Starwood Gets Corus; Pays 60 Cents on the Dollar

A group led by Starwood Capital and TPG Partners officially won the auction for the Corus Bank assets. It was reported that the group paid about $500M more than the nearest competitor for the deal, which raised some eyebrows.

The deal has investors putting in about $550M for a 40% stake in a company that the FDIC will hold a 60% stake in. In addition, the FDIC will provide about $2.4B of financing and capital to the portfolio, which holds about $4.5B of construction loans.

Corus Bank was one of the most aggressive lenders on speculative condo projects throughout the US. Considering where values on many of these new projects have fallen too, and how much more Starwood and TPG paid than their nearest competitor, the deal likely relies more heavily on a housing recovery than the other investors projected.

The UK is experiencing a similar bounce in housing as some US submarkets, but Fitch is projecting that low inflation (deflation?) and unemployment will reverse the 5-month trend of increasing prices.

Similar Posts:

• Starwood Reportedly Winner of Corus Bank Assets
• Investors Jostling for FDIC Assets
• Colony Capital Going After Corus Bankshares
• CRE Dominoes: FDIC Takes Over Three California Banks
• Tamalpais Bank in Hot Water

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