ST Residential selling $1bn US multifamily portfolio

The public-private partnership between the FDIC and a consortium of private real estate investors, including Starwood and TPG, is selling a portfolio of 13 US multifamily properties across eight states.

After repositioning a portfolio of US multifamily properties it acquired from a collapsed Chicago bank, ST Residential is putting 13 of the assets totaling 3,128 units on the selling block.

The multifamily portfolio, with an estimated value of nearly $1 billion, is comprised of properties located in Atlanta, Chicago, Houston, Las Vegas, Los Angeles, Phoenix, Tampa and Stamford, Connecticut. The assets, which will be offered for sale individually in sub-portfolios or as a single portfolio, are being marketed by HFF and Eastdil Secured.

Jonathan Pertchik, chief operating officer of ST Residential, told PERE that, since this is not a distressed sale, ST Residential does not expect the highest bids to come from opportunistic real estate investors. The partnership, however, is casting a global net for potential bidders. 

ST Residential is owned by a public-private partnership between the Federal Deposit Insurance Corporation (FDIC) and a group of US private equity real estate investors, including Starwood Capital Group, TPG Capital, Perry Capital and WLR LeFrak. The Chicago-based firm acquired the portfolio through the acquisition of a larger portfolio held by the former Corus Bank in October 2009. Since then, the partnership has repositioned the properties, many of which originally were condominiums. Following the completion of redevelopment, the portfolio's occupancy on stabilized assets has now reached 98 percent.

“The Corus Bank transaction has performed extremely well for the FDIC and our private investor group,” said Barry Sternlicht, chairman and chief executive officer of Starwood Capital and chairman of ST Residential, in a statement. “The partnership has repaid $1.3 billion of FDIC purchase money notes and has more than $1 billion of cash in hand. More than 32 loans were paid off at par, and we have sold 60 percent of the condo inventory we acquired at ever-escalating prices.”
Wade Hundley, chief executive of ST Residential, added: “Now that we are beginning our fourth year of the realization of the Corus Bank portfolio, the time was right within the portfolio lifecycle to sell these properties for the benefit of the FDIC and our private investors.” The assets are expected to be sold sometime this summer.