Starwood Real Estate Income Trust: Tender Offer

Starwood REIT Lawsuit: Investment Losses in Starwood Real Estate Income Trust

The White Law Group is investigating potential securities claims involving broker-dealers who may have improperly recommended Starwood Real Estate Income Trust Inc. (SREIT) to investors.

Starwood REIT is a non-traded real estate investment trust sponsored by Starwood Capital Group, focused on income-producing residential and commercial real estate. As of June 30, 2025, the REIT reported a net asset value (NAV) of approximately $8.79 billion, slightly down from $8.81 billion the previous month.

Starwood REIT Redemptions & Repurchase Limits

In June 2025, repurchase requests exceeded Starwood REIT’s updated limits of 0.5% monthly and 1.16% quarterly. The REIT fulfilled just 4% of each investor’s request on a pro-rata basis. However, shareholders holding less than $500 were fully redeemed, slightly surpassing the quarterly cap.

Earlier in April and May 2025, under a 0.33% monthly cap, only 3% of requests were fulfilled. In April 2024, Starwood met just 37% of redemptions, leaving $326 million in unmet requests, or about 3.5% of stockholder NAV.

NAV per Share as of August 1, 2025

• Class S: $21.10 (unchanged)
• Class T: $21.12 (? 0.05%)
• Class D: $20.67 (? 0.05%)
• Class I: $20.92 (unchanged)

MacKenzie Tender Offer & Share Discount

MacKenzie Realty Capital Inc. (MKZR) recently offered to purchase 150,000 Class S shares at $15.30 each — a 30% discount to the estimated NAV of $21.84 (as of November 2024). A previous offer in August 2023 was $17.50 per share for 700,000 shares. MacKenzie cited consistent oversubscription in Starwood’s repurchase program, noting fulfillment rates of just 30%–55%.

Liquidity Challenges & Strategy

Since late 2022, Starwood REIT has reportedly faced negative fund flows and has taken several measures:

• Reduced monthly redemption limits to 0.33%
• Reduced quarterly limits to 1%
• Waived 20% of monthly base management fees
• Sold $2.2 billion in assets in 2023
• Borrowed $1.3 billion against its credit facility
• Holds over $15 billion in debt

The REIT’s highly leveraged strategy contributed to NAV growth, but rising interest rates and falling property values have triggered significant redemption activity.

Concerns for Investors: Declining NAV and Redemption Risk

Despite asset sales, Starwood REIT’s NAV reportedly declined 1.4% in April 2024. Ongoing fundraising, limited liquidity, and redemption caps continue to raise concerns about valuation and financial stability.

The Trouble with Non-Traded REITs

Non-traded REITs like Starwood REIT carry significant risks:

• Illiquidity – Shares are difficult to sell.
• High commissions and fees – Often 7–10% upfront, which can incentivize aggressive sales.
• Economic sensitivity – Heavily influenced by market and interest rate conditions.

These investments are often unsuitable for conservative investors or retirees.

Is a Non-Traded REIT Suitable for You?

Broker-dealers must ensure that all recommendations are suitable and properly researched. If Starwood REIT was recommended to you without full disclosure of the risks, you may be eligible to file a FINRA arbitration claim.

Class Action vs. Individual FINRA Arbitration

• Class actions – Suitable for small claims.
• FINRA arbitration – Often preferred for losses exceeding $100,000.

An experienced securities attorney can help evaluate your best recovery option.

Free Consultation with a Securities Attorney

If you invested in Starwood REIT and have concerns, contact The White Law Group at 888-637-5510 or visit The White Law Group website for a free consultation. We represent investors nationwide in claims to recover losses through FINRA arbitration.

The White Law Group is a national securities fraud and investor protection firm with offices in Chicago, IL and Seattle, WA.

FAQs About Starwood

Is Starwood REIT still limiting redemptions in 2025?

Yes. As of June 2025, the REIT continues to restrict redemptions under reduced monthly and quarterly limits.

Why is Starwood REIT offering shares at a discount through third parties?

Third-party offers like MacKenzie’s reflect market concerns over liquidity. The steep discount suggests limited demand and financial pressure.

Can I recover losses from Starwood REIT?

Possibly. If your broker failed to disclose risks or made unsuitable recommendations, you may have grounds for a FINRA arbitration claim.