Starwood REIT Buys 3,336-Unit Affordable Housing Portfolio

MIAMI—Starwood Real Estate Income Trust, a non-traded REIT managed by Starwood Capital Group has acquired a stabilized and affordable housing portfolio with 3,336 units across 18 Southeastern communities. With this acquisition, Starwood Capital will own approximately 24,000 affordable housing units across the country, collectively making the Starwood entities a top-five owner of affordable housing units in the United States. Terms of the transaction were not disclosed.

Starwood Capital did not respond to a request by GlobeSt.com for additional comment. The portfolio is 96% occupied and located mostly in Florida and North Carolina. Its garden-style residential units feature such amenities as swimming pools, clubhouses, playgrounds, fitness centers and laundry facilities. The properties have low vacancy rates and offer affordable options for renters, according to Starwood Capital.

These metropolitan areas are projected to experience robust economic and population growth over the next five years, according to Nielsen, with the portfolio’s largest markets including Orlando, Jacksonville, Charlotte, and Raleigh ranked in the top 10 for population growth with estimates doubling that of the U.S.

Over the next five years these markets are projected to see average income growth of greater than 3.5%. Florida and North Carolina rank high in business-friendly states rankings and continue to attract new residents due to high quality of life and low cost of living factors.

“This transaction is an extension of SREIT’s successful investments in the Florida affordable multifamily housing sector, and expansion into complementary high-growth Sun Belt markets,” said Mark Keatley, managing director at Starwood Capital. “This was truly a rare opportunity to acquire high-quality, well-located affordable housing assets in scale. The portfolio is well positioned to deliver attractive risk-adjusted returns given the persistent supply/demand imbalance for high-quality affordable housing, and we see long-term benefit for residents across the country in maintaining the sustainability of affordable housing.”

Keatley says the company will continue to invest in affordable housing.