Data by YCharts gerenme/iStock via Getty Images Data by YCharts STWD has about $26.1B in total assets, and we can see that this spans across many different areas of real estate. This wide reach enables investors to gain instant diversity within the real estate sector, which mitigates the risk from any sector-specific concentration. Speaking of risk, something that I do not like is the US Office exposure, but thankfully this only accounts for 11% of their portfolio. US Offices were a large source of weakness ...

There's no free lunch on Wall Street, but undervalued dividend stocks are focused on rewarding shareholders with capital returns are the next best thing. While the overall market is up this year, it's important to bear in mind that performance has been driven by just a handful of stocks. It's no wonder that more than half of Americans believe that the stock market is down this year. At first glance, this kind of thinking may seem preposterous to the seasoned investor, especially with the S&P 500 (SPY) tradi ...

About Starwood Property Trust, Inc. Starwood Property Trust (NYSE: STWD) is a leading diversified finance company with a core focus on the real estate and infrastructure sectors. An affiliate of global private investment firm, Starwood Capital Group, the Company has successfully deployed over $97 billion of capital since inception and manages a portfolio of over $26 billion across debt and equity investments. Starwood Property Trust's investment objective is to generate attractive and stable returns for sha ...

Starwood Property's core strength is that it is the largest commercial REIT in the U.S. and therefore has access to a ton of liquidity which the company could deploy to grow its distributable earnings, especially in times of distress. Starwood Property had $9.8B in potential liquidity available as of the end of Q1'24 which is set to make STWD a considerable force on the acquisition front. peshkov Starwood Property Trust (NYSE:STWD) is a strong choice for dividend investors in the commercial real estate mark ...

MIAMI, May 28, 2024 /PRNewswire/ -- Starwood Capital Group ("Starwood Capital"), a global private investment firm with a primary focus on real estate, today announced that Matt Smith will join the firm in June as Managing Director, Head of U.S. Residential Asset Management. In this role, Mr. Smith will oversee the Firm's existing ~107,000-unit market rate and affordable housing multi-family portfolio as well as Highmark Residential, Starwood Capital's multi-family property management affiliate. Mr. Smith ha ...

Financial Data and Key Metrics Changes - The company reported distributable earnings (DE) of $191.6 million or $0.59 per share for Q1 2024, with GAAP net income at $154 million or $0.48 per share [6][28] - The undepreciated book value ended the quarter at $20.69, while GAAP book value was $19.85 [6] - The adjusted debt to undepreciated equity ratio decreased to 2.3x from 2.5x in the previous quarter, indicating improved leverage [12] Business Line Data and Key Metrics Changes - The commercial and residential lending segment contributed DE of $205 million or $0.63 per share, with repayments of $909 million outpacing fundings of $128 million [29] - The property segment generated $59 million of DE or $0.18 per share, significantly boosted by the sale of the master lease portfolio for $387 million [8] - The infrastructure lending segment contributed DE of $20 million or $0.06 per share, with $120 million of new loans committed [11] Market Data and Key Metrics Changes - The active servicing portfolio in the special servicer, LNR, increased from $6.6 billion to $7.2 billion, primarily due to $1.1 billion of transfers in [10] - The company noted that rents increased by 3.4% in 2023, with sponsors for 60 of 72 multifamily loans committing fresh equity [16] - The company has a significant portion of its debt in energy infrastructure lending, benefiting from lower competition and higher energy prices [19] Company Strategy and Development Direction - The company aims to leverage its low leverage diversified business model to capitalize on market opportunities as they arise [14] - There is a focus on affordable housing, which is expected to remain full and support rental growth [22] - The company is exploring new business lines, including energy infrastructure lending, which targets high returns [71] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the commercial real estate market, noting that most property types are performing well at the property level [43] - The company highlighted the importance of maintaining liquidity and access to capital, especially in a challenging economic environment [55] - Management acknowledged the potential for further credit migration and the need for caution in the current market [89] Other Important Information - The company has a record liquidity position of $1.5 billion, not including potential liquidity from asset sales [12] - The general CECL reserve increased by $35 million to $342 million, with 70% related to office loans [7] - The company completed its third infrastructure CLO for $400 million at a favorable coupon rate [34] Q&A Session Summary Question: What explains the discrepancy in performance compared to peers? - Management noted that their portfolio is structured to perform better in the current market, with low leverage and significant liquidity [51] Question: Outlook on office loan ratings migration? - Management indicated that the migration of office loans from three to four ratings is driven by stress in the market, and borrowers are becoming less aggressive in supporting their loans [89] Question: Appetite for residential mortgage credit portfolio? - Management expressed satisfaction with the current performance of their residential mortgage credit portfolio, noting that most of their loans were written several years ago and should perform well [92]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-34436 __________________________________________________ Starwood Property Trust, Inc. (Exact name of registrant as specified in its charter) Maryland 27-0 ...

Starwood Property Trust, Inc. (NYSE:STWD) Q4 2023 Earnings Conference Call February 22, 2024 10:00 AM ET Company Participants Zachary Tanenbaum - Managing Director and Head of Investor Strategy Rina Paniry - Chief Financial Officer Jeffrey DiModica - President Barry Sternlicht - Chairman and Chief Executive Officer Adam Behlman - President of Real Estate Investing and Servicing Pawan Melgiri - Senior Vice President of Investments at Stellar Management Conference Call Participants Sarah Barcomb - BTIG Stephe ...

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |----------|-------|-----------|-------|------------|-----------|-------|-------|-------------------|-----------------|---------|-----------|-------|-------|-------------------|------------------|---------| | Region | % | Occupancy | | Units | Region | % | | Gross investment | Occupancy | Sq. Ft. | Region | % | | Gross investment | Occupancy | Sq. Ft. | | North 7% | | | | 93% 1,230 | Northeast | 30% | | | ...

[Part I](index=6&type=section&id=Part%20I) [Business](index=6&type=section&id=Item%201.%20Business) Starwood Property Trust is a diversified real estate investment trust (REIT) operating across four primary business segments - Starwood Property Trust is a Maryland corporation that commenced operations in August 2009 and is organized to qualify as a REIT, externally managed by an affiliate of Starwood Capital Group[21](index=21&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - The company's business is structured into four reportable segments: **Commercial and Residential Lending**, **Infrastructure Lending**, **Property Segment**, and **Investing and Servicing Segment**[22](index=22&type=chunk)[25](index=25&type=chunk) Commercial and Residential Lending Segment Portfolio (As of Dec 31, 2023) | Investment Category | Carrying Value ($ thousands) | | :--- | :--- | | First mortgages | $14,947,446 | | Loans held-for-sale, residential | $2,604,594 | | HTM debt securities | $590,274 | | Properties, net | $431,155 | | RMBS, fair value option | $449,909 | | **Total Segment Investments** | **$19,272,118** | Infrastructure Lending Segment Portfolio (As of Dec 31, 2023) | Investment Category | Carrying Value ($ thousands) | | :--- | :--- | | First priority infrastructure loans and HTM securities | $2,535,047 | | Investments in unconsolidated entities | $52,691 | | Credit loss allowance | ($20,345) | | **Total Segment Investments** | **$2,567,393** | Property Segment Portfolio (As of Dec 31, 2023) | Investment Category | Carrying Value ($ thousands) | | :--- | :--- | | Woodstar Fund | $2,012,833 | | Properties, net | $555,455 | | Properties held-for-sale, net | $290,937 | | **Total Segment Investments** | **$2,883,785** | Investing and Servicing Segment Portfolio (As of Dec 31, 2023) | Investment Category | Carrying Value ($ thousands) | | :--- | :--- | | CMBS, fair value option | $1,147,550 | | Intangible assets - servicing rights | $57,249 | | Properties, net | $59,774 | | **Total Segment Investments** | **$1,354,105** | - The company faces competition from a wide range of public and private investment vehicles, many of which are larger and may have greater access to capital[56](index=56&type=chunk) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from its external manager, high indebtedness, interest rate sensitivity, and real estate market volatility - The company is dependent on its external Manager, an affiliate of Starwood Capital Group, and its key personnel, which **creates potential conflicts of interest**[69](index=69&type=chunk)[71](index=71&type=chunk)[78](index=78&type=chunk) - **Significant indebtedness of approximately $19.7 billion** as of December 31, 2023, subjects the company to increased risk of loss and potential defaults[96](index=96&type=chunk) - The company is exposed to interest rate fluctuations, which can affect investment yields, financing costs, and the value of its assets[100](index=100&type=chunk)[101](index=101&type=chunk) - The company's real estate investments are illiquid and subject to market risks, with **difficult conditions in the office sector** due to remote work trends[117](index=117&type=chunk)[120](index=120&type=chunk)[122](index=122&type=chunk) - The Infrastructure Lending Segment's portfolio is concentrated in the **power and midstream oil and gas industries**, subjecting it to industry-specific risks[195](index=195&type=chunk)[202](index=202&type=chunk) - The Investing and Servicing Segment's special servicing business exposes the company to risks related to declining servicing fees and competition[208](index=208&type=chunk)[209](index=209&type=chunk) - **Failure to qualify as a REIT** would subject the company to corporate income tax, substantially reducing cash available for distribution to stockholders[235](index=235&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) - Cybersecurity risks could lead to data loss, business interruptions, and financial losses, with threats increasing in frequency and severity[273](index=273&type=chunk)[274](index=274&type=chunk) [Unresolved Staff Comments](index=55&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[283](index=283&type=chunk) [Cybersecurity](index=55&type=section&id=Item%201C.%20Cybersecurity) The company manages cybersecurity through a comprehensive program with Board oversight and has identified no material threats in the last fiscal year - The company has not identified any risks from known cybersecurity threats in the last fiscal year that have materially affected its operations[284](index=284&type=chunk) - Cybersecurity is managed within an enterprise risk management framework featuring a comprehensive program to identify, protect, detect, and respond to threats[285](index=285&type=chunk) - Oversight is provided by the Board of Directors and Audit Committee, with the Chief Information Officer leading the overall cybersecurity function[287](index=287&type=chunk)[288](index=288&type=chunk) - The company employs a multi-layered security approach, including employee training, annual risk assessments, and third-party monitoring[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) [Properties](index=56&type=section&id=Item%202.%20Properties) The company leases office space in multiple U.S. locations, with headquarters in Greenwich, CT - The Company leases office space in multiple U.S. locations, with its headquarters in Greenwich, CT, and a detailed property list is in Schedule III[293](index=293&type=chunk) [Legal Proceedings](index=56&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no material pending legal proceedings - No material legal proceedings are pending against the company[294](index=294&type=chunk) [Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[295](index=295&type=chunk) [Part II](index=57&type=section&id=Part%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=57&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock (STWD) is listed on the NYSE, with regular distributions planned to maintain its REIT status - The company's common stock trades on the NYSE under the symbol **"STWD"**[297](index=297&type=chunk) - As a REIT, the company is generally required to **distribute at least 90% of its taxable income annually** and intends to pay regular quarterly distributions[298](index=298&type=chunk) - As of February 16, 2024, there were **313,375,899 shares of common stock outstanding**[5](index=5&type=chunk)[299](index=299&type=chunk) - There were no sales of unregistered equity securities or company purchases of its common stock during the year ended December 31, 2023[303](index=303&type=chunk)[304](index=304&type=chunk) [[Reserved]](index=58&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=59&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income decreased to $339.2 million in 2023 due to fair value changes and higher credit loss provisions, despite increased interest income - The economic environment in 2023 was marked by market volatility, inflation, and rising interest rates, impacting borrower performance and real estate values[309](index=309&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk) Consolidated Results of Operations Summary ($ in thousands) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Total Revenues | $2,049,908 | $1,464,716 | $1,170,088 | | Total Costs and Expenses | $2,098,318 | $1,272,951 | $989,057 | | Income before income taxes | $417,475 | $997,538 | $501,095 | | Net income attributable to STWD | $339,213 | $871,475 | $447,739 | - For 2023 vs 2022, the Commercial and Residential Lending segment's revenues increased by $536.2 million, but costs rose by $660.2 million due to higher interest expense and credit loss provisions[323](index=323&type=chunk)[324](index=324&type=chunk) - The Property Segment's other income **decreased by $496.4 million** in 2023, mainly due to lower unrealized gains from the Woodstar Fund[338](index=338&type=chunk) - Distributable Earnings, a non-GAAP measure, was **$662.6 million ($2.05 per diluted share)** for 2023, down from $726.3 million ($2.28 per diluted share) for 2022[381](index=381&type=chunk)[382](index=382&type=chunk) Secured Borrowings Summary (As of Dec 31, 2023) | Facility Type | Outstanding Balance ($ thousands) | Maximum Facility Size ($ thousands) | | :--- | :--- | :--- | | Repurchase Agreements | $10,652,359 | $17,580,715 | | Other Secured Financing | $6,796,632 | $8,774,471 | | **Total** | **$17,448,991** | **$26,355,186** | - Critical accounting estimates include the allowance for credit losses under the CECL model, which **increased to $333.1 million** at year-end 2023 from $112.5 million at year-end 2022[458](index=458&type=chunk)[459](index=459&type=chunk)[461](index=461&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=91&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company actively manages credit, interest rate, liquidity, and currency risks through hedging and asset-liability matching - The company is subject to interest rate risk and mitigates it by seeking to match-fund assets and liabilities and using interest rate derivatives[479](index=479&type=chunk) Interest Rate Sensitivity Analysis (Annual Change in Net Investment Income) | Change in Index Rates | Estimated Impact ($ thousands) | | :--- | :--- | | 1.00% Decrease | $(47,391) | | 0.50% Decrease | $(23,696) | | 0.25% Decrease | $(11,848) | | 0.25% Increase | $12,042 | - The company manages foreign currency risk by matching the currency of its foreign assets to borrowings, with **substantially all net asset exposure hedged**[484](index=484&type=chunk)[488](index=488&type=chunk) - The company is exposed to real estate risk from property value fluctuations and credit risk from borrowers' ability to operate underlying properties[476](index=476&type=chunk)[489](index=489&type=chunk) [Financial Statements and Supplementary Data](index=95&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements, which received an unqualified opinion from its auditor Consolidated Balance Sheet Highlights ($ in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Assets | $69,504,196 | $79,043,129 | | Loans held-for-investment, net | $17,574,249 | $18,401,439 | | Total Liabilities | $62,481,214 | $71,844,422 | | Secured financing agreements, net | $13,867,996 | $14,501,532 | | Total STWD Stockholders' Equity | $6,251,089 | $6,462,438 | Consolidated Statement of Operations Highlights ($ in thousands) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Total Revenues | $2,049,908 | $1,464,716 | | Interest Expense | $1,436,107 | $797,121 | | Credit loss provision, net | $243,728 | $46,657 | | Net income attributable to STWD | $339,213 | $871,475 | | Diluted EPS | $1.07 | $2.74 | Consolidated Statement of Cash Flows Highlights ($ in thousands) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $528,597 | $213,741 | | Net cash provided by (used in) investing activities | $855,074 | $(2,950,306) | | Net cash (used in) provided by financing activities | $(1,454,563) | $2,797,879 | - The independent registered public accounting firm, Deloitte & Touche LLP, issued an **unqualified opinion** on the financial statements and internal controls[495](index=495&type=chunk)[505](index=505&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=176&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants - None[862](index=862&type=chunk) [Controls and Procedures](index=176&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of year-end 2023 - Management, including the CEO and CFO, concluded that the company's **disclosure controls and procedures were effective** as of December 31, 2023[864](index=864&type=chunk) - Management's assessment concluded that **internal control over financial reporting was effective** as of December 31, 2023, which was supported by an unqualified audit opinion[866](index=866&type=chunk)[868](index=868&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter ended December 31, 2023[869](index=869&type=chunk) [Other Information](index=176&type=section&id=Item%209B.%20Other%20Information) The company reports no other information and no new director or officer trading arrangements in Q4 2023 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended December 31, 2023[870](index=870&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspection](index=176&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspection) This item is not applicable to the company - Not applicable[871](index=871&type=chunk) [Part III](index=177&type=section&id=Part%20III) [Directors, Executive Officers and Corporate Governance](index=177&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Director, officer, and corporate governance details are incorporated by reference from the 2024 Proxy Statement - All information required for this item is **incorporated by reference** from the registrant's definitive proxy statement for the 2024 Annual Meeting of Shareholders[7](index=7&type=chunk)[873](index=873&type=chunk) - The company has adopted a Code of Business Conduct and Ethics and a Code of Ethics for its Principal Executive Officer and Senior Financial Officers[874](index=874&type=chunk) [Executive Compensation](index=177&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's 2024 Proxy Statement - All information required for this item is **incorporated by reference** from the 2024 Proxy Statement[7](index=7&type=chunk)[876](index=876&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=177&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the company's 2024 Proxy Statement - All information required for this item is **incorporated by reference** from the 2024 Proxy Statement[7](index=7&type=chunk)[877](index=877&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=177&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related transactions and director independence is incorporated by reference from the 2024 Proxy Statement - All information required for this item is **incorporated by reference** from the 2024 Proxy Statement[7](index=7&type=chunk)[878](index=878&type=chunk) [Principal Accountant Fees and Services](index=177&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees is incorporated by reference from the company's 2024 Proxy Statement - All information required for this item is **incorporated by reference** from the 2024 Proxy Statement[7](index=7&type=chunk)[879](index=879&type=chunk) [Part IV](index=178&type=section&id=Part%20IV) [Exhibits and Financial Statement Schedules](index=178&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K - This item lists all financial statements, schedules, and exhibits filed with the report[881](index=881&type=chunk) - Key exhibits filed include the **Management Agreement**, various indentures for senior and convertible notes, and equity compensation plans[882](index=882&type=chunk)[883](index=883&type=chunk)[884](index=884&type=chunk) [Form 10-K Summary](index=181&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that there is no Form 10-K summary - None[886](index=886&type=chunk)