The deal gives the Greenwich, Connecticut-based companies a window into some of the more than $1 trillion of commercial real estate debt scheduled to mature in the next five years in the U.S. and Europe, as well as access to pricing of troubled properties and income from fees. LNR’s special servicer business, which represents bondholders in debt restructurings and foreclosures, is the biggest manager of distressed U.S. commercial real estate loans.With Starwood, Colony, Apollo and similar well capitalized firms getting first crack at the best deals there not many quality deals left for smaller investors, and the following is evidence why the top investment firms' will continue to get the best deals:
“It is a major-league transformative deal,” said Joshua Barber, an analyst with Stifel Nicolaus & Co. in Baltimore. The transaction will give Starwood Property “real size, real scale, unbelievable networks and real mortgage originators.”
Starwood Property gained 4.6 percent to $25.11, the highest closing price since the stock began trading in 2009. The real estate investment trust and competitors including Colony Financial Inc. (CLNY) and Apollo Commercial Real Estate Finance Inc. (ARI) went public that year to try to capitalize on distressed property after the credit crisis.
The company (Starwood) will benefit from having access to LNR’s $131 billion of loans where it is the named special servicer, said Andrew Sossen, chief operating officer and general counsel.
“The information is priceless,” he said in an interview. “As a special servicer, you have a view into what rents are in any given city on any given street in the U.S, to the extent you have a property there. With $131 billion worth of loans, that gives you a data point and a look into the commercial real estate markets throughout the U.S.”