Starwood Capital Seeks to Raise US$11 Billion for New Real Estate Fund

Main Photo: Sternlicht’s 1 Hotel Brooklyn, NYC…photo credit Eric Laignel

Date: August 2020

Location: Global

Name: Starwood Global Opportunity Fund XII

No. Keys: TBA

Who: Barry Sternlicht’s Starwood Capital Group is seeking to amass an $11 billion war chest for real estate wagers. The firm is targeting as much as $8 billion for its flagship Starwood Global Opportunity Fund XII. It’s seeking another $3 billion for a so-called sidecar fund earmarked for distressed opportunities, according to inside people. A spokesman for Starwood declined to comment. The firm, one of the largest private real estate investors worldwide, is raising the new capital in a time of tumult.

Sternlicht told Bloomberg in June that the distress in commercial real estate is “going to be ugly” as a halt to large group meetings stifles the hospitality industry. Starwood Property Trust Inc., a mortgage real estate investment trust, is exploring the sale of a portfolio of energy infrastructure loans and commitments worth almost $2 billion, Bloomberg News reported last week, and its shares have declined almost 40% this year.

“We have been through every subsequent credit and economic crisis and have always emerged stronger,” Sternlicht wrote in a March memo to Starwood Property Trust shareholders. “Crises can present unusual opportunities and while we are being prudent and judicious in this uncertain climate, we look forward to deploying our significant financial resources and global footprint to take advantage of market dislocations as they continue to arise.”

Starwood, partly owned by Dyal Capital Partners, in 2018 raised $7.55 billion for its 11th flagship fund, which was its largest since inception. Investors in that vehicle include the Teachers’ Retirement System of the State of Illinois, Teacher Retirement System of Texas and New York State Teachers Retirement System.

Separately, Sternlicht co-founded a blank-check company known as Jaws Acquisition Corp. that began trading in May. It has said explicitly that it won’t compete with Starwood.

THPT Comment: When Sternlicht speaks, most people listen…$11bn plus his own Jaws company, means plenty of firepower for what are inevitably going to be “opportunities” in the months to follow.

First Seen: Bloomberg Quint

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