Starwood Eyes the Sale of 2,000-Unit Single-Family Rental Portfolio

By Barbra Murray

Starwood is contemplating selling in excess of 2,000 single-family rental homes owned through its subsidiary, Starwood Real Estate Income Trust (SREIT), according to Bloomberg. The news comes roughly three years after SREIT began gobbling up SFRs during the pandemic, when interest rates were at an all-time low. However, as interest rates began to rise higher and higher, Starwood, one of the largest owners of SFRs, began pulling back on acquisitions. Starwood is remaining hush-hush on the details of the planned disposition, but reportedly, the properties that will be put up for sale are part of the 2,300-unit portfolio Starwood acquired from Pretium Partners in 2021 for more than $1 billion. Purportedly, Pretium will reacquire 100 of those residences.

Starwood was among a slew of companies that increased activity in the SFR arena when interest rates were favorable. In July 2021, Tricon Residential announced a $5 Billion joint venture for the acquisition of 18,000 SFRs in the Sun Belt region. Now, however, is a good time to sell these assets, as home prices have risen over the last couple of years and would-be homebuyers are challenged to get in the market given the high interest rates and frosty lending climate. With housing values having risen, if Starwood can find a buyer for the remaining units, it will likely turn a nice profit and perhaps inspire other owners of big SFR portfolios to do the same. 

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