GREENWICH, Conn. (AP) -- Starwood Property Trust and Starwood Capital Group announced Monday they have completed their $1.06 billion acquisition of LNR Property LLC, the former investment arm of the homebuilder Lennar Corp.
LNR, which was spun off by Lennar in 1997, specializes in distressed securities and also invests in and manages real estate. The company has more than 550 employees in 12 offices throughout the U.S. and Europe. Starwood purchased the company from affiliates of Aozora Bank Ltd., iStar Financial and Vornado Realty Trust.
Starwood Property, a publicly traded real estate investment trust, has said the acquisition will diversify its revenue sources and add significant scale to its operations. The company said it expects the deal to increase its earnings and cash flow in 2013 and 2014.
Under terms of the deal, Starwood Property paid $862 million for the majority of LNR's assets, including its loan servicing operations in U.S. and Europe, most of its U.S. loans and investments and 50 percent of LNR's stake in the website Auction.com.
Starwood Capital, which is not publicly traded paid $194 million for LNR's U.S. commercial property group and the other half of LNR's stake in Auction.com.
Shares of Starwood Property rose 3 cents to $27.19 in morning trading. It has traded between $19.40 and $28.94 in the past 52 weeks.