STARWOOD PROPERTY TRUST, INC.
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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. Actual results could differ significantly from the results discussed in the forward‑looking statements due to the factors set forth in “Risk Factors” and elsewhere in this Form 10‑K. References in this Form 10‑K to “we,” “our,” “us,” or the “Company” refer to Starwood Property Trust, Inc. and its subsidiaries.
General
Starwood Property Trust, Inc. (“STWD” and, together with its subsidiaries, “we” or the “Company”) is a Maryland corporation that commenced operations in August 2009, upon the completion of our initial public offering (“IPO”). We are focused primarily on originating, acquiring, financing and managing mortgage loans and other real estate investments in the United States (“U.S.”), Europe and Australia. As market conditions change over time, we may adjust our strategy to take advantage of changes in interest rates and credit spreads as well as economic and credit conditions.
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). Our residential loans are secured by a first mortgage lien on residential property and primarily consist of non-agency residential loans that are not guaranteed by any U.S. 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. 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 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”).
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. 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.
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 such, we will generally not be subject to U.S. federal corporate income tax on that portion of our net income that is distributed to stockholders if we distribute at least 90% of our taxable income to our stockholders by prescribed dates and comply with various other requirements. 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”).
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We are organized as a holding company and conduct our business primarily through our various wholly-owned subsidiaries. We are externally managed and advised by SPT Management, LLC (our “Manager”) pursuant to the terms of a management agreement. Our Manager is controlled by Barry Sternlicht, our Chairman and Chief Executive Officer. Our Manager is an affiliate of Starwood Capital Group Global, L.P. (“Starwood Capital Group”), a privately-held private equity firm founded by Mr. Sternlicht.
Our corporate headquarters office is located at 2340 Collins Avenue, Suite 700, Miami Beach, Florida 33139, and our telephone number is (305) 695-5500.
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. 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
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•utilizing the skills and expertise we acquired through our 2025 acquisition of Fundamental to expand our investments in triple net lease properties.
In order to capitalize on the changing sets of investment opportunities that may be present in the various points of an economic cycle, we may expand or refocus our investment strategy by emphasizing investments in different parts of the capital structure and different sectors of real estate. 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.
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; 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.
These investment guidelines may be changed from time to time by our board of directors without the approval of our stockholders. In addition, both our Manager and our board of directors must approve any change in our investment guidelines that would modify or expand the types of assets in which we invest.
Investment Process
Our investment process includes sourcing and screening of investment opportunities, assessing investment suitability, conducting interest rate and prepayment analysis, evaluating cash flow and collateral performance, and reviewing legal structure and servicer and originator information and investment structuring, as appropriate, to seek an attractive return commensurate with the risk we are bearing. Upon identification of an investment opportunity, the investment will be screened and monitored by us to determine its impact on maintaining our REIT qualification and our exemption from registration under the 1940 Act. We will seek to make investments in sectors where we have strong core competencies and believe market risk and expected performance can be reasonably quantified.
We evaluate each one of our investment opportunities based on its expected risk-adjusted return relative to the returns available from other, comparable investments. In addition, we evaluate new opportunities based on their relative expected returns compared to comparable positions held in our portfolio. The terms of any leverage available to us for use in funding an investment purchase are also taken into consideration, as are any risks posed by illiquidity or correlations with other securities in the portfolio. We also develop a macro outlook with respect to each target asset class by examining factors in the broader economy such as gross domestic product, interest rates, unemployment rates and availability of credit, among other things. We also analyze fundamental trends in the relevant target asset class sector to adjust/maintain our outlook for that particular target asset class.
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.
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We may also utilize other sources of financing to the extent available to us.
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. 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. Our target assets include the following types of loans and other investments:
•Whole mortgage loans: loans secured by a first mortgage lien on a commercial property that provide mortgage financing to commercial property developers or owners generally having maturity dates ranging from three to ten years;
•B-Notes: typically a privately negotiated loan that is secured by a first mortgage on a single large commercial property or group of related properties and subordinated to an A-Note secured by the same first mortgage on the same property or group;
•Mezzanine loans:
Next expected filings
- ~2027-02-25 10-K expected by 2027-03-01 (in 111 days)
- ~2027-05-09 10-Q expected by 2027-05-12 (in 184 days)
- ~2027-08-07 10-Q expected by 2027-08-10 (in 274 days)
- ~2027-11-07 10-Q expected by 2027-11-10 (in 366 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-11-06 8-K Earnings Release
- 2026-11-06 10-Q Quarterly Report
- 2026-08-13 8-K Officer/Director Change
- 2026-08-06 8-K Earnings Release
- 2026-08-06 10-Q Quarterly Report
- 2026-07-10 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2026-06-26 8-K Other Events; Financial Statements and Exhibits
- 2026-06-25 8-K Other Events; Financial Statements and Exhibits
- 2026-05-26 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2026-05-12 8-K Other Events; Financial Statements and Exhibits
- 2026-05-11 8-K Other Events; Financial Statements and Exhibits
- 2026-05-08 10-Q Quarterly Report
- 2026-05-08 8-K Earnings Release
- 2026-02-25 10-K Annual Report
- 2026-02-25 8-K Earnings Release