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Starwood Buys 15,460-Unit Multifamily Portfolio From Strata

Starwood Capital Chairman Barry Sternlicht speaking at a Bisnow event in 2018.

Starwood's nontraded real estate investment trust has raised billions of dollars this year to pour into commercial real estate, and it has just scooped up a portfolio of 62 multifamily communities concentrated in the Southeast.

Starwood Real Estate Investment Trust, a subsidiary of Starwood Capital Group, acquired the 15,460-unit portfolio from Strata Equity Group, the buyer announced Wednesday. It didn't disclose the acquisition price. 

The portfolio SREIT acquired is spread across 27 markets in 10 states, with a concentration in Georgia, Tennessee and North Carolina, Starwood said. The investor said it targeted those markets because of their continued population growth and relatively low cost of living. 

Strata will continue to manage the properties. The San Diego-based firm has sold over $4B in multifamily properties across multiple deals this year, the announcement said. Strata's Scott Wittman and Andrew Gordon led the team that worked on this deal.

The deal is the latest in a wave of major investments from nontraded REITs, a sector that has shattered fundraising records this year and has focused its acquisitions largely on multifamily and industrial properties. Nontraded REITs had raised $24.6B through the end of September surpassing the previous full-year record of $19.6B set in 2013, according to Robert A. Stanger & Co. 

SREIT raised $4.2B through the first nine months of this year, according to Stanger, making it the second-largest nontraded REIT fundraiser behind Blackstone Group. SREIT's portfolio consisted of 246 properties with a total value of $12.6B, Starwood said in the release.