Warren Buffett famously said, “Never invest in a business you don’t understand.” That’s one reason that I have never hit the BUY button for Northstar Realty Finance (NYSE:NRF). I’m sure that the New York-based REIT is a sound business, but the complex structure seems to provide less transparency, often distorting the true value of the company.

I’ll admit I’m not an expert when it comes to understanding NRF, especially the various components of the REIT – from SPEs, VIEs, PEs, CDOs, CMOs, and CMBS (I provide explanations for these terms in my newsletter) – it gets downright perplexing.

However, I am intrigued with NRF and its diversified commercial real estate portfolio with 82% of total assets invested in real estate (and 74% is invested in direct real estate investments). In 2015, the company generated 70% of total revenue from real estate and substantially all assets are invested in and revenues are generated from real estate (excluding the European Portfolio).

Another famous line from Warren Buffett,

One of the things we try very hard to do at Berkshire, is to stay within what I call our circle of competence.

NRF is a seemingly complicated platform that invests in multiple asset classes across commercial real estate (or CRE). The following table presents NRF’s investments as of December 31, 2014, adjusted acquisitions and commitments to purchase real estate through February 24, 2015:

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On February 26, 2015, NRF announced that its board had approved a plan to spin-off the European real estate business into a newly formed publicly traded REIT, Northstar Realty Europe Corp. (NRE) expected to be listed on the New York Stock Exchange and potentially in Europe. European Spin (NRE) is expected to be completed in the second half of 2015.

As part of NRF’s real estate strategy, the REIT explores a variety of real estate investments, both directly and through joint ventures, in order to purchase real estate bolstered by attractive returns.