S-11/A

As filed with the Securities and Exchange Commission on August 19, 2015

Registration No. 333-205440

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________

Amendment No. 1

to

FORM S-11

FOR REGISTRATION

UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES

____________________________________

NORTHSTAR REALTY EUROPE CORP.

(Exact Name of Registrant as Specified in Governing Instruments)

399 Park Avenue, 18th Floor

New York, New York 10022
(212) 547-2600

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

____________________________________

c/o Ronald J. Lieberman, Esq.

Executive Vice President, General Counsel and Secretary

NorthStar Asset Management Group Inc.

399 Park Avenue, 18th Floor

New York, New York 10022
(212) 547-2600

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

____________________________________

Copies to:

Robert W. Downes

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

(212) 558-4000

____________________________________

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box.

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.

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

CALCULATION OF REGISTRATION FEE

Title of Securities Being Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee(2)
Common Stock, $0.01 par value per share	$995,074,000	$115,628

(1) This Registration Statement relates to an indeterminate amount of shares of common stock, par value $0.01 per share, of NorthStar Realty Europe Corp., or NorthStar Europe, that will be distributed pursuant to a spin-off transaction to the holders of common stock, par value $0.01 per share, of NorthStar Realty Finance Corp.

(2) Estimated solely for the purposes of calculating the registration fee pursuant to Rule 457(f)(2) of the Securities Act of 1933, based on the estimated book value of the common stock of NorthStar Europe at the latest practicable date prior to the filing of the Registration Statement, which has been computed based on estimated balances for the European Real Estate Business (as defined herein) to be contributed to NorthStar Europe, in each case as of June 30, 2015.

(3) $133,354 was previously paid with the initial filing of our Registration Statement on Form S-11 on July 2, 2015. Accordingly, no additional amount is being paid herewith upon filing of this Amendment.

____________________________________

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date or dates as the Commission, acting pursuant to said Section 8(a), may determine.

Preliminary Prospectus Subject to Completion, Dated August 19, 2015

The information set forth in this preliminary prospectus is not complete and may be changed. We may not distribute these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

NorthStar Realty Europe Corp.

Shares Common Stock

_____________________________

This prospectus is being furnished in connection with the distribution by NorthStar Realty Finance Corp., a Maryland corporation, or NorthStar Realty, to holders of NorthStar Realty’s common stock, par value $0.01 per share, of all the outstanding shares of common stock, par value $0.01 per share, or the Common Stock, of NorthStar Realty Europe Corp., or NorthStar Europe, the Company or we. We will complete a series of transactions with NorthStar Realty pursuant to which we will own the European real estate business (excluding European healthcare properties) currently owned by NorthStar Realty, as described in this prospectus.

Shares of our Common Stock will be distributed to holders of shares of NorthStar Realty common stock of record as of the close of business, Eastern Time, on                     , 2015, which will be the record date. Each such holder will receive one share of our Common Stock for every            share(s) of NorthStar Realty common stock held on the record date. No fractional shares of the Company will be issued in connection with the distribution. Holders of NorthStar Realty common stock that would otherwise be entitled to fractional shares of the Company as a result of the distribution will receive a check for the cash value thereof. The distribution will be effective at 11:59 p.m. Eastern Time on                     , 2015.

We intend to elect to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes beginning with the year ending December 31, 2015. Refer to “The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution” for a discussion of the federal income tax consequences of the distribution. To assist us in qualifying as a REIT, among other purposes, stockholders are generally restricted from owning more than 9.8% in value or in number of shares, whichever is more restrictive, of the aggregate of our outstanding shares of our Common Stock, or more than 9.8% of the value of the outstanding shares of our stock. See “Description of Capital Stock — Restrictions on Transfer and Ownership of our Common Stock.”

No stockholder approval of the distribution is required or sought. We are not asking you for a proxy and you are requested not to send us a proxy. NorthStar Realty stockholders will not be required to pay for the shares of our Common Stock to be received by them in the distribution or to surrender or to exchange shares of NorthStar Realty common stock in order to receive our Common Stock or to take any other action in connection with the distribution. There is currently no trading market for our Common Stock. We expect to list our Common Stock on the New York Stock Exchange, or NYSE, under the symbol “NRE.”

IN REVIEWING THIS PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DESCRIBED UNDER THE CAPTION “RISK FACTORS” BEGINNING ON PAGE 17.

WE ARE AN EMERGING GROWTH COMPANY AS DEFINED IN THE JUMPSTART OUR BUSINESS STARTUPS ACT OF 2012. REFER TO “RISK FACTORS — RISKS RELATED TO THE SPIN-OFF— THE REDUCED DISCLOSURE REQUIREMENTS APPLICABLE TO US AS AN ‘EMERGING GROWTH COMPANY’ MAY MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS” AND “BUSINESS — EMERGING GROWTH COMPANY STATUS.”

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Stockholders of NorthStar Realty with inquiries related to the distribution should contact NorthStar Realty’s transfer agent, American Stock Transfer & Trust Company, LLC at 1-800-937-5449.

The date of this prospectus is                     , 2015.

_____________________________

TABLE OF CONTENTS

	Page
Forward-Looking Statements	1
Summary	3
Questions and Answers About the Distribution	13
Risk Factors	17
The Distribution	45
Business	52
Distribution Policy	67
Selected Financial Data	68
Unaudited Pro Forma Financial Information	70
Capitalization Table	76
Management’s Discussion and Analysis of Financial Condition and Results of Operations	77
Corporate Governance and Management	90
Executive Compensation	100
Certain Relationships and Related Party Transactions	101
Investment Policies and Policies with Respect to Certain Activities	104
Our Operating Partnership	107
Security Ownership of Certain Beneficial Owners and Management	110
Shares Eligible for Future Sale	111
Description of Capital Stock	112
Certain Provisions of Maryland Law and of Our Charter and Bylaws	115
Federal Income Tax Consequences of Our Status as a REIT	120
Use of Proceeds	139
Determination of Offering Price	139
Legal Matters	139
Experts	139
Additional Information	140
Financial Statements	F-1

-i-

INTRODUCTION

This prospectus is being furnished solely to provide information to NorthStar Realty stockholders who will receive shares of NorthStar Europe Common Stock in the distribution. It is not to be construed as an inducement or encouragement to buy or sell any securities of NorthStar Realty or NorthStar Europe. This prospectus describes, among other things, NorthStar Europe’s business, its relationship with NorthStar Realty and its manager, an affiliate of NorthStar Asset Management Group Inc., or NSAM, and how the spin-off affects NorthStar Realty and its stockholders and provides other information to assist you in evaluating the benefits and risks of holding or disposing of the shares of our Common Stock that you will receive in the spin-off.

Except as otherwise indicated or unless the context otherwise requires, “NorthStar Europe,” “NRE,” “we,” “us,” “our” and “the Company” refer to NorthStar Realty Europe Corp., a Maryland corporation, and its domestic and foreign subsidiaries, after giving effect to the spin-off of NorthStar Realty’s European real estate business (excluding European healthcare properties). All references to “NorthStar Realty” are, as the context may require, to NorthStar Realty excluding NRE after giving effect to the spin-off. Amounts are presented in U.S. dollars using an exchange rate as of June 30, 2015, unless otherwise noted.

We describe in this prospectus the European real estate business to be contributed to NorthStar Europe by NorthStar Realty as if the spin-off has already occurred, such business consisting of: (i) a $100 million multi-tenant leasehold office complex located in the United Kingdom, or the U.K. Complex, purchased by NorthStar Realty in September 2014 (which, together with expected cash and any other related assets, liabilities or activities related to the launch of the European real estate business to be included as part of the proposed spin, we refer to as the NorthStar Europe Predecessor); (ii) a $1.3 billion portfolio primarily comprised of multi-tenant office properties located throughout Europe purchased by NorthStar Realty in April 2015, or the SEB Portfolio; (iii) 37 multi-tenant office properties located throughout Europe with an aggregate purchase price of $536 million acquired by NorthStar Realty in April 2015 across three portfolios comprised of the Internos Portfolio of $225 million, IVG Portfolio of $212 million and the Deka Portfolio of $99 million; and (iv) a $620 million office tower located in Frankfurt, Germany purchased by NorthStar Realty in July 2015, or the Trianon Tower. We collectively refer to the SEB Portfolio, Internos Portfolio, IVG Portfolio, Deka Portfolio and Trianon Tower as our New European Investments and together with the NorthStar Europe Predecessor, as our Current European Portfolio or our European Real Estate Business. Our European Real Estate Business does not include any of NorthStar Realty’s European healthcare properties.

However, NorthStar Europe is a newly-formed entity that will not have conducted any separate operations prior to the spin-off. The financial results of the NorthStar Europe Predecessor or of our New European Investments operated as part of NorthStar Realty may not be indicative of NorthStar Europe’s financial results upon consummation of the spin-off or of the financial results of NorthStar Europe had it owned the U.K. Complex and our New European Investments as an independent public company for the periods presented.

This introduction may not contain all of the information that is important to you and should be read in conjunction with the combined financial statements of the NorthStar Europe Predecessor and the notes thereto included in “Financial Statements,” the unaudited pro forma financial information beginning on page 70 and the risk factors included in “Risk Factors” beginning on page 17 of this prospectus.

We refer in this prospectus to the transaction in which we will be spun-off from NorthStar Realty and become an independent public company as the “separation,” the “Distribution” or the “spin-off.”

-ii-

FORWARD-LOOKING STATEMENTS

This prospectus contains certain forward-looking statements. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “believe,” “could,” “project,” “predict,” “continue,” “future” or other similar words or expressions. Forward-looking statements are not guarantees of performance and are based on certain assumptions, discuss future expectations, describe plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Such statements include, but are not limited to, those relating to the effects of the spin-off described in this prospectus, our ability to grow our business following the spin-off and entering into a long-term management contract with an affiliate of NorthStar Asset Management Group Inc., or NSAM, the operating performance of our investments, our liquidity and financing needs, use of the proceeds from the sale of the Senior Notes (see “Recent Developments”), our management’s track record, the effects of our current strategies and investment activities, our pro forma combined financial statements and our ability to raise and 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 significant risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from those forward-looking statements. These factors include, but are not limited to:

• risks inherent in a spin-off, including those related to the capital resources required to protect against business risks, legal risks and risks associated with the accounting treatment of a spin-off transaction;

• risks associated with operating as an independent public company and loss of certain benefits associated with being owned as part of a larger company;

• our rapid growth and relatively limited experience investing in Europe;

• the ability of NSAM to scale its operations in Europe to effectively manage our growth;

• our ability to realize the anticipated benefits of the spin-off;

• our ability to qualify and remain qualified as a REIT;

• access to debt and equity capital and our liquidity;

• our use of leverage and our ability to comply with the terms of our borrowing arrangements;

• our ability to obtain mortgage financing on our real estate portfolio on favorable terms or at all;

• the effect of economic conditions, particularly in Europe, on the valuation of our investments and on the tenants of the real property that we own;

• the unknown impact of the potential default and/or exit of one or more countries within the European Union;

• our ability to acquire attractive investment opportunities and the impact of competition for attractive investment opportunities;

• our performance pursuant to a long-term management contract with an affiliate of NSAM as our manager, including our reliance on NSAM and its affiliates and sub-advisors/joint venture partners in providing management services to us, the payment of substantial base and potential incentive fees to our manager, the allocation of investments by our manager among us and our manager’s and its affiliates’ other managed companies and strategic vehicles and various conflicts of interest in our relationship with NSAM;

• the effectiveness of our portfolio management techniques and strategies, including our reliance on third parties and the potential loss and/or liability arising as a result of our relationships with such third parties;

• the impact of adverse conditions affecting a specific property type in which we have investments, such as office properties;

• tenant defaults or bankruptcy;

• illiquidity of properties in our portfolio;

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

1

• any failure in our due diligence to identify all relevant facts in our underwriting process or otherwise;

• the impact of credit rating downgrades;

• our ability to manage our costs in line with our expectations and the impact on cash available for distribution, or CAD, and net operating income of our properties, or NOI;

• environmental and regulatory requirements, compliance costs and liabilities related to owning and operating properties in our portfolio and to our business in general;

• effect of regulatory actions, litigation and contractual claims against us and our affiliates, including the potential settlement and litigation of such claims;

• changes in European, international and domestic laws or regulations governing various aspects of our business;

• future changes in local tax law that may have an adverse impact on the cash flow and value of our investments;

• our ability to effectively structure our investments in a tax efficient manner, including for local tax purposes;

• the impact that a rise in future interest rates may have on our floating rate financing;

• potential devaluation of the Euro relative to the U.S. dollar due to quantitative easing and/or other factors which could cause the U.S. dollar value of our investments to decline;

• general foreign exchange risk associated with properties located in European countries located outside of the Eurozone, including the United Kingdom and Sweden;

• the loss of our exemption from the definition of an “investment company” under the Investment Company Act of 1940, as amended, or the Investment Company Act;

• competition for qualified personnel and NSAM’s ability to retain key personnel to manage us effectively;

• the impact of damage to our brand and reputation resulting from internal or external causes;

• the lack of historical financial statements for properties we may acquire in compliance with U.S. Securities and Exchange Commission, or SEC, requirements and U.S. generally accepted accounting principles, or U.S. GAAP, as well as the lack of familiarity of our tenants and third party service providers with such requirements and principles;

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

• the historical combined financial information included in this prospectus not providing an accurate indication of our performance in the future or reflecting what our financial position, results of operations or cash flows would have been had we operated as an independent public company during the periods presented; and

• our status as an emerging growth company.

The foregoing list of factors is not exhaustive. All forward-looking statements included in this prospectus 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 this prospectus under the heading “Risk Factors.”

2

SUMMARY

This summary highlights selected information contained elsewhere in this prospectus relating to the separation of NorthStar Europe from NorthStar Realty and the distribution of NorthStar Europe Common Stock by NorthStar Realty to NorthStar Realty’s common stockholders.

We describe in this prospectus our European Real Estate Business, which includes the NorthStar Europe Predecessor and our New European Investments, to be contributed to NorthStar Europe by NorthStar Realty as if the spin-off has already occurred. However, NorthStar Europe is a newly-formed entity that will not have conducted any separate operations prior to the spin-off. The financial results of the NorthStar Europe Predecessor or of our New European Investments operated as part of NorthStar Realty may not be indicative of NorthStar Europe’s financial results upon consummation of the spin-off or of the financial results of NorthStar Europe had it owned the U.K. Complex and our New European Investments as an independent public company for the periods presented.

The following summary may not contain all of the information that is important to you and should be read in conjunction with the combined financial statements of the NorthStar Europe Predecessor and the notes thereto included in “Financial Statements,” the unaudited pro forma financial information beginning on page 70 and the risk factors beginning on page 17 of this prospectus.

Our Business

We are a newly-formed European commercial real estate company with approximately $2.6 billion, at cost, of investments located throughout nine countries in Europe. We have the ability to invest in a broad spectrum of European commercial real estate. We are currently predominantly focused on office properties and may expand by acquiring other types of commercial real estate located throughout Europe. We expect to make equity investments, directly or indirectly through joint ventures, in a diversified portfolio of European commercial real estate that offers the opportunity to generate attractive risk-adjusted returns. We seek to generate stable cash flow for distribution to our stockholders and in turn build long-term franchise value.

We will be externally managed and advised by an affiliate of NorthStar Asset Management Group Inc. (NYSE: NSAM), which together with its affiliates is referred to in this prospectus as NSAM. We are a Maryland corporation and intend to conduct our operations so as to qualify as a REIT for U.S. federal income tax purposes beginning with the year ending December 31, 2015. Our principal executive offices are located at 399 Park Avenue, 18th Floor, New York, New York 10022 and our telephone number is (212) 547-2600.

The Spin-Off

On February 26, 2015, NorthStar Realty announced that its board of directors, or the NorthStar Realty Board, unanimously approved a plan to spin-off its European real estate business (which excludes NorthStar Realty’s European healthcare properties) into an independent publicly-traded company. In connection with the spin-off, we will enter into a management agreement with an initial term of 20 years on terms substantially consistent with the terms of the existing management agreement between NSAM and NorthStar Realty.

Refer to “The Distribution” section in this prospectus for further discussion regarding the Distribution and to “Corporate Governance and Management — Our Manager — Management Agreement” for further discussion regarding the management agreement.

Reasons for the Spin-Off

The NorthStar Realty Board believes that investors and analysts will regard NorthStar Europe’s distinct focus on investing in European commercial real estate more favorably as a separate company than as part of the existing portfolio and strategy of NorthStar Realty and thus place a greater value on NorthStar Europe as a separate public company. In the event that the spin-off does not have this and other expected benefits, the costs associated with the transaction, including an expected increase in general and administrative expenses, could have a negative effect on the financial condition and ability to make distributions to the stockholders of each company.

The NorthStar Realty Board has determined that separation of our business from NorthStar Realty’s other businesses is in the best interests of NorthStar Realty. The potential benefits considered by the NorthStar Realty Board in making the determination to consummate the Distribution included the following:

• attractive positioning as a European equity REIT with access to a lower cost of capital and capability to execute complex, cross border European transactions;

3

• European equity REIT with substantial growth prospects as financial and other institutions deleverage and wind-down their portfolios in Europe;

• ability to benefit from opportunities in the European markets; and

• opportunity to increase the aggregate value of NorthStar Europe and NorthStar Realty in order to allow each company to issue equity at a lower cost of capital in connection with acquisitions, joint ventures and partnerships on more favorable terms.

The NorthStar Realty Board believes that the aggregate value of NorthStar Realty and NorthStar Europe should increase relative to the value of NorthStar Realty prior to the announcement of the plan to spin-off its European real estate business because the Distribution will permit investors to invest separately in NorthStar Europe and in the remaining businesses of NorthStar Realty. This may make NorthStar Realty’s common stock and NorthStar Europe’s Common Stock more attractive to investors as compared to NorthStar Realty’s common stock before the Distribution and therefore could improve access to the capital markets for both NorthStar Realty and NorthStar Europe. As a result of the Distribution, the common stock of each of NorthStar Realty and NorthStar Europe would become available to classes of investors who seek an investment that offers the growth, risk and sector exposure of either NorthStar Europe or NorthStar Realty, but not that of the combined company. There can be no assurance, however, as to the future market price of the common stock of NorthStar Realty or NorthStar Europe’s Common Stock. Refer to “Risk Factors — Risks Related to the Spin-Off — The aggregate post-Distribution value of NorthStar Realty and NorthStar Europe shares may not equal or exceed the pre-spin-off value of NorthStar Realty shares.”

The NorthStar Realty Board considered several factors that might have a negative effect on NorthStar Realty as a result of the Distribution. For example, certain factors such as a lack of historical financial and performance data for our European Real Estate Business, including investments that were just recently acquired, or for NorthStar Europe as an independent public company may limit investors’ ability to appropriately value the Company’s Common Stock. Furthermore, because the Company will be separated from NorthStar Realty, the Distribution may also limit the ability of the Company to pursue cross-company business transactions and initiatives with other businesses of NorthStar Realty. Finally, following the Distribution, NorthStar Europe will be responsible for certain general and administrative costs previously incurred by NorthStar Realty. Refer to “The Distribution — Reasons for the Distribution” for a further discussion of the factors considered in consummating the Distribution.

Market Opportunity

We believe that the economic environment in Europe has stabilized and the foundations are in place for a gradual and sustained recovery. According to recent European Commission estimates, all of the countries in the European Union, with the exception of Cyprus, are expected to achieve Gross Domestic Product, or GDP, growth in 2015. We believe that the positive outlook for Europe is driven by a number of factors including the following:

• historically low interest rates;

• historically wide spreads between capitalization yields and interest rates;

• the European Central Bank’s quantitative easing program;

• depreciation of the Euro;

• declining unemployment rates;

• relatively low oil prices;

• increased investor and consumer confidence in a sustained European recovery; and

• the apparent stabilization of European sovereign debt and reversal of the recent upward trend in debt/GDP across the Eurozone.

There can be no assurance, however, that the European economy will continue to recover at the current rate or at all. For a discussion of risks relating to adverse conditions in the European and global economy, refer to “Risk Factors — Risks Related to Our Business.” For further discussion regarding our market opportunity, refer to “Business — Market Opportunity” in this prospectus.

Our Strategy

We have the ability to invest in a broad spectrum of European commercial real estate. We are currently predominantly focused on office properties and may expand by acquiring other types of commercial real estate located throughout Europe. We expect to make equity investments, directly or indirectly through joint ventures, in a diversified portfolio of European commercial

4

real estate that offers the opportunity to generate attractive risk-adjusted returns. We seek to generate stable cash flow for distribution to our stockholders and in turn build long-term franchise value.

For further discussion regarding our investment strategy, refer to “Business — Our Strategy” in this prospectus.

Our Competitive Strengths

We believe that we operate with significant competitive strengths, including creating a new opportunity for investors as the only European real estate company listed in the United States, our anticipated access to lower cost of capital, our diversified investment strategy, our high-quality portfolio, our experienced management team and our real estate investment and asset management experience, which will allow us to continue to grow our investments, generate attractive risk-adjusted returns for our stockholders and be well-positioned to benefit from the ongoing recovery in the European commercial real estate market. For additional information regarding our competitive strengths, refer to “Business — NorthStar Europe Competitive Strengths.”

Our Properties

Our current portfolio of $2.6 billion, at cost, is comprised of 52 high-quality properties located in many key European markets, including Berlin, Frankfurt, Hamburg, London, Paris, Amsterdam, Milan, Brussels and Madrid. $2.0 billion of our portfolio was acquired or committed to be acquired in 2014, and given improved market conditions in Europe since such time, we believe has appreciated in value. Our current portfolio is primarily comprised of office properties, with 94% of our in-place rental income generated from office properties as of June 30, 2015, adjusted for an acquisition through August 17, 2015. We hold prime office properties in Germany, the United Kingdom and France that account for approximately 71% of our in-place rental income as of June 30, 2015, adjusted for an acquisition through August 17, 2015. As of June 30, 2015, adjusted for an acquisition through August 17, 2015, our portfolio was 93% occupied, had a weighted average remaining lease term of 6.0 years and included high-quality tenants.

The following presents a summary, as of June 30, 2015, adjusted for an acquisition through August 17, 2015, of our portfolio and diversity across geographic location based on cost:

			Portfolio by Geographic Location
Total portfolio, at cost	$2.6 billion
Number of properties	52
Number of countries	9
Total square meters	520,323
Weighted average occupancy	93	%
Weighted average remaining lease term	6.0 years
In-place rental income related to:(1)
Office properties	94	%
Other	6	%

__________________________________

(1)In-place rental income represents gross rent adjusted for vacancies.

Risk Factors

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors.” Some of these risks and uncertainties include:

• the effect of adverse economic conditions in European, U.S. and global financial markets on the commercial real estate industry;

• our dependence on NSAM as our manager, including our reliance on NSAM’s affiliates, sub-advisors, joint venture partners and third parties, to achieve our investment objectives, grow our business and make distributions;

• NSAM failing to effectively perform its obligations under various agreements with us, including our management agreement;

• our agreements with NSAM and NorthStar Realty not reflecting terms that would have resulted from arm’s-length negotiations among unaffiliated third parties;

5

• the payment of substantial base and potential incentive fees to NSAM may cause NSAM to make decisions that are not in our best interests;

• the allocation of investments by NSAM among us and NSAM’s other managed companies and strategic vehicles and certain other activities of NSAM may create various conflicts of interest in our relationship with NSAM;

• the concentration of our investments in a specific property, property type or region;

• the impact of adverse conditions effecting a specific property type in which we have investments, such as office properties;

• political, economic, market, reputational, operational, legal, regulatory and other risks inherent in conducting business internationally;

• the relative illiquidity of real estate investments;

• the ability of our tenants to successfully operate their businesses;

• regulatory compliance costs and liabilities related to owning and operating properties in our portfolio;

• our access to financing sources on attractive terms, if at all;

• our potential use of leverage;

• the impact that a rise in future interest rates may have on our floating rate financing;

• our use of short-term borrowings;

• the effect of our hedging strategy against interest rate and currency exposure and our ability to align our hedging instruments and the investments being hedged;

• the loss of key personnel if they terminate their employment with NSAM;

• our dependence on information systems and failures of such systems and our ability to implement effective information and cyber security policies, procedures and capabilities;

• unknown impact of the potential default and/or exit of one or more countries within the European Union;

• costs associated with future growth through acquisitions of properties or other companies and our ability to integrate the properties or companies we acquire into our business and operations;

• our ability to change our investment strategy and distribution policy;

• our use of non-GAAP financial measures as indicators of our operating performance;

• provisions of our organizational documents and Maryland law limiting certain business combinations or changes in control;

• substantial European, U.S. and global regulation, numerous contractual obligations and extensive internal policies and our failure to comply with these matters;

• our ability to qualify and remain qualified as a REIT for federal income tax purposes;

• if NorthStar Realty fails to qualify as a REIT in its 2015 taxable year, we would be prevented from electing to qualify as a REIT and if so, would be required to pay income taxes at corporate rates and penalty taxes;

• REIT distribution requirements could adversely affect our liquidity and may force us to borrow funds or sell properties during unfavorable market conditions;

• the spin-off not having the benefits we anticipate or not enjoying all the benefits that we have prior to the spin-off;

• the aggregate post-Distribution value of our Common Stock and NorthStar Realty’s common stock not equaling or exceeding the pre-Distribution value of NorthStar Realty’s common stock;

• our ability to implement our business strategy;

• the absence of a non-volatile, active trading market for our Common Stock;

6

• our ability to engage in desirable strategic or capital-raising transactions following the Distribution;

• our ability to operate as an independent public company;

• satisfaction of the requirements of the Sarbanes-Oxley Act and the effectiveness of our internal control over financial reporting;

• the risk that we might fail to maintain our exclusion from the definition of an “investment company” under the Investment Company Act of 1940, as amended, or the Investment Company Act; and

• our status as an emerging growth company.

Unaudited Pro Forma Financial Information

The following tables present unaudited pro forma combined financial statements of our European Real Estate Business consisting of pro forma combined results of operations for the six months ended June 30, 2015 and year ended December 31, 2014 and a pro forma combined balance sheet as of June 30, 2015, comprised of the following:

• NorthStar Europe Predecessor - includes: (i) the U.K. Complex, which is a $100 million multi-tenant leasehold office complex located in the United Kingdom purchased in September 2014; and (ii) an allocation of certain costs and expenses from activities related to the launch of our European Real Estate Business.

• New European Investments:

• SEB Portfolio - $1.3 billion portfolio primarily comprised of multi-tenant office properties located throughout Europe purchased by NorthStar Realty in April 2015;

• Internos Portfolio - $225 million portfolio comprised of 12 primarily multi-tenant office properties located throughout Europe purchased by NorthStar Realty in April 2015;

• IVG Portfolio - $212 million portfolio comprised of 15 primarily multi-tenant office properties located throughout Europe purchased by NorthStar Realty in April 2015;

• Deka Portfolio - $99 million portfolio comprised of ten primarily multi-tenant office properties located throughout Europe purchased by NorthStar Realty in April 2015; and

• Trianon Tower - $620 million office tower located in Frankfurt, Germany purchased by NorthStar Realty in July 2015.

The unaudited pro forma combined statements of operations represent our European Real Estate Business for the six months ended June 30, 2015 and year ended December 31, 2014 and gives effect to the spin-off of our European Real Estate Business from NorthStar Realty as if it occurred on January 1, 2014. The pro forma combined balance sheet assumes the spin-off of our European Real Estate Business from NorthStar Realty occurred as of June 30, 2015.

The year ended December 31, 2014 is comprised of: (i) the period of our ownership of the U.K. Complex from September 16, 2014 to December 31, 2014, or the NorthStar Owner Period; and (ii) the period from January 1, 2014 to September 15, 2014 represents a period prior to our ownership, or the Prior Owner Period. Therefore, the amounts presented for the year ended December 31, 2014 may not be comparable to future periods.

The unaudited pro forma combined financial statements of our European Real Estate Business are not necessarily indicative of what our financial condition or results of operations would have been for the periods presented, nor are they representative of the future financial condition or results of operations of NorthStar Europe. The unaudited pro forma combined financial statements of our European Real Estate Business should be read in conjunction with the audited combined financial statements and the notes thereto of the NorthStar Europe Predecessor and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” both of which are included elsewhere in this prospectus.

7

The following table presents the unaudited pro forma combined statements of operations of our European Real Estate Business for the six months ended June 30, 2015 and year ended December 31, 2014 (dollars in thousands, except share and per share data):

	Six Months Ended June 30, 2015
	NorthStar Europe Predecessor(1)			Pro Forma Adjustments(2)		Other				Pro Forma(3)
Revenues
Rental and escalation income	$	4,753		$	61,694	$	—			$	66,447
Other revenues	1			—		—				1
Total revenues	4,754			61,694		—				66,448
Expenses
Management fee, related party	—			—		7,000			(4)	7,000
Operating expenses	1,770			11,456		—				13,226
Interest expense	1,523			12,332		7,863			(5)	21,718
General and administrative expenses	1,358			—		—				1,358
Depreciation and amortization	1,814			27,688		—				29,502
Other expenses	—			2,132		—				2,132
Total expenses	6,465			53,608		14,863				74,936
Other income (loss)
Unrealized gain (loss) on investments and other	41			—		—				41
Realized gain (loss) on investments and other	(14		)	—		—				(14		)
Income (loss) before income tax benefit (expense)	(1,684		)	8,086		(14,863		)		(8,461		)
Income tax benefit (expense)	107			—		—				107
Net income (loss)	(1,577		)	8,086		(14,863		)		(8,354		)
Net (income) loss attributable to non-controlling interests	21			—		—				21
Net income (loss) attributable to NorthStar Europe	$	(1,556	)	$	8,086	$	(14,863	)		$	(8,333	)
Earnings (loss) per share:
Basic
Diluted
Weighted average number of shares:(6)
Basic
Diluted

8

	Year ended December 31, 2014
	NorthStar Europe Predecessor(1)			Pro Forma Adjustments(2)		Other				Pro Forma(3)
Revenues
Rental and escalation income	$	9,884		$	134,904	$	—			$	144,788
Other revenues	1,329			—		—				1,329
Total revenues	11,213			134,904		—				146,117
Expenses
Management fee, related party	—			—		14,000			(4)	14,000
Operating expenses	4,294			22,978		—				27,272
Transaction costs	4,198			—		(4,198		)	(7)	—
Interest expense	3,651			24,371		19,133			(5)	47,155
General and administrative expenses	5,883			—		—				5,883
Depreciation and amortization	3,382			62,995		394			(8)	66,771
Other expenses	—			4,264		—				4,264
Total expenses	21,408			114,608		29,329				165,345
Other income (loss)
Unrealized gain (loss) on investments and other	1,900			—		—				1,900
Income (loss) before income tax benefit (expense)	(8,295		)	20,296		(29,329		)		(17,328		)
Income tax benefit (expense)	—			—		—				—
Net income (loss)	(8,295		)	20,296		(29,329		)		(17,328		)
Net (income) loss attributable to non-controlling interests	276			—		460			(8)	736
Net income (loss) attributable to NorthStar Europe	$	(8,019	)	$	20,296	$	(28,869	)		$	(16,592	)
Earnings (loss) per share:
Basic
Diluted
Weighted average number of shares:(6)
Basic
Diluted

9

The following table presents our unaudited pro forma combined balance sheet of our European Real Estate Business as of June 30, 2015 (dollars in thousands):

	NorthStar Europe Predecessor		Pro Forma Adjustments(9)		Other			Pro Forma(3)
Assets
Cash	$	3,265	$	3,848	$	330,986	(10)	$	338,099
Restricted cash	6,106		—		—			6,106
Operating real estate, net	54,985		1,683,027		—			1,738,012
Receivables	1,031		—		—			1,031
Unbilled rent receivable, net	694		—		—			694
Derivative assets, at fair value	1,134		28,015		—			29,149
Deferred costs and intangible assets, net	35,232		180,566		9,014		(10)	224,812
Other assets	2,245		572		—			2,817
Total assets	$	104,692	$	1,896,028	$	340,000		$	2,340,720
Liabilities
Mortgage and other notes payable	$	78,585	$	1,192,574	$	—		$	1,271,159
Senior notes	—		—		340,000		(10)	340,000
Accounts payable and accrued expenses	824		—		—			824
Other liabilities	2,706		24,087		—			26,793
Total liabilities	82,115		1,216,661		340,000			1,638,776
Equity
NorthStar Europe equity	21,439		677,790		—			699,229
Non-controlling interests	1,138		1,577		—			2,715
Total equity	22,577		679,367		—			701,944
Total liabilities and equity	$	104,692	$	1,896,028	$	340,000		$	2,340,720

__________________

(1) The year ended December 31, 2014, includes the Prior Owner Period from January 1, 2014 through September 15, 2014 and NorthStar Owner Period from September 16, 2014 through December 31, 2014. The six months ended June 30, 2015 represents the NorthStar Owner Period.

(2) The following summarizes the pro forma adjustments related to our New European Investments for the six months ended June 30, 2015 and year ended December 31, 2014 (dollars in thousands):

	Six Months Ended June 30, 2015
	SEB Portfolio						Internos Portfolio					Trianon Tower							Other Pro Forma Adjustments(viii)
	Historical (i)		Pro Forma Adjustments				Historical (i)		Pro Forma Adjustments			Historical(i)			Pro Forma Adjustments						Total
Revenues
Rental and escalation income	$	39,906	$	758		(ii)	$	—	$	—	(ii)	$	18,486		$	2,544		(ii)	$	—	$	61,694
Total revenues	39,906		758				—		—			18,486			2,544				—		61,694
Expenses
Interest expense	—		9,506			(iii)	—		—		(iii)	—			2,826			(iii)	—		12,332
Operating expenses	5,564		719			(iv)	—		—			5,173		(iv)	—			(iv)	—		11,456
Depreciation and amortization	—		18,990			(v)	—		—		(v)	—			8,698			(v)	—		27,688
Other expenses	—		2,132				—		—			—			—				—		2,132
Total expenses	5,564		31,347				—		—			5,173			11,524				—		53,608
Income (loss) before income tax benefit (expense)	34,342		(30,589		)		—		—			13,313			(8,980		)		—		8,086
Income tax benefit (expense)	—		—			(vi)	—		—		(vi)	—			—			(vi)	—		—
Net income (loss)	34,342		(30,589		)		—		—			13,313			(8,980		)		—		8,086
Net (income) loss attributable to non-controlling interests	—		—			(vii)	—		—			—			—			(vii)	—		—
Net income (loss) attributable to NorthStar Europe	$	34,342	$	(30,589	)		$	—	$	—		$	13,313		$	(8,980	)		$	—	$	8,086

10

	Year Ended December 31, 2014
	SEB Portfolio						Internos Portfolio					Trianon Tower							Other Pro Forma Adjustments(viii)
	Historical(i)		Pro Forma Adjustments				Historical(i)		Pro Forma Adjustments			Historical(i)			Pro Forma Adjustments						Total
Revenues
Rental and escalation income	$	86,117	$	2,959		(ii)	$	—	$	—	(ii)	$	40,741		$	5,087		(ii)	$	—	$	134,904
Total revenues	86,117		2,959				—		—			40,741			5,087				—		134,904
Expenses
Interest expense	—		16,319			(iii)	—		—		(iii)	—			8,052			(iii)	—		24,371
Operating expenses	8,400		597			(iv)	—		—			13,981		(iv)	—			(iv)	—		22,978
Depreciation and amortization	—		45,598			(v)	—		—		(v)	—			17,397			(v)	—		62,995
Other expenses	—		4,264				—		—			—			—				—		4,264
Total expenses	8,400		66,778				—		—			13,981			25,449				—		114,608
Income (loss) before income tax benefit (expense)	77,717		(63,819		)		—		—			26,760			(20,362		)		—		20,296
Income tax benefit (expense)	—		—			(vi)	—		—		(vi)	—			—			(vi)	—		—
Net income (loss)	77,717		(63,819		)		—		—			26,760			(20,362		)		—		20,296
Net (income) loss attributable to non-controlling interests	—		—			(vii)	—		—			—			—			(vii)	—		—
Net income (loss) attributable to NorthStar Europe	$	77,717	$	(63,819	)		$	—	$	—		$	26,760		$	(20,362	)		$	—	$	20,296

_____________________________

(i) Represents audited financial statements of revenues and certain expenses for our New European Investments for the year ended December 31, 2014 and unaudited financial statements of revenues and certain expenses for our New European Investments for the six months ended June 30, 2015. The SEB Portfolio and the Internos Portfolio were acquired in April 2015 and the Trianon Tower was acquired in July 2015.

(ii) Represents an adjustment to reflect amortization of above and below market leases for each respective New European Investment.

(iii) Represents interest expense for new borrowings for each respective New European Investment and includes amortization of deferred financing costs. The terms of such borrowings are described in “Business—Our Properties” of this prospectus. The estimated amortization period of deferred financing costs ranges from seven to 45 years.

(iv) Represents an adjustment for third party property management and other fees for the SEB Portfolio. Third party management and other fees for the Trianon Tower are included in the historical period and therefore, no adjustment is necessary.

(v) Represents depreciation and amortization expense based on a preliminary purchase price allocation for our New European Investments. The purchase price allocation is a preliminary estimate and may be adjusted within one year of the acquisition in accordance with U.S. GAAP. The depreciation and amortization periods range from one to 40 years.

(vi) We estimate our effective tax rate to be approximately on a blended basis based on projected earnings from our Current European Portfolio.

(vii) We are entitled to a 100% allocation of net income (loss) as a result of the allocation formula as set forth in the governing documents.

(viii) Represents adjustments related to the IVG Portfolio and Deka Portfolio, both acquired in April 2015.

(3) The functional currency of NorthStar Europe is U.S. dollars and the functional currency of the properties comprising our European Real Estate Business is the local currency where the property is located, predominately the Euro. As such, the operations are translated to U.S. dollar using the average exchange rate during the respective period. Additionally, assets and liabilities of such properties denominated in a foreign currency are translated to the U.S. dollar using the currency exchange rate at the end of the period presented. Our New European Investments presented in the unaudited pro forma combined balance sheet are translated using the currency exchange rate as of June 30, 2015.

(4) Represents a pro forma adjustment to reflect asset management and other fees incurred in accordance with the management agreement with NSAM, the terms of which are described in “Corporate Governance and Management—Our Manager—Management Agreement” of this prospectus. The current base management fee of $14 million annually is based on our Current European Portfolio and does not include any adjustment related to the NSAM incentive fee.

(5) Represents a pro forma adjustment to reflect interest expense (including amortization of related deferred financing costs) related to NorthStar Europe’s issuance of $340 million of 4.625% Senior Notes due December 2016, or the Senior Notes, in July 2015 of $7.9 million and $15.7 million for the six months ended June 30, 2015 and the year ended December 31, 2014, respectively. The year ended December 31, 2014 also includes a pro forma adjustment to reflect interest expense (including amortization of related deferred financing costs) related to NorthStar Europe Predecessor of $3.4 million during the Prior Owner Period.    

(6) Weighted average shares used to compute basic and diluted earnings per share represents the number of weighted average shares of Common Stock assumed to be outstanding based on a distribution ratio of one share of NorthStar Europe Common Stock for every share of NorthStar Realty common stock. The actual number of our basic and diluted shares outstanding will not be known until the Distribution.

(7) Transaction costs related to our Current European Portfolio include legal, accounting, tax and other professional services and are not included as part of the pro forma combined statements of operations.

(8) Represents pro forma adjustments related to NorthStar Europe Predecessor during the Prior Owner Period.

11

(9) The following summarizes the pro forma adjustments related to our New European Investments for the unaudited pro forma combined balance sheet as of June 30, 2015 (dollars in thousands):

	As of June 30, 2015(i)(ii)
	SEB Portfolio		Internos Portfolio		Trianon Tower		Other Pro Forma Adjustments(iii)		Total
Assets
Cash	$	3,848	$	—	$	—	$	—	$	3,848
Operating real estate, net	1,130,917		—		552,110		—		1,683,027
Derivative assets, at fair value	8,015		—		20,000		—		28,015
Deferred costs and intangible assets, net	135,560		—		45,006		—		180,566
Other assets	—		—		572		—		572
Total assets	$	1,278,340	$	—	$	617,688	$	—	$	1,896,028
Liabilities
Mortgage and other notes payable	$	826,459	$	—	$	366,115	$	—	$	1,192,574
Other liabilities	24,087		—		—		—		24,087
Total liabilities	850,546		—		366,115		—		1,216,661
Equity
NorthStar Europe equity	427,681		—		250,109		—		677,790
Non-controlling interests	113		—		1,464		—		1,577
Total equity	427,794		—		251,573		—		679,367
Total liabilities and equity	$	1,278,340	$	—	$	617,688	$	—	$	1,896,028

_____________________________

(i) Represents the preliminary purchase price allocation for each of the properties that comprise our New European Investments. The purchase price allocation is a preliminary estimate and may be adjusted within one year of the acquisition in accordance with U.S. GAAP. The purchase price of each portfolio represents the fair value of the assets acquired and liabilities assumed. The pro forma balance sheet includes an adjustment for transaction costs.

(ii) Our New European Investments are predominantly denominated in Euro and GBP. The initial purchase price allocation is translated based on the exchange rate to the U.S. dollar as of June 30, 2015.

(iii) Represents adjustments related to the IVG Portfolio and Deka Portfolio.

(10) Represents a pro forma adjustment to reflect NorthStar Europe’s issuance of the Senior Notes, including related deferred financing costs. We may elect, upon satisfaction of certain conditions, to settle all or part of the principal amount of the Senior Notes in our Common Stock in lieu of cash. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments” for further discussion. Excludes any additional cash that may be contributed upon Distribution.

12

QUESTIONS AND ANSWERS ABOUT THE DISTRIBUTION

The following is a brief summary of the terms of the Distribution. Please refer to “The Distribution” for a more detailed description of the matters described below.

Q: What is the Distribution?

A: The Distribution is the method by which NorthStar Realty will separate the business of the Company from NorthStar Realty’s other businesses, creating two separate publicly-traded companies. In the Distribution, NorthStar Realty will distribute to its common stockholders all of the shares of our Common Stock that it owns. Following the Distribution, we will be a separate company from NorthStar Realty and NorthStar Realty will not retain any ownership interest in us. The number of shares of NorthStar Realty common stock you own will not change as a result of the Distribution.

Q: What is being distributed in the Distribution?

A: Approximately            shares of our Common Stock will be distributed in the Distribution, based upon the                shares of NorthStar Realty common stock expected to be outstanding on the record date. The shares of our Common Stock to be distributed by NorthStar Realty will constitute all of the issued and outstanding shares of our Common Stock immediately after the Distribution. The actual number of shares of our Common Stock to be issued in the Distribution will be determined as of the record date. For more information on the shares being distributed in the Distribution, refer to “Shares Eligible for Future Sale” and “Description of Capital Stock — Common Stock.”

Q: What will I receive in the Distribution?

A: Holders of NorthStar Realty common stock will receive a distribution of one share of our Common Stock for every             share(s) of NorthStar Realty common stock held by them on the record date. As a result of the Distribution, your proportionate interest in NorthStar Realty will not change and, on a fully diluted basis, you will own the same percentage of common stock and voting power in NorthStar Europe as you did in NorthStar Realty on the record date, except as a result of the receipt of cash in lieu of fractional shares. For a more detailed description, refer to “The Distribution.”

Q: What is the record date for the Distribution?

A: Record ownership will be determined as of the close of business, Eastern Time, on                   , 2015, which we refer to as the record date. The person in whose name shares of NorthStar Realty common stock are registered at the close of business on the record date is the person to whom shares of the Company’s Common Stock will be issued in the Distribution. Refer to “The Distribution — Listing and Trading of Our Common Stock” for additional information.

Q: When will the Distribution occur?

A: We expect that shares of our Common Stock will be distributed by our transfer agent in its capacity as the distribution agent, on behalf of NorthStar Realty, effective at 11:59 p.m. Eastern Time on                   , 2015, which we refer to as the Distribution date.

Q: What will the relationship between NorthStar Realty and us be following the Distribution?

A: Following the Distribution, we will be a separate public company and NorthStar Realty will have no continuing ownership interest in us. In connection with the Distribution, we and NorthStar Realty will enter into a separation agreement and will enter into several other agreements for the purpose of accomplishing the distribution of shares of our Common Stock to NorthStar Realty’s common stockholders. These agreements will govern our relationship with NorthStar Realty subsequent to the Distribution and will also provide that all liabilities and obligations attributable to periods prior to the Distribution will remain with NorthStar Realty except for the liabilities for which NorthStar Realty agrees to contribute cash to the Company to enable the Company to pay such liabilities. The separation agreement provides that we and NorthStar Realty agree to provide each other with appropriate indemnities with respect to liabilities arising out of the businesses being transferred to us by NorthStar Realty.

In connection with the Distribution, we will enter into a management agreement with NSAM pursuant to which NSAM will manage the Company for an initial term of 20 years. The management agreement provides for: (i) an annual base management fee equal to the sum of: (a) $14 million; and (b) an additional annual base management fee equal to 1.5% per annum of the sum of: (1) cumulative net proceeds of all common equity and preferred equity issued by us or NorthStar Realty prior to the date of the Distribution, which are used to fund European investments that close subsequent to August 17, 2015 and are contributed to us in connection with the Distribution; (2) any equity we issue in exchange or conversion of notes; (3) any other issuances of common equity, preferred equity or other forms of equity, including but not limited to units, or LTIP Units, in NorthStar Realty Europe Limited Partnership, or our Operating Partnership (excluding equity-

13

based compensation, but including issuances related to an acquisition, investment, joint venture or partnership); and (4) cumulative CAD, if any, in excess of cumulative distributions paid on common stock, LTIP Units or other equity awards beginning the first full calendar quarter after completion of the Distribution; and (ii) an incentive fee determined as described under “Corporate Governance and Management — Our Manager — Management Agreement” with each of the fees set forth in clauses (i) and (ii) being calculated and payable quarterly in arrears in cash. The current base management fee of $14 million is based on our Current European Portfolio.

Immediately following the Distribution, certain of the members of our board of directors will also be directors on the NorthStar Realty Board and/or on the NSAM board of directors. Refer to “Certain Relationships and Related Party Transactions — Relationship Between NorthStar Realty, NSAM and Us After the Distribution” for a discussion of the policy that will be in place for dealing with potential conflicts of interest that may arise from our ongoing relationships with NorthStar Realty and NSAM.

Q: What do I have to do to participate in the Distribution?

A: No action is required on your part. Stockholders of NorthStar Realty on the record date for the Distribution are not required to pay any cash or deliver any other consideration, including any shares of NorthStar Realty common stock, for the shares of our Common Stock distributable to them in the Distribution.

Q: If I sell shares of NorthStar Realty common stock that I own after the date of this prospectus but before the Distribution, am I still entitled to receive shares of NorthStar Europe Common Stock distributable with respect to the shares of NorthStar Realty common stock I sold?

A: Beginning on or shortly before the record date and continuing up to and including the date of the Distribution, it is expected that there will be two markets in NorthStar Realty common stock: a “regular-way” market and an “ex-distribution” market. Shares of NorthStar Realty common stock that trade on the “regular-way” market will trade with an entitlement to our Common Stock distributed pursuant to the spin-off. Shares of NorthStar Realty common stock that trade on the “ex-distribution” market will trade without an entitlement to our Common Stock distributed pursuant to the spin-off. Therefore, if you sell shares of NorthStar Realty common stock in the “regular-way” market after the record date but before the Distribution, you will be selling your right to receive our Common Stock in the Distribution. If you sell shares of NorthStar Realty common stock in the “ex-distribution” market before the Distribution, you will receive the shares of our Common Stock that you are entitled to receive pursuant to your ownership as of the record date of NorthStar Realty common stock.

Q: How will fractional shares be treated in the Distribution?

A: If you would be entitled to receive a fractional share of our Common Stock in the Distribution, you will instead receive a cash payment. Refer to “The Distribution — General” for an explanation of how the cash payments will be determined.

Q: How will NorthStar Realty distribute shares of NorthStar Europe Common Stock to me?

A: Holders of shares of NorthStar Realty’s common stock on the record date will receive shares of our Common Stock in book-entry form. Refer to “The Distribution — General” for a more detailed explanation.

Q: What is the reason for the Distribution?

A: The NorthStar Realty Board believes that investors and analysts will regard NorthStar Europe’s focused strategy of investing in European commercial real estate more favorably as a separate company than as part of the existing portfolio and strategy of NorthStar Realty and thus place a greater value on NorthStar Europe as a separate public company. In the event that the spin-off does not have this and other expected benefits, the costs associated with the transaction, including an expected increase in general and administrative expenses, could have a negative effect on the financial condition and ability to make distributions to the stockholders of each company.

Q: Will I be taxed on the shares of NorthStar Europe Common Stock that I receive in the Distribution?

A: Yes. The Distribution will be in the form of a taxable special distribution to NorthStar Realty common stockholders. An amount equal to the fair market value of our Common Stock received by you will be treated as a taxable dividend to the extent of your ratable share of any current or accumulated earnings and profits of NorthStar Realty, with the excess treated as a nontaxable return of capital to the extent of your tax basis in shares of NorthStar Realty common stock and any remaining excess treated as capital gain. If this special distribution occurs in the structure and timeframe currently anticipated, the special distribution is expected to satisfy a portion of NorthStar Realty’s 2015 REIT taxable income distribution requirements. NorthStar Realty or other applicable withholding agents may be required to withhold on all or a portion of the Distribution payable to non-U.S. stockholders. For a more detailed discussion, see “The Distribution

14

— Material U.S. Federal Income Tax Consequences of the Distribution” and “Federal Income Tax Consequences of Our Status as a REIT.”

Q: Does NorthStar Europe intend to pay cash distributions?

A: We intend to make distributions to holders of our Common Stock on a quarterly basis. Evaluation of our distribution policy will be solely at the discretion of our board of directors and will be based on factors including, but not limited to, CAD, NOI, new investments, capital requirements and other factors our board of directors deems relevant and in accordance with applicable law. For additional information, refer to “Distribution Policy.”

Q: How will NorthStar Europe Common Stock trade?

A: There is not currently a public market for our Common Stock. We expect to list our Common Stock on the NYSE under the symbol “NRE.” Beginning shortly before, and continuing up to and including, the date of the Distribution, we expect that there will be a “when-issued” trading market in our Common Stock. The “when-issued” market will be a trading market for the shares of our Common Stock that will be distributed to holders of shares of NorthStar Realty common stock on the Distribution date. If you owned shares of NorthStar Realty common stock at the record date you will be entitled to shares of our Common Stock distributed pursuant to the Distribution. You may trade this entitlement to shares of our Common Stock, without the shares of NorthStar Realty common stock you own, on the “when-issued” market. On the first trading day following the Distribution date, “when-issued” trading with respect to our Common Stock will end and “regular-way” trading will begin.

Further, beginning shortly before the record date and continuing up to and including the date of the Distribution, we expect that there will be two markets in shares of NorthStar Realty common stock: a “regular-way” market and an “ex-distribution” market. Shares of NorthStar Realty common stock that trade on the “regular-way” market will trade with an entitlement to our Common Stock distributed pursuant to the spin-off. Shares of NorthStar Realty common stock that trade on the “ex-distribution” market will trade without an entitlement to our Common Stock distributed pursuant to the spin-off.

Refer to “The Distribution — Listing and Trading of Our Common Stock” for additional information.

Q: Will the Distribution affect the trading price of my NorthStar Realty common stock?

A: Yes. After the distribution of our Common Stock, the trading price of NorthStar Realty common stock is expected to be lower than the trading price of the NorthStar Realty common stock immediately prior to the Distribution. Moreover, until the market has evaluated the operations of NorthStar Realty without the operations of NorthStar Europe, the trading price of NorthStar Realty common stock may fluctuate as a result of the Distribution. NorthStar Realty believes the separation of NorthStar Europe from NorthStar Realty offers its stockholders the greatest long-term value. However, the combined trading prices of NorthStar Realty common stock and NorthStar Europe Common Stock after the Distribution may be lower than the trading price of NorthStar Realty common stock prior to the Distribution. Refer to “Risk Factors” beginning on page 17.

Q: Do I have appraisal rights?

A: No. Holders of NorthStar Realty common stock are not entitled to appraisal rights in connection with the Distribution.

Q: Is stockholder approval required for the Distribution?

A: No. Stockholder approval is not required for the Distribution. Subsequent to final approval by the NorthStar Realty Board and regulatory approval, NorthStar Realty will distribute its ownership interest in NorthStar Europe to its existing stockholders as of the record date.

Q: Can the NorthStar Realty Board decide to cancel the Distribution?

A: Yes. The occurrence of the Distribution will be subject to certain conditions, including the final approval of the NorthStar Realty Board. The NorthStar Realty Board may, in its sole and absolute discretion, determine to impose or waive conditions to the Distribution or abandon the Distribution. If the NorthStar Realty Board decides to cancel the Distribution or otherwise materially amend the terms of the Distribution, NorthStar Realty will notify stockholders of such decision by issuing a press release and/or filing a current report on Form 8-K.

15

Q: Who is the transfer agent for NorthStar Europe Common Stock?

A: American Stock Transfer & Trust Company, LLC

6201 15th Avenue
Brooklyn, NY 11219
Telephone: 1-800-937-5449
Email: info@amstock.com
Website: www.amstock.com

Q: Where can I get more information?

A: If you have questions relating to the mechanics of the Distribution of shares of NorthStar Europe Common Stock, you should contact the distribution agent:

American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Telephone: 1-800-937-5449
Email: info@amstock.com
Website: www.amstock.com

Before the Distribution, if you have questions relating to the Distribution, you should contact:

NorthStar Realty Finance Corp.
Attn: General Counsel
399 Park Avenue, 18th Floor

New York, NY 10022

Telephone: (212) 547-2600

After the Distribution, if you have questions relating to NorthStar Europe, you should contact:

NorthStar Realty Europe Corp.
Attn: General Counsel
399 Park Avenue, 18th Floor

New York, NY 10022

Telephone: (212) 547-2600

16

RISK FACTORS

The following risk factors and other information included in this prospectus should be carefully considered. If any of the following risks occur, our business, financial condition, operating results, cash flow and liquidity could be materially adversely affected.

Risks Related to Our Business

The commercial real estate industry has been and may continue to be adversely affected by economic conditions in the European, U.S. and global financial markets generally.

Our business and operations are dependent on the commercial real estate industry generally, which in turn is dependent upon global economic conditions.Despite improvements in the global economy, uncertainty remains as to the extent and timing of further recovery. Issues with the instability of credit and financial markets, actions by governments or central banks, weak consumer confidence in many markets and geopolitical or economic instability in certain countries continues to put pressure on the European economy. Instability or volatility of certain countries in the European Union may create risks for stronger countries within the European Union and globally. Global economic and political headwinds, along with global market instability and the risk of maturing commercial real estate debt that may have difficulties being refinanced, may continue to cause periodic volatility in the commercial real estate market for some time.Adverse economic conditions could harm our business and financial condition by, among other factors, reducing the value of our existing investments, limiting our access to debt and equity capital and otherwise negatively impacting our operations.

Challenging economic and financial market conditions could significantly reduce the amount of income we earn on our investments and further reduce the value of our investments.

Challenging economic and financial market conditions may cause us to experience an increase in the number of investments that result in losses, including delinquencies, non-performing investments and a decrease in the value of our property, all of which could adversely affect our results of operations. We may incur substantial losses and need to establish significant provision for losses or impairment. Our revenue from our properties could diminish significantly.

Continuing concerns regarding European debt, market perceptions concerning the instability of the Euro and recent volatility and price movements in the rate of exchange between the U.S. dollar and the Euro could adversely affect our business, results of operations and financing.

Concerns persist regarding the debt burden of certain Eurozone countries and their potential inability to meet their future financial obligations, the overall stability of the Euro and the suitability of the Euro as a single currency, given the diverse economic and political circumstances in individual Eurozone countries and recent declines and volatility in the value of the Euro. These concerns could lead to the re-introduction of individual currencies in one or more Eurozone countries, or, in more extreme circumstances, the possible dissolution of the Euro currency entirely. Should the Euro dissolve entirely, the legal and contractual consequences for holders of Euro-denominated obligations would be uncertain. Such uncertainty would extend to, among other factors, whether obligations previously expressed to be owed and payable in Euros would be re-denominated in a new currency (with considerable uncertainty over the conversion rates), what laws would govern and which country’s courts would have jurisdiction. These potential developments, or market perceptions concerning these and related issues, could materially adversely affect the value of our Euro-denominated investments and obligations.

Furthermore, market concerns about economic growth in the Eurozone relative to the United States and speculation surrounding the potential impact on the Euro of a possible Greek or other country sovereign default and/or exit from the Eurozone may continue to exert downward pressure on the rate of exchange between the U.S. dollar and the Euro, which may adversely affect our results of operations.

Risks Related to Our Manager

Our ability to achieve our investment objectives and to pay distributions depends in substantial part upon the performance of our manager.

In connection with our spin-off from NorthStar Realty, we will enter into a management agreement with NSAM to manage our day-to-day operations and our investments. Our ability to achieve our investment objectives and grow our business will be dependent upon the performance of NSAM in the acquisition of investments, the determination of financing arrangements and the management of our investments and operation of our day-to-day activities under the supervision of, and subject to the policies and guidelines established by, our board of directors. If our manager performs poorly and as a result is unable to originate, acquire and manage our investments successfully, we may be unable to achieve our investment objectives or to pay distributions to stockholders at presently contemplated levels, if at all.

17

Any adverse changes in NSAM’s financial health, the public perception of NSAM or our relationship with NSAM could hinder our operating performance and adversely affect our financial condition and results of operations.

Because NSAM is publicly-traded, any negative reaction by the stock market reflected in its stock price or deterioration in the public perception of NSAM could result in an adverse effect on our ability to acquire properties and obtain financing from third parties on favorable terms or at all. In addition, NSAM depends upon the management and other fees and reimbursement of costs that it receives from us and NSAM’s other managed companies in connection with the acquisition, management and sale of properties to conduct its operations. Any adverse changes in the financial condition of NSAM or our relationship with NSAM could hinder NSAM’s ability to successfully support our business and growth, which could have a material adverse effect on our financial condition and results of operations.

NSAM’s platform may not be as scalable as we anticipate and we could face difficulties growing our business without significant new investment in personnel and infrastructure by NSAM.

While we believe NSAM’s platform for operating our business is highly scalable and can support significant growth in our business without substantial new investment in personnel, expertise and infrastructure on a relative basis, we may be wrong in that assessment. We expect our business to grow substantially over the course of the next several years, which could place significant additional demands on management and other personnel, as well as our support infrastructure. It is possible that if our business grows substantially or that the business of the other companies managed by NSAM continues to grow, including NorthStar Realty, NSAM will need to make significant investments in personnel, expertise and infrastructure to support that growth. NSAM may be unable to make significant investments on a timely basis or at reasonable costs and its failure in this regard could disrupt our business and operations.

Failure of NSAM to effectively perform its obligations under the various agreements we will enter into with it, including the long-term management agreement, could have an adverse effect on our business and performance.

We will engage NSAM to provide asset management and other services to us pursuant to a long-term management agreement and other ancillary agreements. Our ability to achieve our investment objectives and to make distributions to stockholders will depend in substantial part upon the performance of NSAM and its ability to provide us with asset management and other services. We will also be dependent on other third party service providers to whom NSAM may delegate various responsibilities or engage on our behalf. If for any reason NSAM or any other service provider is unable to perform such services at the level we anticipate, alternate service providers may not be readily available on acceptable terms or at all, which could adversely affect our performance and materially harm our ability to execute our business plan.

In addition, the management agreement with NSAM will only be terminable by us for cause. We will be unable to terminate the management agreement for any other reason, including if NSAM performs poorly or is unable to acquire and manage our investments successfully. The term “cause” is limited to specific circumstances to be laid out in the management agreement, including NSAM’s breach of the management agreement or gross negligence that has a materially adverse effect on us. Termination for unsatisfactory financial performance does not constitute “cause” under the management agreement. In addition, we will be contractually committed to NSAM’s management for an initial term of approximately 20 years from the date of the Distribution, with automatic renewal terms thereafter. These provisions will increase our risk that NSAM may not perform well and our business could suffer. If NSAM’s performance as our manager does not meet our or our stockholders’ expectations, and we are unable to terminate the management agreement, the market price of our Common Stock could suffer.

Moreover, pursuant to the management agreement, we will agree to provide NSAM with all investment opportunities for the acquisition of commercial real estate investments that are presented to us or of which we become aware. NSAM will agree to use commercially reasonable efforts to fairly allocate such investment opportunities among us and its other managed companies, including NorthStar Realty, in accordance with an investment allocation policy; however, investment allocations will be determined by NSAM in its sole discretion and there can be no assurance that we will be allocated a fair share of investment opportunities. NSAM will also have the ability, without our consent, to revise the investment allocation policy in connection with obtaining additional managed companies. If NSAM fails to effectively allocate investments to us, we may be unable to achieve our investment objectives, which could have an adverse effect on our business and performance.

Certain fees payable to NSAM will be payable regardless of the performance of our portfolio and may fail to appropriately incentivize NSAM when managing our portfolio.

We will pay NSAM an annual base management fee regardless of the performance of our portfolio. Consequently, we may be required to pay NSAM significant base management fees in a particular quarter despite experiencing a net loss or a decline in the value of our portfolio during that quarter.

NSAM’s entitlement to compensation regardless of our performance might reduce its incentive to devote its time and effort to seeking investments that provide attractive risk-adjusted returns for our portfolio, particularly if other management

18

agreements to which NSAM is a party have a performance-based fee structure. In addition, NSAM has the ability to earn incentive fees each quarter based on our CAD, which may create an incentive for NSAM to invest in investments with higher yield potential, which are generally riskier or more speculative, or sell an investment prematurely for a gain and pay down borrowings, in an effort to increase our short-term net income and thereby increase the incentive fees to which it is entitled. Furthermore, the compensation payable to NSAM will increase as a result of future issuances of our equity securities, even if the issuances are dilutive to existing stockholders. If our interests and those of NSAM are not aligned, the execution of our business plan and our results of operations could be adversely affected, which could materially and adversely affect our ability to make distributions to our stockholders and the market price of our Common Stock.

The fees we will pay to NSAM in connection with the acquisition and management of our investments pursuant to the management agreement will not be determined on an arm’s length basis; therefore, we will not have the benefit of arm’s length negotiations of the type normally conducted between unrelated parties.

The fees we will pay to NSAM for services it will provide to us pursuant to the management agreement will not be determined on an arm’s length basis. As a result, the fees will be determined without the benefit of arm’s length negotiations of the type normally conducted between unrelated parties and may be in excess of amounts that we would otherwise pay to third parties for such services; however, the final terms of the management agreement will be approved by our board of directors, including a majority of the independent members thereof.

In addition to the management fees we will pay to NSAM, we will reimburse NSAM for costs and expenses incurred on our behalf, including indirect personnel and employment costs of NSAM and these costs and expenses may be substantial. 

We will pay NSAM substantial fees for the services it will provide to us and we also will have an obligation to reimburse NSAM for costs and expenses it may incur and pay on our behalf. Subject to certain limitations and exceptions, we will reimburse NSAM for both direct expenses as well as indirect costs, including a portion of NSAM’s personnel and employment costs. The costs and expenses NSAM expects to incur on our behalf, including the compensatory costs incurred by NSAM, may be substantial. There are conflicts of interest that could arise when NSAM makes allocation determinations. NSAM could allocate costs and expenses to us in excess of what we anticipate and such costs and expenses could have an adverse effect on our financial performance and ability to make cash distributions to our stockholders.

There will be conflicts of interest in our relationship with NSAM that could result in decisions that are not in the best interests of our stockholders.

We will be subject to conflicts of interest arising out of our relationship with NSAM, its affiliates, managed entities and strategic ventures. In particular, we expect to compete for investment opportunities directly with other companies and/or accounts that NSAM or its strategic or joint venture partners manage. Certain of NSAM’s managed companies, along with companies, funds and vehicles that are subject to a strategic relationship between NSAM and its strategic or joint venture partners (which we refer to collectively as strategic vehicles), may have investment mandates and objectives that target the same investments as us.

In addition, NSAM may have additional managed companies or strategic vehicles that will compete directly with us for investment opportunities in the future. We will adopt an investment allocation policy with NSAM that is intended to ensure that investments are allocated fairly and appropriately among us and the other NSAM managed companies or strategic vehicles over time, but there is no assurance that NSAM will be successful in eliminating the conflicts arising from the allocation of investment opportunities. When determining the entity for which an investment opportunity would be the most suitable, the factors that NSAM may consider include, among other factors, the following:

• investment objectives, strategy and criteria;

• cash requirements and amount of funds available;

• effect of the investment on the diversification of the portfolio, including by geography, size of investment, type of investment and risk of investment;

• leverage policy and the availability of financing for the investment by each entity;

• anticipated cash flow of the investment to be acquired;

• income tax effects of the purchase;

• the size of the investment;

• cost of capital;

• risk return profiles;

19

• targeted distribution rates;

• anticipated future pipeline of suitable investments;

• the expected holding period of the investment and the remaining term of the NSAM managed company, if applicable;

• affiliate and/or related party considerations; and

• whether a strategic vehicle has received a special allocation (as defined in the investment allocation policy).

If, after consideration of the relevant factors, NSAM determines that an investment is equally suitable for us and one of its managed companies or strategic vehicles, the investment will be allocated among each of the applicable entities, including us, on a rotating basis. New NSAM clients, including us, will be initially added at the end of the rotation. If, after an investment has been allocated to us or any other entity, a subsequent event or development, such as delays in structuring or closing on the investment, makes it, in the opinion of NSAM, more appropriate for an alternative entity to fund the investment, NSAM may determine to place the investment with the more appropriate entity. If an investment opportunity is re-allocated to another managed company or strategic vehicle after being initially allocated to us because of a change in circumstances, for purposes of the rotation schedule, we would still be treated as having the investment opportunity allocated to us. This policy is the same for all of NSAM's managed companies and we anticipate receiving a fair and reasonable allocation of all of NSAM's investment opportunities. In certain situations, NSAM may determine to allow more than one investment vehicle, including us, to co-invest in a particular investment.

NSAM currently manages or sponsors five companies and intends to sponsor additional companies in the future. While none of the other managed companies, sponsored companies, joint ventures or strategic vehicles currently has the same strategic investment focus on European commercial real estate as the Company, there are no restrictions which would preclude the other managed companies and joint ventures from acquiring European commercial real estate properties in the future that could directly compete with the Company’s investments.

There is no assurance this policy will remain in place during the entire period we are seeking investment opportunities. In addition, NSAM may sponsor additional managed companies or strategic vehicles in the future and, in connection with the creation of such managed companies or strategic vehicles, may revise these allocation procedures. The result of a revision to the allocation procedures may, among other things, be to increase the number of parties who have the right to participate in investment opportunities sourced by NSAM or us, thereby reducing the number of investment opportunities available to us.

In addition, under this policy, NSAM investment professionals may consider the investment objectives and anticipated pipeline of future investments of its managed companies or strategic vehicles. The decision of how any potential investment should be allocated among us and one of NSAM’s managed companies or strategic vehicles for which such investment may be suitable may, in many cases, be a matter of subjective judgment which will be made by NSAM. Pursuant to the investment allocation policy, NSAM may choose to allocate favorable investments to its other managed companies instead of to us. Our investment allocation policy with NSAM could produce unfavorable results for us that could harm our business.

NSAM also has and may in the future acquire additional interests in third parties, such as management firms that manage certain of our properties, which may cause its interests to differ from ours. NSAM may also encourage our use of third party service providers, for which we pay a fee. If our interests and NSAM’s interests are not aligned, we may face conflicts of interest that result in action or inaction that is detrimental to us.

NSAM’s professionals who perform services for us will face competing demands relating to their time and conflicts of interests relating to performing services on our behalf, which may cause our operations and stockholders’ investment to suffer.

We will rely on NSAM’s professionals to perform services related to the operation of our business. NSAM professionals performing services for us also perform services for NSAM’s other managed companies. As a result of their interests in NSAM, other managed companies and the fact that they engage in other business activities on behalf of others, these individuals will face conflicts of interest in allocating their time among us, NSAM and other managed companies and other business activities in which they are involved. In addition, certain management personnel performing services on behalf of NSAM own equity interests in NSAM or other managed companies and NSAM may grant additional equity interests in NSAM or other managed companies to such persons in connection with their continued services. These conflicts of interest, as well as the loyalties of these individuals to other entities and investors, could result in action or inaction that is detrimental to our business, which could harm the implementation of our business strategy, our investment opportunities and the returns on our investments. If we do not successfully implement our business strategy, we may be unable to generate the cash needed to make distributions to stockholders and to maintain or increase the value of our investments.

Further, at times when there are turbulent conditions in the real estate markets or distress in the credit markets or other times when we will need focused support and assistance from NSAM, NSAM’s other managed companies may likewise require

20

greater focus and attention, placing NSAM’s resources in high demand. In such situations, we may not receive the level of support and assistance that we may receive if we were internally managed or if NSAM did not act as a manager for other entities.

Our executive officers are employees of NSAM and face conflicts of interest related to their positions and interests in NSAM, which could hinder our ability to implement our business strategy.

Our executive officers are employees of NSAM and provide services to us solely in such capacity pursuant to NSAM’s obligations to us under the management agreement. We do not have employment agreements with any of our executive officers. If the management agreement with NSAM were to be terminated, we would lose the services of all our executive officers and other NSAM investment professionals acting on our behalf. Furthermore,if any of our executive officers ceased to be employed by NSAM, such individual would also no longer serve as one of our executive officers. NSAM is an independent contractor and controls the activities of its employees, including our executive officers. Our executive officers therefore owe duties to NSAM and its stockholders, which may from time-to-time conflict with the duties they owe to us and our stockholders. In addition, our executive officers may also own equity in NSAM or its other managed companies. As a result, the loyalties of these individuals to other entities and investors could result in action or inaction that is detrimental to our business, which could harm the implementation of our business strategy and our investment opportunities.

We may not realize the anticipated benefits of any of our manager’s strategic partnerships and joint ventures.

NSAM may enter into strategic partnerships and joint ventures to further its own interests or the interests of its managed companies, including us. NSAM may not be able to realize the anticipated benefits of these strategic partnerships and joint ventures. These strategic partnerships and/or joint ventures may also subject NSAM and its managed companies, including us, to additional risks and uncertainties, as NSAM and its managed companies, including us, may be dependent upon, and subject to, liability, losses or reputational damage relating to systems, control and personnel that are not under NSAM’s control. In addition, where NSAM does not have a controlling interest, it may not be able to take actions which are in our best interests due to a lack of full control. Furthermore, to the extent that NSAM’s partners provide services to us, certain conflicts of interests will exist. Moreover, disagreements or disputes between NSAM and its partners could result in litigation, which could potentially distract NSAM from our business.

NSAM will manage our portfolio pursuant to very broad investment guidelines and our board of directors is not required to approve each investment and financing decision made by NSAM unless so required by our investment guidelines.

NSAM will be authorized to follow very broad investment guidelines established by our board of directors. Our board of directors periodically will review our investment guidelines and our investment portfolio but will not, and will not be required to, review all of our proposed investments, except in limited circumstances as set forth in our investment guidelines. Our board of directors may also make modifications to our investment guidelines from time to time as it deems appropriate. In addition, in conducting periodic reviews or modifying our investment guidelines, our board of directors may rely primarily on information provided to them by NSAM. Furthermore, transactions entered into by NSAM on our behalf may be costly, difficult or impossible to unwind by the time they are reviewed by our board of directors. NSAM will have flexibility within the broad parameters of our investment guidelines in determining the types and amounts of investments in which to invest on our behalf, including making investments that may result in returns that are substantially below expectations or result in losses, which could materially and adversely affect our business and results of operations, or may otherwise not be in the best interests of our stockholders.

NSAM’s liability will be limited under the management agreement and we will agree to indemnify NSAM against all liabilities incurred in accordance with and pursuant to the management agreement.

In connection with the spin-off, we will enter into a management agreement with NSAM, which will govern our relationship with NSAM. NSAM maintains a fiduciary relationship with us. Under the terms of the management agreement, and subject to applicable law, NSAM, its directors, officers, employees, partners, managers, members, controlling persons, and any other person or entity affiliated with NSAM are not liable to us or our subsidiaries for acts taken or omitted to be taken in accordance with and pursuant to the management agreement, except those resulting from acts of willful misfeasance or bad faith in the performance of NSAM’s duties under the management agreement. In addition, subject to applicable law, we agreed to indemnify NSAM and each of its directors, officers, employees, partners, managers, members, controlling persons and any other person or entity affiliated with NSAM from and against any claims or liabilities, including reasonable legal fees and other expenses reasonably incurred, arising out of or in connection with NSAM’s performance of its duties or obligations under the management agreement or otherwise as our manager, except where attributable to acts of willful misfeasance or bad faith in the performance of NSAM’s duties under the management agreement.

21

NSAM is subject to extensive regulation as an investment adviser in the United States and as a fund services business in the Bailiwick of Jersey, which could adversely affect its ability to manage our business.

Certain of NSAM’s affiliates, including our manager, are subject to regulation as investment advisers and/or fund managers by various regulatory authorities that are charged with protecting the interests of NSAM’s managed companies, including us. Instances of criminal activity and fraud by participants in the investment management industry and disclosures of trading and other abuses by participants in the financial services industry have led the U.S. government and regulators in foreign jurisdictions to consider increasing the rules and regulations governing, and oversight of, the financial system. This activity is expected to result in continued changes to the laws and regulations governing the investment management industry and more aggressive enforcement of the existing laws and regulations. NSAM could be subject to civil liability, criminal liability, or sanction, including revocation of its registration as an investment adviser in the United States, or its registration as a fund services business in the Bailiwick of Jersey, revocation of the licenses of its employees, censures, fines or temporary suspension or permanent bar from conducting business, if it is found to have violated any of these laws or regulations. Any such liability or sanction could adversely affect its ability to manage our business.

NSAM must continually address conflicts between its interests and those of its managed companies, including us. In addition, the SEC, the Jersey Financial Services Commission and other regulators have increased their scrutiny of potential conflicts of interest. However, appropriately dealing with conflicts of interest is complex and difficult and if NSAM fails, or appears to fail, to deal appropriately with conflicts of interest, it could face litigation or regulatory proceedings or penalties, any of which could adversely affect its ability to manage our business.

NSAM could undergo a change of control, which could result in a change of management at NSAM and cause a disruption to our business and operations.

NSAM could undergo a change of control, which could result in a change to the management at NSAM as well as a change to the board of directors at NSAM. Consequently, we could be managed by an entity and personnel that do not have the experience and track record that resides within NSAM and suitable alternatives may not be available. New management and personnel could change the manner in which they provide services to us and may not be effective. Any such fundamental change to NSAM could be disruptive to our business and operations and could have a material adverse effect on our performance.

Risks Related to Our Investments

A prolonged economic slowdown, a lengthy or severe recession or declining real estate values could harm our investments.

Our investments may be susceptible to economic slowdowns or recessions, which could lead to financial losses and a decrease in revenues, earnings and assets. We may continue to expand our commercial real estate portfolio by acquiring additional properties in Europe, which would increase our exposure to global economic slowdowns and recessions. An economic slowdown or recession, in addition to other non-economic factors such as an excess supply of properties, could have a material negative impact on the values of our investments. Declining real estate values will reduce the value of our properties, as well as our ability to refinance our properties and use the value of our existing properties to support the purchase or investment in additional properties. Slower than expected economic growth pressured by a strained labor market, along with overall financial uncertainty, could result in lower occupancy rates and lower lease rates across many property types and may create obstacles for us to achieve our business plans. We may also be less able to pay principal and interest on our borrowings, which could cause us to lose title to properties securing our borrowings. Any of the foregoing could significantly harm our revenues, results of operations, financial condition, business prospects and our ability to make distributions to stockholders.

We are subject to significant competition and we may not be able to compete successfully for investments.

We are subject to significant competition for attractive investment opportunities from other real estate investors, some of which have greater financial resources than us, including publicly-traded REITs, non-traded REITs, insurance companies, commercial and investment banking firms, private institutional funds, hedge funds, private equity funds, sovereign wealth funds and other investors. We may not be able to compete successfully for investments. In addition, the number of entities and the amount of funds competing for suitable investments may increase. If we pay higher prices for investments, our returns may be lower and the value of our investments may not increase or may decrease significantly below the amount we paid for such investments. If such events occur, we may experience lower returns on our investments.

22

While we are focused on investing in European commercial real estate, we have no established investment criteria limiting the particular country or region or industry concentration of our investments. If our investments are concentrated in a particular country or region or property type that experiences adverse economic conditions, our investments may lose value and we may experience losses.

Properties that we may acquire may be concentrated in a particular country or region or in a particular property type. These current and future investments carry the risks associated with significant regional or industry concentration. We have not established and do not plan to establish any investment criteria to limit our exposure to these risks for future investments. As a result, properties underlying our investments may be overly concentrated in certain countries or regions or industries and we may experience losses as a result. A worsening of economic conditions, a natural disaster or civil disruptions in a particular country or region in which our investments may be concentrated, or economic upheaval with respect to a particular property type, could have an adverse effect on our business, including impairing the value of our properties.

Approximately 94% of our in-place rental income is generated from office properties, which increases the likelihood that risks related to owning office properties will become more material to our business and results of operations.

Approximately 94% of our in-place rental income is generated from office properties. Our exposure to the risks inherent in the office sector may make us more vulnerable to a downturn or slowdown in the office sector. A downturn in the office industry could negatively affect our lessees’ ability to make lease payments to us and our ability to pay distributions to our stockholders. These adverse effects may be more pronounced than if our investments were more diversified.

We are subject to additional risks due to the international nature of our investments, which could adversely impact our business and results of operations.

We recently acquired approximately $2.6 billion, at cost, of real estate in Europe, including properties located in Germany, the United Kingdom, France, the Netherlands, Italy, Belgium and Sweden. We expect to pursue additional expansion opportunities in Europe.

Most of our management’s expertise to date is in the United States and neither we nor NSAM has extensive expertise in international markets. Our investments may be affected by factors peculiar to the laws of the jurisdiction in which the borrower or the property is located and these laws may expose us to risks that are different from and/or in addition to those commonly found in the United States. We anticipate paying additional fees to third parties to help manage these portfolios, but there is no assurance this will reduce our risk. We and NSAM may not be as familiar with the potential risks to our investments outside of the United States and we may incur losses as a result. These risks include:

• governmental laws, rules and policies including laws relating to the foreign ownership of real property or mortgages and laws relating to the ability of foreign persons or corporations to remove profits earned from activities within the country to the person’s or corporation’s country of origin;

• translation and transaction risks related to fluctuations in foreign currency exchange rates;

• adverse market conditions caused by inflation, deflation or other changes in national or local political and economic conditions;

• challenges of complying with a wide variety of foreign laws, including corporate governance, operations, taxes and litigation;

• changes in relative interest rates;

• changes in the availability, cost and terms of borrowings resulting from varying national economic policies;

• changes in real estate and other tax rates, the tax treatment of transaction structures and other changes in operating expenses in a particular country where we have an investment;

• our REIT tax status not being respected under foreign laws, in which case any income or gains from foreign sources would likely be subject to foreign taxes, withholding taxes, transfer taxes and value added taxes;

• lack of uniform accounting standards (including availability of information in accordance with U.S. GAAP);

• changes in land use and zoning laws;

• more stringent environmental laws or changes in such laws;

23

• changes in the social stability or other political, economic or diplomatic developments in or affecting a country where we have an investment;

• changes in applicable laws and regulations in the United States that affect foreign operations; and

• legal and logistical barriers to enforcing our contractual rights in other countries, including insolvency regimes, landlord/tenant rights and ability to take possession of collateral. 

Each of these risks might adversely affect our performance and impair our ability to make distributions to our stockholders required to qualify and remain qualified as a REIT. In addition, there is generally less publicly available information about foreign companies and a lack of uniform financial accounting standards and practices (including the availability of information in accordance with U.S. GAAP) which could impair our ability to analyze transactions and receive timely and accurate financial information from tenants necessary to meet our reporting obligations to financial institutions or governmental or regulatory agencies.

Our business will also be subject to extensive regulation by various non-U.S. regulators, including governments, central banks and other regulatory bodies, in the jurisdictions in which the business operates. In many countries, the laws and regulations applicable to the financial services and securities industries are uncertain and evolving and it may be difficult for us to determine the exact requirements of local laws in every market or manage our relationships with multiple regulators in various jurisdictions. Our inability to remain in compliance with local laws in a particular market and manage our relationships with regulators could have a significant and adverse effect not only on our businesses in that market but also on our reputation generally.

Our joint venture partners could take actions that decrease the value of an investment to us and lower our overall return.

We currently are party to and may in the future enter into joint ventures with third parties to make investments. We may also make investments in partnerships or other co-ownership arrangements or participations. Such investments may involve risks not otherwise present with other methods of investment, including, for example, the following risks:

• our joint venture partner in an investment could become insolvent or bankrupt;

• fraud or other misconduct by our joint venture partners;

• we may share decision-making authority with our joint venture partner regarding certain major decisions affecting the ownership of the joint venture and the joint venture property, such as the sale of the property or the making of additional capital contributions for the benefit of the property, which may prevent us from taking actions that are opposed by our joint venture partner;

• such joint venture partner may at any time have economic or business interests or goals that are or that become in conflict with our business interests or goals, including for example the operation of the properties owned by such joint venture;

• such joint venture partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives; and

• the terms of our joint ventures could restrict our ability to sell or transfer our interest to a third party when we desire on advantageous terms, which could result in reduced liquidity.

Any of the above might subject us to liabilities and thus reduce our returns on our investment with that joint venture partner. In addition, disagreements or disputes between us and our joint venture partner could result in litigation, which could increase our expenses and potentially limit the time and effort our officers and directors are able to devote to our business.

Because real estate investments are relatively illiquid, we may not be able to vary our portfolio in response to changes in economic and other conditions, which may result in losses to us.

Many of our investments are illiquid. A variety of factors could make it difficult for us to dispose of any of our investments on acceptable terms even if a disposition is in the best interests of stockholders. We cannot predict whether we will be able to sell any property for the price or on the terms set by us or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. Certain properties may also be subject to transfer restrictions that materially restrict us from selling that property for a period of time or impose other restrictions, such as a limitation on the amount of financing that can be placed or repaid on that property. We may be required to expend cash to correct defects or to make improvements before a property can be sold, and we cannot assure that we will have cash available to correct those defects or to make those improvements. The Internal Revenue Code of 1986, as amended, or the Code, also places limits on our ability to sell certain properties held for fewer than two years.

24

We may also determine to give our tenants a right of first refusal or similar options. As a result, our ability to sell investments in response to changes in economic and other conditions could be limited. To the extent we are unable to sell any property for its book value or at all, we may be required to take a non-cash impairment charge or loss on the sale, either of which would reduce our earnings. Limitations on our ability to respond to adverse changes in the performance of our properties may have a material adverse effect on our business, financial condition and results of operations and our ability to make distributions to stockholders.

We are subject to risks, such as declining real estate values and operating performance, associated with future advance or capital expenditure obligations.

We may need to fund capital expenditures and other significant expenses for our real estate property investments in excess of those projected at the time of our underwriting because of, among other reasons, inaccurate or incomplete technical advice from our advisors at the time of underwriting that results in greater than expected expenditures. Future funding obligations subject us to significant risks such as that the property may have declined in value, projects to be completed with the additional funds may have cost overruns and the tenant may be unable to generate enough cash flow and execute its business plan, or sell or refinance the property, in order to repay our debt due. We could determine that we need to fund more money than we originally anticipated in order to maximize the value of our investment even though there is no assurance additional funding would be the best course of action. Further, future funding obligations require us to maintain higher liquidity than we might otherwise maintain and this could reduce the overall return on our investments. We could also find ourselves in a position with insufficient liquidity to fund future obligations and we could experience losses.

We may obtain only limited warranties when we purchase a property, which will increase the risk that we may lose some or all of our invested capital in the property or rental income from the property which, in turn, could materially adversely affect our business, financial condition and results from operations and our ability to make distributions to stockholders.

The seller of a property often sells such property in an “as is” condition on a “where is” basis and “with all faults,” without any warranties of merchantability or fitness for a particular use or purpose. In addition, the related real estate purchase and sale agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing. Despite our efforts, we may fail to uncover all material risks during our diligence process. The purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property, as well as the loss of rental income from that property if an issue should arise that decreases the value of that property and is not covered by the limited warranties. If any of these results occur, it may have a material adverse effect on our business, financial condition and results of operations and our ability to make distributions to stockholders. In addition, where the seller of a property we purchase is a liquidating fund or funds, we may be further limited in our ability to enforce against breaches of certain representations and warranties granted in the purchase and sale agreement beyond a very limited period of time (as the entities may be dissolved).

The price we pay for acquisitions of real property will be based on our projections of market demand, occupancy and rental income, as well as on market factors, and our return on our investment may be lower than expected if any of our projections are inaccurate.

The price we pay for real property investments will be based on our projections of market demand, occupancy levels, rental income, the costs of any development, redevelopment or renovation of property and other factors. In addition, as the real estate market continues to strengthen with the recovery in the European economies that is expected to continue in 2015 to 2016, we will face increased competition, which may drive up prices for commercial real estate. If any of our projections are inaccurate or we overpay for investments and their value subsequently drops or fails to rise because of market factors, returns on our investment may be lower than expected and could experience losses.

Our lease transactions may not result in market rates over time.

We expect substantially all of our rental and escalation income to come from lease transactions, which may have longer terms than standard arrangements or renewal options that specify maximum rate increases. If we do not accurately judge the potential for increases in market rates, rental and escalation increases under the terms may fail to result in fair market rates over time. Further, we may have no ability to terminate our lease transactions or adjust the rent to then-prevailing market rates. As a result, our income and distributions to stockholders could be lower than they would otherwise be if we did not enter into such lease agreements.

Some of our leases may expire in the same year.

Some of the leases for our real estate investments may expire in the same year. We may also enter into leases that are short term in nature and therefore subject to heightened lease turnover risk. Additionally, for certain of our properties which are primarily leased to one tenant, such as certain of our Italian, French and Dutch properties in the SEB portfolio and the Trianon Tower, lease expirations may impact our ability to comply with financial covenants under our borrowings. As a result, we could

25

be subject to a sudden and material change in value of our portfolio and available cash flow from such investments in the event that these leases are not renewed or in the event that we are not able to comply with or obtain relief from our financial covenants under the borrowings related to, or cross-collateralized with, the properties that are subject to these leases.

We may not be able to relet or renew leases at the properties held by us on favorable terms, or at all.

Certain of our real estate investments were negatively impacted by the more recent challenging economic conditions and all of our investments in real estate may be pressured if economic conditions and rental markets continue to be challenging. For example, upon expiration or earlier termination of leases for space located at our properties, the space may not be relet or, if relet, the terms of the renewal or reletting (including the cost of required renovations or concessions to tenants) may be less favorable than current lease terms. We may be receiving above market rental rates which will decrease upon renewal, which will adversely impact our income and could harm our ability to service our debt and operate successfully. Weak economic conditions would likely reduce tenants’ ability to make rent payments in accordance with the contractual terms of their leases and lead to early termination of leases. Furthermore, commercial space needs may contract, resulting in lower lease renewal rates and longer releasing periods when leases are not renewed. Any of these situations may result in extended periods where there is a significant decline in revenues or no revenues generated by a property. Additionally, to the extent that market rental rates are reduced, property-level cash flow would likely be negatively affected as existing leases renew at lower rates. If we are unable to relet or renew leases for all or substantially all of the space at these properties, if the rental rates upon such renewal or reletting are significantly lower than expected or if our reserves for these purposes prove inadequate, we will experience a reduction in net income and may be required to reduce or eliminate cash distributions to stockholders.

Additionally, the open market lease review process in certain jurisdictions can be a lengthy one and often results in resolution though arbitration. While the agreed rent level generally applies retroactively to the lease review date, this can be a lengthy and costly process.

Many of our investments are dependent upon tenants successfully operating their businesses and their failure to do so could have a material adverse effect on our business, financial condition and results of operations and our ability to make distributions to stockholders.

We depend on our tenants to manage the day-to-day operations of our real estate properties in a manner that generates revenues sufficient to allow them to meet their obligations to us, including their obligations to pay rent, maintain certain insurance coverage, pay real estate taxes and maintain the properties under their operational control in a manner that does not jeopardize their operating licenses or regulatory status. We may not be able to find suitable tenants to lease our properties, and the ability of our tenants to fulfill their obligations to us may depend, in part, upon the overall profitability of their operations, including any other facilities, properties or businesses they may acquire or operate. The cash flow generated by the operation of our properties may not be sufficient for a tenant to meet its obligations to us. Tenants who are having trouble with their cash flow are more likely to expose us to unknown liens and other risks to our investments. In addition, we may have trouble recovering from tenants who are insolvent. Our financial position could be weakened and our ability to fulfill our obligations under our real estate borrowings could be limited if our tenants are unable to meet their obligations to us or we fail to renew or extend our contractual relationship with any of our tenants. Any of these results could have a material adverse effect on our business, financial condition and results of operations and our ability to make distributions to stockholders.

We may become responsible for capital improvements. To the extent such capital improvements are not undertaken, the ability of our tenants to manage our properties effectively and on favorable terms may be affected, which in turn could materially adversely affect our business, financial conditions and results of operations and our ability to make distributions to stockholders.

We may be responsible under local law of certain jurisdictions in which we own property for capital improvements. In France, the legal distribution of charges between us and the tenant may be contractually set out. However, certain French law makes it mandatory for us, as owners of the real properties, for leases entered into or renewed on or after November 3, 2014, to incur expenditures for major repairs, in particular those related to the obsolescence of the properties and those required to meet changing legal regulation. They may also force us to pay certain taxes. These expenditures, which cannot be contractually transferred to the tenant, could have a material adverse effect on our business if they exceed our expectations.

In addition, under German law, maintenance and modernization measures may be required to meet changing legal, environmental or market requirements (e.g., with regard to health and safety requirements and fire protection). The costs associated with keeping properties up to market demand are borne primarily by the property owner. Lease agreements for commercial properties may also transfer responsibility for the maintenance and repair of leased properties to tenants. However, the costs of maintenance and repairs to the roof and structures and of areas located in the leased property used by several tenants may not be fully transferred to tenants by use of general terms and conditions and requires contractual limitation on the amount apportioned.

26

Furthermore, although tenants are generally responsible for capital improvement expenditures under typical net lease structures applicable in the United Kingdom, it is possible that a tenant may not be able to fulfill its obligations to keep the facility in good operating condition. To the extent capital improvements are not undertaken or are deferred, occupancy rates and the amount of rental and reimbursement income generated by the facility may decline, which would negatively impact the overall value of the affected property. We may be forced to incur unexpected significant expense to maintain our properties, even those that are subject to net leases. Any of these results could have a material adverse effect on our business, financial condition and results of operations and our ability to make distributions to stockholders.

We could incur additional costs if the actual costs of maintaining or modernizing our properties exceed our estimates, if we are not permitted to raise rents in connection with maintenance and modernization measures, if hidden defects not covered by insurance or contractual warranties are discovered during the maintenance or modernization process or if additional spending is required. Any failure to undertake appropriate maintenance and modernization measures could adversely affect out rental income and entitle tenants to withhold or reduce rental payments or even to terminate existing lease agreements. If we incur substantial unplanned maintenance, repair and modernization costs or fail to undertake appropriate maintenance measures, this could have a material adverse effect on our business, net assets, financial condition, cash flows or results of operations.

We are party to commercial leases which are heavily regulated to protect the tenant and any future amendments to such regulation could increase our expenditures.

Commercial leases are heavily regulated in some countries in which we operate. In France, the contractual conditions applying to commercial leases duration, renewal, rent and rent indexation are considered matters of public policy, and as such are heavily regulated to protect the tenant. The minimum duration of a commercial lease is nine years. The tenant has the right to terminate the lease at the end of every three-year period, unless contractually agreed otherwise; he also has a right of renewal of the lease upon termination of the lease’s initial period.

In addition, the tenant has a right of revision of the rent every three years. The rent variation, however, is capped. Except where the rental value considerably changes (increase by more than 10% in case of a revision upon a three-year period), the variation of the rent, in case of a revision upon a three-year period or in the case of a renewal, cannot exceed the variation of the indice trimestriel des loyers commerciaux, or the Commercial Rents Index, or the indice trimestriel des loyers des activités tertiaires, or the Retail Rental Index. However, this provision does not apply in case of a renewal of a lease, the initial duration of which exceeded nine years or the effective duration of which exceeded twelve years. In addition, even in the case of a renewed or revised lease where the rental value has considerably changed, the rent increase cannot exceed 10% of the rent paid during the previous year. Consequently, we cannot freely raise rents of ongoing leases.

Furthermore, changes in the content, interpretation or enforcement of these regulations could compromise some of the practices adopted by us in managing our property holdings and increase our costs for operating, maintaining and renovating our property holding and adversely affect the valuation of our property holding. In particular, recent changes to French law amended many provisions applicable to commercial leases in France, and more specifically:

• cancelled any reference in the French commercial code, with respect to the variation of the rent of a renewed or revised lease, to the indice national trimestriel mesurant le coût de la construction, or the Construction Cost Index, and replaced it with the Commercial Rents Index and the Retail Rental Index;

• removed the possibility to contractually remove the right of the tenant to terminate the lease at the end of every three-year period, with the exception of leases for premises to be used exclusively as office space; and

• made it mandatory for the property owner to incur certain charges.

Lease defaults, terminations or landlord-tenant disputes may reduce our income from our real estate investments.

The creditworthiness of our tenants in our real estate investments have been, or could become, negatively impacted as a result of challenging economic conditions or otherwise, which could result in their inability to meet the terms of their leases. Lease defaults or terminations by one or more tenants may reduce our revenues unless a default is cured or a suitable replacement tenant is found promptly. In addition, disputes may arise between the landlord and tenant that result in the tenant withholding rent payments, possibly for an extended period. These disputes may lead to litigation or other legal procedures to secure payment of the rent withheld or to evict the tenant. Upon a lease default, we may have limited remedies, be unable to accelerate lease payments or evict a defaulting tenant and have limited or no recourse against a guarantor. In addition, the legal process for evicting defaulting tenants may be lengthy and costly. Tenants as well as guarantors may have limited or no ability to satisfy any judgments we may obtain. We may also have duties to mitigate our losses and we may not be successful in that regard. Any of these situations may result in extended periods during which there is a significant decline in revenues or no revenues generated by a property. If this occurred, it could adversely affect our results of operations.

27

The bankruptcy, insolvency or financial deterioration of any of our tenants could significantly delay our ability to collect unpaid rents or require us to find new tenants.

Our financial position and our ability to make distributions to stockholders may be adversely affected by financial difficulties experienced by any of our major tenants, including bankruptcy, insolvency or a general downturn in business, or in the event any of our major tenants do not renew or extend their relationship with us as their lease terms expire.

We are exposed to the risk that our tenants may not be able to meet their obligations to us or other third parties, which may result in their bankruptcy or insolvency. Although some of our leases and loans permit us to evict a tenant, demand immediate repayment and pursue other remedies, bankruptcy laws afford certain rights to a party that has filed for bankruptcy or reorganization. A tenant in bankruptcy may be able to restrict our ability to collect unpaid rents or interest during the bankruptcy proceeding. Furthermore, dealing with a tenant bankruptcy or other default may divert management’s attention and cause us to incur substantial legal and other costs.

Bankruptcy laws vary across the different jurisdictions in Europe. In certain jurisdictions, a debtor has the option to assume or reject an unexpired lease. A debtor cannot choose to keep the beneficial provisions of a contract while rejecting the burdensome ones; the contract must be assumed or rejected as a whole. In France, if the debtor chooses to continue an unexpired commercial lease, but still fails to pay the rent in connection with the occupancy after the bankruptcy procedure commencement order, we cannot legally request the termination of the lease before the end of a three-month period from the date of issue of the order relating to the bankruptcy procedure commencement.

Our tenants’ forms of entities may cause special risks or hinder our recovery.

Most of our tenants in the real estate that we own are legal entities rather than individuals. The obligations these entities owe us are typically non-recourse so we can only look to our collateral, and at times, the assets of the entity may not be sufficient to recover our investment. As a result, our risk of loss may be greater than for leases with individuals. Unlike individuals involved in bankruptcies, these legal entities will generally not have personal assets and creditworthiness at stake. As a result, the default or bankruptcy of one of our tenants, or a general partner or managing member of that tenant, may impair our ability to enforce our rights and remedies under the terms of the lease agreement.

Compliance fire and safety and other regulations may require us or our tenants to make unanticipated expenditures which could adversely affect our business, financial condition and results of operations and our ability to make distributions to stockholders.

Our properties are required to comply with jurisdiction-specific fire and safety regulations, building codes and other land regulations and licensing or certification requirements as they may be adopted by governmental agencies and bodies from time-to-time. We may be required to incur substantial costs to comply with those requirements. Changes in labor and other laws could also negatively impact us and our tenants. For example, changes to labor-related statutes or regulations could significantly impact the cost of labor in the workforce, which would increase the costs faced by our tenants and increase their likelihood of default.

Environmental compliance costs and liabilities associated with our properties may materially impair the value of our investments and expose us to liability.

Under various international and local environmental laws, ordinances and regulations, a current or previous owner of real property, such as us and our tenants, may be liable in certain circumstances for the costs of investigation, removal or remediation of, or related releases of, certain hazardous or toxic substances, including materials containing asbestos, at, under or disposed of in connection with such property, as well as certain other potential costs relating to hazardous or toxic substances, including government fines and damages for injuries to persons and adjacent property. In addition, some environmental laws create a lien on the contaminated site in favor of the government for damages and the costs it incurs in connection with the contamination. These laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence or disposal of such substances and liability may be imposed on the owner in connection with the activities of a tenant at the property. The presence of contamination or the failure to remediate contamination may adversely affect our or our tenants’ ability to sell or lease real estate, or to borrow using the real estate as collateral, which, in turn, could reduce our revenues. We, or our tenants, as owner of a site, may be liable under common law or otherwise to third parties for damages and injuries resulting from environmental contamination emanating from the site. The cost of any required investigation, remediation, removal, fines or personal or property damages and our or our tenants’ liability could significantly exceed the value of the property without any limits.

The scope of the indemnification our tenants have agreed to provide us may be limited. For instance, some of our agreements with our tenants do not require them to indemnify us for environmental liabilities arising before the tenant took possession of the premises. Further, we cannot assure stockholders that any such tenant would be able to fulfill its indemnification obligations. If we were deemed liable for any such environmental liabilities and were unable to seek recovery against our tenant, our business, financial condition and results of operations could be materially and adversely affected.

28

We may make investments that involve property types and structures with which we have less familiarity, thereby increasing our risk of loss.

We may determine to invest in residential real estate and multifamily housing and other certain property types with which we have limited or no prior experience. When investing in property types with which we have limited or no prior experience, we may not be successful in our diligence and underwriting efforts. We may also be unsuccessful in preserving value if conditions deteriorate and we may expose ourselves to unknown substantial risks. Furthermore, these investments could require additional management time and attention relative to investments with which we are more familiar. All of these factors increase our risk of loss.

Risks Related to Our Financing Strategy

We may not be able to access financing sources on attractive terms, if at all, which could adversely affect our ability to execute our business plan.

We require outside capital to fund and grow our business. Our business may be adversely affected by disruptions in the debt and equity capital markets and institutional lending market, including the lack of access to capital or prohibitively high costs of obtaining or replacing capital, both domestically and abroad. A primary source of liquidity for us will be the debt and equity capital markets, including issuances, directly or indirectly, of common equity, preferred equity and exchangeable senior notes. Despite recent improvements since the global financial crisis in 2008, the markets could suffer another severe downturn and another liquidity crisis could emerge. Based on the current conditions, we do not know whether any sources of capital will be available to us in the future on terms that are acceptable to us, if at all. If we cannot obtain sufficient debt and equity capital on acceptable terms, our business and our ability to operate could be severely impacted. For information about our available sources of funds, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Sources of Operating Revenues and Cash Flows” and the notes to the NorthStar Europe Predecessor’s combined financial statements beginning on page F-1.

We may be unable to obtain financing required to acquire investments as contemplated in our business plan, which could compel us to restructure or abandon a particular acquisition and harm our ability to make distributions to stockholders.

We expect to fund a portion of our investments with financing. We cannot assure stockholders that financing will be available on acceptable terms, if at all, which could reduce the number, or alter the type, of investments that we would make otherwise. To the extent that financing proves to be unavailable when needed, we may be compelled to modify our investment strategy to optimize the performance of our portfolio. This may reduce our income. Any failure to obtain financing could have a material adverse effect on the continued development or growth of our business and harm our ability to make distributions to stockholders.

We may use leverage in connection with our business, which could adversely affect our return on our investments and reduce cash available for distribution to stockholders.

We may leverage our portfolio generally through the use of credit facilities and other borrowings. The type and percentage of financing will vary depending on our ability to obtain credit and the lender’s estimate of the stability of the portfolio’s cash flow. However, we do not expect to restrict the amount of borrowings that we may incur. High leverage can, particularly during difficult economic times, increase our risk of loss and harm our liquidity. Moreover, we may have to incur more recourse borrowings, including recourse borrowings that are subject to mark-to-market risk, in order to obtain financing for our business. As of June 30, 2015, adjusted for an acquisition through August 17, 2015, we had approximately $1.8 billion of borrowings outstanding.

Substantial borrowings, among other things, could:

• require us to dedicate a large portion of our cash flow to pay principal and interest on our borrowings, which would reduce the availability of cash flow to fund working capital, capital expenditures and other business activities;

• require us to maintain minimum unrestricted cash;

• increase our vulnerability to general adverse economic and industry conditions;

• require us to post additional reserves and other additional collateral to support our financing arrangements, which could reduce our liquidity and limit our ability to leverage our investments;

• subject us to maintaining various debt, operating income, net worth, cash flow and other covenants and financial ratios;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

29

• restrict our operating policies and ability to make strategic acquisitions, dispositions or pursue business opportunities;

• require us to maintain a borrowing base of assets;

• place us at a competitive disadvantage compared to our competitors that have fewer borrowings;

• put us in a position that necessitates raising equity capital at a time that is unfavorable to us and dilutive to our stockholders;

• limit our ability to borrow additional funds (even when necessary to maintain adequate liquidity), dispose of investments or make distributions to stockholders; and

• increase our cost of capital.

Our ability to effectively execute our financing strategy depends on various conditions in the financing markets that are beyond our control, including liquidity and credit spreads. We may be unable to obtain financing on favorable terms, if we are able to obtain additional financing at all. If our strategy is not viable, we will have to find alternative forms of long-term financing for our investments, as secured revolving credit facilities and repurchase agreements may not accommodate long-term financing. This could subject us to more restrictive recourse borrowings and the risk that debt service on less efficient forms of financing would require a larger portion of our cash flow, thereby reducing cash available for distribution to stockholders, for our operations and for future business opportunities. If alternative financing is not available on favorable terms, or at all, we may have to liquidate investments at unfavorable prices to pay off such financing. Our return on our investments and cash available for distribution to stockholders may be reduced to the extent that changes in market conditions cause the cost of our financing to increase relative to the earnings that we can derive from the investments we acquire.

Stockholders may experience substantial dilution, including if we settle the Senior Notes with our Common Stock, which can affect the trading price of our Common Stock, earnings per share and CAD per share.

We have in the past and may continue to undertake substantial offerings of securities that are settleable, exchangeable or convertible into our Common Stock. For example, if we meet all of the conditions under the indenture governing our Senior Notes to settle the Senior Notes in Common Stock and elect to settle the Senior Notes in Common Stock, then depending on the trading price of our Common Stock during the applicable measurement, existing stockholders may experience more than % dilution due to the Common Stock settlement. In addition, we may issue shares of our Common Stock upon exercise or settlement of any share-based payment awards under our equity and incentive plans. If we continue to engage in such offerings, whether through the public markets or in private placements, our existing stockholders may experience immediate and substantial dilution in their percentage ownership of our outstanding Common Stock and such offerings can result in substantial decreases to our stock price. Furthermore, any such dilutions due to the issuance of additional shares of Common Stock could adversely impact our earnings per share and CAD per share.

If we elect to settle our Senior Notes through share settlement, we expect to deliver shares of our Common Stock through the facilities of the Depository Trust Company, or DTC, as the depositary for the Senior Notes but there can be no assurances that DTC will deliver shares promptly following each share settlement date or that DTC will apply its policies and procedures to deliver those shares to the record holders we indicate or at all. As a result, holders of the Senior Notes may not receive shares of our Common Stock promptly following each share settlement date which could cause such holders to short our Common Stock or enter into other hedging strategies which could adversely impact the trading price of our Common Stock.

The Senior Notes will be represented by one or more global securities deposited with, or on behalf of, DTC, as the depositary for the Senior Notes and be registered in the name of a nominee of DTC. Administrative actions in respect of the Senior Notes, including any delivery of our Common Stock in settlement of the principal amount of the Senior Notes, will be executed through DTC and must comply with the rules and procedures of that system. We have no control over DTC. If we make a share settlement election, we will deliver to DTC the settlement amounts for the Senior Notes in five installments corresponding to each five trading-day period included in the 25 trading-day share settlement measurement period and deliverable on each share settlement date. DTC will deliver shares of our Common Stock through its facilities in accordance with its policies and procedures for notice, processing and delivery. There can be no assurances that DTC will deliver shares to the beneficial holders of the Senior Notes promptly following each share settlement date or that DTC will apply its policies and procedures to deliver those shares to the record holders we indicate or at all. As a result, holders of the Senior Notes may not receive shares of our Common Stock promptly following each share settlement date, which may cause such holders to enter into alternative or additional hedging strategies such as shorting our Common Stock which could increase the volatility and adversely impact the trading price of our Common Stock. For more information regarding the Senior Notes, refer to “Recent Developments.”

30

A portion of our borrowings is floating rate and fluctuations in interest rates may cause losses.

Substantially all of our existing borrowings bear, and future borrowing may bear, interest at variable rates. If market interest rates increase, the interest rate on our variable rate borrowings will increase and will create higher debt service requirements, which would adversely affect our cash flow and could adversely impact our results of operations. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions and other factors beyond our control. While we may enter into agreements limiting our exposure to higher debt service requirements, any such agreements may not offer complete protection from this risk.

Our interest rate risk sensitive assets, liabilities and related derivatives are generally held for non-trading purposes. Based on our Current European Portfolio, a hypothetical 1.00%, 2.00% and 3.00% increase in the applicable benchmark (EURIBOR and GBP LIBOR) applied to our floating-rate liabilities and related derivatives would result in an increase in net interest expense of approximately $10.1 million, $14.3 million and $14.5 million, respectively, annually.

In a period of rising interest rates, our interest expense could increase while the income we earn on our investments would not change, which would adversely affect our profitability.

Our operating results depend in large part on differences between the income from our investments less our operating costs, reduced by any credit losses and financing costs. Income from our investments may respond more slowly to interest rate fluctuations than the cost of our borrowings. Consequently, changes in interest rates, particularly short-term interest rates, may influence our net income. Increases in these rates may decrease our net income. Interest rate fluctuations resulting in our interest expense exceeding the income from our investments could result in losses for us and may limit our ability to make distributions to stockholders. In addition, if we need to repay existing borrowings during periods of rising interest rates, we could be required to liquidate one or more of our investments at times that may not permit realization of the maximum return on those investments, which would adversely affect our profitability.

We may not successfully align the maturities of our liabilities with the maturities on our investments, which could harm our operating results and financial condition.

Our general financing strategy is focused on the use of “match-funded” structures. This means that we seek to align the maturities of our liabilities with the maturities on our investments in order to manage the risks of being forced to refinance our liabilities prior to the maturities of our investments. We may fail to appropriately employ match-funded structures on favorable terms, or at all. We may also determine not to pursue a fully match-funded strategy with respect to a portion of our financings for a variety of reasons. If we fail to appropriately employ match-funded strategies or determine not to pursue such a strategy, our exposure to interest rate volatility and exposure to matching liabilities prior to the maturity of the corresponding investment may increase substantially, which could harm our operating results, liquidity and financial condition.

We may use short-term borrowings to finance our investments and we may need to use such borrowings for extended periods of time to the extent we are unable to access long-term financing. This may expose us to increased risks associated with decreases in the fair value of the underlying collateral, which could cause an adverse impact on our results of operations.

We may be dependent on short-term financing arrangements that are not matched in duration to our financial assets. Short-term borrowing through repurchase arrangements, credit facilities and other types of borrowings may put our investments and financial condition at risk. Any such short-term financing may also be recourse to us, which will increase the risk of our investments. We may obtain additional facilities and increase our lines of credit on existing facilities in the future. Our financing structures may economically resemble short-term, floating-rate financing and usually require the maintenance of specific loan-to-collateral value ratios and other covenants. In addition, the value of assets underlying any such short-term financing may be marked-to-market periodically by the lender, including on a daily basis. If the fair value of the investments subject to such financing arrangements decline, we may be required to provide additional collateral or make cash payments to maintain the loan-to-collateral value ratio. If we are unable to provide such collateral or cash repayments, we may lose our economic interest in the underlying investments. Further, such borrowings may require us to maintain a certain amount of cash reserves or to set aside unleveraged assets sufficient to maintain a specified liquidity position that would allow us to satisfy our collateral obligations. These facilities may be restricted to financing certain types of investments, which could impact our investment allocation. In addition, such short-term borrowing facilities may limit the length of time that any given asset may be used as eligible collateral. As a result, we may not be able to leverage our investments as fully as we would choose, which could reduce our income generated on such investments. In the event that we are unable to meet the collateral obligations for our short-term financing arrangements, our financial condition could deteriorate rapidly.

31

We are subject to risks associated with obtaining mortgage financing on our real estate, which could materially adversely affect our business, financial condition and results of operations and our ability to make distributions to stockholders.

As of June 30, 2015, adjusted for an acquisition through August 17, 2015, our real estate portfolio had $1.5 billion of total mortgage financing. Financing for new real estate investments and our maturing borrowings may be provided by credit facilities, private or public debt offerings, assumption of secured borrowings, mortgage financing on a portion of our owned portfolio or through joint ventures. We are subject to risks normally associated with financing, including the risks that our cash flow is insufficient to make timely payments of interest or principal, that we may be unable to refinance existing borrowings or support collateral obligations and that the terms of refinancing may not be as favorable as the terms of existing borrowing. If we are unable to refinance or extend principal payments due at maturity or pay them with proceeds from other capital transactions or the sale of the underlying property, our cash flow may not be sufficient in all years to make distributions to stockholders and to repay all maturing borrowings. This may entitle secured creditors to exercise their rights under their credit documentation which may include an acceleration of their claims and a foreclosure of security. The rights of creditors on foreclosure will be jurisdiction specific, but in the United Kingdom, for example, this may include the appointment of a receiver pursuant to the Law of Property Act 1925 who will be entitled to take possession and control of the relevant secured properties subject to the mortgage and to exercise a power of sale of a property in order discharge the secured indebtedness. This creates a risk that the proceeds will be insufficient to provide us with any equity in those properties. Alternatively, the secured creditors may have the right to appoint an administrator with respect to the property investments situated in the United Kingdom. An administrator is an officer of the court who will take possession, custody and control of the relevant company’s assets and undertaking and to exercise legislative powers that include a power of sale. The appointment of an administrator may similarly create a risk that the proceeds of realization of our assets in an administration will be insufficient to provide us with any equity in those properties or surplus proceeds.

Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, the interest expense relating to that refinanced borrowing would increase, which could reduce our profitability and the amount of distributions we are able to pay to stockholders. Moreover, additional financing increases the amount of our leverage, which could negatively affect our ability to obtain additional financing in the future or make us more vulnerable in a downturn in our results of operations or the economy generally.

Hedging against interest rate and currency exposure may adversely affect our earnings, limit our gains or result in losses, which could adversely affect cash available for distribution to stockholders.

We have and may in the future enter into interest rate swap, cap or floor agreements or pursue other interest rate or currency hedging strategies. Our hedging activity will vary in scope based on interest rate levels, the type of investments held and other changing market conditions. Interest rate and/or currency hedging may fail to protect or could adversely affect us because, among other things:

• interest rate and/or currency hedging can be expensive, particularly during periods of rising and volatile interest rates;

• available interest rate and/or currency hedging may not correspond directly with the risk for which protection is sought;

• the duration of the hedge may not match the duration of the related liability or investment;

• our hedging opportunities may be limited by the treatment of income from hedging transactions under the rules determining REIT qualification;

• the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction;

• the counterparties with which we trade may cease making markets and quoting prices in such instruments, which may render us unable to enter into an offsetting transaction with respect to an open position;

• the party owing money in the hedging transaction may default on its obligation to pay; and

• we may purchase a hedge that turns out not to be necessary, i.e., a hedge that is out of the money.

Any hedging activity we engage in may adversely affect our earnings, which could adversely affect cash available for distribution to stockholders. Therefore, while we may enter into such transactions to seek to reduce interest rate and/or currency risks, unanticipated changes in interest rates or exchange rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged or liabilities being hedged may vary materially. Moreover, for a variety of reasons, we may not be able to establish a perfect correlation between hedging instruments

32

and the investments being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss. We may also be exposed to liquidity issues as a result of margin calls or settlement of derivative hedges.

Hedging instruments often are not traded on regulated exchanges, guaranteed by an exchange or its clearinghouse or regulated by any foreign or U.S. governmental authorities and involve risks and costs.

The cost of using hedging instruments increases as the period covered by the instrument lengthens and during periods of rising and volatile interest rates and change in foreign currency exchange rates. We may increase our hedging activity and thus increase our hedging costs during periods when interest rates are volatile or rising or foreign currency exchange rates are unfavorable and hedging costs have increased. In addition, hedging instruments involve risk since they often are not traded on regulated exchanges, guaranteed by an exchange or its clearing house, or regulated by any foreign or U.S. governmental authorities. Consequently, there are no regulatory or statutory requirements with respect to recordkeeping, financial responsibility or segregation of customer funds and positions. Furthermore, the enforceability of agreements underlying derivative transactions may depend on compliance with applicable statutory, commodity and other regulatory requirements and, depending on the identity of the counterparty, applicable international requirements. The business failure of a hedging counterparty with whom we may enter into a hedging transaction will most likely result in a default. Default by a party with whom we may enter into a hedging transaction may result in the loss of unrealized profits and force us to cover our resale commitments, if any, at the then current market price. It may not always be possible to dispose of or close out a hedging position without the consent of the hedging counterparty and we may not be able to enter into an offsetting contract in order to cover our risk. We cannot assure stockholders that a liquid secondary market will exist for hedging instruments purchased or sold, and we may be required to maintain a position until exercise or expiration, which could result in losses.

Refer to the below risk factor “— Risks Related to Regulatory Matters and Our REIT Tax Status — The direct or indirect effects of the Dodd-Frank Act, enacted in July 2010 for the purpose of stabilizing or reforming the financial markets, may have an adverse effect on our interest rate hedging activities” for a discussion of how the Dodd-Frank Wall Street Reform Act, or the Dodd-Frank Act, may affect the use of hedging instruments.

Risks Related to Our Company

Our ability to operate our business successfully would be harmed if our executive officers or NSAM’s key personnel terminate their employment with NSAM.

Our future success depends, to a significant extent, upon the continued services of our executive officers and NSAM’s key personnel. For instance, the extent and nature of the experience of our executive officers and NSAM’s key personnel and the nature of the relationships they have developed with real estate professionals and financial institutions are critical to the success of our business. We cannot assure stockholders of their continued employment with NSAM. The loss of services of certain of our executive officers or NSAM’s key personnel could harm our business and our prospects.

Our board of directors will adopt certain incentive plans to permit NSAM to create incentives that will allow NSAM to retain and attract the services of its key employees and align its employee’s interests with our stockholders. These incentive plans may be tied to the performance of our Common Stock and a decline in the price of our Common Stock may result in NSAM being unable to motivate and retain our executive officers and NSAM’s key employees. NSAM’s inability to motivate and retain these individuals could also harm our business and our prospects. Additionally, competition for experienced real estate professionals could require NSAM to pay higher wages and provide additional benefits to attract qualified employees, which could result in higher expenses allocated to us by NSAM.

Failure of NorthStar Realty to effectively perform its obligations to us could have an adverse effect on our business and performance.

In connection with the spin-off, we will enter into a separation agreement and various other agreements with NorthStar Realty. These agreements will govern our relationship with NorthStar Realty subsequent to the Distribution and will provide that all liabilities and obligations attributable to periods prior to the Distribution will remain with NorthStar Realty except for the liabilities for which NorthStar Realty agrees to contribute cash to the Company to enable the Company to pay such liabilities. We and NorthStar Realty will also agree to provide each other with indemnities with respect to liabilities arising out of the period after the spin-off. We and NorthStar Realty will rely on each other to perform its obligations under these agreements. Such a failure could also lead to a decline or other adverse effects to our operating results and could harm our ability to execute our business plan.

33

If our ability to issue equity awards is limited, we may be in breach of our management agreement with NSAM and it could impact NSAM’s ability to retain key employees.

We will be required to issue equity awards to NSAM employees at NSAM’s request under the terms of our management agreement. We may at times have limited availability under our incentive plans to issue equity awards to these employees. We may seek stockholder approval for additional equity awards and there is no assurance stockholders would grant such approval. To the extent we do not have sufficient equity awards available, we may have to compensate these employees using cash. Because CAD excludes equity-based compensation expense, payment of higher levels of cash relative to equity awards will have a negative impact on CAD and reduce our liquidity position.

We are highly dependent on information systems and systems failures could significantly disrupt our business.

As a European commercial real estate company, our business is highly dependent on information technology systems, including systems provided by NSAM and third parties over which we have no control. Various measures have been implemented to manage our risks related to the information technology systems, but any failure or interruption of our systems could cause delays or other problems in our activities, which could have a material adverse effect on our financial performance. Potential sources for disruption, damage or failure of our information technology systems include, without limitation, computer viruses, security breaches, human error, cyber attacks, natural disasters and defects in design.

Failure to implement effective information and cyber security policies, procedures and capabilities could disrupt our business and harm our results of operations.

We are dependent on the effectiveness of our information and cyber security policies, procedures and capabilities to protect our computer and telecommunications systems and the data that resides on or is transmitted through them. An externally caused information security incident, such as a hacker attack, virus or worm, or an internally caused issue, such as failure to control access to sensitive systems, could materially interrupt business operations or cause disclosure or modification of sensitive or confidential information and could result in material financial loss, loss of competitive position, regulatory actions, breach of contracts, reputational harm or legal liability.

We will continue to grow our business through acquisitions, which entails substantial risk.

We will continue growing our business through acquisitions. Such acquisitions entail substantial risk. During our due diligence of such acquisitions, we may not uncover all relevant liabilities and we may have limited, if any, recourse against the sellers. We may also incur significant transaction and integration costs in connection with such acquisitions. Further, we may not successfully integrate the investments that we acquire into our business and operations, which could have a material adverse effect on our financial results and condition.

We may change our investment strategy without stockholder consent and make riskier investments.

We may change our investment strategy at any time without the consent of stockholders, which could result in our making investments that are different from and possibly riskier than the investments described in this prospectus. A change in our investment strategy may increase our exposure to interest rate and commercial real estate market fluctuations.

We believe CAD and NOI, each a non-GAAP measure, provide meaningful indicators of our operating performance, however, CAD and NOI should not be considered as an alternative to net income (loss) determined in accordance with U.S. GAAP as indicators of operating performance.

Management will use CAD and NOI, each a non-GAAP measure, to evaluate our profitability and our board of directors will consider CAD and NOI in determining our quarterly cash distributions.

We believe that CAD is useful because it adjusts net income (loss) for a variety of non-cash items. We calculate CAD by subtracting from or adding to net income (loss) attributable to common stockholders, non-controlling interests, if any, and the following items: depreciation and amortization items including depreciation and amortization, excluding amortization of second generation tenant improvements and leasing commissions, straight-line rental income or expense (excluding amortization of rent free periods), amortization of above/below market leases, amortization of deferred financing costs, amortization of discount on financings and other; maintenance capital expenditures; unrealized gain (loss) from the change in fair value; realized gain (loss) on investments and other; impairment on depreciable property; bad debt expense; deferred tax benefit (expense); acquisition gains or losses; distributions and adjustments related to joint venture partners; transaction costs; foreign currency gains (losses); impairment on goodwill and other intangible assets; gains (losses) on sales; and one-time events pursuant to changes in U.S. GAAP and certain other non-recurring items. These items, if applicable, include any adjustments for unconsolidated ventures. The definition of CAD may be adjusted from time to time for our reporting purposes in our discretion, acting through our audit committee or otherwise.

34

We believe NOI is a useful metric of the operating performance of our real estate portfolio in the aggregate. NOI is equal to total property revenue less property operating expenses which includes real estate taxes and third-party property management fees.  However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, transaction costs, depreciation and amortization expense, realized gains (losses) from the sale of properties and other items under U.S. GAAP and capital expenditures and leasing costs necessary to maintain the operating performance of properties, all of which may be significant economic costs. NOI may fail to capture significant trends in these components of U.S. GAAP net income (loss) which further limits its usefulness.

CAD and NOI should not be considered as an alternative to net income (loss), determined in accordance with U.S. GAAP, as indicators of operating performance. In addition, our methodology for calculating CAD and NOI may differ from the methodologies used by other comparable companies, including other REITs, when calculating the same or similar supplemental financial measures and may not be comparable with these companies. For example, our calculation of CAD per share will not take into account any potential dilution from any Senior Notes or restricted stock units subject to performance metrics not yet achieved.

The use of estimates and valuations may be different from actual results, which could have a material effect on our consolidated financial statements.

We make various estimates that affect reported amounts and disclosures. Broadly, those estimates are used in measuring the fair value of certain financial instruments, establishing provision for loan losses and potential litigation liability. Market volatility may make it difficult to determine the fair value for certain of our assets and liabilities. Subsequent valuations, in light of factors then prevailing, may result in significant changes in the values of these financial instruments in future periods. In addition, at the time of any sales and settlements of these assets and liabilities, the price we ultimately realize will depend on the demand and liquidity in the market at that time for that particular type of asset and may be materially lower than our estimate of their current fair value. Estimates are based on available information and judgment. In addition, the value of the assets in our portfolio may differ from our estimates. Therefore, actual values and results could differ from our estimates and that difference could have a material adverse effect on our combined financial statements.

Our distribution policy is subject to change.

Our board of directors will determine an appropriate Common Stock distribution based upon numerous factors, including REIT qualification requirements, the amount of cash flow generated from operations, availability of existing cash balances, borrowing capacity under existing credit agreements, access to cash in the capital markets and other financing sources, our view of our ability to realize gains in the future through appreciation in the value of our investments, general economic conditions and economic conditions that more specifically impact our business or prospects. Our board of directors expects to review changes to our distribution on a quarterly basis and distribution levels are subject to adjustment based upon any one or more of the risk factors set forth in this prospectus, as well as other factors that our board of directors may, from time-to-time, deem relevant to consider when determining an appropriate Common Stock distribution.

We may not be able to make distributions in the future.

Our ability to generate income and to make distributions may be adversely affected by the risks described in this prospectus and any document we file with the SEC. All distributions will be made at the discretion of our board of directors, subject to applicable law, and depend on our earnings, our financial condition, maintenance of our REIT qualification and such other factors as our board of directors may deem relevant from time-to-time. We may not be able to make distributions in the future.

Our ability to make distributions is limited by the requirements of Maryland law.

Our ability to make distributions on our Common Stock is limited by the laws of Maryland. Under applicable Maryland law, a Maryland corporation generally may not make a distribution if, after giving effect to the distribution, the corporation would not be able to pay its liabilities as the liabilities become due in the usual course of business, or generally if the corporation’s total assets would be less than the sum of its total liabilities plus, unless the corporation’s charter provides otherwise, the amount that would be needed if the corporation were dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of the stockholders whose preferential rights are superior to those receiving the distribution. We may not make a distribution on our Common Stock unless permitted by Maryland law.

Stockholders have limited control over changes in our policies and operations, which increases the uncertainty and risks they face as stockholders.

Our board of directors will determine our major policies, including our policies regarding growth, REIT qualification and distributions. Our board of directors may amend or revise these and other policies without a vote of the stockholders. We may change our investment policies without stockholder notice or consent, which could result in investments that are different

35

than, or in different proportion than, those described in this prospectus. Under the Maryland General Corporation Law, or MGCL, and our charter, stockholders have a right to vote only on limited matters. Our board of directors’ broad discretion in setting policies and our stockholders’ inability to exert control over those policies increases the uncertainty and risks stockholders face.

Certain provisions of Maryland law may limit the ability of a third-party to acquire control of us. This could depress our stock price.

Certain provisions of the MGCL may have the effect of inhibiting a third-party from acquiring us or of impeding a change of control under circumstances that otherwise could provide our stockholders with the opportunity to realize a premium over the then-prevailing market price of such shares, including:

• “business combination” provisions that, subject to limitations, prohibit certain business combinations between an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding shares of voting stock or an affiliate or associate of the corporation who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding stock of the corporation) or an affiliate of any interested stockholder and us for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes two super-majority stockholder voting requirements on these combinations; and

• “control share” provisions that provide that holders of “control shares” of our company (defined as voting shares of stock that, if aggregated with all other shares of stock owned or controlled by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of issued and outstanding “control shares,” subject to certain exceptions) have no voting rights except to the extent approved by stockholders by the affirmative vote of at least two-thirds of all of the votes entitled to be cast on the matter, excluding all interested shares.

Pursuant to the Maryland Business Combination Act, our board of directors will exempt any business combinations: (i) between us and NSAM, any of its affiliates or any of their sponsored or other managed companies; and (ii) between us and any person, provided that any such business combination is first approved by our board of directors (including a majority of our directors who are not affiliates or associates of such person). Consequently, the five-year prohibition and the super-majority vote requirements do not apply to business combinations between us and any of them. As a result, such parties may be able to enter into business combinations with us that may not be in the best interest of stockholders, without compliance with the supermajority vote requirements and the other provisions in the statute. Our bylaws contain a provision exempting from the Maryland Control Share Acquisition Act any and all acquisitions by any person of shares of our stock. There can be no assurance that these resolutions or exemptions will not be amended or eliminated at any time in the future.

Our authorized but unissued common and preferred stock and other provisions of our charter and bylaws may prevent a change in our control.

Our charter will authorize us to issue additional authorized but unissued shares of our Common Stock or preferred stock and will authorize a majority of our entire board of directors, without stockholder approval, to amend our charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have the authority to issue. In addition, our board of directors may classify or reclassify any unissued shares of Common Stock or preferred stock and may set the preferences, conversions or other rights, voting powers and other terms of the classified or reclassified shares. Our board of directors could establish a series of common stock or preferred stock that could delay or prevent a transaction or a change in control that might involve a premium price for the common stock or otherwise be in the best interest of stockholders.

Our charter and bylaws will contain other provisions that may delay or prevent a transaction or a change in control that might involve a premium price for shares of our Common Stock or otherwise be in the best interest of stockholders.

Maryland law also allows a corporation with a class of equity securities registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in its charter or bylaws, to a classified board, unless its charter prohibits such an election. Our charter will contain a provision prohibiting such an election to classify our board of directors under this provision of Maryland law. This may make us more vulnerable to a change in control. If stockholders voted to amend this charter provision and to classify our board of directors, the staggered terms of our directors could reduce the possibility of a tender offer or an attempt at a change in control even though a tender offer or change in control might be in the best interests of stockholders.

36

Risks Related to Regulatory Matters and Our REIT Tax Status

We will be subject to substantial regulation, numerous contractual obligations and extensive internal policies and failure to comply with these matters could have a material adverse effect on our business, financial condition and results of operations.

We and our subsidiaries will be subject to substantial regulation, numerous contractual obligations and extensive internal policies. Given our organizational structure, we will be subject to regulation by the SEC, NYSE, Internal Revenue Service, or IRS, and other international, federal, state and local governmental bodies and agencies. These regulations are extensive, complex and require substantial management time and attention. If we fail to comply with any of the regulations that apply to our business, we could be subjected to extensive investigations as well as substantial penalties and our business and operations could be materially adversely affected. Our lack of compliance with applicable law could result in among other penalties, our ineligibility to contract with and receive revenue from the federal government or other governmental authorities and agencies. We also expect to have numerous contractual obligations that we must adhere to on a continuous basis to operate our business, the default of which could have a material adverse effect on our business and financial condition. We will establish internal policies designed to ensure that we manage our business in accordance with applicable law and regulation and in accordance with our contractual obligations. While we will design policies to appropriately operate our business, these internal policies may not be effective in all regards and, further, if we fail to comply with our internal policies, we could be subjected to additional risk and liability.

The direct or indirect effects of the Dodd-Frank Act, enacted in July 2010 for the purpose of stabilizing or reforming the financial markets, may have an adverse effect on our interest rate hedging activities.

In July 2010, the Dodd-Frank Act became law in the United States. Title VII of the Dodd-Frank Act provides for significantly increased regulation of and restrictions on derivatives markets and transactions that could affect our interest rate hedging or other risk management activities, including: (i) regulatory reporting for swaps; (ii) mandated clearing through central counterparties and execution through regulated exchanges or electronic facilities for certain swaps; and (iii) margin and collateral requirements. Although the U.S. Commodity Futures Trading Commission has not yet finalized certain requirements, many other requirements have taken effect, such as swap reporting, the mandatory clearing of certain interest rate swaps and credit default swaps and the mandatory trading of certain swaps on swap execution facilities or exchanges. While the full impact of the Dodd-Frank Act on our interest rate hedging activities cannot be assessed until implementing rules and regulations are adopted and market practice develops, the requirements of Title VII may affect our ability to enter into hedging or other risk management transactions, may increase our costs in entering into such transactions and may result in us entering into such transactions on less favorable terms than prior to effectiveness of the Dodd-Frank Act and the rules promulgated thereunder. The occurrence of any of the foregoing events may have an adverse effect on our business.

If we are deemed an investment company under the Investment Company Act, our business would be subject to applicable restrictions under the Investment Company Act, which could make it impracticable for us to continue our business as contemplated and would have a material adverse impact on the market price of our Common Stock.

We do not believe that we are an “investment company” under the Investment Company Act because we are not, and we do not hold ourselves out, as being engaged primarily in the business of investing, reinvesting or trading in securities, and thus we do not fall within the definition of investment company provided in Section 3(a)(1)(A) of the Investment Company Act. Instead, we are in the business of commercial real estate. In addition, we satisfy the 40% test provided in Section 3(a)(1)(C) of the Investment Company Act. This test provides that issuers that own or propose to acquire investment securities having a value exceeding 40% of the value of the issuer’s total assets are investment companies. Because of the nature of our assets, we do not expect to own investment securities. Instead, we will own commercial real estate through our wholly-owned and majority-owned subsidiaries. Thus, we intend to conduct our operations so that we will not be deemed an investment company under the Investment Company Act. If we were to be deemed an investment company, however, either because of SEC interpretational changes or otherwise, we could, among other things, be required either: (i) to substantially change the manner in which we conduct our operations to avoid being required to register as an investment company; or (ii) to register as an investment company, either of which could have an adverse effect on us and the market price of our Common Stock. If we are required to register as an investment company under the Investment Company Act, we would become subject to substantial regulation with respect to our capital structure (including our ability to use leverage), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), portfolio composition, including restrictions with respect to diversification and industry concentration and other matters.

Failure to qualify as a REIT, or failure to remain qualified as a REIT, would cause us to be taxed as a regular corporation, which would substantially reduce funds available for distributions to our stockholders.

We believe that our organization and proposed method of operation will enable us to meet the requirements for qualification and taxation as a REIT beginning with our taxable year ending December 31, 2015. However, we cannot assure you that we will qualify and remain qualified as a REIT. In connection with our separation from NorthStar Realty, we will receive an opinion from Hunton & Williams LLP that, beginning with our taxable year ending December 31, 2015, we will be organized in conformity

37

with the requirements for qualification and taxation as a REIT under the U.S. federal income tax laws and our intended method of operation will enable us to qualify as a REIT under the U.S. federal income tax laws for our taxable year ending December 31, 2015 and thereafter. You should be aware that Hunton & Williams LLP’s opinion will be based upon customary assumptions, representations and undertakings made by us, NorthStar Realty and certain private REITs in which NorthStar Realty owns an interest, or the Private REITs, as to factual matters, including regarding the nature of our, NorthStar Realty and the Private REITs’ assets and the conduct of our, NorthStar Realty’s and the Private REITs’ business, is not binding upon the IRS, or any court and speaks as of the date issued. In addition, Hunton & Williams LLP’s opinion will be based on existing U.S. federal income tax law governing qualification as a REIT, which is subject to change either prospectively or retroactively. Moreover, our qualification and taxation as a REIT will depend upon our ability to meet on a continuing basis, through actual annual operating results, certain qualification tests set forth in the U.S. federal tax laws. Hunton & Williams LLP will not review our compliance with those tests on a continuing basis. Accordingly, no assurance can be given that our actual results of operations for any particular taxable year will satisfy such requirements.

If we fail to qualify as a REIT in any taxable year, we will face serious tax consequences that will substantially reduce the funds available for distributions to our stockholders because:

• we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to U.S. federal income tax at regular corporate rates;

• we could be subject to the U.S. federal alternative minimum tax and possibly increased state and local taxes; and

• unless we are entitled to relief under certain U.S. federal income tax laws, we could not re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT.

In addition, if we fail to qualify as a REIT, we will no longer be required to make distributions. As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and it would adversely affect the value of our Common Stock. See “Federal Income Tax Consequences of Our Status as a REIT” for a discussion of material U.S. federal income tax consequences relating to us and our Common Stock.

If NorthStar Realty fails to qualify as a REIT in its 2015 taxable year, we would be prevented from electing to qualify as a REIT.

We believe that from the time of our formation until the date of the Distribution, we will be treated as a “qualified REIT subsidiary” of NorthStar Realty. Under applicable Treasury regulations, if NorthStar Realty fails to qualify as a REIT in its 2015 taxable year, unless NorthStar Realty’s failure was subject to relief under U.S. federal income tax laws, we would be prevented from electing to qualify as a REIT prior to the fifth calendar year following the year in which NorthStar Realty failed to qualify.

Complying with REIT requirements may force us to borrow funds to make distributions to stockholders or otherwise depend on external sources of capital to fund such distributions.

To qualify as a REIT, we are required to distribute annually at least 90% of our taxable income, subject to certain adjustments, to stockholders. To the extent that we satisfy the distribution requirement, but distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. In addition, we may elect to retain and pay income tax on our net long-term capital gain. In that case, a stockholder would be taxed on its proportionate share of our undistributed long-term gain and would receive a credit or refund for its proportionate share of the tax we paid. A stockholder, including a tax-exempt or foreign stockholder, would have to file a federal income tax return to claim that credit or refund. Furthermore, we will be subject to a 4% nondeductible excise tax if the actual amount that we distribute to stockholders in a calendar year is less than a minimum amount specified under federal tax laws. We anticipate that distributions generally will be taxable as ordinary income, although a portion of such distributions may be designated by us as long-term capital gain to the extent attributable to capital gain income recognized by us, or may constitute a return of capital to the extent that such distribution exceeds our earnings and profits as determined for tax purposes.

From time-to-time, we may generate taxable income greater than our net income (loss) for U.S. GAAP, due to among other things, amortization of capitalized purchase premiums, fair value adjustments and reserves. In addition, our taxable income may be greater than our cash flow available for distribution to stockholders as a result of, among other things, repurchases of our outstanding debt at a discount and investments in assets that generate taxable income in advance of the corresponding cash flow from the assets (for example, if a borrower defers the payment of interest in cash pursuant to a contractual right or otherwise).

If we do not have other funds available in the situations described in the preceding paragraph, we could be required to borrow funds on unfavorable terms, sell investments at disadvantageous prices or find another alternative source of funds to make distributions sufficient to enable us to distribute enough of our taxable income to satisfy the REIT distribution requirement and to

38

avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity.

Because of the distribution requirement, it is unlikely that we will be able to fund all future capital needs, including capital needs in connection with investments, from cash retained from operations. As a result, to fund future capital needs, we likely will have to rely on third-party sources of capital, including both debt and equity financing, which may or may not be available on favorable terms or at all. Our access to third‑party sources of capital will depend upon a number of factors, including the market’s perception of our growth potential and our current and potential future earnings and cash distributions and the market price of our stock.

We could fail to qualify as a REIT and/or pay additional taxes if the IRS recharacterizes the structure of certain of our European investments.

We have funded our equity in certain of our European investments through the use of instruments that we believe will be treated as equity for U.S. federal income tax purposes. If the IRS disagreed with such characterization and was successful in recharacterizing the nature of our investments in European jurisdictions, we could fail to satisfy one or more of the asset and gross income tests applicable to REITs. Additionally, if the IRS recharacterized the nature of our investments and we were to take action to prevent such REIT test failures, the actions we would take could expose us to increased taxes both internationally and in the United States.

We could be subject to increased taxes if the tax authorities in various European jurisdictions were to modify tax rules and regulations on which we have relied in structuring our European investments.

We currently receive favorable tax treatment in various European jurisdictions through tax rules, regulations, tax authority rulings, and international tax treaties. Should changes occur to these rules, regulations, rulings or treaties, we may no longer receive such benefits, and consequently, the amount of taxes we pay with respect to our European investments may increase.

Even if we qualify as a REIT, we may be subject to tax (including foreign taxes for which we will not be permitted to pass-through any foreign tax credit to our stockholders), which would reduce the amount of cash available for distribution to our stockholders.

Even if we qualify as a REIT, we may be subject to foreign, U.S. federal, state and local taxes, including alternative minimum taxes and foreign, state or local income, franchise, property and transfer taxes. For example, we intend to make investments solely in real properties located outside the United States through foreign entities. Such entities may be subject to local income and property taxes in the jurisdiction in which they are organized or where their assets are located. In addition, in certain circumstances, we may be subject to non-U.S. withholding tax on repatriation of earnings from such non-U.S. entities. To the extent we are required to pay any such taxes we will not be able to pass through to our stockholders any tax credit with respect to our payment of any such taxes.

To the extent we distribute less than 100% of our taxable income, we will be subject to U.S. federal corporate income tax on our undistributed income and will incur a 4% non-deductible excise tax on the amount, if any, by which our distributions in any calendar year are less than a minimum amount specified under the Code. In addition, we could in certain circumstances be required to pay an excise or penalty tax, which could be significant in amount, in order to utilize one or more relief provisions under the Code to maintain qualification for taxation as a REIT. Furthermore, we may hold some of our assets through taxable REIT subsidiaries, or TRSs. Any TRS or other taxable corporation in which we own an interest could be subject to U.S. federal, state and local income taxes at regular corporate rates if such entities are formed as domestic entities or generate income from U.S. sources or activities connected with the United States, and also will be subject to any applicable foreign taxes. Any of these taxes would decrease the amount available for distribution to our stockholders.

Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.

To qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to stockholders and the ownership of our stock. As discussed above, we may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. Additionally, we may be unable to pursue investments that would be otherwise attractive to us in order to satisfy the source of income requirements for qualifying as a REIT.

We must also ensure that, at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified real estate assets, including certain mortgage loans and mortgage-backed securities. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding

39

securities of any one issuer. In addition, in general, no more than 5% of the value of our assets can consist of the securities of any one issuer (other than government securities and qualified real estate assets) and no more than 25% of the value of our total securities can be represented by securities of one or more TRSs.

If we fail to comply with these requirements at the end of any calendar quarter, we must correct such failure within 30 days after the end of the calendar quarter to avoid losing our REIT status and suffering adverse tax consequences, unless certain relief provisions apply. As a result, compliance with the REIT requirements may hinder our ability to operate solely on the basis of profit maximization and may require us to liquidate investments from our portfolio, or refrain from making, otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to stockholders.

Complying with REIT requirements may limit our ability to hedge effectively.

The REIT provisions of the Code may limit our ability to hedge the risks inherent to our operations. Under current law: (i) any transaction entered into in the normal course of our trade or business primarily to manage the risk of interest rate or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, to acquire or carry real estate assets; and (ii) any transaction entered into primarily to manage the risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the 75% or 95% gross income test (or any property which generates such income or gain) will not constitute gross income for purposes of the 75% and 95% income requirements applicable to REITs. We are required to clearly identify any such hedging transaction before the close of the day on which it was acquired, originated or entered into and to satisfy other identification requirements in order to be treated as a qualified hedging transaction. In addition, any income from certain other qualified hedging transactions would generally not constitute gross income for purposes of both the 75% and 95% income tests. However, we may be required to limit the use of hedging techniques that might otherwise be advantageous, which could result in greater risks associated with interest rate or other changes than we would otherwise incur. We intend to structure any hedging transactions in a manner that does not jeopardize our qualification as a REIT.

Currency fluctuations could adversely impact our ability to satisfy the REIT requirements.

We expect that substantially all of our operating income and expense will be denominated in the foreign currencies in which our assets are located, and our Operating Partnership will pay distributions in foreign currencies or U.S. dollars. Accordingly, our Operating Partnership will hold various foreign currencies at any given time and may enter into foreign currency hedging transactions. The U.S. federal income tax rules regarding foreign currency transactions could adversely impact our compliance with the REIT requirements. For example, changes in the U.S. dollar value of the currencies of our operations will impact the determination of our gross income from such operations for U.S. federal income tax purposes. Variations in such currency values could therefore adversely affect our ability to satisfy the REIT gross income tests. In addition, foreign currency held by our Operating Partnership could adversely affect our ability to satisfy the REIT asset tests to the extent our Operating Partnership holds foreign currency on its balance sheet other than its functional currency or otherwise holds any foreign currency that is not held in the normal course of the activities of our Operating Partnership which give rise to qualifying income under the 95% or 75% gross income tests or are directly related to acquiring or holding qualifying assets under the 75% asset test.

If any of our activities do not comply with the applicable REIT requirements, the U.S. federal income tax rules applicable to foreign currencies could magnify the adverse impact of such activities on our REIT compliance. For example, if we receive a distribution from our Operating Partnership that is attributable to operations within a particular foreign jurisdiction, we could recognize foreign currency gain or loss based on the fluctuation in the U.S. dollar value of the local currency of such jurisdiction between the time that the underlying income was recognized and the time of such distribution. Provided that the segment of our Operating Partnership’s business to which such distribution is attributable satisfies certain of the REIT income and asset tests on a standalone basis, any foreign currency gain resulting from such distribution will be excluded for purposes of the REIT gross income tests. However, if such segment did not satisfy the applicable REIT income and asset tests on a standalone basis, any currency gain resulting from such distribution may be non-qualifying income for purposes of the REIT gross income tests, which would adversely affect our ability to satisfy such tests. As another example, foreign currency gain attributable to our holding of certain obligations, including currency hedges of such obligations, will be excluded for purposes of the 95% gross income test, but not the 75% gross income test. However, if such gains are attributable to cash awaiting distribution or reinvestment, such gains may be non-qualifying income under the 75% and 95% gross income tests. See “Federal Income Tax Consequences of Our Status as a REIT — Requirements for Qualification — Gross Income Tests.” Furthermore, the impact of currency fluctuations on our compliance with the REIT requirements could be difficult to predict.

The U.S. federal income tax rules regarding foreign currency transactions are complex, in certain respects uncertain, and limited authority is available regarding the application of such rules. As a result, there can be no assurance that the IRS will not challenge the manner in which we apply such rules to our operations. Any successful challenge could increase the amount which we are required to distribute to our shareholders in order to qualify as a REIT or otherwise adversely impact our compliance with the REIT requirements.

40

Liquidation of assets may jeopardize our REIT qualification.

To qualify as a REIT, we must comply with requirements regarding our assets and our sources of income. If we are compelled to liquidate our investments to satisfy our obligations to our lenders, we may be unable to comply with these requirements, ultimately jeopardizing our qualification as a REIT, or we may be subject to a 100% prohibited transaction tax on any resulting gain if we sell assets that are treated as dealer property or inventory.

Legislative or regulatory tax changes could adversely affect us or stockholders.

At any time, the federal income tax laws can change. Laws and rules governing REITs or the administrative interpretations of those laws may be amended. Any of those new laws or interpretations may take effect retroactively and could adversely affect us or stockholders.

The prohibited transactions tax may limit our ability to engage in transactions, including disposition of assets, which would be treated as sales for federal income tax purposes.

A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property, other than property that we took title to as a result of a default on a debt investment or lease and for which we make a foreclosure property election, but including loans, held primarily for sale to customers in the ordinary course of business. Although a safe-harbor exception to prohibited transaction treatment is available, we cannot assure stockholders that we can comply with such safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of our trade or business. Consequently, we may choose not to engage in certain sales of real property or may conduct such sales or other activities through a TRS.

We may distribute our Common Stock in a taxable distribution, in which case stockholders may sell shares of our Common Stock to pay tax on such distributions, placing downward pressure on the market price of our Common Stock.

We may make taxable distributions that are payable in cash and our Common Stock. The IRS has issued private letter rulings to other REITs treating certain distributions that are paid partly in cash and partly in stock as taxable distributions that would satisfy the REIT annual distribution requirement and qualify for the dividends paid deduction for federal income tax purposes. Those rulings may be relied upon only by taxpayers to whom they were issued, but we could request a similar ruling from the IRS. In addition, the IRS issued a revenue procedure creating a temporary safe harbor that authorized publicly traded REITs to make elective cash/stock distributions, but that temporary safe harbor has expired. Accordingly, it is unclear whether and to what extent we will be able to make taxable distributions payable in cash and our Common Stock. If we made a taxable distribution payable in cash and our Common Stock, taxable stockholders receiving such distributions will be required to include the full amount of the distribution, which is treated as ordinary income to the extent of our current and accumulated earnings and profits, as determined for federal income tax purposes. As a result, stockholders may be required to pay income tax with respect to such distributions in excess of the cash distributions received. If a U.S. stockholder sells our Common Stock that it receives as a distribution in order to pay this tax, the sales proceeds may be less than the amount recorded in earnings with respect to the distribution, depending on the market price of our Common Stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. federal income tax with respect to such distributions, including in respect of all or a portion of such distribution that is payable in our Common Stock. If we made a taxable distribution payable in cash and our Common Stock and a significant number of stockholders determine to sell shares of our Common Stock in order to pay taxes owed on distributions, it may put downward pressure on the trading price of our Common Stock.

The stock ownership restrictions of the Code for REITs and the 9.8% stock ownership limit in our charter may inhibit market activity in our stock and restrict our business combination opportunities.

To qualify as a REIT, five or fewer individuals, as defined in the Code, may not own, actually or constructively, more than 50% in value of our issued and outstanding stock at any time during the last half of a taxable year. Attribution rules in the Code determine if any individual or entity actually or constructively owns our stock under this requirement. Additionally, at least 100 persons must beneficially own our stock during at least 335 days of a taxable year. To help insure that we meet these tests, our charter restricts the acquisition and ownership of shares of our stock.

Our charter, with certain exceptions, will authorize our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our board of directors, no person, including entities, may own more than 9.8% of the value of the outstanding shares of our stock or more than 9.8% in value or number (whichever is more restrictive) of the outstanding shares of our Common Stock. The board may not grant an exemption from these restrictions to any proposed transferee whose ownership in excess of 9.8% of the value of our outstanding Common Stock would result in the termination of our status as a REIT. Despite these restrictions, it is possible that there will be five or fewer individuals who own more than 50% in value of our outstanding shares, which could cause us to fail to continue to qualify as a REIT. These restrictions on transferability

41

and ownership will not apply, however, if our board of directors determines that it is no longer in our best interest to continue to qualify as a REIT.

These ownership limits could delay or prevent a transaction or a change in control that might involve a premium price for our Common Stock or otherwise be in the best interest of the stockholders.

REIT distribution requirements could adversely affect our ability to execute our business plan.

We generally must distribute annually at least 90% of our REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain for this purpose) in order to continue to qualify as a REIT. We intend to make distributions to stockholders to comply with the REIT requirements of the Code and to avoid corporate income tax and the 4% excise tax. We may be required to make distributions to stockholders at times when it would be more advantageous to reinvest cash in our business or when we do not have funds readily available for distribution. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

Distributions paid by REITs do not qualify for the reduced tax rates that apply to other corporate distributions.

The maximum tax rate for “qualified dividends” paid by corporations to individuals is 20%. Distributions paid by REITs, however, generally continue to be taxed at the normal ordinary income rate applicable to the individual recipient (subject to a maximum rate of 39.6%), rather than the preferential rate applicable to qualified dividends. The more favorable rates applicable to regular corporate distributions could cause potential investors who are individuals to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay qualified distributions, which could adversely affect the value of the stock of REITs, including our Common Stock.

Non-U.S. stockholders will generally be subject to withholding tax with respect to our dividends.

Non-U.S. stockholders (as defined in “Material U.S. Federal Income Tax Considerations of the Distribution”) will generally be subject to U.S. federal withholding tax on dividends received from us at a 30% rate, subject to reduction under an applicable treaty or a statutory exemption under the Code. Although such withholding taxes may be creditable in such non-U.S. stockholder’s resident jurisdiction, for many such non-U.S. stockholders, investment in a REIT that invests principally in non-U.S. real property may not be the most tax-efficient way to invest in such assets compared to a direct investment in such assets which would generally not subject such non-U.S. stockholders to U.S. withholding taxes.

Unexpected tax costs could arise through changes to tax law or tax rates in various jurisdictions in which we operate.

There is a risk of unexpected tax costs through lack of tax planning or execution in tax-paying jurisdictions. These matters could have a material adverse effect our business, results of operations, financial condition or prospects.

Changes to our corporate structure may result in an additional tax burden.

We may undergo changes to our corporate structure involving, among other things, the direct or indirect transfer of legal or beneficial title to real estate. These transactions may results in unforeseen adverse tax consequences that may have detrimental effects on our business, net assets, financial condition, cash flow and results of operations.

Risks Related to the Spin-off

The spin-off may not have the benefits we anticipate.

The spin-off may not have the full or any strategic and financial benefits that we expect or such benefits may be delayed or may not materialize at all. The anticipated benefits of the spin-off are based on a number of assumptions, which may prove incorrect. For example, we believe that investors and analysts will regard NorthStar Europe’s focused European Real Estate Business more favorably as a separate company than as part of NorthStar Realty’s existing portfolio and strategy and thus place a greater value on NorthStar Europe as a separate public company than as a business that is a part of NorthStar Realty. In the event that the spin-off does not have this and other expected benefits, the costs associated with the transaction, including an expected increase in general and administrative expenses, could have a negative effect on our financial condition and ability to make distributions to our stockholders. Stockholder approval will not be required or sought in connection with the spin-off.

The aggregate post-Distribution value of NorthStar Realty and NorthStar Europe shares may not equal or exceed the pre-spin-off value of NorthStar Realty shares.

After the spin-off, NorthStar Realty common stock will continue to be listed and traded on the NYSE.We expect to list NorthStar Europe Common Stock on the NYSE under the symbol “NRE.”We cannot assure you that the combined value of NorthStar Realty and NorthStar Europe after the spin-off, as adjusted for any changes in the combined capitalization of these companies, will be equal to or greater than the value of NorthStar Realty prior to the spin-off.Until the market has fully evaluated

42

the business of NorthStar Realty without the business of NorthStar Europe, the value of NorthStar Realty may fluctuate significantly. Similarly, until the market has fully evaluated the business of NorthStar Europe, the value of NorthStar Europe may fluctuate significantly.

We may not be able to successfully implement our business strategy.

Assuming the spin-off is completed, there can be no assurance that we will be able to generate sufficient returns to pay our operating expenses and make satisfactory distributions to our stockholders or any distributions at all, once we commence operations as an independent company. Our financial condition, results of operations and cash flow will be affected by the expenses we will incur as an independent public company, including fees paid to NSAM as well as legal, accounting, compliance and other costs associated with being a public company with equity securities traded on the NYSE. In addition, our results of operations and our ability to make or sustain distributions to our stockholders depend on, among other factors, the availability of opportunities to acquire attractive investments in Europe, the level and volatility of interest rates, the availability of adequate short- and long-term financing, conditions in the real estate market and the financial markets and economic conditions, particularly in Europe. Furthermore, most of our expertise to date is in the United States and neither we nor NorthStar Realty or NSAM has owned or managed substantial investments over the long term in international markets. Our ability to achieve our investment objectives and to make distributions to stockholders will depend in substantial part upon the performance of NSAM and its ability to provide us with asset management and other services. After the spin-off, NorthStar Realty will not be required, and does not intend, to provide us with funds to finance our working capital or other cash requirements, so we will need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, through strategic relationships or other arrangements. There can be no assurance that we will be able to enter into any necessary additional financing on favorable terms or at all.

The Distribution will not qualify for tax-deferred treatment and may be taxable to NorthStar Realty common stockholders as a dividend; however, the tax impact will not be calculated until after the end of the 2015 calendar year.

The Distribution will not qualify for tax-deferred treatment. An amount equal to the fair market value of the shares of our Common Stock received by you on the Distribution date (assuming you are a stockholder of NorthStar Realty as of the applicable record date), including any fractional shares deemed to be received on the Distribution date, will be treated as a taxable dividend to the extent of your share of any of NorthStar Realty’s current or accumulated earnings and profits for the year of the distribution. Any fair market value in the excess of NorthStar Realty’s current or accumulated earnings and profits will be treated first as a non-taxable return of capital to the extent of your tax adjusted basis in NorthStar Realty’s common stock and then as capital gain. The Distribution will not include a distribution of cash, except for certain cash in lieu of fractional shares of our Common Stock, and thus, you will have to obtain cash from other sources to pay the income tax on this income. In addition, NorthStar Realty or other applicable withholding agents may be required or permitted to withhold at the applicable rate on all or a portion of the Distribution payable to non-U.S. stockholders, and any such withholding would be satisfied by NorthStar Realty or such agent withholding by selling a portion of our Common Stock otherwise distributable to non-U.S. stockholders. Such non-U.S. stockholders may bear brokerage fees or other costs from this withholding procedure. Your adjusted tax basis in NorthStar Realty common stock held at the time of the Distribution will be reduced (but not below zero) to the extent the fair market value of the shares of our Common Stock distributed by NorthStar Realty to you in the Distribution exceeds your share of NorthStar Realty’s current and accumulated earnings and profits. Your holding period for your shares of NorthStar Realty’s common stock will not be affected by the Distribution. Neither we nor NorthStar Realty will be able to advise you of the amount of NorthStar Realty’s earnings and profits until after the end of the 2015 calendar year.

Although NorthStar Realty will be ascribing a value to our shares of common stock in the Distribution for tax purposes, and will report that value to stockholders and the IRS, this valuation is not binding on the IRS or any other taxing authority. These taxing authorities could ascribe a higher valuation to such shares, particularly if our Common Stock trades at prices significantly above the value ascribed to such shares by NorthStar Realty in the period following the Distribution. Such a higher valuation may cause a larger reduction in the tax basis of your shares of us or may cause you to recognize additional dividend or capital gain income. You are urged to consult your tax advisor as to the particular tax consequences of the Distribution to you.

The NorthStar Europe Predecessor combined financial results and our unaudited pro forma combined financial statements may not be representative of our results as an independent company.

The combined financial information of the NorthStar Europe Predecessor included in this prospectus has been prepared from the accounting records of the NorthStar Europe Predecessor and does not necessarily reflect what its financial position, results of operations or cash flows would have been had it operated as part of NorthStar Europe during the periods presented. The historical information also does not necessarily indicate what NorthStar Europe’s results of operations, financial position, cash flows or costs and expenses will be in the future. Our pro forma combined financial information set forth under “Unaudited Pro Forma Financial Information” reflects changes that may occur in our funding and operations as a result of the spin-off. However, there can be no assurances that this unaudited pro forma combined financial information will reflect our costs as an independent company.

43

If, following the spin-off, we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act or our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned and our stock price may suffer.

Section 404 of the Sarbanes-Oxley Act requires any company subject to the reporting requirements of the U.S. securities laws to do a comprehensive evaluation of its and its consolidated subsidiaries’ internal controls over financial reporting. To comply with this statute, we will eventually be required to document and test our internal controls procedures, our management will be required to assess and issue a report concerning our internal controls over financial reporting and our independent auditors will be required to issue an opinion on their audit of our internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal controls over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, our management may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley Act. If our management cannot favorably assess the effectiveness of our internal controls over financial reporting or our auditors identify material weaknesses in our internal controls, investor confidence in our financial results may weaken and our stock price may suffer.

Because there has not been any public market for our Common Stock, the market price and trading volume of our Common Stock may be volatile.

Prior to the spin-off, there will have been no trading market for our Common Stock.We cannot predict the extent to which investors’ interest will lead to a liquid trading market or whether the market price of our Common Stock will be volatile. The market price of our Common Stock could fluctuate significantly for many reasons, including in response to the risk factors listed in this prospectus or for reasons unrelated to our specific performance, such as investor perceptions, reports by industry analysts or negative developments with respect to our affiliates, as well as third parties. Our Common Stock could also be volatile as a result of speculation or general economic and industry conditions.

The reduced disclosure requirements applicable to us as an “emerging growth company” may make our Common Stock less attractive to investors.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we may avail ourselves of certain exemptions from various reporting requirements of public companies that are not “emerging growth companies,” including, but not limited to, an exemption from complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act, and, like smaller reporting companies, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirement of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may remain an emerging growth company for up to five full fiscal years following the Distribution. We would cease to be an emerging growth company, and, therefore, become ineligible to rely on the above exemptions, if we have more than $1 billion in annual revenue in a fiscal year, if we issue more than $1 billion of non-convertible debt over a three-year period or on the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act which would occur after: (i) we have filed at least one annual report; (ii) we have been an SEC-reporting company for at least 12 months; and (iii) the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions.

If some investors find our Common Stock less attractive as a result of the exemptions available to us as an emerging growth company, there may be a less active trading market for our Common Stock (assuming a market ever develops) and our value may be more volatile than that of an otherwise comparable company that does not avail itself of the same or similar exemptions.

44

THE DISTRIBUTION

General

The general terms and conditions relating to the Distribution will be set forth in the separation agreement between us and NorthStar Realty, further discussed below under the heading “Certain Relationships and Related Party Transactions — Relationship Between NorthStar Realty, NSAM and Us After the Distribution — Separation Agreement.” Under the separation agreement, the Distribution will be effective at 11:59 p.m., Eastern Time, on , 2015 and NorthStar Realty will distribute all of our outstanding shares of Common Stock to the holders of NorthStar Realty common stock. For NorthStar Realty stockholders who own NorthStar Realty common stock in registered form on the record date, which is the close of business, Eastern Time , 2015, our transfer agent will credit their shares of our Common Stock to book entry accounts established to hold these shares. Our distribution agent will send these stockholders a statement reflecting their ownership of our Common Stock. Book entry refers to a method of recording stock ownership in our records in which no physical certificates are used. For stockholders who own NorthStar Realty common stock through a broker or other nominee, their shares of our Common Stock will be credited to these stockholders’ accounts by the broker or other nominee. As further discussed below, fractional shares will not be distributed in the Distribution. Following the Distribution, stockholders whose shares are held in book entry form may request that their shares of our Common Stock be transferred to a brokerage or other account at any time without charge.

NORTHSTAR REALTY STOCKHOLDERS WILL NOT BE REQUIRED TO PAY FOR SHARES OF OUR COMMON STOCK RECEIVED IN THE DISTRIBUTION OR TO SURRENDER OR EXCHANGE SHARES OF NORTHSTAR REALTY COMMON STOCK IN ORDER TO RECEIVE OUR COMMON STOCK OR TO TAKE ANY OTHER ACTION IN CONNECTION WITH THE DISTRIBUTION. NO VOTE OF NORTHSTAR REALTY STOCKHOLDERS IS REQUIRED OR SOUGHT IN CONNECTION WITH THE DISTRIBUTION, AND NORTHSTAR REALTY STOCKHOLDERS HAVE NO APPRAISAL RIGHTS IN CONNECTION WITH THE DISTRIBUTION.

Fractional shares of NorthStar Europe Common Stock will not be issued to NorthStar Realty stockholders as part of the Distribution or credited to book entry accounts. In lieu of receiving fractional shares, each holder of NorthStar Realty common stock who would otherwise be entitled to receive a fractional share of NorthStar Europe Common Stock will receive cash for the fractional interest. An explanation of the tax consequences of the Distribution can be found below in the subsection captioned “— Material U.S. Federal Income Tax Consequences of the Distribution.” The distribution agent will, as soon as practicable after the Distribution, aggregate fractional shares of NorthStar Europe Common Stock into whole shares and sell them in the open market at the prevailing market prices and distribute the aggregate proceeds, net of brokerage fees, ratably to NorthStar Realty stockholders who would otherwise be entitled to receive a fractional share of NorthStar Europe Common Stock. The amount of such proceeds will depend on the prices at which the aggregated fractional shares are sold by the distribution agent in the open market shortly after the Distribution date. We do not anticipate a significant number of shares being aggregated to satisfy this requirement.

In order to be entitled to receive shares of our Common Stock in the Distribution, NorthStar Realty stockholders must be stockholders of record of NorthStar Realty common stock at the close of business, Eastern Time, , 2015, which is the record date for the Distribution.

Reasons for the Spin-Off

The NorthStar Realty Board believes that investors and analysts will regard NorthStar Europe’s distinct focus on investing in European commercial real estate more favorably as a separate company than as part of the existing portfolio and strategy of NorthStar Realty and thus place a greater value on NorthStar Europe as a separate public company. In the event that the spin-off does not have this and other expected benefits, the costs associated with the transaction, including an expected increase in general and administrative expenses, could have a negative effect on the financial condition and ability to make distributions to the stockholders of each company.

The NorthStar Realty Board has determined that separation of our business from NorthStar Realty’s other businesses is in the best interests of NorthStar Realty. The potential benefits considered by the NorthStar Realty Board in making the determination to consummate the Distribution included the following:

• attractive positioning as a European equity REIT with access to a lower cost of capital and capability to execute complex, cross border European transactions;

• European equity REIT with substantial growth prospects as financial and other institutions deleverage and wind-down their portfolios in Europe;

• ability to benefit from opportunities in the European markets; and

45

• opportunity to increase the aggregate value of NorthStar Europe and NorthStar Realty in order to allow each company to issue equity at a lower cost of capital in connection with acquisitions, joint ventures and partnerships on more favorable terms.

The NorthStar Realty Board believes that the aggregate value of NorthStar Realty and NorthStar Europe should increase relative to the value of NorthStar Realty prior to the announcement of the plan to spin-off its European real estate business because the Distribution will permit investors to invest separately in NorthStar Europe and in the remaining businesses of NorthStar Realty. This may make NorthStar Realty’s common stock and NorthStar Europe’s Common Stock more attractive to investors as compared to NorthStar Realty’s common stock before the Distribution and therefore could improve access to the capital markets for both NorthStar Realty and NorthStar Europe. As a result of the Distribution, the common stock of each of NorthStar Realty and NorthStar Europe would become available to classes of investors who seek an investment that offers the growth, risk and sector exposure of either NorthStar Europe or NorthStar Realty, but not that of the combined company. There can be no assurance, however, as to the future market price of the common stock of NorthStar Realty or NorthStar Europe’s Common Stock. Refer to “Risk Factors — Risks Related to the Spin-Off — The aggregate post-Distribution value of NorthStar Realty and NorthStar Europe shares may not equal or exceed the pre-spin-off value of NorthStar Realty shares.”

The NorthStar Realty Board considered several factors that might have a negative effect on NorthStar Realty as a result of the Distribution. For example, certain factors such as a lack of historical financial and performance data for our European Real Estate Business, including investments that were just recently acquired, or for NorthStar Europe as an independent public company may limit investors’ ability to appropriately value the Company’s Common Stock. Furthermore, because the Company will be separated from NorthStar Realty, the Distribution may also limit the ability of the Company to pursue cross-company business transactions and initiatives with other businesses of NorthStar Realty. Finally, following the Distribution, NorthStar Europe will be responsible for certain general and administrative costs previously incurred by NorthStar Realty.

Results of the Spin-off

After the Distribution, we will be an independent, publicly traded company. Immediately after the Distribution date, we expect that approximately            million shares of our Common Stock will be issued and outstanding, based on the anticipated number of shares of NorthStar Realty common stock outstanding as of the record date. The actual number of shares of our Common Stock to be distributed will be determined based on the number of shares of NorthStar Realty common stock outstanding as of the record date.

In connection with the Distribution, we will enter into a management agreement with NSAM pursuant to which NSAM will manage the Company for an initial term of 20 years. The management agreement provides for: (i) an annual base management fee equal to the sum of: (a) $14 million; and (b) an additional annual base management fee equal to 1.5% per annum of the sum of: (1) cumulative net proceeds of all common equity and preferred equity issued by us or NorthStar Realty prior to the date of the Distribution, which are used to fund European investments that close subsequent to August 17, 2015 and are contributed to us in connection with the Distribution; (2) any equity we issue in exchange or conversion of notes; (3) any other issuances of common equity, preferred equity or other forms of equity, including but not limited to LTIP Units in our Operating Partnership (excluding equity-based compensation, but including issuances related to an acquisition, investment, joint venture or partnership); and (4) cumulative CAD, if any, in excess of cumulative distributions paid on common stock, LTIP Units or other equity awards beginning the first full calendar quarter after completion of the Distribution; and (ii) an incentive fee determined as described under “Corporate Governance and Management — Our Manager — Management Agreement” with each of the fees set forth in clauses (i) and (ii) being calculated and payable quarterly in arrears in cash. The current base management fee of $14 million is based on our Current European Portfolio.

In addition, in conjunction with the Distribution, we will enter into the following agreements with NorthStar Realty or its affiliates: (i) a separation agreement, which will set forth, among other things, our agreements with NorthStar Realty regarding the principal transactions necessary to separate us from NorthStar Realty and distribute our Common Stock; and (ii) a contribution agreement pursuant to which NorthStar Realty will contribute certain limited liability company interests and cash to us. For a detailed description of the foregoing agreements that we will enter into in conjunction with the Distribution, refer to “Certain Relationships and Related Party Transactions.”

The Distribution will not affect the number of outstanding shares of NorthStar Realty common stock or any rights of NorthStar Realty stockholders.

Material U.S. Federal Income Tax Consequences of the Distribution

The following is a summary of the material U.S. federal income tax consequences of the Distribution, and in particular the distribution by NorthStar Realty of shares of our Common Stock to common stockholders of NorthStar Realty.

46

This summary is based upon the Code, the regulations promulgated by the U.S. Treasury Department, rulings and other administrative pronouncements issued by the IRS, and judicial decisions, all as currently in effect, and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. We have not sought and do not intend to seek an advance ruling from the IRS regarding any matter discussed herein. The summary is also based upon the assumption that NorthStar Realty, we, and our respective subsidiaries and affiliated entities will operate in accordance with their applicable organizational documents or partnership agreements and the agreements and other documents applicable to the Distribution. This summary is for general information only and is not tax advice. The Code provisions governing the U.S. federal income tax treatment of REITs (such as NorthStar Realty and us) and their stockholders are highly technical and complex, and this summary is qualified in its entirety by the express language of applicable Code provisions, Treasury regulations promulgated thereunder, and administrative and judicial interpretations thereof. This summary does not address all possible tax considerations that may be material to a stockholder and does not constitute legal or tax advice. Moreover, this summary does not purport to discuss all aspects of U.S. federal income taxation that may be important to a particular stockholder in light of its investment or tax circumstances, or to stockholders subject to special tax rules, such as:

• financial institutions;

• insurance companies;

• broker-dealers;

• regulated investment companies;

• foreign sovereigns and their controlled entities;

• partnerships and trusts;

• persons who will hold NorthStar Realty common stock on behalf of other persons as nominees;

• persons who received NorthStar Realty common stock through the exercise of employee stock options or otherwise as compensation;

• persons who will hold NorthStar Realty common stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated investment; and

• except to the extent discussed below, tax-exempt organizations and foreign investors.

This summary assumes that stockholders will hold their NorthStar Realty common stock as a capital asset for U.S. federal income tax purposes, which generally means as property held for investment.

For purposes of this discussion under the heading “Material U.S. Federal Income Tax Consequences of the Distribution,” a “U.S. stockholder” is a beneficial owner of NorthStar Realty common stock that is, for U.S. federal income tax purposes:

• a citizen or resident of the United States;

• a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any of its states, or the District of Columbia;

• an estate whose income is subject to U.S. federal income taxation regardless of its source; or

• a trust if: (i) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust; or (ii) it has a valid election in place to be treated as a U.S. person.

A “non-U.S. stockholder” is a beneficial owner of NorthStar Realty common stock that is neither a U.S. stockholder nor a partnership (or other entity treated as a partnership) for U.S. federal income tax purposes. If a partnership, including for this purpose any entity that is treated as a partnership for U.S. federal income tax purposes, holds NorthStar Realty common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A stockholder that is a partnership and the partners in such partnership should consult their tax advisors about the U.S. federal income tax consequences of the Distribution.

THE U.S. FEDERAL INCOME TAX TREATMENT OF THE DISTRIBUTION TO STOCKHOLDERS OF NORTHSTAR REALTY DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT AND INTERPRETATIONS OF COMPLEX PROVISIONS OF U.S. FEDERAL INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR

47

AUTHORITY MAY BE AVAILABLE. IN ADDITION, THE TAX CONSEQUENCES OF THE DISTRIBUTION TO ANY PARTICULAR STOCKHOLDER OF NORTHSTAR REALTY WILL DEPEND ON THE STOCKHOLDER’S PARTICULAR TAX CIRCUMSTANCES. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE FOREIGN, U.S. FEDERAL, STATE, AND LOCAL INCOME AND OTHER TAX CONSEQUENCES TO YOU OF THE DISTRIBUTION IN LIGHT OF YOUR PARTICULAR INVESTMENT OR TAX CIRCUMSTANCES.

Tax Classification of the Distribution in General

For U.S. federal income tax purposes, the Distribution will not be eligible for treatment as a tax-deferred distribution by NorthStar Realty with respect to its common stock. Accordingly, the Distribution will be treated as if NorthStar Realty had distributed to each NorthStar Realty common stockholder an amount equal to the fair market value of our Common Stock received by such stockholder, determined as of the date of the Distribution. We refer to such amount as the “distribution amount.” The tax consequences of the Distribution to NorthStar Realty’s stockholders are thus generally the same as the tax consequences of NorthStar Realty’s cash distributions. The discussion below describes the U.S. federal income tax consequences to a U.S. stockholder, a non-U.S. stockholder, and a tax-exempt stockholder of NorthStar Realty common stock upon the receipt of our Common Stock in the Distribution.

Although NorthStar Realty will ascribe a value to our Common Stock distributed in the Distribution, this valuation is not binding on the IRS or any other tax authority. These taxing authorities could ascribe a higher valuation to the distributed Common Stock, particularly if, following the Distribution, those shares of Common Stock trade at prices significantly above the value ascribed to those shares by NorthStar Realty. Such a higher valuation may affect the distribution amount and thus the tax consequences of the distribution to NorthStar Realty’s stockholders. Any cash received by a NorthStar Realty stockholder in lieu of a fractional share of our Common Stock should be treated as if such fractional share had been: (i) received by the stockholder as part of the Distribution and then (ii) sold by such stockholder, via the distribution agent, for the amount of cash received. As described below, the basis of the fractional share deemed received by a NorthStar Realty stockholder will equal the fair market value of such share on the date of the Distribution.

Tax Basis and Holding Period of Our Common Stock Received by Holders of NorthStar Realty Common Stock

A NorthStar Realty stockholder’s tax basis in shares of our Common Stock received in the Distribution generally will equal the fair market value of such shares on the date of the Distribution and the holding period for such shares will begin the day after the date of the Distribution.

Tax Treatment of the Distribution to U.S. Stockholders

The following discussion describes the U.S. federal income tax consequences to a U.S. stockholder upon the receipt of shares of our Common Stock in the Distribution.

Ordinary Dividend Distributions

The portion of the distribution amount received by a U.S. stockholder that is payable out of NorthStar Realty’s current or accumulated earnings and profits and that is not designated by NorthStar Realty as a capital gain dividend will generally be taken into account by such U.S. stockholder as ordinary income and will not be eligible for the dividends received deduction for corporations. With limited exceptions, dividends paid by NorthStar Realty are not eligible for taxation at the preferential income tax rates for qualified dividend income received by U.S. stockholders taxed at individual rates from taxable C corporations. Such U.S. stockholders, however, are taxed at the preferential rates on dividends designated by and received from a REIT, such as NorthStar Realty, to the extent that the dividends are attributable to dividends received by the REIT from TRSs or other taxable C corporations.

Capital Gain Dividend Distributions

A distribution that NorthStar Realty designates as a capital gain dividend will generally be taxed to U.S. stockholders as long-term capital gain, to the extent that such distribution does not exceed NorthStar Realty’s actual net capital gain for the taxable year, without regard to the period for which the holder that receives such distribution has held its NorthStar Realty common stock. Corporate U.S. stockholders may be required to treat up to 20% of some capital gain dividends as ordinary income. Long-term capital gains are generally taxable at reduced maximum federal rates in the case of U.S. stockholders that are taxed at individual rates and ordinary income rates in the case of stockholders that are corporations.

Non-Dividend Distributions

A distribution to U.S. stockholders in excess of NorthStar Realty’s current and accumulated earnings and profits will generally represent a return of capital and will not be taxable to a U.S. stockholder to the extent that the amount of such distribution does not exceed the adjusted basis of the holder’s NorthStar Realty common stock in respect of which the distribution was made.

48

Rather, the distribution will reduce the U.S. stockholder’s adjusted tax basis in its NorthStar Realty common stock. To the extent that such distribution exceeds a U.S. stockholder’s adjusted tax basis in its NorthStar Realty common stock, the holder generally must include such distribution in income as long-term capital gain, or short-term capital gain if the holder’s NorthStar Realty common stock has been held for one year or less.

Tax Treatment of the Distribution to Non-U.S. Stockholders

The following discussion describes the U.S. federal income tax consequences to a non-U.S. stockholder upon the receipt of shares of our Common Stock in the Distribution.

Ordinary Dividend Distributions

The portion of the distribution amount received by a non-U.S. stockholder that is: (i) payable out of NorthStar Realty’s earnings and profits; (ii) not attributable to NorthStar Realty’s capital gains; and (iii) not effectively connected with a U.S. trade or business of the non-U.S. stockholder, will be treated as a dividend that is subject to U.S. withholding tax at the rate of 30%, unless reduced or eliminated by treaty.

In general, non-U.S. stockholders will not be considered to be engaged in a U.S. trade or business solely as a result of their ownership of NorthStar Realty common stock. In cases where the dividend income from a non-U.S. stockholder’s investment in NorthStar Realty common stock is, or is treated as, effectively connected with the non-U.S. stockholder’s conduct of a U.S. trade or business, the non-U.S. stockholder generally will be subject to U.S. federal income tax at graduated rates, in the same manner as U.S. stockholders are taxed with respect to such dividends. Such income must generally be reported on a U.S. income tax return filed by or on behalf of the non-U.S. stockholder. The income may also be subject to the 30% branch profits tax in the case of a non-U.S. stockholder that is a corporation.

Capital Gain Distributions

Under the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA, distributions that are attributable to gain from NorthStar Realty’s sales or exchanges of United States real property interests, or USRPIs, will be taxed to a non-U.S. stockholder as if such gain were effectively connected with a U.S. trade or business, and non-U.S. stockholders will be subject to U.S. federal income tax on the distributions at the rates applicable to U.S. individuals or corporations. NorthStar Realty will be required to withhold a 35% tax on such distributions. Distributions subject to FIRPTA may also be subject to a 30% branch profits tax in the hands of a corporate non-U.S. stockholder.

Distributions received by a non-U.S. stockholder that are attributable to dispositions of NorthStar Realty’s assets other than USRPIs are not subject to U.S. federal income tax, unless: (i) the gain is effectively connected with the non-U.S. stockholder’s U.S. trade or business, in which case the non-U.S. stockholder would be subject to the same treatment as U.S. stockholders with respect to such gain; or (ii) the non-U.S. stockholder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and has a “tax home” in the United States, in which case the non-U.S. stockholder will incur a 30% tax on his capital gains.

Non-Dividend Distributions

Unless NorthStar Realty’s common stock constitutes a USRPI, the distribution amount, to the extent not made out of NorthStar Realty’s earnings and profits, and not attributable to gain from the disposition of USRPIs (including gain realized in the Distribution), will not be subject to U.S. federal income tax. If NorthStar Realty cannot determine at the time of the Distribution whether the distribution amount will exceed its current and accumulated earnings and profits, the Distribution will be subject to withholding at the rate applicable to ordinary dividends, as described above.

If NorthStar Realty’s stock constitutes a USRPI (see discussion below), distributions in excess of the sum of: (i) the non-U.S. stockholder’s proportionate share of NorthStar Realty’s earnings and profits; plus (ii) the non-U.S. stockholder’s basis in its NorthStar Realty common stock, will be taxed under FIRPTA in the same manner as if the NorthStar Realty stock had been sold. In such situations, NorthStar Realty would be required to withhold 10% of such excess, the non-U.S. stockholder would be required to file a U.S. federal income tax return, and the non-U.S. stockholder would be subject to the same treatment and same tax rates as a U.S. stockholder with respect to such excess, subject to applicable alternative minimum tax and a special alternative minimum tax in the case of non-resident alien individuals.

NorthStar Realty’s common stock will not be treated as a USRPI if less than 50% of NorthStar Realty’s assets throughout a prescribed testing period consist of interests in real property located within the United States, excluding, for this purpose, interests in real property solely in a capacity as a creditor. More than 50% of the value of NorthStar Realty’s assets consist of USRPI during the relevant period.

49

NorthStar Realty’s common stock nonetheless will not constitute a USRPI if NorthStar Realty is a “domestically controlled qualified investment entity.” A domestically controlled qualified investment entity includes a REIT, less than 50% of value of which is held directly or indirectly by non-U.S. stockholders at all times during a specified testing period. It is anticipated that NorthStar Realty will be a domestically controlled qualified investment entity at the time of the Distribution, and that a distribution with respect to NorthStar Realty’s stock in excess of NorthStar Realty earnings and profits will not be subject to withholding taxation under FIRPTA. No complete assurance can be given that NorthStar Realty will qualify as a domestically controlled qualified investment entity at the time of the Distribution.

Gain in respect of a non-dividend distribution that would not otherwise be subject to FIRPTA will nonetheless be taxable in the United States to a non-U.S. stockholder in two cases: (i) if the non-U.S. stockholder’s investment in NorthStar Realty common stock is effectively connected with a U.S. trade or business conducted by such non-U.S. stockholder, the non-U.S. stockholder will be subject to the same treatment as a U.S. stockholder with respect to such gain; or (ii) if the non-U.S. stockholder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and has a “tax home” in the United States, the nonresident alien individual will be subject to a 30% tax on the individual’s capital gain.

Withholding of Amounts Distributable to Non-U.S. Stockholders in the Distribution

If NorthStar Realty is required to withhold any amounts otherwise distributable to a non-U.S. stockholder in the Distribution, NorthStar Realty or other applicable withholding agents will collect the amount required to be withheld by reducing to cash for remittance to the IRS a sufficient portion of shares of our Common Stock that such non-U.S. stockholder would otherwise receive, and such holder may bear brokerage or other costs for this withholding procedure. A non-U.S. stockholder may seek a refund from the IRS of any amounts withheld if it is subsequently determined that the amounts withheld exceeded the non-U.S. stockholder’s U.S. tax liability for the year in which the Distribution occurred.

Time for Determination of the Tax Impact of the Distribution

The tax consequences of the Distribution will be affected by a number of facts that are yet to be determined, including NorthStar Realty’s final earnings and profits for 2015 (including as a result of the income and gain NorthStar Realty recognizes in connection with the Distribution), the fair market value of shares of our Common Stock on the date of the Distribution and the extent to which NorthStar Realty recognizes gain on the sales of USRPIs or other capital assets. Thus, a definitive calculation of the U.S. federal income tax consequences of the Distribution will not be possible until after the end of the 2015 calendar year. NorthStar Realty will provide its stockholders with tax information on an IRS Form 1099-DIV, informing them of the character of distributions made during the taxable year, including the Distribution.

Listing and Trading of Our Common Stock

There is not currently a public market for our Common Stock. We expect to list our Common Stock on the NYSE under the symbol “NRE.” Beginning on or shortly before, and continuing up to and including the date of the Distribution, we expect that there will be a “when-issued” market in our Common Stock. “When-issued” trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. The “when-issued” market will be a trading market for our Common Stock that will be distributed to holders of shares of NorthStar Realty common stock on the Distribution date. If you owned shares of NorthStar Realty common stock at the record date, which is the close of business, Eastern Time, on , 2015, you will be entitled to shares of our Common Stock distributed pursuant to the Distribution. You may trade this entitlement to shares of our Common Stock, without the shares of NorthStar Realty common stock you own, on the “when-issued” market. On the first trading day following the Distribution date, “when-issued” trading with respect to our Common Stock will end and “regular-way” trading will begin.

Furthermore, beginning on or shortly before the record date and continuing up to and including the date of the Distribution, we expect that there will be two markets in shares of NorthStar Realty common stock: a “regular-way” market and an “ex-distribution” market. Shares of NorthStar Realty common stock that trade on the “regular-way” market will trade with an entitlement to our Common Stock distributed pursuant to the spin-off. Shares of NorthStar Realty common stock that trade on the “ex-distribution” market will trade without an entitlement to our Common Stock distributed pursuant to the spin-off. Therefore, if you sell shares of NorthStar Realty common stock in the “regular-way” market before the Distribution, you will be selling your right to receive our Common Stock in the Distribution. If you sell shares of NorthStar Realty common stock in the “ex-distribution” market before the Distribution, you will receive the shares of our Common Stock that you are entitled to receive pursuant to your ownership as of the record date of NorthStar Realty common stock.

We cannot assure you as to the price at which our Common Stock will trade before, on or after the Distribution date. Until our Common Stock is fully distributed and an orderly market develops in our Common Stock, if ever, the price at which such stock trades may fluctuate significantly. In addition, the combined trading prices of our Common Stock and NorthStar Realty

50

common stock held by stockholders after the Distribution may be less than, equal to or greater than the trading price of the NorthStar Realty common stock prior to the Distribution.

The shares of our Common Stock distributed to NorthStar Realty stockholders will be freely transferable, subject to the limitations on transfer and ownership set forth in our charter, and except for shares received by people who may have a special relationship or affiliation with us or shares subject to contractual restrictions.For a more detailed discussion of restrictions on transfer and ownership of our Common Stock, refer to “Description of Capital Stock — Restrictions on Transfer and Ownership of our Common Stock.” People who may be considered our affiliates after the Distribution generally include individuals or entities that control, are controlled by, or are under common control with us. This may include certain of our directors, officers and significant stockholders. Persons who are our affiliates will be permitted to sell their shares only pursuant to an effective registration statement under the Securities Act of 1933, as amended, or the Securities Act, or an exemption from the registration requirements of the Securities Act, or in compliance with Rule 144 under the Securities Act.

Conditions to the Distribution

The separation agreement will provide that the Distribution is subject to the satisfaction of certain material conditions, including the following:

• the SEC declaring effective our registration statement and no stop order suspending the effectiveness of the registration statement in effect and no proceedings for such purpose pending before or threatened by the SEC;

• the transaction agreements relating to the Distribution having been duly executed and delivered by the parties;

• no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing consummation of the Distribution or any of the related transactions in effect;

• the receipt by us of an opinion from Hunton & Williams LLP to the effect that, beginning with our taxable year ending December 31, 2015, we will be organized in conformity with the requirements for qualification as a REIT under the Code and our proposed method of operation will enable us to satisfy the requirements for qualification and taxation as a REIT under the U.S. federal income tax laws for the year ending December 31, 2015 and subsequent taxable years; and

• no event or development having occurred or existing that, in the judgment of the NorthStar Realty Board, in its sole discretion, makes it inadvisable to effect the Distribution and other related transactions.

Reason for Furnishing this Prospectus

This prospectus is being furnished by NorthStar Realty solely to provide information to current stockholders of NorthStar Realty who will receive shares of our Common Stock in the Distribution. It is not, and is not to be construed as, an inducement or encouragement to buy or sell any of our securities. We will not update the information in this prospectus except in the normal course of our respective public disclosure obligations and practices.

51

BUSINESS

We describe in this prospectus our European Real Estate Business, which includes the NorthStar Europe Predecessor and our New European Investments, to be contributed to NorthStar Europe by NorthStar Realty as if the spin-off has already occurred. However, NorthStar Europe is a newly-formed entity that will not have conducted any separate operations prior to the spin-off. The financial results of the NorthStar Europe Predecessor or of our New European Investments operated as part of NorthStar Realty may not be indicative of NorthStar Europe’s financial results upon consummation of the spin-off or of the financial results of NorthStar Europe had it owned the U.K. Complex and our New European Investments as an independent public company for the periods presented.

The following discussion may not contain all of the information that is important to you and should be read in conjunction with the combined financial statements of the NorthStar Europe Predecessor and the notes thereto included in “Financial Statements,” the unaudited pro forma financial information beginning on page 70 and the risk factors included in “Risk Factors” beginning on page 17 of this prospectus.

Our Company

We are a newly-formed European commercial real estate company with approximately $2.6 billion, at cost, of investments located throughout nine countries in Europe. We have the ability to invest in a broad spectrum of European commercial real estate. We are currently predominantly focused on office properties and may expand by acquiring other types of commercial real estate located throughout Europe. We expect to make equity investments, directly or indirectly through joint ventures, in a diversified portfolio of European commercial real estate that offers the opportunity to generate attractive risk-adjusted returns. We seek to generate stable cash flow for distribution to our stockholders and in turn build long-term franchise value.

Our current portfolio of $2.6 billion, at cost, is comprised of 52 high-quality properties located in many key European markets, including Berlin, Frankfurt, Hamburg, London, Paris, Amsterdam, Milan, Brussels and Madrid. $2.0 billion of our portfolio was acquired or committed to be acquired in 2014, and given improved market conditions in Europe since such time, we believe has appreciated in value. Our current portfolio is primarily comprised of office properties, with 94% of our in-place rental income generated from office properties as of June 30, 2015, adjusted for an acquisition through August 17, 2015. We hold prime office properties in Germany, the United Kingdom and France that account for approximately 71% of our in-place rental income as of June 30, 2015, adjusted for an acquisition through August 17, 2015. As of June 30, 2015, adjusted for an acquisition through August 17, 2015, our portfolio was 93% occupied, had a weighted average remaining lease term of 6.0 years and included high-quality tenants.

We will be externally managed and advised by NSAM. We were formed as a Maryland corporation on June 18, 2015 and intend to conduct our operations so as to qualify as a REIT for U.S. federal income tax purposes beginning with the year ending December 31, 2015. Our principal executive offices are located at 399 Park Avenue, 18th Floor, New York, New York 10022 and our telephone number is (212) 547-2600.

Market Opportunity

We believe that the economic environment in Europe has stabilized and the foundations are in place for a gradual and sustained recovery. According to recent European Commission estimates, all of the countries in the European Union, with the exception of Cyprus, are expected to achieve GDP growth in 2015. In addition, the European Commission forecasts expected overall 2015 GDP growth in the European Union of 1.8% and in the Eurozone of 1.5%. We believe that the positive outlook for Europe is driven by a number of factors including the following:

• historically low interest rates, with three-month Euribor falling below zero in April 2015 ((0.2)% in August 2015 compared to 5.1% in October 2008);

• historically wide spreads between capitalization yields and interest rates;

• the European Central Bank’s quantitative easing program, with a commitment to purchase €1.1 trillion in assets over a period of nineteen months beginning in the first quarter of 2015;

• the depreciation of the Euro versus the U.S. dollar;

• declining unemployment rates;

• relatively low oil prices;

• increased investor and consumer confidence in a sustained European recovery; and

52

• the apparent stabilization of European sovereign debt and reversal of the recent upward trend in debt/GDP across the Eurozone.

Despite the overall positive outlook, regional disparities continue to exist as European economies recover at different speeds. As a result, attractive investment opportunities opportunities exist in Europe for investors who are able to take a long-term view on the European recovery. Major economies, such as the United Kingdom and Germany, appear to be experiencing healthy growth with expected 2015 GDP growth of 2.4% and 1.6%, respectively, as forecasted by the International Monetary Fund. In addition, some of the more troubled economies, such as Spain, Ireland and the Netherlands, appear to have demonstrated a rapid turnaround. As of July 2015, the International Monetary Fund expects unemployment in the United Kingdom and Germany to decline to 5.4% and 4.9% in 2015, respectively.

We believe property values, particularly as compared to the United States, remain below their historical peaks in many markets within the European Union. For example, U.K. capital values remain well below the last peak across all property types including office, retail and industrial assets with the current cycle witnessing a 44% spread between the bottom and peak of the cycle and, despite the recovery in property values, there remains a considerable opportunity for capital value appreciation.

Property Capital Values - 1990’s Cycle vs. Current	U.K. Property Capital Values

__________________________________

Source: Investment Property Databank Ltd. (IPD)

Investors may also benefit from historically wide spreads between capitalization yields and interest rates. The spread between the weighted average prime yield in the major European real estate markets (across all asset classes) and Euribor stood at approximately 0.08% in the third quarter of 2008. This compares to approximately 4.41% as of June 30, 2015. With interest rates expected to remain at low levels for the foreseeable future, we expect property to increasingly become an attractive source of income return for investors.

53

The following graph shows yield spreads above long-term averages:

Yield Spreads Above Long-Term Average Rates⁽¹⁾

__________________________________

(1) As of August 17, 2015. Source: Jones Lang LaSalle IP, Inc, European property yield data © 2015.

The European office market is steadily improving. Improving economic conditions are positively impacting tenant demand as evidenced by an improvement in take-up, rental growth and declining vacancy in a number of markets. Overall limited new supply has created undersupplied pockets of good quality office space across Europe. This is supporting capital value appreciation. Furthermore, the weaker Euro is likely to help the domestic lodging sector by driving greater in-bound travel to Europe as well as capturing a larger share of domestic leisure travel.

Consistent with the improved economic outlook and market fundamentals for Europe, the investment market has also continued to improve with investment volumes approaching pre-financial crisis levels. According to Colliers International, total European investment volume in the first half of 2015 reached €129 billion, representing approximately a 30% year-on-year increase. Full year volumes for 2015 are currently expected to reach €250 billion, compared to €257 billion in 2007. The office sector continues to drive investment activity across Europe. According to BNP Paribas Real Estate, investment in office properties located in the European Union increased by 20% in 2014 compared to 2013. In the first half of 2015, the office sector represented 35% of total investment volume, but its share of investment activity is slowly declining due to growth in retail and mixed use investments.

Deleveraging by financial institutions and asset management agencies is beginning to gain momentum with approximately €24 billion of commercial real estate loan and real estate owned transactions completed in the first half of 2015 with a further €99 billion estimated to be in the pipeline for the second half of 2015 (compared to approximately €81 billion in 2014 and €30 billion in 2013). A number of open-ended funds are also in the process of being liquidated. It is estimated that German open-ended funds have together sold approximately €18 billion of properties since 2011. Together they own a total of approximately €81 billion of real estate globally as of March 2015, of which approximately €12 billion is estimated to be European properties designated for sale by 2017. A number of companies and asset managers are also beginning to liquidate their portfolios, presenting potential buying opportunities. There is no assurance, however, that we will be able to take advantage of these opportunities.

We intend to focus on the major investment markets in Europe in the near future while remaining open to additional opportunities. While Germany, the United Kingdom and France continue to be the largest European markets, with over 70% of the volume in the second quarter of 2015 according to DTZ, office investment outside of those top three markets has grown by 110% since 2009. Some of the periphery markets including Greece, Spain, Ireland and the Netherlands benefited from a sharp resurgence in investment volumes, which we believe were underpinned by the disposal of properties by the public asset management agencies such as the National Asset Management Agency in Ireland or SAREB in Spain.

In terms of sales activity among cities, according to BNP Paribas, London had the most sales, followed by Paris and Stockholm, with €29 billion, €18 billion and €6 billion invested in 2014, respectively for all property sectors.

54

Due to tight supply and strong pressure on yields, particularly in the core markets, investors are increasingly targeting regional markets in the United Kingdom and Germany. For example, the share of German investments outside the six largest markets accounted for 55% of the investment volume in 2014.

Our Strategy

We have the ability to invest in a broad spectrum of European commercial real estate. We are currently predominantly focused on office properties and may expand by acquiring other types of commercial real estate located throughout Europe. We expect to make equity investments, directly or indirectly through joint ventures, in a diversified portfolio of European commercial real estate that offers the opportunity to generate attractive risk-adjusted returns. We seek to generate stable cash flow for distribution to our stockholders and in turn build long-term franchise value.

Our Competitive Strengths

We believe that we operate with significant competitive strengths that will allow us to continue to grow our investments, generate attractive risk-adjusted returns for our stockholders and be well-positioned to benefit from the ongoing recovery in the European commercial real estate market.

• New Opportunity for Investors – We will be the only diversified European real estate company listed in the United States. We therefore believe we are creating a new opportunity for investors to gain pan-European real estate exposure through one vehicle, with the advantage of the accessibility and liquidity associated with the U.S. capital markets.

• Access to Lower Cost of Capital – As a separate public company, we expect to have lower cost of capital. NSAM has a proven track record of accessing the capital markets on behalf of NorthStar Realty and its other managed companies and we believe that our experience should enable us to structure and finance investments efficiently. We believe NSAM’s experience, together with its affiliates, will provide us access to a wide range of secured and unsecured debt and public and private equity capital sources to grow and fund our business.

• Diversified Investment Strategy – We have a diversified investment strategy, with flexibility to invest in a variety of property types and jurisdictions. This strategy gives our investors the opportunity to gain European exposure through a single investment. In addition, our strategy allows us to take advantage of portfolio sales that appear undervalued that competitors, most of whom are restricted to specific regions or property types in Europe, are unable to pursue.

• High-Quality Portfolio in Key Markets – We have already begun to execute our strategy through our initial acquisitions of high-quality office buildings in many of the major cities across Europe, tapping a large and liquid market that we believe has significant potential for long-term growth.

• Experienced Management Team – Our management team and experienced investment professionals are on the ground in Europe and have the ability to execute on complex, cross-border transactions. We believe our business will continue to benefit from the knowledge and industry contacts that these seasoned executives have gained through their accomplished careers while investing in numerous real estate cycles. We believe the accumulated experience of our senior management team, together with other resources at NSAM, will allow us to identify opportunities and deploy capital across a broad spectrum of potential investments fluidly in response to changes in the investment environment.

• Real Estate Investment and Asset Management Experience – Our asset manager, NSAM, has developed a reputation as a leading, diversified commercial real estate investment and asset management team because of its strong performance record in managing approximately $25 billion in commercial real estate investments as of June 30, 2015, adjusted for acquisitions and commitments to purchase real estate through August 5, 2015. Prior to its spin-off from NorthStar Realty, NSAM historically focused in the United States and more recently NSAM has started managing assets in Europe, and as a result of its third party arrangements, we also benefit from the strength of our local partners in Europe. We believe that we can leverage that extensive real estate experience and the depth and thoroughness of the associated asset management skills to structure and manage our investments prudently and efficiently.

• Public Company Reporting and REIT Experience – NorthStar Realty has operated as a REIT and its common stock has traded on the NYSE under the symbol “NRF” since October 2004. NSAM has also operated as a public company traded on the NYSE under the symbol “NSAM” since July 2014. Our management team is skilled in public company reporting and compliance with the requirements of the Sarbanes-Oxley Act, including internal control certifications, stock exchange regulations and investor relations and is experienced in complying with the requirements under the Code to obtain REIT status and to maintain the ability to be taxed as a REIT for U.S. federal income tax purposes.

55

Financing Strategy

We seek to access a wide range of secured and unsecured debt and public and private equity capital sources to grow and fund our investment activities. We expect to predominantly use investment-level financing as part of our strategy to prudently leverage our investments and deliver attractive risk-adjusted returns to our stockholders. We expect to target overall leverage of 40% to 50%, although there is no assurance that this will be the case.

We plan to pursue a variety of financing arrangements such as mortgage notes and bank loans available from the commercial mortgage backed securities, or CMBS, market, finance companies and banks. In addition, we may use corporate-level financing such as credit facilities and other borrowings. We generally seek to limit our reliance on recourse borrowings. Borrowing levels for our investments may be dependent upon the nature of the investments and the related financing that is available.

In July 2015, we issued $340 million aggregate principal amount of Senior Notes. We received aggregate net proceeds of $331 million, after deducting the underwriters’ discount and other expenses. We loaned the net proceeds from the issuance of the Senior Notes to subsidiaries of NorthStar Realty, which used such amounts for general corporate purposes, including, among other things, the funding of acquisitions, including the Trianon Tower, and the repayment of NorthStar Realty’s borrowings. We expect to enter into an agreement with NorthStar Realty at the time of the Distribution providing that we will reimburse NorthStar Realty if any principal or interest payments on the Senior Notes are made by NorthStar Realty after the Distribution.

The current availability of attractive long-term, non-recourse, non-mark-to-market financing through the European bank markets has bolstered opportunities to acquire real estate. For longer duration, relatively stable cash flow investments, such as those derived from net lease investments, we may use fixed rate financing. For investment cash flow with greater growth potential, we expect to use floating rate financing, which provides prepayment flexibility and may provide a better match between underlying cash flow projections and potential increases in interest rates. Where we use floating rate financing, we expect to generally attempt to mitigate the risk of interest rates rising through hedging arrangements including interest rate swaps and caps. We may vary the mix of fixed and floating rate debt and use a combination of the two when we deem it appropriate. We also may utilize corporate-level financing in the future.

We intend to take advantage of differences in the monetary performance of the various European jurisdictions, which we expect to provide us lower cost to capital and to enable us to fund investments located in economies that are at a more advanced stage of recovery at artificially low financing costs.

Portfolio Management

NSAM will perform portfolio management on our behalf. In addition, we will rely on the services of local third party property managers. The comprehensive portfolio management process 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 investment-specific credit issues and trends on a portfolio-wide basis. Nevertheless, we cannot be certain that such review will identify all issues within our portfolio due to, among other things, adverse economic conditions or events adversely affecting specific investments; therefore, potential future losses may also stem from investments that are not identified during these credit reviews.

The portfolio management team, under the direction of NSAM’s investment committee, will use many methods to actively manage our investment base to preserve our income and capital. Credit risk management is the ability to manage our investments and our tenants/partners in a manner that preserves principal/cost and income and minimizes credit losses that could decrease income and portfolio value. Frequent re-underwriting and dialogue with tenants/partners and regular inspections of our properties have proven to be an effective process for identifying issues early. Monitoring tenant creditworthiness is a key component of our portfolio management process, which may include, to the extent available, a review of financial statements and operating statistics, delinquencies, third party ratings and market data. During the quarterly credit review, or more frequently as necessary, investments may be put on highly-monitored status and identified for possible asset impairment based upon several factors, including missed or late contractual payments, significant declines in performance and other data which may indicate a potential issue in our ability to recover our invested capital from an investment.

Our Properties

Our current portfolio of $2.6 billion, at cost, is comprised of 52 high-quality properties located in many key European markets, including Berlin, Frankfurt, Hamburg, London, Paris, Amsterdam, Milan, Brussels and Madrid. $2.0 billion of our portfolio was acquired or committed to be acquired in 2014, and given improved market conditions in Europe since such time, we believe has appreciated in value. Our current portfolio is primarily comprised of office properties, with 94% of our in-place rental income generated from office properties as of June 30, 2015, adjusted for an acquisition through August 17, 2015. We hold prime office properties in Germany, the United Kingdom and France that account for approximately 71% of our in-place rental income as of June 30, 2015, adjusted for an acquisition through August 17, 2015. As of June 30, 2015, adjusted for an acquisition through

56

August 17, 2015, our portfolio was 93% occupied, had a weighted average remaining lease term of 6.0 years and included high-quality tenants. Management believes that each of the properties that comprise our Current European Portfolio is adequately covered by insurance and each property is suitable and adequate for its intended use.

The following presents a summary, as of June 30, 2015, adjusted for an acquisition through August 17, 2015, of our portfolio and diversity across geographic location based on cost:

			Portfolio by Geographic Location
Total portfolio, at cost	$2.6 billion
Number of properties	52
Number of countries	9
Total square meters	520,323
Weighted average occupancy	93	%
Weighted average remaining lease term	6.0 years
In-place rental income related to:(1)
Office properties	94	%
Other	6	%

__________________________________

(1)In-place rental income represents gross rent adjusted for vacancies.

57

The following table presents our equity investments in properties that we own as of June 30, 2015, adjusted for an acquisition through August 17, 2015 (dollars in thousands except per square meter data):

Location Country, City	Number of Buildings	Estimated Amount(1)(2)			Type(5)	Square Meters(7)	Occupancy	Average Annual In-Place Rental Income per Square Meter(2)		Borrowings(2)(3)
Belgium
Brussels	4	$	67,796		Office	23,602	77%	$	210	$	5,172
U.K.
London - Portman Square(6)(8)	1	279,461			Office	10,447	100%	1,155		191,550
London (Other)(6)	2	202,503			Office	13,378	100%	806		162,058
Scotland	2	20,485			Office	6,086	100%	366		10,785
Woking(6)	1	97,452			Office	20,743	100%	343		78,585
Other (England)	3	31,603			Office	7,267	92%	368		19,429
Subtotal UK	9	631,504				57,921	99%	604		462,407
France
Paris	6	389,815			Office/Industrial	95,424	93%	230		243,484
Germany
Baden-Württemberg	1	6,581			Office	2,070	100%	179		2,851
Bavaria	1	6,216			Office	12,166	75%	119		3,328
Berlin	3	90,310			Hotel/Office	30,539	100%	185		51,497
Bremen	1	2,072			Office/Residential	2,192	97%	107		853
Frankfurt - Trianon Tower(8)	3	621,293			Office/Residential	68,657	98%	490		366,115
Hesse (Frankfurt Other)	1	22,425			Office/Residential	6,832	73%	231		11,569
Hamburg	2	118,610			Office	34,253	86%	203		88,838
North-Rhine Westphalia	9	85,069			Office/Retail	45,753	88%	149		47,498
Schleswig-Holstein	2	6,947			Office/Retail	7,558	51%	147		2,456
Subtotal Germany	23	959,523				210,020	90%	287		575,005
Italy
Milan	2	165,313			Office	30,924	95%	398		68,468
Netherlands
Amsterdam	1	103,710			Office	22,983	100%	309		41,404
Rotterdam	1	168,319			Office	37,816	98%	310		95,767
Other	2	10,238			Office	12,448	92%	235		5,944
Subtotal Netherlands	4	282,267				73,247	98%	298		143,115
Portugal
Albufeira	1	16,819			Retail	11,150	93%	157		—
Lisbon	1	13,650			Office	4,325	86%	245		—
Subtotal Portugal	2	30,469				15,475	91%	181		—
Spain
Madrid	1	8,775			Office	4,025	100%	177		—
Sweden
Gothenburg	1	44,998			Office	9,685	94%	241		20,803
Grand Total	52	$	2,580,460	(4)		520,323	93%	$	315	$	1,518,454

__________________________________

(1) Allocation to individual properties is based on a preliminary estimate of purchase price allocation and subject to change and includes transaction costs, deferred financing costs, derivatives and other assets assumed.

(2) Amounts are translated using the exchange rate as of June 30, 2015 for all properties.

(3) The following table presents borrowings for our Current European Portfolio as of June 30, 2015, adjusted for an acquisition through August 17, 2015 (dollars in thousands):

58

	Final	Contractual	Principal
	Maturity	Interest Rate	Amount
Mortgage and other notes payable(i)
U.K. Complex	Dec-19	(ii)	$	78,585
Internos Portfolio(iii)	Apr-20	(iii)	101,315		(v)
IVG Portfolio(iii)	Apr-20	(iii)	94,066		(v)
Deka Portfolio(iii)	Apr-20	(iii)	51,914		(v)
SEB Portfolio	Apr-22	(iv)	708,858		(v)
SEB Portfolio - Preferred	Apr-60	3.00%(vi)	117,601		(vii)
Trianon Tower	Jul-23	EURIBOR + 1.45%	366,115
Total mortgage and other notes payable			$	1,518,454

____________________

(i) All borrowings are non-recourse to NorthStar Europe and are interest-only through maturity, subject to compliance with covenants of the respective borrowing.

(ii) Comprised of $63.8 million principal amount of floating rate borrowings at GBP LIBOR plus 2.0%, with a related $63.8 million notional value interest rate cap at 2.0% and $14.7 million fixed rate borrowings at 8.0%.

(iii) Represents a cross-collateralized borrowing between the Internos Portfolio, IVG Portfolio and Deka Portfolio. Comprised of $206.3 million principal amount of floating rate borrowings at EURIBOR plus 2.7%, with a related $206.3 million notional value interest rate cap at 2.0% and $41.0 million floating rate borrowing at GBP LIBOR plus 2.7%, with a related $41.0 million notional value interest rate cap at 2.0%.

(iv) Comprised of $393.2 million principal amount of floating rate borrowing at EURIBOR plus 1.8%, with a related $393.2 million notional value interest rate cap at 0.5%, $298.3 million of floating rate borrowing at GBP LIBOR plus 1.8%, with a related $298.3 million notional value interest rate cap at 2.0% and $17.4 million floating rate borrowing at STIBOR plus 1.8%.

(v) Prepayment provisions include a fee based on principal amount ranging from .75% to 1.5% through April 2018 for the Internos Portfolio, IVG Portfolio and Deka Portfolio borrowing and .5% to 2.0% through April 2019 for the SEB Portfolio borrowing.

(vi) Contractual interest rate is 3% per annum through May 2019, increases to EURIBOR plus 12% through May 2022 and then increases to EURIBOR plus 15% through final maturity.

(vii) The Company has the ability to prepay the principal amount in part or in full through May 2019. Any prepayment prior to such date is subject to the payment of the unpaid coupon on outstanding principal amount through May 2019.

(4) The estimated fair value of the portfolio is $2.6 billion translated to U.S. dollars using the exchange rate at June 30, 2015.

(5) Classification based on predominant property type but may include other types of properties.

(6) Certain properties are subject to ground leases.

(7) Excludes parking spaces.

(8) The following tables present information regarding significant properties in our Current European Portfolio (dollars in thousands):

Significant tenants:	Industry	Square Meters	Percentage of Square Meters	In-Place Rental Income		Percentage of In-Place Rental Income	Lease Maturity Date(iv)
Portman Square(i)(iii)
Cushman & Wakefield LLP	Insurance and real estate	5,150	49%	$	5,265	44%	June-25
Invesco UK Limited	Finance and law	2,043	20%	3,205		27%	May-23
Quintain Estates & Development PLC	Insurance and real estate	1,280	12%	1,733		14%	Feb-24
Regus (London Portman Square) Limited	Consulting and other professional services	1,056	10%	958		8%	Sept-20
Total		9,529	91%	$	11,161	93%
Trianon Tower(ii)(iii)
DekaBank Deutsche Girozentrale	Finance and law	35,036	51%	$	20,217	61%	Jun-24
Deutsche Bundesbank	Public institutions and non-governmental organizations (NGOs)	10,659	16%	4,544		14%	March-25
Linklaters LLP	Finance and law	10,082	15%	4,491		14%	Dec-15
Total		55,777	82%	$	29,252	89%

____________________

(i) The terms of the leases of the office and retail premises at Portman Square House range from eight to 20 years. Tenants are generally responsible for the maintenance and repair of their premises, as well as the cost of structural works and repair to common areas performed by the landlord. Tenants are responsible for the cost of insurance, as well as all outgoings, rates and taxes with respect to their premises.

(ii) The terms of the leases of the office and restaurant premises at Trianon Tower range from four to 18 years, while the terms of the residential leases are 25 years (subject to certain exceptions).  Although the specific terms vary by lease, the tenants are generally responsible for the maintenance and repair of their premises and the landlord is responsible for carrying out any structural works. Costs of repair to the common parts of the building are borne by the tenants, though typically subject to a cap. Under the residential leases, the landlord is generally responsible for repair of the premises, structure and common areas, other than ordinary wear and tear of the tenant’s premises subject to a cap.  Subject to variations under specific leases, tenants bear the costs of insurance, as well as the regular operation costs and taxes in respect of their premises.

(iii) We expect to renovate and improve the properties in the ordinary course of business, including a planned approximately €15 million for the Trianon Tower, of which €6 million will be contributed by a tenant and the remainder will be funded through a capital expenditure escrow reserve. With respect to Portman Square, approximately £0.8 million of capital improvements are planned, which will be funded with cash on hand.

(iv) Lease maturity date reflects the expiration date per the leases and does not assume renewal, extension or termination options. Both DekaBank Deutsche Girozentrale and Deutsche Bundesbank have one five-year extension option. No other tenants have extension options.

59

Historical occupancy and average effective rent per square meter:
	Portman Square			Trianon Tower
Period	Historical Occupancy	Average Annual Effective Rent per Square Meter(1)		Historical Occupancy	Average Annual Effective Rent per Square Meter(1)
As of June 30, 2015	100%	$	1,155	98%	$	490
2014	100%	1,119		84%	512
2013	92%	1,115		80%	600
2012	100%	1,118		84%	562
2011	100%	1,006		83%	553
2010	100%	1,091		79%	589

__________________________________

(1)Effective rent represents gross in-place rental income.

Lease expirations:
	Portman Square						Trianon Tower
Year	Square Meters	In-Place Rental Income		Percentage of In-Place Rental Income		Number of Tenants	Square Meters	In-Place Rental Income		Percentage of In-Place Rental Income		Number of Tenants
2015	—	$	—	—		—	10,141	$	4,528	13.7	%	3
2016	27	7		0.1	%	1	4,065	1,916		5.8	%	1
2017	—	—		—		—	—	—		—		—
2018	288	261		2.2	%	1	2,947	578		1.7	%	3
2019	—	—		—		—	—	—		—		—
2020	1,056	958		7.9	%	1	65	19		0.1	%	1
2021	—	—		—		—	—	—		—		—
2022	—	—		—		—	—	—		—		—
2023	2,429	3,588		29.7	%	2	78	12		0.0	%	1
2024	1,496	1,988		16.5	%	2	37,772	21,422		64.7	%	2
2025	5,150	5,265		43.6	%	1	10,659	4,544		13.7	%	1
Thereafter	—	—		—		—	—	—		—		—
Other(1)	1	—		—		1	1,617	109		0.3	%	15
Total	10,447	$	12,067	100.0	%	9	67,344	$	33,128	100.0	%	27

__________________________________

(1)Represents leases with private persons’ for parking and small residential tenants with an indefinite lease term.

Our Leases

The terms of our leases vary significantly by lease and jurisdiction, ranging from three months to 27.5 years.  For example, our leases in the United Kingdom, Germany and Belgium have terms ranging from one year to 27.5 years, while our leases in France and the Netherlands have terms ranging from nine to 15 years and our leases in Spain and Italy have terms of six or seven years.  Contractual and/or statutory tenant break options or extension rights also vary significantly across our portfolio.  The weighted average remaining lease term of our portfolio is 6.0 years as of June 30, 2015, adjusted for an acquisition through August 17, 2015.

Although the specific terms vary by lease and jurisdiction, our leases generally provide that keeping and maintaining the leased premises in good repair is the responsibility of the tenant.  Responsibility for the costs associated with the maintenance and repair of common areas within multi-let buildings varies more significantly, but generally falls upon the tenant.  By contrast, costs associated with structural works or extraordinary repairs of the building are typically the responsibility of the landlord, except in the United Kingdom where the tenant bears these costs.  Responsibility for taxes and costs of insurance premiums also varies across leases and jurisdictions, but most frequently falls upon the tenant.

60

The following table presents lease expirations and associated in-place rental income for our Current European Portfolio (dollars in thousands):

Year	Occupied Square Meters	In-Place Rental Income		Percentage of In-Place Rental Income	Number of Tenants
2015	51,108	$	8,633	6%	26
2016	31,030	9,690		6%	31
2017	24,637	5,362		4%	32
2018	20,307	4,313		3%	27
2019	95,673	31,462		21%	27
2020	41,280	16,962		11%	17
2021	79,279	18,738		12%	31
2022	5,162	983		1%	7
2023	8,450	5,453		4%	15
2024	58,960	31,245		21%	17
Thereafter	57,245	17,446		10%	23
Other(1)	8,535	1,163		1%	147
Total	481,666	$	151,450	100%	400

__________________________________

(1)Represents leases with private persons’ for parking and small residential tenants with an indefinite lease term.

The following table presents the tenant concentration by industry for our Current European Portfolio (dollars in thousands):

Industry	In-Place Rental Income		Percentage of In-Place Rental Income	Number of Tenants
Finance and law	$	70,565	47%	67
Technology and IT services	21,013		14%	46
Insurance and real estate	18,859		12%	20
Public institutions and non-profit government organizations	12,618		8%	23
Consulting and other professional services	3,343		2%	14
Hotel and gastronomy	5,351		4%	19
Construction/logistics	5,997		4%	7
Fashion and consumer goods	3,666		2%	33
Media and public relations	2,202		1%	15
Private person	883		1%	115
Medical and pharmaceuticals	185		0%	4
Other	6,768		5%	37
Total	$	151,450	100%	400

Competition

We expect to be subject to increasing competition in seeking investments. We compete with many third parties engaged in real estate investment activities including publicly-traded REITs, public real estate companies, pension funds, insurance companies, private equity funds, sovereign wealth funds and other investors. Some of these competitors have substantially greater financial resources than we do. Such competitors may also enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies.

Future competition from new market entrants may limit the number of suitable investment opportunities offered to us. It may also result in higher prices, lower yields and a narrower spread over our borrowing costs, making it more difficult for us to originate or acquire new investments on attractive terms.

61

Legal Proceedings

We may be involved in various litigation matters arising in the ordinary course of our business. Although we are unable to predict with certainty the eventual outcome of such litigation, in the opinion of management, no such legal proceedings are expected to have a material adverse effect on our financial position or results of operations.

Employees

We will be externally managed by NSAM and will not have our own employees.

Regulation

We are subject, in certain circumstances, to supervision and regulation by state, federal and international governmental authorities and are subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, among other things:

•    regulate our public disclosures, reporting obligations and capital raising activity;

•    require compliance with applicable REIT rules;

•    regulate credit granting activities;

•    require disclosures to customers;

•    govern secured transactions;

•    set collection, taking title to collateral, repossession and claims-handling procedures and other trade practices;

•    regulate land use and zoning;

•    regulate the foreign ownership or management of real property or mortgages;

• regulate the ability of foreign persons or corporations to remove profits earned from activities within the country to the person’s or corporation’s country of origin;

•    regulate tax treatment and accounting standards; and

• regulate use of derivative instruments and our ability to hedge our risks related to fluctuations in interest rates and exchange rates.

We intend to elect and qualify to be taxed as a REIT under Section 856 through 860 of the Code beginning with the year ending December 31, 2015. As a REIT, we must currently distribute, at a minimum, an amount equal to 90% of our taxable income. In addition, we must distribute 100% of our taxable income to avoid paying corporate federal income taxes. REITs are also subject to a number of organizational and operational requirements in order to elect and maintain REIT status. These requirements include specific share ownership tests and assets and gross income composition tests. If we fail to continue to qualify as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate tax rates. Even if we qualify for taxation as a REIT, we may be subject to state and local income taxes and to U.S. federal income tax and excise tax on our undistributed income.

Real estate properties owned by us and the operations of such properties are subject to various international laws and regulations concerning the protection of the environment, including air and water quality, hazardous or toxic substances and health and safety. In addition, such properties are required to comply with applicable fire and safety regulations, building codes, legal or regulatory provisions regarding access to our properties for persons with disabilities and other land use regulations. For further information regarding environmental matters, refer to “ — Environmental Matters” below.

In addition, we may own hotels, which are subject to various covenants, laws, ordinances and regulations, including regulations relating to common areas. We believe each of our hotels will have the necessary permits and approvals to operate its business.

In the judgment of management, while we do incur significant expense complying with the various regulations to which we are subject, existing statutes and regulations have not had a material adverse effect on our business. However, it is not possible to forecast the nature of future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future business, financial condition, results of operations or prospects.

62

Policies Relating to the Investment Company Act

We intend to conduct our operations so that neither we nor our subsidiaries are required to register as investment companies under the Investment Company Act. We are structured as holding company, holding virtually no assets, other than cash, directly. Our real properties are held through subsidiaries.

Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, which we refer to as the “40% Test.” Excluded from the term “investment securities,” among other things, are U.S. government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. Accordingly, under Section 3(a)(1) of the Investment Company Act, in relevant part, a company is not deemed to be an ‘‘investment company’’ if (i) it neither is, nor holds itself out as being, engaged primarily, nor proposes to engage primarily, in the business of investing, reinvesting or trading in securities; and (ii) it neither is engaged nor proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and does not own or propose to acquire ‘‘investment securities’’ having a value exceeding 40% of the value of its total assets on an unconsolidated basis.

We believe that neither we nor our subsidiaries will fall within either definition of investment company. We are not engaged in the business of investing, reinvesting or trading in securities, but instead are engaged in the business of our subsidiaries, which is the commercial real estate business.

We expect most of our subsidiaries will be wholly-owned subsidiaries, but we may also make investments through joint ventures, which will own real estate. We treat these joint ventures as majority-owned subsidiaries. The determination of whether an entity is a majority-owned subsidiary of our company is made by us. The Investment Company Act defines a majority-owned subsidiary of a person as a company 50% or more of the outstanding voting securities of which are owned by such person, or by another company which is a majority-owned subsidiary of such person. The Investment Company Act further defines voting securities as any security presently entitling the owner or holder thereof to vote for the election of directors of a company. With respect to the joint ventures that are governed by a board of managers, we have the right to vote on at least 50% of the board seats. In some instances, the joint ventures are managed by their members, rather than by a board of managers. Thus, the membership interests do not fall squarely within the definition of voting securities, but we nevertheless consider these joint ventures to be majority-owned subsidiaries. The SEC staff has taken the position that limited partnership interests may be voting securities if one or more limited partners has the right to take part in the conduct or control of the partnership’s business or if the limited partners’ economic interests effectively gives them the power to exercise a controlling influence over the partnership. We believe the same analysis applies to limited liability company interests. Where there is no board of managers for a joint venture, we have 50% of the voting rights with respect to “major decisions” to be made, including any major decisions with respect to the assets of the companies. Thus, because we have 50% or more of the voting rights in these joint ventures, we consider them to be our majority-owned subsidiaries. We have not asked the SEC staff for concurrence of our analysis, our treatment of such securities as voting securities, or whether these joint ventures may be treated in the manner in which we intend, and it is possible that the SEC staff could disagree with any of our determinations. If the SEC staff were to disagree with our treatment of one or more companies as majority-owned subsidiaries, we would need to adjust our strategy and our assets. Any such adjustment in our strategy could have a material adverse effect on us. For more information on certain exemptions that we rely on refer to “Risk Factors — Risks Related to Regulatory Matters and Our REIT Status — If we are deemed an investment company under the Investment Company Act our business would be subject to applicable restrictions under the Investment Company Act, which could make it impracticable for us to continue our business as contemplated and would have a material adverse impact on the market price of our Common Stock.”

To maintain compliance with the Investment Company Act exceptions, we or our subsidiaries may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we or our subsidiaries may have to acquire additional income- or loss-generating assets that we might not otherwise have acquired or may have to forego opportunities to acquire interests in companies that we would otherwise want to acquire and that may be important to our investment strategy. If our subsidiaries fail to satisfy the requirements of any exemption or exclusion under the Investment Company Act, we could be characterized as an investment company. Our manager will continually review our investment activity to attempt to ensure that we will not be required to register as an investment company. Among other things, our manager will attempt to monitor the proportion of our portfolio that is placed in investments in securities.

63

Environmental Matters

A wide variety of environmental and occupational health and safety laws and regulations affect our properties. These complex laws, and their enforcement, involve myriad regulations, many of which involve strict liability on the part of the potential offender. Some of these laws may directly impact us. Under various local environmental laws, ordinances and regulations, an owner of real property, such as us, may be liable for the costs of removal or remediation of hazardous or toxic substances at, under or disposed of in connection with such property, as well as other potential costs relating to hazardous or toxic substances (including government fines and damages for injuries to persons and adjacent property). The cost of any required remediation, removal, fines or personal or property damages and the owner’s liability therefore could exceed or impair the value of the property, and/or the assets of the owner. In addition, the presence of such substances, or the failure to properly dispose of or remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral which, in turn, could reduce our revenues.

Selected Regulations Regarding our Operations in Germany, the United Kingdom and France

Our commercial real estate investments are subject to a variety of laws and regulations in Europe. If we fail to comply with any of these laws and regulations, we may be subject to civil liability, administrative orders, fines or even criminal sanctions. The following provides a brief overview of selected regulations that are applicable to our business operations in Germany, the United Kingdom and France, where a majority of our properties in terms of contribution to rental income are located.

Germany

Land-use Regulations, Building Regulations and Tenancy Law for Commercial Properties

Land-use Regulations. There are several regulations regarding the use of land including German planning law and urban restructuring planning by communities.

Urban Restructuring Planning. Communities may designate certain areas as restructuring areas and undertake comprehensive modernization efforts regarding the infrastructure in such areas. While this may improve the value of properties located in restructuring areas, being located in a restructuring area also imposes certain limitations on the affected properties (e.g., the sale, encumbrance and leasing of such properties, as well as reconstruction and refurbishment measures, are generally subject to special consent by municipal authorities).

Building Regulations. German building laws and regulations are quite comprehensive and address a number of issues, including, but not limited to, permissible types of buildings, building materials, proper workmanship, heating, fire safety, means of warning and escape in case of emergency, access and facilities for the fire department, hazardous and offensive substances, noise protection, ventilation and access and facilities for disabled people. Owners of erected buildings may be required to conduct alterations or improvements of the property if safety or health risks with respect to users of the building or the general public occur, including fire risks, traffic risks, risks of collapse and health risks from injurious building materials such as asbestos. To our knowledge, there are currently no official orders demanding any alterations to existing buildings owned by us.

Tenancy Law for Commercial Properties. German tenancy laws for commercial properties generally provide landlords and tenants with far-reaching discretion in how they structure lease agreements and use general terms and conditions. Certain legal restrictions apply with regard to the strict written form requirements regarding the lease agreement, transfer of operating costs and maintenance costs, cosmetic repairs and final decorative repairs. Lease agreements with a term of more than one year must be executed in writing or are deemed to have been concluded for an indefinite period with the consequence that they can be terminated at the end of one year after turning over the leased property. Operating costs of commercial tenancies may be apportioned to the tenants if the lease agreement stipulates explicitly and specifically which operating costs shall be borne by the tenant. Responsibility for maintenance and repair costs may be transferred to tenants, except for the full cost transfer of maintenance and repair costs for roof, structures and areas used by several tenants in general terms and conditions. Expenses for cosmetic repairs (Schönheitsreparaturen) may, in principle, be allocated to tenants, provided that the obligation to carry out ongoing cosmetic repairs is not combined with an undertaking to perform initial and/or final decorative repairs.

Regulation Relating to Environmental Damage and Contamination

The portion of our commercial real estate portfolio located in Germany is subject to various rules and regulations relating to the remediation of environmental damage and contamination.

Soil Contamination. Pursuant to the German Federal Soil Protection Act, the responsibility for residual pollution and harmful changes to soil, or Contamination, lies with, among others, the perpetrator of the Contamination, such perpetrator’s universal successor, the current owner of the property, the party in actual control of the property and, if the title was transferred after March 1999, the previous owner of the property if such owner knew or should have known about the Contamination, or the Liable Persons. The Liable Person that carried out the remediation work may claim indemnification on a pro rata basis from the

64

other Liable Persons. Independently, from the aforementioned liability, civil law liability for Contaminations can arise from contractual warranty provisions or statutory law.

United Kingdom

For a discussion of the impact of regulations in the United Kingdom, refer to “Risk Factors — Risks Related to our Financing Strategy — We are subject to risks associated with obtaining mortgage financing on our real estate, which could materially adversely affect our business, financial condition and results of operations and our ability to make distributions to stockholders.”

France

Commercial Lease Regulation

The contractual conditions applying to commercial leases periods, renewal, rent and rent indexation are heavily regulated. The minimum duration of commercial leases is nine years. We cannot terminate the lease before such period except in very specific cases (such as reconstructing or elevating an existing building). The tenant, on the other hand, has the power to terminate the lease at the end of each three-year period. However, in leases of premises to be used exclusively as office spaces, such power of the tenant can be contractually removed.

The tenant has also a right of renewal of the lease at the end of its initial period and a right to a revision of the rent every three years. The rent variation is capped. Except in the case where the rental value considerably changes (increase by more than 10% in case of a revision upon a three-year period), the variation of the rent, in case of a revision upon a three-year period or in case of a renewal, cannot exceed the variation of the Commercial Rents Index (indice trimestriel des loyers commerciaux) or the Retail Rental Index (indice trimestriel des loyers des activités tertiaires). However, this provision does not apply in case of a renewal of a lease, the initial duration of which exceeded nine years or the effective duration of which exceeded twelve years. In addition, even in the case of a renewed or revised lease where the rental value has considerably changed, the rent increase cannot exceed 10% of the rent paid during the previous year.

Moreover, the tenant has a right of first refusal if the leased premises are offered for sale. However, this right can be contractually removed.

The legal distribution of charges between us and the tenant can be contractually set out. However, articles L. 145-40-2 and R. 145-35 of the French commercial code, which result from French law no. 2014-626 of June 18, 2014, make it mandatory for the property owner in leases entered into on or after November 3, 2014 to incur expenditures for major repairs, in particular those related to the obsolescence of the properties and those required to meet changing legal regulation. It also forces the property owner to incur certain taxes.

Bankruptcy Law

In France, a safeguarding (sauvegarde), judicial restructuring (redressement judiciaire) or judicial liquidation (liquidation) procedure commencement order against an insolvent tenant does not lead to the automatic termination of the lease. In such cases, we will not be able to get paid directly by the tenant any rent due before the commencement order. Furthermore, the tenant, via the insolvency court appointed receiver, will have the choice to continue or reject any unexpired lease. If the tenant chooses to continue an unexpired lease, but still fails to pay the rent in connection with the occupancy after the issue of the commencement order, we cannot legally request the termination of the lease before the end of a three-month period from the date of issue of the commencement order.

Environmental Law

In France, our investments are subject to regulations regarding the accessibility of buildings to persons with disabilities, public health and the environment, covering a number of areas, including the ownership and use of classified facilities, the use, storage, and handling of hazardous materials in building construction; inspections for asbestos, lead, and termites; inspection of gas and electricity facilities; assessments of energy efficiency; and assessments of technological and natural risks.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the JOBS Act and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” These exemptions include not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

65

Although we are still evaluating the JOBS Act, we may take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us as long as we qualify as an emerging growth company, except that we have irrevocably elected not to take advantage of the extension of time to comply with new or revised financial accounting standards available under Section 102(b) of the JOBS Act.

We will, in general, remain as an emerging growth company for up to five full fiscal years following the Distribution. We would cease to be an emerging growth company and, therefore, become ineligible to rely on the above exemptions, if we:

• have more than $1 billion in annual revenue in a fiscal year;

• issue more than $1 billion of non-convertible debt during the preceding three-year period; or

• become a “large accelerated filer” as defined in Exchange Act Rule 12b-2, which would occur after: (i) we have filed at least one annual report pursuant to the Exchange Act; (ii) we have been an SEC-reporting company for at least 12 months; and (iii) the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.

66

DISTRIBUTION POLICY

We intend to make distributions to holders of our Common Stock on a quarterly basis. Evaluation of our distribution policy and the decision to make a distribution will be made solely at the discretion of our board of directors and will be based on factors including, but not limited to, CAD, NOI, our ability to generate income, availability of existing cash balances, the performance of our business, capital requirements, applicable law, access to cash in the capital markets and other financing sources, distribution requirements necessary to maintain our qualification as a REIT, general economic conditions and economic conditions that more specifically impact our business or prospects and other factors our board of directors deems relevant.

Future distribution levels are subject to adjustment based upon any one or more of the factors set forth above, the matters discussed under “Risk Factors” in this prospectus or any other document we file with the SEC under the Exchange Act and other factors that our board of directors may, from time to time, deem relevant to consider when determining an appropriate common stock distribution. Our board of directors may also determine not to make any distribution.

For more information about our ability to make distributions on the classes and series of stock we are authorized to issue, please refer to the sections entitled “Risk Factors — Risks Related to Our Company” and “Description of Capital Stock” of this prospectus. For more information about distribution requirements in connection with qualifying as and maintaining qualified as a REIT, refer to “Federal Income Tax Consequences of our Status as a REIT— Requirements for Qualification Distribution Requirements.”

67

SELECTED FINANCIAL DATA

The combined financial information of the NorthStar Europe Predecessor includes:

• Prior Owner Period - The U.K. Complex and an allocation of certain costs and expenses related to the launch of our European Real Estate Business for periods prior to September 16, 2014, which is the date NorthStar Realty acquired the U.K. Complex; and

• NorthStar Owner Period - The U.K. Complex and business activities related to our European Real Estate Business for periods from and subsequent to September 16, 2014.

Collectively, the Prior Owner Period and the NorthStar Owner Period represent the NorthStar Europe Predecessor. We have not presented historical information for NorthStar Europe because we have not engaged in any corporate activity since our formation other than the issuance of shares in connection with our initial capitalization and the issuance of the Senior Notes. The combined financial information of the NorthStar Europe Predecessor does not include our New European Investments.

This selected financial information should be read in conjunction with “Unaudited Pro Forma Financial Information” and corresponding notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the audited combined financial statements and the notes thereto and the unaudited interim combined financial statements and the notes thereto included elsewhere in this prospectus. Amounts reported in the combined statements of operations are translated to the U.S. dollar using the average exchange rate for the periods presented. Amounts reported on the combined balance sheets are translated to the U.S. dollar at an exchange rate as of the respective reporting date.

The selected combined balance sheet as of December 31, 2014 and combined statement of operations for the period from September 16, 2014 through December 31, 2014 represent the NorthStar Owner Period. The selected combined balance sheet as of December 31, 2013 and combined statements of operations for the period from January 1, 2014 through September 15, 2014 and the year ended December 31, 2013 represent the Prior Owner Period. This selected financial information is derived from the audited combined financial statements of the NorthStar Europe Predecessor included elsewhere in this prospectus.

The selected combined balance sheet information as of June 30, 2015 and the combined selected combined statements of operations for the six months ended June 30, 2015 and 2014 have been derived from the unaudited interim combined financial statements of the NorthStar Europe Predecessor included elsewhere in this prospectus. Such unaudited interim combined financial statements include all adjustments considered necessary for a fair presentation of the NorthStar Europe Predecessor’s financial position and results of operations and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year.

The historical results of the NorthStar Europe Predecessor are not necessarily indicative of the historical results of our European Real Estate Business, NorthStar Europe or the future results of NorthStar Europe. The audited combined financial statements of the NorthStar Europe Predecessor do not include all assets and liabilities to be contributed to NorthStar Europe. For instance, the audited combined financial statements of the NorthStar Europe Predecessor do not include our New European Investments. Additionally, the combined statements of operations of the NorthStar Europe Predecessor include an allocation of certain costs and expenses incurred by NorthStar Realty on behalf of the NorthStar Europe Predecessor, which although based on certain assumptions and estimates believed to be reasonable may differ from actual results.

The following tables present selected financial information for NorthStar Europe Predecessor (dollars in thousands):

	NorthStar Owner Period			Prior Owner Period			NorthStar Owner Period			Prior Owner Period
	Six Months Ended June 30,						Period from September 16 to December 31			Period from January 1 to September 15			Year Ended
	2015			2014			2014			2014			2013
Operating Data:
Rental and escalation income	$	4,753		$	5,181		$	2,722		$	7,162		$	9,869
Total expenses	6,465			10,180			7,839			13,569			12,163
Net income (loss)	(1,577		)	(2,663		)	(5,288		)	(3,007		)	1,633
Net income (loss) attributable to NorthStar Europe Predecessor	(1,556		)	(2,663		)	(5,012		)	(3,007		)	1,633

68

	NorthStar Owner Period				Prior Owner Period
	June 30,		December 31,		December 31,
	2015		2014		2013
Balance Sheet Data:
Cash	$	3,265	$	1,552	$	1,350
Mortgage notes payable	78,585		77,660		47,895
Total assets	104,692		102,826		90,951
Total liabilities	82,115		81,947		67,367
Total equity	22,577		20,879		23,584

69

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following tables present unaudited pro forma combined financial statements of our European Real Estate Business consisting of pro forma combined results of operations for the six months ended June 30, 2015 and year ended December 31, 2014 and a pro forma combined balance sheet as of June 30, 2015, comprised of the following:

• NorthStar Europe Predecessor - includes: (i) the U.K. Complex, which is a $100 million multi-tenant leasehold office complex located in the United Kingdom purchased in September 2014; and (ii) an allocation of certain costs and expenses from activities related to the launch of our European Real Estate Business.

• New European Investments:

• SEB Portfolio - $1.3 billion portfolio primarily comprised of multi-tenant office properties located throughout Europe purchased by NorthStar Realty in April 2015;

• Internos Portfolio - $225 million portfolio comprised of 12 primarily multi-tenant office properties located throughout Europe purchased by NorthStar Realty in April 2015;

• IVG Portfolio - $212 million portfolio comprised of 15 primarily multi-tenant office properties located throughout Europe purchased by NorthStar Realty in April 2015;

• Deka Portfolio - $99 million portfolio comprised of ten primarily multi-tenant office properties located throughout Europe purchased by NorthStar Realty in April 2015; and

• Trianon Tower - $620 million office tower located in Frankfurt, Germany purchased by NorthStar Realty in July 2015.

The unaudited pro forma combined statements of operations represent our European Real Estate Business for the six months ended June 30, 2015 and year ended December 31, 2014 and gives effect to the spin-off of our European Real Estate Business from NorthStar Realty as if it occurred on January 1, 2014. The pro forma combined balance sheet assumes the spin-off of our European Real Estate Business from NorthStar Realty occurred as of June 30, 2015.

The year ended December 31, 2014 is comprised of: (i) the period of our ownership of the U.K. Complex from September 16, 2014 to December 31, 2014, or the NorthStar Owner Period; and (ii) the period from January 1, 2014 to September 15, 2014 represents a period prior to our ownership, or the Prior Owner Period. Therefore, the amounts presented for the year ended December 31, 2014 may not be comparable to future periods.

The unaudited pro forma combined financial statements of our European Real Estate Business are not necessarily indicative of what our financial condition or results of operations would have been for the periods presented, nor are they representative of the future financial condition or results of operations of NorthStar Europe. The unaudited pro forma combined financial statements of our European Real Estate Business should be read in conjunction with the audited combined financial statements and the notes thereto of the NorthStar Europe Predecessor and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” both of which are included elsewhere in this prospectus.

70

The following table presents the unaudited pro forma combined statements of operations of our European Real Estate Business for the six months ended June 30, 2015 and year ended December 31, 2014 (dollars in thousands, except share and per share data):

	Six Months Ended June 30, 2015
	NorthStar Europe Predecessor(1)			Pro Forma Adjustments(2)		Other				Pro Forma(3)
Revenues
Rental and escalation income	$	4,753		$	61,694	$	—			$	66,447
Other revenues	1			—		—				1
Total revenues	4,754			61,694		—				66,448
Expenses
Management fee, related party	—			—		7,000			(4)	7,000
Operating expenses	1,770			11,456		—				13,226
Interest expense	1,523			12,332		7,863			(5)	21,718
General and administrative expenses	1,358			—		—				1,358
Depreciation and amortization	1,814			27,688		—				29,502
Other expenses	—			2,132		—				2,132
Total expenses	6,465			53,608		14,863				74,936
Other income (loss)
Unrealized gain (loss) on investments and other	41			—		—				41
Realized gain (loss) on investments and other	(14		)	—		—				(14		)
Income (loss) before income tax benefit (expense)	(1,684		)	8,086		(14,863		)		(8,461		)
Income tax benefit (expense)	107			—		—				107
Net income (loss)	(1,577		)	8,086		(14,863		)		(8,354		)
Net (income) loss attributable to non-controlling interests	21			—		—				21
Net income (loss) attributable to NorthStar Europe	$	(1,556	)	$	8,086	$	(14,863	)		$	(8,333	)
Earnings (loss) per share:
Basic
Diluted
Weighted average number of shares:(6)
Basic
Diluted

71

	Year ended December 31, 2014
	NorthStar Europe Predecessor(1)			Pro Forma Adjustments(2)		Other				Pro Forma(3)
Revenues
Rental and escalation income	$	9,884		$	134,904	$	—			$	144,788
Other revenues	1,329			—		—				1,329
Total revenues	11,213			134,904		—				146,117
Expenses
Management fee, related party	—			—		14,000			(4)	14,000
Operating expenses	4,294			22,978		—				27,272
Transaction costs	4,198			—		(4,198		)	(7)	—
Interest expense	3,651			24,371		19,133			(5)	47,155
General and administrative expenses	5,883			—		—				5,883
Depreciation and amortization	3,382			62,995		394			(8)	66,771
Other expenses	—			4,264		—				4,264
Total expenses	21,408			114,608		29,329				165,345
Other income (loss)
Unrealized gain (loss) on investments and other	1,900			—		—				1,900
Income (loss) before income tax benefit (expense)	(8,295		)	20,296		(29,329		)		(17,328		)
Income tax benefit (expense)	—			—		—				—
Net income (loss)	(8,295		)	20,296		(29,329		)		(17,328		)
Net (income) loss attributable to non-controlling interests	276			—		460			(8)	736
Net income (loss) attributable to NorthStar Europe	$	(8,019	)	$	20,296	$	(28,869	)		$	(16,592	)
Earnings (loss) per share:
Basic
Diluted
Weighted average number of shares:(6)
Basic
Diluted

72

The following table presents our unaudited pro forma combined balance sheet of our European Real Estate Business as of June 30, 2015 (dollars in thousands):

	NorthStar Europe Predecessor		Pro Forma Adjustments(9)		Other			Pro Forma(3)
Assets
Cash	$	3,265	$	3,848	$	330,986	(10)	$	338,099
Restricted cash	6,106		—		—			6,106
Operating real estate, net	54,985		1,683,027		—			1,738,012
Receivables	1,031		—		—			1,031
Unbilled rent receivable, net	694		—		—			694
Derivative assets, at fair value	1,134		28,015		—			29,149
Deferred costs and intangible assets, net	35,232		180,566		9,014		(10)	224,812
Other assets	2,245		572		—			2,817
Total assets	$	104,692	$	1,896,028	$	340,000		$	2,340,720
Liabilities
Mortgage and other notes payable	$	78,585	$	1,192,574	$	—		$	1,271,159
Senior notes	—		—		340,000		(10)	340,000
Accounts payable and accrued expenses	824		—		—			824
Other liabilities	2,706		24,087		—			26,793
Total liabilities	82,115		1,216,661		340,000			1,638,776
Equity
NorthStar Europe equity	21,439		677,790		—			699,229
Non-controlling interests	1,138		1,577		—			2,715
Total equity	22,577		679,367		—			701,944
Total liabilities and equity	$	104,692	$	1,896,028	$	340,000		$	2,340,720

__________________

(1) The year ended December 31, 2014, includes the Prior Owner Period from January 1, 2014 through September 15, 2014 and NorthStar Owner Period from September 16, 2014 through December 31, 2014. The six months ended June 30, 2015 represents the NorthStar Owner Period.

(2) The following summarizes the pro forma adjustments related to our New European Investments for the six months ended June 30, 2015 and year ended December 31, 2014 (dollars in thousands):

	Six Months Ended June 30, 2015
	SEB Portfolio						Internos Portfolio					Trianon Tower							Other Pro Forma Adjustments(viii)
	Historical (i)		Pro Forma Adjustments				Historical (i)		Pro Forma Adjustments			Historical(i)			Pro Forma Adjustments						Total
Revenues
Rental and escalation income	$	39,906	$	758		(ii)	$	—	$	—	(ii)	$	18,486		$	2,544		(ii)	$	—	$	61,694
Total revenues	39,906		758				—		—			18,486			2,544				—		61,694
Expenses
Interest expense	—		9,506			(iii)	—		—		(iii)	—			2,826			(iii)	—		12,332
Operating expenses	5,564		719			(iv)	—		—			5,173		(iv)	—			(iv)	—		11,456
Depreciation and amortization	—		18,990			(v)	—		—		(v)	—			8,698			(v)	—		27,688
Other expenses	—		2,132				—		—			—			—				—		2,132
Total expenses	5,564		31,347				—		—			5,173			11,524				—		53,608
Income (loss) before income tax benefit (expense)	34,342		(30,589		)		—		—			13,313			(8,980		)		—		8,086
Income tax benefit (expense)	—		—			(vi)	—		—		(vi)	—			—			(vi)	—		—
Net income (loss)	34,342		(30,589		)		—		—			13,313			(8,980		)		—		8,086
Net (income) loss attributable to non-controlling interests	—		—			(vii)	—		—			—			—			(vii)	—		—
Net income (loss) attributable to NorthStar Europe	$	34,342	$	(30,589	)		$	—	$	—		$	13,313		$	(8,980	)		$	—	$	8,086

73

	Year Ended December 31, 2014
	SEB Portfolio						Internos Portfolio					Trianon Tower							Other Pro Forma Adjustments(viii)
	Historical(i)		Pro Forma Adjustments				Historical(i)		Pro Forma Adjustments			Historical(i)			Pro Forma Adjustments						Total
Revenues
Rental and escalation income	$	86,117	$	2,959		(ii)	$	—	$	—	(ii)	$	40,741		$	5,087		(ii)	$	—	$	134,904
Total revenues	86,117		2,959				—		—			40,741			5,087				—		134,904
Expenses
Interest expense	—		16,319			(iii)	—		—		(iii)	—			8,052			(iii)	—		24,371
Operating expenses	8,400		597			(iv)	—		—			13,981		(iv)	—			(iv)	—		22,978
Depreciation and amortization	—		45,598			(v)	—		—		(v)	—			17,397			(v)	—		62,995
Other expenses	—		4,264				—		—			—			—				—		4,264
Total expenses	8,400		66,778				—		—			13,981			25,449				—		114,608
Income (loss) before income tax benefit (expense)	77,717		(63,819		)		—		—			26,760			(20,362		)		—		20,296
Income tax benefit (expense)	—		—			(vi)	—		—		(vi)	—			—			(vi)	—		—
Net income (loss)	77,717		(63,819		)		—		—			26,760			(20,362		)		—		20,296
Net (income) loss attributable to non-controlling interests	—		—			(vii)	—		—			—			—			(vii)	—		—
Net income (loss) attributable to NorthStar Europe	$	77,717	$	(63,819	)		$	—	$	—		$	26,760		$	(20,362	)		$	—	$	20,296

_____________________________

(i) Represents audited financial statements of revenues and certain expenses for our New European Investments for the year ended December 31, 2014 and unaudited financial statements of revenues and certain expenses for our New European Investments for the six months ended June 30, 2015. The SEB Portfolio and the Internos Portfolio were acquired in April 2015 and the Trianon Tower was acquired in July 2015.

(ii) Represents an adjustment to reflect amortization of above and below market leases for each respective New European Investment.

(iii) Represents interest expense for new borrowings for each respective New European Investment and includes amortization of deferred financing costs. The terms of such borrowings are described in “Business—Our Properties” of this prospectus. The estimated amortization period of deferred financing costs ranges from seven to 45 years.

(iv) Represents an adjustment for third party property management and other fees for the SEB Portfolio. Third party management and other fees for the Trianon Tower are included in the historical period and therefore, no adjustment is necessary.

(v) Represents depreciation and amortization expense based on a preliminary purchase price allocation for our New European Investments. The purchase price allocation is a preliminary estimate and may be adjusted within one year of the acquisition in accordance with U.S. GAAP. The depreciation and amortization periods range from one to 40 years.

(vi) We estimate our effective tax rate to be approximately on a blended basis based on projected earnings from our Current European Portfolio.

(vii) We are entitled to a 100% allocation of net income (loss) as a result of the allocation formula as set forth in the governing documents.

(viii) Represents adjustments related to the IVG Portfolio and Deka Portfolio, both acquired in April 2015.

(3) The functional currency of NorthStar Europe is U.S. dollars and the functional currency of the properties comprising our European Real Estate Business is the local currency where the property is located, predominately the Euro. As such, the operations are translated to U.S. dollar using the average exchange rate during the respective period. Additionally, assets and liabilities of such properties denominated in a foreign currency are translated to the U.S. dollar using the currency exchange rate at the end of the period presented. Our New European Investments presented in the unaudited pro forma combined balance sheet are translated using the currency exchange rate as of June 30, 2015.

(4) Represents a pro forma adjustment to reflect asset management and other fees incurred in accordance with the management agreement with NSAM, the terms of which are described in “Corporate Governance and Management—Our Manager—Management Agreement” of this prospectus. The current base management fee of $14 million annually is based on our Current European Portfolio and does not include any adjustment related to the NSAM incentive fee.

(5) Represents a pro forma adjustment to reflect interest expense (including amortization of related deferred financing costs) related to NorthStar Europe’s issuance of the Senior Notes, in July 2015 of $7.9 million and $15.7 million for the six months ended June 30, 2015 and the year ended December 31, 2014, respectively. The year ended December 31, 2014 also includes a pro forma adjustment to reflect interest expense (including amortization of related deferred financing costs) related to NorthStar Europe Predecessor of $3.4 million during the Prior Owner Period.    

(6) Weighted average shares used to compute basic and diluted earnings per share represents the number of weighted average shares of Common Stock assumed to be outstanding based on a distribution ratio of one share of NorthStar Europe Common Stock for every share of NorthStar Realty common stock. The actual number of our basic and diluted shares outstanding will not be known until the Distribution.

(7) Transaction costs related to our Current European Portfolio include legal, accounting, tax and other professional services and are not included as part of the pro forma combined statements of operations.

(8) Represents pro forma adjustments related to NorthStar Europe Predecessor during the Prior Owner Period.

74

(9) The following summarizes the pro forma adjustments related to our New European Investments for the unaudited pro forma combined balance sheet as of June 30, 2015 (dollars in thousands):

	As of June 30, 2015(i)(ii)
	SEB Portfolio		Internos Portfolio		Trianon Tower		Other Pro Forma Adjustments(iii)		Total
Assets
Cash	$	3,848	$	—	$	—	$	—	$	3,848
Operating real estate, net	1,130,917		—		552,110		—		1,683,027
Derivative assets, at fair value	8,015		—		20,000		—		28,015
Deferred costs and intangible assets, net	135,560		—		45,006		—		180,566
Other assets	—		—		572		—		572
Total assets	$	1,278,340	$	—	$	617,688	$	—	$	1,896,028
Liabilities
Mortgage and other notes payable	$	826,459	$	—	$	366,115	$	—	$	1,192,574
Other liabilities	24,087		—		—		—		24,087
Total liabilities	850,546		—		366,115		—		1,216,661
Equity
NorthStar Europe equity	427,681		—		250,109		—		677,790
Non-controlling interests	113		—		1,464		—		1,577
Total equity	427,794		—		251,573		—		679,367
Total liabilities and equity	$	1,278,340	$	—	$	617,688	$	—	$	1,896,028

_____________________________

(i) Represents the preliminary purchase price allocation for each of the properties that comprise our New European Investments. The purchase price allocation is a preliminary estimate and may be adjusted within one year of the acquisition in accordance with U.S. GAAP. The purchase price of each portfolio represents the fair value of the assets acquired and liabilities assumed. The pro forma balance sheet includes an adjustment for transaction costs.

(ii) Our New European Investments are predominantly denominated in Euro and GBP. The initial purchase price allocation is translated based on the exchange rate to the U.S. dollar as of June 30, 2015.

(iii) Represents adjustments related to the IVG Portfolio and Deka Portfolio.

(10) Represents a pro forma adjustment to reflect NorthStar Europe’s issuance of the Senior Notes, including related deferred financing costs. We may elect, upon satisfaction of certain conditions, to settle all or part of the principal amount of the Senior Notes in our Common Stock in lieu of cash. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments” for further discussion. Excludes any additional cash that may be contributed upon Distribution.

75

CAPITALIZATION TABLE

The following table sets forth our capitalization as of June 30, 2015: (i) on a historical basis of NorthStar Europe Predecessor; and (ii) on an as adjusted basis to give effect to the pro forma adjustments included in our unaudited pro forma combined financial information included elsewhere in this prospectus. The information below is not necessarily indicative of what our capitalization would have been had the Distribution been completed as of June 30, 2015. In addition, this information is not indicative of our future capitalization.

The following table should be read in conjunction with the sections entitled “Selected Financial Data,” “Unaudited Pro Forma Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus (dollars in thousands):

	NorthStar Europe Predecessor		Pro Forma Prior to the Distribution	As Adjusted
Liabilities	$	82,115
Equity
NorthStar Europe equity	21,439
Non-controlling interests	1,138
Total equity	22,577
Total liabilities and equity	$	104,692

76

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We describe in this prospectus our European Real Estate Business, which includes the NorthStar Europe Predecessor and our New European Investments, to be contributed to NorthStar Europe by NorthStar Realty as if the spin-off has already occurred. However, NorthStar Europe is a newly-formed entity that will not have conducted any separate operations prior to the spin-off. The financial results of the NorthStar Europe Predecessor or of our New European Investments operated as part of NorthStar Realty may not be indicative of NorthStar Europe’s financial results upon consummation of the spin-off or of the financial results of NorthStar Europe had it owned the U.K. Complex and our New European Investments as an independent public company for the periods presented.

The following discussion may not contain all of the information that is important to you and should be read in conjunction with the combined financial statements of the NorthStar Europe Predecessor and the notes thereto included in “Financial Statements,” the unaudited pro forma financial information included in “Unaudited Pro Forma Financial Information” beginning on page 70 and the risk factors included in “Risk Factors” beginning on page 17 of this prospectus.

Overview

We are a newly-formed European commercial real estate company with approximately $2.6 billion, at cost, of investments located throughout nine countries in Europe. We have the ability to invest in a broad spectrum of European commercial real estate. We are currently predominantly focused on office properties and may expand by acquiring other types of commercial real estate located throughout Europe. We expect to make equity investments, directly or indirectly through joint ventures, in a diversified portfolio of European commercial real estate that offers the opportunity to generate attractive risk-adjusted returns. We seek to generate stable cash flow for distribution to our stockholders and in turn build long-term franchise value.

We will be externally managed and advised by NSAM. We are a Maryland corporation and intend to conduct our operations so as to qualify as a REIT for U.S. federal income tax purposes beginning with the year ending December 31, 2015.

We seek to access a wide range of secured and unsecured debt and public and private equity capital sources to grow and fund our investment activities. We expect to predominantly use investment-level financing as part of our strategy to prudently leverage our investments and deliver attractive risk-adjusted returns to our stockholders. We expect to target overall leverage of 40% to 50%, although there is no assurance that this will be the case. We plan to pursue a variety of financing arrangements such as mortgage notes and bank loans available from the CMBS market, finance companies and banks. In addition, we may use corporate-level financing such as credit facilities and other borrowings. We generally seek to limit our reliance on recourse borrowings. Borrowing levels for our investments may be dependent upon the nature of the investments and the related financing that is available.

The current availability of attractive long-term, non-recourse, non-mark-to-market financing through the European bank markets has bolstered opportunities to acquire real estate. For longer duration, relatively stable cash flow investments, such as those derived from net lease investments, we may use fixed rate financing. For investment cash flow with greater growth potential, we expect to use floating rate financing, which provides prepayment flexibility and may provide a better match between underlying cash flow projections and potential increases in interest rates. Where we use floating rate financing, we expect to generally attempt to mitigate the risk of interest rates rising through hedging arrangements including interest rate swaps and caps. We may vary the mix of fixed and floating rate debt and use a combination of the two when we deem it appropriate. We also may utilize corporate-level financing in the future.

We believe that we maintain a competitive advantage through a combination of deep industry relationships and access to market leading commercial real estate credit underwriting and capital markets expertise which enables us to manage credit risk across our business lines as well as to structure and finance our investments efficiently. Our ability to invest across the spectrum of investments allows us to take advantage of complementary and overlapping sources of investment opportunities based on a common reliance on commercial real estate fundamentals and application of similar underwriting and asset management skills as we seek to maximize stockholder value and to protect our capital.

Sources of Operating Revenues and Cash Flows

We primarily generate revenue from rental and other operating income from our real estate properties. Our income is primarily derived through the difference between revenue and the cost at which we are able to finance our investments. We may also acquire investments which generate attractive returns without any leverage.

77

Profitability and Performance Metrics

We calculate several metrics to evaluate the profitability and performance of our business but our principal performance metrics are CAD and NOI (refer to “Non-GAAP Financial Measures” for a description of theses metrics).

Outlook and Recent Trends

The global economic and financial crisis of 2008 and 2009 had a dramatic negative impact on the proper functioning of the global capital markets and liquidity across all asset classes and markets. While conditions began to improve in the United States in 2012, recovery in Europe remained slow and uncertain, in particular due to the threat of a widespread sovereign debt crisis. However, the European economy has been steadily recovering. We believe that the economic environment in Europe has stabilized and the foundations are in place for a gradual and sustained recovery. Despite the overall positive outlook, regional disparities continue to exist as European economies recover at different speeds. As a result, attractive investment opportunities exist in Europe for investors who are able to take a long-term view on the European recovery. Historically wide spreads between capitalization yields and interest rates, coupled with property values, particularly as compared to the United States, remaining below their historical peaks in many markets within the European Union create a compelling long-term investment environment in Europe. At the same time, the investment market has also continued to improve as investment volumes approach pre-financial crisis levels, with the office sector continuing to drive investment activity. As financial institutions and asset management agencies continue to deleverage, we anticipate that there will be further opportunities to acquire portfolios and investments at an attractive long term basis.

Virtually all commercial real estate property types were adversely impacted by the global economic and financial crisis. Despite improvements in the global economy, uncertainty remains as to the extent and timing of further recovery. Issues with the instability of credit and financial markets, actions by governments or central banks, weak consumer confidence in many markets and geopolitical or economic instability in certain countries continues to put pressure on the European economy. Instability or volatility of certain countries in the European Union may create risks for stronger countries within the European Union and globally. A return to weak economic conditions in the future, or a lack of continued recovery in Europe, could reduce a tenant’s ability to make payments in accordance with the contractual terms and for companies to lease or occupy new space. To the extent that market rental and occupancy rates are reduced, property-level cash flow could be negatively affected.

Critical Accounting Policies

Basis of Accounting

The combined financial statements and related notes are presented on a carve-out basis and have been prepared from the historical combined balance sheets, statements of operations, comprehensive income (loss) and cash flows attributed to the NorthStar Europe Predecessor in accordance with U.S. GAAP. Historically, financial statements of the NorthStar Europe Predecessor have not been prepared as it has not operated separately from NorthStar Realty. These combined financial statements reflect the revenues and direct expenses of the NorthStar Europe Predecessor and include material assets and liabilities of NorthStar Realty that are specifically identifiable to us. Additionally, the combined financial statements include an allocation of costs and expenses by NorthStar Realty related to the NorthStar Europe Predecessor (primarily compensation and other general and administrative expense) based on an estimate of expenses had the NorthStar Europe Predecessor been run as an independent entity. This allocation method is principally based on relative head count and management’s knowledge of our operations. The amounts allocated in the accompanying combined financial statements are not necessarily indicative of the actual amount of such indirect expenses that would have been recorded had we been a separate independent entity. We believe the assumptions underlying its allocation of indirect expenses are reasonable.

NorthStar Europe Predecessor was determined to be the predecessor for accounting purposes and accordingly, followed S-X Rules 3-01 through 3-04 and Rule 12-28. Because the U.K. Complex was acquired from an unrelated third party on September 16, 2014, a “blackline” presentation for the change in basis giving effect to purchase accounting pursuant to U.S. GAAP is presented.

Principles of Consolidation

Our consolidated financial statements will include the accounts of NorthStar Realty Europe Corp. and its consolidated subsidiaries. We will consolidate variable interest entities, or VIEs, where we are the primary beneficiary and voting interest entities which are generally majority owned or otherwise controlled by us. All significant intercompany balances will be eliminated in consolidation.

Variable Interest Entities

A VIE is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk

78

for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. We will base the qualitative analysis on our review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity. We will reassess the initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events.

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

We will evaluate our investments in unconsolidated ventures to determine whether they are a VIE. We will analyze new investments and financings, as well as reconsideration events for existing investments and financings, which vary depending on type of investment or financing.

Voting Interest Entities

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

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

Investments in Unconsolidated Ventures

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

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

We may account for an investment in an unconsolidated entity at fair value by electing the fair value option where we would record the change in fair value in the combined statements of operations.

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

Non-controlling Interests

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

79

Operating Real Estate

Operating real estate is carried at historical cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their useful life. Operating real estate is depreciated using the straight-line method over the estimated useful lives of the assets. We follow the purchase method for an acquisition of operating real estate, where the purchase price is allocated to tangible assets such as land, building, tenant and land improvements and other identified intangibles, such as goodwill. Ordinary repairs and maintenance will be expensed as incurred. Major replacements and betterments which improve or extend the life of the asset will be capitalized and depreciated over their useful life. Operating real estate will be depreciated using the straight-line method over the estimated useful lives of the assets. Costs directly related to an acquisition deemed to be a business combination are expensed and included in transaction costs in our combined statements of operations. Any excess upon taking title to collateral between the carrying value of a loan over the estimated fair value of the property will be charged to provision for loan losses.

Operating real estate which has met the criteria to be classified as held for sale, will be separately presented on the combined balance sheets. Such operating real estate is recorded at the lower of its carrying value or its estimated fair value less the cost to sell. Once a property is determined to be held for sale, depreciation is no longer recorded.

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 our combined 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.

Revenue Recognition

Operating Real Estate

Rental and escalation income from operating real estate will be derived from leasing of space to various types of tenants. The leases will be for fixed terms of varying length and generally provide for annual rentals and expense reimbursements 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. The excess of rents recognized over amounts contractually due pursuant to the underlying leases will be included in unbilled rent receivable on our combined balance sheets. Escalation income represents revenue from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes paid by us on behalf of the respective property. This revenue will be accrued in the same period as the expenses are incurred.

Impairment on Investments

Operating Real Estate

Our real estate portfolio is 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 is considered impaired if management’s estimate of the aggregate expected future undiscounted cash flow generated by the property is less than the carrying value of the property. In conducting this review, we consider factors including global

80

macroeconomic factors, real estate sector conditions, together with investment specific 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 of the property and recorded in impairment on operating real estate in our combined 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 a tenant to make required rent and other payments contractually due.

Investments in Unconsolidated Ventures

We will review our investments in unconsolidated ventures for which we did not elect the fair value option on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value may be impaired or that its carrying value may not be recoverable. An investment will be considered impaired if the projected net recoverable amount over the expected holding period is less than the carrying value. In conducting this review, we consider factors including global macroeconomic factors, real estate sector conditions, together with investment specific and other factors. To the extent an impairment has occurred and is considered to be other than temporary, the loss will be measured as the excess of the carrying value of the investment over the estimated fair value and recorded in provision for loss on equity investment in our combined statements of operations.

Derivatives

Derivatives are used to manage exposure to interest rate risk and foreign currency exchange rate risk. For derivatives that qualify as a cash flow hedge, the effective portion of the change in fair value of derivatives designated as a hedge will be recorded in accumulated OCI and is subsequently reclassified into income in the period that the hedged item affects income. Amounts reported in OCI that relate to the hedge of our floating-rate borrowings will be reclassified to interest expense as interest payments will be made on associated borrowings.

The change in fair value for derivatives that do not qualify as a hedge for U.S. GAAP will be recorded in earnings. If we elect the fair value option for certain of our borrowings, any derivatives designated as a qualifying hedge at the time no longer qualified for hedge accounting given that the underlying borrowing will be remeasured with changes in the fair value recorded in earnings. For such derivatives, the unrealized gain (loss) at that time will remain in accumulated OCI and will be reclassified into earnings over the life of the associated borrowing.

Foreign Currency

Assets and liabilities denominated in a foreign currency for which the functional currency is a foreign currency are translated using the currency exchange rate in effect at the end of the period presented and the results of operations for such entities are translated into U.S. dollars using the average currency exchange rate in effect during the period. The resulting foreign currency translation adjustment is recorded as a component of accumulated OCI.

Assets and liabilities denominated in a foreign currency for which the functional currency is the U.S. dollar are remeasured using the currency exchange rate in effect at the end of the period presented and the results of operations for such entities are remeasured into U.S. dollars using the average currency exchange rate in effect during the period. The resulting foreign currency remeasurement adjustment is recorded in unrealized gain (loss) on investments and other in the combined statements of operations.

Results of Operations

We have not presented historical information for NorthStar Europe because we have not engaged in any corporate activity since our formation other than the issuance of shares in connection with our initial capitalization and the issuance of the Senior Notes. We have presented financial information for our predecessor, NorthStar Europe Predecessor, in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which includes:

• Prior Owner Period - The U.K. Complex and an allocation of certain costs and expenses related to the launch of our European Real Estate Business for periods prior to September 16, 2014, which is the date NorthStar Realty acquired the U.K. Complex; and

• NorthStar Owner Period - The U.K. Complex and business activities related to our European Real Estate Business for periods subsequent to September 16, 2014.

Collectively, the Prior Owner Period and the NorthStar Owner Period represent the NorthStar Europe Predecessor.

The acquisition of the U.K. Complex by NorthStar Realty was accounted for as a business combination. As a result, the financial results presented in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” have

81

been presented separately for the Prior Owner Period and the NorthStar Owner Period for the year ended December 31, 2014. Refer to Note 1 to the audited combined financial statements of the NorthStar Europe Predecessor for more detail.

The combined financial information included in this prospectus does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly-traded company during the periods presented or those that we will achieve in the future primarily as a result of the following factors:

• the combined financial information of the NorthStar Europe Predecessor does not include our New European Investments; and

• the combined statements of operations of the NorthStar Europe Predecessor includes an allocation of certain costs and expenses incurred by NorthStar Realty on behalf of the NorthStar Europe Predecessor, which although based on certain assumptions and estimates believed to be reasonable may differ from actual results.

Comparison of the Six Months Ended June 30, 2015 to June 30, 2014 (Dollars in Thousands):

	NorthStar Owner Period			Prior Owner Period
	Six Months Ended June 30,						Increase (Decrease)
	2015			2014			Amount			%
Revenues
Rental and escalation income	$	4,753		$	5,181		$	(428	)	(8.26	)%
Other revenues	1			925			(924		)	(99.89	)%
Total revenues	4,754			6,106			(1,352		)	(22.14	)%
Expenses
Operating expenses	1,770			2,212			(442		)	(19.98	)%
Interest expense	1,523			2,453			(930		)	(37.91	)%
General and administrative expenses	1,358			3,922			(2,564		)	(65.37	)%
Depreciation and amortization	1,814			1,593			221			13.87	%
Total expenses	6,465			10,180			(3,715		)	(36.49	)%
Other income (loss)
Unrealized gain (loss)	41			1,414			(1,373		)	(97.10	)%
Realized gain (loss)	(14		)	—			(14		)	—	%
Income (loss) before income tax benefit (expense)	(1,684		)	(2,660		)	976			(36.69	)%
Income tax benefit (expense)	$	107		$	(3	)	110			(3,666.67	)%
Net income (loss)	$	(1,577	)	$	(2,663	)	$	1,086		(40.78	)%

Revenues

Rental and Escalation Income

Rental and escalation income consists of rental revenue and tenant recoveries. Rental and escalation income decreased $0.4 million primarily due to a reduction in recoverable service charges during the NorthStar Owner Period.

Other Revenue

Other revenue for the six months ended June 30, 2014 is related to the Prior Owner Period and was attributable to sundry income.

Expenses

Operating Expenses

Operating expenses decrease of $0.4 million was primarily attributable to lower nonrecoverable operating expesnes and other professional fees incurred in the Prior Owner Period.

Interest Expense

Interest expense decrease of $0.9 million was primarily attributable to a new mortgage notes payable associated with NorthStar Realty’s acquisition of the U.K. Complex in September 2014.

82

General and Administrative Expenses

General and administrative expenses are principally incurred at the corporate level. General and administrative expenses represents an allocation of certain costs and expenses related to activities for the launch of our European Real Estate Business. The six months ended June 30, 2015 also includes $0.2 million related to an allocation of general and administrative expenses, primarily salaries and other professional fees, had NorthStar Europe Predecessor been a stand alone company. Decrease of $2.6 million was primarily attributable to a lower allocation of certain costs and expenses due to higher costs to launch European Real Estate Business for the six months ended June 30, 2014.

Depreciation and Amortization

Depreciation and amortization expense increased $0.2 million primarily due to a preliminary purchase price allocation of the U.K. Complex acquired by NorthStar Realty in September 2014.

Other Income (Loss)

Unrealized Gain (Loss)

Unrealized gain (loss) was related to foreign currency remeasurement on assets and liabilities denominated in foreign currencies during the Prior Owner Period. Translation adjustments for the NorthStar Owner Period are recorded to OCI.

Income Tax Benefit (Expense)

The income tax benefit for the six months ended June 30, 2015 related to a deferred tax benefit for the Northstar Owner Period related to the U.K. Complex.

Comparison of the Year Ended December 31, 2014 to December 31, 2013 (Dollars in Thousands):

	NorthStar Owner Period			Prior Owner Period					Increase (Decrease)
	Period from September 16, 2014 to December 31, 2014			Period from January 1, 2014 to September 15, 2014			Year Ended 2013		Amount			%
Revenues
Rental and escalation income	$	2,722		$	7,162		$	9,869	$	15		0.15	%
Other revenues	39			1,290			1,129		200			17.71	%
Total revenues	2,761			8,452			10,998		215			1.95	%
Expenses
Operating expenses	1,181			3,113			4,002		292			7.30	%
Transaction costs	4,198			—			—		4,198			—	%
Interest expense	165			3,486			4,666		(1,015		)	(21.75	)%
General and administrative expenses	1,207			4,676			340		5,543			1,630.29	%
Depreciation and amortization	1,088			2,294			3,155		227			7.19	%
Total expenses	7,839			13,569			12,163		9,245			76.01	%
Other income (loss)
Unrealized gain (loss)	(210		)	2,110			2,798		(898		)	(32.09	)%
Net income (loss)	$	(5,288	)	$	(3,007	)	$	1,633	$	(9,928	)	(607.96	)%

Revenues

Rental and Escalation Income

Rental and escalation income consists of rental revenue and tenant recoveries.

Other Revenue

Other revenue is principally related to the Prior Owner Period and was attributable to sundry income.

Expenses

Operating Expenses

Property operating expenses increased $0.3 million due to a slight increase in consumption related costs.

83

Transaction Costs

Transaction costs primarily represented expenses such as professional fees related to NorthStar Realty’s acquisition of the U.K. Complex in September 2014.

Interest Expense

Interest expense decrease of $1.0 million was primarily attributable to new mortgage notes payable associated with NorthStar Realty’s acquisition of the U.K. Complex in September 2014.

General and Administrative Expenses

General and administrative expenses are principally incurred at the corporate level. General and administrative expenses represents an allocation of certain costs and expenses related to activities for the launch of our European Real Estate Business. The NorthStar Owner Period also includes $0.1 million related to an allocation of management fees for NSAM services had NorthStar Europe Predecessor been a stand alone company.

Depreciation and Amortization

Depreciation and amortization expense increased $0.2 million primarily due to a preliminary purchase price allocation of the U.K. Complex acquired by NorthStar Realty in September 2014.

Other Income (Loss)

Unrealized Gain (Loss)

Unrealized gain (loss) was related to foreign currency remeasurement on assets and liabilities denominated in foreign currencies during the Prior Owner Period. Translation adjustments for the NorthStar Owner Period are recorded to OCI.

Liquidity and Capital Resources

We require capital to fund our investment activities and operating expenses. Our capital sources may include cash flow from operations, financings secured by our assets such as mortgage notes, borrowings under credit facilities, long-term senior and subordinate corporate capital such as revolving credit facilities, senior term loans, senior notes, senior exchangeable notes and perpetual preferred and common stock.

We seek to meet our long-term liquidity requirements, including the repayment of borrowings and our investment funding needs, through existing cash resources, issuance of debt or equity capital, return of capital from investments and the liquidation or refinancing of assets. Nonetheless, our ability to meet a long-term (beyond one year) liquidity requirement may be subject to obtaining additional debt and equity financing. Any decision by our lenders and investors to provide us with financing will depend upon a number of factors, such as our compliance with the terms of our existing credit arrangements, our financial performance, industry or market trends, the general availability of and rates applicable to financing transactions, such lenders’ and investors’ resources and policies concerning the terms under which they make capital commitments and the relative attractiveness of alternative investment or lending opportunities.

As a REIT, we will be required to distribute at least 90% of our annual REIT taxable income to our stockholders, including taxable income where we do not receive corresponding cash, and we intend to distribute all or substantially all of our REIT taxable income in order to comply with the REIT distribution requirements of the Code and to avoid federal income tax and the non-deductible excise tax. On a quarterly basis, our board of directors will determine an appropriate common stock dividend based upon numerous factors, including CAD, NOI, REIT qualification requirements, availability of existing cash balances, borrowing capacity under existing credit agreements, access to cash in the capital markets and other financing sources, our view of our ability to realize gains in the future through appreciation in the value of our assets, general economic conditions and economic conditions that more specifically impact our business or prospects. Future dividend levels are subject to adjustment based upon our evaluation of the factors described above, as well as other factors that our board of directors may, from time-to-time, deem relevant to consider when determining an appropriate common stock dividend.

We currently believe that our existing sources of funds should be adequate for purposes of meeting our short-term liquidity needs. We expect our initial capitalization plus contractual rental income expected in our first year of operations is sufficient to meet our expected capital expenditures, interest, property operating and general and administrative expenses and common dividends that may be declared by the Company. We may seek to raise additional capital in order to finance new acquisitions.

In July 2015, we issued $340 million principal amount of Senior Notes. We received aggregate net proceeds of $331 million, after deducting the underwriters’ discount and other expenses. We may elect to settle all or part of the principal amount

84

of the Senior Notes in our Common Stock in lieu of cash. Refer to “Recent Developments” for further discussion of the Senior Notes.

Cash Flows

The following presents a summary of our combined statements of cash flows for the six months ended June 30, 2015 (NorthStar Owner Period) and 2014 (Prior Owner Period) and for the years ended December 31, 2014 and 2013 (dollars in thousands). The combined statement of cash flows for the period from September 16, 2014 through December 31, 2014 represent the NorthStar Owner Period and the combined statements of cash flows for the period from January 1, 2014 through September 15, 2014 and the year ended December 31, 2013 represent the Prior Owner Period.

	NorthStar Owner Period			Prior Owner Period			NorthStar Owner Period			Prior Owner Period
							Period From			Period From
							September 16,			January 1,
	Six Months						2014 to			2014 to			Year Ended
	Ended June 30,						December 31,			September 15,			December 31,
Cash flow provided by (used in):	2015			2014			2014			2014			2013
Operating activities	$	1,265		$	2,554		$	(6,728	)	$	(2,681	)	$	7,245
Investing activities	(338		)	(2,020		)	(89,645		)	(2,307		)	(7,263		)
Financing activities	746			(348		)	100,608			(46		)	(656		)
Effect of foreign currency translation on cash	40			(10		)	(2,683		)	3,722			545
Net increase (decrease) in cash	$	1,713		$	176		$	1,552		$	(1,312	)	$	(129	)

Six Months Ended June 30, 2015 Compared to June 30, 2014

Net cash provided by operating activities was $1.3 million for the six months ended June 30, 2015 compared to $2.6 million for the six months ended June 30, 2014. The net cash flow provided by operating activities for the six months ended June 30, 2015 was higher then the six months ended June 30, 2014 due to lower operating costs and lower costs and expenses from activities related to the launch of our European Real Estate Business in 2014.

Net cash used in investing activities was immaterial for the six months ended June 30, 2015. Net cash used in investing activities for the six months ended June 30, 2014 related to improvements of operating real estate.

Net cash provided by financing activities was $0.7 million for the six months ended June 30, 2015 due to the financing by NorthStar Realty for the acquisition of the U.K. Complex in September 2014. There was immaterial cash activity in financing activities for the six months ended June 30, 2014.

Year Ended December 31, 2014 Compared to December 31, 2013

Net cash used in operating activities was $9.4 million for the year ended December 31, 2014 compared to cash provided by operating activities of $7.2 million for the year ended December 31, 2013. The increase in net cash flow used in operating activities was primarily related to a decrease in net cash flow from operating activities, offset by costs and expenses from activities related to the launch of our European Real Estate Business in 2014.

Net cash used in investing activities was $92.0 million for the year ended December 31, 2014 compared to $7.3 million for the year ended December 31, 2013. The increase in net cash used in investing activities related to NorthStar Realty’s acquisition of the U.K. Complex in September 2014.

Net cash provided by financing activities was $100.6 million for the year ended December 31, 2014 compared to net cash used in financing activities of $0.7 million for the year ended December 31, 2013. The net cash provided by financing activities in 2014 relates to the financing by NorthStar Realty for the acquisition of the U.K. Complex in September 2014.

85

Contractual Obligations and Commitments

The following table presents contractual obligations and commitments as of December 31, 2014 (dollars in thousands):

	Payments Due by Period
	Total(1)		Less than 1 year		1-3 years		3-5 years		More than 5 years
NorthStar Europe Predecessor(2)
Mortgage and other note payable	$	77,660	$	—	$	—	$	77,660	$	—
Estimated interest payments(3)	13,664		2,763		5,526		5,375		—
Subtotal	91,324		2,763		5,526		83,035		—
Pro Forma Contractual Obligations(4)
Mortgage and other notes payable	1,439,869		—		—		—		1,439,869
Senior Notes	340,000		—		340,000		—		—
Estimated interest payments(3)	345,372		29,898		59,796		59,796		195,882
Subtotal	2,125,241		29,898		399,796		59,796		1,635,751
Total	$	2,216,565	$	32,661	$	405,322	$	142,831	$	1,635,751

_____________________

(1) Amounts denominated in foreign currencies are translated to the U.S. dollar using the currency exchange rate at the end of the period presented for the U.K. Complex and the exchange rate as of the respective acquisition or commitment date for our New European Investments included in the Pro Forma Contractual Obligations.

(2) Excludes immaterial amounts of related to an operating ground lease.

(3) Applicable LIBOR benchmark plus the respective spread and foreign currency exchange rate as of June 30, 2015 was used to estimate payments for our floating-rate liabilities.

(4) Represents pro forma contractual obligations related to our New European Investments and the Senior Notes. Refer to “Unaudited Pro Forma Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments” for further discussion of our pro forma borrowings.

The table above does not include the amounts payable to NSAM under the management agreement. The annualized fee payable to NSAM is approximately $14 million based on our Current European Portfolio. Refer to “Corporate Governance and Management—Our Manager—Management Agreement” of this prospectus for a discussion of the management agreement with NSAM, the terms of which are described therein.

Off-Balance Sheet Arrangements

We currently do not have any off-balance sheet arrangements.

Related Party Arrangements

For purposes of governing the ongoing relationships between NorthStar Realty and us after the Distribution and to provide for an orderly transition, prior to the Distribution, we and NorthStar Realty will enter into a separation agreement and a contribution agreement, each of which is or will be included as an exhibit to the registration statement of which this prospectus forms a part. These agreements will govern our relationship with NorthStar Realty subsequent to the Distribution and will also provide that all liabilities and obligations attributable to periods prior to the Distribution will remain with NorthStar Realty except for the liabilities for which NorthStar Realty agrees to contribute cash to the Company to enable the Company to pay such liabilities. For a description of the other agreements governing our ongoing relationship with NorthStar Realty, refer to “Certain Relationships and Related Party Transactions.”

In connection with the Distribution, we will enter into a management agreement with NSAM pursuant to which NSAM will manage the Company for an initial term of 20 years. The management agreement provides for: (i) an annual base management fee equal to the sum of: (a) $14 million; and (b) an additional annual base management fee equal to 1.5% per annum of the sum of: (1) cumulative net proceeds of all common equity and preferred equity issued by us or NorthStar Realty prior to the date of the Distribution, which are used to fund European investments that close subsequent to August 17, 2015 and are contributed to us in connection with the Distribution; (2) any equity we issue in exchange or conversion of notes; (3) any other issuances of common equity, preferred equity or other forms of equity, including but not limited to LTIP Units in our Operating Partnership (excluding equity-based compensation, but including issuances related to an acquisition, investment, joint venture or partnership); and (4) cumulative CAD, if any, in excess of cumulative distributions paid on common stock, LTIP Units or other equity awards beginning the first full calendar quarter after completion of the Distribution; and (ii) an incentive fee determined as described under “Corporate Governance and Management — Our Manager — Management Agreement” with each of the fees set forth in clauses (i) and (ii) being calculated and payable quarterly in arrears in cash. The current base management fee of $14 million is based on our Current European Portfolio.

86

Recent Developments

Trianon Tower

In July 2015, we acquired the Trianon Tower, a Class A office tower located in Frankfurt, Germany for an approximate €560 million ($621 million). The Trianon Tower is approximately 68,700 square meters, 98.5% occupied and has a weighted average lease term of approximately seven years with two tenants rated “AAA” and “A” comprising over 70% of gross rent. We financed the Trianon Tower with an approximate €330 million ($366 million) senior mortgage note.

Senior Notes

In July 2015, NRE, a current wholly-owned subsidiary of NorthStar Realty, issued $340 million principal amount of Senior Notes. We received aggregate net proceeds of $331 million, after deducting the underwriters’ discount and other expenses. We loaned the net proceeds from the issuance of the Senior Notes to subsidiaries of NorthStar Realty, which used such amounts for general corporate purposes, including, among other things, the funding of acquisitions, including the Trianon Tower, and the repayment of NorthStar Realty’s borrowings. We expect to enter into an agreement with NorthStar Realty at the time of the Distribution providing that we will reimburse NorthStar Realty if any principal or interest payments on the Senior Notes are made by NorthStar Realty after the Distribution. The sale of the Senior Notes to the underwriters was effected in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act. The Senior Notes are senior unsubordinated and unsecured obligations of NorthStar Europe and NorthStar Realty and NorthStar Realty Finance Limited Partnership will guarantee payments on the Senior Notes. Subject to specified conditions being met, including completion of the Distribution, the listing of our Common Stock and public notice at least 60 days prior to maturity, NorthStar Europe may elect to settle all or part of the principal amount of the Senior Notes in our Common Stock in lieu of cash, in which case the number of shares delivered per note will be based on our Common Stock prices during a measurement period immediately preceding the maturity date.

Non-GAAP Financial Measures

Management will use CAD and NOI, each a non-GAAP measure, to evaluate our profitability and our board of directors will consider CAD and NOI in determining our quarterly cash distributions.

We believe that CAD is useful because it adjusts net income (loss) for a variety of non-cash items. We calculate CAD by subtracting from or adding to net income (loss) attributable to common stockholders, non-controlling interests, if any, and the following items: depreciation and amortization items including depreciation and amortization, excluding amortization of second generation tenant improvements and leasing commissions, straight-line rental income or expense (excluding amortization of rent free periods), amortization of above/below market leases, amortization of deferred financing costs, amortization of discount on financings and other; maintenance capital expenditures, unrealized gain (loss) from the change in fair value; realized gain (loss) on investments and other; impairment on depreciable property; bad debt expense; deferred tax benefit (expense); acquisition gains or losses; distributions and adjustments related to joint venture partners; transaction costs; foreign currency gains (losses); impairment on goodwill and other intangible assets; gains (losses) on sales; and one-time events pursuant to changes in U.S. GAAP and certain other non-recurring items. These items, if applicable, include any adjustments for unconsolidated ventures. The definition of CAD may be adjusted from time to time for our reporting purposes in our discretion, acting through our audit committee or otherwise.

We believe NOI is a useful metric of the operating performance of our real estate portfolio in the aggregate. NOI is equal to total property revenue less property operating expenses which includes real estate taxes and third-party property management fees.  However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, transaction costs, depreciation and amortization expense and realized gains (losses) from the sale of properties and other items under U.S. GAAP and capital expenditures and leasing costs necessary to maintain the operating performance of properties, all of which may be significant economic costs. NOI may fail to capture significant trends in these components of U.S. GAAP net income (loss) which further limits its usefulness.

CAD and NOI should not be considered as an alternative to net income (loss), determined in accordance with U.S. GAAP, as indicators of operating performance. In addition, our methodology for calculating CAD and NOI may differ from the methodologies used by other comparable companies, including other REITs, when calculating the same or similar supplemental financial measures and may not be comparable with these companies. For example, our calculation of CAD per share will not take into account any potential dilution from any Senior Notes or restricted stock units subject to performance metrics not yet achieved.

87

Quantitative and Qualitative Disclosures about Market Risk

We are primarily subject to interest rate risk, foreign currency exchange rate risk and credit risk. These risks are 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.

Interest Rate Risk

Changes in interest rates affect our net income, which is the difference between the income earned on our investments and the interest expense incurred in connection with our borrowings and derivatives. Our operating results depend in large part on differences between the income from our investments less our operating costs, reduced by any credit losses and financing costs. Income from our investments may respond more slowly to interest rate fluctuations than the cost of our borrowings. Consequently, changes in interest rates, particularly short-term interest rates, may influence our net income. Increases in these rates may decrease our net income. Interest rate fluctuations resulting in our interest expense exceeding the income from our investments could result in losses for us and may limit our ability to make distributions to stockholders. In addition, if we need to repay existing borrowings during periods of rising interest rates, we could be required to liquidate one or more of our investments at times that may not permit realization of the maximum return on those investments, which would adversely affect our profitability.

For longer duration, relatively stable investment real estate cash flows such as those derived from net lease assets, we may use fixed rate financing. For real estate cash flows with greater growth potential, we may use floating rate financing, which provides prepayment flexibility and may provide a better match between underlying cash flow projections and potential increases in interest rates. We may vary the mix of fixed and floating rate debt and use a combination of the two when we deem it appropriate. Based on our Current European Portfolio a hypothetical 1.00%, 2.00% and 3.00% increase in the applicable index (EURIBOR and GBP LIBOR) applied to our floating-rate liabilities and related derivatives would result in an increase in net interest expense of approximately $10.1 million, $14.3 million and $14.5 million, respectively, annually. However, this does not reflect the potential increase in rental cash flow associated with economic growth that may be typical in a rising interest rate environment.

A change in interest rates affects the value of our real estate investments. For example, increasing interest rates could result in a higher required yield on investments, which could decrease the value on existing fixed-rate investments in order to adjust their yields to current market levels. In addition, the value of our real estate properties may be influenced by changes in interest rates and credit spreads (as discussed below) because value is typically derived by discounting expected future cash flow generated by the property using interest rates plus a risk premium based on the property type and creditworthiness of the tenants. A lower risk-free rate generally results in a lower discount rate and, therefore, a higher valuation, and vice versa; however, an increase in the risk-free rate would not impact our net income.

We use derivative instruments to manage interest rate exposure. These derivatives are typically in the form of interest rate swap agreements or interest rate cap agreements and the primary objective is to minimize interest rate risks associated with our investments and financing activities. The counterparties to these arrangements are major financial institutions with which we may also have other financial relationships.

As of June 30, 2015, none of our interest rate derivative instruments qualify for hedge accounting treatment. In addition, we may in the future be subject to additional expense based on the notional amount of the derivative and a specified spread over the applicable LIBOR. Because the fair value of these instruments can vary significantly between periods, we may experience significant fluctuations in the amount of our unrealized gain (loss) in any given period.

Foreign Currency Exchange Rate Risk

We are subject to risks related to change in foreign currency exchange rates as a result of our ownership of properties throughout Europe, predominantly the U.S. dollar/Euro exchange rate and U.S. dollar/U.K. Pounds Sterling exchange rate. All of the rent payments under our leases are denominated in Euro or U.K. Pounds Sterling and we expect that substantially all of our future leases will be denominated in the local currency of the nation in which the underlying property is located. A significant portion of our operating expenses and borrowings are also transacted in local currency. We report our results of operations and consolidated financial information in U.S. dollars. As a result, our results of operations as reported in U.S. dollars is impacted by fluctuations in the value of the local currencies in which we conduct our business.  

In an effort to mitigate the risk of fluctuations in foreign currency exchange rates, we, our Operating Partnership and its subsidiaries, actively manage our revenues and expenses so that we incur a significant portion of our expenses, including our operating costs and borrowings, in the same local currencies in which we receive our revenues. In addition, subject to satisfying the requirements for qualification as a REIT, we engage in various hedging strategies, which may include currency futures, swaps, forwards and options. We expect that these strategies and instruments may allow us to reduce, but not eliminate, the risk of

88

fluctuations in foreign currency exchange rates. The counterparties to these arrangements are major financial institutions with which we may also have other financial relationships.

Based on our Current European Portfolio, a hypothetical 10% increase in applicable exchange rate to the U.S dollar applied to our assets and liabilities and related derivatives would result in an increase of net equity of approximately $107.7 million. Such amount would be recorded in OCI. In addition, we enter into derivative instruments to manage foreign currency exposure of our operating income. Based on our Current European Portfolio, a hypothetical 10% increase in in applicable exchange rate to the U.S dollar applied to projected CAD would increase net income by $1.7 million.

Credit Spread Risk

We expect the value of our fixed and floating-rate investments to change with market credit spreads. This means that when market-demanded risk premium, or credit spread, increases, the value of our fixed- and floating-rate assets will decrease and vice versa. Fixed-rate assets are valued based on a market credit spread over the rate payable on the applicable fixed rate instrument of like maturity. This means that their value is dependent on the yield demanded on such assets by the market, based on their credit relative to certain instruments. Demand for a higher yield on investments results in higher or “wider” spread over the benchmark rate to value these assets. Under these conditions, the value of our portfolio should decrease. Conversely, if the spread used to value these assets were to decrease or “tighten,” the value of these assets should increase.

Credit Risk

We are subject to the credit risk of the tenant of our properties. We seek to undertake a rigorous credit evaluation of each tenant prior to acquiring properties. This analysis includes an extensive due diligence investigation of the tenant’s business as well as an assessment of the strategic importance of the underlying real estate to the tenant’s core business operations. Where appropriate, we may seek to augment the tenant’s commitment to the facility by structuring various credit enhancement mechanisms into the underlying leases. These mechanisms could include security deposit requirements or guarantees from entities we deem creditworthy. Additionally, we perform ongoing monitoring of creditworthiness of our tenants which is a key component of our portfolio management process. Such monitoring may include, to the extent available, a review of financial statements and operating statistics, delinquencies, third party ratings and market data.

89

CORPORATE GOVERNANCE AND MANAGEMENT

General

We expect to list our Common Stock on the NYSE under the symbol “NRE.” As a result, we expect that we will be subject to NYSE corporate governance listing standards.

Corporate Governance Guidelines

Our board of directors will adopt our Corporate Governance Guidelines to assist in the exercise of its responsibilities. These guidelines will set forth our practices and policies with respect to among other things, board composition, board member qualifications, responsibilities and education, management succession and self-evaluation. The full text of our Corporate Governance Guidelines will be available on our website at         on or prior to the date of Distribution. A copy will also be able to be obtained by writing to NorthStar Realty Europe Corp., Attn: General Counsel’s office, 399 Park Avenue, 18th Floor, New York, New York 10022.

Board Leadership Structure; Meetings of Independent Directors

Our board of directors believes it is important to select its chairman and the Company’s chief executive officer in the manner it considers in the best interests of the Company at any given point in time. The members of our board of directors possess considerable business experience and in-depth knowledge of the issues the Company faces and are therefore in the best position to evaluate the needs of the Company and how best to organize the Company’s leadership structure to meet those needs. Accordingly, the chairman and chief executive officer positions may be filled by one individual or by two different individuals.

To promote the independence of our board of directors and appropriate supervision of management, the independent directors will select a Lead Non-Management Director to facilitate free and open discussion and communication among the independent directors of our board of directors and management. The Lead Non-Management Director will preside at all executive sessions at which only non-management directors are present. These meetings will be held in conjunction with the regularly scheduled quarterly meetings of our board of directors, but may be called at any time by our Lead Non-Management Director or any of our other independent directors. Our Lead Non-Management Director will set the agenda for these meetings held in executive session and will discuss issues that arise during those meetings with our chairman. Our Lead Non-Management Director will have discussions with our chairman and secretary regarding board of directors meeting agendas and may request inclusion of additional agenda items for meetings of our board of directors. It is expected that the individual who serves as the Lead Non-Management Director will rotate every two years.

Communicating with Our Directors

Our board of directors will adopt a process to receive communications from interested parties, including stockholders. Interested parties may contact the Lead Non-Management Director, any member or all members of our board of directors by mail. To communicate with our board of directors, any individual director, any group of directors or committee, correspondence should be addressed to our board of directors or any such individual director, group of directors or committee by either name or title. All such correspondence should be sent to NorthStar Realty Europe Corp., Attn: General Counsel’s office, 399 Park Avenue, 18th Floor, New York, New York 10022.

All communications received as set forth in the preceding paragraph will be opened by the office of our General Counsel for the sole purpose of determining whether the contents represent a message to our directors. Any contents that are not in the nature of advertising, promotions of a product or service or patently offensive material will be forwarded promptly to the addressee. In the case of communications to our board of directors or any group of directors or committee, the office of the General Counsel will make sufficient copies of the contents to send to each director who is a member of the group or committee to which the envelope is addressed.

Code of Business Conduct and Ethics

We will adopt a code of business conduct and ethics relating to the conduct of our business by our directors and officers. We intend to maintain high standards of ethical business practices and compliance with all laws and regulations applicable to our business, in Europe and elsewhere. Specifically, among other things, our code of business conduct and ethics will prohibit employees from providing gifts, meals or anything of value to government officials or employees or members of their families without prior written approval from the Company’s general counsel. The code will be available on our website at         on or prior to the date of the Distribution and will also be available without charge to stockholders upon written request to NorthStar Realty Europe Corp., Attn: General Counsel’s office, 399 Park Avenue, 18th Floor, New York, New York 10022.

90

Our Directors

Our sole director is currently David T. Hamamoto. For information regarding Mr. Hamamoto, refer to “— Our Manager — Officers of Our Manager” below. We intend to elect additional directors to our board of directors prior to the Distribution to serve as directors of the Company commencing on or prior to the Distribution date.

Director Compensation

We intend to approve and implement a competitive compensation program for our non-employee directors that may consist of one or more of the following: annual retainer fees, equity awards and attendance fees (by remote communication or in person), as well as other forms of compensation. We will also reimburse each of our directors for his or her travel expenses incurred in connection with his or her attendance at full board of directors and committee meetings. We have not made any payments to any of our non-employee directors or director nominees to date.

Board Committees

Our board of directors will appoint an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee and each of these standing committees will adopt a written charter. Each of these committees will be composed exclusively of independent directors, as defined by the listing standards of the stock exchange on which our Common Stock will be listed, which we expect to be the NYSE. Moreover, the Compensation Committee will be composed exclusively of individuals referred to as “non-employee directors” in Rule 16b-3 of the Exchange Act and as “outside directors” in Section 162(m) of the Code.

Audit Committee

At the time of the Distribution, our Audit Committee will consist of at least three members, each of whom will be independent and financially literate under the rules of the stock exchange on which our Common Stock will be listed, which we expect to be the NYSE, and at least one of whom will be an “audit committee financial expert,” as that term is defined by the SEC. The Audit Committee will be responsible for, among other things, engaging an independent registered public accounting firm, reviewing with the independent registered public accounting firm the plans and results of the audit engagement, approving professional services provided by the independent registered public accounting firm, reviewing the independence of the independent registered public accounting firm, considering the range of audit and non-audit fees and assisting our board of directors in its oversight of our internal controls over financial reporting. For more information, refer to “Certain Relationships and Related Party Transactions — Policy for Review of Related Party Transactions.”

On or prior to the date of Distribution, a copy of the Audit Committee charter will be available on our website at                      under the heading “Investor Relations — Corporate Governance” and will also be available without charge to stockholders upon written request to NorthStar Realty Europe Corp., Attn: General Counsel’s office, 399 Park Avenue, 18th Floor, New York, New York 10022.

Compensation Committee

At the time of the Distribution, our Compensation Committee will consist of members that are independent under the rules of the stock exchange on which our Common Stock will be listed, which we expect to be the NYSE. The Compensation Committee will be responsible for, among other things, determining compensation for our executive officers, administering and monitoring our equity compensation plans, evaluating the performance of our executive officers and producing an annual report on executive compensation for inclusion in the proxy statement for our annual meeting of stockholders. The Compensation Committee may delegate some or all of its duties to a subcommittee comprising one or more members of the Compensation Committee.

On or prior to the date of the Distribution, a copy of the Compensation Committee charter will be available on our website at                      under the heading “Investor Relations — Corporate Governance” and will also be available without charge to stockholders upon written request to NorthStar Realty Europe Corp., Attn: General Counsel’s office, 399 Park Avenue, 18th Floor, New York, New York 10022.

Nominating and Corporate Governance Committee

At the time of the Distribution, our Nominating and Corporate Governance Committee will be independent under the rules of the stock exchange on which our Common Stock will be listed, which we expect to be the NYSE. The Nominating and Corporate Governance Committee will be responsible for, among other things, seeking, considering and recommending to our board of directors qualified candidates for election as directors and recommending a slate of nominees for election as directors at the annual meeting. It will also periodically prepare and submit to our board of directors for adoption the Nominating and Corporate Governance Committee’s selection criteria for director nominees. It will review and make recommendations on matters involving

91

the general operation of our board of directors, including director compensation plans and practices and our corporate governance and annually recommend to our board of directors nominees for each committee of our board of directors. In addition, the Nominating and Corporate Governance Committee will annually facilitate the assessment of our board of directors’ performance as a whole and of the individual directors and report thereon to our board of directors.

On or prior to the date of the Distribution, a copy of the Nominating and Corporate Governance Committee charter will be available on our website at                      under the heading “Investor Relations — Corporate Governance” and will also be available without charge to stockholders upon written request to NorthStar Realty Europe Corp., Attn: General Counsel’s office, 399 Park Avenue, 18th Floor, New York, New York 10022.

Our Executive Officers

Set forth below is information regarding the individuals who serve as our executive officers.

Name	Age	Position
Mahbod Nia	39	Chief Executive Officer
Debra A. Hess	51	Interim Chief Financial Officer

Set forth below is biographical information regarding each of our current executive officers.

Mahbod Nia. Mr. Nia has served as our Chief Executive Officer and President since June 2015. Mr. Nia also serves as Managing Director and Head of European Investments at NSAM, a position he has held since July 2014. Prior to joining NSAM, Mr. Nia worked for PanCap Investment Partners, a European real estate investment and advisory firm withclients including the Goldman Sachs Whitehall funds/Archon, Tishman Speyer and Münchener Hypothekenbank. From 2007 to 2009, Mr. Nia was a Senior Executive Director in the Real Estate Banking Group at Goldman Sachs. Prior to 2007, Mr. Nia served in various positions at Citigroup Inc. (formerly Salomon Brothers, where Mr. Nia began his career). Mr. Nia holds a Masters in Economics and Finance from the University of Warwick and a First Class Honors degree in Economics for Business.

Debra A. Hess. Ms. Hess has served as our interim Chief Financial Officer since June 2015. Ms. Hess also serves as Chief Financial Officer of NorthStar Realty, a position she has held since July 2011, and as Chief Financial Officer of NSAM, a position she has held since January 2014. Ms. Hess served as Chief Financial Officer and Treasurer of NorthStar Real Estate Income Trust, Inc., or NorthStar Income, a public non-traded REIT sponsored by NSAM, a position she held from October 2011 to August 2015. Ms. Hess served as Chief Financial Officer and Treasurer of NorthStar Healthcare Income, Inc., or NorthStar Healthcare, a second public non-traded REIT sponsored by NSAM, a position she held from March 2012 to August 2015. Ms. Hess also served as Chief Financial Officer and Treasurer of NorthStar Real Estate Income II, Inc., or NorthStar Income II, a third public non-traded REIT sponsored by NSAM, a position she held from December 2012 to August 2015. Ms. Hess further served as Chief Financial Officer and Treasurer of NorthStar/RXR New York Metro Income, Inc., or NorthStar/RXR New York Metro, a public non-traded REIT co-sponsored by NSAM, a position she held from March 2014 to August 2015. Ms. Hess has significant financial, accounting and compliance experience at public companies. Prior to joining NorthStar Realty, Ms. Hess served as Chief Financial Officer and Compliance Officer of H/2 Capital Partners, where she was employed from August 2008 to June 2011. From March 2003 to July 2008, Ms. Hess was a managing director at Fortress Investment Group, where she also served as Chief Financial Officer of Newcastle Investment Corp., a Fortress portfolio company and a NYSE-listed alternative investment manager. From 1993 to 2003, Ms. Hess served in various positions at Goldman, Sachs & Co., including as Vice President in Goldman Sachs’s Principal Finance Group and as a Manager of Financial Reporting in Goldman Sachs’ Finance Division. Prior to 1993, Ms. Hess was employed by Chemical Banking Corporation in the corporate credit policy group and by Arthur Andersen & Company as a supervisory senior auditor. Ms. Hess holds a Bachelor of Science in Accounting from the University of Connecticut in Storrs, Connecticut and a Master of Business Administration in Finance from New York University in New York, New York.

Limitation of Liability and Indemnification

Maryland law permits a Maryland corporation to include in its charter a provision eliminating the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from: (i) actual receipt of an improper benefit or profit in money, property or services; or (ii) active and deliberate dishonesty that is established by a final judgment and is material to the cause of action. Our charter will contain such a provision which eliminates directors’ and officers’ liability to the maximum extent permitted by Maryland law.

Our charter will authorize and our bylaws will obligate us, to the maximum extent permitted by Maryland law, to indemnify any present or former director or officer or any individual who, while a director of the Company and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her status as a present or former director or officer of the Company and to pay or reimburse

92

their reasonable expenses in advance of final disposition of a proceeding. Our charter and bylaws also will permit us to indemnify and advance expenses to any person who served a predecessor of the Company in any of the capacities described above and any employee or agent of the Company or a predecessor of the Company.

Maryland law requires a corporation (unless its charter provides otherwise, which our charter will not) to indemnify a director or officer who has been successful in the defense of any proceeding to which he or she is made a party by reason of his or her service in that capacity. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made, or threatened to be made, a party to, or witness in, by reason of their service in those or other capacities unless it is established that: (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. A Maryland corporation may not indemnify a director or officer with respect to a proceeding by or in the right of the corporation in which the director or officer was adjudged liable to the corporation or a proceeding charging improper personal benefit to the director or officer in which the director or officer was adjudged liable on the basis that personal benefit was improperly received. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment in a suit by or in the right of the corporation, or for a judgment of liability on the basis that personal benefit was improperly received, is limited to expenses. In addition, Maryland law permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of: (i) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and (ii) a written undertaking by him or on his behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.

We intend to enter into indemnification agreements with each of our directors and executive officers which will require that we indemnify such directors and officers to the maximum extent permitted by Maryland law and that we pay such persons’ expenses in defending any civil or criminal proceeding in advance of final disposition of such proceeding.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Further, the separation agreement between us and NorthStar Realty provides for indemnification by us of NorthStar Realty and its directors, officers and employees and by NorthStar Realty of us and our directors, officers and employees for some liabilities, including liabilities under the Exchange Act. The amount of these indemnity obligations is unlimited.

Our Manager

General

Upon completion of our separation from NorthStar Realty, we will enter into a management agreement with NSAM for an initial term of 20 years, which will be automatically renewed for additional 20-year terms each anniversary thereafter unless earlier terminated. The management agreement may not be terminated during its initial term, during any renewal term or at the end of any term, unless we have cause to terminate, as described under “— Management Agreement — Termination” below. Pursuant to the management agreement, NSAM will be the exclusive provider of the services set forth in the management agreement and will be responsible for managing, operating, directing and supervising the operations and administration of the Company, our subsidiaries and our real estate investments. A form of the management agreement will be filed as an exhibit to the registration statement of which this prospectus forms a part and the following description of the management agreement is qualified in its entirety by reference to the management agreement as so filed.

The services for which NSAM will receive fees and reimbursements include, but are not limited to, the following:

Acquisition Services

• servingas our investment and financial advisor and obtain certain market research and economic and statistical data in connection with our investments and investment objectives and policies;

• subject to the investment objectives and limitations set forth in our charter and the investment guidelines approved by our board of directors: (i) locating, analyzing and selecting potential investments; (ii) structuring and negotiating the terms and conditions of approved investments; and (iii) acquiring approved investments on our behalf;

93

• overseeing the due diligence process related to prospective investments;

• conducting a thorough due diligence process for prospective investments;

• preparing reports regarding prospective investments which include recommendations and supporting documentation necessary for our board of directors to evaluate the proposed investments;

• obtaining reports (which may be prepared by NSAM or its affiliates), where appropriate, concerning the value of proposed investments; and

• negotiating and executing approved investments and other transactions.

Asset Management Services

• investigating, selecting and, on our behalf, engaging and conducting business with such persons as NSAM deems necessary to the proper performance of its obligations under our management agreement, including but not limited to consultants, accountants, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, developers, construction companies and any and all persons acting in any other capacity deemed by NSAM necessary or desirable for the performance of any of the services under our management agreement;

• monitoring applicable markets and obtaining reports (which may be prepared by NSAM or its affiliates) where appropriate, concerning the value of our investments;

• monitoring and evaluating the performance of our investments, providing daily management services to us and performing and supervising the various management and operational functions related to our investments;

• formulating and overseeing the implementation of strategies for the administration, promotion, management, operation, maintenance, improvement, financing and refinancing, marketing, leasing and disposition of investments on an overall portfolio basis;

• coordinating and managing relationships between any joint venture partners and us; and

• providing financial and operational planning services and investment portfolio management functions.

Accounting and Other Administrative Services

• managing and performing the various administrative functions necessary for our day-to-day operations;

• from time-to-time, or at any time reasonably requested by our board of directors, reporting to our directors on NSAM’s performance of services to us under the management agreement;

• coordinating with our independent accountants and auditors to prepare and deliver to the company’s audit committee an annual report covering NSAM’s compliance with certain aspects of the management agreement;

• providing or arranging for administrative services, legal services, office space, office furnishings, personnel and other overhead items necessary and incidental to our business and operations;

• providing financial and operational planning services and portfolio management functions;

• maintaining accounting data and any other information concerning our activities as shall be required to prepare and to file all periodic financial reports and returns required to be filed with the SEC and any other regulatory agency, including annual financial statements;

• maintaining all of our appropriate books and records;

• overseeing tax and compliance services and risk management services and coordinating with appropriate third parties, including independent accountants and other consultants, on related tax matters;

• supervising the performance of such ministerial and administrative functions as may be necessary in connection with our daily operations;

• providing us with all necessary cash management services;

• managing and coordinating with the transfer agent the process of making distributions and payments to stockholders;

94

• consulting with our officers and board of directors and assisting in evaluating and obtaining adequate insurance coverage based upon risk management determinations;

• providing our officers and board of directors with timely updates related to the overall regulatory environment affecting the company, as well as managing compliance with regulatory matters;

• consulting with our officers and board of directors relating to the corporate governance structure and appropriate policies and procedures related thereto; and

• overseeing all reporting, recordkeeping, internal controls and similar matters in a manner to allow us to comply with applicable law.

Stockholder Services

• managing communications with our stockholders, including answering phone calls, preparing and sending written and electronic reports and other communications; and

• establishing technology infrastructure to assist in providing stockholder support and services.

Financing Services

• identifying and evaluating potential financing and refinancing sources, engaging a third party broker if necessary;

• negotiating terms of, arrange and execute financing agreements;

• managing relationships between the company and its lenders; and

• monitoring and overseeing the service of our debt facilities and other financings.

Disposition Services

• consulting with our board of directors and providing assistance with the evaluation and approval of potential asset disposition, sales or liquidity transactions; and

• structuring and negotiating the terms and conditions of transactions pursuant to which our investments may be sold.

Officers of NSAM

Our manager is managed by the following individuals:

Name	Age	Position
David T. Hamamoto	55	Executive Chairman
Albert Tylis	41	Chief Executive Officer and President
Daniel R. Gilbert	45	Chief Investment and Operating Officer of NorthStar Asset Management Group, Ltd, NSAM’s wholly owned subsidiary
Debra A. Hess	51	Chief Financial Officer
Ronald J. Lieberman	45	Executive Vice President, General Counsel and Secretary

Set forth below is biographical information regarding each of NSAM’s executive officers, other than Ms. Hess, whose biographical information is provided under “ — Our Executive Officers.”

David T. Hamamoto. Mr. Hamamoto has served as Executive Chairman of NSAM since August 2015 and served as Chief Executive Officer of NSAM from January 2014 to August 2015. He serves as the sole director of NorthStar Europe, a position he has held since June 2015. Mr. Hamamoto has been Chairman of NorthStar Realty since October 2007 and has served as one of its directors since October 2003. Mr. Hamamoto served as Chief Executive Officer of NorthStar Realty from October 2004 to August 2015 and was its President from October 2004 to April 2011. Mr. Hamamoto also served as Chairman of NorthStar Income from February 2009 until August 2015, and served as its Chief Executive Officer from February 2009 until January 2013. Mr. Hamamoto also served as Chairman of NorthStar Healthcare from January 2013 until January 2014. Mr. Hamamoto also served as Chairman of NorthStar Income II from December 2012 until August 2015. Mr. Hamamoto further served as Co-Chairman of NorthStar/RXR New York Metro from March 2014 until August 2015. Additionally, Mr. Hamamoto serves as a member of the advisory committee of RXR Realty, LLC, or RXR Realty, a leading real estate operating and investment management company focused on high-quality real estate investments in the New York Tri-State area and the co-sponsor of NorthStar/RXR New York Metro, a position he has held since December 2013. Mr. Hamamoto also serves as a member of the executive committee of Island Hospitality Management Inc., a position he has held since January 2015. Mr. Hamamoto served as Executive Chairman from

95

March 2011 until November 2012, and as Chairman, from February 2006 until March 2011, of the board of directors of Morgans Hotel Group Co. (NASDAQ: MHGC). In July 1997, Mr. Hamamoto co-founded NorthStar Capital Investment Corp., the predecessor to NorthStar Realty, for which he served as Co-Chief Executive Officer until October 2004. From 1983 to 1997, Mr. Hamamoto worked for Goldman, Sachs & Co. where he was co-head of the Real Estate Principal Investment Area and general partner of the firm between 1994 and 1997. During Mr. Hamamoto’s tenure at Goldman, Sachs & Co., he initiated the firm’s effort to build a real estate principal investment business under the auspices of the Whitehall Funds. Mr. Hamamoto holds a Bachelor of Science from Stanford University in Palo Alto, California and a Master of Business Administration from the Wharton School of Business at the University of Pennsylvania in Philadelphia, Pennsylvania.

Albert Tylis. Mr. Tylis has served as Chief Executive Officer of NSAM since August 2015 and as its President since January 2014 and has served as one of its directors since August 2015. Mr. Tylis served as President of NorthStar Realty from January 2013 to August 2015 and has served as one of its directors since August 2015. Prior to his current position at NorthStar Realty, Mr. Tylis served as its Co-President from April 2011 until January 2013, its Chief Operating Officer from January 2010 until January 2013, its Secretary from April 2006 until January 2013, an Executive Vice President from April 2006 until April 2011 and its General Counsel from April 2006 to April 2011. Mr. Tylis served as Chief Operating Officer of NorthStar Income from October 2010 until January 2013 and as General Counsel and Secretary of NorthStar Income from October 2010 until April 2011. He also served as Chairman of NorthStar Healthcare from April 2011 until January 2013 and as General Counsel and Secretary of NorthStar Healthcare from October 2010 until April 2011. Mr. Tylis also serves as a member of the advisory committee of RXR Realty, a position he has held since December 2013. Prior to joining NorthStar Realty in August 2005, Mr. Tylis was the Director of Corporate Finance and General Counsel of ASA Institute. From September 1999 through February 2005, Mr. Tylis was a senior attorney at the law firm of Bryan Cave LLP, where he was a member of the Corporate Finance and Securities Group, the Transactions Group, the Banking, Business and Public Finance Group and supported the firm’s Real Estate Group. Mr. Tylis holds a Bachelor of Science from the University of Massachusetts at Amherst and a Juris Doctor from Suffolk University Law School.

Daniel R. Gilbert. Mr. Gilbert has served as Chief Investment and Operating Officer of NorthStar Asset Management Group, Ltd, a wholly-owned subsidiary of NSAM, since June 2014. Mr. Gilbert has served as NorthStar Realty’s Chief Investment and Operating Officer since January 2013. Prior to his current position at NorthStar Realty, Mr. Gilbert served as Co-President of NorthStar Realty from April 2011 until January 2013 and in various other senior management positions since its initial public offering in October 2004. Mr. Gilbert serves as the Chairman, a position he has held since August 2015, and Chief Executive Officer and President of NorthStar Income, a position he has held since January 2013, and served as its President since March 2011 and its Chief Investment Officer from January 2009 through January 2013. Mr. Gilbert serves as the Executive Chairman of NorthStar Healthcare, a position he has held since January 2014, and served as its Chief Executive Officer from August 2012 to January 2014 and Chief Investment Officer from October 2010 through February 2012. Mr. Gilbert also serves as the Chairman, a position he has held since August 2015, and Chief Executive Officer and President of NorthStar Income II, a position he has held since October 2010. Mr. Gilbert further serves as the Co-Chairman, a position he has held since August 2015, and Chief Executive Officer and President of NorthStar/RXR New York Metro, a position he has held since March 2014. Mr. Gilbert served as an Executive Vice President and Managing Director of Mezzanine Lending of NorthStar Capital Investment Corp., the predecessor of NorthStar Realty. Prior to that role, Mr. Gilbert was with Merrill Lynch & Co. in its Global Principal Investments and Commercial Real Estate Department and prior to joining Merrill Lynch, held accounting and legal-related positions at Prudential Securities Incorporated. Mr. Gilbert holds a Bachelor of Arts degree from Union College in Schenectady, New York.

Ronald J. Lieberman. Mr. Lieberman has served as Executive Vice President, General Counsel and Secretary of NSAM since January 2014. Mr. Lieberman has served as Executive Vice President, General Counsel and Secretary of NorthStar Realty since January 2013. Prior to his current position at NorthStar Realty, Mr. Lieberman served as its General Counsel since April 2011, an Executive Vice President since April 2012 and as Assistant Secretary from April 2011 until January 2013. Mr. Lieberman served as NorthStar Income’s Executive Vice President (a position he held from January 2013 to August 2015), General Counsel and Secretary (positions he held from October 2011 to August 2015). Mr. Lieberman serves as NorthStar Healthcare’s Executive Vice President (a position he has held since January 2013), General Counsel and Secretary (positions he held since April 2011). Mr. Lieberman also served as NorthStar Income II’s Executive Vice President (a position he held since March 2013), General Counsel and Secretary (positions he held since December 2012) until August 2015. Mr. Lieberman further serves as Executive Vice President, General Counsel and Secretary for NorthStar/RXR New York Metro, positions he has held since March 2014. Mr. Lieberman also currently serves on the Executive Committee of American Healthcare Investors, LLC. Prior to joining NorthStar Realty, Mr. Lieberman was a partner in the Real Estate Capital Markets practice at the law firm of Hunton & Williams LLP. Mr. Lieberman practiced at Hunton & Williams from September 2000 until March 2011 where he advised numerous REITs, including mortgage REITs and specialized in capital markets transactions, mergers and acquisitions, securities law compliance, corporate governance and other board advisory matters. Prior to joining Hunton & Williams, Mr. Lieberman was the associate general counsel at Entrade, Inc., during which time Entrade was a public company listed on the NYSE. Mr. Lieberman began his legal

96

career at Skadden, Arps, Slate, Meagher and Flom LLP. Mr. Lieberman holds a Bachelor of Arts, Master of Business Administration and Juris Doctor, each from the University of Michigan in Ann Arbor, Michigan.

Management Agreement

Duties of Asset Manager

As asset manager, NSAM will be responsible for our day-to-day operations, subject to the supervision of our board of directors. Through its global network of subsidiaries and branch offices, NSAM will perform (or will cause to be performed) services and activities relating to, among other things, investments and financing, portfolio management and other administrative services, such as accounting and investor relations, to us and our subsidiaries. NSAM will not be obligated to dedicate any of its executives or other personnel exclusively to us, nor to dedicate any specific amounts of time to fulfilling its obligations and NSAM may contract with and provide services to an unlimited number of additional managed companies.

Compensation Under the Management Agreement

In connection with the Distribution, we will enter into a management agreement with NSAM pursuant to which NSAM will manage the Company for an initial term of 20 years. The management agreement provides for:

(i) an annual base management fee equal to the sum of:

(a) $14 million; and

(b) an additional annual base management fee equal to 1.5% per annum of the sum of:

(1) cumulative net proceeds of all common equity and preferred equity issued by us or NorthStar Realty prior to the date of the Distribution, which are used to fund European investments that close subsequent to August 17, 2015 and are contributed to us in connection with the Distribution;

(2) any equity we issue in exchange or conversion of notes;

(3) any other issuances of common equity, preferred equity or other forms of equity, including but not limited to LTIP Units in our Operating Partnership (excluding equity-based compensation, but including issuances related to an acquisition, investment, joint venture or partnership); and

(4) cumulative CAD, if any, in excess of cumulative distributions paid on common stock, LTIP Units or other equity awards beginning the first full calendar quarter after completion of the Distribution; and

(ii) an incentive fee equal to:

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

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

(c) multiplied by the weighted average shares outstanding for the calendar quarter,

Each of the fees set forth in clauses (i) and (ii) are calculated and payable quarterly in arrears in cash.

Weighted average shares represents the number of shares of Common Stock, LTIP Units or other equity-based awards (with some exclusions), outstanding on a daily weighted average basis. With respect to the base management fee, all issuances shall be allocated on a daily weighted average basis during the fiscal quarter of issuances. With respect to the incentive fee, such amounts will be appropriately adjusted from time to time to take into account the effect of any stock split, reverse stock split, stock dividend, reclassification, recapitalization or other similar transaction.

The current base management fee of $14 million is based on our Current European Portfolio.

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

97

Payment of Costs and Expenses and Expense Allocation

We are responsible for all of our direct costs and expenses and will reimburse NSAM for costs and expenses incurred by NSAM on our behalf. NSAM allocates, in good faith, indirect costs to us related to employees, occupancy and other general and administrative costs and expenses in accordance with the terms of, and subject to the limitations contained in, our management agreement with our manager. The indirect costs include our allocable share of our manager’s 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. NSAM allocates these costs to us relative to its other managed companies in good faith. Pursuant to the terms of our management agreement with our manager, we are obligated to reimburse NSAM, in NSAM's discretion, for costs and expenses incurred by NSAM for an amount not to exceed the following: (i) 20% of the combined total of (a) the general and administrative expenses as reported in the consolidated financial statements of each of NorthStar Europe, NorthStar Realty and any new entity spun-off from NorthStar Realty or NorthStar Europe after making certain adjustments described below, or the Managed Company G&A and (b) NSAM’s general and administrative expenses as reported in its consolidated financial statements, excluding equity-based compensation expense and adding back any costs or expenses allocated to any other managed company of NSAM excluding NorthStar Realty; less (ii) the Managed Company G&A, or the Maximum Allocable G&A; provided, however, that NorthStar Europe will not be required to reimburse NSAM for any portion of the Maximum Allocable G&A for which NSAM receives reimbursement from NorthStar Realty or any company spun-off from NorthStar Realty or NorthStar Europe. Subject to the foregoing limitation and the limitations contained in the applicable management agreements between NSAM and NorthStar Realty or any company spun-off from NorthStar Realty or NorthStar Europe, the amount of the Maximum Allocable G&A paid by NorthStar Europe, NorthStar Realty and any company spun-off from NorthStar Realty or NorthStar Europe will be determined by NSAM in its discretion. In determining the reimbursement described above, the reported general and administrative expenses of each of NorthStar Europe, NorthStar Realty and any company spun-off from NorthStar Realty or NorthStar Europe will be adjusted to exclude (1) equity-based compensation expenses, (2) non-recurring expenses, (3) fees payable to NSAM under the terms of the applicable management agreement entered into by such entity with NSAM and (4) any allocation of expenses from NSAM.

In addition, we, together with NorthStar Realty and any company spun-off from NorthStar Realty or NorthStar Europe, will pay directly or reimburse NSAM for up to 50% of any long-term bonus or other compensation that its compensation committee determines shall be paid and/or settled in the form of equity and/or equity-based compensation to executives, employees, service providers and staff of NSAM during any year. Subject to the foregoing limitation and the limitations contained in any applicable management agreement between NSAM and NorthStar Realty or any company spun-off from NorthStar Realty or NorthStar Europe, the amount paid by NorthStar Europe, NorthStar Realty and any company spun-off from NorthStar Realty or NorthStar Europe will be determined by NSAM in its discretion. At the discretion of NSAM’s compensation committee, the foregoing compensation may be granted in shares of NorthStar Europe restricted stock, restricted stock units, long-term incentive plan units or other forms of equity compensation or stock-based awards. The NorthStar Europe equity compensation for each year may be allocated on an individual-by-individual and award-by-award basis at the discretion of the NSAM compensation committee and, as long as the aggregate amount of the equity compensation for such year does not exceed the limits set forth in the management agreement, the proportion of any particular individual’s equity compensation may be greater or less than 50%. We will also pay directly or reimburse NSAM for an allocable portion of any severance paid pursuant to any employment, consulting or similar service agreements in effect between NSAM and any of its executives, employees or other service providers.

Termination

We may terminate the management agreement for cause at any time, including during the initial term, without the payment of any termination fee, with at least 60 days prior written notice to NSAM, upon the occurrence of any of the following:

• NSAM engages in any material act of fraud, misappropriation of funds or embezzlement against us or any of our subsidiaries;

• NSAM’s breach, in bad faith, of any provision of the management agreement or gross negligence that has a “material adverse effect” on us, in each case, if the effects of such breach in bad faith or gross negligence cannot be reversed, or such effects are not reversed within a period of 60 days (or 90 days if NSAM takes steps to reverse such effects within 30 days of the written notice);

• there is a commencement of any proceeding relating to NSAM’s bankruptcy or insolvency, including an order for relief in an involuntary bankruptcy case or NSAM authorizing or filing a voluntary bankruptcy petition that is not dismissed in 60 days;

• there is a determination by a court of competent jurisdiction in a non-appealable binding order, or by the IRS in a closing agreement made under Section 7121 of the Code, that a provision of the management agreement caused or

98

will cause us to fail to satisfy a requirement for qualification as a REIT and, within 60 days of such determination, NSAM has not agreed to amend or modify the management agreement in a manner that would allow us to qualify as a REIT, unless our board of directors determines that qualification as a REIT is no longer necessary or desirable; or

• NSAM’s dissolution.

Under the management agreement, a material adverse effect means a material adverse effect on the business, results of operations, financial condition and assets of the Company and our subsidiaries, taken as a whole. The following, either alone or in combination, shall be excluded from consideration when evaluating the existence of a material adverse effect: (i) changes or effects in general economic conditions; (ii) changes or effects in general market conditions, including the securities, credit or financial markets; (iii) fluctuations in the market value of Common Stock (or other debt or equity securities) on the NYSE, any other market or otherwise; (iv) changes in U.S. GAAP; (v) changes or effects, including legal, tax or regulatory changes, that generally affect the industry in which the Company operates; (vi) any failure by us to meet internal projections, plans or forecasts for any period; (vii) changes or effects that directly arise out of or are directly attributable to the negotiation, execution, public announcement or performance of the management agreement or the compliance with provisions thereof; (viii) changes or effects that arise out of or are attributable to the commencement, occurrence, continuation or intensification of any war, sabotage, armed hostilities or acts of terrorism; and (ix) the effects of earthquakes, hurricanes or other natural disasters. Notice of termination of the management agreement must be provided within 90 days from the date we first became aware of the act of gross negligence, breach or other event that gave rise to the termination event.

Indemnification

We will agree to indemnify, defend and protect NSAM as asset manager and its directors, officers, employees, partners, managers, members, controlling persons and any other person or entity affiliated with NSAM as asset manager and hold NSAM harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company, our stockholders or our subsidiaries) arising out of or otherwise based upon the performance of any of NSAM’s duties or obligations under the management agreement or otherwise as an asset manager of the Company or any of our subsidiaries.

Additional Covenants

In consideration of the services that NSAM will provide under the management agreement, we will grant NSAM a right to appoint one individual to serve as a non-voting observer of our board of directors and any committee thereof. This individual will be entitled to receive copies of all notices, correspondence and materials directed to the members of our board of directors, except in limited circumstances.

99

EXECUTIVE COMPENSATION

Executive Officers

Our named executive officers are expected to be:

Name	Position
Mahbod Nia	Chief Executive Officer
Debra A. Hess	Interim Chief Financial Officer

For all periods prior to December 31, 2014 and prior to the spin-off, we did not conduct business and our named executive officers have been employees of NorthStar Realty and NSAM (or its subsidiaries) and we did not pay compensation to any of our named executive officers. Accordingly, we did not have compensation policies or objectives governing our named executive officer compensation and we have not adopted compensation policies with respect to, among other things, setting base salaries, awarding bonuses or making future grants of equity awards to our executive officers.

Equity Incentive Plan

Summary of Equity Incentive Plan

We currently anticipate that we will adopt an equity incentive plan under which we expect to grant equity incentive awards to eligible persons, including our named executive officers, in order to attract, motivate and retain the talent for which NSAM competes. The terms of our equity incentive plan are not yet established, but we expect it to permit us to make grants of options, stock appreciation rights, restricted stock units, restricted stock, unrestricted stock, dividend equivalent rights, performance-based awards and other equity-based awards, or any combination of the foregoing. We expect to reserve              shares of Common Stock for the issuance of awards under our equity incentive plan.

Compensation Committee Interlocks and Insider Participation

Upon completion of the spin-off, we do not anticipate that any of our executive officers will serve as a member of a compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our compensation committee.

100

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Relationship Between NorthStar Realty, NSAM and Us After the Distribution

Following the Distribution, we will be an independent public company and NorthStar Realty will have no continuing ownership interest in us.

For purposes of governing the ongoing relationships between NorthStar Realty, NSAM and us after the Distribution and to provide for an orderly transition, NorthStar Realty, NSAM and we have entered or will enter into the agreements described in this section prior to the Distribution. In addition, we will be party to a management agreement with NSAM, which is further described above in “Corporate Governance and Management — Our Manager — Management Agreement.”

Certain of the agreements summarized in this section are or will be included as exhibits to the registration statement of which this prospectus forms a part and the following summaries of those agreements are qualified in their entirety by reference to the agreements as so filed.

Separation Agreement

We will enter into a separation agreement with NorthStar Realty which will set forth, among other things, our agreements with NorthStar Realty regarding the principal transactions necessary for NorthStar Realty to distribute our Common Stock. Under the separation agreement, NorthStar Realty will distribute our Common Stock to its common stockholders and our management and certain NorthStar Realty employees as a result of their ownership of certain equity awards of NorthStar Realty entitling them to the same benefits as holders of NorthStar Realty common stock.

The separation agreement will also set forth the other agreements that govern certain aspects of our relationship with NorthStar Realty after the Distribution date. These other agreements are described in additional detail below. A form of the separation agreement will be filed as an exhibit to the registration statement of which this prospectus forms a part and the following description of the separation agreement is qualified in its entirety by reference to the separation agreement as so filed.

Conditions to the Distribution

The separation agreement will provide that the Distribution is subject to the satisfaction of certain material conditions, including the following:

• the SEC declaring effective our registration statement and no stop order suspending the effectiveness of the registration statement in effect and no proceedings for such purpose pending before or threatened by the SEC;

• the transaction agreements relating to the Distribution having been duly executed and delivered by the parties;

• no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing consummation of the Distribution or any of the related transactions in effect;

• the receipt by us of an opinion from Hunton & Williams LLP to the effect that, beginning with the year ending December 31, 2015, we will be organized in conformity with the requirements for qualification as a REIT under the Code and our proposed method of operation will enable us to satisfy the requirements for qualification and taxation as a REIT under the U.S. federal income tax laws for the year ending December 31, 2015 and subsequent taxable years; and

• no event or development having occurred or existing that, in the judgment of the NorthStar Realty Board, in its sole discretion, makes it inadvisable to effect the Distribution and other related transactions.

Transfer of Assets and Assumption of Liabilities

The separation agreement will identify assets to be transferred, liabilities to be assumed and contracts to be performed by each of us and NorthStar Realty as part of the Distribution and it will provide for when and how these transfers, assumptions and assignments will occur.

Legal Matters

In general, NorthStar Realty will assume liability for all pending, threatened and unasserted legal claims relating to actions or omissions occurring prior to the Distribution and we will be responsible for all claims relating to actions or omissions occurring after the Distribution that relate to our business. To the extent a claim relates to a series of actions relating to our business occurring both before and after the Distribution, we will allocate liability for such claims between us and NorthStar Realty on a pro rata basis. In the event of any third-party claims that name both companies as defendants but that do not primarily relate to either our

101

business or NorthStar Realty’s business, each party will cooperate with the other party to defend against such claims. Each party will cooperate in defending any claims against the other for events that are related to the Distribution, but may have taken place prior to, on or after such date.

Insurance

The separation agreement will provide for all pre-Distribution claims to be made under NorthStar Realty’s existing insurance policies and post-Distribution claims to be made under our insurance policies. In addition, the separation agreement will allocate between the parties the right to proceeds and the obligation to incur certain deductibles under certain insurance policies. On or prior to the Distribution date, we will be required to have in place all insurance programs to comply with our contractual obligations and as reasonably necessary for our business. NorthStar Realty will be required, subject to the terms of the agreement, to obtain certain director and officer insurance policies to apply against pre-Distribution claims.

Tax Matters

We have agreed to use our reasonable best efforts to qualify for taxation as a REIT for our taxable year ending December 31, 2015. NorthStar Realty has agreed to use its reasonable best efforts to maintain its REIT status for each of its taxable years ending on or before December 31, 2015, unless NorthStar Realty obtains an opinion from a nationally recognized tax counsel or a private letter ruling from the IRS, on which we can rely, substantially to the effect that NorthStar Realty’s failure to maintain its REIT status will not prevent us from making a valid REIT election for any taxable year, or otherwise cause us to fail to qualify for taxation as a REIT for any taxable year, pursuant to Section 856(g)(3) of the Code. We have also agreed to use commercially reasonable efforts to cooperate with NorthStar Realty as necessary to enable NorthStar Realty to qualify for taxation as a REIT and receive customary legal opinions concerning our qualification and taxation as a REIT, including by providing information and representations to NorthStar Realty and its tax counsel with respect to the composition of our income and assets, the composition of the holders of our stock and our organization, operation and qualification as a REIT for our taxable year or years ending on or before December 31, 2015.

We have also agreed to indemnify NorthStar Realty against all taxes due with respect to us, our subsidiaries, our business and our assets and any and all taxes attributable to the Distribution (other than taxes incurred by NorthStar Realty under Code section 311(b). NorthStar Realty has agreed to indemnify us for any taxes attributable to NorthStar Realty’s failure to qualify as a REIT, unless such failure was wholly or primarily attributable to us, our subsidiaries, our business or our assets.

Other Matters

Other matters governed by the separation agreement will include, but are not limited to, access to financial and other records and information, intellectual property, legal privilege, confidentiality, access to and provision of records and treatment of outstanding guarantees.

The separation agreement will also provide that NorthStar Realty will have the sole and absolute discretion to determine whether to proceed with the Distribution, including the form, structure and terms of any transactions to effect the Distribution and the timing of and satisfaction of conditions to the consummation of the Distribution.

Contribution Agreement

As part of the series of transactions described above under “ — Separation Agreement,” we will enter into a contribution agreement with NorthStar Realty pursuant to which NorthStar Realty will contribute to our Operating Partnership, on or prior to the effective date of the contribution agreement, as the case may be, 100% of the equity interests in certain of NorthStar Realty’s subsidiaries, as set forth in the contribution agreement and $    in cash. Any additional expenses incurred in connection with the spin-off will be paid by NorthStar Realty. A form of the contribution agreement will be filed as an exhibit to the registration statement of which this prospectus forms a part and the preceding description of the contribution agreement is qualified in its entirety by reference to the contribution agreement as so filed.

Conflicts of Interest

As a result of the spin-off, our directors and executive officers may also be serving as directors, officers, employees, consultants or agents of NorthStar Realty, NSAM or any of its other managed companies and we may engage in material business transactions with such entities. Members of our board of directors and our executive officers may have conflicts of interest, or the appearance of conflicts of interest, with respect to matters, including business opportunities or legal proceedings, involving or affecting more than one of the companies to which they serve. Refer to “— Policy for Review of Related Party Transactions” below for a discussion of the policy that will be in place for dealing with potential conflicts of interest that may arise from our ongoing relationship with NorthStar Realty, NSAM and any of its other managed companies.

102

We will renounce our rights to certain business opportunities and our board of directors will enact resolutions that will provide that no director or officer of ours who is also serving as a director, officer, employee, consultant or agent of NorthStar Realty, NSAM or any of its other managed companies and their subsidiaries will be liable to us or our stockholders for breach of any duty that would otherwise exist by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of opportunities to be set forth in our charter or by resolution) to NorthStar Realty, NSAM or any of its other sponsored or managed companies and any of their subsidiaries instead of us, or does not refer or communicate information regarding such corporate opportunities to us. These resolutions will also expressly validate certain contracts, agreements, assignments and transactions (and amendments, modifications or terminations thereof) between us and NorthStar Realty, NSAM and its other sponsored or managed companies and any of their subsidiaries and, to the fullest extent permitted by law, provide that the actions of the overlapping directors or officers in connection therewith are not breaches of duties owed to us, any of our subsidiaries or our respective stockholders. There can be no assurance that the terms of any such transactions will be as favorable to NorthStar Europe as would be the case where there is no overlapping director or executive officer. Refer to “Risk Factors — Risks Related to Our Manager — There will be conflicts of interest in our relationship with NSAM that could result in decisions that are not in the best interests of our stockholders” and “Certain Provisions of Maryland Law and of Our Charter and Bylaws — Certain Corporate Opportunities and Conflicts.”

Policy for Review of Related Party Transactions

Our current policy for the review of related party transactions is that all “disinterested” directors of our audit committee shall evaluate and consider for approval arrangements and relationships that may occur or exist between us, on the one hand, and our directors, our officers and certain persons or entities associated with such persons, on the other hand. Under the written policy, any transaction between us and any such related party (other than de minimis transactions), including, without limitation, any transaction that is required to be disclosed by us in any of our filed periodic reports or proxy statements, will be deemed to be a related party transaction. When reviewing and evaluating a related party transaction, each “disinterested” director of our audit committee may consider, among other things, any effect a transaction may have upon a director’s independence, whether the transaction involves terms and conditions that are no less favorable to us than those that could be obtained in a transaction between us and an unrelated third party and the nature of any director or officer’s involvement in the transaction. Our general counsel will notify the members of our audit committee promptly of new potential related party transactions and any material changes to previously approved or conditionally approved related party transactions.

103

INVESTMENT POLICIES AND POLICIES WITH RESPECT TO CERTAIN ACTIVITIES

Our Investment, Credit and Monitoring Process

Our investment process will combine intensive underwriting with a disciplined decision-making process. We intend to apply fundamental real estate analysis to credit decisions in each of our business lines. Our real estate analysis will be supplemented by financial modeling and stress testing to assess the performance of each specific investment under adverse conditions.

All investment opportunities will be evaluated based on the impact on aggregate portfolio composition and aggregate exposure, real estate market and economic conditions affecting the underlying properties, stability of the underlying property, cash flow and ability to cover debt service and/or expenses, attractiveness compared to alternative investment opportunities and ability to finance the investment with term funding and to minimize interest rate risk. If the investment is deemed to be appropriate, the specialists for the relevant business line will proceed with asset-level analysis, documentation review and financial modeling. They will be encouraged to seek input with respect to market information and pricing from their counterparts in other business lines.

The results of our analysis will be summarized in a memorandum and provided to an investment committee. All members of the investment committee will review prospective investments and may provide input into the investment decision. The specific approval level that is required will depend upon the size and type of the investment being made. After an investment is made, it will be monitored through our surveillance process. Our objective is to anticipate credit changes so that steps can be taken to protect our position or to liquidate investments prior to significant credit deterioration. Asset-level performance information will be updated regularly on our portfolio management system, which will incorporate both proprietary and third-party databases. Overall portfolio composition will be monitored to manage exposure to particular markets, sectors or credits. Each business line will produce a quarterly surveillance report that will be reviewed by the investment committee. If necessary, the committee may meet more frequently to discuss emerging issues within the portfolio and authorize specific actions.

Investment Policies

Investment Objectives

Our investment objective is to make real estate investments that produce attractive risk-adjusted returns and predictable cash flow for distribution to our stockholders. We expect to pursue our investment objectives primarily through the ownership by our Operating Partnership of interests in real estate investments. We intend to pursue diverse real estate investments that have the potential to generate favorable risk-adjusted returns, consistent with the maintenance of our status as a REIT for federal income tax purposes.

Investment Guidelines

Our board of directors will adopt general guidelines for our investments and borrowings to the effect that:

• no investment shall be made which would cause us to fail to qualify as a REIT; and

• no investment shall be made which would cause us to be regulated as an investment company.

These investment guidelines may be changed by our board of directors without the approval of our stockholders.

Investment in Real Estate

We have the ability to invest in a broad spectrum of European commercial real estate. We are currently predominantly focused on office properties and may expand by acquiring other types of commercial real estate located throughout Europe. We expect to make equity investments, directly or indirectly through joint ventures, in a diversified portfolio of European commercial real estate that offers the opportunity to generate attractive risk-adjusted returns. We seek to generate stable cash flow for distribution to our stockholders and in turn build long-term franchise value. We primarily purchase or lease income-producing commercial properties, but we may also acquire other types of properties for long-term investment and sell properties, in whole or in part, when circumstances warrant.

We may also participate with third parties in property ownership, through joint ventures or other forms of co-ownership. These investments may permit us to own interests in larger investments without unduly restricting diversification and, therefore, add flexibility in structuring our portfolio. We will not, however, enter into a joint venture or partnership to make an investment that would not otherwise meet our investment policies. Equity investments may be subject to existing mortgage financing and other indebtedness or other financing or indebtedness as may be incurred in connection with acquiring or refinancing these investments. Debt service on such financing or indebtedness will have a priority over any distributions with respect to our Common Stock. Investments are also subject to our policy not to be treated as an investment company under the Investment Company Act.

104

Financing Policies

Our investment guidelines will not restrict the amount of borrowings that we may incur. We intend to use leverage in order to enhance our overall investment returns, while maintaining appropriate levels of leverage relative to our investments and the cost and structure of available financing. We intend to seek, where possible, to match the terms and interest rates of a substantial part of our assets and liabilities to minimize the differential between overall asset and liability maturities.

We seek to access a wide range of secured and unsecured debt and public and private equity capital sources to grow and fund our investment activities. We expect to predominantly use investment-level financing as part of our strategy to prudently leverage our investments and deliver attractive risk-adjusted returns to our stockholders. We expect to target overall leverage of 40% to 50%, although there is no assurance that this will be the case.

We plan to pursue a variety of financing arrangements such as mortgage notes and bank loans available from the CMBS market, finance companies and banks. In addition, we may use corporate-level financing such as credit facilities and other borrowings. We generally seek to limit our reliance on recourse borrowings. Borrowing levels for our investments may be dependent upon the nature of the investments and the related financing that is available.

For longer duration, relatively stable cash flow investments, such as those derived from net lease investments, we may use fixed rate financing. For investment cash flow with greater growth potential, we expect to use floating rate financing, which provides prepayment flexibility and may provide a better match between underlying cash flow projections and potential increases in interest rates. Where we use floating rate financing, we expect to generally attempt to mitigate the risk of interest rates rising through hedging arrangements including interest rate swaps and caps. We may vary the mix of fixed and floating rate debt and use a combination of the two when we deem it appropriate. We also may utilize corporate-level financing in the future.

We intend to take advantage of differences in the monetary performance of the various European jurisdictions, which we expect to provide us lower cost to capital and to enable us to fund investments located in economies that are at a more advanced stage of recovery at artificially low financing costs.

We anticipate that the process of raising, investing and deploying equity capital will give rise to short-term fluctuations in the levels of leverage within each of our business lines and on an overall basis. Our objectives in utilizing leverage are to improve risk-adjusted returns and, where possible, to lock in, on a long-term non-recourse basis, a spread between the yield on our investments and the cost of their financing. For further information regarding our financing, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Sources of Operating Revenues and Cash Flows.”

Our financing policies may be changed by our board of directors and executive officers without the approval of our stockholders.

Hedging Policies

We may use derivative instruments primarily to manage the risk of interest rate and foreign currency fluctuations. We may use forward or option foreign currency purchase contracts, interest rate swaps, interest rate caps, short sales of securities, options or other hedging instruments in order to implement our hedging strategy. The counterparties to these arrangements are major financial institutions with which we may also have other financial relationships.

Creating an effective strategy for dealing with interest rate and foreign currency movements is complex and no strategy can completely insulate us from risks associated with such fluctuations. There can be no assurance that our hedging activities will have the intended impact on our results. A more detailed discussion of our hedging policy is provided in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations — Quantitative and Qualitative Disclosures About Market Risk.”

Policies with Respect to Other Activities

We will have the authority to offer our Common Stock, preferred stock or options to purchase stock in exchange for property and to repurchase or otherwise acquire our Common Stock or other securities in the open market or otherwise, and we may engage in such activities in the future. We expect, but are not obligated, to issue shares of our Common Stock to holders of operating partnership units in our Operating Partnership upon exercise of their redemption rights. We may issue preferred stock from time to time, in one or more series, as authorized by our board of directors without the need for stockholder approval. We have not engaged in trading, underwriting or agency distribution or sale of securities of other issuers other than our Operating Partnership and do not intend to do so. We have not in the past, but we may in the future, invest in the securities of other issuers for the purpose of exercising control over such issuers. At all times, we intend to make investments in such a manner as to qualify as a REIT, unless because of circumstances or changes in the Code or the regulations of the U.S. Department of the Treasury, our board of directors determines that it is no longer in our best interest to qualify as a REIT. Except as described in this report, we have not made any loans to third parties, although we may in the future make loans to third parties, including, without limitation,

105

to joint ventures in which we participate. We intend to make investments in such a way that we will not be treated as an investment company under the Investment Company Act. We also intend to furnish our stockholders with annual reports containing consolidated financial statements audited by our independent certified public accountants and with quarterly reports containing unaudited consolidated financial statements for each of the first three quarters of each fiscal year. Our policies with respect to such activities may be reviewed and modified or amended from time to time by our board of directors without a vote of the stockholders.

106

OUR OPERATING PARTNERSHIP

Prior to the Distribution, we intend to form NorthStar Realty Europe Limited Partnership, a Delaware limited partnership, or our Operating Partnership. We describe in this section our Operating Partnership as if it has already been formed.

NorthStar Realty Europe Limited Partnership has been organized as a Delaware limited partnership. We are the general partner. The purpose of our Operating Partnership includes the conduct of any business that may be lawfully conducted by a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act, or the DRULPA, except that the partnership agreement of our Operating Partnership requires the business of our Operating Partnership to be conducted in such a manner that will permit us to qualify as a REIT under federal tax laws. The following summary of material provisions of our Operating Partnership agreement is subject to, and is qualified in its entirety by reference to, all the provisions of our operating partnership agreement and applicable provisions of the DRULPA. We have incorporated by reference the partnership agreement as an exhibit to the registration statement of which this prospectus is a part.

General

Pursuant to the operating partnership agreement, the general partner, as the sole general partner of our Operating Partnership, has full, exclusive and complete responsibility and discretion in the management and control of our Operating Partnership. The limited partners of our Operating Partnership have no authority in their capacity as limited partners to transact business for, or participate in the management activities or decisions of, our Operating Partnership except as required by applicable law. Consequently, we, by virtue of our position as the general partner, control the assets and business of our Operating Partnership. However, any amendment to the operating partnership agreement that would: (i) affect the redemption rights; (ii) adversely affect the limited partners’ rights to receive cash distributions; (iii) convert a limited partner interest into a general partner interest; or (iv) modify the limited liability of a limited partner, will require the consent of each partner adversely affected thereby or else shall be effective against only those partners who shall have consented thereto.

Operations

The operating partnership agreement requires that our Operating Partnership be operated in a manner that will enable us to satisfy the requirements for being classified as a REIT for federal tax purposes, to avoid any federal income or excise tax liability imposed by the Code, and to ensure that our Operating Partnership will not be classified as a “publicly traded partnership” for purposes of section 7704 of the Code.

In addition to the administrative and operating costs and expenses incurred by our Operating Partnership, it is anticipated that our Operating Partnership will pay all of our administrative costs and expenses and our expenses will be treated as expenses of our Operating Partnership. Our expenses generally will include: (i) expenses relating to the ownership of interests in and management and operation of, or for the benefit of, our Operating Partnership; (ii) compensation of our officers; (iii) fees and expenses of our directors; and (iv) all costs and expenses of us being a public company, including costs of filings with the SEC reports and other distributions to our stockholders.

Distributions

The operating partnership agreement provides that our Operating Partnership shall distribute cash from operations (including net sale or refinancing proceeds, but excluding net proceeds from the sale of our Operating Partnership’s property in connection with the liquidation of our Operating Partnership) on a quarterly (or, at the election of the general partner, more frequent) basis, in amounts determined by the general partner in its sole discretion, to the partners in accordance with their respective percentage interests in our Operating Partnership. Upon liquidation of our Operating Partnership, after payment of, or adequate provision for, debts and obligations of our Operating Partnership, including any partner loans, it is anticipated that any remaining assets of our Operating Partnership will be distributed to all partners with positive capital accounts in accordance with their respective positive capital account balances. If the general partner has a negative balance in its capital account following a liquidation of our Operating Partnership, it will be obligated to contribute cash to our Operating Partnership equal to the negative balance in its capital account.

Allocations

It is anticipated that income, gain and loss of our Operating Partnership for each fiscal year generally will be allocated among the partners in accordance with their respective interests in our Operating Partnership, subject to compliance with the provisions of sections 704(b) and 704(c) of the Code and Treasury regulations promulgated thereunder.

Capital Contributions and Borrowings

The partnership agreement provides that if the partnership requires additional funds at any time in excess of funds available to the partnership from borrowing or capital contributions, we may borrow such funds from a financial institution or other lender

107

and lend such funds to the partnership. Under the partnership agreement, we are obligated to contribute the proceeds of any offering of shares of our Common Stock as additional capital to our Operating Partnership.

Issuance of Additional Limited Partnership Interests

We are authorized, without the consent of the limited partners, to cause our Operating Partnership to issue additional units to us, to the limited partners or to other persons for such consideration and on such terms and conditions as we deem appropriate. If additional units are issued to us, then we must: (i) issue additional shares of common stock and must contribute to our Operating Partnership the entire proceeds received by us from such issuance; or (ii) issue additional units to all partners in proportion to their respective interests in our Operating Partnership. In addition, we may cause our Operating Partnership to issue to us additional partnership interests in different series or classes, which may be senior to the units, in conjunction with an offering of our securities having substantially similar rights, in which the proceeds thereof are contributed to our Operating Partnership. Consideration for additional partnership interests may be cash or other property or assets. No person, including any partner or assignee, has preemptive, preferential or similar rights with respect to additional capital contributions to our Operating Partnership or the issuance or sale of any partnership interests therein.

The operating partnership may issue units of limited partnership interest that are common units or LTIP Units. The operating partnership also has the authority to issue additional units of limited partnership interest that are preferred as to distributions and upon liquidation to the Operating Partnership units which we refer to as preferred operating partnership units.

LTIP Units

Our operating partnership is also authorized to issue LTIP Units. In general, an LTIP Unit will receive the same quarterly per unit distributions as a common unit. Initially, each LTIP Unit will have a capital account balance of zero and, therefore, will not have full parity with common units with respect to liquidating distributions. However, the partnership agreement provides that “book gain,” or economic appreciation, in our assets realized by our Operating Partnership as a result of the actual sale of all or substantially all of our Operating Partnership’s assets or the revaluation of our Operating Partnership’s assets as provided by applicable Treasury regulations, will be allocated first to the LTIP Unit holders until the capital account per LTIP Unit is equal to the average capital account per-unit of our common units in our Operating Partnership. The partnership agreement provides that our Operating Partnership’s assets will be revalued upon the occurrence of certain events, specifically additional capital contributions by us or other partners, the redemption of a partnership interest, a liquidation (as defined in the Treasury regulations) of our Operating Partnership or the issuance of a partnership interest (including LTIP Units) to a new or existing partner as consideration for the provision of services to, or for the benefit of, our Operating Partnership.

Upon equalization of the capital accounts of the LTIP Units with the average per-unit capital account or our common units, the LTIP Units will achieve full parity with the common units for all purposes, including with respect to liquidating distributions. If such parity is reached and the LTIP Units have vested under the terms of the agreement granting the LTIP Units, then the LTIP Units, subject to the terms and conditions of the partnership agreement, may be converted into an equal number of common units at any time, and thereafter enjoy all the rights of common units. If a sale or revaluation of assets occurs at a time when our Operating Partnership’s assets have appreciated sufficiently since the last revaluation, the LTIP Units would achieve full parity with the common units upon such sale or revaluation. In the absence of sufficient appreciation in the value of our Operating Partnership’s assets at the time of a sale or revaluation, full parity would not be reached.

Consequently, an LTIP Unit may never become convertible because the value of our Operating Partnership’s assets has not appreciated sufficiently between revaluation dates to equalize capital accounts. Until and unless parity is reached, the value for a given number of vested LTIP Units will be less than the value of an equal number of shares of our Common Stock.

Redemption Rights

Pursuant to our operating partnership agreement, the limited partners have the right to cause our Operating Partnership to redeem their common units for cash or, at the election of the general partner, shares of our Common Stock on a one-for-one basis beginning one year after the issuance of such common units. We expect, but are not obligated, to issue shares of our Common Stock to holders of common units in our Operating Partnership upon exercise of their redemption rights. The redemption price will be paid in cash in our discretion or in the event that the issuance of shares of our Common Stock to the redeeming limited partner would: (i) result in any person owning, directly or indirectly, shares of our Common Stock in excess of 9.8% in value or number of shares, whichever is more restrictive, of the aggregate of the outstanding shares of our Common Stock, or more than 9.8% of the value of the outstanding shares of our stock; (ii) result in shares of our securities being owned by fewer than 100 persons (determined without reference to any rules of attribution); (iii) result in our being “closely held” within the meaning of section 856(h) of the Code; (iv) cause us to own, actually or constructively, 9.9% or more of the ownership interests in a tenant of our or our Operating Partnership’s real property, within the meaning of section 856(d)(2)(B) of the Code; or (v) cause the acquisition of shares of our Common Stock by such redeeming limited partner to be “integrated” with any other distribution of

108

shares of our Common Stock for purposes of complying with the Securities Act. Specifically, the partnership agreement prohibits all limited partners from redeeming their common units for a period of one year from the date of issuance.

No Removal of the General Partner

We may not be removed as general partner by the partners with or without cause, except with the consent of the general partner.

Withdrawal of General Partner; Transfer of General Partner’s Interests

The general partner may not withdraw from our Operating Partnership or transfer or assign its interest in our Operating Partnership unless: (i) the interests are transferred to a qualified REIT subsidiary; (ii) the limited partners holding a majority of the outstanding partnership interests held by all limited partners consent; or (iii) the general partner merges with another entity and, immediately after such merger, the surviving entity contributes substantially all of its assets, other than the general partner’s interests in our Operating Partnership, to our Operating Partnership in exchange for operating partnership units.

Restrictions on Transfer of Operating Partnership Units by Limited Partners

The operating partnership agreement imposes certain restrictions on the transfer of units. The operating partnership agreement provides that no limited partner shall transfer all or any portion of its partnership interest to any transferee prior to the one-year anniversary following the consummation of the IPO without the consent of the general partner, which consent may be withheld in its sole and absolute discretion; provided, however, that any limited partner may, at any time without the consent of the general partner: (i) transfer all or part of its partnership interest to any family member, any controlled entity or any affiliate, provided that the transferee is, in any such case, a qualified transferee; or (ii) pledge all or any portion of its partnership interest to a lending institution, that is not an affiliate of such limited partner, as collateral or security for a bona fide loan or other extension of credit, and transfer such partnership interest to such lending institution in connection with the exercise of remedies under such loan or extension or credit. After the one-year anniversary of the consummation of the IPO, each limited partner, and each transferee of partnership interests or assignee pursuant to a permitted transfer, shall have the right to transfer all or any portion of its partnership interest to any person, subject to the provisions of our operating partnership agreement.

No limited partner shall have the right to substitute a transferee as a limited partner in its place. A transferee of the interest of a limited partner may be admitted as a substituted limited partner only with the consent of the general partner which consent may be given or withheld by the general partner in its sole and absolute discretion.

Term

We intend to form our operating partnership prior to the Distribution and expect it to continue until terminated as provided in our operating partnership agreement or by operation of law.

Tax Matters

Pursuant to our operating partnership agreement, the general partner is the tax matters partner of our Operating Partnership and, as such, has authority to handle tax audits and to make tax elections under the Code on behalf of our Operating Partnership.

109

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Beneficial Ownership of Stock

The following table shows the number and percentage of shares of our Common Stock that will be owned of record and beneficially immediately following the time of the Distribution with respect to:

• each director and director nominee;

• each of our named executive officers;

• each person or group of affiliated persons that is the beneficial owner of 5% or more of our Common Stock; and

• all of our directors, director nominees and executive officers as a group.

All information in the table is based upon information available to us as of  , 2015 as to the ownership of our Common Stock and is presented as if the Distribution has occurred prior to the dates of ownership information used in the table.

	Amount and Nature of Beneficial Ownership(1)
Name and Address of Beneficial Owner	Number	Percentage
Principal Stockholders:
The Vanguard Group
Directors and Executive Officers:
David T. Hamamoto
Mahbod Nia
Debra A. Hess
All directors and executive officers as a group

____________

*Less than one percent.

(1) Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. In accordance with SEC rules, each listed person’s beneficial ownership includes all shares the investor actually owns beneficially or of record; all shares over which the investor has or shares direct or indirect voting or dispositive control (such as in the capacity as a general partner of an investment fund); and all shares over which the investor has the right to acquire direct or indirect voting or dispositive control within 60 days (such as shares of restricted Common Stock that are currently vested or which are scheduled to vest within 60 days). Unless otherwise described in a footnote below, number reflects shares of Common Stock.

110

SHARES ELIGIBLE FOR FUTURE SALE

Sales or the availability for sale of substantial amounts of our Common Stock in the public market could adversely affect the prevailing market price for such stock. As of , 2015, there were approximately record holders of NorthStar Realty common stock. Upon completion of the Distribution, we will have outstanding an aggregate of approximately million shares of our Common Stock based upon the approximately million shares of NorthStar Realty common stock outstanding on , 2015. All of the shares of our Common Stock will be freely tradable without restriction, subject to the limitations on ownership set forth in our charter, and without further registration under the Securities Act unless the shares are owned by our “affiliates” as that term is defined in the rules under the Securities Act. For a more detailed discussion of restrictions on transfer of our Common Stock, refer to “Description of Capital Stock — Restrictions on Transfer and Ownership of our Common Stock.” Shares of our Common Stock held by “affiliates” may be sold in the public market only if registered or if they qualify for an exemption from registration or in compliance with Rule 144 under the Securities Act, which is summarized below.

Rule 144

In general, under Rule 144 of the Securities Act as currently in effect, an affiliate would be entitled to sell within any three-month period a number of shares of our Common Stock that does not exceed the greater of:

• one percent of the number of shares of our Common Stock then outstanding; or

• the average weekly trading volume of our Common Stock on the stock exchange on which our Common Stock will be listed, which we expect to be the NYSE, during the four calendar weeks preceding the filing of a notice of Form 144 with respect to such sale.

Sales under Rule 144 are also subject to certain holding period requirements, manner of sale provisions and notice requirements and to the availability of current public information about us.

Stock Awards

We expect to establish an equity incentive plan, pursuant to which we may grant an aggregate of shares of restricted Common Stock to our non-employee directors. Refer to “Executive Compensation — Equity Incentive Plan” for additional information.

111

DESCRIPTION OF CAPITAL STOCK

Our charter will be amended and restated prior to the spin-off, which we refer to, as amended and restated, as our charter. The following is a summary of the material terms of our capital stock that will be contained in our charter and bylaws. The summaries and descriptions below do not purport to be complete statements of the relevant provisions of our charter or our bylaws to be in effect at the time of the spin-off and are qualified in their entirety by reference to these documents, which you should read (along with the applicable provisions of Maryland law) for complete information on our capital stock as of the time of the spin-off. Our charter and bylaws to be in effect at the time of the spin-off will be included as exhibits to our registration statement of which this prospectus forms a part and this summary is qualified in its entirety by such exhibits.

General

We are currently authorized to issue up to 1,000,000,000 shares of Common Stock. Prior to the Distribution, we will amend and restate our charter to provide authorization for us to issue up to 200,000,000 shares of shares of preferred stock, par value $0.01 per share, or our Preferred Stock, in addition to the 1,000,000,000 shares of Common Stock authorized. In addition, our charter will authorize a majority of our entire board of directors, without stockholder approval, to amend our charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that NorthStar Europe is authorized to issue.

On June 18, 2015, the Company issued 100 shares of Common Stock to NorthStar Realty for $1,000, which are the only shares of our Common Stock currently issued and outstanding.

Common Stock

All shares of our Common Stock currently outstanding are duly authorized, validly issued, fully paid and non-assessable, not subject to redemption and without preemptive or other rights to subscribe for or purchase any proportionate part of any new or additional issues of stock of any class or of securities convertible into stock of any class. Holders of our Common Stock will be entitled to receive dividends when authorized by our board of directors and declared by us out of assets legally available for the payment of dividends. They are also entitled to share ratably in our assets legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up, after payment of or adequate provision for all of our known debts and liabilities, including the liquidation preferences of any shares of Preferred Stock. These rights will be subject to the preferential rights of any other class or series of our stock and to the provisions of our charter regarding restrictions on transfer and ownership of our stock.

Subject to our contemplated charter restrictions on transfer and ownership of our stock, each outstanding share of our Common Stock will entitle the holder to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except as expressly provided with respect to any other class or series of our stock, the holders of our Common Stock will possess the exclusive voting power on all matters submitted to a vote of stockholders. There will not be cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of our Common Stock will be able to elect all of the directors then standing for election and the holders of the remaining shares will not be able to elect any directors.

Holders of our Common Stock will have no preference, conversion, exchange, sinking fund, redemption or appraisal rights and will have no preemptive rights to subscribe for any of our securities. Subject to our contemplated charter restrictions on transfer and ownership of stock, all shares of our Common Stock will have equal dividend, liquidation and other rights.

Under Maryland law, a Maryland corporation generally cannot dissolve, amend its charter, merge or consolidate with or convert into another entity, sell all or substantially all of its assets or engage in a statutory share exchange unless approved by the affirmative vote of stockholders holding at least two-thirds of all the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our charter will provide that these matters (other than certain amendments to the provisions of our charter relating to the removal of directors and charter amendments) may be approved by a majority of all of the votes entitled to be cast on the matter. Also, because many of our assets may be held by subsidiaries, these subsidiaries may be able to merge or sell all or substantially all of their assets without the approval of our stockholders.

Transfer Agent and Registrar

The transfer agent and registrar for the Common Stock is American Stock Transfer & Trust Company, LLC.

Preferred Stock

Our charter authorizes our board of directors to classify any unissued shares of Preferred Stock and to reclassify any previously classified but unissued shares of any class or series of stock, as authorized by our board of directors. Prior to issuance

112

of shares of each class or series, our board of directors is required by the MGCL and will be required by our charter to set, subject to the contemplated provisions of our charter regarding the restrictions on transfer and ownership of stock, the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each such class or series. Thus, our board of directors could authorize the issuance of shares of Preferred Stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control of NorthStar Europe that might involve a premium price for holders of our Common Stock or otherwise be in their best interest. As of the date hereof, no shares of Preferred Stock are outstanding and we have no present plans to issue any Preferred Stock.

Restrictions on Transfer and Ownership of our Common Stock

For us to qualify as a REIT under the Code, our stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of twelve months or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of our outstanding stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year.

Our charter contains restrictions on the number of shares of our stock that a person may own. No person, including entities, may acquire or hold, directly or indirectly, in excess of 9.8% in value of the aggregate of the outstanding shares of our stock. In addition, no person, including entities, may acquire or hold, directly or indirectly, our Common Stock in excess of 9.8% (in value or number, whichever is more restrictive) of the aggregate of the outstanding shares of our Common Stock.

Our charter further prohibits: (i) any person from beneficially or constructively owning shares of our stock that would result in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of the taxable year) or otherwise cause us to fail to qualify as a REIT (including, but not limited to, beneficial or constructive ownership that would result in our owning (directly or indirectly) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by us from such tenant would cause us to fail to satisfy any of the gross income requirements of Section 856(c) of the Code); and (ii) any person from transferring shares of our stock if the transfer would result, if effective, in our stock being owned by fewer than 100 persons. Any person who acquires or who attempts or intends to acquire shares of our stock that may violate any of these restrictions or who is the intended transferee of shares of our stock which are transferred to the trust is required to give us immediate written notice, or in the case of a proposed or attempted transaction, give at least 15 days prior written notice, and provide us with such information as we may request in order to determine the effect, if any, of the transfer on our qualification as a REIT.

The above restrictions will not apply if our board of directors determines that it is no longer in our best interests to continue to qualify as a REIT (or that compliance is no longer required for REIT qualification). Our board of directors, in its sole discretion, may exempt (prospectively or retroactively) a person from these limits, subject to such terms, conditions, representations and undertakings as it may determine and as are contained in our charter.

Any attempted transfer of shares of our stock that would result in shares of our stock being owned by fewer than 100 persons will be null and void, and the intended transferee shall acquire no rights in such shares. Any attempted transfer of our stock which, if effective, would result in any other violation of the above limitations, will cause the number of shares causing the violation (rounded to the nearest whole share) to be automatically transferred to a trust for the exclusive benefit of one or more charitable beneficiaries and the proposed transferee will not acquire any rights in the shares. If the automatic transfer to the trust would not be effective for any reason to prevent the violation of the above limitations, then the transfer of that number of shares of stock that otherwise would cause the violation will be null and void, and the proposed transferee will not acquire any rights in the shares. The automatic transfer will be deemed to be effective as of the close of business on the business day (as defined in our charter) prior to the date of the purported transfer. Shares of our stock held in the trust will be issued and outstanding shares. The proposed transferee will not benefit economically from ownership of any shares of stock held in the trust, will have no rights to dividends or other distributions and no rights to vote or other rights attributable to the shares of stock held in the trust. The trustee of the trust will have all voting rights and rights to dividends or other distributions with respect to shares held in the trust. These rights will be exercised for the exclusive benefit of the charitable beneficiary. Any dividend or other distribution paid prior to our discovery that shares of stock have been transferred to the trust must be paid by the recipient to the trustee upon demand. Any dividend or other distribution authorized but unpaid will be paid when due to the trustee. Any dividend or distribution paid to the trustee will be held in trust for the charitable beneficiary. Subject to Maryland law, effective as of the date that the shares of stock are transferred to the trust, the trustee will have the authority, at the trustee’s discretion, to: (i) rescind as void any vote cast by the proposed transferee prior to our discovery that the shares have been transferred to the trust; and (ii) recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary. However, if we have already taken irreversible corporate action, then the trustee will not have the authority to rescind and recast the vote. If necessary to protect our qualification as a REIT, we may establish additional trusts with distinct trustees and charitable beneficiaries to which shares may be transferred.

113

Furthermore, our charter grants our board of directors the authority to take other actions, including the redemption of shares of stock, that it deems advisable to prevent a violation of the transfer and ownership restrictions described above.

Within 20 days of receiving notice from us that shares of our stock have been transferred to the trust, the trustee will sell the shares to a person designated by the trustee, whose ownership of the shares will not violate the above ownership limitations. Upon the sale, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the proposed transferee and to the charitable beneficiary as follows. The proposed transferee will receive the lesser of: (i) the price paid by the proposed transferee for the shares or, if the proposed transferee did not give value for the shares in connection with the event causing the shares to be held in the trust (e.g., a gift, devise or other similar transaction), the market price (as defined in our charter) of the shares on the day of the event causing the shares to be held in the trust and (ii) the price received by the trustee, net of any commission and other expenses of sale, from the sale or other disposition of the shares held in trust. Any net sale proceeds in excess of the amount payable to the proposed transferee will be paid immediately to the charitable beneficiary. If, prior to our discovery that shares of our stock have been transferred to the trust, the shares are sold by the proposed transferee, then: (i) the shares shall be deemed to have been sold on behalf of the trust; and (ii) to the extent that the proposed transferee received an amount for the shares that exceeds the amount he was entitled to receive, the excess shall be paid to the trustee upon demand. 

In addition, shares of our stock held in the trust will be deemed to have been offered for sale to us, or our designee, at a price per share equal to the lesser of: (i) the price per share in the transaction that resulted in the transfer to the trust (or, in the case of a devise or gift, the market price at the time of the devise or gift); and (ii) the market price on the date we, or our designee, accept the offer. We will have the right to accept the offer until the trustee has sold the shares. Upon a sale to us, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the proposed transferee.

All certificates representing shares of our stock will bear a legend referring to the restrictions described above.

Every owner of 5% or more (or such lower percentage as required by the Code or the regulations promulgated thereunder) of our outstanding stock is required, within 30 days after the end of each taxable year, to give us written notice stating his name and address, the number of shares of each class and series of our stock which he beneficially owns and a description of the manner in which the shares are held. Each such owner shall provide us with such additional information as we may request in order to determine the effect, if any, of his beneficial ownership on our qualification as a REIT and to ensure compliance with the ownership limits. In addition, each stockholder shall upon demand be required to provide us with such information as we may request in good faith in order to determine our qualification as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance.

These restrictions on ownership and transfer could delay, defer or prevent a transaction or a change in control that might involve a premium price for the Common Stock or otherwise be in the best interest of the stockholders.

114

CERTAIN PROVISIONS OF MARYLAND LAW AND OF OUR CHARTER AND BYLAWS 

The following description of the terms of certain provisions of Maryland law and our charter and bylaws is only a summary.The summaries and descriptions below do not purport to be complete statements of the relevant provisions of our charter or our bylaws to be in effect at the time of the spin-off and are qualified in their entirety by reference to these documents, which you should read (along with the applicable provisions of Maryland law). Our charter and bylaws to be in effect at the time of the spin-off will be included as exhibits to our registration statement of which this prospectus forms a part and this summary is qualified in its entirety by such exhibits.

Our Board of Directors

Our charter and bylaws will provide that, subject to the rights of holders of one or more classes or series of preferred stock, the number of our directors may be established by our board of directors but may not be fewer than the minimum required by the MGCL (which is currently one) nor more than 15. Any vacancy will be filled, at any regular meeting or at any special meeting called for that purpose, by a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum.

Removal of Directors

Our charter will provide that, subject to the rights of holders of one or more classes or series of preferred stock, a director may be removed only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of directors. This provision, when coupled with the provisions that will be included in our charter and bylaws authorizing our board of directors to fill vacant directorships, will preclude stockholders from removing incumbent directors (except by a substantial affirmative vote) and filling the vacancies created by the removal with their own nominees.

Business Combinations

Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:

• any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting stock; or 

• an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding voting stock of the corporation.

A person is not an interested stockholder under the statute if our board of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. In approving a transaction, our board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board.

After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by our board of directors of the corporation and approved by the affirmative vote of at least:

• 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and 

• two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.

These super-majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.

The statute provides various exemptions from its provisions, including for business combinations that are exempted by the board of directors before the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has, by resolution, exempted any business combinations: (i) between us and NSAM, any of its affiliates or any of their sponsored or other managed companies; and (ii) between us and any person, provided that any such business combination is first approved by our board of directors (including a majority of our directors who are not affiliates or associates of such person).

115

Consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations between NorthStar and any of them. As a result, such parties may be able to enter into business combinations with NorthStar that may not be in the best interest of our stockholders, without compliance with the super-majority vote requirements and the other provisions of the statute. The board of directors may revise, repeal or amend these resolutions at any time.

The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

Control Share Acquisitions

Maryland law provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by the affirmative vote of holders entitled to cast two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquiror, by officers or by directors who are employees of the corporation are excluded from shares entitled to vote on the matter. Control shares are voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power:

• one-tenth or more but less than one-third; 

• one-third or more but less than a majority; or 

• a majority or more of all voting power.

Control shares do not include shares that the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval or shares acquired directly from the corporation. A control share acquisition means the acquisition of issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition may compel the board of directors of the corporation to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction of certain conditions, including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then the corporation may redeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the corporation to redeem control shares is subject to certain conditions and limitations. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or, if a meeting of stockholders is held at which the voting rights of the shares are considered and not approved, as of the date of the meeting. If voting rights for control shares are approved at a stockholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition.

The control share acquisition statute does not apply: (i) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction; or (ii) to acquisitions approved or exempted by the charter or bylaws of the corporation.

Our bylaws will contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of shares of our stock. This provision may be amended or eliminated at any time in the future.

Amendment to Our Charter

Our charter will provide that, except for provisions relating to removal of directors and certain charter amendments related thereto, it may be amended only if such amendment is declared advisable by our board of directors and, to the extent stockholder approval is required, approved by the affirmative vote of the holders of not less than a majority of all of the votes entitled to be cast on the matter.

Dissolution

Our charter will provide that our dissolution must be declared advisable by our board of directors and approved by the affirmative vote of the holders of not less than a majority of all of the votes entitled to be cast on the matter.

116

Subtitle 8

Subtitle 8 of Title 3 of the MGCL, or Subtitle 8, permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in our charter or bylaws, to any or all of five provisions:

• a classified board; 

• a two-thirds vote requirement for removing a director; 

• a requirement that the number of directors be fixed only by vote of the directors; 

• a requirement that a vacancy on the board be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and

• a majority requirement for the calling of a stockholder-requested special meeting of stockholders.

Our charter makes the election to be subject to the provisions of Subtitle 8 relating to the filling of vacancies on our board of directors. Through provisions in our charter and bylaws unrelated to Subtitle 8, we will: (i) require a two-thirds vote for the removal of any director from our board of directors; (ii) vest in our board of directors the exclusive power to fix the number of directorships and fill vacancies on our board of directors; and (iii) require, unless called by our chairman of the board, president, chief executive officer or our board of directors, the request of holders of a majority of outstanding shares to call a special meeting. Our charter will prohibit us from classifying our board of directors through an election under Subtitle 8 of Title 3 of the MGCL. In the future, our board of directors may elect, without stockholder approval, to be subject to the other provisions of Subtitle 8.

Advance Notice of Director Nominations and New Business

Our bylaws will provide that with respect to an annual meeting of stockholders, nominations of persons for election to our board of directors and the proposal of business to be considered by stockholders may be made only: (i) pursuant to our notice of the meeting; (ii) by or at the discretion of our board of directors; or (iii) by a stockholder of record, both at the time of giving notice and at the time of the annual meeting, who is entitled to vote at the meeting in the election of directors and who has complied with the advance notice procedures of our bylaws. With respect to special meetings of stockholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations of persons for election to our board of directors at a special meeting may be made only: (i) by our board of directors; or (ii) provided that the special meeting has been called in accordance with our bylaws for the purposes of electing directors, by a stockholder of record, both at the time of giving notice and at the time of the special meeting, who is entitled to vote at the meeting in the election of directors and who has complied with the advance notice provisions of our bylaws.

Anti-Takeover Effect of Certain Provisions of Maryland Law and of Our Charter and Bylaws

The business combination provisions and, if the applicable provision that will be included in our bylaws is rescinded, the control share acquisition provisions of Maryland law, the provisions that will be included in our charter relating to removal of directors and filling vacancies on our board, the restrictions on ownership and transfer of our shares and the advance notice provisions that will be included in our bylaws could delay, defer or prevent a transaction or a change in the control of us that might involve a premium price for holders of our Common Stock or otherwise be in their best interest.

Exclusive Forum

Our bylaws will provide will that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, shall be the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of NorthStar Europe; (ii) any action asserting a claim of breach of any duty owed by any director or officer or other employee of NorthStar Europe to NorthStar Europe or to the stockholders of NorthStar Europe; (iii) any action asserting a claim against NorthStar Europe or any director or officer or other employee of NorthStar Europe arising pursuant to any provision of the MGCL or the charter or bylaws of NorthStar Europe; or (iv) any action asserting a claim against NorthStar Europe or any director or officer or other employee of NorthStar Europe that is governed by the internal affairs doctrine.

Certain Corporate Opportunities and Conflicts

Certain of our executive officers are also executive officers of NorthStar Realty, NSAM and certain of NSAM’s other managed companies. Certain of our directors are also directors of NorthStar Realty, NSAM and certain of NSAM’s other managed companies. Our board of directors will enact resolutions that will recognize that certain directors and officers of the Company, or

117

the Overlap Persons, may serve as directors, officers, employees, consultants and agents of NorthStar Realty and its subsidiaries and successors, NSAM and/or NSAM’s other managed companies and their subsidiaries and successors, each of the foregoing referred to as an Other Entity, and will provide that if a director or officer of the Company who is an Overlap Person is presented or offered, or otherwise acquires knowledge of, a potential transaction or matter that may constitute or present a business opportunity for the Company or any of our subsidiaries, in which the Company or any of our subsidiaries could have an interest or expectancy (any such transaction or matter, and any such actual or potential business opportunity, referred to as a Potential Business Opportunity): (i) such director or officer will, to the fullest extent permitted by law, have no duty or obligation to refrain from referring such Potential Business Opportunity to any Other Entity and, if such director or officer refers such Potential Business Opportunity to an Other Entity, such director or officer shall have no duty or obligation to refer such Potential Business Opportunity to the Company or to any of our subsidiaries or to give any notice to the Company or to any of our subsidiaries regarding such Potential Business Opportunity (or any matter related thereto); (ii) if such director refers a Potential Business Opportunity to an Other Entity, such director or officer will not be liable to the Company or to any of our subsidiaries, as a director, officer, stockholder or otherwise, for any failure to refer such Potential Business Opportunity to the Company, or for referring such Potential Business Opportunity to any Other Entity, or for any failure to give any notice to the Company regarding such Potential Business Opportunity or any matter relating thereto; (iii) any Other Entity may participate, engage or invest in any such Potential Business Opportunity notwithstanding that such Potential Business Opportunity may have been referred to such Other Entity by an Overlap Person; and (iv) if a director or officer who is an Overlap Person refers a Potential Business Opportunity to an Other Entity, then, as between the Company and/or our subsidiaries on the one hand, and such Other Entity, on the other hand, the Company and our subsidiaries shall be deemed to have renounced any interest, expectancy or right in or to such Potential Business Opportunity or to receive any income or proceeds derived therefrom solely as a result of such director or officer having been presented or offered, or otherwise acquiring knowledge of such Potential Business Opportunity unless in each case referred to in clause (i), (ii), (iii) or (iv), the director or officer believed that the Company possessed substantially better resources to benefit from such Potential Business Opportunity than an Other Entity to which the Potential Business Opportunity was referred (an opportunity meeting all of such conditions, a Restricted Potential Business Opportunity) and was given to such person exclusively in its capacity as an officer or director of the Company. The resolution of our board of directors will also confirm that the taking by an Overlap Person for himself or herself, or the offering or other transfer to an Other Entity, of any Potential Business Opportunity, other than a Restricted Potential Business Opportunity, shall not constitute or be construed or interpreted as: (i) an act or omission of such Overlap Person committed in bad faith or as the result of active or deliberate dishonesty; or (ii) receipt by such Overlap Person of an improper benefit, or an improper personal benefit, in money, property, services or otherwise. In the resolutions of our board of directors, on behalf of the Company, our board of directors will renounce to the fullest extent permitted by law, any interest or expectancy in any Potential Business Opportunity that is not a Restricted Potential Business Opportunity. In the event that our board of directors declines to pursue a Potential Business Opportunity, the Overlap Persons are free to refer such Potential Business Opportunity to an Other Entity.

Our board of directors will also enact resolutions that will provide that no contract, agreement, arrangement or transaction (or any amendment, modification or termination thereof) entered into between the Company and/or any of our subsidiaries, on the one hand, and an Other Entity, on the other hand, before the Company ceased to be an indirect, wholly-owned subsidiary of NorthStar Realty shall be void or voidable or be considered unfair to the Company or any of our subsidiaries because an Other Entity is a party thereto, or because any directors, officers or employees of an Other Entity was present at or participated in any meeting of our board of directors, or a committee thereof, of the Company or of any subsidiary of the Company, that authorized the contract, agreement, arrangement or transaction (or any amendment, modification or termination thereof), or because his, her or their votes were counted for such purpose. The Company may from time to time enter into and perform, and cause or permit any of our subsidiaries to enter into and perform, one or more contracts, agreements, arrangements or transactions (or amendments, modifications or supplements thereto) with an Other Entity. To the fullest extent permitted by law, no such contract, agreement, arrangement or transaction (nor any such amendments, modifications or supplements), nor the performance thereof by the Company or any subsidiary of the Company or an Other Entity, shall be considered contrary to any duty owed to the Company (or to any subsidiary of the Company, or to any stockholder of the Company or any of our subsidiaries) by any director or officer of the Company (or by any director or officer of any subsidiary of the Company) who is an Overlap Person. To the fullest extent permitted by law, no director or officer of the Company or any subsidiary of the Company who is an Overlap Person thereof shall have or be under any duty to the Company (or to any subsidiary of the Company, or to any stockholder of the Company or any of our subsidiaries) to refrain from acting on behalf of the Company or an Other Entity, or any of their respective subsidiaries, in respect of any such contract, agreement, arrangement or transaction or performing any such contract, agreement, arrangement or transaction in accordance with its terms and any action by any director or officer of the Company who is an Overlap Person for an Other Entity, or any of its respective subsidiaries in respect of any such contract, agreement, arrangement or transactions (or amendments, modifications or supplements thereto), or in performance thereof in accordance with its terms, shall not constitute or be construed or interpreted as: (i) an act or omission of such Overlap Person committed in bad faith or as the result of active or deliberate dishonesty; or (ii) receipt by such Overlap Person of an improper benefit, or an improper personal benefit, in money, property, services or otherwise.

118

No amendment, repeal or adoption of any resolution inconsistent with the foregoing provisions will have any effect upon: (i) any agreement between the Company or a subsidiary thereof and any Other Entity, that was entered into before the time of such amendment or repeal or adoption of any such inconsistent resolution, or the Amendment Time, or any transaction entered into in connection with the performance of any such agreement, whether such transaction is entered into before or after the Amendment Time; (ii) any transaction entered into between the Company or a subsidiary thereof and any Other Entity, before the Amendment Time; (iii) the allocation of any business opportunity between the Company or any subsidiary thereof and any Other Entity before the Amendment Time; or (iv) any duty or obligation owed by any director or officer of the Company or any subsidiary of the Company (or the absence of any such duty or obligation) with respect to any Potential Business Opportunity which such director or officer was offered or of which such director or officer otherwise became aware before the Amendment Time (regardless of whether any proceeding relating to any of the above is commenced before or after the Amendment Time).

119

FEDERAL INCOME TAX CONSEQUENCES OF OUR STATUS AS A REIT

This section summarizes the material federal income tax considerations that you, as a stockholder, may consider relevant. Hunton & Williams LLP has acted as our special tax counsel, has reviewed this summary and is of the opinion that the discussion contained herein is accurate in all material respects. Because this section is a summary, it does not address all aspects of taxation that may be relevant to particular stockholders in light of their personal investment or tax circumstances, or to certain types of stockholders that are subject to special treatment under the federal income tax laws, such as:

• insurance companies;

• tax-exempt organizations (except to the extent discussed in “— Taxation of Tax-Exempt Stockholders” below);

• financial institutions or broker-dealers;

• non-U.S. individuals and foreign corporations (except to the extent discussed in “— Taxation of Non-U.S. Stockholders” below);

• U.S. expatriates;

• persons who mark-to-market our securities;

• subchapter S corporations;

• U.S. stockholders (as defined below) whose functional currency is not the U.S. dollar;

• regulated investment companies or REITs;

• trusts and estates;

• holders who receive our Common Stock through the exercise of employee stock options or otherwise as compensation;

• persons holding our Common Stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated investment;

• persons subject to the alternative minimum tax provisions of the Code;

• persons holding our securities through a partnership or similar pass-through entity; and

• persons holding a 10% or more (by vote or value) beneficial interest in our stock.

This summary assumes that stockholders hold our Common Stock as capital assets for federal income tax purposes, which generally means property held for investment.

The statements in this section are based on the current federal income tax laws, are for general information purposes only and are not tax advice. We cannot assure you that new laws, interpretations of law, or court decisions, any of which may take effect retroactively, will not cause any statement in this section to be inaccurate.

WE URGE YOU TO CONSULT YOUR TAX ADVISER REGARDING THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE OWNERSHIP AND SALE OF OUR COMMON STOCK AND OF OUR ELECTION TO BE TAXED AS A REIT. SPECIFICALLY, YOU SHOULD CONSULT YOUR TAX ADVISER REGARDING THE FOREIGN, FEDERAL, STATE AND LOCAL AND OTHER TAX CONSEQUENCES OF SUCH OWNERSHIP, SALE AND ELECTION, AND REGARDING POTENTIAL CHANGES IN APPLICABLE TAX LAWS.

Taxation of Our Company

From the time of our formation until the date of the Distribution, we will be treated as a “qualified REIT subsidiary” of NorthStar Realty. As described below, a corporation that is a “qualified REIT subsidiary” is not treated as a corporation separate from its parent REIT. We intend to elect to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ending December 31, 2015. We believe that, commencing with such year, we have been organized and have operated in such a manner as to qualify for taxation as a REIT under the U.S. federal income tax laws, and we intend to continue to operate in such a manner, but no assurances can be given that we will operate in a manner so as to qualify or remain qualified as a REIT. This section discusses the laws governing the U.S. federal income tax treatment of a REIT and its stockholders. These laws are highly technical and complex.

In connection with the Distribution, we will receive an opinion from Hunton & Williams LLP to the effect that, beginning with our taxable year ending December 31, 2015, we will be organized in conformity with the requirements for qualification and

120

taxation as a REIT under the U.S. federal income tax laws, and our intended method of operation will enable us to qualify as a REIT under the U.S. federal income tax laws for our taxable year ending December 31, 2015 and thereafter. You should be aware that Hunton & Williams LLP’s opinion will be based upon customary assumptions, representations and undertakings made by us, NorthStar Realty and the Private REITs as to factual matters, including representations regarding the nature of our, NorthStar Realty’s and the Private REITs’ assets and the conduct of our, NorthStar Realty’s and the Private REITs’ business. Hunton & Williams LLP’s opinion is not binding upon the IRS, or any court, and speaks as of the date issued. In addition, Hunton & Williams LLP’s opinion will be based on existing U.S. federal income tax law governing qualification as a REIT, which is subject to change either prospectively or retroactively. Moreover, our qualification and taxation as a REIT will depend upon our ability to meet on a continuing basis, through actual annual operating results, certain qualification tests set forth in the federal tax laws. Those qualification tests involve the percentage of income that we earn from specified sources, the percentage of our assets that fall within specified categories, the diversity of our stock ownership, and the percentage of our earnings that we distribute. Hunton & Williams LLP will not review our compliance with those tests on a continuing basis. In addition, the fact that we will be a U.S. REIT making all of our investments through non-U.S. subsidiary entities and in currencies other than the U.S. dollar may subject us to novel issues and interpretations of the various REIT requirements. Accordingly, no assurance can be given that our actual results of operations for any particular taxable year will satisfy such requirements. Hunton & Williams LLP’s opinion does not foreclose the possibility that we may have to use one or more of the REIT savings provisions described below, which would require us to pay an excise or penalty tax (which could be material) in order for us to satisfy the requirements for REIT qualification. For a discussion of the tax consequences of our failure to qualify as a REIT, see “— Requirements for Qualification — Failure to Qualify.”

If we qualify as a REIT, we generally will not be subject to U.S. federal income tax on the taxable income that we distribute to our stockholders. The benefit of that tax treatment is that it avoids the “double taxation,” or taxation at both the corporate and stockholder levels, that generally results from owning stock in a corporation. However, we will be subject to federal tax in the following circumstances:

• We will pay U.S. federal income tax on any taxable income, including undistributed net capital gain, that we do not distribute to stockholders during, or within a specified time period after, the calendar year in which the income is earned.

• We may be subject to the “alternative minimum tax” on any items of tax preference, including any deductions of net operating losses.

• We will pay income tax at the highest corporate rate on:

• net income from the sale or other disposition of property acquired through foreclosure or after a default on a lease of the property, or foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, and

• other non-qualifying income from foreclosure property.

• We will pay a 100% tax on net income from sales or other dispositions of property, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business.

• If we fail to satisfy one or both of the 75% gross income test or the 95% gross income test, as described below under “— Requirements for Qualification — Gross Income Tests,” and nonetheless continue to qualify as a REIT because we meet other requirements, we will pay a 100% tax on the gross income attributable to the greater of the amount by which we fail the 75% gross income test or the 95% gross income test, in either case, multiplied by a fraction intended to reflect our profitability.

• If we fail to distribute during a calendar year at least the sum of: (i) 85% of our REIT ordinary income for the year; (ii) 95% of our REIT capital gain net income for the year; and (iii) any undistributed taxable income required to be distributed from earlier periods, we will pay a 4% nondeductible excise tax on the excess of the required distribution over the amount we actually distributed.

• We may elect to retain and pay income tax on our net long-term capital gain. In that case, a U.S. stockholder would be taxed on its proportionate share of our undistributed long-term capital gain (to the extent that we made a timely designation of such gain to the stockholders) and would receive a credit or refund for its proportionate share of the tax we paid.

• We will be subject to a 100% excise tax on transactions with a TRS that are not conducted on an arm’s-length basis.

121

• In the event of a failure of any of the asset tests, other than a de minimis failure of the 5% asset test or the 10% vote or value test, as described below under “— Requirements for Qualification — Asset Tests,” as long as the failure was due to reasonable cause and not to willful neglect, we file a description of each asset that caused such failure with the IRS, and we dispose of such assets or otherwise comply with the asset tests within six months after the last day of the quarter in which we identify such failure, we will pay a tax equal to the greater of $50,000 or the highest U.S. federal income tax rate then applicable to U.S. corporations (currently 35%) on the net income from the nonqualifying assets during the period in which we failed to satisfy the asset tests.

• In the event we fail to satisfy one or more requirements for REIT qualification, other than the gross income tests and the asset tests, and such failure is due to reasonable cause and not to willful neglect, we will be required to pay a penalty of $50,000 for each such failure.

• If we acquire any asset from a C corporation, or a corporation that generally is subject to full corporate-level tax, in a merger or other transaction in which we acquire a basis in the asset that is determined by reference either to the C corporation’s basis in the asset or to another asset, we will pay tax at the highest regular corporate rate applicable if we recognize gain on the sale or disposition of the asset during the ten-year period after we acquire the asset provided no election is made for the transaction to be taxable on a current basis. The amount of gain on which we will pay tax is the lesser of:

• the amount of gain that we recognize at the time of the sale or disposition, and

• the amount of gain that we would have recognized if we had sold the asset at the time we acquired it.

• We may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to meet record-keeping requirements intended to monitor our compliance with rules relating to the composition of a REIT’s stockholders, as described below in “— Requirements for Qualification — Recordkeeping Requirements.”

• The earnings of our lower-tier entities that are subchapter C corporations, including TRSs, will be subject to federal corporate income tax.

In addition, we and our subsidiaries may be subject to a variety of taxes other than U.S. federal income tax, including foreign, state and local income, transfer, franchise, property and other taxes. For example, we intend to make investments solely in real properties located outside of the United States through foreign entities. Such foreign entities may be subject to local income and property taxes in the jurisdiction in which they are organized or where their assets are located. In addition, in certain circumstances, we may be subject to non-U.S. withholding tax on repatriation of earnings from such non-U.S. entities. To the extent we are required to pay any such taxes, we will not be able to pass through to our stockholders any tax credit with respect to our payment of any such taxes. See “— Foreign, State and Local Taxes.” We could also be subject to tax in situations and with respect to transactions not presently contemplated.

Requirements for Qualification

A REIT is a corporation, trust or association that meets each of the following requirements:

1. It is managed by one or more directors or trustees.

2. Its beneficial ownership is evidenced by transferable shares, or by transferable certificates of beneficial interest.

3. It would be taxable as a domestic corporation, but for the REIT provisions of the U.S. federal income tax laws.

4. It is neither a financial institution nor an insurance company subject to special provisions of the U.S. federal income tax laws.

5. At least 100 persons are beneficial owners of its shares or ownership certificates.

6. Not more than 50% in value of its outstanding shares or ownership certificates is owned, directly or indirectly, by five or fewer individuals, which the Code defines to include certain entities, during the last half of any taxable year.

7. It elects to be a REIT, or has made such election for a previous taxable year, and satisfies all relevant filing and other administrative requirements established by the IRS that must be met to elect and maintain REIT status.

8. It meets certain other qualification tests, described below, regarding the nature of its income and assets and the amount of its distributions to stockholders.

122

9. It uses a calendar year for U.S. federal income tax purposes and complies with the recordkeeping requirements of the U.S. federal income tax laws.

We must meet requirements 1 through 4, 7, 8 and 9 during our entire taxable year and must meet requirement 5 during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. Requirements 5 and 6 will apply to us beginning with our 2016 taxable year. If we comply with all the requirements for ascertaining the ownership of our outstanding stock in a taxable year and have no reason to know that we violated requirement 6, we will be deemed to have satisfied requirement 6 for that taxable year. For purposes of determining share ownership under requirement 6, an “individual” generally

We intend to enter into a long-term management agreement with NSAM pursuant to which we will delegate certain management responsibilities. We have been advised by counsel that entering into that management agreement should not cause us to cease to satisfy requirement 1 above, which requires that a REIT be managed by one or more trustees or directors. If the IRS successfully asserted that our management agreement caused us to fail to satisfy requirement 1, we may be required to pay a $50,000 penalty tax or may fail to qualify as a REIT. See “— Failure to Qualify.”

As noted above, from the time of our formation until the date of the Distribution, we will be treated as a “qualified REIT subsidiary” of NorthStar Realty. Under applicable Treasury regulations, if NorthStar Realty fails to qualify as a REIT in its 2015 taxable year, unless NorthStar Realty’s failure to qualify as a REIT was subject to relief under as described below under “— Failure to Qualify,” we would be prevented from electing to qualify as a REIT prior to the fifth calendar year following the year in which NorthStar Realty failed to qualify.

Qualified REIT Subsidiaries.  A corporation that is a “qualified REIT subsidiary” is not treated as a corporation separate from its parent REIT. All assets, liabilities and items of income, deduction and credit of a “qualified REIT subsidiary” are treated as assets, liabilities and items of income, deduction and credit of the REIT. A “qualified REIT subsidiary” is a corporation, other than a TRS, all the stock of which is owned by the REIT. Thus, in applying the requirements described herein, any “qualified REIT subsidiary” that we own will be ignored, and all assets, liabilities and items of income, deduction and credit of such subsidiary will be treated as our assets, liabilities and items of income, deduction and credit.

Other Disregarded Entities and Partnerships.  An unincorporated domestic entity, such as a partnership or limited liability company, that has a single owner, generally is not treated as an entity separate from its owner for federal income tax purposes. An unincorporated domestic entity with two or more owners is generally treated as a partnership for federal income tax purposes. In the case of a REIT that is a partner in a partnership that has other partners, the REIT is treated as owning its proportionate share of the assets of the partnership and as earning its allocable share of the gross income of the partnership for purposes of the applicable REIT qualification tests. Thus, our proportionate share of the assets, liabilities and items of income of any partnership, and any other partnership, joint venture or limited liability company that is treated as a partnership for federal income tax purposes in which we have acquired or will acquire an interest, directly or indirectly, or a subsidiary partnership, will be treated as our assets and gross income for purposes of applying the various REIT qualification requirements. For purposes of the 10% value test (described under “— Asset Tests”), our proportionate share is based on our proportionate interest in the equity interests and certain debt securities issued by the partnership. For all of the other asset and income tests, our proportionate share is based on our proportionate interest in the capital of the partnership. We intend to cause each non-U.S. disregarded subsidiary to file an entity classification election under Section 301.7701-3 of the Treasury Regulations to be treated as a disregarded entity for U.S. federal income tax purposes.

Entity Classification of Foreign Subsidiaries. We intend to conduct substantially all of our business through our Operating Partnership and certain foreign property-owning entities and intermediate entities. With respect to such foreign property-owning entities and intermediate entities, we intend to use entities that are not per se corporations under Section 301.7701-2(b) of the Treasury Regulations and intend to file entity classification elections under Section 301.7701-3 of the Treasury Regulations to treat such property-owning entities and intermediate entities as pass-through entities (i.e., either as partnerships or disregarded entities) for U.S. federal income tax purposes. If any such pass-through entities were treated associations for U.S. federal income tax purposes, they would be taxable as corporations and, therefore, generally would be subject to an entity-level tax on its income to the extent they generate income from U.S. sources or activities connected to the United States. In such a situation, the character of our assets and items of our gross income would change and could preclude us from satisfying the REIT asset tests (particularly the tests generally preventing a REIT from owning more than 10% of the voting securities, or more than 10% of the value of the securities, of a corporation) or the gross income tests as discussed in “— Asset Tests” and “— Gross Income Tests” above, and in turn would prevent us from qualifying as a REIT. See “— Failure to Qualify,” below, for a discussion of the effect of our failure to meet these tests for a taxable year.

Taxable REIT Subsidiaries.  A REIT may own up to 100% of the stock of one or more TRSs. A TRS is a fully taxable corporation that may earn income that would not be qualifying income if earned directly by the parent REIT. The subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than

123

35% of the voting power or value of the stock will automatically be treated as a TRS. However, an entity will not qualify as a TRS if it directly or indirectly operates or manages a lodging or health care facility or, generally, provides rights to any brand name under which any lodging or health care facility is operated, unless such rights are provided to an “eligible independent contractor” to operate or manage a lodging facility or a health care facility if such rights are held by the TRS as a franchisee, licensee or in a similar capacity and such lodging facility or health care facility is either owned by the TRS or leased to the TRS by its

The TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. Further, the rules impose a 100% excise tax on transactions between a TRS and its parent REIT or the REIT’s tenants that are not conducted on an arm’s-length basis.

Non-U.S. corporations and non-U.S. entities treated as corporations for U.S. federal income tax purposes are not generally subject to U.S. federal corporate income tax except to the extent that they recognize income from U.S. sources or certain activities connected with the United States. However, under certain circumstances, certain U.S. stockholders of a non-U.S. corporation are required to include in their income currently their proportionate share of certain categories of income of the non-U.S. corporation, which includes passive investment income as well as certain other categories. As a result, if we hold an interest in a foreign TRS, such TRS may not be subject to significant U.S. federal corporate income tax, but we may be required to include in our income, on a current basis, certain categories of income recognized by such foreign TRS. These inclusions could affect our ability to comply with the REIT income tests and distribution requirement. See “— Gross Income Tests” and “— Distribution Requirements.” In addition, certain foreign TRSs that we may form may generate income, such as income from providing services, that is not subject to this pass-through regime. We generally would not be required to include the earnings of such a TRS attributable to such activities in our income until we receive a distribution from such TRS.

A REIT is not treated as holding the assets of a taxable subsidiary corporation or as receiving any income that the subsidiary earns. Rather, the stock issued by the subsidiary is an asset in the hands of the parent REIT and the REIT recognizes as income the dividends, if any, that it receives from the subsidiary. This treatment can affect the income and asset test calculations that apply to the REIT. Because a parent REIT does not include the assets and income of such subsidiary corporations in determining the parent’s compliance with the REIT requirements, such entities may be used by the parent REIT to undertake indirectly activities that the REIT rules might otherwise preclude it from doing directly or through pass-through subsidiaries (for example, activities that give rise to certain categories of income such as management fees).

Gross Income Tests

We must satisfy two gross income tests annually to qualify as a REIT. First, at least 75% of our gross income for each taxable year must consist of defined types of income that we derive, directly or indirectly, from investments relating to real property or mortgages on real property or qualified temporary investment income. Qualifying income for purposes of the 75% gross income test generally includes:

• rents from real property;

• interest on debt secured by mortgages on real property or on interests in real property;

• dividends or other distributions on, and gain from the sale of, shares in other REITs;

• gain from the sale of real estate assets;

• income derived from a REMIC in proportion to the real estate assets held by the REMIC, unless at least 95% of the REMIC’s assets are real estate assets, in which case all of the income derived from the REMIC; and

• income derived from the temporary investment in stock and debt investments purchased with the proceeds from the issuance of our stock or a public offering of our debt with a maturity date of at least five years and that we receive during the one-year period beginning on the date on which we received such new capital.

Second, in general, at least 95% of our gross income for each taxable year must consist of income that is qualifying income for purposes of the 75% gross income test (except for income derived from the temporary investment of new capital), other types of interest and dividends, gain from the sale or disposition of stock or securities or any combination of these. Gross income from our sale of property that we hold primarily for sale to customers in the ordinary course of business is excluded from both the numerator and the denominator in both gross income tests. In addition, income and gain from “hedging transactions” that we enter into to hedge borrowings incurred or to be incurred to acquire or carry real estate assets and that are clearly and timely identified as such will be excluded from both the numerator and the denominator for purposes of the 75% and 95% gross income tests. In addition, certain foreign currency gains will be excluded from gross income for purposes of one or both of the gross income tests. See “— Foreign Currency Gain” below. The following paragraphs discuss the specific application of the gross income tests to us.

124

Rents from Real Property.  Rent that we receive from our real property will qualify as “rents from real property” which is qualifying income for purposes of the 75% and 95% gross income tests, only if the following conditions are met:

• First, the rent must not be based, in whole or in part, on the income or profits of any person. However, an amount received or accrued generally will not be excluded from rents from real property solely by reason of being based on fixed percentages of receipts or sales.

• Second, rents we receive from a “related party tenant” will not qualify as rents from real property in satisfying the gross income tests unless the tenant is a TRS, and either: (i) at least 90% of the property is leased to unrelated tenants and the rent paid by the TRS is substantially comparable to the rent paid by the unrelated tenants for comparable space; or (ii) the TRS leases a qualified lodging facility or qualified health care property and engages an eligible independent contractor (as defined above in “— Taxable REIT Subsidiaries”) to operate such facility or property on its behalf. A tenant is a related party tenant if the REIT, or an actual or constructive owner of 10% or more of the REIT, actually or constructively owns 10% or more of the tenant.

• Third, if rent attributable to personal property leased in connection with a lease of real property is 15% or less of the total rent received under the lease, then the rent attributable to personal property will qualify as rents from real property. However, if the 15% threshold is exceeded, the rent attributable to personal property will not qualify as rents from real property.

• Fourth, we generally must not operate or manage our real property or furnish or render services to our tenants, other than through an “independent contractor” who is adequately compensated and from whom we do not derive revenue. However, we may provide services directly to tenants if the services are “usually or customarily rendered” in connection with the rental of space for occupancy only and are not considered to be provided for the tenants’ convenience. In addition, we may provide a minimal amount of “noncustomary” services to the tenants of a property, other than through an independent contractor, as long as our income from the services (valued at not less than 150% of our direct cost of performing such services) does not exceed 1% of our income from the related property. Furthermore, we may own up to 100% of the stock of a TRS which may provide customary and noncustomary services to our tenants without tainting our rental income for the related properties. See “— Taxable REIT Subsidiaries.”

Interest.  The term “interest,” as defined for purposes of both gross income tests, generally excludes any amount that is based, in whole or in part, on the income or profits of any person. However, interest generally includes the following:

• an amount that is based on a fixed percentage or percentages of receipts or sales; and

• an amount that is based on the income or profits of a debtor, as long as the debtor derives substantially all of its income from the real property securing the debt from leasing substantially all of its interest in the property and only to the extent that the amounts received by the debtor would be qualifying “rents from real property” if received directly by a REIT.

If a loan contains a provision that entitles a REIT to a percentage of the borrower’s gain upon the sale of the real property securing the loan or a percentage of the appreciation in the property’s value as of a specific date, income attributable to that loan provision will be treated as gain from the sale of the property securing the loan, which generally is qualifying income for purposes of both gross income tests, provided that the property is not inventory or dealer property in the hands of the borrower or the REIT.

Interest on debt secured by mortgages on real property or on interests in real property, including, for this purpose, prepayment penalties, loan assumption fees and late payment charges that are not compensation for services, generally is qualifying income for purposes of the 75% gross income test. In general, under applicable Treasury Regulations, if a loan is secured by real property and other property and the highest principal amount of the loan outstanding during a taxable year exceeds the fair market value of the real property securing the loan determined as of: (i) the date we agreed to acquire or originate the loan; or (ii) as discussed further below, in the event of a “significant modification,” the date we modified the loan, then a portion of the interest income from such loan will not be qualifying income for purposes of the 75% gross income test, but will be qualifying income for purposes of the 95% gross income test. Although the law is not entirely clear, a portion of the loan will likely be a non-qualifying asset for purposes of the 75% asset test. The non-qualifying portion of such a loan would be subject to, among other requirements, the 10% value test. See “— Asset Tests” below.

Dividends.  Our share of any dividends received from any corporation (including any TRS, but excluding any REIT) in which we own an equity interest will qualify for purposes of the 95% gross income test but not for purposes of the 75% gross income test. Our share of any dividends received from any other REIT in which we own an equity interest will be qualifying income for purposes of both gross income tests.

125

To the extent that we make equity investments in foreign TRSs, we intend to treat certain income inclusions received with respect to those investments as qualifying income for purposes of the 95% gross income test but not the 75% gross income test. The IRS has issued several private letter rulings to other taxpayers concluding that similar income inclusions will be treated as qualifying income for purposes of the 95% gross income test. Those private letter rulings can only be relied upon by the taxpayers to whom they were issued. No assurance can be provided that the IRS will not successfully challenge our treatment of such income inclusions.

Hedging Transactions.  We may enter into hedging transactions with respect to one or more of our assets or liabilities, including hedging transactions designed to minimize our risk with respect to: (i) changes in interest rates on floating rate debt used to acquire or carry our properties; and (ii) fluctuations in local currencies in the jurisdictions in which we invest. Hedging transactions could take a variety of forms, including interest rate swap agreements, interest rate cap agreements, options, futures contracts, forward rate agreements or similar financial instruments. Except to the extent provided by Treasury Regulations, any income from a hedging transaction we enter into: (i) in the normal course of our business primarily to manage risk of interest rate or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, to acquire or carry real estate assets, which we clearly identify as specified in Treasury Regulations before the close of the day on which it was acquired, originated, or entered into, including gain from the sale or disposition of such a transaction; or (ii) primarily to manage risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the 75% or 95% gross income tests which is clearly identified as such before the close of the day on which it was acquired, originated, or entered into, will not constitute gross income for purposes of the 75% or 95% gross income test. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of both of the 75% and 95% gross income tests. We intend to structure our hedging transactions in a manner that will not jeopardize our qualification as a REIT, although no assurance can be given that we will at all times be successful in this regard.      

Foreign Currency Gain.  We expect that we will make all of our investments outside the United States and substantially all of our operating income, expenses and certain distributions from our Operating Partnership will be denominated in currencies other than the U.S. dollar. As a result, we will be subject to foreign currency gains and losses. “Real estate foreign exchange gain” is excluded from the calculation of the 75% gross income test and “passive foreign exchange gain” is excluded from the calculation of the 95% gross income test. “Real estate foreign exchange gain” means: (i) foreign currency gain attributable (without duplication) to (a) an item of income or gain to which the 75% gross income test applies, (b) the acquisition or ownership of obligations secured by mortgages on real property or on interests in real property, or (c) becoming or being the obligor under obligations secured by mortgages on real property.  or interests in real property; or (ii) foreign currency gain attributable to a “qualified business unit” or “QBU” under Section 987 of the Code, provided the QBU itself satisfies both the 75% gross income test and the 75% asset test described below under “— Asset Tests.” Passive foreign exchange gain is (without duplication) real estate foreign exchange gain, foreign currency gain attributable to an item of income or gain to which the 95% gross income test applies, foreign currency gain attributable to the acquisition or ownership of obligations, or foreign currency gain attributable to becoming or being the obligor under obligations. These exclusions for real estate foreign exchange gain and passive foreign exchange gain do not apply to any foreign currency gain derived from dealing, or engaging in substantial and regular trading, in securities. Such gain is treated as non-qualifying income for purposes of both the 75% and 95% gross income tests. In addition, the U.S. federal income tax law provides rules for determining the amount of gross income and deductions that we are treated as recognizing from activities of a QBU conducted in a foreign currency. As a result of these rules, changes in the U.S. dollar value of the currencies of our operations could impact our compliance with the REIT gross income tests, and the impact of these changes on our compliance with the REIT gross income requirements could be difficult to predict.

We intend to invest primarily in real estate assets located outside of the United States, and accordingly we expect that most foreign currency gains recognized by us would generally be excluded from the REIT 75% and 95% gross income tests. However, foreign currency gain attributable to our holding of certain obligations, including currency hedges of such obligations, will be excluded for purposes of the 95% gross income test, but not the 75% gross income test. In addition, if such gains are attributable to cash awaiting distribution or reinvestment, such gains may be non-qualifying income under the 75% and 95% gross income tests. If we were to recognize significant foreign currency gains not excluded from the REIT gross income tests, we could fail to qualify as a REIT.

Prohibited Transactions.  A REIT will incur a 100% tax on the net income derived from any sale or other disposition of property, other than foreclosure property, that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We believe that none of our assets are held primarily for sale to customers and that a sale of any of our assets will not be in the ordinary course of our business. Whether a REIT holds an asset “primarily for sale to customers in the ordinary course of a trade or business” depends, however, on the facts and circumstances in effect from time-to-time, including those related to a particular asset. A safe harbor to the characterization of the sale of property by a REIT as a prohibited transaction and the 100% prohibited transaction tax is available if the following requirements are met:

• the REIT has held the property for not less than two years;

126

• the aggregate expenditures made by the REIT, or any partner of the REIT, during the two-year period preceding the date of the sale that are includable in the basis of the property do not exceed 30% of the selling price of the property; either: (i) during the year in question, the REIT did not make more than seven sales of property other than foreclosure property or sales to which Section 1033 of the Code applies; (ii) the aggregate adjusted bases of all such properties sold by the REIT during the year did not exceed 10% of the aggregate bases of all of the assets of the REIT at the beginning of the year; or (iii) the aggregate fair market value of all such properties sold by the REIT during the year did not exceed 10% of the aggregate fair market value of all of the assets of the REIT at the beginning of the year;

• in the case of property not acquired through foreclosure or lease termination, the REIT has held the property for at least two years for the production of rental income; and

• if the REIT has made more than seven sales of non-foreclosure property during the taxable year, substantially all of the marketing and development expenditures with respect to the property were made through an independent contractor from whom the REIT derives no income.

We will attempt to comply with the terms of that safe harbor when disposing of assets. We cannot assure you, however, that we can comply with that safe harbor or that we will avoid owning property that may be characterized as property that we hold “primarily for sale to customers in the ordinary course of a trade or business.” The 100% tax will not apply to gains from the sale of property that is held through a TRS or other taxable corporation.

Foreclosure Property.  We will be subject to tax at the maximum corporate rate on any income from foreclosure property, which includes certain foreign currency gains and related deductions recognized, other than income that otherwise would be qualifying income for purposes of the 75% gross income test, less expenses directly connected with the production of that income. However, gross income from foreclosure property will qualify under the 75% and 95% gross income tests. Foreclosure property is any real property, including interests in real property, and any personal property incident to such real property:

• that is acquired by a REIT as the result of the REIT having bid on such property at foreclosure or having otherwise reduced such property to ownership or possession by agreement or process of law, after there was a default or default was imminent on a lease of such property or on indebtedness that such property secured;

• for which the related loan was acquired by the REIT at a time when the default was not imminent or anticipated; and

• for which the REIT makes a proper election to treat the property as foreclosure property.

A REIT will not be considered to have foreclosed on a property where the REIT takes control of the property as a mortgagee-in-possession and cannot receive any profit or sustain any loss except as a creditor of the mortgagor. Property generally ceases to be foreclosure property at the end of the third taxable year following the taxable year in which the REIT acquired the property or longer if an extension is granted by the Secretary of the Treasury. However, this grace period terminates and foreclosure property ceases to be foreclosure property on the first day:

• on which a lease is entered into for the property that, by its terms, will give rise to income that does not qualify for purposes of the 75% gross income test, or any amount is received or accrued, directly or indirectly, pursuant to a lease entered into on or after such day that will give rise to income that does not qualify for purposes of the 75% gross income test;

• on which any construction takes place on the property, other than completion of a building or any other improvement, where more than 10% of the construction was completed before default became imminent; or

• which is more than 90 days after the day on which the REIT acquired the property and the property is used in a trade or business which is conducted by the REIT, other than through an independent contractor from whom the REIT itself does not derive or receive any income.

Taxable Income in Excess of Economic Gain.  Due to our investments in real property located outside of the United States, we may enter into hedging transactions to manage our risk with respect to local currency fluctuations. If we were to recognize ordinary income with respect to such hedging transaction and a capital loss on the sale of such real property, we would be required to make a distribution although we may have not realized an overall economic gain. Similarly, the rules regarding foreign currency fluctuations may cause us to have taxable income in excess of our overall economic gain. As a result, a stockholder may recognize dividend income in excess of such stockholder’s true economic gain with respect to our stock. In addition, we may generate less cash flow than taxable income in a particular year and we may incur U.S. federal income tax and the 4% non-deductible excise tax on that income if we do not distribute such income to stockholders in that year. In that event, we may be required to use cash reserves, incur debt or liquidate assets at rates or times that we regard as unfavorable or, to the extent possible, make a taxable

127

distribution of our stock in order to satisfy the REIT 90% distribution requirement and to avoid U.S. federal income tax and the 4% nondeductible excise tax in that year.

Failure to Satisfy the Gross Income Tests.  If we fail to satisfy one or both of the gross income tests for any taxable year, we nevertheless may qualify as a REIT for that year if we qualify for relief under certain provisions of the federal income tax laws. Those relief provisions are available if:

• our failure to meet those tests is due to reasonable cause and not to willful neglect; and

• following such failure for any taxable year, we file a schedule of the sources of our income with the IRS.

We cannot predict, however, whether in all circumstances we would qualify for the relief provisions. In addition, as discussed above in “— Taxation of Our Company,” even if the relief provisions apply, we would incur a 100% tax on the gross income attributable to the greater of the amount by which we fail the 75% or 95% gross income test, in each case, multiplied by a fraction intended to reflect our profitability.

Asset Tests

To qualify as a REIT, we also must satisfy the following asset tests at the end of each quarter of each taxable year. First, at least 75% of the value of our total assets must consist of:

• cash or cash items, including certain receivables and money market funds;

• government securities;

• interests in real property, including leaseholds and options to acquire real property and leaseholds;

• interests in mortgage loans secured by real property;

• stock in other REITs;

• investments in stock or debt instruments during the one-year period following our receipt of new capital that we raise through equity offerings or public offerings of debt with at least a five-year term; and

• regular or residual interests in a REMIC. However, if less than 95% of the assets of a REMIC consists of assets that are qualifying real estate-related assets under the federal income tax laws, determined as if we held such assets, we will be treated as holding directly our proportionate share of the assets of such REMIC.

Cash includes the functional currency of a REIT or its QBU if such foreign currency: (i) is held for use in the normal course of the activities of the REIT or QBU which give rise to qualifying income under the 95% or 75% gross income tests or are directly related to acquiring or holding qualifying assets under the 75% asset test; and (ii) is not held in connection with dealing or engaging in substantial and regular trading in securities. Assets that do not qualify for purposes of the 75% asset test are subject to the additional asset tests described below. We intend to cause our subsidiaries to manage their holdings of foreign currency and related assets in a manner that permits us to qualify under the 75% asset test.

Second, of our investments not included in the 75% asset class, the value of our interest in any one issuer’s securities may not exceed 5% of the value of our total assets, or the 5% asset test.

Third, of our investments not included in the 75% asset class, we may not own more than 10% of the voting power or value of any one issuer’s outstanding securities, or the 10% vote or value test.

Fourth, no more than 25% of the value of our total assets may consist of the securities of one or more TRSs.

Fifth, no more than 25% of the value of our total assets may consist of the securities of TRSs and other non-TRS taxable subsidiaries and other assets that are not qualifying assets for purposes of the 75% asset test, or the 25% securities test.

For purposes of the 5% asset test, the 10% vote or value test and the 25% securities test, the term “securities” does not include stock in another REIT, equity or debt securities of a qualified REIT subsidiary or, in the case of the 5% asset test and 10% vote or value test, TRS debt or equity, mortgage loans or mortgage-backed securities that constitute real estate assets, or equity interests in a partnership. For purposes of the 10% value test, the term “securities” does not include:

• “Straight debt” securities, which is defined as a written unconditional promise to pay on demand or on a specified date a sum certain in money if: (i) the debt is not convertible, directly or indirectly, into equity; and (ii) the interest rate and interest payment dates are not contingent on profits, the borrower’s discretion, or similar factors. “Straight debt” securities do not include any securities issued by a partnership or a corporation in which we or any TRS in

128

which we own more than 50% of the voting power or value of the shares hold non-“straight debt” securities that have an aggregate value of more than 1% of the issuer’s outstanding securities. However, “straight debt” securities include debt subject to the following contingencies:

• a contingency relating to the time of payment of interest or principal, as long as either: (i) there is no change to the effective yield of the debt obligation, other than a change to the annual yield that does not exceed the greater of 0.25% or 5% of the annual yield; or (ii) neither the aggregate issue price nor the aggregate face amount of the issuer’s debt obligations held by us exceeds $1 million and no more than 12 months of unaccrued interest on the debt obligations can be required to be prepaid; and

• a contingency relating to the time or amount of payment upon a default or prepayment of a debt obligation, as long as the contingency is consistent with customary commercial practice;

• Any loan to an individual or an estate;

• Any “section 467 rental agreement” other than an agreement with a related party tenant;

• Any obligation to pay “rents from real property”;

• Certain securities issued by governmental entities;

• Any security issued by a REIT;

• Any debt instrument issued by an entity treated as a partnership for federal income tax purposes in which we are a partner to the extent of our proportionate interest in the equity and debt securities of the partnership; and

• Any debt instrument issued by an entity treated as a partnership for federal income tax purposes not described in the preceding bullet points if at least 75% of the partnership’s gross income, excluding income from prohibited transactions, is qualifying income for purposes of the 75% gross income test described above in “— Gross Income Tests.”

For purposes of the 10% value test, our proportionate share of the assets of a partnership is our proportionate interest in any securities issued by the partnership, without regard to the securities described in the last two bullet points above.

We have funded our equity investments in certain of our holdings through the use of instruments that we believe will be treated as equity for U.S. federal income tax purposes. If the IRS disagreed with such characterization and was successful in recharacterizing the nature of those instruments, we could fail to satisfy one or more of the asset and gross income tests applicable to REITs. Additionally, if the IRS recharacterized the nature of those investments and we were to take action to prevent such REIT test failures, the actions we would take could expose us to increased taxes both internationally and in the United States.

We believe our holdings of real property and other assets and securities relating to such real property will comply with the foregoing REIT asset requirements, and we intend to monitor compliance with such tests on an ongoing basis. There can be no assurance, however, that we will be successful in this effort. Moreover, the values of some of our assets, including the securities of our TRSs or other non-publicly traded investments, may not be susceptible to a precise determination and are subject to change in the future. Furthermore, the proper classification of an instrument as debt or equity for U.S. federal income tax purposes may be uncertain in some circumstances, which could affect the application of the REIT asset tests. Accordingly, there can be no assurance that the IRS will not contend that our assets do not meet the requirements of the REIT asset tests.

We intend to monitor the status of our assets for purposes of the various asset tests. If we fail to satisfy the asset tests at the end of a calendar quarter, we will not lose our REIT qualification if:

• we satisfied the asset tests at the end of the preceding calendar quarter; and

• the discrepancy between the value of our assets and the asset test requirements arose from changes in the market values of our assets and was not wholly or partly caused by the acquisition of one or more non-qualifying assets.

If we did not satisfy the condition described in the second item, above, we still could avoid disqualification by eliminating any discrepancy within 30 days after the close of the calendar quarter in which it arose.

If at the end of any calendar quarter we violate the 5% asset test or the 10% vote or value test described above, we will not lose our REIT qualification if: (i) the failure is de minimis (up to the lesser of 1% of our assets or $10 million); and (ii) we dispose of assets or otherwise comply with the asset tests within six months after the last day of the quarter in which we identify such failure. In the event of a failure of any of the asset tests (other than de minimis failures described in the preceding sentence), as long as the failure was due to reasonable cause and not to willful neglect, we will not lose our qualification as a REIT if we:

129

(i) dispose of assets or otherwise comply with the asset tests within six months after the last day of the quarter in which we identify the failure; (ii) we file a description of each asset causing the failure with the IRS; and (iii) pay a tax equal to the greater of $50,000 or 35% of the net income from the nonqualifying assets during the period in which we failed to satisfy the asset tests.

Distribution Requirements

Each taxable year, we must distribute dividends, other than capital gain dividends and deemed distributions of retained capital gain, to our stockholders in an aggregate amount at least equal to the sum of:

• 90% of our “REIT taxable income,” computed without regard to the dividends paid deduction and our net capital gain or loss and

• 90% of our after-tax net income, if any, from foreclosure property; minus

• the sum of certain items of non-cash income.

Generally, we must pay such distributions in the taxable year to which they relate, or in the following taxable year if: (i) we declare the distribution before we timely file our federal income tax return for the year and pay the distribution on or before the first regular dividend payment date after such declaration; or (ii) we declare the distribution in October, November or December of the taxable year, payable to stockholders of record on a specified day in any such month, and we actually pay the dividend before the end of January of the following year. The distributions under clause (i) are taxable to the stockholders in the year in which paid and the distributions in clause (ii) are treated as paid on December 31 of the prior taxable year. In both instances, these distributions relate to our prior taxable year for purposes of the 90% distribution requirement.

We will pay federal income tax on taxable income, including net capital gain, that we do not distribute to stockholders. Furthermore, if we fail to distribute during a calendar year, or by the end of January following the calendar year in the case of distributions with declaration and record dates falling in the last three months of the calendar year, at least the sum of:

• 85% of our REIT ordinary income for such year;

• 95% of our REIT capital gain income for such year; and

• any undistributed taxable income from prior periods,

we will incur a 4% nondeductible excise tax on the excess of such required distribution over the amounts we actually distribute.

We may elect to retain and pay income tax on the net long-term capital gain we receive in a taxable year. If we so elect, we will be treated as having distributed any such retained amount for purposes of the 4% nondeductible excise tax described above. We have made, and we intend to continue to make, timely distributions sufficient to satisfy the annual distribution requirements and to avoid corporate income tax and the 4% nondeductible excise tax.

It is possible that, from time-to-time, we may experience timing differences between the actual receipt of income and actual payment of deductible expenses and the inclusion of that income and deduction of such expenses in arriving at our REIT taxable income. In the event that such timing differences occur, it might be necessary to arrange borrowings or other means of raising capital to meet the distribution requirements. Additionally, we may, if possible, pay taxable dividends of our stock or debt to meet the distribution requirements.

Under certain circumstances, we may be able to correct a failure to meet the distribution requirement for a year by paying “deficiency dividends” to our stockholders in a later year. We may include such deficiency dividends in our deduction for dividends paid for the earlier year. Although we may be able to avoid income tax on amounts distributed as deficiency dividends, we will be required to pay interest to the IRS based upon the amount of any deduction we take for deficiency dividends.

Recordkeeping Requirements

We must maintain certain records in order to qualify as a REIT. In addition, to avoid a monetary penalty, we must request on an annual basis information from our stockholders designed to disclose the actual ownership of our outstanding shares of beneficial interest. We have complied, and we intend to continue to comply, with these requirements.

Failure to Qualify

If we fail to satisfy one or more requirements for REIT qualification, other than the gross income tests and the asset tests, we could avoid disqualification if our failure is due to reasonable cause and not to willful neglect and we pay a penalty of $50,000 for each such failure. In addition, there are relief provisions for a failure of the gross income tests and asset tests, as described in “— Gross Income Tests” and “— Asset Tests.”

130

If we fail to qualify as a REIT in any taxable year, and no relief provision applies, we would be subject to federal income tax and any applicable alternative minimum tax on our taxable income at regular corporate rates. In calculating our taxable income in a year in which we fail to qualify as a REIT, we would not be able to deduct amounts paid out to stockholders. In fact, we would not be required to distribute any amounts to stockholders in that year. In such event, to the extent of our current and accumulated earnings and profits, distributions to most stockholders taxed at individual rates would generally be taxable at capital gains tax rates. Subject to certain limitations of the federal income tax laws, corporate stockholders might be eligible for the dividends received deduction. Unless we qualified for relief under specific statutory provisions, we also would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as a REIT. We cannot predict whether in all circumstances we would qualify for such statutory relief.

Taxation of Taxable U.S. Stockholders

For the purposes of this discussion under the heading “Material U.S. Federal Income Tax Consequences,” the term “U.S. stockholder” means a beneficial owner of shares of our Common Stock that for U.S. federal income tax purposes is:

• a citizen or resident of the United States;

• a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any of its states or the District of Columbia;

• an estate whose income is subject to U.S. federal income taxation regardless of its source; or

• any trust if: (i) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust; or (ii) it has a valid election in place to be treated as a U.S. person.

If a partnership, entity or arrangement treated as a partnership for U.S. federal income tax purposes holds shares of our Common Stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. If you are a partner in a partnership that will hold shares of our Common Stock, you are urged to consult your tax advisor regarding the consequences of the ownership and disposition of our Common Stock by the partnership.

As long as we qualify as a REIT, a taxable U.S. stockholder must generally take into account as ordinary income distributions made out of our current or accumulated earnings and profits that we do not designate as capital gain dividends or retained long-term capital gain. A U.S. stockholder will not qualify for the dividends received deduction generally available to corporations. In addition, dividends paid to a U.S. stockholder generally will not qualify for the 20% tax rate for “qualified dividend income.” The maximum tax rate for qualified dividend income received by U.S. stockholders taxed at individual rates is 20%. The maximum tax rate on qualified dividend income is lower than the maximum tax rate on ordinary income, which is 39.6%. Qualified dividend income generally includes dividends paid to U.S. stockholders taxed at individual rates by domestic C corporations and certain qualified foreign corporations. Because we are not generally subject to U.S. federal income tax on the portion of our REIT taxable income distributed to our stockholders, our dividends generally will not be eligible for the 20% rate on qualified dividend income. See “— Taxation of Our Company” above. As a result, our ordinary REIT dividends will be taxed at the higher tax rate applicable to ordinary income. However, the 20% tax rate for qualified dividend income will apply to our ordinary REIT dividends: (i) attributable to dividends received by us from non-REIT corporations, such as our TRS; and (ii) to the extent attributable to income upon which we have paid corporate income tax (e.g., to the extent that we distribute less than 100% of our taxable income). In general, to qualify for the reduced tax rate on qualified dividend income, a U.S. stockholder must hold our Common Stock for more than 60 days during the 121-day period beginning on the date that is 60 days before the date on which our Common Stock becomes ex-dividend. In addition, individuals, trusts and estates whose income exceeds certain thresholds are also subject to a 3.8% Medicare tax on dividends received from us.

A U.S. stockholder generally will take into account as long-term capital gain any distributions that we designate as capital gain dividends without regard to the period for which the U.S. stockholder has held our Common Stock. We generally will designate our capital gain dividends as either 20% or 25% rate distributions. See “— Capital Gains and Losses.” A corporate U.S. stockholder, however, may be required to treat up to 20% of certain capital gain dividends as ordinary income.

We may elect to retain and pay income tax on the net long-term capital gain that we receive in a taxable year. In that case, to the extent that we designate such amount in a timely notice to such stockholder, a U.S. stockholder would be taxed on its proportionate share of our undistributed long-term capital gain. The U.S. stockholder would receive a credit for its proportionate share of the tax we paid. The U.S. stockholder would increase the basis in its Common Stock by the amount of its proportionate share of our undistributed long-term capital gain, minus its share of the tax we paid.

131

A U.S. stockholder will not incur tax on a distribution in excess of our current and accumulated earnings and profits if the distribution does not exceed the adjusted basis of the U.S. stockholder’s common stock. Instead, the distribution will reduce the adjusted basis of such shares of our Common Stock. A U.S. stockholder will recognize a distribution in excess of both our current and accumulated earnings and profits and the U.S. stockholder’s adjusted basis in his or her common stock as long-term capital gain, or short-term capital gain if the Common Stock has been held for one year or less, assuming our Common Stock is a capital asset in the hands of the U.S. stockholder. In addition, if we declare a distribution in October, November, or December of any year that is payable to a U.S. stockholder of record on a specified date in any such month, such distribution shall be treated as both paid by us and received by the U.S. stockholder on December 31 of such year, provided that we actually pay the distribution during January of the following calendar year.

Stockholders may not include in their individual income tax returns any of our net operating losses or capital losses. Instead, these losses are generally carried over by us for potential offset against our future income. Taxable distributions from us and gain from the disposition of our Common Stock will not be treated as passive activity income and, therefore, stockholders generally will not be able to apply any “passive activity losses,” such as losses from certain types of limited partnerships in which the stockholder is a limited partner, against such income. In addition, taxable distributions from us and gain from the disposition of our Common Stock generally will be treated as investment income for purposes of the investment interest limitations. We will notify stockholders after the close of our taxable year as to the portions of the distributions attributable to that year that constitute ordinary income, return of capital and capital gain.

Taxation of U.S. Stockholders on the Disposition of Common Stock

A U.S. stockholder who is not a dealer in securities must generally treat any gain or loss realized upon a taxable disposition of our Common Stock as long-term capital gain or loss if the U.S. stockholder has held our Common Stock for more than one year and otherwise as short-term capital gain or loss. In general, a U.S. stockholder will realize gain or loss in an amount equal to the difference between the sum of the fair market value of any property and the amount of cash received in such disposition and the U.S. stockholder’s adjusted tax basis. A stockholder’s adjusted tax basis generally will equal the fair market value of its shares of our Common Stock on the date of the Distribution increased by the excess of net capital gains deemed distributed to the U.S. stockholder (discussed above) less tax deemed paid on such gains and reduced by any returns of capital. See “Material U.S. Federal Income Tax Consequences of the Distribution — Tax Basis & Holding Period of Our Common Stock Received by Holders of NorthStar Realty Stock.” However, a U.S. stockholder must treat any loss upon a sale or exchange of Common Stock held by such stockholder for six months or less as a long-term capital loss to the extent of capital gain dividends and any other actual or deemed distributions from us that such U.S. stockholder treats as long-term capital gain. All or a portion of any loss that a U.S. stockholder realizes upon a taxable disposition of our Common Stock may be disallowed if the U.S. stockholder purchases other Common Stock within 30 days before or after the disposition.

Capital Gains and Losses

A taxpayer generally must hold a capital asset for more than one year for gain or loss derived from its sale or exchange to be treated as long-term capital gain or loss. The highest marginal individual income tax rate currently is 39.6%. The maximum tax rate on long-term capital gain applicable to taxpayers taxed at individual rates is 20% for sales and exchanges of assets held for more than one year. The maximum tax rate on long-term capital gain from the sale or exchange of “Section 1250 property,” or depreciable real property, is 25%, which applies to the lesser of the total amount of the gain or the accumulated depreciation on the Section 1250 property. In addition, individuals, estates or trusts whose income exceeds certain thresholds will be required to pay a 3.8% Medicare tax on gains from the sale of our Common Stock.

With respect to distributions that we designate as capital gain dividends and any retained capital gain that we are deemed to distribute, we generally may designate whether such a distribution is taxable to our stockholders taxed at individual rates at a 20% or 25% rate. Thus, the tax rate differential between capital gain and ordinary income for those taxpayers may be significant. In addition, the characterization of income as capital gain or ordinary income may affect the deductibility of capital losses. A non-corporate taxpayer may deduct capital losses not offset by capital gains against its ordinary income only up to a maximum annual amount of $3,000. A non-corporate taxpayer may carry forward unused capital losses indefinitely. A corporate taxpayer must pay tax on its net capital gain at ordinary corporate rates. A corporate taxpayer may deduct capital losses only to the extent of capital gains, with unused losses being carried back three years and forward five years.

Taxation of Tax-Exempt Stockholders

Tax-exempt entities, including qualified employee pension and profit sharing trusts and individual retirement accounts, generally are exempt from U.S. federal income taxation. However, they are subject to taxation on their unrelated business taxable income, or UBTI. Although many investments in real estate generate UBTI, the IRS has issued a ruling that dividend distributions from a REIT to an exempt employee pension trust do not constitute UBTI. Based on that ruling, amounts that we distribute to tax-exempt stockholders generally should not constitute UBTI. However, if a tax-exempt stockholder were to finance its acquisition

132

of Common Stock with debt, a portion of the income that it receives from us would constitute UBTI pursuant to the “debt-financed property” rules. Moreover, social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans that are exempt from taxation under special provisions of the U.S. federal income tax laws are subject to different UBTI rules, which generally will require them to characterize distributions that they receive from us as UBTI. Finally, in certain circumstances, a qualified employee pension or profit sharing trust that owns more than 10% of our stock must treat a percentage of the dividends that it receives from us as UBTI. Such percentage is equal to the gross income we derive from an unrelated trade or business, determined as if we were a pension trust, divided by our total gross income for the year in which we pay the dividends. That rule applies to a pension trust holding more than 10% of our stock only if:

• the percentage of our dividends that the tax-exempt trust must treat as UBTI is at least 5%;

• we qualify as a REIT by reason of the modification of the rule requiring that no more than 50% of our stock be owned by five or fewer individuals that allows the beneficiaries of the pension trust to be treated as holding our stock in proportion to their actuarial interests in the pension trust; and

• one pension trust owns more than 25% of the value of our stock; or

• a group of pension trusts individually holding more than 10% of the value of our stock collectively owns more than 50% of the value of our stock.

Taxation of Non-U.S. Stockholders

For purposes of this discussion under the heading “Federal Income Tax Consequences of Our Status as a REIT,” the term “non-U.S. stockholder” means a beneficial owner of our Common Stock that is neither a U.S. stockholder nor a partnership (or entity treated as a partnership for U.S. federal income tax purposes). The rules governing U.S. federal income taxation of nonresident alien individuals, foreign corporations, foreign partnerships, and other foreign stockholders are complex. This section is only a summary of such rules. We urge non-U.S. stockholders to consult their tax advisors to determine the impact of federal, state, and local income tax laws on the ownership and disposition of our Common Stock, including any reporting requirements.

The following is a summary of material U.S. federal income tax consequences of the acquisition, ownership and disposition of our Common Stock applicable to non-U.S. stockholders. The discussion is based on current law and is for general information only. It addresses only selective and not all aspects of U.S. federal income taxation.

Non-U.S. stockholders will generally be subject to U.S. federal withholding tax on dividends received from us at a 30% rate, subject to reduction under an applicable treaty or a statutory exemption under the Code. Although such withholding taxes may be creditable in such non-U.S. stockholder’s resident jurisdiction, for many such non-U.S. stockholders, investment in a REIT that invests principally in non-U.S. real property may not be the most tax-efficient way to invest in such assets compared to a direct investment in such assets, which would generally not subject such non-U.S. stockholders to U.S. federal withholding taxes. The remainder of this section generally assumes that we will not hold USRPIs, and therefore will not be treated as a U.S. real property holding company and our Common Stock will not be treated as a USRPI for purposes of FIRPTA.

Ordinary Dividends.  The portion of dividends received by non-U.S. stockholders payable out of our earnings and profits that are not attributable to gains from sales or exchanges of U.S. real property interests and which are not effectively connected with a U.S. trade or business of the non-U.S. stockholder generally will be treated as ordinary income dividends and will be subject to U.S. federal withholding tax at the rate of 30%, unless reduced or eliminated by an applicable income tax treaty. Under some treaties, however, lower rates generally applicable to dividends do not apply to dividends from REITs.

In general, non-U.S. stockholders should not be considered to be engaged in a U.S. trade or business solely as a result of their ownership of our stock because distributions received by the non-U.S. stockholders will be non-U.S. source.

Non-Dividend Distributions.  Unless: (i) our Common Stock constitutes a USRPI; or (ii) either (a) the non-U.S. stockholder’s investment in our Common Stock is effectively connected with a U.S. trade or business conducted by such non-U.S. stockholder (in which case the non-U.S. stockholder will be subject to the same treatment as U.S. stockholders with respect to such gain) or (b) the non-U.S. stockholder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and has a “tax home” in the United States (in which case the non-U.S. stockholder will be subject to a 30% tax on the individual’s net capital gain for the year), distributions by us which are not treated as dividends for U.S. federal income tax purposes (i.e., not treated as being paid out of our current and accumulated earnings and profits) will not be subject to U.S. federal income tax. If it cannot be determined at the time at which a distribution is made whether the distribution will constitute a dividend for U.S. federal income tax purposes, the distribution will be subject to withholding at the rate applicable to dividends. However, the non-U.S. stockholder may seek a refund from the IRS of any amounts withheld if it is subsequently determined that

133

the distribution was, in fact, in excess of our current and accumulated earnings and profits and, therefore, did not constitute a dividend for U.S. federal income tax purposes.

Because it will not generally be possible for us to determine the extent to which a distribution will be from our current or accumulated earnings and profits at the time the distribution is made, we intend to withhold and remit to the IRS 30% of distributions to non-U.S. stockholders unless: (i) a lower treaty rate applies and the non-U.S. stockholder files an IRS Form W-8BEN or W-8BEN-E evidencing eligibility for that reduced treaty rate with us; or (ii) the non-U.S. stockholder files an IRS Form W-8ECI with us claiming that the distribution is income effectively connected with the non-U.S. stockholder’s trade or business.

Capital Gain Dividends.  Capital gain dividends received by a non-U.S. stockholder from a REIT that are not attributable to USRPI capital gains are generally not subject to U.S. federal income or withholding tax, unless either: (i) the non-U.S. stockholder’s investment in our Common Stock is effectively connected with a U.S. trade or business conducted by such non-U.S. stockholder (in which case the non-U.S. stockholder will be subject to the same treatment as U.S. stockholders with respect to such gain); or (ii) the non-U.S. stockholder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and has a “tax home” in the United States (in which case the non-U.S. stockholder will be subject to a 30% tax on the individual’s net capital gain for the year). Capital gain dividends withheld are creditable against the non-U.S. stockholder’s U.S. federal income tax liability or refundable when the non-U.S. stockholder properly and timely files a tax return with the IRS.

Dispositions of Our Common Stock.  Gain from the sale of our Common Stock would be taxable in the United States to a non-U.S. stockholder in two cases: (i) if the non-U.S. stockholder’s investment in our Common Stock is effectively connected with a U.S. trade or business conducted by such non-U.S. stockholder, the non-U.S. stockholder will be subject to the same treatment as a U.S. stockholder with respect to such gain; or (ii) if the non-U.S. stockholder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and has a “tax home” in the United States. In such cases, the nonresident alien individual will be subject to a 30% tax on the individual’s capital gain.

FATCA. A U.S. withholding tax at a 30% rate will be imposed on dividends paid on our Common Stock received by certain non-U.S. stockholders if certain disclosure requirements related to U.S. accounts or ownership are not satisfied. In addition, if those disclosure requirements are not satisfied, a U.S. withholding tax at a 30% rate will be imposed, for payments after December 31, 2016, on proceeds from the sale of our Common Stock received by certain non-U.S. stockholders. If payment of withholding taxes is required, non-U.S. stockholders that are otherwise eligible for an exemption from, or a reduction of, U.S. withholding taxes with respect of such dividends and proceeds will be required to seek a refund from the IRS to obtain the benefit of such exemption or reduction. We will not pay any additional amounts in respect of any amounts withheld.

Information Reporting Requirements and Withholding

We will report to our stockholders and to the IRS the amount of distributions we pay during each calendar year, and the amount of tax we withhold, if any. Under the backup withholding rules, a stockholder may be subject to backup withholding at a rate of 28% with respect to distributions unless the holder:

• is a corporation or qualifies for certain other exempt categories and, when required, demonstrates this fact; or

• provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding, and otherwise complies with the applicable requirements of the backup withholding rules.

A stockholder who does not provide us with its correct taxpayer identification number also may be subject to penalties imposed by the IRS. Any amount paid as backup withholding will be creditable against the stockholder’s income tax liability. In addition, we may be required to withhold a portion of capital gain distributions to any stockholders who fail to certify their non-foreign status to us.

Backup withholding will generally not apply to payments of dividends made by us or our paying agents, in their capacities as such, to a non-U.S. stockholder provided that the non-U.S. stockholder furnishes to us or our paying agent the required certification as to its non-U.S. status, such as providing a valid IRS Form W-8BEN, W-8BEN-E or W-8ECI, or certain other requirements are met. Notwithstanding the foregoing, backup withholding may apply if either we or our paying agent has actual knowledge, or reason to know, that the holder is a U.S. person that is not an exempt recipient. Payments of the net proceeds from a disposition or a redemption effected outside the United States by a non-U.S. stockholder made by or through a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, information reporting (but not backup withholding) generally will apply to such a payment if the broker has certain connections with the U.S. unless the broker has documentary evidence in its records that the beneficial owner is a non-U.S. stockholder and specified conditions are met or an exemption is otherwise established. Payment of the net proceeds from a disposition by a non-U.S. stockholder of Common Stock made by or through the U.S. office of a broker is generally subject to information reporting and backup withholding unless the

134

non-U.S. stockholder certifies under penalties of perjury that it is not a U.S. person and satisfies certain other requirements, or otherwise establishes an exemption from information reporting and backup withholding.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against the stockholder’s U.S. federal income tax liability if certain required information is furnished to the IRS. Stockholders are urged consult their tax advisors regarding application of backup withholding to them and the availability of, and procedure for obtaining an exemption from, backup withholding.

A U.S. withholding tax at a 30% rate will be imposed on dividends paid on our Common Stock received by U.S. stockholders who own their shares through foreign accounts or foreign intermediaries if certain disclosure requirements related to U.S. accounts or ownership are not satisfied. In addition, if those disclosure requirements are not satisfied, a U.S. withholding tax at a 30% rate will be imposed, for payments after December 31, 2016, on proceeds from the sale of our Common Stock received by U.S. stockholders who own their shares through foreign accounts or foreign intermediaries. We will not pay any additional amounts in respect of any amounts withheld.

Other Tax Consequences

Tax Aspects of Our Investments in Our Operating Partnership and Subsidiary Partnerships

Substantially all of our investments are owned indirectly through our Operating Partnership, which will own our assets through certain subsidiaries. Our operating partnership is currently disregarded as a separate entity for U.S. federal income tax purposes because we own, directly and indirectly through disregarded entities, 100% of the interests in it. If our Operating Partnership admits other limited partners, it will be eligible to be taxed as a partnership for U.S. federal income tax purposes. The following discussion summarizes certain U.S. federal income tax considerations applicable to our direct or indirect investments in our Operating Partnership (assuming our Operating Partnership is not a disregarded entity) and any subsidiary partnerships or limited liability companies that we form or acquire (each individually a Partnership and collectively, the Partnerships). The discussion does not cover state or local tax laws or any U.S. tax laws other than U.S. federal income tax laws.

Classification as Partnerships. We will be entitled to include in our income our distributive share of each Partnership’s income and to deduct our distributive share of each Partnership’s losses only if such Partnership is classified for U.S. federal income tax purposes as a partnership (or an entity that is disregarded for U.S. federal income tax purposes if the entity has only one owner or member) rather than as a corporation or an association taxable as a corporation. An unincorporated entity with at least two owners or members will be classified as a partnership, rather than as a corporation, for U.S. federal income tax purposes if it:

• is treated as a partnership under the Treasury regulations relating to entity classification, or the check-the-box regulations; and

• is not a “publicly traded” partnership.

Under the check-the-box regulations, an unincorporated entity with at least two owners or members may elect to be classified either as an association taxable as a corporation or as a partnership. If such an entity fails to make an election, it generally will be treated as a partnership (or an entity that is disregarded for U.S. federal income tax purposes if the entity has only one owner or member) for U.S. federal income tax purposes. Each Partnership intends to be classified as a partnership for U.S. federal income tax purposes, and no Partnership will elect to be treated as an association taxable as a corporation under the check-the-box regulations.

A publicly traded partnership is a partnership whose interests are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof. A publicly traded partnership will not, however, be treated as a corporation for any taxable year if, for each taxable year beginning after December 31, 1987 in which it was classified as a publicly traded partnership, 90% or more of the partnership’s gross income for such year consists of certain passive-type income, including real property rents, gains from the sale or other disposition of real property, interest, and dividends, or the “90% passive income exception.” Treasury regulations, or the “PTP regulations,” provide limited safe harbors from the definition of a publicly traded partnership. Pursuant to one of those safe harbors, or the private placement exclusion, interests in a partnership will not be treated as readily tradable on a secondary market or the substantial equivalent thereof if: (i) all interests in the partnership were issued in a transaction or transactions that were not required to be registered under the Securities Act; and (ii) the partnership does not have more than 100 partners at any time during the partnership’s taxable year. In determining the number of partners in a partnership, a person owning an interest in a partnership, grantor trust, or S corporation that owns an interest in the partnership is treated as a partner in such partnership only if: (i) substantially all of the value of the owner’s interest in the entity is attributable to the entity’s direct or indirect interest in the partnership; and (ii) a principal purpose of the use of the entity is to permit the partnership to satisfy the 100-partner limitation. Each Partnership is expected to qualify for the private placement exclusion in the foreseeable future. Additionally, if our Operating Partnership were a publicly traded partnership, we believe that our Operating

135

Partnership would have sufficient qualifying income to satisfy the 90% passive income exception and thus would continue to be taxed as a partnership for U.S. federal income tax purposes.

If our Operating Partnership admits other limited partners, we do not intend to request a ruling from the IRS that our Operating Partnership will be classified as a partnership for U.S. federal income tax purposes. If for any reason our Operating Partnership were taxable as a corporation, rather than as a disregarded entity or a partnership, for U.S. federal income tax purposes, most, if not all, of the tax consequences described herein would be inapplicable. In particular, we would not qualify as a REIT unless we qualified for certain relief provisions, because the value of our ownership interest in our Operating Partnership would exceed 5% of our assets and we would be considered to hold more than 10% of the voting securities (and more than 10% of the value of the outstanding securities) of another corporation. See “— Requirements for Qualification — Gross Income Tests” and “— Requirements for Qualification — Asset Tests.” In addition, any change in our Operating Partnership’s status for tax purposes might be treated as a taxable event, in which case we might incur tax liability without any related cash distribution. See “— Requirements for Qualification — Distribution Requirements.” Further, items of income and deduction of our Operating Partnership would not pass through to its partners, and its partners would be treated as stockholders for tax purposes. Consequently, our Operating Partnership would be required to pay income tax at corporate rates on its net income, and distributions to its partners would constitute dividends that would not be deductible in computing our Operating Partnership’s taxable income.

Income Taxation of Partnerships and their Partners

Partners, Not the Partnerships, Subject to Tax. A partnership is not a taxable entity for U.S. federal income tax purposes. Rather, we are required to take into account our allocable share of each Partnership’s income, gains, losses, deductions, and credits for any taxable year of such Partnership ending within or with our taxable year, without regard to whether we have received or will receive any distribution from such Partnership.

Partnership Allocations. Although a partnership agreement generally will determine the allocation of income and losses among partners, such allocations will be disregarded for tax purposes if they do not comply with the provisions of the U.S. federal income tax laws governing partnership allocations. If an allocation is not recognized for U.S. federal income tax purposes, the item subject to the allocation will be reallocated in accordance with the partners’ interests in the partnership, which will be determined by taking into account all of the facts and circumstances relating to the economic arrangement of the partners with respect to such item. Each Partnership’s allocations of taxable income, gain, and loss are intended to comply with the requirements of the U.S. federal income tax laws governing partnership allocations.

Tax Allocations With Respect to Our Properties. Income, gain, loss and deduction attributable to appreciated or depreciated property that is contributed to a partnership in exchange for an interest in the partnership must be allocated in a manner such that the contributing partner is charged with, or benefits from, respectively, the unrealized gain or unrealized loss associated with the property at the time of the contribution. The amount of such unrealized gain or unrealized loss, referred to as built-in gain or “built-in loss, is generally equal to the difference between the fair market value of the contributed property at the time of contribution and the adjusted tax basis of such property at the time of contribution, or a book-tax difference. Any property purchased by our Operating Partnership for cash initially will have an adjusted tax basis equal to its fair market value, resulting in no book-tax difference. In the future, however, our Operating Partnership may admit partners in exchange for a contribution of appreciated or depreciated property, resulting in book-tax differences. Such allocations are solely for U.S. federal income tax purposes and do not affect the book capital accounts or other economic or legal arrangements among the partners. The U.S. Treasury Department has issued regulations requiring partnerships to use a “reasonable method” for allocating items with respect to which there is a book-tax difference and outlining several reasonable allocation methods. Under certain available methods, the carryover basis of contributed properties in the hands of our Operating Partnership: (i) would cause us to be allocated lower amounts of depreciation deductions for tax purposes than would be allocated to us if all contributed properties were to have a tax basis equal to their fair market value at the time of the contribution; and (ii) in the event of a sale of such properties, could cause us to be allocated taxable gain in excess of the economic or book gain allocated to us as a result of such sale, with a corresponding benefit to the contributing partners. An allocation described in (ii) above might cause us to recognize taxable income in excess of cash proceeds in the event of a sale or other disposition of property, which might adversely affect our ability to comply with the REIT distribution requirements and may result in a greater portion of our distributions being taxed as dividends.

Basis in Partnership Interest. Our adjusted tax basis in our partnership interest in a Partnership generally is equal to:

• the amount of cash and the basis of any other property contributed by us to the Partnership;

• increased by our allocable share of the Partnership’s income and our allocable share of indebtedness of the Partnership; and

136

• reduced, but not below zero, by our allocable share of the Partnership’s loss and the amount of cash distributed to us, and by constructive distributions resulting from a reduction in our share of indebtedness of our Operating Partnership.

If the allocation of our distributive share of a Partnership’s loss would reduce the adjusted tax basis of our partnership interest below zero, the recognition of such loss will be deferred until such time as the recognition of such loss would not reduce our adjusted tax basis below zero. To the extent that a Partnership’s distributions, or any decrease in our share of the indebtedness of the Partnership, which is considered a constructive cash distribution to the partners, reduce our adjusted tax basis below zero, such distributions will constitute taxable income to us. Such distributions and constructive distributions normally will be characterized as long-term capital gain.

Sale of a Partnership’s Property

Generally, any gain realized by a Partnership on the sale of property held by the Partnership for more than one year will be long-term capital gain, except for any portion of such gain that is treated as depreciation or cost recovery recapture. Any gain or loss recognized by a Partnership on the disposition of contributed properties will be allocated first to the partners of the Partnership who contributed such properties to the extent of their built-in gain or loss on those properties for U.S. federal income tax purposes. The partners’ built-in gain or loss on such contributed properties will equal the difference between the partners’ proportionate share of the book value of those properties and the partners’ tax basis allocable to those properties at the time of the contribution, subject to certain adjustments. Any remaining gain or loss recognized by the Partnership on the disposition of the contributed properties, and any gain or loss recognized by the Partnership on the disposition of the other properties, will be allocated among the partners in accordance with their respective percentage interests in the Partnership.

Our share of any gain realized by a Partnership on the sale of any property held by the Partnership as inventory or other property held primarily for sale to customers in the ordinary course of the Partnership’s trade or business will be treated as income from a prohibited transaction that is subject to a 100% penalty tax. Such prohibited transaction income also may have an adverse effect upon our ability to satisfy the income tests for REIT status. See “— Gross Income Tests.” We do not presently intend to acquire or hold or to allow any Partnership to acquire or hold any property that represents inventory or other property held primarily for sale to customers in the ordinary course of our or such Partnership’s trade or business.

Legislative or Other Actions Affecting REITs

The present U.S. federal income tax treatment of REITs may be modified, possibly with retroactive effect, by legislative, judicial or administrative action at any time. The REIT rules are constantly under review by persons involved in the legislative process and the IRS and the U.S. Treasury Department which may result in statutory changes as well as revisions to regulations and interpretations. Additionally, several of the tax considerations described herein are currently under review and are subject to change. Prospective stockholders are urged to consult with their tax advisors regarding the effect of potential changes to the U.S. federal tax laws on an investment in our Common Stock.

Foreign, State and Local Taxes

We and our subsidiaries and stockholders may be subject to foreign, state and local taxation in various jurisdictions, including those in which they or we transact business, own property or reside. We will likely own interests in properties located in a number of foreign jurisdictions, and we may be required to file tax returns and pay taxes in certain of those jurisdictions. The foreign, state or local tax treatment of our company and our stockholders may not conform to the U.S. federal income tax treatment discussed above. Prospective investors should consult their tax advisors regarding the application and effect of foreign, state or local income and other tax laws on an investment in our Common Stock.

The Code generally gives taxpayers the option of either deducting foreign taxes paid from taxable income or crediting such taxes against the taxpayer’s U.S. federal income tax liability. If we elected to receive the foreign tax credit, we could be able to use part of this credit to offset our liability for U.S. federal income tax, for example by distributing less than 100% (but more than 90%) of our net income, thus incurring a REIT-level U.S. federal income tax liability that could be offset with foreign tax credits. However, we may not be able to fully utilize our foreign tax credits depending upon the source of our foreign income and the timing of our payment of foreign and U.S. federal taxes. In addition, we will not be able to use our foreign tax credits to the extent that we do not otherwise have a U.S. federal income tax liability. In such cases, we could elect to deduct foreign taxes paid, which would reduce the amount that we are required to distribute annually to our stockholders regardless of whether we have any U.S. federal income tax liability. In either event, any foreign taxes incurred by us will not pass through to stockholders as a credit against their U.S. federal income tax liability.

137

FOREIGN TAX CONSIDERATIONS

The following contains a general description of certain local country tax considerations that may be relevant regarding an investment in our Common Stock. It does not purport to be a comprehensive description of all relevant local country tax considerations. This summary is based upon tax laws, regulations and treaties in force and effect at the time of preparation of this prospectus. It is important to note that the relevant laws may change, possibly with retroactive effect. The following is intended only as a general and non-comprehensive summary and is not intended to be, nor should it be considered to be, legal or tax advice with respect to any country’s tax law. In case of doubt, potential investors should consult their professional tax advisers.

We will conduct our operations through property companies and holding companies established in multiple European jurisdictions. Each of these property and holding companies are subject to tax in one or more of the local country jurisdictions in which they are resident or conduct business. Accordingly, we may be subject to tax in several jurisdictions at rates ranging upwards of 39% on ordinary income and capital gains, with additional withholding of upwards of 35%. Additionally, we will generally be subject to real estate-related taxes (for example, property taxes and real estate transfer taxes) in the countries where the properties are located. Further, we may be subject to increased local country taxes in the event that changes are made to the current tax law, regulations, tax authority rulings, tax treaties or tax rates in the various European jurisdictions in which we operate.

138

USE OF PROCEEDS

We will not receive any proceeds from the Distribution.

DETERMINATION OF OFFERING PRICE

No consideration will be paid for the shares of our Common Stock distributed in the Distribution.

LEGAL MATTERS

The validity of the Common Stock issued and distributed pursuant to this prospectus will be passed upon for us by Venable LLP, Baltimore, Maryland, our Maryland counsel. Certain federal income tax matters will be passed upon for us by Hunton & Williams LLP.

EXPERTS

On April 21, 2015, we appointed PricewaterhouseCoopers LLP, or PwC, as our initial independent registered public accounting firm.

The NorthStar Europe Predecessor’s combined financial statements as of December 31, 2014 and 2013 and the related combined statements of operations, comprehensive income (loss) and cash flows for the periods from January 1, 2014 through September 15, 2014 and September 16, 2014 through December 31, 2014, and the year ended December 31, 2013 appearing in this prospectus have been audited by Marcum LLP, or Marcum, an independent registered public accounting firm as stated in their report appearing elsewhere herein and are included in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.

Such report did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. Moreover, during such periods: (i) there were no disagreements between us and Marcum on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused Marcum to make reference to the subject matter of the disagreement in its report on the NorthStar Europe Predecessor’s combined financial statements; and (ii) there were no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.

The combined statement of revenues and certain expenses (Historical Summary) of the Trianon Tower for the year ended December 31, 2014, and the related notes thereto, appearing in this prospectus and registration statement have been audited by Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, independent auditors, as set forth in their report thereon appearing elsewhere herein, and is included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The combined statements of revenues and certain expenses of the SEB Portfolio for the year ended December 31, 2014 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, Société coopérative, independent accountants, given on the authority of said firm as experts in auditing and accounting.

Prior to their engagement, neither we nor anyone acting on our behalf, consulted PwC regarding any of the matters or events set forth in Item 304(a)(2) of Regulation S-K.

139

ADDITIONAL INFORMATION

Before the date of this prospectus, we were not required to file reports with the SEC. We have filed with the SEC a registration statement under the Securities Act on Form S-11 with respect to the shares of our Common Stock being distributed to NorthStar Realty common stockholders in the Distribution. This prospectus, which is a part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits related thereto filed with the SEC, reference to which is made hereby. Statements in this prospectus as to the contents of any contract, agreement or other document are qualified in all respects by reference to such contract, agreement or document. If we have filed any of those contracts, agreements or other documents as an exhibit to the registration statement, you should read the full text of such contract, agreement or document for a more complete understanding of the document or matter involved. For further information with respect to us and our Common Stock, we refer you to the registration statement, including the exhibits and the schedules filed as a part of it.

We intend to furnish the holders of our Common Stock with annual reports and proxy statements containing financial statements audited by an independent registered public accounting firm and to file with the SEC quarterly reports for the first three quarters of each fiscal year containing interim unaudited financial information. We also intend to furnish other reports as we may determine or as required by law.

The registration statement of which this prospectus forms a part and its exhibits and schedules, and other documents that we will file with the SEC, can be inspected without charge and copied at, and copies can be obtained from, the SEC’s public reference room. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. In addition, our SEC filings are available to the public at the SEC’s website at www.sec.gov. We expect to list our Common Stock on the NYSE. If and when our stock is listed on the NYSE, you can also obtain reports, proxy statements and other information about us at the NYSE’s website at www.nyse.com.

Information that we file with the SEC after the date of this prospectus may supersede the information in this prospectus. You may read these reports, proxy statements and other information and obtain copies of such documents and information as described above.

No person is authorized to give any information or to make any representations other than those contained in this prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized. Neither the delivery of this prospectus nor any distribution of securities made hereunder shall imply that there has been no change in the information set forth or in our affairs since the date hereof.

140

Index to Financial Statements

NorthStar Europe Predecessor Audited Combined Financial Statements
Report of Independent Registered Public Accounting Firm	F-2
Combined Balance Sheets as of December 31, 2014 and 2013	F-3
Combined Statements of Operations for the years ended December 31, 2014 and 2013	F-4
Combined Statements of Comprehensive Income (Loss) for the years ended December 31, 2014 and 2013	F-5
Combined Statements of Cash Flows for the years ended December 31, 2014 and 2013	F-6
Notes to Combined Financial Statements	F-7
NorthStar Europe Predecessor Unaudited Combined Interim Financial Statements
Combined Balance Sheets as of June 30, 2015 (unaudited) and December 31, 2014	F-16
Combined Statements of Operations for the six months ended June 30, 2015 and 2014 (unaudited)	F-17
Combined Statements of Comprehensive Income (Loss) for the six months ended June 30, 2015 and 2014 (unaudited)	F-18
Combined Statements of Cash Flows for the six months ended June 30, 2015 and 2014 (unaudited)	F-19
Notes to Combined Financial Statements (unaudited)	F-20
SEB Portfolio
Report of Independent Auditors	F-27
Combined Statements of Revenues and Certain Expenses for the six months ended June 30, 2015 (unaudited) and for the year ended December 31, 2014	F-28
Notes to Combined Statements of Revenues and Certain Expenses for the six months ended June 30, 2015 (unaudited) and for the year ended December 31, 2014	F-29
Trianon Tower
Report of Independent Auditors	F-31
Combined Statements of Revenues and Certain Expenses for the six months ended June 30, 2015 (unaudited) and for the year ended December 31, 2014	F-32
Notes to Combined Statements of Revenues and Certain Expenses for the six months ended June 30, 2015 (unaudited) and for the year ended December 31, 2014	F-33

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Audit Committee of the

Board of Directors and Shareholders

of NorthStar Realty Finance Corp.

We have audited the accompanying combined balance sheets of NorthStar Europe Predecessor (the “Company”) as of December 31, 2014 and 2013, and the related combined statements of operations, comprehensive income (loss) and cash flows for the periods from January 1, 2014 through September 15, 2014 and September 16, 2014 through December 31, 2014, and the year ended December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NorthStar Europe Predecessor as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the for the periods from January 1, 2014 through September 15, 2014 and September 16, 2014 through December 31, 2014, and the year ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

/s/ Marcum LLP

Marcum LLP

Bala Cynwyd, PA

July 2, 2015

F-2

NORTHSTAR EUROPE PREDECESSOR

COMBINED BALANCE SHEETS

(Dollars in Thousands)

	NorthStar Owner Period		Prior Owner Period
	December 31, 2014		December 31, 2013
Assets
Cash	$	1,552	$	1,350
Restricted cash	5,277		1,591
Operating real estate, net	54,896		59,201
Receivables	740		335
Unbilled rent receivable	264		560
Derivative assets, at fair value	1,080		—
Deferred costs and intangible assets, net	36,006		27,914
Other assets	3,011		—
Total assets	$	102,826	$	90,951
Liabilities and Equity
Mortgage notes payable	$	77,660	$	47,895
Accounts payable and accrued expenses	1,698		12,651
Derivative liabilities, at fair value	—		4,187
Other liabilities	2,589		2,634
Total liabilities	81,947		67,367
NorthStar Europe Predecessor equity	19,821		23,584
Non-controlling interest	1,058		—
Total equity	20,879		23,584
Total liabilities and equity	$	102,826	$	90,951

Refer to accompanying notes to the combined financial statements.

F-3

NORTHSTAR EUROPE PREDECESSOR

COMBINED STATEMENTS OF OPERATIONS

(Dollars in Thousands)

	NorthStar Owner Period			Prior Owner Period
	Period from September 16, 2014 to December 31, 2014			Period from January 1 to September 15, 2014			Year Ended December 31, 2013
Revenues
Rental and escalation income	$	2,722		$	7,162		$	9,869
Other revenues	39			1,290			1,129
Total revenues	2,761			8,452			10,998
Expenses
Operating expenses	1,181			3,113			4,002
Transaction costs	4,198			—			—
Interest expense	165			3,486			4,666
General and administrative expenses	1,207			4,676			340
Depreciation and amortization	1,088			2,294			3,155
Total expenses	7,839			13,569			12,163
Other income (loss)
Unrealized gain (loss) on investments and other	(210		)	2,110			2,798
Net income (loss)	(5,288		)	(3,007		)	1,633
Net (income) loss attributable to non-controlling interest	276			—			—
Net income (loss) attributable to the NorthStar Europe Predecessor	$	(5,012	)	$	(3,007	)	$	1,633

Refer to accompanying notes to the combined financial statements.

F-4

NORTHSTAR EUROPE PREDECESSOR

COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

	NorthStar Owner Period			Prior Owner Period
	Period from September 16, 2014 to December 31, 2014			Period from January 1 to September 15, 2014			Year Ended December 31, 2013
Net income (loss)	$	(5,288	)	$	(3,007	)	$	1,633
Other comprehensive income (loss):
Foreign currency translation adjustment	(4,648		)	(57		)	(981		)
Total other comprehensive income (loss)	(9,936		)	(3,064		)	652
Comprehensive income (loss)
Comprehensive (income) loss attributable to non-controlling interest	588			—			—
Comprehensive income (loss) attributable to NorthStar Europe Predecessor	$	(9,348	)	$	(3,064	)	$	652

Refer to accompanying notes to the combined financial statements.

F-5

NORTHSTAR EUROPE PREDECESSOR

COMBINED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

	NorthStar Owner Period			Prior Owner Period
	Period from September 16, 2014 to December 31, 2014			Period from January 1 to September 15, 2014			Year Ended December 31, 2013
Cash flows from operating activities:
Net income (loss)	$	(5,288	)	$	(3,007	)	$	1,633
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization	1,088			2,294			3,155
Amortization of deferred financing costs	18			—			—
Amortization of discount on borrowing	—			846			1,120
Unrealized (gain) loss on investments and other	210			(2,110		)	(2,798		)
Amortization of capitalized above/below market leases	37			37			68
Straight line rental income	(270		)	(352		)	(958		)
Changes in operating assets and liabilities:
Restricted cash	(2,839		)	1,170			(116		)
Receivables	(57		)	189			42
Other assets	(1,726		)	—			—
Accounts payable and accrued expenses	549			(1,979		)	4,879
Other liabilities	1,550			231			220
Net cash provided by (used in) operating activities	(6,728		)	(2,681		)	7,245
Cash flows from investing activities:
Acquisitions of operating real estate, net	(89,484		)	—			—
Improvements of operating real estate	(161		)	(2,307		)	(7,263		)
Net cash (used in) investing activities	(89,645		)	(2,307		)	(7,263		)
Cash flows from financing activities:
Borrowings from mortgage notes	77,660			481			—
Repayment of mortgage notes	—			(527		)	(656		)
Payment of deferred financing costs	(643		)	—			—
Purchase of derivative instruments	(1,249		)	—			—
Change in restricted cash	(2,562		)	—			—
Net transactions with NorthStar Realty	27,400			—			—
Contributions from non-controlling interest	2			—			—
Net cash provided by (used in) financing activities	100,608			(46		)	(656		)
Effect of foreign currency translation on cash	(2,683		)	3,722			545
Net change in cash	1,552			(1,312		)	(129		)
Cash - beginning of period	—			1,350			1,479
Cash - end of period	$	1,552		$	38		$	1,350
Supplemental disclosure of cash flow information
Cash paid during the year for interest	$	2,355		$	2,286		$	3,516

Refer to accompanying notes to the combined financial statements.

F-6

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS

1. Business and Organization

NorthStar Realty Finance Corp. (“NorthStar Realty”) is a diversified commercial real estate company listed on the New York Stock Exchange (“NYSE”) that qualifies as a real estate investment trust (“REIT”). NorthStar Realty is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc. (NYSE: NSAM), which together with its affiliates is referred to as NSAM.

On February 26, 2015 (the “Announcement Date”), NorthStar Realty announced that its board of directors unanimously approved a plan to spin-off its European real estate business (the “Proposed European Spin”) into a newly-formed publicly-traded REIT, NorthStar Realty Europe Corp. (“NRE”) expected to be listed on the NYSE. NSAM will manage NRE pursuant to a long-term management agreement, on substantially similar terms as NorthStar Realty’s management agreement with NSAM. The Proposed European Spin is expected to be completed in the second half of 2015.

On the Announcement Date, NorthStar Realty’s European properties consisted of a $100 million multi-tenant leasehold office complex located in the United Kingdom (the “U.K. Complex”) purchased on September 16, 2014 (“NorthStar Acquisition Date”) from an unrelated third party and $1.9 billion of commitments to purchase two portfolios of primarily multi-tenant office properties from unrelated third parties, that closed in April 2015 (“European Portfolios”). In addition, in June 2015, NorthStar Realty entered into a definitive agreement to purchase a $600 million office tower located in Frankfurt, Germany from an unrelated third party which is expected to close in the third quarter of 2015 (“Trianon Tower”), together with the European Portfolios, (the “New European Investments”). The U.K. Complex, together with the New European Investments, cash and any other related assets, liabilities or activities are expected to be contributed by NorthStar Realty to NRE as part of the Proposed European Spin.

The U.K. Complex and activities related to the launch of the European real estate business, which includes an allocation of certain costs and expenses, comprises the business of NRE (the “European Real Estate Business”). Previously, the U.K. Complex was acquired by IMV Immobilien SE (“IMW”) on July 13, 2012 (“IMW Acquisition Date”). IMW is referred to as the Prior Owner. The period from the NorthStar Acquisition Date to December 31, 2014 is referred to as the NorthStar Owner Period and the period from January 1, 2014 to September 15, 2014, including an allocation of certain costs and expenses related to the European Real Estate Business, and the year ended December 31, 2013 are referred to as the Prior Owner Period. The NorthStar Owner Period together with the Prior Owner Period is referred to as NorthStar Europe Predecessor or the Company.

2. Summary of Significant Accounting Policies

Basis of Accounting

The accompanying combined financial statements and related notes of the Company are presented on a carve-out basis and have been prepared from the historical combined balance sheets, statements of operations and cash flows attributed to the NorthStar Europe Predecessor in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Historically, financial statements of the NorthStar Europe Predecessor have not been prepared as it has not operated separately from NorthStar Realty. These combined financial statements reflect the revenues and direct expenses of the NorthStar Europe Predecessor and include material assets and liabilities of NorthStar Realty that are specifically identifiable to the Company. Additionally, the combined financial statements include an allocation of costs and expenses by NorthStar Realty related to the NorthStar Europe Predecessor (primarily compensation and other general and administrative expense) based on an estimate of expenses had the NorthStar Europe Predecessor been run as an independent entity. This allocation method is principally based on relative head count and management’s knowledge of the operations of the Company. The amounts allocated in the accompanying combined financial statements are not necessarily indicative of the actual amount of such indirect expenses that would have been recorded had the Company been a separate independent entity. The Company believes the assumptions underlying its allocation of indirect expenses are reasonable. In addition, an estimate of management fees to NSAM of $0.1 million was recorded for the NorthStar Owner Period as if NRE was managed as an independent entity and is included in general and administrative expenses.

Such unaudited interim combined financial statements include all adjustments considered necessary for a fair presentation of the NorthStar Europe Predecessor’s financial position and results of operations and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year.

F-7

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

The Company was determined to be the predecessor for accounting purposes and accordingly, followed S-X Rules 3-01 through 3-04 and Rule 12-28. Because the U.K. Complex was acquired from an unrelated third party on September 16, 2014, a “blackline” presentation for the change in basis giving effect to purchase accounting pursuant to U.S. GAAP is presented.

Non-controlling Interests

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

Estimates

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

Comprehensive Income (Loss)

The Company reports combined comprehensive income (loss) in separate statements following the combined statements of operations. Comprehensive income (loss) is defined as the change in equity resulting from net income (loss) and OCI. OCI includes foreign currency translation adjustment.

Restricted Cash

Restricted cash consists of amounts related to operating real estate such as escrows for taxes, insurance, capital expenditures, tenant security deposits, payments required under certain lease agreements.

Operating Real Estate

Operating real estate is carried at historical cost less accumulated depreciation. Costs directly related to an acquisition deemed to be a business combination are expensed and included in transaction costs in the combined statements of operations. Ordinary repairs and maintenance are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their useful life.

Operating real estate is depreciated using the straight-line method over the estimated useful lives of the assets, summarized as follows:

Category:	Term:
Buildings	40 years
Building leasehold interests	Lesser of 40 years or remaining term of the lease
Land improvements	15 years
Tenant improvements	Lesser of the useful life or remaining term of the lease
Equipment	5 to 7 years

The Company follows the purchase method for an acquisition of operating real estate, where the purchase price is allocated to tangible assets such as land, building, tenant and land improvements and other identified intangible assets and liabilities.

The following is a schedule of future contractual minimum rental income under leases as of December 31, 2014 (dollars in thousands):

Years Ending December 31:
2015	$	5,183
2016	5,507
2017	5,907
2018	5,289
2019	4,915
Thereafter	4,889
Total	$	31,690

F-8

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

Cash

Cash 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. To date, the Company has not experienced any losses on cash.

Deferred Costs

Deferred costs include deferred financing costs and deferred lease costs. Deferred financing costs represent commitment fees, legal and other third-party costs associated with obtaining financing. These costs are amortized to interest expense over the term of the financing using either the effective interest method or straight-line method depending on the type of financing. Unamortized deferred financing costs are expensed when the associated borrowing is repaid before maturity. Costs incurred in seeking financing transactions, which do not close, are expensed in the period such financing transaction was terminated. Deferred lease costs consist of fees incurred to initiate and renew operating leases, which are amortized on a straight-line basis over the remaining lease term and is recorded to depreciation and amortization in the combined statements of operations.

Identified Intangibles

The Company records acquired identified intangibles, which includes intangible assets (such as value of the above-market leases, in-place leases and other intangibles) and intangible liabilities (such as the value of below-market leases), based on estimated fair value. The value allocated to the above or below-market leases is amortized over the remaining lease term as a net adjustment to rental income. Other intangible assets are amortized into depreciation and amortization expense on a straight-line basis over the remaining lease term. The weighted average amortization period for above-market leases, below-market leases and in-place lease costs is 7.8 years, 5.7 years and 6.3 years for the NorthStar Owner Period, the period from January 1, 2014 to September 15, 2014 and the year ended December 31, 2013, respectively.

The Company recorded an immaterial amount of amortization of below-market leases for the NorthStar Owner Period, the period from January 1, 2014 to September 15, 2014 and the year ended December 31, 2013, respectively. Amortization of other intangible assets was $0.6 million, $0.7 million and $1.2 million for the NorthStar Owner Period, the period from January 1, 2014 to September 15, 2014 and the year ended December 31, 2013, respectively.

Identified intangible assets are recorded in deferred costs and intangible assets and identified intangible liabilities are recorded in other liabilities on the consolidated balance sheets.

The following table presents identified intangibles as of December 31, 2014 (dollars in thousands):

	Intangibles Assets						Intangible Liabilities
	Above-market Leases			Other(1)			Below-market Leases
Gross amount	$	1,657		$	33,231		$	(151	)
Accumulated amortization	(54		)	(578		)	18
Total	$	1,603		$	32,653		$	(133	)

_______________

(1) Primarily represents the value of in-place leases and below market ground lease.

The following table presents annual amortization of intangible assets and liabilities as of December 31, 2014 (dollars in thousands):

			Above and
Years Ending	Other		Below Market
December 31:	Intangibles(1)		Leases, Net(1)
2015	$	1,738	$	122
2016	1,344		119
2017	964		166
2018	838		160
2019	812		156
Thereafter	26,957		747
Total	$	32,653	$	1,470

_______________

(1) Identified intangibles will be amortized through periods ending December 2025.

F-9

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

Revenue Recognition

Operating Real Estate

Rental and escalation income from operating real estate is derived from leasing of space to various types of tenants. The leases are for fixed terms of varying length and generally provide for annual rentals and expense reimbursements to be paid in quarterly installments. Rental income from leases is recognized on a straight-line basis over the term of the respective leases. The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in unbilled rent receivable on the combined balance sheets. Escalation income represents revenue from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes paid by the Company on behalf of the respective property. This revenue is accrued in the same period as the expenses are incurred.

Fair Value

Fair Value Measurement

The Company follows fair value guidance in accordance with U.S. GAAP to account for its financial instruments. The Company categorizes its financial instruments, based on the priority of the inputs to the valuation technique, 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).

Financial assets and liabilities recorded at fair value on our combined 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.

As of December 31, 2014 and 2013, the Company’s sole recurring financial measurements recorded at fair value were its derivative assets/liabilities. Such derivative instruments are valued using a third-party pricing service. These quotations are not adjusted and are generally based on valuation models with observable inputs such as interest rates and contractual cash flow, and as such, are classified as Level 2 of the fair value hierarchy.

Impairment

The Company’s real estate portfolio is 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 is considered impaired if the Company’s estimate of the aggregate expected future undiscounted cash flow to be generated by the property is less than the carrying value of the property. In conducting this review, the Company considers global macroeconomic factors, including real estate sector conditions, together with investment specific and other factors. To the extent an impairment has occurred, the loss is measured as the excess of the carrying value of the property over the estimated fair value of the property. The Company did not record impairment for the periods presented.

Derivatives

The Company uses derivative instruments as a strategy to manage interest rate risk and does not enter into derivative instruments for trading or speculative purposes. The Company’s derivative instruments are recorded on the balance sheet at fair value and do not qualify as hedges under U.S. GAAP. Therefore, the change in fair value of derivative instruments are recorded in earnings.

F-10

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

Foreign Currency

Assets and liabilities denominated in a foreign currency for which the functional currency is a foreign currency are translated using the currency exchange rate in effect at the end of the period presented and the results of operations for such entities are translated into U.S. dollars using the average currency exchange rate in effect during the period. The resulting foreign currency translation adjustment is recorded as a component of accumulated OCI in the combined statements of equity.

Assets and liabilities denominated in a foreign currency for which the functional currency is the U.S. dollar are remeasured using the currency exchange rate in effect at the end of the period presented and the results of operations for such entities are remeasured into U.S. dollars using the average currency exchange rate in effect during the period. The resulting foreign currency remeasurement adjustment is recorded in unrealized gain (loss) on investments and other in the combined statements of operations.

Income Taxes

Income taxes are accounted for by the asset/liability approach in accordance with U.S. GAAP. Deferred taxes represent the expected future tax consequences when the reported amounts of assets and liabilities are recovered or paid. Such amounts arise from differences between the financial reporting and tax bases of assets and liabilities and are adjusted for changes in tax laws and tax rates in the period which such changes are enacted. The provision for income taxes represents the total of income taxes paid or payable for the current year, plus the change in deferred taxes during the year. Income tax for the periods presented was immaterial.

Recent Accounting Pronouncements

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

In April 2015, the FASB issued an accounting update changing the presentation of financing costs in financial statements. Under the new guidance, an entity would present these costs in the balance sheet as a direct deduction from the related liability rather than as an asset. Amortization of the costs would be reported as interest expense. The new guidance is effective for annual periods and interim periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the guidance on the Company’s combined financial position, results of operations and financial statement disclosures.

3. Operating Real Estate

The following table presents operating real estate, net as of December 31, 2014 and 2013 (dollars in thousands):

	NorthStar Owner			Prior Owner
	Period(1)			Period(2)
	December 31,			December 31,
	2014			2013
Building, leasehold interests and improvements	$	51,646		$	57,483
Tenant improvements	3,767			4,650
Subtotal	55,413			62,133
Less: Accumulated depreciation	(517		)	(2,932		)
Operating real estate, net	$	54,896		$	59,201

_____________

(1) NorthStar Realty has a 93.25% ownership interest in the U.K. Complex.

(2) IMW acquired the shares in Firefly Limited, a Jersey subsidiary formed as the direct owner of the U.K. Complex for £16 million. The fair value of the U.K. Complex on the IMW Acquisition Date was $79 million.

Rental income and service charges to related party tenants was $1.6 million and $1.1 million for the year ended December 31, 2013 and the period from January 1, 2014 to September 15, 2014, respectively. 

F-11

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

The following table presents the final allocation of the purchase price of the assets acquired and liabilities of the IMW Acquisition Date, which is the basis used to record depreciation and amortization expense for the Prior Owner Period.

Assets:
Buildings, leasehold interests and improvements	$	48,820
Acquired intangibles	29,839
Total assets acquired	$	78,659
Liabilities:
Mortgage notes payable	$	44,345
Other liabilities assumed	10,235
Total liabilities	54,580
Total Company's equity	24,079
Total equity	24,079
Total liabilities and equity	$	78,659

The following table presents the preliminary allocation of the purchase price of the assets acquired on the NorthStar Acquisition Date, which is the basis used to record depreciation and amortization expense for the NorthStar Owner Period.

Assets:
Buildings, leasehold interests and improvements	$	57,434
Acquired intangibles	36,328
Total assets acquired	$	93,762
Total Company’s equity	$	92,116
Non-controlling interest	1,646
Total equity	93,762
Total liabilities and equity	$	93,762

Depreciation expense was $0.5 million, $1.6 million and $1.9 million for the NorthStar Owner Period, the period from January 1, 2014 to September 15, 2014 and the year ended December 31, 2013, respectively.

4. Mortgage Notes Payable

The following table presents the Company’s borrowings as of December 31, 2014 and 2013 (dollars in thousands):

NorthStar Owner Period(1)	Principal Amount		Contractual Interest Rate	Maturity Date
As of December 31, 2014:
Mortgage notes payable	$	77,660	LIBOR plus 3.00%	December 2019
Prior Owner Period(2)
As of December 31, 2013:
Mortgage note payable	$	47,895	LIBOR plus 0.95%	April 2015

_______________

(1) Includes a non-recourse senior mortgage and mezzanine mortgage note entered into by NorthStar Realty in December 2014 (“New Borrowing”). The New Borrowing is interest only and the contractual interest rate represents a weighted average. The mezzanine note of $14.6 million with a fixed interest rate of 8%. Amount represents a weighted average.

(2) Represents a non-recourse senior mortgage note assumed by IMW in connection with its acquisition (“Initial Borrowing”). The Initial Borrowing was secured by the U.K. Complex and a Jersey security interest over the shares in Firefly Limited. The Initial Borrowing had quarterly principal amortization of £105,000. The Initial Borrowing was repaid in connection with the acquisition of the U.K. Complex by NorthStar Realty.

The carrying value of mortgage notes payable approximates fair value as of December 31, 2014 and 2013, as such amounts bear floating rates of interest. These fair value measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy.

F-12

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

5. Equity

The combined financial statements of the Company represent the operations of various subsidiaries of the NorthStar Europe Predecessor and include an allocation of costs and expenses of NorthStar Realty related to the NorthStar Europe Predecessor. The following table presents a rollforward of equity for the NorthStar Owner Period, the Prior Owner Period from January 1, 2014 to September 15, 2014 and the year ended December 31, 2013 (dollars in thousands):

Balance as of December 31, 2012	$	22,932
Net income (loss)	1,633
Other comprehensive income (loss)	(981		)
Balance as of December 31, 2013	23,584
Net income (loss)	(3,007		)
Other comprehensive income (loss)	(57		)
Balance as of September 15, 2014	20,520
Balance as of September 16, 2014	—
Net income (loss)	(5,288		)
Other comprehensive income (loss)	(4,060		)
Net transactions with NorthStar Realty	29,169
Non-controlling interest	1,058
Balance as of December 31, 2014	$	20,879

Net transactions with NorthStar Realty represent contributions or distributions related to the operating activities between the Company and NorthStar Realty, which includes certain non-cash activity. The Company had no past borrowing arrangements with NorthStar Realty. There are currently no borrowing arrangements with NorthStar Realty.

Non-controlling interest at December 31, 2014 represents a third party 6.75% equity interest in the U.K. Complex that is consolidated with the Company’s combined financial statements. Net income (loss) attributable to non-controlling interest for the period from September 16, 2014 to December 31, 2014 was a net loss of $0.3 million. There was no non-controlling interest for the period from January 1, 2014 to September 15, 2014 and the year ended December 31, 2013.

6. Derivatives

The following table presents derivative instruments that were not designated as hedges under U.S. GAAP as of December 31, 2014 and 2013 (dollars in thousands):

NorthStar Owner Period	Number	Notional Amount		Fair Value Net Asset (Liability)			Fixed LIBOR / Forward Rate	Maturity
As of December 31, 2014:
Interest rate cap(1)	1	$	63,099	$	1,080		2.0%	January 2020
Prior Owner Period
As of December 31, 2013:
Interest rate swaps	4	$	49,513	$	(4,187	)	6.4%	April 2015

_______________

(1) In connection with the New Borrowing, in December 2014, the Company entered into a multi-year interest rate cap agreement.

The Company recognized an unrealized loss on derivative instruments related to fair value adjustments of $0.2 million and an unrealized gain of $2.1 million and $2.8 million for the NorthStar Owner Period, the period from January 1, 2014 to September 15, 2014 and the year ended December 31, 2013, respectively.

7. Credit Risk Concentrations

Concentrations of credit risk arise when a number of tenants related to the Company’s investments are engaged in similar business activities or located in the same geographic location to be similarly affected by changes in economic conditions. The Company

F-13

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

has approximately 48.6% of rental revenue generated from two tenants during the NorthStar Owner Period. The Company believes it is well diversified and does not have any other concentrations of credit risks.

8. Commitments and Contingencies

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

9. Subsequent Events

The Company has evaluated events and transactions that may have occurred since December 31, 2014 through July 2, 2015, the date the financial statements were available for issuance and noted no items requiring adjustments or additional disclosure to the combined financial statements.

F-14

NorthStar Europe Predecessor

Unaudited Combined Interim Financial Statements

F-15

NORTHSTAR EUROPE PREDECESSOR

COMBINED BALANCE SHEETS

(Dollars in Thousands)

	NorthStar Owner Period
	June 30, 2015 (Unaudited)		December 31, 2014
Assets
Cash	$	3,265	$	1,552
Restricted cash	6,106		5,277
Operating real estate, net	54,985		54,896
Receivables	1,031		740
Unbilled rent receivable	694		264
Derivative assets, at fair value	1,134		1,080
Deferred costs and intangible assets, net	35,232		36,006
Other assets	2,245		3,011
Total assets	$	104,692	$	102,826
Liabilities and Equity
Mortgage notes payable	$	78,585	$	77,660
Accounts payable and accrued expenses	824		1,698
Other liabilities	2,706		2,589
Total liabilities	82,115		81,947
NorthStar Europe Predecessor equity	21,439		19,821
Non-controlling interest	1,138		1,058
Total equity	22,577		20,879
Total liabilities and equity	$	104,692	$	102,826

Refer to accompanying notes to the combined financial statements.

F-16

NORTHSTAR EUROPE PREDECESSOR

COMBINED STATEMENTS OF OPERATIONS

(Dollars in Thousands)

(Unaudited)

	NorthStar Owner Period			Prior Owner Period
	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
Revenues
Rental and escalation income	$	4,753		$	5,181
Other revenues	1			925
Total revenues	4,754			6,106
Expenses
Operating expenses	1,770			2,212
Interest expense	1,523			2,453
General and administrative expenses	1,358			3,922
Depreciation and amortization	1,814			1,593
Total expenses	6,465			10,180
Other income (loss)
Unrealized gain (loss) on investments and other	41			1,414
Realized gain (loss) on investments and other	(14		)	—
Income (loss) before income tax benefit (expense)	(1,684		)	(2,660		)
Income tax benefit (expense)	107			(3		)
Net income (loss)	(1,577		)	(2,663		)
Net (income) loss attributable to non-controlling interest	21			—
Net income (loss) attributable to the NorthStar Europe Predecessor	$	(1,556	)	$	(2,663	)

Refer to accompanying notes to the combined financial statements.

F-17

NORTHSTAR EUROPE PREDECESSOR

COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

(Unaudited)

	NorthStar Owner Period			Prior Owner Period
	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
Net income (loss)	$	(1,577	)	$	(2,663	)
Other comprehensive income (loss):
Foreign currency translation adjustment	289			483
Total other comprehensive income (loss)	(1,288		)	(2,180		)
Comprehensive income (loss)
Comprehensive (income) loss attributable to non-controlling interest	—			—
Comprehensive income (loss) attributable to NorthStar Europe Predecessor	$	(1,288	)	$	(2,180	)

Refer to accompanying notes to the combined financial statements.

F-18

NORTHSTAR EUROPE PREDECESSOR

COMBINED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	NorthStar Owner Period			Prior Owner Period
	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
Cash flows from operating activities:
Net income (loss)	$	(1,577	)	$	(2,663	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization	1,814			1,593
Amortization of deferred financing costs	172			—
Amortization of discount on borrowings	—			592
Unrealized (gain) loss on investments and other	(41		)	(1,414		)
Realized (gain) loss on investments and other	14			—
Amortization of capitalized above/below market leases	115			43
Straight line rental income, net	(414		)	(262		)
Allocation of costs and expenses by NorthStar Realty	1,273			—
Changes in operating assets and liabilities:
Restricted cash	(1,162		)	7
Receivables	(32		)	207
Other assets	752			—
Accounts payable and accrued expense	393			4,451
Other liabilities	(42		)	—
Net cash provided by operating activities	1,265			2,554
Cash flows from investing activities:
Acquisitions of operating real estate, net	(94		)	—
Improvements of operating real estate	(684		)	(1,814		)
Deferred costs and intangible assets	—			(206		)
Change in restricted cash	440			—
Net cash (used in) investing activities	(338		)	(2,020		)
Cash flows from financing activities:
Repayment of mortgage notes	—			(348		)
Payment of deferred financing costs	(847		)	—
Net transactions with NorthStar Realty	1,593			—
Net cash provided by (used in) financing activities	746			(348		)
Effect of foreign currency translation on cash	40			(10		)
Net change in cash	1,713			176
Cash - beginning of period	1,552			1,350
Cash - end of period	$	3,265		$	1,526

Refer to accompanying notes to the combined financial statements.

F-19

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS

(Unaudited)

1. Business and Organization

NorthStar Realty Finance Corp. (“NorthStar Realty”) is a diversified commercial real estate company listed on the New York Stock Exchange (“NYSE”) that qualifies as a real estate investment trust (“REIT”). NorthStar Realty is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc. (NYSE: NSAM), which together with its affiliates is referred to as NSAM.

On February 26, 2015 (the “Announcement Date”), NorthStar Realty announced that its board of directors unanimously approved a plan to spin-off its European real estate business (the “Proposed European Spin”) into a newly-formed publicly-traded REIT, NorthStar Realty Europe Corp. (“NRE”) expected to be listed on the NYSE. NSAM will manage NRE pursuant to a long-term management agreement, on substantially similar terms as NorthStar Realty’s management agreement with NSAM. The Proposed European Spin is expected to be completed in the second half of 2015.

On the Announcement Date, NorthStar Realty’s European properties consisted of a $100 million multi-tenant leasehold office complex located in the United Kingdom (the “U.K. Complex”) purchased on September 16, 2014 (“NorthStar Acquisition Date”) from an unrelated third party and $1.9 billion of commitments to purchase two portfolios of primarily multi-tenant office properties from unrelated third parties, that closed in April 2015 (“European Portfolios”). In addition, in June 2015, NorthStar Realty entered into a definitive agreement to purchase $600 million office tower located in Frankfurt, Germany from an unrelated third party which closed in July 2015 (“Trianon Tower” together with the European Portfolios, the “New European Investments”). The U.K. Complex, together with the New European Investments, cash and any other related assets, liabilities or activities are expected to be contributed by NorthStar Realty to NRE as part of the Proposed European Spin.

The U.K. Complex including an allocation of certain costs and expenses related to the launch of the European real estate business comprises the business of NRE (the “European Real Estate Business”). Previously, the U.K. Complex was acquired by IMV Immobilien SE (“IMW”) on July 13, 2012 (“IMW Acquisition Date”). IMW is referred to as the Prior Owner. The period from the NorthStar Acquisition Date to December 31, 2014 is referred to as the NorthStar Owner Period and the period from January 1, 2014 to September 15, 2014, including an allocation of certain costs and expenses related to the European Real Estate Business, is referred to as the Prior Owner Period. The NorthStar Owner Period together with the Prior Owner Period is referred to as NorthStar Europe Predecessor or the Company.

2. Summary of Significant Accounting Policies

Basis of Quarterly Presentation

The accompanying combined financial statements and related notes of the Company are presented on a carve-out basis and have been prepared from the historical combined balance sheets, statements of operations and cash flows attributed to the NorthStar Europe Predecessor in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Historically, financial statements of the NorthStar Europe Predecessor have not been prepared as it has not operated separately from NorthStar Realty. These combined financial statements reflect the revenues and direct expenses of the NorthStar Europe Predecessor and include material assets and liabilities of NorthStar Realty that are specifically identifiable to the Company. Additionally, the combined financial statements include an allocation of costs and expenses by NorthStar Realty related to the NorthStar Europe Predecessor (primarily compensation and other general and administrative expense) based on an estimate of expenses had the NorthStar Europe Predecessor been run as an independent entity. This allocation method is principally based on relative head count and management’s knowledge of the operations of the Company. The amounts allocated in the accompanying combined financial statements are not necessarily indicative of the actual amount of such indirect expenses that would have been recorded had the Company been a separate independent entity. The Company believes the assumptions underlying its allocation of indirect expenses are reasonable. In addition, an estimate of management fees to NSAM of $0.2 million was recorded for the NorthStar Owner Period as if NRE was managed as an independent entity and is included in general and administrative expenses.

These combined financial statements should be read in conjunction with NorthStar Europe Predecessor’s audited combined financial statements and notes thereto included in the Form S-11 for the years ended December 31, 2014 and 2013.

The Company was determined to be the predecessor for accounting purposes and accordingly, followed S-X Rules 3-01 through 3-04 and Rule 12-28. Because the U.K. Complex was acquired from an unrelated third party on September 16, 2014, a “blackline” presentation for the change in basis giving effect to purchase accounting pursuant to U.S. GAAP is presented.

F-20

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Non-controlling Interests

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

Estimates

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

Comprehensive Income (Loss)

The Company reports combined comprehensive income (loss) in separate statements following the combined statements of operations. Comprehensive income (loss) is defined as the change in equity resulting from net income (loss) and OCI. OCI includes foreign currency translation adjustment.

Restricted Cash

Restricted cash consists of amounts related to operating real estate such as escrows for taxes, insurance, capital expenditures, tenant security deposits, payments required under certain lease agreements.

Operating Real Estate

Operating real estate is carried at historical cost less accumulated depreciation. Costs directly related to an acquisition deemed to be a business combination are expensed and included in transaction costs in the combined statements of operations. Ordinary repairs and maintenance are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their useful life.

The Company follows the purchase method for an acquisition of operating real estate, where the purchase price is allocated to tangible assets such as land, building, tenant and land improvements and other identified intangible assets and liabilities.

Cash

Cash 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. To date, the Company has not experienced any losses on cash.

Deferred Costs

Deferred costs include deferred financing costs and deferred lease costs. Deferred financing costs represent commitment fees, legal and other third-party costs associated with obtaining financing. These costs are amortized to interest expense over the term of the financing using the straight-line method. Unamortized deferred financing costs are expensed when the associated borrowing is repaid before maturity. Costs incurred in seeking financing transactions, which do not close, are expensed in the period such financing transaction was terminated. Deferred lease costs consist of fees incurred to initiate and renew operating leases, which are amortized on a straight-line basis over the remaining lease term and is recorded to depreciation and amortization in the combined statements of operations.

Identified Intangibles

The Company records acquired identified intangibles, which includes intangible assets (such as value of the above-market leases, in-place leases and other intangibles) and intangible liabilities (such as the value of below-market leases), based on estimated fair value. The value allocated to the above or below-market leases is amortized over the remaining lease term as a net adjustment to rental income. Other intangible assets are amortized into depreciation and amortization expense on a straight-line basis over the remaining lease term. As of June 30, 2015 and December 31, 2014, the weighted average amortization period for above-market leases, below-market leases and in-place lease costs is 7.3 years and 7.8 years, respectively.

F-21

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Revenue Recognition

Operating Real Estate

Rental and escalation income from operating real estate is derived from leasing of space to various types of tenants. The leases are for fixed terms of varying length and generally provide for annual rentals and expense reimbursements to be paid in quarterly installments. Rental income from leases is recognized on a straight-line basis over the term of the respective leases. The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in unbilled rent receivable on the combined balance sheets. Escalation income represents revenue from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes paid by the Company on behalf of the respective property. This revenue is accrued in the same period as the expenses are incurred.

Fair Value

Fair Value Measurement

The Company follows fair value guidance in accordance with U.S. GAAP to account for its financial instruments. The Company categorizes its financial instruments, based on the priority of the inputs to the valuation technique, 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).

Financial assets and liabilities recorded at fair value on our combined 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.

As of June 30, 2015 and December 31, 2014, the Company’s sole recurring financial measurement recorded at fair value was its derivative asset. Such derivative instrument is valued using a third-party pricing service. This quotation is not adjusted and is generally based on valuation models with observable inputs such as interest rates and contractual cash flow, and as such, is classified as Level 2 of the fair value hierarchy.

Impairment

The Company’s real estate portfolio is 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 is considered impaired if the Company’s estimate of the aggregate expected future undiscounted cash flow to be generated by the property is less than the carrying value of the property. In conducting this review, the Company considers global macroeconomic factors, including real estate sector conditions, together with investment specific 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 of the property. The Company did not record impairment for the periods presented.

Derivatives

The Company uses derivative instruments as a strategy to manage interest rate risk and does not enter into derivative instruments for trading or speculative purposes. The Company’s derivative instruments are recorded on the combined balance sheet at fair value and do not qualify as hedges under U.S. GAAP. Therefore, the change in fair value of derivative instruments are recorded in earnings.

F-22

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Foreign Currency

Assets and liabilities denominated in a foreign currency for which the functional currency is a foreign currency are translated using the currency exchange rate in effect at the end of the period presented and the results of operations for such entities are translated into U.S. dollars using the average currency exchange rate in effect during the period. The resulting foreign currency translation adjustment is recorded as a component of accumulated OCI in equity.

Assets and liabilities denominated in a foreign currency for which the functional currency is the U.S. dollar are remeasured using the currency exchange rate in effect at the end of the period presented and the results of operations for such entities are remeasured into U.S. dollars using the average currency exchange rate in effect during the period. The resulting foreign currency remeasurement adjustment is recorded in unrealized gain (loss) on investments and other in the combined statements of operations.

Income Taxes

Income taxes are accounted for by the asset/liability approach in accordance with U.S. GAAP. Deferred taxes represent the expected future tax consequences when the reported amounts of assets and liabilities are recovered or paid. Such amounts arise from differences between the financial reporting and tax bases of assets and liabilities and are adjusted for changes in tax laws and tax rates in the period which such changes are enacted. The provision for income taxes represents the total of income taxes paid or payable for the current year, plus the change in deferred taxes during the year. Income tax benefit for the six months ended June 30, 2015 was $0.1 million.

Recent Accounting Pronouncements

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

3. Operating Real Estate

The following table presents operating real estate, net as of June 30, 2015 and December 31, 2014 (dollars in thousands):

	June 30, 2015			December 31, 2014
Building, leasehold interests and improvements	$	52,566		$	51,646
Tenant improvements	3,857			3,767
Subtotal	56,423			55,413
Less: Accumulated depreciation	(1,438		)	(517		)
Operating real estate, net(1)	$	54,985		$	54,896

_____________

(1) NorthStar Realty has a 93.25% ownership interest in the U.K. Complex.

Rental income and service charges to related party tenants was $0.7 million for the six months ended June 30, 2014.

4. Mortgage Notes Payable

The following table presents the Company’s borrowings as of June 30, 2015 and December 31, 2014 (dollars in thousands):

	Principal Amount(1)		Contractual Interest Rate	Maturity Date
As of June 30, 2015:
Mortgage notes payable	$	78,585	(1)	December 2019
As of December 31, 2014:
Mortgage notes payable	$	77,660	(1)	December 2019

_______________

(1) Includes a non-recourse senior mortgage and mezzanine mortgage note entered into by NorthStar Realty in December 2014 (“New Borrowing”). The New Borrowing is interest only and is comprised of $63.8 million principal amount of floating rate borrowing at GBP LIBOR plus 2.0% with a related $63.8 million notional interest rate cap of 2.0% and $14.7 million fixed rate borrowing at 8.0%.

F-23

NORTHSTAR EUROPE PREDECESSOR

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The carrying value of mortgage notes payable approximates fair value as of June 30, 2015 and December 31, 2014, as such amounts bear floating rates of interest. Such fair value measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy.

5. Equity

The combined financial statements of the Company represent the operations of various subsidiaries of the NorthStar Europe Predecessor and include an allocation of costs and expenses of NorthStar Realty related to the NorthStar Europe Predecessor. The following table presents a rollforward of equity for the NorthStar Owner Period and the Prior Owner Period for the six months ended June 30, 2015 and the year ended December 31, 2014 (dollars in thousands):

Balance as of December 31, 2013	$	23,584
Net income (loss)	(3,007		)
Other comprehensive income (loss)	(57		)
Balance as of September 15, 2014	20,520
Balance as of September 16, 2014	—
Net income (loss)	(5,288		)
Other comprehensive income (loss)	(4,060		)
Net transactions with NorthStar Realty	29,169
Non-controlling interest	1,058
Balance as of December 31, 2014	20,879
Net income (loss)	(1,577		)
Other comprehensive income (loss)	289
Net transactions with NorthStar Realty	2,906
Non-controlling interest	80
Balance as of June 30, 2015	$	22,577

Net transactions with NorthStar Realty represent contributions or distributions related to the operating activities between the Company and NorthStar Realty. The Company had no past borrowing arrangements with NorthStar Realty and NSAM. There are currently no borrowing arrangements with NorthStar Realty.

Non-controlling interest as of June 30, 2015 and December 31, 2014 represents a third party 6.75% equity interest in the U.K. Complex. Net loss attributable to non-controlling interest for the six months ended June 30, 2015 was $0.02 million. Other comprehensive income attributable to non-controlling interest for the six months ended June 30, 2015 was $0.02 million. There was no non-controlling interest for the six months ended June 30, 2014.

6.    Derivatives

The following table presents derivative instruments that were not designated as hedges under U.S. GAAP as of June 30, 2015 and December 31, 2014 (dollars in thousands):

	Number	Notional Amount(1)		Fair Value Net Asset (Liability)		Fixed LIBOR / Forward Rate	Maturity
As of June 30, 2015:
Interest rate cap	1	$	63,850	$	1,134	2.00%	January 2020
As of December 31, 2014:
Interest rate cap	1	$	63,099	$	1,080	2.00%	January 2020

_______________

(1) In connection with the New Borrowing, in December 2014, the Company entered into a multi-year interest rate cap agreement.

The Company recognized an unrealized gain on the interest rate cap agreement related to fair value adjustments of $0.04 million and $1.4 million for the six months ended June 30, 2015 and 2014, respectively.

F-24

7. Credit Risk Concentrations

Concentrations of credit risk arise when a number of tenants related to the Company’s investments are engaged in similar business activities or located in the same geographic location to be similarly affected by changes in economic conditions. The Company has approximately 48% of rental revenue generated from two tenants for the six months ended June 30, 2015. The Company believes it is well diversified and does not contain any unusual concentrations of credit risks.

8. Commitments and Contingencies

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

9. Subsequent Events

The Company has evaluated events and transactions that may have occurred since June 30, 2015 through August 19, 2015, the date the financial statements were available for issuance.

F-25

SEB Portfolio

F-26

REPORT OF INDEPENDENT AUDITORS

To the Shareholders of

NorthStar Realty Europe Corp.

We have audited the accompanying combined statements of revenues and certain expenses (the “Statements”) of SEB Portfolio(the “Properties”) for the year ended 31 December 2014.

Management’s Responsibility for the Statements of Revenues and Certain Expenses

Management is responsible for the preparation and fair presentation of the Statements in accordance with accounting principles generally accepted in the United States of America (GAAP) described in Note 2, this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the Statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Properties’ preparation and fair presentation of the Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Properties’ internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the Statements referred to above present fairly, in all material respects, the revenues and certain expenses of the Propertiesfor the year ended 31 December 2014 in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter

We draw attention to Note 1 of the Statements, which describes the basis of accounting. The Statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the registration statement on Form S-11 of NorthStar Realty Europe Corp.), as described in Note 1. The presentation is not intended to be a complete presentation of the Properties’ revenues and expenses. Our opinion is not modified with respect to this matter.

/s/ PricewaterhouseCoopers, Société coopérative

Luxembourg

June 30, 2015

F-27

SEB PORTFOLIO

COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

(Dollars in Thousands)

	Six Months Ended June 30, 2015		Year Ended December 31, 2014
Revenues	(Unaudited)
Rental income	$	36,230	$	80,500
Escalation income	3,676		5,617
Total revenues	39,906		86,117
Certain expenses
Real estate properties - operating expenses	5,564		8,400
Total expenses	5,564		8,400
Revenues in excess of certain expenses	$	34,342	$	77,717

The accompanying notes are an integral part to the combined statements of revenues and certain expenses.

F-28

SEB PORTFOLIO

NOTES TO THE COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

SIX MONTHS ENDED JUNE 30, 2015 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 2014

1. Basis of Presentation

The SEB Portfolio (the “Properties”) are multi-tenant office properties located across seven European countries. The accompanying combined statements of revenues and certain expenses (the “Statements”) relate to the operations of the Properties.

The Statements have been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended, and accordingly, are not representative of the actual results of operations of the Properties. Material amounts excluded consist of interest expense, depreciation and amortization and corporate general and administrative expenses.

2. Summary of Significant Accounting Policies

Revenue Recognition

Rental and escalation income from operating real estate is derived from leasing of space to tenants. The leases are for fixed terms of varying length and generally provide for annual rentals and expense reimbursements to be paid in monthly or quarterly installments. Rental income from leases is recognized on a straight-line basis over the term of the respective leases. Escalation income represents revenue from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes paid by the Properties. This revenue is accrued for in the same period as the expenses are incurred.

Use of Estimates

The preparation of the Statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that could affect the amounts of reported revenues and certain operating expenses. Actual results could differ from those estimates.

Commitments and Contingencies

The Properties may be subject to legal claims and disputes in the ordinary course of business. Management believes any settlement of any existing potential claims and dispute would not have a material impact on the Properties’ revenues and certain expenses.

3. Minimum Future Lease Rentals

There are various lease agreements in place with tenants to lease space in the Properties. As of December 31, 2014, the minimum future cash rents receivable under noncancelable operating leases in each of the next five years and thereafter are as follows (dollars in thousands) (unaudited):

Years Ending:
2015	$	76,749
2016	76,613
2017	74,874
2018	74,611
2019	72,966
Thereafter	100,143
	$	475,956

4. Subsequent Events

Management has evaluated the events and transactions that have occurred through June 30, 2015, the date which the Statements were available to be issued, and noted no items requiring adjustment of the Statements or additional disclosure.

F-29

Trianon Tower

F-30

Report of Independent Auditors

Board of Directors and Stockholders

NorthStar Realty Europe Corp.

We have audited the combined statement of revenues and certain expenses (Historical Summary) of the Trianon Tower for the year ended December 31, 2014, and the related notes to the financial statement.

Management´s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the Historical Summary in conformity with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the Historical Summary that is free of material misstatement, whether due to fraud or error.

Auditor´s Responsibility

Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Summary. The procedures selected depend on the auditor´s judgment, including the assessment of the risks of material misstatement of the Historical Summary, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity´s preparation and fair presentation of the Historical Summary in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion in the effectiveness of the entity´s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Historical Summary.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the Historical Summary referred to above present fairly, in all material respects, the revenues and certain expenses described in Note 2 of Trianon Tower for the year ended December 31, 2014, in conformity with U.S. generally accepted accounting principles.

Basis of Accounting

As described in Note 2 to the financial statements, the Historical Summary has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the registration statement on Form S-11 of NorthStar Realty Europe Corp., and are not intended to be a complete presentation of the Trianon Tower revenue and expenses. Our opinion is not modified with respect to this matter.

June 30, 2015

Ernst & Young GmbH

Wirtschaftsprüfungsgesellschaft

Eschborn/Frankfurt am Main, Germany

/s/ Enzenhofer    

Wirtschaftsprüfer    

(German Public Auditor)    

/s/ Teuber

Wirtschaftsprüferin

(German Public Auditor)

F-31

TRIANON TOWER

COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

(Dollars in Thousands)

	Six Months Ended June 30, 2015		Year Ended December 31, 2014
Revenues	(Unaudited)
Rental and escalation income	$	18,486	$	40,741
Total revenues	18,486		40,741
Certain expenses
Real estate property - operating expenses	4,532		12,467
Asset management expenses	641		1,514
Total expenses	5,173		13,981
Revenues in excess of certain expenses	$	13,313	$	26,760

The accompanying notes are an integral part to the combined statements of revenues and certain expenses.

F-32

TRIANON TOWER

NOTES TO THE COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

SIX MONTHS ENDED JUNE 30, 2015 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 2014

1. Basis of Presentation

The Trianon Tower and the associated buildings (the “Property”) is a multi-tenant office property located in Frankfurt, Germany. The accompanying combined statements of revenues and certain expenses (the “Statements”) relate to the operations of the Property. The acquisition of the Property occurred on July 15, 2015.

The Statements have been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended, and accordingly, are not representative of the actual results of operations of the Property. Material amounts excluded consist of interest expense, depreciation and amortization and corporate general and administrative expenses.

2. Summary of Significant Accounting Policies

Revenue Recognition

Rental and escalation income from operating real estate is derived from leasing of space to tenants. The leases are for fixed terms of varying length and generally provide for annual rentals and expense reimbursements to be paid in monthly installments. Rental income from leases is recognized on a straight-line basis over the term of the respective leases. Escalation income represents revenue from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes paid by the Property on behalf of the respective property. This revenue is accrued for in the same period as the expenses are incurred.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that could affect the amounts of reported revenues and certain operating expenses. Actual results could differ from those estimates.

Commitments and Contingencies

The Property may be subject to legal claims and disputes in the ordinary course of business. Management believes any settlement of any existing potential claims and dispute would not have a material impact on the Property’s revenues and certain expenses.

3. Minimum Future Lease Rentals

There are various lease agreements in place with tenants to lease space in the Property. As of December 31, 2014, the minimum future cash rents receivable under noncancelable operating leases in each of the next five years and thereafter are as follows (dollars in thousands) (unaudited):

Years Ending:
2015	$	31,198
2016	29,791
2017	29,836
2018	29,609
2019	29,378
Thereafter	136,523
	$	286,335

The above future minimum lease payments exclude tenant reimbursements.

4. Concentration of Credit Risk

Three and four tenants comprised approximately 75% of rental and escalation income for the year ended December 31, 2014 and six months ended June 30, 2015, respectively.

5. Subsequent Events

Management has evaluated the events and transactions that have occurred through June 30, 2015, the date which the Statements were available to be issued, and noted no items requiring adjustment of the Statements or additional disclosure.

F-33

PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

Item 31. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses payable by us in connection with the distribution of the securities being registered. All amounts are estimated.

Type of Fee	Amount
SEC filing fee	$	115,628
Accounting fees and expenses
Legal fees and expenses
Printing fees
Miscellaneous
Total

Item 32. Sales to Special Parties.

On June 18, 2015, we issued 100 shares of our Common Stock to NorthStar Realty Finance Corp. in connection with the initial capitalization of our company for an aggregate purchase price of $1,000. The issuance of such shares was effected in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act.

Item 33. Recent Sales of Unregistered Securities.

On June 18, 2015, we issued 100 shares of our Common Stock to NorthStar Realty Finance Corp. in connection with the initial capitalization of our company for an aggregate purchase price of $1,000. The issuance of such shares was effected in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act.

In July 2015, we issued $340 million aggregate principal amount of 4.625% Senior Stock-Settleable Notes due December 2016 to Deutsche Bank Securities Inc. as the representative of the several underwriters of the Senior Notes. The issuance of the Senior Notes to the underwriters was effected in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act.

Item 34. Indemnification of Directors and Officers.

Maryland law permits a Maryland corporation to include in its charter a provision eliminating the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from: (i) actual receipt of an improper benefit or profit in money, property or services; or (ii) active and deliberate dishonesty that is established by a final judgment and is material to the cause of action. Our charter will contain such a provision which eliminates directors’ and officers’ liability to the maximum extent permitted by Maryland law.

Our charter will authorize and our bylaws will obligate us, to the maximum extent permitted by Maryland law, to indemnify any present or former director or officer or any individual who, while a director of the Company and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her status as a present or former director or officer of the Company and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. Our charter and bylaws also will permit us to indemnify and advance expenses to any person who served a predecessor of the Company in any of the capacities described above and any employee or agent of the Company or a predecessor of the Company.

Maryland law requires a corporation (unless its charter provides otherwise, which our charter will not) to indemnify a director or officer who has been successful in the defense of any proceeding to which he or she is made a party by reason of his or her service in that capacity. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made, or threatened to be made, a party to, or witness in, by reason of their service in those or other capacities unless it is established that: (i) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty; (ii) the director or officer actually received an improper personal benefit in money, property or services; or (iii) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. A Maryland corporation may not indemnify a director or officer with respect to a proceeding by or in the right of the corporation in which the director or officer was adjudged liable to the corporation or a proceeding charging improper personal benefit to the director or officer in which the director or officer was adjudged liable on the basis that personal benefit was improperly received. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the

II-1

director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment in a suit by or in the right of the corporation, or for a judgment of liability on the basis that personal benefit was improperly received, is limited to expenses. In addition, Maryland law permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of: (i) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and (ii) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.

We intend to enter into indemnification agreements with each of our directors and executive officers which will require that we indemnify such directors and officers to the maximum extent permitted by Maryland law and that we pay such persons’ expenses in defending any civil or criminal proceeding in advance of final disposition of such proceeding.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Further, the separation agreement between us and NorthStar Realty provides for indemnification by us of NorthStar Realty and its directors, officers and employees and by NorthStar Realty of us and our directors, officers and employees for some liabilities, including liabilities under the Exchange Act. The amount of these indemnity obligations is unlimited.

Item 35. Treatment of Proceeds from Stock Being Registered.

We will not receive any proceeds from the distribution of our Common Stock in the Distribution.

Item 36. Financial Statements and Exhibits.

(a)    Financial Statements. See page F-1 for an index to the financial statements and schedules included in this registration statement.

(b)    Exhibits.

II-2

Exhibit No.	Description
2.1*	Form of Separation Agreement between NorthStar Realty Europe Corp. and NorthStar Realty Finance Corp.
3.1*	Articles of Amendment and Restatement of NorthStar Realty Europe Corp.
3.2*	Form of Bylaws of NorthStar Realty Europe Corp.
4.1	Indenture, dated as of July 1, 2015, by and among NorthStar Realty Europe Corp., NorthStar Realty Finance Corp., NorthStar Realty Finance Limited Partnership and Wilmington Trust, National Association.
5.1*	Opinion of Venable LLP
8.1*	Opinion of Hunton & Williams LLP
10.1*	Form of Amended and Restated Agreement of Limited Partnership of NorthStar Realty Europe Limited Partnership
10.2*	Form of Management Agreement between NorthStar Realty Europe Corp. and an affiliate of NorthStar Asset Management Group Inc.
10.3*	Form of Contribution Agreement between NorthStar Realty Europe Corp. or an affiliate and NorthStar Realty Finance Corp.
10.4	Purchase Agreement, dated June 25, 2015, by and among NorthStar Realty Europe Corp., NorthStar Realty Finance Corp., NorthStar Realty Finance Limited Partnership and Deutsche Bank Securities Inc.
10.5*	Umbrella Agreement, dated December 22, 2014, by and among Prime Holdco C-T, S.à r.l., Prime GER Drehbahn - T S.à r.l., Prime GER Valentinskamp - T S.à r.l. and Trias Pool II A - T S.à r.l., as Buyers, and SEB Investment GmbH (“SEB”), SEB Investment GmbH, Filiale di Milano, SEB Investment GmbH, French Branch SEB Investment GmbH, Altair Issy S.A.S. and Balni bvba (SPRL), as Sellers
10.6*	Umbrella Sale and Purchase Agreement, dated as of February 16, 2015, between SEB Investment GmbH, SEB Investment GmbH, Filiale di Milano, SEB Investment GmbH, French Branch SEB Investment GmbH, Altair Issy S.A.S. and Balni bvba (SPRL), collectively as the Sellers, and certain subsidiaries of the Company listed therein, as Buyers
10.7*	Share Sale and Purchase Agreement, dated June 11 and 12, 2015, by and among Madison Trianon S.à r.l. and MSEOF Trianon S.à r.l., as sellers, and the several purchasers identified therein
21.1*	Subsidiaries of the Registrant
23.1*	Consent of Venable LLP (included in Exhibit 5.1)
23.2*	Consent of Hunton & Williams LLP (included in Exhibit 8.1)
23.3	Consent of Marcum LLP
23.4	Consent of PricewaterhouseCoopers LLP, Société coopérative
23.5	Consent of Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft
24.1**	Power of Attorney (included on signature page)
*	To be filed by amendment.
**	Previously filed.

Item 37. Undertakings.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 will be governed by the final adjudication of such issue.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-11 and has duly caused this Amendment No. 1 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of London, United Kingdom, on August 19, 2015.

NORTHSTAR REALTY EUROPE CORP.
By:	/s/ Mahbod Nia
	Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-11 has been signed by the following persons in the capacities and on the dates indicated.

Name	Title	Date
/s/ Mahbod Nia	Chief Executive Officer (Principal Executive Officer)	August 19, 2015
Mahbod Nia
/s/ Debra A. Hess	Interim Chief Financial Officer (Principal Financial and Accounting Officer)	August 19, 2015
Debra A. Hess
*	Director	August 19, 2015
David T. Hamamoto

By: /s/ Ronald J. Lieberman

Ronald J. Lieberman

* As Attorney-in-fact for the persons indicated.

EX-4.1

Exhibit 4.1

NORTHSTAR REALTY EUROPE CORP.,

as the Issuer,

and

NORTHSTAR REALTY FINANCE CORP. and
NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP,

as the Guarantors,

to

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as the Trustee

Indenture

Dated as of July 1, 2015

4.625% Senior Stock‑Settlable Notes due December 2016

TABLE OF CONTENTS

		Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01	Definitions	2
Section 1.02	Compliance Certificates and Opinions	9
Section 1.03	Form of Documents Delivered to Trustee	9
Section 1.04	Acts of Holders; Record Dates	9
Section 1.05	Notices to Trustee or the Company	11
Section 1.06	Notice to Holders; Waiver	11
Section 1.07	[Reserved]	11
Section 1.08	Effect of Headings and Table of Contents	11
Section 1.09	Successors and Assigns	12
Section 1.10	Separability Clause	12
Section 1.11	Benefits of Indenture	12
Section 1.12	GOVERNING LAW	12
Section 1.13	Business Days	12
Section 1.14	Waiver of Jury Trial	12
Section 1.15	Force Majeure	12
Section 1.16	Counterparts	12
Section 1.17	USA PATRIOT Act	12
ARTICLE II
SECURITY FORMS
Section 2.01	Form and Dating	12
Section 2.02	Authentication	13
Section 2.03	Transfer	13
ARTICLE III
THE SECURITIES
Section 3.01	Title and Terms	18
Section 3.02	Denominations	19
Section 3.03	Execution and Authentication	19
Section 3.04	Temporary Securities	19

‑i‑

Section 3.05	Registration, Registration of Transfer and Exchange	20
Section 3.06	Mutilated, Destroyed, Lost and Stolen Securities	20
Section 3.07	Payment of Interest; Rights Preserved	21
Section 3.08	Persons Deemed Owners	22
Section 3.09	Cancellation	22
Section 3.10	Computation of Interest	22
Section 3.11	CUSIP Numbers	22
Section 3.12	Deposits of Monies	22
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01	Satisfaction and Discharge of Indenture	22
Section 4.02	Application of Trust Money	23
Section 4.03	Paying Agent to Repay Monies Held	23
Section 4.04	Reinstatement	23
ARTICLE V
REMEDIES
Section 5.01	Events of Default	23
Section 5.02	Acceleration of Maturity; Rescission and Annulment	25
Section 5.03	Collection of Indebtedness and Suits for Enforcement by Trustee	25
Section 5.04	Trustee May File Proofs of Claim	26
Section 5.05	Trustee May Enforce Claims Without Possession of Securities	26
Section 5.06	Application of Money Collected	27
Section 5.07	Limitation on Suits	27
Section 5.08	Unconditional Right of Holders to Receive Principal and Interest	27
Section 5.09	Restoration of Rights and Remedies	27
Section 5.10	Rights and Remedies Cumulative	28
Section 5.11	Delay or Omission Not Waiver	28
Section 5.12	Control by Holders	28
Section 5.13	Waiver of Past Defaults	28
Section 5.14	Undertaking for Costs	28
Section 5.15	Waiver of Stay or Extension Laws	29
ARTICLE VI
THE TRUSTEE
Section 6.01	Certain Duties and Responsibilities	29

‑ii‑

Section 6.02	Notice of Defaults	29
Section 6.03	Certain Rights of Trustee	30
Section 6.04	Not Responsible for Recitals or Issuance of Securities	31
Section 6.05	May Hold Securities	31
Section 6.06	Money Held in Trust	31
Section 6.07	Compensation and Reimbursement	31
Section 6.08	Conflicting Interests	31
Section 6.09	Corporate Trustee Required; Eligibility	32
Section 6.10	Resignation and Removal; Appointment of Successor	32
Section 6.11	Acceptance of Appointment by Successor	33
Section 6.12	Merger, Conversion, Consolidation or Succession to Business	33
Section 6.13	Preferential Collection of Claims Against the Company	33
Section 6.14	Appointment of Authenticating Agent	33
ARTICLE VII
HOLDERS’ LISTS AND REPORTS BY TRUSTEE
Section 7.01	Company to Furnish Trustee Names and Addresses of Holders	35
Section 7.02	Preservation of Information; Communications to Holders	35
Section 7.03	Reports by Trustee	35
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.01	Company May Consolidate, Etc., Only on Certain Terms	35
Section 8.02	Successor Substituted	36
ARTICLE IX
MODIFICATIONS; AMENDMENTS; WAIVERS; SUPPLEMENTAL INDENTURES
Section 9.01	Modifications and Amendments Without Consent of Holders	36
Section 9.02	Modifications and Amendments With Consent of Holders	37
Section 9.03	Execution of Supplemental Indentures	38
Section 9.04	Effect of Supplemental Indentures	38
Section 9.05	Reference in Securities to Supplemental Indentures	38
Section 9.06	No Liability for Certain Persons	38

‑iii‑

ARTICLE X
COVENANTS
Section 10.01	Payment of Principal and Interest	38
Section 10.02	Maintenance of Office or Agency	38
Section 10.03	Money for Security Payments to be Held in Trust	39
Section 10.04	Statement by Officers as to Default; Compliance Certificates	39
Section 10.05	Provision of Financial Information	40
Section 10.06	Delivery of Unrestricted Company Common Shares	40
ARTICLE XI
REDEMPTION OF SECURITIES AND PURCHASES THEREUPON
Section 11.01	Right of Redemption	40
Section 11.02	Securities Purchased in Whole or in Part	41
Section 11.03	Covenant to Comply With Applicable Laws Upon Purchase of Securities	41
Section 11.04	Sinking Fund	42
ARTICLE XII
SHARE SETTLEMENT
Section 12.01	Right to Settle in Shares	42
Section 12.02	Share Settlement Procedures	43
Section 12.03	Determination of Daily Settlement Amount	44
Section 12.04	Adjustment of Daily Share Settlement Amount	45
Section 12.05	Certain Other Adjustments	50
Section 12.06	Taxes on Shares Issued	50
Section 12.07	Responsibility of Trustee	50
Section 12.08	Ownership Limit	50
ARTICLE XIII
REPURCHASE
Section 13.01	Repurchase at Option of Holders upon a Change in Control	51
Section 13.02	Securities Purchased in Part	53
Section 13.03	Purchase of Securities in Open Market	53

‑iv‑

ARTICLE XIV
GUARANTEE
Section 14.01	Guarantee	53

‑v‑

INDENTURE, dated as of July 1, 2015, among NORTHSTAR REALTY EUROPE CORP., a corporation duly organized and existing under the laws of the State of Maryland (herein called the “Company”), having its principal office at 399 Park Avenue, 18^th Floor, New York, New York 10022, NORTHSTAR REALTY FINANCE CORP., a corporation duly organized and existing under the laws of the State of Maryland (herein called “NRF”), having its principal office at 399 Park Avenue, 18^th Floor, New York, New York 10022, NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP, a limited partnership duly organized and existing under the laws of the State of Delaware (herein called “NRF Operating Partnership” and, together with NRF, the “Guarantors” and each a “Guarantor”) having its principal office at 399 Park Avenue, 18^th Floor, New York, NY 10022, and Wilmington Trust, National Association, a national banking association having its corporate trust office at 50 South Sixth Street, Suite 1290, Minneapolis, Minnesota 55402, as trustee (herein called the “Trustee”).

RECITALS OF THE COMPANY

The Company has duly authorized the creation of an issue of 4.625% Senior Stock‑Settlable Notes due December 2016 of substantially the tenor and amount hereinafter set forth on the terms provided herein, and to provide therefor, the Company has duly authorized the execution and delivery of this Indenture.

Each Guarantor has duly authorized the creation of a full and unconditional guarantee of the Securities of substantially the tenor and amount hereinafter set forth on the terms provided herein, and to provide therefor, each Guarantor has duly authorized the execution and delivery of this Indenture and of the Guarantee provided for herein.

All things necessary to make the Securities, when executed by the Company and issued, authenticated and delivered hereunder, the valid and legally binding obligations of the Company, and to make this Indenture a valid and legally binding agreement of the Company, in each case in accordance with its terms, have been done.

All things necessary to make the Guarantee (as defined herein), when executed by each Guarantor and delivered hereunder, the valid and legally binding obligation of each Guarantor, and to make this Indenture a valid and legally binding agreement of each Guarantor, in each case in accordance with its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Securities by the Holders (as defined herein) thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows:

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01Definitions.  For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(a)the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(b)all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with U.S. generally accepted accounting principles as in effect on the Issue Date (whether or not such is indicated herein);

(c)unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or Section, as the case may be, of this Indenture;

(d)the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

(e)each reference herein to a rule or form of the Commission shall mean such rule or form and any rule or form successor thereto, in each case as amended from time to time;

(f)“or” is not exclusive;

(g)“including” means including without limitation;

(h)all references to the date the Securities were originally issued shall refer to the Issue Date, except as otherwise specified; and

(i)references to common stock of NRF do not include the Company Common Shares.

Except as otherwise specified in Section 12.03(g), the Company will be responsible for making all calculations called for under this Indenture and the Securities.  These calculations include, but are not limited to, any accrued interest payable on the Securities, redemption prices and the Daily Share Settlement Amounts of the Securities.  The Company will make all these calculations in good faith and, absent manifest error, its calculations will be final and binding on holders of the Securities.  The Company will provide a schedule of its calculations to the Trustee and the Trustee is entitled to rely upon the accuracy of its calculations without independent verification.

“Act” when used with respect to any Holder, has the meaning specified in Section 1.04.

“Additional Securities” has the meaning specified in Section 2.02.

“Affiliate” means, with respect to any specified Person, (i) any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person, (ii) any other Person that owns, directly or indirectly, 10% or more of such specified Person’s Capital Stock or (iii) any officer or director of (A) any such specified Person, (B) any Subsidiary of such specified Person or (C) any Person described in clauses (i) or (ii) above.

“Agent Member” has the meaning specified in Section 2.01(c).

“Applicable Procedures” has the meaning specified in Section 11.01(d).

‑2‑

“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 6.14 hereof to act on behalf of the Trustee to authenticate Securities.

“Board of Directors” or “Board” means the board of directors of a company or its equivalent, including managers of a limited liability company, general partners of a partnership or trustees of a business trust, or any duly authorized committee thereof.

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of a company to have been duly adopted by the Board of Directors of such company and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which federally chartered banking institutions in the City of New York are authorized or obligated to close.

“Capital Stock” means, with respect to any Person, any and all shares, interests, participations, rights in or other equivalents (however designated) of such Person’s capital stock or equity participations, and any rights (other than debt securities convertible into capital stock), warrants or options exchangeable for or convertible into such capital stock and, including, without limitation, with respect to partnerships, limited liability companies or business trusts, ownership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnerships, limited liability companies or business trusts.

“Change in Control” will be deemed to have occurred if any of the following occurs after the Issue Date:

(i)    consummation of any transaction or event (whether by means of a liquidation, share exchange, tender offer, consolidation, recapitalization, reclassification, combination, merger of the Company or NRF or any sale, lease or other transfer of all or substantially all of the consolidated assets of the Company and its consolidated subsidiaries or NRF and its consolidated subsidiaries) or a series of related transactions or events pursuant to which all of the Company Common Shares or shares of common stock of NRF, as applicable, are exchanged for, converted into or constitute solely the right to receive cash, securities or other property;

(ii)    any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable), other than the Company, the Guarantors, or any majority‑owned subsidiary of the Company or the Guarantors, is or becomes the “beneficial owner” (as such term is defined for purposes of Section 13(d)(3) under the Exchange Act), directly or indirectly, of more than 50% of the total voting power in the aggregate of all classes of the Capital Stock of the Company or NRF, as applicable, then outstanding entitled to vote generally in elections of directors, provided that the foregoing exclusion from this clause (ii) of certain affiliate acquisitions would not exclude any reacquisition by the Guarantors of an interest in excess of 50% (as described in this clause (ii)) in the Company;

(iii)    the shares of common stock of NRF or, after the initial listing thereof, the Company Common Shares (or other Capital Stock or securities into which the Securities are then exchangeable) cease to be listed on a U.S. national securities exchange for 30 consecutive days;

(iv)    NRF (or any successor thereto permitted pursuant to the terms of this Indenture) ceases to directly or indirectly control NRF Operating Partnershipother than as a result of a transaction whereby NRF or a subsidiary of NRF is the successor to NRF Operating Partnership; or

(v)    the stockholders of the Company or NRF approve any plan or proposal for the liquidation of itself or of NRF Operating Partnership (other than as a result of a transaction whereby NRF

‑3‑

or a subsidiary of NRF is a successor in interest to NRF Operating Partnership and expressly assumes its obligations under this Indenture).

For the avoidance of doubt, the Distribution shall not constitute a Change in Control for purposes hereof.

For purposes of these provisions “person” includes any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act.

“Change in Control Notice” has the meaning specified in Section 13.01(b).

“Change in Control Offer” has the meaning specified in Section 13.01(a).

“Change in Control Purchase Date” has the meaning specified in Section 13.01(b).

“Change in Control Purchase Notice” has the meaning specified in Section 13.01(c).

“Change in Control Purchase Price” means a purchase price equal to 100% of the principal amount of the Securities a Holder requires the Company to purchase, plus accrued and unpaid interest on Securities to, but excluding, the Change in Control Purchase Date.

“Close of Business” means 5:00 p.m. (New York City time).

“Closing Sale Price” has the meaning specified in Section 12.03(h).

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

“Company” means the Person named as the “Company” in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

“Company Common Shares” means the shares of common stock, par value $0.01 per share, of the Company authorized at the date of this instrument as originally executed or as such stock may be constituted from time to time.  Company Common Shares issuable upon the Company’s election to provide Company Common Shares in lieu of cash at the Stated Maturity Date of the Securities shall include only Company Common Shares or shares of any class or classes of common stock resulting from any reclassification or reclassifications thereof; provided, however, that if at any time there shall be more than one such resulting class, the shares so issuable shall include shares of all such classes, and the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

“Company Order” or “Company Request” means a written order or request signed in the name of the Company by its Chairman of the Board of Directors, its Chief Executive Officer, its Chief Financial Officer, its President, a Vice President, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee or Paying Agent, as applicable.

“control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business shall be administered, which address as of the date of this Indenture is located at 50 South

‑4‑

Sixth Street, Suite 1290, Minneapolis, MN 55402, Attention: NorthStar Realty Europe Corp. Administrator or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as a successor Trustee may designate from time to time by notice to the Holders and the Company).

“corporation” means (except in the definition of “Subsidiary”) a corporation, association, company, joint stock company or business trust.

“Daily Cash Settlement Amount” has the meaning specified in Section 12.03(c).

“Daily Settlement Amount” has the meaning specified in Section 12.03(a).

“Daily Share Settlement Amount” has the meaning specified in Section 12.03(d).

“Daily Share Settlement Value” has the meaning specified in Section 12.03(b).

“Daily VWAP” has the meaning specified in Section 12.03(g).

“Default” means any event that is, or after notice or passage of time, or both, would be, an Event of Default.

“Defaulted Interest” has the meaning specified in Section 3.07.

“Definitive Security” means a certificated Security that does not include the Global Securities Legend.

“Depositary” means The Depository Trust Company, a New York corporation, or its successor.

“Distribution” means the proposed spin‑off of the Company (as that spin‑off may be modified in the sole and complete discretion of NRF or the Company) and the transactions to be consummated in connection therewith.

“Event of Default” has the meaning specified in Section 5.01.

“Excess Share Delivery” has the meaning specified in Section 12.08.

“Exchange Act” means the Securities Exchange Act of 1934 and any successor statute thereto, in each case as amended.

“Ex‑Dividend Date” means the first date upon which the Company Common Shares trade on the Listing Exchange, regular way, without the right to receive the issuance, dividend or distribution in question.

“Expiration Time” has the meaning in Section 12.04(e).

“Federal Bankruptcy Code” means Title 11, U.S. Code.

“Global Security” has the meaning specified in Section 2.01(b).

“Global Securities Legend” means the legend set forth under that caption in Exhibit A to this Indenture.

“Guarantee” shall mean the full and unconditional guarantee of the Company’s obligations under the Securities, including the due and punctual payment of principal of and interest and premium, if any, on the Securities by each of the Guarantors, as more fully set forth in Article XIV.

‑5‑

“Guarantor” means each Person named as a “Guarantor” in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Guarantor” shall mean such successor Person.

“Holder” means a Person in whose name a Security is registered in the Security Register.

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof.

“Issue Date” means July 1, 2015.

“Listing Exchange” means the New York Stock Exchange or the NASDAQ Global Select Market.

“Market Disruption Event” means the occurrence or existence for more than a one‑half hour period in the aggregate on any scheduled trading day for the Company Common Shares of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the securities exchange or otherwise) in the Company Common Shares or in any options contracts or futures contracts relating to the Company Common Shares, and such suspension or limitation occurs or exists at any time before 1:00 p.m. (New York City time) on such day.

“Notice of Default” means a written notice of the kind specified in Section 5.01(c).

“NRF” means the Person named as “NRF” in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “NRF” shall mean such successor Person.

“NRF Operating Partnership” means the Person named as “NRF Operating Partnership” in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “NRF Operating Partnership” shall mean such successor Person.

“Officer’s Certificate” means a certificate signed by the Chairman of the Board of Directors, the Chief Executive Officer, the President, a Vice President, the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee.

“opening of business” means 9:00 a.m. (New York City time).

“Opinion of Counsel” means a written opinion of counsel reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, a Guarantor or the Trustee.

“Outstanding” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

(i)    Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(ii)    Securities for whose payment or purchase money or securities in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; and

(iii)    Securities which have been paid pursuant to Section 3.06 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof

‑6‑

satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, Securities owned by the Company, a Guarantor or any Affiliate of the Company or a Guarantor shall be disregarded and deemed not to be Outstanding (it being understood that Securities to be acquired by the Company pursuant to an offer to purchase shall not be deemed to be owned by the Company until legal title to such Securities passes to the Company), except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded.  Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company, a Guarantor or any Affiliate of the Company or a Guarantor.

“Paying Agent” means any Person authorized by the Company to pay the principal of or interest on any Securities on behalf of the Company.  The Company has initially appointed the Trustee as its Paying Agent pursuant to Section 10.02 hereof.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“principal” of a Security means the principal of the Security plus the premium, if any, payable on that Security which is due or overdue or is to become due at the relevant time.

“Record Expiration Date” has the meaning specified in Section 1.04.

“Resale Restriction Termination Date” has the meaning specified in Section 2.03(g).

“Responsible Officer” when used with respect to the Trustee, means any officer within the Corporate Trust Office, including, any vice president, any assistant vice president, any assistant secretary, any assistant treasurer, or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“Restricted Securities” has the meaning specified in Section 2.03(g).

“Rule 144” means Rule 144 as promulgated under the Securities Act.

“Rule 144A” means Rule 144A as promulgated under the Securities Act.

“scheduled trading day” means a day that is scheduled to be a trading day on the Listing Exchange.

“Securities” means the $300,000,000 4.625% Senior Stock‑Settlable Notes due December 2016 issued on the Issue Date, together with any Additional Securities issued in accordance with Section 2.02.

“Securities Act” means the Securities Act of 1933 and any statute successor thereto, in each case, as amended from time to time.

“Securities Custodian” means the custodian with respect to a Global Security (as appointed by the Depositary) or any successor person thereto, who shall initially be the Trustee.

‑7‑

“Security Register” or “Security Registrar” has the meaning specified in Section 3.05.

“Share Settlement” has the meaning specified in Section 12.01.

“Share Settlement Conditions” has the meaning specified in Section 12.02(a).

“Share Settlement Date” has the meaning specified in Section 12.01(b).

“Share Settlement Discount” has the meaning specified in Section 12.03(d).

“Share Settlement Election” has the meaning specified in Section 3.01.

“Share Settlement Election Date” has the meaning specified in Section 12.02(b).

“Share Settlement Election Notice” has the meaning specified in Section 12.02(b).

“Share Settlement Measurement Period” has the meaning specified in Section 12.03(e).

“Share Settlement Notice Date” has the meaning specified in Section 3.01.

“Share Settlement Value Per Security” has the meaning specified in Section 12.02(b).

“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Company pursuant to Section 3.07.

“Spin‑Off” has the meaning specified in Section 12.04(c).

“Stated Maturity Date” means December 15, 2016.

“Subsidiary” means, with respect to any Person, (i) a corporation a majority of whose Voting Stock is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries thereof and (ii) any other Person (other than a corporation), including, without limitation, a partnership, limited liability company, business trust or joint venture, in which such Person, one or more Subsidiaries thereof or such Person and one or more Subsidiaries thereof, directly or indirectly, at the date of determination thereof, has at least majority ownership interest entitled to vote in the election of directors, managers or trustees thereof (or other Person performing similar functions).  For purposes of this definition, any directors’ qualifying shares or investments by foreign nationals mandated by applicable law shall be disregarded in determining the ownership of a Subsidiary.

“trading day” has the meaning specified in Section 12.03(f).

“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this Indenture was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean such successor Trustee.

“Vice President” when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”

‑8‑

“Voting Stock” means any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the Board of Directors, managers or trustees of any Person (irrespective of whether or not, at the time, stock of any other class or classes shall have, or might have, voting power by reason of the happening of any contingency).

SECTION 1.02Compliance Certificates and Opinions.  Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Trustee may request (1) an Officer’s Certificate stating that, in the opinion of the signer, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, and (2) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

Every Officer’s Certificate with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(a)a statement that the individual signing such certificate has read such covenant or condition and the definitions herein relating thereto;

(b)a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based;

(c)a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d)a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

SECTION 1.03Form of Documents Delivered to Trustee.  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous.  Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

SECTION 1.04Acts of Holders; Record Dates.  Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or

‑9‑

instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof.  Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority.  The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

The ownership of Securities shall be proved exclusively by the Security Register for all purposes.

Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, the Company in reliance thereon, whether or not notation of such action is made upon such Security.

The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders of Securities, provided, however, that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph.  If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided, however, that no such action shall be effective hereunder unless taken on or prior to the applicable Record Expiration Date by Holders of the requisite principal amount of Outstanding Securities on such record date.  Nothing in this paragraph shall prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), nor shall anything in this paragraph be construed to render ineffective any action taken pursuant to or in accordance with any other provision of this Indenture by Holders of the requisite principal amount of Outstanding Securities on the date such action is taken.  Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Record Expiration Date to be given to the Trustee in writing and to each Holder of Securities in the manner set forth in Section 1.06.

The Trustee may but need not set any day as a record date for the purpose of determining the Holders of Outstanding Securities entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 5.02, (iii) any request to institute proceedings referred to in Section 5.07(b) or (iv) any direction referred to in Section 5.12.  If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided, however, that no such action shall be effective hereunder unless taken on or prior to the applicable Record Expiration Date by Holders of the requisite principal amount of Outstanding Securities on such record date.  Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action (whereupon the record date previously set shall automatically and without any action by any Person be cancelled and of no effect), nor shall anything in this paragraph be construed to render ineffective any action taken pursuant to or in accordance with any other provision of this Indenture by Holders of the requisite principal amount of Outstanding Securities on the date such action is taken.  Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the matter(s) to be submitted for potential action by Holders and the applicable Record Expiration Date to be given to the Company in writing and to each Holder of Securities in the manner set forth in Section 1.06.

‑10‑

With respect to any record date set pursuant to this Section, the party hereto that sets such record date may designate any day as the “Record Expiration Date” and from time to time may change the Record Expiration Date to any earlier or later day, provided, however, that no such change shall be effective unless notice of the proposed new Record Expiration Date is given to the other party hereto in writing, and to each Holder of Securities in the manner set forth in Section 1.06, on or before the existing Record Expiration Date.  If a Record Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto that set such record date shall be deemed to have initially designated the 180th day after such record date as the Record Expiration Date with respect thereto, subject to its right to change the Record Expiration Date as provided in this paragraph.  Notwithstanding the foregoing, no Record Expiration Date shall be later than the 180th day after the applicable record date.

Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.

SECTION 1.05Notices to Trustee or the Company.  Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

(a)the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing and mailed, first‑class postage prepaid, to or with the Trustee at its Corporate Trust Office, or

(b)the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first‑class postage prepaid, to the Company addressed to it at the address of the Company’s principal office specified in the first paragraph of this instrument, or at any other address previously furnished in writing to the Trustee by the Company.

SECTION 1.06Notice to Holders; Waiver.  Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first‑class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.  In any case where notice to Holders is given by mail, neither the failure to mail or receive such notice, nor any defect in any such notice, to any particular Holder shall affect the sufficiency or validity of such notice.  Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

Notwithstanding any other provision of this Indenture or any Security, where this Indenture or any Security provides for notice of any event (including any notice of redemption) to a Holder of a Global Security (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depositary for such Security (or its designee) pursuant to the Applicable Procedures.

SECTION 1.07[Reserved].

SECTION 1.08Effect of Headings and Table of Contents.  The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

‑11‑

SECTION 1.09Successors and Assigns.  Without limiting Article VIII hereof, all covenants and agreements in this Indenture by the Company shall bind its respective successors and assigns, whether so expressed or not.

SECTION 1.10Separability Clause.  In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 1.11Benefits of Indenture.  Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 1.12GOVERNING LAW.  THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

SECTION 1.13Business Days.  If any interest payment date, any Share Settlement Date, the Stated Maturity Date or redemption date of a Security would fall on a day that is not a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) the required payment of interest, principal or the redemption price, as applicable, will be made on the next succeeding Business Day and no interest on such payment will accrue for the period from and after the interest payment date, Share Settlement Date, Stated Maturity Date or redemption date to such next succeeding Business Day.

SECTION 1.14Waiver of Jury Trial.  EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.

SECTION 1.15Force Majeure.  In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

SECTION 1.16Counterparts.  This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 1.17USA PATRIOT Act.  The parties hereto acknowledge that in accordance with Section 326 of the USA PATRIOT Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the USA PATRIOT Act.

ARTICLE II

SECURITY FORMS

SECTION 2.01    Form and Dating.  The Securities and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture.  The Securities may have notations, legends or endorsements required by law, stock exchange rule,

‑12‑

agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  Each Security shall be dated the date of its authentication.

(a)    Guarantee. There shall be endorsed on the Securities a Guarantee in substantially the form included in Exhibit A hereto, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture.

(b)    Global Securities.  The Securities shall be issued initially in the form of one or more global Securities in definitive, fully registered form (each, a “Global Security”) without interest coupons and bearing the Global Securities Legend, which shall be deposited on behalf of the Holders of the Securities represented thereby with the Securities Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as provided in this Indenture.  The aggregate principal amount of any Global Securities may from time to time be increased (subject to the limit set forth in Section 2.02) or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee and on the schedules thereto as hereinafter provided.  Notwithstanding the foregoing, the Company may, at any time and its sole discretion, determine not to have the Securities represented by a Global Security and, in such event, will issue the Securities in definitive form in exchange for the entire Global Security relating to the Securities.

(c)    Book‑Entry Provisions.  This Section 2.01(c) shall apply only to a Global Security deposited with or on behalf of the Depositary.

The Company shall execute and the Trustee shall, in accordance with this Section 2.01(c) and Section 2.02 and pursuant to an order of the Company signed by one officer of the Company, authenticate and deliver initially one or more Global Securities that (i) shall be registered in the name of the Depositary for such Global Security or Global Securities or the nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions or held by the Trustee as Securities Custodian.

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary or by the Trustee as Securities Custodian or under such Global Security, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Security.

(d)    Definitive Securities. Except as provided in Section 2.03 or 2.04, owners of beneficial interests in Global Securities will not be entitled to have the Securities represented by such Global Securities registered in their names, will not receive or be entitled to receive physical delivery of certificated Securities in definitive form and will not be considered the owners or holders thereof.

SECTION 2.02Authentication. The Trustee shall authenticate and make available for delivery upon a written order of the Company signed by an officer of the Company Securities for original issue on the date hereof in an aggregate principal amount of $300,000,000 and such amount as may be issued, not in excess of $60,000,000, as a result of the purchase of additional Securities (the “Additional Securities”) pursuant to the initial purchasers’ option granted by the Company under the Purchase Agreement, dated June 25, 2015, among the Company, the Guarantors and Deutsche Bank Securities Inc., as representative of the several initial purchasers named therein. Such order shall specify the amount of the Securities to be authenticated, the date on which the original issue of Securities is to be authenticated and, in the case of an issuance of Additional Securities pursuant to this Section 2.02 after the Issue Date, shall certify that such issuance is in compliance with this Indenture.

SECTION 2.03Transfer. (a)Transfer of Definitive Securities.  When Definitive Securities are presented to the Security Registrar with a request to register the transfer of such Definitive Securities, the Security Registrar shall register the transfer as requested if its reasonable requirements for such transaction are met; provided,

‑13‑

however, that the Definitive Securities surrendered for transfer shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.

(b)Restrictions on Transfer of a Definitive Security for a Beneficial Interest in a Global Security.  A Definitive Security may not be exchanged for a beneficial interest in a Global Security except upon satisfaction of the requirements set forth below.  Upon receipt by the Trustee of a Definitive Security, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar, together with written instructions directing the Trustee to make, or to direct the Securities Custodian to make, an adjustment on its books and records with respect the applicable Global Security to reflect an increase in the aggregate principal amount of the Securities represented by such Global Security, such instructions to contain information regarding the Depositary account to be credited with such increase, then the Trustee shall cancel such Definitive Security and cause, or direct the Securities Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Securities Custodian, the aggregate principal amount of Securities represented by such Global Security to be increased by the aggregate principal amount of the Definitive Security to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in such Global Security equal to the principal amount of the Definitive Security so canceled.  If no applicable Global Securities are then outstanding and the applicable Global Security has not been previously exchanged for certificated securities pursuant to Section 2.04, the Company shall issue and the Trustee shall authenticate, upon written order of the Company in the form of an Officer’s Certificate, a new applicable Global Security in the appropriate principal amount.

(c)Transfer and Exchange of Global Securities.

(i)The transfer and exchange of Global Securities or beneficial interests therein shall be effected through the Depositary, in accordance with this Indenture (including applicable restrictions on transfer set forth herein) and the procedures of the Depositary therefor.  A transferor of a beneficial interest in a Global Security shall deliver a written order given in accordance with the Depositary’s procedures containing information regarding the participant account of the Depositary to be credited with a beneficial interest in such Global Security or another Global Security and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Security and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Security being transferred.

(ii)If the proposed transfer is a transfer of a beneficial interest in one Global Security to a beneficial interest in another Global Security, the Security Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Security to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Security Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of Global Security from which such interest is being transferred.

(iii)Notwithstanding any of the foregoing provisions (other than the provisions set forth in Section 2.04), a Global Security may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary

or any such nominee to a successor Depositary or a nominee of such successor Depositary.

(d)Cancellation or Adjustment of Global Security.  At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, transferred, redeemed, repurchased or canceled, such Global Security shall be returned by the Depositary to the Trustee for cancellation or retained and canceled by the Trustee.  At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, transferred in exchange for an interest in another Global Security, redeemed,

‑14‑

repurchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction.

(e)Obligations with Respect to Transfers and Exchanges of Securities.

(i)To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate, Definitive Securities and Global Securities at the Security Registrar’s request.

(ii)No service charge shall be made for any registration of transfer or exchange of Securities except as provided in Section 3.06 of this Indenture, but the Company may deduct or withhold payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.04 or 9.05 of this Indenture, and in any such case not involving any transfer.

(iii)Prior to the due presentation for registration of transfer of any Security, the Company, the Trustee, the Paying Agent or the Security Registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, the Trustee, the Paying Agent or the Security Registrar shall be affected by notice to the contrary.

(iv)Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange.

(f)No Obligation of the Trustee.

(i)The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice or the payment of any amount, under or with respect to such Securities.  All notices and communications to be given to the Holders and all payments to be made to Holders under the Securities shall be given or made only to the registered Holders (which shall be the Depositary or its nominee in the case of a Global Security).  The rights of beneficial owners in any Global Security shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary.  The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

(ii)The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

‑15‑

(iii)Notwithstanding anything contained herein to the contrary, neither the Trustee nor the Security Registrar shall be responsible for ascertaining whether any transfer complies with the registration provisions of or exemptions from the Securities Act, applicable state securities laws, the Employment Retirement Income Security Act of 1974 (or, in the case of a governmental plan or a church plan (as described in the Employment Retirement Income Security Act of 1974 Sections 3(32) and 3(33), respectively) any substantially similar federal, state or local law), the Internal Revenue Code of 1986 or the Investment Company Act of 1940.

(g)Restricted Securities. Every Security that bears or is required under this Section 2.03(g) to bear the legend set forth in this Section 2.03(g) (the “Restricted Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.03(g) (including the legend set forth below), unless such restrictions on transfer shall be eliminated or otherwise waived by written consent of the Company. The Holder of each such Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer. As used in this Section 2.03(g), the term “transfer” encompasses any sale, pledge, transfer or other disposition whatsoever of any Restricted Security.

Until the date (the “Resale Restriction Termination Date”) that is the later of (1) the date that is one year after the last date of original issuance of the Securities, or such shorter period of time as permitted by Rule 144 or any successor provision thereto, and (2) such later date, if any, as may be required by applicable law, any certificate evidencing such Security shall bear a legend in substantially the following form (unless such Securities have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company in writing, with notice thereof to the Trustee):

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1)    REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

(2)    AGREES FOR THE BENEFIT OF NORTHSTAR REALTY EUROPE CORP. (THE “COMPANY”) AND NORTHSTAR REALTY FINANCE CORP. AND NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP (THE “GUARANTORS”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

(A)    TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

(B)    PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(C)    TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

‑16‑

(D)    PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE GUARANTORS AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

No transfer of any Definitive Security prior to the Resale Restriction Termination Date will be registered by the Security Registrar unless the applicable box on the Form of Assignment and Transfer has been checked.

Any Security (or security issued in exchange or substitution therefor) (i) as to which such restrictions on transfer shall have expired in accordance with their terms, (ii) that has been transferred pursuant to a registration statement that has become effective or been declared effective under the Securities Act and that continues to be effective at the time of such transfer or (iii) that has been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, may, upon surrender of such Security for exchange to the Security Registrar in accordance with the provisions of this Section 2.03, be exchanged for a new Security or Securities, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by this Section 2.03(g) and shall not be assigned a restricted CUSIP number. The Company shall be entitled to instruct the Securities Custodian in writing to so surrender any Global Security as to which any of the conditions set forth in clauses (i) through (iii) of the immediately preceding sentence have been satisfied, and, upon such instruction, the Securities Custodian shall so surrender such Global Security for exchange; and any new Global Security so exchanged therefor shall not bear the restrictive legend specified in this Section 2.03(g) and shall not be assigned a restricted CUSIP number.

As soon as reasonably practicable following one year after the last date of original issuance of the Securities, the Company will notify the Trustee to remove the restrictive legend from the Securities and use reasonable best efforts, in cooperation with the Depositary, to remove the Restricted Securities legend set forth in this Section 2.03(g) and cause the Securities to have an unrestricted CUSIP. Following the Resale Restriction Termination Date, to the extent that deemed removal of restricted securities legends is permitted by the Applicable Procedures as then in force, the Company may, at its sole discretion, choose to proceed with such a deemed removal in accordance with the Applicable Procedures. Neither physical removal of the Restricted Securities legend from the Global Securities nor physical replacement of the CUSIP number specified therein shall be required under the first sentence of this paragraph if the Depositary, upon completion of such procedures, permits trading in the Securities represented by such Global Securities on an unrestricted basis under an unrestricted CUSIP number.

SECTION 2.04    Definitive Securities. (a) A Global Security deposited with the Depositary or with the Trustee as Securities Custodian pursuant to Section 2.01 shall be transferred to the beneficial owners thereof in the form of Definitive Securities, registered in names specified by the Depositary in an aggregate principal amount equal to the principal amount of such Global Security, in exchange for such Global Security, only if such transfer complies with Section 2.03 and the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security or if at any time the Depositary ceases to be a “clearing agency” registered under the Exchange Act, and a successor depositary is not appointed by the Company within 90 days of such notice or after the Company becomes aware of such cessation. In addition, the Company may, in its sole discretion, but is not obligated to, issue Definitive Securities in exchange for any Securities represented by a Global Security upon the request of the Holder thereof.

‑17‑

(b)    Any Global Security that is transferable to the beneficial owners thereof pursuant to this Section 2.04 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations.  Any portion of a Global Security transferred pursuant to this Section shall be executed, authenticated and delivered only in minimum denominations of $2,000 initial principal amount and any integral multiples of $1,000 initial principal amount in excess thereof, and registered in such names as the Depositary shall direct.

(c)    Subject to the provisions of Section 2.04(b), the registered Holder of a Global Security may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

(d)    In the event of the occurrence of any of the events specified in Section 2.04(a), the Company will promptly make available to the Trustee a reasonable supply of Definitive Securities in fully registered form without interest coupons.

ARTICLE III

THE SECURITIES

SECTION 3.01Title and Terms.  The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture on the Issue Date is limited to $300,000,000 principal amount, as automatically increased by the principal amount of any Additional Securities issued, authenticated and delivered pursuant to Section 2.02. Securities may be authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Securities pursuant to Sections 3.04, 3.05, 3.06 or 9.05.

The Securities shall be known and designated as the “4.625% Senior Stock‑Settlable Notes due December 2016” of the Company.  The Stated Maturity Date shall be December 15, 2016.  Interest on the Securities shall accrue at the rate of 4.625% per annum and shall be payable semi-annually, in arrears, on December 15, 2015, June 15, 2016 and the Stated Maturity Date. Payment of interest will include interest accrued for the period commencing on and including the date of original issuance of the Securities or the most recent interest payment date, as the case may be, to but excluding the next following interest payment date or the Stated Maturity Date, as the case may be.  Interest on the Securities will be computed on the basis of a 360‑day year comprised of twelve 30‑day months. Accrued and unpaid interest on the Securities will be payable in cash.

The Company shall pay the principal of and interest on any Global Security in immediately available funds to the Depositary or its nominee, as the case may be, as the registered Holder of such Global Security.  The Company has initially designated the Trustee as its Paying Agent and Security Registrar in respect of the Securities. The Company may, however, change the Paying Agent or Security Registrar for the Securities without prior notice to the Holders thereof and the Company may act as Paying Agent or Security Registrar for the Securities.

The Company may, at its option, by giving irrevocable notice on a date that is not less than 60 nor more than 120 days prior to the Stated Maturity Date (herein called the “Share Settlement Notice Date”), elect to satisfy, in whole or in part, its obligation to repay the principal amount of the Securities at the Stated Maturity Date by delivering Company Common Shares to Holders of the Securities in lieu of cash in accordance with Article XII hereof (herein called a “Share Settlement Election”) so long as the Share Settlement Conditions set forth in Section 12.02 are met on such date.

The Securities shall be guaranteed by each Guarantor as provided in Article XIV and shall have endorsed thereon the Guarantee substantially in the form set forth in Annex A hereto, executed by each Guarantor.

‑18‑

SECTION 3.02Denominations.  The Securities shall be issuable only in registered form without coupons and only in minimum denominations of $2,000 initial principal amount and any integral multiple of $1,000 above that amount.

SECTION 3.03Execution and Authentication.  The terms and provisions contained in the Form of Securities annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.  The Securities shall be executed on behalf of the Company by the Chairman of the Board of Directors, the Chief Executive Officer, the President, a Vice President, the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company and the Guarantee shall be executed on behalf of each Guarantor by the Chairman of the Board of Directors, the Chief Executive Officer, the President, a Vice President, the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of NRF, on its own behalf and in its capacity as the general partner of NRF Operating Partnership.  The signature of any of these officers on the Securities may be manual or facsimile (including electronic).

Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company or either Guarantor shall bind the Company or such Guarantor, as the case may be, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, which shall specify the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated and, in the case of an issuance of Additional Securities pursuant to Section 2.02 after the Issue Date, shall certify that such issuance is in compliance with this Indenture; and the Trustee in accordance with such Company Order shall authenticate and deliver such Securities as provided in this Indenture and not otherwise.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.

Authentication by counterpart shall satisfy the requirements of this Section 3.03 and the requirements of the Securities.

SECTION 3.04Temporary Securities.  Pending the preparation of Definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities having a Guarantee endorsed thereon which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the Definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.

If temporary Securities are issued, the Company will cause Definitive Securities to be prepared without unreasonable delay.  After the preparation of Definitive Securities, the temporary Securities shall be exchangeable for Definitive Securities having a Guarantee endorsed thereon upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to Section 10.02, without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of Definitive Securities having a Guarantee endorsed thereon of authorized denominations and of a like tenor.  Until so exchanged, the

‑19‑

temporary Securities shall in all respects be entitled to the same benefits under this Indenture as Definitive Securities.

SECTION 3.05Registration, Registration of Transfer and Exchange.  The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 10.02 being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as the Company may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities.  The Trustee is hereby appointed (a) the initial “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided and (b) the Securities Custodian with respect to the Global Securities.

The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security for registration of transfer and in compliance with Article II.  When a Security is presented to the Security Registrar with a request to register a transfer, the Security Registrar shall register the transfer as requested if its requirements therefor are met.  When Securities are presented to the Security Registrar with a request to exchange them for an equal principal amount of Securities of other denominations, the Security Registrar shall make the exchange as requested if the same requirements are met.  To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities at the Security Registrar’s request.

All Securities issued upon any registration of transfer or exchange pursuant to the terms of this Indenture shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

No service charge shall be made for any registration of transfer or exchange of Securities except as provided in Section 3.06, but the Company may deduct and withhold a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Sections 3.04 and 9.05, and in any such case not involving any transfer.

Prior to the due presentation for registration of transfer of any Security, the Company, the Trustee, the Paying Agent, and the Security Registrar may deem and treat the Person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest, if any, on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, the Trustee, the Paying Agent or the Security Registrar shall be affected by notice to the contrary.

Any Holder of a Global Security shall, by acceptance of such Global Security, agree that transfers of beneficial interest in such Global Security may be effected only through a book‑entry system maintained by (a) the Holder of such Global Security (or its agent) or (b) any Holder of a beneficial interest in such Global Security, and that ownership of a beneficial interest in such Global Security shall be required to be reflected in a book entry.

SECTION 3.06Mutilated, Destroyed, Lost and Stolen Securities.  If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security having a Guarantee endorsed thereon of like tenor and principal amount and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of each of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute, and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security having a Guarantee endorsed thereon of like tenor and principal amount and bearing a number not contemporaneously outstanding.

‑20‑

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder and to the benefits of the related Guarantee.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 3.07Payment of Interest; Rights Preserved.  Interest on any Security which is payable, and is punctually paid or duly provided for, on any interest payment date or the Stated Maturity Date shall be paid to the Person in whose name that Security (or one or more predecessor securities) is registered at the Close of Business on the first day of the month in which the applicable interest payment date falls (whether or not a Business Day), provided that interest accrued on any Security that is payable at maturity or earlier redemption will be paid to the Person entitled to payment of principal as a result of maturity or redemption, as the case may be.

Any interest on any Security which is payable, but is not punctually paid or duly provided for, on any interest payment date or the Stated Maturity Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in paragraph (a) or (b) below:

(a)the Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the Close of Business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided.  Thereupon the Company shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 15 days after the receipt by the Trustee of the notice of the proposed payment.  The Company shall promptly notify the Trustee of such Special Record Date and shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder in the manner specified in Section 1.06, not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the Close of Business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

(b)the Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause (b), such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section 3.07 and Section 3.05, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

‑21‑

The Company is permitted to withhold from interest payments otherwise payable to a Holder for any amounts the Company is required to withhold by law.

SECTION 3.08Persons Deemed Owners.  Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee shall treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and (subject to Section 3.07) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

SECTION 3.09Cancellation.  All Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it.  The Company shall promptly deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee.  No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture.  All cancelled Securities held by the Trustee shall be disposed of by the Trustee in its customary manner.

SECTION 3.10Computation of Interest.  Interest on the Securities shall be computed on the basis of a 360‑day year comprised of twelve 30‑day months.

SECTION 3.11CUSIP Numbers.  The Company in issuing the Securities may use “CUSIP” and the Trustee shall use the CUSIP numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.  The Company shall promptly notify the Trustee of any change in the CUSIP numbers.

SECTION 3.12Deposits of Monies.  Except to the extent payment is made by the Company’s check or wire transfer pursuant to the terms of the Securities, prior to 11:00 a.m., New York City time, on any interest payment date, any Share Settlement Date or the Stated Maturity Date, the Company shall deposit with the Paying Agent in immediately available funds money sufficient to make cash payments due on any interest payment date, any Share Settlement Date or the Stated Maturity Date in a timely manner which permits the Paying Agent to remit payment to the Holders on such interest payment date, Share Settlement Date or Stated Maturity Date.

ARTICLE IV

SATISFACTION AND DISCHARGE

SECTION 4.01Satisfaction and Discharge of Indenture.  This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when:

(i)    the Company shall deliver to the Security Registrar for cancellation all Securities theretofore authenticated (other than any Securities that have been destroyed, lost or stolen and in lieu of or in substitution for which other Securities shall have been authenticated and delivered) and not theretofore canceled; or

(ii)    all Securities not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable at the Stated Maturity Date for the payment of the principal amount thereof or on any Change in Control Purchase Date,

‑22‑

and the Company shall deposit with the Trustee, in trust, or deliver to the Holders cash funds or Company Common Shares, as applicable, sufficient to pay all amounts due on all of such Securities (other than any Securities that shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Securities shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation, including principal and interest due, accompanied, except in the event the Securities are due and payable solely in cash or Company Common Shares at the Stated Maturity Date or upon an earlier Change in Control Purchase Date, by a verification report as to the sufficiency of the deposited amount from an independent certified accountant or other financial professional reasonably satisfactory to the Trustee, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect (except as to (A) rights hereunder of Holders of the Securities to receive all amounts owing upon the Securities and the other rights, duties and obligations of Holders of the Securities, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee and (B) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on written demand of the Company accompanied by an Officer’s Certificate and an Opinion of Counsel and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture.

Notwithstanding the satisfaction and discharge of this Indenture pursuant to this Article IV, the obligations of the Company to the Trustee under Section 6.07, the obligations of the Company to any Authenticating Agent under Section 6.14 and, if money shall have been deposited with the Trustee pursuant to the preceding paragraph of this Section 4.01, the obligations of the Trustee under Section 4.02 and the last paragraph of Section 10.03 shall survive such satisfaction and discharge.

SECTION 4.02Application of Trust Money.  Subject to the provisions of the last paragraph of Section 10.03, all money deposited with the Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such money has been deposited with the Trustee.

SECTION 4.03Paying Agent to Repay Monies Held.  Upon the satisfaction and discharge of this Indenture, all monies then held by any Paying Agent (if other than the Trustee) shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such monies.

SECTION 4.04Reinstatement.  If the Trustee or the Paying Agent is unable to apply any money in accordance with Section 4.02 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 4.01 until such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 4.02; provided, however, that if the Company makes any payment of interest on or principal of any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE V

REMEDIES

SECTION 5.01    Events of Default. “Event of Default,” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(a)    default in the payment of the principal of the Securities (at the Stated Maturity Date or otherwise) or, if the Company has elected Share Settlement pursuant to Article XII, the Company does not deliver Company Common Shares, in accordance with the terms of Article XII;provided that a failure or delay of any

‑23‑

delivery of Company Common Shares in settlement of the principal amount of the Securities resulting from any action or inaction by the Depositary shall not constitute an Event of Default as long as the Company is using commercially reasonable efforts to accomplish delivery; or

(b)    default in the payment of interest on any of the Securities, when due and payable, for 30 days; or

(c)    default in the performance, or breach, of any covenant or agreement of the Company or either Guarantor under this Indenture and such default or breach shall continue for a period of 60 days after written notice has been given, by registered or certified mail:

(x)    to the Company by the Trustee; or

(y)    to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Securities;

Such written notice shall specify such default or breach and require it to be remedied, stating that such notice is a “Notice of Default” hereunder.

(d)    default by the Company or either Guarantor, as the case may be, under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company or such Guarantor, as the case may be, having an aggregate principal amount outstanding of at least $50,000,000, or under any mortgage, indenture or instrument (including this Indenture) under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company or such Guarantor, as the case may be, having an aggregate principal amount outstanding of at least $50,000,000, whether such indebtedness now exists or shall hereafter be created, which default, after the expiration of any grace period, (A) shall constitute a failure to pay any portion of the principal of such indebtedness when due and payable after the expiration of any applicable grace period with respect thereto or (B) shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without, in the case of clause (A), such indebtedness having been discharged or without, in the case of clause (B), such indebtedness having been discharged or such acceleration having been rescinded or annulled, in each such case after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Securities a written notice specifying such default and requiring the Company or such Guarantor, as the case may be, to cause such indebtedness to be discharged or cause such acceleration to be rescinded or annulled, as the case may be, and stating that such notice is a “Notice of Default” hereunder; provided, that, the Trustee shall not be deemed to have knowledge of such default unless either (A) a Responsible Officer of the Trustee shall have knowledge of such default or (B) the Trustee shall have received written notice thereof from the Company, from any Holder, from the holder of any such indebtedness or from the trustee under any such mortgage, indenture or other instrument; or

(e)    the Company or either Guarantor, as the case may be, shall fail to pay a final, non‑appealable judgment entered by a court of competent jurisdiction against the Company or such Guarantor, as the case may be, in excess of $50,000,000, which judgment is not paid, discharged or stayed within 60 days after such judgment becomes final and non‑appealable; or

(f)    the institution by the Company or either Guarantor, as the case may be, of a voluntary case or proceeding under the Federal Bankruptcy Code or any other similar federal, state or foreign law or any other case or proceedings to be adjudicated a bankrupt or insolvent, or the consent by the Company or either Guarantor, as the case may be, to the entry of a decree or order for relief in respect of the Company or either Guarantor, as the case may be, in any involuntary case or proceeding under the Federal Bankruptcy Code or any other similar federal, state or foreign law or to the institution of bankruptcy or insolvency proceedings against the Company or either Guarantor, as the case may be, or the filing by the Company or either Guarantor, as the case may be, of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or any other similar federal, state or foreign law, or the consent by it to the filing of any such petition or to the appointment of or taking

‑24‑

possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or other similar official) of any of the Company or either Guarantor, as the case may be, or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due or the taking of corporate or limited partnership action (as applicable) by the Company or either Guarantor, as the case may be, in furtherance of any such action; provided that, for the avoidance of doubt, a reorganization whereby NRF or a subsidiary of NRF is the successor to NRF Operating Partnership shall not constitute an Event of Default.

SECTION 5.02    Acceleration of Maturity; Rescission and Annulment.  If an Event of Default (other than those covered by clause (f) of Section 5.01 with respect to the Company or either Guarantor, as the case may be) shall occur and be continuing, the Trustee, by written notice to the Company (and to the Trustee if given by the Holders), or the Holders of at least 25% in aggregate principal amount of the Securities then Outstanding, by notice to the Trustee and the Company, may declare the principal of all of the Outstanding Securities due and payable immediately, upon which declaration, all amounts payable in respect of the Securities shall be due and payable.  If an Event of Default specified in clause (f) of Section 5.01 with respect to the Company or either Guarantor, as the case may be, occurs and is continuing, then the principal of and accrued and unpaid interest, if any, on all the Outstanding Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of Securities.

After a declaration of acceleration under this Indenture, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the Holders of a majority in aggregate principal amount of the then Outstanding Securities, by written notice to the Company and the Trustee, may rescind such declaration if:

(a)    the Company has paid or deposited with the Trustee a sum sufficient to pay:

(i)    all sums paid or advanced by the Trustee under this Indenture and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;

(ii)    all overdue interest on all Securities;

(iii)    the principal of any Securities which have become due otherwise than by such declaration of acceleration and interest thereon at the rate borne by the Securities;

(iv)    to the extent that payment of such interest is lawful, interest upon overdue interest and overdue principal at the rate set forth in the Securities which has become due otherwise than by such declaration of acceleration; and

(b)    all Events of Default, other than the non‑payment of principal of and interest on the Securities that have become due solely by such declaration of acceleration, have been cured or waived.

No such rescission shall affect any subsequent default or impair any right consequent thereto.

SECTION 5.03Collection of Indebtedness and Suits for Enforcement by Trustee.  The Company covenants that if:

(a)default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or

(b)default is made in the payment of the principal (including the delivery of any Company Common Shares deliverable as the result of a Share Settlement Election) of any Security on the due date for payment thereof (it being understood that a failure or delay of any delivery of Company Common Shares in settlement of the principal amount of the Securities resulting from any action or inaction by the Depositary shall not constitute a default in the payment of the principal of any Security on the due date thereof as long as the Company is

‑25‑

using commercially reasonable efforts to accomplish delivery), including with respect to any Security required to have been purchased pursuant to a Change in Control Offer, on the Change in Control Purchase Date the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and interest, and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and on any overdue interest, at the rate provided by the Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

The Trustee shall have the rights and powers set forth in Section 317(a) of the Trust Indenture Act and additionally the Trustee shall be entitled to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and of the Holders of the Securities allowed in any judicial proceeding relative to the Company, the Guarantors or any other obligor upon the Securities, its creditors, or its property, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute the same after the deduction of its charges and expenses; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the Holders to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for compensation and expenses, including counsel fees incurred by it up to the date of such distribution.

If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders by such appropriate judicial proceedings as the Trustee shall deem necessary to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

SECTION 5.04Trustee May File Proofs of Claim.  In case of any judicial proceeding relative to the Company, the Guarantors or any other obligor upon the Securities, any of their respective property or any of their respective creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions that would be authorized under the Trust Indenture Act in respect of an indenture qualified thereunder in order to have claims of the Holders and the Trustee allowed in any such proceeding.  In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07.

No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.

SECTION 5.05Trustee May Enforce Claims Without Possession of Securities.  All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, distributions and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

‑26‑

SECTION 5.06Application of Money Collected.  Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee hereunder;

SECOND: To the payment of the amounts then due and unpaid for principal of and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest, respectively;

THIRD: To the payment of any and all other amounts due under this Indenture or the Securities; and

FOURTH: To the Company (or such other Person as a court of competent jurisdiction may direct).

SECTION 5.07Limitation on Suits.  Subject to Section 5.08, no Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(a)such Holder has previously given written notice to the Trustee of a continuing Event of Default;

(b)the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(c)such Holder or Holders have offered to the Trustee indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request;

(d)the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(e)no direction inconsistent with such written request has been given to the Trustee during such 60‑day period by the Holders of a majority in principal amount of the Outstanding Securities; it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders.

SECTION 5.08Unconditional Right of Holders to Receive Principal and Interest. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and (subject to Section 3.07) interest on such Security on any interest payment date, any Share Settlement Date or the Stated Maturity Date, as applicable, expressed in such Security and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder; provided that a failure or delay of any delivery of Company Common Shares in settlement of the principal amount of the Securities resulting from any action or inaction by the Depositary shall not afford a Holder the right to institute suit for the enforcement of such payment as long as the Company is using commercially reasonable efforts to accomplish delivery.

SECTION 5.09Restoration of Rights and Remedies.  If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such

‑27‑

case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted, subject to the determination in such proceeding.

SECTION 5.10Rights and Remedies Cumulative.  Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

SECTION 5.11Delay or Omission Not Waiver.  No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

SECTION 5.12Control by Holders.  The Holders of a majority in principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, provided that:

(a)such direction shall not be in conflict with any rule of law or with this Indenture or be unduly prejudicial to the Holders of the Securities not joining therein, and

(b)the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

SECTION 5.13Waiver of Past Defaults.  The Holders of not less than a majority in principal amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any past default hereunder and its consequences, except a default:

(a)in the payment of the principal (including the delivery of any Company Common Shares deliverable as the result of a Share Settlement Election) of or interest on any Security (including any Security required to have been purchased pursuant to a Change in Control Offer), or

(b)in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of the Holder of each Outstanding Security affected.

Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

SECTION 5.14Undertaking for Costs.  In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit (including reasonable counsel fees and expenses), and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act in respect of indentures qualified thereunder; provided that this Section 5.14 shall not be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company, in any suit instituted by the Trustee, in any suit instituted by any Holder or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities, or in any suit instituted by any Holder for the enforcement of the payment of the principal of or interest

‑28‑

on any Security on or after the Stated Maturity Date expressed in such Security (or, in the case of a Change in Control Offer, on or after the Change in Control Purchase Date).

SECTION 5.15Waiver of Stay or Extension Laws.  The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

ARTICLE VI

THE TRUSTEE

SECTION 6.01    Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default,

(i)    the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii)    in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by the provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(b)    In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

(c)    No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent misconduct, except that no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers under this Indenture, unless the Trustee has received security and indemnity satisfactory to it against any loss, liability or expense.  The Trustee shall not be liable for any error of judgment unless it is proved that the Trustee was negligent in the performance of its duties hereunder.

(d)    Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.01.

SECTION 6.02Notice of Defaults.  If an Event of Default occurs and is known to the Trustee, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Security Register, notice of such Event of Default hereunder known to the Trustee within 90 days after such Event of Default, or, if later, within 15 days after it becomes known to the Trustee, unless such Event of Default shall have been cured or waived; provided, however, that, except in the case of an Event of Default in the payment of the principal of or interest on any Security, the Trustee shall be protected in withholding such notice if and so long as the Board of Directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee determines that the withholding of such notice is in the interest of the Holders.

‑29‑

SECTION 6.03Certain Rights of Trustee.  Subject to the provisions of Section 6.01:

(a)The Trustee may conclusively rely as to the truth of the statements and correctness of the opinions expressed therein and shall be fully protected in acting or refraining from acting upon any resolution, Officer’s Certificate, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b)any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution of the Company;

(c)whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate;

(d)the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(e)the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(f)the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled (subject to reasonable confidentiality arrangements as may be proposed by the Company) to make reasonable examination (upon prior notice and during regular business hours) of the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation;

(g)the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or custodians or nominees and the Trustee shall not be responsible for the supervision of, or any misconduct or negligence on the part of, any agent or attorney appointed with due care by it hereunder;

(h)the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

(i)in the event that the Trustee is also acting as Authenticating Agent, Paying Agent, Security Registrar or Securities Custodian hereunder, the rights and protections afforded to the Trustee pursuant to this Article VI, including its right to be indemnified, shall also be afforded to such Authenticating Agent, Paying Agent, Security Registrar and Securities Custodian;

(j)the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default and stating such notice is a “Notice of Default” is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture;

‑30‑

(k)in no event shall the Trustee be responsible or liable for punitive, special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action; and

(l)the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

SECTION 6.04Not Responsible for Recitals or Issuance of Securities.  The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and the Trustee or any Authenticating Agent assumes no responsibility for their correctness.  The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.  The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof.

SECTION 6.05May Hold Securities.  The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar, any Securities Custodian or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 6.08 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar, Securities Custodian or such other agent.

SECTION 6.06Money Held in Trust.  Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company.

SECTION 6.07Compensation and Reimbursement.  Each of the Company and the Guarantors, jointly and severally, agrees (1) to pay to the Trustee from time to time such compensation as the Company and the Trustee shall from time to time agree in writing for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) to promptly reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may have been caused by its negligence or willful misconduct; and (3) to indemnify the Trustee, its directors, officers, agents and employees for, and to hold them harmless against, any and all loss, damage, claim, liability or expense incurred without negligence or bad faith on its part, including taxes (other than taxes based upon, measured by or determined by the revenue or income of the Trustee), arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim (whether asserted by the Company, a Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder.

The Trustee shall have a lien prior to the Securities as to all property and funds held by it hereunder for any amount owing to it pursuant to this Section 6.07, except with respect to funds held in trust for the benefit of the Holders of particular Securities.

When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.01(f), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable federal or state bankruptcy, insolvency or other similar law.

Notwithstanding any provisions of this Indenture, the provisions of this Section shall survive the resignation or removal of the Trustee and any satisfaction and discharge of this Indenture.

SECTION 6.08Conflicting Interests.  If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act in respect of indentures qualified thereunder, the Trustee shall either

‑31‑

eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act in respect of indentures qualified thereunder and this Indenture.

SECTION 6.09Corporate Trustee Required; Eligibility.  There shall at all times be a Trustee hereunder which shall be a Person that would be eligible pursuant to the Trust Indenture Act to act as such in respect of indentures qualified thereunder and has, or is a wholly owned subsidiary of a bank holding company that has, a combined capital and surplus of at least $50,000,000 and a Corporate Trust Office in the United States.  If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of a Federal or State supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act in respect of indentures qualified thereunder, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

SECTION 6.10Resignation and Removal; Appointment of Successor.  No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.

(a)The Trustee may resign at any time by giving written notice thereof to the Company.  If an instrument of acceptance by a successor Trustee in accordance with the applicable requirements of Section 6.11 shall not have been delivered to the Company and the resigning Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee.

(b)The Trustee may be removed at any time by Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and to the Company.  If an instrument of acceptance by a successor Trustee in accordance with the applicable requirements of Section 6.11 shall not have been delivered to the Company and the Trustee being removed within 30 days after the giving of such notice of removal, the Trustee being removed may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee.

(c)If at any time:

(i)the Trustee shall fail to comply with Section 6.08 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

(ii)the Trustee shall cease to be eligible under Section 6.09 and shall fail to resign after written request therefor by the Company or by any such Holder, or

(iii)the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, (A) the Company, by a Board Resolution, may remove the Trustee, or (B) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(d)If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee.  If, within one year after such resignation, removal or incapability, or the occurrence of such

‑32‑

vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee and supersede the successor Trustee appointed by the Company.  If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in accordance with the applicable requirements of Section 6.11, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

(e)The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders in the manner provided in Section 1.06.  Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

(f)The resignation or removal of the Trustee pursuant to this Section 6.10 shall not affect the obligation of the Company to indemnify the Trustee pursuant to Section 6.07(3) in connection with the exercise or performance by the Trustee prior to its resignation or removal of any of its powers or duties hereunder.

(g)No Trustee under this Indenture shall be liable for any action or omission of any successor Trustee.

SECTION 6.11Acceptance of Appointment by Successor.  Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.  Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article VI.

SECTION 6.12Merger, Conversion, Consolidation or Succession to Business.  Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided, however, that such corporation shall be otherwise qualified and eligible under this Article VI, without the execution or filing of any paper or any further act on the part of any of the parties hereto.  In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

SECTION 6.13Preferential Collection of Claims Against the Company.  If and when the Trustee shall be or become a creditor of the Company, the Guarantors or any other obligor upon the Securities, the Trustee shall be subject to the provisions of the Trust Indenture Act in respect of indentures qualified thereunder regarding the collection of claims against the Company, the Guarantors or any such other obligor.

SECTION 6.14    Appointment of Authenticating Agent.  The Trustee may appoint an Authenticating Agent or Agents which shall be authorized to act on behalf of the Trustee to authenticate Securities issued upon original issue and upon exchange or registration of transfer or partial purchase or pursuant to Section 3.06, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder.  Wherever reference is made in this

‑33‑

Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent.  Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by federal or state authority.  If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided that such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company.  The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company.  Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 1.06, to all Holders as their names and addresses appear in the Security Register.  Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.  No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.

If an appointment is made pursuant to this Section, the Securities may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

This is one of the Securities described in the within‑mentioned Indenture.

Dated:
	Wilmington Trust, National Association, as Trustee
By:
	As Authentication Agent
By:
	Authorized Signatory

ARTICLE VII

HOLDERS’ LISTS AND REPORTS BY TRUSTEE

‑34‑

SECTION 7.01Company to Furnish Trustee Names and Addresses of Holders.  The Company will furnish or cause to be furnished to the Trustee a list of the names and addresses of the Holders in such form as the Trustee may reasonably request in writing, within 30 days after the receipt by the Company of any such request, as of a date not more than 15 days prior to the time such list is furnished; excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar.

SECTION 7.02    Preservation of Information; Communications to Holders. The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.01 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar, if so acting.

(a)    The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act in respect of indentures qualified thereunder.

(b)    Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of any of them shall be held accountable by reason of any disclosure of information as to the names and addresses of Holders made in accordance with the Trust Indenture Act in respect of indentures qualified thereunder.

SECTION 7.03Reports by Trustee.  Within 60 days after each June 15 (commencing in 2016) on which the Securities remain Outstanding, the Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture to the extent required pursuant to the Trust Indenture Act in respect of indentures qualified thereunder at the times and in the manner provided pursuant thereto in respect of indentures qualified thereunder.

A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities are listed (if any), with the Commission and with the Company.  The Company will promptly notify the Trustee when the Securities are listed on any stock exchange and of any delisting thereof.

ARTICLE VIII

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 8.01    Company May Consolidate, Etc., Only on Certain Terms. None of the Company and the Guarantors shall (1) consolidate with or merge with or into any other Person or sell, convey, lease or transfer its properties and assets substantially as an entirety to any other Person in any one transaction or series of related transactions, or (2) permit any Person to consolidate with or merge into it unless:

(a)    in the case of a merger or consolidation, it is the surviving person or if it is not the surviving person, the surviving person formed by such consolidation or into which it is merged or the person to which its properties and assets are so transferred shall be an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and shall execute and deliver to the Trustee a supplemental indenture expressly assuming the payment when due of the principal of and interest on the Securities, in the case of a transaction involving the Company, or its Guarantee, in the case of either Guarantor, and the performance of its other covenants under this Indenture in either case; and

(b)    in either case, (i) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing, and (ii) an Officer’s Certificate and legal opinion concerning the conditions precedent shall have been delivered to the Trustee.

‑35‑

In the event that the Company or the applicable Guarantor, as the case may be, is not the continuing entity, then, for purposes of this Section 8.01, the references to the Company or such Guarantor, as applicable, shall be deemed to refer to the successor entity.

For the avoidance of doubt, the Distribution shall not constitute a sale, conveyance, lease or transfer of the properties and assets of NRF or NRF Operating Partnership substantially as an entirety for purposes hereof.

SECTION 8.02Successor Substituted.  Upon any consolidation or merger, or any sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the properties and assets of the Company or either Guarantor in accordance with Section 8.01, the successor Person formed by such consolidation or into which the Company or such Guarantor, as the case may be, is merged  or the successor Person to which such sale, assignment, conveyance, transfer, lease or disposition is made shall succeed to, and be substituted for, and may exercise every right and power of the Company or such Guarantor, as applicable, under the Securities and this Indenture, as applicable, with the same effect as if such successor had been named as the Company or such Guarantor, as applicable, in the Securities and this Indenture, as the case may be, and, except in the case of a lease, the Company or such Guarantor, as applicable, shall be released and discharged from its obligations thereunder and hereunder, except for obligations that the predecessor Person may have under the supplemental indenture that evidences the assignment of rights and obligations under this Indenture upon such consolidation, merger, sale, assignment, conveyance, transfer, lease or disposition.

ARTICLE IX

MODIFICATIONS; AMENDMENTS; WAIVERS; SUPPLEMENTAL INDENTURES

SECTION 9.01    Modifications and Amendments Without Consent of Holders.  Without the consent of any Holders, when authorized by a Board Resolution, the Company, the Guarantors and the Trustee, at any time and from time to time, may together amend, waive or supplement this Indenture or the Securities, for any of the following purposes:

(a)    to evidence the succession of another Person as obligor or Guarantor, as the case may be, pursuant to this Indenture and the assumption by any such successor of the covenants of the Company or either Guarantor, as the case may be, herein and in the Securities and to evidence the assumption of obligations under this Indenture;

(b)    to add to the covenants of the Company or a Guarantor for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company or a Guarantor;

(c)    to add any additional Events of Default for the benefit of the Holders of all the Securities;

(d)    to amend or supplement any provisions of this Indenture; provided that no amendment or supplement shall adversely affect the interests of the Holders of any Securities then Outstanding in any material respect;

(e)    to permit or facilitate the issuance of the Securities in uncertificated form; provided that such action shall not adversely affect the interests of the Holders of the Securities in any material respect;

(f)    to secure the Securities or to add guarantees;

(g)    to evidence and provide for the acceptance of appointment of a successor Trustee and to change any of the provisions of this Indenture as is necessary to provide for or facilitate the administration of the trusts under this Indenture by more than one Trustee;

‑36‑

(h)    to provide for rights of Holders if any consolidation, merger or sale of substantially all of the property or assets of the Company or a Guarantor occurs;

(i)    to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture which shall not be inconsistent with the provisions of this Indenture; provided that this action shall not adversely affect the interests of Holders of the Securities in any material respect;

(j)    to supplement any of the provisions of this Indenture to the extent necessary to defease and/or discharge the Securities under this Indenture; provided that the action shall not adversely affect the interests of the Holders of the Securities in any material respect;

(k)    to conform the text of this Indenture or the Securities to any corresponding provision of the “Description of Notes” section of the Offering Circular dated June 25, 2015, pursuant to which the Securities were offered;

provided, however, that the Company shall have delivered to the Trustee an Opinion of Counsel and Officer’s Certificate stating that such action pursuant to clauses (a) to (k) above is permitted by this Indenture.  The Trustee shall not be obligated to enter into any such amendment, waiver or supplemental indenture that adversely affects its own rights, duties or immunities under this Indenture or otherwise.

SECTION 9.02Modifications and Amendments With Consent of Holders.  With the written consent of the Holders of not less than a majority in principal amount of the Outstanding Securities affected by such modification or amendment (voting together as a single class), modification or amendment of the Indenture may be made; provided, however, that no such modification or amendment may, without the written consent of the Holder of each Security affected thereby:

(a)change the Stated Maturity Date for any principal or interest payment on the Securities;

(b)reduce the principal amount or the interest rate payable on the Securities (including the number of Company Common Shares deliverable upon Share Settlement, if applicable);

(c)change the timing for, or reduce any amount (including accrued interest) payable upon, the redemption of the Securities;

(d)change the currency of any payment on the Securities;

(e)change the place of payment on the Securities;

(f)impair a Holder’s right to sue for the enforcement of any payment on or with respect to the Securities as required by this Indenture;

(g)reduce the percentage of principal amount of outstanding Securities necessary to modify or amend this Indenture or waive compliance with certain provisions or certain defaults and consequences under this Indenture; or

(h)modify any of the foregoing provisions or any of the provisions relating to the waiver of certain past defaults or certain covenants, except to increase the required percentage to effect the action or to provide that certain other provisions may not be modified or waived without the consent of the Holders of the Securities.

provided, however, that the Company shall have delivered to the Trustee an Opinion of Counsel and Officer’s Certificate stating that such action pursuant to clauses (a) to (h) above is permitted by this Indenture.  The Trustee shall not be obligated to enter into any such amendment, waiver or supplemental indenture that adversely affects its own rights, duties or immunities under this Indenture or otherwise.

‑37‑

SECTION 9.03Execution of Supplemental Indentures.  In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be given, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel and an Officer’s Certificate stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that all conditions precedent thereto are satisfied.  The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise; provided that the Trustee shall enter into and execute all other supplemental indentures which satisfy all applicable conditions under this Article IX.

SECTION 9.04Effect of Supplemental Indentures.  Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

SECTION 9.05Reference in Securities to Supplemental Indentures.  Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture, provided that any failure by the Trustee to make such notation shall not affect the validity of the matter provided for in such supplemental indenture or any Security hereunder. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.

SECTION 9.06No Liability for Certain Persons.  No director, officer, employee, or stockholder of the Company or the Guarantors, as such, shall have any liability for any obligations of the Company or the Guarantors under the Securities or this Indenture based on or by reason of such obligations or their creation.  Each Holder by accepting a Security waives and releases all such liability.  The foregoing waiver and release are an integral part of the consideration for the issuance of the Securities.

ARTICLE X

COVENANTS

SECTION 10.01Payment of Principal and Interest.  The Company shall duly and punctually pay the principal of and interest on the Securities in accordance with the terms of the Securities and this Indenture.  The Company will deposit or cause to be deposited with the Trustee or its nominee, no later than the opening of business on any interest payment date, any Share Settlement Date or the Stated Maturity Date, all payments so due in accordance with the terms of the Securities and this Indenture, which payments shall be in immediately available funds on any interest payment date, any Share Settlement Date or the Stated Maturity Date; provided that a failure or delay of any delivery of Company Common Shares in settlement of the principal amount of the Securities resulting from any action or inaction by the Depositary shall not be a breach or violation of any covenant hereunder as long as the Company is using commercially reasonable efforts to accomplish delivery.

SECTION 10.02Maintenance of Office or Agency.  The Company shall maintain an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations and surrenders may be made at a Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.  In the event any such notice or demands are so made or served on the Trustee, the Trustee shall promptly forward copies thereof to the Company.

The Company may also from time to time designate one or more other offices or agencies (in or outside the Borough of Manhattan, The City of New York) where the Securities may be presented or surrendered for

‑38‑

any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York, for such purposes.  The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Company hereby initially designates the Trustee as Paying Agent and Security Registrar, and the Corporate Trust Office of the Trustee as one such office or agency of the Company for each of the aforesaid purposes.

SECTION 10.03Money for Security Payments to be Held in Trust.  If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of or interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents, the Company will, prior to 11:00 a.m., New York City time, on each due date of the principal of or interest on any Securities, deposit with a Paying Agent a sum sufficient to pay the principal or interest so becoming due, such sum to be held as provided by the Trust Indenture Act in respect of indentures qualified thereunder, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

The Company shall cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (i) comply with the provisions of the Trust Indenture Act that would be applicable to it as paying agent in respect of an indenture qualified thereunder and (ii) during the continuance of any default by the Company, the Guarantors or any other obligor upon the Securities in the making of any payment in respect of the Securities, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent as such.

The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by such Paying Agent; and, upon such payment by any Paying Agent (other than the Company) to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or interest on any Security and remaining unclaimed for two years after such principal or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

SECTION 10.04Statement by Officers as to Default; Compliance Certificates.  The Company shall deliver to the Trustee, (a) prior to March 31 in each year commencing with the year beginning on January 1, 2016 (if the Securities remain Outstanding), an Officer’s Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder), and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which he may

‑39‑

have knowledge, and (b) as soon as reasonably practicable and in any event within five days after the Company becomes aware of the occurrence of an Event of Default, an Officer’s Certificate setting forth the details of such Event of Default, and the action which the Company proposes to take with respect thereto.

SECTION 10.05Provision of Financial Information. NRF and, after it first becomes obligated to file reports under the Exchange Act, the Company shall provide the Trustee, within 15 days after it is required to file the same with the Commission, copies of the annual reports and information, documents and other reports (or copies of such portions any of the foregoing as the Commission may prescribe) which it is required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act. At any time at which NRF or, after it first becomes obligated to file reports under the Exchange Act, the Company is not required to file information, documents or reports pursuant to either of those sections, then the Company or NRF shall provide to the Trustee and to the Commission such reports as may be prescribed to be filed by it by the Commission at such time. To the extent that the Company or NRF has filed such information with the Commission through the Commission’s EDGAR system, or any successor system employed by the Commission, it shall be deemed to have complied with the requirement of this Section 10.05.

At any time at which the Company or either Guarantor is not subject to the reporting requirements of the Exchange Act, it will promptly furnish to the Holders, beneficial owners and prospective purchasers of the Securities, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of those Securities pursuant to Rule 144A for so long as the Securities are outstanding.

Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute actual or constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

SECTION 10.06Delivery of Unrestricted Company Common Shares. Any Company Common Shares that the Company delivers in respect of the Securities will be delivered in unlegended, unrestricted form through the facilities of the Depositary and will be eligible for immediate resale or onward delivery by the Holders of the Securities that receive such the Company Common Shares, except in each case in the case of any Holders that are or were (within the preceding 90 days) “affiliates” (within the meaning of that term under Rule 144) of the Company, and will be listed on the Listing Exchange.

ARTICLE XI

REDEMPTION OF SECURITIES AND PURCHASES THEREUPON

SECTION 11.01    Right of Redemption.  Any or all of the Securities are redeemable at the election of the Company prior to the Stated Maturity Date.

(a)    Subject to the last sentence of this Section 11.01(a), the Company shall have the right, at any time or from time to time, prior to the Stated Maturity Date, upon not less than 15 nor more than 60 days’ prior written notice delivered to the Holders (with a copy to the Trustee), to redeem any or all of the Securities (provided that no redemption in part may result in the aggregate principal amount of the Outstanding Securities being reduced to less than $100,000,000) for cash at a redemption price (which shall be calculated by the Company) equal to the greater of (x) 100% of the principal amount of the Securities to be redeemed; and (y) the sum of the present values of the remaining scheduled payments of interest and principal that would be due (assuming no Share Settlement Election is made) on the Securities to be redeemed (exclusive of any unpaid interest accrued to, but not including, such redemption date), discounted to such date of redemption on a semiannual basis (assuming a 360‑day year consisting of twelve 30‑day months) at a rate of 0.50% per annum, plus in each case unpaid interest, if any, accrued to, but not including, such date of redemption. Upon notice of any Share Settlement Election by the Company, the Securities will cease to be subject to redemption prior to their Stated Maturity Date.

‑40‑

(b)    In the event that the Company shall redeem fewer than all Securities then Outstanding, the Trustee will select the Securities redeemed by lot, or by such other method as is required by the Depositary for the Securities. The Trustee shall make the selection at least two Business Days before notice of redemption is to be given to the Holders, if the Securities to be redeemed are Global Securities, and at least five Business Days before notice of redemption is to be given to the Holders, if the Securities to be redeemed are Definitive Securities, from Outstanding Securities not previously called for redemption, provided, in each case, that the Trustee receives reasonable advance notice thereof. Securities and portions of the principal amount thereof selected for redemption shall be in integral multiples of $1,000 and such redemption shall not result in any Holder holding Securities in an aggregate principal amount of less than $2,000. The Trustee shall notify the Company promptly of the Securities or portions of the principal amount thereof to be redeemed.

(c)    A notice of redemption sent to the Holders of Securities to be redeemed in accordance with the provisions of this Section 11.01 shall state:

(i)    the redemption date;

(ii)    the redemption price;

(iii)    the name and address of the Paying Agent;

(iv)    that if the Paying Agent holds funds sufficient to pay the redemption price of the Securities that are being redeemed on the redemption date, then on and after such date:

(A)    such Securities will cease to be Outstanding;

(B)    interest on such Securities will cease to accrue; and

(C)    all rights of Holders of such Securities will terminate except the right to receive the redemption price.

(d)    Any Security which is to be redeemed only in part shall be surrendered at an office or agency of the Company designated for that purpose (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Trustee duly executed by, the Holder thereof or its attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.  Upon redemption, interests in Global Securities shall be reduced in accordance with the applicable procedures of the Depositary (the “Applicable Procedures”).

SECTION 11.02Securities Purchased in Whole or in Part.  Any Security that is to be purchased, whether in whole or in part, shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires in the case of Definitive Securities, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Security so surrendered that is not purchased.

SECTION 11.03Covenant to Comply With Applicable Laws Upon Purchase of Securities.  In connection with any offer to purchase Securities under Section 11.02 hereof, the Company shall, in each case if required, (i) comply with Rule 13e‑4, Rule 14e‑1 and any other tender offer rules under the Exchange Act that may then be applicable, (ii) file a Schedule TO or any other required schedule under the Exchange Act and (iii) otherwise

‑41‑

comply with all federal and state securities laws so as to permit the rights and obligations under Section 11.02 to be exercised in the time and in the manner specified in Section 11.02.

SECTION 11.04Sinking Fund.  No sinking fund is provided for the Securities.

ARTICLE XII

SHARE SETTLEMENT

SECTION 12.01Right to Settle in Shares.  (a) Subject to and upon compliance with the provisions of this Indenture, including satisfaction of the Share Settlement Conditions set forth in Section 12.02, the Company, at its election, may satisfy its obligation to repay the principal amount of the Securities at the Stated Maturity Date, in whole or in part, by delivering Company Common Shares in lieu of cash ( “Share Settlement”). In order to make a Share Settlement Election to deliver shares on each Share Settlement Date, the Company will be required to provide an Officer’s Certificate to the Trustee on the Share Settlement Notice Date certifying that the Share Settlement Conditions have been met.

(b)If the Company makes a Share Settlement Election, it shall deliver the Daily Settlement Amounts for the Securities in five installments corresponding to each five trading‑day period included in the Share Settlement Measurement Period and deliverable promptly (but, except as provided below, in no event later than three trading days) following the last trading day in each such five trading‑day period (the date of each such delivery, a “Share Settlement Date”), to the Person in whose name a Security is registered at the close of business on the final day in each such five trading‑day period. Notwithstanding the foregoing, if any Daily Share Settlement Amount adjustment that is required in order to determine the number of the Company Common Shares that must be delivered on a given Share Settlement Date is based on data that will not be available to the Company on such Share Settlement Date, (i) on such Share Settlement Date, the Company shall deliver the number of the Company Common Shares that it would be required to deliver without regard to such adjustment and (ii) promptly (but, except as provided below, in no event later than three trading days) after the relevant data become available, the Company shall thereafter deliver the additional Company Common Shares that it shall be obligated to deliver as a result of such adjustment. Notwithstanding the delivery dates set forth herein, a failure or delay of any delivery of Company Common Shares in settlement of the principal amount of the Securities resulting from any action or inaction by the Depositary shall not constitute a breach of the Company’s obligations to deliver Company Common Shares as provided in this Indenture, including in this Section 12.01(b), or an Event of Default as long as the Company is using commercially reasonable efforts to accomplish such delivery.

(c)Notwithstanding Section 12.01(b), if, on any trading day within the Share Settlement Measurement Period, application of the Daily Share Settlement Amount formula would result in the Daily Share Settlement Amount exceeding 2.5 Company Common Shares, the Company shall deliver, as the Daily Settlement Amount for that day, (a) a Daily Share Settlement Amount consisting of 2.5 Company Common Shares and (b) a Daily Cash Settlement Amount equal to (i) $40.00 minus (ii) 2.5 multiplied by the product of (x) the Share Settlement Discount and (y) the Daily VWAP of the Company Common Shares on such trading day. The number 2.5 as used in this Section 12.01(c) shall be adjusted in the same manner as the Daily Share Settlement Amount would be adjusted upon the occurrence of any event described in Section 12.04.

(d)Notwithstanding Section 12.01(b) or 12.01(c), if, on any trading day in the Share Settlement Measurement Period, the Company Common Shares are not listed on the Listing Exchange, the Company shall not deliver any Company Common Shares in respect of the Daily Share Settlement Amount for such day and each subsequent trading day in the Share Settlement Measurement Period and shall instead deliver, for each such trading day, in respect of each $1,000 initial principal amount of the Securities, cash in lieu of such Company Common Shares in an amount equal to 104% of the Daily Share Settlement Value.

(e)Following the Company’s delivery of the required amounts on each Share Settlement Date, the principal amount of each $1,000 initial principal amount of the Securities shall be deemed to be reduced by $200 as a result of such settlement. Interest at maturity will be paid in cash with respect to the full initial principal

‑42‑

amount for the entire interest period to but excluding the Stated Maturity Date (i.e., without adjustment for such amortization).

(f)If the Company makes a Share Settlement Election, the Company will not deliver fractional Company Common Shares on a Share Settlement Date.  The number of full shares of Company Common Shares that shall be issuable pursuant to Share Settlement on a Share Settlement Date shall be computed on the basis of the aggregate principal amount of the Securities outstanding on the Share Settlement Date.  In determining whether any fractional Company Common Shares are required to be issued, the beneficial ownership of Securities by Agent Members (or, if such information is made available by the Agent Members, the beneficial owners of the Securities beneficially owned by such Agent Members) shall be taken into account to the extent commercially reasonable and then permitted by the Applicable Procedures.  If any fractional Company Common Shares would be issuable upon settlement of the Securities, the Company shall deliver to the Holder (or such Agent Members, as applicable) cash in lieu of any fractional Company Common Shares issuable in connection with payment of the shares based upon the Closing Sale Price (as defined below) of the Company Common Shares on the last day of the applicable five trading day period in respect of which such settlement is being made.

(g)If the Company makes a Share Settlement Election, the Company shall not offer, sell, contract to sell or otherwise dispose of, or enter into or announce any transaction that is designed to, or could be expected to, result in the disposition of, any Company Common Shares or other securities convertible into or exchangeable or exercisable for Company Common Shares or derivatives of Company Common Shares during the period commencing on the first day of the Share Settlement Measurement Period and ending on the final day of the Share Settlement Measurement Period; except that the foregoing shall not apply to any Company Common Shares or other securities convertible into or exchangeable or exercisable for Company Common Shares or derivatives of the Company Common Shares (i) issued in settlement in respect of Securities, (ii) issued in connection with benefit plans, stock option plans, long‑term incentive plans, distribution reinvestment plans or conversions of LTIP or other units of the Company’s operating subsidiary, (iii) granted to employees, consultants or directors of the Company or any of its subsidiaries pursuant to a benefit plan of the Company, or (iv) issued in connection with an acquisition, joint venture or strategic transaction (provided that the recipient of any such Company Common Shares shall enter into a written agreement accepting restrictions substantially equivalent to those applicable to the Company as described in this Section 12.01(g)).

SECTION 12.02Share Settlement Procedures.

(a)The Company may deliver Company Common Shares in lieu of cash in accordance with the provisions of this Article XII and in accordance with the procedures of the Depositary, if the following conditions (the “Share Settlement Conditions”) are met on the Share Settlement Notice Date:

(i)    no Event of Default shall have occurred and be continuing in respect of the Securities;

(ii)    NRF shall have distributed substantially all of its ownership interests in the Company to its shareholders through the Distribution and shall own, or have a right to acquire, no more than 5% of the total issued and outstanding Company Common Shares;

(iii)    the Company Common Shares shall be listed on the Listing Exchange and shall have been so listed for at least 30 trading days;

(iv)    the product of (a) the average daily consolidated trading volume of the Company Common Shares between 9:30 a.m. and 4:00 p.m., New York time, as displayed under the Bloomberg (or any successor service) page applicable to the Company Common Shares (which is expected to be NRE <equity> AQR) (or, if such page is not available or is manifestly incorrect, the consolidated trading volume during regular market hours as reasonably determined by the Company) over the 30 trading‑day period preceding the Share Settlement Notice Date, and (b) the

‑43‑

average daily closing sale price of the Company Common Shares during such 30 trading‑day period shall exceed $10 million;

(v)    the closing sale price of the Company Common Shares on the last trading day prior to the Share Settlement Notice Date shall equal or exceed $12.50;

(vi)    the Company Common Shares that the Company delivers in respect of the Securities will be delivered in unlegended, unrestricted form through the facilities of the Depositary and will be eligible for immediate resale or onward delivery by the Holders of the Securities that receive such Company Common Shares, except in the case of any Holders that are or were (within the preceding 90 days) “affiliates” (within the meaning of that term under Rule 144) of the Company;

(vii)    no Change in Control shall have occurred; and

(viii)    the Company Common Shares shall not have been exchanged or converted into any combination of cash, other securities or other property.

(b)If the Company elects Share Settlement, it must specify a dollar amount that is to be settled by the delivery of Company Common Shares of between $500 and $1,000 (inclusive) in respect of each $1,000 principal amount of Securities (the “Share Settlement Value Per Security”). In order to deliver Company Common Shares with respect to any interest in a Global Security, the Company shall: (i) on the Share Settlement Notice Date (A) deliver written notice of its election (in each case, the “Share Settlement Election Notice”) to the Trustee and the Depositary and (B) issue a press release or file a Current Report on Form 8‑K with equivalent information, (ii) use its commercially reasonable efforts to comply with the Applicable Procedures and (iii) if required, pay all transfer or similar taxes pursuant to Section 12.06. In order to deliver Company Common Shares with respect to any Definitive Securities, the Company shall: (i) on the Share Settlement Notice Date (A) deliver the Share Settlement Election Notice to the Trustee for delivery to the Holders of Definitive Securities and (B) issue a press release or file a Current Report on Form 8‑K with equivalent information, (ii) if required, furnish appropriate endorsements and transfer documents, and (iii) if required, pay all transfer or similar taxes as set forth in Section 12.06.

The date on which the Company satisfies all of the applicable requirements set forth above shall be the Share Settlement Election Date (the “Share Settlement Election Date”).  Notwithstanding any other provision of this Indenture, any Company Common Shares issued to an “affiliate” (within the meaning of Rule 144) of the Company or either Guarantor may be issued with the Restricted Securities legend provided for in Section 2.03(g) hereof (provided that, prior to such issuance, the Company shall cause the Securities in respect of which such issuance is made to be represented by Definitive Securities pursuant to Section 2.04 or otherwise segregate the Securities in respect of which Company Common Shares bearing a Restricted Securities legend are to be delivered) and be subject to the restrictions on resale set forth therein. In such event, the Company shall, as promptly as practicable, in any event no later than five Business Days of the receipt thereof, provide affiliated Holders of the Securities with the Company’s Share Settlement Election Notice and as promptly as practicable, such Holders shall provide to the Trustee in writing the name or names (with corresponding address or addresses) in which any certificate or certificates for Company Common Shares shall be issued. All corresponding Securities shall, unless the Company Common Shares issuable on the Share Settlement Date are to be issued in the same name as the registration of such Securities, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company duly elected by, the Holder or his duly authorized attorney.

(c)If the Company does not make a Share Settlement Election, it shall, not less than 60 days prior to the Stated Maturity Date: (i) notify the Holders of the Securities, and (ii) issue a press release or file a Current Report on Form 8‑K announcing that the Securities will be repaid in cash.

SECTION 12.03Determination of Daily Settlement Amount.  

‑44‑

(a)The “Daily Settlement Amount” means the sum of (i) the Daily Cash Settlement Amount and (ii) the Daily Share Settlement Amount.

(b)The “Daily Share Settlement Value” means 1/25th of the Share Settlement Value Per Security.

(c)The “Daily Cash Settlement Amount” means an amount of cash equal to $40.00 minus the Daily Share Settlement Value.

(d)The “Daily Share Settlement Amount” as of any trading day, means the number of Company Common Shares determined by dividing (i) the Daily Share Settlement Value by (ii) the product of (x) 0.96 (the “Share Settlement Discount”) and (y) the Daily VWAP of the Company Common Shares on such trading day.  

(e)The “Share Settlement Measurement Period” means the 25 consecutive trading‑day period beginning on the 27th scheduled trading day prior to the Stated Maturity Date.

(f)A “trading day” means a day during which (i) trading in securities generally occurs on the Listing Exchange and (ii) there is no Market Disruption Event.

(g)“Daily VWAP” for the Company Common Shares means, for each trading day, the per share volume‑weighted average price as displayed under the heading “Bloomberg VWAP” on the Bloomberg (or any successor service) page applicable to the Company Common Shares (which is expected to be NRE.N <equity>AQR if the Listing Exchange for the Company Common Shares is the New York Stock Exchange or NRE.Q <equity> AQR if the Listing Exchange is the NASDAQ Global Select Market) or (a) its equivalent successor if such page is not available or (b) the equivalent page, as determined by the Company, if the data on such page are not calculated on a basis substantially consistent with the method applied as of the date of this Indenture to data displayed under the heading “Bloomberg VWAP” on Bloomberg (or any successor service) page NRF.N <equity> AQR (or if such volume weighted average price is unavailable, the market value of one Company Common Share on such trading day as determined by the Company’s Board of Directors in good faith using a volume weighted method or by a nationally recognized independent investment banking firm retained by the Company for this purpose).

(h)“Closing Sale Price” of the Company Common Shares or other Capital Stock or similar equity interests or other publicly traded securities on any date means the closing sale price per share (or, if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported on the principal U.S. securities exchange on which such securities are listed or, if such securities are not listed on a U.S. securities exchange, by OTC Markets Group Inc. or another established over‑the‑counter trading market in the United States.  The Closing Sale Price will be determined without regard to after‑hours trading or extended market making.  In the absence of the foregoing, the Company will determine the Closing Sale Price on such basis as it considers appropriate.

SECTION 12.04    Adjustment of Daily Share Settlement Amount.  If the Company makes a Share Settlement Election, then with respect to any trading day that falls on or after the first day of the Share Settlement Measurement Period and on or before the last Share Settlement Date on which the Company delivers Company Common Shares to Holders, if any event that would give rise to a Daily Share Settlement Amount adjustment pursuant to the following provisions occurs, then for each prior trading day in the Share Settlement Measurement Period (or, if such adjustment occurs after the end of the Share Settlement Measurement Period, for each day in such period), the Daily Share Settlement Amount for such prior trading day(s) shall be adjusted by the Company as follows:

(a)    If the Company issues Company Common Shares as a dividend or other distribution on Company Common Shares to all holders of Company Common Shares, or if the Company effects a share split or

‑45‑

share combination of Company Common Shares, the Daily Share Settlement Amount will be adjusted based on the following formula:

ER1  =    ER0 x OS1/OS0

where

ER0 = the Daily Share Settlement Amount in effect immediately prior to the Ex‑Dividend Date for such dividend or other distribution or the effective date of such share split or share combination, as applicable;

ER1  = the Daily Share Settlement Amount in effect on and immediately after the Ex‑Dividend Date for such dividend or other distribution or the effective date of such share split or share combination, as applicable;

OS0 = the number of Company Common Shares outstanding on the Ex‑Dividend Date for such dividend or other distribution or the effective date of such share split or share combination, as applicable; and

OS1 = the number of Company Common Shares outstanding on the Ex‑Dividend Date for such dividend or other distribution or the effective date of such share split or share combination, as applicable, as if such dividend, distribution, split or combination occurred at that time.

(b)    If the Company issues to all holders of Company Common Shares any rights, warrants, options or other securities entitling them for a period of not more than 45 days after the date of issuance thereof to subscribe for or purchase Company Common Shares or securities convertible into Company Common Shares, in either case at an exercise price per share or a conversion price per share less than the Closing Sale Price of Company Common Shares on the business day immediately preceding the time of announcement of such issuance, the Daily Share Settlement Amount will be adjusted based on the following formula:

ER1 = ER0 x (OS0+X)/(OS0+Y)

where

ER0 = the Daily Share Settlement Amount in effect immediately prior to the Ex‑Dividend Date for such issuance;

ER1= the Daily Share Settlement Amount in effect on and immediately after the Ex‑Dividend Date for such issuance;

OS0 = the number of Company Common Shares outstanding immediately prior to the Ex‑Dividend Date for such issuance;

X = the number of Company Common Shares issuable pursuant to such rights, warrants, options, other securities or convertible securities; and

Y = the number of Company Common Shares equal to the quotient of (A) the aggregate price payable to exercise such rights, warrants, options, other securities or convertible securities and (B) the average of the Closing Sale Prices of the Company Common Shares for the 10 consecutive trading days prior to the business day immediately

‑46‑

preceding the date of announcement for the issuance of such rights, warrants, options, other securities or convertible securities.

If the application of the foregoing formula would result in a decrease in the Daily Share Settlement Amount, no adjustment to the Daily Share Settlement Amount will be made.

For purposes of this paragraph (b), in determining whether any rights, warrants, options, other securities or convertible securities entitle the holders to subscribe for or purchase or exercise a conversion right for Company Common Shares at less than the Closing Sale Price of Company Common Shares on the business day immediately preceding the time of announcement of such issuance, and in determining the aggregate exercise or conversion price payable for such Company Common Shares, there shall be taken into account any consideration received by the Company for such rights, warrants, options, other securities or convertible securities and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by the Company’s Board of Directors.

(c)    If the Company distributes shares of Capital Stock, evidences of indebtedness or other assets or property of the Company to all holders of Company Common Shares, excluding:

(i)    dividends or other distributions, rights, warrants, options, other securities or convertible securities referred to in paragraphs (a) or (b) above;

(ii)    dividends or other distributions paid exclusively in cash; and

(iii)    spin‑offs described below in this paragraph (c);

then the Daily Share Settlement Amount will be adjusted based on the following formula:

ER1  = ER0 x SP0/(SP0‑FMV)

where

ER0 = the Daily Share Settlement Amount in effect immediately prior to the Ex‑Dividend Date for such distribution;

ER1 = the Daily Share Settlement Amount in effect on and immediately after the Ex‑Dividend Date for such distribution;

SP0 = the average of the Closing Sale Prices of the Company Common Shares for the ten consecutive trading days prior to the business day immediately preceding the Ex‑Dividend Date for such distribution; and

FMV= the fair market value (as determined in good faith by the Company’s Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding Company Common Share on the Ex‑Dividend Date for such distribution.

With respect to an adjustment pursuant to this paragraph (c) where there has been a payment of a dividend or other distribution on Company Common Shares or shares of Capital Stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit of the Company (such transaction, a “Spin‑Off”), the Daily Share Settlement Amount will be adjusted based on the following formula:

ER1 = ER0 x (FMV0+MP0)/MP0 where

‑47‑

ER0 = the Daily Share Settlement Amount in effect immediately prior to the effective date of the Spin‑Off;

ER1 = the Daily Share Settlement Amount in effect on and immediately after the effective date of the Spin‑Off;

FMV0 = the average of the Closing Sale Prices of the Capital Stock or similar equity interest distributed to holders of Company Common Shares applicable to one share of Company Common Share over the first 10 consecutive trading days after the effective date of the Spin‑Off; and

MP0 = the average of the Closing Sale Prices of Company Common Shares over the first 10 consecutive trading days after the effective date of the Spin‑Off.

(d)    If the Company makes any cash dividend or other distribution to all holders of Company Common Shares, the Daily Share Settlement Amount will be adjusted based on the following formula:

ER1  = ER0 x (SP0)/(SP0‑C)

where

ER0 = the Daily Share Settlement Amount in effect immediately prior to the Ex‑Dividend Date for such distribution;

ER1  = the Daily Share Settlement Amount in effect on and immediately after the Ex‑Dividend Date for such distribution;

SP0 = the average of the Closing Sale Prices of the Company Common Shares over the period of the five consecutive trading days ending on the business day immediately preceding the Ex‑Dividend Date for such distribution; and

C = the amount in cash per share that the Company distributes to holders of the Company Common Shares.

(e)    If the Company or any of its subsidiaries makes a payment in respect of a tender offer or exchange offer for Company Common Shares to the extent that the cash and value of any other consideration included in the payment per share exceeds the Closing Sale Price of a Company Common Share on the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender offer or exchange offer (the “Expiration Time”), the Daily Share Settlement Amount will be adjusted based on the following formula:

ER1 = ER0 x (AC + (SP1 x OS1))/(SP1 x OS0)

where

ER0 = the Daily Share Settlement Amount in effect on the date such tender offer or exchange offer expires;

ER1 = the Daily Share Settlement Amount in effect on the day next succeeding the date such tender offer or exchange offer expires;

‑48‑

AC = the aggregate value of all cash and any other consideration (as determined by the Company’s Board of Directors) paid or payable for shares purchased in such tender offer or exchange offer;

OS0 = the number of Company Common Shares outstanding immediately prior to the date such tender offer or exchange offer expires;

OS1 = the number of Company Common Shares outstanding immediately after such tender offer or exchange offer expires (after giving effect to the purchase or exchange of Company Common Shares pursuant to such tender offer or exchange offer); and

SP1 = the average of the Closing Sale Prices of the Company Common Shares for the five consecutive trading days commencing on the trading day next succeeding the date such tender offer or exchange offer expires.

If the application of the foregoing formula would result in a decrease in the Daily Share Settlement Amount, no adjustment to the Daily Share Settlement Amount will be made.

(f)    If the Company adopts a stockholder rights plan while any Securities remain Outstanding, Holders of Securities will receive, upon delivery of Company Common Shares upon settlement of the Securities, in addition to Company Common Shares, rights under such stockholder rights plan unless, prior to settlement, the rights have expired, terminated or been redeemed or unless the rights have separated from the Company Common Shares.  If the rights provided for in the rights plan adopted by the Company have separated from the Company Common Shares in accordance with the provisions of the applicable stockholder rights agreement so that Holders of Securities would not be entitled to receive any rights in respect of Company Common Shares issuable upon settlement of the Securities, the Daily Share Settlement Amount will be adjusted at the time of separation as if the Company had distributed, to all holders of Company Common Shares, shares of Capital Stock, evidences of indebtedness or other assets or property pursuant to paragraph (c) above.  In lieu of any such adjustment, the Company may amend such applicable stockholder rights agreement to provide that upon settlement of the Securities for Company Common Shares, the holders will receive, in addition to the Company Common Shares issuable upon such settlement, the rights which would have attached to such Company Common Shares if the rights had not become separated from the Company Common Shares under such shareholder rights plan.

(g)    All calculations under this Article XII shall be made by the Company and shall be made to the nearest one ten‑thousandth of a share (including, in the case of any adjustment to the Daily Share Settlement Amount, the resulting adjustment to the Share Settlement).

(h)    Notwithstanding anything to the contrary in this Article XII, no adjustment to the Daily Share Settlement Amount shall be made:

(i)    if Holders are permitted to participate in the dividend, distribution or transaction, as applicable, on an as settled basis, in the transactions set forth above in this Section 12.04;

(ii)    the issuance of any Company Common Shares pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the securities of the Company or any of its subsidiaries and the investment of additional optional amounts in Company Common Shares under any plan;

(iii)    the issuance of any Company Common Shares or units of the Company’s operating partnership or options or rights to purchase those shares or units pursuant to any present

‑49‑

or future employee, directors trustee or consultant benefit plan, employee agreement or arrangement or program of the Company, NRF or any of their respective subsidiaries;

(iv)    a change in the par value of the Company Common Shares;

(v)    accumulated and unpaid dividends or other distributions; and

(vi)    for the avoidance of doubt, except as specifically described above, the issuance of Company Common Shares, limited partnership units by the Company’s operating partnership or equity interests in any subsidiary or by the Company or the Company’s operating partnership or, in any case, the payment of cash upon redemption thereof.

Except as specifically described above, the Daily Share Settlement Amount shall not be subject to adjustment in the case of the issuance of any Company Common Shares or shares of preferred stock of the Company or securities exchangeable for or convertible into Company Common Shares or shares of preferred stock of the Company.

SECTION 12.05Certain Other Adjustments. Whenever a provision of this Indenture requires the calculation of Closing Sale Prices, Daily VWAPs, Daily Share Settlement Amounts or other amounts over a span of multiple days, the Board of Directors will make appropriate adjustments consistent with the provisions described in Section 12.04 to account for any adjustment to the Daily Share Settlement Amount that becomes effective, or any event requiring an adjustment to the Daily Share Settlement Amount where the Ex‑Dividend Date of the event occurs, at any time during the period from which such Closing Sale Prices, Daily VWAPs, Daily Share Settlement Amounts or other amounts are to be calculated.

For purposes hereof, the number of Company Common Shares at any time outstanding shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares.

SECTION 12.06Taxes on Shares Issued. The Company will pay any documentary, stamp or similar issue or transfer tax due on the issue or delivery of Company Common Shares pursuant hereto; provided, however, that if such documentary, stamp or similar issue or transfer tax is due because the Holder of such Securities has requested that Company Common Shares be issued in a name other than that of the Holder of the Securities converted, then such taxes will be paid by the Holder, and the Company shall not be required to issue or deliver any stock certificate evidencing such shares unless and until the Holder shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid; provided, further, that if the Holder does not deliver such cash, the Company may deduct and withhold from the number of Company Common Shares otherwise deliverable to such Holder an amount equal to that required to be deducted and withheld under applicable law.

SECTION 12.07Responsibility of Trustee. The Trustee shall not at any time be under any duty or responsibility to any Holder of Securities to determine or calculate the Daily Share Settlement Amount, to determine whether any facts exist which may require any adjustment of the Daily Share Settlement Amount, or to confirm the accuracy of any such adjustment when made or the appropriateness of the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee shall not be accountable with respect to the validity or value (or the kind or amount) of any Company Common Shares delivered in lieu of cash with respect to each Share Settlement Date; and the Trustee makes no representations with respect thereto. The Trustee shall not be responsible for any failure of the Company to issue, transfer or deliver any Company Common Shares or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article XII. The rights, privileges, protections, immunities and benefits given to the Trustee, including without limitation its right to be compensated, reimbursed, and indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder.

SECTION 12.08Ownership Limit. Notwithstanding any other provision of the Securities, the Company shall not deliver Company Common Shares to a Holder of Securities if receipt of such shares would cause

‑50‑

such Holder (together with such Holder’s Affiliates) to exceed the ownership limit contained in the Company’s charter at the time of such delivery (an “Excess Share Delivery”), unless such Person has been exempted from such limits in the Company’s Board’s sole discretion in accordance with its charter. For the avoidance of doubt, any Company Common Shares received by a Holder on a given Share Settlement Date and disposed of by that Holder prior to a subsequent Share Settlement Date will not be included in calculating such Holder’s ownership levels on such subsequent Share Settlement Date for purposes of the limit described herein. If the Share Settlement Value Per Security specified by the Company would result in an Excess Share Delivery to a given Holder on a Share Settlement Date, only for purposes of delivery to such Holder on such Share Settlement Date, the Company shall be deemed to have elected the highest Share Settlement Value Per Security that would not result in an Excess Share Delivery to such Holder.

ARTICLE XIII

REPURCHASE

SECTION 13.01    Repurchase at Option of Holders upon a Change in Control.

(a)    If a Change in Control occurs at any time prior to the Stated Maturity Date, a Holder of Securities shall have the right, at its option, to require the Company to repurchase all of such Holder’s Securities not previously called for redemption, in whole or in part (in principal amounts of $1,000 or an integral multiple thereof, provided that if such Holder elects repurchase of less than all of the Securities it holds, it must continue to hold a minimum of $2,000 initial principal amount of Securities after giving effect to such repurchase) for cash equal to the Change in Control Purchase Price (such repurchase, the “Change in Control Offer”), subject to satisfaction by or on behalf of the Holder of the requirements set forth below.

(b)    Within 15 days after the occurrence of a Change in Control, the Company shall provide written notification to the Holders of the Change in Control and of the repurchase right arising as a result of the Change in Control (the “Change in Control Notice”).  The Change in Control Notice shall also be delivered to the Trustee. The Company is required to repurchase the Securities on the date that is neither less than 30 nor more than 60 business days after the date of the Change in Control Notice (such date, the “Change in Control Purchase Date”). The Change in Control Notice shall include a form of Change in Control Purchase Notice to be completed by the Holder containing the information contemplated by Section 13.01(c) and shall state:

(i)    the date of such Change in Control;

(ii)    the date by which the Change in Control Purchase Notice must be delivered to the Paying Agent;

(iii)    the Change in Control Purchase Date;

(iv)    Change in Control Purchase Price;

(v)    the name and address of the Trustee and the Paying Agent;

(vi)    that Securities must be surrendered to the Paying Agent (which surrender may, if applicable, be effected through the facilities of the Depositary) to collect payment of the Change in Control Purchase Price;

(vii)    that the Change in Control Purchase Price for any Security as to which a Change in Control Purchase Notice has been duly given will be paid on the Change in Control Purchase Date;

(viii)    that, unless the Company defaults in making payment of the Change in Control Purchase Price, such Securities shall cease to be Outstanding and interest on such Securities shall

‑51‑

cease to accrue and all rights of the Holders of such Securities shall terminate on and after the Change in Control Purchase Date; and

(ix)    the CUSIP number of the Securities.

(c)    A Holder may exercise its rights specified in this Section 13.01 upon delivery of a written notice of such Holder’s exercise of its repurchase right (a “Change in Control Purchase Notice”) to any Paying Agent or depositary specified in the Change in Control Purchase Notice at any time prior to the Close of Business on the second Business Day prior to the Change in Control Purchase Date, stating:

(i)    if such Securities are in certificated form, the certificate number(s) of the Securities which the Holder will deliver to be repurchased (if such Securities are Global Securities, the Change in Control Purchase Notice shall comply with Applicable Procedures);

(ii)    the portion of the principal amount of the Securities to be repurchased, in multiples of $1,000, provided that if such Holder elects repurchase of less than all the Securities it holds, such Holder will continue to hold a minimum of $2,000 initial principal amount of Securities after giving effect to such repurchase; and

(iii)    that such Security shall be repurchased pursuant to the applicable provisions hereof and of the Securities.

The Trustee (or any Paying Agent) shall promptly notify the Company in writing of the receipt by it of any Change in Control Purchase Notice.

Transfers of interests in a Global Security in compliance with the Applicable Procedures or delivery of Securities in certificated form (together with all necessary endorsements) to the Paying Agent at the offices of the Paying Agent and delivery of such Security shall be conditions to the receipt by the Holder of the Change in Control Purchase Price therefor.  Holders electing to require the Company to repurchase Securities must effect such transfer or delivery to the Paying Agent prior to the Change in Control Purchase Date to receive payment of the Change in Control Purchase Price.

(d)    A Change in Control Purchase Notice is irrevocable and may not be withdrawn.

(e)    On or before 11:59 a.m. (New York City time) on the Change in Control Purchase Date, the Company shall deposit with the Paying Agent money sufficient to pay the aggregate Change in Control Purchase Price of the Securities to be purchased pursuant to this Section 13.01.  If the Paying Agent holds, in accordance with the terms of this Indenture, money sufficient to pay the Change in Control Purchase Price of such Securities on the Change in Control Purchase Date or the Business Day following the Change in Control Purchase Date, then, on and after such date, such Securities shall cease to be Outstanding and interest on such Securities shall cease to accrue and all rights of the Holders of such Securities shall terminate (other than the right to receive the Change in Control Purchase Price after delivery or transfer of the Securities).  Such will be the case whether or not book entry transfer of the Securities in book entry form is made and whether or not Securities in certificated form, together with the necessary endorsements, are delivered to the Paying Agent.

(f)    Notwithstanding the foregoing, no Securities may be repurchased by the Company in accordance with the provisions of this Section 13.01 if there has occurred and is continuing an Event of Default with respect to the Securities and the principal amount of the Securities has been accelerated and such acceleration has not been rescinded on or prior to such dates.

(g)    The Paying Agent will promptly return to the respective Holders thereof any Securities with respect to which a Change in Control Purchase Notice has been withdrawn in compliance with this Indenture.

‑52‑

To the extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.01 exceeds the aggregate Change in Control Purchase Price or portions thereof that the Company is obligated to purchase, then promptly after the Change in Control Purchase Date, the Trustee or a Paying Agent, as the case may be, shall return any such excess cash to the Company.

SECTION 13.02Securities Purchased in Part. Any Global Security that is to be purchased only in part shall be adjusted to reflect the amount of any decrease in the amount of Securities then Outstanding represented thereby by the Trustee in accordance with instructions given by a Company Order and shall be made on the records of the Trustee and the Depositary.  Any Security issued in certificated form that is to be purchased only in part shall be surrendered at the office of a Paying Agent, and promptly after the Change in Control Purchase Date, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities, of such authorized denomination or denominations as may be requested by such Holder (which must be equal to $1,000 principal amount or any integral multiple thereof, so long as such Holder continues to hold a minimum of $2,000 initial principal amount of Securities after giving effect to such purchase), in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Security so surrendered that is not purchased.

SECTION 13.03Purchase of Securities in Open Market. The Company, the Guarantors and their respective Affiliates may from time to time purchase the Securities in open market purchases or negotiated transactions at varying prices without prior notice to Holders.  Such purchases may be for cash, securities (including Company Common Shares) or any form of consideration agreed. Any Security that the Company purchases shall be surrendered to the Trustee for cancellation. Any Securities surrendered for cancellation may not be reissued or resold and will be canceled promptly in accordance with Section 3.09. Any Security purchased by either Guarantor or any Affiliate of the Company or a Guarantor may not be resold.

ARTICLE XIV

GUARANTEE

SECTION 14.01    Guarantee.

(a)    Each Guarantor hereby fully and unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee the Company’s obligations under such Security, including the due and punctual payment of principal of and interest and premium, if any, on such Security, whether at an interest payment date, the Stated Maturity Date, upon redemption, upon repurchase at the Holder’s option, or otherwise, in accordance with the terms of such Security and this Indenture. In case of the failure of the Company punctually to pay any such principal, premium or interest, each Guarantor hereby agrees to cause any such payment to be made (without duplication) punctually when and as the same shall become due and payable, whether at an interest payment date, the Stated Maturity Date, upon redemption, upon repurchase at the Holder’s option, or otherwise, and as if such payment were made by the Company. The Guarantee shall be unsecured and unsubordinated indebtedness of each Guarantor and rank equally with other unsecured and unsubordinated indebtedness of each Guarantor that is currently outstanding or that it may issue in the future. Notwithstanding the foregoing, in the event that the Company has made a Share Settlement Election and fails to deliver Company Common Shares to the Holders of the Securities, the Guarantors shall not be responsible for specific performance of the Company’s delivery obligation. For the avoidance of doubt, notwithstanding the preceding sentence, upon any acceleration of the Securities as a result of an Event of Default arising out of the failure by the Company to deliver Company Common Shares in accordance with the provisions of this Indenture, the Guarantors are responsible to the Holders for the payment of the accelerated amount due under the Securities pursuant to the Guarantee.

(b)    Each Guarantor hereby agrees that its obligations hereunder shall be as principal and not merely as surety, and shall be absolute, irrevocable and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of any Security or this Indenture, any failure to enforce the provisions of any Security or this Indenture, or any waiver, modification, consent or indulgence granted with respect thereto by the Holder of such Security or the Trustee, the recovery of any judgment against the Company or any action to

‑53‑

enforce the same, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of each Guarantor, increase the principal amount of such Security or the interest rate thereon or impose or increase any premium payable upon redemption thereof. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to any such Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that the Guarantee will not be discharged except by payment in full of the principal of, and any premium and interest on, the Securities and the complete performance of all other obligations contained in the Securities.

(c)    The Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time payment or delivery on any Security, in whole or in part, is rescinded or must otherwise be repaid or returned to the Company or either Guarantor upon the bankruptcy, liquidation or reorganization of the Company, either Guarantor or otherwise.

(d)    Each Guarantor shall be subrogated to all rights of the Holder of any Security against the Company in respect of any amounts paid to such Holder by such Guarantor pursuant to the provisions of the Guarantee; provided, however, that each Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon, such right of subrogation until the principal of, any premium and interest on, and any additional amounts required with respect to, all Securities shall have been paid or delivered in full.

‑54‑

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

NORTHSTAR REALTY EUROPE CORP., as Issuer
By:	/s/ Ronald J. Lieberman
	Name:	Ronald J. Lieberman
	Title:	Executive Vice President, General Counsel & Secretary
NORTHSTAR REALTY FINANCE CORP., as Guarantor
By:	/s/ Ronald J. Lieberman
	Name:	Ronald J. Lieberman
	Title:	Executive Vice President, General Counsel & Secretary
NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP, as Guarantor
	By: NORTHSTAR REALTY FINANCE CORP., its General Partner
By:	/s/ Ronald J. Lieberman
	Name:	Ronald J. Lieberman
	Title:	Executive Vice President, General Counsel & Secretary
WILMINGTON TRUST, NATIONAL
ASSOCIATION, as Trustee
By:	/s/ Jane Schweiger
	Name:	Jane Schweiger
	Title:	Vice President

‑55‑

EXHIBIT A

[FORM OF SECURITY]

[Global Securities Legend]

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]¹ 

[THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1)    REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

(2)    AGREES FOR THE BENEFIT OF NORTHSTAR REALTY EUROPE CORP. (THE “COMPANY”) AND NORTHSTAR REALTY FINANCE CORP. AND NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP (THE “GUARANTORS”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

(A)    TO THE COMPANY OR ANY SUBSIDIARY THEREOF,

(B)     PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(C)    TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

¹ Include for Global Securities

A‑1

(D)    PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE GUARANTORS AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]² 

NorthStar Realty Europe Corp.

Fully and unconditionally guaranteed by
NorthStar Realty Finance Corp. and NorthStar Realty Finance Limited Partnership
as guarantors

4.625% Stock‑Settlable Senior Notes due December 2016

No.	$
	[CUSIP 66706L AA9] [CUSIP 66706L AC5]

NorthStar Realty Europe Corp., a corporation duly organized and existing under the laws of the State of Maryland (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to     , or registered assigns, $                           (                               DOLLARS) on December 15, 2016 (the “Stated Maturity Date”) and to pay interest on the Stated Maturity Date. Interest shall accrue from, and including, the Issue Date to, but excluding, the Stated Maturity Date and shall be paid on the Stated Maturity Date. Interest shall accrue at the rate of 4.625% per annum, until the principal hereof is paid or duly provided for, provided, however, that any principal and any interest, which is overdue shall bear interest at the rate of 4.625% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or duly provided for. Interest on this Security which is payable, and is punctually paid or duly provided for, on any interest payment date or the Stated Maturity Date shall be paid to the Person in whose name this Security (or one or more predecessor Securities) is registered at the Close of Business on the first day of the month in which the applicable interest payment date falls (whether or not a Business Day), provided that interest accrued on this Security that is payable at maturity or earlier redemption will be paid to the Person entitled to payment of principal as a result of maturity or redemption, as the case may be. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on the Stated Maturity Date and may either be paid to the Person in whose name this Security (or one or more predecessor Securities) is registered at the Close of Business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Company, notice whereof shall be given to Holders of securities not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

² Include for Restricted Securities

A‑2

The Company shall pay the principal of and interest on any Global Security in immediately available funds to the Depositary or its nominee, as the case may be, as the registered Holder of such Global Security. The Company shall pay the principal of any Definitive Security at the office or agency designated by the Company for that purpose. The Company has initially designated the Trustee as its Paying Agent and Security Registrar in respect of the Securities as a place where Securities may be presented for payment or for registration of transfer. The Company may, however, change the Paying Agent or Security Registrar for the Securities without prior notice to the Holders thereof and the Company may act as Paying Agent or Security Registrar for the Securities. Payments on any Definitive Securities may be made, at the Company’s option (i) to Holders of Definitive Securities having an aggregate principal amount of Securities of $5,000,000 or less, by check mailed to the Holders of such Securities as their address in the Security Register and (ii) to Holders having an aggregate principal amount of Definitive Securities in excess of $5,000,000, by either check mailed to each Holder at its address in the Security Register or, upon application by a Holder to the Security Registrar not later than 10 Business Days prior to the Stated Maturity Date, by wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until that Holder notifies, in writing, the Security Registrar to the contrary.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

As provided in the Indenture, the obligations of the Company under the Indenture and this Security are fully and unconditionally guaranteed pursuant to the Guarantee endorsed hereon as provided in the Indenture. Each Holder, by holding this Security, agrees to all of the terms and provisions of said Guarantee and the Indenture.

A‑3

IN WITNESS WHEREOF, the Company has caused this Security to be duly executed.

NORTHSTAR REALTY EUROPE CORP.
By:
	Name:
	Title:
Attest:
	Name:
	Title:

A‑4

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to in the within‑mentioned Indenture.

Dated:

WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE
By
	Authorized Signatory

A‑5

[FORM OF REVERSE OF SECURITY]

This Security is one of a duly authorized issue of Securities of the Company designated as 4.625% Stock‑Settlable Senior Notes due December 2016 (herein called the “Securities”), limited in aggregate principal amount on the Issue Date to $300,000,000 issued and to be issued under an Indenture, dated as of July 1, 2015 (herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company, as Issuer, NorthStar Realty Finance Corp., a corporation duly organized and existing under the laws of the State of Maryland, and NorthStar Realty Finance Limited Partnership, a limited partnership duly organized and existing under the laws of the State of Delaware, as Guarantors, and Wilmington Trust, National Association, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. The Company shall be entitled, subject to its compliance with the terms of the Indenture, to issue Additional Securities pursuant to Section 2.02 of the Indenture. The Securities include the Securities issued on the Issue Date and any Additional Securities. The Securities issued on the Issue Date and any Additional Securities are treated as a single class of securities under the Indenture. In the event there is any conflict between the terms of this Note and of the Indenture, the Indenture shall govern.

The terms of the Securities include those stated in the Indenture and Holders of Securities are referred to the Indenture for a statement of such terms.

This Security is redeemable at the election of the Company prior to the Stated Maturity Date subject to the provisions of the Indenture.

Upon the occurrence of a Change in Control, the Holder has the right, at such Holder’s option, to require the Company to repurchase all of the Holder’s Securities or any portions thereof (in principal amounts of $1,000 or integral multiples in excess thereof, provided that if such Holder elects repurchase of less than all of the Securities it holds, it must continue to hold a minimum of $2,000 initial principal amount of Securities after giving effect to such repurchase) on the Change in Control Purchase Date at a price equal to the Change in Control Purchase Price.

As provided in and subject to the provisions of the Indenture, the Company, upon providing notice to Holders not later than 60 nor more than 120 days prior to the Stated Maturity Date, has the right, at its election, to deliver to Holders of the Securities Company Common Shares in lieu of cash for the principal amount of this Security at the Stated Maturity Date of the Securities.

If an Event of Default shall occur and be continuing, there may be declared due and payable the principal of and accrued and unpaid interest, if any, on all of the outstanding Securities, in the manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a

A‑6

continuing Event of Default with respect to the Securities, the Holders of not less than 25% in principal amount of the Securities at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity satisfactory to the Trustee and the Trustee shall not have received from the Holders of a majority in principal amount of Securities at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to certain suits described in the Indenture, including any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any interest hereon on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

This Security is issuable only in registered form without coupons in minimum denominations of $2,000 and any integral multiples of $1,000 above that amount.

No service charge shall be made for any such registration of transfer or exchange, but the Company may deduct and withhold a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

Interest on this Security shall be computed on the basis of a 360‑day year comprised of twelve 30‑day months.

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

A‑7

GUARANTEE

For value received, each of NorthStar Realty Finance Corp. and NorthStar Realty Finance Limited Partnership (each, a “Guarantor” and together the “Guarantors”) hereby fully and unconditionally, guarantees the Company’s obligations under the Indenture and this Security, including the due and punctual payment of principal of and interest and premium, if any, on the Security on which this Guarantee is endorsed in the amounts and at the time when due, including interest on the overdue principal and interest, if any, on this Security, whether at an interest payment date, the Stated Maturity Date, upon redemption, upon repurchase at the Holder’s option, or otherwise, and all other obligations of NorthStar Realty Europe Corp. (the “Company”) under the Indenture or the Security, to the Holder of this Security, all in accordance with and subject to the terms and limitations of this Security, Article XIV of the Indenture and this Guarantee. Notwithstanding the foregoing, in the event that the Company has made a Share Settlement Election and fails to deliver Company Common Shares to the Holders of the Securities, the Guarantors shall not be responsible for specific performance of the Company’s delivery obligation. For the avoidance of doubt, notwithstanding the preceding sentence, upon any acceleration of the Securities as a result of an Event of Default arising out of the failure by the Company to deliver Company Common Shares in accordance with the provisions of this Indenture, the Guarantors are responsible to the Holders for the payment of the accelerated amount due under the Securities pursuant to the Guarantee. This Guarantee will become effective in accordance with Article XIV of the Indenture and its terms shall be evidenced therein. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Indenture, dated as of July 1, 2015 (the “Indenture”), by and among the Company, each of the undersigned, as Guarantors, and Wilmington Trust, National Association, as Trustee, as amended or supplemented.

The obligations of each of the undersigned to the Holder of this Security pursuant to the Guarantee and the Indenture are expressly set forth in Article XIV of the Indenture and reference is hereby made to the Indenture for the precise terms and limitations of the Guarantee and all of the other provisions of the Indenture to which this Guarantee relates. Each Holder of the Security to which this Guarantee is endorsed, by accepting such Security, agrees to and shall be bound by such provisions.

This Guarantee shall be an unsecured and unsubordinated obligation of each Guarantor and rank equally with other unsecured and unsubordinated indebtedness of each Guarantor that is currently outstanding or that it may issue in the future.

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Security upon which this Guarantee is endorsed shall have been executed by the Trustee under the Indenture by manual signature.

This Guarantee is subject to release upon the terms set forth in the Indenture.

THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

[Signature Page Follows]

A‑8

IN WITNESS WHEREOF, each of the undersigned Guarantors has caused this Guarantee to be duly executed.

NORTHSTAR REALTY FINANCE CORP.
By:
	Name:
	Title:
NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP
By: NORTHSTAR REALTY FINANCE CORP., its General Partner
By:
	Name:
	Title:

A‑9

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Date:
	Your Signature:
		Sign exactly as your name appears on the other side of this Security.

A‑10

Schedule Of Increases Or Decreases In Global Security³ 

The initial principal amount of this Global Security is $              . The following increases or decreases in this Global Security have been made:

Date of Exchange Amount of
decrease in
Principal Amount
of this Global
Security Amount of increase
in Principal
Amount of this
Global Security Principal Amount
of this Global
Security following
such decrease or
increase Signature of
authorized
signatory of
Trustee or
Securities
Custodian

³ To be attached to Global Securities.

A‑11

[FORM OF ASSIGNMENT AND TRANSFER

For value received _______________________ hereby sell(s), assign(s) and transfer(s) unto _________________ (Please insert social security or Taxpayer Identification Number of assignee) the within Security, and hereby irrevocably constitutes and appoints _____________________ attorney to transfer the said Security on the books of the Company, with full power of substitution in the premises.

In connection with any transfer of the within Security occurring prior to the Resale Restriction Termination Date, as defined in the Indenture governing such Security, the undersigned confirms that such Security is being transferred:

☐    To NorthStar Realty Europe Corp., or a subsidiary thereof; or

☐    Pursuant to a registration statement that has become effective under the Securities Act of 1933, as amended; or

☐    To a Qualified Institutional Buyer in compliance with Rule 144A under the Securities Act of 1933, as amended; or

☐    Pursuant to an exemption from registration provided by Rule 144 under the Securities Act of 1933, as amended, or any other available exemption from the registration requirements of the Securities Act of 1933, as amended.

A‑12

Dated: ________________________

___________________________________

___________________________________
Signature(s)

___________________________________
Signature Guarantee

Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission

Rule 17Ad‑15 if Securities are to be delivered, other than to and in the name of the registered holder.

NOTICE: The signature on the assignment must correspond with the name as written upon the face of the Security in every particular without alteration or enlargement or any change whatever. ]⁴ 

⁴ To be attached for Restricted Securities

A‑13

EX-10.4

Exhibit 10.4

NORTHSTAR REALTY EUROPE CORP.

$300,000,000

4.625% SENIOR STOCK-SETTLABLE NOTES DUE DECEMBER 2016

Fully and Unconditionally Guaranteed by

NORTHSTAR REALTY FINANCE CORP.
and
NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP

PURCHASE AGREEMENT

June 25, 2015

Deutsche Bank Securities Inc.

As Representative of the Several Initial Purchasers

60 Wall Street

New York, New York 10005

Ladies and Gentlemen:

Each of NorthStar Realty Europe Corp., a Maryland corporation (the “Issuer”), NorthStar Realty Finance Corp., a Maryland corporation (“NRF”), and NorthStar Realty Finance Limited Partnership, a Delaware limited partnership (“NRF OP” and, together with NRF, the “Guarantors”), hereby confirms its agreement with Deutsche Bank Securities Inc., as representative (the “Representative”) of the several initial purchasers listed on Schedule I hereto (the “Initial Purchasers”), and each of the Initial Purchasers confirms its agreement with the Issuer and the Guarantors, as set forth below.

1.Securities.

The Issuer, which is a newly formed subsidiary of NRF, proposes to (i) issue $300,000,000 aggregate principal amount of 4.625% Senior Stock-Settlable Notes due December 2016 (the “Notes”), guaranteed as to payment by the Guarantors (the “Guarantees”), and sell such Notes to the Initial Purchasers in the aggregate principal amount set forth in Schedule I hereto (the “Firm Securities”); and (ii) grant to the Initial Purchasers an option to purchase all or any part of an additional $60,000,000 aggregate principal amount of Notes (the “Option Securities”). The Firm Securities and the Option Securities are collectively referred to herein as the “Securities.” Subject to the terms and conditions described in the Circular (as defined below) under the caption “Description of Notes—Payment upon Maturity,” the Issuer may elect, at its option, to satisfy its obligation to repay the principal amount of the Notes at maturity in whole or in part by delivering to holders of the Notes shares of the Issuer’s common stock, $0.01 par value per share (generally, the “NRE Common Stock” and, specifically as to the NRE Common Stock issuable upon payment of the Notes, the “Settlement Shares”). The Securities are to be issued under an indenture (the “Indenture”) to be dated as of the Initial

Closing Date (as defined below) by and among the Issuer, the Guarantors and Wilmington Trust, National Association, as trustee (the “Trustee”).

The sale of the Securities to the Initial Purchasers will be made without registration of the Securities under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon certain exemptions from the registration requirements of the Securities Act. The Initial Purchasers have advised the Issuer that each Initial Purchaser will offer and sell the Securities purchased by it hereunder in accordance with Section 4 hereof as soon as such Initial Purchaser deems advisable.

In connection with the sale of the Securities, NRF and the Issuer have prepared and delivered to the Initial Purchasers a preliminary offering circular, dated June 24, 2015 (the “Preliminary Circular”), and will prepare and deliver a pricing supplement (the “Pricing Supplement”) describing the terms of the Securities, each for use by the Initial Purchasers in connection with their solicitation of offers to purchase the Securities. The actual interest rates and certain other terms of the Notes will be determined on June 25, 2015, based on market conditions, and will be reflected in the Pricing Supplement not later than 5:45 p.m., New York City time, on such date or at such other time after the date of this Agreement as shall be agreed by the Issuer and the Representative (the “Applicable Time”). As used herein, “Disclosure Package” shall mean the Preliminary Circular, as supplemented by the Pricing Supplement, any exhibits thereto and the documents stated to be incorporated by reference therein, including any documents filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in the most recent form that has been prepared and delivered by NRF to the Initial Purchasers in connection with their solicitation of offers to purchase the Securities prior to the Applicable Time. Promptly after the Applicable Time, NRF and the Issuer will prepare and deliver to the Initial Purchaser a final offering circular dated the date hereof (the “Final Circular”) and from and after the time such Final Circular is delivered to the Initial Purchasers, all references herein to the “Offering Circular” shall be deemed to be a reference to the most recent Offering Circular (whether the Preliminary Circular or the Final Circular, in each case, as amended or supplemented). The Preliminary Circular and the Final Circular are each sometimes referred to herein as a “Circular.” Each Circular sets forth certain information concerning the Issuer, the Guarantors, the Securities, the NRE Common Stock, this Agreement and the Indenture. Each of the Issuer and NRF hereby confirms that it authorizes the use of the Preliminary Circular, the Pricing Supplement and the Final Circular, and any amendment or supplement thereto prepared by NRF and the Issuer for such purpose, in connection with the offer and sale of the Securities by the Initial Purchasers. Unless stated to the contrary, all references herein to the “Circular” shall include the documents incorporated by reference therein. The terms “supplement,” “amendment” and “amend” as used herein with respect to a Circular shall include all documents deemed to be incorporated by reference in the Preliminary Circular or Final Circular that are filed subsequent to the date of such Circular with the Securities and Exchange Commission (the “Commission”) pursuant to the Exchange Act.

The term “Material Adverse Effect” or “Material Adverse Change” means any material adverse effect on, or change with respect to, the assets, business operation, earnings, prospects, properties or financial condition, present or prospective, of the Issuer, the Guarantors and the Subsidiaries (as defined in Section 3(vi) below), taken as a whole.

2.Purchase, Sale, Payment and Delivery of the Securities.

On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Issuer agrees to issue and sell and the Initial Purchasers severally agree to purchase from the Issuer $300,000,000 aggregate principal amount of Notes (with Guarantees endorsed thereon) at a purchase price equal to 97.5% of the principal amount thereof (the “Purchase Price”) as set forth on Schedule I hereto.

2

In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Issuer hereby grants an option to the Initial Purchasers, exercisable by the Representative on behalf of all Initial Purchasers, to purchase up to an additional $60,000,000 aggregate principal amount of Option Securities at the Purchase Price, plus accrued and unpaid interest from the Initial Closing Date to, but excluding, the applicable Option Closing Date (both as defined below). The option hereby granted will expire 30 days after the date hereof and may be exercised in whole or in part from time to time within such 30-day period upon written notice by the Representative to the Issuer setting forth the principal amount of Option Securities as to which the Representative is then exercising the option and the time and date of payment and delivery for such Option Securities. Any such time and date of delivery (each, an “Option Closing Date”) shall be determined by the Representative, but shall not be later than five full business days after the exercise of such option, nor in any event prior to the Initial Closing Date (as defined below). Such Option Securities shall be purchased for the account of each Initial Purchaser in the same proportion as the principal amount of the Firm Securities set forth opposite such Initial Purchaser’s name on Schedule I hereto bears to the total principal amount of the Firm Securities (subject to adjustment by the Initial Purchasers to eliminate fractions). No Option Securities shall be sold or delivered unless the Firm Securities previously have been, or simultaneously are, sold and delivered. The right to purchase Option Securities or any portion thereof may be exercised from time to time and to the extent not previously exercised may be surrendered and terminated at any time upon notice by the Representative to the Issuer.

The Issuer will deliver against payment of the purchase price the Firm Securities in the form of one or more permanent global notes in definitive form deposited with the Trustee as custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee for DTC. Interests in any permanent global securities will be held only in book-entry form through DTC, except in the limited circumstances described in the Disclosure Package. Payment of the purchase price for, and delivery of global certificates for, the Firm Securities shall be made at the office of Hunton & Williams LLP, 200 Park Avenue, New York, New York 10166, or at such other place as shall be agreed upon by the Representative and the Issuer, at 10:00 a.m. (Eastern time) on July 1, 2015, or such other time not later than ten business days after such date as shall be agreed upon by the Representative and the Issuer (such time and date of payment and delivery being herein called the “Initial Closing Date” and the Initial Closing Date and the Option Closing Dates, if any, each being the applicable “Closing Date”).

In addition, in the event that the Representative has exercised the option to purchase all or any of the Option Securities, payment of the purchase price for, and delivery of one or more global certificates for, such Option Securities shall be made at the above-mentioned office, or at such other place as shall be agreed upon by the Representative and the Issuer, on the Option Closing Date as determined by the Representative and the Issuer.

Payment shall be made to the Issuer by wire transfer of immediately available funds to one or more bank accounts designated by the Issuer, against delivery to the Initial Purchasers of certificates for the purchased Securities.

3.Representations and Warranties.

(a)NRF represents and warrants to the Initial Purchasers as of the date hereof and as of each Closing Date that:

(i)on and as of the Applicable Time, neither the Disclosure Package nor any individual Supplemental Offering Document (as defined in Section 5(b) hereof), when considered together with the Disclosure Package, and at the Closing Date, neither the

3

Disclosure Package, the Final Circular, nor any individual Supplemental Offering Document, when considered together with the Disclosure Package, and any amendment or supplement thereto, contained or will contain, any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Issuer shall not be deemed to make any representations or warranties as to the information contained in or omitted from the Disclosure Package or the Final Circular (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to NRF or the Issuer by or on behalf of the Initial Purchasers specifically for inclusion therein;

(ii)NRF has an authorized capitalization as set forth in both the Disclosure Package and the Final Circular; the outstanding shares of capital stock of NRF have been duly and validly authorized and issued and are fully paid and nonassessable;

(iii) the documents incorporated or deemed to be incorporated by reference in the Offering Circular at the time they were or hereafter are filed with the Commission complied and will comply in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder;

(iv)except as disclosed in the Disclosure Package and the Final Circular, there are no outstanding (A) securities or obligations of the Issuer, the Guarantors or the subsidiaries of NRF required to be set forth in Exhibit 21.1 to NRF’s Form 10-K for the fiscal year ended December 31, 2014 (such subsidiaries, together with NRF OP, are collectively referred to herein as the “Subsidiaries”) convertible into or exchangeable for any capital stock of or partnership interests, membership interests or other equity interests, as the case may be, in the Issuer, the Guarantors or any such Subsidiary, (B) warrants, rights or options to subscribe for or purchase from the Issuer, the Guarantors or any Subsidiary any such capital stock or any such convertible or exchangeable securities or obligations, or (C) obligations of the Issuer, the Guarantors or any Subsidiary to issue any securities or obligations, any such convertible or exchangeable securities or obligations, or any such warrants, rights or options the existence of which, in each case of (A), (B) and (C), is required to be disclosed in the Disclosure Package and the Final Circular and are not so disclosed; the Subsidiaries listed on Exhibit 21.1 to NRF’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 were the only “significant subsidiaries” (as such term is defined in Rule 1-02(w) of Regulation S-X) of NRF as of December 31, 2014; the Issuer has no subsidiaries that are material to the Issuer, the Guarantors and the Subsidiary, taken as a whole;

(v)each of the Issuer, the Guarantors and the Subsidiaries has been duly incorporated or organized and is validly existing as a corporation, general or limited partnership or limited liability company, as the case may be, except to the extent, in the case of the Subsidiaries, that the failure to be so incorporated or organized would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and each of them is in good standing under the laws of its respective jurisdiction of incorporation or

4

organization, except to the extent that the failure to be in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

(vi)each of the Issuer, the Guarantors and the Subsidiaries has the corporate, partnership or limited liability company power, as the case may be, and authority to own their respective properties and conduct their respective businesses, each as described in the Disclosure Package and the Final Circular except to the extent that the failure to have such power or authority would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Issuer’s and the Guarantors’ ability to execute and deliver this Agreement and to consummate the transactions described in this Agreement;

(vii)the Issuer, the Guarantors and the Subsidiaries are duly qualified or licensed and in good standing in each jurisdiction where such qualification or license is required except where the failure, individually or in the aggregate, to be so qualified or licensed would not reasonably be expected to have a Material Adverse Effect;

(viii)except as disclosed in the Disclosure Package and the Final Circular, no Subsidiary is contractually prohibited or restricted, directly or indirectly, from paying dividends to NRF, or from making any other distribution with respect to the outstanding capital stock or the outstanding membership, partnership or other equity interests of such Subsidiary or from repaying to NRF or another subsidiary of NRF any amounts which may from time to time become due under any loans or advances to such Subsidiary from NRF or another subsidiary of NRF, or from transferring such Subsidiary’s property or assets to NRF or another subsidiary of NRF, except, in the case of any Subsidiary other than NRF OP, for any such prohibitions and restrictions that would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect;

(ix)the Amended and Restated Agreement of Limited Partnership of NRF OP, dated as of March 13, 2015 (the “NRF Partnership Agreement”), has been duly and validly authorized, executed and delivered by NRF and is a valid and binding agreement of NRF, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by general principles of equity, and except to the extent that the indemnification and contribution provisions thereof may be limited by federal or state securities laws and public policy considerations in respect thereof;

(x)the Asset Management Agreement, dated June 30, 2014 (the “Asset Management Agreement”), between NSAM J-NRF Ltd (the “Asset Manager”) and NRF has been duly and validly authorized, executed and delivered by NRF and is a valid and binding agreement of NRF, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by general principles of equity, and except to the extent that any indemnification and contribution provisions thereof may be limited by federal or state securities laws and public policy considerations in respect thereof;

5

(xi)NRF is the sole general partner of NRF OP and owns units of partnership interest in NRF OP (“NRF OP Units”) free and clear of any pledge, lien, encumbrance, security interest or other claim except for any pledge, lien, encumbrance, security interest or other claim that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

(xii)none of the Issuer, the Guarantors, nor any Subsidiary is in breach of or in default under (nor has any event occurred which with notice, lapse of time, or both would constitute a breach of, or default under) its respective organizational documents, or in the performance or observance of any obligation, agreement, covenant or condition contained in any license, indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to which the Issuer, the Guarantors or any Subsidiary is a party or by which any of them or their respective properties or assets is bound, except for such breaches or defaults which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

(xiii)the execution, delivery and performance of this Agreement, the Securities and the Indenture and consummation of the transactions contemplated herein will not (A) conflict with, or result in any breach of, or constitute a default under (nor constitute any event which with notice, lapse of time, or both would constitute a breach of, or default under): (1) any provision of the organizational documents of the Issuer, the Guarantors or any Subsidiary, or (2) any provision of any license, indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to which the Issuer, the Guarantors or any Subsidiary is a party or by which any of them or their respective assets or properties may be bound or affected, or under any federal, state, local or foreign law, regulation or rule or any decree, judgment or order applicable to the Issuer, the Guarantors or any Subsidiary, except in the case of this clause (2) for such breaches or defaults which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and which would not reasonably be expected to have a material adverse effect on the Issuer’s and the Guarantors’ ability to perform their agreed upon obligations under this Agreement; or (B) result in the creation or imposition of any lien, charge, claim or encumbrance upon any property or asset of the Issuer or any Subsidiary, except for such liens, charges, claims or encumbrances as are described in the Disclosure Package and the Final Circular or which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

(xiv)this Agreement has been duly authorized, executed and delivered by the Issuer and the Guarantors;

(xv)no approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency is required in connection with the Issuer’s or the Guarantors’ execution, delivery and performance of this Agreement, the Securities and the Indenture, the consummation of the transactions contemplated herein by the Issuer and the Guarantors or the issuance, sale and delivery of the Securities by the Issuer and the Guarantors other than (A) any necessary

6

qualification under the securities or “blue sky” laws of the various jurisdictions in which the Securities are being offered by the Initial Purchasers or (B) any such approvals, authorizations, consents, orders, or filings that if not obtained or made, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and which would not reasonably be expected to have a material adverse effect on the Issuer’s and the Guarantor’s ability to perform their respective agreed upon obligations under this Agreement, the Securities and the Indenture;

(xvi)each of the Issuer, the Guarantors and the Subsidiaries has all necessary licenses, authorizations, consents and approvals and has made all necessary filings required under any federal, state, local or foreign law, regulation or rule, and has obtained all necessary authorizations, consents and approvals from other persons, required in order to conduct their respective businesses as described in both the Disclosure Package and the Final Circular, except to the extent that any failure to have any such licenses, authorizations, consents or approvals, to make any such filings or to obtain any such authorizations, consents or approvals would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; neither the Issuer, the Guarantors nor any of the Subsidiaries is in violation of, in default under, or has received any notice regarding a possible violation, default or revocation of any such license, authorization, consent or approval or any federal, state, local or foreign law, regulation or rule or any decree, order or judgment applicable to the Issuer, the Guarantors or any of the Subsidiaries the effect of which would reasonably be expected to result in a Material Adverse Change;

(xvii)the Indenture has been duly authorized by all necessary action of the Issuer and each of the Guarantors and, at the Initial Closing Date, when duly executed and delivered by the Issuer, each of the Guarantors and the Trustee, will constitute a valid and binding agreement of the Issuer and each of the Guarantors, enforceable against each of the Issuer and the Guarantors in accordance with its terms, subject to general equity principles and to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally from time to time in effect;

(xviii)the Securities have been duly authorized by all necessary action for issuance and sale by the Issuer and each of the Guarantors pursuant to this Agreement and, when executed, authenticated, issued and delivered in the manner provided for in the Indenture and sold and paid for as provided in this Agreement, the Securities will constitute valid and binding obligations of the Issuer and each of the Guarantors, as applicable, entitled to the benefits of the Indenture and enforceable against the Issuer and each of the Guarantors, as applicable, in accordance with their terms and the terms of the Indenture, subject to general equity principles and to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally from time to time in effect;

(xix)the Settlement Shares have been duly authorized by NRE and, if and when issued in accordance with the terms of the Notes and the Indenture, will be validly issued, fully paid and nonassessable, and the issuance of the Settlement Shares will not be subject

7

to preemptive or other similar rights arising by operation of law, under the organizational documents of NRE or under any agreement to which NRE is a party or otherwise;

(xx)except as disclosed in the Disclosure Package and the Final Circular, there are no actions, suits, proceedings, inquiries or investigations pending or, to the knowledge of NRF, threatened against the Issuer, the Guarantors or any Subsidiary or, to the extent that such proceeding affects the properties or assets of the Issuer, the Guarantors or any Subsidiary, any of their respective officers and directors or to which the properties, assets or rights of any such entity are subject, at law or in equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority, arbitral panel or agency which would result in a judgment, decree, award or order that would individually or in the aggregate reasonably be expected to have a Material Adverse Effect;

(xxi)the consolidated financial statements and schedules of NRF, including the notes thereto, incorporated by reference in the Disclosure Package and the Final Circular, present fairly in all material respects the consolidated financial position of NRF as of the dates indicated and the consolidated results of operations and changes in financial position and cash flows of NRF for the periods specified; the consolidated financial statements of NRF incorporated by reference in the Disclosure Package and the Final Circular have been prepared in conformity with generally accepted accounting principles as applied in the United States (“GAAP”) and on a consistent basis during the periods involved and in accordance with Regulation S-X promulgated by the Commission and the financial statement schedules of NRF incorporated by reference in the Disclosure Package and the Final Circular have been compiled on a basis consistent with such consolidated financial statements of NRF; the unaudited pro forma condensed consolidated financial statements of NRF included or incorporated by reference in the Disclosure Package and the Final Circular comply in all material respects with the requirements of the Securities Act and the Exchange Act, the assumptions used in the preparation of such pro forma financial statements are reasonable in all material respects and the pro forma adjustments used therein are appropriate to give effect to the transactions or circumstances described therein; no pro forma financial information, financial statements or supporting schedules, other than (A) those included or incorporated by reference in the Disclosure Package and the Final Circular and (B) Ranger Predecessor, Eclipse Predecessor and INK Acquisition, LLC, are required to be included in a registration statement or prospectus under the Securities Act and the rules and regulations of the Commission promulgated thereunder (the “Securities Act Regulations”);

(xxii)to NRF’s actual knowledge, the consolidated financial statements and schedules of Griffin-American Healthcare REIT II, Inc., a Maryland corporation (“Griffin”), including the notes thereto, incorporated by reference in the Disclosure Package and the Final Circular, present fairly in all material respects the consolidated financial position of Griffin as of the dates indicated and the consolidated results of operations and changes in financial position of Griffin for the periods specified, and such financial statements have been prepared in conformity with GAAP and on a consistent basis during the periods involved and in accordance with Regulation S-X promulgated by the Commission;

8

(xxiii)Grant Thornton LLP, whose reports on the audited consolidated financial statements of NRF constitute part of the Disclosure Package and the Final Circular, is, and was during the periods covered by its reports, independent with respect to NRF as required by the Securities Act and the Securities Act Regulations; to NRF’s actual knowledge, Ernst & Young LLP, whose reports on the audited consolidated financial statements of Griffin constitute part of the Disclosure Package and the Final Circular, is, and was during the periods covered by its reports, independent with respect to Griffin as required by the Securities Act and the Securities Act Regulations;

(xxiv)subsequent to the respective dates of the consolidated financial statements of NRF incorporated by reference in the Disclosure Package and the Final Circular, and except as may be otherwise disclosed in the Disclosure Package and the Final Circular, there has not been (A) any Material Adverse Change or any development or transaction that would reasonably be expected to result in a Material Adverse Change, whether or not arising in the ordinary course of business, (B) any transaction that is material to the Issuer, the Guarantors and the Subsidiaries taken as a whole, entered into by the Issuer, the Guarantors or any of the Subsidiaries, (C) any obligation, contingent or otherwise, directly or indirectly incurred by the Issuer, the Guarantors or any Subsidiary that is material to the Issuer, the Guarantors and the Subsidiaries taken as a whole or (D) any dividend or distribution of any kind declared, paid or made by the Issuer or the Guarantors on any class of their capital stock or other equity interests (other than to NRF, a Subsidiary or holders of NRF OP Units);

(xxv)the Securities and the Settlement Shares conform in all material respects to the descriptions thereof contained in the Disclosure Package and the Final Circular;

(xxvi)all of the outstanding NRF OP Units have been duly authorized and validly issued, were not issued in violation of any preemptive or other similar rights arising by operation of law, under the organizational documents of NRF OP or under any agreement to which NRF OP is a party or otherwise;

(xxvii)neither the Issuer nor the Guarantors have taken, directly or indirectly, any action which is designed to or which has constituted or which might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Issuer or the Guarantors to facilitate the sale or resale of the Securities;

(xxviii)neither the Issuer nor the Guarantors has relied upon the Initial Purchasers or counsel for the Initial Purchasers for any legal, tax or accounting advice in connection with the offering and sale of the Securities except for advice relating to certain U.S. federal income tax matters and advice relating to certain matters with respect to the Investment Company Act of 1940, as amended (the “Investment Company Act”), in either case, received from Hunton & Williams LLP;

(xxix)the Issuer, the Guarantors and the Subsidiaries have good and marketable title in fee simple to all real property, if any, and good title to all personal property, if any, owned by them, in each case free and clear of all liens, security interests, pledges, charges, encumbrances, claims, restrictions, mortgages and defects in such title (collectively, the

9

“Encumbrances”), except such Encumbrances that are disclosed in both the Disclosure Package and the Final Circular or would not reasonably be expected to have a Material Adverse Effect; any real or personal property leased by the Issuer, the Guarantors or any Subsidiary is held under a lease which is a valid and binding agreement, enforceable against the Issuer, the Guarantors or such Subsidiary (to the extent a party thereto) and, to NRF’s knowledge, the other parties thereto, except (A) as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general principles of equity, (B) as otherwise disclosed in both the Disclosure Package and the Final Circular or (C) for such exceptions that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

(xxx)except as disclosed in both the Disclosure Package and the Final Circular, the mortgages, if any, encumbering any real property owned in fee simple by the Issuer, the Guarantors or a Subsidiary are not and will not be: (A) convertible (in the absence of foreclosure) into an equity interest in such real property or in the Issuer, the Guarantors or any Subsidiary, (B) cross-defaulted to any indebtedness other than indebtedness of the Issuer, the Guarantors or any of the Subsidiaries, or (C) cross-collateralized to any property or assets not owned by the Issuer or any of the Subsidiaries, except in the case of clauses (A), (B), or (C) to the extent that any such conversion right, cross-default or cross-collateralization would not, individually or in the aggregate, have a Material Adverse Effect or materially and adversely impact the ability of the Issuer and the Guarantors to consummate the transactions contemplated by this Agreement;

(xxxi)the descriptions of legal or governmental proceedings, contracts, leases and other legal documents in the Disclosure Package and the Final Circular constitute fair summaries, which are accurate in all material respects, of such proceedings or documents, and there are no legal or governmental proceedings, contracts, leases or other documents that are known to NRF of a character that would be required to be included or filed as exhibits in a registration statement or prospectus under the Securities Act and the Securities Act Regulations which are not described in the Disclosure Package and the Final Circular;

(xxxii)the Issuer, the Guarantors and the Subsidiaries own or possess adequate licenses or other rights to use all material patents, trademarks, service marks, trade names, copyrights, software licenses, trade secrets, other intangible property rights and know-how (collectively, “Intangibles”) necessary for the Issuer, the Guarantors and the Subsidiaries taken together as a whole (the “Consolidated Company”) to conduct the business of the Consolidated Company as described in both the Disclosure Package and the Final Circular, and neither the Issuer nor any Subsidiary has received notice of infringement of or conflict with (and NRF knows of no such infringement of or conflict with) asserted rights of others with respect to any Intangibles which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

(xxxiii)NRF maintains a system of internal accounting controls sufficient to provide reasonable assurance that, with respect to the Consolidated Company, (A) transactions are executed in accordance with management’s general or specific

10

authorizations; (B) transactions are recorded as necessary to permit preparation of the consolidated financial statements of NRF in conformity with GAAP and to maintain asset accountability; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences;

(xxxiv)(A)  NRF has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act), which, except as disclosed in both the Disclosure Package and the Final Circular, (1) are designed to ensure that material information relating to NRF, including its consolidated subsidiaries, is made known to NRF’s principal executive officer and NRF’s principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared, (2) have been evaluated for effectiveness as of the end of NRF’s last fiscal year, and (3) are effective in all material respects to perform the functions for which they were established, and (B) based on the evaluation of NRF’s disclosure controls and procedures described above, NRF is not aware of (1) any material weakness in the design or operation of internal control over financial reporting which is reasonably likely to adversely affect NRF’s ability to record, process, summarize and report financial information, or (2) any fraud, whether or not material, that involves management or other employees who have a significant role in NRF’s internal control over financial reporting; and since the most recent evaluation of NRF’s disclosure controls and procedures described above, there have been no significant changes in internal control over financial reporting or in other factors that would significantly affect internal control over financial reporting;

(xxxv)NRF (including any predecessor entities) and each of the Subsidiaries has filed on a timely basis all material federal, state, local and foreign tax returns required to be filed through the date hereof or have properly requested extensions thereof, and all such tax returns are true, correct and complete in all material respects, and have paid all material taxes required to be paid, including any tax assessment, fine or penalty levied against NRF or any of the Subsidiaries; and no tax deficiency has been asserted against any such entity, nor does any such entity know of any tax deficiency which is likely to be asserted against any such entity which, individually or in the aggregate, if determined adversely to any such entity, would reasonably be expected to have a Material Adverse Effect; all material tax liabilities are adequately provided for on the respective books of such entities;

(xxxvi)the statements set forth in the Disclosure Package and the Final Circular under the captions “Material Federal Income Tax Considerations” and “Annex A—Federal Income Tax Consequences of Our Status as a REIT,” insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and complete in all material respects and fairly summarize the federal income tax considerations described therein;

11

(xxxvii)NRF maintains insurance of the types and in the amounts generally deemed adequate by NRF for its business and the business of the Subsidiaries, all of which insurance is in full force and effect in all material respects;

(xxxviii)the Issuer, the Guarantors and the Subsidiaries have received all permits, licenses or other approvals required of them under applicable federal and state occupational safety and health and environmental laws, regulations and rules to conduct the business of the Consolidated Company, and the Issuer, the Guarantors and the Subsidiaries are in compliance with all terms and conditions of any such permits, licenses or approvals, except for any failure to have required permits, licenses or other approvals or to comply with the terms and conditions of such permits, licenses or approvals which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change; the Issuer, the Guarantors and the Subsidiaries are in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Issuer, the Guarantors or any of the Subsidiaries would have any material liability; neither the Issuer, the Guarantors nor any of the Subsidiaries has incurred and none of them expect to incur any material liability under (A) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (B) Section 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (“Code”); each “pension plan” for which the Issuer, the Guarantors or any of the Subsidiaries would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification;

(xxxix)neither the Issuer, the Guarantors nor any of the Subsidiaries or, to the knowledge of NRF, any officer, director, employee or agent purporting to act on behalf of the Issuer, the Guarantors or any of the Subsidiaries has at any time (A) made any contributions to any candidate for political office, or failed to disclose fully any such contributions, in violation of law, (B) made any payment of funds or received or retained any funds in violation of any law, rule or regulation or of a character required to be disclosed in the Disclosure Package and the Final Circular, or (C) engaged in any material transactions, maintained any bank account or used any material corporate funds except for transactions, bank accounts and funds which have been or are, as applicable, reflected in the books and records of the Issuer, the Guarantors and the Subsidiaries;

(xl)except as disclosed in both the Disclosure Package and the Final Circular, there are no material outstanding loans, advances or guarantees of indebtedness by the Issuer, the Guarantors or any of the Subsidiaries to or for the benefit of any of the officers or directors of the Issuer, the Guarantors or any officers or directors of the Subsidiaries or any of the members of the immediate families of any such officers or directors;

12

(xli)except as disclosed in both the Disclosure Package and the Final Circular, all securities issued by any of the Issuer, the Guarantors or any of the Subsidiaries, or any trusts established by any of the Issuer, the Guarantors or any of the Subsidiaries, have been issued and sold in compliance with all applicable federal and state securities laws and the applicable corporate, partnership or limited liability company law of the jurisdiction of incorporation or formation of the Issuer or the Subsidiaries, as applicable;

(xlii)to NRF’s knowledge, no lessee of any portion of any of the real properties leased or owned by the Issuer, the Guarantors or any of the Subsidiaries (collectively, the “Properties”) is in default under any of the leases governing such Properties and there is no event which, but for the passage of time or the giving of notice or both, would constitute a default under any of such leases, except such defaults that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

(xliii)to NRF’s knowledge, neither the Issuer, the Guarantors nor any of the Subsidiaries has any liability under any applicable environmental, health, safety or similar law or otherwise relating to any Hazardous Material (as hereinafter defined) and there are no notices of potential liability or claims pending or, to the knowledge of NRF, threatened against the Issuer, the Guarantors or any of the Subsidiaries or concerning any of the Properties under any applicable environmental, health, safety or similar law or otherwise relating to any Hazardous Material, except for such liabilities or claims which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; neither the Issuer, the Guarantors nor any of the Subsidiaries or, to the knowledge of NRF, any other person, has contaminated or caused conditions that threaten to contaminate any of the Properties with Hazardous Materials, except for such contamination or threats of contamination which would not reasonably be expected to have a Material Adverse Effect; neither the Properties nor any other land ever owned by the Issuer, the Guarantors or any of the Subsidiaries is included on or, to the knowledge of NRF, is proposed for inclusion on the National Priorities List pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., or any similar list or inventory of contaminated properties; as used herein, “Hazardous Material” shall mean any hazardous material, hazardous waste, hazardous substance, hazardous constituent, toxic substance, pollutant, contaminant, asbestos, petroleum, petroleum waste, radioactive material, biohazardous material, explosive or any other material, the presence of which in the environment is prohibited, regulated, or serves as the basis of liability, as defined, listed, or regulated by any applicable federal, state, or local environmental law, ordinance, rule, or regulation;

(xliv)in connection with the offer and sale of the Securities, neither the Issuer nor the Guarantors have offered any of the Securities or any other securities convertible into or exchangeable or exercisable or redeemable for the Securities or the Settlement Shares in a manner in violation of the Securities Act; and neither the Issuer nor the Guarantors have distributed or will distribute any offering material in connection with the offer and sale of the Securities except for the Disclosure Package and the Final Circular;

13

(xlv)the Issuer, the Guarantors and the Subsidiaries and, to the knowledge of NRF, the officers and directors of the Issuer, the Guarantors and the Subsidiaries, in their capacities as such, are, and at the Initial Closing Date and any Option Closing Date will be, in compliance in all material respects with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder;

(xlvi)none of the Issuer and the Guarantors are and, after giving effect to the offering and sale of the Securities as described in the Disclosure Package and the Final Circular, will not be an “investment company,” as such term is defined in the Investment Company Act;

(xlvii)the statistical and market related data included in the Disclosure Package and the Final Circular are based on or derived from sources that NRF believes to be reliable and accurate in all material respects;

(xlviii)NRF is organized and has operated in conformity with the requirements for qualification as a real estate investment trust (a “REIT”) under the Code; NRF qualified as a REIT for the taxable years ended December 31, 2004 through December 31, 2014 and the present and contemplated method of operation of the Issuer and the Subsidiaries will enable NRF to meet the requirements for qualification and taxation as a REIT under the Code for its tax year ending December 31, 2015 and subsequent taxable years; and NRF intends to continue to qualify as a REIT until the Board of Directors of NRF determines that it is no longer in the best interests of NRF to continue to qualify as a REIT; neither NRF nor any of the Subsidiaries has taken any action that would reasonably be expected to cause NRF to fail to qualify as a REIT under the Code at any time;

(xlix)beginning with the taxable year that begins on the first day that NRE ceases to be a “qualified REIT subsidiary” of NRF, NRE will be organized in conformity with the requirements for qualification as a REIT under the Code and NRE’s proposed method of operation will enable it to meet the requirements for qualification and taxation as a REIT under the Code for such taxable year and subsequent taxable years;

(l)none of the Issuer, the Guarantors, any of their respective Affiliates or any person acting on its or their behalf has, directly or indirectly, solicited any offer to buy, sold or offered to sell or otherwise negotiated in respect of, or will solicit any offer to buy or offer to sell or otherwise negotiate in respect of, any security which is or would be integrated with the sale of the Securities in a manner that would require the Securities to be registered under the Securities Act; as used in this Agreement, “Affiliate” means, with respect to any specified person, any other person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such specified person, and for purposes of this definition, control of a person means the power, direct or indirect, to direct or cause the direction of the management and policies of such person whether by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing;

(li)none of the Issuer, the Guarantors, any of their respective Affiliates or any person acting on its or their behalf has engaged or will engage in any form of general

14

solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Securities in the United States;

(lii)the Securities will not be, at any Closing Date, of the same class (within the meaning of Rule 144A(d)(3) of the Securities Act Regulations) as securities listed on a national securities exchange registered under Section 6 of the Exchange Act, or quoted in a U.S. automated interdealer quotation system;

(liii)assuming the accuracy of the representations and warranties of the Initial Purchasers in Section 4 hereof and compliance by the Initial Purchasers with the procedures set forth in Section 4 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers, in the manner contemplated by this Agreement and the Disclosure Package and the Final Circular, to register any of the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended; and

(liv)NorthStar Realty Finance Corp., a Maryland corporation and former indirect parent of NRF, was organized and operated in conformity with the requirements for qualification as a REIT under the Code and qualified as a REIT for its taxable year ended December 31, 2004 through its short taxable year ended June 30, 2014.

(b)Any certificate signed by any officer of NRF delivered to the Initial Purchasers pursuant to the terms or provisions of this Agreement shall be deemed a representation and warranty by NRF to the Initial Purchasers as to the matters covered thereby.

4.Offering of the Securities; Initial Purchasers’ Representations and Warranties.

(a)Each of the Initial Purchasers represents and warrants to and severally agrees with the Issuer and the Guarantors that:

(i)It is an “accredited investor” as defined in Rule 501(a) of the Securities Act Regulations with such knowledge and experience in financial and business matters as are necessary in order to evaluate the merits and risks of an investment in the Securities.

(ii)It (including any person acting on its behalf) has solicited offers and will solicit offers for the Securities only from, and will sell the Securities only to persons that it reasonably believes to be a “qualified institutional buyer” as defined in Rule 144A of the Securities Act Regulations (a “QIB”) and such Initial Purchaser has taken or will take reasonable steps to ensure that each purchaser of the Securities is aware that the Securities are being offered and sold in reliance upon the representations and warranties deemed to have been made by such purchaser as provided in the Offering Circular under the caption “Notice to Investors” and such Initial Purchaser (and any person acting on its behalf) has taken or will take reasonable steps to ensure that the purchaser of such Securities is aware that such sale is being made in reliance upon Rule 144A.

15

(iii)Neither it nor any person acting on its behalf will offer or sell the Securities using any form of general solicitation or general advertising (within the meaning of Regulation D) or in any manner involving a public offering within the meaning of Section 4(a)(2) under the Securities Act.

(iv)The Securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S of the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act.

(v)It has not offered, sold or delivered the Securities, and will not offer, sell or deliver the Securities (i) as part of its distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering of the Securities and the Closing Date (such period, the “Distribution Compliance Period”) within the United States or to, or for the account or benefit of, U.S. persons, except in accordance with Rule 144A of the Securities Act Regulations. Accordingly, the Initial Purchaser represents and agrees that neither it, its affiliates nor any person acting on its behalf has engaged or will engage in any directed selling efforts within the meaning of Rule 902(c) of the Securities Act Regulations with respect to the Securities; and it, its affiliates and all persons acting on its behalf have complied and will comply with the offering restrictions requirements of Regulation S.

(vi)It has not distributed, and prior to the later to occur of the Initial Closing Date and the completion of the distribution of the Securities will not distribute, any offering material in connection with the offering and sale of the Securities other than the Disclosure Package, the Final Circular and one or more term sheets or e-mails relating to the Securities conveyed to prospective purchasers of the Securities containing no more information than that contained in the Disclosure Package or other public information.

(vii)It has not and will not take any action that would cause NRF, the Issuer, NorthStar Asset Management Group Inc. or their respective affiliates to make any registrations, including registration as an alternative investment fund manager under, or notifications pursuant to Article 42 (or otherwise) of, the European Union’s Alternative Investment Fund Managers Directive (No. 2011/61/EU) and all legislation made pursuant thereto, including, where applicable, the applicable implementing legislation and regulations in each member state of the European Economic Area.

(viii)It has not and will not offer the Securities in any jurisdictions outside of the United States, except as contemplated in this Agreement, the Disclosure Package and the Final Circular.

(b)The Initial Purchasers understand that the Issuer and the Guarantors and, for purposes of the opinions to be delivered to them pursuant to Section 7 hereof, counsel to the Issuer and the Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and truth of the foregoing representations and warranties and hereby consents to such reliance.

16

(c)The terms used in this Section 4 that have meanings assigned to them in Regulation S are used herein as so defined.

5.Certain Covenants.

The Issuer and the Guarantors, jointly and severally, agree with the Initial Purchasers:

(a)to furnish to the Initial Purchasers promptly, without charge, during the period referred to in Section 5(c) hereof, as many copies of the Offering Circular and any amendments and supplements thereto as they may reasonably request;

(b)that, during such period after the date hereof and prior to the completion of the distribution of the Securities by the Initial Purchasers, NRF and the Issuer will advise the Representative promptly of any proposal to amend or supplement the Final Circular (including by means of any filings with the Commission made pursuant to the Exchange Act or the rules and regulations of the Commission promulgated thereunder and will not effect such amendment or supplement without the consent of the Representative, not to be unreasonably withheld, except that nothing contained in this Section 5(b) shall prohibit NRF and the Issuer from filing with the Commission any report or schedule which NRF and the Issuer, on the advice of counsel, believes is required to be filed in order to comply with applicable law; neither the consent of the Representative, nor the Representative’s delivery of any such amendment or supplement, will constitute a waiver of any of the conditions set forth in Section 7 hereof; and if at any time prior to the completion of the distribution of the Securities by the Initial Purchasers, NRF and the Issuer have issued or shall have issued any written communication, which would be deemed a “free writing prospectus” as defined in Rule 405 of the Securities Act Regulations if the placement of the Securities contemplated by this Agreement were conducted as a public offering made pursuant to a registration statement filed with the Commission under the Securities Act (a “Supplemental Offering Document”), and there occurred or occurs an event or development as a result of which such Supplemental Offering Document conflicted or would conflict with the information contained in the Disclosure Package or the Final Circular or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, NRF and the Issuer will (i) notify the Representative of the same (this clause (i) does not apply to statements in or omission from any document in the Disclosure Package, any Supplemental Offering Document or the Final Circular in reliance upon and in conformity with written information furnished to NRF or the Issuer by or on behalf of the Initial Purchasers specifically for use therein), (ii) subject to the requirements of this Section 5(b), prepare at their own expense and provide to the Initial Purchasers pursuant to Section 5(a) hereof, an amendment or supplement that will correct such statement or omission, and (iii) supply any supplemented or amended Supplemental Offering Document to the Initial Purchasers and counsel for the Initial Purchasers without charge in such quantities as may be reasonably requested;

(c)that, if at any time prior to the completion of the sale of the Securities by the Initial Purchasers, any event occurs as a result of which the Final Circular, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they

17

were made, not misleading, or if it should be necessary to amend or supplement the Final Circular to comply with applicable law, NRF and the Issuer will promptly (i) notify the Representative of the same (this clause (i) does not apply to statements in or omission from any document in the Disclosure Package, any Supplemental Offering Document or the Final Circular in reliance upon and in conformity with written information furnished to NRF or the Issuer by or on behalf of the Initial Purchasers specifically for use therein), (ii) subject to the requirements of Section 5(b) hereof prepare at their own expense and provide to the Initial Purchasers pursuant to Section 5(a) hereof, an amendment or supplement that will correct such statement or omission or effect such compliance, and (iii) supply any supplemented or amended Final Circular to the Initial Purchasers and counsel for the Initial Purchasers without charge in such quantities as may be reasonably requested;

(d)to cooperate with the Representative for the qualification of the Securities for sale by the Initial Purchasers under the laws of such jurisdictions as the Representative reasonably may designate and will maintain such qualifications in effect as long as reasonably requested by the Representative for the sale of the Securities by the Initial Purchasers; provided, however, that NRF and the Issuer shall not be required to qualify to do business in any jurisdiction in which it is not then so qualified, to file any general consent to service of process or to take any other action which would subject it to general service of process or to taxation in any such jurisdiction where it is not then so subject; and NRF and the Issuer will promptly advise the Representative of the receipt by the Issuer of any written notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(e)to use commercially reasonable efforts to do and perform all things reasonably required to be done and performed by it under this Agreement prior to or after the Initial Closing Date and to satisfy all conditions precedent on their part to the obligation of the Initial Purchasers to purchase and accept delivery of the Securities;

(f)that none of the Issuer, the Guarantors, any of their respective Affiliates or any person acting on its or their behalf (other than the Initial Purchasers or any of their respective Affiliates, as to whom the Issuer and the Guarantors express no representations or agreements) will, directly or indirectly, make offers or sales of any security, or solicit offers to buy any security, under circumstances that would require the registration of the Securities under the Securities Act;

(g)that none of the Issuer, the Guarantors, any of their respective Affiliates or any person acting on its or their behalf (other than the Initial Purchasers or any of their respective Affiliates, as to whom the Issuer and the Guarantors express no representations or agreements) will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Securities;

(h)so long as any of the Securities are “restricted securities” within the meaning of Rule 144(a)(3) of the Securities Act Regulations, at any time at which the Issuer is not then subject to Section 13 or 15(d) of the Exchange Act, to provide at the Issuer’s expense to each holder, each beneficial owner and each prospective purchaser (as designated by such holder) of the Securities, upon the request of such holder, beneficial owner or prospective purchaser, the information required to be provided by Rule 144A(d)(4) of the Securities Act Regulations;

18

(i)to cooperate with the Representative and use their commercially reasonable efforts to permit the Securities to be eligible for clearance and settlement through the facilities of DTC;

(j)to apply the net proceeds from the sale of the Securities by the Issuer in accordance with the statements under the caption “Use of Proceeds” in the Disclosure Package and the Final Circular;

(k)not to take, directly or indirectly, any action which is designed to or which has constituted or which might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Issuer and the Guarantors to facilitate the sale or resale of the Securities;

(l)in connection with the offer and sale of the Securities, not to offer Securities or any other securities convertible into or exchangeable or exercisable or redeemable for the Securities in a manner in violation of the Securities Act;

(m)not to distribute any prospectus or other offering material, other than the Disclosure Package and the Final Circular, in connection with the offer and sale of the Securities;

(n)that NRF will use its best efforts to meet the requirements to qualify as a REIT under the Code until its Board of Directors determines that it is no longer in the best interests of NRF to qualify as a REIT;

(o)beginning with the taxable year that begins on the first day that NRE ceases to be a “qualified REIT subsidiary” of NRF, NRE will use its best efforts to meet the requirements to qualify as a REIT under the Code until its board of directors determines that it is no longer in the best interest of NRE to qualify as a REIT;

(p)that the transfer restrictions and the other provisions set forth in the Disclosure Package and the Final Circular under the caption “Notice to Investors,” including the legend required thereby, shall apply to the Securities except as otherwise agreed by NRF, the Issuer and the Representative; and

(q)that NRF and the Issuer will not, and will not permit any of its Affiliates to, resell any Securities that have been acquired by any of them.

6.Payment of Expenses.

(a)The Issuer and the Guarantors, jointly and severally, agree to pay all costs and expenses incident to the performance of their obligations under this Agreement, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, including expenses, fees and taxes in connection with (i) the preparation, printing and delivery to the Initial Purchasers of the Disclosure Package or any Offering Circular (including financial statements and any schedules or exhibits) and of each amendment or supplement thereto or of any Supplemental Offering Document, (ii) the preparation, issuance and delivery of the certificates for the Securities to the Initial Purchasers and the certificates for the NRE Common Stock, if any, issuable in settlement

19

thereof, including any transfer taxes, any stamp or other duties payable upon the sale, issuance and delivery of the Securities to the Initial Purchasers and any charges of DTC in connection therewith, (iii) the preparation, printing and delivery to the Initial Purchasers of this Agreement, the Indenture, the Securities and such other documents as may be required in connection with the offer, purchase, sale, issuance or delivery of the Securities, (iv) the qualification of the Securities for offering and sale under state laws that NRF, the Issuer and the Representative have mutually agreed are appropriate and the determination of their eligibility for investment under state law as aforesaid, including the legal fees and filing fees and other disbursements of counsel for the Initial Purchasers relating thereto, and the printing and furnishing of copies of any blue sky surveys or legal investment surveys to the Initial Purchasers, (v) any fees of the Financial Industry Regulatory Authority, Inc. (“FINRA”) in connection with the offering of the Securities, (vi) the fees and expenses of any outside counsel and accountants for the Issuer and the Guarantors, any trustee, paying agent, transfer agent or registrar, as applicable, for the Securities and the shares of NRE Common Stock issued in settlement thereof and miscellaneous expenses of the Issuer and the Guarantors referred to in any Offering Circular, (vii) the fees and expenses incurred in connection with the listing of the Settlement Shares, if any, on the New York Stock Exchange (the “NYSE”) or NASDAQ Global Select Market, as applicable, (viii) the costs and expenses of NRF and the Issuer for preparation of the road show materials and (ix) the performance of the Issuer’s and the Guarantors’ other obligations hereunder. The travel and accommodation expenses of the Initial Purchasers and their counsel shall not be borne by or reimbursed by the Issuer or the Guarantors. The Issuer or the Guarantors agree to reimburse the Initial Purchasers for the fees and disbursements of Hunton & Williams LLP, counsel for the Initial Purchasers, solely in connection with such firm delivering to the Initial Purchasers as of each Closing Date such firm’s opinion of counsel as to certain federal income tax matters and certain matters under the Investment Company Act, as set forth in Exhibits C-1, C-2 and D hereto.

(b)If this Agreement shall be terminated by the Representative because of any failure or refusal on the part of the Issuer and the Guarantors to comply, in all material respects, with the terms or to fulfill, in all material respects, any of the conditions of this Agreement, or if for any reason the Issuer or the Guarantors shall be unable to perform its or their obligations under this Agreement, the Issuer and the Guarantors, jointly and severally, will reimburse the Initial Purchasers for all actual out-of-pocket expenses (such as printing, facsimile, courier service, direct computer expenses, accommodations, travel and the reasonable fees and disbursements of Initial Purchasers’ counsel and any other advisors, accountants, appraisers, etc.) reasonably incurred by such Initial Purchasers in connection with this Agreement or the transactions contemplated herein.

7.Conditions of the Initial Purchasers’ Obligations.

The obligations of the Initial Purchasers to purchase and pay for the Securities shall be subject to the accuracy of the representations and warranties of the Issuer and the Guarantors in Section 3 hereof, in each case on and as of the Applicable Time and on and as of the applicable Closing Date, as if made on and as of the Applicable Time and on and as of the applicable Closing Date, to the accuracy of the statements of officers of the Issuer and the Guarantors made pursuant to the provisions hereof, to the performance by the Issuer and the Guarantors of their respective covenants and agreements hereunder and to the following additional conditions:

20

(a)At each Closing Date, the Issuer and the Guarantors shall furnish to the Initial Purchasers the opinion and disclosure letter of Sullivan & Cromwell LLP, counsel for the Issuer and the Guarantors, addressed to the Representative and dated such Closing Date, substantially in the form of Exhibit A-1 and Exhibit A-2 hereto.

(b)At each Closing Date, the Issuer and the Guarantors shall furnish to the Initial Purchasers the opinion of Venable LLP, special Maryland counsel for the Issuer and NRF, addressed to the Representative and dated such Closing Date, substantially in the form of Exhibit B hereto.

(c)On the date of this Agreement and at each Closing Date, the Initial Purchasers shall have received from Grant Thornton LLP and Ernst & Young LLP letters dated the respective dates of delivery thereof and addressed to the Representative, in form and substance satisfactory to the Representative, containing statements and information of the type specified in AU Section 634 “Letters for Underwriters and Certain other Requesting Parties” issued by the American Institute of Certified Public Accountants with respect to the consolidated financial statements of NRF and Griffin, as applicable, incorporated by reference in the Disclosure Package and the Final Circular, and certain financial information of NRF and Griffin, as applicable, incorporated by reference in the Disclosure Package and the Final Circular, and such other matters customarily covered by comfort letters issued in connection with registered public offerings; provided, that the letters delivered at the Initial Closing Date and each Option Closing Date (if applicable) shall use a “cut-off” date no more than three business days prior to such Initial Closing Date or such Option Closing Date, as the case may be.

(d)At each Closing Date, the Initial Purchasers shall have received the favorable opinion of and a negative assurance letter of Hunton & Williams LLP, counsel for the Initial Purchasers, and the favorable opinion of Cleary Gottlieb Steen & Hamilton LLP, special structuring counsel for the Initial Purchasers as to the validity of the Securities, each addressed to the Representative and each dated such Closing Date, in form and substance satisfactory to the Representative. In addition, at each Closing Date, the Initial Purchasers shall have received (i) the favorable opinions of Hunton & Williams LLP, counsel for the Initial Purchasers, as to certain federal income tax matters with respect to NRF, substantially in the form of Exhibit C-1 hereto, and as to certain federal income tax matters with respect to NRE, substantially in the form of Exhibit C-2 hereto, and (ii) the favorable opinion of Hunton & Williams LLP, counsel for the Initial Purchasers, as to certain matters relating to the Investment Company Act with respect to NRF and the Issuer, substantially in the form of Exhibit D hereto, each addressed to the Representative and dated such Closing Date.

(e)No amendment or supplement to the Disclosure Package and the Final Circular shall have been filed to which the Representative shall have objected in writing prior to the filing thereof.

(f)Between the time of execution of this Agreement and the Initial Closing Date or the Option Closing Date, if any, there shall not have been any Material Adverse Change.

21

(g)The Initial Purchasers shall have received, at the Initial Closing Date and the Option Closing Date, if any, a certificate of two of NRF’s executive officers, to the effect that:

(i)the representations and warranties of NRF in this Agreement are true and correct, as if made on and as of the Initial Closing Date and the Option Closing Date, as applicable, and the Issuer and the Guarantors have complied with all of their respective obligations hereunder and satisfied all of the conditions on their part to be performed or satisfied at or prior to the at the Initial Closing Date and the Option Closing Date, as applicable; and

(ii)subsequent to the respective dates as of which information is given in the Disclosure Package and the Final Circular, and except as may be otherwise disclosed in the Disclosure Package and the Final Circular, there has not been (A) any Material Adverse Change, (B) any transaction that is material to the Issuer, the Guarantors and their respective subsidiaries taken as a whole, (C) any obligation, direct or contingent, that is material to the Issuer, the Guarantors and their respective subsidiaries, taken as a whole, incurred by the Issuer, the Guarantors or the Subsidiaries, (D) any change in the capital stock or outstanding indebtedness of the Issuer, the Guarantors or any Subsidiary that is material to the Issuer, the Guarantors and any of their respective subsidiaries, taken as a whole, or (E) any loss or damage (whether or not insured) to the Properties which has been sustained or will have been sustained which would reasonably be expected to have a Material Adverse Effect.

(h)All corporate and partnership proceedings taken in connection with the issuance of the Securities and the transactions contemplated by this Agreement and the Indenture and all legal matters relating thereto shall be reasonably satisfactory to counsel to the Initial Purchasers and counsel to the Initial Purchasers shall have received copies of such papers and documents as they may reasonably request in connection therewith to enable them to pass upon such legal matters.

(i)The Issuer and the Guarantors shall have furnished to the Initial Purchasers such other documents and certificates as to the accuracy and completeness of any statement in the Disclosure Package and the Final Circular, the representations, warranties and statements of NRF contained herein, and the performance by the Issuer and the Guarantors of their covenants contained herein, and the fulfillment of any conditions contained herein, as of the Initial Closing Date or any Option Closing Date, as the Initial Purchasers have requested prior to the date hereof.

8.Termination.

The obligations of the several Initial Purchasers hereunder shall be subject to termination in the absolute discretion of the Representative, at any time prior to the Initial Closing Date or any Option Closing Date, (a) if any of the conditions specified in Section 7 shall not have been fulfilled when and as required by this Agreement to be fulfilled, or (b) if there has been since the respective dates as of which information is given in the Disclosure Package and Final Circular, any Material Adverse Change, or any development involving a prospective Material Adverse Change, or any material change in senior management of NRF, whether or not arising in the ordinary course of business, or (c) if there has occurred any outbreak or escalation of hostilities or other national or international calamity or crisis (including, without limitation, any terrorist or similar attack) or change in national or international economic, political or other conditions the effect of which on the financial markets of the United States is such as to make it, in the judgment of the Representative,

22

impracticable to market the Securities or enforce contracts for the sale of the Securities, or (d) if trading in any securities of NRF has been suspended by the Commission or by the NYSE, or if trading generally on the NYSE or in the NASDAQ Global Select Market has been suspended (including an automatic halt in trading pursuant to market-decline triggers, other than those in which solely program trading is temporarily halted), or limitations on prices for trading (other than limitations on hours or numbers of days of trading) have been fixed, or maximum ranges for prices for securities have been required, by such exchange or FINRA or the over-the-counter market or by order of the Commission or any other governmental authority, or (e) a general banking moratorium shall have been declared by any federal or New York authority, or (f) if there has been any downgrade in the rating of any of NRF’s debt securities or preferred stock by any “nationally recognized statistical rating organization” (as defined for purposes of Section 3(a)(62) under the Exchange Act), or (g) any federal, state, local or foreign statute, regulation, rule or order of any court or other governmental authority has been enacted, published, decreed or otherwise promulgated which, in the opinion of the Representative, materially adversely affects or will materially adversely affect the business or operations of the Consolidated Company.

If the Representative elects to terminate this Agreement as provided in this Section 8, NRF and the Issuer shall be notified promptly by telephone, promptly confirmed by facsimile.

If the sale to the Initial Purchasers of the Securities, as contemplated by this Agreement, is not carried out by the Initial Purchasers for any reason permitted under this Agreement or if such sale is not carried out because the Issuer and the Guarantors shall be unable to comply in all material respects with any of the terms of this Agreement, the Issuer and the Guarantors shall be under no obligation or liability under this Agreement (except to the extent provided in Sections 6 and 10 hereof) and the Initial Purchasers shall be under no obligation or liability to the Issuer and the Guarantors under this Agreement (except to the extent provided in Section 10 hereof).

9.Default by an Initial Purchaser.

If any one or more Initial Purchasers shall fail to purchase and pay for any of the Securities agreed to be purchased by such Initial Purchaser or Initial Purchasers hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Initial Purchasers shall be obligated severally to take up and pay for (in the respective proportions which the principal amount of Securities set forth opposite their names in Schedule I hereto bears to the aggregate principal amount of Securities set forth opposite the names of all the remaining Initial Purchasers) the Securities which the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase; provided, however, that in the event that the aggregate principal amount of Securities which the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10% of the aggregate principal amount of Securities set forth in Schedule I hereto, the remaining Initial Purchasers shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Initial Purchasers do not purchase all of the Securities, this Agreement will terminate without liability to any nondefaulting Initial Purchaser or the Issuer. In the event of a default by any Initial Purchaser as set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representative shall determine in order that the required changes in the Final Circular or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Initial Purchaser of its liability, if any, to the Issuer, the Guarantors and any nondefaulting Initial Purchaser for damages occasioned by its default hereunder.

23

10.Indemnity and Contribution by the Issuer and the Guarantors and by the Initial Purchasers.

(a)The Issuer and the Guarantors, jointly and severally, agree to indemnify, defend and hold harmless each Initial Purchaser, any person who controls the Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and any affiliate of any Initial Purchaser acting as a selling agent of such Initial Purchaser in connection with the distribution of the Securities, from and against any loss, expense, liability, damage or claim (including the reasonable cost of investigation) which, jointly or severally, any such Initial Purchaser or controlling person may incur under the Securities Act, the Exchange Act or otherwise, insofar as such loss, expense, liability, damage or claim arises out of or is based upon (1) any untrue statement or alleged untrue statement of a material fact contained in the Disclosure Package, any Supplemental Offering Document or the Final Circular (the terms Disclosure Package, Supplemental Offering Document and Final Circular for the purpose of this Section 10 being deemed to include the Preliminary Circular, the Pricing Supplement, any Supplemental Offering Document and the Final Circular as of their respective dates and as amended or supplemented by NRF and the Issuer) or (2) any omission or alleged omission to state a material fact required to be stated in the Disclosure Package, any Supplemental Offering Document (taken together with the Disclosure Package) or the Final Circular, or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; except, in the case of each of clauses (1) and (2), insofar as any such loss, expense, liability, damage or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each such case, to the extent contained in and in conformity with information furnished in writing by or on behalf of the Initial Purchaser to NRF or the Issuer expressly for use therein (that information being limited to that described in Section 10(b) hereof). The indemnity agreement set forth in this Section 10(a) shall be in addition to any liability which the Issuer and the Guarantors may otherwise have.

If any action is brought against an Initial Purchaser or controlling person in respect of which indemnity may be sought against the Issuer and the Guarantors pursuant to the foregoing paragraph of this Section 10(a), such Initial Purchaser shall promptly notify the Issuer and the Guarantors in writing of the institution of such action, and the Issuer and the Guarantors shall, if they so elect, assume the defense of such action, including the employment of counsel and payment of expenses; provided, however, that any failure or delay to so notify the Issuer and the Guarantors will not relieve the Issuer and the Guarantors of any obligation hereunder, except to the extent that their ability to defend is materially prejudiced by such failure or delay. The Initial Purchasers or controlling person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Initial Purchaser or such controlling person unless the employment of such counsel shall have been authorized in writing by the Issuer and the Guarantors in connection with the defense of such action, or the Issuer and the Guarantors shall not have employed counsel reasonably satisfactory to the Initial Purchasers or controlling person, as the case maybe, to have charge of the defense of such action within a reasonable time or such indemnified party or parties shall have reasonably concluded (based on the advice of counsel) that there may be defenses available to it or them which are different from or additional to those

24

available to the Issuer and the Guarantors (in which case neither the Issuer nor the Guarantors shall have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the Issuer and the Guarantors and paid as incurred (it being understood, however, that neither the Issuer nor the Guarantors shall be liable for the expenses of more than one separate firm of attorneys for the Initial Purchaser or controlling persons in any one action or series of related actions in the same jurisdiction (other than local counsel in any such jurisdiction) representing the indemnified parties who are parties to such action). Anything in this Section 10(a) to the contrary notwithstanding, neither the Issuer nor the Guarantors shall be liable for any settlement of any such claim or action effected without their written consent.

(b)The Initial Purchasers agree, severally and not jointly, to indemnify, defend and hold harmless the Issuer, the Guarantors, their officers and directors and any person who controls the Issuer or a Guarantor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any loss, expense, liability, damage or claim (including the reasonable cost of investigation) which, jointly or severally, the Issuer, the Guarantors or any such person may incur under the Securities Act, the Exchange Act or otherwise, insofar as such loss, expense, liability, damage or claim arises out of or is based upon (1) any untrue statement or alleged untrue statement of a material fact contained in the Disclosure Package, any Supplemental Offering Document or the Final Circular (the terms Disclosure Package, Supplemental Offering Document and Final Circular for the purpose of this Section 10 being deemed to include the Preliminary Circular, the Pricing Supplement, any Supplemental Offering Document and the Final Circular as of their respective dates and as amended or supplemented by NRF and the Issuer) or (2) any omission or alleged omission to state a material fact required to be stated in the Disclosure Package, any Supplemental Offering Document or Final Circular, or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading, but in each case only insofar as such untrue statement or alleged untrue statement or omission or alleged omission was made in the Disclosure Package, any Supplemental Offering Document or the Final Circular in reliance upon and in conformity with information furnished in writing by or on behalf of the Initial Purchasers to NRF or the Issuer expressly for use therein. The statements set forth in the first sentence of the third paragraph, the fourth sentence of the sixth paragraph, and the ninth, tenth and fourteenth paragraphs under the caption “Plan of Distribution” in the Preliminary Circular and the Final Circular (to the extent such statements relate to the Initial Purchasers) constitute the only information furnished by or on behalf of any Initial Purchaser to NRF or the Issuer for purposes of Section 3(a)(i) hereof and this Section 10. The indemnity agreement set forth in this Section 10(b) shall be in addition to any liabilities that such Initial Purchaser may otherwise have.

If any action is brought against the Issuer, the Guarantors or any such person in respect of which indemnity may be sought against any Initial Purchaser pursuant to the foregoing paragraph, the Issuer, the Guarantors or such person shall promptly notify the Representative in writing of the institution of such action and the Initial Purchasers shall if they so elect assume the defense of such action, including the employment of counsel and payment of expenses; provided, however, that any failure or delay to so notify the Representative will not relieve the Initial Purchasers of any obligation hereunder, except to the extent that the Initial Purchasers’ ability to defend is materially prejudiced by such failure or delay. The Issuer, the Guarantors or such person shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Issuer, the Guarantors or such person unless the

25

employment of such counsel shall have been authorized in writing by the Representative in connection with the defense of such action or the Initial Purchasers shall not have employed counsel reasonably satisfactory to the Issuer, the Guarantors or such person, as the case may be, to have charge of the defense of such action within a reasonable time or such indemnified party or parties shall have reasonably concluded (based on the advice of counsel) that there may be defenses available to it or them which are different from or additional to those available to the Initial Purchasers (in which case the Initial Purchasers shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by such Initial Purchaser and paid as incurred (it being understood, however, that the Initial Purchasers shall not be liable for the expenses of more than one separate firm of attorneys in any one action or series of related actions in the same jurisdiction (other than local counsel in any such jurisdiction) representing the indemnified parties who are parties to such action). Anything in this paragraph to the contrary notwithstanding, no Initial Purchaser shall be liable for any settlement of any such claim or action effected without the written consent of such Initial Purchaser.

(c)If the indemnification provided for in this Section 10 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) and (b) of this Section 10 in respect of any losses, expenses, liabilities, damages or claims referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, expenses, liabilities, damages or claims (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuer and the Guarantors, taken as a whole, on the one hand, and by the Initial Purchasers, on the other, each from the offering of the Securities, or (ii) if (but only if) the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Issuer and the Guarantors, taken as a whole, on the one hand, and of the Initial Purchasers, on the other, in connection with the statements or omissions which resulted in such losses, expenses, liabilities, damages or claims, as well as any other relevant equitable considerations. The relative benefits received by the Issuer and the Guarantors, taken as a whole, shall be deemed to be equal to the gross proceeds from the offering of Securities (before deducting discounts and expenses) received by the Issuer and the benefits received by the Initial Purchasers shall be deemed to be equal to the discounts and commissions received by the Initial Purchasers. The relative fault of the Issuer and the Guarantors, taken as a whole, on the one hand, and of the Initial Purchasers, on the other, shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Issuer and the Guarantors, or by the Initial Purchasers, respectively, and the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any claim or action.

(d)The Issuer and the Guarantors and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in clause (i) and, if applicable, clause (ii) of Section 10(c) above. Notwithstanding the provisions of this

26

Section 10, no Initial Purchaser shall be required to contribute any amount in excess of the discounts and commissions applicable to the Securities purchased by such Initial Purchaser. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute pursuant to this Section 10 are several in proportion to their respective commitments and not joint.

(e)The provisions of this Section shall not affect any agreement between the Issuer and the Guarantors with respect to indemnification.

11.Survival.

The indemnity and contribution agreements contained in Section 10 hereof and the covenants, warranties and representations contained in Sections 3, 4, 5 and 6 of this Agreement shall (i) remain in full force and effect regardless of any investigation made by or on behalf of the Initial Purchasers, or any person who controls the Initial Purchasers within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on behalf of the Issuer, the Guarantors, their directors and officers or any person who controls the Issuer or a Guarantor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and (ii) survive any termination of this Agreement or the sale, delivery and payment of the Securities. The Issuer, the Guarantors and each Initial Purchaser agree promptly to notify the others of the commencement of any litigation or proceeding against it and, in the case of the Issuer and the Guarantors, against any of their respective officers and directors, in connection with the sale and delivery of the Securities, or in connection with the Offering Circular.

12.Duties.

Nothing in this Agreement shall be deemed to create a partnership, joint venture or agency relationship between the parties. The Initial Purchasers undertake to perform such duties and obligations only as expressly set forth herein. Such duties and obligations of the Initial Purchasers with respect to the Securities shall be determined solely by the express provisions of this Agreement, and the Initial Purchasers shall not be liable except for the performance of such duties and obligations with respect to the Securities as are specifically set forth in this Agreement. The Issuer and the Guarantors acknowledge that the Initial Purchasers disclaim any implied duties (including any fiduciary duty), covenants or obligations arising from the Initial Purchasers’ performance of the duties and obligations expressly set forth herein.

13.Notices.

Except as otherwise herein provided, all statements, requests, notices and agreements shall be in writing or by telegram and, if to the Initial Purchasers or the Representative, shall be sufficient in all respects if delivered to Deutsche Bank Securities Inc., 60 Wall Street, 4th Floor, New York, New York 10005, Attention: Equity Capital Markets — Syndicate Desk, fax: (212) 797-9344, with a copy to Deutsche Bank Securities Inc., 60 Wall Street, 36th Floor, New York, New York 10005, Attention: General Counsel, fax: (212) 797-4564; or if to the Issuer or the Guarantors, shall be sufficient in all respects if delivered to NRF at the offices of NRF at 399 Park Avenue, 18th Floor, New York, New York 10022, Attention: General Counsel.

14.Governing Law; Headings.

27

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement.

15.Waiver of Jury Trial.

Each of the Issuer and the Guarantors hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

16.No Fiduciary Duty.

The Issuer and the Guarantors hereby acknowledge that (a) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between Issuer and the Guarantors on the one hand, and the Initial Purchasers and any affiliate through which they may be acting, on the other, (b) the Initial Purchasers are acting as principal and not as agents or fiduciaries of the Issuer or the Guarantors and (c) the engagement by the Issuer and the Guarantors of the Initial Purchasers in connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, Issuer and the Guarantors agree that the Issuer and the Guarantors are solely responsible for making their own judgments in connection with the offering (irrespective of whether any of the Initial Purchasers has advised or is currently advising the Issuer or the Guarantors on related or other matters). The Issuer and the Guarantors agree that they will not claim that the Initial Purchasers have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Issuer and the Guarantors, in connection with such transaction or the process leading thereto.

17.Integration.

Except as set forth herein, this Agreement supersedes all prior agreements and understandings (whether written or oral) among the Issuer, the Guarantors and the Initial Purchasers, or any of them, with respect to the subject matter hereof.

18.Parties at Interest.

The Agreement herein set forth has been and is made solely for the benefit of the Initial Purchasers, the Issuer, the Guarantors and the controlling persons, directors and officers referred to in Sections 10 and 11 hereof, and their respective successors, assigns, executors and administrators. No other person, partnership, association or corporation (including a purchaser, as such purchaser, from any of the Initial Purchasers) shall acquire or have any right under or by virtue of this Agreement.

19.Counterparts and Facsimile Signatures.

This Agreement may be signed by the parties in counterparts, which together shall constitute one and the same agreement among the parties. A facsimile signature shall constitute an original signature for all purposes.

28

If the foregoing correctly sets forth the understanding among the Issuer, the Guarantors and the Representative, on behalf of the Initial Purchasers, please so indicate in the space provided below for the purpose, whereupon this Agreement shall constitute a binding agreement among the Issuer, the Guarantors and the Initial Purchasers.

Very truly yours,
NORTHSTAR REALTY EUROPE CORP.
By:	/s/ Ronald J. Lieberman
Name:	Ronald J. Lieberman
Title:	Executive Vice President and General Counsel

NORTHSTAR REALTY FINANCE CORP.
By:	/s/ Ronald J. Lieberman
Name:	Ronald J. Lieberman
Title:	Executive Vice President and General Counsel

NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP
By:	NorthStar Realty Finance Corp., its general partner
By:	/s/ Ronald J. Lieberman
Name:	Ronald J. Lieberman
Title:	Executive Vice President and General Counsel

[Signature Page to Purchase Agreement]

Accepted and agreed to as

of the date first above written:

DEUTSCHE BANK SECURITIES INC.

Acting on behalf of itself and as representative of the several Initial Purchasers

By: /s/ Paul Stowell_____

   Name: Paul Stowell

   Title: Managing Director

By: /s/ Faiz Khan_______

   Name: Faiz Khan

   Title: Managing Director

[Signature Page to Purchase Agreement]

SCHEDULE I

Initial Purchasers	Aggregate Principal Amount of Firm Securities to be Purchased
Deutsche Bank Securities Inc. Wells Fargo Securities, LLC Citigroup Global Markets Inc.	$210,000,000 $60,000,000 $30,000,000
Total		$300,000,000

EX-23.3

Exhibit 23.3

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT

We consent to the inclusion in this Registration Statement of NorthStar Realty Europe Corp. on Form S-11 of our report dated July 2, 2015, with respect to our audits of the combined balance sheets of NorthStar Europe Predecessor as of December 31, 2014 and 2013, and the related combined statements of operations, comprehensive income (loss) and cash flows for the periods from January 1, 2014 through September 15, 2014 and September 16, 2014 through December 31, 2014, and the year ended December 31, 2013, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.

/s/ Marcum LLP

Marcum LLP

Bala Cynwyd, PA

August 19, 2015

EX-23.4

Exhibit 23.4

Consent of Independent Accountants

NorthStar Realty Europe Corp.

We hereby consent to the use in this Registration Statement on Form S-11 of NorthStar Realty Europe Corp. of our report dated 30 June 2015 relating to the combined statement of revenues and certain expenses of SEB Portfolio, which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ PricewaterhouseCoopers, Société cooperative

PricewaterhouseCoopers, Société cooperative

Luxembourg

18 August 2015

EX-23.5

Exhibit 23.5

Consent of Independent Auditors

We consent to the reference to our firm under the caption "Experts" and to the use of our report dated June 30, 2015 with respect to the combined statement of revenues and certain expenses (Historical Summary) of the Trianon Tower, in the Registration Statement (Form S-11) and related Prospectus of NorthStar Realty Europe Corp. for the registration of shares of its common stock.

Eschborn/Frankfurt am Main, Germany

17 August 2015

Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft

/s/ Enzenhofer    /s/ Helms

Wirtschaftsprüfer    Wirtschaftsprüfer

(German Public Auditor)    (German Public Auditor)