Starwood Property Trust — Q3 2026 Earnings Summary

Financial Performance:

• Reported a GAAP net loss of $389.7 million for the quarter ended September 30, 2026, inclusive of a $336.6 million credit loss provision and $32.2 million in non-cash property impairments.
• Distributable Earnings (DE) were $116.8 million, or $0.31 per diluted share.
• Distributable Earnings prior to realized commercial lending gains and losses were $155.2 million, or $0.41 per diluted share.
• For the nine months ended September 30, 2026, Distributable Earnings were $415.5 million, or $1.09 per diluted share.
• Distributable Earnings prior to realized commercial lending gains and losses for the nine months were $458.7 million, or $1.21 per diluted share.
• Total revenues for the quarter were $545.9 million, with interest income from loans at $409.3 million and rental income at $90.5 million.
• Total costs and expenses for the quarter were $839.7 million, driven by $359.1 million in interest expense and $336.6 million in credit loss provisions.
• Loans held-for-investment, net, totaled $19.97 billion as of September 30, 2026.
• Total assets were $57.96 billion as of September 30, 2026.
• Secured financing agreements, net, were $15.35 billion, and securitized financing, net, was $4.50 billion.
• Unsecured senior notes, net, stood at $4.48 billion.

Guidance and Future Outlook:

• Management expects to resolve almost half of the underperforming assets held at the start of the year.
• The company anticipates continuing to resolve underperforming assets and loans while making meaningful investments.
• Management noted that while borrowers are feeling the pain of higher interest costs, the balance sheet and liquidity remain very strong.

Business Segments and Product Lines:

• Commercial lending investments totaled $2.4 billion in the quarter, the highest level in four years, bringing the commercial lending portfolio to a record $17.8 billion.
• Total investments deployed in the quarter were $3.2 billion, with $8.2 billion deployed in the first nine months of the year.
• The Commercial and Residential Lending Segment reported Distributable Earnings of $146.6 million for the quarter.
• The Property Segment reported Distributable Earnings of $45.9 million for the quarter.
• The Investing and Servicing Segment reported Distributable Earnings of $45.5 million for the quarter.
• The Infrastructure Lending Segment reported Distributable Earnings of $27.3 million for the quarter.
• The Corporate segment reported a Distributable Loss of $148.6 million for the quarter.
• Fitch reaffirmed its highest rating for LNR's Commercial Special Servicer (CSS1).

Market and Competitive Landscape:

• Interest rates skyrocketed during the quarter, causing the forward yield curve to move sharply higher.
• Real estate markets continued to heal, bolstered by a meaningful collapse in most major asset classes.
• The rise in rates sent a shock wave through the property sector and related rate-sensitive sectors.
• Management took advantage of favorable market conditions earlier in the year to proactively refinance and extend corporate debt.
• Approximately $2.1 billion of financing transactions were completed at rates and spreads below those available at the time of the release.

Risks and Challenges:

• Borrowers are experiencing pain due to higher interest costs.
• The company faces risks related to the completion of pending investments and financings, the ability to acquire additional investments, competition within the finance and real estate industries, and the availability of financing.
• Forward-looking statements are subject to risks and uncertainties detailed in the Company's Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

Management Commentary and Tone:

• Barry Sternlicht, Chairman and CEO, described the third quarter as "somewhat historic" due to the sharp rise in interest rates.
• Sternlicht stated the company "held steady" and continued to make meaningful investments while resolving underperforming assets.
• Jeffrey DiModica, President, noted the company remained "even more vigilant" in capital deployment across diversified businesses.
• Management emphasized a focus on the most attractive risk-adjusted returns.

Other Key Points:

• The company repurchased $108 million of common shares in the quarter.
• A dividend of $0.48 per share was declared.
• The company has successfully deployed $123 billion of capital since inception and manages a portfolio of $32 billion across debt and equity investments as of September 30, 2026.
• Supplemental earnings schedules and definitions for Distributable Earnings are available on the company's Investor Relations website.
• A live webcast and conference call regarding these results were scheduled for November 6, 2026.