October 26, 2015
Starwood Capital Group LLC’s Starwood Global Opportunity Fund X is buying apartments from Equity Residential for $5.4B. The acquisition is expected to close in 2016 and will mark Starwood’s largest non-hotel purchase in the firm’s history.
The deal includes 23,262 homes across 72 communities, which is equal to $230,634 per unit. The majority of the proceeds will be paid out in dividends of $9 to $11 a share. The markets represented in the portfolio have experienced rent growth at 5.4% annually in the last five years, which is stronger than the national average.
Barry Sternlicht, founder, chairman and CEO of Starwood, is becoming a powerful force in residential real estate across the United States. Since the U.S. homeownership rate is the lowest in decades, residential landlords are adding assets as multifamily housing continues to offer investors superior returns.
Additionally, Equity Residential is looking to sell 4,728 apartments next year, including their entire portfolio in Connecticut.