Starwood Capital Group has purchased a stabilized affordable housing portfolio of 21 communities, mainly in Dallas-Fort Worth, Houston and Florida. The acquisition of the 4,448-unit portfolio through a controlled affiliate brings Starwood’s total cache of affordable housing properties to nearly 20,700 units, making the private investment firm one of the top 10 largest owners in the U.S.
The terms of the transaction were not disclosed. Starwood said in a statement that the portfolio is 96 percent occupied with an average vintage of 2004. The garden-style communities feature swimming pools, clubhouses, fitness centers, playgrounds, and laundry facilities among other amenities.
Starwood added that the deal was a rare opportunity to invest in high-quality, well-located affordable residences at scale. The company said that the portfolio’s existing income has “significant” downside protection, as well as multiple upside opportunities. The communities are located in markets that are projected to experience more than 5 percent income growth over the next 5 years, according to a CBRE analysis, the statement noted.
Starwood, which has more than $60 billion of assets under management, is building on a track record of large-scale residential portfolio deals. In late 2017 the group’s Starwood Property Trust affiliate agreed to buy a 28-property, 6,185-unit affordable housing portfolio in Florida for some $600 million. The 1,740-unit first phase of the deal closed in December 2017 for $156.2 million, according to Yardi Matrix.