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Starwood REIT Reports Negative Returns Through 3Q23, Lower Redemption Requests

Starwood REIT Reports Negative Returns Through 3Q23, Lower Redemption Requests. Alternative investments, INVEST, investment, investors, NAV, net asset value, real estate, real estate investment trust, redemptions, REIT, share, shareholders, Starwood, Starwood Real Estate Income Trust, Starwood REIT
Starwood REIT Reports Negative Returns Through 3Q23, Lower Redemption Requests. Alternative investments, INVEST, investment, investors, NAV, net asset value, real estate, real estate investment trust, redemptions, REIT, share, shareholders, Starwood, Starwood Real Estate Income Trust, Starwood REIT

Starwood Real Estate Income Trust Inc., a publicly registered non-traded real estate investment trust sponsored by Starwood Capital Group, provided a quarterly update for the third quarter of 2023.

Including the annualized distribution rate, currently ranging from 4.1% to 5.0% depending on share class, SREIT has provided a year-to-date return ranging from negative 6.4% to negative 2.6% (including full upfront selling commissions and dealer manager fees) as of the close of the third quarter. Total return since inception in 2017 ranges from 8.6% to 10.1% (inclusive of full upfront selling commissions and dealer manager fees where applicable) as of Sept. 30, 2023.

As of the end of third quarter, SREIT’s portfolio had $26.8 billion in total asset value and $11.7 billion of net asset value across 705 properties. According to the company, 86% of the portfolio is comprised of rental housing, industrial properties, and floating rate loans.

Approximately two-thirds of SREIT’s real estate is comprised of rental housing with a “mix of market rate apartments, affordable housing, and single-family rentals.” Rent growth across their market rate apartments is 4% and affordable housing is 8%. Occupancy among the market rate apartments is at 94% and affordable housing is at 97%.

SREIT’s second largest asset class is industrial at 14% of the portfolio. The company says its industrial portfolio was 98% occupied at the close of the quarter.

Floating rate loans represent 5% of SREIT’s AUM and are generating 12% levered yields at 42% loan-to-value ratios.

SREIT’s portfolio is 76% allocated to the Southeast and Southwest with their two largest concentrations, approximately 30%, located in Florida and Texas.

Currently, 99% of SREIT’s debt is effectively fixed at approximately 3.5% and has more than five years of duration remaining. In addition, the company says it has minimal debt maturities over the next three years with 1% maturing in 2023, 1% maturing in 2024, and 6% maturing in 2025.

At the end of September 2023, SREIT says it had access to approximately $1.4 billion of liquidity or 12% of net asset value in the form of cash, marketable securities, and lines of credit.

As The DI Wire previously reported, SREIT began to limit investor repurchase requests in December 2022.

According to SREIT, investors who started redeeming in November 2022, when repurchase requests first reached the caps, have received more than 99% of their money back, and investors who started redeeming in June 2023 have received 90% of their money back.

Repurchase requests declined by 16% month-over-month in September 2023. In addition, SREIT says September 2023 repurchase requests were approximately 44% lower than their peak in January 2023.

Starwood Real Estate Income Trust invests in stabilized real estate across the United States and Europe. Since its launch in December 2017, the company has raised a total of $13.7 billion via multiple public offerings, as of Sept. 30, 2023.

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