Actionable Opportunities in Special Situations: Spinoffs, Bankruptcy, Restructurings


Starwood Property Trust Completes Spinoff of Starwood Waypoint Residential Trust

On February 3rd, Starwood Property Trust, Inc. (NYSE:STWD) completed its spinoff of Starwood Waypoint Residential Trust (NYSE:SWAY). The spinoff transaction comprised a one for five distribution of SWAY shares to STWD stockholders of record on January 24th.

Starwood Waypoint will focus primarily on investing in U.S. single-family rental homes and nonperforming residential mortgage loans. Starwood Waypoint currently controls more than 6,700 homes and non-performing loans, focused in Florida and Texas, with a total value of almost $1.1 billion. According to CEO Gary Beasley, Nonperforming residential mortgage loans account for about a quarter of SWAY’s value. Typically, half of these loans will end up as rental properties (perhaps with loan modifications) while the rest may be sold.

Starwood Waypoint is trying to capitalize on the recent surge (over the past 2-3 years) of institutional investors entering the single-home space. For example, in 2013, institutional investors accounted for 1 in 5 home sales.

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