Starwood Property Trust to Acquire $2.2 Billion Net Lease Platform
Starwood Property Trust (NYSE:STWD) has announced a definitive agreement to acquire Fundamental Income Properties from Brookfield Asset Management for $2.2 billion. The acquisition includes a portfolio of 467 properties across 44 states, featuring 92 tenants from 56 industries with a 17-year weighted average lease term and 2.2% annual rent escalations.
The Company will integrate Fundamental's 28-person team and its net lease platform, expanding STWD's presence in the net lease real estate market. The transaction will be funded through a combination of $1.3 billion in assumed financing facilities and additional debt and equity capital. STWD also released preliminary Q2 2025 results, expecting GAAP EPS of $0.36-0.38 and declared a $0.48 dividend for Q3 2025.
Starwood Property Trust (NYSE:STWD) ha annunciato un accordo definitivo per acquisire Fundamental Income Properties da Brookfield Asset Management per 2,2 miliardi di dollari. L'acquisizione comprende un portafoglio di 467 proprietà distribuite in 44 stati, con 92 inquilini appartenenti a 56 settori diversi, caratterizzato da un contratto di locazione medio ponderato di 17 anni e da incrementi annuali del canone del 2,2%.
L'azienda integrerà il team di 28 persone di Fundamental e la sua piattaforma di locazione netta, ampliando la presenza di STWD nel mercato immobiliare delle locazioni nette. L'operazione sarà finanziata attraverso una combinazione di 1,3 miliardi di dollari in finanziamenti assunti e capitale aggiuntivo di debito ed equity. STWD ha inoltre pubblicato i risultati preliminari del secondo trimestre 2025, prevedendo un utile per azione GAAP di 0,36-0,38 dollari e ha dichiarato un dividendo di 0,48 dollari per il terzo trimestre 2025.
Starwood Property Trust (NYSE:STWD) ha anunciado un acuerdo definitivo para adquirir Fundamental Income Properties de Brookfield Asset Management por 2.200 millones de dólares. La adquisición incluye una cartera de 467 propiedades en 44 estados, con 92 inquilinos de 56 industrias, con un plazo promedio ponderado de arrendamiento de 17 años y incrementos anuales de renta del 2,2%.
La compañía integrará al equipo de 28 personas de Fundamental y su plataforma de arrendamiento neto, ampliando la presencia de STWD en el mercado inmobiliario de arrendamientos netos. La transacción se financiará mediante una combinación de 1.300 millones de dólares en facilidades de financiamiento asumidas y capital adicional de deuda y acciones. STWD también publicó resultados preliminares del segundo trimestre de 2025, esperando un EPS GAAP de 0,36-0,38 dólares y declaró un dividendo de 0,48 dólares para el tercer trimestre de 2025.
Starwood Property Trust (NYSE:STWD)는 Brookfield Asset Management로부터 Fundamental Income Properties를 22억 달러에 인수하는 최종 계약을 발표했습니다. 이번 인수에는 44개 주에 걸쳐 467개 부동산 포트폴리오가 포함되며, 56개 산업의 92명의 임차인이 있으며, 평균 임대 기간은 17년, 연간 임대료 상승률은 2.2%입니다.
회사는 Fundamental의 28인 팀과 순임대 플랫폼을 통합하여 STWD의 순임대 부동산 시장 내 입지를 확대할 예정입니다. 이번 거래는 13억 달러의 인수 금융 시설과 추가 부채 및 자본 조합으로 자금을 조달할 예정입니다. STWD는 또한 2025년 2분기 예비 실적을 발표했으며, GAAP 주당순이익(EPS)은 0.36~0.38달러, 2025년 3분기 배당금은 0.48달러로 선언했습니다.
Starwood Property Trust (NYSE:STWD) a annoncé un accord définitif pour acquérir Fundamental Income Properties auprès de Brookfield Asset Management pour 2,2 milliards de dollars. L'acquisition comprend un portefeuille de 467 propriétés réparties dans 44 États, avec 92 locataires issus de 56 secteurs, une durée moyenne pondérée des baux de 17 ans et des augmentations annuelles des loyers de 2,2%.
La société intégrera l'équipe de 28 personnes de Fundamental ainsi que sa plateforme de location nette, élargissant ainsi la présence de STWD sur le marché immobilier des baux nets. La transaction sera financée par une combinaison de 1,3 milliard de dollars de facilités de financement assumées et de capitaux supplémentaires sous forme de dette et de fonds propres. STWD a également publié des résultats préliminaires pour le deuxième trimestre 2025, prévoyant un BPA GAAP de 0,36-0,38 $ et a déclaré un dividende de 0,48 $ pour le troisième trimestre 2025.
Starwood Property Trust (NYSE:STWD) hat eine endgültige Vereinbarung zum Erwerb von Fundamental Income Properties von Brookfield Asset Management für 2,2 Milliarden US-Dollar bekannt gegeben. Die Übernahme umfasst ein Portfolio von 467 Immobilien in 44 Bundesstaaten, mit 92 Mietern aus 56 Branchen, einer gewichteten durchschnittlichen Mietvertragslaufzeit von 17 Jahren und jährlichen Mietsteigerungen von 2,2%.
Das Unternehmen wird das 28-köpfige Team von Fundamental und dessen Net-Lease-Plattform integrieren und so STWDs Präsenz im Net-Lease-Immobilienmarkt ausbauen. Die Transaktion wird durch eine Kombination aus 1,3 Milliarden US-Dollar an übernommenen Finanzierungseinrichtungen sowie zusätzlichem Fremd- und Eigenkapital finanziert. STWD veröffentlichte außerdem vorläufige Ergebnisse für das zweite Quartal 2025, erwartet einen GAAP-Gewinn je Aktie (EPS) von 0,36 bis 0,38 US-Dollar und erklärte eine Dividende von 0,48 US-Dollar für das dritte Quartal 2025.
- Acquisition provides access to specialized asset-backed security financing markets
- Portfolio features 100% occupancy with 17-year weighted average lease term
- Transaction expected to be accretive to distributable earnings
- Built-in 2.2% average annual rent increases provide hedge against inflation
- Zero credit losses since inception in acquired portfolio
- Strong liquidity position of $1.4 billion as of July 15, 2025
- $44 million ($0.13 per share) realized losses from Houston office building sale
- Book value per share declined from $18.87 to $18.78-18.80 quarter-over-quarter
- Two loans foreclosed during Q2 2025 totaling $140 million
- Two loans downgraded to higher risk category with total value of $137 million
Insights
STWD's $2.2B acquisition of Fundamental expands net lease portfolio, provides long-term predictable cash flows with built-in growth, expected to be accretive.
Starwood Property Trust's $2.2 billion acquisition of Fundamental Income Properties represents a significant strategic expansion into the fragmented net lease real estate sector. The deal brings 467 properties across 44 states with impressive portfolio metrics: 92 tenants from 56 industries, 100% occupancy, and a 17-year weighted average lease term with 2.2% annual rent escalations.
This transaction transforms STWD's business composition, reducing its core commercial real estate lending concentration to approximately 50% of assets as it strategically diversifies. The company gains not just properties but a 28-person vertically integrated team with origination, underwriting, and capital markets capabilities, particularly strong relationships with middle-market companies and private equity sponsors.
The timing appears opportunistic. Net lease properties provide defensive characteristics with long-term predictable cash flows, contractual rent increases, and minimal landlord responsibilities - attractive attributes in uncertain economic environments. The acquired portfolio's zero credit losses since inception suggests strong underwriting, while access to specialized asset-backed security financing creates additional capital efficiency.
For Q2 2025, STWD expects distributable earnings of $0.42-$0.44 per share, which includes a $0.13 per share realized loss from the previously disclosed Houston office property sale. Book value per share decreased slightly to $18.78-$18.80 from $18.87 in Q1. The company demonstrated robust investment activity with $3.2 billion deployed across business lines, maintaining $1.4 billion in liquidity after dividend payments.
The transaction and early $0.48 dividend declaration for Q3 2025 reinforce management's confidence in the company's financial position and earnings outlook despite some credit deterioration in their loan portfolio during Q2.
- 467 Properties, 92 Tenants, 17 Year Weighted Average Lease Term and Contractual Rent Growth -
- Platform Provides Growth Engine in Global Net Lease Real Estate Market -
- Solidifies the Company's Position as Leading Diversified REIT -
- Transaction Expected to be Accretive to Distributable Earnings -
- Provides Preliminary Financial Results for Q2 2025 -
- Early Declared
Fundamental, currently owned by Brookfield Asset Management, operates a vertically integrated net lease real estate investment business led by a best-in-class, experienced management team. The 28-person team, which will be employed by the Company, brings comprehensive capabilities across originations, credit and real estate underwriting, portfolio management, and capital markets. Fundamental executes its acquisitions through strong relationships with middle market companies and private equity sponsors across a variety of industries.
The acquired portfolio consists of 467 properties spanning 12 million square feet across 44 states, 56 industries, and 92 tenants. The assets demonstrate strong credit quality, featuring a 17-year weighted average lease term, and
"When we went public in 2009, we said we would create a diversified company around the areas of expertise of our Manager, Starwood Capital. With the addition of another business cylinder, we are expanding into another proven, scalable segment with strong synergies with our platform. Our core commercial real estate lending business is now approximately half of our asset base as we have strategically expanded into complementary lending and investing verticals," said Barry Sternlicht, Chairman and CEO of Starwood Property Trust. "This diversification has allowed us to weather cycles and deliver consistent earnings and dividends for our shareholders, who have earned an average of
Jeffrey DiModica, President of Starwood Property Trust, added, "We are very fortunate to add such a successful, experienced and thoughtful team with deep industry relationships and a proven track record of success. With our combined relationships and global reach, we are poised to increase market share. With nearly 20-year leases, annual rent escalators and access to attractive proven ABS financing, the transaction highlights our safety focus. We anticipate this investment to be accretive to distributable earnings after giving effect to projected refinancing of existing debt and projected acquisition volume, and the impact of this accretion will grow as we deploy more capital at our targeted yields. We are pleased to welcome the Fundamental team to the Starwood family."
"We are excited to join Starwood Property Trust and further scale our business as part of this best-in-class organization," said Chris Burbach, CEO of Fundamental. "Our team has built a proven, credit-oriented origination process, supported by long-standing relationships across industries. Together with Starwood Property Trust's real estate expertise, consistent access to capital, and a growing net lease market, we are well positioned to capitalize on compelling investment opportunities."
Alexi Panagiotakopoulos, CIO of Fundamental, added, "We built our platform to meet the growing capital needs of middle market companies by providing efficient capital along with certainty of execution. Joining Starwood Property Trust enhances our abilities to help our current and future clients grow and improve their businesses."
Summary of Strategic Benefits
The Company expects the acquisition to provide the following benefits:
- Compelling Risk Adjusted Returns with Strong Credit Profile: The diversified net lease portfolio provides predictable, long-term cash flows with built-in downside protection, driven by high tenant quality and durable lease structures with contractual rent growth.
- Attractive Portfolio Characteristics (data as of March 31, 2025):
100% occupied- Diversified across 92 tenants from 56 industries including food production and distribution, auto services, retail, restaurants, entertainment and education
0% credit losses since inception2.2% average annual rent increases2- 17-year weighted average remaining lease term
- Highly Scalable Opportunity: The transaction establishes a platform in the large and highly fragmented net lease market, positioning the Company to capitalize on anticipated growth in transaction volume.
- Enhanced Origination Capabilities: The Fundamental team brings deep relationships with private equity sponsors and middle market businesses, expanding the Company's access to proprietary credit investment opportunities.
- Capital Markets Access: The acquisition provides access to specialized asset-backed security financing markets, enabling the Company to leverage its capital markets expertise for efficient, cost-effective financing solutions across its platform.
- Solidifies Position as Leading Diversified REIT: The acquisition further reinforces the Company's status as a global real estate leader with enhanced capital deployment capabilities across multiple asset classes and a proven ability to deliver attractive risk-adjusted returns through various market cycles.
In connection with the transaction, the Company will assume Fundamental's existing financing facilities totaling
Advisors
BofA Securities is serving as sole financial advisor to Starwood Property Trust.
Wells Fargo and Evercore are serving as financial advisors to Brookfield Asset Management.
Preliminary Results for the Three Months Ended June 30, 2025
On a preliminary basis, for the three months ended June 30, 2025, the Company expects earnings per diluted share in accordance with accounting principles generally accepted in
The Company estimates its book value as of June 30, 2025 was approximately
During the quarter ended June 30, 2025, the Company invested
As of July 15, 2025, the Company had
As previously disclosed, the Company will release its second quarter 2025 financial results on Thursday, August 7, 2025 before the opening of trading on the New York Stock Exchange.
Non-GAAP Financial Measures
Reconciliation of Estimated GAAP Earnings per Diluted Share to Estimated Distributable Earnings per Diluted Share
The table below reconciles the Company's estimated range of GAAP earnings per diluted share to the Company's estimated range of Distributable Earnings per diluted share, for the three months ended June 30, 2025.
Three months ended June 30, 2025 | |||||||
Preliminary | |||||||
Estimated GAAP Earnings per Diluted Share | $ | 0.36 | - | $ | 0.38 | ||
Add / (Deduct): | |||||||
Non-cash items | 0.09 | - | 0.11 | ||||
Unrealized (gains)/losses, net | (0.03) | - | (0.05) | ||||
Estimated Distributable Earnings per Diluted Share | $ | 0.42 | - | $ | 0.44 | ||
Distributable Earnings, a non-GAAP financial measure, is used to compute the Company's incentive fees to its external manager and is an appropriate supplemental disclosure for a mortgage REIT. For the Company's purposes, Distributable Earnings is defined as GAAP net income (loss) excluding non-cash equity compensation expense, the incentive fee due to the Company's external manager, acquisition costs for successful acquisitions, depreciation and amortization of real estate and associated intangibles, any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period and, to the extent deducted from net income (loss), distributions payable with respect to equity securities of subsidiaries issued in exchange for properties or interests therein. The amount is adjusted to exclude one-time events pursuant to changes in GAAP and certain other non-cash adjustments as determined by the Company's external manager and approved by a majority of the Company's independent directors. Refer to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 for additional information regarding Distributable Earnings.
Early Declaration of
The Company's Board of Directors has declared a dividend of
About Starwood Property Trust, Inc.
Starwood Property Trust (NYSE: STWD) is a leading diversified finance company with a core focus on the real estate and infrastructure sectors. An affiliate of global private investment firm, Starwood Capital Group, the Company has successfully deployed
Disclaimer and Forward-Looking Statements
The estimated financial results contained in this press release are preliminary, and final results for the three months ended June 30, 2025 may change. These preliminary results are based upon our estimates and are subject to completion of our quarterly financial closing procedures. In addition, these preliminary results have not been reviewed by our independent registered public accounting firm. This summary of recent results is not a comprehensive statement of our financial results for the three months ended June 30, 2025.
Statements in this press release which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are developed by combining currently available information with our beliefs and assumptions and are generally identified by the words "believe," "expect," "anticipate" and other similar expressions. Although Starwood Property Trust believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, satisfaction or waiver of the conditions precedent to the consummation of the contemplated acquisition of Fundamental, unanticipated difficulties or expenditures relating to, of the failure to realize the benefits of, the contemplated acquisition, including in terms of the acquisition on the Company's future performance, completion of pending investments and financings, continued ability to acquire additional investments, competition within the finance and real estate industries, availability of financing, and other risks detailed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as well as other risks and uncertainties set forth from time to time in the Company's reports filed with the SEC, including its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.
In light of these risks and uncertainties, there can be no assurances that the results referred to in the forward-looking statements contained herein will in fact occur. Except to the extent required by applicable law or regulation, we undertake no obligation to, and expressly disclaim any such obligation to, update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, changes to future results over time or otherwise.
Contact:
Zachary Tanenbaum
Starwood Property Trust
Phone: 203-422-7788
Email: ztanenbaum@starwood.com
1 Assumes CPI of
2 Assumes CPI of
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SOURCE Starwood Property Trust, Inc.
FAQ
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