REIT Buys Commercial Mortgage Assets

Starwood Financial Trust has acquired the commercial mortgage origination and servicing business of Phoenix Home Life Mutual Insurance Co. for an undisclosed amount.The acquired businesses and assets include: Phoenix's commercial mortgage origination, underwriting, and servicing group; the servicing/asset management rights to three commercial mortgage loan portfolios with an outstanding principal balance of $1.3 billion; and the refinancing rights to Phoenix's $950 million mortgage loan portfolio. Jay Sugarman, president and CEO of Starwood Financial, said the acquisition allows the company to expand its proprietary origination and servicing platform and generate a pipeline of financing opportunities. "We hope to replicate this transaction with other owners of real estate-related financial assets and businesses as we seek to further consolidate the sector," Mr. Sugarman said. Philip R. McLoughlin, Phoenix's executive vice president-investments, said the transaction is "also a strategic move for Phoenix, which is shifting the focus of its mortgage investment program to securitized assets." As part of the transaction, Starwood Financial will eventually centralize its loan servicing and related administrative functions in a new office in Hartford, Conn., under the supervision of Barbara Rubin, the former head of Phoenix's mortgage business.