Starwood Real Estate Income Trust reached a nearly $2 billion refinancing deal for a national multifamily portfolio largely comprising workforce and affordable housing units, reflecting interest in that property type by large investors across the country.
Starwood REIT, part of Miami-based Starwood Capital Group, secured $1.719 billion in loan proceeds to refinance 12,955 units in 52 properties across 10 states. Walker & Dunlop arranged the 10-year Freddie Mac loans, the Bethesda, Maryland-based commercial real estate finance and advisory services firm said.
The portfolio involves some of the properties Starwood REIT purchased from San Diego-based Strata Equity Group at the end of 2021. That transaction involved 15,460 units in 62 properties, primarily in the Southeast, including Georgia, Tennessee and North Carolina.
"With a large majority of units in high-growth, high-migration markets, we believe the fundamentals are strong for the long term for our lenders and investors," Jonathan Pollack, president of Starwood Capital, said in a statement. The firm declined via email to comment on locations of the properties.
The refinancing of Starwood REIT's portfolio comes as institutional investors are looking more closely at workforce housing.
In January, New York City-based banking giant Citi launched a five‑year, $60 billion initiative to support the acquisition, construction, rehabilitation and long‑term financing of at least 250,000 affordable housing units nationwide.
High-value markets
That deal included a focus on units for essential workers and lower‑cost rental options in expensive markets.
In September, San Francisco‑based Bridge Housing, a firm with $4 billion in assets, launched its first private equity fund focused on affordable and workforce housing on the West Coast.
As for Starwood REIT, its portfolio spans several asset types, with roughly a quarter of it centered on affordable housing as of the end of February, according to its website.
The dollar amount of the Starwood refinancing is larger than the total volume of Walker & Dunlop loans that Freddie Mac securitized — $1.59 billion — in the first quarter of the year, according to CoStar data.
For the record
Walker and Dunlop's Dustin Stolly, Aaron Appel, Jonathan Schwartz, Keith Kurland, Adam Schwartz, Sean Reimer, Michael Stepniewski and Michael Ianno worked on the deal.