LEADING THE WAY IN NEW YORK REAL ESTATE INVESTING RXR Realty NY Regional Office Securities Offered by NorthStar Securities, LLC Member FINRA/SIPC
DISCLOSURES This sales and advertising presentation is neither an offer to sell nor a solicitation of an offer to buy securities. An offering is made only by the prospectus. This presentation must be read in conjunction with the prospectus in order to fully understand all of the implications and risks of the offering of securities to which the prospectus relates. A copy of the prospectus must be made available to you in connection with any offering. No offering is made except by a prospectus filed with the Department of Law of the State of New York. Neither the Securities and Exchange Commission, the Attorney General of the State of New York nor any other state securities regulator has approved or disapproved of our common stock, determined if the prospectus is truthful or complete or passed on or endorsed the merits of this offering. Any representation to the contrary is a criminal offense. This presentation includes forward-looking statements that can be identified by the use of words such as will, may, should, intend, believe, expect, could, target, or other comparable terminology. Statements concerning projections, future performance, cash flows and any other guidance on present or future periods constitute forward-looking statements. Forward-looking statements involve significant risks and uncertainties and you should not unduly rely on these statements. You should be aware that a number of important factors, including, but not limited to, the factors described in the Risk Factors below and in our filings with the Securities and Exchange Commission, could cause our actual results to differ materially from those in these forward-looking statements. The statements made herein are as of the date hereof and we undertake no obligation to update these statements except as may be required by applicable securities laws. Securities offered through NorthStar Securities, LLC, member FINRA/SIPC, an affiliate and dealer manager for NorthStar/RXR New York Metro Real Estate, Inc. (NorthStar/RXR). NorthStar Securities, LLC is doing business as NorthStar BD Securities, LLC (DE) in the following states: FL, GA, TX and WA.
RISK FACTORS Consider the following risks before making an investment in NorthStar/RXR: We have no operating history and there is no assurance that we will achieve our investment objectives; the prior performance of our sponsors and their affiliated entities may not predict our future results. No public market currently exists for our shares; therefore, it will be difficult to sell your shares. If you are able to sell your shares, you would likely have to sell them at a substantial loss. This is a blind pool offering and you will not have an opportunity to evaluate the investments we make subsequent to the date you subscribe for shares. We depend on our advisor and its affiliates, as well as our sub-advisor and its affiliates, to select our investments and conduct our operations. We will pay substantial fees and expenses to our advisor, sub-advisor and their affiliates which will reduce cash available for investment and distribution. These fees were not determined on an arm s length basis. These fees increase your risk of loss. Our investments may be adversely affected by economic cycles and risks inherent to the New York metropolitan area, especially New York City, and to risks inherent in geographic concentration. We expect to acquire more than a majority of our investments through joint venture arrangements with RXR Value Added Fund III, an affiliate of RXR Realty. We may also enter into joint ventures or other co-ownership arrangements with other third parties. Such investments may involve risks not otherwise present with other investments. We expect to use leverage in connection with our investments, which increases the risk of loss associated with our investments. Our tenants may not be able to make lease payments and our borrowers may not be able to make debt service payments to us due to changes in economic conditions, regulatory requirements and other factors. There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other than cash flow from operations, including offering proceeds, borrowings or sales of assets and distributions may exceed earnings which may reduce an investor s overall return. We have not established a limit on the amount of proceeds we may use to fund distributions. If we pay distributions from sources other than our cash flow from operations, we will have less cash available for investments and your overall return may be reduced. There is no guarantee of any return and you may lose a part or all of your investment. Distributions to the Class T Shares will be reduced by the payment of the distribution fee.
RISK FACTORS Consider the following risks before making an investment in NorthStar/RXR: Our executive officers and other key investment professionals of our sponsors and their affiliates who perform services for us on behalf of our advisor and sub-advisor face conflicts of interest, including time constraints, allocation of investment opportunities and significant conflicts created by compensation arrangements with us and other affiliates of our sponsors. If we only raise the minimum offering amount, or are unable to raise substantial funds, we will be limited in the number and type of investments we can make and the value of your investment in the offering will fluctuate with the performance of the specific assets we acquire. Diversification does not eliminate risk and does not assure better performance. We may change our targeted investments or investment policies without stockholder consent. The offering prices of our Class A Shares, Class T Shares and Class I Shares were not established on an independent basis, therefore, the offering prices will not accurately represent the value of our assets, as they were arbitrarily determined, and the actual value of your investment may be substantially less. Our charter does not require our board of directors to seek stockholder approval to liquidate our assets by a specified date, nor does our charter require our board of directors to list our shares for trading by a specified date. If we fail to qualify as a REIT for federal income tax purposes, our cash available for distribution and the value of our shares could materially decrease. If we terminate our agreement with our advisor, we may be required to pay significant fees to an affiliate of our sponsors, which will reduce the cash available for distribution to you. The other risks set forth in our prospectus and our filings with the Securities and Exchange Commission.
Investment Opportunity NorthStar/RXR is intended for investors seeking: Exposure to a dynamic New York Metropolitan (Metro) commercial real estate market. Potential for capital appreciation and risk-adjusted returns. Current income through monthly distributions.* 5 *There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other than cash flow from operations, including offering proceeds, borrowings or sales of assets and distributions may exceed earnings, which may reduce an investor s overall return. As with any real estate investment, there are various risks including but not limited to: unfavorable market conditions, loss of principal and limited liquidity. NorthStar/RXR may change its targeted investments or investment policies without stockholder consent. NorthStar/RXR s investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in geographic concentrations. Because of this concentration, any adverse situation that disproportionately affects the New York metro area, including a worsening of economy, would have a magnified adverse effect on our portfolio.
Leveraging The Power of Local NorthStar/RXR s Competitive Advantage Established relationships with owners, tenants, brokers, government representatives and local municipalities Demonstrated value creation over multiple real estate cycles Strong understanding of current trends and paths of growth in the New York Metro area Access to off market transactions Extensive underwriting and local market knowledge Ability to structure complex transactions 6 NorthStar/RXR s investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in geographic concentrations. The performance of its co-sponsors, Colony NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR.
NorthStar/RXR s Investment Strategy Concentrate on high-quality, well located commercial real estate (CRE) throughout the New York metro area with strong cash flow and/or value-add opportunities. Focus on office, mixed-used and multifamily properties. Complement our equity strategy with debt investments. 7 We may change our investment objectives, policies and strategy at any time without stockholder consent. Diversification does not eliminate risk and does not assure better performance. NorthStar/RXR s investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in geographic concentrations. Because of this concentration, any adverse situation that disproportionately affects the New York metro area, including a worsening of economy, would have a magnified adverse effect on our portfolio.
Investing in Emerging Sub-Markets The push of higher prices and the pull of new lifestyles has fueled an urban renaissance across New York Metro. Leverage RXR Realty s Power of Local experience to invest in the growing opportunities in these emerging sub-markets. RXR Realty has the experience to recognize early trends and patterns of growth. 8 We may change our investment objectives, policies and strategy at any time without stockholder consent. NorthStar/RXR s investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in geographic concentrations. The performance of Colony NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR.
Why Invest in the New York Metro Area? 9 NorthStar/RXR s investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in geographic concentrations. The performance of Colony NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR. We may change our investment objectives, policies and strategy at any time without shareholder consent. Sources: 1) U.S. Census Bureau, 2015 estimate 2) City of New York, Commitment Plan. 3) Colliers International Manhattan Office Market Report Q4 2016. 4) www.ceo.com, States with Most Fortune 500 Companies, September, 2013. 5) NYC & Company, January 2017.
Largest Domestic Office Market With 506 million square feet of office space, New York City s office market is larger than the next four U.S. office markets combined. Size of Domestic Office Markets Ranked by Square Footage 10 Source: Colliers International, Office Market Outlook Q3 2016
Population is at an All-Time High The New York Metro population is at an all-time high with 8.6 million residents which may drive additional demand for office space, housing and retail services. New York Metro Population Growth (1970-2015) 11 Source: US Census Bureau, 2015 estimate
All-Time High Employment New York City employment is at an all-time high, which we believe will drive increases in office occupancy and rental rates. Employment Growth in New York City Since 1970 12 Source: New York State Department of Labor Statistics as of December 31, 2016
The Ultimate Resilient City New York City has recovered 255% of jobs lost during the recent economic crisis. New York City s historical ability to bounce back after economic disruptions suggests it may weather future downturns better than other major American cities. Jobs Recovered Since Trough As A Percentage Of Jobs Lost 13 Source: Cushman & Wakefield, Manhattan Office Market, April 2014
Record 60.3 Million Visitors in 2016 Visitation to New York City has risen 38% in the last decade, which may further strengthen the New York metro s economy and real estate fundamentals. New York City Visitors Over Last Decade 14 Source: NYC & Company, January 2017
Significant Infrastructure Investment An estimated $30 billion of construction on transportation infrastructure is planned by 2019. By improving the transportation infrastructure, New York Metro is better able to accommodate its growing population and visitors and provide greater access to underutilized, under-developed areas of the city. New York City Municipal Capital Commitments 15 Source: City of New York, CBRE, Manhattan Market Discussion, April 2014
Strong, Diverse Economy Unlike other economic hubs, New York is a desired location for a vast array of industries leading to higher tenant diversification and decreased dependency on a particular sector. New York Industries by Sector 16 Source: Bureau of Labor Statistics, April 2017
Constrained Supply New York City s supply of commercial office space is aging, with little inventory added in recent years. We believe this imbalance between supply and demand may create favorable conditions for owners, operators and developers of office real estate. Total Inventory of Commercial Office Space in Manhattan 17 Source: Colliers International, Manhattan Office Construction Report, Q4 2016
Creating Value Through Institutional Expertise Colony NorthStar, Inc. (Colony NorthStar; NYSE: CLNS) and RXR Realty LLC have partnered to form a strategic relationship to co-sponsor NorthStar/RXR. We believe Colony NorthStar s successful experience running public companies and other non-traded investment vehicles combined with RXR Realty s extensive New York market expertise may provide considerable competitive advantages. 18 The performance of Colony NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR. Colony NorthStar, RXR Realty and NorthStar/RXR are separate companies. An investor purchasing shares in NorthStar/RXR s public offering is making an investment in NorthStar/RXR, not in Colony NorthStar or RXR Realty.
Co-Sponsor Overview Colony NorthStar Colony NorthStar a leading global real estate and investment management firm focused on strategically managing real estate and other investment platforms in the United States and internationally. $56 B I L L I O N ASSETS UNDER PRUDENT & DISCIPLINED INVESTMENT PROCESS MANAGEMENT 1 L E A D I N G G L O B A L R E A L E S TAT E A N D I N V E S T M E N T M A N A G E M E N T F I R M SPONSOR OF ALTERNATIVE INVESTMENT PROGRAMS PROVIDING RETAIL INVESTORS ACCESS TO A BROAD RANGE OF INSTITUTIONAL-QUALITY INVESTMENTS 19 The performance of Colony NorthStar is not indicative of the performance of NorthStar/RXR. Colony NorthStar and NorthStar/RXR are separate companies. An investor purchasing shares in NorthStar/RXR s public offering is making an investment in NorthStar/RXR, not in Colony NorthStar. 1) Represents balance sheet and third-party AUM as of June 30, 2017. Third party AUM represents capital invested alongside balance sheet, but excludes private equity and retail company interests, which are included in Investment Management AUM.
Co-Sponsor Overview RXR Realty RXR Realty is a premier New York-based real estate owner, manager and developer and is comprised of members of the former senior management and operating team of Reckson Associates, a NYSE-listed REIT. $15.7 MANAGEMENT B I L L I O N ASSETS UNDER 1 LOCAL MARKET KNOWLEDGE & INSIDER RELATIONSHIPS 22.1 Million S q u a r e F e e t ¹ u n d e r m a n a g e m e n t 450- P E R S O N V E R T I C A L L Y I N T E G R A T E D R E A L E S T A T E O W N E R A N D O P E R A T O R One of the most adept participants in New York commercial real estate with long-standing relationships $ 6. 3 B I L L I O N EQUITY RAISED SINCE 2009 THROUGH INSTITUTIONAL FUNDS 20 The performance of RXR Realty is not indicative of the performance of NorthStar/RXR. RXR Realty and NorthStar/RXR are separate companies. An investor purchasing shares in NorthStar/RXR s public offering is making an investment in NorthStar/RXR, not in RXR Realty. 1) As of June 30, 2017. Gross estimated asset value compiled by RXR Realty in accordance with company fair value measurement policy and is comprised of capital invested by RXR and its partners as well as leverage.
Manhattan s Top Landlords (by square feet) Rank Landlord Office RSF (in millions) 1 SL Green Realty Corp. 22.6 2 Vornado Realty Trust 20.2 3 Brookfield Properties 20.0 4 RXR Realty 16.2 5 Silverstein Properties 13.1 6 Durst Organization 12.1 7 Boston Properties 11.5 8 Tishman Speyer Properties 10.1 9 Rudin Management Company 10.3 10 Paramount Group 8.6 21 1) SL Green Realty Corp. Form 10Q for the period ending March 31, 2017. 2) Vornado Realty Trust Form 10Q for the period ending March 31, 2017. 3) www.brookfieldofficeproperties.com as of as of May 10, 2017. 4) www.rxrrealty.com as of May 10, 2017. 5) www.silversteinproperties.com as of as of May 10, 2017. 6) www.durst.org as of as of May 10, 2017. 7) Boston Properties, Inc. Form 10Q for the period ending March 31, 2017. 8) www.tishmanspeyer.com as of May 10, 2017. 9) www.rudin.com as of November 17, 2016. 10) Paramount Group, Inc. Form 10Q for the period ending March 31, 2017. This is for illustrative purposes only. There is no guarantee that RXR Realty will continue to rank among top Manhattan landlords and/or own the same amount of square footage in the future. The performance of its co-sponsors NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR.
Experienced New York Investment Team Name Years Relevant Background Chief Executive Officer and Chairman of RXR Realty Scott Rechler 28 CEO, President, COO and Chairman of Reckson Associates Realty Corp. (NYSE: RA) Board and Committee Member Participation: Real Estate Board of New York, member; Real Estate Roundtable, Co-Chair of its Political Action Committee; Co-founder and former member of the Board of American Campus Communities, Inc. (NYSE: ACC) Michael Maturo 32 President and Chief Financial Officer, RXR Realty President and CFO of Reckson Associates Realty Corp. (NYSE: RA) Board and Committee Member Participation: Long Island Association (LIA), Vice Chairman of the Board, member of Executive Committee; Diocese of Rockville Center Pension Plan, investment committee; Catholic Foundation of Diocese of Rockville Center, Chairman of the Board; Real Estate Roundtable, member Jason Barnett 24 Vice Chairman, General Counsel and Secretary of RXR Realty Board and Committee Member Participation: American Bar Association, member; Real Estate Board of New York, member; National Association of Real Estate Investment Trusts, member Member of the American Bar Association and admitted to the Bar for the State of New York 22 The RXR Realty leadership team featured here is not employed by the issuer, NorthStar/RXR New York Metro Real Estate, Inc. The members of the RXR Realty leadership team face conflicts of interest relating to their obligations to other RXR Realty affiliated entities.
NorthStar/RXR Offering Details Co-Sponsors Investment Focus Offering Type Colony NorthStar, Inc. and RXR Realty LLC New York Metro Real Estate Public, Non-Traded REIT Distribution Schedule¹ Minimum Investment Expected Term² Monthly $4,000 Taxable and Tax-Deferred Investment 5 to 8 Years Investor Suitability³ Net worth of at least $250,000 or gross annual income of at least $70,000 and a net worth of at least $70,000 4 23 1) There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other than cash flow from operations, including offering proceeds, borrowings or sales of assets, which may reduce an investor s overall return. 2) There are no assurances that the program will ever complete a liquidity event. 3) AL, CA, IA, KS, KY, MA, ME, MO, NE, NV, NJ, NM, ND, OH, OR, PA, TN and VT impose more stringent suitability requirements. Please review the prospectus prior to investing or recommending that clients invest. NorthStar/RXR is not available to residents of PA. 4) Net worth does not include home, furnishings and personal automobiles.
Investment Highlight Acquisition Investment Summary Acquired an indirect minority interest in an office building located in Midtown Manhattan as part of a $1.65 billion transaction sourced by RXR Realty, NorthStar/RXR s co-sponsor and affiliate of its sub-advisor. Purchase Price: $4,400,000¹ Acquisition Date: May 2016/Dec 2016 Location: Midtown Manhattan Square Feet: 1.8 million² Property Type: Class-A Office Year Built/Renovated: 1960/2006 1285 Avenue of the Americas 24 1) NorthStar/RXR participated in the transaction with an investor group led by RXR Real Estate Value Added Fund - Fund III LP, an institutional real estate private equity fund sponsored by RXR Realty, LLC, as well as other institutional third party real estate investors and high net worth individuals by acquiring an indirect minority interest for a purchase price of approximately $1.9 million in May 2016. NorthStar/RXR completed a $2.5 million follow-on investment in December 2016 using proceeds from the offering, for a total investment amount of approximately $4.4 million. 2) Includes 25,000 square feet of retail space and approximately 84,000 of below-grade square footage. NorthStar/RXR owns an indirect minority interest in the property depicted in the photos. All information provided is as of the acquisition date unless otherwise noted and we undertake no duty to update such information.
Why Invest in NorthStar/RXR RXR Realty has significant experience investing in New York on behalf of institutional investors. The New York Metro commercial real estate market has historically been one of the strongest and most diverse in the world. 1 Positive population, tourism and employment trends in the New York metro support a dynamic and growing real estate market. Combining core property investments with value-added opportunities may create a balanced portfolio that seeks to deliver capital appreciation, cash flow* and risk-adjusted returns. 25 *There is no guarantee of distributions. Distributions have been paid and may continue to be paid from sources other than cash flow from operations, including offering proceeds, borrowings or sales of assets, which may reduce an investor s overall return. As with any real estate investment, there are various risks including but not limited to: unfavorable market conditions, loss of principal and limited liquidity. NorthStar/RXR s investments may be adversely affected by economic cycles and risks inherent to the New York metro area, especially New York City and to risks inherent in geographic concentrations. Because of this concentration, any adverse situation that disproportionately affects the New York metro area, including a worsening of economy, would have a magnified adverse effect on our portfolio. The performance of Colony NorthStar and RXR Realty is not indicative of the performance of NorthStar/RXR. Colony NorthStar, RXR Realty and NorthStar/RXR are separate companies. 1) JLL, New York Office Outlook, Q4 2014.
NOT ALL REITS FOR MORE INFORMATION ARE CREATED Contact your Financial Advisor EQUAL and ask for a client investor kit. Speaker Name www.northstarsecurities.com/rxr Title Sales Desk 877.940.8777 This investment is not suitable for all investors. Please consult the prospectus for suitability standards by investor's state of residence.