REIT Starwood Property to buy Fundamental Income Properties for about $2.2 billion

Starwood Property Trust STWD said on Wednesday it would acquire real estate operating platform Fundamental Income Properties for about $2.2 billion.

The deal — which consists of 467 properties across 44 states — will be funded with cash on hand, alongside debt and equity capital, with Starwood assuming Fundamental's existing financing facilities totaling $1.3 billion.

Shares of Starwood Property — an affiliate of investment firm Starwood Capital Group led by its billionaire founder Barry Sternlicht, fell about 3% in extended trading. The commercial mortgage real estate investment trust has a market capitalization of about $7 billion.

Fundamental, owned by Brookfield Asset Management BAM, focuses on acquiring commercial properties for sale-leaseback deals.

BofA Securities is the financial adviser to Starwood, while Wells Fargo and Evercore are advising Brookfield Asset Management.

Separately, Starwood announced a stock offering of 25.5 million shares to help fund its purchase of Fundamental.