- Starwood Property Trust plans to deploy $783M in new capital, leveraging lower borrowing costs and extended debt maturities.
- The firm anticipates a robust first quarter of investment activity, capitalizing on a thawing CRE capital market.
- PwC and ULI predict the commercial real estate sector is entering a new growth cycle, and executives are more optimistic about 2025.
Starwood Property Trust (STWD) is about to accelerate its investment pace in 2025, signaling renewed confidence in the commercial real estate market, according to Bisnow.
Poised for Success
Starwood Property Trust closed a series of capital markets transactions in December, generating $783M in new funds while reducing its cost of capital and extending debt maturities.
As a result, the company will have no corporate debt maturities until 2026 after repaying unsecured notes in December and March.
Jeffrey DiModica, President of Starwood Property Trust, emphasized the company’s strengthened liquidity position: “With our heightened level of investment activity, we are pleased to have had the opportunity to increase our liquidity again, reduce our cost of funds, and extend the tenor of our debt.”
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Investment Opportunities
Starwood CEO Barry Sternlicht noted a “thawing in CRE capital markets,” creating more lending opportunities for Starwood’s low-leverage, diversified business. The company has developed a “robust pipeline” of investments, with plans to ramp up activity in early 2025.
This optimism aligns with a broader market outlook. PwC and the Urban Land Institute’s October report forecasted a new growth cycle for commercial real estate, suggesting that the sector may have bottomed out. Surveyed executives expressed greater confidence in the market’s trajectory than a year ago.
Why It Matters
Starwood’s aggressive investment strategy reflects improving sentiment in the commercial real estate market. By leveraging its increased liquidity and reduced borrowing costs, Starwood is well-positioned to seize emerging opportunities in a market poised for recovery.
As 2025 begins, Starwood’s moves could signal a broader trend among major players in commercial real estate, with renewed investment activity catalyzing growth across the sector.
