Starwood JV Sells 2,200-Unit Portfolio

Helsinki, Finland. Photo by Julius Jansson on Unsplash

Starwood Capital Group has sold a significant portion of its residential portfolio in Finland after more than two years of ownership. The firm, along with its operating partner Avara Oy, sold the Finnish residential portfolio to Orange Capital Partners for an undisclosed price. CBRE acted as the financial and real estate advisor for Starwood and Avara, while White & Case served as legal advisor.

The portfolio totals 2,200 apartments that are spread across 16 cities in Finland. According to Starwood, 50 percent of the portfolio’s value is located within the Helsinki region. Starwood characterized the portfolio as consisting of high-quality communities that offer sustainable living spaces.

Starwood Capital acquired the multifamily portfolio through a subsidiary in 2019 when the firm felt there was attractive relative value in Finland’s residential market. Finland’s market showed strong supply and demand fundamentals, which also contributed to the portfolio’s resilience throughout the pandemic. During its ownership, Starwood and Avara, who served as the portfolio’s property manager, also conducted major refurbishments to the communities.

EXPANDING ITS EUROPEAN, AMERICAN PRESENCE

Federico Bianchi, European head of asset management at Starwood Capital, said in prepared remarks that the firm is focusing on investing in high-quality, affordable, sustainable homes across its markets. Bianchi added in his prepared statement that the multifamily and single family rental sectors are a high-conviction investment strategy for Starwood across European markets. Beyond the multifamily sector, Starwood is also working on a 2.3 million-square-foot logistics platform across Norway and Denmark, as well as repositioning the Skt Petri Hotel in Copenhagen as 1 Hotel Copenhagen.

While Starwood is a major investor in Europe’s residential sector, the firm and its managed funds have more than 120,000 units under management in the U.S. In November, Starwood Real Estate Income Trust Inc., a REIT that’s managed by a Starwood Capital Group subsidiary, acquired a 62-property multifamily portfolio with 15,460 units located across 10 states.