Starwood REIT

Starwood REIT Reduces NAV. Lawsuits Against Financial Advisors?

Starwood Real Estate Income Trust, a perpetual-life monthly NAV REIT backed by the private investment firm Starwood Capital Group, has adjusted the net asset values (NAV) of its Class S, I, D, and T common stock shares as of March 31, 2020. Starwood REIT announced the update.

Class S Shares, which can be purchased through broker and transaction-based accounts, have a NAV per share of approximately $21.25, compared to the preceding month’s valuation of $21.72 per share.

Class T shares that are usually available through Brokerage and transaction-based accounts possess a NAV per share of about $21.08.

Class D shares have a net asset value per share of approximately $21.13. These shares are offered through fee-based programs called wrap accounts as well as participating broker-dealers, registered investment advisors (RIAs), and bank trust departments or other associations. Last month, Class D shares had a NAV per share of $21.60.

Course I shares, which are sold to endowments, foundations, pension funds, and other institutional investors, have a NAV per share of $21.20.

Starwood reported that the reduction in NAV was principally driven by both the smallest allocations in its portfolio: securities and resorts.

“COVID-19 continues to impact virtually every part of the U.S. economy,” Starwood said in a filing with the Securities and Exchange Commission (SEC). “Our March 31, 2020, NAV per share decreased by 2.2 percent compared to our February 29, 2020 NAV per share.”

Starwood Lawsuits By Investors Against Financial Advisors

Industry experts expect a reduction in share price by Starwood and other REITs. Many companies have reduced or eliminated dividends because of the loss of revenue due to coronavirus. Some traded REITs have taken a substantial loss, in some cases, over 75%.

There are likely to be lawsuits against financial by investors who lost money investing in REITs. This is likely to be a huge issue because many investors were put into REITs like Starwood that didn’t fully understand the risks or were over concentrated. 

Haselkorn & Thibaut, a national investor law firm, is currently talking to investors and investigating claims against financial advisors who sold Starwood REITs to their clients.

Starwood’s Allocation

Securities accounts for 8 percent of the REIT’s portfolio, and at the end of Marchthe securities allocation was approximately 91 percent spent in residential mortgage-backed securities, and roughly 9 percent invested in commercial asset-backed securities.

Approximately seven percentage of Starwood REIT’s portfolio is invested in branded, select-service resorts, and due to traveling declines and stay at home orders, hotel occupancies dropped from approximately 83 percent in February to roughly 45 percent from the end of March.

Despite The month-over-month decline in NAV, Starwood REIT suggested that its April 2020 rent collections round the multifamily, office, and industrial properties are “extremely positive,” and they’ve received a restricted number of requests from tenants seeking rent relief. As of April 14, 2020, the REIT had accumulated 91% of its rental income for these asset classes, while on precisely the same day in March 2020, collected 92 percent.

Ninety-seven percent of lease across all asset classes (multifamily, office, industrial, hotel, and medical office), precisely the same percentage as the previous month at precisely the same moment.

Which invests in stabilized real estate across the United States and Europe, broke escrow in December 2018, and raised $1.4 billion in Investor equity as of May 2020. Owned 71 investments in real estate, one investment in an unconsolidated Real estate venture, and 75 places in real estate-related securities.

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