Starwood Property Trust Expands Multifamily Affordable Housing Portfolio With Acquisition
(4 months ago)
GREENWICH, Conn: Starwood Property Trust, Inc. (NYSE: STWD), a leading diversified real estate finance company and the largest commercial mortgage REIT in the U.S., announced that it has signed a definitive agreement to acquire an institutional-quality multifamily affordable housing portfolio in Florida comprised of 28 properties and 6,185 units for approximately USD 600 million.
The portfolio is 99% leased and predominately located in Orlando with smaller concentrations in the West Palm Beach, Tampa, and Miami MSA's. Starwood Property Trust is acquiring the portfolio with a combination of units in a newly-formed subsidiary which are exchangeable into STWD common shares, cash and debt financing.
"This uniquely structured, off-market investment in a high quality multifamily affordable housing portfolio is a great way to begin 2018," stated Barry Sternlicht, Chairman and CEO of Starwood Property Trust. "The properties are located in Florida markets with strong fundamentals. Given the persistent supply/demand imbalance for high quality rent restricted housing coupled with its attractive financing, we believe this investment will provide stable and attractive double digit cash-on-cash returns over the long term."
Mr. Sternlicht continued, "This transaction is an extension of Starwood Property Trust's previous successful investment in the affordable multifamily housing sector and upon closing our portfolio will consist of over 15,100 units of housing located predominately in Florida. Additionally, the REIT's manager, Starwood Capital Group, has investments in nearly 20,000 market rate units in complementary Florida markets, which provides us significant confidence in this investment. We will continue to utilize our scale and deep industry relationships to identify large, unique transactions with attractive in-place cash flows, strong underlying fundamentals and appropriately moderate risk profiles to drive sector-leading total returns for our shareholders."
The transaction is expected to close in phases due to timing of regulatory approvals and the assumption of in-place financing. The first phase, comprising 1,740 units, closed late in December 2017. The Company expects to complete the remaining phases of the transaction by the end of the second quarter 2018, subject to customary closing conditions.