10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

(Mark One)
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2017
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number: 001-37597

NORTHSTAR REALTY EUROPE CORP.

(Exact Name of Registrant as Specified in its Charter)

Maryland (State or Other Jurisdiction of Incorporation or Organization) 32-0468861 (IRS Employer Identification No.)

590 Madison Avenue, 34th Floor, New York, NY 10022

(Address of Principal Executive Offices, Including Zip Code)

(212) 547-2600

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Class	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x     No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o   No x

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Annual Report on Form 10-K or any amendment to this Annual Report on Form 10-K. x

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

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

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

The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2017, was $688,237,787. As of March 8, 2018, the registrant had issued and outstanding 55,410,367 shares of common stock, $0.01 par value per share.

DOCUMENTS INCORPORATED BY REFERENCE

None.

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A (“Amendment No. 1”) to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2017 (the “Original Annual Report”) is being filed solely to revise the Report of Independent Registered Public Accounting Firm related to PricewaterhouseCoopers, Société coopérative’s (“PwC”) opinion contained in Part II, Item 8 of the Original Annual Report to include the sentence “We have served as the Company’s auditor since 2015.” The change to add the sentence to the filed copy of PwC’s audit report in this Amendment No. 1, does not affect PwC’s unqualified opinion on the registrant’s financial statements previously expressed in the Original Audit Report.

As required by the Rule 12b-15 promulgated under the Securities Exchange Act of 1934, as amended, in this Amendment No. 1 the registrant has included the entire text of Part II, Item 8 and new certifications of its Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1 and 32.2) and a new Consent of PwC in Part IV, Item 15.

Except as set forth above, no changes have been made to the Original Annual Report, and this Amendment No. 1 does not amend, modify or update the disclosures in the Original Annual Report in any way.

Item 8.    Financial Statements and Supplementary Data

The consolidated financial statements of NorthStar Realty Europe Corp. and the notes related to the foregoing combined consolidated financial statements, together with the independent registered public accounting firm’s reports thereon are included in this Item 8.

Index to Consolidated Financial Statements

	Page
Reports of Independent Registered Public Accounting Firm	4
Consolidated Balance Sheets as of December 31, 2017 and 2016	5
Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015	6
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017, 2016 and 2015	7
Consolidated Statements of Equity for the years ended December 31, 2017, 2016 and 2015	8
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015	9
Notes to Consolidated Financial Statements	11
Schedule III - Real Estate and Accumulated Depreciation as of December 31, 2017	41

3

Report of Independent Registered Public Accounting Firm

To theBoard of Directors and Stockholders of

NorthStar Realty Europe Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of NorthStar Realty Europe Corp. and its subsidiaries as of December 31, 2017 and December 31, 2016, and the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2017, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and December 31, 2016, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2017 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/PricewaterhouseCoopers, Société coopérative Luxembourg, March 13, 2018

Represented by

Cornelis. J. Hage

We have served as the Company’s auditor since 2015.

4

NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

	December 31, 2017			December 31, 2016
Assets
Operating real estate, gross	$	1,606,890		$	1,614,432
Less: accumulated depreciation	(95,356		)	(63,585		)
Operating real estate, net	1,511,534			1,550,847
Preferred equity investments	35,347			—
Cash and cash equivalents	64,665			66,308
Restricted cash	6,917			10,242
Receivables, net of allowance of $747 and $553 as of December 31, 2017 and December 31, 2016, respectively	9,048			6,015
Assets held for sale	169,082			28,208
Derivative assets, at fair value	7,024			13,729
Intangible assets, net	114,185			148,403
Other assets, net	23,115			21,640
Total assets	$	1,940,917		$	1,845,392
Liabilities
Mortgage and other notes payable, net	$	1,223,443		$	1,149,119
Accounts payable and accrued expenses	27,240			28,004
Due to related party (refer to Note 6)	3,590			4,991
Derivative liabilities, at fair value	5,270			—
Intangible liabilities, net	28,632			30,802
Liabilities related to assets held for sale	648			2,041
Other liabilities	25,757			28,918
Total liabilities	1,314,580			1,243,875
Commitments and contingencies
Redeemable non controlling interest (refer to Note 9)	1,992			1,610
Equity
NorthStar Realty Europe Corp. Stockholders’ Equity
Preferred stock, $0.01 par value, 200,000,000 shares authorized, no shares issued and outstanding as of December 31, 2017 and December 31, 2016	—			—
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 55,402,259 and 55,395,143 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively	555			554
Additional paid-in capital	940,579			925,473
Retained earnings (accumulated deficit)	(347,053		)	(282,769		)
Accumulated other comprehensive income (loss)	25,618			(51,424		)
Total NorthStar Realty Europe Corp. stockholders’ equity	619,699			591,834
Non-controlling interests	4,646			8,073
Total equity	624,345			599,907
Total liabilities, redeemable non controlling interest and equity	$	1,940,917		$	1,845,392

Refer to accompanying notes to consolidated financial statements.

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NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Data)

	Years Ended December 31,
	2017			2016			2015(2)
Revenues
Rental income	$	105,349		$	124,321		$	101,023
Escalation income	21,625			25,173			18,822
Interest income	1,706			—			—
Other income	1,243			1,721			694
Total revenues	129,923			151,215			120,539
Expenses
Properties - operating expenses	31,119			35,892			26,559
Interest expense	25,844			41,439			36,129
Transaction costs	6,117			2,610			120,101
Impairment losses	—			27,468			1,710
Management fee, related party	14,408			14,068			2,333
Other expenses	9,251			12,376			10,535
General and administrative expenses	7,384			8,077			3,502
Compensation expense (1)	23,768			19,257			850
Depreciation and amortization	54,014			64,979			56,283
Total expenses	171,905			226,166			258,002
Other income (loss)
Unrealized gain (loss) on derivatives and other (refer to Note 10)	(12,863		)	(11,257		)	(8,731		)
Realized gain (loss) on sales and other	22,367			26,448			1,376
Income (loss) before income tax benefit (expense)	(32,478		)	(59,760		)	(144,818		)
Income tax benefit (expense)	2,145			(2,742		)	675
Net income (loss)	(30,333		)	(62,502		)	(144,143		)
Net (income) loss attributable to non controlling interests	(792		)	749			1,007
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	$	(31,125	)	$	(61,753	)	$	(143,136	)
Earnings (loss) per share:
Basic	$	(0.57	)	$	(1.07	)	$	(2.30	)
Diluted	$	(0.57	)	$	(1.07	)	$	(2.30	)
Weighted average number of shares:
Basic	55,073,383			57,875,479			62,183,638
Diluted	55,599,222			58,564,986			62,865,124

____________________

(1) Compensation expense for the years endedDecember 31, 2017, 2016 and 2015 is comprised of equity-based compensation expenses. For the year endedDecember 31, 2017, compensation expense includes the impact of substantially all time based and certain performance based awards vesting in connection with the change of control of the Manager (refer to Note 7).

(2) The Company began paying fees on November 1, 2015, in connection with the management agreement with the Manger (refer to Note 6).

Refer to accompanying notes to consolidated financial statements.

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NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

	Years Ended December 31,
	2017			2016			2015
Net income (loss)	$	(30,333	)	$	(62,502	)	$	(144,143	)
Other comprehensive income (loss):
Foreign currency translation adjustment, net	77,745			(55,226		)	6,971
Total other comprehensive income (loss)	77,745			(55,226		)	6,971
Comprehensive income (loss)	47,412			(117,728		)	(137,172		)
Comprehensive (income) loss attributable to non-controlling interests	(1,495		)	1,991			1,082
Comprehensive income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	$	45,917		$	(115,737	)	$	(136,090	)

Refer to accompanying notes to consolidated financial statements.

7

NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars and Shares in Thousands)

	Common Stock					Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Income (Loss)			Total NorthStar Stockholders’ Equity			Non-controlling Interests			Total Equity
	Shares		Amount
Balance as of December 31, 2014	—		$	—		$	116,982		$	(33,630	)	$	(4,336	)	$	79,016		$	1,058		$	80,074
Net transaction with NorthStar Realty	—		—			653,534			—			—			653,534			—			653,534
Capital contribution of NorthStar Realty	62,988		630			249,370			—			—			250,000			—			250,000
Non-controlling interests - contribution	—		—			—			—			—			—			192			192
Formation of Operating Partnership (refer to note 9)	—		—			(8,749		)	—			—			(8,749		)	8,749			—
Reallocation of interest in Operating Partnership (refer to Note 9)	—		—			(852		)	—			—			(852		)	852			—
Amortization of equity-based compensation	—		—			311			—			—			311			526			837
Issuance and vesting of restricted stock, net of tax withholding	18		—			—			—			—			—			—			—
Tax withholding related to vesting of equity-based compensation	—		—			(547		)	—			—			(547		)	—			(547		)
Retirement of shares of common stock	(3,680	)	(37		)	(41,387		)	—			—			(41,424		)	—			(41,424		)
Other comprehensive income (loss)	—		—			—			—			6,896			6,896			75			6,971
Dividends on common stock and equity-based compensation	—		—			—			(9,480		)	—			(9,480		)	(104		)	(9,584		)
Net income (loss)	—		—			—			(143,136		)	—			(143,136		)	(1,175		)	(144,311		)
Balance as of December 31, 2015	59,326		593			968,662			(186,246		)	2,560			785,569			10,173			795,742
Reallocation of interest in Operating Partnership (refer to Note 9)	—		—			2,252			—			—			2,252			(2,252		)	—
Amortization of equity-based compensation	—		—			15,682			—			—			15,682			2,557			18,239
Issuance and vesting of restricted stock, net of tax withholding	1,731		17			(17		)	—			—			—			—			—
Tax withholding related to vesting of equity-based compensation	—		—			(2,546		)	—			—			(2,546		)	—			(2,546		)
Retirement of shares of common stock	(5,662	)	(56		)	(58,560		)	—			—			(58,616		)	—			(58,616		)
Other comprehensive income (loss)	—		—			—			—			(53,984		)	(53,984		)	(1,242		)	(55,226		)
Dividends on common stock and equity-based compensation	—		—			—			(34,770		)	—			(34,770		)	(414		)	(35,184		)
Net income (loss)	—		—			—			(61,753		)	—			(61,753		)	(749		)	(62,502		)
Balance as of December 31, 2016	55,395		554			925,473			(282,769		)	(51,424		)	591,834			8,073			599,907
Reallocation of interest in Operating Partnership (refer to Note 9)	—		—			1,817			—			—			1,817			(1,817		)	—
Non-controlling interests - distribution	—		—			—			—			—			—			(1,915		)	(1,915		)
Non-controlling interests - redemption	—		—			(156		)	—			—			(156		)	—			(156		)
Conversion of Common Units to common stock (refer to Note 9)	268		3			3,054			—			—			3,057			(3,057		)	—
Conversion of RSUs to common stock (refer to Note 8)	83		1			(1		)	—			—			—			—			—
Amortization of equity-based compensation (refer to Note 7)	—		—			21,433			—			—			21,433			2,174			23,607
Issuance and vesting of restricted stock, net of tax withholding	517		6			(6		)	—			—			—			—			—
Cost of capital	—		—			(50		)	—			—			(50		)	—			(50		)
Tax withholding related to vesting of equity-based compensation	(861	)	(9		)	(10,985		)	—			—			(10,994		)	—			(10,994		)
Other comprehensive income (loss)	—		—			—			—			77,042			77,042			703			77,745
Dividends on common stock and equity-based compensation	—		—			—			(33,159		)	—			(33,159		)	(307		)	(33,466		)
Net income (loss)	—		—			—			(31,125		)	—			(31,125		)	792			(30,333		)
Balance as of December 31, 2017	55,402		$	555		$	940,579		$	(347,053	)	$	25,618		$	619,699		$	4,646		$	624,345

Refer to accompanying notes to consolidated financial statements.

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NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

	Years Ended December 31,
	2017			2016			2015
Cash flows from operating activities:
Net income (loss)	$	(30,333	)	$	(62,502	)	$	(144,143	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	54,014			64,979			56,283
Amortization of deferred financing costs	2,813			7,117			5,936
Amortization of equity-based compensation	23,731			18,239			837
Allowance for uncollectible accounts	1,481			1,294			115
Unrealized (gain) loss on derivatives and other	12,863			11,257			8,669
Realized (gain) loss on sales and other	(22,367		)	(26,448		)	(1,376		)
Goodwill impairment losses	—			—			1,710
Real estate impairment losses	—			27,468			—
Foreign currency loss on deposits included in transaction costs	—			—			6,402
Amortization of capitalized above/below market leases	627			2,463			1,191
Straight line rental income	(6,314		)	(6,705		)	(5,695		)
Deferred income taxes, net	(1,515		)	(4,952		)	(2,992		)
Changes in assets and liabilities:
Restricted cash	3,199			(2,717		)	(16,483		)
Receivables	(2,077		)	(1,890		)	(7,844		)
Other assets	(15		)	(3,063		)	(1,023		)
Accounts payable and accrued expenses	(6,018		)	(4,461		)	28,551
Due to related party	(1,401		)	987			3,447
Other liabilities	(3,516		)	7,064			16,235
Net cash provided by (used in) operating activities	25,172			28,130			(50,180		)
Cash flows from investing activities:
Acquisition of operating real estate	—			—			(1,921,511		)
Improvements of operating real estate	(17,668		)	(10,413		)	(3,003		)
Origination of preferred equity investments	(35,347		)	—			—
Proceeds from sale of operating real estate	141,360			395,226			22,623
Other assets	(141		)	(4,432		)	—
Deferred leasing costs	(3,712		)	—			—
Changes in restricted cash	—			11,243			1,359
Net cash provided by (used in) investing activities	84,492			391,624			(1,900,532		)
Cash flows from financing activities:
Repayment of mortgage and other notes payable	(77,804		)	(200,666		)	(127,280		)
Borrowings from credit facility	35,000			65,000			—
Borrowings from mortgage and other notes payable	5,649			11,770			1,224,327
Repayment of credit facility	(35,000		)	(65,000		)	—
Proceeds of issuance of Senior Notes	—			—			340,000
Repurchase of Senior Notes	—			(273,028		)	—
Repayment of Senior Notes	—			(67,200		)	—
Payment of financing costs	(2,020		)	(3,938		)	(33,470		)
Purchase of derivative instruments	—			(414		)	(31,069		)
Settlement of derivatives	979			(787		)	—
Tax withholding related to vesting of equity-based compensation	(10,994		)	(2,546		)	—
Repurchase of common stock	—			(58,616		)	(38,082		)
Contribution of NorthStar Realty	—			—			250,000
Dividends	(33,466		)	(35,184		)	(9,584		)
Net transactions with NorthStar Realty	—			—			653,534
Contributions from non-controlling interest	—			—			3,190
Distributions to non-controlling interest	(1,915		)	(247		)	—
Net cash provided by (used in) financing activities	(119,571		)	(630,856		)	2,231,566
Effect of foreign currency translation on cash and cash equivalents	8,264			(6,434		)	890
Net increase (decrease) in cash and cash equivalents	(1,643		)	(217,536		)	281,744
Cash and cash equivalents—beginning of period	66,308			283,844			2,100
Cash and cash equivalents—end of period	$	64,665		$	66,308		$	283,844

Refer to accompanying notes to consolidated financial statements.

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NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands) (Continued)

	Years Ended December 31,
	2017		2016		2015
Supplemental disclosure of non-cash investing and financing activities:
Reclassification of operating real estate to assets held for sale	$	160,651	$	22,327	$	5,318
Conversion of Common Units to common stock	3,057		—		—
Reclassification of intangibles to assets and liabilities held for sale	4,467		2,045		776
Reclassification of operating real estate to intangible assets/liabilities	—		—		170,694
Reclassification of other assets in investing activities to assets held for sale	—		2,523		—
Formation of Operating Partnership	—		—		8,749
Assumption of mortgage note payable upon acquisition	—		—		273,021
Reclassification of other assets to operating real estate	—		—		52,245
Reclassification of other assets and liabilities to assets held for sale	3,316		740		—
Reclassification related to measurement adjustments/other	—		827		5,291
Retirement of shares of common stock	—		—		3,342
Assumption of working capital items upon acquisition	—		—		2,569
Assumption of deferred tax liabilities and corresponding goodwill	—		—		24,491
Reallocation of interest in Operating Partnership	1,817		2,252		852
Amounts payable relating to financing costs	—		—		1,808
Accrued capital expenditures and deferred assets	2,609		1,975		692
Supplemental disclosures of cash flow information:
Payment of interest expense	$	22,251	$	33,483	$	24,273
Payment of income tax	4,433		1,928		1,298

Refer to accompanying notes to consolidated financial statements.

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NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Formation and Organization

NorthStar Realty Europe Corp. (“NorthStar Europe” or the “Company”) (NYSE: NRE), a publicly-traded real estate investment trust (“REIT”), is a European focused commercial real estate company with predominantly prime office properties in key cities within Germany, the United Kingdom and France. The Company commenced operations on November 1, 2015 following the spin-off by NorthStar Realty Finance Corp. (“NorthStar Realty”) of its European real estate business (excluding its European healthcare properties) into a separate publicly-traded company, NorthStar Realty Europe Corp., a Maryland corporation (the “Spin-off”). The Company’s objective is to provide its stockholders with stable and recurring cash flow supplemented by capital growth over time.

The Company is externally managed and advised by an affiliate of the Manager. References to “the Manager” refer to NorthStar Asset Management Group Inc. (“NSAM”) for the period prior to the Mergers (refer below) and Colony NorthStar, Inc. (“Colony NorthStar” or “CLNS”), for the period subsequent to the Mergers. As part of the Mergers, NSAM changed its name to Colony NorthStar, Inc.

Substantially all of the Company’s assets, directly or indirectly, are held by, and the Company conducts its operations, directly or indirectly, through NorthStar Realty Europe Limited Partnership, a Delaware limited partnership and the operating partnership of the Company (the “Operating Partnership”). The Company has elected to be taxed, and will continue to conduct its operations so as to continue to qualify, as a REIT for U.S. federal income tax purposes.

All references herein to the Company refer to NorthStar Realty Europe Corp. and its consolidated subsidiaries, including the Operating Partnership, collectively, unless the context otherwise requires.

Merger Agreements among NSAM, NorthStar Realty and Colony Capital, Inc.

On January 10, 2017, the Company’s external manager, NSAM, completed a tri-party merger with NorthStar Realty and Colony Capital, Inc. (“Colony”), pursuant to which the companies combined in an all-stock merger (“the Mergers”) of equals transaction to create a diversified real estate and investment management company. Under the terms of the merger agreement, NSAM, Colony and NorthStar Realty, through a series of transactions, merged with and into NSAM, which was renamed Colony NorthStar (NYSE: CLNS). Colony NorthStar is a leading global equity REIT with an embedded investment management platform.

Amended and Restated Management Agreement

On November 9, 2017, the Company entered into an amended and restated management agreement (the “Amended and Restated Management Agreement”) with an affiliate of our Manager, effective as of January 1, 2018. Refer to Note 6 “Related Party Arrangements” for a description of the terms of the Amended and Restated Management Agreement.

2. Summary of Significant Accounting Policies

Basis of Accounting

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

The consolidated financial statements for the period January 1, 2015 to October 31, 2015 represent the Company’s activity prior to the spin-off by NorthStar Realty of its European real estate business (the “Spin-off”) and reflects the revenues and direct expenses of the Company and include material assets and liabilities of NorthStar Realty that are specifically identifiable to the European real estate business and contributed to the Company upon completion of the Spin-off.

The consolidated financial statements for the period prior to the Spin-off include an allocation of costs and expenses by NorthStar Realty related to the Company (primarily compensation and other general and administrative expense) based on an estimate of expenses as if the Company was managed as an independent entity. This allocation method is principally based on relative headcount and management’s knowledge of the operations of the Company. The amounts allocated in the accompanying consolidated 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 the Manager of $0.3 million for the period from January 1, 2015 through the Spin-off are recorded as if the Company was managed as an independent entity and is included in general and administrative expense in the consolidated statements of operations. The Company began paying management fees to the Manager on November 1, 2015 pursuant to the terms of the Company’s management agreement with the Manager (refer to Note 6).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, the Operating Partnership and their consolidated subsidiaries. The Company consolidates variable interest entities (“VIE”) where the Company is the primary beneficiary and voting interest entities which are generally majority owned or otherwise controlled by the Company. All significant intercompany balances are 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 for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. The Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity. The Company reassesses its initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events.

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

The Company will evaluate its investments to determine whether they are a VIE. The Company analyzes 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 the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company does not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party or through a simple majority vote.

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

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 consolidated balance sheets and presented separately as net income (loss) and other comprehensive income (loss) (“OCI”) attributable to 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.

Reclassifications

Certain prior period amounts have been reclassified in the consolidated financial statements to conform to current period presentation including the gain (loss) on net cash on derivatives from unrealized gain (loss) on derivatives and other to realized gain (loss) on sales and other on the consolidated statements of operations for the year ended December 31, 2017 (refer to Note 10).

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Estimates

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

Comprehensive Income (Loss)

The Company reports consolidated comprehensive income (loss) in separate statements following the consolidated statements of operations. Comprehensive income (loss) is defined as the change in equity resulting from net income (loss) and OCI. The components of OCI principally include the foreign currency translation adjustment, net.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with an original maturity date of three months or less and deposits held with third parties that are readily convertible to cash to be cash equivalents. Cash, including amounts restricted at certain banks and financial institutions, may at times exceed insurable amounts. The Company seeks to mitigate credit risk by placing cash and cash equivalents with major financial institutions. To date, the Company has not experienced any losses on cash and cash equivalents. Cash and cash equivalents exclude escrow arrangements entered into for specific warranties in relation to the real estate sales which are recorded in other assets in the consolidated financial statements.

Restricted Cash

Restricted cash primarily consists of amounts related to operating real estate such as escrows for taxes, insurance, capital expenditures, tenant security deposits and payments required under certain lease agreements and amounts related to the Company’s borrowings.

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 improvements which 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.

The Company accounts for purchases of operating real estate that qualify as business combinations using the acquisition method, where the purchase price is allocated to tangible assets such as land, building, tenant and land improvements and other identified intangibles, such as in-place leases, above/below-market leases and goodwill. Costs directly related to an acquisition deemed to be a business combination are expensed and included in transaction costs in the consolidated statements of operations.

Operating real estate is depreciated using the straight-line method over the estimated useful lives of the assets, summarized as follows:

Category:	Term:
Building	40 years
Building improvements	Lesser of the useful life or remaining life of the building
Building leasehold interests	Lesser of 40 years or remaining term of the lease
Tenant improvements	Lesser of the useful life or remaining term of the lease

Minimum rental amounts due under tenant leases are generally subject to scheduled adjustments. The following table presents approximate future minimum rental income under noncancelable operating leases to be received over the next five years and thereafter as of December 31, 2017 (dollars in thousands):

Years Ending December 31:(1)
2018	$	97,703
2019	100,373
2020	85,284
2021	74,694
2022	66,468
Thereafter	198,745
Total	$	623,267

_________________________

(1)    Translated to the U.S. dollar using the currency exchange rate as of December 31, 2017.

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Preferred Equity Investments

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

Assets and Related Liabilities Held For Sale

Operating real estate which has met the criteria to be classified as held for sale is separately presented on the consolidated 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 net of the intangible assets associated with the asset, with any write-down to fair value less cost to sell recorded as an impairment loss. Once a property is determined to be held for sale, depreciation and amortization is no longer recorded. The Company records a gain or loss on sale of real estate when title is conveyed to the buyer and the Company has no substantial economic involvement with the property. If the sales criteria for the full accrual method are not met, the Company defers some or all of the gain or loss recognition by applying the finance, leasing, profit sharing, deposit, installment or cost recovery method, as appropriate, until the sales criteria are met.

Deferred Costs

Deferred costs primarily include deferred financing costs and deferred lease costs. Deferred financing costs represent commitment fees, legal and other third-party costs associated with obtaining financing. Costs related to revolving credit facilities are recorded in other assets and are amortized to interest expense using the straight-line basis over the term of the facility. Costs related to other borrowings are recorded net against the carrying value of such borrowings and are amortized into interest expense using 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 to realized gain (loss) on sales and other. Costs incurred in seeking financing transactions, which do not close, are expensed in the period in which it is determined that the financing will not occur. 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 are recorded to depreciation and amortization in the consolidated statements of operations.

Intangible Assets and Intangible Liabilities

The Company records acquired identified intangibles, which includes intangible assets (such as value of the above-market leases, in-place leases, below-market ground leases, goodwill 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 net to rental income, the value of below-market ground leases is amortized into properties - operating expense and in-place leases is amortized into depreciation and amortization expense, respectively, in the consolidated statements of operations on a straight-line basis over the respective remaining lease term.

Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination and is not amortized. The Company analyzes goodwill for impairment on an annual basis and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be fully recoverable. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit, related to such goodwill, is less than the carrying amount as a basis to determine whether the two-step impairment test is necessary. The first step in the impairment test compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds fair value, the second step is required to determine the amount of the impairment loss, if any, by comparing the implied fair value of the reporting unit goodwill with the carrying amount of such goodwill. The implied fair value of goodwill is derived by performing a hypothetical purchase price allocation for the reporting unit as of the measurement date, allocating the reporting unit’s estimated fair value to its net assets and identifiable intangible assets. The residual amount represents the implied fair value of goodwill. To the extent this amount is below the carrying value of goodwill, an impairment loss is recorded in the consolidated statements of operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents identified intangibles as of December 31, 2017 and 2016 (dollars in thousands):

	December 31, 2017(1)							December 31, 2016(1)
	Gross Amount		Accumulated Amortization			Net		Gross Amount		Accumulated Amortization			Net
Intangible assets:
In-place lease	$	64,427	$	(24,290	)	$	40,137	$	80,924	$	(25,193	)	$	55,731
Above-market lease	34,882		(9,919		)	24,963		36,471		(7,965		)	28,506
Below-market ground lease	34,497		(1,109		)	33,388		51,876		(1,490		)	50,386
Goodwill(2)	15,697		N/A			15,697		13,780		N/A			13,780
Total	$	149,503	$	(35,318	)	$	114,185	$	183,051	$	(34,648	)	$	148,403
Intangible liabilities:
Below-market lease	$	32,267	$	(8,964	)	$	23,303	$	34,163	$	(8,104	)	$	26,059
Above-market ground lease	5,513		(184		)	5,329		4,839		(96		)	4,743
Total	$	37,780	$	(9,148	)	$	28,632	$	39,002	$	(8,200	)	$	30,802

_______________________

(1) As of December 31, 2017, the weighted average amortization period for above-market leases, below-market leases and in-place leases was 6.4 years, 9.2 years and 5.7 years, respectively. As of December 31, 2016, the weighted average amortization period for above-market leases, below-market leases and in-place leases was 7.1 years, 9.8 years and 6.1 years, respectively.

(2) Represents goodwill associated with certain acquisitions in exchange for shares in the underlying portfolios. The goodwill and a corresponding deferred tax liability was recorded at acquisition based on tax basis differences.

The following table presents a rollforward of goodwill for the year endedDecember 31, 2017 (dollars in thousands):

Balance as of December 31, 2015	$	22,852
Disposal of goodwill(1)	(8,561		)
Adjustments from foreign currency translation	(511		)
Balance as of December 31, 2016	13,780
Adjustments from foreign currency translation	1,917
Balance as of December 31, 2017	$	15,697

_______________________

(1) Represents goodwill associated with certain disposals structured as share sales.

The following table presents amortization of acquired above-market leases, net of acquired below-market leases and below-market ground leases and amortization of other intangible assets for the years endedDecember 31, 2017, 2016 and 2015 (dollars in thousands):

		Years Ended December 31,
	Statements of operations location:	2017		2016		2015
Amortization of above-market leases, net of acquired below-market leases	Rental income / properties - operating expenses	$	666	$	2,162	$	2,335
Amortization of other intangible assets	Depreciation and amortization expense	13,817		19,543		20,468

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents annual amortization of intangible assets and liabilities (dollars in thousands):

	Intangible Assets						Intangible Liabilities
Years Ending December 31:	In-place Leases, Net		Above-market Leases, Net		Below-market Ground Lease Value, Net		Below-market Leases, Net		Above-market Ground Lease Value, Net
2018	$	9,272	$	4,030	$	399	$	2,839	$	75
2019	8,801		4,008		399		2,839		75
2020	7,094		3,860		399		2,805		75
2021	6,010		3,848		399		2,635		75
2022	4,169		3,848		399		2,626		75
Thereafter	4,791		5,369		31,393		9,559		4,954
Total	$	40,137	$	24,963	$	33,388	$	23,303	$	5,329

Other Assets and Other Liabilities

The following tables present a summary of other assets and other liabilities as of December 31, 2017 and 2016 (dollars in thousands):

	December 31,
	2017		2016
Other assets:
Prepaid expenses	$	1,936	$	1,951
Deferred leasing and other costs, net	6,019		3,029
Straight-line rent, net	10,969		10,182
Escrow receivable	3,286		6,168
Other	905		310
Total	$	23,115	$	21,640
	December 31,
	2017		2016
Other liabilities:
Deferred tax liabilities	$	8,548	$	8,916
Prepaid rent received and unearned revenue	8,406		13,585
Tenant security deposits	4,435		4,322
Prepaid escalation and other income	3,982		1,560
Other	386		535
Total	$	25,757	$	28,918

Revenue Recognition

Operating Real Estate

Rental and escalation income from operating real estate is derived from leasing of space to various types of tenants. Rental revenue recognition commences when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. The leases are for fixed terms of varying length and generally provide for annual rentals, subject to indexation, and expense reimbursements to be paid in quarterly or monthly 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 other assets, net on the consolidated balance sheets. The Company amortizes any tenant inducements as a reduction of revenue utilizing the straight-line method over the term of the lease. 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.

In a situation in which a lease or leases associated with a significant tenant have been, or are expected to be, terminated early, the Company evaluates the remaining useful life of depreciable or amortizable assets in the asset group related to the lease that will be terminated (i.e., tenant improvements, above and below market lease intangibles, in-place lease value and leasing commissions). Based upon consideration of the facts and circumstances surrounding the termination, the Company may write-off or accelerate the depreciation and amortization associated with the asset group. Such amounts are included within depreciation and amortization in the consolidated statements of operations.

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Preferred Equity Investments

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

Impairment on Investments

Operating Real Estate

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, 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 and recorded in impairment losses in the consolidated statements of operations. For the years endedDecember 31, 2017 and 2015, the Company did not recognize any impairment losses. For the year endedDecember 31, 2016, the Company recognized $27.5 million of impairment losses.

An allowance for a doubtful account for a tenant receivable is 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. Additionally, the Company establishes, on a current basis, an allowance for future tenant credit losses on unbilled rent receivable based on an evaluation of the collectability of such amounts.

Preferred Equity Investments

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

Income recognition is suspended for an investment when, in the opinion of the Company, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired investment is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired investment is not in doubt, contractual interest is recorded as interest income when received, under the cash basis method until an accrual is resumed when the investment becomes contractually current and performance is demonstrated to be resumed. Interest accrued and not collected will be reversed against interest income. An investment is written off when it is no longer realizable and/or legally discharged. As of December 31, 2017, the Company did not have any impaired preferred equity investments.

Equity-Based Compensation

The Company accounts for equity-based compensation awards using the fair value method, which requires an estimate of fair value of the award. Awards may be based on a variety of measures such as time, performance, market or a combination thereof. For time-based awards, fair value is determined based on the stock price on the grant date. The Company recognizes compensation expense over the vesting period on a straight-line basis or the attribution method depending if the grant is to an employee or non-employee. For performance-based awards, fair value is determined based on the stock price at the date of grant and an estimate of the probable achievement of such measure. The Company recognizes compensation expense over the requisite service period, net of estimated forfeitures, using the accelerated attribution expense method. For market-based measures, fair value is determined using a Monte Carlo analysis under a risk-neutral premise using a risk-free interest rate. The Company recognizes compensation expense, over the requisite service period, net of estimated forfeitures, on a straight-line basis. For awards with a combination of performance or market measures, the Company estimates the fair value as if it were two separate awards. First, the Company estimates the probability of achieving the performance measure. If it is not probable the performance condition will be met, the

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Company records the compensation expense based on the fair value of the market measure, as described above. This expense is recorded even if the market-based measure is never met. If the performance-based measure is subsequently estimated to be achieved, the Company records compensation expense based on the performance-based measure. The Company would then record a cumulative catch-up adjustment for any additional compensation expense.

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

Derivatives

The Company seeks to use derivative instruments to manage exposure to interest rate risk and foreign currency exchange rate risk. The change in fair value for a derivative is recorded in unrealized gain (loss) on derivatives and other in the consolidated statements of operations.

The Company’s derivative instruments are recorded on the consolidated balance sheets at fair value and do not qualify as hedges under U.S. GAAP.

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 (“CTA”), net, is recorded as a component of accumulated OCI in the consolidated statements of equity. For the years endedDecember 31, 2017, 2016 and 2015, the Company reclassified $(1.4) million, $17.7 million and $0.3 million, respectively, of CTA to realized gain (loss) on sales and other in the consolidated statements of operations due to the sale of certain real estate assets (refer to Note 3).

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 derivatives and other in the consolidated statements of operations.

Earnings Per Share

The Company’s basic earnings per share (“EPS”) is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common stock outstanding. Diluted EPS includes restricted stock and the potential dilution that could occur if outstanding restricted stock units (“RSUs”) or other contracts to issue common stock, assuming performance hurdles have been met, were converted to common stock (including limited partnership interests in the Operating Partnership owned by holders other than the Company (“Common Units”) and Common Units which are structured as profits interests (“LTIP Units” collectively referred to as Unit Holders) (refer to Note 8), where such exercise or conversion would result in a lower EPS. The dilutive effect of such RSUs and Unit Holders is calculated assuming all units are converted to common stock.

Income Taxes

The Company has elected to be taxed as a REIT for U.S. federal income tax purposes with the initial filing of its 2015 U.S. federal tax return and will continue to comply with the related provisions of the Internal Revenue Code of 1986, as amended, the (“Internal Revenue Code”). Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income and share ownership tests are met. To maintain its qualification as a REIT, the Company must annually distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. The Company distributes to its stockholders 100% of its taxable income and therefore no provision for U.S. federal income taxes has been included in the accompanying consolidated financial statements for the years endedDecember 31, 2017, 2016 and 2015. Dividends distributed for the years endedDecember 31, 2017 and 2016 were characterized, for U.S. federal income tax purposes, as return of capital.Dividends distributed for the year ended December 31, 2015 was characterized, for U.S. federal income tax purposes, as ordinary income.

The Company conducts its business through foreign subsidiaries which may be subject to local level income tax in the European jurisdictions it operates. The Company has also elected taxable REIT subsidiary (“TRS”) status for one of the Company’s foreign subsidiaries. This enables the Company to provide services that would otherwise be considered impermissible for REITs and participate in activities that do not qualify as “rents from real property.” The TRS is not resident in the U.S. and, as such, not

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

subject to U.S. taxation but is subject to foreign income taxes only. As a result, the effective tax rate of less than 6.6% is due to those foreign taxes. In addition, the REIT will not generally be subject to any additional U.S. taxes on the repatriation of its earnings.

For the year ended December 31, 2017, the Company’s foreign subsidiaries recorded $0.6 million of current income tax benefit and $1.5 million of a deferred income tax benefit. For the year ended December 31, 2016, the Company’s foreign subsidiaries recorded $7.7 million of current income tax expense and an offsetting $5.0 million of a deferred income tax benefit. For the year ended December 31, 2015, the Company’s foreign subsidiaries recorded $2.3 million of current income tax expense and an offsetting $3.0 million of a deferred income tax benefit. For the Company’s foreign subsidiaries, including the Company’s foreign TRS, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the foreign tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. The Company evaluates the realizability of its deferred tax assets (e.g. net operating loss) and recognizes a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers estimates of expected future taxable income, existing and projected book/tax differences, tax planning strategies available and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. Due to past and projected losses in certain local jurisdictions where the Company does not have carryback potential and/or cannot sufficiently forecast future taxable income, the Company recognized net cumulative valuation allowances against the Company’s deferred tax assets. The Company will continue to review its deferred tax assets in accordance with U.S. GAAP. The valuation allowance at December 31, 2017, 2016 and 2015 of $22.7 million, $26.6 million and $21.5 million, respectively, relates to deferred tax assets in jurisdictions that had not met the “more-likely-than-not” realization threshold criteria. The change to the valuation allowance is primarily due to disposals of operating real estate.

Changes in estimate of deferred tax asset realizability, if any, are included in income tax benefit (expense) in the consolidated statements of operations.

The following tables present a summary of the Company’s deferredtaxassets and liabilities as of December 31, 2017 and 2016 (dollars in thousands):

	December 31,
	2017			2016
Deferred tax asset
Net operating losses	$	19,587		$	21,608
Interest deferral	5,598			4,356
Transaction costs capitalized to operating real estate	6,992			6,654
Operating real estate	2,852			2,028
Other	7,920			7,410
Total deferred tax asset	42,949			42,056
Valuation allowance	(22,666		)	(26,565		)
Deferred tax assets, net of valuation allowance	20,283			15,491
Deferred tax liabilities
Operating real estate	(23,126		)	(20,418		)
Other	(5,705		)	(3,989		)
Total deferred tax liabilities	(28,831		)	(24,407		)
Net deferred tax liability	$	(8,548	)	$	(8,916	)

The Company is allowed to carryforward its net operating losses indefinitely in most of the tax jurisdictions it files with some annual restrictions.

The Company has assessed its tax positions for all open tax years, which includes 2015 to 2017 and concluded there were no uncertain tax positions to be recognized.  The Company’s accounting policy with respect to interest and penalties is to classify these amounts as a component of income tax expense, where applicable. As of December 31, 2017 and 2016, the Company has not recognized any such amounts related to uncertain tax positions, respectively.

Recent Accounting Pronouncements: Accounting Standards Adopted in 2017

In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance (Accounting Standards Update “ASU” No. 2016-05) clarifying that an assessment of whether an embedded contingent put or call option is clearly and closely related to a borrowing requires only an analysis of the four-step decision sequence. Additionally, entities are not required to separately assess whether the contingency itself is clearly and closely related. Entities are required to apply the guidance to existing instruments in

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

scope using a modified retrospective transition method as of the date of adoption. The guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those years. The Company has adopted this guidance and it did not have any material impact on its consolidated financial position, results of operations and financial statement disclosures.

In March 2016, the FASB issued guidance (ASU No. 2016-09) which amends several aspects of the accounting for equity-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. The guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2016. The Company has adopted this guidance and has made a policy election to account for forfeitures upon occurrence. The adoption did not have a material impact on the Company’s consolidated financial position, results of operations and financial statement disclosures.

Recent Accounting Pronouncements: Future Application of Accounting Standards

Revenue Recognition - In May 2014, FASB issued an accounting update (ASU No. 2014-09) 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 Company has adopted the standard on its required effective date of January 1, 2018 using the modified retrospective approach and has applied the guidance to contracts not yet completed as of the date of adoption. The new revenue standard specifically excludes revenue streams for which specific guidance is stipulated in other sections of the codification and therefore it will not impact rental income or interest income generated on financial instruments such as preferred equity investments. The Company is the lessor for triple net and gross leases classified as operating leases in which rental income and tenant reimbursements are recorded. The revenue from these leases are scoped out of the new revenue recognition guidance. All leases are accounted for under ASC 840 until the adoption of the new leasing guidance within ASC 842. The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

Leases - In February 2016, the FASB issued an accounting update (ASU No. 2016-02) which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The update requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The update is expected to result in the recognition of a right-to-use asset and related liability to account for the Company’s future obligations under its ground lease arrangements for which it is the lessee. The update will require that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Under this guidance, allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained will no longer be capitalized as initial direct costs and instead will be expensed as incurred. Lessors will continue to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company expects to adopt the package of practical expedients under the guidance and the Company will not need to reassess whether any expired or expiring contracts contain leases; will not need to revisit lease classification for any expired or expiring leases; and will not need to reassess initial direct costs for any existing leases. In addition, the Company expects to adopt the practical expedient which allows lessors to consider lease and non-lease components as a single performance obligation to the extent that the timing and pattern of revenue recognition is the same and the lease is classified an operating lease. As of December 31, 2017, the Company has two ground lease agreements with annual payments of $0.7 million. The new guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements and is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the impact, if any, that this guidance will have on its consolidated financial position, results of operations and financial statement disclosures.

Financial Instruments - In June 2016, the FASB issued guidance (ASU No. 2016-13) that changes the impairment model for most financial instruments by requiring companies to recognize an allowance for expected losses, rather than incurred losses as required currently by the other-than-temporary impairment model. The guidance will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures (e.g., loan commitments). The new guidance is effective for reporting periods beginning after December 15, 2019 and will be applied as a cumulative adjustment to retained earnings as of the effective date. The Company continues to assess the potential effect the adoption of this guidance will have on its consolidated financial statements and related disclosures.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cash Flow Classification - In August 2016, the FASB issued guidance (ASU No. 2016-15) that makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The new guidance requires adoption on a retrospective basis unless it is impracticable to apply, in which case the Company would be required to apply the amendments prospectively as of the earliest date practicable. The Company does not expect the adoption of this standard to have a material impact on its consolidated statements of cash flows.

Restricted Cash - In November 2016, the FASB issued guidance (ASU No. 2016-18) which requires entities to show the changes in the total of cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. Entities will no longer be permitted to present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The guidance is effective for reporting periods beginning after December 15, 2017 and will be applied retrospectively to all periods presented. The Company expects the new guidance will result in a change in presentation of restricted cash on the face of the consolidated statement of cash flows; otherwise this guidance will not have a significant impact on the consolidated statements of cash flows and disclosures.

Business Combination - In January 2017, the FASB issued guidance (ASU No. 2017-01) to clarify the definition of a business under ASC 805. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance is effective for fiscal years, and interim periods within those years, beginning December 15, 2017. The amendments in this update will be applied on a prospective basis. The Company expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets). A significant difference between the accounting for an asset acquisition and a business combination is that transaction costs are capitalized for an asset acquisition, rather than expensed for a business combination. The Company plans to adopt the standard on its required effective date of January 1, 2018. The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

Goodwill Impairment - In January 2017, the FASB issued guidance (ASU No. 2017-04) which removes Step 2 from the goodwill impairment test. The guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019.  The Company is evaluating the impact, if any, that this guidance will have on its consolidated financial position, results of operations and financial statement disclosures.

Derecognition and Partial Sales of Nonfinancial Assets - In February 2017, the FASB issued an accounting update (ASU No. 2017-05) which clarifies the scope of recently established guidance on nonfinancial asset derecognition, which applies to the derecognition of all nonfinancial assets and in-substance nonfinancial assets.  In addition, the guidance clarifies the accounting for partial sales of nonfinancial assets and in-substance nonfinancial assets to align with the new revenue recognition standard to be more consistent with the accounting for sale of a business. Specifically, in a partial sale to a noncustomer, when a noncontrolling interest is received or retained, the latter is considered a noncash consideration and measured at fair value, which would result in full gain or loss recognized upon sale. This guidance has the same effective date as the new revenue guidance, which is January 1, 2018, with early adoption permitted beginning January 1, 2017.  Both the revenue guidance and this update must be adopted concurrently.  While the options for transition are similar to the new revenue guidance, either full retrospective or modified retrospective, the transition approach need not be aligned between both updates. The Company plans to adopt the standard on its required effective date of January 1, 2018 using the modified retrospective approach. The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

Share-based Payments - In May 2017, the FASB issued guidance (ASU No. 2017-09) clarifying when to account for a change to the terms or conditions of a share-based payment award as a modification.  The guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those years.  The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Operating Real Estate

The following table presents operating real estate, net as of December 31, 2017 and December 31, 2016 (dollars in thousands):

	December 31, 2017			December 31, 2016
Land	$	393,691		$	360,555
Buildings and improvements	954,314			980,053
Building, leasehold interests and improvements	195,929			212,864
Furniture, fixtures and equipment	1,653			1,214
Tenant improvements	61,303			59,746
Operating real estate, gross	1,606,890			1,614,432
Less: accumulated depreciation	(95,356		)	(63,585		)
Operating real estate, net	$	1,511,534		$	1,550,847

For the years ended December 31, 2017, 2016 and 2015 depreciation expense was $40.2 million, $45.2 million and $35.8 million, respectively.

Real Estate Held for Sale

The following table summarizes the Company’s operating real estate held for sale as of December 31, 2017 (dollars in thousands):

			Assets(1)								Liabilities(1)
Location	Type	Properties	Operating Real Estate, Net		Intangible Assets, Net		Other Assets		Total(2)		Intangible Liabilities, Net		Total
Lisbon, Portugal	Office	1	$	11,910	$	62	$	23	$	11,995	$	—	$	—
Rotterdam, Netherlands	Office	1	148,741		5,053		3,293		157,087		648		648
Total		2	$	160,651	$	5,115	$	3,316	$	169,082	$	648	$	648

___________________

(1) The assets and liabilities classified as held for sale are expected to be sold on the open market as asset sales subject to standard industry terms and conditions. The assets contributed $13.2 million, $14.1 million and $10.8 million of revenue and $(7.5) million, $(7.3) million and $(18.9) million of income (loss) before income tax benefit (expense) for the years endedDecember 31, 2017, 2016 and 2015, respectively.

(2) Represents operating real estate and intangible assets, net of accumulated depreciation and amortization of $18.7 million prior to being reclassified into held for sale.

Real Estate Sales

The following table summarizes the Company’s real estate sales for the years ended December 31, 2017, 2016 and 2015 (dollars in thousands):

	Years Ended December 31, (1)
	2017		2016		2015
Properties	6		18		3
Carrying Value(2)	$	109,366	$	386,122	$	15,226
Sales Price	$	137,509	$	412,107	$	21,895
Net Proceeds(3)	$	132,538	$	406,850	$	20,955
Realized Gain(4)	$	23,172	$	20,728	$	5,729

__________________

(1) Years ended December 31, 2017, 2016 and 2015 amounts are translated using the average exchange rate for the year ended December 31, 2017.

(2) Includes the assets and liabilities related to share sales.

(3) Represents proceeds net of sales costs and excludes the associated property debt repayments of $76.2 million and $173.9 million for the years endedDecember 31, 2017 and 2016, respectively. There were no property debt repayments for the year ended December 31, 2015.

(4) The Company recorded an additional realized gain for the year endedDecember 31, 2017 of $2.3 million related to the release of escrow accounts from prior disposals.

As of December 31, 2017, there were $1.8 million in certain escrow accounts that were not held by the Company which the Company could potentially record as a realized gain.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Preferred Equity Investments

In May 2017, the Company partnered with a property developer in China to acquire 20 Gresham Street, a Class A office building in London, United Kingdom and the Company invested $35.3 million (£26.2 million) of preferred equity, which the Company accounts for as a debt investment.

The following table presents one preferred equity investment as of December 31, 2017 (dollars in thousands):

	December 31, 2017
Asset Type	Principal Amount		Carrying Value		Fixed Rate		Mandatory Redemption
Preferred equity investment	$	35,347	$	35,347	8.00	%	May 2020

Credit Quality Monitoring

The Company’s preferred equity investment is secured by interests in entities that directly own real estate properties, which serve as the primary source of cash for the payment of principal and interest. The Company evaluates its preferred equity investment at least quarterly and determines the relative credit quality principally based on: (i) whether the borrower is currently paying debt service in accordance with its contractual terms; and (ii) whether the Company believes the borrower will be able to perform under its contractual terms in the future, as well as the Company’s expectations as to the ultimate recovery of principal at maturity. The Company categorizes a preferred equity investment for which it expects to receive full payment of contractual principal and interest payments as “performing.” The Company will categorize a weaker credit quality preferred equity investment that is currently performing, but for which it believes future collection of all or some portion of principal and interest is in doubt, into a category called “performing with a loan loss reserve.” The Company will categorize a weaker credit quality preferred equity investment that is not performing, which the Company defines as a loan in maturity default and/or past due on its contractual debt service payments and deemed not to be collectible, as a non-performing loan (“NPL”).

As of December 31, 2017, the Company’s preferred equity investment was performing in accordance with the contractual terms of its governing documents, in all material respects, and was categorized as a performing loan. For the year endedDecember 31, 2017, the preferred equity investment contributed all interest income recorded on the consolidated statement of operations.

5. Borrowings

The following table presents borrowings as of December 31, 2017 and 2016 (dollars in thousands):

			December 31,
			2017				2016
	Final Maturity	Contractual Interest Rate(3)	Principal Amount		Carrying Value		Principal Amount		Carrying Value
Mortgage and other notes payable:(1)
U.K. Complex(2)	(2)	GBP LIBOR + 1.75%	$	—	$	—	$	50,116	$	49,284
U.K. Complex - Mezzanine(2)	(2)	8.325%	—		—		11,565		11,497
Trias Portfolio 1(4)(6)	Apr-20	EURIBOR + 2.70%	10,378		10,116		13,724		13,301
Trias Portfolio 2(4)(6)(8)	Dec-20	EURIBOR + 1.55%	91,577		90,880		78,952		78,708
Trias Portfolio 3(4)(6)	Apr-20	EURIBOR + 1.65%	44,814		43,684		40,923		39,568
Trias Portfolio 4(4)(6)	Apr-20	GBP LIBOR + 2.70%	17,326		17,123		15,843		15,446
SEB Portfolio 1(6)	Jul-24(9)	EURIBOR + 1.55%(9)	317,317		313,153		278,539		274,614
SEB Portfolio 2(6)	Jul-24(9)	GBP LIBOR + 1.55%(9)	250,825		247,902		229,353		226,078
SEB Portfolio - Preferred(5)	Apr-60	2.30%	102,560		102,271		90,033		89,720
Trianon Tower(4)(6)	Jul-23	EURIBOR + 1.30%	395,294		393,763		347,012		345,422
Other - Preferred(7)	Oct-45	1.00%	4,551		4,551		6,151		5,481
Total mortgage and other notes payable			$	1,234,642	$	1,223,443	$	1,162,211	$	1,149,119

________________________

(1) All mortgage notes and other notes payable are denominated in local currencies, and as such, the principal amount generally increased from 2016 to 2017 due to the change in the Euro or U.K. Pound Sterling compared to the U.S. dollar. All borrowings are non-recourse and are interest-only through maturity, subject to compliance with covenants of the respective borrowing, and denominated in the same currency as the assets securing the borrowing.

(2) In November 2017, the Company repaid the mortgage notes upon the sale of the associated property.

(3) All floating rate debt is subject to interest rate caps of 0.5% for EURIBOR and 2.0% for GBP LIBOR which are used to manage interest rate exposure.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(4) Trias Portfolio represents the cross-collateralized borrowings among the IVG Portfolio, Internos Portfolio and Deka Portfolio.

(5) Represents preferred equity certificates with a contractual interest rate of 2.3% through May 2019, which can be prepaid at that time without penalty in part or in full, which increases to EURIBOR plus 12.0% through May 2022 and subsequently to EURIBOR plus 15.0% through final maturity. Certain prepayments prior to May 2019 are subject to the payment of the unpaid coupon on outstanding principal amount through May 2019.

(6) Prepayment provisions include a fee based on principal amount ranging from 0.25% to 1.0% through December 2019 for the Trias Portfolio borrowings and 1.0% to 2.0% through July 2020 for the SEB Portfolio borrowings and 0.60% through June 30, 2018 and 0.30% through June 30, 2019 for Trianon Tower borrowings.

(7) Represents preferred equity certificates each with a fixed contractual interest rate of 1.0% per annum plus variable interest based on specified income levels associated with the German property companies of the Trias Portfolios which can be prepaid at any time without penalty through final maturity, which is thirty years from the issuance date.

(8) In June 2017, the Company amended and restated the agreement to increase the loan amount by $5.9 million and reduce future minimum capital expenditure spending requirements.

(9) In September 2017, the Company amended and restated the agreement to reduce the margin from 1.80% to 1.55% and extended the maturity date from April 1, 2022 to July 20, 2024.

The following table presents a reconciliation of principal amount to carrying value of the Company’s mortgage and other notes payable as of December 31, 2017 and 2016 (dollars in thousands):

	December 31,
	2017			2016
Principal amount	$	1,234,642		$	1,162,211
Deferred financing costs, net	(11,199		)	(13,092		)
Carrying value	$	1,223,443		$	1,149,119

The following table presents scheduled principal on borrowings, based on final maturity as of December 31, 2017 (dollars in thousands):

	Mortgage and Other Notes Payable
Years ending December 31:
2018	$	—
2019	—
2020	164,095
2021	—
2022	—
2023 and thereafter	1,070,547
Total	$	1,234,642

As of December 31, 2017 and 2016, the Company was in compliance with all of its financial covenants.

Senior Notes

In July 2015, the Company issued $340.0 million principal amount of 4.625% senior stock-settlable notes due December 2016 (the “Senior Notes”) for aggregate net proceeds of $331.0 million, after deducting the underwriters’ discount and other expenses. The Senior Notes were senior unsubordinated and unsecured obligations of the Company and NorthStar Realty and NorthStar Realty’s operating partnership guaranteed payments on the Senior Notes.

The proceeds from the issuance of the Senior Notes were distributed 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. Such distribution to NorthStar Realty was recorded in equity in net transactions with NorthStar Realty. During 2016, the Company repurchased approximately $272.3 million of the Senior Notes, at a slight premium to par value, through privately negotiated transactions and settled the remaining Senior Notes in cash at maturity.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Credit Facility

In May 2016, the Company entered into a $75.0 million corporate revolving credit facility (the “Credit Facility”) with certain commercial bank lenders, with an initial one year term. The Credit Facility was secured by collateral relating to a borrowing base at that time and guarantees by certain subsidiaries of the Company. In October 2016, the Company permanently reduced the aggregate commitments under the Credit Facility to $35.0 million. In April 2017, the Company amended and restated the Credit Facility with aggregate commitments of $35.0 million and an initial two year term. The Credit Facility no longer contains a limitation on availability based on a borrowing base and the interest rate remains the same. The Credit Facility has an accordion feature, allowing the total facility to increase to $70 million. In March 2018, the Company amended the Credit Facility, increasing the size to $70 million and extending the term until April 2020 with one year extension option. The Credit Facility includes an accordion feature, providing for the ability to increase the facility to $105 million. As of December 31, 2017, there is no outstanding balance on the Credit Facility.

6.    Related Party Arrangements

On November 9, 2017, the Company entered into an Amended and Restated Management Agreement with an affiliate of the Manager, effective as of January 1, 2018. The description of the management agreement included below relates to the original agreement that was entered into in November 2015 and which will be superseded as of January 1, 2018 by the Amended and Restated Management Agreement.

Colony NorthStar, Inc.

Management Agreement

The Company entered into a management agreement with an affiliate of the Manager in November 2015. As asset manager, the Manager is responsible for the Company’s day-to-day operations, subject to supervision and management of the Company’s board of directors (the “Board”). Through its global network of subsidiaries and branch offices, the Manager performs services and engages in activities relating to, among other things, investments and financing, portfolio management and other administrative services, such as accounting and investor relations, to the Company and its subsidiaries. The management agreement with the Manager provides for a base management fee and incentive fee.

Base Management Fee

For the years endedDecember 31, 2017, 2016 and 2015, the Company incurred $14.4 million, $14.1 million and $2.3 million, respectively, related to the base management fee. As of December 31, 2017 and 2016, $3.6 million and $3.5 million, respectively, was recorded in due to related party on the consolidated balance sheets. The base management fee to the Manager is calculated as 1.5% per annum of the sum of:

• any equity the Company issues in exchange or conversion of exchangeable or stock-settlable notes;

• any other issuances by the Company of common equity, preferred equity or other forms of equity, including but not limited to LTIP Units in the Operating Partnership (excluding units issued to the Company and equity-based compensation, but including issuances related to an acquisition, investment, joint venture or partnership); and

• cumulative cash available for distribution (“CAD”), if any, of the Company in excess of cumulative distributions paid on common stock, LTIP Units or other equity awards which began with the Company’s fiscal quarter ended March 31, 2016.

Incentive Fee

For the years endedDecember 31, 2017, 2016 and 2015, the Company did not incur an incentive fee. The incentive fee is calculated and payable quarterly in arrears in cash, equal to:

• the product of: (a) 15.0% and (b) the Company’s CAD before such incentive fee, divided by the weighted average shares outstanding for the calendar quarter, of any amount in excess of $0.30 per share and up to $0.36 per share; plus

• the product of: (a) 25.0% and (b) the Company’s CAD before such incentive fee, divided by the weighted average shares outstanding for the calendar quarter, of any amount in excess of $0.36 per share;

• multiplied by the Company’s weighted average shares outstanding for the calendar quarter.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Additional Management Agreement Terms

The Company’s management agreement with the Manager provides that in the event of a change of control of the Manager or other event that could be deemed an assignment of the management agreement, the Company will consider such assignment in good faith and not unreasonably withhold, condition or delay the Company’s consent. The management agreement further provides that the Company anticipates consent would be granted for an assignment or deemed assignment to a party with expertise in commercial real estate and over $10 billion of assets under management. The management agreement also provides that, notwithstanding anything in the agreement to the contrary, to the maximum extent permitted by applicable law, rules and regulations, in connection with any merger, sale of all or substantially all of the assets, change of control, reorganization, consolidation or any similar transaction by the Company or the Manager, directly or indirectly, the surviving entity will succeed to the terms of the management agreement.

Payment of Costs and Expenses and Expense Allocation

The Company is responsible for all of its direct costs and expenses and reimburses the Manager for costs and expenses incurred by the Manager on the Company’s behalf. In addition, the Manager may allocate indirect costs to the Company 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, the Company’s management agreement with the Manager (the “G&A Allocation”). The Company’s management agreement with the Manager provides that the amount of the G&A Allocation will not exceed the following: (i) 20% of the total of: (a) the Company’s general and administrative expenses as reported in their consolidated financial statements excluding: (1) equity-based compensation expense, (2) non-recurring items, (3) fees payable to the Manager under the terms of the applicable management agreement and (4) any allocation of expenses to the Company (“NRE’s G&A”); and (b) the Manager’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 managed company of the Manager; less (ii) NRE’s G&A. The G&A Allocation may include the Company’s allocable share of the Manager’s compensation and benefit costs associated with dedicated or partially dedicated personnel who spend all or a portion of their time managing the Company’s affairs, based upon the percentage of time devoted by such personnel to the Company’s affairs. The G&A Allocation may also include rental and occupancy, technology, office supplies, travel and entertainment and other general and administrative costs and expenses, which may be allocated based on various methodologies, such as weighted average employee count or the percentage of time devoted by personnel to the Company’s affairs. In addition, the Company will pay directly or reimburse the Manager for an allocable portion of any severance paid pursuant to any employment, consulting or similar service agreements in effect between the Manager and any of its executives, employees or other service providers.

The Company’s obligation to reimburse the Manager for the G&A Allocation and any severance, at the Manager’s discretion, and the 20% cap on the G&A Allocation, as described above, applies on an aggregate basis to the Company.

For the year endedDecember 31, 2017, the Manager did not allocate any general and administrative expenses to the Company. For the years endedDecember 31, 2016 and 2015, the Manager allocated $0.2 million and $0.4 million, respectively, to the Company. For the years endedDecember 31, 2017, 2016 and 2015, the Manager did not allocate any severance to the Company.

In addition, the management agreement provides that the Company and any company spun-off from the Company, shall pay directly or reimburse the Manager for up to 50% of any long-term bonus or other compensation that the Manager’s compensation committee determines shall be paid and/or settled in the form of equity and/or equity-based compensation to executives, employees and service providers of the Managers’ during any year. Subject to this limitation and limitations contained in any applicable management agreement between the Manager and any company spun-off from the Company, the amount paid by the Company and any company spun-off from the Company will be determined by the Manager in its discretion. At the discretion of the Manager’s compensation committee, this compensation may be granted in shares of the Company’s restricted stock, restricted stock units, long-term incentive plan units or other forms of equity compensation or stock-based awards; provided that if at any time a sufficient number of shares of the Company’s common stock are not available for issuance under the Company’s equity compensation plan, such compensation shall be paid in the form of RSUs, LTIP Units or other securities that may be settled in cash.The Company’s equity compensation for each year may be allocated on an individual-by-individual basis at the discretion of the Manager’s 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%.

The Company does not have employment agreements with its named executive officers, but the Company has generally agreed to pay directly or reimburse the Manager for the portion of any severance paid by the Manager or any of its affiliates to an individual pursuant to the terms of any employment, consulting or similar service agreement, including any employment agreements with Colony NorthStar or its subsidiaries and its named executive officers, that corresponds to or is attributable to: (i) the equity compensation that the Company is required to pay directly or reimburse the Manager pursuant to the management agreement; (ii)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

any cash and/or equity compensation paid directly by the Company to such individual as an employee or other service provider of the Company; and (iii) any amounts paid to such individual by the Manager or any of its affiliates that the Company is obligated to reimburse the Manager pursuant to the management agreement. With respect to Mahbod Nia only, in lieu of the foregoing severance payment or reimbursement, the Company has agreed to pay directly or reimburse the Manager for 50% of any cash payments made by the Manager or any of its affiliates in connection with the termination of Mr. Nia’s employment either without cause or upon the non-renewal of Mr. Nia’s term of employment by the employer or by Mr. Nia for good reason; provided that the Board consented to the taking of such action (or, with respect to a termination for good reason, any action taken with the intent to create good reason). Because the Company’s obligation to pay these amounts is owed to the Manager and not directly to the Company’s named executive officers and the Company does not control the terms of the agreements between the Manager or its affiliates and the Company’s named executive officers, the discussion above does not include these amounts or a discussion of any arrangements that the Manager or its affiliates may have with the Company’s named executive officers pursuant to which our obligations to the Manager may arise.

Management Agreement Amendment

On November 9, 2017, the Company entered into an Amended and Restated Management Agreement with CNI NRE Advisors, LLC, a Delaware limited liability company (unless the context requires otherwise, together with its affiliates, the “Asset Manager”), an affiliate of Colony NorthStar, effective as of January 1, 2018.

Under the Amended and Restated Management Agreement, the Asset Manager is generally responsible to manage the Company’s day to day operations, subject to the supervision and management of the Board. The Asset Manager is required to provide the Company with a management team and other appropriate employees and resources necessary to manage the Company.

Term; Renewals

The Amended and Restated Management Agreement provides for an initial term (beginning January 1, 2018) of five years (the “Initial Term”), with subsequent automatic renewals for additional three year terms, unless either party provides notice to the other party of its intention to decline to renew the agreement at least six months prior to the expiration of the then-current term. During the Initial Term, the Amended and Restated Management Agreement is terminable only for cause (as described in the Amended and Restated Management Agreement).

If the Company elects not to renew the Amended and Restated Management Agreement at the end of a term, it will be obligated to pay the Asset Manager a termination fee (the “Termination Fee”) equal to three times the amount of the base management fees earned by the Asset Manager over the four most recent quarters immediately preceding the non-renewal. In addition, if at any time after the Initial Term, the Company undergoes a “change of control” (as described in the Amended and Restated Management Agreement), the Company may elect to terminate the agreement but upon any such termination it will be obligated to pay the Termination Fee to the Asset Manager.

Assignment

The Amended and Restated Management Agreement provides that in the event of a change of control of the Asset Manager or other event that could be deemed an assignment of the Amended and Restated Management Agreement, the Company will consider such assignment in good faith and not unreasonably withhold, condition or delay the Company’s consent. The Amended and Restated Management Agreement further provides that the Company anticipates consent would be granted for an assignment or deemed assignment to a party with expertise in commercial real estate and over $10 billion of assets under management. The Amended and Restated Management Agreement also provides that, notwithstanding anything in the agreement to the contrary, to the maximum extent permitted by applicable law, rules and regulations, in connection with any merger, sale of all or substantially all of the assets, change of control, reorganization, consolidation or any similar transaction by the Company or the Asset Manager, directly or indirectly, the surviving entity will succeed to the terms of the Amended and Restated Management Agreement.

Base Management Fee

Pursuant to the Amended and Restated Management Agreement, beginning January 1, 2018, the Company is obligated to pay quarterly, in arrears, in cash, the Asset Manager a base management fee per annum equal to:

• 1.50% of the Company’s reported EPRA NAV (as described in the Amended and Restated Management Agreement) for EPRA NAV amounts up to and including $2.0 billion; plus

• 1.25% of the Company’s reported EPRA NAV on any EPRA NAV amount exceeding $2.0 billion.

EPRA NAV is based on a U.S. GAAP balance sheet adjusted based on the Company’s interpretation of the European Public Real Estate Association (“EPRA”) guidelines, and similar as prior practices, including adjustments such as fair value of operating real estate, straight-line rent and deferred taxes and additional adjustments to be determined by the Company in good faith based on

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any changes to U.S. GAAP, international accounting standards or EPRA guidelines. In calculating EPRA NAV, the liquidation preference of preferred securities outstanding shall not be included as a liability of the Company and shall not reduce EPRA NAV.

Incentive Fee

In addition to the base management fees, the Company is obligated to pay the Asset Manager an incentive fee, if any (the “Incentive Fee”), with respect to each measurement period equal to twenty percent (20%) of: (i) the excess of (a) the Company’s Total Stockholder Return (as defined in the Amended and Restated Management Agreement, which includes stock price appreciation and dividends received and is subject to a high watermark price established when a prior incentive fee is realized) for the relevant measurement period above (b) a 10% cumulative annual hurdle rate, multiplied by (ii) the Company’s Weighted Average Shares (as defined in the Amended and Restated Management Agreement) during the measurement period. The first measurement period for the incentive fee will begin January 1, 2018 and end on December 31 of the applicable calendar year and subsequent measurement periods will begin on January 1 of the subsequent calendar year. Subject to the conditions set forth in Section 4(d) of the Amended and Restated Management Agreement for common stock payments, the Company may elect to pay the Incentive Fee, if any, in cash or in shares of restricted common stock or shares of unrestricted common stock repurchased by the Company in the open market or a combination thereof. Any shares of common stock delivered by the Company will be subject to lock-up restrictions that will be released in equal one-third increments on each anniversary of the end of the measurement period with respect to which such incentive fee was earned. In calculating the value of the shares of the Company’s common stock paid in satisfaction of the Incentive Fee obligation, the shares of restricted common stock will be valued at the higher of: (i) the volume weighted average trading price per share for the ten consecutive trading days (as defined in the Amended and Restated Management Agreement) ending on the trading day prior to the date the payment is due and (ii) the Company’s EPRA NAV per share, based on the Company’s most recently published EPRA NAV and the Weighted Average Shares as of the end of the period with respect to which such EPRA NAV was published.

Costs and Expenses

The Company is responsible to pay (or reimburse the Asset Manager) for all of the Company’s direct, out of pocket costs and expenses of the Company as a stand alone company incurred by or on behalf of the Company and its subsidiaries, all of which must be reasonable, customary and documented. Internalized Service Costs (as defined below) are not intended to be covered costs and expense under this provision and are subject to the limits described in the next paragraph.

In addition to the expenses described in the prior paragraph, for each calendar quarter, beginning with the first quarter of 2018, the Company is obligated to reimburse the Asset Manager for (i) all direct, reasonable, customary and documented costs and expenses incurred by the Asset Manager for salaries, wages, bonuses, payroll taxes and employee benefits for personnel employed by the Asset Manager: (a) who solely provide services to the Company which prior to January 1, 2018 were provided by unaffiliated third parties, including accounting and treasury services or (b) who were hired by the Asset Manager after January 1, 2018 but who solely provide services to the Company in respect of one of the categories of services previously internalized pursuant to clause (a) and who were not hired in connection with any event which otherwise resulted in an increase to the Company’s net asset value (such costs and expenses set forth in clauses (i) and (ii), the “Internalized Service Costs”), plus (ii) 20% of the amount calculated under clause (i) to cover reasonable overhead charges with respect to such personnel, provided that the Company shall not be obligated to reimburse the Asset Manager for such costs and expenses to the extent they exceed the following quarterly limits:

• 0.0375% of the Company’s aggregate gross asset value as of the end of the prior calendar quarter (excluding cash and cash equivalents and certain other exclusions) as calculated for purposes of determining EPRA NAV (“GAV”), for GAV amounts to and including $2.5 billion, plus

• 0.0313% of GAV amounts between $2.5 billion and $5.0 billion, plus

• 0.025% of GAV amounts exceeding $5.0 billion.

If the Asset Manager’s actual Internalized Service Costs during any quarter exceed the quarterly limit described in the preceding paragraph (the cumulative excess amounts, if any, in respect of each quarter during a calendar year, the (“Quarterly Cap Excess Amount”), the Company is obligated to reimburse the Asset Manager on an annual basis for an amount equal to the lesser of (i) the Quarterly Cap Excess Amount and (ii) the sum of the amounts, if any, determined for each quarter within such calendar year by which Internalized Services Costs in respect of such quarter were less than the quarterly limits described in the prior paragraph.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Equity Based Compensation

In addition, the Company expects to make annual equity compensation grants to management of the Company and other employees of the Asset Manager, provided that the aggregate annual grant amount, type and other terms of such equity compensation must be approved by the Company’s compensation committee. The Asset Manager will have discretion in allocating the aggregate grant among the Company’s management and other employees of the Asset Manager.

Under the Amended and Restated Management Agreement, beginning with the Company’s 2018 annual stockholders’ meeting, the Asset Manager will have the right to nominate one director (who is expected to be one of the Company’s current directors employed by the Asset Manager) to the Company’s board of directors.

Transaction Expenses

The Company agreed to pay for up to $2.5 million of fees and expenses payable by the Asset Manager to its external financial advisors in connection with the negotiation and execution of the Amended and Restated Management Agreement.

Colony NorthStar Ownership Waiver and Voting Agreement

In connection with the entry into the Amended and Restated Management Agreement, the Company provided Colony NorthStar with an ownership waiver under the Company’s Articles of Amendment and Restatement, allowing Colony NorthStar to purchase up to 45% of the Company’s stock. The waiver provides that if the Amended and Restated Management Agreement is terminated, Colony NorthStar may not purchase any shares of the Company’s common stock to the extent Colony NorthStar owns (or would own as a result of such purchase) more than 9.8% of the Company’s capital stock. In connection with the waiver, Colony NorthStar also agreed that for all matters submitted to a vote of the Company’s stockholders, to the extent Colony NorthStar owns more than 25% of the Company’s common stock (such shares owned by Colony NorthStar in excess of the 25% threshold, the “Excess Shares”), it will vote the Excess Shares in the same proportion that the remaining shares of the Company not owned by Colony NorthStar or its affiliates are voted. If the Amended and Restated Management Agreement is terminated, then beginning on the third anniversary of such termination, the threshold described in the prior sentence will be reduced from 25% to 9.8%.

Manager Ownership of Common Stock

As of December 31, 2017, Colony NorthStar and its subsidiaries owned 5.6 million shares of the Company’s common stock, or approximately 10.2% of the total outstanding common stock.

7. Compensation Expense

The following summarizes the equity-based compensation for the years ended December 31, 2017, 2016 and 2015:

For the years endedDecember 31, 2017, 2016 and 2015 the Company recorded $23.8 million, $19.3 million and $0.9 million, respectively, of equity-based compensation expense which is recorded in compensation expenses on the consolidated statements of operations. As of December 31, 2017, equity-based compensation expense to be recognized over the remaining vesting period through January 2020 is $6.7 million, provided there are no additional forfeitures.

2015 Omnibus Stock Incentive Plan

Pursuant to the NorthStar Realty Europe Corp. 2015 Omnibus Stock Incentive Plan (the “2015 Plan”), the Company may issue equity awards to directors, officers, employees, co-employees, consultants and advisors of the Company, the Manager or of any parent or subsidiary who provides services to the Company. The number of shares that may be issued under the 2015 Plan equals 10 million shares of common stock, plus on January 1, 2017 and each January 1 thereafter, an additional 2% of the number of shares of common stock issued and outstanding on the immediately preceding December 31. In addition, shares of common stock underlying any awards that are forfeited, canceled, held back upon exercise of a stock option or settlement of an award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of common stock or otherwise terminated (other than by exercise) will be added back to the shares of common stock available for issuance under the 2015 Plan. As of December 31, 2017, under the 2015 Plan, a total of 1.2 million shares of common stock had been issued (net of forfeitures and shares held back for tax withholding), 1.7 million shares were reserved for issuance pursuant to outstanding equity awards (including 0.1 million reserved for issuance upon conversion of outstanding LTIP Units and 1.6 million reserved for issuance pursuant to the outstanding Absolute RSUs and Relative RSUs) and 8.2 million otherwise unreserved shares remained available for issuance.

All of the equity awards issued by the Company since the spin-off from NorthStar Realty on November 1, 2015 have been issued under the 2015 Plan. During the year endedDecember 31, 2017, the Company issued 500,642 restricted shares of common stock under the 2015 Plan to employees of the Manager or its subsidiaries in accordance with the terms of the management agreement described above in Note 6, of which 379,594 vested in connection with the Mergers.

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NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In March 2016, as contemplated in connection with the Spin-off, the Company granted an aggregate of 995,698 restricted shares of common stock and 1,493,551 restricted stock units (“RSUs”) to employees of the Manager or one of its subsidiaries under the 2015 Plan. The restricted shares of common stock were subject to vesting over the approximately four year period ending December 31, 2019, subject to continued employment with the Manager or one of its subsidiaries and the RSUs were market-based awards subject to the achievement of performance-based vesting conditions and continued employment with the Manager or one of its subsidiaries. Approximately one-half of these RSUs are subject to the achievement of performance-based hurdles relating to the Company’s absolute total stockholder return and continued employment with the Manager or one of its subsidiaries over the approximately four year period from the grant date through December 31, 2019 (the “Absolute RSUs”). The other approximately one-half of these RSUs are subject to the achievement of performance-based hurdles based on the Company’s total stockholder return relative to the MSCI US REIT Index and continued employment with the Manager or one of its subsidiaries over the approximately four year period from the grant date through December 31, 2019 (the “Relative RSUs”). Award recipients may earn up to 100% of the Absolute RSUs that were granted and up to 125% of the Relative RSUs that were granted. Upon vesting pursuant to the terms of the Absolute RSUs and Relative RSUs, the RSUs that vest will be settled in shares of common stock and the recipients will be entitled to receive the distributions that would have been paid with respect to a share of common stock (for each share that vests) on or after the date the RSUs were initially granted. In accordance with their terms, all of these restricted shares of common stock that remained outstanding vested in connection with the Mergers. The Absolute and Relative RSUs were not affected by the Mergers and remain outstanding, subject to forfeitures occurring in connection with termination of employment with the Manager or one of its subsidiaries.

Pre-Spin-off NorthStar Realty Equity Awards

In addition to equity awards issued under the 2015 Plan, the Company also had equity subject to outstanding equity-based awards granted by NorthStar Realty prior to the Spin-Off. In connection with the Spin-Off, holders of shares of common stock of NorthStar Realty and LTIP units of NorthStar Realty’s operating partnership subject to outstanding equity awards received one share of the Company’s common stock or one Common Unit in the Operating Partnership, respectively, for every six shares of common stock of NorthStar Realty or LTIP units of NorthStar Realty’s operating partnership held. Other equity and equity-based awards relating to NorthStar Realty’s common stock, such as RSUs, were adjusted to also relate to one-sixth of a share of the Company’s common stock, but otherwise generally remained subject to the same vesting and other terms that applied prior to the Spin-off. Performance-based vesting conditions based on total stockholder return of NorthStar Realty or NorthStar Realty and NSAM were adjusted to refer to combined total stockholder return of NorthStar Realty and the Company or NorthStar Realty, NSAM and the Company, respectively, with respect to periods after the Spin-Off and references to a change of control or similar term in outstanding awards, which referred to a change of control of either NorthStar Realty or NSAM, were adjusted, to the extent such awards relate to common stock of the Company or Common Units in the Operating Partnership, to refer to a change of control of either the Company or NSAM.

Following the Spin-off, NorthStar Realty and the compensation committee of its Board continued to administer all awards granted by NorthStar Realty prior to the Spin-off, but the Company was obligated to issue shares of the Company’s common stock or other equity awards of its subsidiaries or make cash payments in lieu thereof or with respect to dividend or distribution equivalent obligations to the extent required by these awards. These awards continued to be governed by the NorthStar Realty equity plans, as applicable, and shares of the Company’s common stock issued pursuant to these awards were not be issued pursuant to, and did not reduce availability under, the 2015 Plan. In connection with the Mergers, all of these outstanding equity-based awards (other than an RSU relating to 83,333 shares of the Company’s common stock which vested in September 2017 upon a vesting event) vested or were forfeited.

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NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents activity related to the issuance, vesting, conversion and forfeitures of restricted stock and Common Units. The balance as of December 31, 2017 represents vested Common Units and unvested market-based RSUs (grants in thousands):

	Year Ended December 31, 2017
	Restricted Stock(1)		Common Units(3)		Restricted Stock Units(4)		Performance RSUs(5)		Total Grants		Weighted Average Grant Price
December 31, 2016	1,139		688		83		1,868		3,778		$	11.29
Granted	501		—		—		—		501		12.69
Converted	—		(268	)	—		—		(268	)	21.10
Vested(2)	(1,519	)	—		(83	)	(178	)	(1,780	)	10.35
Forfeited(6)	—		—		—		(237	)	(237	)	4.87
December 31, 2017	121		420		—		1,453		1,994		$	11.95

___________________

(1) Represents restricted stock included in common stock.

(2) Vested primarily includes the acceleration of substantially all outstanding equity awards of the Company in connection with the change of control of NSAM as a result of the Mergers.

(3) Includes vested and unvested Common Units in the Operating Partnership issued in the Spin-off with respect to equity-based awards granted by NorthStar Realty prior to the Spin-off. As of December 31, 2017, all of these Common Units in the Operating Partnership were vested.

(4) Relates to an equity-based award granted by NorthStar Realty prior to the Spin-off and represents a non-employee grant subject to service-based vesting conditions, which was scheduled to vest on January 22, 2019, however, in September 2017, pursuant to the terms of the RSU award, a vesting event occurred and on October 2, 2017, the Company issued 83,333 shares of common stock in settlement of these RSUs. The RSUs were entitled to dividend equivalents prior to vesting and the dividends were settled in cash.

(5) As of December 31, 2017, represented outstanding Absolute and Relative RSUs.

(6) Includes the forfeiture of performance based RSUs issued to NSAM executives as part of historical bonus plans in connection with the change of control of NSAM.

8. Stockholders’ Equity

Spin-off

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

Share Repurchase

In November 2015, the Company’s board of directors authorized the repurchase of up to $100 million of its outstanding common stock. That authorization expired in November 2016 and at such time the Board authorized an additional repurchase of up to $100 million of its outstanding common stock through November 2017. In March 2018, the Company’s board of directors authorized the repurchase of up to $100 million of its outstanding common stock. The authorization expires in March 2019, unless otherwise extended by the Company’s board of directors. For the year endedDecember 31, 2017, the Company did not repurchase any shares of its common stock. For the year endedDecember 31, 2016, the Company repurchased 5.7 million shares of its common stock for approximately $58.6 million. For the year endedDecember 31, 2015, the Company repurchased 3.6 million shares of its common stock for approximately $41.4 million. From the original authorization in November 2015 through December 31, 2017, the Company repurchased 9.3 million shares of its common stock for approximately $100.0 million.

Director Grants

In July 2016, the Company issued 15,368 shares of restricted common stock with a fair value at the date of grant of $0.1 million to one of its board of directors as an initial grant of equity. The stock will generally vest over three years.

In November 2016, the Company issued 43,518 shares of common stock with a fair value at the date of grant of $0.5 million to its non-employee directors in connection with their re-election to the Company’s board of directors as part of their annual grants. The stock vested immediately.

In August 2017, the Company issued 30,340 shares of common stock with a fair value at the date of grant of $0.4 million to its independent directors as an annual grant of equity. The stock fully vested at issuance.

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NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dividends

The following table presents dividends declared (on a per share basis) with respect to the years endedDecember 31, 2017, 2016 and 2015:

Common Stock
Declaration Date	Dividend Per Share
2017
March 7	$	0.15
May 1	$	0.15
August 2	$	0.15
November 6	$	0.15
2016
March 15	$	0.15
May 10	$	0.15
August 3	$	0.15
November 1	$	0.15
2015
November 23	$	0.15

Earnings Per Share

The following table presents EPS for the years endedDecember 31, 2017, 2016 and 2015 (dollars and shares in thousands, except per share data):

	Years Ended December 31,
	2017			2016			2015
Numerator:
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	$	(31,125	)	$	(61,753	)	$	(143,136	)
Net income (loss) attributable to Unit Holders non-controlling interest	(372		)	(778		)	(1,052		)
Net income (loss) attributable to common stockholders and Unit Holders(1)	$	(31,497	)	$	(62,531	)	$	(144,188	)
Denominator:(2)
Weighted average shares of common stock	55,073			57,875			62,184
Weighted average Unit Holders(1)	526			690			681
Weighted average shares of common stock and Unit Holders(2)	55,599			58,565			62,865
Earnings (loss) per share:
Basic	$	(0.57	)	$	(1.07	)	$	(2.30	)
Diluted	$	(0.57	)	$	(1.07	)	$	(2.30	)

____________________________________________________________

(1) The EPS calculation takes into account Unit Holders, which receive non-forfeitable dividends from the date of grant, share equally in the Company’s net income (loss) and convert on a one-for-one basis into common stock.

(2) Excludes the effect of restricted stock and RSUs outstanding that were not dilutive as of December 31, 2017. These instruments could potentially impact diluted EPS in future periods, depending on changes in the Company’s stock price and other factors.

9. Non-controlling Interests

Operating Partnership

Non-controlling interests include the aggregate Unit Holders’ interest in the Operating Partnership. Net income (loss) attributable to the non-controlling interest is based on the weighted average Unit Holders’ ownership percentage of the Operating Partnership for the respective period. The issuance of additional common stock, Common Units or LTIP Units changes the percentage ownership of both the Unit Holders and the Company. Since a Common Unit or LTIP Unit is generally redeemable for cash or common stock at the option of the Company, it is deemed to be equivalent to common stock. Therefore, such transactions are treated as capital transactions and result in an allocation between stockholders’ equity and non-controlling interests on the accompanying consolidated balance sheets to account for the change in the ownership of the underlying equity in the Operating Partnership. On a quarterly basis, the carrying value of such non-controlling interest is reallocated based on the number of Unit Holders in total in proportion

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

to the number of Units Holders plus the number of shares of common stock outstanding. As of December 31, 2017 and 2016, the Company allocated $1.8 million and $2.3 million, respectively from stockholders’ equity to non-controlling interest on the consolidated balance sheets and consolidated statement of equity.

As of December 31, 2017, 420,359 Common Units and LTIP Units were outstanding, representing a 0.8% ownership and non-controlling interest in the Operating Partnership. Net income (loss) attributable to the Operating Partnership non-controlling interest for the years endedDecember 31, 2017, 2016 and 2015 was a net loss of $0.4 million, $0.8 million and $1.1 million, respectively.

Redeemable Non-controlling Interest

In connection with the acquisition of the Trianon Tower in July 2015, the Company sold a 5.5% non-controlling interest in certain subsidiaries that own the Trianon Tower for $1.5 million. In conjunction with the sale, the Company entered into a put option whereby the holder may redeem its interest for cash at the greater of fair market value of such non-controlling interest or €2.1 million beginning in November 2020 through January 2021. The Company recorded the non-controlling interest at its acquisition date fair value as temporary equity due to the redemption option. The carrying amount of redeemable noncontrolling interests is adjusted to its redemption value at the end of each reporting period, but no less than its initial carrying value, with such adjustments recognized in additional paid-in capital.

10. Risk Management and Derivative Activities

Derivatives

The Company uses derivative instruments primarily to manage interest rate and currency risk and such derivatives are not considered speculative. These derivative instruments are in the form of interest cap agreements where the primary objective is to minimize interest rate risks associated with investment and financing activities and foreign currency forward agreements where the primary objective is to minimize foreign currency exchange rate risks associated with operating activities. The counterparties of these arrangements are major financial institutions with which the Company may also have other financial relationships. The Company is exposed to credit risk in the event of non-performance by these counterparties and it monitors their financial condition; however, the Company currently does not anticipate that any of the counterparties will fail to meet their obligations.

The following tables present derivative instruments that were not designated as hedges under U.S. GAAP as of December 31, 2017 and December 31, 2016 (dollars in thousands):

	Number(1)	Notional Amount		Fair Value Asset (Liability)			Range of Fixed GBP LIBOR / EURIBOR	Range of Maturity
As of December 31, 2017:
Interest rate caps	31	$	1,193,012	$	7,024		(2)	April 2020 - July 2023
Foreign currency forwards, net(3)	4	58,647		(5,270		)	N/A	February 2018 - November 2018
Total	35	$	1,251,659	$	1,754
As of December 31, 2016:
Interest rate caps	32	$	1,107,400	$	8,659		(2)	January 2020 - July 2023
Foreign currency forwards(3)	20	72,806		5,070			N/A	February 2017 - November 2017
Total	52	$	1,180,206	$	13,729

_____________________________

(1)    Represents number of transactions.

(2)    Includes a range of interest rate caps of 0.5% for EURIBOR and 2.0% for GBP LIBOR.

(3)    Includes Euro currency forwards as of December 31, 2017 and Euro and U.K. Pounds Sterling currency forwards as of December 31, 2016.

The following table presents the fair value of derivative instruments, as well as their classification on the consolidated balance sheets, as of December 31, 2017 and December 31, 2016 (dollars in thousands):

	Balance Sheet	December 31, 2017		December 31, 2016
	Location
Interest rate caps	Derivative assets	$	7,024	$	8,659
Foreign currency forwards	Derivative assets	$	—	$	5,070
Foreign currency forwards	Derivative liabilities	$	5,270	$	—

33

NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents the effect of derivative instruments in the consolidated statements of operations for the years endedDecember 31, 2017, 2016 and 2015 (dollars in thousands):

		Years Ended December 31,
		2017			2016			2015
Amount of gain (loss) recognized in earnings:	Statements of operations location:
Adjustment to fair value of interest rate caps	Unrealized gain (loss) on derivatives and other(1)	$	(2,726	)	$	(14,936	)	$	(8,897	)
Adjustment to fair value of foreign currency forwards held at the end of the reporting period	Unrealized gain (loss) on derivatives and other (1)	(5,270		)	4,872			417
Adjustment to fair value of foreign currency forwards settled during the period	Unrealized gain (loss) on derivatives and other (1)	(5,070		)	(219		)	—
Net cash receipt (payment) on derivatives	Realized gain (loss) on sales and other	979			(787		)	—

_____________________________

(1)    Excludes the unrealized gain (loss) relating to foreign currency remeasurement adjustments.

The Company’s counterparties held no cash margin as collateral against the Company’s derivative contracts as of December 31, 2017 and December 31, 2016. The Company had no derivative financial instruments that were designated as hedges in qualifying hedging relationships as of December 31, 2017 and December 31, 2016.

11. Fair Value

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 are recorded at fair value on the consolidated balance sheets and 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.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following is a description of the valuation techniques used to measure fair value of assets and liabilities accounted for at fair value on a recurring basis and the general classification of these instruments pursuant to the fair value hierarchy.

Derivative Instruments

Derivative instruments consist of interest rate caps and foreign currency exchange contracts that are traded over-the-counter, and are valued using a third-party service provider. These quotations are not adjusted and are generally based on valuation models with observable inputs such as contractual cash flow, yield curve, foreign currency rates and credit spreads and as such, are classified as Level 2 of the fair value hierarchy. Derivative instruments are also assessed for credit valuation adjustments due to the risk of non-performance by the Company and derivative counterparties.

34

NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair Value of Financial Instruments

In addition to the above disclosures regarding financial assets or liabilities which are recorded at fair value, U.S. GAAP requires disclosure of fair value about all financial instruments. The following disclosure of estimated fair value of financial instruments was determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value.

The following table presents the principal amount, carrying value and fair value of certain financial assets and liabilities as of December 31, 2017 and 2016 (dollars in thousands):

	December 31, 2017						December 31, 2016
	Principal/Notional Amount		Carrying Value		Fair Value		Principal/Notional Amount		Carrying Value		Fair Value
Financial assets:(1)
Derivative assets	$	1,193,012	$	7,024	$	7,024	$	1,180,206	$	13,729	$	13,729
Preferred equity investment	35,347		35,347		35,783		—		—		—
Financial liabilities:(1)
Mortgage and other notes payable, net	$	1,234,642	$	1,223,443	$	1,231,321	$	1,162,211	$	1,149,119	$	1,146,134
Derivative liabilities	58,647		5,270		5,270		—		—		—

_____________________________

(1) The fair value of other financial instruments not included in this table is estimated to approximate their carrying value.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of the reporting date. Although management is not aware of any factors that would significantly affect fair value, such amounts have not been comprehensively revalued for purposes of these consolidated financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

Mortgage and Other Notes Payable

For mortgage and other notes payable, the Company primarily uses rates currently available with similar terms and remaining maturities to estimate fair value. These measurements are determined using rates as of the end of the reporting period or market credit spreads over the rate payable on fixed rate of like maturities. These fair value measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy.

Preferred Equity Investments

For preferred equity investments, fair value was computed by comparing the current yield to the estimated yield for newly originated loans with similar credit risk or the market yield at which a third party might expect to purchase such investment. Fair value was determined assuming fully-extended maturities regardless of structural or economic tests required to achieve such extended maturities. These fair value measurements are generally based on unobservable inputs and, as such, are classified as Level 3 of the fair value hierarchy.

12. 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 current legal proceedings are not expected to have a material adverse effect on the Company’s financial position or results of operations.

The Company engages third-party service providers for its portfolio who are remunerated based on either a fixed fee or a percentage of rental income. The contract terms vary by party and are subject to termination options. These costs are recorded in properties - operating expense and other expenses in the consolidated statements of operations.

35

NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As part of the terms of agreements relating to certain assets the Company disposed, as is customary for such transactions in Europe, the Company agreed to provide certain warranties to the buyer.

Obligations Under Ground Leases

The following table presents minimum future rental payments under the Company’s contractual ground lease obligations for certain building leaseholds for the year endedDecember 31, 2017 (dollars in thousands):

Years ending December 31:	Total(1)
2018	$	705
2019	705
2020	705
2021	705
2022	705
Thereafter	46,828
Total minimum lease payments	$	50,353

__________________

(1) Represent two ground leases with an average expiry of 2095. None of these are paid directly by the tenants.

Risk Management

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 region to be similarly affected by changes in economic conditions. The Company monitors its portfolios to identify potential concentrations of credit risks. For the year endedDecember 31, 2017, one tenant, DekaBank Deutsche Girozentrale, accounted for more than 10% of the Company’s total revenue. This tenant has 6.4 years remaining on its lease. Otherwise, the Company has no other tenant that generates 10% or more of its total revenue. Additionally, for the year endedDecember 31, 2017, Germany, France and the United Kingdom each accounted for more than 10% of the Company’s total revenue. The Company believes the remainder of its portfolio is well diversified and does not contain any unusual concentrations of credit risks.

13. Quarterly Financial Information (Unaudited)

The following presents selected quarterly information for the years endedDecember 31, 2017 and 2016 (dollars in thousands, except per share data):

	Three Months Ended
	December 31,			September 30,			June 30,			March 31,
	2017			2017			2017			2017
Rental income	$	26,041		$	27,747		$	26,025		$	25,536
Escalation income	5,265			5,641			5,558			5,161
Interest income	705			704			297			—
Interest expense	6,203			6,536			6,722			6,383
Management fee, related party	3,692			3,585			3,572			3,559
Transaction costs	4,552			332			973			260
Depreciation and amortization	14,535			14,396			12,520			12,563
Other, net(1)	15,893			13,906			12,720			27,760
Unrealized gain (loss) on derivatives and other	(795		)	(3,472		)	(7,655		)	(941		)
Realized gain (loss) on sales and other	13,735			1,681			1,981			4,970
Income (loss) before income tax benefit (expense)	76			(6,454		)	(10,301		)	(15,799		)
Net income (loss)	2,537			(6,806		)	(10,538		)	(15,526		)
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	1,442			(6,770		)	(10,447		)	(15,350		)
Earnings (loss) per share:(2)
Basic	$	0.02		$	(0.12	)	$	(0.19	)	$	(0.28	)
Diluted	$	0.02		$	(0.12	)	$	(0.19	)	$	(0.28	)

__________________

(1) Primarily relates to properties - operating expenses, general and administrative expense, other expenses and compensation expense offset by other income.

(2) The total for the year may differ from the sum of the quarters as a result of weighting.

36

NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Three Months Ended
	December 31,			September 30,			June 30,			March 31,
	2016			2016			2016			2016
Rental income	$	25,700		$	29,798		$	33,990		$	34,833
Escalation income	5,347			7,828			5,908			6,090
Interest expense	7,955			9,301			11,641			12,542
Management fee, related party	3,520			3,548			3,500			3,500
Transaction costs	(23		)	150			1,652			831
Depreciation and amortization	13,715			13,989			18,404			18,871
Other, net(1)	20,531			19,585			44,271			16,962
Unrealized gain (loss) on derivatives and other	8,319			(4,982		)	1,159			(15,753		)
Realized gain (loss) on sales and other	20,460			3,814			4,622			(2,448		)
Income (loss) before income tax benefit (expense)	14,128			(10,115		)	(33,789		)	(29,984		)
Net income (loss)	13,902			(12,770		)	(34,309		)	(29,325		)
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	13,859			(12,721		)	(33,909		)	(28,982		)
Earnings (loss) per share:(2)
Basic	$	0.25		$	(0.22	)	$	(0.57	)	$	(0.49	)
Diluted	$	0.24		$	(0.22	)	$	(0.57	)	$	(0.49	)

__________________

(1) Primarily relates to properties - operating expenses, general and administrative expense, impairment loss, other expenses and compensation expense offset by other income.

(2) The total for the year may differ from the sum of the quarters as a result of weighting.

14. Segment Reporting

The Company currently conducts its business through the following three segments, based on how management reviews and manages its business:

• Real Estate Equity- Focused on European prime office properties located in key cities within Germany, the United Kingdom and France.

• Preferred Equity - Represents the Company’s preferred equity investment secured by interest in a European prime office property.

• Corporate - The corporate segment significantly includes corporate level interest expense, management fee and general and administrative expenses.

37

NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables present segment reporting for the years endedDecember 31, 2017, 2016 and 2015 (dollars in thousands):

	Year Ended December 31, 2017
Statement of Operations:	Real Estate Equity			Preferred Equity		Corporate				Total
Revenues
Rental income	$	105,349		$	—	$	—			$	105,349
Escalation income	21,625			—		—				21,625
Interest income	—			1,706		—				1,706
Expenses
Interest expense(1)	24,989			—		855				25,844
Management fee, related party	—			—		14,408				14,408
Transaction costs(4)	—			538		5,579				6,117
Depreciation and amortization	54,014			—		—				54,014
Other, net	20,887		(2)	72		39,816			(3)	60,775
Income (loss) before income tax benefit (expense)	27,084			1,096		(60,658		)		(32,478		)
Income tax benefit (expense)	2,145			—		—				2,145
Net income (loss)	$	29,229		$	1,096	$	(60,658	)		$	(30,333	)
Balance Sheets:
December 31, 2017
Total Assets	$	1,901,282		$	37,133	$	2,502			$	1,940,917

___________________________________

(1) Includes $2.4 million and $0.4 million of amortization of deferred financing costs in the real estate equity and corporate segments, respectively.

(2) Primarily relates to properties - operating expenses and unrealized loss on interest rate caps offset by other income and realized gain on sales.

(3) Primarily relates to general and administrative expense and unrealized loss on foreign currency forwards.

(4) Transaction costs relates to costs associated with amending the management agreement in our corporate segment and other transaction costs in our preferred equity segment.

	Year Ended December 31, 2016
Statement of Operations:(1)	Real Estate Equity				Corporate				Total
Revenues
Rental income	$	124,321			$	—			$	124,321
Escalation income	25,173				—				25,173
Expenses
Interest expense(2)	30,974				10,465				41,439
Management fee, related party	—				14,068				14,068
Transaction costs(5)	—				2,610				2,610
Depreciation and amortization	64,979				—				64,979
Other, net	57,546			(3)	28,612			(4)	86,158
Income (loss) before income tax benefit (expense)	(4,005		)		(55,755		)		(59,760		)
Income tax benefit (expense)	(2,742		)		—				(2,742		)
Net income (loss)	$	(6,747	)		$	(55,755	)		$	(62,502	)
Balance Sheets:
December 31, 2016
Total Assets	$	1,835,531			$	9,861			$	1,845,392

___________________________________

(1) The Company did not have a preferred equity segment for the year ended December 31, 2016.

(2) Includes $3.7 million and $3.4 million of amortization of deferred financing costs in the real estate and corporate segments, respectively.

(3) Primarily relates to properties - operating expense, realized loss on the sale of real estate and impairment loss on real estate offset by the realized gain on foreign currency translation and other.

(4) Primarily relates to general and administrative expense and unrealized loss on foreign currency forwards. Includes an allocation of general and administrative expense from the Manager of $0.2 million.

(5) Transaction costs primarily relate to costs associated the Mergers in our corporate segment.

38

NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Year Ended December 31, 2015
Statement of Operations:	Real Estate Equity				Corporate				Total
Revenues
Rental income	$	101,023			$	—			$	101,023
Escalation income	18,822				—				18,822
Expenses
Interest expense(1)	25,365				10,764				36,129
Management fee, related party	—				2,333				2,333
Transaction costs(4)	120,101				—				120,101
Depreciation and amortization	56,283				—				56,283
Other, net	24,237			(2)	25,580			(3)	49,817
Income (loss) before income tax benefit (expense)	(106,141		)		(38,677		)		(144,818		)
Income tax benefit (expense)	675				—				675
Net income (loss)	$	(105,466	)		$	(38,677	)		$	(144,143	)
Balance Sheets:
December 31, 2015
Total Assets	$	2,544,992			$	138,058			$	2,683,050

___________________________________

(1) Includes $2.9 million and $3.0 million of amortization of deferred financing costs in the real estate equity and corporate segments, respectively.

(2) Primarily relates to properties - operating expense, unrealized loss on interest rate caps and impairment loss on goodwill offset by the realized gain on the sale of real estate and other income.

(3) Primarily relates to general and administrative expense, compensation expense and unrealized loss on foreign currency forwards.

(4) Transaction costs primarily represents expenses such as real estate transfer tax and professional fees related to the acquisitions in 2015 in our real estate equity segment.

Geography

The following table presents geographic information about the Company's total rental and escalation income for the years ended December 31, 2017, 2016 and 2015 (in thousands):

	Years Ended December 31,
	2017			2016		2015
Office
Germany	$	51,241		$	53,743	$	31,969
United Kingdom	36,984			38,483		36,882
France	20,051			19,551		13,802
Other	14,167		(1)	30,656		31,001
Subtotal	122,443			142,433		113,654
Other	4,531			7,061		6,191
Total	$	126,974		$	149,494	$	119,845

__________________

(1) Includes an asset in Portugal and an asset in the Netherlands which are classified as held-for-sale as of December 31, 2017.

15. Subsequent Events

Dividends

On March 7, 2018, the Company declared a dividend of $0.15 per share of common stock. The common stock dividend is expected be paid on March 23, 2018 to stockholders of record as of the close of business on March 19, 2018.

Share Repurchase

In March 2018, the Company’s board of directors authorized the repurchase of up to $100 million of its outstanding common stock. The authorization expires in March 2019, unless otherwise extended by the Company’s board of directors.

39

Disposals

In February 2018, the Company agreed a definitive sale and purchase agreement to sell the Maastoren property, the Company’s largest non-core asset, for approximately $190 million. The Company expects to release approximately $60 million of net equity after repayment of financing (including release premium) and transaction costs.

Credit Facility

In March 2018, the Company amended the Credit Facility, increasing the size to $70 million and extending the term until April 2020 with one year extension option. The Credit Facility includes an accordion feature, providing for the ability to increase the facility to $105 million.

40

NORTHSTAR REALTY EUROPE AND SUBSIDIARIES

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

As of December 31, 2017

(Dollars in Thousands)

Column A		Column B		Column C Initial Cost				Column D Capitalized Subsequent to Acquisition		Column E Gross Amount Carried at Close of Period						Column F					Column G	Column H
Asset	Location	Encumbrances(1)		Land		Building & Improvements		Land, Buildings & Improvements		Land		Building & Improvements		Total		Accumulated Depreciation			Total (2)(4)		Date Acquired	Life on Which Depreciation is Computed
Germany(3)
Trianon	Frankfurt	$	395,293	$	89,410	$	518,441	$	10,388	$	89,410	$	528,829	$	618,239	$	(39,122	)	$	579,117	7/15/2015	40 years
Valentinskamp	Hamburg	34,646		24,609		30,086		4,653		24,609		34,739		59,348		(2,851		)	56,497		4/1/2015	40 years
Parexel	Berlin	30,912		8,425		37,703		1		8,425		37,704		46,129		(2,799		)	43,330		4/8/2015	40 years
Drehbahn	Hamburg	29,251		27,287		10,628		726		27,287		11,354		38,641		(1,430		)	37,211		4/1/2015	40 years
Ludwigstrasse	Cologne	19,696		12,435		20,026		486		12,435		20,512		32,947		(1,736		)	31,211		4/8/2015	40 years
Dammtorwall	Hamburg	15,105		7,046		14,082		132		7,046		14,214		21,260		(1,275		)	19,985		4/1/2015	40 years
Uhlandstrasse	Frankfurt	12,576		4,504		15,916		1,998		4,504		17,914		22,418		(1,454		)	20,964		4/8/2015	40 years
Munster	Germany	5,998		2,811		5,689		1,515		2,811		7,204		10,015		(499		)	9,516		4/8/2015	40 years
Subtotal		543,477		176,527		652,571		19,899		176,527		672,470		848,997		(51,166		)	797,831
France
Berges de Seine	Paris, Issy	96,129		100,198		55,317		134		100,198		55,451		155,649		(5,400		)	150,249		4/1/2015	40 years
Mac Donald	Paris, Other	54,742		34,505		44,831		7		34,505		44,838		79,343		(4,214		)	75,129		4/1/2015	40 years
Marceau	Paris, CBD	26,209		35,505		13,586		1,357		35,505		14,943		50,448		(1,378		)	49,070		4/8/2015	40 years
Joubert	Paris, CBD	6,959		10,547		4,353		57		10,547		4,410		14,957		(390		)	14,567		4/8/2015	40 years
Subtotal		184,039		180,755		118,087		1,555		180,755		119,642		300,397		(11,382		)	289,015
United Kingdom
Portman Square	London, West End	140,144		—		188,366		2,229		—		190,595		190,595		(14,569		)	176,026		4/1/2015	40 years
Condor House	London, City	110,682		16,767		126,575		1,582		16,767		128,157		144,924		(10,670		)	134,254		4/1/2015	40 years
Glasgow	Other	5,054		2,474		7,043		—		2,474		7,043		9,517		(560		)	8,957		4/8/2015	40 years
Chiswick	Greater London	8,385		6,906		6,641		12		6,906		6,653		13,559		(532		)	13,027		4/8/2015	40 years
St Albans	Greater London	3,887		2,083		4,830		7		2,083		4,837		6,920		(454		)	6,466		4/8/2015	40 years
Subtotal		268,152		28,230		333,455		3,830		28,230		337,285		365,515		(26,785		)	338,730
Other(5)
IC Hotel	Germany, Berlin	12,148		864		22,919		129		864		23,048		23,912		(1,572		)	22,340		4/8/2015	40 years
Ibis Berlin	Germany, Berlin	8,432		903		12,474		—		903		12,474		13,377		(853		)	12,524		4/8/2015	40 years
Neuermarkt	Germany, Werl	1,815		995		2,748		99		995		2,847		3,842		(240		)	3,602		4/8/2015	40 years
Marly	France, Greater Paris	22,024		5,069		44,034		5		5,069		44,039		49,108		(3,094		)	46,014		4/8/2015	40 years
Kirchheide	Germany, Other	—		348		1,394		—		348		1,394		1,742		(264		)	1,478		4/8/2015	40 years
Subtotal		44,419		8,179		83,569		233		8,179		83,802		91,981		(6,023		)	85,958
Grand Total		$	1,040,087	$	393,691	$	1,187,682	$	25,517	$	393,691	$	1,213,199	$	1,606,890	$	(95,356	)	$	1,511,534
Held-for-Sale
Office123	Portugal	$	—	$	670	$	12,000	$	114	$	670	$	12,114	$	12,784	$	(874	)	$	11,910	4/8/2015	40 years
Maastoren	Netherlands	87,444		11,441		148,534		561		11,441		149,095		160,536		(11,795		)	148,741		4/1/2015	40 years
Grand Total		$	87,444	$	12,111	$	160,534	$	675	$	12,111	$	161,209	$	173,320	$	(12,669	)	$	160,651

______________________

(1) Excludes the preferred equity certificates of $107.1 million.

(2) Aggregate cost for federal income tax purposes is $1.7 billion as of December 31, 2017.

(3) German office properties comprise nine buildings.

(4) Excludes intangibles.

(5) Represents retail, industrial and hotel (net lease) assets.

41

NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

As of December 31, 2017

(Dollars in Thousands)

The following table presents changes in the Company’s operating real estate portfolio as of December 31, 2017, 2016 and 2015 (dollars in thousands):

	2017			2016			2015
Beginning balance	$	1,614,432		$	2,120,460		$	55,413
Property acquisitions	—			—			2,080,038
Reclassification	—			(733		)	—
Transfers to held for sale	(173,320		)	(23,138		)	(5,330		)
Improvements	18,033			10,792			3,414
Retirements and disposals	(60,234		)	(353,883		)	(14,514		)
Foreign currency translation	207,979			(139,066		)	1,439
Ending balance	$	1,606,890		$	1,614,432		$	2,120,460

The following table presents changes in accumulated depreciation as of December 31, 2017, 2016 and 2015 (dollars in thousands):

	2017			2016			2015
Beginning balance	$	(63,585	)	$	(35,303	)	$	(517	)
Depreciation expense	(40,196		)	(45,219		)	(35,842		)
Assets held for sale	12,669			811			31
Retirements and disposals	5,722			10,635			213
Foreign currency translation	(9,966		)	5,491			812
Ending balance	$	(95,356	)	$	(63,585	)	$	(35,303	)

42

PART IV.

Item 15.   Exhibits and Financial Statements Schedules

(a) 1. Consolidated Financial Statements and (a) 2. Financial Statement Schedules are included in Part II, Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2017 and 2016

Consolidated Statements of Operations for the years endedDecember 31, 2017, 2016 and 2015

Consolidated Statements of Comprehensive Income (Loss) for the years endedDecember 31, 2017, 2016 and 2015

Consolidated Statements of Equity for the years endedDecember 31, 2017, 2016 and 2015

Consolidated Statements of Cash Flows for the years endedDecember 31, 2017, 2016 and 2015

Notes to the Consolidated Financial Statements

Schedule III-Real Estate and Accumulated Depreciation as of December 31, 2017

(a) 3. Exhibit Index:

43

Exhibit Number		Description of Exhibit
2.1		Separation Agreement between NorthStar Realty Europe Corp. and NorthStar Realty Finance Corp. (incorporated by reference to Exhibit 10.2 to NorthStar Realty Europe’s Current Report on Form 8-K filed on November 3, 2015)
3.1		Articles of Amendment and Restatement of NorthStar Realty Europe Corp. (incorporated by reference to Exhibit 3.1 to NorthStar Realty Europe’s Current Report on Form 8-K filed on October 23, 2015)
3.2		Bylaws of NorthStar Realty Europe Corp. (incorporated by reference to Exhibit 3.2 to NorthStar Realty’s Europe’s Registration Statement on Form S-11 filed on October 9, 2015)
10.1		Amended and Restated Asset Management Agreement amending that certain Asset Management Agreement between NorthStar Realty Europe Corp. and an affiliate of NorthStar Asset Management Group Inc. dated as of November 9, 2017, by and among NorthStar Realty Europe Corp. and CNI NRE Advisors, LLC (incorporated by reference to Exhibit 10.1 to NorthStar Realty Europe’s Annual Report on Form 10-K filed on March 13, 2018)
10.2		First Amendment to Credit Agreement and New Lender Joinder Agreement dated March 9, 2018, to amend the Amended and Restated Credit Agreement dated April 6, 2017, among NorthStar Realty Europe Limited Partnership, as borrower, NorthStar Realty Europe Corp., the Lender party thereto, and Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer. (incorporated by reference to Exhibit 10.2 to NorthStar Realty Europe’s Annual Report on Form 10-K filed on March 13, 2018)
10.3		Amended and Restated Credit Agreement, dated as of April 6, 2017, by and among NorthStar Realty Europe Limited Partnership, as borrower, NorthStar Realty Europe Corp., as guarantor, Merrill Lynch, Pierce, Fenner & Smith Incorporated as sole lead arranger and bookrunner and Bank of America, N.A. as administrative agent and the other commercial bank lenders thereto (incorporated by reference to Exhibit 10.1 to NorthStar Realty’s Europe’s Current Report on Form 8-K for the period April 6, 2017 and filed on April 6, 2017)
10.4		Waiver Letter by and among NorthStar Realty Europe Corp. and an affiliate of Colony NorthStar, Inc. dated as of November 9, 2017 (incorporated by reference to Exhibit 10.2 to NorthStar Realty’s Europe’s Quarterly Report on Form 10-Q filed on November 9, 2017)
10.5		Amendment Agreement dated September 5, 2017 by and among Prime Holdco C-T S.à r.l., the borrowers and guarantors identified therein, Aareal Bank AG, as mandated lead arranger, lender, finance agent to the other finance parties thereto, and security trustee, and Capita Trust Company Limited, as English security trustee, to that certain Amendment and Restatement Agreement, dated as of July 1, 2015, by and among Prime Holdco C-T, S.à r.l., the borrowers and guarantors identified therein, Aareal Bank AG, as the agent, arranger and original lender, and the other parties identified therein (incorporated by reference to Exhibit 10.1 to NorthStar Realty’s Europe’s Current Report on Form 8-K filed on September 11, 2017)
10.6		Amended and Restated Agreement of Limited Partnership of NorthStar Realty Europe Limited Partnership dated October 31, 2015 (incorporated by reference to Exhibit 10.4 to NorthStar Realty Europe’s Current Report on Form 8-K filed on November 3, 2015)
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., collectively as the sellers, and the several purchasers identified therein (incorporated by reference to Exhibit 10.9 to NorthStar Realty Europe’s Registration Statement on Form S-11 filed on September 29, 2015)
10.8		Amendment and Restatement Agreement, dated as of July 20, 2015, to the Loan Agreement of September 25, 2014, between Geschäftshaus am Gendarmenmarkt GmbH, as borrower, and Landesbank Hessen-Thüringen Girozentrale, as lender (incorporated by reference to Exhibit 10.12 to NorthStar Realty Europe’s Registration Statement on Form S-11 filed on October 9, 2015)
10.9		Second Amendment Agreement, dated June 21, 2016, by and among Geschäftshaus am Gendarmenmarkt GmbH and GMS Gebäudemanagement und Service GmbH as the Security Providers and Landesbank Hessen-Thüringen Girozentrale (incorporated by reference to Exhibit 10.2 to NorthStar Realty’s Europe’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016)
10.10	+	Form of NorthStar Realty Europe Corp. 2015 Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.13 to NorthStar Realty’s Europe’s Registration Statement on Form S-11 filed on October 9, 2015)
10.11	+	Form of Indemnification Agreement between NorthStar Realty Europe Corp. and each of its directors and executive officers (incorporated by reference to Exhibit 10.14 to NorthStar Realty’s Europe’s Registration Statement on Form S-11 filed on October 9, 2015)
12.1		Ratio of Earnings to Combined Fixed Charges (incorporated by reference to Exhibit 12.1 to NorthStar Realty Europe’s Annual Report on Form 10-K filed on March 13, 2018)
21.1		Significant Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to NorthStar Realty Europe’s Annual Report on Form 10-K filed on March 13, 2018)
23.1	*	Consent of PricewaterhouseCoopers, Société coopérative
24.1		Power of Attorney (incorporated by reference from the signature page to NorthStar Realty Europe’s Annual Report on Form 10-K filed on March 13, 2018
31.1	*	Certification by the Chief Executive Officer pursuant to 17 CFR 240.13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Certification by the Chief Financial Officer pursuant to 17 CFR 240.13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	*	Certification by the Chief Executive Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	*	Certification by the Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1		Additional Material U.S. Federal Income Tax Considerations (incorporated by reference to Exhibit 99.1 to NorthStar Realty Europe’s Annual Report on Form 10-K filed on March 13, 2018)
101.0	*	The following materials from the NorthStar Realty Europe Corp. Amendment No. 1 on Form 10-K/A for the year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016; (ii) Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015; (iii) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017, 2016 and 2015; (iv) Consolidated Statements of Equity for the years ended December 31, 2017, 2016 and 2015; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015; and (vi) Notes to Consolidated Financial Statements

____________________________________________________________

* Filed herewith.

+ Denotes management contract or compensatory plan or arrangement required to be filed as an exhibit hereto.

44

SIGNATURES

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

		NorthStar Realty Europe Corp.
Date:	March 23, 2018	By:	/s/ MAHBOD NIA
			Name:	Mahbod Nia
			Title:	Chief Executive Officer and President

Signature	Title	Date
/s/ MAHBOD NIA	Chief Executive Officer and President	March 23, 2018
Mahbod Nia	(Principal Executive Officer)
/s/ KEITH A. FELDMAN	Chief Financial Officer and Treasurer	March 23, 2018
Keith A. Feldman	(Principal Financial Officer and Principal Accounting Officer)
*	Chairman and Director	March 23, 2018
Richard B. Saltzman
*	Director	March 23, 2018
Judith A. Hannaway
*	Director	March 23, 2018
Wesley D. Minami
*	Director	March 23, 2018
Mario Chisholm
*	Director	March 23, 2018
Oscar Junquera
*	Director	March 23, 2018
Dianne Hurley
* By: /s/ KEITH A. FELDMAN	Attorney-in-Fact pursuant to Power of Attorney	March 23, 2018
Keith A. Feldman

45

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S‑8 (No. 333-207618) and Form S-3 (No. 333-221649) of NorthStar Realty Europe Corp. of our report dated March 13, 2018 relating to the financial statements and financial statement schedule, which appears in this Form 10-K/A.

/s/ PricewaterhouseCoopers, Société Coopérative

Luxembourg

March 23, 2018

Represented by Cornelis J. Hage

EX-31.1

EXHIBIT 31.1

CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER PURSUANT TO

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

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mahbod Nia, certify that:

1. I have reviewed this Amendment No. 1 on Form 10-K/A of NorthStar Realty Europe Corp. for the fiscal year endedDecember 31, 2017;

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

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

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

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

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

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

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

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

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

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

Date:	March 23, 2018	By:	/s/ MAHBOD NIA
			Mahbod Nia
			Chief Executive Officer and President

EX-31.2

EXHIBIT 31.2

CERTIFICATION BY THE CHIEF FINANCIAL OFFICER PURSUANT TO

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

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Keith A. Feldman, certify that:

1. I have reviewed this Amendment No. 1 on Form 10-K/A of NorthStar Realty Europe Corp. for the fiscal year endedDecember 31, 2017;

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

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

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

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

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

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

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

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

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

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

Date:	March 23, 2018	By:	/s/ KEITH A. FELDMAN
			KEITH A. FELDMAN
			Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

       In connection with Amendment No. 1 on Form 10-K/A of NorthStar Realty Europe Corp. (the “Company”) for the fiscal year endedDecember 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mahbod Nia, as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

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

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

Date:	March 23, 2018	By:	/s/ MAHBOD NIA
			Mahbod Nia
			Chief Executive Officer and President

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

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

EX-32.2

EXHIBIT 32.2

CERTIFICATION BY THE CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with Amendment No. 1 on Form 10-K/A of NorthStar Realty Europe Corp. (the “Company”) for the fiscal year endedDecember 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Keith A. Feldman, as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

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

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

Date:	March 23, 2018	By:	/s/ KEITH A. FELDMAN
			Keith A. Feldman
			Chief Financial Officer

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

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

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Mar. 08, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	NorthStar Realty Europe Corp.
Entity Central Index Key	0001646587
Entity Current Reporting Status	Yes
Document Type	10-K/A
Document Period End Date	Dec. 31, 2017
Amendment Flag	true
Amendment Description	revise the Report of Independent Registered Public Accounting Firm related to PricewaterhouseCoopers, Société coopérative’s opinion
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		55,410,367
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Public Float			$ 688,237,787

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Assets
Operating real estate, gross	$ 1,606,890	$ 1,614,432
Less: accumulated depreciation	(95,356)	(63,585)
Operating real estate, net	1,511,534	1,550,847
Preferred equity investments	35,347	0
Cash and cash equivalents	64,665	66,308
Restricted cash	6,917	10,242
Receivables, net of allowance of $747 and $553 as of December 31, 2017 and December 31, 2016, respectively	9,048	6,015
Assets held for sale	169,082	28,208
Derivative assets, at fair value	7,024	13,729
Intangible assets, net	114,185	148,403
Other assets, net	23,115	21,640
Total assets	1,940,917	1,845,392
Liabilities
Mortgage and other notes payable, net	1,223,443	1,149,119
Accounts payable and accrued expenses	27,240	28,004
Due to related party (refer to Note 6)	3,590	4,991
Derivative liabilities, at fair value	5,270	0
Intangible liabilities, net	28,632	30,802
Liabilities related to assets held for sale	648	2,041
Other liabilities	25,757	28,918
Total liabilities	1,314,580	1,243,875
Commitments and contingencies
Redeemable non controlling interest (refer to Note 9)	1,992	1,610
Equity
Preferred stock, $0.01 par value, 200,000,000 shares authorized, no shares issued and outstanding as of December 31, 2017 and December 31, 2016	0	0
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 55,402,259 and 55,395,143 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively	555	554
Additional paid-in capital	940,579	925,473
Retained earnings (accumulated deficit)	(347,053)	(282,769)
Accumulated other comprehensive income (loss)	25,618	(51,424)
Total NorthStar Realty Europe Corp. stockholders’ equity	619,699	591,834
Non-controlling interests	4,646	8,073
Total equity	624,345	599,907
Total liabilities, redeemable non controlling interest and equity	$ 1,940,917	$ 1,845,392

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Receivables, allowance	$ 747	$ 553
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	200,000,000	200,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (shares)	55,402,259	55,395,143
Common stock, shares outstanding (shares)	55,402,259	55,395,143

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	[1]
Revenues
Rental income		$ 105,349	$ 124,321	$ 101,023
Escalation income		21,625	25,173	18,822
Interest income		1,706	0	0
Other income		1,243	1,721	694
Total revenues		129,923	151,215	120,539
Expenses
Properties - operating expenses		31,119	35,892	26,559
Interest expense		25,844	41,439	36,129
Transaction costs		6,117	2,610	120,101
Impairment losses		0	27,468	1,710
Management fee, related party		14,408	14,068	2,333
Other expenses		9,251	12,376	10,535
General and administrative expenses		7,384	8,077	3,502
Compensation expense	[2]	23,768	19,257	850
Depreciation and amortization		54,014	64,979	56,283
Total expenses		171,905	226,166	258,002
Other income (loss)
Unrealized gain (loss) on derivatives and other (refer to Note 10)		(12,863)	(11,257)	(8,731)
Realized gain (loss) on sales and other		22,367	26,448	1,376
Income (loss) before income tax benefit (expense)		(32,478)	(59,760)	(144,818)
Income tax benefit (expense)		2,145	(2,742)	675
Net income (loss)		(30,333)	(62,502)	(144,143)
Net (income) loss attributable to non controlling interests		(792)	749	1,007
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders		$ (31,125)	$ (61,753)	$ (143,136)
Earnings (loss) per share:
Basic (in dollars per share)		$ (0.57)	$ (1.07)	$ (2.30)
Diluted (in dollars per share)		$ (0.57)	$ (1.07)	$ (2.30)
Weighted average number of shares:
Basic (shares)		55,073,383	57,875,479	62,183,638
Diluted (shares)		55,599,222	58,564,986	62,865,124

[1] The Company began paying fees on November 1, 2015, in connection with the management agreement with the Manger (refer to Note 6).

[2] Compensation expense for the years ended December 31, 2017, 2016 and 2015 is comprised of equity-based compensation expenses. For the year ended December 31, 2017, compensation expense includes the impact of substantially all time based and certain performance based awards vesting in connection with the change of control of the Manager (refer to Note 7).

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (30,333)	$ (62,502)	$ (144,143)	[1]
Other comprehensive income (loss):
Foreign currency translation adjustment, net	77,745	(55,226)	6,971
Total other comprehensive income (loss)	77,745	(55,226)	6,971
Comprehensive income (loss)	47,412	(117,728)	(137,172)
Comprehensive (income) loss attributable to non-controlling interests	(1,495)	1,991	1,082
Comprehensive income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	$ 45,917	$ (115,737)	$ (136,090)

[1] The Company began paying fees on November 1, 2015, in connection with the management agreement with the Manger (refer to Note 6).

XML

CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Total NorthStar Stockholders’ Equity	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit)	Accumulated Other Comprehensive Income (Loss)	Non-controlling Interests
Beginning Balance (shares) at Dec. 31, 2014			0
Beginning Balance at Dec. 31, 2014	$ 80,074	$ 79,016	$ 0	$ 116,982	$ (33,630)	$ (4,336)	$ 1,058
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net transaction with NorthStar Realty	653,534	653,534		653,534
Capital contribution of NorthStar Realty (shares)			62,988
Capital contribution of NorthStar Realty	250,000	250,000	$ 630	249,370
Non-controlling interests - contribution	192						192
Formation of Operating Partnership (refer to note 9)		(8,749)		(8,749)			8,749
Reallocation of interest in Operating Partnership (refer to Note 9)	0	(852)		(852)			852
Amortization of equity-based compensation	837	311		311			526
Issuance and vesting of restricted stock, net of tax withholding (shares)			18
Tax withholding related to vesting of equity-based compensation	(547)	(547)		(547)
Retirement of shares of common stock (shares)			(3,680)
Retirement of shares of common stock	(41,424)	(41,424)	$ (37)	(41,387)
Other comprehensive income (loss)	6,971	6,896				6,896	75
Dividends on common stock and equity-based compensation	(9,584)	(9,480)			(9,480)		(104)
Net income (loss)	(144,311)	(143,136)			(143,136)		(1,175)
Ending Balance (shares) at Dec. 31, 2015			59,326
Ending Balance at Dec. 31, 2015	795,742	785,569	$ 593	968,662	(186,246)	2,560	10,173
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reallocation of interest in Operating Partnership (refer to Note 9)	0	2,252		2,252			(2,252)
Amortization of equity-based compensation	18,239	15,682		15,682			2,557
Issuance and vesting of restricted stock, net of tax withholding (shares)			1,731
Issuance and vesting of restricted stock, net of tax withholding	0	0	$ 17	(17)
Tax withholding related to vesting of equity-based compensation	(2,546)	(2,546)		(2,546)
Retirement of shares of common stock (shares)			(5,662)
Retirement of shares of common stock	(58,616)	(58,616)	$ (56)	(58,560)
Other comprehensive income (loss)	(55,226)	(53,984)				(53,984)	(1,242)
Dividends on common stock and equity-based compensation	(35,184)	(34,770)			(34,770)		(414)
Net income (loss)	(62,502)	(61,753)			(61,753)		(749)
Ending Balance (shares) at Dec. 31, 2016			55,395
Ending Balance at Dec. 31, 2016	599,907	591,834	$ 554	925,473	(282,769)	(51,424)	8,073
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reallocation of interest in Operating Partnership (refer to Note 9)	0	1,817		1,817			(1,817)
Non-controlling interests - distribution	(1,915)						(1,915)
Non-controlling interests - redemption	(156)	(156)		(156)
Conversion of common units to common stock (shares)			268
Conversion of Common Units to common stock (refer to Note 9)	0	3,057	$ 3	3,054			(3,057)
Conversion of RSUs to common stock (in shares)			83
Conversion of RSUs to common stock (refer to Note 8)	0		$ 1	(1)
Amortization of equity-based compensation	23,607	21,433		21,433			2,174
Issuance and vesting of restricted stock, net of tax withholding (shares)			517
Issuance and vesting of restricted stock, net of tax withholding	0		$ 6	(6)
Cost of capital	(50)	(50)		(50)
Tax withholding related to vesting of equity-based compensation (shares)			(861)
Tax withholding related to vesting of equity-based compensation	(10,994)	(10,994)	$ (9)	(10,985)
Other comprehensive income (loss)	77,745	77,042				77,042	703
Dividends on common stock and equity-based compensation	(33,466)	(33,159)			(33,159)		(307)
Net income (loss)	(30,333)	(31,125)			(31,125)		792
Ending Balance (shares) at Dec. 31, 2017			55,402
Ending Balance at Dec. 31, 2017	$ 624,345	$ 619,699	$ 555	$ 940,579	$ (347,053)	$ 25,618	$ 4,646

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income (loss)	$ (30,333,000)	$ (62,502,000)	$ (144,143,000)	[1]
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	54,014,000	64,979,000	56,283,000	[1]
Amortization of deferred financing costs	2,813,000	7,117,000	5,936,000
Amortization of equity-based compensation	23,731,000	18,239,000	837,000
Allowance for uncollectible accounts	1,481,000	1,294,000	115,000
Unrealized (gain) loss on derivatives and other	12,863,000	11,257,000	8,669,000
Realized (gain) loss on sales and other	(22,367,000)	(26,448,000)	(1,376,000)
Goodwill impairment losses	0	0	1,710,000
Real estate impairment losses	0	27,468,000	0
Foreign currency loss on deposits included in transaction costs	0	0	6,402,000
Amortization of capitalized above/below market leases	627,000	2,463,000	1,191,000
Straight line rental income	(6,314,000)	(6,705,000)	(5,695,000)
Deferred income taxes, net	(1,515,000)	(4,952,000)	(2,992,000)
Changes in assets and liabilities:
Restricted cash	3,199,000	(2,717,000)	(16,483,000)
Receivables	(2,077,000)	(1,890,000)	(7,844,000)
Other assets	(15,000)	(3,063,000)	(1,023,000)
Accounts payable and accrued expenses	(6,018,000)	(4,461,000)	28,551,000
Due to related party	(1,401,000)	987,000	3,447,000
Other liabilities	(3,516,000)	7,064,000	16,235,000
Net cash provided by (used in) operating activities	25,172,000	28,130,000	(50,180,000)
Cash flows from investing activities:
Acquisition of operating real estate	0	0	(1,921,511,000)
Improvements of operating real estate	(17,668,000)	(10,413,000)	(3,003,000)
Origination of preferred equity investments	(35,347,000)	0	0
Proceeds from sale of operating real estate	141,360,000	395,226,000	22,623,000
Other assets	(141,000)	(4,432,000)	0
Deferred leasing costs	(3,712,000)	0	0
Changes in restricted cash	0	11,243,000	1,359,000
Net cash provided by (used in) investing activities	84,492,000	391,624,000	(1,900,532,000)
Cash flows from financing activities:
Repayment of mortgage and other notes payable	(77,804,000)	(200,666,000)	(127,280,000)
Borrowings from credit facility	35,000,000	65,000,000	0
Borrowings from mortgage and other notes payable	5,649,000	11,770,000	1,224,327,000
Repayment of credit facility	(35,000,000)	(65,000,000)	0
Proceeds of issuance of Senior Notes	0	0	340,000,000
Repurchase of Senior Notes	0	(273,028,000)	0
Repayment of Senior Notes	0	(67,200,000)	0
Payment of financing costs	(2,020,000)	(3,938,000)	(33,470,000)
Purchase of derivative instruments	0	(414,000)	(31,069,000)
Settlement of derivatives	(979,000)	787,000	0
Tax withholding related to vesting of equity-based compensation	(10,994,000)	(2,546,000)	0
Repurchase of common stock	0	(58,616,000)	(38,082,000)
Contribution of NorthStar Realty	0	0	250,000,000
Dividends	(33,466,000)	(35,184,000)	(9,584,000)
Net transactions with NorthStar Realty	0	0	653,534,000
Contributions from non-controlling interest	0	0	3,190,000
Distributions to non-controlling interest	(1,915,000)	(247,000)	0
Net cash provided by (used in) financing activities	(119,571,000)	(630,856,000)	2,231,566,000
Effect of foreign currency translation on cash and cash equivalents	8,264,000	(6,434,000)	890,000
Net increase (decrease) in cash and cash equivalents	(1,643,000)	(217,536,000)	281,744,000
Cash and cash equivalents—beginning of period	66,308,000	283,844,000	2,100,000
Cash and cash equivalents—end of period	64,665,000	66,308,000	283,844,000
Supplemental disclosure of non-cash investing and financing activities:
Reclassification of operating real estate to assets held for sale	160,651,000	22,327,000	5,318,000
Conversion of Common Units to common stock	3,057,000	0	0
Reclassification of intangibles to assets and liabilities held for sale	4,467,000	2,045,000	776,000
Reclassification of operating real estate to intangible assets/liabilities	0	0	170,694,000
Reclassification of other assets in investing activities to assets held for sale	0	2,523,000	0
Formation of Operating Partnership	0	0	8,749,000
Assumption of mortgage note payable upon acquisition	0	0	273,021,000
Reclassification of other assets to operating real estate	0	0	52,245,000
Reclassification of other assets and liabilities to assets held for sale	3,316,000	740,000	0
Reclassification related to measurement adjustments/other	0	827,000	5,291,000
Retirement of shares of common stock	0	0	3,342,000
Assumption of working capital items upon acquisition	0	0	2,569,000
Assumption of deferred tax liabilities and corresponding goodwill	0	0	24,491,000
Reallocation of interest in Operating Partnership	1,817,000	2,252,000	852,000
Amounts payable relating to financing costs	0	0	1,808,000
Accrued capital expenditures and deferred assets	2,609,000	1,975,000	692,000
Supplemental disclosures of cash flow information:
Payment of interest expense	22,251,000	33,483,000	24,273,000
Payment of income tax	$ 4,433,000	$ 1,928,000	$ 1,298,000

[1] The Company began paying fees on November 1, 2015, in connection with the management agreement with the Manger (refer to Note 6).

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Formation and Organization

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Formation and Organization

Formation and Organization

NorthStar Realty Europe Corp. (“NorthStar Europe” or the “Company”) (NYSE: NRE), a publicly-traded real estate investment trust (“REIT”), is a European focused commercial real estate company with predominantly prime office properties in key cities within Germany, the United Kingdom and France. The Company commenced operations on November 1, 2015 following the spin-off by NorthStar Realty Finance Corp. (“NorthStar Realty”) of its European real estate business (excluding its European healthcare properties) into a separate publicly-traded company, NorthStar Realty Europe Corp., a Maryland corporation (the “Spin-off”). The Company’s objective is to provide its stockholders with stable and recurring cash flow supplemented by capital growth over time.

The Company is externally managed and advised by an affiliate of the Manager. References to “the Manager” refer to NorthStar Asset Management Group Inc. (“NSAM”) for the period prior to the Mergers (refer below) and Colony NorthStar, Inc. (“Colony NorthStar” or “CLNS”), for the period subsequent to the Mergers. As part of the Mergers, NSAM changed its name to Colony NorthStar, Inc.

Substantially all of the Company’s assets, directly or indirectly, are held by, and the Company conducts its operations, directly or indirectly, through NorthStar Realty Europe Limited Partnership, a Delaware limited partnership and the operating partnership of the Company (the “Operating Partnership”). The Company has elected to be taxed, and will continue to conduct its operations so as to continue to qualify, as a REIT for U.S. federal income tax purposes.

All references herein to the Company refer to NorthStar Realty Europe Corp. and its consolidated subsidiaries, including the Operating Partnership, collectively, unless the context otherwise requires.

Merger Agreements among NSAM, NorthStar Realty and Colony Capital, Inc.

On January 10, 2017, the Company’s external manager, NSAM, completed a tri-party merger with NorthStar Realty and Colony Capital, Inc. (“Colony”), pursuant to which the companies combined in an all-stock merger (“the Mergers”) of equals transaction to create a diversified real estate and investment management company. Under the terms of the merger agreement, NSAM, Colony and NorthStar Realty, through a series of transactions, merged with and into NSAM, which was renamed Colony NorthStar (NYSE: CLNS). Colony NorthStar is a leading global equity REIT with an embedded investment management platform.

Amended and Restated Management Agreement

On November 9, 2017, the Company entered into an amended and restated management agreement (the “Amended and Restated Management Agreement”) with an affiliate of our Manager, effective as of January 1, 2018. Refer to Note 6 “Related Party Arrangements” for a description of the terms of the Amended and Restated Management Agreement.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Accounting

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

The consolidated financial statements for the period January 1, 2015 to October 31, 2015 represent the Company’s activity prior to the spin-off by NorthStar Realty of its European real estate business (the “Spin-off”) and reflects the revenues and direct expenses of the Company and include material assets and liabilities of NorthStar Realty that are specifically identifiable to the European real estate business and contributed to the Company upon completion of the Spin-off.

The consolidated financial statements for the period prior to the Spin-off include an allocation of costs and expenses by NorthStar Realty related to the Company (primarily compensation and other general and administrative expense) based on an estimate of expenses as if the Company was managed as an independent entity. This allocation method is principally based on relative headcount and management’s knowledge of the operations of the Company. The amounts allocated in the accompanying consolidated 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 the Manager of $0.3 million for the period from January 1, 2015 through the Spin-off are recorded as if the Company was managed as an independent entity and is included in general and administrative expense in the consolidated statements of operations. The Company began paying management fees to the Manager on November 1, 2015 pursuant to the terms of the Company’s management agreement with the Manager (refer to Note 6).

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, the Operating Partnership and their consolidated subsidiaries. The Company consolidates variable interest entities (“VIE”) where the Company is the primary beneficiary and voting interest entities which are generally majority owned or otherwise controlled by the Company. All significant intercompany balances are 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 for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. The Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity. The Company reassesses its initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events.

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

The Company will evaluate its investments to determine whether they are a VIE. The Company analyzes 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 the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company does not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party or through a simple majority vote.

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

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 consolidated balance sheets and presented separately as net income (loss) and other comprehensive income (loss) (“OCI”) attributable to 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.

Reclassifications

Certain prior period amounts have been reclassified in the consolidated financial statements to conform to current period presentation including the gain (loss) on net cash on derivatives from unrealized gain (loss) on derivatives and other to realized gain (loss) on sales and other on the consolidated statements of operations for the year ended December 31, 2017 (refer to Note 10).

Estimates

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

Comprehensive Income (Loss)

The Company reports consolidated comprehensive income (loss) in separate statements following the consolidated statements of operations. Comprehensive income (loss) is defined as the change in equity resulting from net income (loss) and OCI. The components of OCI principally include the foreign currency translation adjustment, net.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with an original maturity date of three months or less and deposits held with third parties that are readily convertible to cash to be cash equivalents. Cash, including amounts restricted at certain banks and financial institutions, may at times exceed insurable amounts. The Company seeks to mitigate credit risk by placing cash and cash equivalents with major financial institutions. To date, the Company has not experienced any losses on cash and cash equivalents. Cash and cash equivalents exclude escrow arrangements entered into for specific warranties in relation to the real estate sales which are recorded in other assets in the consolidated financial statements.

Restricted Cash

Restricted cash primarily consists of amounts related to operating real estate such as escrows for taxes, insurance, capital expenditures, tenant security deposits and payments required under certain lease agreements and amounts related to the Company’s borrowings.

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 improvements which 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.

The Company accounts for purchases of operating real estate that qualify as business combinations using the acquisition method, where the purchase price is allocated to tangible assets such as land, building, tenant and land improvements and other identified intangibles, such as in-place leases, above/below-market leases and goodwill. Costs directly related to an acquisition deemed to be a business combination are expensed and included in transaction costs in the consolidated statements of operations.

Operating real estate is depreciated using the straight-line method over the estimated useful lives of the assets, summarized as follows:

Category:	Term:
Building	40 years
Building improvements	Lesser of the useful life or remaining life of the building
Building leasehold interests	Lesser of 40 years or remaining term of the lease
Tenant improvements	Lesser of the useful life or remaining term of the lease

Minimum rental amounts due under tenant leases are generally subject to scheduled adjustments. The following table presents approximate future minimum rental income under noncancelable operating leases to be received over the next five years and thereafter as of December 31, 2017 (dollars in thousands):

Years Ending December 31:(1)
2018	$	97,703
2019	100,373
2020	85,284
2021	74,694
2022	66,468
Thereafter	198,745
Total	$	623,267

_________________________

(1)    Translated to the U.S. dollar using the currency exchange rate as of December 31, 2017.

Preferred Equity Investments

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

Assets and Related Liabilities Held For Sale

Operating real estate which has met the criteria to be classified as held for sale is separately presented on the consolidated 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 net of the intangible assets associated with the asset, with any write-down to fair value less cost to sell recorded as an impairment loss. Once a property is determined to be held for sale, depreciation and amortization is no longer recorded. The Company records a gain or loss on sale of real estate when title is conveyed to the buyer and the Company has no substantial economic involvement with the property. If the sales criteria for the full accrual method are not met, the Company defers some or all of the gain or loss recognition by applying the finance, leasing, profit sharing, deposit, installment or cost recovery method, as appropriate, until the sales criteria are met.

Deferred Costs

Deferred costs primarily include deferred financing costs and deferred lease costs. Deferred financing costs represent commitment fees, legal and other third-party costs associated with obtaining financing. Costs related to revolving credit facilities are recorded in other assets and are amortized to interest expense using the straight-line basis over the term of the facility. Costs related to other borrowings are recorded net against the carrying value of such borrowings and are amortized into interest expense using 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 to realized gain (loss) on sales and other. Costs incurred in seeking financing transactions, which do not close, are expensed in the period in which it is determined that the financing will not occur. 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 are recorded to depreciation and amortization in the consolidated statements of operations.

Intangible Assets and Intangible Liabilities

The Company records acquired identified intangibles, which includes intangible assets (such as value of the above-market leases, in-place leases, below-market ground leases, goodwill 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 net to rental income, the value of below-market ground leases is amortized into properties - operating expense and in-place leases is amortized into depreciation and amortization expense, respectively, in the consolidated statements of operations on a straight-line basis over the respective remaining lease term.

Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination and is not amortized. The Company analyzes goodwill for impairment on an annual basis and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be fully recoverable. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit, related to such goodwill, is less than the carrying amount as a basis to determine whether the two-step impairment test is necessary. The first step in the impairment test compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds fair value, the second step is required to determine the amount of the impairment loss, if any, by comparing the implied fair value of the reporting unit goodwill with the carrying amount of such goodwill. The implied fair value of goodwill is derived by performing a hypothetical purchase price allocation for the reporting unit as of the measurement date, allocating the reporting unit’s estimated fair value to its net assets and identifiable intangible assets. The residual amount represents the implied fair value of goodwill. To the extent this amount is below the carrying value of goodwill, an impairment loss is recorded in the consolidated statements of operations.

The following table presents identified intangibles as of December 31, 2017 and 2016 (dollars in thousands):

	December 31, 2017(1)							December 31, 2016(1)
	Gross Amount		Accumulated Amortization			Net		Gross Amount		Accumulated Amortization			Net
Intangible assets:
In-place lease	$	64,427	$	(24,290	)	$	40,137	$	80,924	$	(25,193	)	$	55,731
Above-market lease	34,882		(9,919		)	24,963		36,471		(7,965		)	28,506
Below-market ground lease	34,497		(1,109		)	33,388		51,876		(1,490		)	50,386
Goodwill(2)	15,697		N/A			15,697		13,780		N/A			13,780
Total	$	149,503	$	(35,318	)	$	114,185	$	183,051	$	(34,648	)	$	148,403
Intangible liabilities:
Below-market lease	$	32,267	$	(8,964	)	$	23,303	$	34,163	$	(8,104	)	$	26,059
Above-market ground lease	5,513		(184		)	5,329		4,839		(96		)	4,743
Total	$	37,780	$	(9,148	)	$	28,632	$	39,002	$	(8,200	)	$	30,802

_______________________

(1) As of December 31, 2017, the weighted average amortization period for above-market leases, below-market leases and in-place leases was 6.4 years, 9.2 years and 5.7 years, respectively. As of December 31, 2016, the weighted average amortization period for above-market leases, below-market leases and in-place leases was 7.1 years, 9.8 years and 6.1 years, respectively.

(2) Represents goodwill associated with certain acquisitions in exchange for shares in the underlying portfolios. The goodwill and a corresponding deferred tax liability was recorded at acquisition based on tax basis differences.

The following table presents a rollforward of goodwill for the year endedDecember 31, 2017 (dollars in thousands):

Balance as of December 31, 2015	$	22,852
Disposal of goodwill(1)	(8,561		)
Adjustments from foreign currency translation	(511		)
Balance as of December 31, 2016	13,780
Adjustments from foreign currency translation	1,917
Balance as of December 31, 2017	$	15,697

_______________________

(1) Represents goodwill associated with certain disposals structured as share sales.

The following table presents amortization of acquired above-market leases, net of acquired below-market leases and below-market ground leases and amortization of other intangible assets for the years endedDecember 31, 2017, 2016 and 2015 (dollars in thousands):

		Years Ended December 31,
	Statements of operations location:	2017		2016		2015
Amortization of above-market leases, net of acquired below-market leases	Rental income / properties - operating expenses	$	666	$	2,162	$	2,335
Amortization of other intangible assets	Depreciation and amortization expense	13,817		19,543		20,468

The following table presents annual amortization of intangible assets and liabilities (dollars in thousands):

	Intangible Assets						Intangible Liabilities
Years Ending December 31:	In-place Leases, Net		Above-market Leases, Net		Below-market Ground Lease Value, Net		Below-market Leases, Net		Above-market Ground Lease Value, Net
2018	$	9,272	$	4,030	$	399	$	2,839	$	75
2019	8,801		4,008		399		2,839		75
2020	7,094		3,860		399		2,805		75
2021	6,010		3,848		399		2,635		75
2022	4,169		3,848		399		2,626		75
Thereafter	4,791		5,369		31,393		9,559		4,954
Total	$	40,137	$	24,963	$	33,388	$	23,303	$	5,329

Other Assets and Other Liabilities

The following tables present a summary of other assets and other liabilities as of December 31, 2017 and 2016 (dollars in thousands):

	December 31,
	2017		2016
Other assets:
Prepaid expenses	$	1,936	$	1,951
Deferred leasing and other costs, net	6,019		3,029
Straight-line rent, net	10,969		10,182
Escrow receivable	3,286		6,168
Other	905		310
Total	$	23,115	$	21,640
	December 31,
	2017		2016
Other liabilities:
Deferred tax liabilities	$	8,548	$	8,916
Prepaid rent received and unearned revenue	8,406		13,585
Tenant security deposits	4,435		4,322
Prepaid escalation and other income	3,982		1,560
Other	386		535
Total	$	25,757	$	28,918

Revenue Recognition

Operating Real Estate

Rental and escalation income from operating real estate is derived from leasing of space to various types of tenants. Rental revenue recognition commences when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. The leases are for fixed terms of varying length and generally provide for annual rentals, subject to indexation, and expense reimbursements to be paid in quarterly or monthly 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 other assets, net on the consolidated balance sheets. The Company amortizes any tenant inducements as a reduction of revenue utilizing the straight-line method over the term of the lease. 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.

In a situation in which a lease or leases associated with a significant tenant have been, or are expected to be, terminated early, the Company evaluates the remaining useful life of depreciable or amortizable assets in the asset group related to the lease that will be terminated (i.e., tenant improvements, above and below market lease intangibles, in-place lease value and leasing commissions). Based upon consideration of the facts and circumstances surrounding the termination, the Company may write-off or accelerate the depreciation and amortization associated with the asset group. Such amounts are included within depreciation and amortization in the consolidated statements of operations.

Preferred Equity Investments

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

Impairment on Investments

Operating Real Estate

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, 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 and recorded in impairment losses in the consolidated statements of operations. For the years endedDecember 31, 2017 and 2015, the Company did not recognize any impairment losses. For the year endedDecember 31, 2016, the Company recognized $27.5 million of impairment losses.

An allowance for a doubtful account for a tenant receivable is 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. Additionally, the Company establishes, on a current basis, an allowance for future tenant credit losses on unbilled rent receivable based on an evaluation of the collectability of such amounts.

Preferred Equity Investments

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

Income recognition is suspended for an investment when, in the opinion of the Company, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired investment is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired investment is not in doubt, contractual interest is recorded as interest income when received, under the cash basis method until an accrual is resumed when the investment becomes contractually current and performance is demonstrated to be resumed. Interest accrued and not collected will be reversed against interest income. An investment is written off when it is no longer realizable and/or legally discharged. As of December 31, 2017, the Company did not have any impaired preferred equity investments.

Equity-Based Compensation

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

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

Derivatives

The Company seeks to use derivative instruments to manage exposure to interest rate risk and foreign currency exchange rate risk. The change in fair value for a derivative is recorded in unrealized gain (loss) on derivatives and other in the consolidated statements of operations.

The Company’s derivative instruments are recorded on the consolidated balance sheets at fair value and do not qualify as hedges under U.S. GAAP.

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 (“CTA”), net, is recorded as a component of accumulated OCI in the consolidated statements of equity. For the years endedDecember 31, 2017, 2016 and 2015, the Company reclassified $(1.4) million, $17.7 million and $0.3 million, respectively, of CTA to realized gain (loss) on sales and other in the consolidated statements of operations due to the sale of certain real estate assets (refer to Note 3).

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 derivatives and other in the consolidated statements of operations.

Earnings Per Share

The Company’s basic earnings per share (“EPS”) is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common stock outstanding. Diluted EPS includes restricted stock and the potential dilution that could occur if outstanding restricted stock units (“RSUs”) or other contracts to issue common stock, assuming performance hurdles have been met, were converted to common stock (including limited partnership interests in the Operating Partnership owned by holders other than the Company (“Common Units”) and Common Units which are structured as profits interests (“LTIP Units” collectively referred to as Unit Holders) (refer to Note 8), where such exercise or conversion would result in a lower EPS. The dilutive effect of such RSUs and Unit Holders is calculated assuming all units are converted to common stock.

Income Taxes

The Company has elected to be taxed as a REIT for U.S. federal income tax purposes with the initial filing of its 2015 U.S. federal tax return and will continue to comply with the related provisions of the Internal Revenue Code of 1986, as amended, the (“Internal Revenue Code”). Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income and share ownership tests are met. To maintain its qualification as a REIT, the Company must annually distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. The Company distributes to its stockholders 100% of its taxable income and therefore no provision for U.S. federal income taxes has been included in the accompanying consolidated financial statements for the years endedDecember 31, 2017, 2016 and 2015. Dividends distributed for the years endedDecember 31, 2017 and 2016 were characterized, for U.S. federal income tax purposes, as return of capital.Dividends distributed for the year ended December 31, 2015 was characterized, for U.S. federal income tax purposes, as ordinary income.

The Company conducts its business through foreign subsidiaries which may be subject to local level income tax in the European jurisdictions it operates. The Company has also elected taxable REIT subsidiary (“TRS”) status for one of the Company’s foreign subsidiaries. This enables the Company to provide services that would otherwise be considered impermissible for REITs and participate in activities that do not qualify as “rents from real property.” The TRS is not resident in the U.S. and, as such, not subject to U.S. taxation but is subject to foreign income taxes only. As a result, the effective tax rate of less than 6.6% is due to those foreign taxes. In addition, the REIT will not generally be subject to any additional U.S. taxes on the repatriation of its earnings.

For the year ended December 31, 2017, the Company’s foreign subsidiaries recorded $0.6 million of current income tax benefit and $1.5 million of a deferred income tax benefit. For the year ended December 31, 2016, the Company’s foreign subsidiaries recorded $7.7 million of current income tax expense and an offsetting $5.0 million of a deferred income tax benefit. For the year ended December 31, 2015, the Company’s foreign subsidiaries recorded $2.3 million of current income tax expense and an offsetting $3.0 million of a deferred income tax benefit. For the Company’s foreign subsidiaries, including the Company’s foreign TRS, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the foreign tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. The Company evaluates the realizability of its deferred tax assets (e.g. net operating loss) and recognizes a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers estimates of expected future taxable income, existing and projected book/tax differences, tax planning strategies available and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. Due to past and projected losses in certain local jurisdictions where the Company does not have carryback potential and/or cannot sufficiently forecast future taxable income, the Company recognized net cumulative valuation allowances against the Company’s deferred tax assets. The Company will continue to review its deferred tax assets in accordance with U.S. GAAP. The valuation allowance at December 31, 2017, 2016 and 2015 of $22.7 million, $26.6 million and $21.5 million, respectively, relates to deferred tax assets in jurisdictions that had not met the “more-likely-than-not” realization threshold criteria. The change to the valuation allowance is primarily due to disposals of operating real estate.

Changes in estimate of deferred tax asset realizability, if any, are included in income tax benefit (expense) in the consolidated statements of operations.

The following tables present a summary of the Company’s deferredtaxassets and liabilities as of December 31, 2017 and 2016 (dollars in thousands):

	December 31,
	2017			2016
Deferred tax asset
Net operating losses	$	19,587		$	21,608
Interest deferral	5,598			4,356
Transaction costs capitalized to operating real estate	6,992			6,654
Operating real estate	2,852			2,028
Other	7,920			7,410
Total deferred tax asset	42,949			42,056
Valuation allowance	(22,666		)	(26,565		)
Deferred tax assets, net of valuation allowance	20,283			15,491
Deferred tax liabilities
Operating real estate	(23,126		)	(20,418		)
Other	(5,705		)	(3,989		)
Total deferred tax liabilities	(28,831		)	(24,407		)
Net deferred tax liability	$	(8,548	)	$	(8,916	)

The Company is allowed to carryforward its net operating losses indefinitely in most of the tax jurisdictions it files with some annual restrictions.

The Company has assessed its tax positions for all open tax years, which includes 2015 to 2017 and concluded there were no uncertain tax positions to be recognized.  The Company’s accounting policy with respect to interest and penalties is to classify these amounts as a component of income tax expense, where applicable. As of December 31, 2017 and 2016, the Company has not recognized any such amounts related to uncertain tax positions, respectively.

Recent Accounting Pronouncements: Accounting Standards Adopted in 2017

In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance (Accounting Standards Update “ASU” No. 2016-05) clarifying that an assessment of whether an embedded contingent put or call option is clearly and closely related to a borrowing requires only an analysis of the four-step decision sequence. Additionally, entities are not required to separately assess whether the contingency itself is clearly and closely related. Entities are required to apply the guidance to existing instruments in scope using a modified retrospective transition method as of the date of adoption. The guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those years. The Company has adopted this guidance and it did not have any material impact on its consolidated financial position, results of operations and financial statement disclosures.

In March 2016, the FASB issued guidance (ASU No. 2016-09) which amends several aspects of the accounting for equity-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. The guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2016. The Company has adopted this guidance and has made a policy election to account for forfeitures upon occurrence. The adoption did not have a material impact on the Company’s consolidated financial position, results of operations and financial statement disclosures.

Recent Accounting Pronouncements: Future Application of Accounting Standards

Revenue Recognition - In May 2014, FASB issued an accounting update (ASU No. 2014-09) 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 Company has adopted the standard on its required effective date of January 1, 2018 using the modified retrospective approach and has applied the guidance to contracts not yet completed as of the date of adoption. The new revenue standard specifically excludes revenue streams for which specific guidance is stipulated in other sections of the codification and therefore it will not impact rental income or interest income generated on financial instruments such as preferred equity investments. The Company is the lessor for triple net and gross leases classified as operating leases in which rental income and tenant reimbursements are recorded. The revenue from these leases are scoped out of the new revenue recognition guidance. All leases are accounted for under ASC 840 until the adoption of the new leasing guidance within ASC 842. The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

Leases - In February 2016, the FASB issued an accounting update (ASU No. 2016-02) which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The update requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The update is expected to result in the recognition of a right-to-use asset and related liability to account for the Company’s future obligations under its ground lease arrangements for which it is the lessee. The update will require that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Under this guidance, allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained will no longer be capitalized as initial direct costs and instead will be expensed as incurred. Lessors will continue to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company expects to adopt the package of practical expedients under the guidance and the Company will not need to reassess whether any expired or expiring contracts contain leases; will not need to revisit lease classification for any expired or expiring leases; and will not need to reassess initial direct costs for any existing leases. In addition, the Company expects to adopt the practical expedient which allows lessors to consider lease and non-lease components as a single performance obligation to the extent that the timing and pattern of revenue recognition is the same and the lease is classified an operating lease. As of December 31, 2017, the Company has two ground lease agreements with annual payments of $0.7 million. The new guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements and is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the impact, if any, that this guidance will have on its consolidated financial position, results of operations and financial statement disclosures.

Financial Instruments - In June 2016, the FASB issued guidance (ASU No. 2016-13) that changes the impairment model for most financial instruments by requiring companies to recognize an allowance for expected losses, rather than incurred losses as required currently by the other-than-temporary impairment model. The guidance will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures (e.g., loan commitments). The new guidance is effective for reporting periods beginning after December 15, 2019 and will be applied as a cumulative adjustment to retained earnings as of the effective date. The Company continues to assess the potential effect the adoption of this guidance will have on its consolidated financial statements and related disclosures.

Cash Flow Classification - In August 2016, the FASB issued guidance (ASU No. 2016-15) that makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The new guidance requires adoption on a retrospective basis unless it is impracticable to apply, in which case the Company would be required to apply the amendments prospectively as of the earliest date practicable. The Company does not expect the adoption of this standard to have a material impact on its consolidated statements of cash flows.

Restricted Cash - In November 2016, the FASB issued guidance (ASU No. 2016-18) which requires entities to show the changes in the total of cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. Entities will no longer be permitted to present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The guidance is effective for reporting periods beginning after December 15, 2017 and will be applied retrospectively to all periods presented. The Company expects the new guidance will result in a change in presentation of restricted cash on the face of the consolidated statement of cash flows; otherwise this guidance will not have a significant impact on the consolidated statements of cash flows and disclosures.

Business Combination - In January 2017, the FASB issued guidance (ASU No. 2017-01) to clarify the definition of a business under ASC 805. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance is effective for fiscal years, and interim periods within those years, beginning December 15, 2017. The amendments in this update will be applied on a prospective basis. The Company expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets). A significant difference between the accounting for an asset acquisition and a business combination is that transaction costs are capitalized for an asset acquisition, rather than expensed for a business combination. The Company plans to adopt the standard on its required effective date of January 1, 2018. The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

Goodwill Impairment - In January 2017, the FASB issued guidance (ASU No. 2017-04) which removes Step 2 from the goodwill impairment test. The guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019.  The Company is evaluating the impact, if any, that this guidance will have on its consolidated financial position, results of operations and financial statement disclosures.

Derecognition and Partial Sales of Nonfinancial Assets - In February 2017, the FASB issued an accounting update (ASU No. 2017-05) which clarifies the scope of recently established guidance on nonfinancial asset derecognition, which applies to the derecognition of all nonfinancial assets and in-substance nonfinancial assets.  In addition, the guidance clarifies the accounting for partial sales of nonfinancial assets and in-substance nonfinancial assets to align with the new revenue recognition standard to be more consistent with the accounting for sale of a business. Specifically, in a partial sale to a noncustomer, when a noncontrolling interest is received or retained, the latter is considered a noncash consideration and measured at fair value, which would result in full gain or loss recognized upon sale. This guidance has the same effective date as the new revenue guidance, which is January 1, 2018, with early adoption permitted beginning January 1, 2017.  Both the revenue guidance and this update must be adopted concurrently.  While the options for transition are similar to the new revenue guidance, either full retrospective or modified retrospective, the transition approach need not be aligned between both updates. The Company plans to adopt the standard on its required effective date of January 1, 2018 using the modified retrospective approach. The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

Share-based Payments - In May 2017, the FASB issued guidance (ASU No. 2017-09) clarifying when to account for a change to the terms or conditions of a share-based payment award as a modification.  The guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those years.  The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

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Operating Real Estate

12 Months Ended

Dec. 31, 2017

Real Estate [Abstract]

Operating Real Estate

Operating Real Estate

The following table presents operating real estate, net as of December 31, 2017 and December 31, 2016 (dollars in thousands):

	December 31, 2017			December 31, 2016
Land	$	393,691		$	360,555
Buildings and improvements	954,314			980,053
Building, leasehold interests and improvements	195,929			212,864
Furniture, fixtures and equipment	1,653			1,214
Tenant improvements	61,303			59,746
Operating real estate, gross	1,606,890			1,614,432
Less: accumulated depreciation	(95,356		)	(63,585		)
Operating real estate, net	$	1,511,534		$	1,550,847

For the years ended December 31, 2017, 2016 and 2015 depreciation expense was $40.2 million, $45.2 million and $35.8 million, respectively.

Real Estate Held for Sale

The following table summarizes the Company’s operating real estate held for sale as of December 31, 2017 (dollars in thousands):

			Assets(1)								Liabilities(1)
Location	Type	Properties	Operating Real Estate, Net		Intangible Assets, Net		Other Assets		Total(2)		Intangible Liabilities, Net		Total
Lisbon, Portugal	Office	1	$	11,910	$	62	$	23	$	11,995	$	—	$	—
Rotterdam, Netherlands	Office	1	148,741		5,053		3,293		157,087		648		648
Total		2	$	160,651	$	5,115	$	3,316	$	169,082	$	648	$	648

___________________

(1) The assets and liabilities classified as held for sale are expected to be sold on the open market as asset sales subject to standard industry terms and conditions. The assets contributed $13.2 million, $14.1 million and $10.8 million of revenue and $(7.5) million, $(7.3) million and $(18.9) million of income (loss) before income tax benefit (expense) for the years endedDecember 31, 2017, 2016 and 2015, respectively.

(2) Represents operating real estate and intangible assets, net of accumulated depreciation and amortization of $18.7 million prior to being reclassified into held for sale.

Real Estate Sales

The following table summarizes the Company’s real estate sales for the years ended December 31, 2017, 2016 and 2015 (dollars in thousands):

	Years Ended December 31, (1)
	2017		2016		2015
Properties	6		18		3
Carrying Value(2)	$	109,366	$	386,122	$	15,226
Sales Price	$	137,509	$	412,107	$	21,895
Net Proceeds(3)	$	132,538	$	406,850	$	20,955
Realized Gain(4)	$	23,172	$	20,728	$	5,729

__________________

(1) Years ended December 31, 2017, 2016 and 2015 amounts are translated using the average exchange rate for the year ended December 31, 2017.

(2) Includes the assets and liabilities related to share sales.

(3) Represents proceeds net of sales costs and excludes the associated property debt repayments of $76.2 million and $173.9 million for the years endedDecember 31, 2017 and 2016, respectively. There were no property debt repayments for the year ended December 31, 2015.

(4) The Company recorded an additional realized gain for the year endedDecember 31, 2017 of $2.3 million related to the release of escrow accounts from prior disposals.

As of December 31, 2017, there were $1.8 million in certain escrow accounts that were not held by the Company which the Company could potentially record as a realized gain.

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Preferred Equity Investments

12 Months Ended

Dec. 31, 2017

Mortgage Loans on Real Estate [Abstract]

Preferred Equity Investments

Preferred Equity Investments

In May 2017, the Company partnered with a property developer in China to acquire 20 Gresham Street, a Class A office building in London, United Kingdom and the Company invested $35.3 million (£26.2 million) of preferred equity, which the Company accounts for as a debt investment.

The following table presents one preferred equity investment as of December 31, 2017 (dollars in thousands):

	December 31, 2017
Asset Type	Principal Amount		Carrying Value		Fixed Rate		Mandatory Redemption
Preferred equity investment	$	35,347	$	35,347	8.00	%	May 2020

Credit Quality Monitoring

The Company’s preferred equity investment is secured by interests in entities that directly own real estate properties, which serve as the primary source of cash for the payment of principal and interest. The Company evaluates its preferred equity investment at least quarterly and determines the relative credit quality principally based on: (i) whether the borrower is currently paying debt service in accordance with its contractual terms; and (ii) whether the Company believes the borrower will be able to perform under its contractual terms in the future, as well as the Company’s expectations as to the ultimate recovery of principal at maturity. The Company categorizes a preferred equity investment for which it expects to receive full payment of contractual principal and interest payments as “performing.” The Company will categorize a weaker credit quality preferred equity investment that is currently performing, but for which it believes future collection of all or some portion of principal and interest is in doubt, into a category called “performing with a loan loss reserve.” The Company will categorize a weaker credit quality preferred equity investment that is not performing, which the Company defines as a loan in maturity default and/or past due on its contractual debt service payments and deemed not to be collectible, as a non-performing loan (“NPL”).

As of December 31, 2017, the Company’s preferred equity investment was performing in accordance with the contractual terms of its governing documents, in all material respects, and was categorized as a performing loan. For the year endedDecember 31, 2017, the preferred equity investment contributed all interest income recorded on the consolidated statement of operations.

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Borrowings

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Borrowings

Borrowings

The following table presents borrowings as of December 31, 2017 and 2016 (dollars in thousands):

			December 31,
			2017				2016
	Final Maturity	Contractual Interest Rate(3)	Principal Amount		Carrying Value		Principal Amount		Carrying Value
Mortgage and other notes payable:(1)
U.K. Complex(2)	(2)	GBP LIBOR + 1.75%	$	—	$	—	$	50,116	$	49,284
U.K. Complex - Mezzanine(2)	(2)	8.325%	—		—		11,565		11,497
Trias Portfolio 1(4)(6)	Apr-20	EURIBOR + 2.70%	10,378		10,116		13,724		13,301
Trias Portfolio 2(4)(6)(8)	Dec-20	EURIBOR + 1.55%	91,577		90,880		78,952		78,708
Trias Portfolio 3(4)(6)	Apr-20	EURIBOR + 1.65%	44,814		43,684		40,923		39,568
Trias Portfolio 4(4)(6)	Apr-20	GBP LIBOR + 2.70%	17,326		17,123		15,843		15,446
SEB Portfolio 1(6)	Jul-24(9)	EURIBOR + 1.55%(9)	317,317		313,153		278,539		274,614
SEB Portfolio 2(6)	Jul-24(9)	GBP LIBOR + 1.55%(9)	250,825		247,902		229,353		226,078
SEB Portfolio - Preferred(5)	Apr-60	2.30%	102,560		102,271		90,033		89,720
Trianon Tower(4)(6)	Jul-23	EURIBOR + 1.30%	395,294		393,763		347,012		345,422
Other - Preferred(7)	Oct-45	1.00%	4,551		4,551		6,151		5,481
Total mortgage and other notes payable			$	1,234,642	$	1,223,443	$	1,162,211	$	1,149,119

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(1) All mortgage notes and other notes payable are denominated in local currencies, and as such, the principal amount generally increased from 2016 to 2017 due to the change in the Euro or U.K. Pound Sterling compared to the U.S. dollar. All borrowings are non-recourse and are interest-only through maturity, subject to compliance with covenants of the respective borrowing, and denominated in the same currency as the assets securing the borrowing.

(2) In November 2017, the Company repaid the mortgage notes upon the sale of the associated property.

(3) All floating rate debt is subject to interest rate caps of 0.5% for EURIBOR and 2.0% for GBP LIBOR which are used to manage interest rate exposure.

(4) Trias Portfolio represents the cross-collateralized borrowings among the IVG Portfolio, Internos Portfolio and Deka Portfolio.

(5) Represents preferred equity certificates with a contractual interest rate of 2.3% through May 2019, which can be prepaid at that time without penalty in part or in full, which increases to EURIBOR plus 12.0% through May 2022 and subsequently to EURIBOR plus 15.0% through final maturity. Certain prepayments prior to May 2019 are subject to the payment of the unpaid coupon on outstanding principal amount through May 2019.

(6) Prepayment provisions include a fee based on principal amount ranging from 0.25% to 1.0% through December 2019 for the Trias Portfolio borrowings and 1.0% to 2.0% through July 2020 for the SEB Portfolio borrowings and 0.60% through June 30, 2018 and 0.30% through June 30, 2019 for Trianon Tower borrowings.

(7) Represents preferred equity certificates each with a fixed contractual interest rate of 1.0% per annum plus variable interest based on specified income levels associated with the German property companies of the Trias Portfolios which can be prepaid at any time without penalty through final maturity, which is thirty years from the issuance date.

(8) In June 2017, the Company amended and restated the agreement to increase the loan amount by $5.9 million and reduce future minimum capital expenditure spending requirements.

(9) In September 2017, the Company amended and restated the agreement to reduce the margin from 1.80% to 1.55% and extended the maturity date from April 1, 2022 to July 20, 2024.

The following table presents a reconciliation of principal amount to carrying value of the Company’s mortgage and other notes payable as of December 31, 2017 and 2016 (dollars in thousands):

	December 31,
	2017			2016
Principal amount	$	1,234,642		$	1,162,211
Deferred financing costs, net	(11,199		)	(13,092		)
Carrying value	$	1,223,443		$	1,149,119

The following table presents scheduled principal on borrowings, based on final maturity as of December 31, 2017 (dollars in thousands):

	Mortgage and Other Notes Payable
Years ending December 31:
2018	$	—
2019	—
2020	164,095
2021	—
2022	—
2023 and thereafter	1,070,547
Total	$	1,234,642

As of December 31, 2017 and 2016, the Company was in compliance with all of its financial covenants.

Senior Notes

In July 2015, the Company issued $340.0 million principal amount of 4.625% senior stock-settlable notes due December 2016 (the “Senior Notes”) for aggregate net proceeds of $331.0 million, after deducting the underwriters’ discount and other expenses. The Senior Notes were senior unsubordinated and unsecured obligations of the Company and NorthStar Realty and NorthStar Realty’s operating partnership guaranteed payments on the Senior Notes.

The proceeds from the issuance of the Senior Notes were distributed 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. Such distribution to NorthStar Realty was recorded in equity in net transactions with NorthStar Realty. During 2016, the Company repurchased approximately $272.3 million of the Senior Notes, at a slight premium to par value, through privately negotiated transactions and settled the remaining Senior Notes in cash at maturity.

Credit Facility

In May 2016, the Company entered into a $75.0 million corporate revolving credit facility (the “Credit Facility”) with certain commercial bank lenders, with an initial one year term. The Credit Facility was secured by collateral relating to a borrowing base at that time and guarantees by certain subsidiaries of the Company. In October 2016, the Company permanently reduced the aggregate commitments under the Credit Facility to $35.0 million. In April 2017, the Company amended and restated the Credit Facility with aggregate commitments of $35.0 million and an initial two year term. The Credit Facility no longer contains a limitation on availability based on a borrowing base and the interest rate remains the same. The Credit Facility has an accordion feature, allowing the total facility to increase to $70 million. In March 2018, the Company amended the Credit Facility, increasing the size to $70 million and extending the term until April 2020 with one year extension option. The Credit Facility includes an accordion feature, providing for the ability to increase the facility to $105 million. As of December 31, 2017, there is no outstanding balance on the Credit Facility.

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Related Party Arrangements

12 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Related Party Arrangements

Related Party Arrangements

On November 9, 2017, the Company entered into an Amended and Restated Management Agreement with an affiliate of the Manager, effective as of January 1, 2018. The description of the management agreement included below relates to the original agreement that was entered into in November 2015 and which will be superseded as of January 1, 2018 by the Amended and Restated Management Agreement.

Colony NorthStar, Inc.

Management Agreement

The Company entered into a management agreement with an affiliate of the Manager in November 2015. As asset manager, the Manager is responsible for the Company’s day-to-day operations, subject to supervision and management of the Company’s board of directors (the “Board”). Through its global network of subsidiaries and branch offices, the Manager performs services and engages in activities relating to, among other things, investments and financing, portfolio management and other administrative services, such as accounting and investor relations, to the Company and its subsidiaries. The management agreement with the Manager provides for a base management fee and incentive fee.

Base Management Fee

For the years endedDecember 31, 2017, 2016 and 2015, the Company incurred $14.4 million, $14.1 million and $2.3 million, respectively, related to the base management fee. As of December 31, 2017 and 2016, $3.6 million and $3.5 million, respectively, was recorded in due to related party on the consolidated balance sheets. The base management fee to the Manager is calculated as 1.5% per annum of the sum of:

• any equity the Company issues in exchange or conversion of exchangeable or stock-settlable notes;

• any other issuances by the Company of common equity, preferred equity or other forms of equity, including but not limited to LTIP Units in the Operating Partnership (excluding units issued to the Company and equity-based compensation, but including issuances related to an acquisition, investment, joint venture or partnership); and

• cumulative cash available for distribution (“CAD”), if any, of the Company in excess of cumulative distributions paid on common stock, LTIP Units or other equity awards which began with the Company’s fiscal quarter ended March 31, 2016.

Incentive Fee

For the years endedDecember 31, 2017, 2016 and 2015, the Company did not incur an incentive fee. The incentive fee is calculated and payable quarterly in arrears in cash, equal to:

• the product of: (a) 15.0% and (b) the Company’s CAD before such incentive fee, divided by the weighted average shares outstanding for the calendar quarter, of any amount in excess of $0.30 per share and up to $0.36 per share; plus

• the product of: (a) 25.0% and (b) the Company’s CAD before such incentive fee, divided by the weighted average shares outstanding for the calendar quarter, of any amount in excess of $0.36 per share;

• multiplied by the Company’s weighted average shares outstanding for the calendar quarter.

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

Additional Management Agreement Terms

The Company’s management agreement with the Manager provides that in the event of a change of control of the Manager or other event that could be deemed an assignment of the management agreement, the Company will consider such assignment in good faith and not unreasonably withhold, condition or delay the Company’s consent. The management agreement further provides that the Company anticipates consent would be granted for an assignment or deemed assignment to a party with expertise in commercial real estate and over $10 billion of assets under management. The management agreement also provides that, notwithstanding anything in the agreement to the contrary, to the maximum extent permitted by applicable law, rules and regulations, in connection with any merger, sale of all or substantially all of the assets, change of control, reorganization, consolidation or any similar transaction by the Company or the Manager, directly or indirectly, the surviving entity will succeed to the terms of the management agreement.

Payment of Costs and Expenses and Expense Allocation

The Company is responsible for all of its direct costs and expenses and reimburses the Manager for costs and expenses incurred by the Manager on the Company’s behalf. In addition, the Manager may allocate indirect costs to the Company 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, the Company’s management agreement with the Manager (the “G&A Allocation”). The Company’s management agreement with the Manager provides that the amount of the G&A Allocation will not exceed the following: (i) 20% of the total of: (a) the Company’s general and administrative expenses as reported in their consolidated financial statements excluding: (1) equity-based compensation expense, (2) non-recurring items, (3) fees payable to the Manager under the terms of the applicable management agreement and (4) any allocation of expenses to the Company (“NRE’s G&A”); and (b) the Manager’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 managed company of the Manager; less (ii) NRE’s G&A. The G&A Allocation may include the Company’s allocable share of the Manager’s compensation and benefit costs associated with dedicated or partially dedicated personnel who spend all or a portion of their time managing the Company’s affairs, based upon the percentage of time devoted by such personnel to the Company’s affairs. The G&A Allocation may also include rental and occupancy, technology, office supplies, travel and entertainment and other general and administrative costs and expenses, which may be allocated based on various methodologies, such as weighted average employee count or the percentage of time devoted by personnel to the Company’s affairs. In addition, the Company will pay directly or reimburse the Manager for an allocable portion of any severance paid pursuant to any employment, consulting or similar service agreements in effect between the Manager and any of its executives, employees or other service providers.

The Company’s obligation to reimburse the Manager for the G&A Allocation and any severance, at the Manager’s discretion, and the 20% cap on the G&A Allocation, as described above, applies on an aggregate basis to the Company.

For the year endedDecember 31, 2017, the Manager did not allocate any general and administrative expenses to the Company. For the years endedDecember 31, 2016 and 2015, the Manager allocated $0.2 million and $0.4 million, respectively, to the Company. For the years endedDecember 31, 2017, 2016 and 2015, the Manager did not allocate any severance to the Company.

In addition, the management agreement provides that the Company and any company spun-off from the Company, shall pay directly or reimburse the Manager for up to 50% of any long-term bonus or other compensation that the Manager’s compensation committee determines shall be paid and/or settled in the form of equity and/or equity-based compensation to executives, employees and service providers of the Managers’ during any year. Subject to this limitation and limitations contained in any applicable management agreement between the Manager and any company spun-off from the Company, the amount paid by the Company and any company spun-off from the Company will be determined by the Manager in its discretion. At the discretion of the Manager’s compensation committee, this compensation may be granted in shares of the Company’s restricted stock, restricted stock units, long-term incentive plan units or other forms of equity compensation or stock-based awards; provided that if at any time a sufficient number of shares of the Company’s common stock are not available for issuance under the Company’s equity compensation plan, such compensation shall be paid in the form of RSUs, LTIP Units or other securities that may be settled in cash.The Company’s equity compensation for each year may be allocated on an individual-by-individual basis at the discretion of the Manager’s 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%.

The Company does not have employment agreements with its named executive officers, but the Company has generally agreed to pay directly or reimburse the Manager for the portion of any severance paid by the Manager or any of its affiliates to an individual pursuant to the terms of any employment, consulting or similar service agreement, including any employment agreements with Colony NorthStar or its subsidiaries and its named executive officers, that corresponds to or is attributable to: (i) the equity compensation that the Company is required to pay directly or reimburse the Manager pursuant to the management agreement; (ii) any cash and/or equity compensation paid directly by the Company to such individual as an employee or other service provider of the Company; and (iii) any amounts paid to such individual by the Manager or any of its affiliates that the Company is obligated to reimburse the Manager pursuant to the management agreement. With respect to Mahbod Nia only, in lieu of the foregoing severance payment or reimbursement, the Company has agreed to pay directly or reimburse the Manager for 50% of any cash payments made by the Manager or any of its affiliates in connection with the termination of Mr. Nia’s employment either without cause or upon the non-renewal of Mr. Nia’s term of employment by the employer or by Mr. Nia for good reason; provided that the Board consented to the taking of such action (or, with respect to a termination for good reason, any action taken with the intent to create good reason). Because the Company’s obligation to pay these amounts is owed to the Manager and not directly to the Company’s named executive officers and the Company does not control the terms of the agreements between the Manager or its affiliates and the Company’s named executive officers, the discussion above does not include these amounts or a discussion of any arrangements that the Manager or its affiliates may have with the Company’s named executive officers pursuant to which our obligations to the Manager may arise.

Management Agreement Amendment

On November 9, 2017, the Company entered into an Amended and Restated Management Agreement with CNI NRE Advisors, LLC, a Delaware limited liability company (unless the context requires otherwise, together with its affiliates, the “Asset Manager”), an affiliate of Colony NorthStar, effective as of January 1, 2018.

Under the Amended and Restated Management Agreement, the Asset Manager is generally responsible to manage the Company’s day to day operations, subject to the supervision and management of the Board. The Asset Manager is required to provide the Company with a management team and other appropriate employees and resources necessary to manage the Company.

Term; Renewals

The Amended and Restated Management Agreement provides for an initial term (beginning January 1, 2018) of five years (the “Initial Term”), with subsequent automatic renewals for additional three year terms, unless either party provides notice to the other party of its intention to decline to renew the agreement at least six months prior to the expiration of the then-current term. During the Initial Term, the Amended and Restated Management Agreement is terminable only for cause (as described in the Amended and Restated Management Agreement).

If the Company elects not to renew the Amended and Restated Management Agreement at the end of a term, it will be obligated to pay the Asset Manager a termination fee (the “Termination Fee”) equal to three times the amount of the base management fees earned by the Asset Manager over the four most recent quarters immediately preceding the non-renewal. In addition, if at any time after the Initial Term, the Company undergoes a “change of control” (as described in the Amended and Restated Management Agreement), the Company may elect to terminate the agreement but upon any such termination it will be obligated to pay the Termination Fee to the Asset Manager.

Assignment

The Amended and Restated Management Agreement provides that in the event of a change of control of the Asset Manager or other event that could be deemed an assignment of the Amended and Restated Management Agreement, the Company will consider such assignment in good faith and not unreasonably withhold, condition or delay the Company’s consent. The Amended and Restated Management Agreement further provides that the Company anticipates consent would be granted for an assignment or deemed assignment to a party with expertise in commercial real estate and over $10 billion of assets under management. The Amended and Restated Management Agreement also provides that, notwithstanding anything in the agreement to the contrary, to the maximum extent permitted by applicable law, rules and regulations, in connection with any merger, sale of all or substantially all of the assets, change of control, reorganization, consolidation or any similar transaction by the Company or the Asset Manager, directly or indirectly, the surviving entity will succeed to the terms of the Amended and Restated Management Agreement.

Base Management Fee

Pursuant to the Amended and Restated Management Agreement, beginning January 1, 2018, the Company is obligated to pay quarterly, in arrears, in cash, the Asset Manager a base management fee per annum equal to:

• 1.50% of the Company’s reported EPRA NAV (as described in the Amended and Restated Management Agreement) for EPRA NAV amounts up to and including $2.0 billion; plus

• 1.25% of the Company’s reported EPRA NAV on any EPRA NAV amount exceeding $2.0 billion.

EPRA NAV is based on a U.S. GAAP balance sheet adjusted based on the Company’s interpretation of the European Public Real Estate Association (“EPRA”) guidelines, and similar as prior practices, including adjustments such as fair value of operating real estate, straight-line rent and deferred taxes and additional adjustments to be determined by the Company in good faith based on any changes to U.S. GAAP, international accounting standards or EPRA guidelines. In calculating EPRA NAV, the liquidation preference of preferred securities outstanding shall not be included as a liability of the Company and shall not reduce EPRA NAV.

Incentive Fee

In addition to the base management fees, the Company is obligated to pay the Asset Manager an incentive fee, if any (the “Incentive Fee”), with respect to each measurement period equal to twenty percent (20%) of: (i) the excess of (a) the Company’s Total Stockholder Return (as defined in the Amended and Restated Management Agreement, which includes stock price appreciation and dividends received and is subject to a high watermark price established when a prior incentive fee is realized) for the relevant measurement period above (b) a 10% cumulative annual hurdle rate, multiplied by (ii) the Company’s Weighted Average Shares (as defined in the Amended and Restated Management Agreement) during the measurement period. The first measurement period for the incentive fee will begin January 1, 2018 and end on December 31 of the applicable calendar year and subsequent measurement periods will begin on January 1 of the subsequent calendar year. Subject to the conditions set forth in Section 4(d) of the Amended and Restated Management Agreement for common stock payments, the Company may elect to pay the Incentive Fee, if any, in cash or in shares of restricted common stock or shares of unrestricted common stock repurchased by the Company in the open market or a combination thereof. Any shares of common stock delivered by the Company will be subject to lock-up restrictions that will be released in equal one-third increments on each anniversary of the end of the measurement period with respect to which such incentive fee was earned. In calculating the value of the shares of the Company’s common stock paid in satisfaction of the Incentive Fee obligation, the shares of restricted common stock will be valued at the higher of: (i) the volume weighted average trading price per share for the ten consecutive trading days (as defined in the Amended and Restated Management Agreement) ending on the trading day prior to the date the payment is due and (ii) the Company’s EPRA NAV per share, based on the Company’s most recently published EPRA NAV and the Weighted Average Shares as of the end of the period with respect to which such EPRA NAV was published.

Costs and Expenses

The Company is responsible to pay (or reimburse the Asset Manager) for all of the Company’s direct, out of pocket costs and expenses of the Company as a stand alone company incurred by or on behalf of the Company and its subsidiaries, all of which must be reasonable, customary and documented. Internalized Service Costs (as defined below) are not intended to be covered costs and expense under this provision and are subject to the limits described in the next paragraph.

In addition to the expenses described in the prior paragraph, for each calendar quarter, beginning with the first quarter of 2018, the Company is obligated to reimburse the Asset Manager for (i) all direct, reasonable, customary and documented costs and expenses incurred by the Asset Manager for salaries, wages, bonuses, payroll taxes and employee benefits for personnel employed by the Asset Manager: (a) who solely provide services to the Company which prior to January 1, 2018 were provided by unaffiliated third parties, including accounting and treasury services or (b) who were hired by the Asset Manager after January 1, 2018 but who solely provide services to the Company in respect of one of the categories of services previously internalized pursuant to clause (a) and who were not hired in connection with any event which otherwise resulted in an increase to the Company’s net asset value (such costs and expenses set forth in clauses (i) and (ii), the “Internalized Service Costs”), plus (ii) 20% of the amount calculated under clause (i) to cover reasonable overhead charges with respect to such personnel, provided that the Company shall not be obligated to reimburse the Asset Manager for such costs and expenses to the extent they exceed the following quarterly limits:

• 0.0375% of the Company’s aggregate gross asset value as of the end of the prior calendar quarter (excluding cash and cash equivalents and certain other exclusions) as calculated for purposes of determining EPRA NAV (“GAV”), for GAV amounts to and including $2.5 billion, plus

• 0.0313% of GAV amounts between $2.5 billion and $5.0 billion, plus

• 0.025% of GAV amounts exceeding $5.0 billion.

If the Asset Manager’s actual Internalized Service Costs during any quarter exceed the quarterly limit described in the preceding paragraph (the cumulative excess amounts, if any, in respect of each quarter during a calendar year, the (“Quarterly Cap Excess Amount”), the Company is obligated to reimburse the Asset Manager on an annual basis for an amount equal to the lesser of (i) the Quarterly Cap Excess Amount and (ii) the sum of the amounts, if any, determined for each quarter within such calendar year by which Internalized Services Costs in respect of such quarter were less than the quarterly limits described in the prior paragraph.

Equity Based Compensation

In addition, the Company expects to make annual equity compensation grants to management of the Company and other employees of the Asset Manager, provided that the aggregate annual grant amount, type and other terms of such equity compensation must be approved by the Company’s compensation committee. The Asset Manager will have discretion in allocating the aggregate grant among the Company’s management and other employees of the Asset Manager.

Under the Amended and Restated Management Agreement, beginning with the Company’s 2018 annual stockholders’ meeting, the Asset Manager will have the right to nominate one director (who is expected to be one of the Company’s current directors employed by the Asset Manager) to the Company’s board of directors.

Transaction Expenses

The Company agreed to pay for up to $2.5 million of fees and expenses payable by the Asset Manager to its external financial advisors in connection with the negotiation and execution of the Amended and Restated Management Agreement.

Colony NorthStar Ownership Waiver and Voting Agreement

In connection with the entry into the Amended and Restated Management Agreement, the Company provided Colony NorthStar with an ownership waiver under the Company’s Articles of Amendment and Restatement, allowing Colony NorthStar to purchase up to 45% of the Company’s stock. The waiver provides that if the Amended and Restated Management Agreement is terminated, Colony NorthStar may not purchase any shares of the Company’s common stock to the extent Colony NorthStar owns (or would own as a result of such purchase) more than 9.8% of the Company’s capital stock. In connection with the waiver, Colony NorthStar also agreed that for all matters submitted to a vote of the Company’s stockholders, to the extent Colony NorthStar owns more than 25% of the Company’s common stock (such shares owned by Colony NorthStar in excess of the 25% threshold, the “Excess Shares”), it will vote the Excess Shares in the same proportion that the remaining shares of the Company not owned by Colony NorthStar or its affiliates are voted. If the Amended and Restated Management Agreement is terminated, then beginning on the third anniversary of such termination, the threshold described in the prior sentence will be reduced from 25% to 9.8%.

Manager Ownership of Common Stock

As of December 31, 2017, Colony NorthStar and its subsidiaries owned 5.6 million shares of the Company’s common stock, or approximately 10.2% of the total outstanding common stock.

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Compensation Expense

12 Months Ended

Dec. 31, 2017

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

Compensation Expense

Compensation Expense

The following summarizes the equity-based compensation for the years ended December 31, 2017, 2016 and 2015:

For the years endedDecember 31, 2017, 2016 and 2015 the Company recorded $23.8 million, $19.3 million and $0.9 million, respectively, of equity-based compensation expense which is recorded in compensation expenses on the consolidated statements of operations. As of December 31, 2017, equity-based compensation expense to be recognized over the remaining vesting period through January 2020 is $6.7 million, provided there are no additional forfeitures.

2015 Omnibus Stock Incentive Plan

Pursuant to the NorthStar Realty Europe Corp. 2015 Omnibus Stock Incentive Plan (the “2015 Plan”), the Company may issue equity awards to directors, officers, employees, co-employees, consultants and advisors of the Company, the Manager or of any parent or subsidiary who provides services to the Company. The number of shares that may be issued under the 2015 Plan equals 10 million shares of common stock, plus on January 1, 2017 and each January 1 thereafter, an additional 2% of the number of shares of common stock issued and outstanding on the immediately preceding December 31. In addition, shares of common stock underlying any awards that are forfeited, canceled, held back upon exercise of a stock option or settlement of an award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of common stock or otherwise terminated (other than by exercise) will be added back to the shares of common stock available for issuance under the 2015 Plan. As of December 31, 2017, under the 2015 Plan, a total of 1.2 million shares of common stock had been issued (net of forfeitures and shares held back for tax withholding), 1.7 million shares were reserved for issuance pursuant to outstanding equity awards (including 0.1 million reserved for issuance upon conversion of outstanding LTIP Units and 1.6 million reserved for issuance pursuant to the outstanding Absolute RSUs and Relative RSUs) and 8.2 million otherwise unreserved shares remained available for issuance.

All of the equity awards issued by the Company since the spin-off from NorthStar Realty on November 1, 2015 have been issued under the 2015 Plan. During the year endedDecember 31, 2017, the Company issued 500,642 restricted shares of common stock under the 2015 Plan to employees of the Manager or its subsidiaries in accordance with the terms of the management agreement described above in Note 6, of which 379,594 vested in connection with the Mergers.

In March 2016, as contemplated in connection with the Spin-off, the Company granted an aggregate of 995,698 restricted shares of common stock and 1,493,551 restricted stock units (“RSUs”) to employees of the Manager or one of its subsidiaries under the 2015 Plan. The restricted shares of common stock were subject to vesting over the approximately four year period ending December 31, 2019, subject to continued employment with the Manager or one of its subsidiaries and the RSUs were market-based awards subject to the achievement of performance-based vesting conditions and continued employment with the Manager or one of its subsidiaries. Approximately one-half of these RSUs are subject to the achievement of performance-based hurdles relating to the Company’s absolute total stockholder return and continued employment with the Manager or one of its subsidiaries over the approximately four year period from the grant date through December 31, 2019 (the “Absolute RSUs”). The other approximately one-half of these RSUs are subject to the achievement of performance-based hurdles based on the Company’s total stockholder return relative to the MSCI US REIT Index and continued employment with the Manager or one of its subsidiaries over the approximately four year period from the grant date through December 31, 2019 (the “Relative RSUs”). Award recipients may earn up to 100% of the Absolute RSUs that were granted and up to 125% of the Relative RSUs that were granted. Upon vesting pursuant to the terms of the Absolute RSUs and Relative RSUs, the RSUs that vest will be settled in shares of common stock and the recipients will be entitled to receive the distributions that would have been paid with respect to a share of common stock (for each share that vests) on or after the date the RSUs were initially granted. In accordance with their terms, all of these restricted shares of common stock that remained outstanding vested in connection with the Mergers. The Absolute and Relative RSUs were not affected by the Mergers and remain outstanding, subject to forfeitures occurring in connection with termination of employment with the Manager or one of its subsidiaries.

Pre-Spin-off NorthStar Realty Equity Awards

In addition to equity awards issued under the 2015 Plan, the Company also had equity subject to outstanding equity-based awards granted by NorthStar Realty prior to the Spin-Off. In connection with the Spin-Off, holders of shares of common stock of NorthStar Realty and LTIP units of NorthStar Realty’s operating partnership subject to outstanding equity awards received one share of the Company’s common stock or one Common Unit in the Operating Partnership, respectively, for every six shares of common stock of NorthStar Realty or LTIP units of NorthStar Realty’s operating partnership held. Other equity and equity-based awards relating to NorthStar Realty’s common stock, such as RSUs, were adjusted to also relate to one-sixth of a share of the Company’s common stock, but otherwise generally remained subject to the same vesting and other terms that applied prior to the Spin-off. Performance-based vesting conditions based on total stockholder return of NorthStar Realty or NorthStar Realty and NSAM were adjusted to refer to combined total stockholder return of NorthStar Realty and the Company or NorthStar Realty, NSAM and the Company, respectively, with respect to periods after the Spin-Off and references to a change of control or similar term in outstanding awards, which referred to a change of control of either NorthStar Realty or NSAM, were adjusted, to the extent such awards relate to common stock of the Company or Common Units in the Operating Partnership, to refer to a change of control of either the Company or NSAM.

Following the Spin-off, NorthStar Realty and the compensation committee of its Board continued to administer all awards granted by NorthStar Realty prior to the Spin-off, but the Company was obligated to issue shares of the Company’s common stock or other equity awards of its subsidiaries or make cash payments in lieu thereof or with respect to dividend or distribution equivalent obligations to the extent required by these awards. These awards continued to be governed by the NorthStar Realty equity plans, as applicable, and shares of the Company’s common stock issued pursuant to these awards were not be issued pursuant to, and did not reduce availability under, the 2015 Plan. In connection with the Mergers, all of these outstanding equity-based awards (other than an RSU relating to 83,333 shares of the Company’s common stock which vested in September 2017 upon a vesting event) vested or were forfeited.

The following table presents activity related to the issuance, vesting, conversion and forfeitures of restricted stock and Common Units. The balance as of December 31, 2017 represents vested Common Units and unvested market-based RSUs (grants in thousands):

	Year Ended December 31, 2017
	Restricted Stock(1)		Common Units(3)		Restricted Stock Units(4)		Performance RSUs(5)		Total Grants		Weighted Average Grant Price
December 31, 2016	1,139		688		83		1,868		3,778		$	11.29
Granted	501		—		—		—		501		12.69
Converted	—		(268	)	—		—		(268	)	21.10
Vested(2)	(1,519	)	—		(83	)	(178	)	(1,780	)	10.35
Forfeited(6)	—		—		—		(237	)	(237	)	4.87
December 31, 2017	121		420		—		1,453		1,994		$	11.95

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(1) Represents restricted stock included in common stock.

(2) Vested primarily includes the acceleration of substantially all outstanding equity awards of the Company in connection with the change of control of NSAM as a result of the Mergers.

(3) Includes vested and unvested Common Units in the Operating Partnership issued in the Spin-off with respect to equity-based awards granted by NorthStar Realty prior to the Spin-off. As of December 31, 2017, all of these Common Units in the Operating Partnership were vested.

(4) Relates to an equity-based award granted by NorthStar Realty prior to the Spin-off and represents a non-employee grant subject to service-based vesting conditions, which was scheduled to vest on January 22, 2019, however, in September 2017, pursuant to the terms of the RSU award, a vesting event occurred and on October 2, 2017, the Company issued 83,333 shares of common stock in settlement of these RSUs. The RSUs were entitled to dividend equivalents prior to vesting and the dividends were settled in cash.

(5) As of December 31, 2017, represented outstanding Absolute and Relative RSUs.

(6) Includes the forfeiture of performance based RSUs issued to NSAM executives as part of historical bonus plans in connection with the change of control of NSAM.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Spin-off

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

Share Repurchase

In November 2015, the Company’s board of directors authorized the repurchase of up to $100 million of its outstanding common stock. That authorization expired in November 2016 and at such time the Board authorized an additional repurchase of up to $100 million of its outstanding common stock through November 2017. In March 2018, the Company’s board of directors authorized the repurchase of up to $100 million of its outstanding common stock. The authorization expires in March 2019, unless otherwise extended by the Company’s board of directors. For the year endedDecember 31, 2017, the Company did not repurchase any shares of its common stock. For the year endedDecember 31, 2016, the Company repurchased 5.7 million shares of its common stock for approximately $58.6 million. For the year endedDecember 31, 2015, the Company repurchased 3.6 million shares of its common stock for approximately $41.4 million. From the original authorization in November 2015 through December 31, 2017, the Company repurchased 9.3 million shares of its common stock for approximately $100.0 million.

Director Grants

In July 2016, the Company issued 15,368 shares of restricted common stock with a fair value at the date of grant of $0.1 million to one of its board of directors as an initial grant of equity. The stock will generally vest over three years.

In November 2016, the Company issued 43,518 shares of common stock with a fair value at the date of grant of $0.5 million to its non-employee directors in connection with their re-election to the Company’s board of directors as part of their annual grants. The stock vested immediately.

In August 2017, the Company issued 30,340 shares of common stock with a fair value at the date of grant of $0.4 million to its independent directors as an annual grant of equity. The stock fully vested at issuance.

Dividends

The following table presents dividends declared (on a per share basis) with respect to the years endedDecember 31, 2017, 2016 and 2015:

Common Stock
Declaration Date	Dividend Per Share
2017
March 7	$	0.15
May 1	$	0.15
August 2	$	0.15
November 6	$	0.15
2016
March 15	$	0.15
May 10	$	0.15
August 3	$	0.15
November 1	$	0.15
2015
November 23	$	0.15

Earnings Per Share

The following table presents EPS for the years endedDecember 31, 2017, 2016 and 2015 (dollars and shares in thousands, except per share data):

	Years Ended December 31,
	2017			2016			2015
Numerator:
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	$	(31,125	)	$	(61,753	)	$	(143,136	)
Net income (loss) attributable to Unit Holders non-controlling interest	(372		)	(778		)	(1,052		)
Net income (loss) attributable to common stockholders and Unit Holders(1)	$	(31,497	)	$	(62,531	)	$	(144,188	)
Denominator:(2)
Weighted average shares of common stock	55,073			57,875			62,184
Weighted average Unit Holders(1)	526			690			681
Weighted average shares of common stock and Unit Holders(2)	55,599			58,565			62,865
Earnings (loss) per share:
Basic	$	(0.57	)	$	(1.07	)	$	(2.30	)
Diluted	$	(0.57	)	$	(1.07	)	$	(2.30	)

____________________________________________________________

(1) The EPS calculation takes into account Unit Holders, which receive non-forfeitable dividends from the date of grant, share equally in the Company’s net income (loss) and convert on a one-for-one basis into common stock.

(2) Excludes the effect of restricted stock and RSUs outstanding that were not dilutive as of December 31, 2017. These instruments could potentially impact diluted EPS in future periods, depending on changes in the Company’s stock price and other factors.

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Non-controlling Interests

12 Months Ended

Dec. 31, 2017

Noncontrolling Interest [Abstract]

Non-controlling Interests

Non-controlling Interests

Operating Partnership

Non-controlling interests include the aggregate Unit Holders’ interest in the Operating Partnership. Net income (loss) attributable to the non-controlling interest is based on the weighted average Unit Holders’ ownership percentage of the Operating Partnership for the respective period. The issuance of additional common stock, Common Units or LTIP Units changes the percentage ownership of both the Unit Holders and the Company. Since a Common Unit or LTIP Unit is generally redeemable for cash or common stock at the option of the Company, it is deemed to be equivalent to common stock. Therefore, such transactions are treated as capital transactions and result in an allocation between stockholders’ equity and non-controlling interests on the accompanying consolidated balance sheets to account for the change in the ownership of the underlying equity in the Operating Partnership. On a quarterly basis, the carrying value of such non-controlling interest is reallocated based on the number of Unit Holders in total in proportion to the number of Units Holders plus the number of shares of common stock outstanding. As of December 31, 2017 and 2016, the Company allocated $1.8 million and $2.3 million, respectively from stockholders’ equity to non-controlling interest on the consolidated balance sheets and consolidated statement of equity.

As of December 31, 2017, 420,359 Common Units and LTIP Units were outstanding, representing a 0.8% ownership and non-controlling interest in the Operating Partnership. Net income (loss) attributable to the Operating Partnership non-controlling interest for the years endedDecember 31, 2017, 2016 and 2015 was a net loss of $0.4 million, $0.8 million and $1.1 million, respectively.

Redeemable Non-controlling Interest

In connection with the acquisition of the Trianon Tower in July 2015, the Company sold a 5.5% non-controlling interest in certain subsidiaries that own the Trianon Tower for $1.5 million. In conjunction with the sale, the Company entered into a put option whereby the holder may redeem its interest for cash at the greater of fair market value of such non-controlling interest or €2.1 million beginning in November 2020 through January 2021. The Company recorded the non-controlling interest at its acquisition date fair value as temporary equity due to the redemption option. The carrying amount of redeemable noncontrolling interests is adjusted to its redemption value at the end of each reporting period, but no less than its initial carrying value, with such adjustments recognized in additional paid-in capital.

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Risk Management and Derivative Activities

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Risk Management and Derivative Activities

Risk Management and Derivative Activities

Derivatives

The Company uses derivative instruments primarily to manage interest rate and currency risk and such derivatives are not considered speculative. These derivative instruments are in the form of interest cap agreements where the primary objective is to minimize interest rate risks associated with investment and financing activities and foreign currency forward agreements where the primary objective is to minimize foreign currency exchange rate risks associated with operating activities. The counterparties of these arrangements are major financial institutions with which the Company may also have other financial relationships. The Company is exposed to credit risk in the event of non-performance by these counterparties and it monitors their financial condition; however, the Company currently does not anticipate that any of the counterparties will fail to meet their obligations.

The following tables present derivative instruments that were not designated as hedges under U.S. GAAP as of December 31, 2017 and December 31, 2016 (dollars in thousands):

	Number(1)	Notional Amount		Fair Value Asset (Liability)			Range of Fixed GBP LIBOR / EURIBOR	Range of Maturity
As of December 31, 2017:
Interest rate caps	31	$	1,193,012	$	7,024		(2)	April 2020 - July 2023
Foreign currency forwards, net(3)	4	58,647		(5,270		)	N/A	February 2018 - November 2018
Total	35	$	1,251,659	$	1,754
As of December 31, 2016:
Interest rate caps	32	$	1,107,400	$	8,659		(2)	January 2020 - July 2023
Foreign currency forwards(3)	20	72,806		5,070			N/A	February 2017 - November 2017
Total	52	$	1,180,206	$	13,729

_____________________________

(1)    Represents number of transactions.

(2)    Includes a range of interest rate caps of 0.5% for EURIBOR and 2.0% for GBP LIBOR.

(3)    Includes Euro currency forwards as of December 31, 2017 and Euro and U.K. Pounds Sterling currency forwards as of December 31, 2016.

The following table presents the fair value of derivative instruments, as well as their classification on the consolidated balance sheets, as of December 31, 2017 and December 31, 2016 (dollars in thousands):

	Balance Sheet	December 31, 2017		December 31, 2016
	Location
Interest rate caps	Derivative assets	$	7,024	$	8,659
Foreign currency forwards	Derivative assets	$	—	$	5,070
Foreign currency forwards	Derivative liabilities	$	5,270	$	—

The following table presents the effect of derivative instruments in the consolidated statements of operations for the years endedDecember 31, 2017, 2016 and 2015 (dollars in thousands):

		Years Ended December 31,
		2017			2016			2015
Amount of gain (loss) recognized in earnings:	Statements of operations location:
Adjustment to fair value of interest rate caps	Unrealized gain (loss) on derivatives and other(1)	$	(2,726	)	$	(14,936	)	$	(8,897	)
Adjustment to fair value of foreign currency forwards held at the end of the reporting period	Unrealized gain (loss) on derivatives and other (1)	(5,270		)	4,872			417
Adjustment to fair value of foreign currency forwards settled during the period	Unrealized gain (loss) on derivatives and other (1)	(5,070		)	(219		)	—
Net cash receipt (payment) on derivatives	Realized gain (loss) on sales and other	979			(787		)	—

_____________________________

(1)    Excludes the unrealized gain (loss) relating to foreign currency remeasurement adjustments.

The Company’s counterparties held no cash margin as collateral against the Company’s derivative contracts as of December 31, 2017 and December 31, 2016. The Company had no derivative financial instruments that were designated as hedges in qualifying hedging relationships as of December 31, 2017 and December 31, 2016.

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Fair Value

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

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 are recorded at fair value on the consolidated balance sheets and 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.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following is a description of the valuation techniques used to measure fair value of assets and liabilities accounted for at fair value on a recurring basis and the general classification of these instruments pursuant to the fair value hierarchy.

Derivative Instruments

Derivative instruments consist of interest rate caps and foreign currency exchange contracts that are traded over-the-counter, and are valued using a third-party service provider. These quotations are not adjusted and are generally based on valuation models with observable inputs such as contractual cash flow, yield curve, foreign currency rates and credit spreads and as such, are classified as Level 2 of the fair value hierarchy. Derivative instruments are also assessed for credit valuation adjustments due to the risk of non-performance by the Company and derivative counterparties.

Fair Value of Financial Instruments

In addition to the above disclosures regarding financial assets or liabilities which are recorded at fair value, U.S. GAAP requires disclosure of fair value about all financial instruments. The following disclosure of estimated fair value of financial instruments was determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value.

The following table presents the principal amount, carrying value and fair value of certain financial assets and liabilities as of December 31, 2017 and 2016 (dollars in thousands):

	December 31, 2017						December 31, 2016
	Principal/Notional Amount		Carrying Value		Fair Value		Principal/Notional Amount		Carrying Value		Fair Value
Financial assets:(1)
Derivative assets	$	1,193,012	$	7,024	$	7,024	$	1,180,206	$	13,729	$	13,729
Preferred equity investment	35,347		35,347		35,783		—		—		—
Financial liabilities:(1)
Mortgage and other notes payable, net	$	1,234,642	$	1,223,443	$	1,231,321	$	1,162,211	$	1,149,119	$	1,146,134
Derivative liabilities	58,647		5,270		5,270		—		—		—

_____________________________

(1) The fair value of other financial instruments not included in this table is estimated to approximate their carrying value.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of the reporting date. Although management is not aware of any factors that would significantly affect fair value, such amounts have not been comprehensively revalued for purposes of these consolidated financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

Mortgage and Other Notes Payable

For mortgage and other notes payable, the Company primarily uses rates currently available with similar terms and remaining maturities to estimate fair value. These measurements are determined using rates as of the end of the reporting period or market credit spreads over the rate payable on fixed rate of like maturities. These fair value measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy.

Preferred Equity Investments

For preferred equity investments, fair value was computed by comparing the current yield to the estimated yield for newly originated loans with similar credit risk or the market yield at which a third party might expect to purchase such investment. Fair value was determined assuming fully-extended maturities regardless of structural or economic tests required to achieve such extended maturities. These fair value measurements are generally based on unobservable inputs and, as such, are classified as Level 3 of the fair value hierarchy.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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 current legal proceedings are not expected to have a material adverse effect on the Company’s financial position or results of operations.

The Company engages third-party service providers for its portfolio who are remunerated based on either a fixed fee or a percentage of rental income. The contract terms vary by party and are subject to termination options. These costs are recorded in properties - operating expense and other expenses in the consolidated statements of operations.

As part of the terms of agreements relating to certain assets the Company disposed, as is customary for such transactions in Europe, the Company agreed to provide certain warranties to the buyer.

Obligations Under Ground Leases

The following table presents minimum future rental payments under the Company’s contractual ground lease obligations for certain building leaseholds for the year endedDecember 31, 2017 (dollars in thousands):

Years ending December 31:	Total(1)
2018	$	705
2019	705
2020	705
2021	705
2022	705
Thereafter	46,828
Total minimum lease payments	$	50,353

__________________

(1) Represent two ground leases with an average expiry of 2095. None of these are paid directly by the tenants.

Risk Management

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 region to be similarly affected by changes in economic conditions. The Company monitors its portfolios to identify potential concentrations of credit risks. For the year endedDecember 31, 2017, one tenant, DekaBank Deutsche Girozentrale, accounted for more than 10% of the Company’s total revenue. This tenant has 6.4 years remaining on its lease. Otherwise, the Company has no other tenant that generates 10% or more of its total revenue. Additionally, for the year endedDecember 31, 2017, Germany, France and the United Kingdom each accounted for more than 10% of the Company’s total revenue. The Company believes the remainder of its portfolio is well diversified and does not contain any unusual concentrations of credit risks.

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Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information (Unaudited)

Quarterly Financial Information (Unaudited)

The following presents selected quarterly information for the years endedDecember 31, 2017 and 2016 (dollars in thousands, except per share data):

	Three Months Ended
	December 31,			September 30,			June 30,			March 31,
	2017			2017			2017			2017
Rental income	$	26,041		$	27,747		$	26,025		$	25,536
Escalation income	5,265			5,641			5,558			5,161
Interest income	705			704			297			—
Interest expense	6,203			6,536			6,722			6,383
Management fee, related party	3,692			3,585			3,572			3,559
Transaction costs	4,552			332			973			260
Depreciation and amortization	14,535			14,396			12,520			12,563
Other, net(1)	15,893			13,906			12,720			27,760
Unrealized gain (loss) on derivatives and other	(795		)	(3,472		)	(7,655		)	(941		)
Realized gain (loss) on sales and other	13,735			1,681			1,981			4,970
Income (loss) before income tax benefit (expense)	76			(6,454		)	(10,301		)	(15,799		)
Net income (loss)	2,537			(6,806		)	(10,538		)	(15,526		)
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	1,442			(6,770		)	(10,447		)	(15,350		)
Earnings (loss) per share:(2)
Basic	$	0.02		$	(0.12	)	$	(0.19	)	$	(0.28	)
Diluted	$	0.02		$	(0.12	)	$	(0.19	)	$	(0.28	)

__________________

(1) Primarily relates to properties - operating expenses, general and administrative expense, other expenses and compensation expense offset by other income.

(2) The total for the year may differ from the sum of the quarters as a result of weighting.

	Three Months Ended
	December 31,			September 30,			June 30,			March 31,
	2016			2016			2016			2016
Rental income	$	25,700		$	29,798		$	33,990		$	34,833
Escalation income	5,347			7,828			5,908			6,090
Interest expense	7,955			9,301			11,641			12,542
Management fee, related party	3,520			3,548			3,500			3,500
Transaction costs	(23		)	150			1,652			831
Depreciation and amortization	13,715			13,989			18,404			18,871
Other, net(1)	20,531			19,585			44,271			16,962
Unrealized gain (loss) on derivatives and other	8,319			(4,982		)	1,159			(15,753		)
Realized gain (loss) on sales and other	20,460			3,814			4,622			(2,448		)
Income (loss) before income tax benefit (expense)	14,128			(10,115		)	(33,789		)	(29,984		)
Net income (loss)	13,902			(12,770		)	(34,309		)	(29,325		)
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	13,859			(12,721		)	(33,909		)	(28,982		)
Earnings (loss) per share:(2)
Basic	$	0.25		$	(0.22	)	$	(0.57	)	$	(0.49	)
Diluted	$	0.24		$	(0.22	)	$	(0.57	)	$	(0.49	)

__________________

(1) Primarily relates to properties - operating expenses, general and administrative expense, impairment loss, other expenses and compensation expense offset by other income.

(2) The total for the year may differ from the sum of the quarters as a result of weighting.

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Segment Reporting

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company currently conducts its business through the following three segments, based on how management reviews and manages its business:

• Real Estate Equity- Focused on European prime office properties located in key cities within Germany, the United Kingdom and France.

• Preferred Equity - Represents the Company’s preferred equity investment secured by interest in a European prime office property.

• Corporate - The corporate segment significantly includes corporate level interest expense, management fee and general and administrative expenses.

The following tables present segment reporting for the years endedDecember 31, 2017, 2016 and 2015 (dollars in thousands):

	Year Ended December 31, 2017
Statement of Operations:	Real Estate Equity			Preferred Equity		Corporate				Total
Revenues
Rental income	$	105,349		$	—	$	—			$	105,349
Escalation income	21,625			—		—				21,625
Interest income	—			1,706		—				1,706
Expenses
Interest expense(1)	24,989			—		855				25,844
Management fee, related party	—			—		14,408				14,408
Transaction costs(4)	—			538		5,579				6,117
Depreciation and amortization	54,014			—		—				54,014
Other, net	20,887		(2)	72		39,816			(3)	60,775
Income (loss) before income tax benefit (expense)	27,084			1,096		(60,658		)		(32,478		)
Income tax benefit (expense)	2,145			—		—				2,145
Net income (loss)	$	29,229		$	1,096	$	(60,658	)		$	(30,333	)
Balance Sheets:
December 31, 2017
Total Assets	$	1,901,282		$	37,133	$	2,502			$	1,940,917

___________________________________

(1) Includes $2.4 million and $0.4 million of amortization of deferred financing costs in the real estate equity and corporate segments, respectively.

(2) Primarily relates to properties - operating expenses and unrealized loss on interest rate caps offset by other income and realized gain on sales.

(3) Primarily relates to general and administrative expense and unrealized loss on foreign currency forwards.

(4) Transaction costs relates to costs associated with amending the management agreement in our corporate segment and other transaction costs in our preferred equity segment.

	Year Ended December 31, 2016
Statement of Operations:(1)	Real Estate Equity				Corporate				Total
Revenues
Rental income	$	124,321			$	—			$	124,321
Escalation income	25,173				—				25,173
Expenses
Interest expense(2)	30,974				10,465				41,439
Management fee, related party	—				14,068				14,068
Transaction costs(5)	—				2,610				2,610
Depreciation and amortization	64,979				—				64,979
Other, net	57,546			(3)	28,612			(4)	86,158
Income (loss) before income tax benefit (expense)	(4,005		)		(55,755		)		(59,760		)
Income tax benefit (expense)	(2,742		)		—				(2,742		)
Net income (loss)	$	(6,747	)		$	(55,755	)		$	(62,502	)
Balance Sheets:
December 31, 2016
Total Assets	$	1,835,531			$	9,861			$	1,845,392

___________________________________

(1) The Company did not have a preferred equity segment for the year ended December 31, 2016.

(2) Includes $3.7 million and $3.4 million of amortization of deferred financing costs in the real estate and corporate segments, respectively.

(3) Primarily relates to properties - operating expense, realized loss on the sale of real estate and impairment loss on real estate offset by the realized gain on foreign currency translation and other.

(4) Primarily relates to general and administrative expense and unrealized loss on foreign currency forwards. Includes an allocation of general and administrative expense from the Manager of $0.2 million.

(5) Transaction costs primarily relate to costs associated the Mergers in our corporate segment.

	Year Ended December 31, 2015
Statement of Operations:	Real Estate Equity				Corporate				Total
Revenues
Rental income	$	101,023			$	—			$	101,023
Escalation income	18,822				—				18,822
Expenses
Interest expense(1)	25,365				10,764				36,129
Management fee, related party	—				2,333				2,333
Transaction costs(4)	120,101				—				120,101
Depreciation and amortization	56,283				—				56,283
Other, net	24,237			(2)	25,580			(3)	49,817
Income (loss) before income tax benefit (expense)	(106,141		)		(38,677		)		(144,818		)
Income tax benefit (expense)	675				—				675
Net income (loss)	$	(105,466	)		$	(38,677	)		$	(144,143	)
Balance Sheets:
December 31, 2015
Total Assets	$	2,544,992			$	138,058			$	2,683,050

___________________________________

(1) Includes $2.9 million and $3.0 million of amortization of deferred financing costs in the real estate equity and corporate segments, respectively.

(2) Primarily relates to properties - operating expense, unrealized loss on interest rate caps and impairment loss on goodwill offset by the realized gain on the sale of real estate and other income.

(3) Primarily relates to general and administrative expense, compensation expense and unrealized loss on foreign currency forwards.

(4) Transaction costs primarily represents expenses such as real estate transfer tax and professional fees related to the acquisitions in 2015 in our real estate equity segment.

Geography

The following table presents geographic information about the Company's total rental and escalation income for the years ended December 31, 2017, 2016 and 2015 (in thousands):

	Years Ended December 31,
	2017			2016		2015
Office
Germany	$	51,241		$	53,743	$	31,969
United Kingdom	36,984			38,483		36,882
France	20,051			19,551		13,802
Other	14,167		(1)	30,656		31,001
Subtotal	122,443			142,433		113,654
Other	4,531			7,061		6,191
Total	$	126,974		$	149,494	$	119,845

__________________

(1) Includes an asset in Portugal and an asset in the Netherlands which are classified as held-for-sale as of December 31, 2017.

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Subsequent Events

12 Months Ended

Dec. 31, 2017

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Dividends

On March 7, 2018, the Company declared a dividend of $0.15 per share of common stock. The common stock dividend is expected be paid on March 23, 2018 to stockholders of record as of the close of business on March 19, 2018.

Share Repurchase

In March 2018, the Company’s board of directors authorized the repurchase of up to $100 million of its outstanding common stock. The authorization expires in March 2019, unless otherwise extended by the Company’s board of directors.

Disposals

In February 2018, the Company agreed a definitive sale and purchase agreement to sell the Maastoren property, the Company’s largest non-core asset, for approximately $190 million. The Company expects to release approximately $60 million of net equity after repayment of financing (including release premium) and transaction costs.

Credit Facility

In March 2018, the Company amended the Credit Facility, increasing the size to $70 million and extending the term until April 2020 with one year extension option. The Credit Facility includes an accordion feature, providing for the ability to increase the facility to $105 million.

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Schedule III - Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2017

SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]

Schedule III-Real Estate and Accumulated Depreciation

NORTHSTAR REALTY EUROPE AND SUBSIDIARIES

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

As of December 31, 2017

(Dollars in Thousands)

Column A		Column B		Column C Initial Cost				Column D Capitalized Subsequent to Acquisition		Column E Gross Amount Carried at Close of Period						Column F					Column G	Column H
Asset	Location	Encumbrances(1)		Land		Building & Improvements		Land, Buildings & Improvements		Land		Building & Improvements		Total		Accumulated Depreciation			Total (2)(4)		Date Acquired	Life on Which Depreciation is Computed
Germany(3)
Trianon	Frankfurt	$	395,293	$	89,410	$	518,441	$	10,388	$	89,410	$	528,829	$	618,239	$	(39,122	)	$	579,117	7/15/2015	40 years
Valentinskamp	Hamburg	34,646		24,609		30,086		4,653		24,609		34,739		59,348		(2,851		)	56,497		4/1/2015	40 years
Parexel	Berlin	30,912		8,425		37,703		1		8,425		37,704		46,129		(2,799		)	43,330		4/8/2015	40 years
Drehbahn	Hamburg	29,251		27,287		10,628		726		27,287		11,354		38,641		(1,430		)	37,211		4/1/2015	40 years
Ludwigstrasse	Cologne	19,696		12,435		20,026		486		12,435		20,512		32,947		(1,736		)	31,211		4/8/2015	40 years
Dammtorwall	Hamburg	15,105		7,046		14,082		132		7,046		14,214		21,260		(1,275		)	19,985		4/1/2015	40 years
Uhlandstrasse	Frankfurt	12,576		4,504		15,916		1,998		4,504		17,914		22,418		(1,454		)	20,964		4/8/2015	40 years
Munster	Germany	5,998		2,811		5,689		1,515		2,811		7,204		10,015		(499		)	9,516		4/8/2015	40 years
Subtotal		543,477		176,527		652,571		19,899		176,527		672,470		848,997		(51,166		)	797,831
France
Berges de Seine	Paris, Issy	96,129		100,198		55,317		134		100,198		55,451		155,649		(5,400		)	150,249		4/1/2015	40 years
Mac Donald	Paris, Other	54,742		34,505		44,831		7		34,505		44,838		79,343		(4,214		)	75,129		4/1/2015	40 years
Marceau	Paris, CBD	26,209		35,505		13,586		1,357		35,505		14,943		50,448		(1,378		)	49,070		4/8/2015	40 years
Joubert	Paris, CBD	6,959		10,547		4,353		57		10,547		4,410		14,957		(390		)	14,567		4/8/2015	40 years
Subtotal		184,039		180,755		118,087		1,555		180,755		119,642		300,397		(11,382		)	289,015
United Kingdom
Portman Square	London, West End	140,144		—		188,366		2,229		—		190,595		190,595		(14,569		)	176,026		4/1/2015	40 years
Condor House	London, City	110,682		16,767		126,575		1,582		16,767		128,157		144,924		(10,670		)	134,254		4/1/2015	40 years
Glasgow	Other	5,054		2,474		7,043		—		2,474		7,043		9,517		(560		)	8,957		4/8/2015	40 years
Chiswick	Greater London	8,385		6,906		6,641		12		6,906		6,653		13,559		(532		)	13,027		4/8/2015	40 years
St Albans	Greater London	3,887		2,083		4,830		7		2,083		4,837		6,920		(454		)	6,466		4/8/2015	40 years
Subtotal		268,152		28,230		333,455		3,830		28,230		337,285		365,515		(26,785		)	338,730
Other(5)
IC Hotel	Germany, Berlin	12,148		864		22,919		129		864		23,048		23,912		(1,572		)	22,340		4/8/2015	40 years
Ibis Berlin	Germany, Berlin	8,432		903		12,474		—		903		12,474		13,377		(853		)	12,524		4/8/2015	40 years
Neuermarkt	Germany, Werl	1,815		995		2,748		99		995		2,847		3,842		(240		)	3,602		4/8/2015	40 years
Marly	France, Greater Paris	22,024		5,069		44,034		5		5,069		44,039		49,108		(3,094		)	46,014		4/8/2015	40 years
Kirchheide	Germany, Other	—		348		1,394		—		348		1,394		1,742		(264		)	1,478		4/8/2015	40 years
Subtotal		44,419		8,179		83,569		233		8,179		83,802		91,981		(6,023		)	85,958
Grand Total		$	1,040,087	$	393,691	$	1,187,682	$	25,517	$	393,691	$	1,213,199	$	1,606,890	$	(95,356	)	$	1,511,534
Held-for-Sale
Office123	Portugal	$	—	$	670	$	12,000	$	114	$	670	$	12,114	$	12,784	$	(874	)	$	11,910	4/8/2015	40 years
Maastoren	Netherlands	87,444		11,441		148,534		561		11,441		149,095		160,536		(11,795		)	148,741		4/1/2015	40 years
Grand Total		$	87,444	$	12,111	$	160,534	$	675	$	12,111	$	161,209	$	173,320	$	(12,669	)	$	160,651

______________________

(1) Excludes the preferred equity certificates of $107.1 million.

(2) Aggregate cost for federal income tax purposes is $1.7 billion as of December 31, 2017.

(3) German office properties comprise nine buildings.

(4) Excludes intangibles.

(5) Represents retail, industrial and hotel (net lease) assets.

NORTHSTAR REALTY EUROPE CORP. AND SUBSIDIARIES

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

As of December 31, 2017

(Dollars in Thousands)

The following table presents changes in the Company’s operating real estate portfolio as of December 31, 2017, 2016 and 2015 (dollars in thousands):

	2017			2016			2015
Beginning balance	$	1,614,432		$	2,120,460		$	55,413
Property acquisitions	—			—			2,080,038
Reclassification	—			(733		)	—
Transfers to held for sale	(173,320		)	(23,138		)	(5,330		)
Improvements	18,033			10,792			3,414
Retirements and disposals	(60,234		)	(353,883		)	(14,514		)
Foreign currency translation	207,979			(139,066		)	1,439
Ending balance	$	1,606,890		$	1,614,432		$	2,120,460

The following table presents changes in accumulated depreciation as of December 31, 2017, 2016 and 2015 (dollars in thousands):

	2017			2016			2015
Beginning balance	$	(63,585	)	$	(35,303	)	$	(517	)
Depreciation expense	(40,196		)	(45,219		)	(35,842		)
Assets held for sale	12,669			811			31
Retirements and disposals	5,722			10,635			213
Foreign currency translation	(9,966		)	5,491			812
Ending balance	$	(95,356	)	$	(63,585	)	$	(35,303	)

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Basis of Quarterly Presentation

Basis of Accounting

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

The consolidated financial statements for the period January 1, 2015 to October 31, 2015 represent the Company’s activity prior to the spin-off by NorthStar Realty of its European real estate business (the “Spin-off”) and reflects the revenues and direct expenses of the Company and include material assets and liabilities of NorthStar Realty that are specifically identifiable to the European real estate business and contributed to the Company upon completion of the Spin-off.

The consolidated financial statements for the period prior to the Spin-off include an allocation of costs and expenses by NorthStar Realty related to the Company (primarily compensation and other general and administrative expense) based on an estimate of expenses as if the Company was managed as an independent entity. This allocation method is principally based on relative headcount and management’s knowledge of the operations of the Company. The amounts allocated in the accompanying consolidated 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 the Manager of $0.3 million for the period from January 1, 2015 through the Spin-off are recorded as if the Company was managed as an independent entity and is included in general and administrative expense in the consolidated statements of operations. The Company began paying management fees to the Manager on November 1, 2015 pursuant to the terms of the Company’s management agreement with the Manager (refer to Note 6).

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, the Operating Partnership and their consolidated subsidiaries. The Company consolidates variable interest entities (“VIE”) where the Company is the primary beneficiary and voting interest entities which are generally majority owned or otherwise controlled by the Company. All significant intercompany balances are eliminated in consolidation.

Variable Interest Entities

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

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

The Company will evaluate its investments to determine whether they are a VIE. The Company analyzes 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

Voting Interest Entities

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

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

Non-controlling Interests

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 consolidated balance sheets and presented separately as net income (loss) and other comprehensive income (loss) (“OCI”) attributable to 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.

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified in the consolidated financial statements to conform to current period presentation including the gain (loss) on net cash on derivatives from unrealized gain (loss) on derivatives and other to realized gain (loss) on sales and other on the consolidated statements of operations for the year ended December 31, 2017 (refer to Note 10).

Estimates

Estimates

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

Comprehensive Income (Loss)

Comprehensive Income (Loss)

The Company reports consolidated comprehensive income (loss) in separate statements following the consolidated statements of operations. Comprehensive income (loss) is defined as the change in equity resulting from net income (loss) and OCI. The components of OCI principally include the foreign currency translation adjustment, net.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly-liquid investments with an original maturity date of three months or less and deposits held with third parties that are readily convertible to cash to be cash equivalents. Cash, including amounts restricted at certain banks and financial institutions, may at times exceed insurable amounts. The Company seeks to mitigate credit risk by placing cash and cash equivalents with major financial institutions. To date, the Company has not experienced any losses on cash and cash equivalents. Cash and cash equivalents exclude escrow arrangements entered into for specific warranties in relation to the real estate sales which are recorded in other assets in the consolidated financial statements.

Restricted Cash

Restricted Cash

Restricted cash primarily consists of amounts related to operating real estate such as escrows for taxes, insurance, capital expenditures, tenant security deposits and payments required under certain lease agreements and amounts related to the Company’s borrowings.

Operating Real Estate

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 improvements which 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.

The Company accounts for purchases of operating real estate that qualify as business combinations using the acquisition method, where the purchase price is allocated to tangible assets such as land, building, tenant and land improvements and other identified intangibles, such as in-place leases, above/below-market leases and goodwill. Costs directly related to an acquisition deemed to be a business combination are expensed and included in transaction costs in the consolidated statements of operations.

Operating real estate is depreciated using the straight-line method over the estimated useful lives of the assets, summarized as follows:

Category:	Term:
Building	40 years
Building improvements	Lesser of the useful life or remaining life of the building
Building leasehold interests	Lesser of 40 years or remaining term of the lease
Tenant improvements	Lesser of the useful life or remaining term of the lease

Preferred Equity Investments

Preferred Equity Investments

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

Assets and Liabilities Held For Sale

Assets and Related Liabilities Held For Sale

Operating real estate which has met the criteria to be classified as held for sale is separately presented on the consolidated 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 net of the intangible assets associated with the asset, with any write-down to fair value less cost to sell recorded as an impairment loss. Once a property is determined to be held for sale, depreciation and amortization is no longer recorded. The Company records a gain or loss on sale of real estate when title is conveyed to the buyer and the Company has no substantial economic involvement with the property. If the sales criteria for the full accrual method are not met, the Company defers some or all of the gain or loss recognition by applying the finance, leasing, profit sharing, deposit, installment or cost recovery method, as appropriate, until the sales criteria are met.

Deferred Costs

Deferred Costs

Deferred costs primarily include deferred financing costs and deferred lease costs. Deferred financing costs represent commitment fees, legal and other third-party costs associated with obtaining financing. Costs related to revolving credit facilities are recorded in other assets and are amortized to interest expense using the straight-line basis over the term of the facility. Costs related to other borrowings are recorded net against the carrying value of such borrowings and are amortized into interest expense using 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 to realized gain (loss) on sales and other. Costs incurred in seeking financing transactions, which do not close, are expensed in the period in which it is determined that the financing will not occur. 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 are recorded to depreciation and amortization in the consolidated statements of operations.

Intangible Assets and Intangible Liabilities

Intangible Assets and Intangible Liabilities

The Company records acquired identified intangibles, which includes intangible assets (such as value of the above-market leases, in-place leases, below-market ground leases, goodwill 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 net to rental income, the value of below-market ground leases is amortized into properties - operating expense and in-place leases is amortized into depreciation and amortization expense, respectively, in the consolidated statements of operations on a straight-line basis over the respective remaining lease term.

Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination and is not amortized. The Company analyzes goodwill for impairment on an annual basis and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be fully recoverable. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit, related to such goodwill, is less than the carrying amount as a basis to determine whether the two-step impairment test is necessary. The first step in the impairment test compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds fair value, the second step is required to determine the amount of the impairment loss, if any, by comparing the implied fair value of the reporting unit goodwill with the carrying amount of such goodwill. The implied fair value of goodwill is derived by performing a hypothetical purchase price allocation for the reporting unit as of the measurement date, allocating the reporting unit’s estimated fair value to its net assets and identifiable intangible assets. The residual amount represents the implied fair value of goodwill. To the extent this amount is below the carrying value of goodwill, an impairment loss is recorded in the consolidated statements of operations.

Revenue Recognition

Revenue Recognition

Operating Real Estate

Rental and escalation income from operating real estate is derived from leasing of space to various types of tenants. Rental revenue recognition commences when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. The leases are for fixed terms of varying length and generally provide for annual rentals, subject to indexation, and expense reimbursements to be paid in quarterly or monthly 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 other assets, net on the consolidated balance sheets. The Company amortizes any tenant inducements as a reduction of revenue utilizing the straight-line method over the term of the lease. 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.

In a situation in which a lease or leases associated with a significant tenant have been, or are expected to be, terminated early, the Company evaluates the remaining useful life of depreciable or amortizable assets in the asset group related to the lease that will be terminated (i.e., tenant improvements, above and below market lease intangibles, in-place lease value and leasing commissions). Based upon consideration of the facts and circumstances surrounding the termination, the Company may write-off or accelerate the depreciation and amortization associated with the asset group. Such amounts are included within depreciation and amortization in the consolidated statements of operations.

Preferred Equity Investments

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

Impairment on Investments

Impairment on Investments

Operating Real Estate

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, 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 and recorded in impairment losses in the consolidated statements of operations. For the years endedDecember 31, 2017 and 2015, the Company did not recognize any impairment losses. For the year endedDecember 31, 2016, the Company recognized $27.5 million of impairment losses.

An allowance for a doubtful account for a tenant receivable is 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. Additionally, the Company establishes, on a current basis, an allowance for future tenant credit losses on unbilled rent receivable based on an evaluation of the collectability of such amounts.

Preferred Equity Investments

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

Income recognition is suspended for an investment when, in the opinion of the Company, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired investment is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired investment is not in doubt, contractual interest is recorded as interest income when received, under the cash basis method until an accrual is resumed when the investment becomes contractually current and performance is demonstrated to be resumed. Interest accrued and not collected will be reversed against interest income. An investment is written off when it is no longer realizable and/or legally discharged. As of December 31, 2017, the Company did not have any impaired preferred equity investments.

Equity-Based Compensation

Equity-Based Compensation

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

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

Derivatives

Derivatives

The Company seeks to use derivative instruments to manage exposure to interest rate risk and foreign currency exchange rate risk. The change in fair value for a derivative is recorded in unrealized gain (loss) on derivatives and other in the consolidated statements of operations.

The Company’s derivative instruments are recorded on the consolidated balance sheets at fair value and do not qualify as hedges under U.S. GAAP.

Foreign Currency

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 (“CTA”), net, is recorded as a component of accumulated OCI in the consolidated statements of equity. For the years endedDecember 31, 2017, 2016 and 2015, the Company reclassified $(1.4) million, $17.7 million and $0.3 million, respectively, of CTA to realized gain (loss) on sales and other in the consolidated statements of operations due to the sale of certain real estate assets (refer to Note 3).

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 derivatives and other in the consolidated statements of operations.

Earnings Per Share

Earnings Per Share

The Company’s basic earnings per share (“EPS”) is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common stock outstanding. Diluted EPS includes restricted stock and the potential dilution that could occur if outstanding restricted stock units (“RSUs”) or other contracts to issue common stock, assuming performance hurdles have been met, were converted to common stock (including limited partnership interests in the Operating Partnership owned by holders other than the Company (“Common Units”) and Common Units which are structured as profits interests (“LTIP Units” collectively referred to as Unit Holders) (refer to Note 8), where such exercise or conversion would result in a lower EPS. The dilutive effect of such RSUs and Unit Holders is calculated assuming all units are converted to common stock.

Income Taxes

Income Taxes

The Company has elected to be taxed as a REIT for U.S. federal income tax purposes with the initial filing of its 2015 U.S. federal tax return and will continue to comply with the related provisions of the Internal Revenue Code of 1986, as amended, the (“Internal Revenue Code”). Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income and share ownership tests are met. To maintain its qualification as a REIT, the Company must annually distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. The Company distributes to its stockholders 100% of its taxable income and therefore no provision for U.S. federal income taxes has been included in the accompanying consolidated financial statements for the years endedDecember 31, 2017, 2016 and 2015. Dividends distributed for the years endedDecember 31, 2017 and 2016 were characterized, for U.S. federal income tax purposes, as return of capital.Dividends distributed for the year ended December 31, 2015 was characterized, for U.S. federal income tax purposes, as ordinary income.

The Company conducts its business through foreign subsidiaries which may be subject to local level income tax in the European jurisdictions it operates. The Company has also elected taxable REIT subsidiary (“TRS”) status for one of the Company’s foreign subsidiaries. This enables the Company to provide services that would otherwise be considered impermissible for REITs and participate in activities that do not qualify as “rents from real property.” The TRS is not resident in the U.S. and, as such, not subject to U.S. taxation but is subject to foreign income taxes only. As a result, the effective tax rate of less than 6.6% is due to those foreign taxes. In addition, the REIT will not generally be subject to any additional U.S. taxes on the repatriation of its earnings.

For the year ended December 31, 2017, the Company’s foreign subsidiaries recorded $0.6 million of current income tax benefit and $1.5 million of a deferred income tax benefit. For the year ended December 31, 2016, the Company’s foreign subsidiaries recorded $7.7 million of current income tax expense and an offsetting $5.0 million of a deferred income tax benefit. For the year ended December 31, 2015, the Company’s foreign subsidiaries recorded $2.3 million of current income tax expense and an offsetting $3.0 million of a deferred income tax benefit. For the Company’s foreign subsidiaries, including the Company’s foreign TRS, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the foreign tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. The Company evaluates the realizability of its deferred tax assets (e.g. net operating loss) and recognizes a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers estimates of expected future taxable income, existing and projected book/tax differences, tax planning strategies available and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to forecast its business and general economic environment in future periods. Due to past and projected losses in certain local jurisdictions where the Company does not have carryback potential and/or cannot sufficiently forecast future taxable income, the Company recognized net cumulative valuation allowances against the Company’s deferred tax assets. The Company will continue to review its deferred tax assets in accordance with U.S. GAAP. The valuation allowance at December 31, 2017, 2016 and 2015 of $22.7 million, $26.6 million and $21.5 million, respectively, relates to deferred tax assets in jurisdictions that had not met the “more-likely-than-not” realization threshold criteria. The change to the valuation allowance is primarily due to disposals of operating real estate.

Changes in estimate of deferred tax asset realizability, if any, are included in income tax benefit (expense) in the consolidated statements of operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements: Accounting Standards Adopted in 2017

In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance (Accounting Standards Update “ASU” No. 2016-05) clarifying that an assessment of whether an embedded contingent put or call option is clearly and closely related to a borrowing requires only an analysis of the four-step decision sequence. Additionally, entities are not required to separately assess whether the contingency itself is clearly and closely related. Entities are required to apply the guidance to existing instruments in scope using a modified retrospective transition method as of the date of adoption. The guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those years. The Company has adopted this guidance and it did not have any material impact on its consolidated financial position, results of operations and financial statement disclosures.

In March 2016, the FASB issued guidance (ASU No. 2016-09) which amends several aspects of the accounting for equity-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. The guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2016. The Company has adopted this guidance and has made a policy election to account for forfeitures upon occurrence. The adoption did not have a material impact on the Company’s consolidated financial position, results of operations and financial statement disclosures.

Recent Accounting Pronouncements: Future Application of Accounting Standards

Revenue Recognition - In May 2014, FASB issued an accounting update (ASU No. 2014-09) 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 Company has adopted the standard on its required effective date of January 1, 2018 using the modified retrospective approach and has applied the guidance to contracts not yet completed as of the date of adoption. The new revenue standard specifically excludes revenue streams for which specific guidance is stipulated in other sections of the codification and therefore it will not impact rental income or interest income generated on financial instruments such as preferred equity investments. The Company is the lessor for triple net and gross leases classified as operating leases in which rental income and tenant reimbursements are recorded. The revenue from these leases are scoped out of the new revenue recognition guidance. All leases are accounted for under ASC 840 until the adoption of the new leasing guidance within ASC 842. The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

Leases - In February 2016, the FASB issued an accounting update (ASU No. 2016-02) which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The update requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The update is expected to result in the recognition of a right-to-use asset and related liability to account for the Company’s future obligations under its ground lease arrangements for which it is the lessee. The update will require that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Under this guidance, allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained will no longer be capitalized as initial direct costs and instead will be expensed as incurred. Lessors will continue to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company expects to adopt the package of practical expedients under the guidance and the Company will not need to reassess whether any expired or expiring contracts contain leases; will not need to revisit lease classification for any expired or expiring leases; and will not need to reassess initial direct costs for any existing leases. In addition, the Company expects to adopt the practical expedient which allows lessors to consider lease and non-lease components as a single performance obligation to the extent that the timing and pattern of revenue recognition is the same and the lease is classified an operating lease. As of December 31, 2017, the Company has two ground lease agreements with annual payments of $0.7 million. The new guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements and is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the impact, if any, that this guidance will have on its consolidated financial position, results of operations and financial statement disclosures.

Financial Instruments - In June 2016, the FASB issued guidance (ASU No. 2016-13) that changes the impairment model for most financial instruments by requiring companies to recognize an allowance for expected losses, rather than incurred losses as required currently by the other-than-temporary impairment model. The guidance will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures (e.g., loan commitments). The new guidance is effective for reporting periods beginning after December 15, 2019 and will be applied as a cumulative adjustment to retained earnings as of the effective date. The Company continues to assess the potential effect the adoption of this guidance will have on its consolidated financial statements and related disclosures.

Cash Flow Classification - In August 2016, the FASB issued guidance (ASU No. 2016-15) that makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The new guidance requires adoption on a retrospective basis unless it is impracticable to apply, in which case the Company would be required to apply the amendments prospectively as of the earliest date practicable. The Company does not expect the adoption of this standard to have a material impact on its consolidated statements of cash flows.

Restricted Cash - In November 2016, the FASB issued guidance (ASU No. 2016-18) which requires entities to show the changes in the total of cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. Entities will no longer be permitted to present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The guidance is effective for reporting periods beginning after December 15, 2017 and will be applied retrospectively to all periods presented. The Company expects the new guidance will result in a change in presentation of restricted cash on the face of the consolidated statement of cash flows; otherwise this guidance will not have a significant impact on the consolidated statements of cash flows and disclosures.

Business Combination - In January 2017, the FASB issued guidance (ASU No. 2017-01) to clarify the definition of a business under ASC 805. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance is effective for fiscal years, and interim periods within those years, beginning December 15, 2017. The amendments in this update will be applied on a prospective basis. The Company expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets). A significant difference between the accounting for an asset acquisition and a business combination is that transaction costs are capitalized for an asset acquisition, rather than expensed for a business combination. The Company plans to adopt the standard on its required effective date of January 1, 2018. The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

Goodwill Impairment - In January 2017, the FASB issued guidance (ASU No. 2017-04) which removes Step 2 from the goodwill impairment test. The guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019.  The Company is evaluating the impact, if any, that this guidance will have on its consolidated financial position, results of operations and financial statement disclosures.

Derecognition and Partial Sales of Nonfinancial Assets - In February 2017, the FASB issued an accounting update (ASU No. 2017-05) which clarifies the scope of recently established guidance on nonfinancial asset derecognition, which applies to the derecognition of all nonfinancial assets and in-substance nonfinancial assets.  In addition, the guidance clarifies the accounting for partial sales of nonfinancial assets and in-substance nonfinancial assets to align with the new revenue recognition standard to be more consistent with the accounting for sale of a business. Specifically, in a partial sale to a noncustomer, when a noncontrolling interest is received or retained, the latter is considered a noncash consideration and measured at fair value, which would result in full gain or loss recognized upon sale. This guidance has the same effective date as the new revenue guidance, which is January 1, 2018, with early adoption permitted beginning January 1, 2017.  Both the revenue guidance and this update must be adopted concurrently.  While the options for transition are similar to the new revenue guidance, either full retrospective or modified retrospective, the transition approach need not be aligned between both updates. The Company plans to adopt the standard on its required effective date of January 1, 2018 using the modified retrospective approach. The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

Share-based Payments - In May 2017, the FASB issued guidance (ASU No. 2017-09) clarifying when to account for a change to the terms or conditions of a share-based payment award as a modification.  The guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those years.  The Company does not believe that this guidance will have a material impact on its consolidated financial statements and related disclosures.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Property, Plant and Equipment

Operating real estate is depreciated using the straight-line method over the estimated useful lives of the assets, summarized as follows:

Category:	Term:
Building	40 years
Building improvements	Lesser of the useful life or remaining life of the building
Building leasehold interests	Lesser of 40 years or remaining term of the lease
Tenant improvements	Lesser of the useful life or remaining term of the lease

Schedule of Future Minimum Rental Income under Leases

The following table presents approximate future minimum rental income under noncancelable operating leases to be received over the next five years and thereafter as of December 31, 2017 (dollars in thousands):

Years Ending December 31:(1)
2018	$	97,703
2019	100,373
2020	85,284
2021	74,694
2022	66,468
Thereafter	198,745
Total	$	623,267

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(1)    Translated to the U.S. dollar using the currency exchange rate as of December 31, 2017.

Schedule of Identified Intangibles

The following table presents identified intangibles as of December 31, 2017 and 2016 (dollars in thousands):

	December 31, 2017(1)							December 31, 2016(1)
	Gross Amount		Accumulated Amortization			Net		Gross Amount		Accumulated Amortization			Net
Intangible assets:
In-place lease	$	64,427	$	(24,290	)	$	40,137	$	80,924	$	(25,193	)	$	55,731
Above-market lease	34,882		(9,919		)	24,963		36,471		(7,965		)	28,506
Below-market ground lease	34,497		(1,109		)	33,388		51,876		(1,490		)	50,386
Goodwill(2)	15,697		N/A			15,697		13,780		N/A			13,780
Total	$	149,503	$	(35,318	)	$	114,185	$	183,051	$	(34,648	)	$	148,403
Intangible liabilities:
Below-market lease	$	32,267	$	(8,964	)	$	23,303	$	34,163	$	(8,104	)	$	26,059
Above-market ground lease	5,513		(184		)	5,329		4,839		(96		)	4,743
Total	$	37,780	$	(9,148	)	$	28,632	$	39,002	$	(8,200	)	$	30,802

_______________________

(1) As of December 31, 2017, the weighted average amortization period for above-market leases, below-market leases and in-place leases was 6.4 years, 9.2 years and 5.7 years, respectively. As of December 31, 2016, the weighted average amortization period for above-market leases, below-market leases and in-place leases was 7.1 years, 9.8 years and 6.1 years, respectively.

(2) Represents goodwill associated with certain acquisitions in exchange for shares in the underlying portfolios. The goodwill and a corresponding deferred tax liability was recorded at acquisition based on tax basis differences.

Schedule of Goodwill

The following table presents a rollforward of goodwill for the year endedDecember 31, 2017 (dollars in thousands):

Balance as of December 31, 2015	$	22,852
Disposal of goodwill(1)	(8,561		)
Adjustments from foreign currency translation	(511		)
Balance as of December 31, 2016	13,780
Adjustments from foreign currency translation	1,917
Balance as of December 31, 2017	$	15,697

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(1) Represents goodwill associated with certain disposals structured as share sales.

Finite-lived Intangible Assets Amortization Expense

The following table presents amortization of acquired above-market leases, net of acquired below-market leases and below-market ground leases and amortization of other intangible assets for the years endedDecember 31, 2017, 2016 and 2015 (dollars in thousands):

		Years Ended December 31,
	Statements of operations location:	2017		2016		2015
Amortization of above-market leases, net of acquired below-market leases	Rental income / properties - operating expenses	$	666	$	2,162	$	2,335
Amortization of other intangible assets	Depreciation and amortization expense	13,817		19,543		20,468

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table presents annual amortization of intangible assets and liabilities (dollars in thousands):

	Intangible Assets						Intangible Liabilities
Years Ending December 31:	In-place Leases, Net		Above-market Leases, Net		Below-market Ground Lease Value, Net		Below-market Leases, Net		Above-market Ground Lease Value, Net
2018	$	9,272	$	4,030	$	399	$	2,839	$	75
2019	8,801		4,008		399		2,839		75
2020	7,094		3,860		399		2,805		75
2021	6,010		3,848		399		2,635		75
2022	4,169		3,848		399		2,626		75
Thereafter	4,791		5,369		31,393		9,559		4,954
Total	$	40,137	$	24,963	$	33,388	$	23,303	$	5,329

Schedule of Other Assets and Other Liabilities

The following tables present a summary of other assets and other liabilities as of December 31, 2017 and 2016 (dollars in thousands):

	December 31,
	2017		2016
Other assets:
Prepaid expenses	$	1,936	$	1,951
Deferred leasing and other costs, net	6,019		3,029
Straight-line rent, net	10,969		10,182
Escrow receivable	3,286		6,168
Other	905		310
Total	$	23,115	$	21,640
	December 31,
	2017		2016
Other liabilities:
Deferred tax liabilities	$	8,548	$	8,916
Prepaid rent received and unearned revenue	8,406		13,585
Tenant security deposits	4,435		4,322
Prepaid escalation and other income	3,982		1,560
Other	386		535
Total	$	25,757	$	28,918

Schedule of Deferred Tax Assets and Liabilities

The following tables present a summary of the Company’s deferredtaxassets and liabilities as of December 31, 2017 and 2016 (dollars in thousands):

	December 31,
	2017			2016
Deferred tax asset
Net operating losses	$	19,587		$	21,608
Interest deferral	5,598			4,356
Transaction costs capitalized to operating real estate	6,992			6,654
Operating real estate	2,852			2,028
Other	7,920			7,410
Total deferred tax asset	42,949			42,056
Valuation allowance	(22,666		)	(26,565		)
Deferred tax assets, net of valuation allowance	20,283			15,491
Deferred tax liabilities
Operating real estate	(23,126		)	(20,418		)
Other	(5,705		)	(3,989		)
Total deferred tax liabilities	(28,831		)	(24,407		)
Net deferred tax liability	$	(8,548	)	$	(8,916	)

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Operating Real Estate (Tables)

12 Months Ended

Dec. 31, 2017

Real Estate [Abstract]

Schedule of Operating Real Estate

The following table presents operating real estate, net as of December 31, 2017 and December 31, 2016 (dollars in thousands):

	December 31, 2017			December 31, 2016
Land	$	393,691		$	360,555
Buildings and improvements	954,314			980,053
Building, leasehold interests and improvements	195,929			212,864
Furniture, fixtures and equipment	1,653			1,214
Tenant improvements	61,303			59,746
Operating real estate, gross	1,606,890			1,614,432
Less: accumulated depreciation	(95,356		)	(63,585		)
Operating real estate, net	$	1,511,534		$	1,550,847

Schedule of Real Estate Held for Sale

The following table summarizes the Company’s operating real estate held for sale as of December 31, 2017 (dollars in thousands):

			Assets(1)								Liabilities(1)
Location	Type	Properties	Operating Real Estate, Net		Intangible Assets, Net		Other Assets		Total(2)		Intangible Liabilities, Net		Total
Lisbon, Portugal	Office	1	$	11,910	$	62	$	23	$	11,995	$	—	$	—
Rotterdam, Netherlands	Office	1	148,741		5,053		3,293		157,087		648		648
Total		2	$	160,651	$	5,115	$	3,316	$	169,082	$	648	$	648

___________________

(1) The assets and liabilities classified as held for sale are expected to be sold on the open market as asset sales subject to standard industry terms and conditions. The assets contributed $13.2 million, $14.1 million and $10.8 million of revenue and $(7.5) million, $(7.3) million and $(18.9) million of income (loss) before income tax benefit (expense) for the years endedDecember 31, 2017, 2016 and 2015, respectively.

(2) Represents operating real estate and intangible assets, net of accumulated depreciation and amortization of $18.7 million prior to being reclassified into held for sale.

Schedule of Proceeds from Sales of Real Estate

The following table summarizes the Company’s real estate sales for the years ended December 31, 2017, 2016 and 2015 (dollars in thousands):

	Years Ended December 31, (1)
	2017		2016		2015
Properties	6		18		3
Carrying Value(2)	$	109,366	$	386,122	$	15,226
Sales Price	$	137,509	$	412,107	$	21,895
Net Proceeds(3)	$	132,538	$	406,850	$	20,955
Realized Gain(4)	$	23,172	$	20,728	$	5,729

__________________

(1) Years ended December 31, 2017, 2016 and 2015 amounts are translated using the average exchange rate for the year ended December 31, 2017.

(2) Includes the assets and liabilities related to share sales.

(3) Represents proceeds net of sales costs and excludes the associated property debt repayments of $76.2 million and $173.9 million for the years endedDecember 31, 2017 and 2016, respectively. There were no property debt repayments for the year ended December 31, 2015.

(4) The Company recorded an additional realized gain for the year endedDecember 31, 2017 of $2.3 million related to the release of escrow accounts from prior disposals.

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Preferred Equity Investments (Tables)

12 Months Ended

Dec. 31, 2017

Mortgage Loans on Real Estate [Abstract]

Schedule of Mortgage Loans on Real Estate

The following table presents one preferred equity investment as of December 31, 2017 (dollars in thousands):

	December 31, 2017
Asset Type	Principal Amount		Carrying Value		Fixed Rate		Mandatory Redemption
Preferred equity investment	$	35,347	$	35,347	8.00	%	May 2020

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Borrowings (Tables)

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Schedule of Long-term Borrowings

The following table presents borrowings as of December 31, 2017 and 2016 (dollars in thousands):

			December 31,
			2017				2016
	Final Maturity	Contractual Interest Rate(3)	Principal Amount		Carrying Value		Principal Amount		Carrying Value
Mortgage and other notes payable:(1)
U.K. Complex(2)	(2)	GBP LIBOR + 1.75%	$	—	$	—	$	50,116	$	49,284
U.K. Complex - Mezzanine(2)	(2)	8.325%	—		—		11,565		11,497
Trias Portfolio 1(4)(6)	Apr-20	EURIBOR + 2.70%	10,378		10,116		13,724		13,301
Trias Portfolio 2(4)(6)(8)	Dec-20	EURIBOR + 1.55%	91,577		90,880		78,952		78,708
Trias Portfolio 3(4)(6)	Apr-20	EURIBOR + 1.65%	44,814		43,684		40,923		39,568
Trias Portfolio 4(4)(6)	Apr-20	GBP LIBOR + 2.70%	17,326		17,123		15,843		15,446
SEB Portfolio 1(6)	Jul-24(9)	EURIBOR + 1.55%(9)	317,317		313,153		278,539		274,614
SEB Portfolio 2(6)	Jul-24(9)	GBP LIBOR + 1.55%(9)	250,825		247,902		229,353		226,078
SEB Portfolio - Preferred(5)	Apr-60	2.30%	102,560		102,271		90,033		89,720
Trianon Tower(4)(6)	Jul-23	EURIBOR + 1.30%	395,294		393,763		347,012		345,422
Other - Preferred(7)	Oct-45	1.00%	4,551		4,551		6,151		5,481
Total mortgage and other notes payable			$	1,234,642	$	1,223,443	$	1,162,211	$	1,149,119

________________________

(1) All mortgage notes and other notes payable are denominated in local currencies, and as such, the principal amount generally increased from 2016 to 2017 due to the change in the Euro or U.K. Pound Sterling compared to the U.S. dollar. All borrowings are non-recourse and are interest-only through maturity, subject to compliance with covenants of the respective borrowing, and denominated in the same currency as the assets securing the borrowing.

(2) In November 2017, the Company repaid the mortgage notes upon the sale of the associated property.

(3) All floating rate debt is subject to interest rate caps of 0.5% for EURIBOR and 2.0% for GBP LIBOR which are used to manage interest rate exposure.

(4) Trias Portfolio represents the cross-collateralized borrowings among the IVG Portfolio, Internos Portfolio and Deka Portfolio.

(5) Represents preferred equity certificates with a contractual interest rate of 2.3% through May 2019, which can be prepaid at that time without penalty in part or in full, which increases to EURIBOR plus 12.0% through May 2022 and subsequently to EURIBOR plus 15.0% through final maturity. Certain prepayments prior to May 2019 are subject to the payment of the unpaid coupon on outstanding principal amount through May 2019.

(6) Prepayment provisions include a fee based on principal amount ranging from 0.25% to 1.0% through December 2019 for the Trias Portfolio borrowings and 1.0% to 2.0% through July 2020 for the SEB Portfolio borrowings and 0.60% through June 30, 2018 and 0.30% through June 30, 2019 for Trianon Tower borrowings.

(7) Represents preferred equity certificates each with a fixed contractual interest rate of 1.0% per annum plus variable interest based on specified income levels associated with the German property companies of the Trias Portfolios which can be prepaid at any time without penalty through final maturity, which is thirty years from the issuance date.

(8) In June 2017, the Company amended and restated the agreement to increase the loan amount by $5.9 million and reduce future minimum capital expenditure spending requirements.

(9) In September 2017, the Company amended and restated the agreement to reduce the margin from 1.80% to 1.55% and extended the maturity date from April 1, 2022 to July 20, 2024.

Summary of Reconciliation of Principal Amount to Carrying Value

The following table presents a reconciliation of principal amount to carrying value of the Company’s mortgage and other notes payable as of December 31, 2017 and 2016 (dollars in thousands):

	December 31,
	2017			2016
Principal amount	$	1,234,642		$	1,162,211
Deferred financing costs, net	(11,199		)	(13,092		)
Carrying value	$	1,223,443		$	1,149,119

Schedule of Principal Payments on Borrowings, Based on Final Maturity

The following table presents scheduled principal on borrowings, based on final maturity as of December 31, 2017 (dollars in thousands):

	Mortgage and Other Notes Payable
Years ending December 31:
2018	$	—
2019	—
2020	164,095
2021	—
2022	—
2023 and thereafter	1,070,547
Total	$	1,234,642

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Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2017

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

Schedule of Common Unit and Unvested Restricted Stock Activity

The following table presents activity related to the issuance, vesting, conversion and forfeitures of restricted stock and Common Units. The balance as of December 31, 2017 represents vested Common Units and unvested market-based RSUs (grants in thousands):

	Year Ended December 31, 2017
	Restricted Stock(1)		Common Units(3)		Restricted Stock Units(4)		Performance RSUs(5)		Total Grants		Weighted Average Grant Price
December 31, 2016	1,139		688		83		1,868		3,778		$	11.29
Granted	501		—		—		—		501		12.69
Converted	—		(268	)	—		—		(268	)	21.10
Vested(2)	(1,519	)	—		(83	)	(178	)	(1,780	)	10.35
Forfeited(6)	—		—		—		(237	)	(237	)	4.87
December 31, 2017	121		420		—		1,453		1,994		$	11.95

___________________

(1) Represents restricted stock included in common stock.

(2) Vested primarily includes the acceleration of substantially all outstanding equity awards of the Company in connection with the change of control of NSAM as a result of the Mergers.

(3) Includes vested and unvested Common Units in the Operating Partnership issued in the Spin-off with respect to equity-based awards granted by NorthStar Realty prior to the Spin-off. As of December 31, 2017, all of these Common Units in the Operating Partnership were vested.

(4) Relates to an equity-based award granted by NorthStar Realty prior to the Spin-off and represents a non-employee grant subject to service-based vesting conditions, which was scheduled to vest on January 22, 2019, however, in September 2017, pursuant to the terms of the RSU award, a vesting event occurred and on October 2, 2017, the Company issued 83,333 shares of common stock in settlement of these RSUs. The RSUs were entitled to dividend equivalents prior to vesting and the dividends were settled in cash.

(5) As of December 31, 2017, represented outstanding Absolute and Relative RSUs.

(6) Includes the forfeiture of performance based RSUs issued to NSAM executives as part of historical bonus plans in connection with the change of control of NSAM.

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Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Schedule of Dividends Declared

The following table presents dividends declared (on a per share basis) with respect to the years endedDecember 31, 2017, 2016 and 2015:

Common Stock
Declaration Date	Dividend Per Share
2017
March 7	$	0.15
May 1	$	0.15
August 2	$	0.15
November 6	$	0.15
2016
March 15	$	0.15
May 10	$	0.15
August 3	$	0.15
November 1	$	0.15
2015
November 23	$	0.15

Schedule of Earnings Per Share

The following table presents EPS for the years endedDecember 31, 2017, 2016 and 2015 (dollars and shares in thousands, except per share data):

	Years Ended December 31,
	2017			2016			2015
Numerator:
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	$	(31,125	)	$	(61,753	)	$	(143,136	)
Net income (loss) attributable to Unit Holders non-controlling interest	(372		)	(778		)	(1,052		)
Net income (loss) attributable to common stockholders and Unit Holders(1)	$	(31,497	)	$	(62,531	)	$	(144,188	)
Denominator:(2)
Weighted average shares of common stock	55,073			57,875			62,184
Weighted average Unit Holders(1)	526			690			681
Weighted average shares of common stock and Unit Holders(2)	55,599			58,565			62,865
Earnings (loss) per share:
Basic	$	(0.57	)	$	(1.07	)	$	(2.30	)
Diluted	$	(0.57	)	$	(1.07	)	$	(2.30	)

____________________________________________________________

(1) The EPS calculation takes into account Unit Holders, which receive non-forfeitable dividends from the date of grant, share equally in the Company’s net income (loss) and convert on a one-for-one basis into common stock.

(2) Excludes the effect of restricted stock and RSUs outstanding that were not dilutive as of December 31, 2017. These instruments could potentially impact diluted EPS in future periods, depending on changes in the Company’s stock price and other factors.

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Risk Management and Derivative Activities (Tables)

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Derivative Instruments not Designated as Hedges under U.S. GAAP

The following tables present derivative instruments that were not designated as hedges under U.S. GAAP as of December 31, 2017 and December 31, 2016 (dollars in thousands):

	Number(1)	Notional Amount		Fair Value Asset (Liability)			Range of Fixed GBP LIBOR / EURIBOR	Range of Maturity
As of December 31, 2017:
Interest rate caps	31	$	1,193,012	$	7,024		(2)	April 2020 - July 2023
Foreign currency forwards, net(3)	4	58,647		(5,270		)	N/A	February 2018 - November 2018
Total	35	$	1,251,659	$	1,754
As of December 31, 2016:
Interest rate caps	32	$	1,107,400	$	8,659		(2)	January 2020 - July 2023
Foreign currency forwards(3)	20	72,806		5,070			N/A	February 2017 - November 2017
Total	52	$	1,180,206	$	13,729

_____________________________

(1)    Represents number of transactions.

(2)    Includes a range of interest rate caps of 0.5% for EURIBOR and 2.0% for GBP LIBOR.

(3)    Includes Euro currency forwards as of December 31, 2017 and Euro and U.K. Pounds Sterling currency forwards as of December 31, 2016.

Schedule of Fair Value of Derivative Instruments and Balance Sheet Classification

The following table presents the fair value of derivative instruments, as well as their classification on the consolidated balance sheets, as of December 31, 2017 and December 31, 2016 (dollars in thousands):

	Balance Sheet	December 31, 2017		December 31, 2016
	Location
Interest rate caps	Derivative assets	$	7,024	$	8,659
Foreign currency forwards	Derivative assets	$	—	$	5,070
Foreign currency forwards	Derivative liabilities	$	5,270	$	—

Schedule of the Effect of Derivative Instruments on Combined Statements of Operations

The following table presents the effect of derivative instruments in the consolidated statements of operations for the years endedDecember 31, 2017, 2016 and 2015 (dollars in thousands):

		Years Ended December 31,
		2017			2016			2015
Amount of gain (loss) recognized in earnings:	Statements of operations location:
Adjustment to fair value of interest rate caps	Unrealized gain (loss) on derivatives and other(1)	$	(2,726	)	$	(14,936	)	$	(8,897	)
Adjustment to fair value of foreign currency forwards held at the end of the reporting period	Unrealized gain (loss) on derivatives and other (1)	(5,270		)	4,872			417
Adjustment to fair value of foreign currency forwards settled during the period	Unrealized gain (loss) on derivatives and other (1)	(5,070		)	(219		)	—
Net cash receipt (payment) on derivatives	Realized gain (loss) on sales and other	979			(787		)	—

_____________________________

(1)    Excludes the unrealized gain (loss) relating to foreign currency remeasurement adjustments.

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Fair Value (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities

The following table presents the principal amount, carrying value and fair value of certain financial assets and liabilities as of December 31, 2017 and 2016 (dollars in thousands):

	December 31, 2017						December 31, 2016
	Principal/Notional Amount		Carrying Value		Fair Value		Principal/Notional Amount		Carrying Value		Fair Value
Financial assets:(1)
Derivative assets	$	1,193,012	$	7,024	$	7,024	$	1,180,206	$	13,729	$	13,729
Preferred equity investment	35,347		35,347		35,783		—		—		—
Financial liabilities:(1)
Mortgage and other notes payable, net	$	1,234,642	$	1,223,443	$	1,231,321	$	1,162,211	$	1,149,119	$	1,146,134
Derivative liabilities	58,647		5,270		5,270		—		—		—

_____________________________

(1) The fair value of other financial instruments not included in this table is estimated to approximate their carrying value.

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Commitment and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

The following table presents minimum future rental payments under the Company’s contractual ground lease obligations for certain building leaseholds for the year endedDecember 31, 2017 (dollars in thousands):

Years ending December 31:	Total(1)
2018	$	705
2019	705
2020	705
2021	705
2022	705
Thereafter	46,828
Total minimum lease payments	$	50,353

__________________

(1) Represent two ground leases with an average expiry of 2095. None of these are paid directly by the tenants.

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Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

The following presents selected quarterly information for the years endedDecember 31, 2017 and 2016 (dollars in thousands, except per share data):

	Three Months Ended
	December 31,			September 30,			June 30,			March 31,
	2017			2017			2017			2017
Rental income	$	26,041		$	27,747		$	26,025		$	25,536
Escalation income	5,265			5,641			5,558			5,161
Interest income	705			704			297			—
Interest expense	6,203			6,536			6,722			6,383
Management fee, related party	3,692			3,585			3,572			3,559
Transaction costs	4,552			332			973			260
Depreciation and amortization	14,535			14,396			12,520			12,563
Other, net(1)	15,893			13,906			12,720			27,760
Unrealized gain (loss) on derivatives and other	(795		)	(3,472		)	(7,655		)	(941		)
Realized gain (loss) on sales and other	13,735			1,681			1,981			4,970
Income (loss) before income tax benefit (expense)	76			(6,454		)	(10,301		)	(15,799		)
Net income (loss)	2,537			(6,806		)	(10,538		)	(15,526		)
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	1,442			(6,770		)	(10,447		)	(15,350		)
Earnings (loss) per share:(2)
Basic	$	0.02		$	(0.12	)	$	(0.19	)	$	(0.28	)
Diluted	$	0.02		$	(0.12	)	$	(0.19	)	$	(0.28	)

__________________

(1) Primarily relates to properties - operating expenses, general and administrative expense, other expenses and compensation expense offset by other income.

(2) The total for the year may differ from the sum of the quarters as a result of weighting.

	Three Months Ended
	December 31,			September 30,			June 30,			March 31,
	2016			2016			2016			2016
Rental income	$	25,700		$	29,798		$	33,990		$	34,833
Escalation income	5,347			7,828			5,908			6,090
Interest expense	7,955			9,301			11,641			12,542
Management fee, related party	3,520			3,548			3,500			3,500
Transaction costs	(23		)	150			1,652			831
Depreciation and amortization	13,715			13,989			18,404			18,871
Other, net(1)	20,531			19,585			44,271			16,962
Unrealized gain (loss) on derivatives and other	8,319			(4,982		)	1,159			(15,753		)
Realized gain (loss) on sales and other	20,460			3,814			4,622			(2,448		)
Income (loss) before income tax benefit (expense)	14,128			(10,115		)	(33,789		)	(29,984		)
Net income (loss)	13,902			(12,770		)	(34,309		)	(29,325		)
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	13,859			(12,721		)	(33,909		)	(28,982		)
Earnings (loss) per share:(2)
Basic	$	0.25		$	(0.22	)	$	(0.57	)	$	(0.49	)
Diluted	$	0.24		$	(0.22	)	$	(0.57	)	$	(0.49	)

__________________

(1) Primarily relates to properties - operating expenses, general and administrative expense, impairment loss, other expenses and compensation expense offset by other income.

(2) The total for the year may differ from the sum of the quarters as a result of weighting.

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Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Schedule of Segment Reporting

The following tables present segment reporting for the years endedDecember 31, 2017, 2016 and 2015 (dollars in thousands):

	Year Ended December 31, 2017
Statement of Operations:	Real Estate Equity			Preferred Equity		Corporate				Total
Revenues
Rental income	$	105,349		$	—	$	—			$	105,349
Escalation income	21,625			—		—				21,625
Interest income	—			1,706		—				1,706
Expenses
Interest expense(1)	24,989			—		855				25,844
Management fee, related party	—			—		14,408				14,408
Transaction costs(4)	—			538		5,579				6,117
Depreciation and amortization	54,014			—		—				54,014
Other, net	20,887		(2)	72		39,816			(3)	60,775
Income (loss) before income tax benefit (expense)	27,084			1,096		(60,658		)		(32,478		)
Income tax benefit (expense)	2,145			—		—				2,145
Net income (loss)	$	29,229		$	1,096	$	(60,658	)		$	(30,333	)
Balance Sheets:
December 31, 2017
Total Assets	$	1,901,282		$	37,133	$	2,502			$	1,940,917

___________________________________

(1) Includes $2.4 million and $0.4 million of amortization of deferred financing costs in the real estate equity and corporate segments, respectively.

(2) Primarily relates to properties - operating expenses and unrealized loss on interest rate caps offset by other income and realized gain on sales.

(3) Primarily relates to general and administrative expense and unrealized loss on foreign currency forwards.

(4) Transaction costs relates to costs associated with amending the management agreement in our corporate segment and other transaction costs in our preferred equity segment.

	Year Ended December 31, 2016
Statement of Operations:(1)	Real Estate Equity				Corporate				Total
Revenues
Rental income	$	124,321			$	—			$	124,321
Escalation income	25,173				—				25,173
Expenses
Interest expense(2)	30,974				10,465				41,439
Management fee, related party	—				14,068				14,068
Transaction costs(5)	—				2,610				2,610
Depreciation and amortization	64,979				—				64,979
Other, net	57,546			(3)	28,612			(4)	86,158
Income (loss) before income tax benefit (expense)	(4,005		)		(55,755		)		(59,760		)
Income tax benefit (expense)	(2,742		)		—				(2,742		)
Net income (loss)	$	(6,747	)		$	(55,755	)		$	(62,502	)
Balance Sheets:
December 31, 2016
Total Assets	$	1,835,531			$	9,861			$	1,845,392

___________________________________

(1) The Company did not have a preferred equity segment for the year ended December 31, 2016.

(2) Includes $3.7 million and $3.4 million of amortization of deferred financing costs in the real estate and corporate segments, respectively.

(3) Primarily relates to properties - operating expense, realized loss on the sale of real estate and impairment loss on real estate offset by the realized gain on foreign currency translation and other.

(4) Primarily relates to general and administrative expense and unrealized loss on foreign currency forwards. Includes an allocation of general and administrative expense from the Manager of $0.2 million.

(5) Transaction costs primarily relate to costs associated the Mergers in our corporate segment.

	Year Ended December 31, 2015
Statement of Operations:	Real Estate Equity				Corporate				Total
Revenues
Rental income	$	101,023			$	—			$	101,023
Escalation income	18,822				—				18,822
Expenses
Interest expense(1)	25,365				10,764				36,129
Management fee, related party	—				2,333				2,333
Transaction costs(4)	120,101				—				120,101
Depreciation and amortization	56,283				—				56,283
Other, net	24,237			(2)	25,580			(3)	49,817
Income (loss) before income tax benefit (expense)	(106,141		)		(38,677		)		(144,818		)
Income tax benefit (expense)	675				—				675
Net income (loss)	$	(105,466	)		$	(38,677	)		$	(144,143	)
Balance Sheets:
December 31, 2015
Total Assets	$	2,544,992			$	138,058			$	2,683,050

___________________________________

(1) Includes $2.9 million and $3.0 million of amortization of deferred financing costs in the real estate equity and corporate segments, respectively.

(2) Primarily relates to properties - operating expense, unrealized loss on interest rate caps and impairment loss on goodwill offset by the realized gain on the sale of real estate and other income.

(3) Primarily relates to general and administrative expense, compensation expense and unrealized loss on foreign currency forwards.

(4) Transaction costs primarily represents expenses such as real estate transfer tax and professional fees related to the acquisitions in 2015 in our real estate equity segment.

The following table presents geographic information about the Company's total rental and escalation income for the years ended December 31, 2017, 2016 and 2015 (in thousands):

	Years Ended December 31,
	2017			2016		2015
Office
Germany	$	51,241		$	53,743	$	31,969
United Kingdom	36,984			38,483		36,882
France	20,051			19,551		13,802
Other	14,167		(1)	30,656		31,001
Subtotal	122,443			142,433		113,654
Other	4,531			7,061		6,191
Total	$	126,974		$	149,494	$	119,845

__________________

(1) Includes an asset in Portugal and an asset in the Netherlands which are classified as held-for-sale as of December 31, 2017.

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Summary of Significant Accounting Policies - Basis of Accounting (Details) $ in Millions	10 Months Ended
	Oct. 31, 2015 USD ($)
General and Administrative Expense | Management fees
Related Party Transaction [Line Items]
Related party transaction	$ 0.3

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Summary of Significant Accounting Policies - Schedule of Property Plant and Equipment Useful Lives (Details)	12 Months Ended
	Dec. 31, 2017
Building
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	40 years
Building leasehold interests | Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	40 years

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Summary of Significant Accounting Policies - Schedule of Future Minimum Rents (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Years Ending December 31:
2018	$ 97,703
2019	100,373
2020	85,284
2021	74,694
2022	66,468
Thereafter	198,745
Total	$ 623,267

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Summary of Significant Accounting Policies - Intangible Assets and Intangible Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Intangible assets:
Goodwill, Gross Amount	$ 15,697	$ 13,780
Total, Gross Amount	149,503	183,051
Intangible assets, Accumulated Amortization	(35,318)	(34,648)
Goodwill, Net	15,697	13,780	$ 22,852
Total, Net	114,185	148,403
Intangible liabilities:
Below-market lease, Gross Amount	32,267	34,163
Below-market lease, Accumulated Amortization	(8,964)	(8,104)
Total	23,303	26,059
Total, gross intangible liabilities	37,780	39,002
Total, accumulated amortization intangible liabilities	(9,148)	(8,200)
Total, net intangible liabilities	$ 28,632	$ 30,802
Below Market Lease, Remaining Amortization Period	9 years 2 months	9 years 9 months 18 days
In-place lease
Intangible assets:
Intangible assets, Gross Amount	$ 64,427	$ 80,924
Intangible assets, Accumulated Amortization	(24,290)	(25,193)
Total	$ 40,137	$ 55,731
Intangible liabilities:
Finite-Lived Intangible Assets, Remaining Amortization Period	5 years 8 months 1 day	6 years 1 month 6 days
Above-market Leases, Net
Intangible assets:
Intangible assets, Gross Amount	$ 34,882	$ 36,471
Intangible assets, Accumulated Amortization	(9,919)	(7,965)
Total	24,963	28,506
Intangible liabilities:
Above-market ground lease, gross	5,513	4,839
Above-market ground lease, accumulated amortization	(184)	(96)
Total	$ 5,329	$ 4,743
Finite-Lived Intangible Assets, Remaining Amortization Period	6 years 5 months 5 days	7 years 1 month 6 days
Below-market ground lease
Intangible assets:
Intangible assets, Gross Amount	$ 34,497	$ 51,876
Intangible assets, Accumulated Amortization	(1,109)	(1,490)
Total	$ 33,388	$ 50,386

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Summary of Significant Accounting Policies - Schedule of Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Goodwill [Roll Forward]
Beginning balance goodwill	$ 13,780	$ 22,852
Disposal of goodwill		(8,561)
Adjustments from foreign currency translation	1,917	(511)
Ending balance goodwill	$ 15,697	$ 13,780

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Summary of Significant Accounting Policies - Schedule of Intangible Asset Amortization (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Intangible Assets
Amortization of above-market leases, net of acquired below-market leases	$ 666	$ 2,162	$ 2,335
Other Intangible Assets
Intangible Assets
Amortization of other intangible assets	$ 13,817	$ 19,543	$ 20,468

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Summary of Significant Accounting Policies - Schedule of Future Intangible Amortization (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Below-market Leases, Net
2018	$ 2,839
2019	2,839
2020	2,805
2021	2,635
2022	2,626
Thereafter	9,559
Total	23,303	$ 26,059
In-place Leases, Net
Intangible Assets
2018	9,272
2019	8,801
2020	7,094
2021	6,010
2022	4,169
Thereafter	4,791
Total	40,137	55,731
Above-market Leases, Net
Intangible Assets
2018	4,030
2019	4,008
2020	3,860
2021	3,848
2022	3,848
Thereafter	5,369
Total	24,963	28,506
Intangible Liabilities
Total	5,329	$ 4,743
Below-market Leases, Net
Intangible Assets
2018	399
2019	399
2020	399
2021	399
2022	399
Thereafter	31,393
Total	33,388
Above-market Ground Lease Value, Net
Intangible Liabilities
2018	75
2019	75
2020	75
2021	75
2022	75
Thereafter	4,954
Total	$ 5,329

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Summary of Significant Accounting Policies - Other Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Other assets:
Prepaid expenses	$ 1,936	$ 1,951
Deferred leasing and other costs, net	6,019	3,029
Straight-line rent, net	10,969	10,182
Escrow receivable	3,286	6,168
Other	905	310
Total	23,115	21,640
Other liabilities:
Deferred tax liabilities	8,548	8,916
Prepaid rent received and unearned revenue	8,406	13,585
Tenant security deposits	4,435	4,322
Prepaid escalation and other income	3,982	1,560
Other	386	535
Total	$ 25,757	$ 28,918

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Summary of Significant Accounting Policies - Impairment on Investment (Details) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Impairment losses	$ 0	$ 0	$ 27,468,000	$ 0

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Summary of Significant Accounting Policies - Equity Based Compensation (Details)	12 Months Ended
	Dec. 31, 2017 awardtype
Accounting Policies [Abstract]
Share based compensation number of award types	2

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Summary of Significant Accounting Policies - Foreign Currency (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
CTA reclassified to realized gain (loss)	$ (1.4)	$ 17.7	$ 0.3

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Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Current Foreign Tax Expense (Benefit)	$ 600	$ (7,700)	$ (2,300)
Deferred Foreign Income Tax Expense (Benefit)	1,500	5,000	3,000
Deferred Tax Assets, Valuation Allowance	$ 22,666	$ 26,565	$ 21,500

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Summary of Significant Accounting Policies - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Net operating losses	$ 19,587	$ 21,608
Interest deferral	5,598	4,356
Transaction costs capitalized to operating real estate	6,992	6,654
Operating real estate	2,852	2,028
Other	7,920	7,410
Total deferred tax asset	42,949	42,056
Valuation allowance	(22,666)	(26,565)	$ (21,500)
Deferred tax assets, net of valuation allowance	20,283	15,491
Operating real estate	(23,126)	(20,418)
Other	(5,705)	(3,989)
Total deferred tax liabilities	(28,831)	(24,407)
Net deferred tax liability	$ (8,548)	$ (8,916)

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Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - Ground Leases $ in Millions	12 Months Ended
	Dec. 31, 2017 USD ($) lease
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of ground lease agreements | lease	2
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Annual rental income | $	$ 0.7

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Operating Real Estate - Operating Real Estate, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Real Estate [Abstract]
Land	$ 393,691	$ 360,555
Buildings and improvements	954,314	980,053
Building, leasehold interests and improvements	195,929	212,864
Furniture, fixtures and equipment	1,653	1,214
Tenant improvements	61,303	59,746
Operating real estate, gross	1,606,890	1,614,432
Less: accumulated depreciation	(95,356)	(63,585)
Operating real estate, net	$ 1,511,534	$ 1,550,847

XML

Operating Real Estate - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Depreciation	$ 40.2	$ 45.2	$ 35.8
Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Escrow reserves	$ 1.8

XML

Operating Real Estate - Real Estate Held for Sale (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) property	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Real Estate Properties [Line Items]
Operating Real Estate, Net	$ 169,082	$ 28,208
Revenue	13,200	14,100	$ 10,800
Pretax loss	(7,500)	$ (7,300)	$ (18,900)
Depreciation and amortization	$ 18,700
Held-for-sale
Real Estate Properties [Line Items]
Properties | property	2
Operating Real Estate, Net	$ 160,651
Intangible Assets, Net	5,115
Other Assets	3,316
Total assets held-for-sale	169,082
Intangible Liabilities, Net	648
Total liabilities held-for-sale	$ 648
Held-for-sale | Lisbon, Portugal
Real Estate Properties [Line Items]
Properties | property	1
Operating Real Estate, Net	$ 11,910
Intangible Assets, Net	62
Other Assets	23
Total assets held-for-sale	11,995
Intangible Liabilities, Net	0
Total liabilities held-for-sale	$ 0
Held-for-sale | Rotterdam, Netherlands
Real Estate Properties [Line Items]
Properties | property	1
Operating Real Estate, Net	$ 148,741
Intangible Assets, Net	5,053
Other Assets	3,293
Total assets held-for-sale	157,087
Intangible Liabilities, Net	648
Total liabilities held-for-sale	$ 648

XML

Operating Real Estate - Real Estate Sales (Details)	12 Months Ended
	Dec. 31, 2017 USD ($) property	Dec. 31, 2016 USD ($) property	Dec. 31, 2015 USD ($) property
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Operating real estate, net	$ 1,511,534,000	$ 1,550,847,000
Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Properties | property	6	18	3
Net proceeds	$ 132,538,000	$ 406,850,000	$ 20,955,000
Repayments of debt	76,200,000	173,900,000	0
Realized gain	23,172,000	20,728,000	5,729,000
Six Non-Core Assets Sold | Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Operating real estate, net	109,366,000
Sales Price	137,509,000
Eighteen Non-Core Assets Sold | Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Operating real estate, net		386,122,000
Sales Price		$ 412,107,000
Three Non-core Assets Sold | Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Operating real estate, net			15,226,000
Sales Price			$ 21,895,000
Prior Disposal Release From Escrow | Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Realized gain	$ 2,300,000

XML

Preferred Equity Investments (Details) $ in Thousands, £ in Millions	12 Months Ended
	Dec. 31, 2017 USD ($)	May 31, 2017 USD ($)	May 31, 2017 GBP (£)	Dec. 31, 2016 USD ($)
Mortgage Loans on Real Estate [Line Items]
Principal Amount	$ 35,347
Carrying Value	$ 35,347			$ 0
Fixed Rate	8.00%
20 Gresham Street
Mortgage Loans on Real Estate [Line Items]
Carrying Value		$ 35,300	£ 26.2

XML

Borrowings (Details) - USD ($) $ in Thousands	1 Months Ended		8 Months Ended	12 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Aug. 31, 2017	Dec. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Principal Amount				$ 1,234,642	$ 1,162,211
Carrying Value				1,223,443	1,149,119
Mortgage and Other Notes Payable
Debt Instrument [Line Items]
Principal Amount				1,234,642	1,162,211
Carrying Value				$ 1,223,443	1,149,119
Mortgage and Other Notes Payable | SEB Portfolio | Minimum
Debt Instrument [Line Items]
Prepayment fee percentage range on principal				1.00%
Mortgage and Other Notes Payable | SEB Portfolio | Maximum
Debt Instrument [Line Items]
Prepayment fee percentage range on principal				2.00%
Mortgage and Other Notes Payable | Trias Portfolio | Minimum
Debt Instrument [Line Items]
Prepayment fee percentage range on principal				0.25%
Mortgage and Other Notes Payable | Trias Portfolio | Maximum
Debt Instrument [Line Items]
Prepayment fee percentage range on principal				1.00%
Mortgage and Other Notes Payable | Floating - GBP LIBOR Plus 1.75% | U.K. Complex
Debt Instrument [Line Items]
Principal Amount				$ 0	50,116
Carrying Value				$ 0	49,284
Mortgage and Other Notes Payable | Floating - GBP LIBOR Plus 1.75% | U.K. Complex | GBP LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				1.75%
Mortgage and Other Notes Payable | Fixed - at 8.325% | U.K. Complex
Debt Instrument [Line Items]
Principal Amount				$ 0	11,565
Carrying Value				$ 0	11,497
Stated interest rate				8.325%
Mortgage and Other Notes Payable | EURIBOR Plus 2.70% | Trias Portfolio 1
Debt Instrument [Line Items]
Principal Amount				$ 10,378	13,724
Carrying Value				$ 10,116	13,301
Increase in loan amount		$ 5,900
Mortgage and Other Notes Payable | EURIBOR Plus 2.70% | Trias Portfolio 1 | EURIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.70%
Mortgage and Other Notes Payable | EURIBOR Plus 1.55% | Trias Portfolio 2
Debt Instrument [Line Items]
Principal Amount				$ 91,577	78,952
Carrying Value				$ 90,880	78,708
Mortgage and Other Notes Payable | EURIBOR Plus 1.55% | Trias Portfolio 2 | EURIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				1.55%
Mortgage and Other Notes Payable | EURIBOR Plus 1.55% | SEB Portfolio 1
Debt Instrument [Line Items]
Principal Amount				$ 317,317	278,539
Carrying Value				$ 313,153	274,614
Mortgage and Other Notes Payable | EURIBOR Plus 1.55% | SEB Portfolio 1 | EURIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	1.55%		1.80%	1.55%
Mortgage and Other Notes Payable | EURIBOR Plus 1.65% | Trias Portfolio 3
Debt Instrument [Line Items]
Principal Amount				$ 44,814	40,923
Carrying Value				$ 43,684	39,568
Mortgage and Other Notes Payable | EURIBOR Plus 1.65% | Trias Portfolio 3 | EURIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				1.65%
Mortgage and Other Notes Payable | GBP LIBOR Plus 2.70% | Trias Portfolio 4
Debt Instrument [Line Items]
Principal Amount				$ 17,326	15,843
Carrying Value				$ 17,123	15,446
Mortgage and Other Notes Payable | GBP LIBOR Plus 2.70% | Trias Portfolio 4 | GBP LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.70%
Mortgage and Other Notes Payable | GBP LIBOR Plus 1.80% | SEB Portfolio 2
Debt Instrument [Line Items]
Principal Amount				$ 250,825	229,353
Carrying Value				$ 247,902	226,078
Mortgage and Other Notes Payable | GBP LIBOR Plus 1.80% | SEB Portfolio 2 | GBP LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				1.55%
Mortgage and Other Notes Payable | Fixed rate at 2.30% | SEB Portfolio - Preferred
Debt Instrument [Line Items]
Principal Amount				$ 102,560	90,033
Carrying Value				$ 102,271	89,720
Stated interest rate				2.30%
Mortgage and Other Notes Payable | EURIBOR Plus 1.30% | Trianon Tower
Debt Instrument [Line Items]
Principal Amount				$ 395,294	347,012
Carrying Value				$ 393,763	345,422
Mortgage and Other Notes Payable | EURIBOR Plus 1.30% | Trianon Tower | EURIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				1.30%
Mortgage and Other Notes Payable | EURIBOR Plus 1.30% | Trianon Tower | EURIBOR | Repayment provision through June 30, 2018
Debt Instrument [Line Items]
Prepayment fee percentage range on principal				0.60%
Mortgage and Other Notes Payable | EURIBOR Plus 1.30% | Trianon Tower | EURIBOR | Repayment provision through June 30, 2019
Debt Instrument [Line Items]
Prepayment fee percentage range on principal				0.30%
Mortgage and Other Notes Payable | Fixed rate at 1.00% | Trias Portfolio
Debt Instrument [Line Items]
Stated interest rate				1.00%
Maturity				30 years
Mortgage and Other Notes Payable | Fixed rate at 1.00% | Other-Preferred
Debt Instrument [Line Items]
Principal Amount				$ 4,551	6,151
Carrying Value				$ 4,551	$ 5,481
Stated interest rate				1.00%
Mortgage and Other Notes Payable | Variable rate | SEB Portfolio - Preferred
Debt Instrument [Line Items]
Stated interest rate				2.30%
Mortgage and Other Notes Payable | Variable rate | SEB Portfolio - Preferred | May 2019 through May 2022
Debt Instrument [Line Items]
Stated interest rate				12.00%
Mortgage and Other Notes Payable | Variable rate | SEB Portfolio - Preferred | May 2022 through Maturity
Debt Instrument [Line Items]
Stated interest rate				15.00%
Interest rate caps | Not designated as hedges | GBP LIBOR | Maximum
Debt Instrument [Line Items]
Interest rate caps				2.00%
Interest rate caps | Not designated as hedges | EURIBOR | Minimum
Debt Instrument [Line Items]
Interest rate caps				0.50%

XML

Borrowings - Reconciliation of Principal to Carrying Amount (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Debt Disclosure [Abstract]
Principal amount	$ 1,234,642	$ 1,162,211
Deferred financing costs, net	(11,199)	(13,092)
Carrying value	$ 1,223,443	$ 1,149,119

XML

Borrowings - Scheduled Principal on Borrowings (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Years ending December 31:
Total	$ 1,234,642	$ 1,162,211
Mortgage and Other Notes Payable
Years ending December 31:
2018	0
2019	0
2020	164,095
2021	0
2022	0
2023 and thereafter	1,070,547
Total	$ 1,234,642

XML

Borrowings - Narrative (Details) - USD ($)		1 Months Ended
	Mar. 13, 2018	Apr. 30, 2017	May 31, 2016	Jul. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Oct. 31, 2016
Debt Instrument [Line Items]
Principal amount					$ 1,234,642,000	$ 1,162,211,000
Senior Notes
Debt Instrument [Line Items]
Principal amount						$ 272,300,000
Credit Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Corporate revolving credit facility		$ 35,000,000	$ 75,000,000.0				$ 35,000,000.0
Initial term		2 years	1 year
Higher borrowing capacity		$ 70,000,000
Credit facility					$ 0
Senior Notes, 4.625 Percent Due December 2016 | Exchangeable Debt
Debt Instrument [Line Items]
Debt instrument, face amount				$ 340,000,000.0
Stated interest rate				4.625%
Proceeds from issuance of debt				$ 331,000,000
Subsequent Event | Credit Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Corporate revolving credit facility	$ 70,000,000
Debt instrument term extension option	1 year
Higher borrowing capacity	$ 105,000,000

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Related Party Arrangements (Details) - USD ($) $ / shares in Units, shares in Millions		12 Months Ended
	Nov. 09, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Related Party Transaction [Line Items]
Annualized base management fee to be paid		$ 3,590,000	$ 4,991,000
Long-term bonus or other compensation | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Reimbursement percentage		50.00%
Affiliated Entity | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Asset management fee expense, related party		$ 14,400,000	14,100,000	$ 2,300,000
Annualized base management fee to be paid		3,600,000	3,500,000
Asset management agreement, assets under management		$ 10,000,000,000
Increase in annualized base management fee		20.00%
Affiliated Entity | Tier One | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Asset management agreement, incentive fee		15.00%
Affiliated Entity | Tier Two | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Asset management agreement, incentive fee		25.00%
Affiliated Entity | Minimum | Tier One | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Asset management agreement, incentive fee, per share (in dollars per share)		$ 0.30
Affiliated Entity | Minimum | Tier Two | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Asset management agreement, incentive fee, per share (in dollars per share)		0.36
Affiliated Entity | Maximum | Tier One | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Asset management agreement, incentive fee, per share (in dollars per share)		$ 0.36
Affiliated Entity | Management fees | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Additional asset management fee		1.50%
Affiliated Entity | Allocation of Severance Costs | Due to Related Party | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Allocated general and administrative expense		$ 0	0	0
Affiliated Entity | Cost and expense reimbursement | Due to Related Party | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Allocated general and administrative expense		$ 0	$ 200,000	$ 400,000
Affiliated Entity | Long-term bonus or other compensation | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Reimbursement percentage		50.00%
Asset Manager | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Asset management agreement, incentive fee	20.00%
Management agreement initial term	5 years
Management agreement renewal term	3 years
NAV threshhold	$ 2,000,000,000
Incentive fee annual hurdle rate	10.00%
Measurement period number of trading days	10 days
NorthStar Realty Europe Corp. | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Common stock owned (shares)		5.6
Ownership percentage by parent		10.20%
Tier One | Asset Manager | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Base management fee	1.50%
Tier Two | Asset Manager | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Base management fee	1.25%
Tier One | Asset Manager | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Overhead reimbursement percentage	20.00%
Service cost as percentage of GAV	0.0375%
Gross asset value threshhold	$ 2,500,000,000
Tier Two | Asset Manager | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Service cost as percentage of GAV	0.0313%
Gross asset value threshhold	$ 5,000,000,000
Tier Three | Asset Manager | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Service cost as percentage of GAV	0.025%
NorthStar Realty Europe Corp. (NRE) | Colony NorthStar, Inc.
Related Party Transaction [Line Items]
Equity method investment ownership percentage allowed under waiver	45.00%
Equity method investment ownership allowed upon agreement termination	9.80%
NorthStar Realty Europe Corp. (NRE) | Colony NorthStar, Inc. | Minimum
Related Party Transaction [Line Items]
Equity method investment ownership percentage voting threshhold	25.00%
NorthStar Realty Europe Corp. (NRE) | Colony NorthStar, Inc. | Maximum
Related Party Transaction [Line Items]
Transaction fees	$ 2,500,000

XML

Compensation Expense - Narrative (Details) $ in Millions			1 Months Ended	3 Months Ended		12 Months Ended
	Oct. 02, 2017 shares	Oct. 31, 2015 shares	Mar. 31, 2016 shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($) shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2015 USD ($)	Sep. 30, 2017 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (shares)				1,994,000	3,778,000	1,994,000
Awards granted (shares)						501,000
Vesting of restricted stock (shares)						1,780,000
Spinoff conversion ratio		0.1667
Conversion ratio		0.50
Common stock given as payout (shares)		0.3333
2015 Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (shares)				10,000,000		10,000,000
Number of shares authorized, percent increase				2.00%		2.00%
Options outstanding (shares)				1,200,000		1,200,000
Common stock, capital shares reserved for future issuance (shares)				1,700,000		1,700,000
Shares unreserved and available for issuance (shares)				8,200,000		8,200,000
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense | $				$ 23.8	$ 19.3		$ 0.9
Equity-based compensation expense not yet recognized | $				$ 6.7		$ 6.7
Options outstanding (shares)				121,000	1,139,000	121,000
Awards granted (shares)						501,000
Vesting of restricted stock (shares)						1,519,000
Restricted Stock | 2015 Omnibus Stock Incentive Plan | Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (shares)						500,642
Vesting of restricted stock (shares)						379,594
Restricted Stock | Spin-off
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (shares)			995,698
Award vesting period			4 years
LTIP Units | 2015 Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, capital shares reserved for future issuance (shares)				100,000		100,000
Absolute and Relative Restricted Stock Units (RSUs) | 2015 Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, capital shares reserved for future issuance (shares)				1,600,000		1,600,000
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (shares)				0	83,000	0		83,333
Awards granted (shares)	83,333					0
Vesting of restricted stock (shares)						83,000
Restricted Stock Units (RSUs) | 2015 Omnibus Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of performance-based equity instruments based on total shareholder return			50.00%
Percent of performance-based equity instruments, subject to total shareholder return relative to the MSCI US REIT index			50.00%
Restricted Stock Units (RSUs) | Spin-off
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (shares)			1,493,551
Maximum award vesting rights based on absolute performance, percentage			100.00%
Maximum award vesting rights based on relative performance, percentage			125.00%

XML

Compensation Expense - Common Units and Unvested Restricted Stock Activity (Details) - $ / shares		12 Months Ended
	Oct. 02, 2017	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (shares)		3,778,000
New grants (shares)		501,000
Conversions in period (shares)		(268,000)
Vesting of restricted stock (shares)		(1,780,000)
Forfeited or canceled grants (shares)		(237,000)
Ending balance (shares)		1,994,000
Weighted Average Grant Price
Beginning balance (in dollars per share)		$ 11.29
New grants (in dollars per share)		12.69
Conversions in period (in dollars per share)		21.10
Vesting of restricted stock (in dollars per share)		10.35
Forfeited or canceled grants (in dollars per share)		4.87
Ending balance (in dollars per share)		$ 11.95
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (shares)		1,139,000
New grants (shares)		501,000
Conversions in period (shares)		0
Vesting of restricted stock (shares)		(1,519,000)
Forfeited or canceled grants (shares)		0
Ending balance (shares)		121,000
Common Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (shares)		688,000
New grants (shares)		0
Conversions in period (shares)		(268,000)
Vesting of restricted stock (shares)		0
Forfeited or canceled grants (shares)		0
Ending balance (shares)		420,000
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (shares)		83,000
New grants (shares)	83,333	0
Conversions in period (shares)		0
Vesting of restricted stock (shares)		(83,000)
Forfeited or canceled grants (shares)		0
Ending balance (shares)		0
Performance RSUs
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (shares)		1,868,000
New grants (shares)		0
Conversions in period (shares)		0
Vesting of restricted stock (shares)		(178,000)
Forfeited or canceled grants (shares)		(237,000)
Ending balance (shares)		1,453,000

XML

Stockholders' Equity - Narrative (Details) - USD ($)	1 Months Ended			12 Months Ended		23 Months Ended
	Aug. 31, 2017	Nov. 30, 2016	Jul. 31, 2016	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2017	Mar. 13, 2018	Nov. 30, 2015
Subsequent Event [Line Items]
Authorized amount of outstanding common stock (up to)		$ 100,000,000						$ 100,000,000
Common stock repurchased (shares)				5,700,000	3,600,000
Common stock repurchased				$ 58,600,000	$ 41,400,000
Shares repurchased (shares)						9,300,000
Repurchase of equity						$ 100,000,000
Director | Restricted Stock
Subsequent Event [Line Items]
Common stock, shares issued (shares)	30,340	43,518	15,368
Common stock value issued	$ 400,000	$ 500,000	$ 100,000
Award vesting period			3 years
Subsequent Event
Subsequent Event [Line Items]
Authorized amount of outstanding common stock (up to)							$ 100,000,000

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Stockholders' Equity - Dividends Declared (Details) - $ / shares	Nov. 06, 2017	Aug. 02, 2017	May 01, 2017	Mar. 07, 2017	Nov. 01, 2016	Aug. 03, 2016	May 10, 2016	Mar. 15, 2016	Nov. 23, 2015
Equity [Abstract]
Dividends per share of common stock (in dollars per share)	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15

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Stockholders' Equity - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Common Stock
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders									$ (31,125)	$ (61,753)	$ (143,136)	[1]
Net income (loss) attributable to Unit Holders non-controlling interest									(372)	(778)	(1,052)
Net income (loss) attributable to common stockholders and Unit Holders									$ (31,497)	$ (62,531)	$ (144,188)
Weighted average shares of common stock (shares)									55,073,383	57,875,479	62,183,638	[1]
Weighted average Unit Holders (shares)									526,000	690,000	681,000
Weighted average shares of common stock and Unit Holders (shares)									55,599,222	58,564,986	62,865,124	[1]
Earnings (loss) per share:
Basic (in dollars per share)	$ 0.02	$ (0.12)	$ (0.19)	$ (0.28)	$ 0.25	$ (0.22)	$ (0.57)	$ (0.49)	$ (0.57)	$ (1.07)	$ (2.30)	[1]
Diluted (in dollars per share)	$ 0.02	$ (0.12)	$ (0.19)	$ (0.28)	$ 0.24	$ (0.22)	$ (0.57)	$ (0.49)	$ (0.57)	$ (1.07)	$ (2.30)	[1]
LTIP Units
Earnings (loss) per share:
Shares issued upon conversion of awards (shares)									1

[1] The Company began paying fees on November 1, 2015, in connection with the management agreement with the Manger (refer to Note 6).

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Non-controlling Interests (Details) $ in Thousands, € in Millions	12 Months Ended
	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jul. 31, 2015 USD ($)	Jul. 31, 2015 EUR (€)
Noncontrolling Interest [Line Items]
Reallocation of interest in Operating Partnership (refer to Note 9)	$ 0	$ 0	$ 0
Non-controlling ownership interest	0.80%
Net income (loss) attributable to Unit Holders non-controlling interest	$ (372)	(778)	(1,052)
Ownership percentage in disposed asset				5.50%	5.50%
Redeemable noncontrolling interest, equity, redemption value | €					€ 2.1
Non-controlling Interest in Subsidiaries Owning Trianon Tower
Noncontrolling Interest [Line Items]
Consideration received				$ 1,500
Non-controlling interest
Noncontrolling Interest [Line Items]
Reallocation of interest in Operating Partnership (refer to Note 9)	$ 1,817	$ 2,252	$ (852)
LTIP units | Non-controlling interest
Noncontrolling Interest [Line Items]
Number of units outstanding (shares) | shares	420,359

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Risk Management and Derivative Activities - Derivative Instruments Not Designated as Hedges (Details) - Not designated as hedges $ in Thousands	Dec. 31, 2017 USD ($) instrument	Dec. 31, 2016 USD ($) instrument
Derivative [Line Items]
Number | instrument	35	52
Notional Amount	$ 1,251,659	$ 1,180,206
Fair Value Asset (Liability)	$ 1,754	$ 13,729
Interest rate caps
Derivative [Line Items]
Number | instrument	31	32
Notional Amount	$ 1,193,012	$ 1,107,400
Fair Value Asset (Liability)	$ 7,024	$ 8,659
Interest rate caps | EURIBOR | Minimum
Derivative [Line Items]
Interest rate caps	0.50%
Interest rate caps | GBP LIBOR | Maximum
Derivative [Line Items]
Interest rate caps	2.00%
Foreign currency forwards, net
Derivative [Line Items]
Number | instrument	4	20
Notional Amount	$ 58,647	$ 72,806
Fair Value Asset (Liability)	$ (5,270)	$ 5,070

XML

Risk Management and Derivative Activities - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Derivative assets | Interest rate caps
Derivative [Line Items]
Derivatives	$ 7,024	$ 8,659
Derivative assets | Foreign currency forwards
Derivative [Line Items]
Derivatives	0	5,070
Derivative liabilities | Foreign currency forwards
Derivative [Line Items]
Derivatives	$ 5,270	$ 0

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Risk Management and Derivative Activities - Effect of Derivative Instruments in the Combined Consolidated Statements of Operations (Details) - Unrealized gain (loss) on derivatives and other(1) - Derivatives - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Derivative [Line Items]
Net cash receipt (payment) on derivatives	$ 979	$ (787)	$ 0
Interest rate caps
Derivative [Line Items]
Adjustments to fair value	(2,726)	(14,936)	(8,897)
Foreign currency forwards
Derivative [Line Items]
Adjustments to fair value	(5,270)	4,872	417
Foreign Exchange Forward Settled During Period
Derivative [Line Items]
Adjustments to fair value	$ (5,070)	$ (219)	$ 0

XML

Risk Management and Derivative Activities - Narrative (Details)	Dec. 31, 2017 USD ($) instrument	Dec. 31, 2016 USD ($) instrument
Derivative [Line Items]
Cash collateral held by counter parties | $	$ 0	$ 0
Designated as hedge
Derivative [Line Items]
Number of derivative instruments | instrument	0	0

XML

Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 7,024	$ 13,729
Derivative liabilities	5,270	0
Principal/Notional Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	1,193,012	1,180,206
Preferred equity investment	35,347	0
Derivative liabilities	58,647	0
Principal/Notional Amount | Mortgage and other notes payable, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage and other notes payable, net	1,234,642	1,162,211
Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	7,024	13,729
Preferred equity investment	35,347	0
Derivative liabilities	5,270	0
Carrying Value | Mortgage and other notes payable, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage and other notes payable, net	1,223,443	1,149,119
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	7,024	13,729
Preferred equity investment	35,783	0
Derivative liabilities	5,270	0
Fair Value | Mortgage and other notes payable, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage and other notes payable, net	$ 1,231,321	$ 1,146,134

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Commitments and Contingencies - Schedule of Future Minimum Rental Payments (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) lease lessee
Finite-Lived Intangible Assets [Line Items]
Number of significant lessees | lessee	1
Significant lessee remaining lease term	6 years 4 months 12 days
Ground Leases
Finite-Lived Intangible Assets [Line Items]
2018	$ 705
2019	705
2020	705
2021	705
2022	705
Thereafter	46,828
Total Minimum lease payments	$ 50,353
Ground Leases Expiring 2089 [Member]
Finite-Lived Intangible Assets [Line Items]
Number of Ground Leases Treated as Operating Leases | lease	2

XML

Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	[1]
Quarterly Financial Information Disclosure [Abstract]
Rental income	$ 26,041	$ 27,747	$ 26,025	$ 25,536	$ 25,700	$ 29,798	$ 33,990	$ 34,833	$ 105,349	$ 124,321	$ 101,023
Escalation income	5,265	5,641	5,558	5,161	5,347	7,828	5,908	6,090	21,625	25,173	18,822
Interest income	705	704	297	0					1,706	0	0
Interest expense	6,203	6,536	6,722	6,383	7,955	9,301	11,641	12,542	25,844	41,439	36,129
Management fee, related party	3,692	3,585	3,572	3,559	3,520	3,548	3,500	3,500	14,408	14,068	2,333
Transaction costs	4,552	332	973	260	(23)	150	1,652	831	6,117	2,610	120,101
Depreciation and amortization	14,535	14,396	12,520	12,563	13,715	13,989	18,404	18,871	54,014	64,979	56,283
Other, net	15,893	13,906	12,720	27,760	20,531	19,585	44,271	16,962
Unrealized gain (loss) on derivatives and other	(795)	(3,472)	(7,655)	(941)	8,319	(4,982)	1,159	(15,753)	(12,863)	(11,257)	(8,731)
Realized gain (loss) on sales and other	13,735	1,681	1,981	4,970	20,460	3,814	4,622	(2,448)	22,367	26,448	1,376
Income (loss) before income tax benefit (expense)	76	(6,454)	(10,301)	(15,799)	14,128	(10,115)	(33,789)	(29,984)	(32,478)	(59,760)	(144,818)
Net income (loss)	2,537	(6,806)	(10,538)	(15,526)	13,902	(12,770)	(34,309)	(29,325)	$ (30,333)	$ (62,502)	$ (144,143)
Net income (loss) attributable to NorthStar Realty Europe Corp. common stockholders	$ 1,442	$ (6,770)	$ (10,447)	$ (15,350)	$ 13,859	$ (12,721)	$ (33,909)	$ (28,982)
Earnings (loss) per share:
Basic (in dollars per share)	$ 0.02	$ (0.12)	$ (0.19)	$ (0.28)	$ 0.25	$ (0.22)	$ (0.57)	$ (0.49)	$ (0.57)	$ (1.07)	$ (2.30)
Diluted (in dollars per share)	$ 0.02	$ (0.12)	$ (0.19)	$ (0.28)	$ 0.24	$ (0.22)	$ (0.57)	$ (0.49)	$ (0.57)	$ (1.07)	$ (2.30)

[1] The Company began paying fees on November 1, 2015, in connection with the management agreement with the Manger (refer to Note 6).

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Segment Reporting (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2017 USD ($) segment	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Segment Reporting Information [Line Items]
Number of reporting segments | segment									3
Revenues
Rental income	$ 26,041	$ 27,747	$ 26,025	$ 25,536	$ 25,700	$ 29,798	$ 33,990	$ 34,833	$ 105,349	$ 124,321	$ 101,023	[1]
Escalation income	5,265	5,641	5,558	5,161	5,347	7,828	5,908	6,090	21,625	25,173	18,822	[1]
Interest income	705	704	297	0					1,706	0	0	[1]
Expenses
Interest expense	6,203	6,536	6,722	6,383	7,955	9,301	11,641	12,542	25,844	41,439	36,129	[1]
Management fee, related party	3,692	3,585	3,572	3,559	3,520	3,548	3,500	3,500	14,408	14,068	2,333	[1]
Transaction costs	4,552	332	973	260	(23)	150	1,652	831	6,117	2,610	120,101	[1]
Depreciation and amortization	14,535	14,396	12,520	12,563	13,715	13,989	18,404	18,871	54,014	64,979	56,283	[1]
Other, net									60,775	86,158	49,817
Income (loss) before income tax benefit (expense)	76	(6,454)	(10,301)	(15,799)	14,128	(10,115)	(33,789)	(29,984)	(32,478)	(59,760)	(144,818)	[1]
Income tax benefit (expense)									2,145	(2,742)	675	[1]
Net income (loss)	2,537	$ (6,806)	$ (10,538)	$ (15,526)	13,902	$ (12,770)	$ (34,309)	$ (29,325)	(30,333)	(62,502)	(144,143)	[1]
Total assets	1,940,917				1,845,392				1,940,917	1,845,392	2,683,050
Amortization of deferred financing costs									2,813	7,117	5,936
General and administrative expenses									7,384	8,077	3,502	[1]
Real Estate Equity
Revenues
Rental income									105,349	124,321	101,023
Escalation income									21,625	25,173	18,822
Interest income									0
Expenses
Interest expense									24,989	30,974	25,365
Management fee, related party									0	0	0
Transaction costs									0	0	120,101
Depreciation and amortization									54,014	64,979	56,283
Other, net									20,887	57,546	24,237
Income (loss) before income tax benefit (expense)									27,084	(4,005)	(106,141)
Income tax benefit (expense)									2,145	(2,742)	675
Net income (loss)									29,229	(6,747)	(105,466)
Total assets	1,901,282				1,835,531				1,901,282	1,835,531	2,544,992
Amortization of deferred financing costs									2,400	3,700	2,900
Preferred Equity
Revenues
Rental income									0
Escalation income									0
Interest income									1,706
Expenses
Interest expense									0
Management fee, related party									0
Transaction costs									538
Depreciation and amortization									0
Other, net									72
Income (loss) before income tax benefit (expense)									1,096
Income tax benefit (expense)									0
Net income (loss)									1,096
Total assets	37,133								37,133
Corporate
Revenues
Rental income									0	0	0
Escalation income									0	0	0
Interest income									0
Expenses
Interest expense									855	10,465	10,764
Management fee, related party									14,408	14,068	2,333
Transaction costs									5,579	2,610	0
Depreciation and amortization									0	0	0
Other, net									39,816	28,612	25,580
Income (loss) before income tax benefit (expense)									(60,658)	(55,755)	(38,677)
Income tax benefit (expense)									0	0	0
Net income (loss)									(60,658)	(55,755)	(38,677)
Total assets	$ 2,502				$ 9,861				2,502	9,861	138,058
Amortization of deferred financing costs									$ 400	3,400	$ 3,000
General and administrative expenses										$ 200

[1] The Company began paying fees on November 1, 2015, in connection with the management agreement with the Manger (refer to Note 6).

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Segment Reporting - Geographical Segments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Rental and escalation income	$ 126,974	$ 149,494	$ 119,845
Office
Segment Reporting Information [Line Items]
Rental and escalation income	122,443	142,433	113,654
Office | Germany
Segment Reporting Information [Line Items]
Rental and escalation income	51,241	53,743	31,969
Office | United Kingdom
Segment Reporting Information [Line Items]
Rental and escalation income	36,984	38,483	36,882
Office | France
Segment Reporting Information [Line Items]
Rental and escalation income	20,051	19,551	13,802
Office | Other
Segment Reporting Information [Line Items]
Rental and escalation income	14,167	30,656	31,001
Non-Office | Other
Segment Reporting Information [Line Items]
Rental and escalation income	$ 4,531	$ 7,061	$ 6,191

XML

Subsequent Events (Details) - USD ($)												1 Months Ended
	Mar. 13, 2018	Mar. 07, 2018	Nov. 06, 2017	Aug. 02, 2017	May 01, 2017	Mar. 07, 2017	Nov. 01, 2016	Aug. 03, 2016	May 10, 2016	Mar. 15, 2016	Nov. 23, 2015	Feb. 28, 2018	Apr. 30, 2017	Nov. 30, 2016	Oct. 31, 2016	May 31, 2016	Nov. 30, 2015
Subsequent Event [Line Items]
Dividends per share of common stock (in dollars per share)			$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15
Authorized amount of outstanding common stock (up to)														$ 100,000,000			$ 100,000,000
Subsequent Event
Subsequent Event [Line Items]
Dividends per share of common stock (in dollars per share)		$ 0.15
Authorized amount of outstanding common stock (up to)	$ 100,000,000
Credit Facility | Revolving Credit Facility
Subsequent Event [Line Items]
Corporate revolving credit facility													$ 35,000,000		$ 35,000,000.0	$ 75,000,000.0
Higher borrowing capacity													$ 70,000,000
Credit Facility | Revolving Credit Facility | Subsequent Event
Subsequent Event [Line Items]
Corporate revolving credit facility	$ 70,000,000
Debt instrument term extension option	1 year
Higher borrowing capacity	$ 105,000,000
Held-for-sale | Maastoren | Subsequent Event
Subsequent Event [Line Items]
Consideration received												$ 190,000,000
Release of equity on sale												$ 60,000,000

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Schedule III - Real Estate and Accumulated Depreciation (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) building	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 1,040,087
Initial cost of land	393,691
Initial cost of buildings & improvements	1,187,682
Capitalized subsequent to acquisition of land, buildings & improvements	25,517
Gross amount carried at close of period, land	393,691
Gross amount carried at close of period, building & improvements	1,213,199
Gross amount carried at close of period, total	1,606,890	$ 1,614,432	$ 2,120,460	$ 55,413
Accumulated depreciation	(95,356)	(63,585)	$ (35,303)	$ (517)
Operating real estate, net	1,511,534	$ 1,550,847
Preferred equity certificates	107,100
Federal income tax basis	1,700,000
Held-for-Sale
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	87,444
Initial cost of land	12,111
Initial cost of buildings & improvements	160,534
Capitalized subsequent to acquisition of land, buildings & improvements	675
Gross amount carried at close of period, land	12,111
Gross amount carried at close of period, building & improvements	161,209
Gross amount carried at close of period, total	173,320
Accumulated depreciation	(12,669)
Operating real estate, net	160,651
Trianon
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	395,293
Initial cost of land	89,410
Initial cost of buildings & improvements	518,441
Capitalized subsequent to acquisition of land, buildings & improvements	10,388
Gross amount carried at close of period, land	89,410
Gross amount carried at close of period, building & improvements	528,829
Gross amount carried at close of period, total	618,239
Accumulated depreciation	(39,122)
Operating real estate, net	$ 579,117
Life on which depreciation is computed	40 years
Valentinskamp
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 34,646
Initial cost of land	24,609
Initial cost of buildings & improvements	30,086
Capitalized subsequent to acquisition of land, buildings & improvements	4,653
Gross amount carried at close of period, land	24,609
Gross amount carried at close of period, building & improvements	34,739
Gross amount carried at close of period, total	59,348
Accumulated depreciation	(2,851)
Operating real estate, net	$ 56,497
Life on which depreciation is computed	40 years
Parexel
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 30,912
Initial cost of land	8,425
Initial cost of buildings & improvements	37,703
Capitalized subsequent to acquisition of land, buildings & improvements	1
Gross amount carried at close of period, land	8,425
Gross amount carried at close of period, building & improvements	37,704
Gross amount carried at close of period, total	46,129
Accumulated depreciation	(2,799)
Operating real estate, net	$ 43,330
Life on which depreciation is computed	40 years
Drehbahn
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 29,251
Initial cost of land	27,287
Initial cost of buildings & improvements	10,628
Capitalized subsequent to acquisition of land, buildings & improvements	726
Gross amount carried at close of period, land	27,287
Gross amount carried at close of period, building & improvements	11,354
Gross amount carried at close of period, total	38,641
Accumulated depreciation	(1,430)
Operating real estate, net	$ 37,211
Life on which depreciation is computed	40 years
Ludwigstrasse
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 19,696
Initial cost of land	12,435
Initial cost of buildings & improvements	20,026
Capitalized subsequent to acquisition of land, buildings & improvements	486
Gross amount carried at close of period, land	12,435
Gross amount carried at close of period, building & improvements	20,512
Gross amount carried at close of period, total	32,947
Accumulated depreciation	(1,736)
Operating real estate, net	$ 31,211
Life on which depreciation is computed	40 years
Dammtorwall
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 15,105
Initial cost of land	7,046
Initial cost of buildings & improvements	14,082
Capitalized subsequent to acquisition of land, buildings & improvements	132
Gross amount carried at close of period, land	7,046
Gross amount carried at close of period, building & improvements	14,214
Gross amount carried at close of period, total	21,260
Accumulated depreciation	(1,275)
Operating real estate, net	$ 19,985
Life on which depreciation is computed	40 years
Uhlandstrasse
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 12,576
Initial cost of land	4,504
Initial cost of buildings & improvements	15,916
Capitalized subsequent to acquisition of land, buildings & improvements	1,998
Gross amount carried at close of period, land	4,504
Gross amount carried at close of period, building & improvements	17,914
Gross amount carried at close of period, total	22,418
Accumulated depreciation	(1,454)
Operating real estate, net	$ 20,964
Life on which depreciation is computed	40 years
Munster
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 5,998
Initial cost of land	2,811
Initial cost of buildings & improvements	5,689
Capitalized subsequent to acquisition of land, buildings & improvements	1,515
Gross amount carried at close of period, land	2,811
Gross amount carried at close of period, building & improvements	7,204
Gross amount carried at close of period, total	10,015
Accumulated depreciation	(499)
Operating real estate, net	$ 9,516
Life on which depreciation is computed	40 years
Germany
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 543,477
Initial cost of land	176,527
Initial cost of buildings & improvements	652,571
Capitalized subsequent to acquisition of land, buildings & improvements	19,899
Gross amount carried at close of period, land	176,527
Gross amount carried at close of period, building & improvements	672,470
Gross amount carried at close of period, total	848,997
Accumulated depreciation	(51,166)
Operating real estate, net	$ 797,831
Number of buildings | building	9
Berges de Seine
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 96,129
Initial cost of land	100,198
Initial cost of buildings & improvements	55,317
Capitalized subsequent to acquisition of land, buildings & improvements	134
Gross amount carried at close of period, land	100,198
Gross amount carried at close of period, building & improvements	55,451
Gross amount carried at close of period, total	155,649
Accumulated depreciation	(5,400)
Operating real estate, net	$ 150,249
Life on which depreciation is computed	40 years
Mac Donald
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 54,742
Initial cost of land	34,505
Initial cost of buildings & improvements	44,831
Capitalized subsequent to acquisition of land, buildings & improvements	7
Gross amount carried at close of period, land	34,505
Gross amount carried at close of period, building & improvements	44,838
Gross amount carried at close of period, total	79,343
Accumulated depreciation	(4,214)
Operating real estate, net	$ 75,129
Life on which depreciation is computed	40 years
Marceau
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 26,209
Initial cost of land	35,505
Initial cost of buildings & improvements	13,586
Capitalized subsequent to acquisition of land, buildings & improvements	1,357
Gross amount carried at close of period, land	35,505
Gross amount carried at close of period, building & improvements	14,943
Gross amount carried at close of period, total	50,448
Accumulated depreciation	(1,378)
Operating real estate, net	$ 49,070
Life on which depreciation is computed	40 years
Joubert
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 6,959
Initial cost of land	10,547
Initial cost of buildings & improvements	4,353
Capitalized subsequent to acquisition of land, buildings & improvements	57
Gross amount carried at close of period, land	10,547
Gross amount carried at close of period, building & improvements	4,410
Gross amount carried at close of period, total	14,957
Accumulated depreciation	(390)
Operating real estate, net	$ 14,567
Life on which depreciation is computed	40 years
France
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 184,039
Initial cost of land	180,755
Initial cost of buildings & improvements	118,087
Capitalized subsequent to acquisition of land, buildings & improvements	1,555
Gross amount carried at close of period, land	180,755
Gross amount carried at close of period, building & improvements	119,642
Gross amount carried at close of period, total	300,397
Accumulated depreciation	(11,382)
Operating real estate, net	289,015
Portman Square
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	140,144
Initial cost of land	0
Initial cost of buildings & improvements	188,366
Capitalized subsequent to acquisition of land, buildings & improvements	2,229
Gross amount carried at close of period, land	0
Gross amount carried at close of period, building & improvements	190,595
Gross amount carried at close of period, total	190,595
Accumulated depreciation	(14,569)
Operating real estate, net	$ 176,026
Life on which depreciation is computed	40 years
Condor House
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 110,682
Initial cost of land	16,767
Initial cost of buildings & improvements	126,575
Capitalized subsequent to acquisition of land, buildings & improvements	1,582
Gross amount carried at close of period, land	16,767
Gross amount carried at close of period, building & improvements	128,157
Gross amount carried at close of period, total	144,924
Accumulated depreciation	(10,670)
Operating real estate, net	$ 134,254
Life on which depreciation is computed	40 years
Glasgow
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 5,054
Initial cost of land	2,474
Initial cost of buildings & improvements	7,043
Capitalized subsequent to acquisition of land, buildings & improvements	0
Gross amount carried at close of period, land	2,474
Gross amount carried at close of period, building & improvements	7,043
Gross amount carried at close of period, total	9,517
Accumulated depreciation	(560)
Operating real estate, net	$ 8,957
Life on which depreciation is computed	40 years
Chiswick
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 8,385
Initial cost of land	6,906
Initial cost of buildings & improvements	6,641
Capitalized subsequent to acquisition of land, buildings & improvements	12
Gross amount carried at close of period, land	6,906
Gross amount carried at close of period, building & improvements	6,653
Gross amount carried at close of period, total	13,559
Accumulated depreciation	(532)
Operating real estate, net	$ 13,027
Life on which depreciation is computed	40 years
St Albans
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 3,887
Initial cost of land	2,083
Initial cost of buildings & improvements	4,830
Capitalized subsequent to acquisition of land, buildings & improvements	7
Gross amount carried at close of period, land	2,083
Gross amount carried at close of period, building & improvements	4,837
Gross amount carried at close of period, total	6,920
Accumulated depreciation	(454)
Operating real estate, net	$ 6,466
Life on which depreciation is computed	40 years
United Kingdom
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 268,152
Initial cost of land	28,230
Initial cost of buildings & improvements	333,455
Capitalized subsequent to acquisition of land, buildings & improvements	3,830
Gross amount carried at close of period, land	28,230
Gross amount carried at close of period, building & improvements	337,285
Gross amount carried at close of period, total	365,515
Accumulated depreciation	(26,785)
Operating real estate, net	338,730
IC Hotel
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	12,148
Initial cost of land	864
Initial cost of buildings & improvements	22,919
Capitalized subsequent to acquisition of land, buildings & improvements	129
Gross amount carried at close of period, land	864
Gross amount carried at close of period, building & improvements	23,048
Gross amount carried at close of period, total	23,912
Accumulated depreciation	(1,572)
Operating real estate, net	$ 22,340
Life on which depreciation is computed	40 years
Ibis Berlin
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 8,432
Initial cost of land	903
Initial cost of buildings & improvements	12,474
Capitalized subsequent to acquisition of land, buildings & improvements	0
Gross amount carried at close of period, land	903
Gross amount carried at close of period, building & improvements	12,474
Gross amount carried at close of period, total	13,377
Accumulated depreciation	(853)
Operating real estate, net	$ 12,524
Life on which depreciation is computed	40 years
Neuermarkt
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 1,815
Initial cost of land	995
Initial cost of buildings & improvements	2,748
Capitalized subsequent to acquisition of land, buildings & improvements	99
Gross amount carried at close of period, land	995
Gross amount carried at close of period, building & improvements	2,847
Gross amount carried at close of period, total	3,842
Accumulated depreciation	(240)
Operating real estate, net	$ 3,602
Life on which depreciation is computed	40 years
Marly
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 22,024
Initial cost of land	5,069
Initial cost of buildings & improvements	44,034
Capitalized subsequent to acquisition of land, buildings & improvements	5
Gross amount carried at close of period, land	5,069
Gross amount carried at close of period, building & improvements	44,039
Gross amount carried at close of period, total	49,108
Accumulated depreciation	(3,094)
Operating real estate, net	$ 46,014
Life on which depreciation is computed	40 years
Kirchheide
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 0
Initial cost of land	348
Initial cost of buildings & improvements	1,394
Capitalized subsequent to acquisition of land, buildings & improvements	0
Gross amount carried at close of period, land	348
Gross amount carried at close of period, building & improvements	1,394
Gross amount carried at close of period, total	1,742
Accumulated depreciation	(264)
Operating real estate, net	$ 1,478
Life on which depreciation is computed	40 years
Other
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 44,419
Initial cost of land	8,179
Initial cost of buildings & improvements	83,569
Capitalized subsequent to acquisition of land, buildings & improvements	233
Gross amount carried at close of period, land	8,179
Gross amount carried at close of period, building & improvements	83,802
Gross amount carried at close of period, total	91,981
Accumulated depreciation	(6,023)
Operating real estate, net	85,958
Portugal | Held-for-Sale
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	0
Initial cost of land	670
Initial cost of buildings & improvements	12,000
Capitalized subsequent to acquisition of land, buildings & improvements	114
Gross amount carried at close of period, land	670
Gross amount carried at close of period, building & improvements	12,114
Gross amount carried at close of period, total	12,784
Accumulated depreciation	(874)
Operating real estate, net	$ 11,910
Life on which depreciation is computed	40 years
Netherlands | Held-for-Sale
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 87,444
Initial cost of land	11,441
Initial cost of buildings & improvements	148,534
Capitalized subsequent to acquisition of land, buildings & improvements	561
Gross amount carried at close of period, land	11,441
Gross amount carried at close of period, building & improvements	149,095
Gross amount carried at close of period, total	160,536
Accumulated depreciation	(11,795)
Operating real estate, net	$ 148,741
Life on which depreciation is computed	40 years

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Schedule III - Real Estate and Accumulated Depreciation - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
SEC Schedule III, Reconciliation of Carrying Amount of Real Estate Investments [Roll Forward]
Beginning balance	$ 1,614,432	$ 2,120,460	$ 55,413
Property acquisitions	0	0	2,080,038
Reclassification	0	(733)	0
Transfers to held for sale	(173,320)	(23,138)	(5,330)
Improvements	18,033	10,792	3,414
Retirements and disposals	(60,234)	(353,883)	(14,514)
Foreign currency translation	207,979	(139,066)	1,439
Ending balance	1,606,890	1,614,432	2,120,460
SEC Schedule III, Reconciliation of Real Estate Accumulated Depreciation [Roll Forward]
Beginning balance	(63,585)	(35,303)	(517)
Depreciation expense	(40,196)	(45,219)	(35,842)
Assets held for sale	12,669	811	31
Retirements and disposals	5,722	10,635	213
Foreign currency translation	(9,966)	5,491	812
Ending balance	$ (95,356)	$ (63,585)	$ (35,303)