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 offices, including affiliated operations, in Greenwich, Atlanta, Chicago, Frankfurt, Hong Kong, London, Los Angeles, Miami, San Francisco 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 Spain to Sweden. 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—Global Capital Raise of the Year (2014), European Firm of the Year (2013), North American Firm of the Year (2010), Global Industry Figure of the Year (Mr. Sternlicht, 2010 and 2009) and North American Industry Figure of the Year (Mr. Sternlicht, 2010) from PERE; Investor of the Year and Executive of the Year (Mr. Sternlicht, 2010) from Commercial Property Executive; and The Mortgage Observer’s Most Important Person in Commercial Real Estate Finance (Mr. Sternlicht, 2013); the Cornell Icon of the Industry Award (Mr. Sternlicht, 2015) from the Cornell University School of Hotel Administration; and the Lifetime Achievement Award (Mr. Sternlicht, 2015) from the International Hotel Investment Forum.
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 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
Starwood Capital funds acquire TMI Hospitality, one of the largest owners, managers and developers of select-service hotels in the U.S.
Starwood Capital launches Baccarat Hotels & Resorts brand with opening of Manhattan flagship
Starwood Capital launches 1 Hotels brand with opening of South Beach property in Miami
Starwood Global Opportunity Fund (SOF X) closes at $5.6B—the Firm’s largest fund to date
Starwood Capital funds acquire a portfolio of apartments the United States from Equity Residential in a transaction valued at $5.4B—the largest non-hotel purchase in the Firm’s history.
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, we have been one of the most prolific investors in distressed debt since the global financial crisis, while acquiring cash-flowing office, residential, industrial, retail and hotel assets at discounts to replacement cost. We also have successfully built platform strategies such as our land portfolio, retail malls and select-service hotels. We have raised 15 opportunistic real estate funds to date, with the most recent (Starwood Global Opportunity Fund X), attracting $5.6 billion of committed capital—the largest fund in the Firm’s history.
With total capital deployed since inception of almost $20 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.
Formed in 2012 to acquire, redevelop, lease, manage and operate the retail centers in Starwood Capital’s portfolio, Starwood Retail Partners has grown to become one of the largest mall enterprises in the United States. Starwood Retail Partners seeks to capitalize on opportunities in the rapidly changing retail landscape through a unique combination of talent, experience and execution capabilities in the regional mall, lifestyle, street retail and power center sectors. Through a variety of co-investments, joint-venture partnerships, stand-alone transactions and a closed-end core-plus fund, Starwood Retail Partners currently manages a portfolio of 30 properties across the United States, comprising 28 million square feet of gross leasable area and almost $7 billion in value. With approximately 370 employees, the organization brings hands-on experience in management, leasing and redevelopment to each of its investments.
Hotel Brand Management
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 (through LNR’s subsidiary, Hatfield Philips International), 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 named special servicer on 27% on all CMBS transactions in the industry representing an unpaid principal balance of $124 billion. In Europe, Hatfield Philips has been the active servicer on more than £50 billion and the named special servicer on over £35
billion of loans since 1997.
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. In 2016, Starwood Waypoint merged with Colony American Homes, bringing together two industry pioneers and creating a portfolio of over 30,000 homes. 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, while 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, a Starwood Capital affiliate, is an SEC-registered investment adviser that pursues opportunities to arbitrage the difference between public and private real estate market valuations.
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 2013, the group made a $35 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 group 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. 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’s principals own a minority interest in Balbec Capital LP, a pioneering investor in portfolios of steeply discounted claims where the debtor or assets are in bankruptcy. The company’s investments typically range across a broad spectrum that includes consumer, small business and SME debt, in which the obligor has filed for bankruptcy protection or entered into another restructuring, as well as financing and analytics services for local operators that invest in similar portfolios. With a track record of innovation in the worldwide insolvency markets, Balbec Capital seeks to generate returns that are uncorrelated to the capital markets and mitigate risk through a broadly diversified global portfolio.
Starwood Capital has 25 years of experience covering virtually every real estate asset class. The Firm has acquired more than $57 billion of opportunistic real estate assets since inception, generating strong returns during that time. The Firm also operates the largest commercial mortgage REIT in the U.S. (Starwood Property Trust).
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/return dynamics evolving.
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 $4.3 billion in 48 transactions from 1999 through 3Q15. 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 155 employees. Today, Starwood Capital and its affiliates operate 10 office worldwide. Our expansive worldwide network allows us to efficiently evaluate the most compelling risk/return opportunities across the globe—and, as a result, our pipeline of potential investments is the most robust we have 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 underlying assets. In addition, our in-house loan workout expertise 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 our investment strategy:
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 more than $42 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 18% 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 acquired approximately $9 billion of unpaid principal balance non-performing loans across our last three funds (SOF VIII, SOF IX and SOF X). 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 29 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.
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 Group, 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 possesses an expertise in the design of real estate assets that is unsurpassed in the private equity industry. This sensibility starts at the top: Our CEO, Barry Sternlicht, is a member of the Interior Design Hall of Fame—and he was joined this year by our Head of Design, Kemper Hyers. A number of our assets are striking in their aesthetics, even as they ultimately help drive value for our investors.
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.
Target markets with high barriers to entry and little to no competitive supply planned or under construction.
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.
Purchase—at favorable prices—fundamentally sound assets that have previously lacked capital, attention or effective management.
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.
Actively manage concentrations of fund capital by diversifying exposures across risk profiles, geographic areas, asset classes and positions in the capital structure.
The Firm has consistently demonstrated an ability 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 hitting its peak in 2008, we minimized our acquisitions and maximized our dispositions of assets—whereas in more recent years, our focus shifted to emphasize a higher volume of acquisitions.
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.