MIAMI – November 06, 2026 -- Starwood Property Trust (NYSE: STWD) reported a third-quarter GAAP net loss of $389.7 million, or $1.08 per diluted share, driven by a $336.6 million credit loss provision and $32.2 million of non-cash property impairments. Distributable Earnings (DE), a non-GAAP measure, came in at $116.8 million, or $0.31 per diluted share, for the quarter ended September 30.
DE prior to realized commercial lending gains and losses reached $155.2 million, or $0.41 per diluted share. The company declared a dividend of $0.48 per share.
Starwood invests $3.2 billion in the quarter and $8.2 billion in nine months
Commercial lending accounted for $2.4 billion of third-quarter investments, the highest level in four years. That lifted the commercial lending portfolio to a record $17.8 billion.
Chairman and CEO Barry Sternlicht said the company has deployed $8.2 billion across its business lines in the first nine months at "very attractive risk adjusted returns." He added that Starwood still expects to resolve almost half of the underperforming assets it began the year with.
Rate spike strains borrowers as Starwood cites strong liquidity
Sternlicht described the quarter as "somewhat historic," with interest rates rising sharply and the forward yield curve moving significantly higher. He said the increase sent a shock wave through the property sector and rate-sensitive segments, and that borrowers are feeling the pain of higher interest costs. He said the company's balance sheet and liquidity remain very strong.
Starwood buys back a record $108 million of its own shares
The company repurchased $108 million of common shares in the quarter, a record, according to President Jeffrey DiModica. He said Starwood is being more vigilant in deploying capital across its diversified businesses, focused on the most attractive risk-adjusted returns.
DiModica said the company completed about $2.1 billion of financing transactions earlier in the year, before the rate rise. It proactively refinanced and extended corporate debt at rates and spreads below those available today.
Fitch reaffirms top special servicer rating for LNR
Fitch reaffirmed its highest rating, CSS1, for LNR's commercial special servicer.
Starwood uses DE to compute incentive fees owed to its external manager. It reports the second measure, DE prior to realized commercial lending gains and losses, to help investors assess the earning capacity of the existing portfolio. That measure excludes realized gains and losses from resolving nonaccrual commercial loans and from disposing of foreclosed properties held in the Commercial and Residential Lending Segment.