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•	the market, economic and environmental conditions in the industrial real estate, single-family rental, healthcare, commercial real estate debt and equity, investment management and hospitality sectors;

•	any decrease in our net income and funds from operations as a result of the Mergers (as defined in Item 1. - Business), or our other acquisition activity;

•	our ability to manage and integrate following the Mergers and our other acquisitions effectively and maintain consistent standards and controls and realize the anticipated benefits of the acquisitions;

•	our exposure to risks to which we have not historically been exposed, including liabilities with respect to the assets acquired through the Mergers and our other acquisitions;

•	our business and investment strategy, including the ability of the businesses in which we have a significant investment to execute their business strategies;

•	our ability to grow our business by raising capital for the companies that we manage;

•	the ability to realize substantial efficiencies and synergies as well as anticipated strategic and financial benefits, and the impact of legislative, regulatory and competitive changes;

•	performance of our investments relative to our expectations and the impact on our actual return on invested equity, as well as the cash provided by these investments and available for distribution;

•	the impact of adverse conditions affecting a specific asset class in which we have investments;

•	the impact of economic conditions on third parties on which we rely;

•	adverse domestic or international economic conditions and the impact on the commercial real estate or real-estate related industries;

•	actions, initiatives and policies of the U.S. and non-U.S. governments and changes to U.S. or non-U.S. government policies and the execution and impact of these actions, initiatives and policies;

•	our ability to obtain and maintain financing arrangements, including securitizations;

•	the availability of attractive investment opportunities;

•	our ability to satisfy and manage our capital requirements;

•	the general volatility of the securities markets in which we participate;

•	changes in interest rates and the market value of our target assets;

•	our ability to maintain our qualification as a real estate investment trust for U.S. federal income tax purposes;

•	our ability to maintain our exemption from registration as an investment company under the Investment Company Act of 1940, as amended;

•	the availability of qualified personnel; and

•	our understanding of our competition.

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Healthcare - Our healthcare properties are comprised of a diverse portfolio of medical office buildings, senior housing, skilled nursing and other healthcare properties. Over half of our healthcare properties are medical office buildings and properties structured under a net lease to healthcare operators. Substantially all of our net leases include annual escalating rent provisions. In addition, our portfolio consists of senior housing operating facilities which include healthcare properties that operate through management agreements with independent third-party operators, predominantly through structures permitted by the REIT Investment Diversification and Empowerment Act of 2007, or RIDEA, structures that permit us, through a taxable REIT subsidiary, or TRS, to have direct exposure to resident fee income and incur customary related operating expenses. Our medical office buildings are a combination of single tenant and multi-tenant properties typically structured with long-term leases with the tenants.

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Light Industrial - Our industrial properties are comprised of primarily light industrial assets in infill locations that are vital for e-commerce and other tenants that require increasingly quick delivery times. These properties are generally either multi-tenant buildings of up to 500,000 square feet or single tenant buildings of up to 250,000 square feet with an office build-out of less than 20%. The portfolio is well-diversified with over 800 tenants and across 37 million square feet across 15 major U.S. markets, with significant concentrations in Atlanta, Dallas and Chicago.

•	Hospitality - Our hotel portfolio is a geographically diverse portfolio primarily comprised of extended stay hotels and premium branded select service hotels primarily located in major metropolitan markets with the majority affiliated with top hotel brands.

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Other Equity and Debt - Includes our portfolios of net lease, multifamily and multi-tenant office properties, our interest in Colony Starwood Homes (NYSE: SFR), which is one of the largest publicly traded owners and operators of single family rental homes in the U.S., and a portfolio of commercial real estate, or CRE, loans and securities, our limited partnership interests in real estate private equity funds, or PE Investments, and various other equity investments.

•	Investment Management - Our investment management business is expected to generate fee income through investment management services, sponsoring numerous investment products across a diverse set of institutional and retail investors.

•	capitalizing on asset-level underwriting experience and market analytics to identify investments with pricing dislocations and attractive risk-return profiles that can be purchased at meaningful discounts to our estimates of intrinsic value;

•	seeking to acquire assets that are undervalued as a result of operating uncertainty or liquidity constraints;

•	enhancing cash flow and asset values during ownership by active asset management and implementing opportunistic resolution and exit strategies;

•	originating and structuring senior and/or junior loans with attractive return profiles relative to the underlying value and financial operating performance of the real estate collateral and the strength and quality of the sponsorship;

•	retaining control, where possible, over the formulation and execution of the management strategies with respect to our assets, including the restructuring of non-performing or sub-performing loans, the negotiation of discounted pay offs or

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•	structuring transactions with a prudent amount of leverage, if any, given the risk of the underlying asset’s cash flow, attempting to match the structure and duration of the financing with the underlying asset’s cash flow, including through the use of hedges, as appropriate.

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•	Corporate Governance Guidelines

•	Code of Business Conduct and Ethics

•	Code of Ethics for Principal Executive Officer and Senior Financial Officers

•	Complaint Procedures for Accounting and Audit Matters

•	Audit Committee Charter

•	Compensation Committee Charter

•	Nominating and Corporate Governance Committee Charter

•	Risk Committee Charter

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•	a large increase in the amount of assets under management and a diversification of types of assets under management, which may create risks related to scaling and combining of the platforms necessary to manage the combined assets of the companies;

•	additional conflicts between and among the clients and managed vehicles of the company;

•	certain investment vehicles historically managed by NSAM or Colony may compete for investment opportunities and may be adversely impacted to the extent such opportunities are allocated between them;

•	our possible failure to successfully implement our plan to optimize our combined portfolio consisting primarily of owned real estate; and

•	our larger and newly-combined team of management and employees may require time to become fully effective and may not be able to achieve our anticipated synergies and higher earnings growth.

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•	a number of our competitors have more personnel and greater financial, technical, marketing and other resources than we do;

•	many of our competitors have raised, or are expected to raise, significant amounts of capital, and many of them have investment objectives similar to ours, which may create additional competition for investment opportunities and reduce the size and duration of pricing inefficiencies that we seek to exploit;

•	some of our competitors (including strategic competitors) may have a lower cost of capital and access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to our managed vehicles, particularly our managed vehicles that directly use leverage or rely on debt financing of their portfolio companies to generate superior investment returns;

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•	some of our competitors have higher risk tolerances, different risk assessments or lower return thresholds, which could allow them to consider a wider variety of investments and to bid more aggressively than us for investments;

•	our competitors may be able to achieve synergistic cost savings in respect of an investment that we cannot, which may provide them with a competitive advantage in bidding for an investment;

•	there are relatively few barriers to entry impeding new funds, and the successful efforts of new entrants into our various lines of business, including major commercial and investment banks and other financial institutions, have resulted in increased competition;

•	some investors may prefer to invest with an investment manager whose equity securities are not traded on a national securities exchange;

•	some investors may prefer to pursue investments directly instead of investing through one of our funds;

•	other industry participants will from time to time seek to recruit our investment professionals and other employees away from us; and

•	other investment managers may offer more products and services than we do, have more diverse sources of revenue or be more adept at developing, marketing and managing new products and services than we are.

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•	limit our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;

•	restrict us from making strategic acquisitions or cause us to make non-strategic divestitures;

•	restrict us from paying dividends to our stockholders;

•	increase our vulnerability to general economic and industry conditions; and

•	require a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our borrowings, thereby reducing our ability to use cash flow to fund our operations, capital expenditures and future business opportunities.

•	Our cash flow from operations may be insufficient to make required payments of principal of and interest on the debt or we may fail to comply with all of the other covenants contained in the debt, which is likely to result in:

•	acceleration of such debt (and any other debt containing a cross-default or cross-acceleration provision) that we may be unable to repay from internal funds or to refinance on favorable terms, or at all;

•	our inability to borrow unused amounts under our financing arrangements, even if we are current in payments on borrowings under those arrangements; and/or

•	the loss of some or all of our assets to foreclosure or sale;

•	Our debt may increase our vulnerability to adverse economic and industry conditions with no assurance that investment yields will increase with higher financing costs;

•	We may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, stockholder distributions or other purposes; and

•	We may not be able to refinance debt that matures prior to the investment it was used to finance on favorable terms, or at all.

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•	restrictions and problems relating to the repatriation of profits;

•	difficulties and costs of staffing and managing international operations;

•	the burden of complying with multiple and potentially conflicting laws;

•	laws restricting foreign companies from conducting business;

•	unexpected changes in regulatory requirements;

•	the impact of different business cycles and economic instability;

•	political instability and civil unrest;

•	greater difficulty in perfecting our security interests, collecting accounts receivable, foreclosing on secured assets and protecting our interests as a creditor in bankruptcies in certain geographic regions;

•	potentially adverse tax consequences;

•	share ownership restrictions on foreign operations;

•	tariff regimes of the countries in which we do business; and

•	geographic, time zone, language and cultural differences between personnel in different areas of the world.

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•	future growth that does not follow our historical trends;

•	changes in the economic environment, competitive landscape and financial markets;

•	new and additional costs and expenses attributable to our operations, including our operations as a public company, an adviser and a company within an extensively regulated industry; and

•	the transitions we are undergoing as a result of the Mergers, resulting in our operations as a single public entity.

•	changes in stock market analyst recommendations or earnings estimates regarding our common stock, other companies comparable to it or companies in the industries we serve;

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•	actual or anticipated fluctuations in our operating results or future prospects;

•	reactions to public announcements by us;

•	strategic actions taken by our company or our competitors, such as the intended business separations, acquisitions or restructurings;

•	failure of our company to achieve the perceived benefits of the transactions, including financial results and anticipated synergies, as rapidly as or to the extent anticipated by financial or industry analysts;

•	adverse conditions in the financial market or general U.S. or international economic conditions, including those resulting from war, incidents of terrorism and responses to such events; and

•	sales of common stock by our company, members of our management team or significant stockholders.

•	a limited availability of market quotations for our Class A common stock;

•	a limited amount of news and analyst coverage for our company;

•	a decreased ability for us to issue additional securities or obtain additional financing in the future; and

•	limited liquidity for our stockholders due to thin trading.

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•	whether we declare or fail to declare dividends on our preferred stock from time to time;

•	real or anticipated changes in the credit ratings assigned to our securities;

•	our creditworthiness and credit profile;

•	interest rates;

•	developments in the securities, credit and housing markets, and developments with respect to financial institutions generally;

•	the market for similar securities; and

•	economic, corporate, securities market, geopolitical, regulatory or judicial events that affect us, the asset management or real estate industries or the financial markets generally.

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“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock), or an affiliate thereof, for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes special appraisal rights and supermajority voting requirements on these combinations; and

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“control share” provisions that provide that holders of “control shares” of our company (defined as voting shares which, when aggregated with all other shares owned or controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.

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•	the possibility that investors might become bankrupt or otherwise be unable to meet their capital contribution obligations;

•	that operating and/ or management agreements of a managed vehicle often restrict our ability to transfer or liquidate our interest when we desire or on advantageous terms;

•	that our relationships with the investors will be generally contractual in nature and may be terminated or dissolved under the terms of the agreements, or we may be removed as general partner and manager, and in such event, we may not continue to manage or invest in the applicable managed vehicle underlying such relationships;

•	that disputes between us and the investors may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and result in subjecting the investments owned by the applicable managed vehicle to additional risk; and

•	that we may incur liability for obligations of a managed vehicle by reason of being its general partner or manager.

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•	allocating funds based on numerous factors, including investment objectives, available cash, diversification/concentration, leverage policy, the size of the investment, tax, anticipated pipeline of suitable investments and fund life;

•	all transactions where we co-invest with a Retail Company are subject to the approval of the independent directors of the applicable Retail Company;

•	investment allocations are reviewed as part of the annual advisory contract renewal process of each Retail Company; and

•	quarterly review of all of the investment activities of the Retail Company by the independent directors of the Retail Company.

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•	an economic downturn in the industrial real estate sector;

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environmentally hazardous conditions, including the presence of or proximity to underground storage tanks for the storage of petroleum products and other hazardous toxic substances, or the failure to properly remediate these substances, and the resulting potential for release of such products and substances, which may adversely affect our ability to sell, rent or pledge such properties as collateral for future borrowings;

•	restrictions imposed by environmental laws on the manner in which property may be used or businesses may be operated; and

•	the risk of liabilities, including under environmental laws and regulations, arising from leasing properties to customers that engage in industrial, manufacturing, and commercial activities that involve hazardous or toxic substances.

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•	changes in the international, national, regional and local economic climate;

•	changes in business and leisure travel patterns;

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•	increases in energy prices or airline fares or terrorist incidents, which impact the propensity of people to travel and revenues from our hospitality facilities because operating costs cannot be adjusted as quickly;

•	supply growth in markets where we own hotels, which may adversely affect demand at our properties;

•	the attractiveness of our hotels to consumers relative to competing hotels;

•	the performance of the managers of our hotels;

•	outbreaks of disease and the impact on travel of natural disasters and weather;

•	physical damage to our hotels as a result of earthquakes, hurricanes or other natural disasters or the income lost as a result of the damage;

•	changes in room rates and increases in operating costs due to inflation, labor costs and other factors; and

•	unionization of the labor force at our hotels.

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•	construction cost overruns and delays;

•	a possible shortage of liquidity to fund capital improvements and the related possibility that financing for these capital improvements may not be available to us on affordable terms;

•	the renovation investment failing to produce the returns on investment that we expect;

•	disruptions in the operations of the hotel as well as in demand for the hotel while capital improvements are underway; and

•	disputes with franchisors or hotel managers regarding compliance with relevant management or franchise agreements.

•	local, state, national or international economic conditions;

•	real estate conditions, such as an oversupply of or a reduction in demand for real estate space in an area;

•	lack of liquidity inherent in the nature of the asset;

•	tenant/operator mix and the success of the tenant/operator business;

•	the ability and willingness of tenants/operators/managers to maintain the financial strength and liquidity to satisfy their obligations to us and to third parties;

•	reliance on tenants/operators/managers to operate their business in a sufficient manner and in compliance with their contractual arrangements with us;

•	ability and cost to replace a tenant/operator/manager upon default;

•	property management decisions;

•	property operating costs, including insurance premiums, real estate taxes and maintenance costs;

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•	the perceptions of the quality, convenience, attractiveness and safety of the properties;

•	branding, marketing and operational strategies;

•	competition from comparable properties;

•	the occupancy rate of, and the rental rates charged at, the properties;

•	the ability to collect on a timely basis all rent;

•	the effects of any bankruptcies or insolvencies;

•	the expense of leasing, renovation or construction;

•	changes in interest rates and in the availability, cost and terms of mortgage financing;

•	unknown liens being placed on the properties;

•	bad acts of third parties;

•	the ability to refinance mortgage notes payable related to the real estate on favorable terms, if at all;

•	changes in governmental rules, regulations and fiscal policies;

•	tax implications;

•	changes in laws, including laws that increase operating expenses or limit rents that may be charged;

•	the impact of present or future environmental legislation and compliance with environmental laws, including costs of remediation and liabilities associated with environmental conditions affecting properties;

•	cost of compliance with the Americans with Disabilities Act of 1990;

•	adverse changes in governmental rules and fiscal policies;

•	social unrest and civil disturbances;

•	acts of nature, including earthquakes, hurricanes and other natural disasters;

•	terrorism;

•	the potential for uninsured or underinsured property losses;

•	adverse changes in state and local laws, including zoning laws; and

•	other factors which are beyond our control.

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•	Colony or NRF, as applicable, would be subject to U.S. federal, state and local income tax on its net income at regular corporate rates for the years it did not qualify as a REIT (and, for such years, would not be allowed a deduction for dividends paid to stockholders in computing its taxable income) and we would succeed to the liability for such taxes;

•	if we were considered to be a “successor” of such entity, we would not be eligible to elect REIT status until the fifth taxable year following the year during which such entity was disqualified, unless it were entitled to relief under applicable statutory provisions;

•	even if we were eligible to elect REIT status, we would be subject to tax (at the highest corporate rate in effect at the date of the sale) on the built-in gain on each asset of Colony or NRF, as applicable, existing at the time of the Mergers if we were to dispose of such asset for up to 5 years following the Mergers; and

•	we would succeed to any earnings and profits accumulated by Colony or NRF, as applicable, for tax periods that such entity did not qualify as a REIT and we would have to pay a special dividend and/or employ applicable deficiency dividend procedures (including interest payments to the IRS) to eliminate such earnings and profits to maintain our REIT qualification.

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(1)	On December 22, 2016, NSAM declared a special dividend for its common stockholders of $228 million or approximately $1.16 per share contingent upon consummation of the Mergers. The special dividend was paid on January 27, 2017 to common stockholders of record of NSAM as of the close of business on January 3, 2017.

(1)	On December 22, 2016, NSAM declared a special dividend for its common stockholders of $228 million or approximately $1.16 per share contingent upon consummation of the Mergers. The special dividend was paid on January 27, 2017 to common stockholders of record of NSAM as of the close of business on January 3, 2017.

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(1)	On December 22, 2016, NSAM declared a special dividend for its common stockholders of $228 million or approximately $1.16 per share contingent upon consummation of the Mergers. The special dividend was paid on January 27, 2017 to common stockholders of record as of the close of business on January 3, 2017.

(2)	On October 30, 2014, NSAM declared its first dividend of $0.10 on common stock, on a per share basis, for the three months ended September 30, 2014.

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•	NorthStar Listed Companies - Provided asset management and other services on a fee basis by managing the day-to-day activities of the NorthStar Listed Companies. NSAM began earning fees from NorthStar Realty on July 1, 2014 and NorthStar Europe on November 1, 2015.

•	Retail Companies - Provided asset management and other services on a fee basis by managing the day-to-day activities of the Retail Companies.

•	Broker-dealer - Raised capital in the retail market through NorthStar Securities and earned dealer manager fees for selling equity in the Retail Companies.

•	Direct Investments - Invested in strategic partnerships and joint ventures with third-parties, either consolidated or unconsolidated, with expertise in commercial real estate or other sectors and markets, where NSAM benefited from the fee stream and potential incentive fee.

•	Corporate/Other - Included corporate level general and administrative expenses, as well as special servicing on a fee basis in connection with certain securitization transactions. In addition, such segment included opportunistic investments, such as the purchase of the NorthStar Listed Companies common stock.

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(1)	Represents amount of shares registered and raised to offer pursuant to each Retail Company’s public offering, distribution reinvestment plan and follow-on public offering.

(2)	NorthStar Healthcare successfully completed its initial public offering on February 2, 2015 by raising $1.1 billion in capital and its follow-on public offering on January 19, 2016 by raising $0.7 billion in capital. NorthStar Income II closed its initial public offering on November 9, 2016 and raised $1.1 billion in capital.

(3)	Any asset management and other fees incurred by NorthStar/RXR New York Metro will be shared equally between NSAM and RXR Realty, as co-sponsors.

(4)	NorthStar/RXR New York Metro’s registration statement became effective in 2015 and began raising capital in 2016. Colony NorthStar expects the capital raise to accelerate in 2017.

(5)	Offering period subject to extension as determined by the board of directors or trustees of each Retail Company.

(6)	Offering is for two feeder funds in a master feeder structure.

(7)	NorthStar Capital Fund’s registration statement was declared effective by the SEC in May 2016. Colony NorthStar expects NorthStar Capital Fund to begin raising capital from third parties in the first half 2017.

(8)	NorthStar/Townsend Investment submitted a registration statement on Form N-2 to the SEC in October 2016. Colony NorthStar expects NorthStar/Townsend Investment to begin raising capital in the first half 2017.

(9)	In connection with the distribution support agreement with each Retail Company, an affiliate of Colony NorthStar purchased shares of common stock in NorthStar/RXR New York Metro and NorthStar Capital Fund for $1.5 million and $2.0 million, respectively, since inception through December 31, 2016.

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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

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(1)	The increase was driven by the growth in assets of the Retail Companies. The average invested assets of the Retail Companies for the years ended December 31, 2016 and 2015 is $6.8 billion and $5.8 billion, respectively.

(2)	The decrease was due to less investment activity of the Retail Companies for the year ended 2016 as compared to 2015, with aggregate investment acquisitions of $1.8 billion in 2016 as compared to $2.8 billion in 2015.

(3)	The increase was due to more repayment or disposition activity of the Retail Companies for the year ended 2016 as compared to 2015, with aggregate investment repayments or dispositions of $801.4 million in 2016 as compared to $280.6 million in 2015.

(4)	NSAM began earning fees on January 29, 2016, or the Townsend Acquisition Date.

•	Class A shares: selling commissions of up to 7% of gross offering proceeds raised and dealer manager fee of up to 3% of gross offering proceeds raised.

•	Class T shares: selling commissions of up to 2% of gross offering proceeds raised and dealer manager fee of up to 2.75% of gross offering proceeds raised.

•	Class D shares: no selling commissions and dealer manager fees of up to 2% of gross offering proceeds raised.

•	Class I Shares: no selling commissions or dealer manager fees.

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(1)	Includes capital raised through distribution reinvestment plans of $100.0 million and $109.0 million for the years ended December 31, 2016 and 2015, respectively, for which NorthStar Securities did not earn selling commission or dealer manager fees.

(2)	NorthStar Healthcare successfully completed its follow-on public offering on January 19, 2016. Equity raised for the year ended 2016 primarily represents proceeds from NorthStar Healthcare’s distribution reinvestment plan for which NorthStar Securities did not earn commission income.

(3)

For the year ended December 31, 2016, NSAM raised gross offering proceeds of $133.6 million from the sale of Class A shares, $144.6 million from the sale of Class T shares and $32.1 million from shares issued as part of distribution reinvestment plans. For the year ended December 31, 2015, NSAM raised gross offering proceeds of $536.1 million from the sale of Class A shares and $19.2 million from shares issued as part of distribution reinvestment plans. NorthStar Income II closed its initial public offering on November 9, 2016 and raised $1.1 billion in capital.

(4)	NorthStar/RXR New York Metro’s registration statement became effective in 2015 and began raising capital in 2016. Colony NorthStar expects the capital raise to accelerate in 2017.

(5)	NorthStar Capital Fund’s registration statement was declared effective by the SEC in May 2016. Colony NorthStar expects NorthStar Capital Fund to begin raising capital from third parties in the first half 2017.

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(1)	Includes equity-based compensation expense and depreciation and amortization.

(2)	Represents depreciation and amortization.

(3)	Represents an impairment loss.

(4)	Excludes NSAM’s portion of equity in earnings (losses) from the Townsend Funds of $0.7 million.

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(1)	The increase was driven by the growth in assets of the Retail Companies. The average invested assets of the Retail Companies for the years ended December 31, 2015 and 2014 is $5.8 billion and $2.3 billion, respectively.

(2)	The increase was due to more investment activity of the Retail Companies for the year ended 2015 as compared to 2014, with aggregate investment acquisitions of $2.8 billion in 2015 as compared to $2.4 billion in 2014.

(3)	The increase was due to more repayment or disposition activity of the Retail Companies for the year ended 2015 as compared to 2014, with aggregate investment repayments or dispositions of $280.6 million in 2015 as compared to $259.2 million in 2014.

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•	Class A shares: selling commissions of up to 7% of gross offering proceeds raised and dealer manager fee of up to 3% of gross offering proceeds raised.

•	Class T shares: selling commissions of up to 2% of gross offering proceeds raised and dealer manager fee of up to 2.75% of gross offering proceeds raised.

(1)	Includes capital raised through distribution reinvestment plans of $109.0 million and $59.0 million for the years ended December 31, 2015 and 2014, respectively, for which NorthStar Securities did not earn selling commission or dealer manager fees.

(2)	Capital raising pace at NorthStar Income II accelerated in 2015 compared to 2014.

(3)	NorthStar/RXR New York Metro’s registration statement became effective in 2015 and began raising capital in 2016.

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(1)	Includes equity-based compensation expense and depreciation and amortization.

(2)	Represents depreciation and amortization.

•	acquisitions of our target assets and related ongoing commitments;

•	our general partner commitments to our future funds and co-investment commitments to other investment vehicles;

•	our operations, including compensation, administrative and overhead costs;

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•	distributions to our stockholders;

•	principal and interest payments on our borrowings; and

•	income tax liabilities of taxable REIT subsidiaries and of the Company subject to limitations as a REIT.

•	cash on hand;

•	our credit facilities;

•	fees received from our investment management business;

•	cash flow generated from our investments, both from operations and return of capital;

•	proceeds from full or partial realization of investments;

•	investment-level financing;

•	proceeds from public or private equity and debt offerings; and

•	capital commitments from limited partners of sponsored funds.

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(1)

The consolidated statement of cash flows for the year ended December 31, 2014 includes: (i) NSAM’s cash flows for the six months ended December 31, 2014, which represents NSAM’s cash flows following the NSAM Spin-off; and (ii) NSAM’s cash flows for the six months ended June 30, 2014, which represents a carve-out of NSAM’s historical financial information including revenues and expenses attributable to NSAM related to NorthStar Realty’s historical asset management business. As a result, the years ended December 31, 2016 and 2015 may not be comparable to 2014.

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(1)	As of December 31, 2016, NSAM had contractual commitments under operating leases for NSAM’s offices (refer to Commitments and Contingencies in Part II, Item 8. “Financial Statements and Supplementary Data” for further discussion).

(2)	The Term Loan was repaid in January 2017 in connection with the Mergers.

(3)	Represents commitments to co-invest approximately 1% of the total unfunded commitments in the Townsend Funds. Such amounts are due on demand and therefore presented as obligations due in less than one year.

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(1)

The consolidated financial statements for the year ended December 31, 2014 represent NSAM’s results of operations following the NSAM Spin-off on June 30, 2014. The year ended December 31, 2014 includes: (i) NSAM’s results of operations for the six months ended December 31, 2014, which represents the activity following the NSAM Spin-off; and (ii) NSAM’s results of operations for the six months ended June 30, 2014, which represents a carve-out of its historical financial information including revenues and expenses attributable to NSAM, related to NorthStar Realty’s historical asset management business. As a result, the two years ended December 31, 2016 may not be comparable to the prior period presented.

(2)	NSAM began earning fees on July 1, 2014, in connection with the management agreement with NorthStar Realty and began earnings fees on November 1, 2015, in connection with the management agreement with NorthStar Europe (refer to Note 3).

(3)	The years ended December 31, 2016, 2015 and 2014 include $61.6 million, $57.5 million and $51.7 million, respectively, of equity-based compensation expense. Refer to Note 9 for further disclosure.

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1.	Business and Organization

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2.	Summary of Significant Accounting Policies

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(1)	Represents Townsend’s interest in real estate private equity funds sponsored by Townsend (“Townsend Funds”) (refer to Note 4).

(2)	Colony NorthStar expects $166.5 million of goodwill to be deductible for tax purposes.

(3)	Goodwill includes $5.5 million related to a share deal acquisition of the seller’s corporate entity. The deferred tax liability and corresponding goodwill are recorded at acquisition based on differences between book and tax basis.

(4)	Represents NSAM’s investment in Townsend prior to a post closing adjustment of $7.6 million relating to a distribution of excess cash to NSAM.

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(1)	Excludes non-recurring transaction costs and prior compensation arrangements of Townsend.

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(1)	Includes existing customers and expected retention of such customers.

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(1)	Represents a $28.5 million note receivable from a third party related to the sale of the Island Interest (refer to Note 4) in connection with the Mergers.

(2)	NSAM recorded the present value of the expected future distribution fees as receivable/income from certain Retail Companies and corresponding payable/expense to participating broker-dealers each of $5.1 million as of December 31, 2016.

(3)	Represents an obligation to the sellers who are entitled to approximately 84% of the value of the Townsend Funds at the Townsend Acquisition Date, along with any income related to capital contributed prior to acquisition. NSAM is obligated to fund contributions and is entitled to any income on such contributions subsequent to the Townsend Acquisition Date (refer to Note 4).

(4)	Primarily represents deferred tax liability related to the Townsend acquisition related to a share deal acquisition of the seller’s corporate entity. The deferred tax liability and corresponding goodwill are recorded at acquisition based on differences between the book and tax basis.

(5)	Represents incentive fees received that are not yet earned related to the Townsend Funds (refer to below) and as a result, represents a contingent obligation.

(1)

Approximately 50% of incentive fees received by the Townsend Funds are due to certain employees of Townsend. Payment is made to such employees when such incentive fee income is earned and approved by executive management of Townsend (refer to below). NSAM records the expense in compensation expense in the consolidated statements of operations when payment becomes probable and reasonably estimable but no later than the period in which the underlying income is recognized.

(2)	Represents withholding tax related to vesting and net settlement of equity-based awards.

(3)	Represented a one-time buyout in satisfaction of all participating interests related to non-executive incentive interests in the advisor to NSAM’s first Retail Company (refer to Note 3).

(4)	Related to the purchase of NorthStar Realty shares which were settled in January 2016 (refer to Note 6).

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3.	Management Agreements

(1)	Represents fees earned through NSAM’s investment in Townsend. NSAM began earning fees on the Townsend Acquisition Date. NSAM was also entitled to $1.8 million of management and other fees from January 14, 2016 to the Townsend Acquisition Date, which was recorded net of operating expenses in other income in the consolidated statements of operations.

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(1)

The base management fee will increase for NorthStar Europe by an amount equal to 1.5% per annum of the sum of: the cumulative net proceeds of all future common equity and preferred equity issued, equity issued in exchange or conversion of exchangeable senior notes or stock-settlable notes based on the stock price at the date of issuance and any other issuances of common equity, preferred equity or other forms of equity, including but not limited to limited partnership interests in the NorthStar Europe operating partnerships, which are structured as profits interests (excluding units issued to the parent company and equity-based compensation, but including issuances related to an acquisition, investment, joint venture or partnership) by the NorthStar Europe and cumulative cash available for distribution (“CAD”) of the NorthStar Europe, in excess of cumulative distributions paid on common stock, LTIP units or other equity awards beginning the first full calendar quarter after the NSAM Spin-off and NRE Spin-off, respectively.

(2)

The incentive fee is calculated by the product of 15% or 25% and CAD before such incentive fee, divided by the weighted average shares outstanding for the calendar quarter, when such amount is within a certain hurdle multiplied by the weighted average shares outstanding of the NorthStar Listed Companies for the calendar quarter. Weighted average shares represent the number of shares of the NorthStar Listed Companies’ common stock, LTIP Units or other equity-based awards (with some exclusions), outstanding on a daily weighted average basis.

(3)	After giving effect to NorthStar Realty’s reverse stock split in October 2015 and the NRE Spin-off.

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(1)	Represents amount of shares registered and raised to offer pursuant to each Retail Company’s public offering, distribution reinvestment plan and follow-on public offering.

(2)	NorthStar Healthcare successfully completed its initial public offering on February 2, 2015 by raising $1.1 billion in capital and its follow-on public offering on January 19, 2016 by raising $0.7 billion in capital. NorthStar Income II closed its initial public offering on November 9, 2016 and raised $1.1 billion in capital.

(3)	Any asset management and other fees incurred by NorthStar/RXR New York Metro will be shared equally between NSAM and RXR Realty, as co-sponsors.

(4)	NorthStar/RXR New York Metro’s registration statement became effective in 2015 and began raising capital in 2016. Colony NorthStar expects the capital raise to accelerate in 2017.

(5)	Offering period subject to extension as determined by the board of directors or trustees of each Retail Company.

(6)	Offering is for two feeder funds in a master feeder structure.

(7)	NorthStar Capital Fund’s registration statement was declared effective by the SEC in May 2016. Colony NorthStar expects NorthStar Capital Fund to begin raising capital from third parties in the first half 2017.

(8)	NorthStar/Townsend Investment submitted a registration statement on Form N-2 to the SEC in October 2016. Colony NorthStar expects NorthStar/Townsend Investment to begin raising capital in the first half 2017.

(9)	In connection with the distribution support agreement with each Retail Company, an affiliate of Colony NorthStar purchased shares of common stock in NorthStar/RXR New York Metro and NorthStar Capital Fund for $1.5 million and $2.0 million, respectively, since inception through December 31, 2016.

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•	Class A shares: selling commissions of up to 7% of gross offering proceeds raised and dealer manager fee of up to 3% of gross offering proceeds raised.

•	Class T shares: selling commissions of up to 2% of gross offering proceeds raised and dealer manager fee of up to 2.75% of gross offering proceeds raised.

•	Class D shares: no selling commissions and dealer manager fees of up to 2% of gross offering proceeds raised.

•	Class I Shares: no selling commissions or dealer manager fees.

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(1)	Includes selling commission expense to NorthStar Securities employees. For the years ended December 31, 2016, 2015 and 2014, NSAM incurred $2.7 million, $14.0 million and $13.8 million, respectively.

(2)	Excludes direct expenses of NorthStar Securities.

4.	Investments in Unconsolidated Ventures

(1)	Excludes NSAM’s acquired interest in Distributed Finance Corporation (“Distributed Finance”) in June 2014, a marketplace finance platform, for $4.0 million with a carrying value of $2.7 million as of December 31, 2015. In addition, NSAM entered into a convertible debt investment in Distributed Finance in January 2016 for $1.0 million. As of December 31, 2016, both investments are fully impaired.

(2)

NSAM acquired the AHI Interest in AHI Newco, LLC (“AHI Ventures”), a direct wholly-owned subsidiary of AHI for $57.5 million, consisting of $37.5 million in cash and $20.0 million of NSAM’s common stock, subject to certain lock-up and vesting restrictions ($10.0 million of NSAM’s common stock vested immediately). NSAM’s investment in AHI Ventures is structured as a joint venture between NSAM, the principals of AHI and James F. Flaherty III. The members of AHI are entitled to receive certain distributions of operating cash flow and certain promote fees in accordance with the allocations set forth in the joint venture agreement. For the years ended December 31, 2016 and 2015, NSAM received distributions of $5.7 million and $4.6 million related to the AHI Interest, respectively.

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(3)

NSAM acquired the Island Interest in Island through Island Hospitality Joint Venture, LLC (“Island Ventures”), a subsidiary of Island JV Members Inc. (“Island Members”) for $37.7 million, consisting of $33.2 million in cash and $4.5 million of NSAM’s common stock, subject to certain lock-up and vesting restrictions ($4.5 million of NSAM’s common stock vested immediately). NSAM’s investment in Island Ventures was structured as a joint venture between NSAM and Island Members. The members of Island Ventures were entitled to receive certain distributions of operating cash flow and certain promote fees in accordance with the allocations set forth in the joint venture agreement. For the years ended December 31, 2016 and 2015, NSAM received distributions of $6.5 million and $4.5 million related to the Island Interest, respectively. In December 2016, in connection with the Mergers, NSAM sold the Island Interest for a note receivable of $28.5 million that matures in January 2027 at 8% and cash of $3.2 million, resulting in a realized loss of $15.4 million, which includes closing and other related costs.

(4)	Represents interests in real estate private equity funds sponsored by Townsend. The following table summarizes the Townsend Funds, which are accounted for as cost method investments at fair value, as of December 31, 2016 and for the period from the Townsend Acquisition Date through December 31, 2016 (dollars in thousands):

(1)	Investments in closed-ended funds are not redeemable and investments in open-ended funds have semi-annual redemption options with 120 days advance notice.

(2)

NSAM assumed an obligation to the sellers of Townsend, including certain Townsend employees, under which they are entitled to approximately 84% of the value of the Townsend Funds at the Townsend Acquisition Date along with any income related to capital contributed prior to acquisition. NSAM is obligated to fund all future contributions and is entitled to any income on such contributions subsequent to the Townsend Acquisition Date. As of December 31, 2016, the carrying amount of such liability is $16.5 million and is recorded in other liabilities on the consolidated balance sheet. Certain distributions received are paid against the assumed obligation of $16.5 million to the sellers.

(3)	Subsequent to the Townsend Acquisition Date, NSAM has commitments to co-invest approximately 1% of the total unfunded commitment in the Townsend Funds.

(4)	NSAM’s portion of equity in earnings (losses) from the Townsend Funds is $0.7 million for the period from the Townsend Acquisition Date through December 31, 2016.

(1)	Decrease primarily due to the sale of the Island Interest in connection with the Mergers.

(1)	Includes Island and AHI for the year ended December 31, 2016.

(2)	Includes Island from acquisition date (January 9, 2015) through December 31, 2015 and AHI for the year ended December 31, 2015.

(3)	Includes AHI from acquisition date (December 5, 2014) through December 31, 2014.

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5.	Borrowings

6.	Related Party Arrangements

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7.	Fair Value

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.

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8.	Commitments and Contingencies

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9.	Compensation Expense

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(1)

Represents restricted stock included in common stock outstanding. Included 0.7 million of shares of common stock issued to certain members of Townsend’s management team who own the remaining interest in Townsend. The grant was based on NSAM’s stock price on such date and is related to future services to be rendered and subject to time-based vesting conditions through December 31, 2020. Such shares were not part of the acquisition cost.

(2)	Included 2.4 million shares of restricted stock that vested and 0.4 million shares of restricted stock that were retired to satisfy minimum statutory withholding requirements.

(3)

Includes previous time-based grants of 0.7 million to Mr. Jay Flaherty. In connection with entering into the Healthcare Strategic Partnership, NorthStar Realty granted Mr. Flaherty 0.5 million on January 22, 2014, adjusted to reflect NorthStar Realty’s reverse stock split and the NSAM Spin-Off, which vest on January 22, 2019, unless certain conditions are met. The RSUs are entitled to dividend equivalents prior to vesting and may be settled either in shares of common stock of NSAM or in cash at the option of NSAM. Mr. Flaherty is also entitled to incremental grants of NSAM’s common stock subject to certain conditions being met pursuant to a separate contractual arrangement entered into in connection with the Healthcare Strategic Partnership. Such incremental grants totaled approximately 0.2 million RSUs issued in connection with the completion of NorthStar Healthcare’s initial public offering and follow-on public offering and the services Mr. Flaherty provides to the Healthcare Strategic Partnership and vest on the third anniversary of the grant date, unless certain conditions are met.

(4)	December 31, 2015 included 1.1 million RSUs previously issued from NorthStar Realty, 0.8 million performance based RSUs granted to non-executive employees as part of the NSAM Spin-off and 0.7 million RSUs related to NorthStar Realty’s bonus plan for 2012 that were settled in January 2016 by NSAM issuing 362,006 shares of common stock, net of the minimum statutory tax withholding requirements.

(5)

December 31, 2015 included 3.7 million shares of performance common stock issued by NSAM to executives as part of the NSAM Spin-Off and 0.5 million shares of performance common stock issued as part of NSAM’s 2014 bonus plan to executives. During 2016, 1.0 million of shares of performance common stock were issued to executives as part of NSAM’s 2015 bonus plan. The grant price per share for the performance common stock issued as part of the NSAM bonus plan was $3.43 per share, which was determined using a risk free interest rate of 0.88%. Upon vesting, these shares of performance common stock automatically convert into shares of common stock and the executives will be entitled to receive the distributions that would have been paid with respect to a share of common stock (for each share of performance common stock that vests) on or after January 1, 2015.

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10.	Stockholders’ Equity

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(1)	Diluted EPS excludes the effect of equity-based awards issued that were not dilutive for the periods presented. These instruments could potentially impact diluted EPS in future periods, depending on changes in NSAM’s stock price and other factors.

(1)	On December 22, 2016, NSAM declared a special dividend for its common stockholders of $228 million or approximately $1.16 per share contingent upon consummation of the Mergers. The special dividend was paid on January 27, 2017 to common stockholders of record as of the close of business on January 3, 2017.

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11.	Non-controlling Interests

12.	Income Taxes

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(1)	Subsequent to the NSAM Spin-off, NSAM became subject to both domestic and international income tax, as such, there was no income tax benefit (expense) for the six months ended June 30, 2014.

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(1)	Subsequent to the NSAM Spin-off, NSAM became subject to both domestic and international income tax, as such, there was no income tax benefit (expense) for the six months ended June 30, 2014.

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13.	Quarterly Financial Information (Unaudited)

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

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

14.	Segment Reporting

•	NorthStar Listed Companies - Provided asset management and other services on a fee basis by managing the day-to-day activities of the NorthStar Listed Companies. NSAM began earning fees from NorthStar Realty on July 1, 2014 and NorthStar Europe on November 1, 2015.

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•	Retail Companies - Provided asset management and other services on a fee basis by managing the day-to-day activities of the Retail Companies.

•	Broker-dealer - Raised capital in the retail market through NorthStar Securities and earned dealer manager fees for selling equity in the Retail Companies.

•	Direct Investments - Invested in strategic partnerships and joint ventures with third-parties, either consolidated or unconsolidated, with expertise in commercial real estate or other sectors and markets, where NSAM benefited from the fee stream and potential incentive fee. NSAM began earning fees from Townsend on the Townsend Acquisition Date.

•	Corporate/Other - Included corporate level general and administrative expenses, as well as special servicing on a fee basis in connection with certain securitization transactions. In addition, such segment included opportunistic investments, such as the purchase of the NorthStar Listed Companies common stock.

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(1)	Direct general and administrative expenses incurred by the broker-dealer.

(2)	For the year ended December 31, 2016, NSAM recognized in equity in earnings (losses), operating income of $10.8 million, which excludes $14.1 million of equity-based compensation expense and depreciation and amortization expense and $0.5 million related to the Townsend Funds.

(3)	Includes general and administrative expenses including equity-based compensation of $59.0 million, of which $0.4 million related to Townsend grants, transaction costs of $47.4 million and unrealized loss of $4.5 million.

(4)	Primarily represents receivables from related parties. Subsequent to December 31, 2016, NSAM received $10.0 million from the Managed Companies.

(1)	Direct general and administrative expenses incurred by the broker-dealer.

(2)	For the year ended December 31, 2015, NSAM recognized in equity in losses, operating income of $14.5 million, which excludes $2.0 million of equity-based compensation expense and $10.8 million of depreciation and amortization expense.

(3)	Includes $3.8 million of unrealized loss.

(4)	Primarily represents receivables from related parties as of December 31, 2015. Subsequent to December 31, 2015, NSAM received $53.6 million of reimbursements from the Managed Companies.

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(1)	NSAM began earning fees on July 1, 2014 with NorthStar Realty and November 1, 2015 with NorthStar Europe (refer to Note 3).

(2)	Direct general and administrative expenses incurred by the broker-dealer.

(3)	Primarily represents receivables from related parties as of December 31, 2015.

15.	Subsequent Events

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*

The information that is required by Items 10, 11, 12, 13 and 14 (other than the information included in this Annual Report on Form 10-K) is incorporated herein by reference from the definitive proxy statement relating to the 2017 Annual Meeting of Stockholders, to be filed with the U.S. Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, no later than 120 days after the end of Colony NorthStar’s fiscal year ended December 31, 2016.

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*	Filed herewith.

†	Denotes a management contract or compensatory plan or arrangement.

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(1)	Because there were no fixed charges prior to 2015 the ratio is not applicable.

(2)	Because there was no preferred stock outstanding for the periods presented, the ratio is not applicable.

(1)	Registration Statement on Form S-8 (File No. 333-215509) of Colony NorthStar, Inc. pertaining to the 2014 Omnibus Stock Incentive Plan;

(2)	Registration Statement on Form S-3 ASR (File No. 333-215506) of Colony NorthStar, Inc. pertaining to the registration of its class A common stock, preferred stock, depositary shares, warrants, and rights;

(3)	Registration Statement on Form S-8 POS (File No. 333-197104-01) of Colony NorthStar, Inc. pertaining to the 2014 Omnibus Stock Incentive Plan; and

(4)	Registration Statement on Form S-8 POS (File No. 333-212739) of Colony NorthStar, Inc. pertaining to the NorthStar Realty Finance Corp. Third Amended and Restated 2004 Omnibus Stock Incentive Plan;

1.	I have reviewed this Annual Report on Form 10-K of Colony NorthStar, Inc.;

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.

1.	I have reviewed this Annual Report on Form 10-K of Colony NorthStar, Inc.;

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.

(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.

(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.

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Upfront consideration paid in a combination of 1.43 million shares of Class A Common Stock, 563,987 shares of newly created Class B Common Stock and 21.34 million of OP Units, measured based upon the closing price of the Company’s common stock of $26.19 on April 1, 2015, as well as $61.4 million of cash payments made for working capital, transaction and integration costs incurred on behalf of CCLLC and tax withholding on behalf of Mr. Saltzman. The aggregate upfront consideration was valued at $672.3 million.

•

Contingent consideration to be paid in a combination of up to approximately 1.02 million shares of Class A Common Stock, 90,991 shares of Class B Common Stock and approximately 3.47 million OP Units, subject to multi-year performance targets for achievement of certain funds from operations per share targets and capital-raising thresholds from the funds management businesses. If the minimum performance target for either of these metrics is not met or exceeded, a portion of the contingent consideration paid in respect of the other metric would not be paid out in full.

(1)	The estimated fair values and purchase price allocation at April 2, 2015 are subject to retrospective adjustments during the measurement period, which ended on April 1, 2016, based upon new information obtained about facts and circumstances that existed as of the date of acquisition.

(2)	Estimated fair value of contingent consideration is subject to remeasurement each reporting period, as discussed in Note 14.

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(1)	Includes a TDR loan that is current under its modified terms but placed on nonaccrual in 2016. The Company has not received any interest payments subsequent to the modification in 2016 as under the contractual terms of the loan, the Company, as the junior lien holder, would receive interest payments only upon full repayment of principal and interest outstanding to the senior lien holder.

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(1)	Dollar amounts of purchase price and allocation to assets acquired and liabilities assumed are translated based on foreign exchange rates as of respective dates of acquisition, where applicable. Purchase price excludes transaction costs.

(2)	Useful lives of real estate assets acquired in 2016 range from 15 to 44 years for buildings, 2 to 11 years for improvements, 33 years for below-market ground lease obligations and 1 to 11 years for other lease intangibles.

(3)

Real estate acquisitions in the fourth quarter of 2016 were determined to be asset acquisitions upon the Company's adoption, effective October 1, 2016, of the new guidance clarifying the definition of a business. The asset acquisitions in 2015 were net lease properties in which the Company entered into sale-leaseback transactions with the sellers. Transaction costs associated with asset acquisitions were capitalized, totaling approximately $0.7 million and $9.0 million for the years ended December 31, 2016 and 2015, respectively.

(4)

Prior to the fourth quarter of 2016, acquisitions of real estate assets with existing leases where the sellers are not the lessees were classified as business combinations. Upon adoption of the new guidance effective October 1, 2016, acquisitions of real estate assets with existing leases but where substantially all the fair value of gross assets acquired were concentrated in a single asset or a group of similar assets, qualified as asset acquisitions. Transaction costs associated with business combinations are expensed, totaling $6.5 million and $22.2 million for the years ended December 31, 2016 and 2015, respectively.

(5)	The estimated fair values and purchase price allocation are provisional and subject to retrospective adjustments during the measurement period, not to exceed one year, based upon new information obtained about facts and circumstances that existed as of the date of acquisition.

(6)	The real estate asset acquired was sold in August 2016.

(7)	In the third quarter of 2016, a measurement period adjustment was identified related to a lease contract, which resulted in a decrease to lease intangible asset of $0.6 million, with a corresponding increase of approximately $0.6 million to land and immaterial increase to buildings and improvements.

(8)	The Company acquired equity in a subsidiary of the seller, partially financed by a non-callable bond, and assumed the liabilities of the entity acquired of $2.1 million, as well as the entity's tax basis, resulting in a tax basis difference recorded as a deferred tax liability of $30.8 million upon acquisition.

(9)

Through June 30, 2016, certain measurement period adjustments were identified which impacted provisional accounting, related to below-market operating ground leases assumed in connection with the properties acquired as well as lease expirations. These adjustments cumulatively resulted in an increase to lease intangible assets and lease intangible liabilities of $15.4 million and $1.3 million, respectively, with a corresponding decrease to land of $21.4 million and an increase to buildings and improvements of $4.7 million. Included in the consolidated statement of operations for the year ended December 31, 2016 was a $0.4 million decrease in depreciation and amortization

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(1)

Included in income from equity method investments in 2016 was a gain of $45.0 million from redemption of the Company's preferred equity investment in an equity method investee. In June 2016, in conjunction with a refinancing transaction, the investee restructured the Company's investment by redeeming the original preferred equity and entering into a new preferred equity investment with the Company under amended terms, including a recourse guarantee and a fixed return. As a result of the restructuring, the Company relinquished its profit participation interest in the investee and deferred its ability to exercise certain rights.

•	Loans receivable, consisting of first mortgages and subordinated mortgages, were valued based on discounted cash flow projections of principal and interest expected to be collected, which includes consideration of the financial standing of the borrower or sponsor as well as operating results of the underlying collateral, with discount rates ranging from approximately 7% to 18.6%.

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•	Operating properties were valued based on market comparables or discounted cash flows using estimated net operating income of the respective properties and in some cases, considering a potential sales strategy, with discount rates between 9.75% to 14%.

•	Carrying value of loans receivables and real estate assets approximated their fair values for investments that were recently originated or acquired.

•	Debt obligations of the investment entities were consolidated at the outstanding principal as all debt consolidated was indexed to LIBOR and existing credit spreads approximated market rates.

•	The carrying values of cash, interest receivable, due from affiliates and accrued and other liabilities approximated fair values due to their short term nature.

•	Noncontrolling interests were primarily determined at their proportionate share of the net assets determined as described above.

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(1)

For intangible assets and intangible liabilities recognized in connection with real estate business combinations, purchase price allocations may be subject to adjustments during the measurement period, not to exceed one year from date of acquisition, based upon new information obtained about facts and circumstances that existed as of the date of acquisition. Carrying amounts at December 31, 2016 and 2015 reflect measurement period adjustments, where applicable (see Notes 3 and 6).

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(1)	Restricted cash includes borrower escrow accounts, tenant security deposits and escrow accounts for interest, property taxes and capital expenditure reserves required under secured financing agreements.

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(2)	Deferred financing costs relate to revolving credit arrangements and are shown net of accumulated amortization of $11.6 million and $6.8 million as of December 31, 2016 and 2015, respectively.

(1)	Depreciation of fixed assets was $4.7 million and $3.3 million for the years ended December 31, 2016 and 2015, respectively.

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(1)	All secured debt presented in the table are non-recourse unless otherwise stated as recourse debt.

(2)	Payment terms: P&I = Periodic payment of principal and interest; I/O = Periodic payment of interest only with principal at maturity (except for principal repayments to release collateral properties disposed)

(3)

These financings in connection with loan portfolio acquisitions require monthly interest payments and principal curtailment based upon the ratio of principal outstanding to collateral cost basis. The current principal curtailment requirement ranges from 65% to 80% of all excess cash flow from the underlying loan portfolios, after payment of certain loan servicing fees and monthly interest, but may increase or decrease in the future. The financing arrangements provide for either a single or multiple 1-year extension options to the initial term. Under certain financing agreements, an interest rate cap is required to be maintained at a maximum strike rate of 2.50% on 1-month LIBOR for at least 50% of outstanding principal.

(4)	Paid off in June 2016.

(5)

Interest rate is determined based on an adjusted 1-month LIBOR plus a spread of 2.5%, or the greater of (i) federal funds rate plus 3.0% and (ii) prime rate plus 1.0%. Initial term is subject to two 1-year extension options. Payment terms consist of periodic interest, with principal to be paid down to a minimum of $20.0 million after December 31, 2019 and remaining principal due at maturity. An interest rate cap is required to be maintained at a 3.0% strike on 1-month LIBOR.

(6)

A mortgage loan originated by the Company was restructured into a senior and junior note, with the senior note assumed by a third party lender. The Company accounted for the transfer of the senior note as a financing transaction. The senior note bears interest at 1-month LIBOR plus 3.5% or at a minimum of 4.0%, and is subject to two 1-year extension options on its initial term exercisable by the borrower.

(7)

The Company entered into two warehouse facilities with different commercial banks. The initial term of each facility is subject to a 1-year extension option. The facility with a maturity date of February 2017 has been extended to March 2017, is full recourse to OP and provided up to $150 million in financing. The facility maturing in April 2018 is partial recourse and provided up to $250 million in financing. In October 2016, commitments under these facilities were reduced to $25 million and $100 million, respectively. At December 31, 2016, the total outstanding principal on the facility maturing in April 2018 was related to loans held for sale.

(8)

Initial term is subject to two 1-year extensions. Payment terms are interest only through January 2017, followed by periodic principal and interest payments for the remaining term of the loan. An interest rate cap is required to be maintained at a maximum strike rate of 3.0% strike on 1-month LIBOR. Interest rate spread is presented as a weighted average across different tranches of the loan. At December 31, 2016, the total outstanding principal balance was related to the remaining hotel portfolio that was held for sale.

(9)	Initial term is subject to two 1-year extensions, during which principal and interest payments are required.

(10)	Initial term is subject to two 1-year extensions and an interest rate cap is required to be maintained at a 2.25% strike on 3-month GBP LIBOR.

(11)

Seller provided zero-interest financing on acquired portfolio of properties with imputed interest of 4.02%, requiring principal payments of €15,750,000, €35,437,500 and €27,562,000 in November 2016, November 2017 and November 2018, respectively. A discount was established at inception and is being accreted to debt principal as interest expense. As of December 31, 2016, the Company was in negotiations with the seller to restructure the financing arrangement and no principal payment was made in November 2016.

(12)	An interest rate cap is required to be maintained at a 1.50% strike on 3-month Euribor.

(13)

This debt was obtained in connection with the acquisition of the portfolio of light industrial real estate assets and operating platform in December 2014, has three 1-year extension options, with interest rate increasing to 1-month LIBOR plus 2.5% after the fourth anniversary date, and requires an interest rate cap to be maintained at a 3.0% strike on 1-month LIBOR. At December 31, 2016, $22.9 million of the outstanding principal balance was related to eight properties held for sale.

(14)	I/O through April 2021 and P&I thereafter.

(15)	I/O through October 2021 and P&I thereafter.

(16)	I/O through October 2024 and P&I thereafter.

(17)	I/O through November 2021 and P&I thereafter.

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(18)	I/O through November 2024 and P&I thereafter.

(19)	I/O through December 2021 and P&I thereafter.

(20)	An interest rate cap is required to be maintained at a maximum strike rate of 2.25% on 3-month GBP LIBOR.

(21)

Interest rate spread was 2.75% at inception and amended to a weighted average of 3.28% in January 2016. Initial term is subject to two 1-year extensions. Payment terms changes from interest only to periodic principal and interest if specific loan-to-value threshold is exceeded at any time effective August 2016. An interest rate cap is required to be maintained at a maximum strike rate of 2.25% on 3-month GBP LIBOR. Interest rate spread is presented as a weighted average of the facility amount across two tranches of the loan. At December 31, 2016, $24.4 million of outstanding principal balance was related to three properties held for sale.

(22)	An interest rate cap is required to be maintained at a maximum strike rate of 1.50% on 3-month Euribor.

(23)	An interest rate cap is required to be maintained at a maximum strike rate of 2.25% on 3-month GBP LIBOR.

(24)	In January 2017, the maturity date on the revolving line of credit was extended to April 2017.

(25)

The Company, through its indirect Cayman subsidiaries—Colony Mortgage Capital Series 2014-FL1 Ltd., Colony Mortgage Capital Series 2014-FL2 Ltd. and Colony Mortgage Capital Series 2015-FL3 Ltd.—securitized commercial mortgage loans originated within the Company’s Transitional CRE Lending Platform. Senior notes issued by the securitization trusts were generally sold to third parties and subordinated notes retained by the Company. These three securitizations are accounted for as secured financing with the underlying mortgage loans pledged as collateral. Principal repayments from underlying collateral loans must be applied to repay the notes until fully paid off, irrespective of the contractual maturities on the notes. Underlying collateral loans have initial terms of two to three years. Interest rate spreads on these CMBS debt are presented above on a weighted average basis.

(26)

The Company transferred acquired loans, secured by multifamily properties, into a securitization trust, Colony Multifamily Mortgage Trust 2014-1, with the most senior certificates issued by the trust sold to third parties and the Company retaining the remaining certificates. The securitization was accounted for as a secured financing with the underlying mortgage loans pledged as collateral. Although the certificates do not have a contractual maturity date, principal repayments from the underlying collateral loans must be applied to repay the debt until the balance is paid in full. The underlying collateral loans have initial remaining terms of 1 to 24 years.

(27)	In connection with the Combination, the Company assumed two promissory notes, with full recourse, bearing interest at a fixed weighted-average rate of 5.02%.

(1)	Amounts include a combined $3.6 million of discount on seller-provided zero-interest financing being accreted to debt principal.

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(1)	Carrying amounts include $1.4 million and $1.7 million of premium and are shown net of debt issuance costs of $11.1 million and $13.1 million at December 31, 2016 and 2015, respectively.

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•	forward contracts whereby the Company agrees to sell an amount of foreign currency for an agreed upon amount of U.S. dollars; and

•	foreign exchange collars (caps and floors) without upfront premium costs, which consist of a combination of currency options with single date expirations, whereby the Company gains protection against foreign currency weakening below a specified level and pays for that protection by giving up gains from foreign currency appreciation above a specified level.

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(1)

For the years ended December 31, 2016, 2015 and 2014, excluded from the calculation of diluted net income per share is the effect of adding back $27.3 million, $27.3 million and $23.3 million, respectively, of interest expense and 24,949,000, 24,694,700 and 20,784,600 weighted average dilutive common share equivalents, respectively, for the assumed conversion of the Convertible Notes, as their inclusion would be antidilutive. Also excluded from the calculation of diluted income per share for the years ended December 31, 2015 and 2014 is the effect of adding back $280,000 and $25,000, respectively, of interest expense and 187,800 and 14,700 weighted average dilutive common share equivalents, respectively, for the assumed repayment of the $10.0 million unsecured note issued to CCM (see Note 16) in shares of the Company's common stock as its inclusion would be antidilutive.

(2)

OP Units, subject to lock-up agreements, may be redeemed for registered or unregistered Class A common shares on a one-for-one basis. At December 31, 2016 and 2015, 20,661,600 and 21,749,000, respectively, of redeemable OP Units were outstanding. The redemption of these OP Units would not be dilutive and were not included in the computation of diluted earnings per share for the years ended December 31, 2016 and 2015. For the year ended December 31, 2014, weighted average dilutive shares include the effect of 4,900 shares of common stock issuable to the former Manager for incentive fees incurred for the period.

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▪	Base management fee of 1.5% per annum of stockholders' equity, as defined;

▪	Incentive fee each quarter, measured based on a core earning metric, as defined in the management agreement, payable in shares of the Company's common stock;

▪	Reimbursement of certain expenditures incurred by the Manager, including allocation of overhead costs; and

▪	Cost of employment for the Company's chief financial officer pursuant to a secondment agreement with an affiliate of the Manager.

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(1)	All outstanding stock grants made to the Manager prior to the Combination became employee awards effective April 2, 2015.

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(1)	Net operating losses in United Kingdom and Spain may be carried forward indefinitely.

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•	Light industrial real estate assets and operating platform;

•	Single-family residential rentals through equity method investments Colony Starwood Homes subsequent to the merger described below (formerly Colony American Homes, or "CAH") and in Colony American Finance, LLC (formerly a subsidiary of CAH);

•	Other real estate equity investments;

•	Loan originations and acquisitions; and

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•	Investment management of Company-sponsored funds and other investment vehicles.

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(1)	Income tax benefit (expense) related to specific investments within each segment has been allocated to the respective segments in 2014 (previously unallocated).

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(1)	Total income excludes cost reimbursement income from affiliates.

(2)	Long-lived assets exclude financial instruments, investment management contract and customer relationship intangible assets, as well as real estate held for sale.

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•	the market, economic and environmental conditions in the industrial real estate, single-family rental, and lodging sectors;

▪	our business and investment strategy, including the ability of Colony Starwood Homes, in which we have a significant investment, to execute its single-family home rental strategy;

•	our ability to generate revenue from the single-family homes in which we own an interest;

•	our ability to dispose of our real estate investments quickly;

•	the performance of the hotels in which we own an interest;

▪	market trends in our industry, interest rates, real estate values, the debt securities markets or the general economy or the demand for commercial real estate loans;

▪	our projected operating results;

▪	actions, initiatives and policies of the U.S. government and changes to U.S. government policies and the execution and impact of these actions, initiatives and policies;

▪	the state of the U.S. and global economy generally or in specific geographic regions;

▪	our ability to obtain and maintain financing arrangements, including securitizations;

▪	the amount and value of commercial mortgage loans requiring refinancing in future periods;

▪	the availability of attractive investment opportunities;

▪	the availability and cost of debt financing from traditional lenders;

▪	the volume of short-term loan extensions;

▪	the demand for new capital to replace maturing loans;

▪	our expected leverage;

▪	the general volatility of the securities markets in which we participate;

▪	changes in the value of our assets;

▪	interest rate mismatches between our target assets and any borrowings used to fund such assets;

▪	changes in interest rates and the market value of our target assets;

▪	changes in prepayment rates on our target assets;

▪	effects of hedging instruments on our target assets;

▪	rates of default or decreased recovery rates on our target assets;

▪	the impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters;

▪	our ability to maintain our qualification as a real estate investment trust ("REIT") for U.S. federal income tax purposes;

▪	our ability to maintain our exemption from registration as an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”);

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▪	the availability of opportunities to acquire commercial mortgage-related, real estate-related and other securities;

▪	the availability of qualified personnel;

▪	estimates relating to our ability to make distributions to our stockholders in the future; and

▪	our understanding of our competition.

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•	On June 2, 2016, entered into a definitive Merger Agreement with NSAM and NRF to combine in an all-stock merger to form Colony NorthStar. The Merger was approved by the shareholders of the Company, NSAM and NRF on December 20, 2016 and closed on January 10, 2017;

•	In January 2016, closed the merger between our equity method investee, CAH, and SWAY;

•	In February 2016, realized a gain of $49.3 million from the sale of a foreclosed property in Germany, of which $35.1 million was attributable to noncontrolling interests in investment entities;

•

On March 31, 2016, amended our credit facility which increased our borrowing capacity by $50 million to $850 million and at a lower interest rate of one-month LIBOR plus 2.25% per annum (from 2.75% per annum) for a four year term with two six-month extensions. Subsequently, on January 10, 2017, under Colony NorthStar, the borrowing capacity of our credit facility was further increased to $1 billion, and maturity date extended to January 11, 2021, with two six-month extension options;

•	In June 2016, realized a gain of $45.0 million from a redemption of our profit participation interest in an equity method investee by our joint venture partner, of which $7.5 million was attributable to noncontrolling interests in investment entities;

•	In September 2016, held a closing of our sponsored open-end industrial fund. Total committed capital of $312 million has been called as of December 31, 2016;

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•	Significant acquisitions in our other real estate equity segment in 2016 include a portfolio of 23 industrial properties in Spain and an office property in France for total purchase price of $112.6 million. Additionally, our light industrial portfolio in the U.S. acquired 30 additional buildings for an aggregate purchase price of $314.1 million; and

•	In 2016, $551.5 million of loans were originated or acquired, including additional advances under existing commitments, collateralized by commercial real estate and land development.

•	Light industrial real estate assets and associated operating platform, held through a co-investment partnership formed and managed by us acting as general partner, which represented a new segment upon acquisition in December 2014;

•	Single-family residential rentals through equity method investments in Colony Starwood Homes (SFR), subsequent to the merger of CAH and SWAY in January 2016, and Colony American Finance, LLC ("CAF," formerly a subsidiary of CAH);

•	Other real estate equity investments, which include real estate acquired in settlement of loans or from acquisition of operating properties, common equity in real estate or related companies, and certain preferred equity investments with profit participation meeting certain risk or return profiles;

•	Originations including senior and subordinated loans, commercial mortgage backed securities and preferred equity, as well as secondary loan acquisitions including performing and non-performing commercial real estate debt; and

•	Investment management of Company-sponsored funds and other investment vehicles, which formed a new reportable segment following the Combination on April 2, 2015.

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(1)	Geographic breakdown was based on net assets of the underlying investments held by the respective segments at December 31, 2016 and 2015.

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(1)	Results of the light industrial segment in 2014 is for the period from December 18, 2014 to December 31, 2014.

(2)	Results of the investment management segment in 2015 is for the period from April 2, 2015 to December 31, 2015.

(1)	Results for the period from acquisition date of December 18, 2014 through December 31, 2014 are not comparable to results for a full year in 2015 and 2016.

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(1)	Represents annualized fixed base rental amount using rental revenue computed on a straight-line basis in accordance with GAAP and excludes the impact of amortization of above- and below-market lease values.

•	Total portfolio leased percentage increased from 93% at December 31, 2015 to 96% at December 31, 2016, adding 2,875,000 rentable square feet, net of dispositions.

•	Leasing activity continued at a steady pace with 106 new leases totaling 2.7 million square feet and 107 lease renewals totaling approximately 4.4 million square feet. Tenant retention based on square footage was 68% for the year. At December 31, 2016, no more than 16% of existing leases are scheduled to expire in any single year over the next ten years.

•	Acquisitions and dispositions in 2016 are summarized below:

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(1)	Our same store portfolio comprises 245 properties, which includes the same properties that were owned in 2016 and 2015, and excludes properties that were acquired or sold at any time during the year in 2016 and 2015.

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•	The increase in same store property operating income resulted from a combination of increased occupancy, higher negotiated market rental rates on new and renewal lease transactions, and contractual rental rate increases within existing leases.

•	Lower same store property operating expenses can be attributed in part to cost savings from bundling of insurance policies in 2016.

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•	New loans originated or acquired and additional advances under existing commitments totaled $551.5 million, with $285.7 million of these new loans invested alongside the Company's sponsored global real estate credit fund, and of which $75.3 million are PCI loans.

•	Loans with total carrying value of $221.0 million were sold during the year, with immaterial losses for costs related to dispositions.

•

At December 31, 2016, we have unfunded lending commitments to borrowers of $314.9 million or $140.9 million net of amounts attributable to noncontrolling interests, with another $16.5 million commitment under development and construction lending arrangements accounted for as equity method investments. Additionally, pursuant to the restructuring of a delinquent borrower, we committed to fund an investment of $23.6 million in the borrower.

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•	In December 2016, we had made a deposit of $50.4 million for a bid on a nonperforming loan portfolio in Europe. In January 2017, our bid was successful and we have funded the remaining $452.6 million for the acquisition, with $366.7 million through third party financing.

(1)	Excludes non-PCI loans with carrying values of $29.4 million and $75.0 million that were held for sale at December 31, 2016 and 2015, respectively.

(2)	Excludes immaterial provision on interest receivable. For loans not wholly-owned by us, provision for loan losses of $21.2 million and $26.4 million in 2016 and 2015, respectively, were attributed to noncontrolling interests in investments entities.

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•	Management fee income as investment advisor, comprising (a) base management fees for the day-to-day operations and administration of our managed funds, generally around 1% per annum of the limited partners' net funded capital; and (b) asset management fees, which are one-time fees received upon closing of each investment made by our

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•	Investment income from (a) our nominal interests in our sponsored funds as general partner, or (b) our investment in third party asset managers in which we have a significant influence, both of which are accounted for as an equity method investment; and in the future,

•	Performance based incentive income as general partner, which is earned when the cumulative returns of our sponsored funds are in excess of preferred returns to limited partners.

•	The $2.0 billion decrease in AUM can be attributed primarily to disposition of a non-fee-bearing private equity investment and continued realization of investments from liquidating legacy funds.

•	FEEUM decreased $2.4 billion, driven by a change in fee basis for two 2006 vintage funds that are in liquidation, and realization of investments by liquidating legacy funds outpacing inflows of managed capital.

(1)

AUM refers to the assets for which the Company provides investment management services and includes assets for which we may or may not charge management fees and/or performance allocations. AUM is the sum of: (a) the gross fair value of investments held directly by the Company or managed by the Company on behalf of its private funds, co-investments, or other investment vehicles; (b) leverage, inclusive of debt held by investments and deferred purchases prices; (c) uncalled limited partner capital commitments that the Company is entitled to call from investors during the given commitment period at its discretion pursuant to the terms of their respective funds; and (d) with respect to majority-owned and substantially controlled investments the Company consolidates gross assets attributable to third-party investors. The Company’s calculations of AUM may differ from the calculations of other asset managers, and as a result, these measures may not be comparable to similar measures presented by other asset managers.

(2)

FEEUM refers to the equity for which the Company provides investment management services and from which it derives management fees and/or performance allocations. At December 31, 2016, FEEUM includes approximately $0.3 billion of uncalled limited partner capital commitments that does not bear fees until such capital is called at the Company’s discretion. Additionally, $0.3 billion pertains to FEEUM of our equity-method investment in a German-based asset management platform. The Company’s calculations of FEEUM may differ from the calculations of other asset managers, and as a result, these measures may not be comparable to similar measures presented by other asset managers.

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(1)

For the year ended December 31, 2016, adjustments attributable to noncontrolling interests in investment entities include $64.8 million related to real estate depreciation and amortization, $8.7 million related to impairment of real estate, offset by $50.5 million related to gain on sales of real estate. For the year ended December 31, 2015, adjustments attributable to noncontrolling interests in investment entities

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(1)	Represents annualized fixed base rental amount in effect as of December 31, 2016 using rental revenue computed on a straight-line basis in accordance with GAAP and excludes the impact of amortization of above- and below-market lease values. Rents denominated in foreign currencies have been translated at the applicable currency exchange rate at December 31, 2016.

(2)	Leases exclude renewal options and tenant ground leases.

(4)	Includes eight properties with one building each located in Chicago, totaling 1,186,647 rentable square feet and 90% leased in aggregate, that were held for sale at December 31, 2016.

(5)	Reflects year of initial acquisition for properties held through joint ventures that were consolidated on April 2, 2015.

(6)	These are net leased properties in which tenants are responsible for all operating expenses associated with the properties.

(7)	Excludes one building with approximately 218,000 square feet that is subject to development.

•	acquisitions of our target assets and related ongoing commitments;

•	our general partner commitments to our future funds and co-investment commitments to other investment vehicles;

•	our operations, including compensation, administrative and overhead costs;

•	distributions to our stockholders;

•	principal and interest payments on our borrowings, including interest obligation on our convertible debt; and

•	income tax liabilities of taxable REIT subsidiaries and of the Company subject to limitations as a REIT.

•	cash on hand;

•	our credit facilities;

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•	fees received from our investment management business;

•	cash flow generated from our investments, both from operations and return of capital;

•	proceeds from full or partial realization of investments;

•	investment-level financing;

•	proceeds from public or private equity and debt offerings; and

•	capital commitments from limited partners of sponsored funds.

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(1)	Future interest payments on our line of credit were estimated based on the applicable index at December 31, 2016 and unused commitment fee of 0.35% per annum, assuming principal is repaid on maturity date of March 31, 2020. See Note 11 to the Consolidated Financial Statements.

(2)	Amounts reflect future principal and interest payments through contractual maturity dates of the convertible senior notes. See Note 11 to the Consolidated Financial Statements.

(3)

Amounts include minimum principal or principal curtailment based upon cash flows from collateral loans after payment of certain loan servicing fees and monthly interest, as well as fixed or floating rate interest obligations and unused commitment fee on credit facilities, through initial maturity date of the respective secured financing. The timing of future principal payments was in accordance with scheduled principal payments or otherwise estimated based on expected future cash flows of underlying collateral loans such as for CMBS debt. CMBS debt obligations are estimated to be repaid earlier than the contractual maturity only if proceeds from the underlying loans are repaid by the borrowers. Interest on floating rate debt was determined based on the applicable index at December 31, 2016. See Note 11 to the Consolidated Financial Statements.

(4)

We assumed noncancellable operating ground leases as lessee or sublessee in connection with certain properties acquired. The amounts represent minimum future base rent commitments through initial expiration dates of the respective leases, excluding any contingent rent payments, as well as exclude ground leases which require only nominal annual payments and those associated with real estate held for sale. Rents paid under ground leases are recoverable from tenants.

(5)	We lease office space under noncancellable operating leases. The amounts reflect only minimum lease payments and do not project any potential escalation or other lease-related payments.

(6)

Contingent consideration in connection with the Combination is payable to certain senior executives of the Company in shares of Class A and Class B common stock, as well as OP Units, subject to achievement of multi-year performance targets. Although the earnout period expires on June 30, 2018, portions of contingent consideration related to capital raising targets may become due upon achieving those targets. The amount presented reflects the estimated fair value of the contingent consideration at December 31, 2016.

(7)

Our investment commitments are in connection with our investments in unconsolidated joint ventures, consolidated investments and general partner commitments to sponsored funds. The amount presented reflects only our share of investment commitments, excluding commitments attributable to noncontrolling interests of consolidated investments. $62.9 million of the commitments represent general partner commitments to our sponsored funds. The majority of the remaining commitments are lending commitments in which the borrower may submit a request for funding based on the achievement of certain criteria, which must be approved by us as lender, such as

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(1)

Represents the consolidated assets and liabilities of NorthStar Realty Finance Limited Partnership (the “Operating Partnership”). The Operating Partnership is a consolidated variable interest entity (“VIE”), of which the Company is the sole general partner and owns approximately 99%. As of December 31, 2016, the assets and liabilities of the Operating Partnership include $9.0 billion and $6.8 billion of assets and liabilities, respectively, of certain VIEs that are consolidated by the Operating Partnership. Refer to Note 17 for further disclosure.

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(1)	The consolidated financial statements for the year ended December 31, 2016 represent the Company’s results of operations following the NRE Spin-off on October 31, 2015. The years ended December 31, 2015 and 2014 include a carve-out of revenues and expenses attributable to NorthStar Europe recorded in discontinued operations.

(2)	The years ended December 31, 2016, 2015 and 2014 includes $24.2 million, $27.7 million and $24.9 million of equity-based compensation expense, respectively. Refer to Note 11 for further disclosure.

(3)	The six months ended June 30, 2014 includes $13.7 million of equity-based compensation recorded in discontinued operations.

(4)	The years ended December 31, 2015 and 2014 is adjusted for the one-for-two reverse stock split completed on November 1, 2015. Refer to Note 12. “Stockholders’ Equity” for additional disclosure.

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1.	Business and Organization

2.	Summary of Significant Accounting Policies

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(1)	Primarily represents capital improvements, furniture, fixtures and equipment, tenant improvements, lease renewal and replacement reserves related to operating real estate.

(2)	Primarily represents insurance, real estate tax, repair and maintenance, tenant security deposits and other escrows related to operating real estate.

(3)	Represents proceeds from repayments and/or sales pending distribution in consolidated N-Star CDOs.

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(1)	Excludes rental income from healthcare and hotel properties permitted by the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”) and manufactured housing communities, multifamily and independent living properties that are subject to short-term leases.

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(2)	Primarily represents the value associated with certificates of need associated with certain healthcare properties, franchise agreements associated with certain hotel properties and other intangible assets.

(1)	Identified intangibles will be amortized through periods ending December 2026.

(2)	Excludes $14.5 million of certificates of need associated with certain healthcare properties that are not amortized.

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3.	Operating Real Estate

(1)	As of December 31, 2016 and 2015, operating real estate was subject to $6.4 billion and $7.3 billion of mortgage and other notes payable, respectively.

(1)	Represents operating real estate and intangible assets, net of accumulated depreciation and amortization of $182.9 million.

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(2)

In May 2016, the Company entered into an agreement to sell its manufactured housing portfolio for $2.0 billion with $1.3 billion of related mortgage financing expected to be assumed as part of the transaction. The Company expects to receive $614.8 million of net proceeds, including a $50.0 million deposit made by the buyer. The Company expects the transaction to close in the first quarter 2017. There is no assurance the transaction will close on the terms anticipated, if at all.

4.	Real Estate Debt Investments

(1)

Includes three loans that pursuant to certain terms and conditions which may or may not be satisfied, where the Company has an option to purchase the properties securing these loans. One of these three loans is a Sterling denominated loan of £66.7 million, of which £22.0 million is available to be funded as of December 31, 2016. This loan has various maturity dates depending upon the timing of advances; however, will be no later than March 2022.

(2)	Assuming that all loans that have future fundings meet the terms to qualify for such funding, the Company’s cash requirement on future fundings would be $11.1 million.

(3)	Based on principal amount.

(4)	$25.6 million principal amount (excluding CRE debt in N-Star CDOs) has a weighted average LIBOR floor of 0.50%.

(5)	Based on initial maturity and for floating-rate debt, calculated using one-month LIBOR as of December 31, 2016 and for one CRE debt investment with a LIBOR floor greater than LIBOR, using such floor.

(6)	All CRE debt investments are unleveraged.

(7)	In January 2017, the Company sold the loan for net proceeds of $34.0 million.

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(1)	Includes three loans that pursuant to certain terms and conditions which may or may not be satisfied, where the Company has an option to purchase the properties securing these loans. One is a Sterling denominated loan of £66.7 million. This loan has various maturity dates depending upon the timing of advances; however, will be no later than March 2022.

(2)	Based on principal amount.

(3)	$63.9 million principal amount (excluding CRE debt in N-Star CDOs) has a weighted average LIBOR floor of 0.95%. Includes one first mortgage loan with a principal amount of $5.8 million with a spread over the prime rate.

(4)	Based on initial maturity and for floating-rate debt, calculated using one-month LIBOR as of December 31, 2015 and for CRE debt with a LIBOR floor, using such floor.

(5)	In the first quarter 2016, the Company sold these seven loans and used $46.9 million of proceeds to pay down the Company’s loan facility, resulting in net proceeds of $178.2 million.

(1)	Assumes that all debt with extension options will qualify for extension at such maturity according to the conditions stipulated in the governing documents.

(2)	Excludes three non-performing loans (“NPLs”) with an aggregate principal amount of $28.0 million as of December 31, 2016 due to maturity defaults, of which $21.3 million relates to a loan in an N-Star CDO.

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(1)	Excludes $0.3 million, $0.8 million and $1.0 million provision for loan losses for the years ended December 31, 2016, 2015 and 2014, respectively, relating to manufactured housing notes receivables recorded in assets of properties held for sale.

(2)	Excludes $3.5 million and $1.2 million of provision for loan losses primarily relating to exit fees on real estate debt, held for sale for the years ended December 31, 2016 and 2015, respectively.

(1)	Includes one first mortgage loan acquired with deteriorated credit quality with a carrying value of $3.0 million and $3.1 million as of December 31, 2016 and 2015, respectively.

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(2)	Includes one mezzanine loan with a $3.7 million carrying value which was extended in January 2017 and one mezzanine loan with a 100% loan loss reserve with no carrying value as of December 31, 2016 and 2015. The loan with no carrying value is not considered a NPL as debt service is currently being received.

(3)	Includes one first mortgage loan with a $2.4 million carrying value in an N-Star CDO.

(1)	Principal amount differs from carrying value primarily due to unamortized origination fees and costs, unamortized premium or discount and loan loss reserves included in the carrying value of the investment. Excludes one first mortgage loan acquired with deteriorated credit quality with a carrying value of $3.0 million and $3.1 million as of December 31, 2016 and 2015, respectively.

(2)	Excludes one loan with a carrying value of $34.0 million which was sold in the first quarter 2017. Such loan is considered a TDR as of December 31, 2016.

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5.	Investments in Private Equity Funds

(1)	As of December 31, 2016, the Company’s expected future contributions to funds is $1 million with $6 million of remaining deferred purchase price. The actual amount of future contributions underlying the fund interests that may be called and funded by the Company could vary materially from the Company’s expectations.

(2)	As of December 31, 2016, the Company is invested in 126 funds. The total number of funds includes 12 funds held across multiple PE Investments.

(3)	As of December 31, 2016, cash flow is expected through June 30, 2022, with a weighted average expected remaining life of 1.1 years.

(4)

In February 2016, the Company sold substantially all of its interest in PE Investment II for proceeds of $184.1 million. In September 2016, the Company sold a portfolio of PE Investments for a gross sales price of $317.6 million with $44.7 million of deferred purchase price assumed as part of the transaction, including $5.6 million of deferred purchase price which was the obligation of an unconsolidated joint venture. The Company received $238.6 million of net proceeds. Refer to Note 10. Related Party Arrangements for further disclosure.

(5)	Recorded in equity in earnings in the consolidated statements of operations.

(6)

The Company holds a 36% ownership interest in PE Investment I with a subsidiary of NorthStar Real Estate Income Trust, Inc. (“NorthStar Income”) (together with the Company, the “NorthStar Entities”) and a third party. PE Investment I provides for all cash distributions on a priority basis to the NorthStar Entities until the NorthStar Entities receive a 1.5x multiple on all of their invested capital. The Company guaranteed all of its funding obligations that may be due and owed under PE Investment I agreements directly to PE Investment I entities. The Company and NorthStar Income each agreed to indemnify the other proportionately for any losses that may arise in connection with the funding and other obligations as set forth in the governing documents in the case of a joint default by the Company and NorthStar Income. The Company and NorthStar Income further agreed to indemnify each other for all of the losses that may arise as a result of a default that is solely caused by the Company or NorthStar Income, as the case may be.

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6.	Investments in Unconsolidated Ventures

(1)	In December 2013, the Company entered into a strategic transaction with RXR Realty, a leading real estate owner, developer and investment management company focused on high-quality real estate in the New York Tri-State area.

(2)

Represents the Company’s investment in NSAM retail companies: NorthStar Income, NorthStar Healthcare Income, Inc. (“NorthStar Healthcare”), NorthStar Real Estate Income II, Inc. (“NorthStar Income II”), NorthStar Corporate Income Fund (“NorthStar Corporate Fund”) and NorthStar/RXR New York Metro Real Estate, Inc. (“NorthStar/RXR New York Metro”). Affiliates of NSAM manage NorthStar Income, NorthStar Healthcare, NorthStar Income II, NorthStar Corporate Fund, NorthStar/RXR New York Metro, NorthStar Real Estate Capital Income Fund (“NorthStar Capital Fund”) which, together with any new retail company sponsored by NSAM, are collectively referred to as the “NSAM Retail Companies”. The Company’s ownership interest in NorthStar Income, NorthStar Income II and NorthStar Healthcare as of December 31, 2016 is 0.5%, 0.6% and 0.3%, respectively.

(3)	In June 2013, in connection with the restructuring of an existing mezzanine loan, the Company acquired a 9.99% equity interest for $8.5 million in a joint venture that owns two office buildings in Chicago.

(4)

In October 2007, the Company entered into a joint venture with Whitehall Street Global Real Estate Limited Partnership 2007 (“Whitehall”) to form LandCap Partners and LandCap LoanCo. (collectively referred to as “LandCap”). The joint venture is managed by a third-party management group. The Company and Whitehall agreed to no longer provide additional new investment capital in the LandCap joint venture.

(5)	In September 2014, the Company entered into an investment with SteelWave, a real estate investment manager, owner and operator with a portfolio of commercial assets focused in key markets in the western United States.

(6)	Aerium is a pan-European real estate investment manager specializing in commercial real estate properties. The Company recorded an unrealized loss on its interest in Aerium of $8.6 million for the year ended December 31, 2016.

(7)

CS Federal Drive, LLC (“CS/Federal”) owns three adjacent class A office/flex buildings in Colorado. The properties were acquired for $54.3 million and were financed with two separate non-recourse mortgages totaling $38.0 million and the remainder in cash. The mortgages matured on February 11, 2016. In January 2017, a mortgage of $24 million was repaid on one of the buildings. The joint venture is currently in negotiations with the lender on the remaining mortgage.

(8)

In July 2013, the Company through a joint venture with a private investor, acquired a multifamily property with 498 units, located in Philadelphia, Pennsylvania for an aggregate purchase price of $41.0 million, including all costs, escrows and reserves. The property was financed with a non-recourse mortgage note of $29.5 million and the remainder in cash. In April 2015, the property obtained additional non-recourse financing of $7.0 million. Both financings mature on July 1, 2023 and have a weighted average fixed interest rate of 3.87%. The joint venture is exploring the sale of the property.

(9)	The Company owns all of the common stock of NorthStar Realty Finance Trusts I through VIII (collectively, the “Trusts”). The Trusts were formed to issue trust preferred securities. Refer to Note 17 for further disclosure.

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(1)

NorthStar/RXR New York Metro’s registration statement filed with the SEC seeks to offer up to $2 billion in a public offering of multiple classes of common stock. In December 2015, the Company and RXR Realty satisfied NorthStar/RXR New York Metro’s minimum offering amount as a result of the purchase of 0.2 million shares of its common stock for an aggregate $2.0 million, of which $1.5 million was invested. The Company is responsible for 75% of the distribution support commitment to NorthStar/RXR New York Metro, with RXR Realty responsible for the remaining 25%. NSAM began raising capital for NorthStar/RXR New York Metro in the second quarter 2016.

(2)

NorthStar Corporate Fund’s registration statement was declared effective by the SEC in February 2016. OZ Institutional Credit Management LP was initially engaged to serve as its sub-advisor to manage investments pursuant to a sub-advisory agreement, which has been subsequently terminated. NorthStar Corporate Fund is evaluating engaging a new sub-advisor. There is no assurance that Colony NorthStar will be able to engage a new sub-adviser on similar terms, if at all.

(3)

NorthStar Capital Fund’s registration statement on Form N-2 filed with the SEC seeks to raise up to $3 billion in a public offering of common stock. In March 2016, the Company invested $2.0 million of seed capital into NorthStar Capital Fund. In May 2016, NorthStar Capital Fund was declared effective by the SEC and expects to begin raising capital from third parties in the first half 2017. The Company currently consolidates the company based on its majority voting interest in the entity.

(1)	Includes summarized financial information for PE Investments for the nine months ended September 30, 2016, which is the most recent financial information available from the underlying funds.

(2)	Includes net investment income and unrealized and realized gains and losses for PE Investments.

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7.	Real Estate Securities, Available for Sale

(1)	Excludes $141.0 million principal amount of N-Star CDO bonds payable that are eliminated in consolidation and includes $2.0 million of N-Star CDO bonds owned in N-Star CDO IX.

(2)	All securities are unleveraged.

(3)	Based on amortized cost for N-Star CDO equity and principal amount for remaining securities.

(4)	Based on expected maturity and for floating-rate securities, calculated using the applicable LIBOR as of December 31, 2016.

(5)	The fair value option was elected for these securities (refer to Note 14).

(6)	The fair value option was elected for $16.4 million carrying value of these securities (refer to Note 14).

(7)	Investments in the same securitization tranche held in separate CDO financing transactions are reported as separate investments.

(8)	As of December 31, 2016, the weighted average remaining life of the N-Star CDO bonds and N-Star CDO equity is 1.1 years and 2.2 years, respectively.

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(1)	Excludes $142.9 million principal amount of N-Star CDO bonds payable that are eliminated in consolidation.

(2)	All securities are unleveraged.

(3)	Based on amortized cost for N-Star CDO equity and principal amount for remaining securities.

(4)	Based on expected maturity and for floating-rate securities, calculated using the applicable LIBOR as of December 31, 2015.

(5)	The fair value option was elected for these securities (refer to Note 14).

(6)	The fair value option was elected for $48.7 million carrying value of these securities (refer to Note 14).

(7)	Investments in the same securitization tranche held in separate CDO financing transactions are reported as separate investments.

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8.	Borrowings

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(1)	Refer to Note 15 for further disclosure regarding derivative instruments which are used to manage interest rate exposure.

(2)	For borrowings with a contractual interest rate based on LIBOR, represents three-month LIBOR for the SLC and Wakefield Portfolio and one-month LIBOR for the other borrowings.

(3)	Carrying value represents fair value with respect to CDO bonds payable and junior subordinated notes due to the election of the fair value option (refer to Note 14) and amortized cost, net of deferred financing costs for the other borrowings.

(4)	Mortgage and other notes payable are subject to customary non-recourse carveouts.

(5)	An aggregate principal amount of $5.6 billion is comprised of 20 senior mortgage notes totaling $4.4 billion and 16 mezzanine mortgage notes totaling $1.2 billion.

(6)	Represents final maturity taking into consideration the Company’s extension options.

(7)	Contractual interest rate represents a weighted average.

(8)	In December 2016, the Company sold a subset of its portfolio of medical office buildings within the Griffin-American Portfolio and the Company paid off $658.7 million of such borrowings, a portion of which represents a pay down above the assets aggregate allocated borrowing amount.

(9)	Represents borrowings in unconsolidated N-Star CDOs.

(10)	In connection with the Mergers, the Corporate Term Borrowing was repaid.

(11)	As of December 31, 2016, the borrower was not in compliance with certain operating covenants a result of the tenant’s failure to satisfy the portfolio coverage covenant under the master lease.  The Company expects to receive a waiver from the lenders for such default.

(12)	As of December 31, 2016, as a result of a debt yield test, the Company is currently funding net operating cash of the hotel portfolio collateral related to this borrowing into a lender controlled escrow account to fund debt service.  The Company may need to fund additional amounts until the test is satisfied.  The Company does not believe the impact will be material.

(13)	In November 2016, the Company terminated the Loan Facility.

(14)	Refer to Note 3 for further disclosure.

(15)	Refer to Note 10 for further disclosure.

(16)	In October 2015, the mortgage matured and in 2016, the Company conveyed all properties back to the lender. The Company recorded a realized gain of $41.1 million upon extinguishment related to such borrowing.

(17)	Represents a secured borrowing financing transaction in connection with a first mortgage loan recorded in real estate debt investments, net that was transferred in 2013 to a securitization entered into by NorthStar Income.

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(1)	The 7.25% Notes and 5.375% Notes have a final maturity date of June 15, 2027 and June 15, 2033, respectively. The above table reflects the holders’ repurchase rights which may require the Company to repurchase the 7.25% Notes and 5.375% Notes on June 15, 2017 and June 15, 2023, respectively.

(2)	Borrowings of properties held for sale are expected to be paid off or assumed by buyers of the assets being sold.

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(1)	The remaining amortization period for the 5.375% Notes is 6.5 years.

(1)	The effective interest rate of the 5.375% Notes was 7.1% for the year ended December 31, 2016.

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9.	Spin-offs

(1)	Represents ten months of total revenues and expenses of NorthStar Europe included in discontinued operations prior to the NRE Spin-off on October 31, 2015.

(2)	Represents six months of total revenues and expenses of NSAM included in discontinued operations prior to the NSAM Spin-off on June 30, 2014.

(3)

Includes asset management and other fee income from NSAM Retail Companies earned prior to the NSAM Spin-off and selling commissions and dealer manager fees earned by selling equity in the NSAM Retail Companies through NorthStar Securities. Additionally, revenues exclude the effect of any fees that NSAM began earning in connection with the management agreement with the Company upon completion of the NSAM Spin-off.

(4)	Includes an allocation of indirect expenses of the Company to NSAM related to managing the NSAM Retail Companies and owning NorthStar Securities, including salaries, equity-based compensation and other general and administrative expenses (primarily occupancy and other costs) based on an estimate had the asset management business been run as an independent entity.

(5)	Includes $109.5 million and $27.5 million of transaction costs related to acquisitions for the years ended December 31, 2015 and 2014, respectively.

(6)	Includes $42.4 million and $1.4 million of depreciation and amortization for the years ended December 31, 2015 and 2014, respectively.

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10.	Related Party Arrangements

•	the product of: (a) 15% 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 $0.68 per share and up to $0.78 per share, after giving effect to the Reverse Split and the NRE Spin-off (“15% Hurdle”); plus

•	the product of: (a) 25% 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 $0.78 per share, after giving effect to the Reverse Split and the NRE Spin-off (“25% Hurdle”);

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

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•

In February 2016, the Company sold substantially all of its 70% interest in PE Investment II to the existing owners of the remaining 30% interest, one a third party which purchased approximately 80% of the interest sold and the other, NorthStar Income which purchased the other approximate 20% of the interest sold. NorthStar Income paid $37.3 million for its respective interest. As part of the transaction, both buyers assumed the deferred purchase price obligation, on a pro rata basis, of the PE Investment II joint venture.

•	In February 2016, the Company sold a 49% interest in one loan with a total principal amount of $40.3 million to a third party, at par, with the remaining 51% interest sold to NorthStar Income II, also at par.

•	In February 2016, the Company sold one CRE security with a carrying value of $12.5 million to NorthStar Income II.

•	In March 2016, the Company sold its 60% interest in the Senior Housing Portfolio to NorthStar Healthcare, which owned the remaining 40% interest, for $534.5 million. NorthStar Healthcare assumed the Company’s portion of the $648.2 million of related mortgage financing and the Company received approximately $149.4 million of proceeds, net of sales costs.

•	In September 2016, the Company sold a portfolio of PE Investments to NorthStar Income II for a gross sales price of $317.6 million with $44.7 million of deferred purchase price assumed as part of the transaction, including $5.6 million of deferred purchase price which was the obligation of an unconsolidated joint venture. The Company received $238.6 million of net proceeds.

•	In connection with the redemption of the Company’s interest in the Industrial Portfolio, the third party equity obtained a preferred loan of $98.4 million from NorthStar Income II to finance the transaction.

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11.	Compensation Expense

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(1)	Represents restricted stock included in common stock outstanding.

(2)

Represents employee and non-employee grants subject to time-based vesting conditions. Included previous time-based grants of 0.25 million to Mr. Jay Flaherty. In connection with entering into the Healthcare Strategic Partnership, NorthStar Realty granted Mr. Flaherty 0.25 million on January 22, 2014, adjusted to reflect NorthStar Realty’s reverse stock split and the NSAM Spin-Off, which vest on January 22, 2019, unless certain conditions are met. The RSUs are entitled to dividend equivalents prior to vesting and may be settled either in shares of common stock of NSAM or in cash at the option of NSAM.

(3)

December 31, 2015 represents 0.9 million performance based RSUs granted to non-executive employees as part of NorthStar Realty and NSAM bonus plans. The grant date share price ranged from $9.86 to $21.57, which was determined using a risk free interest rate that ranged from .44% to 1.00%. 0.3 million RSUs related to NorthStar Realty’s bonus plan for 2012 were settled by the Company by issuing 158,191shares of common stock, net of the minimum statutory tax withholding requirements, in January 2016. 0.25 million RSUs related to NorthStar Realty’s bonus plan for 2013 were settled by the Company by issuing 113,924 shares of common stock, net of the minimum statutory tax withholding requirements, in January 2017. During 2016, 0.6 million performance based RSUs were issued to executives as part of NSAM’s 2015 bonus plan. The grant price per share for the performance-based RSUs was $1.70, which was determined using a risk free interest rate of 0.88%.

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12.	Stockholders’ Equity

(1)	250 million shares have been authorized and all shares have a $0.01 par value. All preferred shares have a $25 per share liquidation preference.

(2)	The Series C, D and E shares are currently not callable.

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(1)	The EPS calculation takes into account LTIP Units, 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 exchangeable senior notes, restricted stock and RSUs outstanding that were not dilutive as of December 31, 2016. 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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(3)	The years ended December 31, 2015 and 2014 is adjusted for the Reverse Split effected on November 1, 2015.

13.	Non-controlling Interests

14.	Fair Value

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.

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(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.

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(1)	Includes a CRE debt investment made in connection with an investment in unconsolidated venture, for which the fair value option was elected.

(2)	Represents an interest rate swap in the corporate segment and includes a credit valuation adjustment.

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(1)	Includes CRE debt investments made in connection with certain investments in unconsolidated ventures, for which the fair value option was elected.

(2)	Represents an interest rate swap in the corporate segment and includes a credit valuation adjustment.

(1)	Includes CRE debt investments made in connection with an investment in unconsolidated venture, for which the fair value option was elected.

(2)	Transfers between Level 2 and Level 3 represent a fair value measurement from a third-party pricing service or broker quotations that have become more or less observable during the period. Transfers are assumed to occur at the beginning of the year.

(3)	Excludes one derivative instrument, which for the year ended December 31, 2016, an unrealized loss of $27.3 million was recorded. Such amount includes an unrealized loss of $17.2 million related to a credit valuation adjustment.

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(1)	Includes CRE debt investments made in connection with certain investments in unconsolidated ventures, for which the fair value option was elected.

(2)	Transfers between Level 2 and Level 3 represent a fair value measurement from a third-party pricing service or broker quotations that have become more or less observable during the period. Transfers are assumed to occur at the beginning of the year.

(3)	Excludes one derivative instrument, which for the year ended December 31, 2015, an unrealized loss of $95.9 million was recorded. Such amount is net of an unrealized gain of $23.1 million related to a credit valuation adjustment.

(1)	Includes CRE debt investments made in connection with an investment in unconsolidated venture, for which the fair value option was elected.

(2)	Includes timing and amount of expected future cash flow.

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(1)	Includes CRE debt investments made in connection with certain investments in unconsolidated ventures, for which the fair value option was elected.

(2)	December 31, 2016 excludes 24 CRE securities including $88.2 million of N-Star CDO bonds and $5.1 million of CRE securities, for which the fair value option was not elected. December 31, 2015 excludes 28 CRE securities including $216.7 million of N-Star CDO bonds and $6.9 million of CRE securities, for which the fair value option was not elected.

(1)	Represents financial assets and liabilities for which the fair value option was elected.

(2)	Represents foreign currency remeasurement on investments, cash and deposits primarily denominated in British Pounds.

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

(2)	Refer to “Determination of Fair Value” above for disclosures of methodologies used to determine fair value.

(3)	Derivative assets and liabilities exclude timing swaps with an aggregate notional amount of $12.6 million and $28.0 million as of December 31, 2016 and 2015, respectively.

(4)	The fair value option has been elected for these liabilities.

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15.	Risk Management and Derivative Activities

(1)	Excludes timing swaps with a notional amount of $12.6 million and $28.0 million as of December 31, 2016 and 2015, respectively.

(2)	Interest rate swaps in consolidated N-Star CDOs are liabilities and are only subject to the credit risks of the respective CDO transaction. As the interest rate swaps are senior to all the liabilities of the respective CDO and the fair value of each of the CDO’s investments exceeded the fair value of the CDO’s derivative liabilities, a credit valuation adjustment was not recorded.

(3)	Includes a $2.0 billion notional forward-starting interest rate swap with a maturity date of December 3, 2029, which requires a mandatory cash redemption by December 3, 2019 at fair value.

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(1)	Represents 48 ground leases of which 18 leases ground rent are paid directly by the tenants/operators.

17.	Variable Interest Entities

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(1)	The Company’s maximum exposure to loss as of December 31, 2016 would not exceed the carrying value of its investment.

(2)	Excludes a secured borrowing with a carrying value of $52.2 million related to a real estate debt investment.

18.	Segment Reporting

•

Real Estate - The real estate business pursues various types of investments in commercial real estate located throughout the United States that includes healthcare, hotel, net lease and multi-tenant office properties. In addition, it includes certain healthcare properties located outside of the United States and PE Investments diversified by property type and geography. In addition, the Company is also invested in manufactured housing communities and multifamily properties.

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•

Healthcare - The healthcare properties are comprised of a diverse portfolio of medical office buildings, senior housing, skilled nursing and other healthcare properties. The majority of the healthcare properties are medical office buildings and properties structured under a net lease to healthcare operators. In addition, the Company owns senior operating facilities, which include healthcare properties that operate through management agreements with independent third-party operators, predominantly through structures permitted by RIDEA that permit the Company, through a TRS, to have direct exposure to resident fee income and incur customary related operating expenses. In March 2016, the Company sold its 60% interest in a $899 million Senior Housing Portfolio for $534.5 million. The buyer assumed the Company’s portion of the $648.2 million of related mortgage financing and the Company received approximately $149.4 million of proceeds, net of sales costs. In December 2016, the Company sold a subset of its portfolio of medical office buildings within the Griffin-American Portfolio for $767.8 million with $658.7 million of related mortgage financing paid off as part of the transaction. The Company received $78.0 million of net proceeds. In January 2017, the Company sold an interest in its healthcare portfolio for net proceeds of approximately $340 million. Refer to Note 20. Subsequent Events for further disclosure.

•	Hotel - The hotel portfolio is a geographically diverse portfolio primarily comprised of extended stay hotels and premium branded select service hotels primarily located in major metropolitan markets with the majority affiliated with top hotel brands.

•

Manufactured Housing - The manufactured housing portfolio consists of communities that lease pad rental sites for placement of factory built homes located throughout the United States. In addition, the portfolio includes manufactured homes and receivables related to the financing of homes sold to residents. In May 2016, the Company entered into an agreement to sell its manufactured housing portfolio for $2.0 billion with $1.3 billion of related mortgage financing expected to be assumed as part of the transaction. The Company expects to receive $614.8 million of net proceeds. The Company expects the transaction to close in the first quarter 2017. There is no assurance the transaction will close on the terms anticipated, if at all.

•	Net Lease - The net lease properties are primarily industrial, office and retail properties typically under net leases to corporate tenants. In September 2016, the Company redeemed its interests in the Industrial Portfolio for $169.6 million of net proceeds.

•	Multifamily - The multifamily portfolio primarily focuses on properties located in suburban markets that are well suited to capture the formation of new households. In 2016, the Company sold ten multifamily properties for $306.9 million with $209.9 million of mortgage financing assumed as part of the transaction. The Company received $84.7 million of net proceeds.

•	Multi-tenant Office - The Company pursues the acquisition of multi-tenant office properties currently focused on the western United States.

•

PE Investments - The real estate business also includes investments (directly or indirectly in joint ventures) owning PE Investments managed by institutional quality sponsors and diversified by property type and geography. In February 2016, the Company sold substantially all of its interest in PE Investment II for proceeds of $184.1 million. In September 2016, the Company sold a portfolio of PE Investments for a gross sales price of $317.6 million with $44.7 million of deferred purchase price assumed as part of the transaction, including $5.6 million of deferred purchase price which was the obligation of an unconsolidated joint venture. The Company received $238.6 million of net proceeds. Refer to Note 10. Related Party Arrangements for further disclosure.

•

Commercial Real Estate Debt - The CRE debt business is focused on originating, acquiring and asset managing senior and subordinate debt investments secured primarily by commercial real estate and includes first mortgage loans, subordinate mortgage and mezzanine loans and participations in such loans and preferred equity interests. The Company may from time to time take title to collateral in connection with a CRE debt investment as REO which would be included in the CRE debt business. In 2016, the Company sold or received repayment for 15 debt investments and a REO with a total principal amount of $388.6 million and used $72.1 million of proceeds to pay down the Company’s loan facility in full, resulting in $313.2 million of net proceeds.

•

Commercial Real Estate Securities - The CRE securities business is predominately comprised of N-Star CDO bonds and N-Star CDO equity of deconsolidated N-Star CDOs and includes other securities, mostly CMBS meaning each asset is a pool backed by a large number of commercial real estate loans. The Company also invests in opportunistic CRE securities such as an investment in a “B-piece” CMBS. In 2016, the Company sold certain CRE securities for $53.9 million of net proceeds.

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N-Star CDOs - The Company historically originated or acquired CRE debt and securities investments that were predominantly financed through permanent, non-recourse CDOs. The Company’s remaining consolidated CDOs are past the reinvestment period and given the nature of these transactions, these CDOs are amortizing over time as the underlying assets pay down or are sold. The Company has been winding down its legacy CDO business and investing in a broad and diverse range of CRE assets. As a result, this distinct business is a significantly smaller portion of its business today than in the past. As of December 31, 2016, only N-Star securities CDOs I and IX continue to be consolidated. Refer to Note 17 for further disclosure regarding deconsolidated N-Star CDOs. The Company continues to receive collateral management fees related to administrative responsibilities for deconsolidated N-Star CDO financing transactions, which are recorded in other revenue and included in the N-Star CDOs segment.

•	Corporate - The corporate segment includes NSAM management fees incurred, corporate level interest income and interest expense and general and administrative expenses.

(1)	Includes $33.9 million of rental and escalation income and $1.9 million of net income from a portfolio of healthcare assets located in the United Kingdom.

(2)	Based on CDO financing transactions that were primarily collateralized by CRE securities and may include other types of investments. $2.6 million of collateral management fees were earned from CDO financing transactions, of which $0.7 million were eliminated in consolidation.

(3)	Primarily represents interest income earned from notes receivable on manufactured homes and interest income on loans in the Company’s healthcare portfolio.

(4)	Represents income earned from N-Star CDO bonds repurchased at a discount, recognized using the effective interest method, that is eliminated in consolidation. The corresponding interest expense is recorded in net interest income in the N-Star CDOs segment.

(5)	Primarily relates to depreciation and amortization of $337.2 million.

(6)	Includes management fees to NSAM of $186.8 million and an unrealized loss on a derivative instrument of $27.3 million.

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(1)	Includes $37.6 million of rental and escalation income and $2.3 million of net income from a portfolio of healthcare assets located in the United Kingdom.

(2)	Based on CDO financing transactions that were primarily collateralized by either CRE debt or securities and may include other types of investments. $5.2 million of collateral management fees were earned from CDO financing transactions, of which $2.3 million were eliminated in consolidation.

(3)

Prior to the NRE Spin-off, the Company generated rental and escalation income from its European properties. The European real estate segment represents the consolidated results of operations and balance sheet of such European real estate business which was transferred to NorthStar Europe in connection with the NRE Spin-off. Amounts related to the European real estate business are reported in discontinued operations. Represents the consolidated statements of operations of NorthStar Europe reported in discontinued operations and includes an allocation of indirect expenses from the Company (refer to Note 9).

(4)	Primarily represents interest income earned from notes receivable on manufactured homes and interest income on loans in the Company’s healthcare portfolio.

(5)	Represents income earned from N-Star CDO bonds repurchased at a discount, recognized using the effective interest method, that is eliminated in consolidation. The corresponding interest expense is recorded in net interest income in the N-Star CDO segments.

(6)	Primarily relates to depreciation and amortization of $454.8 million.

(7)	Includes management fees to NSAM of $198.7 million.

(8)	Primarily relates to transaction costs of $109.5 million and depreciation and amortization of $42.4 million.

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(1)

Based on CDO financing transactions that were primarily collateralized by CRE securities and may include other types of investments. $5.9 million of collateral management fees were earned from CDO financing transactions for the year ended December 31, 2014, of which $2.6 million were eliminated in consolidation. The eliminated amounts are recorded as other revenue in the Corporate segment and as an expense in the N-Star CDO segment.

(2)	Represents the consolidated statements of operations of NSAM reported in discontinued operations and includes an allocation of indirect expenses from the Company (refer to Note 9).

(3)	Represents the consolidated statements of operations of NorthStar Europe reported in discontinued operations and includes an allocation of indirect expenses from the Company (refer to Note 9).

(4)	Primarily represents interest income earned from notes receivable on manufactured homes.

(5)	Represents income earned from CDO bonds repurchased at a discount, recognized using the effective interest method, that is eliminated in consolidation. The corresponding interest expense is recorded in net interest income in the N-Star CDOs segment.

(6)	Includes depreciation and amortization of $182.1 million.

(7)	Primarily relates to transaction costs of $27.5 million.

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19.	Supplemental Disclosures of Non-cash Investing and Financing Activities

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20.	Subsequent Events