Starwood REIT closes $144m of deals in first 43 days

The mortgage REIT created by Barry Sternlicht’s Starwood Capital group has acquired $110m portfolio of loans on seven properties and $10.9m in bonds secured against a NYC hotel. The firm has another $66m of deals under contract.

Starwood Property Trust has closed $144 million of deals in less than two months with another $66 million of transaction already under contract.

The mortgage REIT created by Barry Sternlicht said today it invested $23.3 million of equity for two TALF deals from New York’s Federal Reserve. The transactions were done on a 75 percent/25 percent partnership with Starwood Capital’s private equity real estate fund, Starwood Global Opportunity Fund VIII.

The AAA-CMBS securities, which the firm closed at the end of August and September, were financed with $171.6 million of financing via the Term Asset-Backed Securities Loan Facility (TALF), with an average fixed rate of 3.8 percent.

The REIT also invested $10.9 million in bonds secured by a first mortgage on a New York City hotel and closed on a $110 million portfolio of loans secured against seven properties leased to a single tenant. The expected unlevered yields on the investments are 11 percent and 13 percent respectively.

The REIT also has another $66 million of deals under contract to close, including a mezzanine position and a first mortgage on a shopping centre, as well as another $250 million of first mortgage deals deemed “highly probable”, the firm said in a statement.

On a conference call announcing the firm's results to 30 September, Sternlicht said the mortgage REIT was looking at various investment opportunities, including parts of the bankrupt retail lender CIT. However, he told analysts: “We don’t want to complicate things yet, we want to keep things really straight forward and simple [for shareholders].”

The REIT has raised more than $921 million to date following its IPO on 17 August, the firm added in the statement. However, for the period to the end of September, it saw a net loss of $1.9 million owing to “non-cash, stock-based compensation”.