Starwood REIT Reports Lower Monthly NAV and Excessive Redemption Requests
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 April 30, 2023.
The company’s portfolio remains approximately 83% allocated to rental residential and industrial. Starwood’s portfolio is 75% allocated to the Southeast and Southwest U.S. with a significant amount allocated to Florida and Texas.
The company says it also continues to maintain liquidity to navigate the current environment. As of the end of April 2023, Starwood had access to approximately $2.0 billion of liquidity or 15% of NAV in the form of cash, marketable securities and lines of credit.
As of April 30, 2023, the REIT’s NAV was approximately $12.8 billion, compared to approximately $13.0 billion the previous month.
Class S shares, which are purchased through brokerage and transaction-based accounts, have an NAV per share of approximately $25.51, compared to $25.72 the previous month.
Class T shares, which are typically available through brokerage and transaction-based accounts, have an NAV per share of approximately $25.51. The previous month, Class T shares were valued at $25.73.
Class D shares have a net asset value per share of approximately $25.07, compared to $25.28 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 $25.32. The previous month, Class I shares had an NAV per share of $25.54.
Shares were initially priced at $20.00 each plus applicable selling commissions and fees.
The REIT had 505.7 million shares outstanding as of April 30, 2023, compared to 509.4 million shares the previous month.
SREIT reports that it continues to receive monthly and quarterly redemption requests in excess of the limits detailed in it share repurchase plan, which precludes it from honoring requests that exceed 2% of its NAV per month or 5% per quarter.
The REIT announced that in April 2023, they received repurchase requests equal to 4.2% of their aggregate monthly NAV. SREIT honored all repurchase requests for April 2023 on a pro rata basis up to the 2% monthly limitation. As such, 47.7% of each stockholder’s repurchase request was satisfied in April 2023. SREIT noted that their “structure continues to provide investors with liquidity over time, as it was designed.” According to Starwood, investors who started redeeming in November, when redemption requests were first prorated, have received 97% of their money back in 6 months.
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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