GREENWICH, CT-A controlled affiliate of Starwood Capital Group has bought a pool of REO office and retail assets from special servicer CWCapital Asset Management LLC for $191 million. The seven office and four retail properties all were part of a 67-asset, $2.57-billion pool that CWCAM brought to market this past October.
The office portion of the Starwood Capital acquisition comprises 1.3 million square feet and is located mainly in California and Arizona. It includes 3800 Chapman and 500 Orange Tower, two Orange, CA properties formerly owned by MPG Office Trust; as well as Arrowhead Creekside in Glendale, AZ; Avion Lakeside in Chantilly, VA; Howe Corprorate Center in Sacramento; Plaza Squaw Peak in Phoenix; and Southcreek Corprorate Center II in Overland Park, KS, near Kansas City, MO.
The four retail assets comprise a total of 295,000 square feet. They include East Thunderbird Square North in Scottsdale, AZ; Greenfield Gateway in Mesa, AZ; Lincoln Ridge Retail in Lincoln, CA; and Shoppes at Home Depot in the Nashville suburb of Antioch, TN.
“We are pleased to be acquiring an income-generating portfolio of REO assets located in markets with attractive fundamentals,” says Mark Keatley, SVP at Starwood Capital. “We intend to sell several assets in the near term, and deploy our in-house REO/workout team and operating platforms to create value on the remainder of the pool.”
Chris Graham, senior managing director at Starwood Capital, adds that the portfolio buy “highlights our expertise in distressed investing and asset management, and also reflects our longstanding approach of buying assets at significantly below replacement cost.” Accordingly, he says, “we believe that this transaction features strong downside protection, as well as considerable upside potential in both the near and intermediate term.”
When it brought the pool to market this past fall, CWCAM said the sale was structured so that prospective purchasers could submit offers on individual pools, groups of pools, single assets or the portfolio in its entirety. The special servicer said that it expected that the market would see this offering as a unique opportunity to acquire a large and diversified portfolio of mortgage loan and real property assets representing trophy, core, core-plus and value-add strategic investments
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