Starwood Further Limits Withdrawals

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Starwood Real Estate Income Trust, struggling with a cash crunch, has opted to further limit redemption requests instead of selling assets into a discounted market.

The new restrictions cap monthly withdrawals at 0.33% of net asset value. The REIT, which manages about $10 billion, also said it would buy back only 1% of the value of the fund’s assets every quarter, down from 5% earlier.

“We cannot recommend being an aggressive seller of real estate assets today given what we believe to be a near-bottom market with limited transaction volumes, and our belief that the real estate markets will improve,” Barry Sternlicht, who leads the Starwood Capital Group, and Sean Harris, CEO Starwood’s REIT, said in a letter to shareholders.

Starwood also said that it would cut its management fees in the face of the mounting withdrawal requests and just $752 million in available liquidity at the end of April.

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