For Starwood Property Trust, $13B Deployed in 2025 and a Record $31B In Assets

Starwood Property Trust had strong year in 2025, as the real estate investment trust (REIT) deployed $12.7 billion in capital in 2025 — the second-largest investment total in 16 years for the firm — and ended the year holding a company record $30.7 billion in assets, with commercial real estate loans making up 54 percent of its total portfolio. 

During an earnings call Wednesday, Starwood reported fourth-quarter net income of $96.9 million, up from $72.6 million in the third quarter of 2025, and fourth-quarter distributable earnings of $159.5 million, up slightly from distributable earnings of $148.6 million in the third quarter. 

Starwood reported full-year net income of $411.5 million in 2025, up from 2024’s full-year net income total of $359.9 million, which was inclusive of a $197.4 million credit loss provision that year. The firm’s full-year disturbable earnings in 2025 declined 8 percent, to $615.5 million. 

Moreover, the firm did not cover its dividend in 2025, meaning it paid out more in dividends to shareholders than it earned in net profit, an indicator that its payouts to shareholders are not supported by current earnings. But Chief Financial Officer Rina Paniry emphasized during her earnings call remarks that Starwood has “never cut [its] dividend.” 

Chairman and CEO Barry Sternlicht took the good with the bad on Wednesday, calling in from a flight and owning up to the dividend issue, but noting the firm saw strong results from its global commercial lending, infrastructure lending, conduit and special servicing businesses. 

“I think you can see that 2025 was a transition year for Starwood Property Trust,” said Sternlicht. “The really good news is we built an incredible machine. We have all the pieces in place to outperform for our shareholders in the long run.”

Starwood’s lending volumes in 2025 were impressive: $6.4 billion in commercial real estate lending, a firm record $2.6 billion in infrastructure credit, and $2.4 billion in net-lease loans. 

The firm originated $1.7 billion of CRE loans in the fourth quarter alone. After taking $670 million of repayments into account, Starwood grew its funded loan portfolio by $823 million in the fourth quarter to $16.6 billion, its second-highest level since inception, according to Paniry. 

Jeff DiModica, president of Starwood Property Trust, noted in his remarks that the firm raised and repriced $4.4 billion in capital and corporate debt in 2025, with that particular debt issued at the tightest spreads in Starwood’s 16-year history. DiModica also said that Starwood originated $1.7 billion in CRE loans in the fourth quarter alone, and that it anticipates “a robust origination year” in 2026, with its loan portfolio expected to reach $17 billion by the end of the first quarter. 

DiModica also spoke to the REIT’s ongoing strategic repositioning plan, which has seen it gradually move out of office, which now only makes up 8 percent of Starwood’s portfolio, and go all in on multifamily and industrial, which together comprised 72 percent of Starwood’s 2025 originations.

“As we enter 2026, our properties are clear: Resolve legacy credit, maintain a conservative balance sheet, and selectively grow our highest-returning business to secure full earnings power,” said DiModica. 

He also conceded that, unlike other parts of the economy, commercial real estate has taken longer to normalize and recover, and has been plagued by an uneven performance across asset classes and U.S. geographies. But DiModica emphasized that 2025 ended with continued stabilization in credit markets and improving transaction activity, as trends tick upward amid increased capital markets liquidity and a more favorable rate environment. 

“We built Starwood Property Trust to operate through cycles, and this year reflected that,” said DiModica.

Brian Pascus can be reached at bpascus@commercialobserver.com.