Private investors, Rising Rents – The Washington Post

Many of those same firms imposed aggressive rent increases and rode the historic wave of rent hikes to big profits.

Few, however, stood to benefit more than Starwood Capital Group.

A private investment firm led by Florida billionaire Barry Sternlicht, Starwood has been one of the most active acquirers of apartments, and a model for the industry. Over the past seven years, it has amassed a portfolio of more than 115,000 apartments, which by some rankings stands as the nation’s largest such collection.

Private firms rarely disclose specific information about rent hikes, but according to leases reviewed by The Washington Post, prices at some Starwood complexes increased by 30 percent or more.

At Starwood’s Wellington Green in Palm Beach County, Fla., the company raised some rents by as much as 52 percent in 2022; at the Griffin Apartments in Scottsdale, Ariz., it increased them by 35 percent. At the Cove at Boynton Beach, it boosted rents on some units by as much as 93 percent in 2022.

At some Starwood apartment complexes intended for low-income tenants and built with government subsidies, the company increased rents by 10 percent. Though the rents on such units are limited by Department of Housing and Urban Development guidelines, the company began charging higher rent soon after the government lifted the limits, even for tenants who were mid-lease.

“Tenants seem capable and willing to pay these rent increases,” Sternlicht said in early 2022 in a call with investors. “I think this is the strongest real estate market I’ve seen in 30 years, 35 years.”

While Starwood says its prices merely reflect market forces and its own rising costs, the growing role of private investors among the nation’s apartment landlords coincides with a historic wave of rent hikes.

In 2021, rent increases were more than double what they had been any previous year, according to the Yardi Matrix Multifamily National Report, with asking rents jumping by 10 percent or more in 26 major metropolitan areas. The increases continued through at least October 2022, when rents were rising about 8 percent annually.

“When they said my rent was going up, I was like, ‘What in the world?’” said Sakeema Rainner, 29, who with her four children rented a government-subsidized West Palm Beach apartment where she said the rent jumped about 10 percent. “They just don’t care.”

Starwood provided some figures to The Post showing that the company raised rents at an average…