Greenwich, Conn.-based Starwood Property Trust has completed the purchase of a portfolio of 20 performing commercial mortgage loans and B notes from Teachers Insurance and Annuity Association of America. The loans were acquired for approximately $512 million, including $2.5 million of accrued interest, and were funded by cash on hand, the real estate investment trust reports.
The loans are secured by retail and office assets totaling 4.5 million square feet across 10 states that are approximately 96% occupied. The portfolio has a weighted average debt yield of 17.7% and a weighted average coupon of 7.75%. The debt-service-coverage ratio on the portfolio is approximately 1.8x.
The portfolio, excluding the $112 million of loans that have a maturity within the next 12 months, has a weighted average remaining term of two years. The loans that mature within the next 12 months are a near cash equivalent with an attractive yield, Starwood says. The loans also provide the company with a near-term option to originate new loans.
SOURCE: Starwood Property Trust Inc.