(Bloomberg)—Barry Sternlicht’s Starwood Capital Group is seeking offers for a portfolio of apartment buildings that together may fetch more than $1 billion, according to people with knowledge of the matter.
The portfolio includes so-called Class B apartment buildings in U.S. states such as Texas and Washington that Starwood and Milestone Apartments Real Estate Investment Trust amassed through a takeover of Landmark Apartment Trust Inc. in January 2016. The following year, Starwood took Milestone private, too. It’s possible that the portfolio will include some buildings previously owned by Milestone as well, said one of the people, who asked not to be identified because the matter is private. A Starwood representative declined to comment on the marketing of the buildings.
The Class B classification is given to buildings that don’t command the highest rent in their markets and count middle-income households as their key tenant base. Expected vacancy levels of no more than 5 percent at such properties should spur faster rent growth this year compared with other classes of apartments, according to a report from brokerage Marcus & Millichap.
“The apartment market is healthy as it’s ever been,” Sternlicht said in a CNBC interview last week. Greenwich, Connecticut-based Starwood, one of the world’s largest private real estate investors, with roughly $56 billion under management, is a frequent buyer and seller of property. Earlier this month, it finished raising $7.55 billion for its 11th opportunistic real estate fund.
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