Starwood Capital Group Global, the US private equity real estate firm led by Barry Sternlicht, has entered the London office market.
The firm said in a statement it purchased the City Tower building at 40 Basinghall Street, in the City of London, for an undisclosed price, from PRUPIM, the property arm of UK insurer Prudential.
City Tower is a 42,500 square foot property over 21 floors, and home to approximately 40 tenants. Starwood said it had appointed Cushman & Wakefield as leasing agent and asset manager for the building.
Sean Arnold, head of European acquisitions for Starwood said in the statement: “While staying patient and selective, we are starting to see the types of value opportunities that have not existed here for many years.”
“City Tower is a good example,” he added, “(it is) a prominent tower building in a core city location, purchased at a substantial discount to today’s replacement cost and at an attractive initial cash yield, with multiple ways to drive the building’s value as and when the City market recovers.”
News of the deal came as Starwood REIT revealed it has secured $144m of deals in first 43 days of launching its US mortgage REIT.
It has acquired a $110 million portfolio of loans on seven properties and $10.9 million in bonds secured against a New York hotel. The firm has another $66 million of deals under contract.