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Feb. 6, 2014

Starwood Spins Off Single-Family Rental REIT

By Dees Stribling, Contributing Writer

New York—Shares in Starwood Waypoint Residential Trust, a single-family rental real estate investment trust, have started regular trading on the New York Stock Exchange under the ticker symbol SWAY. The trading follows the company’s spinoff from Starwood Property Trust Inc., which involved a one-for-five distribution of Starwood Waypoint shares to stockholders of Starwood Property Trust as of Jan. 24, 2014.

Waypoint was originally formed to acquire, renovate, and lease single-family properties in the wake of the contraction of the housing market in the late 2000s, when prices dropped and a large number of REOs or otherwise distressed properties came on the market. Since 2009, the company has acquired and rented single-family properties, and has also bought nonperforming residential mortgages.

As part of the spinoff, the new REIT received $100 million in cash from its parent company, along with a $400 million line of credit. Starwood Waypoint also starts its existence with no debt. Currently the company has a portfolio of about 6,800 homes and nonperforming loans.

The market has been awash recently with new REITs specializing in single-family homes. In December 2012, Silver Bay (SBY) went public, followed by American Residential Properties (ARPI) in the spring of 2013. In the summer of last year, American Homes 4 Rent (AMH) also went public.

Large single-family landlords are also planning bond sales. American Homes 4 Rent, for instance, which owns about 21,000 rental houses, recently picked Goldman Sachs to sell bonds backed by single-family rent payments. Late last year, Blackstone Group, which had previously created Invitation Homes to acquire and lease single-family homes, sold bonds backed by single-family properties — the first offering of its kind.

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