Real estate mogul Barry Sternlicht is making his latest deal.
On Thursday, two of his companies â€" Starwood Capital Group and Starwood Property Trust â€" agreed to pay $1.05 billion for LNR Property, bolstering their positions in distressed commercial real estate.
The deal comes at a potentially opportune time. Big banks, particularly in Europe, have been unloading assets to raise capital and shore up their balance sheets. The largest financial institutions in Europe are expected to sell $78 billion of non-core assets this year, with many reducing their exposure to real estate, according to a study by PricewaterhouseCoopers.
“We are delighted to announce this transformative and highly strategic acquisition that diversifies Starwood Property Trust’s revenue sources, adds significant scale to our operating platform and dramatically expands our proprietary origination capabilities,†Mr. Sternlicht, the chief executive and chairman of Starwood Property Trust said in a statement.
Starwood expects the deal will add to earnings and cash flow in 2013 and 2014. The deal is expected to close in the second quarter.
