06/19/2009

Green Departs as Debt Chief at Starwood

Bill Green has stepped down as head of Starwood Capital's debt-investment business.

Green, one of the best-known commercial real estate lenders, left Starwood last week. He joined the firm in late 2007 after a long stint at Wachovia, including six years as head of the bank's U.S. commercial MBS group.

The circumstances surrounding his departure were unclear, but several people familiar with the matter said that his exit had been planned for several months and that his relations with Starwood remain amicable.

The buzz is that Green plans to relocate from New York to Charlotte and set up an investment business. Green's family has been in London since Wachovia transferred him there in 2007 to oversee its European real estate unit. He has been eager to reunite with them in Charlotte, where he was based for many years with Wachovia.

At Starwood, Green oversaw a $630 million fund that started acquiring distressed debt last year. Returns for the vehicle couldn't be learned, but many debt funds that bought assets last year were hammered when real estate prices continued their deep descent.

The Starwood vehicle, called Starwood Debt Fund 2, had a final close in February. It has $2.5 billion of investment power, including leverage. In April, Starwood completed raising about $300 million of equity for a "sidecar" fund that can co-invest with the main fund. Starwood began marketing the debt fund and its sidecar late in 2007.

Starwood senior managing director Jeff Dishner, who has led the firm's opportunity fund group, is overseeing the debt-fund operation, apparently on an interim basis. Executives at other firms said Starwood is recruiting a replacement for Green. A Starwood spokesman declined to comment.

Two weeks ago, Starwood announced that it plans to raise $500 million via an IPO for a REIT, Starwood Properties, that would buy and originate real estate debt. The company, based in Greenwich, Conn., is headed by chief executive Barry Sternlicht.

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