One of NorthStar Healthcare’s competitive advantages is the ability to deploy capital in both equity and debt investments. This allows management the flexibility to invest where we see the best risk-adjusted opportunities.
Equity Investing for Growth
We will make equity investments primarily in the form of lease or management transactions, whereby we acquire a property and either enter into a lease or a management agreement with an experienced operator. These investments may not only help us generate income for investors but may also allow investors to benefit from any potential future capital appreciation in the value of our properties.
Debt Investing for Income
We expect the majority of our commercial real estate investments will consist of first mortgage loans and the remainder will be subordinate mortgages, mezzanine loans, preferred equity investments and participation in such loans. However, we have not established any limits on the percentage of our portfolio that may be comprised of these various categories of loans which present differing levels of risk. These investments may help us generate income for investors while preserving capital and managing risk.
As with any real estate investment, there are various risks including but not limited to: unfavorable market conditions, loss of principal and limited liquidity. Diversification does not eliminate risk and does not assure better performance. Potential allocation set forth above may not reflect actual allocation of the NorthStar Healthcare equity/debt portfolio. Furthermore, we may change our investment objectives, policies and strategy at any time without stockholder consent.