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&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&lt;b&gt;1. Business and Organization&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;NorthStar Real Estate Income Trust,&amp;#160;Inc. (the "Company") was formed on January&amp;#160;26, 2009 and elected to qualify as a real estate investment trust ("REIT") beginning with the taxable year ended December&amp;#160;31, 2010. The Company was formed to originate, acquire and asset manage a diversified portfolio of commercial real estate ("CRE") debt, securities and other select equity investments. CRE debt investments may include first mortgage loans, subordinate mortgage and mezzanine loans and participations in such loans and preferred equity interests. CRE securities will primarily consist of commercial mortgage-backed securities ("CMBS") and may include unsecured REIT debt, collateralized debt obligation ("CDO") notes and other securities. The Company is externally managed by NS Real Estate Income Trust Advisor,&amp;#160;LLC (the "Advisor") and has no employees. The Advisor uses the investment professionals of NorthStar Realty Finance Corp. (the "Sponsor") to manage the business. The Sponsor is a diversified CRE investment and asset management company publicly traded on the New York Stock Exchange and was formed in October 2003.&lt;/font&gt;&lt;/p&gt;
&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;Substantially all business is conducted through NorthStar Real Estate Income Trust Operating Partnership,&amp;#160;LP (the "Operating Partnership"). The Company is the sole general partner of the Operating Partnership. The initial limited partners of the Operating Partnership are the Advisor and NorthStar OP Holdings,&amp;#160;LLC (the "Special Unit Holder"). The Advisor invested $1,000 in the Operating Partnership in exchange for common units and the Special Unit Holder invested $1,000 in the Operating Partnership and has been issued a separate class of limited partnership units (the "Special Units"), which are collectively recorded as non-controlling interests on the consolidated balance sheets as of June&amp;#160;30, 2013 and December&amp;#160;31, 2012. As the Company accepted subscriptions for shares, it contributed substantially all of the net proceeds to the Operating Partnership as a capital contribution. As of June&amp;#160;30, 2013, the Company's limited partnership interest in the Operating Partnership was 99.98%.&lt;/font&gt;&lt;/p&gt;
&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;The Company's charter authorizes the issuance of up to 400,000,000 shares of common stock with a par value of $0.01 per share and up to 50,000,000 shares of preferred stock with a par value of $0.01 per share. The board of directors of the Company is authorized to amend its charter, without the approval of the stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue.&lt;/font&gt;&lt;/p&gt;
&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;The Company initially registered to offer up to 100,000,000 shares pursuant to the primary offering (the "Primary Offering") and up to 10,526,315 shares pursuant to the distribution reinvestment plan (the "DRP") and are herein collectively referred to as the Offering. The Offering, including proceeds from the merger with NorthStar Income Opportunity REIT I,&amp;#160;Inc. completed on October&amp;#160;18, 2010 as a reverse merger and recapitalization (the "Merger Transaction"), is herein collectively referred to as the Total Offering. In April 2013, the board of directors of the Company authorized the reallocation of shares available from the DRP to the Primary Offering. The Primary Offering (including 7.6&amp;#160;million shares reallocated from the DRP, the "Total Primary Offering") was completed on July&amp;#160;1, 2013 and all of the shares initially registered for the Offering were issued. The Company intends to continue to offer shares pursuant to the DRP beyond the Total Primary Offering. As a result, the board of directors of the Company approved the filing of a registration statement on Form&amp;#160;S-3 with the Securities and Exchange Commission (the "SEC") to issue an additional 15.0&amp;#160;million shares pursuant to the DRP, which was declared effective on July&amp;#160;3, 2013.&lt;/font&gt;&lt;/p&gt;
&lt;p style="FONT-FAMILY: times;"&gt;&lt;font size="2"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;From inception through the completion of the Total Primary Offering, the Company raised Total Primary Offering gross proceeds of $1,072.9&amp;#160;million. The Total Offering raised gross proceeds of $1,128.4&amp;#160;million through such date.&lt;/font&gt;&lt;/p&gt;
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 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 275

 -SubTopic 10

 -Section 50

 -Paragraph 2

 -URI http://asc.fasb.org/extlink&amp;oid=6927468&amp;loc=d3e6003-108592



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