Starwood Capital to buy 72 properties from Equity Residential for $5.37 bn

US private investment firm Starwood Capital Group yesterday struck a deal to buy 72 properties from real estate company Equity Residential for about $5.37 billion.

The acquisition is the largest non-hotel purchase in Starwood Capital's history.The properties comprising a mix of 23,262 mid-rise and garden-style apartment buildings are located in five states, including South Florida, Denver, Colorado, Washington, DC, Seattle, Washington and Inland Empire, California.

The portfolio is being sold unencumbered of existing debt, providing maximum flexibility for new acquisition financing, Starwood Capital said in a statement.

Post closing, Starwood Capital will control more than 88,000 units, making it one of the largest owners of multifamily housing in the US.

Including this transaction, Starwood has acquired or is under contract to acquire approximately 67,800 multifamily units over the last 12 months.

''The size of this transaction underscores our conviction in multifamily housing's continuing ability to offer superior risk-adjusted returns. The strong underlying demographics for apartments and positive leverage- resulting in robust cash-on-cash yields - make this portfolio a very attractive investment,'' said Barry Sternlicht, chairman and CEO of Starwood Capital.

''The acquisition of a portfolio of this size and quality is a very rare opportunity. Our intimate market knowledge and access to capital allowed us to execute on this transaction quickly and efficiently,'' said Christopher Graham, senior managing director and head of Real Estate Acquisitions for the Americas at Starwood Capital.

Based in Connecticut, Starwood Capital has more than 1,400 employees, has raised around $32 billion of equity capital since its inception in 1991, and currently manages over $45 billion in assets.