Starwood REIT Reports Lower Aggregate Monthly NAV, Lower Per Share NAV
Starwood Real Estate Income Trust Inc., a publicly registered non-traded real estate investment trust sponsored by Starwood Capital Group, has provided an update on its portfolio and estimated monthly net asset value per share for its classes of common stock as of March 31, 2023.
The company’s portfolio remains approximately 83% allocated to rental residential and industrial. According Starwood, when including its floating rate loans, self-storage, extended-stay hotels, hospitality, and net lease properties, its portfolio is 93% allocated to sectors that “are performing well in the current environment.” Starwood’s portfolio is 75% allocated to the Southeast and Southwest U.S. with a significant amount allocated to Florida and Texas, where “they continue to see strong population and employment growth.”
The company says that rental residential continues to maintain approximately 95% occupancy. Over the last quarter, rent increases over expiring market rate apartment leases remain at 6% and industrial fundamentals also “remain strong” with occupancy holding greater than 98%. According to the report, over the past quarter, rent growth on new leases over expiring leases has grown 53%.
The “minimal exposure” Starwood’s portfolio does have to office is in strong performing markets and in “trophy and Class A quality properties.” Starwood says there is still good demand for high quality offices in superior locations. Over the last 15 months, they reportedly signed 506,000 square feet of office leases at rents that are 3.4% above pre-COVID acquisition underwriting. Two of their office assets in Boston and Atlanta have increased occupancy from 90% at year-end 2021 to more than 97% currently. Overall, their office portfolio has 91% occupancy and more than six-years of lease term remaining.
As of March 31, 2023, the REIT’s NAV was approximately $13.0 billion, compared to approximately $13.6 billion the previous month.
Class S shares, which are purchased through brokerage and transaction-based accounts, have an NAV per share of approximately $25.72, compared to $26.31 the previous month.
Class T shares, which are typically available through brokerage and transaction-based accounts, have an NAV per share of approximately $25.73. The previous month, Class T shares were valued at $26.32.
Class D shares have a net asset value per share of approximately $25.28, compared to $25.86 the previous month. These shares are sold through fee-based programs known as wrap accounts as well as participating broker-dealers, certain registered investment advisers, and bank trust departments or other organizations.
Class I shares, which are sold to endowments, foundations, pension funds and other institutional investors, have an NAV per share of $25.54. The previous month, Class I shares had an NAV per share of $26.12.
Shares were initially priced at $20.00 each plus applicable selling commissions and fees.
The REIT had 509.4 million shares outstanding as of March 31, 2023, compared to 517.2 million shares the previous month.
As The DI Wire previously reported, SREIT limited investor repurchase requests again in January.
Starwood Real Estate Income Trust invests in stabilized real estate across the United States and Europe. Its initial $5 billion offering launched in December 2017 and raised approximately $3.9 billion from investors before closing in June 2021. The first follow-on offering, comprised of $10 billion in shares, launched immediately afterward and raised approximately $8 billion. The second follow-on offering, which is currently offering up to $18 billion in shares of common stock, launched in August 2022 and has raised approximately $516.6 million in the primary offering to-date.
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