FREQUENTLY ASKED QUESTIONS - …

1 NorthStar Healthcare FAQs | 1 FREQUENTLY ASKED QUESTIONS On December 4, 2018, NorthStar Healthcare Income, Inc. (the Company) filed a Form 8-K with the Securities and Exchange Commission (SEC) in which the Company reported its estimated per share value as of June 30, 2018. Set forth below are the Company s responses to certain of the more FREQUENTLY ASKED QUESTIONS . For additional information regarding the Company, please see the Company s filings with the SEC, including its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018, and its Current Report on Form 8-K filed with the SEC on December 4, 2018. The Company s SEC filings can be obtained free of charge at the SEC s website located at or at the Company s Investor s Relations tab on its website located at Why did the Company s estimated per share value decrease?

2 As set forth in the Company s public filings, there are many factors that contribute to the Company s current estimated net asset value per share. The factors below were significant contributors to the decline in the estimated per share value from June 30, 2017 of $ to June 30, 2018 of $ : Consistent with past and current trends in the seniors housing market, the Company's portfolio is facingoccupancy challenges in select markets attributable to increases in supply, thereby reducing operatingrevenue in those assets affected by new supply. Labor costs in NorthStar Healthcare's investments have increased due to statutory wage increases andreduced availability of qualified workers in certain markets, resulting in increases in property-level operatingexpenses.

3 Downward pressures on cash flow continue for the skilled nursing industry, which has resulted in certaincases in restructuring leases or replacing tenants and reducing rental income at affected assets. Operator transitions at select investments resulted in short-term disruption in operations and occupancy,though most have been completed and the Company believes are now progressing towards stabilization. NorthStar Healthcare continues to reinvest in its assets and investments through maintenance and strategiccapital expenditures, which, depending upon the nature of the capital expenditures, may be accretive to theasset or necessary to maintain the asset's value. During the twelve months ended June 30, 2018, NorthStar Healthcare made distributions to shareholders inexcess of funds available for distribution, which has a dilutive effect on NorthStar Healthcare's per shareestimated additional information regarding the determination of the Company's estimated value per share, please see the Current Report on Form 8-K filed by the Company with the SEC on December 4, changes to the estimated value per share in the future does the Company currently expect?

4 The Company does not currently expect to establish a new estimated value per share until December 2019. As a result, it is difficult to predict potential changes to the Company s next estimated value per share. NorthStar Healthcare FAQs | 2 What is the breakdown between skilled nursing and senior housing in your portfolio and how do the market fundamentals differ between these two asset classes? Based on the Company s historical cost, approximately 24% of the Company s portfolio is skilled nursing, with 70% senior housing. Skilled nursing facilities are licensed properties where the majority of residents require continual nursing or medical care and depend upon federal and state health care benefit programs ( , Medicare and Medicaid) for a majority of their revenues.

5 Senior housing facilities ( , independent living facilities, assisted living facilities, etc.) are rental properties that, depending upon the nature of the property, may provide residents with supportive care from trained professionals and predominantly rely upon private pay for their revenues. While certain market fundamentals, such as national and regional economic conditions, new supply of competitive properties, and increased labor costs due to recent changes in minimum wage standards, have an overlapping impact on both asset classes, others, such as changes in government reimbursement, expenses associated with government investigations, and legal actions, can have a more significant impact on skilled nursing facilities.

6 For additional information regarding the Company s investments, refer to Management s Discussion and Analysis of Financial Condition and Results of Operations Investments in the Company s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018, which was filed with the SEC on November 13, 2018. What is the Company s current strategy?Certain key elements of the Company s strategy as of September 30, 2018 are as follows: Maintain a Diversified Portfolio. The Company believes that mid-acuity senior housing facilities provide anopportunity to generate risk-adjusted returns and benefit from positive future demographic trends. Inaddition, the Company believes that maintaining a balanced portfolio of assets diversified by investmenttype, geographic location, asset type, revenue source and operating model may mitigate the risk that anysingle factor or event could materially harm its business.

7 Pursue Strategic Capital Expenditures and Development Opportunities. The Company will continue to investcapital into its operating portfolio in order to maintain market position as well as functional and operatingstandards. In addition, the Company will continue to execute on and identify strategic developmentopportunities for its existing investments that may involve replacing, converting or renovating facilities in itsportfolio which, in turn, would allow the Company to provide an optimal mix of services and enhance theoverall value of its assets. Execute on the Company s Operator Transition Plan and Stabilize the Portfolio. The Company has been andis currently in the process of transitioning several of its portfolios to new operators or managers, both as aresult of execution of its business plan in connection with recent acquisitions and to reposition properties asa result of performance issues by certain operators or managers.

8 Assess Opportunities for Asset Repositioning. As the healthcare industry evolves, the Company will continueto assess the need for strategic asset repositioning, including evaluating assets, operators and markets toposition its portfolio for optimal performance. The Company s strategy includes potentially selling andtransitioning assets that do not meet its operator, real estate or market criteria or overall portfoliomanagement do operator transitions impact performance?Operator transitions can result in operational disruptions, elevate expenses and reduce occupancy at the affected properties. For example, the Company s Winterfell portfolio was transitioned to a new operator, Solstice Senior Living (Solstice) in November 2017, however occupancy decreased from an average of in the second quarter of 2017 to in the second quarter of 2018.

9 Winterfell s occupancy did increase to an average of in the third quarter of 2018, however the portfolio continues to experience the inherent challenges and obstacles that occur with an operator transition of this size and complexity. The Company s management team is working closely with Solstice and the rest of its operating partners to implement focused and strategic plans to increase occupancy and improve performance. NorthStar Healthcare FAQs | 3 What actions are the Company taking to improve performance?The Company s advisor uses many methods to actively manage the Company s asset base to enhance or preserve its income, value and capital and mitigate risk. The Company s advisor s asset management team seeks to identify strategic development opportunities that may involve replacing, converting or renovating facilities in its portfolio which, in turn, would allow facilities to provide an optimal mix of services and enhance the overall value of the Company s assets.

10 To manage risk, the Company s advisor engages in frequent review and dialogue with operators/managers/borrowers/third party advisors and periodic inspections of the Company s properties. In addition, the Company s advisor s asset management team considers the impact of regulatory changes on the performance of the Company s portfolio. During the quarterly operating results review, or more FREQUENTLY as necessary, investments are put on highly-monitored status, as appropriate, based upon several factors, including missed or late contractual payments, significant declines in performance and other data which may indicate a potential issue in the Company s ability to recover its invested capital from an investment.