Colony StarwoodHomes is accelerating its exitfrom the nonperforming-loan business.
The company's board of trustees on May 4 authorized the saleof the company's entire NPL portfolio, and the company plans to begin marketingthe portfolio and assessing disposition options immediately. The business will betreated as discontinued operations in subsequent financial periods.
As of March 31, the company's NPL portfolio comprised 2,308 first-lienloans, compared to 2,53 9 first-lien NPLs as of Dec. 31, 2015, and it owned 738real estate-owned, or REO, homes as of March 31. The reduction in NPLs is primarilydue to resolution activity during the first quarter; from inception to date, thecompany has resolved 71% of all NPLs acquired.
The aggregate purchase price of $344.6 million for the remaining2,308 NPLs represents 61.6% of their collateral property broker-price opinion value.
Following the mergerof Starwood Waypoint Residential Trust and Colony American Homes Inc., all of thecompany's NPL and REO assets were recorded at fair value as of the Jan. 5 mergertransaction date due to the company's decision to exit that business, which mutedthe effect of GAAP accounting gains from the resolution and sale of these assetsduring the quarter.
NPL resolutions and REO sales produced $36.3 million of grosscash proceeds during the quarter, for net proceeds of $29.4 million after the paydown of $6.9 million of associated debt. As of March 31, there was $267.5 millionof outstanding debt associated with the NPL business, which the company intendsto pay down in connection with the wind down of that segment.
The company noted that it sold 351 homes during the January toMarch period, including 124 single-family rental homes and 227 REO homes. Grosssales proceeds totaled $24.0 million from the sales of single-family rental home,with the company recording a gain of approximately $1.4 million on these transactions.The REO home sales generated gross sales proceeds of $29.9 million; the companydid not record a gain on these sales as the gain associated with these sales wasmuted due to merger-related purchase accounting.
During the first quarter, Colony Starwood acquired 12 homes foran aggregate estimated total investment of $1.8 million, or about $151,000 per home,including estimated investment costs for renovation.