CRE Investors want their money back
A giant commercial real-estate fund is scrambling to escape a looming cash crunch caused by the long line of investors who want their money back.
The $10 billion fund from Starwood Capital Group has been trying to preserve its available cash and credit by limiting investor redemptions.
In the first quarter, the fund was hit with $1.3 billion in withdrawal requests but satisfied less than $500 million of them
These developments have left the Starwood Real Estate Income Trust, known as Sreit, with three options—none of them appealing.
It could take on more debt. It could sell properties into a tough market. Or it could halt completely or limit further redemptions, a move that would greatly impair the fund’s ability to raise new money.
Unless it takes one of these three steps, Sreit looks poised to run out of cash and credit before year-end
if the current pace of redemptions continues.
Other real-estate funds are handling the pressure from the long queue of redemptions in varying degrees.
Wall Street Journal 20 May 2024
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