Starwood Credit Real Estate Income Trust: NAV, Payout Cut, Fees

What SCREDIT is, and what it is not

SCREDIT is a private placement: the 10-Q says it is “conducting a continuous, blind pool private offering” to accredited investors under Regulation D, which means no prospectus and no 424B3 supplement. What you can read is the Form 10 it filed in 2023 and its 10-Ks, 10-Qs and 8-Ks. The offering began on October 31, 2023 and the first shares sold on December 1, 2023 at $20.00. The filings we read do not state a minimum investment (the Form D data in our private REIT Form D analysis shows none either).

It is not Starwood Real Estate Income Trust (SREIT), which this fund's 10-K calls “a non-traded equity REIT sponsored by Starwood Capital”, and it is not the listed Starwood Property Trust. The link is people: SCREDIT's chief executive is also Chief Originations Officer of Starwood Property Trust (10-K).

Three classes have shares outstanding. Classes T and D are authorized but, in the 10-Q's words, “no Class D or Class T shares have been issued.”

Source: Form 10-Q for June 30, 2026 (accession 0001193125-26-348256); holders from the 2025 Form 10-K (accession 0001193125-26-119699).

NAV per share: under the $20.00 start

NAV rose slowly through 2025, peaked in the autumn and has drifted down since.

Sources: Forms 10-K for 2024 (accession 0000950170-25-043063) and 2025 (0001193125-26-119699), Forms 10-Q for June 30 and September 30, 2025 (0000950170-25-107028, 0001193125-25-279378), March 31 and June 30, 2026 (0001193125-26-216719, 0001193125-26-348256).

From the autumn 2025 high to the latest price, Class I is down about 1.9% ($20.3660 to $19.9805, our arithmetic). Over the 18 months from December 31, 2024 to June 30, 2026 total NAV grew 78% (from $212.5 million to $379.0 million, our arithmetic), so the decline happened while new money was arriving.

Sale prices trail the month-end NAV. The January 1, 2026 sale price ($20.3538 for Class I) equals the November 30, 2025 NAV in the 10-K, and the August 3, 2026 price ($19.9909) matches the $19.99 June 30 NAV, so a subscriber in month M pays roughly the NAV of month M minus two (our reading of the filings). The September 1, 2026 prices were $19.9805 for Class I and $20.0250 for Class S.

Class E shows what the fees cost. It receives the same gross distribution but pays no management, performance or servicing fee, and its NAV per share is $21.04, $1.05 above Class I (it was $0.50 above at December 31, 2024 and $0.91 at December 31, 2025). A Class I holder since the first sale has received $5.00 of gross distributions per share in 34 monthly declarations (our sum, including a $0.21 special in December 2025) on a share that is now priced at $19.98.

The payout: from $0.1560 to $0.1300 a month

Sources: monthly Form 8-Ks (for example accession 0001193125-26-246455 for May 2026 and 0001193125-26-289547 for June 2026), 2025 Form 10-K (0001193125-26-119699) and 2024 Form 10-K (0000950170-25-043063).

The cut came with the second-quarter results. The filings do not explain it, so we can only show the arithmetic behind it:

Sources: Forms 10-K for 2025 (accession 0001193125-26-119699) and 2024 (0000950170-25-043063), Form 10-Q for June 30, 2026 (0001193125-26-348256). The last four columns of coverage are our arithmetic. The fund elected fair value for its loans and the filing says origination fees are booked immediately in other revenue.

Two readings are possible and the table supports both. In 2024 earnings were thin and a tenth of the payout was return of capital for tax ($0.1639 of $1.5592 per Class I share, our arithmetic); in 2025 everything was taxed as ordinary dividends. In the first half of 2026 operating cash flow of $12.7 million was 83% of the $15.2 million declared (our arithmetic), yet the 10-Q's distribution table still attributes 100% to cash flow from operations and says “our inception to date cash flows from operating activities funded 100% of our distributions.” Both can be true: 2024 and 2025 had a surplus and 2026 is drawing on it.

Fees: the waiver ended, and there is no expense support

Source: Form 10-Q for June 30, 2026 (accession 0001193125-26-348256), Notes 2 and 10; Form 10-K for 2025 (accession 0001193125-26-119699); Form 10-K for 2024 (accession 0000950170-25-043063).

We searched all 89 filings we saved for “expense support” and found no such agreement. What Starwood gave was a temporary management-fee waiver: it ran until the earlier of July 1, 2026 and six months after cumulative gross proceeds from Class S and Class I sales, excluding reinvested distributions and “Strategic Investors”, passed $300 million, and the Advisor waived about $2.8 million in 2025 and $2.0 million in the first half of 2026. On July 1, 2026 it ended: “the additional waiver of the Management Fee agreed to by the Advisor ended and accordingly, the Advisor began earning Management Fees commencing July 1, 2026.” At 1.25% on $342.3 million of Class S and Class I NAV that is about $4.3 million a year, or $1.1 million a quarter, which is 16% of second-quarter net income (our arithmetic).

A back-of-envelope view of the quarter ahead: second-quarter net income of $6.8 million less $1.1 million of fee is $5.7 million, against about $7.3 million of distributions at $0.13 on 18.8 million shares, or roughly 78% (our arithmetic; it ignores growth and new origination fees). The June cut was sized to a payout that still needs the fund to grow.

Who is behind the money: CalSTRS and Starwood

Sources: Form 10-Q for June 30, 2026 (accession 0001193125-26-348256); Form 10-K for 2025 (accession 0001193125-26-119699), Item 12; Form 8-K of July 21, 2025 (0000950170-25-097099).

The 10-Q puts Starwood's promise this way: “Starwood Capital has agreed, from time to time, to purchase from us an aggregate amount of not less than $150 million in Class E shares.” Four-fifths of that is still uncalled, and the shares it has bought are 8.9% of all shares.

CalSTRS matters more for the flow. Adding its 2,468,088 shares at March 20 and the 621,931 it bought on May 8, it held about 3.09 million of the 8.64 million Class I shares at June 30, roughly 36% (our arithmetic). Of the $56.1 million of Class I proceeds in the first half of 2026, $42.5 million was CalSTRS ($62.5 million at June 30 less $20.0 million at December 31, 2025; our arithmetic), and the 8-Ks show 1,000,455 more shares for $20.0 million on August 4. Without it, Class I proceeds including reinvested distributions were about $13.6 million in six months. The August 3 8-K reports 1,043,325 Class I shares sold for $20.9 million, and the 10-Q reports CalSTRS buying 1,000,455 shares for $20.0 million the next day, so most of that sale appears to be CalSTRS (our reading). How the pension fund schedules its draws is not in the filings; what is in them is that this one buyer sets the pace of growth.

Repurchases: paid in full, but the window that matters is not public yet

Sources: Forms 10-Q for June 30, 2025 (accession 0000950170-25-107028), September 30, 2025 (0001193125-25-279378), March 31, 2026 (0001193125-26-216719) and June 30, 2026 (0001193125-26-348256), Item 2; Form 10-K for 2025 (0001193125-26-119699). The 10-Qs report amounts fulfilled, not amounts requested, so no offered, requested or prorated percentages can be computed.

The plan allows repurchases of up to 5% of aggregate NAV per calendar quarter, about $19 million at June 30 NAV (our arithmetic). The largest window so far, $6.4 million in April 2026, was about 1.7% of June 30 NAV (our arithmetic), and 306,209 of its 316,594 shares were Class I. Shares held under a year are repurchased at 95% of the price, the board may repurchase fewer shares or none at all, and the 10-Q warns that the shares “should be considered as having only limited liquidity and at times may be illiquid.” The requests made for the quarter ended June 30, 2026 will show as a July 2026 line in the Q3 10-Q, which last year was filed on November 13.

For perspective on what Starwood's own filing tells readers, the 10-K cites its sister fund: “Starwood Real Estate Income Trust, Inc. (“SREIT”), a non-traded equity REIT sponsored by Starwood Capital, began pro rating repurchase requests in November 2022.” We follow that fund in our SREIT performance and redemptions history and in how SREIT repurchased its own adviser's shares outside its plan; the Class E and fee-share carve-outs here work the same way.

The loan book: loans only, no office, no CMBS

The balance sheet has one investment line, loans receivable at fair value: $1,526.5 million against $1,527.6 million of principal, a weighted-average rate of 6.19% over SOFR (or SONIA for one UK loan) and a weighted-average maximum maturity of 3.5 years, with $54.7 million of unfunded commitments. The business description allows CMBS and CLOs “to a lesser extent”, but none is held, and no office property appears.

Source: Form 10-Q for June 30, 2026 (accession 0001193125-26-348256), Note 3.

By region: West 31%, Southeast 28%, Southwest 10%, Midwest 10% (new in 2026), Mid-Atlantic 9%, international 8% (the UK industrial loan, down from 14%; the 10-Q reports one $78.8 million repayment at par in the quarter and does not name the loan), Northeast 4%. The 10-K lists every loan at December 31, 2025:

Source: Form 10-K for 2025 (accession 0001193125-26-119699), loan table in Item 7. The four largest loans were 49.4% of the book (our arithmetic); 12 of the 18 were originated in 2025.

Because the loans are carried at fair value, “no allowance for credit losses is recorded” and the credit signal is the mark. Fair value was within 0.1% of principal at June 30, 2026 (our arithmetic), and the filings we read mention no loan on non-accrual or past due. Since the quarter ended the fund closed a $45.2 million U.S. loan at about 5.9% and bought a euro participation of €88.2 million at about 5.1%, both reported in the 10-Q's subsequent events.

Leverage and financing

Source: Form 10-Q for June 30, 2026 (accession 0001193125-26-348256), Note 4. Maturities exclude extension options.

Sources: balance sheets in the Forms 10-K and 10-Q listed above. The ratios are our arithmetic; the fund defines its own leverage ratio against gross asset value.

The 10-K says the “target leverage ratio will be 60% to 75% on a portfolio-wide basis,” and the fund ended June at the top of that range after repaying $67.5 million of net borrowings in the second quarter, down from 3.47x NAV in December. Loans yield 6.19% and the repo costs 5.23%, so the margin is about one percentage point on borrowed money (our arithmetic). Recourse to the fund is limited to 25% of each facility's obligations, collateral was $375.5 million above the debt at the three largest lenders, and $521 million of current maturities (Morgan Stanley US in July 2027 and Wells Fargo in November 2027) come due before 2028 unless extended (our sum). Compared with Goldman's GS REFT, which marks every loan at par and sits at 2.9x with a CLO, SCREDIT has no securitization and a lender group that is entirely banks.

What a holder can do with this

• Price the shares off the filing, not the pitch. Class I at $19.99 and Class S at $20.05 are both under $20.00; a Class S buyer also pays up to 3.5% on top and 0.85% a year after, so the break-even is further away.
• Read the 17% cut as the new base. At $0.13 a month, coverage depends on the fee waiver that just ended and on new loans paying origination fees. Check each month's 8-K and the Q3 10-Q (mid-November) for the same six numbers: net income, other revenue, operating cash flow, distributions, management fee, performance fee.
• Know who sits beside you. About 36% of Class I is one pension fund that cannot exit before 2029 or $1.5 billion of NAV, and Starwood's Class E shares are outside the 5% cap. If either changes behavior, the people in the queue are Class S and Class I holders who bought through a broker.
• Ask the questions the filings do not answer. Why the distribution was cut, what the Class S and I request volume was in the June window, and whether the $150 million Starwood commitment will be called.
• Think about size. This is a private fund with 1,308 holders of record in Classes S and I (CalSTRS is one of them), 3.0x leverage and quarterly liquidity at the board's discretion. For a six-figure position the question is how much of your real estate allocation can sit in an illiquid, leveraged lender.

FAQ

Sources: Form 10-Q for June 30, 2026 (accession 0001193125-26-348256) and for March 31, 2026 (0001193125-26-216719); Form 10-K for 2025 (0001193125-26-119699) and 2024 (0000950170-25-043063); Forms 10-Q for June 30 and September 30, 2025 (0000950170-25-107028, 0001193125-25-279378); Form 8-K of July 21, 2025 (0000950170-25-097099); and the monthly Forms 8-K filed December 2023 through September 30, 2026, all read on EDGAR on October 9, 2026. Coverage ratios, leverage ratios, annualized payout rates, CalSTRS's share of Class I, the management-fee estimate and sums are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.