0001628280-24-021355.txt : 20240508 0001628280-24-021355.hdr.sgml : 20240508 20240508065617 ACCESSION NUMBER: 0001628280-24-021355 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 20240508 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20240508 DATE AS OF CHANGE: 20240508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STARWOOD PROPERTY TRUST, INC. CENTRAL INDEX KEY: 0001465128 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] ORGANIZATION NAME: 05 Real Estate & Construction IRS NUMBER: 270247747 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34436 FILM NUMBER: 24924156 BUSINESS ADDRESS: STREET 1: C/O STARWOOD CAPITAL GROUP STREET 2: 591 WEST PUTNAM AVENUE CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: (203) 422-7700 MAIL ADDRESS: STREET 1: C/O STARWOOD CAPITAL GROUP STREET 2: 591 WEST PUTNAM AVENUE CITY: GREENWICH STATE: CT ZIP: 06830 8-K 1 stwd-20240508.htm 8-K stwd-20240508
0001465128FALSE00014651282024-05-082024-05-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 8, 2024

Starwood Property Trust, Inc.
(Exact name of registrant as specified in its charter)

Maryland001-3443627-0247747
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)

591 West Putnam Avenue
Greenwich, CT
 06830
(Address of principal (Zip Code)
executive offices)  
Registrant’s telephone number,
including area code:
(203) 422-7700

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.01 par value per shareSTWDNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02. Results of Operations and Financial Condition.

On May 8, 2024, Starwood Property Trust, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2024. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.
 
Item 9.01. Financial Statements and Exhibits.

(d)    Exhibits

Exhibit
Number

Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



2



EXHIBIT INDEX

Exhibit
Number
Description
99.1



3



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: May 8, 2024
STARWOOD PROPERTY TRUST, INC.
 By:
/s/ RINA PANIRY
 Name:Rina Paniry
 Title:Chief Financial Officer, Treasurer, Chief Accounting Officer and Principal Financial Officer

4

EX-99.1 2 stwd_pressrelease-q12024.htm EX-99.1 Document
image_0a.jpg
Exhibit 99.1
For Immediate Release
Starwood Property Trust Reports Results for
Quarter Ended March 31, 2024
– Quarterly GAAP Earnings of $0.48 and Distributable Earnings (DE) of $0.59 per Diluted Share –
– Issued $600 Million of Senior Unsecured Sustainability Notes due 2029 –
– Sold Master Lease Portfolio for $387 Million –
– Over $1.0 Billion in Loan Repayments –
– Liquidity Increased to a Record $1.5 Billion –
– Undepreciated Book Value Per Share of $20.69 –
– Paid Dividend of $0.48 per Share –
GREENWICH, Conn., May 8, 2024 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) today announced operating results for the fiscal quarter ended March 31, 2024. The Company’s first quarter 2024 GAAP net income was $154.3 million, and Distributable Earnings (a non-GAAP financial measure) was $191.6 million. These amounts include net gains of $90.8 million and $37.4 million, respectively, on the sale of our Master Lease Portfolio.

“We continue to navigate this dynamic market landscape with our low leverage multi-cylinder business. This quarter, we monetized our Master Lease Portfolio, highlighting the success we have had in creating value from our owned property assets. Along with our infrastructure lending, residential lending, special servicing, CMBS and conduit businesses, the properties have been a strong complement to our core commercial lending business. We will continue to pursue opportunities to deploy capital into the best risk-adjusted investments across all of our business lines as opportunities arise,” commented Barry Sternlicht, Chairman and CEO of Starwood Property Trust.

“We have maintained our strong access to liquidity, as demonstrated by our $600 million five-year unsecured debt issuance this quarter. We were the first in our industry to issue unsecured debt in over two years with a transaction that was 7x oversubscribed from more than 150 institutional credit investors,” added Jeffrey DiModica, President of Starwood Property Trust.


Supplemental Schedules
The Company has published supplemental earnings schedules on its website in order to provide additional disclosure and financial information for the benefit of the Company’s stakeholders. Specifically, these materials can be found on the Company’s website in the Investor Relations section under “Quarterly Results” at www.starwoodpropertytrust.com.
1



Webcast and Conference Call Information
The Company will host a live webcast and conference call on Wednesday, May 8, 2024, at 10:00 a.m. Eastern Time. To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. The webcast is available at www.starwoodpropertytrust.com in the Investor Relations section of the website. The Company encourages use of the webcast due to potential extended wait times to access the conference call via dial-in. 
To Participate via Telephone Conference Call:
Dial in at least 15 minutes prior to start time.
Domestic: 1-877-407-9039
International: 1-201-689-8470

Conference Call Playback:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Passcode: 13742859
The playback can be accessed through May 22, 2024.
About Starwood Property Trust, Inc.
Starwood Property Trust (NYSE: STWD), an affiliate of global private investment firm Starwood Capital Group, is a leading diversified finance company with a core focus on the real estate and infrastructure sectors. As of March 31, 2024, the Company has successfully deployed over $97 billion of capital since inception and manages a portfolio of over $26 billion across debt and equity investments. Starwood Property Trust’s investment objective is to generate attractive and stable returns for shareholders, primarily through dividends, by leveraging a premiere global organization to identify and execute on the best risk adjusted returning investments across its target assets. Additional information can be found at www.starwoodpropertytrust.com.
Forward-Looking Statements
Statements in this press release which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Forward-looking statements are developed by combining currently available information with our beliefs and assumptions and are generally identified by the words “believe,” “expect,” “anticipate” and other similar expressions.  Although Starwood Property Trust, Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained.  Factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, completion of pending investments and financings, continued ability to acquire additional investments, competition within the finance and real estate industries, availability of financing, and other risks detailed under the heading “Risk Factors” in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as well as other risks and uncertainties set forth from time to time in the Company’s reports filed with the SEC, including its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.
In light of these risks and uncertainties, there can be no assurances that the results referred to in the forward-looking statements contained herein will in fact occur. Except to the extent required by applicable law or regulation, we undertake no obligation to, and expressly disclaim any such obligation to, update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, changes to future results over time or otherwise.

2




Additional information can be found on the Company’s website at www.starwoodpropertytrust.com.

Contact:
Zachary Tanenbaum
Starwood Property Trust
Phone: 203-422-7788
Email: ztanenbaum@starwood.com
3



Starwood Property Trust, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations by Segment
For the three months ended March 31, 2024
(Amounts in thousands)
Commercial and
Residential
Lending
Segment
Infrastructure
Lending
Segment
Property
Segment
Investing
and Servicing
Segment
CorporateSubtotalSecuritization
VIEs
Total
Revenues:
Interest income from loans$394,472 $66,398 $— $2,622 $— $463,492 $— $463,492 
Interest income from investment securities31,405 138 — 21,144 — 52,687 (34,481)18,206 
Servicing fees128 — — 13,039 — 13,167 (3,478)9,689 
Rental income3,565 — 20,775 4,507 — 28,847 — 28,847 
Other revenues983 392 127 748 604 2,854 — 2,854 
Total revenues430,553 66,928 20,902 42,060 604 561,047 (37,959)523,088 
Costs and expenses:
Management fees192 — — — 45,822 46,014 — 46,014 
Interest expense236,149 38,973 13,298 8,317 59,429 356,166 (210)355,956 
General and administrative16,828 5,955 1,263 23,467 3,150 50,663 — 50,663 
Costs of rental operations2,025 — 5,707 2,612 — 10,344 — 10,344 
Depreciation and amortization1,949 14 5,855 1,749 251 9,818 — 9,818 
Credit loss provision, net34,977 862 — — — 35,839 — 35,839 
Other expense730 — — (56)— 674 — 674 
Total costs and expenses292,850 45,804 26,123 36,089 108,652 509,518 (210)509,308 
Other income (loss):
Change in net assets related to consolidated VIEs— — — — — — 10,086 10,086 
Change in fair value of servicing rights— — — (3,381)— (3,381)3,609 228 
Change in fair value of investment securities, net(6,991)— — (16,458)— (23,449)24,364 915 
Change in fair value of mortgage loans, net(40,677)— — 11,664 — (29,013)— (29,013)
Income from affordable housing fund investments— — 9,448 — — 9,448 — 9,448 
Earnings from unconsolidated entities7,345 327 — 313 — 7,985 (310)7,675 
(Loss) gain on sale of investments and other assets, net(41)— 92,003 — — 91,962 — 91,962 
Gain (loss) on derivative financial instruments, net110,952 122 1,721 3,012 (13,868)101,939 — 101,939 
Foreign currency (loss) gain, net(41,818)(84)32 — — (41,870)— (41,870)
Gain (loss) on extinguishment of debt315 (560)(1,209)— — (1,454)— (1,454)
Other (loss) income, net(2,676)40 — — (2,630)— (2,630)
Total other income (loss)26,409 (155)101,995 (4,844)(13,868)109,537 37,749 147,286 
Income (loss) before income taxes164,112 20,969 96,774 1,127 (121,916)161,066  161,066 
Income tax (provision) benefit(721)128 — (613)— (1,206)— (1,206)
Net income (loss)163,391 21,097 96,774 514 (121,916)159,860  159,860 
Net (income) loss attributable to non-controlling interests(3)— (6,225)700 — (5,528)— (5,528)
Net income (loss) attributable to Starwood Property Trust, Inc.$163,388 $21,097 $90,549 $1,214 $(121,916)$154,332 $ $154,332 
4



Definition of Distributable Earnings
Distributable Earnings, a non-GAAP financial measure, is used to compute the Company’s incentive fees to its external manager and is an appropriate supplemental disclosure for a mortgage REIT. For the Company’s purposes, Distributable Earnings is defined as GAAP net income (loss) excluding non-cash equity compensation expense, the incentive fee due to the Company’s external manager, acquisition costs for successful acquisitions, depreciation and amortization of real estate and associated intangibles, any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period and, to the extent deducted from net income (loss), distributions payable with respect to equity securities of subsidiaries issued in exchange for properties or interests therein. The amount is adjusted to exclude one-time events pursuant to changes in GAAP and certain other non-cash adjustments as determined by the Company’s external manager and approved by a majority of the Company’s independent directors. Refer to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 for additional information regarding Distributable Earnings.
Reconciliation of Net Income to Distributable Earnings
For the three months ended March 31, 2024
(Amounts in thousands except per share data)
Commercial and
Residential
Lending
Segment
Infrastructure
Lending
Segment
Property
Segment
Investing
and Servicing
Segment
CorporateTotal
Net income (loss) attributable to Starwood Property Trust, Inc.$163,388 $21,097 $90,549 $1,214 $(121,916)$154,332 
Add / (Deduct):
Non-controlling interests attributable to Woodstar II Class A Units— — 4,659 — — 4,659 
Non-controlling interests attributable to unrealized gains/losses— — (1,678)(2,053)— (3,731)
Non-cash equity compensation expense2,200 456 86 1,597 5,707 10,046 
Management incentive fee— — — — 19,083 19,083 
Depreciation and amortization2,099 5,939 1,843 — 9,886 
Interest income adjustment for securities5,581 — — 10,005 — 15,586 
Consolidated income tax provision (benefit) associated with fair value adjustments721 (128)— 613 — 1,206 
Other non-cash items— 274 38 324 
Reversal of GAAP unrealized and realized (gains) / losses on:
Loans40,677 — — (11,664)— 29,013 
Credit loss provision, net34,977 862 — — — 35,839 
Securities6,991 — — 16,458 — 23,449 
Woodstar Fund investments— — (9,448)— — (9,448)
Derivatives(110,952)(122)(1,721)(3,012)13,868 (101,939)
Foreign currency41,818 84 (32)— — 41,870 
Earnings from unconsolidated entities(7,345)(327)— (313)— (7,985)
Sales of properties— — (92,003)— — (92,003)
Recognition of Distributable realized gains / (losses) on:
Loans (2,395)— — 11,642 — 9,247 
Realized credit loss— (1,546)— — — (1,546)
Securities (8,994)— — (31,982)— (40,976)
Woodstar Fund investments— — 17,610 — — 17,610 
Derivatives40,734 95 5,817 4,353 (9,149)41,850 
Foreign currency (5,601)(15)32 — — (5,584)
Earnings (loss) from unconsolidated entities1,324 (16)— 313 — 1,621 
Sales of properties— — 39,150 — — 39,150 
Distributable Earnings (Loss)$205,226 $20,445 $59,234 $(948)$(92,398)$191,559 
Distributable Earnings (Loss) per Weighted Average Diluted Share$0.63 $0.06 $0.18 $ $(0.28)$0.59 
5



Starwood Property Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet by Segment
As of March 31, 2024
(Amounts in thousands)
Commercial and
Residential
Lending
Segment
Infrastructure
Lending
Segment
Property
Segment
Investing
and Servicing
Segment
CorporateSubtotalSecuritization
VIEs
Total
Assets:
Cash and cash equivalents$9,602 $137,049 $29,103 $8,340 $143,269 $327,363 $— $327,363 
Restricted cash11,506 41,394 1,031 6,862 64,548 125,341 — 125,341 
Loans held-for-investment, net14,221,471 2,376,191 — 9,200 — 16,606,862 — 16,606,862 
Loans held-for-sale2,518,600 47,149 — 123,619 — 2,689,368 — 2,689,368 
Investment securities1,113,081 18,422 — 1,124,724 — 2,256,227 (1,540,154)716,073 
Properties, net434,365 — 551,502 58,698 — 1,044,565 — 1,044,565 
Investments of consolidated affordable housing fund— — 2,008,937 — — 2,008,937 — 2,008,937 
Investments in unconsolidated entities25,371 53,018 — 33,154 — 111,543 (14,616)96,927 
Goodwill— 119,409 — 140,437 — 259,846 — 259,846 
Intangible assets12,724 — 24,505 60,293 — 97,522 (34,255)63,267 
Derivative assets73,830 216 4,280 4,590 — 82,916 — 82,916 
Accrued interest receivable179,147 11,750 1,484 1,939 178 194,498 — 194,498 
Other assets186,807 5,745 61,505 17,296 48,500 319,853 — 319,853 
VIE assets, at fair value— — — — — — 41,633,853 41,633,853 
Total Assets$18,786,504 $2,810,343 $2,682,347 $1,589,152 $256,495 $26,124,841 $40,044,828 $66,169,669 
Liabilities and Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities$127,023 $24,337 $10,730 $28,936 $68,972 $259,998 $— $259,998 
Related-party payable— — — — 44,226 44,226 — 44,226 
Dividends payable— — — — 153,174 153,174 — 153,174 
Derivative liabilities22,074 — — 261 52,312 74,647 — 74,647 
Secured financing agreements, net9,051,746 1,069,519 598,850 521,399 1,335,623 12,577,137 (20,650)12,556,487 
Collateralized loan obligations and single asset securitization, net2,406,928 816,939 — — — 3,223,867 — 3,223,867 
Unsecured senior notes, net— — — — 2,751,666 2,751,666 — 2,751,666 
VIE liabilities, at fair value— — — — — — 40,065,423 40,065,423 
Total Liabilities11,607,771 1,910,795 609,580 550,596 4,405,973 19,084,715 40,044,773 59,129,488 
Temporary Equity: Redeemable non-controlling interests
— — 415,485 — — 415,485 — 415,485 
Permanent Equity:
Starwood Property Trust, Inc. Stockholders’ Equity:
Common stock— — — — 3,234 3,234 — 3,234 
Additional paid-in capital1,486,260 705,773 (615,052)(663,588)4,972,459 5,885,852 — 5,885,852 
Treasury stock— — — — (138,022)(138,022)— (138,022)
Retained earnings (accumulated deficit)5,678,294 193,775 2,065,089 1,557,613 (8,987,149)507,622 — 507,622 
Accumulated other comprehensive income14,061 — — — — 14,061 — 14,061 
Total Starwood Property Trust, Inc. Stockholders’ Equity7,178,615 899,548 1,450,037 894,025 (4,149,478)6,272,747 — 6,272,747 
Non-controlling interests in consolidated subsidiaries118 — 207,245 144,531 — 351,894 55 351,949 
Total Permanent Equity7,178,733 899,548 1,657,282 1,038,556 (4,149,478)6,624,641 55 6,624,696 
Total Liabilities and Equity$18,786,504 $2,810,343 $2,682,347 $1,589,152 $256,495 $26,124,841 $40,044,828 $66,169,669 
6

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Cover Page
May 08, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date May 08, 2024
Entity Registrant Name Starwood Property Trust, Inc.
Entity Incorporation, State or Country Code MD
Entity File Number 001-34436
Entity Tax Identification Number 27-0247747
Entity Address, Address Line One 591 West Putnam Avenue
Entity Address, City or Town Greenwich
Entity Address, State or Province CT
Entity Address, Postal Zip Code 06830
City Area Code 203
Local Phone Number 422-7700
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.01 par value per share
Trading Symbol STWD
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001465128
Amendment Flag false
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