Since founding Starwood Capital during the depths of the savings & loan crisis with the purchase of non-performing loans and real estate assets from Resolution Trust Corp., Chairman and CEO Barry Sternlicht has overseen the Firm’s growth into a diversified investment company that today encompasses more than 1,160 employees. Including affiliated operations, the Firm maintains offices in Greenwich (our global headquarters), Atlanta, Chicago, Frankfurt, London, Los Angeles, Luxembourg, Miami, Paris, San Francisco, São Paulo and Washington, D.C.
The Firm’s business is built upon innovation. We have created a number of market-leading platforms to enhance operational efficiencies and maximize the value of our investments’ underlying assets. These platforms include:
In our pursuit of the most compelling opportunities globally, we have invested in markets ranging from Thailand to France to Brazil to Poland. Highlighting our international commitment, Starwood Capital in 2011 made the strategic decision to enhance its longstanding presence in Europe in anticipation of a prolonged recovery across the region—with our Global Head of Real Estate Acquisitions, Jeff Dishner, moving to London to oversee this effort.
Reflecting the success of its investment activities, Starwood Capital and its professionals have received numerous industry accolades over the years—including being named PERE’s European Firm of the Year (2013) and North American Firm of the Year (2010), and Global Industry Figure of the Year (Mr. Sternlicht, 2010 and 2009) and North American Industry Figure of the Year (Mr. Sternlicht, 2010); Commercial Property Executive’s Investor of the Year and Executive of the Year (Mr. Sternlicht, 2010); and The Mortgage Observer’s Most Important Person in Commercial Real Estate Finance (Mr. Sternlicht, 2013).
Barry Sternlicht launches Starwood Capital Group.
Starwood Opportunity Funds I and IA close at $52M.
Starwood Capital funds contribute multifamily holdings to Equity Residential (NYSE: EQR)—which goes on to become the largest publicly-traded apartment owner in the country, with Mr. Sternlicht serving on its Board of Directors
Starwood Opportunity Fund 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 Investors closes at $220M
Starwood Capital creates Starwood Hotels & Resorts Worldwide (NYSE: HOT) and Mr. Sternlicht becomes Chairman and CEO
Starwood Capital, via affiliates, purchases Westin Hotels & Resorts and begins a new growth phase for the business
Starwood Opportunity Fund 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 Capita, via an affiliate, makes its first international investment, purchasing the distressed loans of condominiums in Bangkok
Starwood Hotels & Resorts Worldwide is added to the S&P 500 Index
Starwood Opportunity Fund VI closes at $567M
Starwood Capital, via an affiliate, takes National Golf Properties private
Starwood Capital opens an office in London—marking the beginning of the Firm’s significant expansion of its international operations
Starwood Global Opportunity Fund VII closes at $1.475B
Starwood Capital Hospitality Fund I closes at $900M
Starwood Capital funds complete the $3.2B acquisition of Groupe Taittinger and Société du Louvre
Starwood Capital, via an affiliate, acquires Mammoth Mountain, one of the top-ranked ski resorts in the U.S.
Starwood Capital, via an affiliate, acquires BR Guest Hospitality, owner and operator of some of New York most successful restaurant brands
The Visionaire, developed by Starwood Capital, becomes Manhattan’s first Platinum LEED-certified condominium project
Starwood Energy Infrastructure Fund I closes at $433M
Starwood Capital 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 commercial mortgage REIT that is the largest blind pool company ever listed on the NYSE
Starwood Capital funds acquire 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 Capital, via an affiliate, purchases a property in New York’s Chelsea neighborhood that, when redeveloped as the Walker Tower, sets a new record price for a downtown Manhattan condo sale
Starwood Global Opportunity Fund VIII closes at $1.83B
Starwood Capital funds acquire The Viceroy Resort—making the Firm the largest employer on the island of Anguilla
Starwood Capital Global Hospitality Fund II closes at $965M
Starwood Capital funds acquire two prime Manhattan assets that the Firm will develop into flagship properties for its 1 Hotels and Baccarat Hotels & Resorts brands
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 Energy Group finances the Gainesville (FL) Renewable Energy Center—one of North America’s largest-ever biomass projects
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 and conference center platform
Starwood Capital, via an affiliate, and Starwood Property Trust to acquire LNR Property LLC (along with subsidiary Hatfield Philips International) for $1.05B, thus expanding the Firm’s distressed real estate expertise
Starwood Capital portfolio company TRI Pointe Homes (NYSE: TPH) goes public and is later combined with a Weyerhaeuser subsidiary to create one of the largest homebuilders in the United States
Starwood Distressed Opportunity Fund IX closes at $4.2B
Starwood Energy Infrastructure Fund 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 enters into a strategic partnership to develop the new stadium campus for AS Roma, one of the world’s leading football clubs
Starwood Capital, via an affiliate, acquires a diverse portfolio of assets in Sweden and Norway for $1.4B—the largest property transaction in Scandinavia for the year
This has been Starwood Capital’s primary business since the Firm raised its first distressed real estate fund in 1992. 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-reward propositions. For example, we have been one of the most prolific investors in distressed debt since the Global Financial Crisis, while acquiring cash-flowing office, residential, retail, industrial and hotel assets at discounts to replacement cost. We have also successfully built platform strategies such as our land portfolio, retail malls and select service hotels. We have successfully raised nine opportunistic real estate funds to date, with the most recent (Starwood Distressed Opportunity Fund IX) attracting $4.2 billion of committed capital.
With total capital deployed since inception of more than $17 billion, Starwood Property Trust (NYSE: STWD) is the largest commercial mortgage real estate investment trust in the U.S. Externally managed by Starwood Capital, Starwood Property Trust focuses on originating, investing in, financing and managing commercial mortgage loans and other commercial real estate debt 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 Retail Partners manages one of the largest regional mall operating platforms in the U.S., with a portfolio of 28 properties totaling 27 million square feet of gross leasable area and $5 billion of gross asset value. Starwood Retail Partners seeks to capitalize on opportunities in the rapidly evolving retail landscape by acquiring, redeveloping and repositioning premier real estate assets in the regional mall, lifestyle and power center sectors. Utiliziing its deep experience in management, leasing and redevelopment, Starwood Retail Partners is well-positioned to transform leading shopping centers into the one-stop retail destinations of the future.
SH Group is a hotel brand management company that provides the Firm with significant proprietary investment opportunities. Professionals within SH Group also serve as Starwood Capital’s in-house design and hotel operations experts. Leveraging its marketing, design, operational and technological expertise, SH Group is the force behind some of the most groundbreaking and dynamic hotel brands in the world, including:
Starwood Capital, through Starwood Property Trust’s 2013 acquisition of LNR Property LLC, also operates as a special loan servicer in the U.S. and a primary and special loan servicer in Europe, and has expanded its product offerings to include fixed-rate and conduit loans. LNR provides Starwood Capital with unique insight into the distressed debt market, as it is the named special servicer on $131 billion in real estate debt, and currently manages $15 billion of real estate-owned and distressed loans. In Europe, LNR subsidiary Hatfield Philips is the active primary servicer on $12 billion and special servicer on $8 billion of commercial mortgage-backed securities.
In February 2014, Starwood Property Trust spun off its single-family residential business, which merged with Waypoint Real Estate Group to create Starwood Waypoint Residential Trust (NYSE: SWAY)—one of the largest publicly traded investors, owners and operators of single-family rental homes in the U.S. Starwood Capital also created TRI Pointe Homes (NYSE: TPH), a West Coast homebuilder that merged with Weyerhaeuser’s homebuilding business in 2014 to create one of the largest homebuilders in the U.S. TRI Pointe Homes provides Starwood Capital with a unique perspective on the U.S. residential markets. Starwood Land Ventures, one the nation’s leading providers of residential sites to the homebuilding industry, offers additional insights into land valuation trends in the U.S. and their resulting impact on residential property values.
Starwood Real Estate Securities is an SEC-registered investment adviser with total assets under management of almost $600 million. Through its two long/short equity funds and one long-only fund, Starwood Real Estate Securities pursues opportunities to arbitrage the difference between public and private real estate market valuations. Using value-oriented, fundamental analysis, the team seeks to outperform the S&P 500 and REIT indices with significantly lower volatility.
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, Starwood Energy Infrastructure Fund I and II, and other affiliated investment vehicles, Starwood Energy Group manages total equity commitments of approximately $2.3 billion, and has executed transactions totaling more than $4 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 November 2013, the group closed its first transaction: a $35 million investment in Northeast Natural Energy funding an acreage acquisition and development program in one of the most prolific areas of the Marcellus Shale. Leveraging its industry knowledge and extensive transactional experience, Starwood Oil & Gas is well-positioned to capitalize on the dramatic transformation of the energy sector.
Balbec Capital LP, an affiliate of Starwood Capital, is a pioneering investor in portfolios of steeply discounted claims where the debtor and assets are in bankruptcy. The team’s investments typically involve credit card and other personal loan claims subject to court-approved and administered payment plans on unsecured consumer debt. Through its global platform and experience in worldwide insolvency markets, Balbec Capital LP seeks to generate returns that are uncorrelated to the capital markets and mitigate risk through a broadly diversified portfolio.
Starwood Capital has 24 years of experience covering virtually every real estate asset class. The Firm has acquired more than $46 billion of opportunistic real estate assets since inception, and has generated strong returns during that time. The Firm also operates the largest ($5.35 billion) commercial mortgage REIT in the U.S.
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 we see risk-reward dynamics evolve.
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 increased, encompassing countries all around the world. In Europe alone, Starwood Capital has invested $4.1 billion in 47 transactions from 1999 through 2014, and acquired more than $1.3 billion in 31 transactions in the region via the Firm’s debt platforms, Starwood Property Trust (NYSE: STWD) and Starwood European Real Estate Finance (LSE: SWEF). We expect increasing numbers of attractive investment opportunities to emerge from the region.
To provide on-the-ground support for international investment opportunities as they emerge, the Firm has opened a number of offices around the world. For example, we opened a local London office in 2003 that now serves as the hub of a pan-European operation comprising approximately 160 employees. Today, Starwood Capital and its affiliates operate 12 offices worldwide. Our expansive network allows us to efficiently evaluate the most compelling risk-reward opportunities across the globe—and, as a result, our pipeline of potential investments is the most robust we’ve seen since the Firm’s founding.
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 sourcing the majority of its transactions off-market. The Firm also boasts a history of extraordinary creativity that extends to its innovative transaction structuring and execution capabilities.
The Firm has broad operating experience in all real estate asset classes, with asset management organized into dedicated teams by specialty. We have created a number of platforms to enhance operational efficiencies and maximize the value of the underlying assets. In addition, our in-house loan workout expertise—highlighted by our affiliates, special servicers LNR Property LLC and Hatfield Philips International—gives us the ability to manage large portfolios of non-performing loans.
The expertise developed through Starwood Capital’s symbiotic business lines enhances our judgment throughout the underwriting process. These investment platforms provide the Firm with critical bottom-up intelligence that helps set the agenda for future transactions:
The Firm’s capital markets expertise is a core competency that sets it apart from more traditional real estate investors. Starwood Capital 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 we could generate from individual sales, we have created additional value for our investors through a number of successful public market executions, including:
On the debt side, our veteran in-house capital markets team has closed transactions totaling approximately $37.3 billion since March 2010. The team’s expertise and global network of lending relationships allow us to obtain best-in-market terms for our investors, while using brokers only sparingly (less than 14% of the time).
Starwood Capital was founded during the savings & loan crisis, when the Firm acquired real estate holdings from Resolution Trust Corp. The Firm has since capitalized on numerous opportunities to purchase distressed assets at deep discounts. In fact, the Firm has acquired $6.7 billion of NPLs across our last two funds. Starwood Capital affiliates LNR Property LLC and Hatfield Philips International, two of the largest special loan servicers, also provide insight into various troubled real estate projects.
The senior team at Starwood Capital has worked together for an average of 15 years, and has an average of 28 years of industry experience—across all real estate asset classes and stages of the investment cycle.
Starwood Capital’s disciplined investment approach has enabled the Firm to deliver consistently strong performance across its funds, with our first seven funds 100% liquidated.
Starwood Capital occupies a distinctive 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, utilizing co-investment funds. For its sweet spot of midsized transactions, the Firm’s reputation, sophistication, speed, access to capital and ability to execute provide us with a competitive advantage over smaller firms. On larger transactions, the Firm’s proven ability to conduct detailed due diligence using a vast network of resources and relationships provides us with an in-depth understanding of potential investments that many of our peers cannot match in a cost-efficient manner.
Purchase—at favorable prices—fundamentally sound assets that have previously lacked capital, attention or the proper financial incentives.
Seek to use the proper leverage—in amount and duration—to reflect the stability of each asset’s cash flow. In certain cases, we secure debt longer than our expected hold period—representing a potential asset upon exit if interest rates rise, as we expect them to.
Target markets with high barriers to entry and little to no competitive supply planned or under construction.
Actively manage concentrations of fund capital by diversifying exposures across risk profiles, geographic areas, asset classes and positions in the capital structure.
Treat our investment partners’ capital as our own—because part of it is our own. Starwood Capital’s partners invest alongside our LPs in every transaction that we sponsor. We have never taken transaction fees—believing instead that we should profit only after our investors receive a full return of their capital plus an attractive preferred return.
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. We have 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, Starwood Capital works on the “micro” side to pinpoint investment opportunities with asymmetrical return potential through value-added management.