Starwood Capital Forms Public Infrastructure Subsidiary

Citing a need in today’s “increasingly turbulent real estate and credit markets,” Starwood Capital Group Global L.L.C., has tapped two real estate executives to head up a new subsidiary that will manage investments in U.S. public real estate infrastructure bonds. Starwood said today Ramiro Albarran and Bob Burch, former Bank of America executives, will join Starwood Infrastructure Finance L.L.C., as managing principals. Albarran and Burch will have the primary responsibility for finding and managing Starwood Infrastructure Finance’s investments. “Starwood Infrastructure Finance will fill a valuable need in today’s market by providing long-term capital projects (large and small) across the country with attractive risk-adjusted returns for our investors,” Karl Frey, managing director for Starwood Capital, said in today’s release. “Starwood Infrastructure Finance will take a disciplined approach to underwriting these bonds for what they are–non-recourse real estate development loans–and we are especially pleased to have the ideal management team in place to lead that effort.” Albarran was previously national head of investment banking for public finance at Bank of America and a member of the group’s operating and commitment committees. Burch was a managing director at Bank of America and the national manager for real estate securities within public finance, which was responsible for structuring all the real estate infrastructure bonds underwritten by Bank of America. Burch and Albarran could not be reached for comment by press time today. A spokesperson for Starwood Capital Group Global told CPN today that Albarran and Burch “are on the job and are very actively looking for projects.” He declined to discuss locations or projects that the group will be looking at for its investments. In the Starwood Capital release, Albarran said the new subsidiary’s “initial focus would be to purchase performing debt on ongoing projects that hold great long-term potential, but are in need of new capital partners.” He said the subsidiary would not be a “short-term, work-out play, but rather a long-term capital provider in this sector, working hand-in-hand with developers and underwriters to see projects through to a successful conclusion.” On June 4, CPN reported that the United States spends about $400 billion a year on new infrastructure and improvements to its roads, rails, ports and other public projects. Earlier this month, John McMillan, a Cushman & Wakefield of California Inc. executive director, told CPN that public investments were needed in Southern California’s industrial infrastructure to expand its capacity, particularly its ports.