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Thursday, January 24, 2013

Sternlicht's Starwood to purchase distressed debt servicer for $1 bln, (NYSE: STWD)

Real estate mogul Barry Sternlicht's Starwood Property Trust and investment firm Starwood Capital will purchase LNR Property LLC, the biggest manager of distressed commercial debt, for $1.05 billion to expand into the booming market for such loans.Banks across the world are working through their distressed commercial real estate loan portfolios, selling them at discounts to clean up their balance sheets. Consulting firm Ernst & Young expects nearly $1 trillion of U.S. commercial real estate loans to mature in the next few years.Starwood Capital Group will pay $197 million for LNR's U.S. Commercial Property Group and 50 percent of LNR's ownership in real estate site Property will pay $856 million for the rest of LNR's assets, including its U.S. special servicing business and Hatfield Philips, the largest primary and special servicer in Europe.

Starwood Property Trust, Inc. is a holding company and conducts its business through its subsidiaries. Shares of STWD traded higher by 5.33% or $1.28/share to $25.29. In the past year, the shares have traded as low as $19.40 and as high as $24.56. On average, 995735 shares of STWD exchange hands on a given day and today's volume is recorded at 487510.