Starwood REIT and Morningstar Properties Form Self-Storage Focused Joint Venture
Starwood Real Estate Income Trust Inc., a publicly registered non-traded real estate investment trust, has formed a joint venture with Morningstar Properties LLC.
Starwood Real Estate Income Trust Inc., a publicly registered non-traded real estate investment trust, has formed a joint venture with Morningstar Properties LLC, an owner and operator of self-storage facilities, to purchase stabilized self-storage properties.
The joint venture includes the recapitalization of 25 properties owned by Morningstar’s funds, as well as a commitment of capital to continue buying assets in the sector under the Morningstar brand.
“We look forward to partnering with Morningstar and adding self-storage into [Starwood REIT’s] portfolio of assets,” said Ethan Bing, managing director at Starwood Capital. “The sector’s stable cash flows fit well with [Starwood REIT’s] yield and long-term hold objectives. Morningstar is a best-in-class branded operator and this partnership provides immediate scale in a fragmented sector in addition to creating a platform for substantial growth.”
The seed portfolio for the newly formed venture includes 1.8 million square feet of storage space located throughout the Sun Belt region, which is experiencing population, employment and income growth.
“The storage sector has been resilient throughout the COVID-19 pandemic and continues to exhibit attractive fundamentals,” the companies said in a statement. “The joint venture will seek to capitalize on favorable sector and regional trends through acquisition of high-quality portfolios and one-off assets.”
As of November 30, 2021, the Starwood REIT portfolio had a total asset value of $18.2 billion across 334 properties.
Starwood Real Estate Income Trust Inc., which invests in stabilized real estate across the United States and Europe, raised $3.9 billion in its initial public offering from December 2017 to June 2021.
The REIT’s $10 billion follow-on offering was declared effective in early June 2021 and has raised $3.8 billion, as of mid-December 2021. As of November 30, 2021, the REIT’s aggregate NAV was $8 billion.
