ADVISORY AGREEMENT AMONG NORTHSTAR REAL ESTATE INCOME TRUST, INC., NORTHSTAR REAL ESTATE INCOME TRUST OPERATING PARTNERSHIP, LP, AND NS REAL ESTATE INCOME TRUST ADVISOR, LLC

EXHIBIT 10.2

ADVISORY AGREEMENT

AMONG

NORTHSTAR REAL ESTATE INCOME TRUST, INC.,

NORTHSTAR REAL ESTATE INCOME TRUST OPERATING PARTNERSHIP, LP,

AND

NS REAL ESTATE INCOME TRUST ADVISOR, LLC

TABLE OF CONTENTS

ADVISORY AGREEMENT

          THIS ADVISORY AGREEMENT (this “ Agreement ”), dated as of the                      day of                                          , 2009, and effective as of the date that the Registration Statement (as defined below) is declared effective by the Securities and Exchange Commission (the “ Effective Date ”), is entered into by and among NorthStar Real Estate Income Trust, Inc., a Maryland corporation (the “ Company ”), NorthStar Real Estate Income Trust Operating Partnership, LP, a Delaware limited partnership (the “ Operating Partnership ”), and NS Real Estate Income Trust Advisor, LLC, a Delaware limited liability company (the “ Advisor ”). Capitalized terms used herein shall have the meanings ascribed to them in Section 1 below.

W I T N E S S E T H

     WHEREAS, the Company intends to qualify as a REIT, and to invest its funds in investments permitted by the terms of Sections 856 through 860 of the Code;

     WHEREAS, the Company is the general partner of the Operating Partnership and intends to conduct all of its business and make all or substantially all Investments through the Operating Partnership;

     WHEREAS, the Company and the Operating Partnership desire to avail themselves of the knowledge, experience, sources of information, advice, assistance and certain facilities available to the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of, the Board of the Company, all as provided herein; and

     WHEREAS, the Advisor is willing to undertake to render such services, subject to the supervision of the Board, on the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

     As used in this Agreement, the following terms shall have the meanings specified below:

      Acquisition Expenses means any and all expenses, excluding Acquisition Fees incurred by the Company, the Operating Partnership, the Advisor or any of their Affiliates in connection with the selection, evaluation, acquisition, origination or development of any Investments, whether or not acquired or originated, as applicable, including, without limitation, legal fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on properties or other investments not acquired, accounting fees and expenses, title insurance premiums and the costs of performing due diligence.

      Acquisition Fees means the fee payable to the Advisor pursuant to Section 8.01 plus all other fees and commissions, excluding Acquisition Expenses, paid by any Person to any Person in connection with making or investing in any Investments or the purchase, development or construction of any Property by the Company. Included in the computation of such fees or commissions shall be any real estate commission, selection fee, development fee, construction fee, nonrecurring management fee, loan fees or points or any fee of a similar nature, however designated. Excluded shall be development fees and construction fees paid to Persons not Affiliated with the Advisor in connection with the actual development and construction of a Property.

      Advisor means (i) NS Real Estate Income Trust Advisor, LLC, a Delaware limited liability company, or (ii) any successor advisor to the Company.

      Affiliate or Affiliated means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by, or under common control with such other Person; (ii) any Person directly or indirectly owning, controlling, or holding with the power to vote 10.0% or more of the outstanding voting securities of such other Person; (iii) any legal entity for which such Person acts as an executive officer, director, trustee, or general partner; (iv) any Person 10.0% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by such other Person; and (v) any executive officer, director, trustee, or general partner of such other Person. An entity shall not be deemed to control or be under common control with a program sponsored by the sponsor of the Company unless (A) the entity owns 10.0% or more of the voting equity interests of such program or (B) a majority of the Board (or equivalent governing body) of such program is composed of Affiliates of the entity.

      Asset Management Fee means the fees payable to the Advisor pursuant to Section 8.02.

      Average Invested Assets means, for a specified period, the average of the aggregate book value of the assets of the Company invested, directly or indirectly, in Investments before reserves for depreciation or bad debts or other similar non-cash reserves, computed by taking the average of such values at the end of each month during such period.

      Board means the board of directors of the Company, as of any particular time.

      Bylaws means the bylaws of the Company, as amended from time to time.

      Cause means with respect to the termination of this Agreement, fraud, criminal conduct, willful misconduct, gross negligence or breach of fiduciary duty by the Advisor, or a material breach of this Agreement by the Advisor.

      Charter means the articles of incorporation of the Company, as amended from time to time.

      Code means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time.

      Company means NorthStar Real Estate Income Trust, Inc., a corporation organized under the laws of the State of Maryland.

      Contract Sales Price means the total consideration received by the Company for the sale of an Investment.

      Cost of Investments means the sum of (i) with respect to the acquisition or origination of a Property, Loan or other Permitted Investment to be wholly owned, directly or indirectly, by the Company, the amount actually paid or allocated to fund the acquisition, origination, development, construction or improvement of the Property, Loan or other Permitted Investment, inclusive of expenses associated with such Property, Loan or other Permitted Investment and the amount of any debt associated with, or used to fund the investment in, such Property, Loan or other Permitted Investment and (ii) with respect to the acquisition or origination of a Property, Loan or other Permitted Investment through any Joint Venture, the portion of the amount actually paid or allocated to fund the acquisition, origination, development, construction or improvement of the Property, Loan or other Permitted Investment, inclusive of expenses associated with such Property, Loan or other Permitted Investment and expenses of the Joint Venture, plus the amount of any debt associated with, or used to fund the investment in, such Property, Loan or other Permitted Investment that is attributable to the Company’s investment in such Joint Venture.

      Dealer Manager means NS Capital Markets, LLC, a Delaware limited liability company, or such other Person or entity selected by the Board to act as dealer manager for the Offering.

      Disposition Fee means the fees payable to the Advisor pursuant to Section 8.03.

      Distribution means any distributions of money or other property by the Company to Stockholders, including distributions that may constitute a return of capital for federal income tax purposes.

      Excess Amount has the meaning set forth in Section 9.02.

      Expense Year has the meaning set forth in Section 9.02.

      FINRA means the Financial Industry Regulatory Authority, Inc.

      GAAP means generally accepted accounting principles as in effect in the United States of America from time to time.

      Good Reason means either (i) any failure by the Company or the Operating Partnership to obtain a satisfactory agreement from any successor to the Company or the Operating Partnership to assume and agree to perform the Company’s or the Operating Partnership’s obligations under this Agreement; or (ii) any material breach of this Agreement of any nature whatsoever by the Company or the Operating Partnership.

      Gross Proceeds means the aggregate purchase price of all Shares sold for the account of the Company through an Offering, without deduction for Organization and Offering Expenses, and not including Shares sold pursuant to the Company’s distribution reimbursement plan.

      Independent Directors has the meaning set forth in the Articles of Incorporation.

      Initial Public Offering means the initial public offering of Shares registered on Registration Statement No. 333-[                      ] on
Form S-11.

      Investments means any investments by the Company or the Operating Partnership in Properties, Loans and all other investments in which the Company or the Operating Partnership may acquire an interest, either directly or indirectly, including through ownership interests in a Joint Venture, pursuant to its Charter, Bylaws and the investment objectives and policies adopted by the Board from time to time, other than short-term investments acquired for purposes of cash management.

      Joint Venture means any joint venture, limited liability company, partnership or other entity pursuant to which the Company is a co-venturer or partner with respect to the ownership of any Investments.

      Listing means the listing of the Shares on a national securities exchange. Upon such Listing, the Shares shall be deemed “Listed.”

      Loans means mortgage loans and other types of debt financing investments made by the Company or the Operating Partnership, either directly or indirectly, including through ownership interests in a Joint Venture, including, without limitation, mezzanine loans, B-notes, bridge loans, convertible debt, wraparound mortgage loans, construction mortgage loans, loans on leasehold interests, and participations in such loans.

      NASAA REIT Guidelines means the Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities Administrators Association as in effect on the Effective Date.

      Net Income means, for any period, the Company’s total revenues applicable to such period, less the total expenses applicable to such period excluding additions to reserves for depreciation, bad debts or other similar non-cash reserves; provided, however, Net Income for purposes of calculating total allowable Operating Expenses (as defined herein) shall exclude the gain from the sale of the Company’s assets.

      Offering means any offering of Shares that is registered with the SEC, excluding Shares offered under any employee benefit plan.

      Operating Expenses means all costs and expenses paid or incurred by the Company, as determined under GAAP, that in any way are related to the operation of the Company or its business, including fees paid to the Advisor, but excluding (i) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration, and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and Listing, (ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and bad debt reserves, (v) incentive fees paid in compliance with the NASAA REIT Guidelines, (vi) Acquisition Fees, origination fees, Acquisition Expenses, real estate commissions on the resale of real property and other fees and expenses connected with the acquisition, financing, disposition, management and ownership of real estate interests, loans or other property (other than commissions on the sale of assets other than real property), including the costs of foreclosure, insurance premiums, legal services, maintenance, repair, and improvement of property. The definition of “Operating Expenses” set forth above is intended to encompass only those expenses which are required to be treated as “Total Operating Expenses” under the NASAA REIT Guidelines. As a result, and notwithstanding the definition set forth above, any expense of the Company which is not part of Total Operating Expenses under the NASAA REIT Guidelines shall not be treated as part of “Operating Expenses” for purposes hereof.

      Operating Partnership means NorthStar Real Estate Income Trust Operating Partnership, LP, a Delaware limited partnership formed to own and operate Investments on behalf of the Company.

      Operating Partnership Agreement means the agreement among the Company, the Advisor and NorthStar OP Holdings, LLC.

      OP Units means the units of limited partnership interest in the Operating Partnership.

      Organization and Offering Expenses means any and all costs and expenses incurred by or on behalf of the Company and to be paid from the Assets in connection with the formation of the Company and the qualification and registration of an Offering, and the marketing and distribution of Shares, including, without limitation, total underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys), expenses for printing, engraving and amending registration statements or supplementing prospectuses, mailing and distributing costs, salaries of employees while engaged in sales activity, telephone and other telecommunications costs, all advertising and marketing expenses, charges of transfer agents, registrars, trustees, escrow holders, depositories and experts and fees, expenses and taxes related to the filing, registration and qualification of the sale of the Shares under federal and state laws, including taxes and fees and accountants’ and attorneys’ fees.

      Person means an individual, corporation, partnership, estate, trust (including a trust qualified under Section 401(a) or 501(c) (17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity, or any government or any agency or political subdivision thereof, and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

      Property means any real property or properties transferred or conveyed to the Company or the Operating Partnership, either directly or indirectly, including through ownership interests in a Joint Venture.

      Property Manager means an entity that has been retained to perform and carry out property management services at one or more of the Properties, excluding persons, entities or independent contractors retained or hired to perform facility management or other services or tasks at a particular Property, the costs for which are passed through to and ultimately paid by the tenant at such Property.

      Registration Statement means the registration statement filed by the Company with the SEC on Form S-11 (Reg. No. 333-[                      ]), as amended from time to time, in connection with the Initial Public Offering.

      REIT means a “real estate investment trust” under Sections 856 through 860 of the Code.

      Sale means (i) any transaction or series of transactions whereby: (A) the Company or the Operating Partnership sells, grants, transfers, conveys, or relinquishes its ownership of any Investment or portion thereof, including the transfer of any Property that is the subject of a ground lease, including any event with respect to any Investment that gives rise to a significant amount of insurance proceeds or condemnation awards, and including the issuance by one of the Company’s subsidiaries of any asset-backed securities or collateralized debt obligations as part of a securitization transaction; (B) the Company or the Operating Partnership sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Company or the Operating Partnership in any Joint Venture in which it is a partner; or (C) any Joint Venture in which the Company or the Operating Partnership is a co-venturer or partner, sells, grants, transfers, conveys, or relinquishes its ownership of any Investment or portion thereof, including any event with respect to any Investment that gives rise to insurance claims or condemnation awards, and including the issuance by such Joint Venture or one of its subsidiaries of any asset-backed securities or collateralized debt obligations as part of a securitization transaction.

      SEC means the United States Securities and Exchange Commission.

      Securities means any Shares, any other stock, shares or other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing.

      Shares means shares of common stock of the Company, par value $.01 per share.

      Special OP Units means the separate series of limited partnership interests to be issued in accordance with Section 8.04.

      Stockholders means the registered holders of the Shares.

      Termination Date means the date of termination of the Agreement determined in accordance with Article 15 hereof.

      Termination Event means the termination or nonrenewal of this Agreement (i) in connection with a merger, sale of assets or transaction involving the Company pursuant to which a majority of the Board then in office are replaced or removed, (ii) by the Advisor for Good Reason or (iii) by the Company and the Operating Partnership other than for Cause.

      2%/25% Guidelines means the requirement pursuant to the NASAA REIT Guidelines that, in any period of four consecutive fiscal quarters, total Operating Expenses not exceed the greater of 2.0% of the Company’s Average Invested Assets during such 12-month period or 25.0% of the Company’s Net Income over the same 12-month period.

ARTICLE 2

APPOINTMENT

     The Company and the Operating Partnership hereby appoint the Advisor to serve as their advisor and asset manager on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.

ARTICLE 3

DUTIES OF THE ADVISOR

     The Advisor is responsible for managing, operating, directing and supervising the operations and administration of the Company and its assets.  The Advisor undertakes to use its commercially reasonable efforts to present to the Company and the Operating Partnership potential investment opportunities, to make investment decisions on behalf of the Company subject to the limitations in the Company’s Charter, the direction and oversight of the Board and Section 4.03 hereof, and to provide the Company with a continuing and suitable investment program consistent with the investment objectives and policies of the Company as determined and adopted from time to time by the Board.  Subject to the limitations set forth in this Agreement, including Article 4 hereof, and the continuing and exclusive authority of the Board over the management of the Company, the Advisor shall, either directly or by engaging an Affiliate or third party, perform the following duties:

      3.01 Offering Services . The Advisor shall manage and supervise:

          (i) Development of the Initial Public Offering and any subsequent Offering approved by the Board, including the determination of the specific terms of the securities to be offered by the Company, preparation of all offering and related documents, and obtaining all required regulatory approvals of such documents;

          (ii) Along with the Dealer Manager, approval of the participating broker-dealers and negotiation of the related selling agreements;

          (iii) Coordination of the due diligence process relating to participating broker-dealers and their review of the Registration Statement and other Offering and Company documents;

          (iv) Preparation and approval of all marketing materials contemplated to be used by the Dealer Manager or others relating to the Offering;

          (v) Along with the Dealer Manager, negotiation and coordination with the transfer agent for the receipt, collection, processing and acceptance of subscription agreements, commissions, and other administrative support functions;

          (vi) Creation and implementation of various technology and electronic communications related to the Offering; and

          (vii) All other services related to the Offering, other than services that (a) are to be performed by the Dealer Manager, (b) the Company elects to perform directly or (c) would require the Advisor to register as a broker-dealer with the SEC, FINRA or any state.

      3.02 Acquisition Services.

          The Advisor shall:

          (i) Serve as the Company’s investment and financial advisor and obtain certain market research and economic and statistical data in connection with the Company’s Investments and investment objectives and policies;

          (ii) Subject to Article 4 hereof and the investment objectives and policies of the Company: (a) locate, analyze and select potential Investments; (b) structure and negotiate the terms and conditions of transactions pursuant to which the Investments will be made; and (c) acquire Investments on behalf of the Company;

          (iii) Oversee the due diligence process related to prospective Investments;

          (iv) Prepare reports regarding prospective investments which include recommendations and supporting documentation necessary for the Board to evaluate the prospective investments;

          (v) Obtain reports (which may be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of prospective Investments of the Company; and

          (vi) Negotiate and execute approved Investments and other transactions.

      3.03 Asset Management Services .

          The Advisor shall:

          (i) Investigate, select, and, on behalf of the Company, engage and conduct business with such Persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including but not limited to consultants, accountants, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, developers, construction companies, Property Managers and any and all Persons acting in any other capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services;

          (ii) Monitor applicable markets and obtain reports (which may be prepared by the Advisor or its Affiliates) where appropriate, concerning the value of Investments of the Company;

          (iii) Monitor and evaluate the performance of Investments of the Company, provide daily management services to the Company and perform and supervise the various management and operational functions related to the Company’s Investments;

          (iv) Formulate and oversee the implementation of strategies for the administration, promotion, management, operation, maintenance, improvement, financing and refinancing, marketing, leasing and disposition of Investments on an overall portfolio basis;

          (v) Oversee the performance by the Property Managers of their duties, including collection and proper deposits of rental payments and payment of Property expenses and maintenance;

          (vi) Conduct periodic on-site property visits to some or all (as the Advisor deems reasonably necessary) of the Properties to inspect the physical condition of the Properties and to evaluate the performance of the Property Managers;

          (vii) Review, analyze and comment upon the operating budgets, capital budgets and leasing plans prepared and submitted by each Property Manager and aggregate these property budgets into the Company’s overall budget;

          (viii) Coordinate and manage relationships between the Company and any Joint Venture partners; and

          (ix) Provide financial and operational planning services and investment portfolio management functions.

      3.04 Accounting and Other Administrative Services.

          The Advisor shall:

          (i) Manage and perform the various administrative functions necessary for the management of the day-to-day operations of the Company;

          (ii) From time-to-time, or at any time reasonably requested by the Board, make reports to the Board on the Advisor’s performance of services to the Company under this Agreement;

          (iii) Coordinate with the Company’s independent accountants and auditors to prepare and deliver to the Company’s audit committee an annual report covering the