Starwood Capital Group has acquired LNR Property for more than $1bn, in a strategic acquisition which will strengthen the private equity firm’s position to buy distressed real estate debt on both sides of the Atlantic.
Rialto Capital Management and BGC Partners, a Cantor Fitzgerald affiliate were the underbidders, reported the Wall Street Journal last night.
Starwood is expected to close the deal by the end of the year.
LNR, spun-off by home builder Lennar Corp in 1997, is currently owned by a three-strong consortium comprised of Cerberus Capital Management, Vornado Realty Trust and iStar Financial.
LNR owns LNR Partners Europe, which in turn owns Hatfield Philips, one of the top three largest primary and special loan servicing platforms in Europe.
Wall Street Journal’s report said that Starwood’s intentions with LNR remain unclear, but LNR has marketed itself as a company “well-positioned to be built up as a large-scale commercial real-estate-services firm”.
In Europe, Cerberus has tended to use Hatfield Philips as its due diligence specialist on loan portfolio bids, through its three-times removed corporate connection: that is its stake in LNR Property, which owns LNR Partners Europe, which owns Hatfield.
The significance of this acquisition for Starwood in Europe, and indeed for LNR and Hatfield, is unclear.
All parties declined to comment.