Starwood to Buy LNR Property
Barry Sternlicht's Starwood Capital Group has agreed to buy LNR Property LLC, a large player in the distressed-commercial-property market, for more than $1 billion, according to two people knowledgeable of the deal.</br></br>Miami-based LNR is the country's largest so-called special servicer, which oversees workouts of commercial mortgages when they fall into trouble and takes in fees to sell or modify the loans. Should the deal be completed, it would give Starwood a clear window into troubled commercial properties around the U.S.</br></br>A spokesman for the Greenwich, Conn., private equity firm declined to comment.</br></br>LNR, which was spun off by home builder Lennar Corp. in 1997 and currently is owned by a group that includes Cerberus Capital Management, Vornado Realty Trust and iStar Financial Inc. It has other businesses including debt investment and development. But the bulk of its business comes from special servicing, which has grown as owners have defaulted on tens of billions of dollars in debt since the recession.</br></br>LNR and other special servicers represent investors who hold bonds backed by pools of loans, known as commercial-mortgage-backed securities. As of the end of 2011, the company was overseeing $25.4 billion of loans that had run into trouble, according to a June report on LNR from Fitch Ratings.