Starwood-Ceruzzi formed to acquire retail real estate.

A new company, combining the resources of Starwood Capital Group, L.L.C. of Greenwich, CT and Ceruzzi Properties of Westport, CT, has been formed to acquire and develop retail properties throughout the United States.

The private company, owned by affiliates of Ceruzzi and Starwood, expects to convert to a publicly traded REIT once it increases its portfolio by an additional $1 billion.

Founded in 1998, Ceruzzi Properties rapidly became a leading developer of "big-box" retail "power centers" throughout the northeastern United States. It brings existing and development assets in excess of five million square feet of space to the new venture.

Ceruzzi's success is based on comprehensive in-house capability in zoning, construction, leasing and management of retail properties. A representative list of tenants procured by Ceruzzi on previous retail projects includes Target, Toys R' Us, CVS, Filene's Basement, numerous Home Depot store Linens N' Things, Sony Theaters, Kohl's, Barnes & Noble, Marshalls, Office Max, Pep Boys, Sports Authority, Circuit City, Costco, Bobs, Home Place, PetSmart, Modells, Office Depot, Staples and Stop & Shop.

Starwood Capital is a diversified investment company that invests in real estate and operating businesses. Since its inception in 1991, Starwood Capital has become one of the largest owners of real estate and related businesses in the United States and has completed in excess of 120 separate acquisitions resulting in assets owned or controlled (or co-controlled) in excess of $6 billion.

"We are thrilled to be able to combine our development experience with a large, yet entrepreneurial financial partner, and we expect that the venture will benefit immensely from Starwood's deal flow," said Louis Ceruzzi, president of Starwood-Ceruzzi L.L.C.

"Starwood views this as an expansion of its reach into the retail sector," said Rick Kleeman, a director of Starwood Capital Group. "While we have been active in other markets, this allows us to begin a retail operation with a strong foundation. We are delighted to be launching our retail initiative with a partner as capable as Lou. This venture provides us with access to Ceruzzi's pipeline of development projects, together with an experienced and successful operating manager."

Starwood Capital has acquired or financed a highly diversified portfolio which includes over 28,000 multi-family units, over 12,000 residential lots and over 6.5 million square feet of office space. Starwood Capital has been particularly active in the hospitality area. Among its more notable accomplishments has been the reorganization and recapitalization of Hotel Investors Trust into Starwood Lodging Trust, the top-performing REIT in the United States for the past two calendar years, and Starwood Capital's acquisition of privately-held Westin Hotels and Resorts in a private partnership with Goldman Sachs and Nomura Asset Capital Corporation.

Starwood Lodging recently announced the acquisition of Westin Hotels for $ 1.6 billion and the acquisition of ITT Corporation for $13.3 billion. Together, these acquisitions will make Starwood Lodging the largest hotel company and the largest real estate investment trust in the world.