Starwood Property Trust, Inc. focuses primarily on originating, acquiring, financing and managing commercial mortgage loans and other commercial real estate debt investments, commercial mortgage-backed securities (CMBS), and other commercial real estate investments in both the U.S. and Europe. The company refers to the following as its target assets, such as commercial real estate mortgage loans, preferred equity interests, CMBS and other commercial real estate-related debt investments. The company’s target assets might also include residential mortgage-backed securities (RMBS), certain residential mortgage loans, distressed or non-performing commercial loans, commercial properties subject to net leases and equity interests in commercial real estate. Segments As of December 31, 2015, the company had three business segments: Lending, Investing and Servicing, and Property. Lending: This segment engages primarily in originating, acquiring, financing and managing commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, CMBS, RMBS and other real estate and real estate-related debt investments in both the U.S. and Europe that are held-for-investment. Investing and Servicing This segment includes servicing businesses in both the U.S. and Europe that manage and work out problem assets; an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, including subordinated interests of securitization and resecuritization transactions; a mortgage loan business, which originates conduit loans for the primary purpose of selling these loans into securitization transactions; and an investment business that selectively acquires commercial real estate assets, including properties acquired from CMBS trusts. This segment excludes the consolidation of securitization variable interest entities. Property This segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, including multi-family properties, which are held for investment. Target Assets The company invests in target assets secured primarily by the U.S. or European collateral. The company focuses primarily on originating or acquiring commercial mortgage whole loans, B-Notes, mezzanine loans, preferred equity and mortgage-backed securities. The company might invest in performing and non-performing mortgage loans and other real estate-related loans and debt investments. The company might acquire target assets through portfolio or other acquisitions. The company’s target assets include the following types of loans and other investments with respect to commercial real estate: Whole Mortgage Loans: Loans secured by a first mortgage lien on a commercial property that provide mortgage financing to commercial property developers or owners generally having maturity dates ranging from 3 to 10 years. B-Notes: A privately negotiated loan that is secured by a first mortgage on a single large commercial property or group of related properties and subordinated to an A Note secured by the same first mortgage on the same property or group. Mezzanine Loans: Loans made to commercial property owners that are secured by pledges of the borrower’s ownership interests in the property and/or the property owner, subordinate to whole mortgage loans secured by first or second mortgage liens on the property and senior to the borrower’s equity in the property. Construction or Rehabilitation Loans: Mortgage loans and mezzanine loans to finance the cost of construction or rehabilitation of a commercial property. CMBS: Securities that are collateralized by commercial mortgage loans, including senior and subordinated investment grade CMBS, below investment grade CMBS, and unrated CMBS. Corporate Bank Debt: Term loans and revolving credit facilities of commercial real estate operating or finance companies, each of which are generally secured by such companies’ assets. Corporate Bonds: Debt securities issued by commercial real estate operating or finance companies that might or might not be secured by such companies’ assets, including investment grade corporate bonds, below investment grade corporate bonds, and unrated corporate bonds. Equity: Equity interests in commercial real estate properties. The company has also invested in the following types of loans and other debt investments relating to residential real estate: Non-Agency RMBS: Securities collateralized by residential mortgage loans that are not guaranteed by any U.S. Government agency or federally chartered corporation. Residential Mortgage Loans: Loans secured by a first mortgage lien on residential property. In addition, the company might invest in the following real estate-related investments: Net Leases: Commercial properties subject to net leases, which leases typically have longer terms than gross leases, require tenants to pay all of the operating costs associated with the properties and have contractually specified rent increases throughout their terms. Agency RMBS: RMBS for which a U.S. government agency or a federally chartered corporation guarantees payments of principal and interest on the securities. Commercial Real Estate Owned: Commercial properties purchased from CMBS trusts. Commercial Non-Performing Loans (NPLs): As part of the company’s efforts to attain additional servicing rights in Europe, it might acquire a minority interest in portfolios of NPLs, alongside other majority investors. Regulation The company is required to comply with certain provisions of the Equal Credit Opportunity Act that are applicable to commercial loans and the Fair Housing Act. Tax Status The company has elected to be taxed as a real estate investment trust (REIT) under the Internal Revenue Code of 1986, as amended. As a result, the company is not subject to Federal or State income taxation at the corporate level to the extent it distributes annually approximately 90% of its REIT taxable income to its shareholders and satisfies certain other requirements. History Starwood Property Trust, Inc. was founded in 2009.
starwood property trust inc
591 West Putnam Avenue
Greenwich, CT 06830
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