Starwood Capital is investing more than $5.3bn (€4.8bn) in a portfolio of US multifamily assets being sold by Sam Zell’s Equity Residential.
The private investment manager said it was buying the portfolio for its tenth opportunity fund, Global Opportunity Fund X.
The portfolio of 23,262 apartments is spread across the US and includes concentrations in South Florida, Denver, Colorado, Washington DC, Seattle, Washington and Inland Empire, California.
The deal, Starwood’s largest ever non-hotel purchase, is expected to close in the first quarter of next year.
Barry Sternlicht, chairman and chief executive, said: “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.”
Starwood said it would now control more than 88,000 units, making the company one of the largest owners of US multifamily housing.
Starwood said it had acquired or was under contract to acquire approximately 67,800 multifamily units over the last 12 months.
Christopher Graham, senior managing director and head of real estate acquisitions for the Americas at Starwood, said: “The acquisition of a portfolio of this size and quality is a very rare opportunity.
“The two largest markets in this new portfolio – South Florida and Denver – are both seeing very impressive and sustainable indications of growth, driven by compelling demographics, affordability and fundamentals.”