Starwood Real Estate Income Trust Acquires 15,460 Unit Multifamily Housing Portfolio from Strata Equity Group

Rhea-AI Summary

On Nov. 10, 2021, Starwood Real Estate Income Trust acquired a multifamily housing portfolio of 15,460 units from Strata Equity Group. The properties span 62 communities across 10 states, primarily in the Southeast, with growing populations and employment rates projected to double U.S. averages in the next five years. Strata will manage the assets post-acquisition. As of Sept. 30, 2021, SREIT had an asset value of $12.6 billion across 246 properties. This acquisition aligns with SREIT's strategy to enhance its portfolio stability and yield.

Positive

• Acquisition of a large portfolio (15,460 units) enhances growth potential.
• Properties situated in high-growth markets expected to outperform U.S. averages.
• Strata's continued management ensures operational continuity.

Negative

• None.

MIAMI, Nov. 10, 2021 /PRNewswire/ -- Starwood Real Estate Income Trust, Inc. ("SREIT"), a non-listed REIT managed by Starwood REIT Advisors, L.L.C., a subsidiary of Starwood Capital Group ("Starwood Capital"), announced today the acquisition of a multifamily housing portfolio of 15,460 units located in 62 communities from Strata Equity Group ("Strata"), a privately held real estate investment and management company based in San Diego. Terms of the transaction were not disclosed.

The acquired portfolio is located in 27 markets across 10 states, primarily in the Southeast region of the United States, including Georgia, Tennessee, and North Carolina. The portfolio's markets are experiencing substantial population, employment and income growth, projected to outpace the U.S. average by 2x over the next five years. These markets offer lower taxes and a cost of living below the national average, and continue to benefit from migratory trends toward the Sun Belt and other growth markets. The portfolio's units offer affordability with high-quality amenities. Strata will remain in an asset management role for the acquired portfolio.

James Kane, Head of Multifamily Asset Management for Starwood Capital, said, "We have known and respected the Strata team for many years and are pleased that this relationship led to a mutually beneficial transaction for both companies. We look forward to continuing to work with Strata to help realize the value of this portfolio."

The Strata team responsible for the structuring and execution of the transaction was led by Scott Wittman and Andrew Gordon, Strata's Chief Investment and Chief Operating Officers. Strata has sold in excess of $4 billion in multifamily assets this year through multiple transactions.

David Michan, Strata's CEO, commented, "We are thrilled to complete this extraordinary transaction with Starwood on behalf of Strata and our investors. This further validates our strategy of acquiring quality affordable housing in growing markets. The Strata team has worked tirelessly to assemble and enhance this portfolio on top of the strong platform we have built. The assets performed well through the pandemic and we are excited the Strata team will remain involved and be a part of the continued success of these assets going forward." 

As of September 30, 2021, the SREIT portfolio had a total asset value of $12.6 billion across 246 properties. "We appreciate the opportunity to work directly with Strata on this significant transaction that is well suited to the stable yield profile of SREIT," added Ethan Bing, Managing Director at Starwood Capital. "Portfolio recapitalizations are a key component of our investment strategy for SREIT and this transaction is another example of our ability to offer an attractive structure that meets the objectives of large owners seeking liquidity."

About Starwood Capital Group
Starwood Capital Group is a private investment firm with a core focus on global real estate, energy infrastructure and oil & gas. The Firm and its affiliates maintain 16 offices in seven countries around the world, and currently have approximately 4,000 employees. Since its inception in 1991, Starwood Capital Group has raised over $65 billion of capital, and currently has approximately $100 billion of assets under management. Through a series of comingled opportunity funds and Starwood Real Estate Income Trust, Inc. (SREIT), a non-listed REIT, the Firm has invested in virtually every category of real estate on a global basis, opportunistically shifting asset classes, geographies and positions in the capital stack as it perceives risk/reward dynamics to be evolving. Starwood Capital also manages Starwood Property Trust (NYSE: STWD), the largest commercial mortgage real estate investment trust in the United States, which has successfully deployed over $76 billion of capital since inception and manages a portfolio of over $21 billion across debt and equity investments. Over the past 30 years, Starwood Capital Group and its affiliates have successfully executed an investment strategy that involves building enterprises in both the private and public markets. Additional information can be found at starwoodcapital.com.

About Starwood Real Estate Income Trust
Starwood Real Estate Income Trust, Inc. is a perpetual-life, monthly NAV REIT that directly invests in high quality, stabilized, income-producing real estate. SREIT is managed by Starwood REIT Advisors L.L.C., a subsidiary of Starwood Capital Group. For more information, please visit our website at www.starwoodnav.reit.

About Strata Equity Group
Strata Equity Group is a privately held real estate investment and management company founded by Carlos D. Michan in 1983. The Company is led by Carlos and his son, David, who serves as Chief Executive Officer. The organization operates at an institutional scale throughout the U.S., primarily focused on the execution of Strata's core strategy of ownership and management of value-add multifamily and commercial/industrial properties. Additionally, Strata acquires undeveloped land to design and entitle for master planned and mixed-use communities providing a sizable supply of lots for national homebuilders. Additional information can be found at www.strataequity.com.

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SOURCE Starwood Real Estate Income Trust, Inc.

FAQ

What is the significance of Starwood's acquisition of 15,460 units from Strata on Nov. 10, 2021?

The acquisition strengthens Starwood's portfolio in fast-growing markets, potentially boosting returns.

How many states are included in the portfolio acquired by Starwood Real Estate Income Trust?

The portfolio spans 10 states, primarily in the Southeast region.

What impact could the acquisition of 15,460 units have on Starwood Real Estate Income Trust's stock symbol STWD?

While indirectly related, enhanced portfolio value may positively impact investor sentiment towards STWD.

What strategy does Starwood Real Estate Income Trust follow with its acquisitions?

SREIT focuses on acquiring high-quality, stable assets to enhance yield and capitalize on market growth.