Apollo Global Management Invests $1.02 Billion in Starwood Venture

Apollo Global Management Inc. is investing $1.02 billion to acquire a 41.5% stake in a joint venture with Starwood Real Estate Income Trust (SREIT). The partnership will own approximately 120 affordable housing properties across the United States.

SREIT plans to use the proceeds from the deal to repay a portion of its credit facility, a move designed to improve liquidity and increase returns for shareholders. This transaction follows an earlier decision by Starwood Capital Group to halt redemptions from its $22.5 billion fund to avoid the necessity of selling assets at depressed market prices.

Under the terms of the agreement, SREIT will distribute a portion of the cash generated by the apartment portfolio to Apollo. Additionally, SREIT retains a call option to buy back the interest held by Apollo within five to ten years at a capped internal rate of return of 7%.