Starwood Capital acquires $312m US distressed loan portfolio

The Greenwich, Connecticut-based private investment firm has purchased its eighth loan portfolio in two years.

Starwood Capital Group has closed on the acquisition of a commercial loan portfolio with a total face value of $312 million from an unnamed Southwestern US regional bank. The firm declined to disclose the purchase price.

The portfolio includes 106 senior mortgage loans and real estate owned (REO) assets. The loans – about half of which are performing – are backed by a broad range of property types, including office, retail, multifamily, commercial land, hotel and residential. Seventy percent of the loans were originated in Texas, with the remainder concentrated in Colorado and Arizona.

The loan portfolio is the eighth that Starwood has acquired from a number of banks and financial institutions over the past two years. Most notably, the firm teamed up with TPG Capital and Perry Capital in 2009 to purchase $4.5 billion in construction loans and REO assets formerly owned by Chicago-based Corus Bank. That deal, which was valued at about $2.77 billion, was one of the largest acquisitions of distressed commercial real estate assets in recent years.

“These loan portfolios are an important part of our ongoing strategy where we work directly with bank managements to structure transactions that fulfill their needs and also meet our own investment criteria,” said Chris Graham, managing director at Starwood, in a statement. “We expect to continue to pursue similar transactions in the near future.”

As reported by PERE earlier this month, Starwood held a $1.2 billion first close on its ninth global real estate fund, Starwood Distressed Opportunity Fund IX, in December, just four months after its launch. The vehicle, which is targeting between $2 billion and $3 billion of equity, will focus predominantly on distressed opportunities in the US.