Starwood buys stake in Brazilian operator

The Greenwich, Connecticut-based private equity real estate firm has invested $150 million in the logistics arm of Brazilian developer MRV Engenharia. The transaction represents the firm’s first major investment in Brazil since opening an acquisitions office there last year.

In its first major investment in Brazil since opening an acquisitions office in the country, Starwood Capital has purchased a 33 percent stake in MRV Logistica, the industrial real estate subsidiary of Brazilian developer MRV Engenharia, for $150 million. In addition, MRV Engenharia has invested $60 million of fresh capital into its logistics arm.  

According to Ryan Hawley, vice president of acquisitions at Starwood Capital do Brasil, Starwood's Brazilian affiliate, MRV Logistica was formed in 2008, but the global financial crisis hindered its growth plan. Now with the market more stable, Starwood felt that acquiring a stake in MRV Logistica was a good fit. 

“Most deals in Brazil are development deals, which are inherently riskier. The only way for us to be comfortable is with a partner that knows what it's doing,” Hawley said. “[MRV Logistica is] a proven entity. They can grow really quickly and know how to build. We've got the right guys.” 

Prior to Starwood's investment, the logistics arm was 63 percent owned by MRV Engenharia and the remainder was owned by select shareholders of MRV. Now, Starwood owns 33 percent, MRV Engenharia owns 42 percent and the remainder will be owned by the shareholders. 

MRV Logistica operates and leases warehouse space near major transportation routes in Brazil's industrialised southeast region. Currently, it has a portfolio of 10 million square feet of gross leasable area (GLA), 1.5 million square feet of which is either developed or under construction. 

Moving forward, Starwood plans to help MRV Logistica complete construction on its remaining 8.5 million square feet of GLA, as well as seek out additional opportunities, within the next 18 to 24 months. “Seventy percent of the capital is going to go to building out the existing land bank and 30 percent will go towards new land,” said Hawley. 

The transaction is Starwood Capital do Brasil's first major investment since it opened in São Paulo last year.