TPG RE Finance gets $325M infusion from Starwood

Stake in company will provide “additional liquidity and flexibility to navigate the current economic environment”

National /
May.May 29, 2020 02:01 PM
TPG Real Estate Finance Trust CEO Greta Guggenheim and Starwood Capital CEO Barry Sternlicht (Getty)

TPG Real Estate Finance Trust CEO Greta Guggenheim and Starwood Capital CEO Barry Sternlicht (Getty)

Facing a cash crunch, TPG Real Estate Finance Trust has secured a major infusion a little over two weeks after it sold off nearly $1 billion of its commercial real estate debt.

The real estate investment trust announced that Starwood Capital is taking a stake in the company, providing it with up to $325 million in new capital.

Greta Guggenheim, TPG RE Finance CEO, said the investment will provide the firm with “with additional liquidity and flexibility to navigate the current economic environment.” Under the agreement, Starwood will hold preferred stock and warrants.

Earlier this month, TPG RE Finance announced it was selling off a billion dollars in CRE debt to fight off margin calls, amid the coronavirus crisis. That disclosure came at its first quarter earnings in which the company said liquidity constraints raised substantial doubt about its ability to continue “as a going concern.”

Real estate investment trusts like TPG RE Finance, hedge funds and private equity firms that have issued billions in construction loans, mortgages and bonds backed by property debt are now under increasing pressure. Businesses that had been shuttered by the pandemic are beginning to open, but mortgage payments are coming in late or being skipped altogether.

Starwood and its boss, Barry Sternlicht, have been on the lookout for investment opportunities, including the decimated hotel sector.

“We love distress markets from a buyer’s standpoint,” Sternlicht told The Real Deal in a recent interview. “I like markets like this where you have to hustle. Hopefully, we’re big enough now to help people survive, too. They can come to us, and we can give them capital.”

Contact Sasha Jones at [email protected]


Related Articles

arrow_forward_ios
Starwood CEO Barry Sternlicht and Blackstone CEO Stephen Schwarzman (Getty)
Blackstone, Starwood up bid for Extended Stay America
Blackstone, Starwood up bid for Extended Stay America
Starwood Capital CEO Barry Sternlicht and HFZ Capital chairman Ziel Feldman with the Chatsworth at 344 West 72nd Street and (Getty, Google Maps)
Starwood takes control of 21 units at HFZ’s Chatsworth
Starwood takes control of 21 units at HFZ’s Chatsworth
Starwood Capital Group CEO Barry Sternlicht (Getty, iStock)
“Tsunami of change” in blue states a “dangerous game,” says Barry Sternlicht
“Tsunami of change” in blue states a “dangerous game,” says Barry Sternlicht
Barry Sternlicht (Getty, iStock)
Real estate is a “four-letter word” in the capital markets: Sternlicht
Real estate is a “four-letter word” in the capital markets: Sternlicht
Lanhee Yung and Sush Torgalkar (Photos via Cornell; Getty)
Extell, Starwood alums seek $500M for “contrarian” investing
Extell, Starwood alums seek $500M for “contrarian” investing
Starwood Capital CEO Barry Sternlicht and President Donald Trump (left)(Getty; iStock)
Barry Sternlicht dumps on Trump over Proud Boy remarks
Barry Sternlicht dumps on Trump over Proud Boy remarks
Barry Sternlicht (Getty, iStock)
Barry Sternlicht on 1031s: Kill them
Barry Sternlicht on 1031s: Kill them
Starwood Capital Group CEO Barry Sternlicht (Getty)
Starwood eyes $11B raise for real estate, distressed bets
Starwood eyes $11B raise for real estate, distressed bets
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...