The Cube, Berlin, Germany
Starwood Global Opportunity Fund XI
Tour Total, Berlin, Germany
Starwood Global Opportunity Fund XI
Since founding Starwood Capital during the depths of the savings & loan crisis with the purchase of non-performing loans and real estate assets from the Resolution Trust Corp., Chairman and CEO Barry Sternlicht has overseen the Firm’s growth into a diversified investment company that today encompasses more than 4,500 employees. The Firm maintains offices in Miami (Headquarters), Arlington, Atlanta, Chicago, Dallas, Greenwich, Los Angeles, New York, San Francisco, Washington, D.C., and affiliated offices in Amsterdam, Hong Kong, London, Luxembourg, Sydney and Tokyo.
Starwood Capital’s hallmark is to invest opportunistically, moving between geographies, asset classes and positions in the capital stack as the Firm perceives risk/return dynamics to be evolving. To execute this strategy, Starwood Capital has built up geographic and asset-class expertise in the Firm’s targeted markets.
Throughout its history, the Firm has created a number of market-leading platforms to enhance operational efficiencies and maximize the value of its investments. These platforms include:
In its pursuit of the most compelling opportunities globally, Starwood Capital has invested in more than 30 countries, ranging from the Americas to Europe to Asia. Highlighting Starwood Capital’s international commitment and ability to shift geographies to capitalize on market dislocations, the Firm made the strategic decision in 2011 to enhance its longstanding presence in Europe.
Reflecting the success of its investment activities, Starwood Capital and its professionals have received numerous industry accolades over the years, including:
Barry Sternlicht launches Starwood Capital
Starwood Opportunity Funds I and IA (SOF I and IA) close at $52M
SOF I/IA contribute the majority of their multifamily portfolio to Equity Residential (NYSE: EQR)—which goes on to become the largest publicly traded apartment owner in the U.S., with Mr. Sternlicht serving on its Board of Directors
Starwood Opportunity Fund II (SOF II) closes at $102M
Starwood Capital, via an affiliate, acquires a majority of the distressed senior debt of Hotel Investors Trust, thus setting the stage for the Firm’s emergence as a global leader in the hospitality space
Starwood Mezzanine (SOF III) Investors closes at $220M
Starwood Capital creates Starwood Hotels & Resorts Worldwide (NYSE: HOT) and Mr. Sternlicht becomes Chairman and CEO
Starwood Capital purchases Westin Hotels & Resorts and begins a new growth phase for the business
Starwood Opportunity Fund IV (SOF IV) closes at $830M
Starwood Capital creates Starwood Financial, subsequently renamed iStar Financial (NYSE: STAR), which becomes one of the largest publicly traded real estate finance companies in the U.S.
Starwood Hotels & Resorts Worldwide completes the $14B acquisition of ITT Sheraton, making the company the largest hotel operator in the world
First W Hotel opens in New York
Starwood Opportunity Fund V closes at $516M
Starwood Capital makes its first non-hotel investments in Europe (London) and in Asia (Japan and Thailand)
Starwood Hotels & Resorts Worldwide is added to the S&P 500 Index
Starwood Opportunity Fund VI (SOF VI) closes at $567M
Starwood Capital, via an affiliate, takes National Golf Properties (NYSE: TEE) private
Starwood Capital opens an office in London—marking the beginning of the Firm’s significant expansion of the Firm’s international operations that also includes a Luxembourg hub with responsibility for all European investments in Starwood Capital funds
Mr. Sternlicht returns to Starwood Capital full time as Chairman and CEO
Starwood Capital Hospitality Fund I (Hotel I) closes at approximately $900M
Starwood Capital funds complete the $3.2B acquisition of Groupe Taittinger and Société du Louvre
Starwood Global Opportunity Fund VII (SOF VII) closes at $1.475B
Starwood Capital sells Taittinger champagne company, which was part of the Groupe Taittinger/Société du Louvre acquisition
Starwood Energy Infrastructure Fund (SEIF I) closes at $433M
The Visionaire, developed by Starwood Capital via an affiliate, becomes Manhattan’s first Platinum LEED-certified condominium project
Starwood Capital, via an affiliate, launches Starwood Land Ventures, which goes on to become one of the leading providers of residential sites to the U.S. homebuilding industry
Starwood Debt Fund II closes at $378M
Starwood Capital creates Starwood Property Trust (NYSE: STWD), a leading diversified finance company that is the largest blind pool company ever listed on the NYSE
Starwood Capital leads a consortium in acquiring Corus Bank’s $4.5B face-value loan portfolio from the FDIC in one of the government’s largest distressed debt transactions during the Great Recession
Starwood Global Opportunity Fund VIII (SOF VIII) closes at $1.83B
Starwood Capital Global Hospitality Fund II (Hotel II) closes at $965M
Starwood Energy Group, via an affiliate, completes the Starwood SSM Project—one of the largest solar power plants in Canada
Starwood Capital, via an affiliate, makes the first in a series of acquisitions that will establish the Firm as one of the largest operators of select-service and extended-stay hotels in the U.S.
Starwood Capital affiliate Starwood European Real Estate Finance (LSE: SWEF) goes public
SOF VIII’s TRI Pointe Homes (NYSE: TPH) goes public and is later combined with a Weyerhaeuser subsidiary to create one of the largest homebuilders in the U.S.
Starwood Capital funds acquire Principal Hayley, which the Firm subsequently merges with Four Pillars and De Vere Ventures to create a leading U.K. hotel platform
Starwood Capital, via an affiliate, and Starwood Property Trust acquire LNR Property LLC (along with subsidiary Hatfield Philips International) for $1.05B, thus expanding the Firm’s distressed real estate expertise
Starwood Distressed Opportunity Fund IX (SOF IX) closes at $4.2B
Starwood Energy Infrastructure Fund II (SEIF II) closes at $983M
Starwood Waypoint Residential Trust (NYSE: SWAY), one of the largest owners of single-family rental homes in the U.S., goes public
Starwood Capital leads a consortium to take public Opus Bank (NASDAQ: OPB), a leading regional real estate lender
A Starwood Capital fund acquires a diverse portfolio of assets in Sweden and Norway for $1.4B—the largest property transaction in Scandinavia for the year
Starwood Global Opportunity Fund X (SOF X) closes at $5.6B
Starwood Capital launches 1 Hotels and Baccarat Hotels & Resorts brands
Starwood Capital funds acquire TMI Hospitality, one of the largest owners, managers and developers of select-service hotels in the U.S.
Starwood Capital funds acquire a portfolio of apartments in the United States from Equity Residential in a transaction valued at $5.4B
One of China’s largest life insurance companies, along with some major sovereign wealth funds and insurance companies, invest with Starwood Capital in approximately $3.3B of U.S. select-service hotels
Starwood Capital funds acquire Milestone Apartments REIT
Starwood Waypoint Residential Trust merges with Invitation Homes, creating the largest single-family landlord in the U.S.
Starwood Capital acquires a multifamily property management company, now named Highmark Residential
Starwood Global Opportunity Fund XI (SOF XI) closes at $7.56B
Starwood Energy Infrastructure Fund III (SEIF III) closes at $1.2B
Launched Starwood Real Estate Income Trust (SREIT), a non-listed NAV REIT
Starwood Property Trust acquires GE Capital’s infrastructure finance division, now known as Starwood Infrastructure Finance
Launched Treehouse Hotels brand
Starwood Opportunity Zone Fund I closes at $304M
Starwood Distressed Special Situations Co-Investment closes at ~$700M
Starwood Capital becomes a carbon neutral firm
Starwood Distressed Opportunity Fund XII (SOF XII) closes at $10B
Starwood Capital funds complete the take-private of Extended Stay America, a leading owner and operator of economy extended-stay hotels, in a 50/50 JV for an aggregate purchase price of $6.3B
Starwood Capital funds complete the take-private of RDI REIT—a public company with a $1.3B portfolio anchored by high-quality industrial and logistics assets in Europe
Starwood European Real Estate Debt Fund I closed at £262M—created to capitalize on the dislocated real estate financing market in Europe
Starwood Capital considers opportunistic real estate investing to be defined by minimizing downside risk and maximizing upside. In executing this strategy, the Firm’s seasoned team pursues global investment opportunities across all real estate asset classes and positions in the capital stack that offer compelling risk/return propositions. For example, Starwood Capital has been one of the most prolific investors in distressed debt since the global financial crisis, while acquiring cash-flowing office, residential, industrial and hotel assets at discounts to replacement cost. The Firm has also successfully built platform strategies in asset classes such as residential land and select-service hotels. Starwood Capital has fully raised 16 opportunistic real estate funds to date, with the most recent (Starwood Distressed Opportunity Fund XII), attracting $10 billion of committed capital.
With total capital deployed since inception of more than $85 billion, Starwood Property Trust (NYSE: STWD) is a leading diversified finance company with a core focus on the real estate and infrastructure sectors. Externally managed by Starwood Capital, Starwood Property Trust focuses on originating, acquiring, financing and managing commercial mortgage loans and other real estate investments. Starwood European Real Estate Finance Ltd. (LSE: SWEF), also externally managed by Starwood Capital, pursues similar investment objectives to Starwood Property Trust, with a geographic focus on Europe.
Starwood Capital, through Starwood Property Trust’s 2013 acquisition of LNR Property LLC, operates as a special loan servicer in the U.S., and has expanded its product offerings to include fixed-rate and conduit loans. LNR provides Starwood Capital with unique insights into the distressed debt market, as it is the world’s largest commercial mortgage special servicer by active balance named special servicer on approximately 26% of all transactions in the CMBS universe.
SH Hotels & Resorts is a hotel brand management company with over 1,500 employees that provides the Firm with significant proprietary investment opportunities and helps enhance the performance of fund hotel investments—including assisting Starwood Capital’s in-house design and hotel operations experts. Leveraging its marketing, design, operational and technological expertise, SH Hotels & Resorts is the force behind some of the most groundbreaking and dynamic hotel brands in the world, including:
Starwood is one of the largest owners of multifamily in the U.S. and in 2017 acquired a multifamily management company. This provides the Firm with asset and market information not accessible to competitors, which helps with deal sourcing, underwriting and asset management. The team’s expertise also is valuable with revenue/expense management and marketing.
Positioning our assets and operations for the future is core to Starwood’s investing philosophy. Starwood believes technology made for the built world can create substantial value in our real estate assets, and we are embracing the rapid growth in property technology. We are focused on identifying and implementing best-in-class PropTech to optimize operations across our assets, facilitate the collection and analysis of real-time data, and use this data to enhance our investment underwriting and business plan decisions.
We target proven growth markets that have demonstrated strong fundamentals and liquidity.
Starwood Real Estate Income Trust, Inc. (SREIT) is a non-listed REIT with an investment strategy that targets a diversified portfolio of high-quality, stabilized, income-producing real estate. Starwood Real Estate Income Trust invests in primary and secondary markets across the U.S. and in Europe. For more information about Starwood Real Estate Income Trust, please visit starwoodnav.reit
Starwood Energy Group specializes in energy infrastructure investments, with a focus on the natural gas and renewable power generation and transmission sectors. Through its general opportunity funds and other affiliated investment vehicles, Starwood Energy Group has raised over $3 billion of equity capital and has executed transactions totaling more than $7 billion in enterprise value. By leveraging its extensive operations, development, construction, acquisition and financing expertise, the team is well-positioned to capitalize on opportunities emerging in this rapidly evolving industry.
Starwood Oil & Gas invests in conventional and unconventional oil & gas assets in North America. In 2013, the group made a $36 million investment in Northeast Natural Energy to fund the Charleston, WV-based company’s acreage acquisition and development program in one of the most prolific areas of the Marcellus Shale. In 2015, the team led a $110 million investment in EagleRidge Energy, a Dallas-based oil & gas producer focused on one of the lowest-cost natural gas shale plays in Texas. In 2017, the group led a $50 million investment in Ventana Exploration and Production to acquire non-operating working interests and minerals in the prolific STACK and SCOOP basins in Central Oklahoma. Leveraging its industry knowledge and extensive transactional experience, Starwood Oil & Gas is well-positioned to capitalize on the dramatic transformation of the energy sector.
Starwood Capital has 31 years of experience covering virtually every real estate asset class. The Firm has acquired over $94 billion of opportunistic real estate assets since inception, generating strong returns throughout that time. The Firm also operates a leading diversified finance company —Starwood Property Trust (NYSE: STWD), which has deployed over $72 billion in capital since inception.
A hallmark of Starwood Capital is the ability to pursue a wide variety of investment opportunities as they emerge—moving from asset class to asset class, shifting geographies from the U.S. to international markets and changing positions in the capital stack as the team perceives risk/return dynamics to be evolving.
As one of the largest institutional real estate investors in the world, Starwood Capital benefits from a worldwide sourcing engine—creating a robust deal flow, and accessing the majority of transactions on an off-market basis. In fact, over 80% of SOF VIII – XII’s investments were sourced off-market or via small auctions. The Firm also boasts a history of extraordinary creativity that extends to its innovative transaction structuring and execution capabilities.
The Firm has broad real estate operating experience, with asset management organized into dedicated teams by specialty. The Firm has created a number of platforms to enhance operational efficiencies and maximize the value of underlying assets. In addition, our in-house loan workout expertise gives us the ability to manage large portfolios of non-performing loans.
Starwood Capital’s capital markets expertise is a core competency that the Firm believes sets it apart from more traditional real estate investors. The team constantly evaluates real estate in relation to the capital markets in order to take advantage of pricing inefficiencies, and arbitrage between the public and private markets. When the public markets are willing to pay more for assets or platforms than could be generated from longer-term holds or individual asset sales, Starwood Capital has completed a number of successful public market executions, including:
On the debt side, the Firm’s skilled in-house capital markets team has closed transactions totaling over $140 billion since January 2010. The team’s expertise and global network of lending relationships has often allowed it to obtain best-in-market terms for investors, while using brokers only sparingly.
The expertise developed through Starwood Capital’s symbiotic business lines enhances the team’s judgment throughout the underwriting process. These platforms provide critical bottom-up intelligence that helps set the agenda for the Firm’s investment strategy:
Starwood Capital’s track record as a global investor is well-established. Beginning with the purchase of distressed condominium loans in Bangkok in 1999, the Firm’s international investments have steadily grown to encompass more than 30 countries. In Europe alone, Starwood Capital has committed more than $10 billion of equity in over 80 transactions since 1999. Today, Starwood Capital and its affiliates operate 16 offices worldwide. This expansive network allows the Firm to efficiently evaluate the most compelling risk/return opportunities across the globe.
Starwood Capital was founded during the savings & loan crisis in the early 1990s, when the Firm acquired real estate holdings from the Resolution Trust Corp. The Firm has since capitalized on numerous opportunities to purchase distressed assets at deep discounts. Across its last three funds, the Firm has acquired over $10 billion of unpaid principal balance NPLs, partially sourced by engaging domestic money center and regional banks, and forming strategic partnerships with the National Asset Management Agency (Ireland’s “bad bank”) and the FDIC (via the Corus Bank investment) to purchase some of their NPL pools, as well as purchasing a pool from Bankia (Spain’s amalgamation of seven troubled local banks). Starwood Capital also benefits from the distressed real estate expertise of LNR Property LLC one of the largest special loan servicers.
The executive committee at Starwood Capital has worked together for an average of 22 years, and has an average of 29 years of industry experience—across all real estate asset classes and stages of the investment cycle.
Starwood Capital occupies what it believes is a distinct niche in the market: Nimble enough to target transactions of $50–125 million, yet large enough to capitalize on billion-dollar investment opportunities around the world by utilizing co-investment funds. For its sweet spot of midsized transactions, Starwood Capital believes that the Firm’s reputation, sophistication, speed, access to capital and ability to execute provide the Firm with a competitive advantage over smaller, more regional firms. On larger transactions, the Firm’s proven ability to conduct detailed due diligence using a vast network of resources and relationships results in an in-depth understanding of potential investments that few investors can match in a cost-efficient manner.
Starwood Capital’s disciplined investment approach has enabled the Firm to consistently deliver strong performance across its funds, with the Firm’s first eight funds 100% liquidated.
Starwood Capital’s opportunistic real estate program is distinguished by the Firm’s proven ability to develop creative strategies to add value throughout the investment process—enabling the most advantageous exit. The success of this approach is underscored by the Firm’s sale of 21 assets since 2010 that have set records for:
Starwood Capital Group is a proud signatory of the United Nations-supported Principles for Responsible Investment. The Firm continues to set a new standard for the private equity industry in environmentally responsible investment and development, across all real estate asset classes. Nowhere is this commitment more apparent than 1 Hotels. Operated by Starwood Capital affiliate SH Hotels & Resorts, this luxury lifestyle brand represents hospitality with a purpose: To celebrate nature while encouraging sophisticated travelers to live well, do better and connect with the world around them.
Starwood Capital believes that it possesses an expertise in the design of real estate assets that is unsurpassed in the private equity industry. This sensibility starts at the top: CEO Barry Sternlicht is a member of the Interior Design Hall of Fame. A number of Starwood Capital’s assets have been acclaimed for their aesthetics, which ultimately help drive value for the Firm’s investors.
Target markets with high barriers to entry and little to no competitive supply planned or under construction. Since the economic recovery has generally been slow and steady, Starwood Capital has not seen the type of aggressive supply that would typically result from the recent rent growth and strength of the markets.
Seek to get ahead of capital flows in areas where economic growth is projected to drive tenant demand but new supply is not yet on the horizon. The Starwood Capital team has found that capital flows often influence asset valuations as much as—or more than—the impact of local market supply and demand trends. Once these target markets are identified, the team works on the “micro” side to pinpoint opportunities for asymmetrical return potential through value-add asset management.
Purchase—at favorable prices—fundamentally sound assets that have previously lacked capital, attention or effective management. Buying below replacement cost offers a margin of safety, typically ensuring that no new construction/ competition will be completed until values rise to justify new product. Starwood Capital’s recent transactions demonstrate that opportunities continue to arise to acquire assets at discounted prices.
Seek to use proper leverage—in amount and duration—to reflect the stability of each asset’s cash flow. In the current market, Starwood Capital can typically buy property at yields in excess of the cost of debt and generate strong cash-on-cash yields during the hold period. Positive leverage allows the investment team to be patient for a recovery, lessening the reliance on the residual value to achieve strong returns. In most cases, Starwood Capital can secure debt longer than the expected hold period—thus creating a potential asset upon exit if interest rates rise.
Actively manage concentrations of fund capital by diversifying exposures across risk profiles, geographic areas, asset classes and positions in the capital structure.
Acquire undermanaged or undercapitalized assets that the Starwood Capital team can stabilize and refurbish, and implement a dynamic asset management plan in order to position each investment for sale at the maximum price. In appropriate cases, the Firm can create a growth platform through the acquisition of complementary assets and/or portfolios.
Seek to enhance returns in both cyclical downturns and upswings by maintaining a disciplined approach to assets and their value. For example, prior to the market crash in 2008, Starwood Capital minimized its acquisitions and maximized dispositions of assets—whereas in subsequent years, the Firm shifted its focus toward a higher volume of acquisitions. By the same token, the Firm took advantage of a number of distressed investment opportunities in the wake of the Great Recession but shifted toward more defensive asset classes in recent years.
Design optimal exit strategies that can generate maximum asset value, with options including an individual asset sale, portfolio sale, operating company sale or public market execution—all of which Starwood Capital has extensive experience in executing.
Treat Starwood Capital investment partners’ capital as the Firm’s own—because a meaningful portion of it is the Firm’s own. Starwood Capital’s partners invest alongside its LPs in every transaction that the Firm sponsors. Further, Starwood Capital does not earn transaction fees in its opportunity funds.