Salesforce Tower, London Financed by Starwood Property Trust INVESTMENTS Private Transactions Public Offerings Privatizations Eco-Conscious Investment The following are some notable investments over the Firm’s history. PRIVATE TRANSACTIONS CORUS BANK In October 2009, a consortium led by Starwood Capital acquired a $4.5 billion face-value distressed loan portfolio owned by the former Corus Bank. The $2.7 billion purchase of the portfolio from the Federal Deposit Insurance Corp. was one of the government’s largest distressed debt transactions during the Great Recession. The portfolio at acquisition consisted of more than 100 loans and owned real estate assets linked to high-quality condominiums in major gateway cities, multifamily housing, office properties and land. Our strategy included “reworking” more than 40 large, non-performing loan positions and creating a dedicated entity (ST Residential) to manage the 13-asset multifamily portfolio. The team subsequently created an innovative branded lifestyle message for the multifamily properties that allowed it to raise prices and rents while achieving healthy absorption rates, followed by a successful program of loan payoffs, condo sales and asset sales. We had fully realized 88 of the assets by the end of 2013, and sold the last major asset in March 2015. We can now look back on what has proven to be an extraordinary investment for investors and the U.S. government. TRTX RESCUE FINANCING In May 2020, we recapitalized TPG Real Estate Finance Trust, a publicly traded commercial mortgage REIT (NYSE: TRTX), with a structured investment of preferred equity and warrants to purchase common stock. The transaction structure provided downside protection with a fixed return and seniority via the preferred equity, combined with upside from equity appreciation via the warrants. At the time, the company needed liquidity to relieve pressure from lender margin calls due to Covid-related market volatility, and Starwood was one of the few investors willing to commit capital at this point in the pandemic. At the time of our investment, TRTX owned a portfolio of 66 floating rate loans, totaling $5.75 billion of commitments, collateralized by high-quality real estate in institutional markets where we have experience investing. The collateral was primarily office, multifamily and mixed-use, with minimal exposure to construction or the sectors most directly impacted by Covid. We had a unique understanding of the situation given our experience managing Starwood Property Trust, and believe that our position has significant protection. By the end of June 2021, the investment had returned our equity investment plus substantial profit with additional warrants still owned by Starwood’s fund. URBAN INDUSTRIAL PORTFOLIO We acquired this 10-asset, 1.6 million square foot portfolio of light industrial, distribution and life science assets in the U.K. via an off-market transaction in December 2019. At acquisition, the assets both were located in close proximity to key distribution routes, and had strong historical performance. Further, the assets boasted a highly diversified tenant mix with sectors including distribution, R&D, construction, engineering, trade counter and business services. During our ownership, the assets benefitted from the growth of e-commerce, increasing demand for well-located industrial assets, as well as the steady depletion of industrial-zoned land close to urban centers. After only a 12-month hold, we sold the portfolio in December 2020 for a significant premium to acquisition price. DIVERSIFIED SCANDINAVIAN PORTFOLIO We started investing in the Scandinavian market in 2013 and were one of the first non-local investors to pursue this very local investor dominated market. We acquired the Diversified Scandinavian Portfolio investment in January 2015 by purchasing two property companies: SveaReal Fastigheter in Sweden (79 properties totaling 9M sf) and Fortin in Norway (27 properties totaling 2.4M sf) for a combined $1.4B. The transaction represented a rare opportunity to access Scandinavia at scale and was the largest real estate transaction in the region since the global financial crisis. Although the region had generally proven challenging for foreign buyers prior to our acquisition, our deep relationships in the region enabled us to secure this opportunity on an off-market basis. Several factors have helped make this a successful investment including proactive asset management, value-add initiatives, market conditions and opportunistic sales. Prior to September 2018 we had sold 35 assets for a gross exit price of ~$790 million, and in September 2018 we closed on a portfolio sale including 51 out of the 106 original properties. We are now winding up the remaining assets. This transaction is a prime example of Starwood Capital’s ability to get ahead of capital flows in areas not yet on the radar screen of other investors. NATIONAL MULTIFAMILY PORTFOLIO In January 2016, SOF X and a Starwood Capital co-invest acquired an institutionally owned, Class A multifamily portfolio that included assets in South Florida, Denver, Washington, D.C., Seattle and the Inland Empire, California. The portfolio consisted of 23,262 units across 72 garden style and mid-rise communities—operated as 66 distinct assets post-close. These Class A assets had an average vintage of 1996, limited deferred maintenance and amenities such as 9 foot ceilings, in-unit washers and dryers, and parking garages. With this acquisition—together with SOF X’s purchase of Landmark Apartment Trust (17,624 units), also completed in January 2016—Starwood Capital became one of the largest owners of market-rate multifamily housing in the United States. At its $5.4B purchase price, the transaction was the largest non-hotel acquisition in Starwood Capital’s history. Starwood Capital’s close, longstanding relationship with the seller created an opportunity to purchase these assets off-market. The seller was focused on a quick, certain execution and only approached a few bidders that could complete such a large transaction. 1 HOTEL & HOMES SOUTH BEACH When Starwood Capital purchased the Gansevoort Miami South Beach in February 2012, the Firm had strong conviction in the strength of the South Beach hotel and recovering residential market due to its first-hand, front-row seat provided from its purchase of Corus Bank, a separate investment, which owned more than 2,000 condo units in the Miami area at its peak. With this knowledge in mind, the Firm acquired this beachfront property and over the next three years leveraged the collective expertise of its in-house design and hotel asset management teams to complete a gut renovation that completely transformed the tired, 1970s-style Gansevoort into a LEED Silver-certified building featuring stunning natural materials and lush landscaping. The renovation replaced the direct ocean facing façade of the building, which was a concrete wall with few openings, with floor-to-ceiling windows. The renovation also included completing 155 condominiums totaling 232,000 square feet, breaking the pool deck in two to create a more human scale to the pool and common areas, developing a 14,000 square foot gym from leftover space and a 5,500 square foot Bamford spa (the first in the U.S.), buying out/relocating several tenants and releasing 25,000 square feet of owned retail space, and gutting and creating a new rooftop bar and pool. The property was opened as the newly rebranded 1 Hotel South Beach in March 2015, repositioning the property as one of the premier hotel and condo destinations in the booming South Beach market. The opening also marked the launch of 1 Hotels, a new lifestyle hotel brand that cultivates the best of eco-conscious design and sustainable architecture, together with extraordinary comfort and an unrivaled level of service. The Firm received numerous industry and guest accolades while increasing the hotel’s net operating income 800%. In February 2019, the Firm closed on the sale of 1 Hotel South Beach for $610 million, which translates to $1.44 million per key – a record for the highest price per key ever achieved in the state of Florida, beating the prior record by over 30% or nearly $350 thousand per key. This sale also set a record for the highest price per key for a U.S. hotel outside of New York and the highest price per key for a resort property in the U.S. THE PRINCIPAL HOTEL COMPANY We assembled this portfolio by acquiring three bankrupt companies from two banks between February 2013 and March 2014 for a gross purchase price of $1.1 billion. In February 2013, Starwood Distressed Opportunity Fund IX, alongside a limited partner co-investment vehicle, acquired Principal Hayley Group and its extraordinary pan-U.K. collection of 22 grande-dame style hotels, as well as a London conference center. This purchase represented an opportunity to invest in an entire hotel company, including its management team, brands and technology platform. The platform expanded in January 2014 through the acquisition of Four Pillars Hotels—a portfolio of five hotels located in and around the historic city of Oxford. The portfolio grew further in March 2014 with the acquisition of De Vere Venues, which added 23 owned and leased hotels, as well as several conference centers in London. That month we combined the three U.K. hotel portfolios to form a unique, pan-U.K. collection of 50 owned and leased hotels including 7,064 keys (plus 10 franchise and management contracts). The combined platform enabled us to unlock significant synergies including over £5M in annual cost savings. In November 2016 we relaunched the three legacy companies under a new lifestyle-hotel platform, The Principal Hotel Company, and subsequently won numerous international hotel industry and design awards. Major achievements across the combined portfolio include: signing a 175-year lease on the renowned Grand Hotel Birmingham in April 2017 to establish a pipeline of additional iconic properties and to execute £45M interior fit-out; performing a spectacular renovation of The Hotel Russell beginning in July 2016, which reopened in April 2018 as The Principal London, the flagship hotel of the Principal brand; renovating and opening Wotton House, Beaumont Estate, Latimer Estate and Tortworth Court as flagships for the De Vere brand, which relaunched in September 2017, and selling a portfolio of 34 assets for $1.1 billion – a sale that broke numerous records and locked in strong returns for our investors. INTOWN SUITES In June 2013, SOF IX acquired InTown Suites, one of the largest owners of economy extended stay properties in the U.S. Our purchase price was a 20% discount to estimated replacement cost and a 10-15% discount to the seller’s basis. We sourced the transaction through extended off-market discussions with the seller. At original acquisition, the company owned and operated 138 properties (17,978 rooms), representing ~25% of the extended-stay sector. These properties behave more like apartments than hotels, as they rent by the week. InTown’s units, which come furnished and include utilities, cable and internet, offer residents a lower-cost and flexible alternative to apartments. As of acquisition, we were bullish on the economy extended-stay sector, as there was virtually no competitive supply currently under construction. We believed there was attractive upside to be captured by strategically investing in the underlying brand and expanding the company’s footprint through accretive acquisitions and, potentially, franchising and development opportunities. This thesis has been proven correct. SELECT-SERVICE HOTEL PORTFOLIO In 2015, Starwood Capital took a major step in the Firm’s expansion into the select-service space with Starwood Global Opportunity Fund X’s acquisition, alongside a limited partner co-investment vehicle, of TMI Hospitality, one of the largest owners, managers and developers of select-service hotels in the United States, with 184 operating hotels and more than a dozen in the development pipeline. This follows joint ventures that Starwood Capital has established across multiple recent funds that target select-service hotels with strong cash-on-cash yields that can be acquired at significant discounts to replacement cost. As a result, the Firm has assembled one of the largest collections of select-service hotels in the United States. In October 2016, a Chinese life insurance company announced that it would serve as the anchor and leading investor for a 280-asset, 24,000-key select-service portfolio alongside a consortium of sovereign wealth funds and other investors that Starwood Capital assembled. Starwood Capital created value throughout all phases of the investment period for these select-service properties. The assets in the sold portfolio were acquired at favorable entry points and aggregated into a portfolio well-diversified by brand, geography and demand drivers. The Firm’s dedicated select-service asset management team implemented strategies to improve revenue, control costs and strategically invest capital to improve guest-facing areas—to maximize return on investment and profitability. In addition, the team executed an exit strategy of a private portfolio sale to investors seeking a well-diversified portfolio of strong cash flow-generating hotels. SEATTLE MACY’S OFFICE REDEVELOPMENT In October 2015, SOF X acquired a condo interest in the top four floors of the Macy’s department store in downtown Seattle — with plans to convert those floors to creative office space. The owned space included 316K sf of offices on floors 5–8, which were previously used by Macy’s for retail and regional offices — as well as exclusive use of ground floor space for a dedicated office lobby and elevator bank. At the time of our acquisition, the Seattle office market had seen robust growth fueled by tech-oriented tenants, which comprised nearly half of all recent leasing activity. There were very few existing blocks of office space over 100K sf available in downtown Seattle, and this project contained the largest existing block of contiguous space in the CBD. In September 2017, we signed a 15-year office lease for 485K sf with Amazon. The office space was key to Amazon’s growth plans — located within two blocks of its U.S. headquarters with room for more than 2,500 employees. In January 2020, we acquired the remainder of the building (4 floors; an additional 280K sf) from Macy’s and concurrently entered into a coterminous lease expansion with Amazon. PCT EL SEGUNDO OFFICE CAMPUS In October 2017, SOF XI acquired PCT Office Campus, a LEED Gold-certified Class A office campus in El Segundo, California comprising 1.5M sf in three office towers. The office towers are the tallest and most-recognizable buildings in El Segundo and our purchase price represented a 39% discount to replacement cost. Our acquisition basis was well below recent El Segundo trades of mid-rise creative office and low rise creative office, as well as Class A trades in nearby submarkets such as Santa Monica, Playa Vista and Culver City. Prior to making this investments, our acquisitions team spent significant time conducting market research to identify submarkets best positioned to benefit from improving macro trends and office fundamentals throughout LA. Los Angeles was one of the nation’s last office markets to recover from the Great Recession, and we discovered several trends that led us to believe it was poised to deliver outsized risk-adjusted returns. It became clear to us in late 2016 that El Segundo was evolving from an office market dependent on the aerospace and defense industries, into one with broad appeal to traditional corporate tenants as well as media, technology and entertainment companies. We believed that tenant demand (and institutional capital flows) would accelerate into El Segundo, offering a unique opportunity for SOF XI to make a sizable investment in a gateway market ahead of other investors. Our original El Segundo thesis has come to fruition. Our El Segundo investments are terrific examples of how we studied a market, developed conviction, and then targeted investment opportunities directly. U.S. SUBURBAN OFFICE PORTFOLIO In April 2015, SOF X purchased a 6.7 million square-foot, high-quality, well-located suburban office portfolio in an off-market transaction for $1.125 billion. The vast majority of assets were located in the high-growth markets of Raleigh, Nashville and South Florida. The portfolio at acquisition included 61 existing buildings and 57 acres of land, as well as a building under construction in Raleigh. The buildings were based in markets with minimal supply under construction, with the majority of that new construction pre-leased—thus greatly reducing the negative impact new supply might have on the portfolio. Starwood Capital’s asset management team positioned the portfolio’s assets to capitalize on strong cash flow and maximize profit by investing in high-return amenities, actively engaging tenants on early renewals and increasing rents to market levels. The team has also taken advantage of opportunities to generate upside through early asset sales—including selling non-strategic properties for prices well above initial allocations. This investment demonstrated Starwood Capital’s ability to identify an attractive point in the cycle to enter markets that were well-positioned for growth. LNR PROPERTY LLC Starwood Capital has long demonstrated the ability to tackle complex investments that offer attractive risk/return potential. Such was the case when the Firm teamed up with affiliate Starwood Property Trust (NYSE: STWD) on the $1.05B acquisition of the largest special servicer in the U.S., LNR Property LLC, in April 2013. While Starwood Property Trust‘s purchase of LNR greatly enhanced its expertise in the distressed marketplace and added Starwood Mortgage Capital, a commercial real estate conduit loan origination platform, Starwood Capital through an affiliated fund also acquired two important components. The first was LNR’s Commercial Property Group, a real estate portfolio consisting of 26 assets in nine states, concentrated in land suitable primarily for single and multifamily development. The second component was an interest in Auction.com, which sells owned real estate and loans on behalf of financial institutions, corporations and individual owners. In 2014, Google Capital invested $50 million in Auction.com and committed to helping the company take advantage of its unique platform. LNR’s position as the largest special servicer in the United States—and the named special servicer on approximately 20% of all CMBS transactions in the industry—enables it to provide unique insights into sectors and markets. NAMA LOAN PORTFOLIO In August 2013, SOF IX purchased—at a significant discount to par—an €809.4 million ($1.0 billion) non-performing loan portfolio from the National Asset Management Agency (NAMA), the Irish “bad bank.” Consisting of 18 loans secured by 39 Irish commercial properties, the portfolio was the first sale of Irish assets by NAMA. The pool—heavily concentrated in Dublin, Ireland’s largest and most liquid market—comprised retail, industrial and residential properties, offices, parking garages and land/development sites. The transaction highlights distressed debt experience, and it positioned us to benefit from the recovering Irish real estate market in general, and Dublin in particular. STARWOOD LAND VENTURES Anticipating an opportunity that would emerge following the financial crisis, the Firm in 2008 began to selectively acquire both small and large assemblages of finished and semi-finished residential lots in some of the nation’s most distressed markets that the team nonetheless believed were positioned for recovery. To pursue this strategy, Starwood Capital created Starwood Land Ventures, which teamed up on an exclusive basis with best-in-class, local residential land experts in Arizona, California, Colorado and Florida. Starwood Land Ventures on behalf of multiple funds purchased nearly 20,000 lots. DENVER UNION STATION ASSEMBLAGE In 2011, Starwood Capital via SOF VIII capitalized on the opportunity to form a joint venture with the master developer for the 50-acre Union Station project in Denver, Colorado—the largest transit-oriented development in the U.S. The Firm believed that Denver was poised for a resurgence, and that the Lower Downtown (LoDo) area in particular—which includes the Union Station neighborhood—was primed to emerge as the new city center. As part of the JV, SOF VIII’s partner contributed several undeveloped land parcels that were all located within steps of the historic Union Station, which has become Denver’s new transit hub. The first building that the JV developed, One Union Station, was sold in 2014—and established a new high-water mark for Denver office pricing on a per-square-foot basis. The second, the Triangle Building, was completed in August 2015 and sold in May 2017. The third property, 16 Chestnut, was sold to an institutional core investor in June 2016, prior to the start of construction—setting a new record for the highest price per buildable square foot ever paid for land in Denver, and locking in profits without ever putting a shovel in the ground. The building was 81% pre-leased to Davita Healthcare Partners, the leading provider of kidney services in the United States. WALKER TOWER With its Walker Tower investment, Starwood Capital was able to position itself to capitalize on the New York City luxury condo boom. In December 2010, the team negotiated a 50% interest in a 19-story condominium complex located at 212 West 18th Street, between 7th and 8th avenues, in New York City’s stylish Chelsea neighborhood. At the time of acquisition, the Firm’s outlook for high-end luxury development in the downtown Manhattan area was extremely positive, due to decreasing supply, a stable price environment, increasing sales volumes and limited new construction. Originally built in 1929 for Bell Telephone Company, the property was designed by Ralph Thomas Walker—named “the architect of the century” by The New York Times. Walker Tower presented an exciting redevelopment opportunity, due to its 13’6” average ceiling heights, art deco architecture, space for residential terraces, unobstructed views of the Empire State Building, Hudson River, New York Harbor and both midtown and downtown, neighborhood amenities and existing development rights. The transformation of the asset into 47 high-end residential condominiums involved a gut renovation of the entire building, as well as the construction of four additional floors. Starwood Capital’s in-house design staff, in collaboration with the Firm’s development partners, produced what we believed to be an extraordinary product. Clearly, the market agreed with the team’s assessment—extremely high demand allowed Walker Tower to sell out at an average of $3,750 per square foot. A full-floor penthouse unit in the building sold in January 2014 for $51 million, or nearly $8,400 per square foot—setting a new record for a downtown Manhattan condominium transaction. WESTIN HOTELS & RESORTS In 1993, Japanese construction company Aoki Corp. was under pressure from its lenders to shed non-core operations, including Westin Hotels & Resorts. The hotel company had been struggling, and a reputation for poor operating performance had prevented it from adding new management contracts. After extensive negotiations, funds managed by Starwood Capital acquired Westin in May 1995 for $537 million. The team quickly installed a new management team to execute a strategy of operational enhancements, brand marketing and growth. As a result of these efforts, Westin saw its managed or franchised hotels increase from approximately 70 to more than 120, before Starwood Hotels & Resorts (formerly NYSE: HOT, since merged with Marriott Hotels) purchased the business for $1.6 billion in January 1998. This transaction served as an early example of the Firm’s skill in identifying undervalued assets and enhancing operations through its asset management expertise—and helped establish the Firm as a global leader in the hospitality space. PUBLIC OFFERINGS STARWOOD PROPERTY TRUST Amid the depths of the Great Recession, Starwood Capital recognized that traditional commercial lenders were withdrawing from the marketplace and a significant need had emerged for alternative commercial mortgage financings. In August 2009, Starwood Capital created Starwood Property Trust, Inc. (NYSE: STWD), a publicly traded real estate finance company focusing on originating, acquiring, financing and managing commercial mortgage loans and other commercial real estate debt investments. With an initial market capitalization of $950 million, Starwood Property Trust was, at the time of its IPO, the largest blind pool company ever created and traded on the NYSE. In conjunction with Starwood Capital, Starwood Property Trust in April 2013 acquired LNR Property LLC and subsidiary LNR Partners LLC, the largest special servicer in the U.S., thus gaining significant expertise in the distressed marketplace while also adding substantial scale and sophistication to the company’s operations. In addition, Starwood Property Trust in early 2014 spun off its single-family residential operations into a separate entity (Starwood Waypoint Homes has since merged with Invitation Homes) that is now the largest publicly traded investor, owner and operator of single-family rental homes in the U.S. The business has grown dramatically since inception, and Starwood Property Trust today is a diversified finance company with a core focus on the real estate and infrastructure sectors. With total capital deployed since inception of more than $69 billion, Starwood Property Trust continues to solidify its position as one of the world’s leading non-bank lenders. STARWOOD HOTELS & RESORTS WORLDWIDE, INC. Starwood Capital is perhaps best known for creating and building Starwood Hotels & Resorts. This leading global hotel company has its origins in Starwood Capital’s initial investment in publicly traded Hotel Investors Trust (NYSE: HOT) in 1994. At that time, HOT had an equity market capitalization of just $8 million and needed an immediate recapitalization. Through a series of complex negotiations, Starwood Capital affiliates acquired a majority interest in HOT, and completed a restructuring and reorganization of the company. Between 1994 and 1998, Starwood Capital dramatically expanded the rebranded Starwood Hotels—highlighted by the acquisition of two major hotel companies, Westin Hotels & Resorts and ITT Sheraton. Following these transactions, Starwood Hotels in three short years had become the largest hotel company in the world, with more than 120,000 employees at its peak, 895 properties in 100 countries, and ownership of brands such as W Hotels, Westin, Sheraton, The St. Regis, Le Méridien and The Luxury Collection. Barry Sternlicht became the Chairman and Chief Executive Officer of the renamed Starwood Hotels & Resorts in 1995. Mr. Sternlicht created W Hotels, generally regarded as the world’s most successful “boutique” brand, built St. Regis Hotels from a single hotel to a global brand, and is credited with industry innovations including the Westin Heavenly® Bed and line of related products and Starwood Preferred Guest, the industry’s first “no-blackout” frequent-stay program. EQUITY RESIDENTIAL At its inception in 1991, Starwood Capital was focused on the disarray in the real estate markets resulting from the S&L crisis of the late 1980s and early 1990s. Over approximately 18 months, the Firm acquired 7,000 multifamily units at a fraction of replacement cost through the purchase of equity and distressed debt from the Resolution Trust Corp., FDIC and troubled lending institutions. In assembling this portfolio, Starwood Capital focused on newer properties in fundamentally sound secondary markets, with the strategic view that the recovery would be both imminent and dramatic. In August 1993, the Starwood Capital funds contributed approximately 6,400 multifamily units to Sam Zell’s Equity Residential (NYSE: EQR) at its IPO. EQR went on to become the largest publicly traded apartment owner in the country, with Barry Sternlicht serving on its Board of Directors for several years. This transaction marked the first of numerous investments in which the Firm created leading real estate platforms or companies in order to enhance value for its investors. STARWOOD WAYPOINT RESIDENTIAL TRUST Consistent with Starwood Capital’s longstanding approach of investing capital at attractive return levels relative to risk, the investment team identified an opportunity to buy, renovate and lease a large assemblage of single-family homes across the United States. Leveraging the efforts of Starwood Capital, affiliate Starwood Property Trust (NYSE: STWD) constructed a portfolio of over 7,000 single-family homes and distressed and nonperforming residential mortgage loans. The team built this portfolio using a network of local partners who managed the renovation and leasing of these homes and the resolution of the loans. Starwood Capital also used its real estate acumen to build scale in select geographic markets that the team believed had the greatest potential for long-term appreciation, and in which the team could buy homes at the largest discounts to replacement cost. The success of these efforts was reflected in the fact that the portfolio grew to almost $800 million, or 13% of Starwood Property Trust’s equity base. Once the team decided to spin off these assets, it scoured the country to find a best-in-class management team to build an industry-leading company. To that end, Starwood Capital acquired Waypoint Homes, a veteran of this newly institutional asset class. In 2014, Starwood Capital and Starwood Property Trust completed the spinoff of the single-family rental business and created Starwood Waypoint Residential Trust (NYSE: SWAY). In 2016, Starwood Waypoint merged with Colony American Homes, bringing together two industry pioneers and creating a portfolio of over 30,000 homes. In 2017 Starwood Waypoint Homes (NYSE: SFR) merged with Invitation Homes (NYSE: INVH) and the combined company is the largest publicly traded investor, owner and operator of single-family rental homes in the United States. ISTAR FINANCIAL, INC. In the mid-1990s, Starwood Capital recognized that the abundance of real estate capital, led by the growing REIT sector, was driving up pricing on traditional asset classes, and thus shifted its acquisition focus to mezzanine lending. After executing more than $1 billion in financings within a four-year period, the Firm capitalized on its sizable, well-seasoned portfolio and took the business public in 1998 by creating Starwood Financial, Inc. (NYSE: SFI). The Firm contributed the assets to a small, public REIT that it controlled and provided a dedicated management team to the entity. Barry Sternlicht became Chairman of the Board and several other executives of the Firm assumed Board seats. Starwood Capital subsequently expanded the company by closing on more than $1.1 billion of new financing commitments and by merging with TriNet Corporate Realty Trust. Subsequently renamed iStar Financial, Inc., the firm grew to be one of the largest publicly traded finance companies focused exclusively on commercial real estate, with an enterprise value of more than $16 billion at its peak. PRIVATIZATIONS MILESTONE MULTIFAMILY PORTFOLIO In April 2017, Starwood Capital investment vehicles acquired Milestone Apartments REIT (TSX: MST.UN), a Toronto Stock Exchange-listed, multifamily REIT, for a total enterprise value of approximately $3B. Milestone owned a high-quality, Class B+ portfolio of 78 garden-style apartment assets with 24,061 units in high-growth markets concentrated in Texas and the Southeastern and Western U.S. Our basis was approximately $123K per unit, which was an estimated 25–30% discount to replacement cost. We acquired Milestone in an off-market transaction through direct negotiations with the company’s management team and board of directors. We knew Milestone well through our acquisition of Landmark Apartment Trust, after which Milestone managed approximately 17.6K Landmark units for Starwood Capital. We believed the public markets were undervaluing Milestone and taking the company private offered a unique opportunity to acquire a high-quality portfolio in our target markets. At acquisition, Starwood Capital owned similar assets in 87% of Milestone’s markets by unit count, providing valuable information and adding to our conviction in pursuit of this opportunity. Starwood Capital is one of the largest owners of market-rate multifamily housing in the U.S. and the firm continues to build its multifamily operational expertise in numerous markets. LANDMARK APARTMENT TRUST In January 2016, SOF X and Milestone Apartments REIT acquired Landmark Apartment Trust, a publicly registered, non-traded REIT. SOF X acquired 57 stabilized apartment assets totaling 17,624 units in the Southeastern U.S. – our acquisition basis was 38% below replacement cost. Milestone Apartments REIT acquired the additional assets that SOF X later acquired in a separate investment (Milestone Multifamily Portfolio). SOF X’s portfolio—93% occupied at acquisition—had major concentrations in Dallas, Atlanta, Orlando, Tampa, Charlotte, and Nashville. With this acquisition—together with SOF X’s purchase of the National Multifamily Portfolio (23,262 units), also completed in January 2016—Starwood Capital became one of the largest owners of market-rate multifamily housing in the United States. The portfolio was concentrated in some of the fastest-growing markets in the U.S., with over 50% of the portfolio’s NOI at acquisition located in the country’s top 14 MSAs for projected five-year population, household and employment growth. We modified our initial business plan and sold the majority of assets early in order to capitalize on compressed cap rates due to strong investor demand for value add 1980s product. SOCIÉTÉ DU LOUVRE In December 2005, Starwood Capital funds completed the $3.2 billion acquisition of Groupe Taittinger and Société du Louvre (SDL), a family-controlled French conglomerate. At acquisition, SDL’s assets included one of Europe’s largest hotel networks—a unique collection of 15 luxury hotels, the most famous of which was the Hôtel de Crillon in Paris, and more than 800 budget hotels under three brands. SDL also owned several luxury goods businesses, including famed champagne producer Taittinger, iconic crystal maker Baccarat and Annick Goutal perfumes. The Firm’s track record with this complex investment includes a number of milestones: a revamp and expansion of the Louvre Hotels budget business that spurred dramatic market share gains, and eventually led to the sale of the business to China’s Jin Jiang International Holdings Co., Ltd.; the sale of the Taitttinger Champagne and Annick Goutal businesses; the sale of a 22% stake in Baccarat and an enhancement of the brand in conjunction with its 250-year anniversary that included the launch in March 2015 of the ultra-luxury Baccarat Hotel & Residences New York; the execution of a sale-leaseback transaction for 32 budget hotels in France at an attractive yield; and the careful disposition of the portfolio’s luxury hotels at compelling prices. This investment displays many of the hallmarks of Starwood Capital—creativity, agility and tenacity—and enabled the Firm to leverage its expertise in the hospitality industry, as well as its branding and operational savvy, to maximize the value of the portfolio. ECO-CONSCIOUS INVESTMENT Starwood Capital doesn’t just look at real estate as it is today— we see it as it could be. This concept extends to our approach to environmentally responsible investing as well. Instead of accepting the status quo when managing property, we are committed to setting a new standard for the private equity industry. Nowhere is this commitment more apparent than 1 Hotels. Operated by Starwood Capital affiliate SH Group, this luxury lifestyle brand represents hospitality with a purpose: To celebrate nature while encouraging sophisticated travelers to live well, do better and connect with the world around them. All 1 Hotels are designed to meet the stringent requirements of LEED certification, the rating system administered by the U.S. Green Building Council that is the industry standard to evaluate building performance. Each property in the 1 Hotels portfolio is distinguished by open spaces bathed in natural light, food made with the freshest organic ingredients and materials for construction and furnishings that are reclaimed or repurposed whenever possible. The daily operation of each 1 Hotel is carefully planned to minimize the property’s carbon footprint by minimizing energy use, leveraging local resources, conserving non-renewable materials, minimizing plastic and paper consumption and reducing landfill waste. Starwood Capital has demonstrated time and again that environmentally conscious investing can also be profitable investing. Whether employed for hotels, malls, housing, offices, condos or energy infrastructure, sustainable design and practices often result in more efficient processes that reduce expenses and enhance the value of real estate assets. Such properties also benefit from the growing demand from eco-mindful tenants, buyers and investors. For example, sales prices for our condos at 1 Hotel & Homes South Beach and Pierhouse have far exceeded brokers’ expectations and continue to achieve significant premiums to the market. As an industry leader, we embrace the opportunity to serve as stewards of the environment. We are just as serious about serving as stewards of our investors’ hard-earned capital and across our portfolio have demonstrated that these critical responsibilities can go hand-in-hand. Starwood Capital Group is a proud signatory of the United Nations-supported Principles for Responsible Investment.