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What changed in STARWOOD PROPERTY TRUST, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of STARWOOD PROPERTY TRUST, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+385 added−360 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-27)

Top changes in STARWOOD PROPERTY TRUST, INC.'s 2025 10-K

385 paragraphs added · 360 removed · 301 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

35 edited+7 added−2 removed42 unchanged
Biggest changeIn addition to our Manager making direct investments on our behalf, we may enter into joint venture, management or other agreements with persons that have special expertise or sourcing capabilities. 7 Tab l e of Contents Investment Guidelines Our board of directors has adopted the following investment guidelines: • our investments will be in our target assets unless otherwise approved by our board of directors; • no investment shall be made that would cause us to fail to qualify as a REIT for federal income tax purposes; • no investment shall be made that would cause us or any of our subsidiaries to be required to be registered as an investment company under the 1940 Act; • not more than 25% of our equity will be invested in any individual asset without the consent of a majority of our independent directors; and • (a) any investment that is less than $150.0 million will require approval of our Chief Executive Officer; (b) any investment that is equal to or in excess of $150.0 million but less than $250.0 million will require approval of our Manager’s investment committee; (c) any investment that is equal to or in excess of $250.0 million but less than $400.0 million will require approval of each of the investment committee of our board of directors and our Manager’s investment committee; and (d) any investment that is equal to or in excess of $400.0 million will require approval of each of our board of directors and our Manager’s investment committee.
Biggest changeInvestment Guidelines Our board of directors has adopted the following investment guidelines: • our investments will be in our target assets unless otherwise approved by our board of directors; • no investment shall be made that would cause us to fail to qualify as a REIT for federal income tax purposes; • no investment shall be made that would cause us or any of our subsidiaries to be required to be registered as an investment company under the 1940 Act; and • not more than 25% of our equity will be invested in any individual asset without the consent of a majority of our independent directors.
Government agency or federally chartered corporation; • Residential loans: loans secured by a first mortgage lien on residential property; • Infrastructure loans: senior secured project finance loans and senior secured project finance investment securities secured by power generation facilities and midstream, downstream and upstream oil and gas assets; and • Net leases: commercial properties subject to net leases, which leases typically have longer terms than gross leases, require tenants to pay substantially all of the operating costs associated with the properties and often have contractually specified rent increases throughout their terms.
Government agency or federally chartered corporation; • Residential loans: loans secured by a first mortgage lien on residential property; • Infrastructure loans: senior secured project finance loans and senior secured project finance investment securities secured by power generation facilities and midstream, downstream and upstream oil and gas assets; and • Net leases: commercial properties subject to net leases (including triple net leases), which leases typically have longer terms than gross leases, require tenants to pay substantially all of the operating costs associated with the properties and often have contractually specified rent increases throughout their terms.
We have four reportable business segments as of December 31, 2024 and we refer to the investments within these segments as our target assets: • Real estate commercial and residential lending (the “Commercial and Residential Lending Segment”)—engages primarily in originating, acquiring, financing and managing commercial first mortgages, non-agency residential mortgages (“residential loans”), subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (“CMBS”), residential mortgage-backed securities (“RMBS”) and other real estate and real estate-related debt investments in the U.S., Europe and Australia (including distressed or non-performing loans).
We have four reportable business segments as of December 31, 2025 and we refer to the investments within these segments as our target assets: • Real estate commercial and residential lending (the “Commercial and Residential Lending Segment”)—engages primarily in originating, acquiring, financing and managing commercial first mortgages, non-agency residential mortgages (“residential loans”), subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (“CMBS”), residential mortgage-backed securities (“RMBS”) and other real estate and real estate-related debt investments in the U.S., Europe and Australia (including distressed or non-performing loans).
Regions: North East 18.4 % 16.4 % South East 15.8 % 16.3 % South West 15.4 % 15.2 % West 10.5 % 8.9 % Mid Atlantic 9.3 % 9.7 % Midwest 2.2 % 2.4 % International: United Kingdom 12.8 % 12.9 % Australia 7.3 % 8.2 % Other Europe 6.3 % 8.1 % Bahamas/Bermuda 2.0 % 1.9 % 100.0 % 100.0 % Our primary focus has been to build a portfolio of commercial mortgage and mezzanine loans with attractive risk‑adjusted returns by focusing on the underlying real estate fundamentals and credit analysis of the borrowers.
Regions: South West 19.0 % 15.4 % North East 18.9 % 18.4 % South East 12.7 % 15.8 % West 12.4 % 10.5 % Mid Atlantic 6.4 % 9.3 % Midwest 3.2 % 2.2 % International: United Kingdom 9.3 % 12.8 % Other Europe 11.1 % 6.3 % Australia 6.5 % 7.3 % Bahamas/Bermuda 0.5 % 2.0 % 100.0 % 100.0 % Our primary focus has been to build a portfolio of commercial mortgage and mezzanine loans with attractive risk‑adjusted returns by focusing on the underlying real estate fundamentals and credit analysis of the borrowers.
Item 1. Business. The following description of our business should be read in conjunction with the information included elsewhere in this Form 10‑K for the year ended December 31, 2024. This discussion contains forward‑looking statements that involve risks and uncertainties.
Item 1. Business. The following description of our business should be read in conjunction with the information included elsewhere in this Form 10‑K for the year ended December 31, 2025. This discussion contains forward‑looking statements that involve risks and uncertainties.
Our operations in the U.S., Europe and Australia are subject, in certain instances, to supervision and regulation by U.S. and other governmental authorities and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, among other things: (1) regulate credit granting activities; (2) establish maximum interest rates, finance charges and other charges; (3) require disclosures to customers; (4) govern secured transactions; (5) set collection, foreclosure, repossession and claims handling procedures and other trade practices; and (6) regulate affordable housing rental activities.
Our operations in the U.S., Europe and Australia are subject, in certain instances, to supervision and regulation by U.S. and other governmental authorities and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, among other things: (1) regulate credit granting activities; (2) establish maximum interest rates, finance charges and other charges; (3) require disclosures to customers; (4) govern secured transactions; (5) set collection, foreclosure, repossession and claims handling procedures and other trade practices; and (6) regulate affordable 14 Table of Contents housing rental activities.
The Company believes that its competitive compensation, outstanding benefits, training opportunities and stimulating work environment help attract and retain people with exceptional financial and real estate skills. Taxation of the Company We have elected to be taxed as a REIT under the Code for federal income tax purposes.
The Company believes that its competitive compensation, outstanding benefits, training opportunities and stimulating work environment help attract and retain people with exceptional financial and real estate skills. 15 Table of Contents Taxation of the Company We have elected to be taxed as a REIT under the Code for federal income tax purposes.
The application of this methodology resulted in mezzanine loans with carrying values of $0.9 billion and $1.0 billion being classified as first mortgages as of December 31, 2024 and 2023, respectively. (2) Subordinated mortgages include B-Notes and junior participation in first mortgages where we do not own the senior A-Note or senior participation.
The application of this methodology resulted in mezzanine loans with carrying values of $1.3 billion and $0.9 billion being classified as first mortgages as of December 31, 2025 and 2024, respectively. (2) Subordinated mortgages include B-Notes and junior participation in first mortgages where we do not own the senior A-Note or senior participation.
We also operate our business in a manner that will permit us to maintain our exemption from registration under the Investment Company Act of 1940 as amended (the “Investment Company Act” or “1940 Act”). We are organized as a holding company and conduct our business primarily through our various wholly-owned subsidiaries.
We also operate our business in a manner that will permit us to maintain our exemption from registration under the Investment Company Act of 1940 as amended (the “Investment Company Act” or “1940 Act”). 6 Table of Contents We are organized as a holding company and conduct our business primarily through our various wholly-owned subsidiaries.
Our investment strategy focuses on a few fundamental themes: • origination and acquisition of real estate debt assets with an implied basis sufficiently low to weather declines in asset values; • acquisition of equity interests in commercial real estate properties that generate stable current returns, increase the duration of our investment portfolio and provide potential for capital appreciation; • focus on real estate markets and asset classes with strong supply and demand fundamentals and/or barriers to entry; • structuring and financing each transaction in a manner that reflects the risk of the underlying asset’s cash flow stream and credit risk profile, and efficiently managing and maintaining the transaction’s interest rate and currency exposures at levels consistent with management’s risk objectives; • seeking situations where our size, scale, speed and sophistication allow us to position ourselves as a “one-stop” lending solution for real estate owner/operators; • utilizing the skills, expertise, and contacts developed by our Manager over the past 33 years as one of the premier global real estate investment managers to: (i) correctly anticipate trends and identify attractive risk-adjusted investment opportunities in U.S., European and Australian real estate markets; and (ii) expand and diversify our presence in various asset classes, including: • origination and acquisition of residential loans, including non-agency residential loans sometimes referred to as “non-qualified mortgages” or “non-QMs”; and • origination and acquisition of corporate and asset-backed loans; • utilizing the skills, expertise and infrastructure we acquired through our 2013 acquisition of LNR Property LLC (“LNR”), a market leading diversified real estate investment management and loan servicing company comprising our Investing and Servicing Segment, to expand and diversify our presence in various segments of real estate, including: • origination of small and medium sized loan transactions ($5 million to $50 million) for both investment and securitization/gain-on-sale; • investment in CMBS; • investment in commercial real estate; • special servicing of commercial real estate loans in commercial real estate securitization transactions; and • utilizing the skills and expertise we acquired through our 2018 acquisition of the Infrastructure Lending Segment from GE Capital Global Holdings, LLC (“GE Capital”) to expand our originations and acquisitions of infrastructure debt investments.
Our investment strategy focuses on a few fundamental themes: • origination and acquisition of real estate debt assets with an implied basis sufficiently low to weather declines in asset values; • acquisition of equity interests in commercial real estate properties that generate stable current returns, increase the duration of our investment portfolio and provide potential for capital appreciation; • focus on real estate markets and asset classes with strong supply and demand fundamentals and/or barriers to entry; • structuring and financing each transaction in a manner that reflects the risk of the underlying asset’s cash flow stream and credit risk profile, and efficiently managing and maintaining the transaction’s interest rate and currency exposures at levels consistent with management’s risk objectives; • seeking situations where our size, scale, speed and sophistication allow us to position ourselves as a “one-stop” lending solution for real estate owner/operators; • utilizing the skills, expertise, and contacts developed by our Manager over the past 34 years as one of the premier global real estate investment managers to: (i) correctly anticipate trends and identify attractive risk-adjusted investment opportunities in U.S., European and Australian real estate markets; and (ii) expand and diversify our presence in various asset classes, including: • origination and acquisition of residential loans, including non-agency residential loans sometimes referred to as “non-qualified mortgages” or “non-QMs”; and • origination and acquisition of corporate and asset-backed loans; • utilizing the skills, expertise and infrastructure we acquired through our 2013 acquisition of LNR Property LLC (“LNR”), a market leading diversified real estate investment management and loan servicing company comprising our Investing and Servicing Segment, to expand and diversify our presence in various segments of real estate, including: • origination of small and medium sized loan transactions ($5 million to $50 million) for both investment and securitization/gain-on-sale; • investment in CMBS; • investment in commercial real estate; • special servicing of commercial real estate loans in commercial real estate securitization transactions; • utilizing the skills and expertise we acquired through our 2018 acquisition of the Infrastructure Lending Segment to expand our originations and acquisitions of infrastructure debt investments; and 7 Table of Contents • utilizing the skills and expertise we acquired through our 2025 acquisition of Fundamental to expand our investments in triple net lease properties.
In addition, we may invest in the following real estate-related investments: • Agency RMBS: RMBS for which a U.S. government agency or a federally chartered corporation guarantees payments of principal and interest on the securities. 9 Tab l e of Contents Business Segments We currently operate our business in four reportable segments: the Commercial and Residential Lending Segment, the Infrastructure Lending Segment, the Property Segment and the Investing and Servicing Segment.
In addition, we may invest in the following real estate-related investments: • Agency RMBS: RMBS for which a U.S. government agency or a federally chartered corporation guarantees payments of principal and interest on the securities. 9 Table of Contents Business Segments We currently operate our business in four reportable segments: the Commercial and Residential Lending Segment, the Infrastructure Lending Segment, the Property Segment and the Investing and Servicing Segment.
We intend to post on our website any amendment to, or waiver of, a provision of our Code of Business Conduct and Ethics or Code of Ethics for Principal Executive Officer and Senior Financial Officers that applies to our Chief Executive 16 Tab l e of Contents Officer, Chief Financial Officer or persons performing similar functions and that relates to any element of the code of ethics definition set forth in Item 406 of Regulation S-K of the Securities Act of 1933, as amended.
We intend to post on our website any amendment to, or waiver of, a provision of our Code of Business Conduct and Ethics or Code of Ethics for Principal Executive Officer and Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer or persons performing similar functions and that relates to any element of the code of ethics definition set forth in Item 406 of Regulation S-K of the Securities Act of 1933, as amended.
To communicate with our board of directors electronically, we have established an e-mail address, BoardofDirectors@stwdreit.com, to which stockholders may send correspondence to our board of directors or any such individual directors or group or committee of directors.
To communicate with our board of directors electronically, we have established an e-mail address, BoardofDirectors@stwdreit.com, to which stockholders may send correspondence to our board of directors or any such individual directors or group or committee of directors. 16 Table of Contents
Financing Strategy Subject to maintaining our qualification as a REIT for U.S. federal income tax purposes and our exemption from registering under the 1940 Act, we may finance the acquisition of our target assets, to the extent available to us, through the following methods: • sources of private and government sponsored financing, including long and short-term repurchase agreements, warehouse and bank credit facilities, and mortgage loans on equity interests in commercial real estate properties; • loan sales, syndications, securitizations and/or collateralized loan obligation ("CLO") transactions; and • public or private offerings of our equity and/or debt.
Financing Strategy Subject to maintaining our qualification as a REIT for U.S. federal income tax purposes and our exemption from registering under the 1940 Act, we may finance the acquisition of our target assets, to the extent available to us, through the following methods: • sources of private and government sponsored financing, including long and short-term repurchase agreements, warehouse and bank credit facilities, and mortgage loans on equity interests in commercial real estate properties; • loan sales, syndications, securitizations and/or CLO and ABS transactions; and • public or private offerings of our equity and/or debt. 8 Table of Contents We may also utilize other sources of financing to the extent available to us.
As of December 31, 2024 and 2023, our Commercial and Residential Lending Segment’s investment portfolio, excluding residential loans, RMBS, properties and other investments, had the following characteristics based on carrying values: Collateral Property Type December 31, 2024 December 31, 2023 Multifamily 34.5 % 37.1 % Office 22.0 % 22.4 % Hotel 12.1 % 14.3 % Mixed Use 9.6 % 7.2 % Industrial 8.9 % 8.0 % Residential 1.6 % 1.7 % Retail 1.6 % 1.4 % Other 9.7 % 7.9 % 100.0 % 100.0 % Geographic Location December 31, 2024 December 31, 2023 U.S.
As of December 31, 2025 and 2024, our Commercial and Residential Lending Segment’s investment portfolio, excluding residential loans, RMBS, properties and other investments, had the following characteristics based on carrying values: Collateral Property Type December 31, 2025 December 31, 2024 Multifamily 39.3 % 36.1 % Office 18.1 % 22.0 % Industrial 14.8 % 8.2 % Hotel 8.2 % 12.1 % Mixed Use 4.9 % 9.6 % Data Center 3.8 % 0.7 % Retail 2.0 % 1.6 % Other 8.9 % 9.7 % 100.0 % 100.0 % Geographic Location December 31, 2025 December 31, 2024 U.S.
(3) Includes $35.7 million and $37.9 million of servicing rights intangibles eliminated in consolidation against VIE assets pursuant to ASC 810 as of December 31, 2024 and 2023, respectively. (4) Includes $14.8 million and $14.6 million of investments in unconsolidated entities eliminated in consolidation against VIE assets pursuant to ASC 810 as of December 31, 2024 and 2023, respectively.
(3) Includes $37.3 million and $35.7 million of servicing rights intangibles eliminated in consolidation against VIE assets pursuant to ASC 810 as of December 31, 2025 and 2024, respectively. (4) Includes $15.0 million and $14.8 million of investments in unconsolidated entities eliminated in consolidation against VIE assets pursuant to ASC 810 as of December 31, 2025 and 2024, respectively.
As of December 31, 2024 and 2023, our Infrastructure Lending Segment’s investment portfolio had the following characteristics based on carrying values: Collateral Type December 31, 2024 December 31, 2023 Power 57.1 % 55.1 % Oil & gas - midstream 33.5 % 35.0 % Oil & gas - downstream 8.5 % 7.0 % Oil & gas - upstream 0.9 % 1.0 % Other — % 1.9 % 100.0 % 100.0 % Geographic Location December 31, 2024 December 31, 2023 U.S.
As of December 31, 2025 and 2024, our Infrastructure Lending Segment’s investment portfolio had the following characteristics based on carrying values: Collateral Type December 31, 2025 December 31, 2024 Power 56.9 % 57.1 % Oil & gas - midstream 27.5 % 33.5 % Oil & gas - downstream 12.6 % 8.5 % Oil & gas - upstream — % 0.9 % Other 3.0 % — % 100.0 % 100.0 % Geographic Location December 31, 2025 December 31, 2024 U.S.
If we own both the A-Note and B-Note, we categorize the loan as a first mortgage loan. (3) Eliminated in consolidation against VIE liabilities pursuant to Accounting Standards Codification (“ASC”) 810. 10 Tab l e of Contents (4) CMBS held-to-maturity (“HTM”) and mandatorily redeemable preferred equity interests in commercial real estate entities.
If we own both the A-Note and B-Note, we categorize the loan as a first mortgage loan. (3) Eliminated in consolidation against VIE liabilities pursuant to Accounting Standards Codification (“ASC”) 810. 10 Table of Contents (4) CMBS held-to-maturity (“HTM”) and mandatorily redeemable preferred equity interests in commercial real estate entities. (5) Represents the weighted average coupon of residential mortgage loans.
As of December 31, 2024, the Investing and Servicing Segment’s CMBS had a weighted-average expected maturity of 5.4 years. 14 Tab l e of Contents Regulation We have elected, and are organized and conduct our operations, to qualify as a REIT under the Code, as further described below.
As of December 31, 2025, the Investing and Servicing Segment’s CMBS had a weighted-average expected maturity of 5.2 years. Regulation We have elected, and are organized and conduct our operations, to qualify as a REIT under the Code, as further described below.
Human Capital Resources As of December 31, 2024, the Company had 286 full-time employees, the majority of which are real estate professionals located throughout the U.S.
Human Capital Resources As of December 31, 2025, the operating subsidiaries of the Company had 324 full-time employees, the majority of which are real estate professionals located throughout the U.S.
Our Manager also benefits from Starwood Capital Group’s dedicated asset management group operating in offices located in the U.S. and abroad. We also benefit from Starwood Capital Group’s portfolio management, finance and administration functions, which address legal, compliance, investor relations and operational matters, asset valuation, risk management and information technologies in connection with the performance of our Manager’s duties.
We also benefit from Starwood Capital Group’s portfolio management, finance and administration functions, which address legal, compliance, investor relations and operational matters, asset valuation, risk management and information technologies in connection with the performance of our Manager’s duties.
We may invest in performing and non-performing mortgage loans and other real estate-related loans and debt investments. We may acquire target assets through portfolio acquisitions or other types of acquisitions. Our Manager targets desirable markets where it has expertise in the real estate collateral underlying the assets being acquired.
We may acquire target assets through portfolio acquisitions or other types of acquisitions. Our Manager targets desirable markets where it has expertise in the real estate collateral underlying the assets being acquired.
Also includes $148.6 million and $177.3 million of non-controlling interests in the consolidated entities which hold certain of these CMBS as of December 31, 2024 and 2023, respectively. (2) Includes $30.3 million and $33.0 million of non-controlling interests in the consolidated entities which hold certain debt balances as of December 31, 2024 and 2023, respectively.
Also includes $146.5 million and $148.6 million of non-controlling interests in the consolidated entities which hold certain of these CMBS as of December 31, 2025 and 2024, respectively. (2) Includes $25.8 million and $30.3 million of non-controlling interests in the consolidated entities which hold certain debt balances as of December 31, 2025 and 2024, respectively.
Our segments exclude the consolidation of securitization variable interest entities (“VIEs”). We are organized and conduct our operations to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”).
We are organized and conduct our operations to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”).
As of December 31, 2024, commercial loans held‑for‑investment and HTM securities had a weighted‑average expected maturity of 2.4 years, calculated assuming all extension options are exercised by the borrower, although our loans may be repaid prior to such date. 11 Tab l e of Contents Infrastructure Lending Segment The following table sets forth the amount of each category of investments we owned within our Infrastructure Lending Segment as of December 31, 2024 and 2023 (dollars in thousands): Face Amount Carrying Value Asset Specific Financing Net Investment Unlevered Return on Asset (1) December 31, 2024 First priority infrastructure loans and HTM securities $ 2,631,732 $ 2,580,775 $ 1,989,860 $ 590,915 8.9 % Credit loss allowance N/A (21,553) — (21,553) Investments in unconsolidated entities N/A 54,105 — 54,105 $ 2,631,732 $ 2,613,327 $ 1,989,860 $ 623,467 December 31, 2023 First priority infrastructure loans and HTM securities $ 2,589,481 $ 2,535,047 $ 1,905,319 $ 629,728 10.0 % Credit loss allowance N/A (20,345) — (20,345) Investments in unconsolidated entities N/A 52,691 — 52,691 $ 2,589,481 $ 2,567,393 $ 1,905,319 $ 662,074 __________________________________________ (1) Calculated using applicable index rates for variable rate investments as of the respective period end and excludes loans for which interest income is not recognized.
As of December 31, 2025, commercial loans held‑for‑investment and HTM securities had a weighted‑average expected maturity of 2.7 years, calculated assuming all extension options are exercised by the borrower, although our loans may be repaid prior to such date. 11 Table of Contents Infrastructure Lending Segment The following table sets forth the amount of each category of investments we owned within our Infrastructure Lending Segment as of December 31, 2025 and 2024 (dollars in thousands): Face Amount Carrying Value Asset Specific Financing Net Investment Unlevered Return on Asset (1) December 31, 2025 First priority infrastructure loans and HTM securities $ 2,942,115 $ 2,880,319 $ 2,365,478 $ 514,841 8.1 % Credit loss allowance N/A (24,667) — (24,667) Investments in unconsolidated entities N/A 57,997 — 57,997 $ 2,942,115 $ 2,913,649 $ 2,365,478 $ 548,171 December 31, 2024 First priority infrastructure loans and HTM securities $ 2,631,732 $ 2,580,775 $ 1,989,860 $ 590,915 8.9 % Credit loss allowance N/A (21,553) — (21,553) Investments in unconsolidated entities N/A 54,105 — 54,105 $ 2,631,732 $ 2,613,327 $ 1,989,860 $ 623,467 __________________________________________ (1) Calculated using applicable index rates for variable rate investments as of the respective period end and excludes loans for which interest income is not recognized.
Regions: North East 31.7 % 32.5 % South West 20.5 % 27.6 % Midwest 20.1 % 19.4 % South East 17.0 % 10.1 % West 5.8 % 4.3 % Mid-Atlantic 1.4 % 1.7 % Other 1.3 % 2.0 % International: United Kingdom 1.9 % 2.0 % Mexico 0.3 % 0.4 % 100.0 % 100.0 % As of December 31, 2024, the Infrastructure Lending Segment’s first priority infrastructure loans and HTM securities had a weighted‑average contractual maturity of 4.4 years. 12 Tab l e of Contents Property Segment The following table sets forth the amount of each category of investments held within our Property Segment as of December 31, 2024 and 2023 (amounts in thousands): December 31, 2024 December 31, 2023 Properties, net $ 657,246 $ 555,455 Properties held-for-sale, net — 290,937 Lease intangibles, net 21,415 24,560 Woodstar Fund 2,073,533 2,012,833 $ 2,752,194 $ 2,883,785 The following table sets forth our net investment and other information regarding the Property Segment’s properties and lease intangibles as of December 31, 2024 (dollars in thousands): Carrying Value Asset Specific Financing Net Investment Occupancy Rate Weighted Average Remaining Lease Term Office—Medical Office Portfolio $ 785,513 $ 479,732 $ 305,781 88.5% 5.2 years D.C.
Regions: North East 27.2 % 31.7 % South West 25.2 % 20.5 % Midwest 21.7 % 20.1 % West 12.4 % 5.8 % South East 10.3 % 17.0 % Mid-Atlantic 1.1 % 1.4 % Other 1.1 % 1.3 % International: Canada 0.8 % — % Mexico 0.2 % 0.3 % United Kingdom — % 1.9 % 100.0 % 100.0 % As of December 31, 2025, the Infrastructure Lending Segment’s first priority infrastructure loans and HTM securities had a weighted‑average contractual maturity of 5.1 years. 12 Table of Contents Property Segment The following table sets forth the amount of each category of investments held within our Property Segment as of December 31, 2025 and 2024 (amounts in thousands): December 31, 2025 December 31, 2024 Properties, net $ 2,674,276 $ 657,246 Lease intangibles, net 368,589 21,415 Woodstar Fund 1,727,499 2,073,533 $ 4,770,364 $ 2,752,194 The following table sets forth our net investment and other information regarding the Property Segment’s properties and lease intangibles as of December 31, 2025 (dollars in thousands): Carrying Value Asset Specific Financing Net Investment Occupancy Rate (1) Weighted Average Remaining Lease Term Fundamental $ 2,413,702 $ 1,376,492 $ 1,037,210 99.8% 17.3 years Office—Medical Office Portfolio 793,105 482,092 311,013 88.1% 5.6 years D.C.
As of December 31, 2024 and 2023, our Property Segment’s investment portfolio had the following geographic characteristics based on carrying values: Geographic Location December 31, 2024 December 31, 2023 South East 85.3 % 82.8 % North East 4.2 % 4.2 % South West 2.9 % 4.7 % Mid-Atlantic 2.9 % — % West 2.5 % 3.6 % Midwest 2.2 % 4.7 % 100.0 % 100.0 % Refer to Schedule III included in Item 8 of this Form 10‑K for a detailed listing of the properties held by the Company, including their respective geographic locations. 13 Tab l e of Contents Investing and Servicing Segment The following table sets forth the amount of each category of investments we owned within our Investing and Servicing Segment as of December 31, 2024 and 2023 (amounts in thousands): Face Amount Carrying Value Asset Specific Financing Net Investment December 31, 2024 CMBS, fair value option $ 2,822,153 $ 1,225,024 (1) $ 445,966 (2) $ 779,058 Intangible assets - servicing rights N/A 58,135 (3) — 58,135 Lease intangibles, net N/A 5,545 — 5,545 Loans held-for-sale, fair value option, commercial 125,695 121,384 86,753 34,631 Investments in unconsolidated entities N/A 33,640 (4) — 33,640 Properties, net N/A 65,466 58,375 7,091 $ 2,947,848 $ 1,509,194 $ 591,094 $ 918,100 December 31, 2023 CMBS, fair value option $ 2,729,194 $ 1,147,550 (1) $ 401,059 (2) $ 746,491 Intangible assets - servicing rights N/A 57,249 (3) — 57,249 Lease intangibles, net N/A 6,155 — 6,155 Loans held-for-sale, fair value option, commercial 45,400 41,043 26,014 15,029 Loans held-for-investment 9,200 9,200 — 9,200 Investments in unconsolidated entities N/A 33,134 (4) — 33,134 Properties, net N/A 59,774 68,784 (9,010) $ 2,783,794 $ 1,354,105 $ 495,857 $ 858,248 ______________________________________________ (1) Includes $1.20 billion and $1.13 billion of CMBS eliminated in consolidation against VIE liabilities pursuant to ASC 810 as of December 31, 2024 and 2023, respectively.
Regions: South East 57.9 % 85.3 % Midwest 14.3 % 2.2 % North East 8.4 % 4.2 % West 8.0 % 2.5 % South West 6.4 % 2.9 % Mid-Atlantic 4.8 % 2.9 % International: Canada 0.2 % — % 100.0 % 100.0 % Refer to Schedule III included in Item 8 of this Form 10‑K for a detailed listing of the properties held by the Company, including their respective geographic locations. 13 Table of Contents Investing and Servicing Segment The following table sets forth the amount of each category of investments we owned within our Investing and Servicing Segment as of December 31, 2025 and 2024 (amounts in thousands): Face Amount Carrying Value Asset Specific Financing Net Investment December 31, 2025 CMBS, fair value option $ 2,871,255 $ 1,284,863 (1) $ 480,378 (2) $ 804,485 Intangible assets - servicing rights N/A 65,533 (3) — 65,533 Lease intangibles, net N/A 3,691 — 3,691 Loans held-for-sale, fair value option, commercial 47,300 45,476 — 45,476 Investments in unconsolidated entities N/A 33,203 (4) — 33,203 Properties, net N/A 41,662 37,519 4,143 $ 2,918,555 $ 1,474,428 $ 517,897 $ 956,531 December 31, 2024 CMBS, fair value option $ 2,822,153 $ 1,225,024 (1) $ 445,966 (2) $ 779,058 Intangible assets - servicing rights N/A 58,135 (3) — 58,135 Lease intangibles, net N/A 5,545 — 5,545 Loans held-for-sale, fair value option, commercial 125,695 121,384 86,753 34,631 Investments in unconsolidated entities N/A 33,640 (4) — 33,640 Properties, net N/A 65,466 58,375 7,091 $ 2,947,848 $ 1,509,194 $ 591,094 $ 918,100 ______________________________________________ (1) Includes $1.25 billion and $1.20 billion of CMBS eliminated in consolidation against VIE liabilities pursuant to ASC 810 as of December 31, 2025 and 2024, respectively.
Government agency or federally chartered corporation. • Infrastructure lending (the “Infrastructure Lending Segment”)—engages primarily in originating, acquiring, financing and managing infrastructure debt investments. • Real estate property (the “Property Segment”)—engages primarily in acquiring and managing equity interests in stabilized and to be stabilized commercial real estate properties, including multifamily properties, that are held for investment. • Real estate investing and servicing (the “Investing and Servicing Segment”)—includes (i) a servicing business in the U.S. that manages and works out problem assets, (ii) an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, including subordinated interests of securitization and resecuritization transactions, (iii) a mortgage loan business which originates conduit loans for the primary purpose of selling these loans into securitization transactions and (iv) an investment business that selectively acquires commercial real estate assets, including properties acquired from CMBS trusts.
This includes multifamily properties, multi-tenant medical office net lease properties and diversified single-tenant triple net lease properties, all of which are held for investment. • Real estate investing and servicing (the “Investing and Servicing Segment”)—includes (i) a servicing business in the U.S. that manages and works out problem assets, (ii) an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, including subordinated interests of securitization and resecuritization transactions, (iii) a mortgage loan business which originates conduit loans for the primary purpose of selling these loans into securitization transactions and (iv) an investment business that selectively acquires commercial real estate assets, including properties acquired from CMBS trusts.
Our corporate headquarters office is located at 2340 Collins Avenue, Suite 700, Miami Beach, Florida 33139, and our telephone number is (305) 695-5500. 6 Tab l e of Contents Investment Strategy We seek to attain attractive risk-adjusted returns for our investors over the long term by sourcing and managing a diversified portfolio of target assets, financed in a manner that is designed to deliver attractive returns across a variety of market conditions and economic cycles.
Investment Strategy We seek to attain attractive risk-adjusted returns for our investors over the long term by sourcing and managing a diversified portfolio of target assets, financed in a manner that is designed to deliver attractive returns across a variety of market conditions and economic cycles.
We may also utilize other sources of financing to the extent available to us. 8 Tab l e of Contents Our Target Assets We invest in target assets secured primarily by U.S., European or Australian collateral. We focus primarily on originating or opportunistically acquiring commercial mortgage whole loans, B-Notes, mezzanine loans, preferred equity and mortgage-backed securities (“MBS”).
Our Target Assets We invest in target assets secured primarily by U.S., European or Australian collateral. We focus primarily on originating or opportunistically acquiring commercial mortgage whole loans, B-Notes, mezzanine loans, preferred equity and mortgage-backed securities (“MBS”). We may invest in performing and non-performing mortgage loans and other real estate-related loans and debt investments.
Commercial and Residential Lending Segment The following table sets forth the amount of each category of investments we owned across various property types within our Commercial and Residential Lending Segment as of December 31, 2024 and 2023 (dollars in thousands): Face Amount Carrying Value Asset Specific Financing Net Investment Unlevered Return on Asset (6) December 31, 2024 First mortgages (1) $ 12,955,038 $ 12,931,333 $ 7,371,711 $ 5,559,622 8.3 % Subordinated mortgages (2) 31,000 31,247 — 31,247 15.4 % Mezzanine loans (1) 324,021 323,041 — 323,041 11.3 % Other loans 46,688 46,255 — 46,255 13.2 % Loans held-for-sale, fair value option, residential 2,694,959 2,394,624 2,125,990 268,634 4.5 % (5) RMBS, available-for-sale 180,654 93,806 17,248 76,558 10.4 % RMBS, fair value option 326,274 421,122 (3) 154,870 266,252 18.5 % HTM debt securities (4) 405,404 404,081 121,832 282,249 8.9 % Credit loss allowance N/A (451,205) — (451,205) Equity security 5,606 5,146 — 5,146 Investments in unconsolidated entities N/A 26,441 — 26,441 Properties, net N/A 650,966 87,750 563,216 $ 16,969,644 $ 16,876,857 $ 9,879,401 $ 6,997,456 December 31, 2023 First mortgages (1) $ 14,996,627 $ 14,947,446 $ 10,223,439 $ 4,724,007 9.4 % Subordinated mortgages (2) 76,882 76,560 — 76,560 16.0 % Mezzanine loans (1) 274,899 273,146 — 273,146 14.0 % Other loans 71,843 71,012 — 71,012 12.5 % Loans held-for-sale, fair value option, residential 2,909,126 2,604,594 2,286,070 318,524 4.5 % (5) RMBS, available-for-sale 191,916 102,368 18,638 83,730 10.1 % RMBS, fair value option 326,274 449,909 (3) 147,428 302,481 19.6 % HTM debt securities (4) 592,542 590,274 133,142 457,132 10.1 % Credit loss allowance N/A (301,837) — (301,837) Equity security 9,226 8,340 — 8,340 Investments in unconsolidated entities N/A 19,151 — 19,151 Properties, net N/A 431,155 234,889 196,266 $ 19,449,335 $ 19,272,118 $ 13,043,606 $ 6,228,512 __________________________________________ (1) First mortgages include first mortgage loans and any contiguous mezzanine loan components because as a whole, the expected credit quality of these loans is more similar to that of a first mortgage loan.
Commercial and Residential Lending Segment The following table sets forth the amount of each category of investments we owned across various property types within our Commercial and Residential Lending Segment as of December 31, 2025 and 2024 (dollars in thousands): Face Amount Carrying Value Asset Specific Financing Net Investment Unlevered Return on Asset (6) December 31, 2025 First mortgages (1) $ 16,148,916 $ 16,086,585 $ 8,640,667 $ 7,445,918 7.4 % Subordinated mortgages (2) 15,290 15,683 — 15,683 13.4 % Mezzanine loans (1) 313,619 311,175 — 311,175 11.5 % Other loans 51,688 51,255 — 51,255 9.1 % Loans held-for-sale, fair value option, residential 2,455,552 2,278,067 1,929,086 348,981 4.4 % (5) RMBS, available-for-sale 172,554 88,283 55,467 32,816 10.4 % RMBS, fair value option 326,274 404,688 (3) 152,312 252,376 17.7 % HTM debt securities (4) 176,067 175,473 54,202 121,271 6.1 % Credit loss allowance N/A (453,544) — (453,544) Equity security 722 628 — 628 Investments in unconsolidated entities N/A 8,514 — 8,514 Properties, net N/A 732,714 29,751 702,963 $ 19,660,682 $ 19,699,521 $ 10,861,485 $ 8,838,036 December 31, 2024 First mortgages (1) $ 12,955,038 $ 12,931,333 $ 7,371,711 $ 5,559,622 8.3 % Subordinated mortgages (2) 31,000 31,247 — 31,247 15.4 % Mezzanine loans (1) 324,021 323,041 — 323,041 11.3 % Other loans 46,688 46,255 — 46,255 13.2 % Loans held-for-sale, fair value option, residential 2,694,959 2,394,624 2,125,990 268,634 4.5 % (5) RMBS, available-for-sale 180,654 93,806 17,248 76,558 10.4 % RMBS, fair value option 326,274 421,122 (3) 154,870 266,252 18.5 % HTM debt securities (4) 405,404 404,081 121,832 282,249 8.9 % Credit loss allowance N/A (451,205) — (451,205) Equity security 5,606 5,146 — 5,146 Investments in unconsolidated entities N/A 26,441 — 26,441 Properties, net N/A 650,966 87,750 563,216 $ 16,969,644 $ 16,876,857 $ 9,879,401 $ 6,997,456 __________________________________________ (1) First mortgages include first mortgage loans and any contiguous mezzanine loan components because as a whole, the expected credit quality of these loans is more similar to that of a first mortgage loan.
Starwood Capital Group has invested in all major real estate asset classes, directly and indirectly, through operating companies, portfolios of properties and single assets.
Starwood Capital Group has invested in all major real estate asset classes, directly and indirectly, through operating companies, portfolios of properties and single assets. Starwood Capital Group invests at different levels of the capital structure, including equity, preferred equity, mezzanine debt and senior debt, depending on the asset risk profile and return expectation.
In addition to cash coupon, unlevered return includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.
(6) Calculated using applicable index rates for variable rate investments as of the respective period end and excludes loans for which interest income is not recognized. In addition to cash coupon, unlevered return includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.
Our investment strategy may be amended from time to time, if recommended by our Manager and approved by our board of directors, without the approval of our stockholders.
Our investment strategy may be amended from time to time, if recommended by our Manager and approved by our board of directors, without the approval of our stockholders. In addition to our Manager making direct investments on our behalf, we may enter into joint venture, management or other agreements with persons that have special expertise or sourcing capabilities.
Starwood Capital Group invests at different levels of the capital structure, including equity, preferred equity, mezzanine debt and senior debt, depending on the asset risk profile and return expectation. 15 Tab l e of Contents Our Manager draws upon the experience and expertise of Starwood Capital Group’s team of professionals and support personnel operating in 17 cities across eight countries.
Our Manager draws upon the experience and expertise of Starwood Capital Group’s team of professionals and support personnel operating in 19 cities across ten countries. Our Manager also benefits from Starwood Capital Group’s dedicated asset management group operating in offices located in the U.S. and abroad.
Removed
(5) Represents the weighted average coupon of residential mortgage loans. (6) Calculated using applicable index rates for variable rate investments as of the respective period end and excludes loans for which interest income is not recognized.
Added
Government agency or federally chartered corporation. • Infrastructure lending (the “Infrastructure Lending Segment”)—engages primarily in originating, acquiring, financing and managing infrastructure debt investments. • Real estate property (the “Property Segment”)—engages primarily in acquiring and managing equity interests in stabilized and to be stabilized commercial real estate.
Removed
Multifamily Conversion 115,223 — 115,223 N/A N/A Subtotal—undepreciated carrying value 900,736 479,732 421,004 Accumulated depreciation and amortization (222,075) — (222,075) Net carrying value $ 678,661 $ 479,732 $ 198,929 See Notes 7 and 8 to the Consolidated Financial Statements for a description of the above-referenced Property Segment Portfolios and Woodstar Fund.
Added
Our segments exclude the consolidation of securitization variable interest entities (“VIEs”), principally representing CMBS trust vehicles that we consolidate by virtue of our role as special servicer. However, they include securitized financing VIEs such as collateralized loan obligations (“CLOs”), single asset securitizations (“SASBs”) and asset-backed securitizations (“ABSs”).
Added
On July 23, 2025, we acquired Fundamental Income Properties, LLC (“Fundamental”), which was completed by way of merger, for approximately $2.2 billion inclusive of $1.3 billion of indebtedness assumed. At acquisition, Fundamental owned 468 properties, spanning 12.3 million square feet across 44 states, 59 industries and 90 tenants.
Added
The properties, which consist of retail, industrial and service facilities, are leased under 103 individual and master net operating lease agreements with a 17.1 year weighted-average lease base term. Fundamental is aggregated within our Property Segment.
Added
Our corporate headquarters office is located at 2340 Collins Avenue, Suite 700, Miami Beach, Florida 33139, and our telephone number is (305) 695-5500.
Added
Multifamily Conversion 118,586 — 118,586 N/A N/A Subtotal—undepreciated carrying value 3,325,393 1,858,584 1,466,809 Accumulated depreciation and amortization (282,528) — (282,528) Net carrying value $ 3,042,865 $ 1,858,584 $ 1,184,281 __________________________________________ (1) Occupancy calculated based on number of properties for our single-tenant net lease properties and square footage for multi-tenant net lease properties.
Added
See Notes 7 and 8 to the Consolidated Financial Statements for a description of the above-referenced Property Segment Portfolios and Woodstar Fund. As of December 31, 2025 and 2024, our Property Segment’s investment portfolio had the following geographic characteristics based on carrying values: Geographic Location December 31, 2025 December 31, 2024 U.S.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

101 edited+21 added−10 removed519 unchanged
Biggest changeThe economic performance and value of these investments can be adversely affected by many factors that are generally applicable to most real estate, including the following: • changes in the national, regional, local and international economic climate; • local conditions, such as oversupply of space or a reduction in demand for real estate in the areas in which they are located; • competition from other available space; • a reduction in demand for commercial or multifamily properties, including in the case of office properties as a result of an increase in remote and hybrid working arrangements; • the attractiveness of the real estate to tenants; • increases in operating costs if these costs cannot be passed through to tenants; • the financial condition of tenants and the ability to collect rent from tenants; • vacancies, changes in market rental rates and the need to periodically renovate, repair and re-let space; • changes in interest rates and the availability of financing; • changes in zoning laws and taxation, government regulation and potential liability under environmental or other laws or regulations; 34 Tab l e of Contents • acts of God, including, without limitation, earthquakes, hurricanes, pandemics, epidemics or other public health emergencies, wildfires, droughts, other natural disasters, global climate change, or acts of war or terrorism, in each case which may result in uninsured or underinsured losses; and • decreases in the underlying value of real estate.
Biggest changeThe economic performance and value of these investments can be adversely affected by many factors that are generally applicable to most real estate, including the following: • changes in the national, regional, local and international economic climate; • local conditions, such as oversupply of space or a reduction in demand for real estate in the areas in which they are located; • competition from other available space; • a reduction in demand for commercial or multifamily properties; • the attractiveness of the real estate to tenants; • increases in operating costs if these costs cannot be passed through to tenants; • the financial condition of tenants and the ability to collect rent from tenants; • vacancies, changes in market rental rates and the need to periodically renovate, repair and re-let space; • changes in interest rates and the availability of financing; • changes in zoning laws and taxation, government regulation and potential liability under environmental or other laws or regulations; • acts of God, including, without limitation, earthquakes, hurricanes, pandemics, epidemics or other public health emergencies, wildfires, droughts, other natural disasters, global climate change, or acts of war or terrorism, in each case which may result in uninsured or underinsured losses; and • decreases in the underlying value of real estate. 34 Table of Contents Certain significant expenditures associated with an investment in commercial real estate assets (such as mortgage payments, real estate taxes and maintenance costs) generally do not decline when circumstances cause a reduction in income from the asset.
In addition, the Starwood Private Real Estate Funds currently, and additional competing vehicles may in the future, participate in some of our investments, possibly at a more senior level in the capital structure of the underlying borrower and related real estate than our investment.
In addition, Starwood Private Real Estate Funds currently, and additional competing vehicles may in the future, participate in some of our investments, possibly at a more senior level in the capital structure of the underlying borrower and related real estate than our investment.
In the event of the bankruptcy of a mortgage loan borrower, the mortgage loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the mortgage loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law.
In the event of the bankruptcy of a mortgage loan borrower, the mortgage loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the mortgage loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law.
A number of factors may impair borrowers’ abilities to repay their loans, including: • changes in the borrowers’ income or assets; • acts of God, including, without limitation, earthquakes, hurricanes, pandemics, epidemics or other public health emergencies, wildfires, droughts, other natural disasters and global climate change, which may result in uninsured losses; • acts of war or terrorism, including the consequences of such events; • adverse changes in national and local economic and market conditions; • changes in governmental laws and regulations, including fiscal policies, zoning ordinances and environmental legislation and the related costs of compliance; • costs of remediation and liabilities associated with environmental conditions; and • the potential for uninsured or under-insured property losses.
A number of factors may impair borrowers’ abilities to repay their loans, including: • changes in the borrowers’ income or assets; • acts of God, including, without limitation, earthquakes, hurricanes, pandemics, epidemics or other public health emergencies, wildfires, droughts, other natural disasters and global climate change, which may result in uninsured losses; • acts of war or terrorism, including the consequences of such events; • adverse changes in national and local economic and market conditions; • changes in governmental laws and regulations, including fiscal and trade policies, zoning ordinances and environmental legislation and the related costs of compliance; • costs of remediation and liabilities associated with environmental conditions; and • the potential for uninsured or under-insured property losses.
If financial institutions with whom we seek to finance our investments require that one or more of our Manager’s executives continue to serve in such capacity and if one or more of our Manager’s executives are no longer employed by our Manager, it may constitute an event of default and the financial institution providing the arrangement may have acceleration rights with respect to outstanding borrowings and termination rights with respect to our ability to finance our future investments with that institution.
If financial institutions with whom we seek to finance our investments require that one or more of our Manager’s executives continue to serve in such capacity and if one or more of those executives are no longer employed by our Manager, it may constitute an event of default and the financial institution providing the arrangement may have acceleration rights with respect to outstanding borrowings and termination rights with respect to our ability to finance our future investments with that institution.
Moreover, the CECL model creates more volatility in the level of our credit loss provisions. If we are required to materially increase our future level of credit loss allowances for any reason, such increase could adversely affect our business, results of operations, liquidity and financial condition.
Moreover, the CECL model creates volatility in the level of our credit loss provisions. If we are required to materially increase our future level of credit loss allowances for any reason, such increase could adversely affect our business, results of operations, liquidity and financial condition.
The discovery of material environmental liabilities attached to such properties could have a material adverse effect on our results of operations and financial condition and our ability to make distributions to our stockholders. We may invest in commercial properties subject to net leases, which could subject us to losses. We may invest in commercial properties subject to net leases.
The discovery of material environmental liabilities attached to such properties could have a material adverse effect on our results of operations and financial condition and our ability to make distributions to our stockholders. We invest in commercial properties subject to net leases, which could subject us to losses.
Most of the assets in our Investing and Servicing Segment are held through a TRS, which is subject to entity level taxes on income that it earns. Taxes on income from such assets have materially increased the taxes paid by our TRS.
Most of the assets in our Investing and Servicing Segment are held through a TRS, which is subject to entity level taxes on income that it earns. Taxes on income from such assets have materially increased the taxes paid by our TRSs.
As a result, the value of, and income from, investments in commercial properties subject to net leases will depend, in part, upon the ability of the applicable tenant to meet its obligations to maintain the property under the terms of the net lease.
As a result, the value of, and income from, investments in commercial properties subject to net leases depend, in part, upon the ability of the applicable tenant to meet its obligations to maintain the property under the terms of the net lease.
Incurring substantial debt subjects us to many risks that, if realized, would materially and adversely affect us, including the risk that: • our cash flow from operations may be insufficient to make required payments of principal of and interest on the debt or we may fail to comply with all of the other covenants contained in the debt, which is likely to result in (i) acceleration of such debt (and any other debt containing a cross-default or cross-acceleration provision) that we may be unable to repay from internal funds or to refinance on favorable terms, or at all, (ii) our inability to borrow 21 Tab l e of Contents unused amounts under our financing arrangements, even if we are current in payments on borrowings under those arrangements and/or (iii) the loss of some or all of our assets to foreclosure or sale; • our debt may increase our vulnerability to adverse economic and industry conditions, and investment yields may not increase with higher financing costs; • we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, stockholder distributions or other purposes; and • we may not be able to refinance debt that matures prior to the investment it was used to finance on favorable terms, or at all.
Incurring substantial debt subjects us to many risks that, if realized, would materially and adversely affect us, including the risk that: • our cash flow from operations may be insufficient to make required payments of principal of and interest on the debt or we may fail to comply with all of the other covenants contained in the debt, which is likely to result in (i) acceleration of such debt (and any other debt containing a cross-default or cross-acceleration provision) that we may be unable to repay from internal funds or to refinance on favorable terms, or at all, (ii) our inability to borrow unused amounts under our financing arrangements, even if we are current in payments on borrowings under those arrangements and/or (iii) the loss of some or all of our assets to foreclosure or sale; 21 Table of Contents • our debt may increase our vulnerability to adverse economic and industry conditions, and investment yields may not increase with higher financing costs; • we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, stockholder distributions or other purposes; and • we may not be able to refinance debt that matures prior to the investment it was used to finance on favorable terms, or at all.
Certain provisions of the Maryland General Corporation Law (the “MGCL”) that are applicable to Maryland REITs, such as the Company, may have the effect of deterring a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-prevailing market price of our common stock.
Certain provisions of the Maryland General Corporation Law (the “MGCL”) that are applicable to Maryland corporations, such as the Company, may have the effect of deterring a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-prevailing market price of our common stock.
Our outstanding indebtedness currently includes our bank credit facilities, our repurchase agreements, our CLOs, our SASB, our convertible senior notes, our unsecured senior notes and mortgage debt on certain investment properties.
Our outstanding indebtedness currently includes our bank credit facilities, our repurchase agreements, our CLOs, our SASB, our ABSs, our convertible senior notes, our unsecured senior notes and mortgage debt on certain investment properties.
Many of our subsidiaries rely on the exclusion from the definition of an investment company under Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged in [the business of] . . . purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exclusion, as interpreted by the SEC staff, generally requires that at least 55% of a subsidiary’s portfolio must be comprised of qualifying real estate assets and at least 80% of its portfolio must be comprised of qualifying real estate assets and real estate-related assets (and no more than 20% comprised of miscellaneous assets).
Many of our subsidiaries rely on the exclusion from the definition of an investment company under Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged in [the business of] . . . purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exclusion, as interpreted by the SEC staff, generally requires that at least 55% of a subsidiary’s portfolio must be comprised of qualifying real estate assets and at least 80% of its portfolio must be comprised of qualifying real estate assets and real estate-related assets (and no more than 20% 43 Table of Contents comprised of miscellaneous assets).
The “control share” provisions of the MGCL provide that “control shares” of a Maryland corporation (defined as shares which, when aggregated with other shares controlled by the stockholder (except solely by virtue of a revocable proxy), entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to 42 Tab l e of Contents be cast on the matter, excluding votes entitled to be cast by the acquirer of control shares, our officers and our personnel who are also our directors.
The “control share” provisions of the MGCL provide that “control shares” of a Maryland corporation (defined as shares which, when aggregated with other shares controlled by the stockholder (except solely by virtue of a revocable proxy), entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting 42 Table of Contents rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding votes entitled to be cast by the acquirer of control shares, our officers and our personnel who are also our directors.
This could materially and adversely affect us by, for example, leading to a decline in our stock price and impairing our ability to raise capital. Our board of directors has approved very broad investment guidelines for our Manager and does not approve each investment and financing decision made by our Manager unless required by our investment guidelines.
This could materially and adversely affect us by, for example, leading to a decline in our stock price and impairing our ability to raise capital. Our board of directors has approved very broad investment guidelines for our Manager and does not approve each investment and financing decision made by our Manager.
From time to time, one or more private investment funds sponsored by Starwood Capital Group (collectively, “Starwood Private Real Estate Funds”) may be subject to exclusivity provisions that require all or a portion of investment opportunities related to real estate to be allocated to such Starwood Private Real Estate Funds rather than to us.
For example, from time to time, one or more private investment funds sponsored by Starwood Capital Group (collectively, “Starwood Private Real Estate Funds”) may be subject to exclusivity provisions that require all or a portion of investment opportunities related to real estate to be allocated to such Starwood Private Real Estate Funds rather than to us.
We may not have the ability to raise funds on acceptable terms necessary to settle conversions of our outstanding convertible senior notes or to purchase our outstanding convertible senior notes upon a fundamental change. As of December 31, 2024, we had $380.8 million in principal amount of convertible senior notes outstanding.
We may not have the ability to raise funds on acceptable terms necessary to settle conversions of our outstanding convertible senior notes or to purchase our outstanding convertible senior notes upon a fundamental change. As of December 31, 2025, we had $380.8 million in principal amount of convertible senior notes outstanding.
Concerns about the real estate market, inflation, energy costs, geopolitical issues and the availability and cost of credit have contributed to increased volatility and diminished expectations for the economy and markets going forward, any of which could adversely affect our business and financial results.
Concerns about the real estate market, inflation, energy costs, geopolitical issues, tariff policies and the availability and cost of credit have contributed to increased volatility and diminished expectations for the economy and markets going forward, any of which could adversely affect our business and financial results.
In addition, many of our construction or rehabilitation loans have multiple lenders and if another lender fails to fund, we could be faced with the choice of either funding for that defaulting lender or suffering a delay or protracted interruption in the progress of construction, renovation, refurbishment or expansion. 26 Tab l e of Contents The commercial mortgage loans we originate or acquire and the mortgage loans underlying our CMBS investments are subject to the ability of the commercial property owner to generate net income from operating the property, as well as the risks of delinquency and foreclosure.
In addition, many of our construction or rehabilitation loans have multiple lenders and if another lender fails to fund, we could be faced with the choice of either funding for that defaulting lender or suffering a delay or protracted interruption in the progress of construction, renovation, refurbishment or expansion. 26 Table of Contents The commercial mortgage loans we originate or acquire and the mortgage loans underlying our CMBS investments are subject to the ability of the commercial property owner to generate net income from operating the property, as well as the risks of delinquency and foreclosure.
These investments also subject us to the risks inherent with real estate-related investments, including: • risks of delinquency and foreclosure, and risks of loss in the event thereof; • the dependence upon the successful operation of, and net income from, real property; • risks generally incident to interests in real property; and • risks specific to the type and use of a particular property. 28 Tab l e of Contents These risks may adversely affect the value of our investments in commercial real estate operating and finance companies and the ability of the issuers thereof to make principal and interest payments in a timely manner, or at all, and could result in significant losses.
These investments also subject us to the risks inherent with real estate-related investments, including: • risks of delinquency and foreclosure, and risks of loss in the event thereof; • the dependence upon the successful operation of, and net income from, real property; • risks generally incident to interests in real property; and • risks specific to the type and use of a particular property. 28 Table of Contents These risks may adversely affect the value of our investments in commercial real estate operating and finance companies and the ability of the issuers thereof to make principal and interest payments in a timely manner, or at all, and could result in significant losses.
Even if representations and warranties are made by counterparties from whom we acquired the loans, they may not parallel the representations and warranties our subsidiaries make or may otherwise not protect us from losses, including, for example, due to the fact that the counterparty may be insolvent or otherwise unable to make a payment at the time of a claim against such counterparty for damages for a breach of a representation or warranty. 30 Tab l e of Contents The residential loans that we may acquire, and that underlie the RMBS we acquire, are subject to risks particular to investments secured by mortgage loans on residential property.
Even if representations and warranties are made by counterparties from whom we acquired the loans, they may not parallel the representations and warranties our subsidiaries make or may otherwise not protect us from losses, including, for example, due to the fact that the counterparty may be insolvent or otherwise unable to make a payment at the time of a claim against such counterparty for damages for a breach of a representation or warranty. 30 Table of Contents The residential loans that we may acquire, and that underlie the RMBS we acquire, are subject to risks particular to investments secured by mortgage loans on residential property.
Our estimates and judgments are based on a number of factors, including projected cash flow from the collateral securing our loans and debt securities, debt structure, including the availability of reserves and substantive recourse guarantees, likelihood of repayment in full at maturity, potential for refinancing and expected market value of the collateral, all of which remain uncertain and are subjective.
Our estimates and judgments are based on a number of factors, including projected cash flow from the collateral securing our loans and debt securities, debt structure, including the availability of reserves and substantive recourse guarantees, likelihood of repayment in full at maturity, potential for refinancing 19 Table of Contents and expected market value of the collateral, all of which remain uncertain and are subjective.
As a result, we are subject to the risk that the project company may make business decisions with which we disagree or that the project company may take risks or otherwise act in ways that do not serve our interests. 39 Tab l e of Contents Operation of a project underlying an infrastructure loan involves significant risks and hazards that may impair the project company’s ability to repay the loan, resulting in its default, which could have a material adverse effect on our business and financial results.
As a result, we are subject to the risk that the project company may make business decisions with which we disagree or that the project company may take risks or otherwise act in ways that do not serve our interests. 39 Table of Contents Operation of a project underlying an infrastructure loan involves significant risks and hazards that may impair the project company’s ability to repay the loan, resulting in its default, which could have a material adverse effect on our business and financial results.
The scope and duration of any future pandemic, epidemic or other public health crisis, the pace at which government and other restrictions are imposed and lifted, the scope of additional actions taken to mitigate the spread of disease, global 19 Tab l e of Contents vaccination and booster rates, the speed and extent to which global or local markets recover from any such disruptions caused by such a public health crisis, and the impact of these factors on our business, financial condition, results of operations, liquidity, the market price of our common stock and our ability to make distributions to our stockholders would depend on future developments that would be highly uncertain and unpredictable.
The scope and duration of any future pandemic, epidemic or other public health crisis, the pace at which government and other restrictions are imposed and lifted, the scope of additional actions taken to mitigate the spread of disease, global vaccination and booster rates, the speed and extent to which global or local markets recover from any such disruptions caused by such a public health crisis, and the impact of these factors on our business, financial condition, results of operations, liquidity, the market price of our common stock and our ability to make distributions to our stockholders would depend on future developments that would be highly uncertain and unpredictable.
To qualify for this deduction, the domestic stockholder receiving such dividend must hold the dividend-paying REIT shares for at least 46 days (taking into account certain special holding period rules) of the 91-day period beginning 45 days before the 45 Tab l e of Contents shares become ex-dividend, and cannot be under an obligation to make related payments with respect to a position in substantially similar or related property.
To qualify for this deduction, the domestic stockholder receiving such dividend must hold the dividend-paying REIT shares for at least 46 days (taking into account certain special holding period rules) of the 91-day period beginning 45 days 45 Table of Contents before the shares become ex-dividend, and cannot be under an obligation to make related payments with respect to a position in substantially similar or related property.
The prices of lower credit quality securities are generally less sensitive to interest rate changes than more highly rated investments, but more sensitive to adverse economic downturns or individual issuer developments. 27 Tab l e of Contents Dislocations, illiquidity and volatility in the market for commercial real estate as well as the broader financial markets could adversely affect the performance and value of commercial mortgage loans, the demand for CMBS and the value of CMBS investments.
The prices of lower credit quality securities are generally less sensitive to interest rate changes than more highly rated investments, but more sensitive to adverse economic downturns or individual issuer developments. 27 Table of Contents Dislocations, illiquidity and volatility in the market for commercial real estate as well as the broader financial markets could adversely affect the performance and value of commercial mortgage loans, the demand for CMBS and the value of CMBS investments.
We have entered into financing arrangements that are structured as sale and repurchase agreements pursuant to which we would nominally sell certain of our assets to a counterparty and simultaneously enter into an agreement to repurchase these assets at a later date in exchange for a purchase price.
We have entered into financing arrangements that are structured as sale and repurchase agreements pursuant to which we would nominally sell certain of our assets to a counterparty and simultaneously enter into an agreement to repurchase these 47 Table of Contents assets at a later date in exchange for a purchase price.
The securitization of our portfolio investments might magnify our exposure to losses on those portfolio investments because the subordinated interest we retain in the loans sold would be subordinate to the senior interest in the loans sold, and we would, therefore, absorb all of the losses sustained with respect to a loan sold before the owners of the senior interest experience any losses.
The securitization of our portfolio investments might magnify our exposure to losses on those portfolio investments because the subordinated interest we retain in the loans sold would be subordinate to the senior interest in the loans sold, and we would, therefore, absorb all of the losses sustained with respect to a loan sold before the owners of the senior interest 23 Table of Contents experience any losses.
We make preferred equity investments. These investments involve a higher degree of risk than conventional debt financing due to a variety of factors, including their non-collateralized nature and subordinated ranking to other loans and liabilities of the entity in which such preferred equity is held.
Our preferred equity investments involve a greater risk of loss than conventional debt financing. We make preferred equity investments. These investments involve a higher degree of risk than conventional debt financing due to a variety of factors, including their non-collateralized nature and subordinated ranking to other loans and liabilities of the entity in which such preferred equity is held.
Prepayment rates are influenced by changes in interest rates and a variety of economic, geographic and other factors beyond our control, including, without limitation, housing and financial markets and relative interest rates on fixed rate mortgage loans and adjustable rate mortgage loans (“ARMs”). Consequently, prepayment rates cannot be predicted.
Prepayment rates are influenced by changes in interest rates and a variety of economic, geographic and other factors beyond our control, including, without limitation, housing 31 Table of Contents and financial markets and relative interest rates on fixed rate mortgage loans and adjustable rate mortgage loans (“ARMs”). Consequently, prepayment rates cannot be predicted.
See “—Risks Related to Our Relationship with Our Manager.” Accordingly, we may not continue to have access to Lotus Infrastructure Partners or Starwood Oil and Gas and their respective officers and key personnel. 37 Tab l e of Contents We are subject to the risks of investing in infrastructure loans, many of which are outside our control, and that may negatively impact our business and financial results.
See “—Risks Related to Our Relationship with Our Manager.” Accordingly, we may not continue to have access to Lotus Infrastructure Partners or Starwood Oil and Gas and their respective officers and key personnel. 37 Table of Contents We are subject to the risks of investing in infrastructure loans, many of which are outside our control, and that may negatively impact our business and financial results.
See Item 1. "Business—Investment Guidelines” in this Form 10-K for additional information regarding these investment guidelines. In addition, in conducting periodic reviews, our board of directors may rely and may make investments through affiliates primarily on information provided to them by our Manager.
"Business—Investment Guidelines” in this Form 10-K for additional information regarding these investment guidelines. In addition, in conducting periodic reviews, our board of directors may rely and may make investments through affiliates primarily on information provided to them by our Manager.
Net operating income of an income-producing property can be adversely affected by, among other things, • tenant mix; • success of tenant businesses; • property management decisions; • property location, condition and design; • competition from comparable types of properties; • changes in laws that increase operating expenses or limit rents that may be charged; • changes in national, regional or local economic conditions and/or specific industry segments, including the credit and securitization markets; • a reduction in demand for commercial or multifamily properties, including, in the case of office properties, as a result of an increase in remote and hybrid working arrangements; • declines in regional or local real estate values; • declines in regional or local rental or occupancy rates; • increases in interest rates, real estate tax rates and other operating expenses; • costs of remediation and liabilities associated with environmental conditions; • the potential for uninsured or underinsured property losses; • changes in governmental laws and regulations, including fiscal policies, zoning ordinances and environmental legislation and the related costs of compliance; and • acts of God, terrorist attacks, pandemics, epidemics or other public health emergencies, natural disasters, global climate change, social unrest and civil disturbances.
Net operating income of an income-producing property can be adversely affected by, among other things, • tenant mix; • success of tenant businesses; • property management decisions; • property location, condition and design; • competition from comparable types of properties; • changes in laws that increase operating expenses or limit rents that may be charged; • changes in national, regional or local economic conditions and/or specific industry segments, including the credit and securitization markets; • a reduction in demand for commercial or multifamily properties; • declines in regional or local real estate values; • declines in regional or local rental or occupancy rates; • increases in interest rates, real estate tax rates and other operating expenses; • costs of remediation and liabilities associated with environmental conditions; • the potential for uninsured or underinsured property losses; • changes in governmental laws and regulations, including fiscal and trade policies, zoning ordinances and environmental legislation and the related costs of compliance; and • acts of God, terrorist attacks, pandemics, epidemics or other public health emergencies, natural disasters, global climate change, social unrest and civil disturbances.
Our Subsidiary REIT is required to satisfy, on a stand-alone basis, the REIT asset, income, organizational, distribution, stockholder ownership and other requirements described above, and if it were to fail to qualify as a REIT, then our Subsidiary REIT would face adverse tax consequences similar to those described above with respect to our qualification as a REIT and, as described above, failure could 48 Tab l e of Contents have an adverse effect on our ability to comply with the REIT income and asset tests and thus could impair our ability to qualify as a REIT unless we could avail ourselves of certain relief provisions.
Our Subsidiary REIT is required to satisfy, on a stand-alone basis, the REIT asset, income, organizational, distribution, stockholder ownership and other requirements described above, and if it were to fail to qualify as a REIT, then our Subsidiary REIT would face adverse tax consequences similar to those described above with respect to our qualification as a REIT and, as described above, failure could have an adverse effect on our ability to comply with the REIT income and asset tests and thus could impair our ability to qualify as a REIT unless we could avail ourselves of certain relief provisions.
A return of capital is not taxable, but has the effect of reducing the basis of a stockholder’s investment in our common stock. Risks Related to Sources of Financing Our access to sources of financing may be limited and thus our ability to maximize our returns may be adversely affected.
A return of capital is not taxable, but has the effect of reducing the basis of a stockholder’s investment in our common stock. 20 Table of Contents Risks Related to Sources of Financing Our access to sources of financing may be limited and thus our ability to maximize our returns may be adversely affected.
Our bylaws require us to indemnify each director or officer, to the maximum extent permitted by Maryland law, in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service to us.
Our bylaws require us to indemnify each director or officer, to the maximum extent permitted by Maryland law, in the defense of any proceeding to which he or she is made, or threatened to be made, a 44 Table of Contents party by reason of his or her service to us.
Accordingly, the adoption of the CECL model has materially affected, and will continue to materially affect, how we determine our credit loss provision and required us, and could continue to require us, to significantly increase our allowance and recognize provisions for credit losses earlier in the lending cycle.
The use of the CECL model has materially affected, and will continue to materially affect, how we determine our credit loss provision and has required us, and could continue to require us, to significantly increase our allowance and recognize provisions for credit losses earlier in the lending cycle.
This could increase the cost of our hedging activities because our TRS would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear.
This could increase the cost of our hedging activities because our TRS would be subject to tax on gains or expose us to greater risks 49 Table of Contents associated with changes in interest rates than we would otherwise want to bear.
Our charter, with certain exceptions, authorizes our 46 Tab l e of Contents board of directors to take the actions that are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our board of directors, no person may own more than 9.8% of the aggregate value of our outstanding capital stock.
Our charter, with certain exceptions, authorizes our 46 Table of Contents board of directors to take the actions that are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our board of directors, no person may own more than 9.8% of the aggregate value of our outstanding capital stock.
Although Starwood Capital Group has adopted such an investment allocation policy, Starwood Capital Group has some discretion as to how investment opportunities are allocated. As a result, we may either not be presented with the opportunity to participate in these investments or may be limited in our ability to invest.
Although Starwood Capital Group has adopted such an investment allocation policy, Starwood Capital Group has some 17 Table of Contents discretion as to how investment opportunities are allocated. As a result, we may either not be presented with the opportunity to participate in these investments or may be limited in our ability to invest.
In addition, we will 35 Tab l e of Contents typically need to obtain the approval of HUD in order to acquire or dispose of a significant interest in or manage a HUD-assisted property. We may not always receive such approval. We are subject to the general risks of owning properties relating to the healthcare industry.
In addition, we will typically need to obtain the approval of HUD in order to acquire or dispose of a significant interest in or manage a HUD-assisted property. We may not always receive such approval. 35 Table of Contents We are subject to the general risks of owning properties relating to the healthcare industry.
Many of the investments in the portfolio of our Infrastructure Lending Segment are focused in the power industry, including thermal power and renewable power. If there is a downturn in the U.S. or global power industry generally, the 38 Tab l e of Contents applicable infrastructure investments may default or not perform in accordance with expectations.
Many of the investments in the portfolio of our Infrastructure Lending Segment are focused in the power industry, including thermal power and renewable power. If there is a downturn in the U.S. or global power industry generally, the 38 Table of Contents applicable infrastructure investments may default or not perform in accordance with expectations.
In connection with the special servicing of mortgage loans, a special servicer may, at the direction of the directing certificateholder, generally take actions with respect to the specially serviced mortgage loans that could adversely affect the 40 Tab l e of Contents holders of some or all of the more senior classes of CMBS.
In connection with the special servicing of mortgage loans, a special servicer may, at the direction of the directing certificateholder, generally take actions with respect to the specially serviced mortgage loans that could adversely affect the 40 Table of Contents holders of some or all of the more senior classes of CMBS.
It is possible, however, that the IRS could assert that we did not own the assets during the term of the sale and repurchase agreement, in which case we could fail to qualify as a REIT. 47 Tab l e of Contents We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them.
It is possible, however, that the IRS could assert that we did not own the assets during the term of the sale and repurchase agreement, in which case we could fail to qualify as a REIT. We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them.
The value of our investment portfolio is affected by prepayment rates on our mortgage assets. In many cases, borrowers are not prohibited from making prepayments on their mortgage loans.
Prepayment rates may adversely affect the value of our investment portfolio. The value of our investment portfolio is affected by prepayment rates on our mortgage assets. In many cases, borrowers are not prohibited from making prepayments on their mortgage loans.
Accordingly, if such tests are not satisfied, we, as holders of the subordinate debt and equity interests in the applicable CLO, may experience a significant reduction in our cash flow from those interests. 36 Tab l e of Contents Moreover, the reinvestment and replenishment period in one or more of our CLOs may be nearing the end of its term.
Accordingly, if such tests are not satisfied, we, as holders of the subordinate debt and equity interests in the applicable CLO, may experience a significant reduction in our cash flow from those interests. Moreover, the reinvestment and replenishment period in one or more of our CLOs may be nearing the end of its term.
To the extent that this underwriting has incorrectly anticipated the timing or magnitude of losses, our business may be adversely affected. Some of the mortgage loans underlying the CMBS are in default and additional 41 Tab l e of Contents loans may default in the future.
To the extent that this underwriting has incorrectly anticipated the timing or magnitude of losses, our business may be adversely affected. Some of the mortgage loans underlying the CMBS are in default and additional 41 Table of Contents loans may default in the future.
Our conflicts of interest policy may not adequately address all of the conflicts of interest that may arise with respect to our investment activities and also may limit the allocation of investments to us.
Our related party transaction policy may not adequately address all of the conflicts of interest that may arise with respect to our investment activities and also may limit the allocation of investments to us.
Some of the factors that could negatively affect our stock price or result in fluctuations in the price or trading volume of our common stock include: • our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects; • actual or perceived conflicts of interest with our Manager or Starwood Capital Group and individuals, including our executives; • equity issuances by us or share resales by our stockholders, or the perception that such issuances or resales may occur; • actual or anticipated accounting problems; • publication of research reports about us or the real estate industry; • changes in market valuations of similar companies; • adverse market reaction to the level of leverage we employ; • additions to or departures of our Manager’s or Starwood Capital Group’s key personnel; • speculation in the press or investment community; • our failure to meet, or the lowering of, our earnings estimates or those of any securities analysts; • increases in market interest rates, which may lead investors to demand a higher distribution yield for our common stock and would result in increased interest expenses on our debt; • failure to maintain our REIT qualification; • uncertainty regarding our exemption from the Investment Company Act; • price and volume fluctuations in the stock market generally; and • general market and economic conditions, including the current state of the credit and capital markets. 52 Tab l e of Contents In the past, securities class action litigation has often been instituted against companies following periods of volatility in their share price.
Some of the factors that could negatively affect our stock price or result in fluctuations in the price or trading volume of our common stock include: 52 Table of Contents • our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects; • actual or perceived conflicts of interest with our Manager or Starwood Capital Group and individuals, including our executives; • equity issuances by us or share resales by our stockholders, or the perception that such issuances or resales may occur; • actual or anticipated accounting problems; • publication of research reports about us or the real estate industry; • changes in market valuations of similar companies; • adverse market reaction to the level of leverage we employ; • additions to or departures of our Manager’s or Starwood Capital Group’s key personnel; • speculation in the press or investment community; • our failure to meet, or the lowering of, our earnings estimates or those of any securities analysts; • increases in market interest rates, which may lead investors to demand a higher distribution yield for our common stock and would result in increased interest expenses on our debt; • failure to maintain our REIT qualification; • uncertainty regarding our exemption from the Investment Company Act; • price and volume fluctuations in the stock market generally; and • general market and economic conditions, including the current state of the credit and capital markets.
Furthermore, our Manager may use 50 Tab l e of Contents complex strategies, and transactions entered into by our Manager may be costly, difficult or impossible to unwind by the time they are reviewed by our board of directors.
Furthermore, our Manager may use complex strategies, and transactions entered 50 Table of Contents into by our Manager may be costly, difficult or impossible to unwind by the time they are reviewed by our board of directors.
Subject to the provisions of the co-investment and allocation agreement as described in the next paragraph, there can be no assurance that future Starwood Private Real Estate Funds would not be subject to such exclusivity requirements and, as a result, they may acquire investment opportunities that would not be available to us.
Subject to the provisions of our co-investment and allocation agreement, there can be no assurance that future Starwood Private Real Estate Funds would not be subject to such exclusivity requirements and, as a result, they may acquire investment opportunities that would not be available to us.
Our significant indebtedness subjects us to increased risk of loss and may reduce cash available for distributions to our stockholders. We currently have a significant amount of indebtedness outstanding. As of December 31, 2024, our total consolidated indebtedness was approximately $17.3 billion (excluding accounts payable, accrued expenses, other liabilities, VIE liabilities and unfunded commitments).
Our significant indebtedness subjects us to increased risk of loss and may reduce cash available for distributions to our stockholders. We currently have a significant amount of indebtedness outstanding. As of December 31, 2025, our total consolidated indebtedness was approximately $22.1 billion (excluding accounts payable, accrued expenses, other liabilities, VIE liabilities and unfunded commitments).
We expect that some commercial properties subject to net leases in which we invest generally will be occupied by a single tenant and, therefore, the success of these investments will be materially dependent on the financial stability of each such 33 Tab l e of Contents tenant.
We expect that some commercial properties subject to net leases in which we invest generally will be occupied by a single tenant and, therefore, the success of these investments will be materially dependent on the financial stability of each such tenant.
In addition, losses in our TRS will not directly reduce our REIT taxable income but may reduce current or future taxable income in the TRS. 49 Tab l e of Contents Partnership tax audits could increase the tax liability borne by us in the event of a U.S. federal income tax audit of a subsidiary partnership.
In addition, losses in our TRS will not directly reduce our REIT taxable income but may reduce current or future taxable income in the TRS. Partnership tax audits could increase the tax liability borne by us in the event of a U.S. federal income tax audit of a subsidiary partnership.
There can be no assurance that the measures we take to ensure the integrity of our systems will provide protection, especially because cyberattack techniques used change frequently, may persist undetected over 51 Tab l e of Contents extended periods of time, and may not be mitigated in a timely manner to prevent or minimize the impact of an attack.
There can be no assurance that the measures we take to ensure the integrity of our systems will provide 51 Table of Contents protection, especially because cyberattack techniques used change frequently and with increasing sophistication, may persist undetected over extended periods of time, and may not be mitigated in a timely manner to prevent or minimize the impact of an attack.
In addition, certain of our subsidiaries in our Infrastructure Lending Segment may seek to 43 Tab l e of Contents rely, among other things, on the exceptions from the definition of “investment company” contained in Section 3(c)(5)(A) or Section 3(c)(5)(B) of the Investment Company Act.
In addition, certain of our subsidiaries in our Infrastructure Lending Segment may seek to rely, among other things, on the exceptions from the definition of “investment company” contained in Section 3(c)(5)(A) or Section 3(c)(5)(B) of the Investment Company Act.
In addition, we may be obligated to fund the defense costs incurred by our directors 44 Tab l e of Contents and officers. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist absent the current provisions in our charter and bylaws or that might exist with other companies.
In addition, we may be obligated to fund the defense costs incurred by our directors and officers. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist absent the current provisions in our charter and bylaws or that might exist with other companies.
Sternlicht, our Chairman and Chief Executive Officer, Jeffrey G. Dishner, one of our other directors, and certain of our executive officers are executives of Starwood Capital Group. Our Manager and executive officers may have conflicts between their duties to us and their duties to, and interests in, Starwood Capital Group and its other investment funds.
Sternlicht, our Chairman and Chief Executive Officer, two of our other directors and certain of our executive officers are executives of Starwood Capital Group. Our Manager and executive officers may have conflicts between their duties to us and their duties to, and interests in, Starwood Capital Group and its other investment funds.
Bridge loans are 29 Tab l e of Contents also subject to risks of borrower defaults, bankruptcies, fraud, losses and special hazard losses that are not covered by standard hazard insurance.
Bridge loans are 29 Table of Contents also subject to risks of borrower defaults, bankruptcies, fraud, losses and special hazard losses that are not covered by standard hazard insurance.
There is also an increasing trend among some businesses to utilize shared office spaces and co-working spaces.
There is also an increasing trend among some businesses to utilize shared office spaces, including co-working environments.
These factors include, without limitation: federal, state or local legislative action or initiatives designed to provide homeowners with assistance in avoiding residential loan foreclosures and that serve to delay the foreclosure process; Home Affordable Modification Program and other programs that require specific procedures to be followed to explore the refinancing of a mortgage loan prior to the commencement of a foreclosure proceeding; and continued declines in real estate values and sustained high levels of unemployment that increase the number of foreclosures and place additional pressure on the already overburdened judicial and administrative systems. 31 Tab l e of Contents Prepayment rates may adversely affect the value of our investment portfolio.
These factors include, without limitation: federal, state or local legislative action or initiatives designed to provide homeowners with assistance in avoiding residential loan foreclosures and that serve to delay the foreclosure process; Home Affordable Modification Program and other programs that require specific procedures to be followed to explore the refinancing of a mortgage loan prior to the commencement of a foreclosure proceeding; and continued declines in real estate values and sustained high levels of unemployment that increase the number of foreclosures and place additional pressure on the already overburdened judicial and administrative systems.
In most instances, this involves us transferring our loans to a special purpose securitization entity in exchange for cash. In some sale transactions, we also retain a subordinated interest in the loans 23 Tab l e of Contents sold.
In most instances, this involves us transferring our loans to a special purpose securitization entity in exchange for cash. In some sale transactions, we also retain a subordinated interest in the loans sold.
However, a portion of our distributions may be designated by us as long-term capital gains to the extent that they are attributable to capital gain income recognized by us or may constitute a return of capital to the extent that they exceed our 20 Tab l e of Contents earnings and profits as determined for tax purposes.
However, a portion of our distributions may be designated by us as long-term capital gains to the extent that they are attributable to capital gain income recognized by us or may constitute a return of capital to the extent that they exceed our earnings and profits as determined for U.S. federal income tax purposes.
This could result in increased risk to the value of our investment portfolio. Distributable Earnings is not a measure calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and is defined within Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations--Non-GAAP Financial Measures" in this Form 10-K.
Distributable Earnings is not a measure calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and is defined within Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations--Non-GAAP Financial Measures" in this Form 10-K.
However, pursuant to the 2017 Tax Cuts and Jobs Act, such domestic stockholders may generally be allowed to deduct from their taxable income one-fifth of the ordinary dividends payable to them by REITs for taxable years beginning before January 1, 2026. This would amount to a reduction in the effective tax rate on REIT dividends as compared to prior law.
However, pursuant to the 2017 Tax Cuts and Jobs Act and the 2025 One Big Beautiful Bill Act, such domestic stockholders may generally be allowed to deduct from their taxable income one-fifth of the ordinary dividends payable to them by REITs. This would amount to a reduction in the effective tax rate on REIT dividends as compared to prior law.
Our financing sources currently include our bank credit facilities, our repurchase agreements, our CLOs, our single asset securitization (“SASB”), our convertible senior notes, our unsecured senior notes, our mortgage debt on certain investment properties and equity and debt offerings.
Our financing sources currently include our bank credit facilities, our repurchase agreements, our CLOs, our SASB, our ABSs, our convertible senior notes, our unsecured senior notes, our mortgage debt on certain investment properties and equity and debt offerings.
Cybersecurity incidents and cyber-attacks, ransomware attacks, and social engineering attempts (including business email compromise attacks) have been occurring globally at a more frequent and severe level and will likely continue to increase in frequency in the future.
Cybersecurity incidents and cyber-attacks, ransomware attacks, and social engineering attempts (including business email compromise attacks) have been occurring globally at a more frequent and severe level, with increasing sophistication, including through the use of artificial intelligence, and will likely continue to increase in frequency and sophistication in the future.
Our Manager and Starwood Capital Group have also agreed in our co-investment and allocation agreement that for so long as the management agreement is in effect and our Manager and Starwood Capital Group are under common control, no entity controlled by Starwood Capital Group will sponsor or manage a potential competing vehicle unless Starwood Capital Group adopts a policy that either (i) provides for the fair and equitable allocation of investment opportunities in our “target assets” (as defined in our co-investment and allocation agreement) among all such vehicles and us or (ii) provides us the right to co-invest 17 Tab l e of Contents with respect to any “target assets” (as defined in our co-investment and allocation agreement) with such vehicles, in each case subject to the suitability of each investment opportunity for the particular vehicle and us and each such vehicle’s and our availability of cash for investment.
Our Manager and Starwood Capital Group have also agreed in our co-investment and allocation agreement that for so long as the management agreement is in effect and our Manager and Starwood Capital Group are under common control, no entity controlled by Starwood Capital Group will sponsor or manage a potential competing vehicle, or any private or foreign “competing vehicle” (a vehicle that invests primarily in our “target assets,” excluding any investment vehicle that invests predominantly in non-U.S. mortgage assets) unless Starwood Capital Group adopts a policy that either (i) provides for the fair and equitable allocation of investment opportunities in our “target assets” (as defined in our co-investment and allocation agreement) among all such vehicles and us or (ii) provides us the right to co-invest with respect to any “target assets” with such vehicles, in each case subject to the suitability of each investment opportunity for the particular vehicle and us and each such vehicle’s and our availability of cash for investment.
In evaluating investments and other management strategies, the opportunity to earn incentive compensation based on Distributable Earnings may lead our Manager to place undue emphasis on the maximization of Distributable Earnings at the expense of other criteria, such as preservation of capital, in order to achieve higher incentive compensation. Investments with higher yield potential are generally riskier or more speculative.
In evaluating investments and 18 Table of Contents other management strategies, the opportunity to earn incentive compensation based on Distributable Earnings may lead our Manager to place undue emphasis on the maximization of Distributable Earnings at the expense of other criteria, such as preservation of capital, in order to achieve higher incentive compensation.
The management agreement with our Manager was not negotiated on an arm’s-length basis and may not be as favorable to us as if it had been negotiated with an unaffiliated third party and may be costly and difficult to terminate. Certain of our executive officers and two of our directors are executives of Starwood Capital Group.
The management agreement with our Manager was not negotiated on an arm’s-length basis and may not be as favorable to us as if it had been negotiated with an unaffiliated third party and may be costly and difficult to terminate.
The utilization of our repurchase agreements is subject to the pre-approval of the lender. We utilize repurchase agreements to finance certain investments. In order for us to borrow funds under a repurchase agreement, our lender must have the right to review the potential assets for which we are seeking financing and approve such assets in its sole discretion.
In order for us to borrow funds under a repurchase agreement, our lender must have the right to review the potential assets for which we are seeking financing and approve such assets in its sole discretion.
There is a strong inverse correlation between home price growth rates and mortgage loan delinquencies. In addition, the office sector has been adversely affected by a decrease in demand, including as a result of an increase in remote and hybrid working arrangements, and the retail sector continues to be adversely affected by the continued growth in e-commerce.
There is a strong inverse correlation between home price growth rates and mortgage loan delinquencies. In addition, the office sector continues to be adversely affected by a decrease in demand, as discussed below, and the retail sector continues to be adversely affected by the continued growth in e-commerce.
In addition, in general, no more than 5% of the value of our assets (other than government securities, securities of a TRS, and qualified real estate assets) can consist of the securities of any one issuer, and no more than 20% of the value of our total securities can be represented by securities of one or more TRSs.
In addition, in general, no more than 5% of the value of our assets (other than government securities, securities of a TRS, and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% (20% for taxable years beginning after December 31, 2017 and before January 1, 2026) of the value of our total securities can be represented by securities of one or more TRSs.
Our Manager, Starwood Capital Group and their respective affiliates may sponsor or manage one or more publicly traded investment vehicles, public reporting vehicles or funds that invest generally in real estate assets but not primarily in our “target assets” (as defined in our co-investment and allocation agreement) or one or more publicly traded investment vehicles, public reporting vehicles, or funds that do invest in some of our target assets (a “potential competing vehicle”).
Pursuant to our co-investment and allocation agreement, our Manager, Starwood Capital Group and their respective affiliates (i) may not sponsor or manage any U.S. publicly-traded vehicle that invests primarily in our “target assets” (as defined in our co-investment and allocation agreement) and (ii) may sponsor or manage one or more U.S. publicly-traded investment vehicles that invest generally in real estate assets but not primarily in our “target assets” (a “potential competing vehicle”).
We have been and may continue to be adversely affected by trends in the office sector. Remote and hybrid working arrangements, flexible work schedules, open workplaces, videoconferencing, and teleconferencing have become more common, and these trends accelerated as a result of the recent COVID-19 pandemic. These practices have and may continue to enable businesses to reduce their office space requirements.
We have been and may continue to be adversely affected by trends in the office sector. Remote and hybrid working arrangements, flexible work schedules, open workplaces, videoconferencing, and teleconferencing have continued to be more common, and have enabled, and may continue to enable, businesses to reduce their office space requirements.
To the extent that our portfolio is concentrated in any one region or type of asset, downturns relating generally to such region or type of asset may result in defaults on a number of our 25 Tab l e of Contents investments within a short time period, which may reduce our net income and the value of our common stock and accordingly reduce our ability to make distributions to our stockholders.
To the extent that our portfolio is concentrated in any one region or type of asset, downturns relating generally to such region or type of asset may result in defaults on a number of our investments within a short time period, which may reduce our net income and the value of our common stock and accordingly reduce our ability to make distributions to our stockholders. 25 Table of Contents Difficult conditions in the mortgage, commercial and residential real estate markets may cause us to experience market losses related to our holdings.
Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT or the U.S. federal income tax consequences of such qualification.
We cannot predict how changes in the tax laws might affect us or our stockholders. New legislation, U.S. Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT or the U.S. federal income tax consequences of such qualification.
In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions or liabilities being hedged may vary materially.
In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions or liabilities being hedged may vary materially. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio positions or liabilities being hedged.
This type of litigation could result in substantial costs and divert our attention and resources. There may be future dilution of our common stock as a result of additional issuances of our securities, which could adversely impact our stock price.
There may be future dilution of our common stock as a result of additional issuances of our securities, which could adversely impact our stock price.
In the event of a default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-letting our property. If a lease is terminated, we may also incur significant losses to make the leased premises ready for another tenant and experience difficulty or a significant delay in re-leasing such property.
If a lease is terminated, we may also incur significant 33 Table of Contents losses to make the leased premises ready for another tenant and experience difficulty or a significant delay in re-leasing such property.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+2 added−2 removed10 unchanged
Biggest changeAn external vendor risk management platform is utilized to evaluate, rate, monitor, and track vendor risk pertaining to our critical vendors. The security practices and processes of the service providers are monitored regularly, and periodic assessments may be performed on the service providers’compliance with cybersecurity terms, based on the service providers’ risk.
Biggest changeThe security practices and processes of the service providers are monitored regularly, and periodic assessments may be performed on the service providers’ compliance with cybersecurity terms, based on the service providers’ risk. For any of our hosted applications we by default require the vendor to maintain a System and Organization Controls (“SOC”) 1 or SOC 2 report.
The Board and Audit Committee also may receive updates on topics such as the results of various cybersecurity assessments, third party risk management, and evolving risks. Our Chief Information Officer leads our overall cybersecurity function and is responsible for developing and implementing our information security program and managing our response to threats.
The Board and Audit Committee also may receive updates on topics such as the results of various cybersecurity assessments, third party risk management, and evolving risks. 54 Table of Contents Our Chief Information Officer leads our overall cybersecurity function and is responsible for developing and implementing our information security program and managing our response to threats.
We also maintain a cybersecurity insurance policy to mitigate risks associated with cybersecurity incidents, though coverage may not be available or sufficient to cover costs of certain cybersecurity incidents. Risk Management and Strategy We consider cybersecurity, along with other top risks, within our enterprise risk management framework.
We also maintain a cybersecurity insurance policy to mitigate 53 Table of Contents risks associated with cybersecurity incidents, though coverage may not be available or sufficient to cover costs of certain cybersecurity incidents. Risk Management and Strategy We consider cybersecurity, along with other top risks, within our enterprise risk management framework.
Governance Oversight of cybersecurity is a joint responsibility of our Board of Directors and Audit Committee, with each receiving at least quarterly updates on our cybersecurity program, including measures taken to address cybersecurity risks and significant cybersecurity incidents.
Additionally, employees are regularly tested with phishing campaigns reinforcing their awareness of email threats. Governance Oversight of cybersecurity is a joint responsibility of our Board of Directors and Audit Committee, with each receiving at least quarterly updates on our cybersecurity program, including measures taken to address cybersecurity risks and significant cybersecurity incidents.
We also conduct independent audits, including through the use of third-party assessors on both the design 53 Tab l e of Contents and operational effectiveness of security controls and consult with external advisors on best practices to address new challenges.
We also conduct independent audits, including through the use of third-party assessors on both the design and operational effectiveness of security controls and consult with external advisors on best practices to address new challenges. An external vendor risk management platform is utilized to evaluate, rate, monitor, and track vendor risk pertaining to our critical vendors.
All employees are required to complete a monthly computer-based Security Awareness Training Program that includes various topics on cybersecurity risk management best practices. This program educates users to identify information security threats and what actions should be taken. Additionally, employees are regularly tested with phishing campaigns reinforcing their awareness of email threats.
We also periodically perform simulations and tabletop exercises at a management level and incorporate external resources and advisors as needed. All employees are required to complete a monthly computer-based Security Awareness Training Program that includes various topics on cybersecurity risk management best practices. This program educates users to identify information security threats and what actions should be taken.
For any of our hosted applications we by default require the vendor to maintain a System and Organization Controls (“SOC”) 1 or SOC 2 report. If a third party vendor is not able to provide a SOC 1 or SOC 2 report, we take additional steps to assess their cybersecurity preparedness and assess our relationship on that basis.
If a third party vendor is not able to provide a SOC 1 or SOC 2 report, we take additional steps to assess their cybersecurity preparedness and assess our relationship on that basis. Our assessment of risks associated with the use of third party providers is part of our overall cybersecurity risk management framework.
As a real estate finance services firm, we do not maintain a significant level of personally identifiable information data, so our exposure to data breaches is limited.
As a real estate finance services firm, we do not maintain a significant level of personally identifiable information data, so our exposure to data breaches is limited. As of December 31, 2025, we have not had any known instances of material cybersecurity incidents, including third-party incidents, during any of the prior three fiscal years.
Removed
In the last fiscal year, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, cash flow or financial condition.
Added
We also utilize artificial intelligence tools, including generative artificial intelligence, in a limited and controlled manner to support certain operational, analytical and process-efficiency functions within our business. Our use of AI is subject to information security, data protection and monitoring controls designed to be consistent with those that apply to our broader technology environment.
Removed
Our assessment of risks associated with the use of third party providers is part of our overall cybersecurity risk management framework. We also periodically perform simulations and tabletop exercises at a management level and incorporate external resources and advisors as needed.
Added
AI tools are not used to make autonomous investment, underwriting, or credit decisions. We maintain internal policies governing the use of AI technologies, including guidelines and restrictions on the types of data that may be input into such tools, and we leverage enterprise-grade platforms with contractual and security protections.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
Biggest changeCurrently, no material legal proceedings are pending against us that could have a material adverse effect on our business, financial position or results of operations. Item 4. Mine Safety Disclosures. Not applicable. 54 Tab l e of Contents PART II
Biggest changeCurrently, no material legal proceedings are pending against us that could have a material adverse effect on our business, financial position or results of operations. Item 4. Mine Safety Disclosures. Not applicable. PART II
Item 2. Properties. The Company leases office space in Miami Beach, FL; New York, NY; Los Angeles, CA; Stamford, CT; and Charlotte, NC. Refer to Schedule III included in Item 8 of this Form 10‑K for a listing of investment properties owned as of December 31, 2024. Item 3. Legal Proceedings.
Item 2. Properties. The Company leases office space in Miami Beach, FL; New York, NY; Los Angeles, CA; Stamford, CT; Charlotte, NC and Phoenix, AZ. Refer to Schedule III included in Item 8 of this Form 10‑K for a listing of investment properties owned as of December 31, 2025. Item 3. Legal Proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−1 removed2 unchanged
Biggest changeIssuer Purchases of Equity Securities There were no purchases of common stock during the year ended December 31, 2024.
Biggest changeSales of Unregistered Equity Securities There were no sales of unregistered equity securities during the year ended December 31, 2025. Issuer Purchases of Equity Securities There were no purchases of common stock during the year ended December 31, 2025. Item 6. [Reserved] 56 Table of Contents
We generally intend over time to pay quarterly distributions in an amount at least equal to our taxable income. Refer to Note 18 to the Consolidated Financial Statements for the Company’s dividend history for the three years ended December 31, 2024.
We generally intend over time to pay quarterly distributions in an amount at least equal to our taxable income. Refer to Note 18 to the Consolidated Financial Statements for the Company’s dividend history for the three years ended December 31, 2025.
On February 21, 2025, the closing price of our common stock, as reported by the NYSE, was $19.90 per share. We intend to make regular quarterly distributions to holders of our common stock and distribution equivalents to holders of restricted stock units which are settled in shares of common stock.
On February 20, 2026, the closing price of our common stock, as reported by the NYSE, was $18.06 per share. We intend to make regular quarterly distributions to holders of our common stock and distribution equivalents to holders of restricted stock units which are settled in shares of common stock.
One of the holders of record is Cede & Co., which holds shares as nominee for The Depository Trust Company which itself holds shares on behalf of other beneficial owners of our common stock. 55 Tab l e of Contents Stock Performance Graph CUMULATIVE TOTAL RETURN Based upon initial investment of $100 on December 31, 2019 (1) Starwood Property Trust FTSE NAREIT Mortgage REITs Index (2) S&P 500 Index 12/31/2019 $ 100.00 $ 100.00 $ 100.00 12/31/2020 $ 88.36 $ 81.38 $ 118.39 12/31/2021 $ 120.03 $ 94.05 $ 152.34 12/31/2022 $ 99.48 $ 69.27 $ 124.73 12/31/2023 $ 125.95 $ 79.79 $ 157.48 12/31/2024 $ 125.07 $ 79.96 $ 196.85 __________________________________________ (1) Dividend reinvestment is assumed.
One of the holders of record is Cede & Co., which holds shares as nominee for The Depository Trust Company which itself holds shares on behalf of other beneficial owners of our common stock. 55 Table of Contents Stock Performance Graph CUMULATIVE TOTAL RETURN Based upon initial investment of $100 on December 31, 2020 (1) Starwood Property Trust FTSE NAREIT Mortgage REITs Index S&P 500 Index 12/31/2020 $ 100.00 $ 100.00 $ 100.00 12/31/2021 $ 135.83 $ 115.56 $ 128.68 12/31/2022 $ 112.58 $ 85.11 $ 105.36 12/31/2023 $ 142.54 $ 98.04 $ 133.03 12/31/2024 $ 141.54 $ 98.25 $ 166.28 12/31/2025 $ 148.43 $ 114.13 $ 195.98 __________________________________________ (1) Dividend reinvestment is assumed.
Holders As of February 21, 2025, there were 600 holders of record of the Company’s 337,423,560 shares of common stock outstanding.
Holders As of February 20, 2026, there were 440 holders of record of the Company’s 370,581,767 shares of common stock outstanding.
Removed
(2) The Bloomberg REIT Mortgage Index used for comparison in our prior year graph is no longer published. We retrospectively replaced it with the FTSE NAREIT Mortgage REITs Index (FNMR-FTX) in the graph above. Sales of Unregistered Equity Securities There were no sales of unregistered equity securities during the year ended December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

139 edited+48 added−41 removed144 unchanged
Biggest changeThe following table summarizes our quarterly Distributable Earnings per weighted average diluted share for the years ended December 31, 2024, 2023 and 2022: Distributable Earnings For the Three-Month Periods Ended March 31, June 30, September 30, December 31, 2024 $ 0.59 $ 0.48 $ 0.48 $ 0.48 2023 0.49 0.49 0.49 0.58 2022 0.76 0.51 0.51 0.50 Distributable Earnings per weighted average diluted share for the year ended December 31, 2024 does not equal the sum of the individual quarters due to rounding and other computational factors. 72 Tab l e of Contents The following table presents our summarized results of operations and reconciliation to Distributable Earnings for the year ended December 31, 2024, by business segment (amounts in thousands, except per share data): Commercial and Residential Lending Segment Infrastructure Lending Segment Property Segment Investing and Servicing Segment Corporate Total Revenues $ 1,566,550 $ 260,993 $ 69,982 $ 208,759 $ 2,514 $ 2,108,798 Costs and expenses (1,123,862) (174,812) (96,453) (155,704) (432,075) (1,982,906) Other income (loss) 128,256 444 192,522 2,701 (43,806) 280,117 Income (loss) before income taxes 570,944 86,625 166,051 55,756 (473,367) 406,009 Income tax (provision) benefit (9,116) 259 — (16,575) — (25,432) (Income) loss attributable to non-controlling interests (14) — (38,201) 17,571 — (20,644) Net income (loss) attributable to Starwood Property Trust, Inc. 561,814 86,884 127,850 56,752 (473,367) 359,933 Add / (Deduct): Non-controlling interests attributable to Woodstar II Class A Units — — 18,638 — — 18,638 Non-controlling interests attributable to unrealized gains/losses — — 6,551 (34,961) — (28,410) Non-cash equity compensation expense 9,750 1,975 370 6,127 23,564 41,786 Management incentive fee — — — — 35,324 35,324 Depreciation and amortization 10,239 17 23,896 7,440 — 41,592 Interest income adjustment for securities 20,252 — — 35,593 — 55,845 Consolidated income tax provision (benefit) associated with fair value adjustments 9,116 (259) — 16,575 — 25,432 Other non-cash items 14 — 1,111 (940) — 185 Reversal of GAAP unrealized and realized (gains) / losses on: (1) Loans (3,597) — — (72,283) — (75,880) Credit loss provision, net 194,260 3,140 — — — 197,400 Securities (76) — — 83,748 — 83,672 Woodstar Fund investments — — (102,141) — — (102,141) Derivatives (196,349) (152) (1,492) (3,454) 43,513 (157,934) Foreign currency 73,830 187 (89) — — 73,928 Earnings from unconsolidated entities (11,599) (1,414) — (1,473) — (14,486) Sales of properties — — (92,003) (8,402) — (100,405) Recognition of Distributable realized gains / (losses) on: Loans (2) (5,235) — — 73,214 — 67,979 Realized credit loss (3) — (1,546) — — — (1,546) Securities (4) (9,556) — — (48,711) — (58,267) Woodstar Fund investments (5) — — 70,346 — — 70,346 Derivatives (6) 144,325 334 8,283 9,354 (43,265) 119,031 Foreign currency (7) (26,055) (46) 89 — — (26,012) Earnings (loss) from unconsolidated entities (8) 5,577 (437) — 1,338 — 6,478 Sales of properties (9) — — 39,150 3,323 — 42,473 Distributable Earnings (Loss) $ 776,710 $ 88,683 $ 100,559 $ 123,240 $ (414,231) $ 674,961 Distributable Earnings (Loss) per Weighted Average Diluted Share $ 2.32 $ 0.27 $ 0.30 $ 0.37 $ (1.24) $ 2.02 73 Tab l e of Contents The following table presents our summarized results of operations and reconciliation to Distributable Earnings for the year ended December 31, 2023, by business segment (amounts in thousands, except per share data): Commercial and Residential Lending Segment Infrastructure Lending Segment Property Segment Investing and Servicing Segment Corporate Total Revenues $ 1,704,210 $ 239,985 $ 94,172 $ 174,804 $ 1,622 $ 2,214,793 Costs and expenses (1,271,867) (174,713) (113,461) (145,129) (393,994) (2,099,164) Other income (loss) (1,511) 6,026 293,339 15,277 (11,285) 301,846 Income (loss) before income taxes 430,832 71,298 274,050 44,952 (403,657) 417,475 Income tax benefit (provision) 990 590 — (898) — 682 Income attributable to non-controlling interests (14) — (77,156) (1,774) — (78,944) Net income (loss) attributable to Starwood Property Trust, Inc. 431,808 71,888 196,894 42,280 (403,657) 339,213 Add / (Deduct): Non-controlling interests attributable to Woodstar II Class A Units — — 18,732 — — 18,732 Non-controlling interests attributable to unrealized gains/losses — — 47,249 (13,885) — 33,364 Non-cash equity compensation expense 8,755 1,469 310 6,372 22,341 39,247 Management incentive fee — — — — 35,709 35,709 Depreciation and amortization 7,810 64 32,257 10,263 84 50,478 Interest income adjustment for securities 22,404 — — 28,368 — 50,772 Extinguishment of debt, net — — — — (246) (246) Consolidated income tax (benefit) provision associated with fair value adjustments (990) (590) — 898 — (682) Other non-cash items (66) — 1,140 (270) — 804 Reversal of GAAP unrealized and realized (gains) / losses on: (1) Loans (25,874) — — (36,828) — (62,702) Credit loss provision, net 225,720 18,008 — — — 243,728 Securities (69,259) — — 51,889 — (17,370) Woodstar Fund investments — — (291,244) — — (291,244) Derivatives 25,206 (123) (2,111) 4,348 11,285 38,605 Foreign currency (60,644) (201) 11 — — (60,834) Earnings from unconsolidated entities (4,410) (5,702) — (8,849) — (18,961) Sales of properties — — — (25,841) — (25,841) Unrealized impairment of properties 124,902 — — — — 124,902 Recognition of Distributable realized gains / (losses) on: Loans (2) (4,072) — — 36,375 — 32,303 Realized credit loss (3) (12,292) (10,795) — — — (23,087) Securities (4) 105 — — (22,475) — (22,370) Woodstar Fund investments (5) — — 61,513 — — 61,513 Derivatives (6) 119,917 397 22,851 (2,493) (32,659) 108,013 Foreign currency (7) (7,250) 13 (11) — — (7,248) Earnings (loss) from unconsolidated entities (8) 4,410 (1,908) — 7,020 — 9,522 Sales of properties (9) — — — 6,246 — 6,246 Distributable Earnings (Loss) $ 786,180 $ 72,520 $ 87,591 $ 83,418 $ (367,143) $ 662,566 Distributable Earnings (Loss) per Weighted Average Diluted Share $ 2.43 $ 0.22 $ 0.27 $ 0.26 $ (1.13) $ 2.05 74 Tab l e of Contents The following table presents our summarized results of operations and reconciliation to Distributable Earnings for the year ended December 31, 2022, by business segment (amounts in thousands, except per share data): Commercial and Residential Lending Segment Infrastructure Lending Segment Property Segment Investing and Servicing Segment Corporate Total Revenues $ 1,167,980 $ 154,362 $ 91,832 $ 205,311 $ 69 $ 1,619,554 Costs and expenses (611,637) (100,591) (92,651) (137,814) (330,833) (1,273,526) Other income (loss) (115,802) 4,431 789,726 56,095 (82,987) 651,463 Income (loss) before income taxes 440,541 58,202 788,907 123,592 (413,751) 997,491 Income tax benefit (provision) 69,199 12 — (7,688) — 61,523 Income attributable to non-controlling interests (14) — (172,598) (14,927) — (187,539) Net income (loss) attributable to Starwood Property Trust, Inc. 509,726 58,214 616,309 100,977 (413,751) 871,475 Add / (Deduct): Non-controlling interests attributable to Woodstar II Class A Units — — 18,764 — — 18,764 Non-controlling interests attributable to unrealized gains/losses — — 143,769 (5,161) — 138,608 Non-cash equity compensation expense 7,966 1,246 285 5,616 25,072 40,185 Management incentive fee — — — — 49,586 49,586 Depreciation and amortization 4,919 348 33,005 11,959 — 50,231 Interest income adjustment for securities 10,777 — — 12,362 — 23,139 Extinguishment of debt, net — — — — (986) (986) Consolidated income tax (benefit) provision associated with fair value adjustments (64,616) (7) — 3,345 — (61,278) Other non-cash items 87,813 — 1,174 (37) — 88,950 Reversal of GAAP unrealized and realized (gains) / losses on: (1) Loans 352,412 — — (6,190) — 346,222 Credit loss provision, net 39,780 6,877 — — — 46,657 Securities (11,818) — — 43,179 — 31,361 Woodstar Fund investments — — (755,736) — — (755,736) Derivatives (338,994) (1,235) (35,081) (41,692) 82,987 (334,015) Foreign currency 96,651 317 (12) — — 96,956 Loss (earnings) from unconsolidated entities 11,242 (3,982) — (2,871) — 4,389 Sales of properties (86,610) — — (51,079) — (137,689) Recognition of Distributable realized gains / (losses) on: Loans (2) (73,406) — — 5,467 — (67,939) Securities (4) (3,102) — — (20,443) — (23,545) Woodstar Fund investments (5) — — 56,576 — — 56,576 Derivatives (6) 97,444 5 2,138 32,591 214 132,392 Foreign currency (7) (4,652) 58 12 — — (4,582) (Loss) earnings from unconsolidated entities (8) (10,798) 2,632 — 4,236 — (3,930) Sales of properties (9) 84,738 — 35,768 — 120,506 Distributable Earnings (Loss) $ 709,472 $ 64,473 $ 81,203 $ 128,027 $ (256,878) $ 726,297 Distributable Earnings (Loss) per Weighted Average Diluted Share $ 2.22 $ 0.20 $ 0.26 $ 0.40 $ (0.80) $ 2.28 75 Tab l e of Contents ______________________________________________________________________________________________________________________ (1) The reconciling items in this section are exactly equivalent to the amounts recognized within GAAP net income (before the consolidation of VIEs), each of which can be agreed back to the respective lines within Note 24 to our Consolidated Financial Statements.
Biggest changeThe following table summarizes our quarterly Distributable Earnings per weighted average diluted share for the years ended December 31, 2025, 2024 and 2023: Distributable Earnings For the Three-Month Periods Ended March 31, June 30, September 30, December 31, 2025 $ 0.45 $ 0.43 $ 0.40 $ 0.42 2024 0.59 0.48 0.48 0.48 2023 0.49 0.49 0.49 0.58 Distributable Earnings per weighted average diluted share for the years ended December 31, 2025 and 2024 do not equal the sum of the individual quarters due to rounding and other computational factors. 73 Table of Contents The following table presents our summarized results of operations and reconciliation to Distributable Earnings for the year ended December 31, 2025, by business segment (amounts in thousands, except per share data): Commercial and Residential Lending Segment Infrastructure Lending Segment Property Segment Investing and Servicing Segment Corporate Total Revenues $ 1,347,738 $ 276,786 $ 137,016 $ 244,313 $ 1,768 $ 2,007,621 Costs and expenses (791,809) (183,853) (174,366) (142,934) (494,410) (1,787,372) Other income 111,744 1,618 39,732 73,180 33,289 259,563 Income (loss) before income taxes 667,673 94,551 2,382 174,559 (459,353) 479,812 Income tax provision (12,297) (110) (1,844) (22,468) — (36,719) Income attributable to non-controlling interests (15) — (25,488) (6,046) — (31,549) Net income (loss) attributable to Starwood Property Trust, Inc. 655,361 94,441 (24,950) 146,045 (459,353) 411,544 Add / (Deduct): Non-controlling interests attributable to Woodstar II Class A Units — — 18,546 — — 18,546 Non-controlling interests attributable to unrealized gains/losses — — (13,066) 272 — (12,794) Non-cash equity compensation expense 11,318 2,794 3,780 5,582 30,620 54,094 Management incentive fee — — — — 13,746 13,746 Depreciation and amortization 12,023 — 60,616 7,085 — 79,724 Straight-line rent adjustment — — (153) 126 — (27) Interest income adjustment for loans and securities 23,300 — — 39,750 — 63,050 Consolidated income tax provision (benefit) associated with fair value adjustments 12,297 110 (40) 22,468 — 34,835 Other non-cash items 15 — (328) (1,761) — (2,074) Reversal of GAAP unrealized and realized (gains) / losses on: (1) Loans (122,117) — — (62,323) — (184,440) Credit loss provision, net 15,851 3,519 — — — 19,370 Securities (8,422) — — 16,803 — 8,381 Woodstar Fund investments — — (46,953) — — (46,953) Derivatives 155,014 (38) 4,196 1,385 (33,289) 127,268 Foreign currency (112,778) (364) 198 — — (112,944) Earnings from unconsolidated entities (2,708) (3,892) — (9,249) — (15,849) Sales of properties (5,223) — 21 (10,060) — (15,262) Impairment of properties 26,766 — — — — 26,766 Recognition of Distributable realized gains / (losses) on: Loans (2) (2,435) — — 61,175 — 58,740 Securities (4) (1,355) — — (35,012) — (36,367) Woodstar Fund investments (5) — — 110,569 — — 110,569 Derivatives (6) 70,004 186 (1,722) (1,925) (27,955) 38,588 Foreign currency (7) 1,554 219 (199) — — 1,574 Earnings from unconsolidated entities (8) 2,708 2,801 — 10,116 — 15,625 Sales of properties (9) (43,343) — (25) 3,192 — (40,176) Distributable Earnings (Loss) $ 687,830 $ 99,776 $ 110,490 $ 193,669 $ (476,231) $ 615,534 Distributable Earnings (Loss) per Weighted Average Diluted Share $ 1.89 $ 0.27 $ 0.30 $ 0.53 $ (1.30) $ 1.69 74 Table of Contents The following table presents our summarized results of operations and reconciliation to Distributable Earnings for the year ended December 31, 2024, by business segment (amounts in thousands, except per share data): Commercial and Residential Lending Segment Infrastructure Lending Segment Property Segment Investing and Servicing Segment Corporate Total Revenues $ 1,566,550 $ 260,993 $ 69,982 $ 208,759 $ 2,514 $ 2,108,798 Costs and expenses (1,123,862) (174,812) (96,453) (155,704) (432,075) (1,982,906) Other income (loss) 128,256 444 192,522 2,701 (43,806) 280,117 Income (loss) before income taxes 570,944 86,625 166,051 55,756 (473,367) 406,009 Income tax (provision) benefit (9,116) 259 — (16,575) — (25,432) (Income) loss attributable to non-controlling interests (14) — (38,201) 17,571 — (20,644) Net income (loss) attributable to Starwood Property Trust, Inc. 561,814 86,884 127,850 56,752 (473,367) 359,933 Add / (Deduct): Non-controlling interests attributable to Woodstar II Class A Units — — 18,638 — — 18,638 Non-controlling interests attributable to unrealized gains/losses — — 6,551 (34,961) — (28,410) Non-cash equity compensation expense 9,750 1,975 370 6,127 23,564 41,786 Management incentive fee — — — — 35,324 35,324 Depreciation and amortization 10,239 17 23,896 7,440 — 41,592 Interest income adjustment for loans and securities 20,252 — — 35,593 — 55,845 Consolidated income tax provision (benefit) associated with fair value adjustments 9,116 (259) — 16,575 — 25,432 Other non-cash items 14 — 1,111 (940) — 185 Reversal of GAAP unrealized and realized (gains) / losses on: (1) Loans (3,597) — — (72,283) — (75,880) Credit loss provision, net 194,260 3,140 — — — 197,400 Securities (76) — — 83,748 — 83,672 Woodstar Fund investments — — (102,141) — — (102,141) Derivatives (196,349) (152) (1,492) (3,454) 43,513 (157,934) Foreign currency 73,830 187 (89) — — 73,928 Earnings from unconsolidated entities (11,599) (1,414) — (1,473) — (14,486) Sales of properties — — (92,003) (8,402) — (100,405) Recognition of Distributable realized gains / (losses) on: Loans (2) (5,235) — — 73,214 — 67,979 Realized credit loss (3) — (1,546) — — — (1,546) Securities (4) (9,556) — — (48,711) — (58,267) Woodstar Fund investments (5) — — 70,346 — — 70,346 Derivatives (6) 144,325 334 8,283 9,354 (43,265) 119,031 Foreign currency (7) (26,055) (46) 89 — — (26,012) Earnings (loss) from unconsolidated entities (8) 5,577 (437) — 1,338 — 6,478 Sales of properties (9) — — 39,150 3,323 — 42,473 Distributable Earnings (Loss) $ 776,710 $ 88,683 $ 100,559 $ 123,240 $ (414,231) $ 674,961 Distributable Earnings (Loss) per Weighted Average Diluted Share $ 2.32 $ 0.27 $ 0.30 $ 0.37 $ (1.24) $ 2.02 75 Table of Contents The following table presents our summarized results of operations and reconciliation to Distributable Earnings for the year ended December 31, 2023, by business segment (amounts in thousands, except per share data): Commercial and Residential Lending Segment Infrastructure Lending Segment Property Segment Investing and Servicing Segment Corporate Total Revenues $ 1,704,210 $ 239,985 $ 94,172 $ 174,804 $ 1,622 $ 2,214,793 Costs and expenses (1,271,867) (174,713) (113,461) (145,129) (393,994) (2,099,164) Other income (loss) (1,511) 6,026 293,339 15,277 (11,285) 301,846 Income (loss) before income taxes 430,832 71,298 274,050 44,952 (403,657) 417,475 Income tax benefit (provision) 990 590 — (898) — 682 Income attributable to non-controlling interests (14) — (77,156) (1,774) — (78,944) Net income (loss) attributable to Starwood Property Trust, Inc. 431,808 71,888 196,894 42,280 (403,657) 339,213 Add / (Deduct): Non-controlling interests attributable to Woodstar II Class A Units — — 18,732 — — 18,732 Non-controlling interests attributable to unrealized gains/losses — — 47,249 (13,885) — 33,364 Non-cash equity compensation expense 8,755 1,469 310 6,372 22,341 39,247 Management incentive fee — — — — 35,709 35,709 Depreciation and amortization 7,810 64 32,257 10,263 84 50,478 Interest income adjustment for loans and securities 22,404 — — 28,368 — 50,772 Extinguishment of debt, net — — — — (246) (246) Consolidated income tax (benefit) provision associated with fair value adjustments (990) (590) — 898 — (682) Other non-cash items (66) — 1,140 (270) — 804 Reversal of GAAP unrealized and realized (gains) / losses on: (1) Loans (25,874) — — (36,828) — (62,702) Credit loss provision, net 225,720 18,008 — — — 243,728 Securities (69,259) — — 51,889 — (17,370) Woodstar Fund investments — — (291,244) — — (291,244) Derivatives 25,206 (123) (2,111) 4,348 11,285 38,605 Foreign currency (60,644) (201) 11 — — (60,834) Earnings from unconsolidated entities (4,410) (5,702) — (8,849) — (18,961) Sales of properties — — — (25,841) — (25,841) Unrealized impairment of properties 124,902 — — — — 124,902 Recognition of Distributable realized gains / (losses) on: Loans (2) (4,072) — — 36,375 — 32,303 Realized credit loss (3) (12,292) (10,795) — — — (23,087) Securities (4) 105 — — (22,475) — (22,370) Woodstar Fund investments (5) — — 61,513 — — 61,513 Derivatives (6) 119,917 397 22,851 (2,493) (32,659) 108,013 Foreign currency (7) (7,250) 13 (11) — — (7,248) Earnings (loss) from unconsolidated entities (8) 4,410 (1,908) — 7,020 — 9,522 Sales of properties (9) — — — 6,246 — 6,246 Distributable Earnings (Loss) $ 786,180 $ 72,520 $ 87,591 $ 83,418 $ (367,143) $ 662,566 Distributable Earnings (Loss) per Weighted Average Diluted Share $ 2.43 $ 0.22 $ 0.27 $ 0.26 $ (1.13) $ 2.05 76 Table of Contents ______________________________________________________________________________________________________________________ (1) The reconciling items in this section are exactly equivalent to the amounts recognized within GAAP net income (before the consolidation of VIEs), each of which can be agreed back to the respective lines within Note 24 to our Consolidated Financial Statements.
The decrease in credit loss provision was primarily due to a lesser deterioration in modeled macroeconomic forecasts in the year ended December 31, 2024 compared to the year ended December, 2023, the effect of which was partially offset by selecting the most unfavorable modeled macroeconomic forecast for office and retail loans in 2024.
The decrease in credit loss provision was primarily due to a lesser deterioration in modeled macroeconomic forecasts in the year ended December 31, 2024 compared to the year ended December 31, 2023, the effect of which was partially offset by selecting the most unfavorable modeled macroeconomic forecast for office and retail loans in 2024.
The interest rate swaps are used primarily to hedge our interest rate risk on residential loans held-for-sale and to fix our interest rate payments on certain variable rate borrowings which fund fixed rate investments.
The interest rate swaps are used primarily to hedge our interest rate risk on residential loans held-for-sale and to fix our interest rate payments on certain variable rate borrowings which fund fixed rate investments.
The foreign currency hedges are used to fix the U.S. dollar amounts of cash flows (both interest and principal payments) we expect to receive from our foreign currency denominated loans and investments.
The foreign currency hedges are used to fix the U.S. dollar amounts of cash flows (both interest and principal payments) we expect to receive from our foreign currency denominated loans and investments.
The decrease in interest income from loans reflects (i) a $123.0 million decrease from commercial loans, reflecting lower average balances and additional loans placed on nonaccrual, partially offset by higher prepayment related income, and (ii) a $10.4 million decrease from residential loans principally due to lower average balances.
The decrease in interest income from loans reflects (i) a $123.0 million decrease from commercial loans, reflecting lower average balances and additional loans placed on nonaccrual, partially offset by higher prepayment related income, and (ii) a $10.4 million decrease from residential loans principally due to lower average balances.
The treatment of CMBS interest income on a GAAP basis is complicated by our application of the ASC 810 consolidation rules. In an attempt to treat these securities similar to the trust’s other investment securities, we compute distributable interest income pursuant to an effective yield methodology.
The treatment of CMBS interest income on a GAAP basis is complicated by our application of the ASC 810 consolidation rules. In an attempt to treat these securities similar to our other investment securities, we compute distributable interest income pursuant to an effective yield methodology.
As of December 31, 2024, we had various repurchase agreements, with details referenced in the table provided below. 2) Secured Property Financings: We use long-term mortgage facilities from commercial lenders and government sponsors of affordable housing loans to finance many of the investment properties that we hold. These facilities accrue interest at either fixed or floating rates.
As of December 31, 2025, we had various repurchase agreements, with details referenced in the table provided below. 2) Secured Property Financings: We use long-term mortgage facilities from commercial lenders and government sponsors of affordable housing loans to finance many of the investment properties that we hold. These facilities accrue interest at either fixed or floating rates.
With the Starwood brand, market presence, and lending/asset management platform that we have developed, we are focused primarily on the following opportunities: (1) Continue to expand our market presence as a leading provider of acquisition, refinance, development and expansion capital to large real estate projects (greater than $75 million) in infill locations, and other attractive market niches where our size and scale give us an advantage to provide a “one-stop” lending solution for real estate developers, owners and operators; (2) Continue to expand our investment activities in subordinate CMBS and revenues from special servicing; (3) Continue to expand our capabilities in syndication and securitization, which serve as a source of attractively priced, matched-term financing; (4) Continue to leverage our Investing and Servicing Segment’s sourcing and credit underwriting capabilities to expand our overall footprint in the commercial real estate debt markets; (5) Expand our investment activities in both (i) targeted real estate equity investments and (ii) residential mortgage finance; and (6) Expand our originations and acquisitions of infrastructure debt investments.
With the Starwood brand, market presence, and lending/asset management platform that we have developed, we are focused primarily on the following opportunities: (1) Continue to expand our market presence as a leading provider of acquisition, refinance, development and expansion capital to large real estate projects (greater than $75 million) in infill locations, and other attractive market niches where our size and scale give us an advantage to provide a “one-stop” lending solution for real estate developers, owners and operators; (2) Continue to expand our investment activities in subordinate CMBS and revenues from special servicing; (3) Continue to expand our capabilities in syndication and securitization, which serve as a source of attractively priced, matched-term financing; (4) Continue to leverage our Investing and Servicing Segment’s sourcing and credit underwriting capabilities to expand our overall footprint in the commercial real estate debt markets; (5) Expand our investment activities in both (i) targeted real estate equity investments (including net lease and triple net lease commercial properties) and (ii) residential mortgage finance; and (6) Expand our originations and acquisitions of infrastructure debt investments.
Subsequently, cumulative adverse changes in expected cash flows on our available-for-sale debt securities are recognized currently as an increase to the allowance for credit losses. However, the allowance is limited to the amount by which the AFS debt security’s amortized cost exceeds its fair value.
Subsequently, cumulative adverse changes in expected cash flows on our AFS debt securities are recognized currently as an increase to the allowance for credit losses. However, the allowance is limited to the amount by which the AFS debt security’s amortized cost exceeds its fair value.
Based on our quantitative assessment during the fourth quarter of 2024, we determined that the fair value of the Infrastructure Lending Segment reporting unit to which goodwill is attributed exceeded its carrying value including goodwill.
Based on our quantitative assessment during the fourth quarter of 2025, we determined that the fair value of the Infrastructure Lending Segment reporting unit to which goodwill is attributed exceeded its carrying value including goodwill.
We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (loss) and cash flow from operating activities determined in accordance with GAAP.
We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (loss) and cash flows from operating activities determined in accordance with GAAP.
Securitization VIE Eliminations Refer to the preceding comparison of the year ended December 31, 2024 to the year ended December 31, 2023 for a discussion of securitization VIE eliminations. Income Tax Benefit Our consolidated income taxes principally relate to the taxable nature of our loan servicing and loan securitization businesses which are housed in TRSs.
Securitization VIE Eliminations Refer to the preceding comparison of the year ended December 31, 2025 to the year ended December 31, 2024 for a discussion of securitization VIE eliminations. Income Tax (Provision) Benefit Our consolidated income taxes principally relate to the taxable nature of our loan servicing and loan securitization businesses which are housed in TRSs.
We may be required to record further increases to our CECL reserves in the future, depending on the performance of our portfolio and broader market conditions, and there may be volatility in the level of our CECL reserves, particularly if market conditions relevant to the office sector do not improve.
We may be required to record further increases to our CECL reserves in the future, depending on the performance of our portfolio and broader market conditions, and there may be volatility in the level of our 57 Table of Contents CECL reserves, particularly if market conditions relevant to the office sector do not improve.
This increase reflects the increase in interest income, partially offset by the increase in interest expense on our secured financing facilities, both as discussed in the sections above.
This decrease reflects the decrease in interest income, partially offset by the decrease in interest expense on our secured financing facilities, both as discussed in the sections above.
Other loss decreased by $0.4 million during the year ended December 31, 2024. 77 Tab l e of Contents Property Segment Distributable Earnings by Portfolio (amounts in thousands) For the Year Ended December 31, 2024 2023 Change Master Lease Portfolio $ 40,712 $ 19,966 $ 20,746 Medical Office Portfolio 7,127 20,268 (13,141) Woodstar Fund, net of non-controlling interests 57,403 50,414 6,989 Other/Corporate (4,683) (3,057) (1,626) Distributable Earnings $ 100,559 $ 87,591 $ 12,968 The Property Segment’s Distributable Earnings increased by $13.0 million, from $87.6 million during the year ended December 31, 2023 to $100.6 million during the year ended December 31, 2024.
Property Segment Distributable Earnings by Portfolio (amounts in thousands) For the Year Ended December 31, 2024 2023 Change Master Lease Portfolio $ 40,712 $ 19,966 $ 20,746 Medical Office Portfolio 7,127 20,268 (13,141) Woodstar Fund, net of non-controlling interests 57,403 50,414 6,989 Other/Corporate (4,683) (3,057) (1,626) Distributable Earnings $ 100,559 $ 87,591 $ 12,968 The Property Segment’s Distributable Earnings increased by $13.0 million, from $87.6 million during the year ended December 31, 2023 to $100.6 million during the year ended December 31, 2024.
During the years ended December 31, 2024 and 2023, the weighted average unlevered yields on the Infrastructure Lending Segment’s loans and investment securities, excluding those for which interest income is not recognized, were 10.6% and 10.2%, respectively, primarily reflecting higher prepayment related income in 2024. 64 Tab l e of Contents During the years ended December 31, 2024 and 2023, the Infrastructure Lending Segment’s weighted average secured borrowing rates, inclusive of the amortization of deferred financing fees, were 7.8% and 7.6%, respectively.
During the years ended December 31, 2024 and 2023, the weighted average unlevered yields on the Infrastructure Lending Segment’s loans and investment securities, excluding those for which interest income is not recognized, were 10.6% and 10.2%, respectively, primarily reflecting higher prepayment related income in 2024. 69 Table of Contents During the years ended December 31, 2024 and 2023, the Infrastructure Lending Segment’s weighted average secured borrowing rates, inclusive of the amortization of deferred financing fees, were 7.8% and 7.6%, respectively.
This presentation also allows for a more transparent reconciliation of the unrealized gain (loss) adjustments below to the segment data presented in Note 24. 71 Tab l e of Contents The weighted average diluted share count applied to Distributable Earnings for purposes of determining Distributable Earnings per share (“EPS”) is computed using the GAAP diluted share count, adjusted for the following: (i) Unvested stock awards – Currently, unvested stock awards are excluded from the denominator of GAAP EPS.
This presentation also allows for a more transparent reconciliation of the unrealized gain (loss) adjustments below to the segment data presented in Note 24. 72 Table of Contents The weighted average diluted share count applied to Distributable Earnings for purposes of determining Distributable Earnings per share (“EPS”) is computed using the GAAP diluted share count, adjusted for the following: (i) Unvested stock awards – Currently, unvested stock awards are excluded from the denominator of GAAP EPS.
The increase in costs and expenses primarily reflects (i) an $11.9 million increase in general and administrative expenses, principally reflecting increased 65 Tab l e of Contents incentive compensation due to higher loan securitization volume and (ii) a $2.3 million increase in interest expense primarily on higher conduit loan balances, partially offset by (iii) a $4.4 million decrease in depreciation and other costs of rental operations due to fewer operating properties held.
The increase in costs and expenses primarily reflects (i) an $11.9 million increase in general and administrative expenses, principally reflecting increased incentive compensation due to higher loan securitization volume and (ii) a $2.3 million increase in interest expense primarily on 70 Table of Contents higher conduit loan balances, partially offset by (iii) a $4.4 million decrease in depreciation and other costs of rental operations due to fewer operating properties held.
(c) Excludes $181.2 million of loan funding commitments in which management projects the Company will not be obligated to fund in the future due to repayments made by the borrower earlier than, or in excess of, expectations.
(c) Excludes $429.5 million of loan funding commitments in which management projects the Company will not be obligated to fund in the future due to repayments made by the borrower earlier than, or in excess of, expectations.
The favorable change in foreign currency gain (loss) and the unfavorable change in gain (loss) on foreign currency hedges reflect the weakening of the U.S. dollar against the GBP and EUR, partially offset by a slight strengthening against the AUD, during the year ended December 31, 2023 compared to a strengthening of the U.S. dollar against each of those currencies during the year ended December 31, 2022.
The unfavorable change in foreign currency gain (loss) and the favorable change in gain (loss) on foreign currency hedges reflect the strengthening of the U.S. dollar against the GBP, EUR and AUD during the year ended December 31, 2024, compared to a weakening of the U.S. dollar against the GBP and EUR, partially offset by a slight strengthening against the AUD, during the year ended December 31, 2023.
During the years ended December 31, 2024 and 2023, the Commercial and Residential Lending Segment’s weighted average secured borrowing rates, inclusive of the amortization of deferred financing fees, were 7.4% and 7.3%, respectively. 63 Tab l e of Contents Interest rate hedges had the effect of adjusting these weighted average borrowing costs to 6.5% and 6.6% during the year ended December 31, 2024 and 2023, respectively.
During the years ended December 31, 2024 and 2023, the Commercial and Residential Lending Segment’s weighted average secured borrowing rates, inclusive of the amortization of deferred financing fees, were 7.4% and 7.3%, respectively. 68 Table of Contents Interest rate hedges had the effect of adjusting these weighted average borrowing costs to 6.5% and 6.6% during the year ended December 31, 2024 and 2023, respectively.
The increase reflects the net increase in interest income, partially offset by the increase in interest expense on the secured financing facilities, both as discussed in the sections above.
The increase reflects the increase in interest income from loans, partially offset by the increase in interest expense on the secured financing facilities, both as discussed in the sections above.
The senior notes accrue interest at fixed 83 Tab l e of Contents interest rates, while the term loans are variable, and vary in tenure. Refer to Notes 11 and 12 to the Consolidated Financial Statements for further discussion of our financing arrangements.
The senior notes accrue interest at fixed interest rates, while the term loans are variable, and vary in tenure. Refer to Notes 11 and 12 to the Consolidated Financial Statements for further discussion of our financing arrangements.
(j) Includes: (i) $323.5 million outstanding on a repurchase facility that is not subject to margin calls; and (ii) $30.3 million outstanding on one of our repurchase facilities that represents the 49% pro rata share owed by a non-controlling partner in a consolidated joint venture (see Note 16 to the Consolidated Financial Statements).
(i) Includes: (i) $319.5 million outstanding on a repurchase facility that is not subject to margin calls; and (ii) $25.8 million outstanding on one of our repurchase facilities that represents the 49% pro rata share owed by a non-controlling partner in a consolidated joint venture (see Note 16 to the Consolidated Financial Statements).
Our secured financings, CLOs and SASB consist primarily of matched-term funding for our loans and investment securities and long-term mortgages on our owned properties. Repayments of such facilities are generally made from proceeds from maturities, prepayments or sales of such investments and operating cash flows from owned properties.
Our secured financings and the CLO and SASB portions of our securitized financing consist primarily of matched-term funding for our loans and investment securities and long-term mortgages on our owned properties. Repayments of such facilities are generally made from proceeds from maturities, prepayments or sales of such investments and operating cash flows from owned properties.
Significant judgment is required when estimating expected cash flows used in determining the credit loss allowance for AFS debt securities; therefore, actual results over time could be materially different. As of December 31, 2024, we held $93.8 million of AFS debt securities.
Significant judgment is required when estimating expected cash flows used in determining the credit loss allowance for AFS debt securities; therefore, actual results over time could be materially different. As of December 31, 2025, we held $88.3 million of AFS debt securities.
Refer to Note 12 to the Consolidated Financial Statements for further disclosure regarding the terms of our unsecured senior notes. 85 Tab l e of Contents Scheduled Principal Repayments on Investments and Overhang on Financing Facilities The following scheduled and/or projected principal repayments on our investments were based on amounts outstanding and extended contractual maturities of those investments as of December 31, 2024.
Refer to Note 12 to the Consolidated Financial Statements for further disclosure regarding the terms of our unsecured senior notes. Scheduled Principal Repayments on Investments and Overhang on Financing Facilities The following scheduled and/or projected principal repayments on our investments were based on amounts outstanding and extended contractual maturities of those investments as of December 31, 2025.
Our future loan commitments are expected to be primarily matched-term funded under secured financing agreements with any difference funded from available cash on hand or other potential sources of financing discussed above.
Our future funding commitments are expected to be primarily matched-term funded with secured or securitized financing, with any difference funded from available cash on hand or other potential sources of financing discussed above.
(e) Certain facilities with an outstanding balance of $2.3 billion as of December 31, 2024 are indexed to EURIBOR, BBSY, SARON and SONIA. The remainder are indexed to SOFR. (f) Certain facilities with an aggregate initial maximum facility size of $10.7 billion may be increased to $11.1 billion, subject to certain conditions. The $11.1 billion amount includes such upsizes.
(e) Certain facilities with an outstanding balance of $2.7 billion as of December 31, 2025 are indexed to EURIBOR, BBSY, SARON, SONIA and STIBOR. The remainder are indexed to SOFR. (f) Certain facilities with an aggregate initial maximum facility size of $11.8 billion may be increased to $12.2 billion, subject to certain conditions. The $12.2 billion amount includes such upsizes.
Offsetting these cash inflows was cash interest expense of $1.3 billion, general and administrative expenses of $277.5 million and a net change in operating assets and liabilities of $5.1 million.
Offsetting these cash inflows was cash interest expense of $1.2 billion, general and administrative expenses of $286.5 million and a net change in operating assets and liabilities of $41.5 million.
After making adjustments for the calculation of Distributable Earnings, revenues were $1.7 billion, costs and expenses were $1.0 billion, other income was $101.5 million and there was no income tax provision or benefit.
After making adjustments for the calculation of Distributable Earnings, revenues were $1.4 billion, costs and expenses were $753.0 million, other income was $69.4 million and there was no income tax provision or benefit.
At December 31, 2024, we had 100,000,000 shares of preferred stock available for issuance and 162,590,312 shares of common stock available for issuance. Refer to Note 18 to the Consolidated Financial Statements for a discussion of our issuances of equity securities in recent years.
At December 31, 2025, we had 100,000,000 shares of preferred stock available for issuance and 129,437,121 shares of common stock available for issuance. Refer to Note 18 to the Consolidated Financial Statements for a discussion of our issuances of equity securities in recent years.
During the years ended December 31, 2024, 2023 and 2022, we recognized credit loss provisions of $197.4 million, $243.7 million and $46.7 million, respectively, and the related credit loss allowance was $504.3 million and $333.1 million at December 31, 2024 and 2023, respectively.
During the years ended December 31, 2025, 2024 and 2023, we recognized credit loss provisions of $19.4 million, $197.4 million and $243.7 million, respectively, and the related credit loss allowance was $506.4 million and $504.3 million at December 31, 2025 and 2024, respectively.
Recent Accounting Developments Refer to Note 2 to the Consolidated Financial Statements for a discussion of recent accounting developments and the expected impact to the Company. 90 Tab l e of Contents
Recent Accounting Developments Refer to Note 2 to the Consolidated Financial Statements for a discussion of recent accounting developments and the expected impact to the Company.
Other income decreased by $2.0 million during the year ended December 31, 2024, primarily due to (i) an $18.8 million increase in realized foreign currency losses and (ii) a $9.7 million increase in recognized losses on RMBS investments, partially offset by (iii) a $24.4 million increase in realized gains on interest rate and foreign currency derivatives and (iv) a $1.2 million increase in earnings from unconsolidated entities.
Other income decreased by $2.0 million during the year ended December 31, 2024, primarily due to (i) an $18.8 million increase in realized foreign currency losses and (ii) a $9.7 million increase in recognized losses on RMBS investments, partially offset by (iii) a $24.4 million increase in realized gains on interest rate and foreign currency derivatives and (iv) a $1.2 million increase in earnings from unconsolidated entities. 80 Table of Contents Infrastructure Lending Segment The Infrastructure Lending Segment’s Distributable Earnings increased by $16.2 million, from $72.5 million during the year ended December 31, 2023 to $88.7 million during the year ended December 31, 2024.
The reclassified revenues, along with applicable changes in fair value of investment securities and servicing rights, comprise the other income (loss) caption “Change in net assets related to consolidated VIEs,” which represents our beneficial interest in those consolidated VIEs.
Such eliminations have no overall effect on net income (loss) attributable to Starwood Property Trust. The reclassified revenues, along with applicable changes in fair value of investment securities and servicing rights, comprise the other income (loss) caption “Change in net assets related to consolidated VIEs,” which represents our beneficial interest in those consolidated VIEs.
The CLO has a contractual maturity of October 2036 and a weighted average cost of financing of SOFR + 2.10%, inclusive of the amortization of deferred issuance costs.
The CLO has a contractual maturity of October 2037 and a weighted average cost of financing of SOFR + 1.91%, inclusive of the amortization of deferred issuance costs.
The CLO has a contractual maturity of October 2036 and a weighted average cost of financing of SOFR + 2.10%, inclusive of the amortization of deferred issuance costs.
The CLO has a contractual maturity of October 2037 and a weighted average cost of financing of SOFR + 1.91%, inclusive of the amortization of deferred issuance costs.
The CLO has a contractual maturity of April 2036 and a weighted average cost of financing of SOFR + 2.41%, inclusive of the amortization of deferred issuance costs.
The CLO has a contractual maturity of April 2037 and a weighted average cost of financing of SOFR + 1.94%, inclusive of the amortization of deferred issuance costs.
These facilities are secured by the equity interests in certain of our subsidiaries which totaled $6.0 billion as of December 31, 2024.
(n) These facilities are secured by the equity interests in certain of our subsidiaries which totaled $7.7 billion as of December 31, 2025.
During the years ended December 31, 2023 and 2022, the weighted average unlevered yields on the Commercial and Residential Lending Segment’s loans and investment securities, excluding retained RMBS and loans for which interest income is not recognized, were as follows: For the Year Ended December 31, 2023 2022 Commercial 9.4 % 6.5 % Residential 5.1 % 4.7 % Overall 8.8 % 6.2 % The weighted average unlevered yield on our commercial loans increased primarily due to higher average index rates.
During the years ended December 31, 2025 and 2024, the weighted average unlevered yields on the Commercial and Residential Lending Segment’s loans and investment securities, excluding retained RMBS and loans for which interest income is not recognized, were as follows: For the Year Ended December 31, 2025 2024 Commercial 8.1 % 9.7 % Residential 5.0 % 5.0 % Overall 7.7 % 9.0 % The weighted average unlevered yield on our commercial loans decreased primarily due to lower average index rates and spreads and lower prepayment related income.
The unfavorable change in foreign currency gain (loss) and the favorable change in gain (loss) on foreign currency hedges reflect the strengthening of the U.S. dollar against the pound sterling (“GBP”), Euro (“EUR”) and Australian dollar (“AUD”) during the year ended December 31, 2024, compared to a weakening of the U.S. dollar against the GBP and EUR, partially offset by a slight strengthening against the AUD, during the year ended December 31, 2023.
The favorable change in foreign currency gain (loss) and the unfavorable change in gain (loss) on foreign currency hedges reflect the weakening of the U.S. dollar against the pound sterling (“GBP”), Euro (“EUR”) and Australian dollar (“AUD”) during the year ended December 31, 2025, compared to a strengthening of the U.S. dollar against each of those currencies in the year ended December 31, 2024.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Commercial and Residential Lending Segment The Commercial and Residential Lending Segment’s Distributable Earnings increased by $76.7 million, from $709.5 million during the year ended December 31, 2022 to $786.2 million during the year ended December 31, 2023.
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Commercial and Residential Lending Segment The Commercial and Residential Lending Segment’s Distributable Earnings decreased by $9.5 million, from $786.2 million during the year ended December 31, 2023 to $776.7 million during the year ended December 31, 2024.
After making adjustments for the calculation of Distributable Earnings, revenues were $244.7 million, costs and expenses were $143.4 million, other income was $39.3 million, there was no income tax provision or benefit and the deduction of income attributable to non-controlling interests was $17.4 million.
After making adjustments for the calculation of Distributable Earnings, revenues were $284.4 million, costs and expenses were $132.2 million, other income was $47.3 million, there was no income tax provision or benefit and the deduction of income attributable to non-controlling interests was $5.8 million.
Corporate Corporate loss increased by $110.2 million, from $256.9 million during the year ended December 31, 2022 to $367.1 million during the year ended December 31, 2023, primarily due to (i) a $78.7 million increase in interest expense reflecting higher average outstanding term loan and unsecured senior note balances, as well as higher interest rates, and (ii) a $32.9 million unfavorable change in realized gain (loss) on fixed-to-floating interest rate swaps which hedge a portion of our unsecured senior notes. 81 Tab l e of Contents Liquidity and Capital Resources Liquidity is a measure of our ability to meet our cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make new investments where appropriate, pay dividends to our stockholders and other general business needs.
Corporate Corporate loss increased by $47.1 million, from $367.1 million during the year ended December 31, 2023 to $414.2 million during the year ended December 31, 2024, primarily due to (i) a $35.7 million increase in interest expense reflecting higher average unsecured borrowings outstanding and (ii) a $10.6 million increase in realized losses on fixed-to-floating interest rate swaps which hedge a portion of our unsecured senior notes. 82 Table of Contents Liquidity and Capital Resources Liquidity is a measure of our ability to meet our cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make new investments where appropriate, pay dividends to our stockholders and other general business needs.
On the closing date, the CLO issued $400.0 million of notes, of which $330.0 million of notes was purchased by third party investors and $70.0 million of subordinated notes were retained by us.
On the closing date, the CLO issued $500.0 million of notes, of which $413.5 million of notes were purchased by third party investors and $86.5 million of subordinated notes were retained by us.
As of December 31, 2024, we were in compliance with all such covenants. 86 Tab l e of Contents Cash Requirements Dividends U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income.
Cash Requirements Dividends U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income.
Infrastructure Lending Segment The Infrastructure Lending Segment’s Distributable Earnings increased by $16.2 million, from $72.5 million during the year ended December 31, 2023 to $88.7 million during the year ended December 31, 2024. After making adjustments for the calculation of Distributable Earnings, revenues were $261.0 million, costs and expenses were $171.2 million and other loss was $1.1 million.
Infrastructure Lending Segment The Infrastructure Lending Segment’s Distributable Earnings increased by $11.1 million, from $88.7 million during the year ended December 31, 2024 to $99.8 million during the year ended December 31, 2025. After making adjustments for the calculation of Distributable Earnings, revenues were $276.8 million, costs and expenses were $177.5 million and other income was $0.5 million.
In those cases, we depart from the collective pool approach and determine the credit loss allowance as any excess of the amortized cost basis of the loan or security over (i) the present value of expected future cash flows discounted at the contractual effective interest rate or (ii) the fair value of the collateral, if repayment is expected solely from the collateral. 88 Tab l e of Contents Significant judgment is required when estimating future credit losses; therefore, actual results over time could be materially different.
In those cases, we depart from the collective pool approach and determine the credit loss allowance as any excess of the amortized cost basis of the loan or security over (i) the present value of expected future cash flows discounted at the contractual effective interest rate or (ii) the fair value of the collateral, if repayment is expected solely from the collateral.
During the years ended December 31, 2023 and 2022, the weighted average unlevered yields on the Infrastructure Lending Segment’s loans and investment securities, excluding those for which interest income is not recognized, were 10.2% and 6.6%, respectively, primarily reflecting higher average index rates in 2023.
During the years ended December 31, 2025 and 2024, the weighted average unlevered yields on the Infrastructure Lending Segment’s loans and investment securities, excluding those for which interest income is not recognized, were 9.7% and 10.6%, respectively, reflecting lower average index rates and spreads, partially offset by higher prepayment related income, in 2025.
As of December 31, 2024, we had $43.9 billion and $37.4 billion of assets and liabilities, respectively, that are measured at fair value, including $38.9 billion of VIE assets and $37.3 billion of VIE liabilities we consolidate pursuant to ASC 810.
As of December 31, 2025, we had $38.7 billion and $32.9 billion of assets and liabilities, respectively, that are measured at fair value, including $34.5 billion of VIE assets and $32.8 billion of VIE liabilities we consolidate pursuant to ASC 810.
These items are typically offset by a decrease in the fair value of our domestic servicing rights intangible which reflects the expected amortization of this deteriorating asset, net of increases in fair value due to the attainment of new servicing contracts.
These items are typically offset by a decrease in the fair value of our domestic servicing rights intangible which reflects the expected amortization of this deteriorating asset, net of increases in fair value due to the attainment of new servicing contracts. Derivatives include instruments which hedge interest rate risk and credit risk on our conduit loans and CMBS investments.
Cash and cash equivalents increased by $244.6 million during the year ended December 31, 2024, reflecting net cash provided by investing activities of $2.0 billion and operating activities of $646.6 million. partially offset by net cash used in financing activities of $2.4 billion. 82 Tab l e of Contents Net cash provided by operating activities of $646.6 million during the year ended December 31, 2024 related primarily to cash interest income of $1.6 billion from our loans and $183.8 million from our investment securities.
Cash and cash equivalents increased by $121.0 million during the year ended December 31, 2025, reflecting net cash provided by financing activities of $3.0 billion and operating activities of $977.9 million, partially offset by net cash used in investing activities of $3.8 billion. 83 Table of Contents Net cash provided by operating activities of $977.9 million during the year ended December 31, 2025 related primarily to cash interest income of $1.4 billion from our loans and $157.0 million from our investment securities.
Our secured debt agreements contain customary affirmative and negative covenants, including financial covenants, that in some cases restrict our total leverage (as defined therein).
Our secured debt agreements contain customary affirmative and negative covenants, including financial covenants, that in some cases restrict our total leverage (as defined therein). As of December 31, 2025, we were in compliance with all such covenants.
Other minor adjustments are made to reflect management’s expectations for other components of the projected cash flow stream. Costs and expenses increased by $14.0 million during the year ended December 31, 2024, primarily due to a $12.1 million increase in general and administrative expenses reflecting increased incentive compensation due to higher loan securitization volume.
Costs and expenses increased by $14.0 million during the year ended December 31, 2024, primarily due to a $12.1 million increase in general and administrative expenses reflecting increased incentive compensation due to higher loan securitization volume.
Other Potential Sources of Financing In the future, we may also use other sources of financing to fund the acquisition of our target assets and maturities of our unsecured senior notes, including other secured as well as unsecured forms of borrowing and sale of senior loan interests and other assets.
Other Potential Sources of Financing In the future, we may also use other sources of financing to fund the acquisition of our target assets and maturities of our unsecured senior notes, including other secured as well as unsecured forms of borrowing and sale of senior loan interests and other assets. 87 Table of Contents Leverage Policies We employ leverage, to the extent available, to fund the acquisition of our target assets, increase potential returns to our stockholders, or provide temporary liquidity.
The tax treatment for our aggregate distributions per share of common stock paid with respect to the 2024 tax year is as follows: Record Date Payable Date Per Share Dividend Ordinary Taxable Dividends Taxable Qualified Dividends Total Capital Gain Distribution Unrecaptured 1250 Gain Section 199A Dividends 3/29/2024 4/15/2024 0.4800 0.3807 0.0717 0.0993 0.0455 0.3090 6/28/2024 7/15/2024 0.4800 0.3807 0.0717 0.0993 0.0455 0.3090 9/30/2024 10/15/2024 0.4800 0.3807 0.0717 0.0993 0.0455 0.3090 12/31/2024 1/15/2025 0.1392 0.1104 0.0208 0.0288 0.0132 0.0896 $ 1.5792 $ 1.2525 $ 0.2359 $ 0.3267 $ 0.1497 $ 1.0166 The cash dividend of $0.48 per share of common stock (with a record date of December 31, 2024, that was paid on January 15, 2025) is a split-year dividend, of which $0.1392 is allocable to 2024 for federal income tax purposes and the remaining $0.3408 will be allocable to 2025 for federal income tax purposes.
The tax treatment for our aggregate distributions per share of common stock paid with respect to the 2025 tax year is as follows: Record Date Payable Date Per Share Dividend Ordinary Taxable Dividends Taxable Qualified Dividends Total Capital Gain Distribution Unrecaptured 1250 Gain Section 199A Dividends 12/31/2024 1/15/2025 $ 0.3408 $ 0.1946 $ 0.0472 $ 0.0508 $ 0.0071 $ 0.1474 3/31/2025 4/15/2025 0.4800 0.2740 0.0665 0.0716 0.0101 0.2075 6/30/2025 7/15/2025 0.4800 0.2740 0.0665 0.0716 0.0101 0.2075 9/30/2025 10/15/2025 0.4800 0.2740 0.0665 0.0716 0.0101 0.2075 $ 1.7808 $ 1.0166 $ 0.2467 $ 0.2656 $ 0.0374 $ 0.7699 The cash dividend of $0.48 per share of common stock (with a record date of December 31, 2024, that was paid on January 15, 2025) is a split-year dividend, of which $0.1392 was allocable to 2024 and the remaining $0.3408 is allocable to 2025 for federal income tax purposes.
Net cash used in financing activities of $2.4 billion for the year ended December 31, 2024 related primarily to repayments and deferred loan costs on our debt, net of borrowings, of $2.1 billion and dividend distributions of $620.0 million. Offsetting these cash outflows was net proceeds from issuances of common stock of $395.5 million.
Net cash provided by financing activities of $3.0 billion for the year ended December 31, 2025 related primarily to borrowings on our debt, net of repayments and deferred loan costs, of $3.1 billion and proceeds from issuances of common stock of $567.8 million. Offsetting these cash inflows was dividend distributions of $668.9 million.
(k) The maximum facility size as of December 31, 2024 of $410.0 million may be increased to $750.0 million, subject to certain conditions. (l) Certain facilities with an aggregate initial maximum facility size of $637.1 million may be increased to $737.1 million, subject to certain conditions. The $737.1 million amount includes such upsizes.
(j) The maximum facility size as of December 31, 2025 of $615.0 million may be increased to $1.3 billion, subject to certain conditions. The $1.3 billion amount includes such upsize. (k) Certain facilities with an aggregate initial maximum facility size of $878.1 million may be increased to $978.1 million, subject to certain conditions. The $978.1 million amount includes such upsizes.
The amount is calculated as net sales proceeds less undepreciated cost, adjusted for any noncontrolling interest. 76 Tab l e of Contents Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Commercial and Residential Lending Segment The Commercial and Residential Lending Segment’s Distributable Earnings decreased by $9.5 million, from $786.2 million during the year ended December 31, 2023 to $776.7 million during the year ended December 31, 2024.
The amount is calculated as net sales proceeds less undepreciated cost, adjusted for any noncontrolling interest and any realized gain or loss on extinguishment of debt. 77 Table of Contents Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Commercial and Residential Lending Segment The Commercial and Residential Lending Segment’s Distributable Earnings decreased by $88.9 million, from $776.7 million during the year ended December 31, 2024 to $687.8 million during the year ended December 31, 2025.
After making adjustments for the calculation of Distributable Earnings, revenues were $95.8 million, costs and expenses were $84.5 million, other income was $87.5 million and the deduction for income attributable to non-controlling interests in the Woodstar Fund was $11.2 million.
After making adjustments for the calculation of Distributable Earnings, revenues were $137.0 million, costs and expenses were $111.1 million, other income was $106.4 million, income tax provision was $1.8 million and the deduction for income attributable to non-controlling interests in the Woodstar Fund was $20.0 million.
The decrease was primarily due to non-controlling interests in lower income, reflecting lower unrealized gains in fair value, of the Woodstar Fund during the year ended December 31, 2023. 70 Tab l e of Contents Non-GAAP Financial Measures Distributable Earnings is a non-GAAP financial measure.
The decrease was primarily due to non-controlling interests in (i) lower income of the Woodstar Fund, reflecting lower unrealized increases in fair value, and (ii) losses of a consolidated CMBS joint venture during the year ended December 31, 2024. 71 Table of Contents Non-GAAP Financial Measures Distributable Earnings is a non-GAAP financial measure.
The following table presents our diluted weighted average shares used in our GAAP EPS calculation reconciled to our diluted weighted average shares used in our Distributable EPS calculation (amounts in thousands): For the Year Ended December 31, 2024 2023 2022 Diluted weighted average shares - GAAP EPS 320,569 310,507 315,728 Add: Unvested stock awards 3,873 3,708 3,485 Add: Woodstar II Class A Units 9,707 9,760 9,773 Less: Convertible Notes dilution — — (9,649) Diluted weighted average shares - Distributable EPS 334,149 323,975 319,337 As noted above, the definition of Distributable Earnings allows management to make adjustments, subject to the approval of a majority of our independent directors.
The following table presents our diluted weighted average shares used in our GAAP EPS calculation reconciled to our diluted weighted average shares used in our Distributable EPS calculation (amounts in thousands): For the Year Ended December 31, 2025 2024 2023 Diluted weighted average shares - GAAP EPS 349,991 320,569 310,507 Add: Unvested stock awards 5,134 3,873 3,708 Add: Woodstar II Class A Units 9,659 9,707 9,760 Diluted weighted average shares - Distributable EPS 364,784 334,149 323,975 As noted above, the definition of Distributable Earnings provides flexibility for management to make additional adjustments, subject to the approval of a majority of our independent directors, when appropriate in order for Distributable Earnings to be calculated in a manner consistent with its definition and objective.
In the normal course of business, we are in discussions with our lenders to extend, amend or replace any financing facilities which contain near term expirations.
In the normal course of business, we are in discussions with our lenders to extend, amend or replace any financing facilities which contain near term expirations. The ABS securitized financing of Fundamental’s properties is expected to be refinanced with similar ABS financing at or prior to its respective maturity.
It remains difficult to predict the full impact of recent events and any future changes in interest rates or inflation. In addition, following the onset of the COVID-19 pandemic, the U.S. office sector has been adversely affected by the increase in remote working arrangements and, over the past several years, the retail sector has been adversely affected by electronic commerce.
In addition, following the onset of the COVID-19 pandemic, the U.S. office sector has been adversely affected by the increase in remote working arrangements and, over the past several years, the retail sector has been adversely affected by electronic commerce and the multifamily sector has been strained by sustained higher interest rates.
Other cash inflows included sales and principal collections, net of originations and purchases of loans held-for-sale of $202.9 million, receipts from our interest rate derivatives of $73.7 million, servicing fees of $72.9 million, net rental income of $55.6 million and distributions from our affordable housing fund investments of $41.4 million.
Other cash inflows included distributions from our affordable housing fund investments of $393.0 million, sales and principal collections, net of originations and purchases of loans held-for-sale of $361.8 million, servicing fees of $106.3 million, net rental income of $119.5 million and receipts from our interest rate derivatives of $26.3 million.
(g) The facility with a current maturity of February 2025 was extended to February 2026 subsequent to December 31, 2024. (h) Certain facilities with an outstanding balance of $342.6 million as of December 31, 2024 carry a rolling 12-month term which may reset monthly or quarterly with the lender's consent.
(g) Certain facilities with an outstanding balance of $246.4 million as of December 31, 2025 carry a rolling 6 or 12-month term which may reset monthly or quarterly with the lender's consent. These facilities carry no maximum facility size.
The decrease was primarily due to non-controlling interests in (i) lower income of the Woodstar Fund, reflecting lower unrealized increases in fair value, and (ii) losses of a consolidated CMBS joint venture during the year ended December 31, 2024. 66 Tab l e of Contents Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Commercial and Residential Lending Segment Revenues For the year ended December 31, 2023, revenues of our Commercial and Residential Lending Segment increased $536.2 million to $1.7 billion, compared to $1.2 billion for the year ended December 31, 2022.
The increase was primarily due to non-controlling interests in lower unrealized losses of a consolidated CMBS joint venture, partially offset by noncontrolling interests in lower income of the Woodstar Fund, reflecting an unfavorable change in unrealized increase (decrease) in fair value of its investments. 67 Table of Contents Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Commercial and Residential Lending Segment Revenues For the year ended December 31, 2024, revenues of our Commercial and Residential Lending Segment decreased $137.6 million to $1.6 billion, compared to $1.7 billion for the year ended December 31, 2023.
Interest rate hedges had the effect of reducing these weighted average borrowing costs to 6.6% and 3.9% during the year ended December 31, 2023 and 2022, respectively. 67 Tab l e of Contents Other Loss For the year ended December 31, 2023, other loss of our Commercial and Residential Lending Segment decreased $114.3 million to $1.5 million, compared to $115.8 million for the year ended December 31, 2022.
Interest rate hedges had the effect of adjusting these weighted average borrowing costs to 5.9% and 6.5% during the year ended December 31, 2025 and 2024, respectively. 64 Table of Contents Other Income For the year ended December 31, 2025, other income of our Commercial and Residential Lending Segment decreased $16.6 million to $111.7 million, compared to $128.3 million for the year ended December 31, 2024.
Investing and Servicing Segment Revenues For the year ended December 31, 2023, revenues of our Investing and Servicing Segment decreased $30.5 million to $174.8 million, compared to $205.3 million for the year ended December 31, 2022.
Investing and Servicing Segment Revenues For the year ended December 31, 2025, revenues of our Investing and Servicing Segment increased $35.5 million to $244.3 million, compared to $208.8 million for the year ended December 31, 2024.
Property Segment Change in Results by Portfolio (amounts in thousands) $ Change from prior period Revenues Costs and expenses Gain (loss) on derivative financial instruments Other income (loss) Income (loss) before income taxes Master Lease Portfolio $ (24,594) $ (16,211) $ — $ 90,795 $ 82,412 Medical Office Portfolio 375 (1,675) (619) (1,046) 385 Woodstar Fund 66 (8) — (189,103) (189,029) Other/Corporate (37) 886 — (844) (1,767) Total $ (24,190) $ (17,008) $ (619) $ (100,198) $ (107,999) See Notes 7 and 8 to the Consolidated Financial Statements for a description of the above-referenced Property Segment portfolios and fund.
Property Segment Change in Results by Portfolio (amounts in thousands) $ Change from prior period Revenues Depreciation and amortization Other costs and expenses Gain (loss) on derivative financial instruments Other income (loss) Income (loss) before income taxes Master Lease Portfolio $ (24,594) $ (8,434) $ (7,777) $ — $ 90,795 $ 82,412 Medical Office Portfolio 375 9 (1,684) (619) (1,046) 385 Woodstar Fund 66 — (8) — (189,103) (189,029) Other/Corporate (37) — 886 — (844) (1,767) Total $ (24,190) $ (8,425) $ (8,583) $ (619) $ (100,198) $ (107,999) Revenues For the year ended December 31, 2024, revenues of our Property Segment decreased $24.2 million to $70.0 million, compared to $94.2 million for the year ended December 31, 2023, primarily due to the sale of our Master Lease Portfolio on February 29, 2024.
During the year ended December 31, 2023, we recognized $124.9 million of impairment losses on two foreclosed properties in the Commercial and Residential Lending Segment, as discussed in Note 7 to the Consolidated Financial Statements.
As of December 31, 2025, we had properties held-for-investment with a carrying value of $3.4 billion. During the year ended December 31, 2025, we recognized $26.8 million of impairment losses on four foreclosed properties in the Commercial and Residential Lending Segment, as discussed in Note 7 to the Consolidated Financial Statements.
Revenues increased by $40.9 million during the year ended December 31, 2024, primarily due to (i) a $27.7 million increase in servicing fees principally related to loan modifications and a $17.4 million increase in interest income from conduit loans and CMBS investments, partially offset by a $5.7 million decrease in rental income due to fewer operating properties held.
After making adjustments for the calculation of Distributable Earnings, revenues were $244.7 million, costs and expenses were $143.4 million, other income was $39.3 million, there was no income tax provision or benefit and the deduction of income attributable to non-controlling interests was $17.4 million. 81 Table of Contents Revenues increased by $40.9 million during the year ended December 31, 2024, primarily due to (i) a $27.7 million increase in servicing fees principally related to loan modifications and a $17.4 million increase in interest income from conduit loans and CMBS investments, partially offset by a $5.7 million decrease in rental income due to fewer operating properties held.
The unfavorable change in net gain (loss) on derivatives during the year ended December 31, 2023 reflects (i) a $182.7 million decreased gain on interest rate swaps principally related to residential loans, which partially offsets the favorable change in fair value of those loans, and (ii) a $181.5 million unfavorable change in gain (loss) on foreign currency hedges.
The unfavorable change in gain (loss) on derivatives during the year ended December 31, 2025 reflects (i) a $205.6 million unfavorable change in gain (loss) on foreign currency hedges and (ii) a $145.8 million unfavorable change in gain (loss) on interest rate swaps principally related to residential loans.
Infrastructure Lending Segment • Acquired $532.0 million of infrastructure loans and funded $25.8 million of pre-existing infrastructure loan commitments. • Received proceeds of $365.9 million from principal repayments on our infrastructure loans and bonds. • In October 2024, we refinanced a pool of our infrastructure loans held-for-investment through a CLO, Starwood 2024-SIF4.
Infrastructure Lending Segment • Committed $2.6 billion for new infrastructure loans and bonds, of which the Company funded $2.3 billion, and also funded $31.3 million of pre-existing infrastructure loan commitments. • Received proceeds of $2.0 billion from principal repayments on our infrastructure loans and bonds. • Refinanced a pool of our infrastructure loans held-for-investment in October 2025 through a CLO, Starwood 2025-SIF6.
Income taxes, which principally relate to the taxable nature of this segment’s loan servicing and loan securitization businesses which are housed in TRSs, decreased $4.3 million to no provision or benefit in the year ended December 31, 2023.
Income Tax Provision Our consolidated income taxes principally relate to the taxable nature of our loan servicing and loan securitization businesses which are housed in TRSs. For the year ended December 31, 2025, our income tax provision increased $11.3 million to $36.7 million, compared to $25.4 million for the year ended December 31, 2024.
For a discussion of our results of operations excluding the impact of ASC 810 as it relates to the consolidation of securitization VIEs, refer to the section captioned “Non-GAAP Financial Measures.” The following table compares our summarized results of operations for the years ended December 31, 2024, 2023 and 2022 by business segment (amounts in thousands): For the Year Ended December 31, $ Change 2024 vs. 2023 $ Change 2023 vs. 2022 2024 2023 2022 Revenues: Commercial and Residential Lending Segment $ 1,566,550 $ 1,704,210 $ 1,167,980 $ (137,660) $ 536,230 Infrastructure Lending Segment 260,993 239,985 154,362 21,008 85,623 Property Segment 69,982 94,172 91,832 (24,190) 2,340 Investing and Servicing Segment 208,759 174,804 205,311 33,955 (30,507) Corporate 2,514 1,622 69 892 1,553 Securitization VIE eliminations (161,955) (164,885) (154,838) 2,930 (10,047) 1,946,843 2,049,908 1,464,716 (103,065) 585,192 Costs and expenses: Commercial and Residential Lending Segment 1,123,862 1,271,867 611,637 (148,005) 660,230 Infrastructure Lending Segment 174,812 174,713 100,591 99 74,122 Property Segment 96,453 113,461 92,651 (17,008) 20,810 Investing and Servicing Segment 155,704 145,129 137,814 10,575 7,315 Corporate 432,075 393,994 330,833 38,081 63,161 Securitization VIE eliminations (834) (846) (575) 12 (271) 1,982,072 2,098,318 1,272,951 (116,246) 825,367 Other income (loss): Commercial and Residential Lending Segment 128,256 (1,511) (115,802) 129,767 114,291 Infrastructure Lending Segment 444 6,026 4,431 (5,582) 1,595 Property Segment 192,522 293,339 789,726 (100,817) (496,387) Investing and Servicing Segment 2,701 15,277 56,095 (12,576) (40,818) Corporate (43,806) (11,285) (82,987) (32,521) 71,702 Securitization VIE eliminations 161,121 164,039 154,310 (2,918) 9,729 441,238 465,885 805,773 (24,647) (339,888) Income (loss) before income taxes: Commercial and Residential Lending Segment 570,944 430,832 440,541 140,112 (9,709) Infrastructure Lending Segment 86,625 71,298 58,202 15,327 13,096 Property Segment 166,051 274,050 788,907 (107,999) (514,857) Investing and Servicing Segment 55,756 44,952 123,592 10,804 (78,640) Corporate (473,367) (403,657) (413,751) (69,710) 10,094 Securitization VIE eliminations — — 47 — (47) 406,009 417,475 997,538 (11,466) (580,063) Income tax (provision) benefit (25,432) 682 61,523 (26,114) (60,841) Net income attributable to non-controlling interests (20,644) (78,944) (187,586) 58,300 108,642 Net income attributable to Starwood Property Trust, Inc. $ 359,933 $ 339,213 $ 871,475 $ 20,720 $ (532,262) 62 Tab l e of Contents Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Commercial and Residential Lending Segment Revenues For the year ended December 31, 2024, revenues of our Commercial and Residential Lending Segment decreased $137.6 million to $1.6 billion, compared to $1.7 billion for the year ended December 31, 2023.
For a discussion of our results of operations excluding the impact of ASC 810 as it relates to the consolidation of securitization VIEs, refer to the section captioned “Non-GAAP Financial Measures.” The following table compares our summarized results of operations for the years ended December 31, 2025, 2024 and 2023 by business segment (amounts in thousands): For the Year Ended December 31, $ Change 2025 vs. 2024 $ Change 2024 vs. 2023 2025 2024 2023 Revenues: Commercial and Residential Lending Segment $ 1,347,738 $ 1,566,550 $ 1,704,210 $ (218,812) $ (137,660) Infrastructure Lending Segment 276,786 260,993 239,985 15,793 21,008 Property Segment 137,016 69,982 94,172 67,034 (24,190) Investing and Servicing Segment 244,313 208,759 174,804 35,554 33,955 Corporate 1,768 2,514 1,622 (746) 892 Securitization VIE eliminations (163,332) (161,955) (164,885) (1,377) 2,930 1,844,289 1,946,843 2,049,908 (102,554) (103,065) Costs and expenses: Commercial and Residential Lending Segment 791,809 1,123,862 1,271,867 (332,053) (148,005) Infrastructure Lending Segment 183,853 174,812 174,713 9,041 99 Property Segment 174,366 96,453 113,461 77,913 (17,008) Investing and Servicing Segment 142,934 155,704 145,129 (12,770) 10,575 Corporate 494,410 432,075 393,994 62,335 38,081 Securitization VIE eliminations (810) (834) (846) 24 12 1,786,562 1,982,072 2,098,318 (195,510) (116,246) Other income (loss): Commercial and Residential Lending Segment 111,744 128,256 (1,511) (16,512) 129,767 Infrastructure Lending Segment 1,618 444 6,026 1,174 (5,582) Property Segment 39,732 192,522 293,339 (152,790) (100,817) Investing and Servicing Segment 73,180 2,701 15,277 70,479 (12,576) Corporate 33,289 (43,806) (11,285) 77,095 (32,521) Securitization VIE eliminations 162,522 161,121 164,039 1,401 (2,918) 422,085 441,238 465,885 (19,153) (24,647) Income (loss) before income taxes: Commercial and Residential Lending Segment 667,673 570,944 430,832 96,729 140,112 Infrastructure Lending Segment 94,551 86,625 71,298 7,926 15,327 Property Segment 2,382 166,051 274,050 (163,669) (107,999) Investing and Servicing Segment 174,559 55,756 44,952 118,803 10,804 Corporate (459,353) (473,367) (403,657) 14,014 (69,710) 479,812 406,009 417,475 73,803 (11,466) Income tax (provision) benefit (36,719) (25,432) 682 (11,287) (26,114) Net income attributable to non-controlling interests (31,549) (20,644) (78,944) (10,905) 58,300 Net income attributable to Starwood Property Trust, Inc. $ 411,544 $ 359,933 $ 339,213 $ 51,611 $ 20,720 63 Table of Contents Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Commercial and Residential Lending Segment Revenues For the year ended December 31, 2025, revenues of our Commercial and Residential Lending Segment decreased $218.8 million to $1.4 billion, compared to $1.6 billion for the year ended December 31, 2024.
Corporate Corporate loss increased by $47.1 million, from $367.1 million during the year ended December 31, 2023 to $414.2 million during the year ended December 31, 2024, primarily due to (i) a $35.7 million increase in interest expense reflecting higher average unsecured borrowings outstanding and (ii) a $10.6 million increase in realized losses on fixed-to-floating interest rate swaps which hedge a portion of our unsecured senior notes.
Corporate Corporate loss increased by $62.0 million, from $414.2 million during the year ended December 31, 2024 to $476.2 million during the year ended December 31, 2025, primarily due to (i) a $67.5 million increase in interest expense reflecting higher average balances of unsecured senior notes and secured term loans outstanding, partially offset by lower spreads and index rates on the secured term loans, and (ii) a $7.4 million increase in base management fees, partially offset by (iii) a $15.3 million lower realized loss on fixed-to-floating interest rate swaps which hedge a portion of our unsecured senior notes.
Based on our qualitative assessment during the fourth quarter of 2024, we believe that the Investing and Servicing Segment reporting unit to which the LNR acquisition goodwill was attributed is not currently at risk of failing a quantitative assessment.
Based on our quantitative assessment during the fourth quarter of 2025, we determined that the fair value of the Investing and Servicing Segment reporting unit to which the LNR acquisition goodwill was attributed exceeded its carrying value including goodwill.
Elevated interest rates over time may adversely affect our existing borrowers and lead to nonperformance as higher costs may dampen consumer spending and slow income growth, which may negatively impact the collateral underlying certain of our loans. Additionally, elevated interest rates could adversely affect the value of commercial real estate we own and that collateralizes our loans.
Elevated interest rates and tariffs over time may adversely affect our borrowers and our tenants. Higher costs may dampen consumer spending and slow income growth, which may negatively impact the collateral underlying certain of our loans and certain of our commercial assets subject to net lease whose customer base could be adversely impacted.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+6 added−3 removed19 unchanged
Biggest changeWhile the fair value of the forward starting swap will impact earnings, it will not impact net investment income until its effective date. 91 Tab l e of Contents The following table presents financial instruments where we have utilized interest rate derivatives to hedge interest rate risk and the related interest rate derivatives as of December 31, 2024 and 2023 (dollars in thousands); however, consistent with Note 14 to the Consolidated Financial Statements, the notional value and number of credit instruments excludes the residential lending reverse swap trades and forward starting swaps as well as certain other interest rate swaps that were not effective as of December 31, 2024: Face Value of Hedged Instruments Aggregate Notional Value of Credit Instruments Number of Credit Instruments Instrument hedged as of December 31, 2024 Loans held-for-sale $ 2,820,654 $ 3,573,200 47 RMBS, available-for-sale 180,654 40,000 1 CMBS, fair value option 76,641 38,380 1 HTM debt securities 7,955 7,358 1 Secured financing agreements 507,895 531,746 4 Unsecured senior notes 2,250,000 2,235,000 5 $ 5,843,799 $ 6,425,684 59 Instrument hedged as of December 31, 2023 Loans held-for-sale $ 2,954,526 $ 3,646,500 43 RMBS, available-for-sale 191,916 85,000 2 CMBS, fair value option 67,433 58,800 2 HTM debt securities 9,629 9,629 1 Secured financing agreements 716,786 1,358,775 8 Unsecured senior notes 1,000,000 970,000 2 $ 4,940,290 $ 6,128,704 58 The table below summarizes the estimated annual change in net investment income for our variable rate investments and our variable rate debt assuming increases or decreases in SOFR or other applicable index rates and adjusted for the effects of our interest rate hedging activities (amounts in thousands).
Biggest changeThe following table presents financial instruments where we have utilized interest rate derivatives to hedge interest rate risk and the related interest rate derivatives as of December 31, 2025 and 2024 (dollars in thousands); however, consistent with Note 14 to the Consolidated Financial Statements, the notional value and number of interest rate derivatives excludes the residential lending reverse swap trades and forward starting swaps as well as certain other interest rate swaps that were not effective as of December 31, 2025: Face Value of Hedged Instruments Aggregate Notional Value of Credit Instruments Number of Credit Instruments Instrument hedged as of December 31, 2025 Loans held-for-sale $ 2,502,852 $ 2,238,400 28 RMBS, available-for-sale 172,554 40,000 1 CMBS, fair value option 102,587 57,380 2 HTM debt securities 22,302 16,898 3 Net lease properties 229,246 229,200 2 Secured financing agreements 490,000 490,000 2 Unsecured senior notes 3,275,000 3,275,000 7 $ 6,794,541 $ 6,346,878 45 Instrument hedged as of December 31, 2024 Loans held-for-sale $ 2,820,654 $ 3,573,200 47 RMBS, available-for-sale 180,654 40,000 1 CMBS, fair value option 76,641 38,380 1 HTM debt securities 7,955 7,358 1 Secured financing agreements 507,895 531,746 4 Unsecured senior notes 2,250,000 2,235,000 5 $ 5,843,799 $ 6,425,684 59 The table below summarizes the estimated annual change in net investment income for our variable rate investments and our variable rate debt assuming increases or decreases in SOFR or other applicable index rates and adjusted for the effects of our interest rate hedging activities (amounts in thousands).
However, this table excludes: (i) our floating rate residential loan debt along with its related hedges (see Note 14); (ii) certain other interest rate swaps that were not effective as of December 31, 2024 (see Note 14); and (iii) nonaccrual loans (see Note 5).
However, this table excludes: (i) our floating rate residential loan debt along with its related hedges (see Note 14); (ii) certain other interest rate swaps that were not effective as of December 31, 2025 (see Note 14); and (iii) nonaccrual loans (see Note 5).
We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing and terms of capital we raise. Interest Rate Risk Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control.
We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing and terms of capital we raise. 92 Table of Contents Interest Rate Risk Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control.
Our financial statements are prepared in accordance with GAAP, and our distributions are determined by our board of directors consistent with our obligation to distribute to our stockholders at least 90% of our REIT taxable income on an annual basis in order to maintain our REIT qualification; in each case, our activities and balance sheet are measured with reference to historical cost and/or fair value without considering inflation. 94 Tab l e of Contents
Our financial statements are prepared in accordance with GAAP, and our distributions are determined by our board of directors consistent with our obligation to distribute to our stockholders at least 90% of our REIT taxable income on an annual basis in order to maintain our REIT qualification; in each case, our activities and balance sheet are measured with reference to historical cost and/or fair value without considering inflation. 95 Table of Contents
(3,631) ______________________________________________________________________________________________________________________ (1) Primarily relates to expected net interest cash flows on the respective assets and liabilities over their term. Substantially all of our net asset exposure to the GBP, EUR, AUD and CHF has been hedged with foreign currency forward contracts as of December 31, 2024, as indicated in the table above.
(1,945) kr — ______________________________________________________________________________________________________________________ (1) Primarily relates to expected net interest cash flows on the respective assets and liabilities over their term. Substantially all of our net asset exposure to the GBP, EUR, AUD, CHF and SEK has been hedged with foreign currency forward contracts as of December 31, 2025, as indicated in the table above.
This could 92 Tab l e of Contents have a negative impact on our results of operations. In some situations, we may be forced to sell assets to maintain adequate liquidity, which could cause us to incur losses. Fair Value Risk The estimated fair value of our investments fluctuates primarily due to changes in interest rates and other factors.
In some situations, we may be forced to sell assets to maintain adequate liquidity, which could cause us to incur losses. Fair Value Risk The estimated fair value of our investments fluctuates primarily due to changes in interest rates and other factors.
Refer to Note 14 to the Consolidated Financial Statements for further detail regarding our foreign currency derivatives and their contractual maturities. 93 Tab l e of Contents Real Estate Risk The market values of commercial and residential mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns, public health emergencies and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes.
Real Estate Risk The market values of commercial and residential mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns, public health emergencies and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes.
In general, an increase in prepayment rates accelerates the amortization of purchase premiums, thereby reducing the interest income earned on the assets. Conversely, discounts on such assets are accreted into interest income. In general, an increase in prepayment rates accelerates the accretion of purchase discounts, thereby increasing the interest income earned on the assets.
As we receive prepayments of principal on our assets, any premiums paid on such assets are amortized against interest income. In general, an increase in prepayment rates accelerates the amortization of purchase premiums, thereby reducing the interest income earned on the assets. Conversely, discounts on such assets are accreted into interest income.
Extension Risk We compute the projected weighted-average life of our assets based on assumptions regarding the rate at which the borrowers will prepay the loans or extend. If prepayment rates decrease in a rising interest rate environment or extension options are exercised, the life of the fixed-rate assets could extend beyond the term of the secured debt agreements.
If prepayment rates decrease in a rising interest rate environment or extension options are exercised, the life of the fixed-rate assets could extend beyond the term of the secured debt agreements. This could have a negative impact on our results of operations.
The following table represents our assets and liabilities that are denominated in Pounds Sterling (“GBP”), Euros (“EUR”), Australian dollars (“AUD”) and Swiss Francs (“CHF”), as well as our expected future net interest receipts (amounts in thousands): December 31, 2024 GBP EUR AUD CHF Foreign currency assets £ 1,504,911 € 748,130 A$ 1,645,315 Fr. 65,995 Foreign currency liabilities (1,089,633) (481,566) (1,148,993) (48,856) Foreign currency contracts - notional, net (490,124) (293,927) (654,648) (19,084) Subtotal (1) £ (74,845) € (27,363) A$ (158,325) Fr.
(459) kr (82,270) 94 Table of Contents December 31, 2024 GBP EUR AUD CHF SEK Foreign currency assets £ 1,504,911 € 748,130 A$ 1,645,315 Fr. 65,995 kr — Foreign currency liabilities (1,089,633) (481,566) (1,148,993) (48,856) — Foreign currency contracts - notional, net (490,124) (293,927) (654,648) (19,084) — Subtotal (1) £ (74,846) € (27,363) A$ (158,326) Fr.
The following table presents our credit instruments as of December 31, 2024 and December 31, 2023 (dollars in thousands): Face Value of Loans Held-for-Sale Aggregate Notional Value of Credit Instruments Number of Credit Instruments December 31, 2024 $ 125,695 $ 64,000 4 December 31, 2023 $ 45,400 $ 49,000 3 Capital Market Risk We are exposed to risks related to the equity capital markets and our related ability to raise capital through the issuance of our common stock or other equity instruments.
Capital Market Risk We are exposed to risks related to the equity capital markets and our related ability to raise capital through the issuance of our common stock or other equity instruments.
Removed
Income (Expense) Subject to Interest Rate Sensitivity Variable rate investments and indebtedness (1) 1.00% Decrease 0.50% Decrease 0.25% Increase Investment income from variable rate investments $ 15,170,417 $ (138,754) $ (71,050) $ 36,214 Interest expense from variable rate debt, net of interest rate derivatives (13,422,389) 137,144 68,687 (34,357) Net investment income from variable rate instruments $ 1,748,028 $ (1,610) $ (2,363) $ 1,857 ______________________________________________________________________________________________________________________ (1) Includes the notional value of interest rate derivatives.
Added
The following table presents our credit instruments as of December 31, 2025 and December 31, 2024 (dollars in thousands): Face Value of Loans Held-for-Sale Aggregate Notional Value of Credit Instruments Number of Credit Instruments December 31, 2025 $ 47,300 $ 70,000 1 December 31, 2024 $ 125,695 $ 64,000 4 During the year ended December 31, 2025, we also entered into a credit default swap with a notional amount of $20.0 million to hedge a portion of credit risk on a large commercial loan held-for-investment.
Removed
Prepayment Risk Prepayment risk is the risk that principal will be repaid earlier than anticipated, causing the return on certain investments to be less than expected. As we receive prepayments of principal on our assets, any premiums paid on such assets are amortized against interest income.
Added
While the fair value of the forward starting swap will impact earnings, it will not impact net investment income until its effective date.
Removed
(1,944) December 31, 2023 GBP EUR AUD CHF Foreign currency assets £ 1,684,671 € 1,105,375 A$ 1,927,795 Fr. 64,266 Foreign currency liabilities (1,166,900) (364,198) (1,350,903) (47,474) Foreign currency contracts - notional, net (538,939) (815,083) (882,675) (20,423) Subtotal (1) £ (21,168) € (73,906) A$ (305,783) Fr.
Added
Income (Expense) Subject to Interest Rate Sensitivity Variable rate investments and indebtedness (1) 0.50% Decrease 0.25% Decrease 0.25% Increase Investment income from variable rate investments $ 18,343,043 $ (82,566) $ (42,361) $ 44,204 Interest expense from variable rate debt, net of interest rate derivatives (16,761,829) 86,058 43,029 (43,098) Net investment income from variable rate instruments $ 1,581,214 $ 3,492 $ 668 $ 1,106 ______________________________________________________________________________________________________________________ (1) Includes the notional value of interest rate derivatives. 93 Table of Contents Prepayment Risk Prepayment risk is the risk that principal will be repaid earlier than anticipated, causing the return on certain investments to be less than expected.
Added
In general, an increase in prepayment rates accelerates the accretion of purchase discounts, thereby increasing the interest income earned on the assets. Extension Risk We compute the projected weighted-average life of our assets based on assumptions regarding the rate at which the borrowers will prepay the loans or extend.
Added
The following table represents our assets and liabilities that are denominated in Pounds Sterling (“GBP”), Euros (“EUR”), Australian dollars (“AUD”), Swiss Francs (“CHF”) and Swedish Kronas (“SEK”) as well as our expected future net interest receipts (amounts in thousands): December 31, 2025 GBP EUR AUD CHF SEK Foreign currency assets £ 1,192,231 € 1,365,608 A$ 1,651,036 Fr. 43,301 kr 1,261,669 Foreign currency liabilities (831,947) (995,093) (1,144,147) (32,018) (983,330) Foreign currency contracts - notional, net (427,663) (403,709) (719,628) (11,742) (360,609) Subtotal (1) £ (67,379) € (33,194) A$ (212,739) Fr.
Added
Refer to Note 14 to the Consolidated Financial Statements for further detail regarding our foreign currency derivatives and their contractual maturities.

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