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 There are plenty of people that think a commercial real estate bust will be the next shoe to drop in the financial crisis, and evidently real estate mogul Barry Sternlicht is one of them. Sternlicht's Starwood Property Trust Inc., a new company formed to originate and invest in commercial real estate mortgages, has filed to go public in a $500 million initial public offering to capitalize on the hundreds of billions in commercial real estate that needs to refinance over the next five years. According to the S-1 regulatory filing: "We believe that the next five years will be one of the most attractive real estate investment periods in the past 50 years...a void in the debt and equity capital available for investing in real estate has been created as many banks, insurance companies, finance companies and fund managers face insolvency or have determined to reduce or discontinue investment in debt or equity related to real estate. "We believe that there will be a significant supply of distressed investment opportunities from sellers and equity sponsors of real estate...We believe that well-funded managers will have the opportunity to acquire real estate debt positions and assets with limited competition and at prices deeply discounted to replacement cost." The credit crunch has clamped down on commercial real estate lending in a big way, making it difficult for the borrowers to refinance commercial property loans and sending delinquencies higher. Phillip F. Blumberg, the chairman of Blumberg Capital Partners, recently estimated that between 2010 and 2013 roughly $1 trillion in commercial real estate loans will mature and need to be refinanced, he said in an interview. With debt markets no where near able to handle that much volume, investors like Sternlicht smell opportunity and plenty of it. - George White See Starwood IPO filing See NY Post interview with Blumberg
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From: Edgar Perez,
For The Deal readers interested, GoldenNetworking.com is hosting Distressed Investing Leaders Forum 2009 on July 29th at the World Financial Center, featuring Stephen Norris, co-founder of The Carlyle Group and currently Chairman of Gulf Cap Partners, as Keynote Speaker, on Restructuring A Distressed Company: What Does It Really Take?, and practitioners from prestigious companies such as Cedarview Capital Management LP, Jefferies & Company, Simon Development Group, Fortis Investments, Amherst Partners LLC and T5 Equity Partners, among others. More information: http://www.distressedinvestingleadersforum.com.
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July 16, 2009 2:56 AM
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