www.washingtonpost.com/business/2023/01/02/starwood-rents-apartments-private-investors/
anuary 2, 2023 at 7:00 a.m. ET
For tenants across the country, the huge rent hikes of recent years have been a burden. For the private investment firms emerging as America’s landlords, they’ve been a bonanza.
Amid a flurry of sales over the past decade, when more than $1 trillion of apartment buildings changed hands, private investors and real estate trusts went on a binge: The proportion of apartments sold to them rose from 44 percent in 2011 to 70 percent in early 2022, according to data and research firm MSCI.
Many of those same firms imposed aggressive rent increases and rode the historic wave of rent hikes to big profits.
Few, however, stood to benefit more than Starwood Capital Group.
A private investment firm led by Florida billionaire Barry Sternlicht, Starwood has been one of the most active acquirers of apartments, and a model for the industry. Over the past seven years, it has amassed a portfolio of more than 115,000 apartments which by some rankings stands as the nation’s largest such collection.
Private firms rarely disclose specific information about rent hikes, but according to leases reviewed by The Washington Post, prices at some Starwood complexes increased by 30 percent or more.
At Starwood’s Wellington Green in Palm Beach County, Fla., the company raised some rents by as much as 52 percent in 2022; at the Griffin Apartments in Scottsdale, Ariz. it increased them by 35 percent. At the Cove at Boynton Beach, it boosted rents on some units by as much as 93 percent in 2022.
At some Starwood apartment complexes intended for low-income tenants and built with government subsidy, the company increased rents by 10 percent. Though the rents on such units are limited by HUD guidelines, the company began charging higher rent soon after the government lifted the limits, even for tenants who were mid-lease.
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