Starwood Property Trust Inc. · NYSE:STWD
Starwood Property Trust — Investor Presentation (May 2018)
24 slides from Starwood Property Trust's investor presentation, May 2018
Slide 1: Investor Presentation May 2018
INVESTOR PRESENTATION May 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 $5.6B • 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 EARNINGS BY SEGMENT Property Property 25% 22% Lending, Commercial REIS, SMC 45% 1% REIS, SMC REIS, Property 6% 3% REIS, REIS, Property Servicing 6% 2% Lending, REIS, Commercial REIS, CMBS Servicing 56% 8% 7% Lending, Lending, Reside
Slide 6: STWD's Evolving Strategy
STWD’s Evolving Strategy 2013 2015 2017 2009 2011 • Acquired LNR Property LLC • Deployed a total of • Deployed $7.3B of • IPO in August • Deployed a total for $0.7B $5.8B of capital in 2015 capital 2009 raised of $2.0B of capital • Deployed a total of $4.1B of • Acquired a $350M • Commenced strategy
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) Size W.A. LTV • Reputation, scale and market knowledge $10,000 66% 65% $8,000 • Information advantage from affiliation with 64% $6,000 Starwood Capita
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 75% LTV first mortgage at a rate of L + 3.35% Senior tranche has a 56% LTV while the junior tranche remains at 75% LTV A $56M $100M $75M 0-
Slide 11: Lending Segment: Diversified Loan Portfolio With Strong Fundamentals
Lending Segment Diversified Loan Portfolio With Strong Fundamentals CARRYING VALUE BY LOAN TYPE CARRYING VALUE BY REGION (1) CARRYING VALUE BY PROPERTY TYPE (1) Subordinated CMBS Other Industrial Other mortgages 3% South West 3% Parking 2% 4% North East 3% 16% 3% 27% Mezzanine Multi-family loans Off
Slide 12: Lending Segment Portfolio Returns
Lending Segment Portfolio Returns ($ M) As of March 31, 2018 As of December 31, 2017 As of September 30. 2017 As of June 30. 2017 As of March 31. 2017 Optimal Optimal Optimal Optimal Optimal Return on Return on Return on Return on Return on Asset Returns Asset-Level Asset-Level Asset-Level Asset-Lev
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 $100,000 35% Millions SPECIAL • Named special servicer on 160 trusts with a $90,000 collateral balance of $73B 30% SERVICING OF $80,
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 $8.8B of capital every real estate cycle since 1991 • In evaluating a new CMBS investment, • Se
Slide 16: Property Segment Overview
Property Segment Overview High Quality Stabilized Assets with Attractive Current Return Profile • Focused on investing in high quality real estate with: DUBLIN PORTFOLIO – Stable current cash-on-cash returns – Potential for capital appreciation – Longer duration of cash flows – Natural inflation hed
Slide 17: Property Segment Portfolio
Property Segment Portfolio ($ M) Net Carrying Asset Specific Net Occupancy Investment (1) Value Financing Investment Rate Wholly-Owned: Various, U.S. - Medical Office $ 760 $ 489 $ 271 92.4% Dublin, Ireland - Office 539 344 194 100.0% Dublin, Ireland - Multi-family residential 20 13 7 93.0% Southeas
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) $5,980 1.0% Increase $15 +$0.06/share $2,068 2.0% Increase $33 +$0.13/share Variable Rate Net Equity Assets ($3,912) +$0.20/ 3.0% Increase
Slide 20: Conservative Balance Sheet
Conservative Balance Sheet Utilize a Combination of Secured Asset-Level, Unsecured and Off Balance Sheet Debt DEBT-TO-EQUITY RATIOS (1) CAPITALIZATION 2.1x 1.6x Unsecured Debt (2) $2.3 Equity Market (3) Capitalization $5.5 (2) Secured Debt $5.6 Excluding Off Balance Including Off Balance Sheet Lever
Slide 21: Total Debt Capacity
Total Debt Capacity Over $12 Billion of On-Balance Sheet Debt Capacity Not Including A-Note Syndications US$ (M) Debt Obligations Maximum Available (1) Type Facility Size Drawn Capacity Asset Specific Financing: Large Loans $ 5,590 $ 2,338 $ 3,252 Properties 2,223 2,160 63 Residential Loans 645 445
Slide 22: Excellent Returns with Acceptable Risk
Excellent Returns with Acceptable Risk Distributed Over $3.8B in Dividends(1) Since Inception Generating Sector-Leading Total Returns For Shareholders of over 11% Per Year(2) CUMULATIVE DIVIDENDS (1) DIVIDEND COVERAGE US$ (M) 113% Dividend Coverage $4,500 Since 2013 $0.70 $4,000 $0.60 $3,500 $3,000
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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