A new Houston alliance River Star Capital a joint venture between Riverway Properties and Starwood Land Ventures plans to invest more than $150 million in local residential land acquisitions over the next 2 years. There are also plans to buy and hold finished homesites, provide equity and loans to other developers and purchase debt from lenders.
Starwood's parent company has set up a $1.5 billion fund that will be used to invest in real estate projects across the country. RiverStar will have access to $150 million of that to concentrate on Houston. During the past 16 years, Starwood Capital Group and its affiliates have invested $6 billion of equity capital in transactions representing more than $30 billion of asset value. RiverStar Capital will launch its acquisition campaign by investing in areas of Houston that have experienced traditionally high levels of growth.
The group is currently looking at projects in Fort Bend County and along Interstate 10 and U.S. Highway 59. The group expects to complete its first acquisition within the year. Despite the slowing housing market River Star Capital expects Houston to continue growing in terms of job creation and population.
Riverway, which was founded in 1992 as a land brokerage and community development firm, has developed or invested in numerous local residential projects including Villaggio, Riverstone Ranch, Mission Sierra and Tuscany. Since its founding, the company has acquired, developed or brokered more than $100 million in residential land and lot transactions.
In addition to traditional land deals, RiverStar is planning to buy and hold finished lots because the increase in commodities is making it more expensive to develop lots for delivery to builders. The joint venture is also planning to provide equity and loans to other developers to help further deals that may be falling apart in the wake of the credit crunch.
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