- Starwood ended Q3 with $2.2B in liquidity and raised $2.3B in new capital.
- The firm originated $1.4B in loans, its second-highest quarterly total.
- A $2.2B acquisition of Fundamental Income Properties impacted short-term earnings but is expected to drive long-term growth.
- Starwood’s CRE portfolio grew to $15.8B, with a reduced exposure to office assets.
A Strong but Transitional Quarter
Starwood reported $72.6M in net income, flat year-over-year, and $148.6M in distributable earnings, down 6% from last year. According to the Commercial Observer, CEO Barry Sternlicht called the quarter “very productive” despite near-term dividend pressure from recent investments.
Capital Raised and Ready
The firm raised $2.3B in equity and term loans during the quarter. It now holds over $2B in deployable capital heading into Q4 and 2026.
Loan Activity Picks Up
Starwood originated $1.4B in new loans and funded $219M in prior commitments. It also secured $1.3B in repayments. The firm’s CRE lending portfolio grew by $271M during the quarter.
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Triple-Net Bet
The $2.2B acquisition of Fundamental Income Properties added 67 triple-net leased assets across 44 states. Sternlicht acknowledged the deal was dilutive in the short term but said it was a strategic move for long-term value.
Focused Lending Strategy
President Jeff DiModica said the firm is sticking to core areas like multifamily, industrial, data centers, and European assets. Office now makes up just 8% of the loan book, down from 9% last year.
Looking Ahead
Executives expect lower interest rates and tighter credit spreads to support stronger activity. Sternlicht pointed to improving fundamentals in 2026, despite some economic risks, including weaker labor trends and a divided property market.
