Starwood Financial Acquires Acre Partners
NEW YORK, March 20 /PRNewswire/ -- Starwood Financial Inc. (NYSE: SFI) today announced that it has acquired American Corporate Real Estate, L.L.C. and its affiliate, American Corporate Real Estate, Inc. ("ACRE Partners"), a privately-held firm focused on providing public and private corporations with highly-structured, value-added financing solutions for their real estate facilities. ACRE's three principals, H. Cabot Lodge, Barclay G. Jones and R. Michael Dorsch, have each been appointed Executive Vice President - Investments for Starwood Financial. Messrs. Lodge and Jones formerly headed net lease investments at W.P. Carey & Co., Inc., a corporate sale/leaseback specialist, between 1983 and 1998. Mr. Dorsch was previously founder and managing partner of Corporate Realty Capital, a private investment company specializing in corporate real estate.
Starwood Financial acquired by merger ACRE Partners' institutional investment advisory business and its investment interests in structured net lease transactions made on behalf of its clients. ACRE Partners and its affiliates currently invest capital on behalf of William E. Simon & Sons, a private merchant bank and institutional money manager founded by the former United States Treasury Secretary. SFI will continue to invest in and act as advisor to Simon Realty's net lease investment program.
As part of the transaction, Starwood Financial acquired the rights to the "saleleaseback.com," "1031source.com" and "triplenet.com" Internet domain names. Starwood Financial is exploring the development of an e-commerce platform to facilitate the tax-free exchange of net leased properties.
As consideration for the ACRE acquisition, Starwood Financial issued 214,674 common shares to ACRE's principals and minority owners, with an additional 285,326 shares reserved for future issuance on or before December 2001 to the extent growth targets for capital under management are achieved. The acquisition is not expected to have a material impact on SFI's adjusted earnings per share in 2000 and 2001. The acquisition, which will be accounted for as a purchase, closed on March 17, 2000.
Jay Sugarman, Starwood Financial's chief executive officer, stated, "I am extremely pleased to add the significant investment talent and experience of the ACRE team to our market-leading finance platform, particularly given our recent acquisition of TriNet Corporate Realty. Messrs. Lodge and Jones were instrumental in building W.P. Carey's net lease business over many years, and Mr. Dorsch has extensive experience in the sale/leaseback arena. Together, the ACRE principals have closed approximately $3 billion of structured net lease transactions, and bring with them an extensive and valuable set of corporate relationships." Mr. Sugarman continued, "With this acquisition, we continue toward our goal of building a world-class finance company that provides innovative and state-of-the-art financial solutions to both private and corporate owners of real estate nationwide."
Cabot Lodge, managing partner of ACRE Partners, commented, "On behalf of American Corporate Real Estate, we are very excited to join the Starwood Financial organization. We are of very similar minds regarding risk and reward, and firmly believe that SFI is building the dominant structured finance platform within the commercial real estate sector. We believe we can add immediate and substantial value to Starwood Financial's net lease business by increasing the pace of new investments and enhancing SFI's returns from the TriNet assets it recently purchased."
In addition to Messrs. Lodge, Jones and Dorsch, the ACRE Partners team includes Kenneth G. Beitz, Samantha K. Garbus and Ann Marie Luongo in New York, David E. Gibbons in Dallas and John Churchward in Boston. The ACRE Partners professionals in New York and Dallas will join SFI's existing offices in those cities, while Messrs. Dorsch and Churchward will occupy a new SFI office in Boston. Starwood Financial also anticipates nominating Mr. Lodge to its Board of Directors.
Starwood Financial is the leading publicly traded finance company focused on the commercial real estate industry. The company, which is taxed as a real estate investment trust, provides structured mortgage, mezzanine and lease financing through its proprietary origination, acquisition and servicing platform. The company's mission is to maximize risk-adjusted returns on equity by providing innovative and value-added financing solutions to the real estate industry. Additional information about Starwood Financial is available on the Internet at www.starwoodfinancial.com.
(Note: Statements in this press release that are not historical fact may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Starwood Financial Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from Starwood Financial Inc.'s expectations include completion of pending investments, continued availability to originate new investments, the availability and cost of capital for future investments, competition within the finance and real estate industries, economic conditions, and other risks detailed from time to time in Starwood Financial Inc.'s SEC reports.) SOURCE Starwood Financial Inc.
CONTACT: Spencer B. Haber, Executive Vice President and CFO of Starwood Financial, 212-930-9400; or H. Cabot Lodge, Managing Partner of American Corporate Real Estate, 212-446-9324; or Phil Fitzgerald, Vice President of William E. Simon & Sons, 310-996-8768; or Adam Weiner or Eric Berman or Sarah Zitter-Milstein, all of Kekst and Company, media, 212-521-4800/