Starwood Property Trust to buy Florida affordable housing portfolio for about $600m
Starwood Property Trust has signed a definitive agreement to acquire an institutional-quality multifamily affordable housing portfolio in Florida comprised of 28 properties and 6,185 units for approximately $600 million.
The portfolio is 99 percent leased and predominately located in Orlando with smaller concentrations in the West Palm Beach, Tampa, and Miami MSA’s.
“Given the persistent supply/demand imbalance for high quality rent restricted housing coupled with its attractive financing, we believe this investment will provide stable and attractive double digit cash-on-cash returns over the long term,” said Barry Sternlicht, chairman and CEO of Starwood Property Trust.
Starwood Property Trust is acquiring the portfolio with a combination of units in a newly-formed subsidiary which are exchangeable into STWD common shares, cash and debt financing.
Sternlicht continued, “This transaction is an extension of Starwood Property Trust’s previous successful investment in the affordable multifamily housing sector and upon closing our portfolio will consist of over 15,100 units of housing located predominately in Florida. Additionally, the REIT’s manager, Starwood Capital Group, has investments in nearly 20,000 market rate units in complementary Florida markets, which provides us significant confidence in this investment.”
The transaction is expected to close in phases due to timing of regulatory approvals and the assumption of in-place financing.
The first phase, comprising 1,740 units, closed late in December 2017. The company expects to complete the remaining phases of the transaction by the end of the second quarter 2018, subject to customary closing conditions.
