(AP) Starwood Property Trust Inc. (STWD) (A Greenwich CT based REIT) said it will spin off its single-family rental-home unit into a real estate investment trust headed by Waypoint Real Estate Group’s management division, which is being acquired in the deal.
The spinoff, Starwood Waypoint Residential Trust, held $750 million in 4,268 homes and non-performing loans on 1,549 properties as of Sept. 30, Starwood Property said in a statement. The new REIT will receive $100 million in cash from its parent, a $400 million line of credit and no debt, which will position it to be the second-largest publicly traded single-family rental REIT by portfolio value, according to Starwood Property Chairman Barry Sternlicht.
“We’re buying $50 million to $60 million homes a month and the baby is getting a little large -- like Moby-Dick,”Sternlicht said. “With Waypoint, we’ll have best-in-class management that has capability proven to get to scale.”
Wall Street-backed investors have been racing to buy houses as prices, which fell as much as 35 percent from their 2006 peak, are rising at their fastest pace in seven years. Demand for rental homes is growing from millions of households that went through foreclosure or can’t qualify for a mortgage.
Sternlicht, 52, will be chairman of the new company, which he expects to begin trading publicly on the New York Stock Exchange under the ticker SWAY in February. Gary Beasley and Doug Brien, Waypoint’s current co-chief executive officers, will serve as co-CEOs of the new company.
Sternlicht, whose Greenwich, Connecticut-based Starwood Capital Group has $26.3 billion under management, began investing in distressed real estate after the 1980s savings-and-loan crisis. Starwood Property is a REIT managed by a Starwood Capital affiliate.
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