Starwood REIT Completes Commercial Mortgage Buy
Starwood Property Trust (STWD) completed the purchase of a portfolio of 20 performing commercial mortgage loans and B notes from Teachers Insurance and Annuity Association of America on February 26, 2010. Starwood Property Trust — a real estate investment trust (REIT) that focuses on originating, investing in, and financing commercial mortgage loans and other commercial real estate-related debt investments — announced that the deal closed on Thursday. HousingWire previously reported the deal in February. Starwood paid $512m for the loans, including $2.5m in accrued interest, all from cash reserves. The loans are secured by 4.5m square feet of retail and office assets across 10 states. All told, the real estate is 96% occupied. Starwood said the portfolio has a weighted average debt yield of 17.7% and a weighted average coupon of 7.75% and the debt service coverage ratio on the portfolio is approximately 1.8x. Starwood said $112m of the loans mature within the next 12 months, but the remaining portfolio has a weighted average remaining term of 2 years. Starwood added the loans that mature over the next 12 months are at a near cash equivalent “with an attractive yield and provide the company with a near term option to originate new loans.” On Friday, Starwood announced its board of directors declared a dividend of $0.22 per common share for the quarter ending March 31, 2010. The dividend is payable on April 15, 2010 to common shareholders of record on March 31, 2010. Starwood releases its Q409 results on Monday. Write to Austin Kilgore. The author held no relevant investments.