Financial Data and Key Metrics Changes - The company reported distributable earnings (DE) of $156 million or $0.45 per share, while GAAP net income was $112 million or $0.33 per share [5] - The company committed $2.3 billion towards new investments, marking the highest quarter in nearly three years [5] - The overall loan book grew by $859 million, reaching $14.5 billion at quarter end [6][23] - The CECL reserve decreased by $26 million to a balance of $456 million, representing 4.2% of the lending and REO portfolios [10] Business Line Data and Key Metrics Changes - Commercial and residential lending contributed DE of $179 million or $0.51 per share, with $1.4 billion of loans originated [6] - The residential lending portfolio ended the quarter at $2.4 billion, with repayments totaling $55 million [10] - The investing and servicing segment contributed DE of $50 million or $0.14 per share, with an active servicing portfolio of $9.6 billion [12] - Infrastructure lending committed a record $677 million of loans, with a portfolio totaling $2.8 billion at quarter end [13] Market Data and Key Metrics Changes - The company noted that the CMBS single asset single borrower market has pulled back, creating opportunities for well-capitalized lenders [16] - The company has seen a significant increase in debt and equity deals in the market, with 50% more deals compared to the same period last year [16] - The U.S. office exposure declined to just 9% [24] Company Strategy and Development Direction - The company aims to achieve investment grade status and is exploring various investment opportunities, including a potential acquisition of a RESI originator [35][72] - The focus is on three investment themes: data centers, Europe, and multifamily assets [22] - The company plans to maintain a strong dividend, having paid it for 45 consecutive quarters [19] Management's Comments on Operating Environment and Future Outlook - Management anticipates a weakening economy but believes it will lead to lower interest rates, which will benefit the property segment [28][32] - The company is optimistic about transaction volumes re-accelerating despite current market uncertainties [33] - Management expressed confidence in their ability to navigate the current environment, citing a strong balance sheet and liquidity [44] Other Important Information - The company completed a $500 million issuance of senior unsecured sustainability notes, enhancing its liquidity position [14] - The company has significant credit capacity across its business lines, with $9.5 billion of availability [15] Q&A Session Summary Question: Progress on resolving nonperforming loans - Management indicated that there are several apartment deals likely to be sold at their basis this year, with ongoing efforts to resolve other assets [49][50] Question: Opportunities in residential credit - Management acknowledged the potential in residential credit and is exploring various opportunities, including the possibility of acquiring an originator [70][72] Question: Corporate M&A outlook - Management expressed optimism about potential M&A opportunities as some companies may face challenges in the current environment [76][78] Question: Timing of loan closings and interest income - Management expects an increase in interest income in the upcoming quarters due to a strong pipeline of loan closings [82]

Financial Data and Key Metrics Changes - The company reported distributable earnings (DE) of $156 million or $0.45 per share, while GAAP net income was $112 million or $0.33 per share [5] - The company committed $2.3 billion towards new investments, marking the highest quarter in nearly three years [5] - The overall loan book grew by $859 million, reaching $14.5 billion at quarter end [6][23] - The CECL reserve decreased by $26 million to $456 million, representing 4.2% of the lending and REO portfolios [9] Business Line Data and Key Metrics Changes - Commercial and residential lending contributed DE of $179 million or $0.51 per share, with $1.4 billion of loans originated [6] - The residential lending portfolio ended the quarter at $2.4 billion, with repayments at par [10] - The investing and servicing segment contributed DE of $50 million or $0.14 per share, with a servicing portfolio of $9.6 billion [12] - Infrastructure lending saw a record commitment of $677 million, with a portfolio of $2.8 billion at quarter end [13] Market Data and Key Metrics Changes - The company noted that the CMBS single asset single borrower market has pulled back, creating opportunities for well-capitalized lenders [16] - The company has seen a significant increase in debt and equity deals in the market, with 50% more deals compared to the same period last year [16] - The company expects to maintain a strong origination pace, with over $1 billion already closed in the first month of the second quarter [16] Company Strategy and Development Direction - The company aims to achieve investment grade status and grow all investment segments, including exploring acquisitions in the residential credit space [29][36] - The focus is on three investment themes: data centers, Europe, and multifamily assets, with 70% of Q1 equity in data centers [22] - The company plans to leverage its strong balance sheet and liquidity to capitalize on market opportunities [44] Management's Comments on Operating Environment and Future Outlook - Management anticipates a weakening economy but believes it will lead to lower interest rates, which could benefit the property segment [32] - The company is optimistic about transaction volumes re-accelerating and sees a favorable environment for capital deployment [33][34] - Management highlighted the importance of maintaining a disciplined growth strategy, avoiding unnecessary risks while capitalizing on opportunities [82] Other Important Information - The company has a current liquidity of $1.5 billion, excluding potential liquidity from asset sales and refinancings [14] - The adjusted debt to undepreciated equity ratio ended the quarter at 2.25x, indicating a strong capital position [15] - The company has over $650 million in reserves for its CRE lending book, which is expected to lead to lower reserves and higher earnings in the future [24] Q&A Session Summary Question: Progress on resolving nonperforming loans - Management indicated progress on resolving nonperforming loans, with expectations to sell certain apartment deals at their basis this year [49] Question: Opportunities in residential credit - Management acknowledged the potential in residential credit and is exploring opportunities to re-enter the market, including the possibility of acquiring an originator [70] Question: Corporate M&A outlook - Management expressed optimism about potential M&A activity in the sector, noting that some companies may be under pressure to consolidate [76] Question: Timing of loan closings and interest income - Management expects an increase in interest income in Q2 due to a strong pipeline and significant loan closings at the end of Q1 [80] Question: Subordinate debt opportunities - Management indicated plans to explore opportunities in subordinate debt, including originating mezzanine loans and participating in B pieces [84]

Q1 2025 SUPPLEMENTAL REPORTING INFORMATION Table of Contents | Press Release | Page | 1 | | --- | --- | --- | | Highlights | Page | 7 | | Commercial and Residential Lending Segment | Page | 10 | | Infrastructure Lending Segment | Page | 18 | | Property Segment | Page | 19 | | Investing and Servicing Segment | Page | 22 | | Capitalization | Page | 24 | | Appendix | Page | 30 | (i) Cover photo: $190M first mortgage participation in The Perigon, Miami Beach PRESS RELEASE – Closed $1.3 Billion After Quarter End ...

Core Insights - Starwood Property Trust, Inc. reported a GAAP net income of $112.3 million and Distributable Earnings of $156.3 million for Q1 2025, continuing its trend of paying a quarterly dividend of $0.48 per share for over a decade [1][11]. Financial Performance - The company achieved a significant financial flexibility with commercial lending originations in 2025 already surpassing the total for the previous year [2]. - Starwood Property Trust raised $18 billion since its IPO, demonstrating strong access to capital markets [3]. - The company reported a current liquidity of $1.5 billion and has no corporate debt maturities for over a year [3][11]. Investment Activities - In Q1 2025, Starwood Property Trust invested $2.3 billion, including $1.4 billion in commercial lending and a record $0.7 billion in infrastructure lending [11]. - The company closed $1.3 billion in transactions after the quarter, with $0.9 billion in commercial lending [11]. Portfolio and Assets - As of March 31, 2025, Starwood Property Trust manages a portfolio exceeding $26 billion across debt and equity investments [7]. - The company holds $4.9 billion in unencumbered assets and $1.5 billion in unrealized property gains that can be utilized to enhance distributable earnings [3]. Earnings and Dividends - The Distributable Earnings per diluted share for Q1 2025 was reported at $0.45, while the GAAP earnings per diluted share stood at $0.33 [11][15]. - The company continues to focus on generating attractive and stable returns for shareholders primarily through dividends [7].

Preliminary Information [Registrant Information](index=1&type=section&id=Registrant%20Information) STWD is a Maryland corporation and large accelerated filer, with **339.5 million shares outstanding** as of May 2, 2025 - Starwood Property Trust, Inc. (STWD) is a **Maryland corporation** and a **large accelerated filer**, having filed all required reports under the Securities Exchange Act of 1934[2](index=2&type=chunk)[3](index=3&type=chunk) Common Stock Information | Metric | Value | | :----- | :---- | | Common stock outstanding (as of May 2, 2025) | 339,454,864 shares | | Common stock par value | $0.01 per share | | Exchange | New York Stock Exchange | [Special Note Regarding Forward-Looking Statements](index=2&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially - The report contains **forward-looking statements** based on current beliefs and assumptions, which are subject to change due to various known and unknown events or factors[6](index=6&type=chunk)[7](index=7&type=chunk) - Factors that may cause actual results to vary include **borrower defaults**, **impairment of real estate value**, **availability of acquisition opportunities**, **timing mismatches in financing**, **economic conditions**, **geopolitical events**, **changes in laws**, **increased competition**, **interest rate changes**, and **liquidity costs**[9](index=9&type=chunk) - Readers are cautioned **not to place undue reliance** on these statements, and the company disclaims any obligation to update or revise them[6](index=6&type=chunk)[8](index=8&type=chunk) Part I - Financial Information [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements, including balance sheets, operations, and cash flows, are presented [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) - Total assets decreased by approximately **$393 million** from December 31, 2024, to March 31, 2025, primarily driven by a decrease in VIE assets and loans held-for-sale, partially offset by an increase in loans held-for-investment[13](index=13&type=chunk) - Total liabilities decreased by approximately **$356 million**, mainly due to a reduction in VIE liabilities and unsecured senior notes, while secured financing agreements increased[13](index=13&type=chunk) Condensed Consolidated Balance Sheets (amounts in thousands) | Metric | As of March 31, 2025 | As of December 31, 2024 | | :---------------------------- | :------------------- | :---------------------- | | **Assets:** | | | | Cash and cash equivalents | $440,580 | $377,831 | | Total Assets | $62,163,347 | $62,556,497 | | **Liabilities:** | | | | Total Liabilities | $55,006,596 | $55,363,025 | | **Equity:** | | | | Total Starwood Property Trust, Inc. Stockholders' Equity | $6,405,665 | $6,437,107 | | Total Liabilities and Equity | $62,163,347 | $62,556,497 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) - Total revenues decreased by **$104.9 million (20.1%) YoY**, primarily due to lower interest income from loans and investment securities[17](index=17&type=chunk) - Net income attributable to Starwood Property Trust, Inc. decreased by **$42.1 million (27.3%) YoY**, resulting in a basic EPS decrease from **$0.49 to $0.33**[17](index=17&type=chunk) Condensed Consolidated Statements of Operations (amounts in thousands) | Metric | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | | :---------------------------- | :---------------------------------------- | :---------------------------------------- | | Total revenues | $418,180 | $523,088 | | Total costs and expenses | $384,224 | $509,308 | | Total other income | $85,911 | $147,286 | | Net income | $116,101 | $159,860 | | Net income attributable to Starwood Property Trust, Inc. | $112,255 | $154,332 | | Basic EPS | $0.33 | $0.49 | | Diluted EPS | $0.33 | $0.48 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) - Comprehensive income attributable to Starwood Property Trust, Inc. decreased by **$41.7 million YoY**, mainly driven by lower net income and a slightly reduced other comprehensive loss[19](index=19&type=chunk) Condensed Consolidated Statements of Comprehensive Income (amounts in thousands) | Metric | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | | :---------------------------- | :---------------------------------------- | :---------------------------------------- | | Net income | $116,101 | $159,860 | | Other comprehensive loss | $(867) | $(1,291) | | Comprehensive income attributable to Starwood Property Trust, Inc. | $111,388 | $153,041 | [Condensed Consolidated Statements of Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) - Total Starwood Property Trust, Inc. Stockholders' Equity decreased by **$31.4 million** from December 31, 2024, to March 31, 2025, primarily due to dividends declared exceeding net income, partially offset by proceeds from equity plans and share-based compensation[21](index=21&type=chunk) - Dividends declared were **$0.48 per share** for the three months ended March 31, 2025, totaling **$163.9 million**[21](index=21&type=chunk) Condensed Consolidated Statements of Equity (amounts in thousands) | Metric | As of March 31, 2025 | As of December 31, 2024 | | :---------------------------- | :------------------- | :---------------------- | | Total Starwood Property Trust, Inc. Stockholders' Equity | $6,405,665 | $6,437,107 | | Total Permanent Equity | $6,729,916 | $6,766,777 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) - Net cash provided by operating activities significantly increased to **$238.9 million** in Q1 2025 from **$55.9 million** in Q1 2024[24](index=24&type=chunk) - Investing activities shifted from providing **$1.17 billion** in Q1 2024 to using **$906.4 million** in Q1 2025, primarily due to higher originations of loans held-for-investment and lower proceeds from sales of real estate[24](index=24&type=chunk) - Financing activities provided **$805.5 million** in Q1 2025, a substantial change from using **$1.08 billion** in Q1 2024, driven by higher proceeds from borrowings and lower principal repayments[26](index=26&type=chunk) Condensed Consolidated Statements of Cash Flows (amounts in thousands) | Metric | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net cash provided by operating activities | $238,865 | $55,949 | | Net cash (used in) provided by investing activities | $(906,449) | $1,165,661 | | Net cash provided by (used in) financing activities | $805,506 | $(1,079,833) | | Net increase in cash, cash equivalents and restricted cash | $137,922 | $141,777 | | Cash, cash equivalents and restricted cash, end of period | $692,351 | $452,704 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's business, accounting policies, and specific financial line items [Note 1 Business and Organization](index=10&type=section&id=Note%201%20Business%20and%20Organization) STWD is a Maryland REIT focused on originating, acquiring, financing, and managing mortgage loans and real estate investments - **STWD is a Maryland corporation**, commenced operations in August 2009, and operates as a **REIT**, generally not subject to U.S. federal corporate income tax on distributed net income[29](index=29&type=chunk)[31](index=31&type=chunk) - The company's strategy involves originating, acquiring, financing, and managing mortgage loans and other real estate investments in the U.S., Europe, and Australia, with flexibility to adjust based on market conditions[29](index=29&type=chunk) - **Commercial and Residential Lending Segment:** Focuses on commercial first mortgages, non-agency residential mortgages, subordinated/mezzanine loans, preferred equity, CMBS, RMBS, and other real estate debt - **Infrastructure Lending Segment:** Engages in originating, acquiring, financing, and managing infrastructure debt investments - **Property Segment:** Acquires and manages equity interests in stabilized and to-be-stabilized commercial real estate properties, including multifamily - **Investing and Servicing Segment:** Includes a U.S. servicing business, investment

Core Insights - Starwood Capital Group is expanding its credit platform by launching Starwood Insurance Strategies, aimed at providing insurance companies access to its real asset credit expertise [1][3] - The firm has appointed Rob Allard as Chief Investment Officer for this new division, leveraging his 27 years of experience in financial markets, particularly in insurance and asset-backed finance [1][3] Company Overview - Starwood Capital Group is a leading global investment firm focused on real estate and infrastructure, managing approximately $115 billion in total assets [2][4] - Since 2010, the firm has originated over $100 billion in credit investments across various sectors, including Starwood Property Trust and Starwood Infrastructure Finance [2][5] Strategic Positioning - The company aims to enhance its relationships with the insurance industry by offering tailored credit solutions that align with the risk-return profiles sought by these investors [3][4] - Starwood Capital's extensive portfolio includes over 15,000 properties worldwide, providing unique market insights and access that drive investment activities [3][6] Leadership and Expertise - Rob Allard's previous experience includes serving as Chief Investment Officer at Rothesay Asset Management North America, where he played a key role in its establishment and growth [1][3] - The firm emphasizes its ability to deliver products that meet the specific needs of insurance clients, distinguishing itself from competitors by not having a captive client base for its risk-return profile [3][4]

Core Viewpoint - Starwood Property Trust will release its first quarter 2025 financial results on May 9, 2025, before the market opens, followed by a conference call to discuss performance and recent events [1][4]. Financial Results Announcement - The financial results will be available on the company's website on May 9, 2025 [6]. - A conference call is scheduled for May 9, 2025, at 10:00 a.m. Eastern Time to review the first quarter performance and hold a Q&A session [1]. Participation Details - Participants can join the conference call by dialing in at least five minutes prior to the start time, with domestic and international numbers provided [3]. - A playback of the conference call will be available for 90 days after the event [2][3]. Company Overview - Starwood Property Trust is a diversified finance company focused on real estate and infrastructure, managing a portfolio of over $25 billion across debt and equity investments [4]. - The company has deployed over $102 billion of capital since its inception and aims to generate attractive and stable returns for shareholders primarily through dividends [4].

Core Insights - The current market volatility has created opportunities for income and value investors, particularly those focused on defensive stocks with a medium- to long-term investment horizon [2]. Group 1: Investment Focus - iREIT+HOYA Capital emphasizes income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1]. - The service offers a free two-week trial to explore top ideas within exclusive income-focused portfolios [1]. Group 2: Market Context - Passive investors, particularly those invested in index funds like the S&P 500, are experiencing challenges due to market fluctuations [2]. - The ongoing market conditions are seen as a chance for investors who prioritize income over capital gains [2].

Core Insights - Starwood Capital Group and Fontainebleau Development are collaborating on the development of 1 Homes Jupiter Island, which will feature 26 oceanfront estate residences designed for luxury living [1][2][4] - The residences will range from 4,000 to 6,000 square feet and will include three to four bedrooms, with a focus on sustainability and luxury [1][6] - The project is positioned as a unique opportunity for exclusive oceanfront living in a limited development area on Jupiter Island [8] Company Overview - Starwood Capital Group is a private investment firm focused on global real estate, managing approximately $115 billion in assets and having raised over $80 billion since its inception [10] - Fontainebleau Development is a premier real estate development group with a diverse portfolio, including hospitality, residential, and commercial sectors, and has been involved in over 100 projects valued at over $38 billion [13][14] Project Details - 1 Homes Jupiter Island will offer luxury amenities such as custom kitchens, energy-efficient appliances, and smart home technology, designed to enhance the coastal lifestyle [6][7] - The development will include penthouses with private rooftop terraces and beach residences with oversized terraces and private pools, emphasizing outdoor living [6][8] - The project aims to create a seamless connection with the natural beauty of the region, reflecting a commitment to luxury and sustainability [4][5]

Core Insights - A joint venture between Starwood Capital Group and Land Strategies Management has acquired a portfolio of master-planned communities in Texas for approximately $800 million [1][2] Company Overview - Starwood Capital Group is a global private investment firm focused on real estate, with over $115 billion in assets under management and has raised over $80 billion since its inception in 1991 [4] - Hines is a leading global real estate investment manager, owning and operating $90.1 billion in assets across various property types [5][6] Acquisition Details - The acquisition includes 11 master-planned communities in advanced stages of development, featuring over 16,000 residential lots and over 600 acres of commercial land in Dallas, Houston, and Austin [2] - The communities are situated in high-growth submarkets with a strong track record of homebuilder activity, indicating a favorable investment environment [2][3] Strategic Intent - Starwood Capital aims to capitalize on long-term residential land fundamentals by acquiring well-located master-planned communities [3] - The investment is seen as a rare opportunity to acquire mature communities with substantial infrastructure completed and active lot sales to over 30 homebuilders [3] Market Context - The transaction highlights the strong investment appetite for master-planned communities that provide essential housing in high-growth markets [3] - The living sector, particularly single-family housing, is identified as a high-conviction investment theme for Hines globally [3]