The Loan bears interest at a rate of 14.0% per annum. In addition, the Borrower has paid an upfront origination fee to the Lenders equal to 3.0% of the maximum principal amount of $206.0 million. The Loan is due in five years; however, the Borrower may voluntarily prepay all or a portion of the Loan at any time, subject to a “make whole payment”, equal to the amount (if positive) of the present value of all future payments of interest that would become due with respect to such prepaid amount from the date of prepayment thereof through and including the maturity date, discounted at a rate of 14%. Upon any repayment of any portion of the principal amount under the Loan (whether or not at maturity), the Borrower also will pay the Lenders an exit fee equal to the difference (if positive) between (x) the interest that would have accrued and been then payable on the repaid portion if the interest rate under the Loan Agreement were 15.625% and (y) the internal rate of return realized by the Lenders on such repaid portion, taking into account all cash amounts actually received by the Lenders with respect to such repaid portion other than any make whole payments described above.
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"We are pleased to have the opportunity to execute such a significant high-yielding, quality investment just three weeks after our initial public offering,” said Richard Saltzman, Chief Executive Officer and President of Colony Financial. “This first major investment is a testament to the relationships we enjoy in the commercial real estate marketplace and is viewed as a prototype for future transactions within the REIT. The attractive yield profile, high cash pay feature and first-lien security within the capital structure are what make this transaction attractive to Colony Financial. We are being selective in our asset allocation, focused on building the optimal portfolio for the long term.”

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My concern with ARI, is that something this attractive would get shunted into some private fund (with incentive fee's) and not into the public REIT.

CLNY has co-investment rights which are IMHO very important in an externally managed company.