Starwood Property Trust Inc. · NYSE:STWD
Starwood Property Trust — Investor Presentation (March 2018)
24 slides from Starwood Property Trust's investor presentation, March 2018
Slide 1: Investor Presentation March 2018
INVESTOR PRESENTATION March 2018
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains certain forward-looking statements, including, without limitation, statements concerning our operations, economic performance and financial condition. These forward-looking statements are made pursuant to the safe harbor provisions of the Private
Slide 3: Starwood Property Trust Today (NYSE: STWD)
Starwood Property Trust Today (NYSE: STWD) • A leading real estate finance company and the largest commercial (1) mortgage REIT in the U.S. with a market capitalization of approximately $5.2B • Highly flexible investment platform backed by 350 dedicated employees and leveraging Starwood Capital
Slide 4: STWD's Primary Investment Cylinders
STWD’s Primary Investment Cylinders Commercial Residential Owned Real Special CMBS Loan Lending Lending Estate CMBS Investing Servicing Origination • Originate • Invest in non- • Invest in high- • 20-year track • Largest • Originate $10M floating-rate first agency quality stable record of real comme
Slide 5: Diversified, Complementary and Scalable Platforms
Diversified, Complementary and Scalable Platforms ASSETS BY SEGMENT CORE EARNINGS BY SEGMENT Property Property 22% 17% Lending 48% Investing & Servicing Investing & 14% Lending Servicing 64% 35% Total Assets: $12.5B (1) 2017 YTD Core Earnings: $1.2B (2) Note: Figures as of December 31, 2017 1) Stati
Slide 6: STWD's Evolving Strategy
STWD’s Evolving Strategy 2011 2013 2015 2017 2009 • Deployed a • Acquired LNR Property • Deployed a total of • Deployed $7.3B of • IPO in August total of $2.0B of LLC for $0.7B $5.8B of capital in 2015 capital 2009 raised capital in 2011 • Deployed a total of $4.1B • Acquired a $350M • Commenced str
Slide 7: Starwood Capital Group
Starwood Capital Group A Leading Global Real Estate Investment Firm STARWOOD CAPITAL AFFILIATED BUSINESSES GROUP PROFILE • Founded in 1991 by Barry Real Estate Equity Performing Real Estate Debt Energy Sternlicht • Current assets under management in excess of $56B • Acquired $94B of assets over the
Slide 8: Starwood Property Trust Organization
Starwood Property Trust Organization Fully integrated real estate debt platform with over 350 dedicated professionals STARWOOD PROPERTY TRUST INVESTMENT COMMITTEE Jeffrey DiModica Barry Sternlicht President, Starwood Property Trust Chairman and CEO Starwood Capital Group & Starwood Property Trust An
Slide 9: Lending Segment Overview
Lending Segment Overview 66% Leading Provider of First Mortgage and Mezzanine Loans STWD COMPETITIVE ADVANTAGES PORTFOLIO SIZE¹ VS. W.A. LTV (2) ($M) • Reputation, scale and market knowledge Size W.A. LTV $10,000 66% 65% $8,000 • Information advantage from affiliation with 64% Starwood Capital Group
Slide 10: Lending Segment: Loan Origination And Structuring Process
Lending Segment 66 Hypothetical Loan Origination And Structuring Process 1. Originate Whole Loan 2. Either Retain First Mortgage or Split Into Sr/Jr Originate a 70% LTV first mortgage at a rate of L + 3.75% Senior tranche has a 50% LTV while the junior tranche remains at 70% LTV A $50M $100M $70M 0-
Slide 11: Lending Segment: Diversified Loan Portfolio
Lending Segment Diversified Loan Portfolio With Strong Fundamentals CARRYING VALUE BY LOAN TYPE CARRYING VALUE BY REGION (1) CARRYING VALUE BY PROPERTY TYPE (1) Other Other Other South West 13% 3% 13% 12% Industrial North East 2% Mid Atlantic 31% Parking Office CMBS 5% 2% 33% 5% Midwest Multi-family
Slide 12: Lending Segment Portfolio Returns
Lending Segment Portfolio Returns ($ M) As of December 31, 2017 As of September 30. 2017 As of June 30. 2017 As of March 31. 2017 As of December 31, 2016 Optimal Optimal Optimal Optimal Optimal Return on Return on Return on Return on Return on Asset Returns Asset-Level Asset-Level Asset-Level Asset-
Slide 13: In-Depth Underwriting and Management of Real Estate Credit Risk
In-Depth Underwriting and Management of Real Estate Credit Risk i ORIGINATION • Sources deals from borrowers, banks and brokerage community • Compensation linked to loan performance ii CREDIT / UNDERWRITING • Performs independent due diligence on market, property and sponsor and conducts site visits
Slide 14: Investing & Servicing Segment Overview
Investing & Servicing Segment Overview 21% Leading CMBS Investor, Special Servicer and Conduit Originator • Largest CMBS special servicer SPECIAL SERVICER MARKET SHARE $0.0 40.0% Millions SPECIAL • Named special servicer on 160 trusts with a $0.0 35.0% collateral balance of $73B SERVICING OF $0.0 30
Slide 15: Investment & Servicing Segment Advantages
Investment & Servicing Segment Advantages 21% THE POWER OF EXPERIENCE UNDERWRITING PROCESS • The longest serving investor in • Since 2013 the segment has deployed subordinate CMBS; persevered through over $8.5B of capital every real estate cycle since 1991 • In evaluating a new CMBS investment, • Se
Slide 16: Property Segment Overview
Property Segment Overview Continued Focus on Growth of Real Estate Portfolio • Focused on investing in high quality real estate with: DUBLIN PORTFOLIO – Stable current cash-on-cash returns – Potential for capital appreciation – Longer duration of cash flows – Natural inflation hedge • Acquired five
Slide 17: Property Segment Portfolio
Property Segment Portfolio ($ M) Net Carrying Weighted Asset Specific Net Occupancy Investment (1) Average Value Financing Investment Rate Lease Term Wholly-Owned: Various, U.S. - Medical Office $ 760 $ 489 $ 271 93.6% 6.1 years Dublin, Ireland - Office 525 335 190 99.4% 10.6 years Dublin, Ireland -
Slide 18: Established Culture of Managing Risk
Established Culture of Managing Risk BEST-IN-CLASS MARKET RISK MANAGEMENT POLICIES Credit • Comprehensive underwriting and asset management processes Risk • Special servicer provides a unique natural credit hedge as more loans fall into special servicing upon credit deterioration Interest • 93% of p
Slide 19: Well-Positioned to Benefit from a Rising Interest Rate Environment
Well-Positioned to Benefit from a Rising Interest Rate Environment CASH FLOW SENSITIVITY VARIABLE RATE ASSETS & LIABILITIES (1) TO CHANGES IN LIBOR (1) ($M) ($M) $6,550 1.0% Increase $19 +$0.07/share $2,343 2.0% Increase $41 +$0.16/share Variable Rate Net Equity Assets +$0.25/ ($4,207) 3.0% Increase
Slide 20: Conservative Balance Sheet
Conservative Balance Sheet Utilize a Combination of Secured Asset-Level and Corporate-Level Debt HISTORICAL DEBT-TO-EQUITY RATIO (1) CAPITALIZATION 1.7x 1.6x 1.5x 1.4x 1.4x 1.4x Unsecured Debt Equity Market $2.6 Capitalization $5.6 (3) Secured Debt $5.8 (2) 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 NOTE: As of
Slide 21: Total Debt Capacity
Total Debt Capacity $12.3 Billion of On-Balance Sheet Debt Capacity Not Including A-Note Syndications Debt Obligations US$ (M) Maximum Available (1) Type Facility Size Drawn Capacity Asset Specific Financing: Large Loans $ 6,334 $ 3,098 $ 3,236 Property Segment 1,670 1,640 30 Conduit Loans 450 67 38
Slide 22: Excellent Returns with Acceptable Risk
Excellent Returns with Acceptable Risk Distributed Over $3.7B in Dividends(1) Since Inception Generating Sector-Leading Total Returns For Shareholders of 11% Per Year(2) CUMULATIVE DIVIDENDS (1) DIVIDEND COVERAGE US$ (M) 113% Dividend Coverage $4,000 Since 2013 $0.70 $3,500 $0.60 $3,000 Starwood Way
Slide 23: STWD: A Premier Multi-Cylinder Platform
STWD: A Premier Multi-Cylinder Platform Scaling Existing Businesses Developing New Businesses Building the Premier Internally Multi-Cylinder Finance Company Primarily Focused on Exploring New Asset Classes the Real Estate Industry Geographic Expansion Future growth opportunities will come from a com
Slide 24: NYSE: STWD
NYSE : STWD
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