With redemption requests mounting and just US$752 million in available liquidity at the end of April, the clock was ticking for SREIT to make a move. The new restrictions, which cap monthly withdrawals at 0.33% of net asset value — which would have been about US$33 million in April — are much more narrow than the previous 2% limit. Starwood will cut its management fees while the measures are in place, which the firm expects will be six to 12 months.
Billionaire Barry Sternlicht is convinced the real estate market will rebound with just a bit more time. Many investors in his US$10 billion ($13.52 billion) Starwood Real Estate Income Trust aren’t so sure — and want their money back now.
That tension, between Starwood Capital Group’s chief executive who hates the idea of selling properties at their lows and investors who hate the idea of having their money trapped, reached a tipping point on May 23. The vehicle, known as SREIT, took the drastic step of further tightening limits on shareholders’ ability to pull money, in an effort to preserve liquidity and stave off asset sales.
