Starwood Capital closes latest real estate fund

This sixth fund aims to deploy much of its $567m of capital in Western Europe and Japan.

International real estate fund manager Starwood Capital Group LLC has confirmed the closing of its sixth real estate opportunity fund at $567m. The Starwood Global Opportunity Fund VI [SOF VI] received commitments from both private and institutional capital and is intended to take advantage of real esatte investment opportunities arising in the US, UK, Western Europe and Japan.  

The firm said that as of 31 March, 2002, SOF VI had already acquired a property portfolio valued at approximately $485m representing approximately $145m of investor capital. The company intends to make investments in a diversified portfolio of office, senior housing, industrial, retail, mixed use, residential land development, and corporate transactions. 

“This is a particularly interesting time to invest in real estate,” says Barry Sternlicht, Starwood’s Chairman & CEO.  “The spread between U.S. cap rates and interest rates is perhaps the widest we have seen in decades.  We are also seeing disruption in the real estate markets following last year’s dramatic economic downturn, and financing for new projects is as difficult as it’s been in 15 years.'

Although Starwood's track record has seen it particularly active in the US, it's clear the firm wants to take advantage of what it sees as compelling investment opportunities in Europe and Asia. Said Sternlicht: 'Internationally, Western Europe offers opportunity as corporations and governments divest their vast real estate holdings.  Japan could offer one of the most profitable real estate markets as appropriate fiscal reforms are implemented.' 

Since 1991, through a series of opportunity funds and affiliates, Starwood Capital Group Global reports that it has invested more than $7bn in various real estate assets, strategic joint ventures and real estate operating companies producing an IRR in excess of 40 per cent on invested capital.

Starwood Capital has also led the formation of the world’s largest hotel company (measured by EBITDA): Starwood Hotel and Resorts Worldwide Inc., as well as the largest dedicated mezzanine real estate lender in the US, Starwood Financial [now called i-Star Financial], and participated in the formation of the largest multifamily Real Estate and Investment Trust [REIT], the Equity Residential Properties Trust.

Sister publication Private Equity International magazine has just released an in-depth study of private equity firm's growing activities in the real estate sector in Europe in its July/August issue. Just click on the banner advertisement on the homepage to find out more, or follow the link on the right.