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Starwood to exit investment in US homebuilder

The firm invested $150m in Tri Pointe Group in 2010.

Starwood Capital Group is selling the remainder of its stake in Tri Pointe Group, the Newport Beach, California-based homebuilder said Friday.

Starwood originally invested $150 million in the developer in 2010, which allowed Tri Pointe to buy 353 lots in six California communities in 2011, according to its website. The nearly 12 million Tri Pointe shares that Starwood plans to sell were worth $155 million when the market opened Friday. Neither company could be reached for comment.

Capital for Starwood’s original investment came from Starwood Global Opportunity Fund VIII, which closed on $1.8 billion of equity in April 2010, PERE previously reported. Investors in the opportunistic fund included the Teachers’ Retirement System of Louisiana, which earmarked $75 million; Pennsylvania State Employees’ Retirement System, which allocated $50 million; and Texas County and District Retirement System, which committed $40 million, according to PERE data.

Barry Sternlicht, Starwood’s founder, is Tri Pointe’s chairman of the board of directors and Chris Graham, a senior managing director at Starwood, is also on the board. While Starwood owned 5 percent or more of Tri Pointe stock, the firm could nominate a member of the board. It was unclear at press time whether the Starwood executives planned to retain their board seats.

Tri Pointe was founded in 2009 and has since expanded to six homebuilding brands, which collectively owned about 25,000 lots as of December 31, according to the company’s annual report. The company went public in 2013, with Starwood putting up 3.7 million shares for sale during the initial public offering.

“Through our relationship with Starwood Capital Group, our management team has drawn upon the deep real estate knowledge base of Starwood Capital Group’s personnel and its established track record of investing in real estate operating companies,” Tri Pointe said in its 2013 annual report. “Affiliates of Starwood Capital Group may make available to us for purchase, at market prices, certain of their owned residential land holdings.”

Tri Pointe’s last publicly-disclosed transaction was the June purchase of a 220,000 square foot development site in El Monte, California for $14.6 million, according to data provider Real Capital Analytics.