Starwood Completes $178M Commercial Mortgage Securitization

The company separated the loans into senior and junior loans, with the five senior loans contributing a face value of $84 million to the securitization in addition to $92 million in proceeds. Starwood also retained $94 million in junior interests.

August 18, 2010
By Allison Landa, News Editor

Commercial real estate finance firm Starwood Property Trust has completed commercial mortgage securitization of five mortgage loans totaling $178 million. The company separated the loans into senior and junior loans, with the five senior loans contributing a face value of $84 million to the securitization in addition to $92 million in proceeds. Starwood also retained $94 million in junior interests.

The senior loans, which are comprised of either a senior A note or senior participation, are secured by office, retail and industrial properties and have remaining maturities between four and seven years. The initial purchasers were Goldman, Sachs & Co., Citigroup Global Markets Inc. and Wells Fargo Securities, L.L.C.

The securitization generated non-recourse match funded financing with an effective cost of funds of approximately 3.5 percent. Starwood Capital Group head of real estate fixed income Leo Huang said that the company’s retained investments are expected to generate returns in excess of 16 percent on a non-recourse, match funded basis. Starwood Capital is the firm’s external manager.

Starwood Property Trust focuses primarily on originating, investing in, financing and managing commercial mortgage loans and other commercial real estate-related debt investments. The firm has originated or acquired more than $1.3 billion in loans since its IPO in August 2009.