Starwood Property Trust (STWD): Loan Book and Dividend Coverage

STWD is not Starwood Real Estate Income Trust

Three different Starwood vehicles come up in the same searches, and their filings say so. Starwood Property Trust (STWD) is the New York Stock Exchange-listed mortgage REIT covered here. It describes itself as “an affiliate of global private investment firm Starwood Capital Group” and is externally managed under a management agreement, paying a base fee of 1.5% of stockholders' equity a year (about $25.0 million in Q2 2026). Starwood Real Estate Income Trust (SREIT) is a non-traded REIT that owns property and sells shares to individuals; see our SREIT review. Starwood Credit Real Estate Income Trust is a private-offering lending REIT; see that page.

They do business with each other. In April 2024 STWD bought from SREIT, “an affiliate of our Manager,” a £176.0 million ($219.8 million) first mortgage loan participation on UK vacation cottages, caravan homes and resorts at par less 1.0%; it was repaid in August 2025. In March 2026 STWD and a European debt fund advised by Starwood Capital affiliates rebalanced their interests in a $969.2 million logistics loan at par. None of that makes STWD's dividend, price or loan book a proxy for SREIT's redemptions, and nothing in this page applies to SREIT.

What the $0.48 is paid out of

STWD's board declares a $0.48 dividend each quarter. The measure the company points to is distributable earnings, which it calls “a performance metric we consider when declaring our dividends” and says “historically, over time” has been “a strong indicator of our dividends per share.” The table lines up every quarter in the 10-K and 10-Qs. DE as a percentage of the dividend is our arithmetic; GAAP diluted EPS is shown where the filings give it for that quarter.

The same comparison in dollars, from the DE reconciliation tables and the statements of equity (dividends declared are on all common shares, so the dollar ratio differs slightly from the per-share ratio; for 2025 the per-share figure is $1.69 against $1.92, or 88%):

Dividends declared rose from $602.6 million to $685.9 million because the share count grew (diluted weighted-average shares went from 310.5 million in 2023 to 350.0 million in 2025, and 370.6 million were outstanding at June 30, 2026) while the per-share rate stayed fixed. The filings do not say what the board will do if DE stays near $0.40. The 10-Q says only: “Before we pay any dividend, whether for U.S. federal income tax purposes or otherwise, we must first meet both our operating and debt service requirements.” Dividends payable at June 30, 2026 were $180.7 million. The Q3 2026 declaration is not in any filing on EDGAR as of October 14, 2026 (the latest filing is an 8-K of August 13, 2026); the Q3 10-Q will show it.

What distributable earnings leaves out

DE is a non-GAAP measure, and STWD defines it in the 10-Q: GAAP net income excluding non-cash equity compensation, the manager's incentive fee, depreciation and amortization of real estate, unrealized gains and losses, and other non-cash items, with realized gains and losses included. Three things follow for a reader trying to judge the dividend.

• Credit reserves and impairments are out until realized. “The CECL reserve and any property impairment losses have been excluded from Distributable Earnings,” and STWD expects to “only recognize such potential credit or property impairment losses in Distributable Earnings if and when such amounts are deemed nonrecoverable upon a realization event.” Q2 2026 added back a $30.2 million credit loss provision. The 10-Q adds that the timing of loss realization in DE “may differ materially” from the GAAP reserve.
• Realized gains count. In Q2 2026 the Property segment's DE of $34.2 million included $18.2 million of realized gains on Woodstar Fund investments (the consolidated affordable housing fund), 53% of that segment's DE (our arithmetic); the first-half figure is $37.0 million.
• The gap to GAAP is large. Q2 2026 GAAP net income attributable to common stockholders was $6.6 million ($0.01 a share) against DE of $151.5 million; for the first half it was $58.4 million against $298.8 million.

None of this makes DE a wrong measure. It is the company's own, it is how its manager's incentive fee is computed, and it is what the dividend history is set against. It does mean DE can run ahead of GAAP while loans are on nonaccrual and reserves are held, and that “coverage” depends on which measure you choose.

The four segments, one quarter

STWD reports four segments plus a corporate column. The corporate column holds the costs that sit above the segments: in Q2 2026 GAAP interest expense of $107.6 million (mostly the unsecured notes) and management fees of $30.4 million. Q2 2026, from the earnings release:

The four operating segments earned $289.4 million of DE and the corporate column took $137.9 million, or 48% (our arithmetic). Commercial and Residential Lending, the loan book below, produced $0.49 of the $0.40: more than the whole. The Property segment holds Fundamental (527 net lease properties in 44 states, 123 tenants, 16.8-year weighted-average lease term at June 30, 2026), a 34-building medical office portfolio (89.9% occupied), the Woodstar affordable housing fund ($1.73 billion) and a vacant Washington, D.C. office building being converted to apartments ($123.1 million). The Investing and Servicing segment holds CMBS, a conduit lending business and a named special servicing portfolio of $93.6 billion. Infrastructure Lending is $2.86 billion of loans, 62% power and 35% oil and gas by collateral (our arithmetic from the mix table below).

What is in the $22.5 billion loan book

At June 30, 2026 STWD reported $22.45 billion of gross loans, 76% of them commercial (our arithmetic). Variable-rate commercial loans were $15.86 billion, 92% of commercial loans held for investment, at an average spread of 3.3% over the index (our arithmetic for the share).

In addition, STWD had $2.56 billion of unfunded loan commitments at June 30, 2026 and $3.70 billion of future funding commitments on commercial and infrastructure loans, $2.87 billion of them due within a year (our arithmetic from the contractual obligations table: $1.55 billion and $1.32 billion for the two segments). It originated or acquired $1.4 billion of commercial loans in Q2 2026, including a $598.7 million first mortgage loan (a 3% participation in the overall loan) for the construction of a data center in Texas pre-leased to an investment-grade tenant, of which STWD funded $84.2 million.

The commercial lending collateral mix, as a share of carrying value (excluding residential loans, RMBS and properties):

Data centers nearly doubled in six months and multifamily fell by 3.7 points. Outside the United States the same portfolio was 28.6% at June 30, 2026 (United Kingdom 9.1%, Australia 7.6%, Germany 4.4%, Ireland 3.7%, other Europe 3.1%, Bermuda 0.7%), up from 27.4% (our arithmetic). In the United States the largest regions were the North East (17.1%) and South West (16.8%).

No risk ratings: how STWD grades its commercial loans

Many commercial mortgage REITs publish a 1-to-5 risk rating table and a watch list. STWD's 10-K and 10-Qs do not: the only mention of risk ratings is a sentence saying it picked harsher macro forecasts “for those loans containing higher risk ratings,” with no table behind it. What STWD does publish is a credit-quality table by loan-to-stabilized-value (LTV), which it calls “the most significant indicator of credit quality for our commercial loans,” with the credit loss allowance on each bucket:

Two readings. First, the reserve is concentrated: the over-70% bucket was 36.8% of commercial loans and 89% of the commercial allowance at June 30, 2026 (82% at December 31, 2025, our arithmetic). Second, the over-70% bucket grew by $0.69 billion in six months while credit-deteriorated loans fell from $132.2 million to $40.4 million, which fits foreclosures and a reclassification rather than repayment. The filing does not say which individual loans sit in the over-70% bucket, so it does not tell you how much of the $947 million of nonaccrual loans is in it. “LTV” here is loan-to-stabilized-value, not today's appraised value.

Nonaccrual loans, quarter by quarter

STWD reports past-due and nonaccrual loans in a short paragraph, not a table; the table below rebuilds it from four filings. Loans that are 90 days or more past due are on nonaccrual, except one commercial loan each quarter for which STWD acquired the senior mortgage interest to protect its mezzanine position; the total is our arithmetic and ties to the company's own $967.7 million at December 31, 2025. Amounts in $ millions.

At December 31, 2025 and June 30, 2026 the total was 5.1% and 4.2% of gross loans (our arithmetic). Three further items sit outside this table. Seven commercial lending preferred interests, held as part of loan modifications, were on nonaccrual with $96.4 million of amortized cost ($65.0 million at December 31, 2025). A $19.2 million infrastructure bond on a coal-fired power plant in Mississippi has been on cost-recovery nonaccrual since 2023, with a $10.0 million allowance. And a $35.5 million mezzanine loan on an Irish office portfolio, nonaccrual since 2025, carries a $26.8 million specific allowance. No non-credit-deteriorated commercial loan was added to nonaccrual in the first half of 2026, the 10-Q says; the 2025 additions were $179.0 million against $238.0 million of resolutions.

What happened to the loans that left. Three first-mortgage loans were foreclosed in the first quarter of 2026 and moved onto the balance sheet as property:

The segment that makes the loans now holds more property: its “properties, net” went from $732.7 million (December 31, 2025) to $1,028.7 million, and the 10-Q describes them as “properties acquired through loan foreclosure or exercise of control over a mezzanine loan borrower's pledged equity interests.” That is the “trapped equity” the chairman's quote in the release refers to: the same release says the company expects “to resolve nearly $900 million of underperforming assets by year end or shortly thereafter.” The release does not say which assets or how they are counted, and the 10-Q does not give that figure.

Modifications. One loan met the accounting definition of a modification for a borrower in difficulty: $88.7 million (0.52% of commercial loans), extended from January 2026 to October 2028 with the interest rate cut by 95 basis points, the cut recoverable through an exit fee, plus minimum paydowns. STWD also reduced the spread on three other loans and four cross-collateralized loans ($482.4 million remaining at June 30, 2026), with the borrowers contributing more equity. All previously modified loans were performing under their modified terms at June 30, 2026.

The credit loss allowance since 2022

STWD says “we do not have a history of realized credit losses on our HFI loans and HTM securities,” so its CECL model uses industry loss databases as a benchmark. The allowance on funded loans:

The allowance went from $99.4 million to $448.3 million in two years and has been about $400 million to $450 million since. At June 30, 2026 it was 1.87% of gross loans (2.04% at December 31, 2025, our arithmetic). Counting the $36.0 million reserve on unfunded commitments and the $55.3 million on held-to-maturity securities, total credit loss allowances were $510.5 million (our arithmetic). The first-half charge-offs were the Phoenix ($19.7 million) and Dallas ($5.3 million) specific allowances, taken when the loans were foreclosed. For the first half of 2026 the provision across all instruments was $29.8 million, of which only $4.1 million was on funded loans; $7.8 million was on unfunded commitments and $17.9 million on held-to-maturity securities, mostly preferred interests.

Debt: $23.7 billion, and the July 2026 refinancing

STWD funds its loans with repurchase agreements, CLOs, asset-backed securities and unsecured notes. Balance-sheet debt at June 30, 2026 against stockholders' equity:

The ratio excludes $29.29 billion of liabilities of consolidated securitization trusts, which STWD consolidates as special servicer and which are matched by trust assets. Secured debt outstanding was $18.93 billion at June 30, 2026, including $6.88 billion drawn on commercial loan repurchase lines (maximum size $12.34 billion). The company's schedule of loan repayments against financing for the next four quarters shows $4.94 billion of expected principal repayments on loans and securities against $4.28 billion of required financing repayments, a net $785.1 million inflow. The 10-Q adds: “In the normal course of business, the Company is in discussions with its lenders to extend, amend or replace any financing facilities which contain near term expirations.”

Unsecured notes. Ten tranches, $4,930.75 million of principal at June 30, 2026, a 6.2% weighted-average effective rate in Q2 and covenant compliance reported:

After the two July transactions, unsecured principal is $4,530.75 million (our arithmetic): $380.75 million in 2027, $500.0 million in 2028, $1,100.0 million in 2029, $1,400.0 million in 2030 and $1,150.0 million in 2031. None falls due before July 2027. The 10-Q expects the notes “to be repaid from a combination of available cash on hand, approved but undrawn capacity under our secured financing agreements, and/or equity issuances or other potential sources of financing.” In the release, the company says its Q2 corporate debt deals moved its weighted average corporate debt maturity to 3.7 years. Secured maturities are shorter: of $14.09 billion of contractual secured financings, $1.74 billion was due in under a year; of $4.84 billion of securitized financing, $0.59 billion.

For how the same refinancing pressure looks across apartment and office lenders, see our commercial real estate debt maturity wall page.

Book value per share and buybacks

STWD's filings do not state a book value per share. Dividing stockholders' equity attributable to STWD by common shares outstanding gives $17.54 at June 30, 2026 ($6,498.96 million over 370.63 million shares), $17.98 at March 31, 2026 and $18.34 at December 31, 2025 (our arithmetic; the company's own supplemental book value may differ). Equity fell $296.6 million in six months while dividends of $357.3 million exceeded GAAP net income of $58.4 million, which is the same dividend-versus-earnings gap seen above, now in the balance sheet.

The board authorized $400.0 million of buybacks of shares and convertible notes in February 2026. Through June 30, 2026 STWD bought 1,708,338 shares for $29.9 million, 581,795 of them in May at an average $17.16, leaving $370.1 million of capacity. The May price was 98% of June 30 equity per share (our arithmetic). At that price the $1.92 annual dividend is an 11.2% yield (our arithmetic); that is a yield on a price STWD paid, not on a price you can assume today, and this page quotes no market price. The cover page showed 370,168,950 shares outstanding at July 31, 2026.

What a shareholder or prospective buyer can do with this

This page is analysis of public documents. These are the checks the filings let you make yourself.

• Pick a coverage measure and write it down. At $0.40 of DE the $0.48 dividend is 83% covered; at GAAP EPS of $0.01 it is not covered at all. Both are true. The company chooses DE and says it excludes CECL until losses are realized.
• Follow the $947 million. Nonaccrual loans have been between $919 million and $1.10 billion for four quarters. What changes the picture is what happens to the loans that are foreclosed: the $1.03 billion of property in the lending segment is where the next DE losses or gains would be realized, and the 10-Q says that is when DE recognizes them.
• Watch the over-70% LTV bucket. It holds 89% of the allowance. If it keeps growing, the reserve will have to grow with it.
• Check the date of the next filing. The Q3 2026 10-Q and release are due in early November; in 2025 STWD filed both on November 10. They will show the Q3 dividend declaration, DE per share, the nonaccrual paragraph and any change to the $0.48.
• If you hold STWD to compare it with a non-traded credit fund, the difference is the exit, not the loans. STWD trades daily; non-traded REITs and BDCs sell on tender or repurchase terms. Our page on non-traded versus publicly traded REITs covers it, and for another listed lender with a dividend cut, see Arbor Realty Trust and Ready Capital. For what STWD's loans pay borrowers, see commercial real estate loan rates.

FAQ

All figures are from Starwood Property Trust, Inc. (CIK 1465128) filings on SEC EDGAR, read on October 14, 2026: Form 10-K for 2025 (accession 0001465128-26-000009, filed February 25, 2026); Forms 10-Q for September 30, 2025 (0001465128-25-000018), March 31, 2026 (0001465128-26-000018) and June 30, 2026 (0001465128-26-000029, filed August 6, 2026); and the earnings releases furnished as Exhibit 99.1 to Form 8-K of February 25, May 8 and August 6, 2026 (0001465128-26-000008, -000017 and -000028). Sums, ratios, percentages, the nonaccrual totals, the debt-to-equity ratio, the note ladder after July 2026 and equity per share are our arithmetic. The most recent filing on EDGAR as of October 14, 2026 was an 8-K of August 13, 2026. This is analysis of public documents, not investment, legal or tax advice.