Colony Starwood Homes (NYSE:SFR) Files An 8-K Entry into a Material Definitive Agreement

Item1.01

On June5, 2017, Colony Starwood Homes (the Company, we, us, or
our) entered into a securities purchase agreement (Purchase
Agreement) with Waypoint/GI Venture, LLC (the GI Seller), to
which the Company agreed to acquire a portfolio of 3,106
single-family rental homes (the GI Portfolio) located entirely
within its existing core markets (the acquisition or GI Portfolio
Acquisition). to the Purchase Agreement, the consideration to be
paid for the GI Portfolio is approximately $815million, inclusive
of the assumption of an existing $500million secured term loan
with a maturity date of December15, 2018 and with a borrowing
rate of 287.5 basis points over one-month LIBOR.

The GI Portfolio Acquisition is expected to close in the third
quarter of 2017, subject to the satisfaction of various closing
conditions, including, among other things, the assumption or
payoff of GI Sellers existing $500million secured term loan, the
accuracy of the parties representations and warranties and
compliance with the parties respective covenants in the Purchase
Agreement. There can be no assurance that the GI Portfolio
Acquisition will be consummated in the time frame, on the terms
or in the manner currently anticipated or at all or that the
Company will be able to obtain approval to assume GI Sellers
existing $500million secured term loan from the lender
thereunder.

Item5.02. Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.

In the Offering (as defined below), Colony NorthStar, Inc.,
Colony Capital, LLC and their affiliated entities (collectively,
the Colony Entities) intend to sell all of the remaining Company
common shares owned or controlled by them.As a result, on June5,
2017, the three trustees of the Company affiliated with the
Colony Entities, Thomas J. Barrack, Jr., Justin T. Chang and
Richard B. Saltzman, announced their intentions to resign as
trustees of the Company upon closing of the Offering.
Additionally, two independent trustees of the Company, Robert T.
Best and John L. Steffens, announced their intentions to resign
as trustees of the Company upon closing of the Offering in order
to reduce the number of members of the Companys board of trustees
to a total of nine following the Offering. There were no
disagreements between any of Messrs. Barrack, Chang, Saltzman,
Best and Steffens and the Company on any matter relating to the
Companys operations, policies or practices.

On June5, 2017, the Company issued a press release announcing the
GI Portfolio Acquisition. A copy of such press release is
furnished as Exhibit 99.1 to this Current Report on Form 8-K.

On June5, 2017, the Company issued a press release announcing
that underwritten public offering of 19,933,187 of its common
shares, of which 11,433,187 common shares will be offered by
certain selling shareholders (the Offering). The Company has
granted the underwriter a 30-day option to purchase up to an
additional 2,989,978 common shares from the Company. A copy of
such press release is furnished as Exhibit 99.2 to this Current
Report on Form 8-K.

The information included in this Current Report on Form 8-K under
this Item 7.01 (including Exhibit 99.1 and Exhibit 99.2 hereto)
is being furnished and shall not be deemed to be filed for the
purposes of Section18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liabilities of Section18,
nor shall it be incorporated by reference into a filing under the
Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, except as shall be expressly set forth
by specific reference in such filing.

This Current Report on Form 8-K does not constitute an offer to
sell or a solicitation of an offer to buy any securities.

Rationale for the GI Portfolio Acquisition

We believe the acquisition will create strategic and financial
benefits to us, including the following:

the GI Portfolio Acquisitions anticipated impact on our Core FFO
(as defined below) per share. On this basis, we estimated that
the GI Portfolio Acquisition, inclusive of the associated loss of
management fee revenue, would be neutral to our 2018 Core FFO per
share and, exclusive of the associated loss of management fee
revenue, would be accretive to our 2018 Core FFO per share.

We caution you not to place undue reliance on our expectations
with respect to the GI Portfolio Acquisitions impact on our 2018
Core FFO per share because they are based solely on data made
available to us in the diligence process in connection with the
GI Portfolio Acquisition and our internal estimates. Our
experience operating the GI Portfolio may change our expectations
with respect to the GI Portfolio Acquisitions impact on our 2018
Core FFO per share. In addition, the GI Portfolio Acquisitions
impact on our 2018 Core FFO per share may differ from our
expectations based on numerous other factors, including our
ability to dispose, on a timely basis, of the 386 homes from the
GI Portfolio that we do not intend to hold for the long-term,
difficulties collecting anticipated rental revenues, property tax
reassessments and unanticipated expenses at the properties that
we cannot pass on to tenants, as well as the risk factors set
forth below and in our Annual Report on Form 10-K for the year
ended December 31, 2016.

GI Portfolio Overview

The GI Portfolio consists of 3,106 single-family rental homes
located in our existing core markets of Southern California,
Northern California, Chicago, Atlanta, Tampa, Phoenix, Miami and
Orlando, including 386 homes that we do not intend to hold for
the long-term. As of March31, 2017, the Net Owned Home portion of
the GI Portfolio was 95.8% occupied and had an Average Monthly
Rent per unit of $1,703, which is above that of our existing Net
Owned Home portfolio and meaningfully higher than the average of
the other public single-family rental REITs. The table below
provides details of the Net Owned Homes in the GI Portfolio as of
and for the three months ended March31, 2017 (see definitions
below):

Risks Related to the Proposed GI Portfolio
Acquisition

We cannot assure you that the proposed GI Portfolio
Acquisition will be completed in the time frame, on the terms or
in the manner currently anticipated or at all.

There are a number of risks and uncertainties relating to the GI
Portfolio Acquisition. For example, the GI Portfolio Acquisition
may not be completed, or may not be completed in the time frame,
on the terms or in the manner currently anticipated, as a result
of a number of factors, including the failure of the parties to
satisfy one or more of the conditions to closing. There can be no
assurance that the conditions to closing of the GI Portfolio
Acquisition will be satisfied or waived or that other events will
not intervene to delay or result in the failure to close the GI
Portfolio Acquisition. We may not be able to obtain approval to
assume GI Sellers existing $500million secured term loan from the
lender thereunder. If we do not obtain such approval, we will
fund a larger portion of the GI Portfolio Acquisition by
borrowing under our existing credit facility, which in turn may
limit our ability to obtain additional financing for working
capital, capital expenditures, acquisitions and other investments
or general corporate purposes and to execute our business
strategy. The Purchase Agreement may be terminated by the parties
thereto under certain circumstances. Delays in closing the GI
Portfolio Acquisition or the failure to close the GI Portfolio
Acquisition at all may result in our incurring significant
additional costs in connection with such delay or termination of
the Purchase Agreement and/or failing to achieve the anticipated
benefits of the GI Portfolio Acquisition. Any delay in closing or
a failure to close the GI Portfolio Acquisition could have a
material adverse effect on us and/or the trading price of our
common shares.

If we are unable to complete the GI Portfolio Acquisition, we
will have incurred significant due diligence, legal, accounting
and other transaction costs in connection with the GI Portfolio
Acquisition without our shareholders realizing the anticipated
benefits. We cannot assure you that we will acquire the GI
Portfolio because the proposed GI Portfolio Acquisition is
subject to a variety of factors, including the satisfaction of
customary closing conditions.

In the event the GI Portfolio Acquisition is not consummated, we
may use the net proceeds to us from the Offering for general
corporate purposes, which may be dilutive to our earnings per
share and funds from operations per share.

If completed, the GI Portfolio Acquisition may not
achieve its intended benefits.

There can be no assurance that we will be able to realize the
expected benefits of the GI Portfolio Acquisition. The expected
synergies and operating efficiencies of the GI Portfolio
Acquisition may not be fully realized within the anticipated time
frame or at all. Such synergies and operating efficiencies may
not be fully realized for various reasons, including, among
others, if we are not able to dispose, on a timely basis or at
all, of the 386 homes from the GI Portfolio that we do not intend
to hold for the long-term. As a result of the GI Portfolio
Acquisition, we will no longer receive management fee income from
the GI Portfolio, which, for the three months ended March31,
2017, was approximately $2.0million. The loss of this management
fee income will negatively impact net income, FFO and cash flows
and may make it more difficult to achieve the expected benefits
of the GI Portfolio Acquisition on a timely basis or at all. In
addition, the GI Portfolio Acquisitions impact on our 2018 Core
FFO per share may differ from our expectations based on numerous
other factors, including our ability to dispose, on a timely
basis, of the 386 homes from the GI Portfolio that we do not
intend to hold for the long-term, difficulties collecting
anticipated rental revenues, property tax reassessments and
unanticipated expenses at the properties that we cannot pass on
to tenants. Failure to achieve the intended benefits of the GI
Portfolio Acquisition could result in increased costs and have a
material adverse effect on us, our financial performance and/or
the trading price of our common shares.

We may be subject to unknown or contingent
liabilities related to the GI Portfolio for which we may have no
or limited recourse against the sellers.

The GI Portfolio may be subject to unknown or contingent
liabilities for which we may have no or limited recourse against
the sellers. In addition, the total amount of costs and expenses
that we may incur with respect to liabilities associated with the
GI Portfolio may exceed our expectations, which could have a
material adverse effect on us.

The unaudited pro forma consolidated financial
information included in Exhibit 99.5 hereto is presented for
illustrative purposes only and is not necessarily indicative of
what our financial position, results of operations and other data
would have been if the GI Portfolio Acquisition had actually been
completed on the dates indicated and is not intended to project
such information for any future date or for any future period, as
applicable.

The unaudited pro forma consolidated financial information
included in Exhibit 99.5 hereto that give effect to the GI
Portfolio Acquisition and the Offering is based on numerous
assumptions and estimates underlying the adjustments described in
the accompanying notes, which are based on available information
and assumptions that our management considers reasonable. In
addition, such unaudited pro forma consolidated financial
information does not reflect adjustments for other developments
with our business or GI Portfolios business after March31, 2017.
As a result, the unaudited pro forma consolidated financial
information does not purport to represent what our financial
condition actually would have been had the GI Portfolio
Acquisition and the Offering occurred on March31, 2017 or
represent what the results of our operations actually would have
been had the GI Portfolio Acquisition and the Offering occurred
on January1, 2016 or project our financial position or results of
operations as of any future date or for any future period, as
applicable.

Certain Definitions

Net Owned Homes represents wholly-owned single-family rental
properties and is measured by the number of total rental units
and excludes real estate owned homes and homes that were not
intended to be held for the long-term and are not in service.

Occupancy represents the percentage of an identified rental unit
population occupied as of the measurement period and is
calculated by dividing (a)the number of occupied units in such
identified population of rental units as of the last day of the
measurement period by (b)the number of rental units in such
identified population of rental units.

Average Monthly Rent represents (a)the aggregate monthly
contractual cash rent (excluding rent concessions and incentives)
for an identified population of occupied rental units divided by
(b)the number of rental units in the identified population.

Blended Rent Growth represents the weighted average rent growth
on all new leases (replacement leases) and renewals during a
measured period, and is calculated by dividing (a)the aggregate
contractual first month rent on all new leases and lease renewals
executed during the applicable period for an identified
population of occupied rental units by (b)the aggregate
contractual last month rent for such identified population of
rental units before renewal or new lease. This calculation does
not include lease escalations or step-ups for multi-year leases.

Renewal Rent Growth represents the percentage change in monthly
contractual rent resulting from all lease renewals that became
effective during a measurement period for an identified
population of rental units and is calculated by dividing (a)the
aggregate contractual first month rent (excluding rent
concessions and incentives) on lease renewals executed during the
applicable measurement period for an identified population of
rental units by (b)the aggregate contractual last month rent for
such identified population of rental units before renewal.

Replacement Rent Growth represents the percentage change in
monthly contractual rent resulting from new leases on properties
previously leased to different residents during a measurement
period for an identified population of rental units and is
calculated by dividing (a)the aggregate contractual first month
rent (excluding rent concessions and incentives) on new leases
signed during the applicable measurement period for an identified
population of occupied rental units by (b)the aggregate
contractual last month rent for such identified population of
rental units under the prior lease on such properties.

Funds from operations or FFO is defined by the National
Association of Real Estate Investment Trusts (NAREIT FFO) as net
income or loss (computed in accordance with U.S. generally
accepted accounting principles) excluding gains or losses from
sales of previously depreciated real estate assets, plus
depreciation and amortization of real estate assets, impairment
of real estate assets, discontinued operations and adjustments
for unconsolidated partnerships and joint ventures. Our Core FFO
begins with NAREIT FFO and is adjusted for share-based
compensation, merger and transaction-related expenses,
transitional (duplicative post-merger) expenses, gain or loss on
derivative financial instruments, amortization of derivative
financial instruments, severance expense, non-cash interest
expense related to amortization of deferred financing costs and
discounts on convertible senior notes, and other non-comparable
items, as applicable.

(a) Financial statements of businesses acquired

The unaudited statement of revenues and certain expenses of
Waypoint/GI Venture, LLC and Subsidiaries for the three months
ended March31, 2017 is filed as Exhibit 99.3 hereto. The audited
consolidated financial statements of Waypoint/GI Venture, LLC and
Subsidiaries as of and for the year ended December31, 2016 are
filed as Exhibit 99.4 hereto.

(b) Pro Forma Financial Information

The unaudited pro forma consolidated balance sheet of the Company
as of March31, 2017 and the unaudited pro forma consolidated
statements of operations of the Company for the three months
ended March31, 2017 and the year ended December31, 2016 are filed
as Exhibit 99.5 hereto. Such unaudited pro forma consolidated
financial statements are not necessarily indicative of the
financial position or operating results that actually would have
been achieved if the adjustments set forth therein had been in
effect as of the dates and for the periods indicated or that may
be achieved in future periods and should be read in conjunction
with the historical financial statements of the Company and
Waypoint/GI Venture, LLC and Subsidiaries.

About Colony Starwood Homes (NYSE:SFR)

Colony Starwood Homes, formerly Starwood Waypoint Residential Trust, is a real estate investment trust (REIT). The Company operates through two segments: single-family rental (SFRs), which includes the business activities associated with its investments in residential properties, and non-performing residential mortgage loans (NPLs), which includes the business activities associated with its investments in NPLs. The Company identifies and pursues individual home acquisition opportunities through various sources, including multiple listing services (MLS) listings, foreclosure auctions and short sales. The Company’s portfolio includes approximately 34,670 owned homes and homes underlying NPLs. Its homes are located in South Florida, Atlanta, Houston, Tampa, Dallas, Denver, Chicago, Orlando, Southern California, Northern California, Phoenix and Las Vegas. Colony Starwood Partnership, L.P. is a limited partnership through which the Company conducts substantially all of its business.