments will be considered transitional in nature because the business plan is to re-position, re-develop or otherwise lease-up the property in order to improve the collateral. At the time of acquisition or origination, the underlying property revenues may not be sufficient to support lease payments, debt service or generate positive net operating income. The business plan may necessitate a lease reserve or interest or other reserves, whether through proceeds from our loans, borrowings, offering proceeds or otherwise, to support lease payments or debt service and capital expenditures during the implementation of the business plan. There may also be a requirement for the borrower, tenant/operator, guarantor or us, to refill these reserves should they become deficient during the applicable period for any reason.

Critical Accounting Policies

Below is a discussion of the accounting policies that management believes will be critical once we commence operations. We consider these policies critical because we believe that understanding these policies is critical to understanding and evaluating our reported financial results. Additionally, these policies may involve significant management judgment and assumptions or require estimates about matters that are inherently uncertain. These judgments will affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of our consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our consolidated financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses.

Operating Real Estate

We will follow the purchase method for an acquisition of operating real estate, where the purchase price is allocated to tangible assets such as land, building, furniture and fixtures, improvements and other identified intangibles. Major replacements and betterments which improve or extend the life of the asset will be capitalized and depreciated over their useful life. Ordinary repairs and maintenance will be expensed as incurred. Operating real estate will be carried at historical cost less accumulated depreciation. Operating real estate will be depreciated using the straight-line method over the estimated useful life of the assets. Construction costs incurred in connection with our investments will be capitalized and included in operating real estate, net on our consolidated balance sheets. Construction or redevelopment in progress will not be depreciated until the development is substantially completed. Costs directly related to an acquisition deemed to be a business combination will be expensed and included in transaction costs in our consolidated statements of operations. We will evaluate whether a real estate acquisition constitutes a business and whether business combination accounting is appropriate.

Real Estate Debt Investments

CRE debt investments are generally intended to be held to maturity and, accordingly, will be carried at cost, net of unamortized loan fees, premium, discount and unfunded commitments. CRE debt investments that are deemed to be impaired will be carried at amortized cost less a loan loss reserve, if deemed appropriate, which approximates fair value. CRE debt investments where we do not intend to hold the loan for the foreseeable future or until its expected payoff will be classified as held for sale and recorded at the lower of cost or estimated value.

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Real Estate Securities

We will classify our CRE securities investments as available for sale on the acquisition date, which will be carried at fair value. Unrealized gains (losses) will be recorded as a component of accumulated other comprehensive income, or OCI, in our consolidated statements of equity. However, we may elect the fair value option for certain of our available for sale securities, and as a result, any unrealized gains (losses) on such securities will be recorded in unrealized gain (loss) on investments and other in our consolidated statements of operations.

Revenue Recognition

Operating Real Estate

Real Estate Debt Investments

Interest income will be recognized on an accrual basis and any related premium, discount, origination costs and fees will be amortized over the life of the investment using the effective interest method. The amortization will be reflected as an adjustment to interest income in our consolidated statements of operations. The amortization of a premium or accretion of a discount will be discontinued if such loan is reclassified to held for sale.

Real Estate Securities

Credit Losses and Impairment on Investments

Operating Real Estate

Our real estate portfolio will be reviewed on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value of our operating real estate may be impaired or that its carrying value may not be recoverable. A property’s value will be considered impaired if management’s estimate of the aggregate expected future undiscounted cash flow generated by the property is less than the carrying value. In conducting this review, management will consider U.S. macroeconomic factors, real estate sector, asset specific conditions and other factors. To the extent an impairment has occurred, the loss will be measured as the excess of the carrying value of the property over the estimated fair value and recorded in impairment on operating real estate in our consolidated statements of operations.

An allowance for a doubtful account for a tenant receivable will be established based on a periodic review of aged receivables resulting from estimated losses due to the inability of tenants to make required rent and other payments contractually due. Additionally, we will establish, on a current basis, an allowance for future tenant credit losses on unbilled rent receivables based on an evaluation of the collectability of such amounts.

Real Estate Debt Investments

Loans will be considered impaired when, based on current information and events, it is probable that we will not be able to collect principal and interest amounts due according to the contractual terms. We will assess the credit quality of the portfolio and adequacy of loan loss reserves on a quarterly basis, or more frequently as necessary. Significant judgment of management will be required in this analysis. We will consider the estimated net recoverable value of the loan as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the quality and financial condition of the borrower and the competitive situation of the area where the underlying collateral is located. Because this determination will be based on projections of future economic events, which are inherently subjective, the amount ultimately realized may differ materially from the carrying value as of the balance sheets date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the loan, a loan loss reserve will be recorded with a corresponding charge to provision for loan losses. The loan loss reserve for each loan will be maintained at a level that is determined to be adequate by management to absorb probable losses.

Income recognition will be suspended for a loan at the earlier of the date at which payments become 90-days past due or when, in the opinion of management, a full recovery of income and principal becomes doubtful. When the ultimate collectability of

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the principal of an impaired loan is in doubt, all payments will be applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired loan is not in doubt, contractual interest will be recorded as interest income when received, under the cash basis method until an accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. A loan will be written off when it is no longer realizable and/or legally discharged.

Real Estate Securities

CRE securities for which the fair value option is elected are not evaluated for other-than-temporary impairment, or OTTI, as any change in fair value is recorded in our consolidated statements of operations. Realized losses on such securities are reclassified to realized gain (loss) on investments and other as losses occur.

CRE securities for which the fair value option is not elected will be evaluated for OTTI quarterly. Impairment of a security is considered to be other-than-temporary when: (i) the holder has the intent to sell the impaired security; (ii) it is more likely than not the holder will be required to sell the security; or (iii) the holder does not expect to recover the entire amortized cost of the security. When a CRE security has been deemed to be other-than-temporarily impaired due to (i) or (ii), the security is written down to its fair value and an OTTI is recognized in the consolidated statements of operations. In the case of (iii), the security is written down to its fair value and the amount of OTTI is then bifurcated into: (a) the amount related to expected credit losses; and (b) the amount related to fair value adjustments in excess of expected credit losses. The portion of OTTI related to expected credit losses will be recognized in our consolidated statements of operations. The remaining OTTI related to the valuation adjustment will be recognized as a component of accumulated OCI in our consolidated statements of equity. The portion of OTTI recognized through earnings will be accreted back to the amortized cost basis of the security through interest income, while amounts recognized through OCI are amortized over the life of the security with no impact on earnings. CRE securities which are not high-credit quality will be considered to have an OTTI if the security has an unrealized loss and there has been an adverse change in expected cash flow. The amount of OTTI is then bifurcated as discussed above.

Liquidity and Capital Resources

We will require capital to fund our investment activities, operating expenses and to make distributions. We will obtain the capital required to acquire and manage our CRE portfolio and conduct our operations from the proceeds of our Offering and any future offerings we may conduct. We will access additional capital from secured or unsecured financings from banks and other lenders and from any undistributed funds from our operations. As of September 30, 2015, we have not made any investments and our total assets consists of $0.2 million of cash.

If we are unable to raise funds in our Offering, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments we make and the value of an investment in us will fluctuate with the performance of the specific assets we acquire. Further, we have certain fixed direct and indirect operating expenses, including certain expenses as a publicly offered REIT, regardless of whether we are able to raise substantial funds in our Offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.

We currently have no outstanding borrowings. Once we have fully invested the proceeds of our Offering, we expect that our financing will not exceed 50% of the greater of the cost or fair value of our investments, although it may exceed this level during our organization and offering stage. Our charter limits us from incurring borrowings that would exceed 300% of our net assets. We cannot exceed this limit unless any excess in borrowing over such level is approved by a majority of our independent directors. We would need to disclose any such approval to our stockholders in our next quarterly report along with the justification for such excess. An approximation of this leverage calculation is 75% of the cost of our investments, including cash.

In addition to making investments in accordance with our investment objectives, we will use our capital resources to make certain payments to our Advisor Entities and our Dealer Manager. During our organization and offering stage, these payments will include payments to our Dealer Manager for selling commissions and dealer manager fees and payments to our Dealer Manager and our Advisor Entities, or their affiliates, as applicable, for reimbursement of certain organization and offering costs. However, we will not be obligated to reimburse our Advisor Entities, or their affiliates, as applicable, to the extent that the aggregate of selling commissions, dealer manager fees and other organization and offering costs incurred by us exceed 15% of gross proceeds from our Offering. During our acquisition and development stage, we expect to make payments to our Advisor Entities, or their affiliates, as applicable, in connection with the selection and origination or acquisition of investments, the management of our assets and costs incurred by our Advisor Entities in providing services to us. We entered into advisory and sub-advisory agreements with our Advisor Entities, which have a one-year term but may be renewed for an unlimited number of successive one-year periods upon the mutual consent of our Advisor Entities and our board of directors, including a majority of our independent directors.

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Off-Balance Sheet Arrangements

As of September 30, 2015, we had no off-balance sheet arrangements.

Related Party Arrangements

NSAM J-NS/RXR Ltd. and RXR NTR Sub-Advisor LLC

Subject to certain restrictions and limitations, our Advisor Entities are responsible for managing our affairs on a day-to-day basis and for identifying, acquiring, originating and asset managing investments on our behalf. Our Advisor Entities may delegate certain of their obligations to affiliated entities, which may be organized under the laws of the United States or foreign jurisdictions. For such services, to the extent permitted by law and regulations, our Advisor Entities will receive fees and reimbursements from us, of which the Sub-Advisor generally will receive 50% of all fees and up to 25% of all reimbursements.

We will pay the Sub-Advisor, or its affiliates, development, leasing, property management and construction related service fees that are usual and customary for owners and operators in the geographic area of the property.

Fees to Advisor Entities

Asset Management Fee

Our Advisor Entities, or their affiliates, will receive a monthly asset management fee equal to one-twelfth of 1.25% of the sum of the amount funded or allocated for CRE 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 through a joint venture).

Acquisition Fee

Our Advisor Entities, or their affiliates, will also receive an acquisition fee equal to 2.25% of each real estate property acquired by us, including acquisition costs and any financing attributable to an equity investment (or our proportionate share thereof in the case of an equity investment made through a joint venture) and 1.0% of the amount funded or allocated by us to acquire or originate investments, including acquisition costs and any financing attributable to such investments (or our proportionate share thereof in the case of an investment made through a joint venture). An acquisition fee incurred related to an equity investment will generally be expensed as incurred. An acquisition fee paid to our Advisor Entities related to the acquisition of an equity or CRE debt investment in an unconsolidated joint venture is included in investments in unconsolidated ventures on our consolidated balance sheets. An acquisition fee paid to our Advisor Entities related to the origination or acquisition of CRE debt investments will be included in CRE debt investments, net on our consolidated balance sheets and will be amortized to interest income over the life of the investment using the effective interest method. We will record as an expense certain acquisition costs and fees associated with transactions deemed to be business combinations in which we consolidate the asset and capitalizes the costs for transactions deemed to be acquisitions of an asset, including an equity investment.

Disposition Fee

For substantial assistance in connection with the sale of investments and based on the services provided, our Advisor Entities, or their affiliates, will receive a disposition fee equal to 2.0% of the contract sales price of each property sold and 1.0% of the contract sales price of each CRE debt investment sold or syndicated. We will not pay a disposition fee upon the maturity, prepayment, workout, modification or extension of a CRE debt investment unless there is a corresponding fee paid by our borrower, in which case the disposition fee is the lesser of: (i) 1.0% of the principal amount of the CRE debt investment prior to such transaction; or (ii) the amount of the fee paid by our borrower in connection with such transaction. If we take ownership of a property as a result of a workout or foreclosure of a CRE debt investment, we will pay a disposition fee upon the sale of such property. A disposition fee from the sale of an investment is generally expensed and included in asset management and other fees - related party in our consolidated statements of operations. A disposition fee for a CRE debt investment incurred in a transaction other than a sale will be included in CRE debt investments, net on our consolidated balance sheets and will be amortized to interest income over the life of the investment using the effective interest method.

Reimbursements to Advisor Entities

Operating Costs

Our Advisor Entities, or their affiliates, will be entitled to receive reimbursement for direct and indirect operating costs incurred by our Advisor Entities in connection with administrative services provided to us. Our Advisor Entities allocates, in good faith, indirect costs to us related to our Advisor Entities and their affiliates’ employees, occupancy and other general and administrative costs and expenses in accordance with the terms of, and subject to the limitations contained in, the advisory

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agreement with our Advisor Entities. The indirect costs include our allocable share of our Advisor Entities compensation and benefit costs associated with dedicated or partially dedicated personnel who spend all or a portion of their time managing our affairs, based upon the percentage of time devoted by such personnel to our affairs. The indirect costs also include rental and occupancy, technology, office supplies and other general and administrative costs and expenses. However, there will be no reimbursement for personnel costs related to executive officers and other personnel involved in activities for which our Advisor Entities receive an acquisition fee or a disposition fee. Our Advisor Entities allocate these costs to us relative to its and its affiliates’ other managed companies in good faith and has reviewed the allocation with our board of directors, including its independent directors. Our Advisor Entities will update the board of directors on a quarterly basis of any material changes to the expense allocation and will provide a detailed review to the board of directors, at least annually, and as otherwise requested by the board of directors. We will reimburse our Advisor Entities quarterly for operating costs (including the asset management fee) based on a calculation for the four preceding fiscal quarters not to exceed the greater of: (i) 2.0% of our average invested assets; or (ii) 25.0% of our 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. Notwithstanding the above, we may reimburse our Advisor Entities for expenses in excess of this limitation if a majority of our independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. We calculate the expense reimbursement quarterly based upon the trailing twelve-month period.

Organization and Offering Costs

Our Advisor Entities, or their affiliates, will be entitled to receive reimbursement for organization and offering costs paid on behalf of us in connection with our Offering. We are obligated to reimburse our Advisor Entities, or their affiliates, as applicable, for organization and offering costs to the extent the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15% of gross proceeds from our Offering. Our Advisor Entities do not expect reimbursable organization and offering costs, excluding selling commissions and dealer manager fees, to exceed $30.0 million, or 1.5% of the total proceeds available to be raised from our Offering. We will not reimburse our Advisor Entities for any organization and offering costs that our independent directors determine are not fair and commercially reasonable to us. We will record organization and offering costs each period based on an allocation of expected total organization and offering costs to be reimbursed. Organization costs will be recorded in general and administrative expenses in the consolidated statements of operations and offering costs will be recorded as a reduction to equity.

NorthStar Securities, LLC

Selling Commissions and Dealer Manager Fees

Pursuant to a dealer manager agreement, we will pay our Dealer Manager, an affiliate of the Sponsor, selling commissions, all of which will be reallowed to participating broker-dealers. In addition, we will pay our Dealer Manager a dealer manager fee, a portion of which is typically reallowed to participating broker-dealers and paid to certain employees of our Dealer Manager, refer to Note 7 Subsequent Events - Reclassification of Shares and Related Amendments. No selling commissions or dealer manager fees will be paid for sales pursuant to our DRP. As of September 30, 2015, no selling commissions or dealer manager fees were paid pursuant to our dealer manager agreement.

Distribution Support Agreement

Pursuant to a distribution support agreement, NorthStar Realty and RXR agreed to purchase 75% and 25%, respectively, of any shares, up to an aggregate of $10.0 million in shares of our common stock (which will include any shares NorthStar Realty and RXR may purchase in order to satisfy the minimum offering requirement) in certain circumstances in order to provide additional funds to support distributions to stockholders, if necessary.

NorthStar Realty and RXR

Recent Developments

Reclassification of Shares and Related Amendments

On October 6, 2015, we filed a post-effective amendment to our registration statement in order to offer Class A Shares and Class T Shares of our common stock. In connection with the offering of Class T Shares and reclassification of our shares of common stock into Class A Shares and Class T Shares, on November 3, 2015, we filed articles of amendment and restatement, or our Second Articles of Amendment and Restatement, with the state of Maryland. The terms of the Class A Shares are

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identical to the shares of common stock issued prior to November 3, 2015. The SEC declared the post-effective amendment effective on November 12, 2015, at which time we began offering for sale in our Primary Offering up to $1,800,000,000 in shares of common stock at a price of $10.11 per Class A Share and $9.55 per Class T Share. The following table presents the differences in fees and selling commissions between the classes of our common stock:



	Class A			Class T
Initial Offering Price	$	10.11		$	9.55
Selling Commission (per share)	7.00		%	2.00		%
Dealer Manager Fee (per share)	3.00		%	2.75		%
Annual Distribution Fee (per share)	None			1.00		%

The distribution fee is calculated on outstanding Class T Shares issued in our Primary Offering in an amount equal to 1.0% per annum of the gross offering price per share (or, if we are no longer offering shares in a public offering, the most recent gross offering price per share or the estimated per share value of Class T Shares, if any has been disclosed). We will cease paying distribution fees with respect to each Class T Share on the earliest to occur of the following: (i) a listing of shares of our common stock on a national securities exchange; (ii) such Class T Share is no longer outstanding; (iii) the dealer manager’s determination that total underwriting compensation from all sources, including dealer manager fees, selling commissions, distribution fees and any other underwriting compensation paid to participating broker dealers with respect to all Class A Shares and Class T Shares would be in excess of 10% of the gross proceeds of our Primary Offering; or (iv) the end of the month in which the transfer agent, on our behalf, determines that total underwriting compensation with respect to the Class T primary shares held by a stockholder within his or her particular account, including dealer manager fees, selling commissions, and distribution fees, would be in excess of 10% of the total gross offering price at the time of the investment in the Class T Shares held in such account.

Other than the differing fees, as described above, the Class A Shares and Class T Shares have identical rights and privileges, such as identical voting rights.

In connection with the foregoing, effective November 12, 2015, we have amended our dealer manager agreement, the participating dealer agreement, and the distribution support agreement. In addition, we have amended our DRP to enable participating stockholders to automatically reinvest in additional shares of the same class at a price equal to $9.81 per Class A Share and $9.27 per Class T Share until we establish an estimated value per share. Once we establish an estimated value per share, shares issued pursuant to our DRP will be reinvested at a price equal to 97% of the estimated per share value for such class of shares. We have also amended our share repurchase program, or our Share Repurchase Program. Pursuant to our amended Share Repurchase Program, shares will be repurchased at a price equal to customer account statement value as determined in accordance with FINRA Rule 15-02.

Name Change

Our Second Articles of Amendment and Restatement also provide for the change of our name from NorthStar/RXR New York Metro Income, Inc. to NorthStar/RXR New York Metro Real Estate, Inc., which emphasizes our primary focus on office, mixed use and multifamily real estate equity investments concentrated in the New York metropolitan area. The change of our name was effective as of November 3, 2015, the date of the filing of our Second Articles of Amendment and Restatement.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We will be primarily subject to interest rate risk and credit risk. These risks will be dependent on various factors beyond our control, including monetary and fiscal policies, domestic and international economic conditions and political considerations. Our market risk sensitive assets, liabilities and related derivative positions will be held for investment and not for trading purposes.

As of September 30, 2015, our only asset was cash, which was held in a non-interest bearing account, so any change in interest rates would have no impact on our earnings.

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

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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.

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PART II. Other Information

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Use of Proceeds from Registered Securities

During the period covered by this Form 10-Q, we did not issue any equity securities that were not registered under the Securities Act of 1933, as amended, or Securities Act.

On February 9, 2015, our registration statement on Form S-11 (File No. 333-200617), covering our Offering of up to $1,800,000,000 in shares of common stock offered pursuant to our Primary Offering and up to $200,000,000 in shares of common stock offered pursuant to our DRP was declared effective under Securities Act of 1933, as amended, or the Securities Act. We expect to sell the shares registered in our Offering over a two-year period ending February 2017, unless extended by our board of directors. As of September 30, 2015, our Advisor Entities incurred organization and offering costs of $3.3 million on our behalf. These costs are not recorded in our consolidated financial statements as of September 30, 2015 because such costs are not a liability of ours until the minimum amount of $2.0 million in gross offering proceeds is raised and such costs will only become a liability of ours to the extent the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15.0% of gross proceeds raised from our Offering. We will record organization and offering costs each period based on an allocation determined by the expectation of total organization and offering costs to be reimbursed.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We adopted our Share Repurchase Program effective February 9, 2015, which may enable stockholders to sell their shares to us in limited circumstances. We may not repurchase shares unless a stockholder has held shares for at least one year. However, we may repurchase shares held for less than one year in connection with a stockholder’s death or qualifying disability, if the disability is deemed qualifying by our board of directors in their sole discretion and after receiving written notice from the stockholder or the stockholder’s estate. We are not obligated to repurchase shares under our Share Repurchase Program. We fund repurchase requests received during a quarter with proceeds set aside for that purpose which are not expected to exceed proceeds received from our DRP. However, to the extent that the aggregate DRP proceeds are not sufficient to fund repurchase requests, our board of directors may, in its sole discretion, choose to use other sources of funds. Our board of directors may, in its sole discretion, amend, suspend or terminate our Share Repurchase Program at any time upon ten days’ notice except that changes in the number of shares that can be repurchased during any calendar year will take effect only upon ten business days’ prior written notice. In addition, our Share Repurchase Program will terminate in the event a secondary market develops for our shares or until our shares are listed on a national exchange or included for quotation in a national securities market.

As of September 30, 2015, we have not issued any shares of common stock in our Offering and we have not repurchased any shares pursuant to our Share Repurchase Program.

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Item 6. Exhibits



Exhibit Number		Description of Exhibit
3.1		Second Articles of Amendment and Restatement of NorthStar/RXR New York Metro Real Estate, Inc. (filed as Exhibit 3.1 to Post-Effective Amendment No. 2 to the Company’s Registration Statement on Form S-11 (File No. 333-200617) filed with the SEC on November 3, 2015, and incorporated herein by reference)
3.2		Bylaws of NorthStar/RXR New York Metro Real Estate, Inc. (filed as Exhibit 3.2 to the Company’s Registration Statement on Form S-11 (File No. 333-200617) filed with the SEC on November 26, 2014, and incorporated herein by reference)
4.1		Form of Subscription Agreement (included as Appendix B to Post-Effective Amendment No. 1 to the Company’s Registration Statement on Form S-11 (File No. 333-200617) filed with the SEC on October 6, 2015 and incorporated herein by reference)
4.2		Distribution Reinvestment Plan (included as Appendix C to Post-Effective Amendment No. 1 to the Company’s Registration Statement on Form S-11 (File No. 333-200617) filed with the SEC on October 6, 2015 and incorporated herein by reference)
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
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
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/RXR New York Metro Real Estate, Inc. Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of September 30, 2015 (unaudited) and December 31, 2014; (ii) Consolidated Statements of Equity for the nine months ended September 30, 2015 (unaudited) and year ended December 31, 2014; and (iii) Notes to Consolidated Financial Statements (unaudited).

____________________________________________________________________________


*	Filed herewith

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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/RXR New York Metro Real Estate, Inc.
Date:	November 13, 2015	By:	/s/ DANIEL R. GILBERT
			Name:	Daniel R. Gilbert
			Title:	Chief Executive Officer and President

		By:	/s/ FRANK V. SARACINO
			Name:	Frank V. Saracino
			Title:	Chief Financial Officer and Treasurer

Stockholders' Equity

9 Months Ended

Sep. 30, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock

As of September 30, 2015 and December 31, 2014, the Company had 22,223 shares outstanding.

Distribution Reinvestment Plan

Share Repurchase Program

Equity-Based Compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity-Based Compensation

CONSOLIDATED BALANCE SHEETS - USD ($)

Sep. 30, 2015

Dec. 31, 2014

Assets

Cash

$ 201,007

Total assets

201,007

NorthStar/RXR New York Metro Real Estate, Inc. Stockholders’ Equity

Preferred stock, $0.01 par value, 50,000,000 shares authorized as of September 30, 2015 and no shares authorized as of December 31, 2014, no shares issued and outstanding as of September 30, 2015 and December 31, 2014

Common stock, $0.01 par value, 400,000,000 shares authorized as of September 30, 2015 and 200,000 shares authorized as of December 31, 2014, 22,223 shares issued and outstanding as of September 30, 2015 and December 31, 2014

222

Additional paid-in capital

199,785

Total NorthStar/RXR New York Metro Real Estate, Inc. stockholders’ equity

200,007

Non-controlling interests

1,000

Total equity

$ 201,007

Related Party Arrangements

9 Months Ended

Sep. 30, 2015

Related Party Arrangements

NSAM J-NS/RXR Ltd. and RXR NTR Sub-Advisor LLC

Fees to Advisor Entities

Asset Management Fee

Acquisition Fee

The Advisor Entities, or their affiliates, will also receive an acquisition fee equal to 2.25% of each real estate property acquired by the Company, including acquisition costs and any financing attributable to an equity investment (or the proportionate share thereof in the case of an equity investment made through a joint venture) and 1.0% of the amount funded or allocated by the Company to acquire or originate CRE debt investments, including acquisition costs and any financing attributable to such investments (or the proportionate share thereof in the case of an investment made through a joint venture). An acquisition fee incurred related to an equity investment will generally be expensed as incurred. An acquisition fee paid to the Advisor Entities related to the acquisition of an equity or CRE debt investment in an unconsolidated joint venture is included in investments in unconsolidated ventures on the consolidated balance sheets. An acquisition fee paid to the Advisor Entities related to the origination or acquisition of CRE debt investments will be included in debt investments, net on the consolidated balance sheets and will be amortized to interest income over the life of the investment using the effective interest method. The Company records as an expense certain acquisition costs and fees associated with transactions deemed to be business combinations in which it consolidates the asset and capitalizes the costs for transactions deemed to be acquisitions of an asset, including an equity investment.

Disposition Fee

Reimbursements to Advisor Entities

Operating Costs

Organization and Offering Costs

NorthStar Securities, LLC

Selling Commissions and Dealer Manager Fees

Distribution Support Agreement

NorthStar Realty and RXR

CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares

Sep. 30, 2015

Dec. 31, 2014

Statement of Financial Position [Abstract]

Preferred stock, par value (in dollars per share)

$ 0.01

Preferred stock, shares authorized (shares)

50,000,000

Preferred stock, shares issued (shares)

Preferred stock, shares outstanding (shares)

Common stock, par value (in dollars per share)

$ 0.01

Common stock, shares authorized (shares)

400,000,000

200,000

Common stock, shares issued (shares)

22,223

Common stock, shares outstanding (shares)

22,223

Equity-Based Compensation (Details)

9 Months Ended

Sep. 30, 2015

USD ($)

director

Equity-based compensation

Number of independent directors | director

Target gross offering proceeds | $

$ 2,000,000

Restricted stock

Equity-based compensation

Shares granted

5,000

Document and Entity Information - shares

9 Months Ended

Sep. 30, 2015

Nov. 11, 2015

Class of Stock [Line Items]

Entity Registrant Name

NorthStar/RXR New York Metro Real Estate, Inc.

Entity Central Index Key

0001603671

Entity Current Reporting Status

Yes

Current Fiscal Year End Date

--12-31

Entity Filer Category

Non-accelerated Filer

Amendment Flag

false

Document Type

10-Q

Document Period End Date

Sep. 30, 2015

Document Fiscal Year Focus

2015

Document Fiscal Period Focus

Class A

Class of Stock [Line Items]

Entity Common Stock, Share Outstanding - Class A

22,223

Class T

Class of Stock [Line Items]

Entity Common Stock, Share Outstanding - Class A

Stockholders' Equity (Details) - $ / shares

9 Months Ended

Sep. 30, 2015

Dec. 31, 2014

Common Stock [Abstract]

Number of common shares outstanding

22,223

Share Repurchase Program

Holding period of shares required for repurchase

1 year

DRP

Distribution Reinvestment Plan

Initial purchase price per share under the DRP (in dollars per share)

$ 9.50

Percentage of estimated value per share of common stock (percent)

95.00%

Period within which the company expects to establish an estimated value per share

150 days

Notice period served by board of directors to amend or terminate distribution reinvestment plan

10 days

CONSOLIDATED STATEMENTS OF EQUITY - USD ($)

Dec. 31, 2014

Sep. 30, 2015

Increase (Decrease) in Stockholder's Equity

Balance

$ 201,007

Balance (in shares)

22,223

Common Stock

Increase (Decrease) in Stockholder's Equity

Balance

$ 222

Balance (in shares)

22,223

Additional Paid-in Capital

Increase (Decrease) in Stockholder's Equity

Balance

$ 199,785

Total Company’s Stockholders’ Equity

Increase (Decrease) in Stockholder's Equity

Balance

200,007

Non-controlling Interests

Increase (Decrease) in Stockholder's Equity

Balance

$ 1,000

Non-controlling Interest (Details) - USD ($)

9 Months Ended

12 Months Ended

Sep. 30, 2015

Dec. 31, 2014

Noncontrolling Interest [Line Items]

Noncontrolling interests

$ 1,000

NorthStar/RXR NTR OP Holdings LLC

Noncontrolling Interest [Line Items]

Noncontrolling interests

$ 1,000

Summary of Significant Accounting Policies (Details)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Number of days past due for suspension of income recognition

90 days

Business and Organization (Details) - USD ($)

9 Months Ended

12 Months Ended

Feb. 09, 2015

Mar. 28, 2014

Sep. 30, 2015

Dec. 31, 2014

Class of Stock [Line Items]

Noncontrolling interests

$ 1,000

Common stock, shares authorized (shares)

400,000,000

200,000

Common stock, par value (in dollars per share)

$ 0.01

Preferred stock, shares authorized (shares)

50,000,000

Preferred stock, par value (in dollars per share)

$ 0.01

Proceeds from issuance of common stock

$ 200,000

Common stock filed in a registration statement with SEC, for issuance pursuant to the primary offering (shares)

180,000,000

Common stock filed in a registration statement with SEC, for issuance pursuant to DRP (shares)

21,052,632

Minimum

Class of Stock [Line Items]

Common stock filed in a registration statement with SEC, for issuance pursuant to offering (shares)

200,000

Maximum

Class of Stock [Line Items]

Common stock filed in a registration statement with SEC, for issuance pursuant to offering (shares)

201,052,632

Sponsor of the Registrant

Class of Stock [Line Items]

Number of shares of common stock issued (shares)

16,667

Co-Sponsor of the Registrant

Class of Stock [Line Items]

Number of shares of common stock issued (shares)

5,556

NorthStar/RXR NTR OP Holdings LLC

Class of Stock [Line Items]

Noncontrolling interests

$ 1,000

Related Party Arrangements (Details)

9 Months Ended

Sep. 30, 2015

USD ($)

Quarter

Dec. 31, 2013

NorthStar Realty Finance Corporation

Distribution Support Agreement

Commitment to purchase common stock (percent)

75.00%

RXR Realty

Distribution Support Agreement

Commitment to purchase common stock (percent)

25.00%

RXR Realty | NorthStar Realty Finance Corporation

NorthStar Realty and RXR

Equity interest percentage

27.00%

Sub-Advisor

Sub-Advisor

Sub-advisors percentage rights to fees

50.00%

Sub-advisors percentage rights to reimbursements

25.00%

Advisor | Asset Management Fee

Asset Management Fee Monthly Factor

8.33%

Asset Management Fee

Monthly asset management fee rate

0.10417%

Annual asset management fee rate

1.25%

Advisor | Acquisition Fee

Acquisition Fee

Maximum acquisition fee

2.25%

Acquisition fee as percentage of principal amount funded to originate debt or other real estate investments

1.00%

Advisor | Disposition Fee

Disposition Fee

Disposition fee of contract sales price of each property

2.00%

Maximum disposition fee as a percentage of contract sales price of CRE investment sold

1.00%

Disposition fee as a percentage of the principal amount of the loan or CRE debt investment prior to the specified transaction

1.00%

Advisor | Operating Costs

Operating Costs

Reimbursement of personnel costs related to officers and personnel involved in activities for which other fees is received

$ 0

Number of fiscal quarters | Quarter

Reimbursement expense period

12 months

Advisor | Maximum | Operating Costs

Operating Costs

Percentage of average invested assets reimbursable as operating costs

2.00%

Percentage of net income, 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 the company's assets, considered for reimbursement of operating costs

25.00%

Advisor | Maximum | Organization and Offering Costs

Organization and Offering Costs

Percentage of gross offering proceeds from primary offering, reimbursable as organization and offering costs

15.00%

Expected reimbursable organization and offering costs, excluding selling commissions and dealer manager fee

$ 30,000,000

Expected reimbursable organization and offering costs, excluding selling commissions and dealer manager fee, as a percentage of total proceeds available to be raised from the primary offering

1.50%

Co-Sponsor of the Registrant | Maximum

Distribution Support Agreement

Commitment to purchase common stock

$ 10,000,000

Subsequent Events (Fees and Selling Commissions Between Classes) (Details) - Subsequent Event

Nov. 12, 2015

$ / shares

Class A

Subsequent Event [Line Items]

Selling Commission (per share)

7.00%

Dealer Manager Fee (per share)

3.00%

Class T

Subsequent Event [Line Items]

Selling Commission (per share)

2.00%

Dealer Manager Fee (per share)

2.75%

Annual Distribution Fee (per share)

1.00%

Primary Offering | Class A

Subsequent Event [Line Items]

Offering price (in dollars per share)

$ 10.11

Primary Offering | Class T

Subsequent Event [Line Items]

Offering price (in dollars per share)

$ 9.55

Business and Organization

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business and Organization

As of September 30, 2015, the Company had not begun issuing shares in its Primary Offering and neither the Company nor the Operating Partnership had acquired or committed to make any investments.

Non-controlling Interests

9 Months Ended

Sep. 30, 2015

Noncontrolling Interest [Abstract]

Non-controlling Interests

Operating Partnership

Subsequent Events (Narrative) (Details) - USD ($)

Nov. 12, 2015

Nov. 01, 2015

Mar. 28, 2014

Nov. 03, 2015

Subsequent Event [Line Items]

Amount of common stock authorized for sale in Primary Offering (up to)

$ 200,000

Subsequent Event | Class A

Subsequent Event [Line Items]

Threshold for compensation paid to broker, percentage of gross proceeds

10.00%

Subsequent Event | Class A | Distribution Reinvestment Plan and Share Repurchase Program

Subsequent Event [Line Items]

Shares able to automatically reinvest (in dollars per share)

$ 9.81

Distribution reinvestment, percent of current offering price

97.00%

Subsequent Event | Class T

Subsequent Event [Line Items]

Annual Distribution Fee (per share)

1.00%

Threshold for compensation paid to broker, percentage of total gross offering price

10.00%

Subsequent Event | Class T | Distribution Reinvestment Plan and Share Repurchase Program

Subsequent Event [Line Items]

Shares able to automatically reinvest (in dollars per share)

$ 9.27

Distribution reinvestment, percent of current offering price

97.00%

Subsequent Event | Primary Offering

Subsequent Event [Line Items]

Amount of common stock authorized for sale in Primary Offering (up to)

$ 1,800,000,000

Subsequent Event | Primary Offering | Class A

Subsequent Event [Line Items]

Offering price (in dollars per share)

$ 10.11

Subsequent Event | Primary Offering | Class T

Subsequent Event [Line Items]

Offering price (in dollars per share)

$ 9.55



By:	/s/ DANIEL R. GILBERT
	Daniel R. Gilbert
	Chief Executive Officer
	Date:	November 13, 2015


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.

Related Party Arrangements	9 Months Ended
Related Party Arrangements	Sep. 30, 2015
Related Party Transactions [Abstract]
Related Party Arrangements	Related Party Arrangements NSAM J-NS/RXR Ltd. and RXR NTR Sub-Advisor LLC Subject to certain restrictions and limitations, the Advisor Entities are responsible for managing the Company’s affairs on a day-to-day basis and for identifying, acquiring, originating and asset managing investments on behalf of the Company. The Advisor Entities may delegate certain of their obligations to affiliated entities, which may be organized under the laws of the United States or foreign jurisdictions. For such services, to the extent permitted by law and regulations, the Advisor Entities will receive fees and reimbursements from the Company, of which the Sub-Advisor generally will receive 50% of all fees and up to 25% of all reimbursements. The Company will pay the Sub-Advisor, or its affiliates, development, leasing, property management and construction related service fees that are usual and customary for owners and operators in the geographic area of the property. Fees to Advisor Entities Asset Management Fee The Advisor Entities, or their affiliates, will receive a monthly asset management fee equal to one-twelfth of 1.25% of the sum of the amount funded or allocated for CRE investments, including expenses and any financing attributable to such investments, less any principal received on debt and securities investments (or the proportionate share thereof in the case of an investment made through a joint venture). Acquisition Fee The Advisor Entities, or their affiliates, will also receive an acquisition fee equal to 2.25% of each real estate property acquired by the Company, including acquisition costs and any financing attributable to an equity investment (or the proportionate share thereof in the case of an equity investment made through a joint venture) and 1.0% of the amount funded or allocated by the Company to acquire or originate CRE debt investments, including acquisition costs and any financing attributable to such investments (or the proportionate share thereof in the case of an investment made through a joint venture). An acquisition fee incurred related to an equity investment will generally be expensed as incurred. An acquisition fee paid to the Advisor Entities related to the acquisition of an equity or CRE debt investment in an unconsolidated joint venture is included in investments in unconsolidated ventures on the consolidated balance sheets. An acquisition fee paid to the Advisor Entities related to the origination or acquisition of CRE debt investments will be included in debt investments, net on the consolidated balance sheets and will be amortized to interest income over the life of the investment using the effective interest method. The Company records as an expense certain acquisition costs and fees associated with transactions deemed to be business combinations in which it consolidates the asset and capitalizes the costs for transactions deemed to be acquisitions of an asset, including an equity investment. Disposition Fee For substantial assistance in connection with the sale of investments and based on the services provided, the Advisor Entities, or their affiliates, will receive a disposition fee equal to 2.0% of the contract sales price of each property sold and 1.0% of the contract sales price of each CRE debt investment sold or syndicated. The Company will not pay a disposition fee upon the maturity, prepayment, workout, modification or extension of a CRE debt investment unless there is a corresponding fee paid by the borrower, in which case the disposition fee is the lesser of: (i) 1.0% of the principal amount of the CRE debt investment prior to such transaction; or (ii) the amount of the fee paid by the borrower in connection with such transaction. If the Company takes ownership of a property as a result of a workout or foreclosure of a CRE debt investment, the Company will pay a disposition fee upon the sale of such property. A disposition fee from the sale of an investment is generally expensed and will be included in asset management and other fees - related party in the Company’s consolidated statements of operations. A disposition fee for a CRE debt investment incurred in a transaction other than a sale will be included in CRE debt investments, net on the consolidated balance sheets and will be amortized to interest income over the life of the investment using the effective interest method. Reimbursements to Advisor Entities Operating Costs The Advisor Entities, or their affiliates, are entitled to receive reimbursement for direct and indirect operating costs incurred by the Advisor Entities in connection with administrative services provided to the Company. The Advisor Entities allocate, in good faith, indirect costs to the Company related to the Advisor Entities and their affiliates’ employees, occupancy and other general and administrative costs and expenses in accordance with the terms of, and subject to the limitations contained in, the advisory agreement with the Advisor Entities. The indirect costs include the Company’s allocable share of the Advisor Entities compensation and benefit costs associated with dedicated or partially dedicated personnel who spend all or a portion of their time managing the Company’s affairs, based upon the percentage of time devoted by such personnel to the Company’s affairs. The indirect costs also include rental and occupancy, technology, office supplies and other general and administrative costs and expenses. However, there will be no reimbursement for personnel costs related to executive officers and other personnel involved in activities for which the Advisor Entities receive an acquisition fee or a disposition fee. The Advisor Entities allocate these costs to the Company relative to its and its affiliates’ other managed companies in good faith and has reviewed the allocation with the Company’s board of directors, including its independent directors. The Advisor Entities will update the board of directors on a quarterly basis of any material changes to the expense allocation and will provide a detailed review to the board of directors, at least annually, and as otherwise requested by the board of directors. The Company will reimburse the Advisor Entities quarterly for operating costs (including the asset management fee) based on a calculation for the four preceding fiscal quarters not to exceed the greater of: (i) 2.0% of its average invested assets; or (ii) 25.0% of its 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. Notwithstanding the above, the Company may reimburse the Advisor Entities for expenses in excess of this limitation if a majority of the Company’s independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. The Company will calculate the expense reimbursement quarterly based upon the trailing twelve-month period. Organization and Offering Costs The Advisor Entities, or their affiliates, will be entitled to receive reimbursement for organization and offering costs paid on behalf of the Company in connection with the Offering. The Company will be obligated to reimburse the Advisor Entities, or their affiliates, as applicable, for organization and offering costs to the extent the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15% of gross proceeds from the Offering. The Advisor Entities do not expect reimbursable organization and offering costs, excluding selling commissions and dealer manager fees, to exceed $30.0 million, or 1.5% of the total proceeds available to be raised from the Offering. The Company shall not reimburse the Advisor Entities for any organization and offering costs that the Company’s independent directors determine are not fair and commercially reasonable to the Company. The Company will record organization and offering costs each period based on an allocation of expected total organization and offering costs to be reimbursed. Organization costs will be recorded in general and administrative expenses in the consolidated statements of operations and offering costs will be recorded as a reduction to equity. NorthStar Securities, LLC Selling Commissions and Dealer Manager Fees Pursuant to a dealer manager agreement, the Company will pay the Dealer Manager, an affiliate of the Sponsor, selling commissions, all of which will be reallowed to participating broker-dealers. In addition, the Company will pay the Dealer Manager a dealer manager fee, a portion of which is typically reallowed to participating broker-dealers and paid to certain employees of the Dealer Manager, refer to Note 7 Subsequent Events - Reclassification of Shares and Related Amendments. No selling commissions or dealer manager fees will be paid for sales pursuant to the DRP. As of September 30, 2015, no selling commissions or dealer manager fees were paid pursuant to the dealer manager agreement. Distribution Support Agreement Pursuant to a distribution support agreement, NorthStar Realty and RXR agreed to purchase 75% and 25%, respectively, of any shares, up to an aggregate of $10.0 million in shares of the Company’s common stock (which will include any shares NorthStar Realty and RXR may purchase in order to satisfy the minimum offering requirement) in certain circumstances in order to provide additional funds to support distributions to stockholders, if necessary. NorthStar Realty and RXR In December 2013, NorthStar Realty entered into a strategic transaction with RXR. The investment in RXR Realty includes an approximate 27% equity interest. NorthStar Realty’s equity interest in RXR Realty is structured so that NSAM may be entitled to certain fees in connection with RXR’s investment management business.

Equity-Based Compensation (Details)	9 Months Ended
Equity-Based Compensation (Details)	Sep. 30, 2015 USD ($) director shares
Equity-based compensation
Number of independent directors \| director	3
Target gross offering proceeds \| $	$ 2,000,000
Restricted stock
Equity-based compensation
Shares granted	5,000

Related Party Arrangements (Details)	9 Months Ended
Related Party Arrangements (Details)	Sep. 30, 2015 USD ($) Quarter	Dec. 31, 2013
NorthStar Realty Finance Corporation
Distribution Support Agreement
Commitment to purchase common stock (percent)	75.00%
RXR Realty
Distribution Support Agreement
Commitment to purchase common stock (percent)	25.00%
RXR Realty \| NorthStar Realty Finance Corporation
NorthStar Realty and RXR
Equity interest percentage		27.00%
Sub-Advisor
Sub-Advisor
Sub-advisors percentage rights to fees	50.00%
Sub-advisors percentage rights to reimbursements	25.00%
Advisor \| Asset Management Fee
Related Party Transaction [Line Items]
Asset Management Fee Monthly Factor	8.33%
Asset Management Fee
Monthly asset management fee rate	0.10417%
Annual asset management fee rate	1.25%
Advisor \| Acquisition Fee
Acquisition Fee
Maximum acquisition fee	2.25%
Acquisition fee as percentage of principal amount funded to originate debt or other real estate investments	1.00%
Advisor \| Disposition Fee
Disposition Fee
Disposition fee of contract sales price of each property	2.00%
Maximum disposition fee as a percentage of contract sales price of CRE investment sold	1.00%
Disposition fee as a percentage of the principal amount of the loan or CRE debt investment prior to the specified transaction	1.00%
Advisor \| Operating Costs
Operating Costs
Reimbursement of personnel costs related to officers and personnel involved in activities for which other fees is received	$ 0
Number of fiscal quarters \| Quarter	4
Reimbursement expense period	12 months
Advisor \| Maximum \| Operating Costs
Operating Costs
Percentage of average invested assets reimbursable as operating costs	2.00%
Percentage of net income, 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 the company's assets, considered for reimbursement of operating costs	25.00%
Advisor \| Maximum \| Organization and Offering Costs
Organization and Offering Costs
Percentage of gross offering proceeds from primary offering, reimbursable as organization and offering costs	15.00%
Expected reimbursable organization and offering costs, excluding selling commissions and dealer manager fee	$ 30,000,000
Expected reimbursable organization and offering costs, excluding selling commissions and dealer manager fee, as a percentage of total proceeds available to be raised from the primary offering	1.50%
Co-Sponsor of the Registrant \| Maximum
Distribution Support Agreement
Commitment to purchase common stock	$ 10,000,000