Starwood Property Trust looks to offload $2B loan portfolio

Mortgage REIT acquired portfolio in 2018 as a means to diversify beyond real estate

TRD NATIONAL /
Jul.July 23, 2020 09:00 AM
Starwood Property Trust CEO Barry Sternlicht (Getty)

Starwood Property Trust CEO Barry Sternlicht (Getty)

Starwood Property Trust is reportedly trying to sell a portfolio of loans that it purchased in 2018 as a way to diversify beyond commercial real estate.

The firm has engaged an advisor to help it find potential buyers for the portfolio, which is composed of energy infrastructure loans and commitments, according to Bloomberg.

When Starwood purchased the portfolio in 2018, it consisted of $2.1 billion in loans and $400 million in unfunded commitments. As of March, that had fallen to $1.6 billion worth of loans and $300 million in commitments, according to Bloomberg.

Starwood’s stock is down 40 percent from last year, and CEO Barry Sternlicht has a dim outlook on the New York market.

The billionaire is also seeing opportunity in distress: In recent months, Starwood has been buying up real estate-backed securities in the belief that they are undervalued.

“Crises can present unusual opportunities,” Sternlicht said in a memo to shareholders in March, “and while we are being prudent and judicious in this uncertain climate, we look forward to deploying our significant financial resources and global footprint to take advantage of market dislocations as they continue to arise.” [Bloomberg] — Sylvia Varnham O’Regan


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