Starwood Real Estate Income Trust Completes Acquisition of 15,460 Unit Multifamily Housing Portfolio from Strata Equity Group

November 22, 2021 | Starwood Real Estate Income Trust

Starwood Real Estate Income Trust, a non-listed REIT managed by Starwood REIT Advisors, L.L.C., a subsidiary of Starwood Capital Group, announced the acquisition of a multifamily housing portfolio of 15,460 units located in 62 communities from Strata Equity Group, a privately held real estate investment and management company based in San Diego. Terms of the transaction were not disclosed.

The acquired portfolio is located in 27 markets across 10 states, primarily in the Southeast region of the United States, including Georgia, Tennessee, and North Carolina. The portfolio’s markets are experiencing substantial population, employment and income growth, projected to outpace the U.S. average by 2x over the next five years. These markets offer lower taxes and a cost of living below the national average, and continue to benefit from migratory trends toward the Sun Belt and other growth markets. The portfolio’s units offer affordability with high-quality amenities. Strata will remain in an asset management role for the acquired portfolio.

James Kane, Head of Multifamily Asset Management for Starwood Capital, said, “We have known and respected the Strata team for many years and are pleased that this relationship led to a mutually beneficial transaction for both companies. We look forward to continuing to work with Strata to help realize the value of this portfolio.” 

The Strata team responsible for the structuring and execution of the transaction was led by Scott Wittman and Andrew Gordon, Strata’s Chief Investment and Chief Operating Officers. Strata has sold in excess of $4 billion in multifamily assets this year through multiple transactions. 

David Michan, Strata’s CEO, commented, “We are thrilled to complete this extraordinary transaction with Starwood on behalf of Strata and our investors. This further validates our strategy of acquiring quality affordable housing in growing markets. The Strata team has worked tirelessly to assemble and enhance this portfolio on top of the strong platform we have built. The assets performed well through the pandemic and we are excited the Strata team will remain involved and be a part of the continued success of these assets going forward.”  

As of September 30, 2021, the SREIT portfolio had a total asset value of $12.6 billion across 246 properties. “We appreciate the opportunity to work directly with Strata on this significant transaction that is well suited to the stable yield profile of SREIT,” added Ethan Bing, Managing Director at Starwood Capital. “Portfolio recapitalizations are a key component of our investment strategy for SREIT and this transaction is another example of our ability to offer an attractive structure that meets the objectives of large owners seeking liquidity.”