Starwood Property Trust Closes $2.5B Energy Debt Deal
These energy infrastructure assets have a low correlation to the commercial real estate sector.
NEW YORK–Starwood Property Trust has closed its previously announced $2.5 billion acquisition of GE Capital’s Energy Financial Services’ Project Finance Debt Business.
The platform Starwood acquired does loan origination, underwriting, capital markets and asset management, and has a loan portfolio consisting of 50 senior loans secured by energy infrastructure real assets, including approximately $470 million of unfunded loan commitments. Another $150 million of loans were excluded from the final close due to potential near term repayment.
“A Multi-Cylinder Finance Company”
When the deal was first announced in August, Starwood Property Trust’s Chairman and CEO Barry Sternlicht said the acquisition was part of the REIT’s push to be a “multi-cylinder finance company.”
In other words: energy infrastructure assets have a low correlation to the commercial real estate sector.
Indeed Sternlicht spelled that out, saying “we should never overstay our welcome in any one business line and always have opportunities to deploy capital into only those verticals where reward clearly outweighs risk”.