Nomura backs Starwood’s $482.5M CMBS refi of scattered rental homes

Commercial Observer reports, citing Fitch Ratings, that Nomura Securities has provided Starwood Asset Management with a $482.5 million floating-rate, interest-only CMBS loan. The money refinances 1,749 single-family rentals. They sit across 10 states. The debt matures in August 2028. It carries three extension options. Each runs a year. Using all of them would push the term to 2031.

The portfolio came together in 2021 and 2022. Starwood paid $674 million for it. The new loan is roughly 72 percent of that cost. Fitch measured occupancy at just over 96 percent in April. The average home measures 1,812 square feet. It dates to 1992. The typical property is roughly three decades old. Nearly a third of the homes are in Georgia. A quarter are in Arizona, and just under 12 percent are in Florida. That Sun Belt tilt ties the loan's performance to those states' job markets. Palm Beach County holds 27 of the homes, most in Lake Worth. The financing arrived the same week Starwood closed a separate deal in Miami-Dade County. That deal was worth $115 million. It covered four affordable housing properties.

Nomura's return gives the deal its broader weight. The bank helped pioneer U.S. CMBS in the 1990s. It stayed away for 27 years and returned last year. This loan is the most substantial test of that return yet. Underwriting houses scattered across 10 states is heavier work than a single-asset loan. It takes more servicing machinery and more disposition planning. The collateral is granular; the work is in the details. The floating-rate, interest-only structure leaves rate risk with Starwood. The extension options give the sponsor a long runway to find lower-cost permanent debt. With no amortization, the full balance comes due in 2028. Only if Starwood exercises every option would that date move to 2031. For lenders who finance single-family rentals and watch the CMBS market, the deal sets a benchmark for how scattered-site portfolios get financed in this cycle.