Starwood Property Trust posts Q3 GAAP loss but maintains dividend and logs positive distributable earnings

Starwood Property Trust reported a steep third-quarter GAAP loss as it set aside money for potential credit problems and recorded property write-downs, but the large mortgage real estate investment trust still generated positive distributable earnings and kept its dividend unchanged.

In an 8-K filed Friday with the Securities and Exchange Commission, Starwood said it posted a net loss of $389.7 million for the quarter ended Sept. 30. The loss included a $336.6 million credit loss provision and $32.2 million of non-cash property impairments. At the same time, distributable earnings — a non-GAAP measure mortgage REITs often use to gauge cash available for dividends — were $116.8 million, or $0.31 per weighted average diluted share. Distributable earnings before realized commercial lending gains and losses were $155.2 million, or $0.41 per diluted share. The company declared a quarterly dividend of $0.48 per common share.

The company also pointed to continued business activity during the quarter. Starwood said it invested $3.2 billion in the period and $8.2 billion in the first nine months of 2026. That included $2.4 billion of commercial lending in the quarter, which it described as its largest quarterly commercial lending volume in four years. Its commercial lending portfolio grew to a record $17.8 billion. Starwood also said it repurchased $108 million of common shares during the quarter, which it called a record quarterly buyback.

Starwood Property Trust is a publicly traded mortgage REIT and diversified real estate finance company affiliated with Starwood Capital Group. For companies in the sector, GAAP net income can swing sharply because of credit provisions, valuation changes and other accounting items. Investors therefore often look alongside those figures at distributable earnings, a company-defined metric commonly used to assess dividend-paying capacity.

The quarter’s results reflected pressure from a higher-rate environment, which the company said has weighed on borrowers and real-estate-related assets. Barry Sternlicht, Starwood’s chairman and CEO, said, “Although our borrowers are feeling the pain of higher interest costs, our balance sheet and liquidity remain very strong.” Jeffrey DiModica, the company’s president, added, “We completed approximately $2.1 billion of financing transactions at rates and spreads below those available today.”

As of Sept. 30, Starwood said it had deployed $123 billion of capital since inception and managed a $32 billion portfolio spanning debt and equity investments.