NEW YORK—StarwoodCapital Group has made a $325 million strategic investment inmortgage lender TPG RE Finance. Its non-votinginvestment, made in the formof preferred stock and detachable warrants to purchase thecompany's common stock, comes as the mortgage REIT struggles to regain itsfooting after issuing a goingconcern warning that it may not have enough liquidity to meet itsobligations and keep operations afloat. The REIT was hammered inMarch and April when the markets plunged and forced TPG Finance tosell assets in order to meet margin calls.
A handful of bidders hadreportedly been circling TPG RE Finance with offers, according to areport in Bloomberg, including Oxford PropertiesGroup and AlmanacRealty Investors.
Starwood Capital's investment will provide TPG RE with liquidityand access to additional capital at its option. Proceeds from theinitial closing will be used to make voluntary deleveragingpayments under some of the company's secured financing facilities,and for general corporate purposes.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
