Starwood Property Trust inked a deal to buy a sizable affordable housing portfolio in Florida, composed of 28 properties and 6,185 units, for about $600M, according to the REIT's filing with the Securities and Exchange Commission.
The properties are 99% leased and predominately in Orlando, with smaller concentrations in metro Tampa, West Palm Beach and Miami.
Starwood is acquiring the portfolio with a combination of units in a newly formed subsidiary, SPT Dolphin, which are exchangeable into STWD common shares, along with cash and debt financing.
"The properties are located in Florida markets with strong fundamentals," Starwood Chairman and CEO Barry Sternlicht said in a statement.
Sternlicht cited the region's persistent supply-demand imbalance for affordable housing, as well as attractive financing, as reasons to go ahead with the deal.
Starwood has been aggressive in the sector. Once the deal is closed, its affordable portfolio — most of which is in Florida — will consist of over 15,100 units. Starwood Capital Group has investments in nearly 20,000 market-rate units in Florida.
The company expects the transaction 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. The remaining phases are slated to close by the end of Q2.
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