Starwood Property Trust (STWD) could be a solid choice for investors given its recent upgrade to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change. The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate. Since a cha ...

spawns/E+ via Getty Images Introduction I've been thinking a lot about retirement lately. Don't get me wrong. I'm not going anywhere. As I have written in prior articles, I don't yet have the capital to retire in most developed nations - at least not comfortably and without the need to take significant financial risks. And even if I did, I wouldn't stop covering macroeconomics, dividend strategies, and other topics we frequently discuss. What I have been doing is thinking about different ways to improve the ...

i 19 i I ul ryasick Starwood Property (NYSE:STWD) delivered a decent, but not great, earnings report for the second fiscal quarter on Tuesday. While the REIT supported its dividend with distributable earnings, weaker performance in the commercial and residential segment led to a deterioration in distribution coverage. Starwood Property's distribution coverage ratio dropped to 100% in the second-quarter, meaning the REIT's safety margin completely disappeared and the REIT is potentially going to have to rese ...

Financial Data and Key Metrics - Distributable earnings (DE) for the quarter were $158 million, or $0.48 per share, while GAAP net income was $78 million, or $0.24 per share [5] - The company committed to $925 million in new investments during the quarter, with 62% of investments made in businesses other than commercial lending [5] - The loan book ended the quarter at $14.7 billion, with a weighted average risk rating of 3.0, up from 2.9 last quarter [6] - The CECL reserve increased by $33 million to $380 million, with 70% related to office loans [8] - The company's adjusted debt to undepreciated equity ratio decreased to 2.29x, the lowest level in over two years [13] Business Line Performance - Commercial and residential lending contributed $189 million in DE, or $0.58 per share, with $353 million in new loan originations [6] - Residential lending saw a $2.5 billion on-balance sheet loan portfolio, with $62 million in par repayments and a $34 million net positive mark-to-market [9] - The Property segment contributed $14 million in DE, primarily from the Florida Affordable Housing Fund, with rent increases implemented in June [10] - Investing and servicing contributed $37 million in DE, with $363 million in securitizations completed or priced at above-historic profit margins [10] - Infrastructure lending contributed $24 million in DE, with $237 million in new loan commitments and $313 million in repayments and sales [12] Market Performance - The company's active servicing portfolio increased by over 30% to $9.4 billion, the highest level since COVID, driven by $2.5 billion in transfers into servicing [11] - The named servicing portfolio increased to $98 billion, driven by $5.1 billion in new assignments [11] - The energy infrastructure lending business continues to perform well, with mid-teens levered returns on loans made since 2018 [22] Strategic Direction and Industry Competition - The company is diversifying its business model, with 57% of assets now in commercial lending and significant investments in other sectors [5] - The company is focusing on converting underperforming office assets into multifamily properties, with one such conversion expected to recover more than the basis [7] - The company is leveraging its expertise in multifamily properties to stabilize and potentially sell underperforming assets [19] - The company is well-positioned to benefit from a potential decline in interest rates, with 40% of assets in non-CRE lending businesses [34] Management Commentary on Operating Environment and Future Outlook - Management highlighted the positive impact of a potential decline in interest rates on CRE credit, particularly for multifamily and hospitality sectors [16] - The company expects to see increased borrower support for assets as rates decline, particularly in the multifamily and hospitality sectors [16] - Management remains optimistic about the company's ability to navigate the current cycle, with significant embedded gains in its property portfolio [23] - The company is well-positioned to capitalize on lending opportunities as banks remain reluctant to lend, particularly in the CRE space [38] Other Important Information - The company repriced its 2027 $591 million term loan B facility, reducing the spread by 50 basis points to SOFR plus 2.75% [12] - The company's credit ratings were affirmed by all three major rating agencies, recognizing its diversity, leverage profile, and liquidity position [13] - The company was awarded the 2024 Nareit Gold Investor CARE Award for communications and reporting excellence [14] Q&A Session Summary Question: Rick Shane (JPMorgan) - Credit and Borrower Sentiment - Rick Shane asked about the shift in borrower sentiment given the recent changes in forward rate expectations [45] - Barry Sternlicht noted that it is too early to tell, but the recent rate movements could help borrowers stay afloat until 2025 [45] - Jeff DiModica added that the company's CECL reserve has increased to $380 million, reflecting cautious optimism about future rate changes [48] Question: Stephen Laws (Raymond James) - Originations and Investment Opportunities - Stephen Laws inquired about the pace of originations and where the company sees the best returns [55] - Jeff DiModica highlighted strong returns in the energy infrastructure business and a growing pipeline in CRE lending [55] - Barry Sternlicht mentioned that the company has over $1 billion in actionable CRE loans and is balancing its needs to fix assets with new investments [58] Question: Don Fandetti (Wells Fargo) - Capital Inflow Post-Fed Rate Cuts - Don Fandetti asked about the potential inflow of capital into CRE once the Fed cuts rates [68] - Barry Sternlicht discussed the complexity of the equity side of real estate and the potential for increased investment from international and high-net-worth individuals [68] Question: Jade Rahmani (KBW) - Starwood Solutions and CMBS Market Growth - Jade Rahmani asked for an update on Starwood Solutions and the potential growth of the CMBS market [75] - Jeff DiModica noted that Starwood Solutions is still in its early stages but has potential for growth, particularly with government clients [75] - Barry Sternlicht and Jeff DiModica discussed the growth potential in the CMBS market, particularly for 5-year loans, and the company's position in the market [76][79] Closing Remarks - Barry Sternlicht expressed optimism about the company's future and thanked shareholders, the Board, and the team for their support during challenging times [84]

Q2 2024 SUPPLEMENTAL REPORTING INFORMATION Table of Contents | --- | --- | --- | |--------------------------------------------|---------------|-------| | Press Release \nHighlights | Page \nPage | 1 \n9 | | Commercial and Residential Lending Segment | Page | 12 | | Infrastructure Lending Segment | Page | 20 | | Property Segment | Page | 21 | | Investing and Servicing Segment | Page | 24 | | Capitalization | Page | 26 | | Appendix | Page | 32 | Cover photo: Thoresby Hall, Nottinghamshire, UK (i) PRESS RELEAS ...

Starwood Property Trust (STWD) came out with quarterly earnings of $0.48 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.49 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this commercial real estate investment trust would post earnings of $0.46 per share when it actually produced earnings of $0.59, delivering a surprise of 28.26%. Over the last four quarters, the company has surpassed consensus EPS estimates ...

– Quarterly GAAP Earnings of $0.24 and Distributable Earnings (DE) of $0.48 per Diluted Share – – Paid Dividend of $0.48 per Share and Declared $0.48 Dividend for each of the next Two Quarters – – Received Repayments of $0.9 Billion in the Quarter – – Repriced our $591.0 Million Term Loan B, Reducing Spread by 50 bps to S+275 – – Received 8th Nareit Gold Investor CARE (Communications & Reporting Excellence) Award – – LNR's Commercial Special Servicer Rating of CSS1 (Highest Rating Possible) Reaffirmed by Fi ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, $0.01 par value per share STWD New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-34436 _ ...

"We created a differentiated multi-cylinder company and have maintained a low leverage balance sheet in order to enable us to outperform in times of volatility. We expect to maintain our dividend for the foreseeable future assuming macro and market conditions don't materially change. As a result, our Board has declared our third and fourth quarter dividends of $0.48 per quarter, in-line with our current dividend. Beyond our current earnings power, we have the ability to monetize the over $4.00 per share of ...

Webcast Conference Call Playback: Domestic: 1-844-512-2921 International: 1-412-317-6671 Passcode: 13742860 The playback can be accessed through August 20, 2024. About Starwood Property Trust, Inc. Zachary Tanenbaum Starwood Property Trust Phone: 203-422-7788 Email: [email protected] During the conference call, the Company's officers will review second quarter performance, discuss recent events and conduct a question-and-answer period. To Participate in the Telephone Conference Call: Dial in at least five m ...