Tom Barrack's Colony Capital Inc. said it's combining with NorthStar Realty Finance Corp. and NorthStar Asset Management Group Inc. in an all-stock deal to form a real estate investment trust.
Shareholders of each of the companies will own 33% or 34% of the new entity, which will be called Colony NorthStar Inc., the companies said Friday in a statement. Mr. Barrack will be executive chairman of the new entity while Richard Saltzman, Colony's chief executive officer, will be CEO. David Hamamoto, chairman of NorthStar Realty, will be executive vice chairman.
The new REIT will have $38 billion in investment assets under management, the companies said in the statement. Mr. Barrack is the billionaire real estate mogul behind the 2008 takeover of Michael Jackson's Neverland Ranch property. Combining with NorthStar Realty Finance and NorthStar Asset Management adds assets including health-care properties, hotels and manufactured housing to build its real estate holdings.
NorthStar Realty Finance hired a division of UBS Group AG to advise on a possible recombination in February. Activist investor Jonathan Litt of Land & Buildings Investment Management LLC has been pressuring NorthStar Realty to sell assets and return to an internally managed structure.
NorthStar Asset Management, which announced in January that it hired Goldman Sachs Group Inc. to explore strategic alternatives, was spun off from NorthStar Realty Finance. NorthStar Asset Management Group owns real estate consultant Townsend Group.