Starwood Capital Group has formed Starwood European Finance Company (StarFin), a European real estate finance platform, to take advantage of financing opportunities arising from property owners needing to refinance existing loans that are maturing, and ongoing demand for new real estate debt capital which is no longer widely available from the banking system.
This will be Starwood Capital’s third major debt platform and follows its two debt platforms in the US which have lent over USD10bn.
Cushman & Wakefield, the global commercial property consultant through its investment management arm Cushman & Wakefield Investors (CWI), is to be a partner and investor in StarFin. CWI will help source financing opportunities and provide market intelligence and research.
Peter Denton, head of European debt at Starwood, says: “Starwood was established in 1991 in the depths of that real estate downturn. In good times and bad we’ve built a track record in real estate financing via large debt platforms. We’re looking forward to expanding our presence in the European financing market.
“Coming together with Cushman & Wakefield Investors gives us a full house of experience in Europe at a time when a debt maturity bubble is looming, banks are severely constrained from lending and new property activities need funding.”
Carlo Barel di Sant’Albano, chief executive of Cushman & Wakefield EMEA, adds: “The debt funding gap is undeniable and offers striking opportunities. This partnership means we’ll combine our market intelligence and extensive European platform with Starwood Capital’s expertise and experience in the real estate debt market.”
StarFin will be led by Starwood Capital’s European management team, including Jeff Dishner, senior managing director, and Denton, who together have over 40 years of real estate experience including setting up and managing several successful debt businesses.
StarFin will focus on the UK and Northern Europe real estate markets and will follow a broad loan origination (lending direct to the property owner) and acquisition (acquiring part of a loan made by another lender) model, investing across a combination of senior, whole, subordinated, bridge and development loans with a maximum portfolio loan-to-value of 75 per cent. Typical loan sizes sought will be from EUR40m for whole loans and from EUR20m for subordinated loans, with capacity to undertake transactions of greater scale; in all property sectors including commercial, industrial, office, retail and residential.