Flaherty Resigns from NorthStar Healthcare Board

James F. Flaherty III has resigned as vice chairman and board member of NorthStar Healthcare Income, dramatically scaling back his involvement in the real estate investment trust he initially joined as president and CEO two years ago.

Flaherty’s resignation was effective immediately as of Feb. 9, according to an 8-K filing. The decision was personal and not due to any disagreement related to operations, policies, or practices, and Flaherty will continue to provide investment and other services through the investment committee of Northstar Healthcare’s advisor.

Prior to joining NorthStar, Jay Flaherty became one of the senior housing industry’s most high-profile and influential leaders as Chairman and CEO of HCP Inc. (NYSE: HCP). Under his leadership, the REIT’s market capitalization grew from approximately $2 billion in 2013 to more than $20 billion in 2013. After HCP’s board ousted him in 2013, seeking a change in leadership style, Flaherty forged a partnership with New York City-based NorthStar Realty Finance (NYSE: NRF).


In addition to leading its non-traded health care REIT, NorthStar Healthcare Income, Flaherty aimed to substantially grow NorthStar’s on-balance sheet health care real estate portfolio and work toward raising institutional capital for funds to be managed by NorthStar Asset Management Group (NYSE: NSAM).

About 10 months into his time with NorthStar, Flaherty was elected vice chairman of the board and stepped down from the CEO and president position, which was assumed by Ronald J. Jeanneault. Flaherty’s advice and counsel are “unrivaled” in the industry, Executive Chairman of Northstar Healthcare Daniel R. Gilbert said at that time.

NorthStar Healthcare was involved in one of the banner senior housing transactions of 2015, with a 30% stake in a $1.125 billion joint venture with another REIT to acquire Trilogy Investors LLC. NorthStar Healthcare currently has an equity portfolio of about $2.3 billion, with the majority being senior housing assets. But like other senior housing owners and operators, the constellation of NorthStar businesses also is facing pressure due to declining share prices. Last month, an investor began agitating for changes in how NorthStar Asset Management and NorthStar Realty Finance are structured.


Written by Tim Mullaney

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