Barry Sternlicht’s Starwood Property Trust Inc. said it will consider separating its single-family home rental business and investments in nonperforming residential loans from the rest of the company.
As of March 31, Starwood owned a portfolio of 1,644 foreclosed homes in seven states, which it bought for $200 million, the real estate investment trust said today in a regulatory filing. Starwood has also acquired 1,318 nonperforming residential loans at an aggregate cost of $173.1 million, according to the filing. The unpaid balance on these loans at the end of March was $363.2 million.
“The company’s board of directors has not formally evaluated any such transaction, and there can be no assurance as to the assets to be included or the timing, terms, structure or completion of any such transaction,” Greenwich, Connecticut-based Starwood said in the filing.
Real estate investors are buying up single-family homes, seeking to capitalize on rising demand for rentals from people who lost houses to foreclosure, can’t qualify for a mortgage or down want to own. Blackstone Group LP, based in New York and the world’s largest private-equity firm, has spent more than $3.5 billion to buy 20,000 single-family rentals, while Tom Barrack’s Santa Monica, California-based Colony Capital LLC has raised $2.2 billion.
Starwood also invests in commercial mortgage-backed securities and originates commercial-property loans.