Colony and RXR: Make Investors Whole

Dear Colony and RXR,

Your non-traded REIT, NorthStar/RXR New York Metro Income, Inc., at around $38 million in investor capital, is just a speck in both your commercial real estate investment empires.  It is unfortunate that this REIT did not catch on with financial advisors, especially given the quality of the RXR management team and its long-term successful track record.  It's an ugly reality that sometimes financial advisors and their clients find investment funds that pay unsustainable 8% distributions and acquire dubious assets preferable to lower initial distributions and the potential for real long-term value appreciation.

As you know, New York Metro Income has two investments and a net asset value of $8.49 per share.  I read your filing yesterday, August 21, 2018, about your plan to liquidate the REIT's assets through a series of asset sales and internal transactions, and your generous offer to forfeit your shares to increase distributable cash to investors.  I did not, however, after reading the filing several times, note any mention of an intent to return investor capital in full.  I figure, based on a $10.00 per share offer price and the $8.49 NAV per share, that Colony and RXR would need to contribute $5.7 million, or about $2.9 million each to fully return investor capital.  I know that $3 million is not nothing, but it is a small amount to pay for firms of your size, and the goodwill you'd accrue with investors, financial advisors, and the broker dealers that invested with you would be far greater than $3 million.

Sincerely,

Rational Realist