Barry Sternlicht’s Starwood Property Trust Inc. is exploring promoting an nearly $2 billion portfolio of vitality infrastructure loans and commitments primarily acquired from General Electric Co. lower than two years in the past, in response to folks with information of the matter.
Starwood is working with an adviser to solicit curiosity from potential consumers, one of many folks mentioned, requesting anonymity as a result of the talks are non-public. The agency is open to letting some staff transfer as a part of a transaction, the particular person added.
A spokesman for Greenwich, Connecticut-based Starwood declined to remark.
When the actual property funding belief introduced the portfolio’s acquisition within the latter half of 2018, Chairman and Chief Executive Officer Sternlicht mentioned he was looking for methods to diversify past Starwood’s give attention to business actual property.
At the time, the property included a roughly $2.1 billion portfolio of 51 loans, in addition to $400 million of unfunded commitments. By the tip of March this yr, the pile shrank to $1.6 billion in loans and $300 million in commitments throughout 34 positions, principally with U.S. debtors, in response to a May submitting. Almost three-quarters of the portfolio is secured by pure gasoline and technology property, with the rest backed by property corresponding to pipelines and wind farms, the submitting exhibits.
The common mortgage measurement is $46 million with an unlevered yield of 6.2%, the submitting exhibits. Most loans are floating-rate and have a weighted common lifetime of 4.eight years.
Starwood’s shares are down 40% this yr, closing at $14.82 on Tuesday to offer it a $4.2 billion market valuation. Still, that’s up markedly from March, when the spreading coronavirus pandemic despatched the worth beneath $9 and prompted Sternlicht to ship a memo to shareholders.
“We have been through every subsequent credit and economic crisis and have always emerged stronger,” he wrote that month. “Crises can present unusual opportunities and while we are being prudent and judicious in this uncertain climate, we look forward to deploying our significant financial resources and global footprint to take advantage of market dislocations as they continue to arise.”