Starwood REIT Acquires 62-Property Portfolio

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Privately held real estate investment management company Strata Equity Group has sold a 62-asset multifamily portfolio with a total of 15,460 units across 10 states to Starwood Real Estate Income Trust Inc., a non-listed REIT managed by a Starwood Capital Group subsidiary.

Starwood declined to share the price of the transaction and the locations of the properties. The portfolio is located in 27 markets primarily in the Southeast including the states of Georgia, Tennessee and North Carolina. Strata will remain in an asset management role. 

David Michan, Strata’s CEO, said in prepared remarks the sale of the portfolio further validates the firm’s strategy of acquiring quality affordable housing in growing markets. He said the assets performed well through the pandemic and he was excited the Strata team would remain involved and be a part of the continued success of the assets going forward. 

The portfolio’s markets are seeing substantial population, employment and income growth. Starwood noted that growth is expected to outpace the national average by two times over the next five years. The REIT stated the markets offer lower taxes and cost of living below the national average. The markets are expected to continue to benefit from migratory trends toward the Sun Belt and other growth markets. The units within the portfolio were described as affordable with high-quality amenities.

Markets Strata is active in the Southeast include Atlanta and Savannah in Georgia, Knoxville and Nashville in Tennessee, Charlotte and Greensboro/Winston-Salem in North Carolina and Charleston in South Carolina. Last year, Strata had one of the top multifamily transactions in the Wilmington, N.C., market with the $45.5 million acquisition of the 223-unit One Midtown community from Wilkinson Real Estate Advisors, according to Yardi Matrix data.

The Strata team responsible for the structuring and execution of the SREIT transaction was led by Chief Investment Officer Scott Wittman and Chief Operating Officer Andrew Gordon. Strata has sold more than $4 billion in multifamily assets this year through multiple transactions. Details were not available on these dispositions.

Earlier Transactions

The acquisition comes a year after another two sizable transactions by SREIT. In November 2020, the REIT acquired two multifamily portfolios for a combined $644.8 million as part of its affordable housing platform. The portfolios were comprised of 32 communities with a total of 4,618 units. The larger of the two deals was a transaction for 28 communities with 3,660 units, primarily in Virginia and North Carolina for $521.3 million. The smaller deal added a four-community portfolio with 858 units in Jacksonville, Fla., for $113.5 million. 

As of Sept. 30, the SREIT portfolio had a total asset value of $12.6 billion across 246 properties. The REIT invests in high-quality, stabilized, income-producing real estate and is managed by Starwood REIT Advisors LLC.