Starwood Capital Group is continuing its takeover spree with the planned purchase of a residential real estate company, according to an announcement Thursday.
The Greenwich, Connecticut-based alternatives manager is buying Forestar Group, an Austin-based company founded in 1955 that invests in real estate and other peripheral businesses for $605 million in a cash-for-stock deal. If Forestar shareholders approve the deal, it is expected to close in the third quarter.
A Starwood spokesman could not be reached for comment.
Forestar owns 50 residential and mixed-use projects in 10 states, according to its fourth-quarter earnings report. The company develops for-sale housing communities primarily in the southern US, with 730 acres of land in California currently under the entitlement process.
One of its major development projects is Cibolo Canyons, a 2,100-acre, master-planned community in San Antonio, Texas with 1,791 residential lots, of which 1,142 have been sold as of year-end 2016. The project’s residential development includes both single-family homes and active adult condominiums. Cibolo Canyons also has 58 acres of multifamily and retail real estate, along with the JW Marriott San Antonio Hill Country Resort & Spa, which has 1,002 hotel rooms and two golf courses from which Forestar can collect a portion of hotel occupancy and sales revenues.
Last year, Forestar identified a number of non-core assets that it intended to sell, including four multifamily real estate assets and timberland and water interests. The firm sold another non-core segment, its oil and gas business, last month. The firm’s real estate segment accounted for 96 percent of its revenues in 2016, according to its fourth-quarter earnings report.
The Forestar acquisition comes on the heels of Starwood’s purchase of Milestone Apartment REIT, a real estate investment trust it acquired in a deal valued at $2.6 billion last month, PERE previously reported. The addition of Milestone’s 78 garden-style, Sunbelt-located apartment communities brought Starwood’s total apartment portfolio to 109,600 units. Milestone previously partnered with Starwood to buy multifamily REIT Landmark Apartment Trust for $1.9 billion, in a deal that closed last year.
Starwood manages $52 billion, according to its website. The firm is currently raising capital for both a new core-plus platform and its latest opportunistic fund, Starwood Opportunity Fund XI Global. It was unclear at press time through which vehicle Starwood would acquire Forestar.