The White Law Group Investigates Potential Claims Involving Starwood Real Estate Income Trust (SREIT)
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 that focuses on income-producing residential and commercial real estate. Despite its size and reputation, the REIT has faced mounting investor complaints tied to its liquidity restrictions, declining valuations, and redemption limitations.
Starwood REIT Complaints: Limited Liquidity and Redemption Caps
Starwood Real Estate Income Trust (SREIT) once again limited investor redemptions in October 2025 after requests exceeded its 0.5% monthly cap, resulting in investors receiving only about 4% of what they sought on a pro rata basis. The REIT also reported a modest decline in total net asset value, falling to approximately $8.42 billion as of October 31—a 1.03% decrease from the prior month.
NAV per share across all classes (S, T, D, and I) similarly declined by roughly 0.78% to 0.79%. Despite ongoing liquidity pressures, the offering continues, with SREIT having raised roughly $1.3 billion through its primary offering and an additional $0.6 billion through its distribution reinvestment plan to date.
MacKenzie Realty Capital’s Tender Offer for Starwood REIT Shares
In October 2025, MacKenzie Realty Capital Inc. (Nasdaq: MKZR) — a publicly traded REIT — announced a new tender offer to acquire up to 150,000 Class S shares of Starwood REIT for $16.25 per share, representing a 22% discount to Starwood’s estimated NAV of $20.76.
The offer, totaling roughly $2.4 million, gives investors an alternative exit amid Starwood’s redemption backlog. MacKenzie noted that its tender provides “immediate liquidity,” avoiding what could be a multi-year wait for redemption under Starwood’s current limits.
This is MacKenzie’s third offer for Starwood shares in less than two years:
- July 2024: $17.50 per share
- February 2025: $15.30 per share
According to filings, MacKenzie and its affiliates were able to redeem a portion of previously acquired Starwood shares in September 2025 at NAV ($20.76), reportedly generating a significant profit spread.
Third-party offers like MacKenzie’s are often discouraged by non-traded REIT sponsors such as Starwood but continue to serve as one of the few available liquidity avenues for frustrated investors.
The Trouble with Non-Traded REITs
Non-traded REITs like Starwood REIT often pose risks that may not have been fully disclosed to investors:
- Illiquidity – Shares cannot be easily sold.
- High commissions – Often 7–10%, incentivizing brokers to recommend them.
- Valuation risk – NAVs may not reflect true market value.
- Interest rate sensitivity – Rising rates can quickly erode returns.
These investments may be unsuitable for conservative investors or retirees seeking liquidity and stable income.
Starwood REIT Lawsuit: Can Investors Recover Their Losses?
If your financial advisor or broker recommended Starwood REIT without fully explaining the risks, you may have grounds to pursue recovery through a FINRA arbitration claim.
The White Law Group represents investors nationwide in claims against brokerage firms for unsuitable investment recommendations, misrepresentation, and failure to perform due diligence on alternative investments like non-traded REITs.
Class Action vs. FINRA Arbitration
While some investors may consider joining a Starwood REIT class action lawsuit, most recovery claims are better pursued individually through FINRA arbitration, which typically provides:
- Faster resolution
- Greater control over your case
- Potential for full recovery of losses
Free Consultation with a Securities Attorney
If you invested in Starwood Real Estate Income Trust (SREIT) and are concerned about investment losses, redemption delays, or discounted tender offers, contact The White Law Group at (888) 637-5510 for a free consultation.
We are a national securities fraud and investor protection firm with offices in Chicago, Illinois and Seattle, Washington, representing investors across the country in Starwood REIT lawsuits and similar claims.
FAQs About Starwood REIT
Is Starwood REIT still limiting redemptions?
Yes. As of fall 2025, Starwood continues to cap redemptions under strict monthly and quarterly limits, leaving many investors waiting months or years for liquidity.
Why are third parties offering to buy Starwood REIT shares at a discount?
Tender offers like MacKenzie’s reflect the lack of liquidity and declining investor confidence. The steep discounts signal limited demand and mounting concern over Starwood’s financial stability.
Can I recover my investment losses from Starwood REIT?
Possibly. If your broker recommended Starwood without fully explaining the risks, you may be eligible to pursue a FINRA arbitration claim to recover losses.
