Starwood Property Trust And Starwood Capital Group To Acquire LNR Property LLC
- Starwood Property Trust to Acquire Premier Real Estate Servicing and Debt
Origination Platform -
- Significantly Expands Starwood Property Trust's Product Offerings, Pipeline
Opportunities and Underwriting Capabilities -
- Creates Unique Combination of Expertise, Data and Access to Capital -
GREENWICH, Conn. and MIAMI, Jan. 24, 2013
GREENWICH, Conn. and MIAMI, Jan. 24, 2013 /PRNewswire/ --Starwood Property
Trust (NYSE: STWD) (the "Company") and Starwood Capital Group, a leading
global private investment firm, on behalf of Starwood Distressed Opportunity
Fund IX, today announced that they have entered into a definitive agreement to
acquire LNR Property LLC ("LNR") for a total purchase price of $1.05 billion
LNR, founded in 1969, is a leading diversified real estate investment,
finance, management and development firm with over 550 employees located in 12
offices throughout the US and Europe.
Under the terms of the agreement, Starwood Property Trust will acquire the
following LNR business segments for a total purchase price of $856 million:
oUS Special Servicer – the largest US special servicer with over $131
billion in loans under management and real estate owned;
oUS Investment Securities Portfolio – a portfolio of legacy whole loans,
CMBS and CDO investments;
oArchetype Mortgage Capital – a commercial real estate conduit loan
origination platform designed to provide unique financing solutions
throughout the US;
oArchetype Financial Institution Services – an acquirer, manager, and
servicer of portfolios of small balance commercial loans and real estate
oLNR Europe – which consists of Hatfield Philips, the largest independent
primary and special servicer in Europe, and LNR European Investment Fund,
a European CRE debt fund; and
oAuction.com – 50 percent of LNR's interest in the nation's leading real
estate exchange selling residential and commercial real estate via
In addition, Starwood Capital Group will acquire for $197 million both LNR's
US Commercial Property Group and the other 50 percent of LNR's ownership
interest in Auction.com.
"We are delighted to announce this transformative and highly strategic
acquisition that diversifies Starwood Property Trust's revenue sources, adds
significant scale to our operating platform and dramatically expands our
proprietary origination capabilities," said Barry Sternlicht, Starwood
Property Trust's Chairman and Chief Executive Officer. "We expect the
combination of LNR's capabilities, Starwood Property Trust's superior access
to capital, and both firms' underwriting expertise to result in a long-term
and sustainable competitive advantage."
Mr. Sternlicht continued, "We are pleased to add LNR's deep and talented team
of experienced professionals, who have a demonstrated track record of
generating profits through all stages of the real estate cycle."
Toby Cobb and Justin Kennedy, Co-Chief Executive Officers of LNR, commented:
"The entire LNR team is extremely excited to be joining the Starwood family.
Having partnered on several large transactions, we knew that Starwood Property
Trust's unique capital and investment capabilities would be a perfect
complement for LNR's operating platform and diligence capabilities. This is a
truly powerful combination and we look forward to continuing to grow the
The acquisition is expected to be accretive to earnings and cash flow in 2013
(before transaction expenses) and 2014, resulting in enhanced dividend
coverage for Starwood Property Trust's shareholders.
Summary of Strategic Benefits
Starwood Property Trust expects the combination to benefit the Company in
three key areas:
oExpanded Investment Pipeline: Widens scope of potential capital deployment
opportunities via more than 15,000 touch points with borrowers
representing more than $125 billion in loans, a proven conduit originator,
a small balance commercial real estate loan platform, unmatched CMBS
investing capabilities, a leading platform in Europe, and an ownership
interest in Auction.com which will provide incremental deal flow.
oScale and Diversification: Establishes Starwood Property Trust as a full
service real estate finance company and immediately expands breadth of
business lines to include CMBS securities and special servicing, which are
counter-cyclical investments and provide a natural hedge in a variety of
oEnhanced Risk Management: Adds a premier global platform of real estate
underwriters and workout specialists with access to an unmatched
proprietary database on the performance of over $400 billion of commercial
real estate loans and underlying assets, resulting in industry-leading
underwriting and risk assessment via a significant information advantage.
The completion of the acquisition is subject to the satisfaction of a number
of customary conditions, including the expiration of waiting periods and the
receipt of approvals under Hart-Scott-Rodino, and is expected to close during
the second quarter of 2013.
LNR is currently owned by affiliates of Aozora Bank Ltd, a subsidiary of
certain investment funds managed by Cerberus Capital Management L.P., iStar
Financial, a subsidiary of certain investment funds managed by Oaktree Capital
Management, L.P., and Vornado Realty Trust.
"The current ownership group invested in LNR because we recognized its
significant potential under our collective stewardship," said Jay Sugarman,
Chairman of LNR. "Having successfully transformed the company through new
management and new strategic directives, we are pleased to realize on that
investment and grateful for the dedication of all the LNR employees that
enabled this outcome."
Conference Call and Investor Information
An investor presentation discussing the transaction will be available in the
investor relations section of Starwood Property Trust's website. The Company
has scheduled a conference call for Thursday, January 24, at 8:30am Eastern
Time to discuss the acquisition. A webcast will be available on the investor
relations section of Starwood Property Trust's website at
To Participate In the Telephone Conference Call
Dial in at least five minutes prior to start time.
Conference Call Playback:
The playback can be accessed through February 7, 2013.
Citigroup and Credit Suisse are serving as financial advisors to Starwood
Property Trust on the transaction and Sidley Austin LLP is acting as legal
counsel. Lazard is serving as financial advisor to the sellers of LNR Property
About Starwood Property Trust, Inc.
Starwood Property Trust, Inc. is focused on originating, investing in,
financing and managing commercial mortgage loans and other commercial real
estate debt investments, commercial mortgage-backed securities ("CMBS"), and
other commercial real estate-related debt investments. Starwood Property
Trust, Inc. also invests in residential mortgage-backed securities ("RMBS")
and residential real estate owned, and may invest in non-performing loans,
commercial properties subject to net leases and residential mortgage loans.
The Company is externally managed and advised by SPT Management, LLC, an
affiliate of Starwood Capital Group, and has elected to be taxed as a real
estate investment trust for U.S. federal income tax purposes.
About Starwood Capital Group
Starwood Capital Group is a private, U.S.-based investment firm with a core
focus on global real estate. Since the group's inception in 1991, the firm
has raised over $16 billion of equity capital and, through its various funds,
has invested $13.7 billion representing $36 billion in assets. Starwood
Capital Group currently has over $22 billion of assets under management.
Starwood Capital Group maintains offices in Greenwich, Atlanta, San Francisco,
Washington, D.C., Los Angeles and Chicago, and affiliated offices in London,
Luxembourg, Paris, Mumbai and Sao Paulo. Starwood Capital Group has invested
in nearly every class of real estate on a global basis, including office,
retail, residential, senior housing, golf, hotels, resorts and industrial
assets. Starwood Capital Group and its affiliates have successfully executed
an investment strategy that includes building enterprises around core real
estate portfolios in both the private and public markets. Additional
information about Starwood Capital can be found at www.starwoodcapital.com.
About LNR Property LLC
LNR Property LLC is a market leader in commercial real estate finance,
management and development, with established expertise and demonstrated
capability in the investment, management and servicing of commercial real
estate assets, secured real estate loans and loan pools. LNR, which was
founded in 1969, is headquartered in Miami Beach, Florida and has 12 offices
throughout the US and Europe. LNR's Commercial Property Group is focused on
creating value by acquiring, developing, repositioning, managing and selling
interests in commercial and multi-family real estate, including land. LNR's
Asset Services Group focuses on LNR's loan and loan securities businesses and
is one of the nation's leading buyers of non-investment grade and unrated
commercial mortgage backed securities ("CMBS"), and is the leading special
servicer in the U.S.
Investor Relations – Starwood Property Trust
Media Relations – Starwood Property Trust
Phil Denning or Jason Chudoba
Media Relations – Starwood Capital Group
SOURCE Starwood Property Trust, Inc.
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