Jeff DiModica and Dennis Schuh

In a world that has plenty of reasons for flapping, some teams were unflappable this past year. Case in point: Starwood Property Trust. 

These cooler-than-a-cucumber cats racked up $10.8 billion in total transaction volume between $7.5 billion in originations — across floating-rate balance sheet loans and CMBS, $1.4 billion in energy-oriented real estate loans, and $1.8 billion via its European funds. Mon dieu! 

“We raised equity in the fourth quarter, and we raised debt five times from December until now — probably $3.5 billion at SOFR plus 250. We’re raising money at the tightest spread we ever have,” Jeff DiModica said. “We’re very liquid, and the goal for us as a mortgage REIT has been to grow our book. We’ve made a loan every quarter of every year since we’ve been alive, and we never shut down, which is really important. We’re now hoping that 2025 will be our biggest origination year ever. It will have to rival 2021, but we have the capital to do it, and we’re in position to have a really massive year.” 

Headline-grabbing transactions this past year for the Starwood team included a $195 million loan to refinance One High Line, a trophy mixed-use property consisting of luxury condo units, a Faena Hotel and commercial real estate space in Manhattan’s West Chelsea neighborhood; and the $500 million mezzanine loan Starwood closed for the construction of a 174-megawatt data center in Salt Lake City that’s 100 percent pre-leased to Oracle. 

The latter deal undoubtedly caused some green-eyed monsters to materialize among the firm’s peers, but Starwood has long been an active participant in the data center space across debt, equity and development. 

“Everybody wants their hand in the [data center] cookie jar and is trying to get exposure to the deals, because they’re $2 billion deals and they generally have highly rated tenants that are the most valuable companies in the world,” Dennis Schuh said. “It has gotten competitive and pricing has tightened, but we have a competitive advantage because the deals are so big, and we have a really large balance sheet plus have a lot of capital, so we’ve been able to do really large deals.” 

Starwood wrote $500 million of mezzanine debt on the deal, but also took a portion of the senior mortgage, and “most people can’t make a $500 million loan today,” DiModica said. 

“I think our ability to understand the complexity of the projects, and write really big tickets is what differentiated us on that,” Schuh said. “Plus, there was a transaction that preceded that deal where we closed a $100 million mezzanine loan on a portfolio that this same borrower had in only three weeks — that allowed us to then do this $500 million loan to get this really large data center built.”  

The market was hit by the equivalent of a large, wet fish in the run-up to this list being released, but the Starwood team is unfazed by the bumps and is seeing more inquiries come its way as a result. 

“The SASB market was really strong and spreads were really tight, but now they’ve backed up,” Schuh said. “So, for those people who traffic in those spaces a lot, things are going to slow down. The market may whipsaw back, but everyone thinks we’re in for a volatile quarter or two. There was a big SASB deal for over $1 billion that was pulled, and now the borrower is asking us: ‘Could you do the whole billion-dollar loan?’ So those types of scenarios will benefit us.” 

Plus, “We raised $500 million two weeks ago,” DiModica said. “Our ability to raise capital on the debt side or on the equity side is unparalleled. We have the capital to continue to grow, and we’re also growing our bank relationships, so it’s setting us up for a super strong year.” 

Get ready.