Jeff DiModica and Dennis Schuh

“A Starwood was born” several years ago now — in 1991, to be exact — and its REIT Starwood Property Trust also shines even in the most ominously cloudy market skies. 

The firm completed $4.5 billion in total debt originations in 2023, and also leaned into other credit investments, including energy infrastructure lending, deploying $1.1 billion in the space last year. Notable deals included a $156 million refinance for THesis Miami, a multifamily and hotel development in the firm’s hometown, on behalf of sponsor NRI Real Estate Investment and Technology. 

“We looked for the best risk-adjusted returns, and focused on the right asset classes in the right sectors,” Dennis Schuh said of the past year. 

Indeed, multifamily dominates the firm’s loan portfolio, comprising just over a third of its originations, while the top markets hit were the Southeast and Northeast (each weighing in at 15 percent). 

In a year when many lenders were sidelined, Starwood differentiated itself by being a consistent, reliable counterparty to its borrowers. Coming out of COVID, the team set an intention to have less leverage and less office exposure than its peers — reducing the latter by 50 percent. Those key decisions allowed Starwood to maintain liquidity and continue to invest every quarter today. 

Not that it was always a walk in the park. “We’ve gone back to block-and-tackle asset management, and figuring out how to work out difficult deals,” Jeff DiModica said. 

“All hands on deck is something that came out of Jeff’s mouth more than once or twice in the last 24 months,” Schuh concurred. “It’s apropos, because we’ve definitely all been in a storm. Everyone became asset managers, focused on preserving capital but also adding value outside of what we historically have done.” 

Meeting the market’s needs, it also launched Starwood Solutions to help borrowers tackle myriad problems at the asset and portfolio levels — leaning in on its experience servicing $88 billion of loans at LNR — plus a new middle-market lending business aimed at capitalizing on the $10 million to $50 million loan size aperture left behind by the regional banking crisis.

“These initiatives are ways to make us more valuable to our clients, and the real estate community — we’re adding more arrows in our quiver to be more effective,” Schuh said. “You don’t want to be a one-trick pony.”

Aiding those choices is Starwood Property Trust’s scale, which is nothing to be sneezed at. With 350 dedicated employees, plus the resources of Starwood Capital Group’s 5,000 professionals — managing $115 billion of real estate — to draw from, it’s positioned in a way that very few competitors are. Further, it has all of its underwriting and asset management capabilities in house, the latter of which has played a much more important role this past year as the industry wobbled amid choppy capital markets and rising interest rates.

Starwood had much to celebrate this past year. In March, it issued the first bond deal in two years in the CRE debt space and had $3.5 billion of orders from 156 accounts — both record amounts — for the five-year, $600 million corporate bond offering. “It was a really good day for our business,” DiModica said. “We priced 75 basis points tighter than initial price talk and upsized significantly. We reopened the debt space for companies like ours, and created liquidity to go on offense going forward.”

It also continues to diversify its staff. Today, 39 percent of Starwood Property Trust employees are female, and 43 percent are racially diverse.