Private investment firm Starwood Capital Group, Greenwich, Conn., has purchased a nonperforming commercial real estate (CRE)loan portfolio with an outstanding principal balance of $157 million from an undisclosed Midwest regional bank.
The portfolio was purchased for 40 cents on the dollar, representing approximately 32% of initial capitalization. The portfolio consists of 137 commercial loans with concentrations in Florida, Indiana, Michigan, North Carolina and Ohio.
Through its Starwood Global Opportunity Fund VIII, the company has now purchased three loan portfolios with an aggregate outstanding principal balance of $537 million.
In terms of CRE prices, DebtX that the aggregate value of CRE loans priced by the firm that back CMBS decreased to 80.3% as of November 30, 2010 from 80.9% as of October 29, 2010. Loan values were 77.7% as of November 30, 2009, DebtX reported.
“The decline in the value of commercial real estate loans in November was due primarily to an increase in Treasury rates,” DebtX CEO Kingsley Greenland. said.“Rising Treasury yields were partially offset by tighter whole loan spreads for higher quality assets.”
Last November, DebtX priced 55,886 CRE loans that have a $662.5 billion aggregate principal balance.
These loans, which back 616 CMBS trusts, each received a DXMark®. This is a price based on 10 years of data from billions of dollars in loan sales that were executed by the company.