GREENWICH, CT—Starwood Capital has bolstered its portfolio by nine assets in a deal just forged with Wells Real Estate Investment Trust II. The assets, located in Orlando, Tampa, Charlotte, Winston-Salem, Pittsburgh and Salt Lake City, went for $260.5 million.
According to Starwood senior vice president Mark Keatley, “Most of these buildings are located in markets with outsized job and population growth projections." Spokespeople for Starwood would not provide specifics on the locations of each of the properties.
Nevertheless managing director Chris Graham adds that the portfolio fits in with Starwood's investment strategy in that it generates “Strong cash-on-cash returns” and because the portfolio was purchased at “well below” replacement cost.
Those returns are based in the 95% lease rates in most of the buildings and the roster of investment-grade tenants. More than 80% of the in-place income being generated from the properties comes from these tenants, Graham says.
Limited new supply in the markets mentioned was another compelling reason for the buy, he concludes.
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
