Starwood acquires rental pioneer Waypoint, plans REIT spinoff

November 01, 2013 02:15PM

Starwood Property Trust has acquired Waypoint Real Estate Group, one of the first companies to invest in rental homes.

Starwood will spin off its single-family rental unit into a real estate investment trust to be headed by Waypoint’s management division. The move will reportedly fill an in-house management gap troubling the REIT before. Waypoint, which hit a wall when it tried to go public earlier this year, will benefit from a cash infusion, though Gary Beasley and Doug Brien, Waypoint’s current co-CEOS, declined to tell Bloomberg News how much Starwood paid in the acquisition.

“We’ve always wanted to find a way to build a big platform,” Beasley told Bloomberg. “Really, the only thing that’s been missing for us is capital.”

Barry Sternlicht, Starwood’s CEO, told Bloomberg that Waypoint would serve as Starwood’s “operating engine for us to reach our objectives.” Their management, he said, has proven to get to scale.

As of Sept. 30, the newly-formed Starwood Waypoint Residential Trust held $750 million in 4,268 homes and nonperforming loans on 1,549 properties, Starwood said in a statement.

Waypoint, which landed a $65 million loan last month to expand its acquisition of foreclosed homes that it turned into rentals, will continue to manage its different investment rental properties, which are owned by 11 different funds. [Bloomberg News] Julie Strickland