Starwood Property Trust Posts $389.7 Million GAAP Loss

The Tip Desk · November 6, 2026 · 3 min read

Distributable Earnings were $0.31 a share after a $336.6 million credit loss provision, as the company invested $3.2 billion and held a $0.48 dividend.

Starwood Property Trust, Inc. (STWD) reported a third-quarter GAAP net loss of $389.7 million, or $1.08 a share, after a $336.6 million credit loss provision and $32.2 million of non-cash property impairments.

The diversified finance company, an affiliate of Starwood Capital Group, had posted $6.6 million of GAAP net income in the June quarter. Distributable Earnings, the non-GAAP measure the company uses to compute incentive fees, fell to $116.8 million, or $0.31 a share, from $151.5 million, or $0.40 a share.

Distributable Earnings prior to realized commercial lending gains and losses was $155.2 million, or $0.41 a share. That measure excludes realized gains and losses on the disposition or resolution of commercial loans that were on nonaccrual and on properties acquired through foreclosure in the Commercial and Residential Lending segment.

The Commercial and Residential Lending segment recorded a $236.6 million net loss, including a $336.8 million credit loss provision and a $121.4 million change in fair value of mortgage loans. Infrastructure Lending earned $31.1 million, the Property segment $20.0 million, and Investing and Servicing $30.6 million. Corporate results were a $234.9 million loss.

Total revenues were $545.9 million, including $409.3 million of interest income from loans, $90.5 million of rental income and $30.3 million of servicing fees. Interest expense was $359.1 million.

Chairman and Chief Executive Officer Barry Sternlicht said interest rates rose sharply and the forward yield curve moved higher, sending a shock through the property sector even as real estate markets continued to heal. He said the company held steady and continued to invest while resolving underperforming assets and loans. Through the first nine months of 2026, the company said it deployed $8.2 billion.

Investments in the quarter were $3.2 billion, up from $2.5 billion in the June quarter. Commercial lending investments of $2.4 billion were the highest in four years, bringing that portfolio to a record $17.8 billion from $17.3 billion at June 30.

President Jeffrey DiModica said the company took advantage of favorable market conditions earlier in the year, before the rate rise, to refinance and extend corporate debt, completing about $2.1 billion of financing transactions at rates and spreads below those available later. He said the company remained vigilant in deploying capital and purchased a record $108 million of common shares in the quarter, compared with $30 million of repurchases in the six months through July.

Sternlicht said the company still expects to resolve almost half of the underperforming assets it started the year with, and that borrowers are feeling higher interest costs while the balance sheet and liquidity remain strong.

The dividend remained $0.48 a share. Fitch reaffirmed its highest rating for LNR’s commercial special servicer.

As of September 30, 2026, the company said it had deployed $123 billion of capital since inception and managed a $32 billion portfolio across debt and equity investments.