Starwood raises US$508m for net lease expansion
Starwood Property Trust secured US$507.7m late on Wednesday from an overnight follow-on stock sale, locking in the equity funding needed to purchase a net lease portfolio of properties from Brookfield Asset Management.
Bank of America and Wells Fargo priced 25.5m shares at US$19.91, the bottom of the US$19.91–$20.33 marketing range and a 4.5% discount to the US$20.85 closing price.
The commercial mortgage REIT closed on Thursday at US$19.71 on volume of 30.4m shares, more than 10 times normal and suggestive of retail churn.
In marketing the deal, Starwood outlined its plans to acquire a US$2.2bn portfolio of net lease properties from Brookfield Asset Management. That purchase price includes US$1.3bn of assumed debt, a portion of which Starwood plans to refinance at a lower borrowing cost.
Bank of America also served as financial adviser to Starwood on the acquisition, which is expected to close next Wednesday, July 23.
Net lease is a new business for Starwood, whose core is commercial lending. To help smooth the learning curve, Starwood will retain a team of 28 real estate professionals who run the business for Brookfield.