Blogger David Phillips over at the 10Q Detective has done a nice write-up on NorthStar Realty Finance (NRF). NorthStar continues to perform well in the CRE mREIT space, but its stock price has been punished due to NRF's heavy reliance on access to the capital markets for sources of funding. NRF has two series of preferred shares outstanding and eight different TruPS issuances. With the very weak CDO market, NRF has been forced to turn to warehouse lines and commercial paper for funding, which has weakened the balance sheet some.
The bright spot for NorthStar is that it has a diversified revenue stream, including lease income, investment income, and interest income. However, the diversification and investments create an operating structure with complex and difficult accounting. With a 16% yield, however, investors willing to take a leap of faith may be richly rewarded.
The bright spot for NorthStar is that it has a diversified revenue stream, including lease income, investment income, and interest income. However, the diversification and investments create an operating structure with complex and difficult accounting. With a 16% yield, however, investors willing to take a leap of faith may be richly rewarded.
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