Starwood Property Trust shares fall 6.5%, Q3 profit misses estimates

Starwood Property Trust (STWD) posted a third-quarter GAAP net loss of $389.7 million, or $1.08 per diluted share.

Shares fell 6.5% at 3:59 p.m. ET, from a $12.88 close.

Distributable earnings, a non-GAAP measure, were $116.8 million, or 31 cents per diluted share, missing the 36-cent consensus.

Here's how the company did:

• Distributable earnings: 31 cents per diluted share vs. 36 cents expected
• Distributable earnings before realized commercial lending gains and losses: 41 cents per diluted share
• Revenue: $545.85 million vs. $542.81 million expected, and $488.9 million a year earlier
• GAAP net loss attributable to the company: $389.7 million, or $1.08 per diluted share

Revenue has risen in each of the last three quarters, from $488.9 million in the third quarter of 2025 to $513.7 million in the second quarter of 2026.

The loss included a $336.6 million credit loss provision and $32.2 million of non-cash property impairments. For the first nine months, distributable earnings were $415.5 million, or $1.09 per diluted share.

Investments and loan book

The company invested $3.2 billion in the quarter and $8.2 billion in the first nine months. Commercial lending investments reached $2.4 billion, the highest in four years, lifting the portfolio to a record $17.8 billion.

Chairman and CEO Barry Sternlicht said the company still expects “to resolve almost half of the underperforming assets we started the year with.”

Refinancing and capital returns

About $2.1 billion of financing was completed earlier this year, at rates and spreads below those available today.

It repurchased $108 million of common shares in the quarter. A dividend of 48 cents per share was included.

Ratings

Fitch reaffirmed its highest rating for LNR's commercial special servicer, CSS1.