2025 Annual Report and Letter to Shareholders

2025 ANNUAL REPORT

THE 74 - NEW YORK, NY

Shareholders of Starwood Property Trust,

It seems like yesterday, but seventeen years ago at our IPO in 2009, in the wake of the financial crisis, we set out to build a real estate finance company designed to survive and thrive through cycles

• not one dependent on a single market, sector, or funding source. Over time, we have deliberately transformed Starwood Property Trust from a commercial mortgage REIT into a diversified finance platform with scale, operating businesses, owned real estate, infrastructure lending, and deep capital markets access.

  Despite a global pandemic and the fastest interest rate increases in modern history, we have continued to expand and diversify the platform, strengthened the balance sheet, and preserved our dividend. Today, we are not simply a mortgage REIT - and we do not have a true peer in scale or business model. Our hybrid model - combining large-scale lending, owned real estate, infrastructure finance, and one of the leading special servicing platforms in the country - was built to endure.

  2025 HIGHLIGHTS

  • Deployed $12.7 billion of capital - our second largest investing year ever

  • Grew total assets to a record $30.7 billion

  • Raised and repriced $4.4 billion of corporate capital at the tightest lending spreads in our history

  • Originated a near record $6.4 billion of commercial real estate loans

  • Delivered a record year in infrastructure lending with $2.6 billion of new investments

  • Increased activity and earnings in our special servicing platform

  • Completed the acquisition of a $2.2 billion net lease business, expanding our owned real estate portfolio and adding duration and consistency to our earnings base

  • Preserved our dividend, making us the only commercial mortgage REIT that has never cut its dividend

Historical Asset Diversification

We exited 2025 with meaningful embedded earnings power. We have almost $2 billion of unfunded commercial real estate lending commitments that we expect will generate incremental income as they fund. Our new net lease business provides duration and contractual rent increases that is well positioned to grow earnings as it scales. We have excess liquidity to deploy, and we continue to access the unsecured and structured credit markets at lending spreads that are the tightest in our history and among the tightest in our sector.

COMMERCIAL LENDING

Our commercial lending platform continues to grow and is expected to reach a record balance in 2026, led by multifamily and industrial loans which represent the majority of our loan portfolio today. Our office exposure has declined materially, and today loans secured by U.S. office represent only 8% of our assets.

Credit remains an area of focus. We ended the year with a concentrated group of non-accrual and foreclosed assets and each has defined business plans to maximize shareholder value. We evaluate each asset individually. In some cases, selling quickly maximizes value. In other instances, leasing, repositioning, or recapitalizing produces materially improved long-term outcomes. We have the scale, liquidity, and real estate expertise to execute either path. Our goal is to resolve non-earning assets thoughtfully while protecting shareholder capital.

ENERGY INFRASTRUCTURE

The reduction in office lending has helped create capital for our infrastructure lending business to deliver their largest origination year ever, supported by durable demand for power generation, data infrastructure, and energy assets. We expect power needs to continue to grow, creating more investment opportunities, and decreasing the loan-to-value ratios of our existing loan portfolio.

SPECIAL SERVICING

An important differentiator for us is our special servicing platform. Servicing activity rose meaningfully in 2025 as defaults increased across the commercial mortgage-backed securities (CMBS) market. We have always described our servicer as a positive carry credit hedge - it earns more when markets are under pressure - and that once again proved true this year. Few companies have this countercyclical earnings capability.

NET LEASE

In 2025, we completed the acquisition of Fundamental Income Properties, adding 28 seasoned professionals and more than $2 billion of long-duration, net lease assets with 100% occupancy, zero defaults, a weighted average lease term of more than 17 years, and approximately 2.3% annual rent escalations, assuming a 2% or greater CPI increase. We have already improved the financing profile of these assets through securitizations executed at tighter-than-underwritten debt spreads and are currently optimizing bank line pricing. While the platform is modestly dilutive during its ramp-up phase - as expected - we see a clear path to accretion as acquisitions scale, overhead is relatively fixed, and financing costs improve.

SUMMARY

After several years of headwinds, we believe real estate is beginning to experience more tailwinds. Interest rates have fallen and are expected to continue falling. Supply growth is declining materially. Transaction volumes in the U.S. should improve, as they have in Europe, as U.S. rates normalize creating significant loan origination opportunities. Capital markets are liquid and real estate remains the largest asset class in the world, historically performing well during broader market volatility.

Our balance sheet remains a core strength and we are conservatively leveraged relative to our peers. We could increase leverage to enhance near-term earnings, but we have instead chosen durability and flexibility.

Alignment matters. Insider ownership stands at approximately 6% of the Company, or roughly $380

million of stock - greater than the insider ownership of all of our peers combined. We are aligned with you because we are significant shareholders alongside you, and we manage this company with a long-term ownership mindset.

We have built a diversified, scaled real estate finance platform unlike any other in our sector. As capital is deployed, legacy assets are resolved, and our newer businesses continue to mature, our earnings power should build.

We want to thank our shareholders for their continued support, and our Board of Directors for their wisdom and guidance.

Yours very truly,

Chairman and Chief Executive Officer President

Forward-Looking Statements

This shareholder letter contains certain forward-looking statements, including without limitation, statements concerning our operations, economic performance, financial condition and prospects. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to the section entitled "Special Note Regarding Forward-Looking Statements" in our Annual Report on Form 10-K for the year ended December 31, 2025 for more information.

BOARD OF DIRECTORS

Barry S. Sternlicht

Chairman & CEO

Starwood Capital Group & Starwood Property Trust

Jonathan L. Pollack

President / Starwood Capital Group

Vice Chairman / Starwood Property Trust

Jeffrey G. Dishner

Vice Chairman

Starwood Capital Group

Richard D. Bronson

Chairman

The Bronson Companies, LLC

Camille J. Douglas Principal Svanninge Capital

Deborah L. Harmon

Co-Founder and Chief Executive Officer

Artemis Real Estate Partners

Solomon J. Kumin

Co-President

Leucadia Asset Management LLC

Fred Perpall

Chief Executive Officer

The Beck Group

Fred S. Ridley

Partner

Foley & Lardner LLP

Strauss Zelnick

Founder & Managing Partner

Zelnick Media Capital (ZMC)

EXECUTIVE TEAM

Barry S. Sternlicht

Chairman & CEO

Starwood Capital Group & Starwood Property Trust

Jeffrey F. DiModica, CFA

President

Starwood Property Trust

Rina Paniry

Chief Financial Officer

Starwood Property Trust

PRINCIPAL EXECUTIVE OFFICE

Starwood Property Trust 2340 Collins Avenue, Suite 700 Miami Beach, Florida 33139 Phone: (305) 695-5500

https://www.starwoodpropertytrust.com

INVESTOR RELATIONS CONTACT

Zachary Tanenbaum Starwood Property Trust Phone: (203) 422-7788

ztanenbaum@starwood.com

TRANSFER AGENT

Computershare Trust Company, N.A. PO Box 43078

Providence, RI 02940-3078

Within USA, US territories & Canada - Phone: (877) 373 6374 Outside USA, US territories & Canada - Phone: (781) 575 3100

Washington, D.C. 20549

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025 or

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-34436

(Exact name of registrant as specified in its charter)

Maryland

(State or other jurisdiction of incorporation or organization)

2340 Collins Avenue, Suite 700 Miami Beach, Florida

(Address of Principal Executive Offices)

27-0247747

(I.R.S. Employer Identification No.)

33139

(Zip Code)

Registrant's telephone number, including area code (305) 695-5500

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act

of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No

As of June 30, 2025, the aggregate market value of the voting stock held by non-affiliates was $6.4 billion based on the reported last sale price of our common stock on June 30, 2025. Shares of our common stock held by affiliates, which includes officers and directors of the registrant, have been excluded from this calculation. This calculation does not reflect a determination that persons are affiliates for any other purposes.

The number of shares of the issuer's common stock, $0.01 par value, outstanding as of February 20, 2026 was 370,581,767.

DOCUMENTS INCORPORATED BY REFERENCE

Documents Incorporated By Reference: The information required by Part III of this Form 10-K, to the extent not set forth herein or by amendment, is incorporated by reference from the registrant's definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A on or prior to April 30, 2026.

TABLE OF CONTENTS

Page

Part I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Item 1C. Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Part II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Item 6. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . 57

Item 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . 181

Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . 182

Part III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

182

Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . 183

Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

Part IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

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Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K (this "Form 10-K") 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 Securities Litigation Reform Act of 1995. 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. Forward-looking statements do not guarantee future performance, which may be materially different from that expressed in, or implied by, any such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their respective dates.

These forward-looking statements are based largely on our current beliefs, assumptions and expectations of our future performance taking into account all information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or within our control, and which could materially affect actual results, performance or achievements. Factors that may cause actual results to vary from our forward-looking statements include, but are not limited to:

• defaults by borrowers in paying debt service on outstanding indebtedness;

• impairment in the value of real estate property securing our loans or in which we invest;

• availability of mortgage origination and acquisition opportunities acceptable to us;

• potential mismatches in the timing of asset repayments and the maturity of the associated financing agreements;

• national and local economic and business conditions, including as a result of the impact of public health emergencies;

• the occurrence of certain geo-political events (such as wars, terrorist attacks and tensions between states, including global trade disputes related to tariffs) that affect the normal and peaceful course of international relations;

• general and local commercial and residential real estate property conditions;

• changes in federal government policies;

• changes in federal, state and local governmental laws and regulations;

• increased competition from entities engaged in mortgage lending and securities investing activities;

• changes in interest rates; and

• the availability of, and costs associated with, sources of liquidity.

In light of these risks and uncertainties, there can be no assurances that the results referred to in the forward-looking statements contained in this Form 10-K 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.

Summary Risk Factors

We are subject to a number of risks that, if realized, could have a material adverse effect on our business, financial condition, results of operations, liquidity, the market price of our common stock and our ability to make distributions to our stockholders. Some of our more significant challenges and risks include, but are not limited to, the following, which are described in greater detail below:

• We are dependent on Starwood Capital Group Global, L.P. ("Starwood Capital Group"), including its affiliate, SPT Management, LLC (our "Manager") and their key personnel, who provide services to us through a management agreement, and we may not find a suitable replacement for our Manager and Starwood Capital Group if the management agreement is terminated, or for these key personnel if they leave Starwood Capital Group or otherwise become unavailable to us.

• There are various conflicts of interest in our relationship with Starwood Capital Group, including our Manager, which could result in decisions that are not in the best interests of our stockholders.

• The management agreement with our Manager was not negotiated on an arm's-length basis and may not be as favorable to us as if it had been negotiated with an unaffiliated third party and may be costly and difficult to terminate.

• Our access to sources of financing may be limited and thus our ability to maximize our returns may be adversely affected.

• Our significant indebtedness subjects us to increased risk of loss and may reduce cash available for distributions to our stockholders.

• Interest rate fluctuations could significantly decrease our results of operations and cash flows and the market value of our investments.

• Hedging may adversely affect our earnings, which could reduce our cash available for distribution to our stockholders.

• The lack of liquidity in our investments may adversely affect our business.

• Difficult conditions in the mortgage, commercial and residential real estate markets may cause us to experience market losses related to our holdings.

• Our commercial construction or rehabilitation lending may expose us to increased lending risks.

• The commercial mortgage loans we originate or acquire and the mortgage loans underlying our commercial mortgage-backed securities ("CMBS") investments are subject to the ability of the commercial property owner to generate net income from operating the property, as well as the risks of delinquency and foreclosure.

• If we overestimate the yields or incorrectly price the risks of our investments, we may experience losses.

• The B-Notes that we acquire are subject to additional risks related to the privately negotiated structure and terms of the transaction, which may result in losses to us. Our mezzanine loans involve greater risks of loss than senior loans secured by similar income-producing properties.

• We may acquire and sell from time to time residential loans, including "non-QM" loans, which may subject us to legal, regulatory and other risks, which could adversely impact our business and financial results.

• The residential loans that we may acquire, and that underlie the residential mortgage-backed securities ("RMBS") we acquire, are subject to risks particular to investments secured by mortgage loans on residential property. These risks are heightened because we may purchase non-performing loans.

• Prepayment rates may adversely affect the value of our investment portfolio.

• Some of our portfolio investments are recorded at fair value and, as a result, there is uncertainty as to the value of these investments. We may experience a decline in the fair value of our assets.

• We invest in commercial properties subject to net leases, which could subject us to losses.

• Investments outside the U.S. that are denominated in foreign currencies subject us to foreign currency risks and to the uncertainty of foreign laws and markets, which may adversely affect our distributions and our real estate investment trust ("REIT") status.

• We invest in equity interests in commercial real estate assets, which subjects us to the general risks of owning commercial real estate.

• We have sponsored, and purchased the more junior securities of, collateralized loan obligations ("CLOs") and such instruments involve significant risks, including that these securities receive distributions from the applicable CLO only if the CLO generates enough income to first pay all the investors holding senior tranches and all CLO expenses.

• We are subject to the risks of investing in infrastructure loans, many of which are outside our control, and that may negatively impact our business and financial results.

• The investment portfolio of our Infrastructure Lending Segment is concentrated in the power industry and, to a lesser extent, the midstream oil and gas industry, which subjects the portfolio to more risks than if the investments were more

  diversified. The power and oil and gas industries are subject to extensive regulation, which could adversely impact the business and financial performance of the projects to which our infrastructure loans relate.

• The business activities of our Investing and Servicing Segment, particularly our special servicing business, expose us to certain risks.

• The risks of investment in subordinated CMBS are magnified in the case of our Investing and Servicing Segment, where the principal payments received by the CMBS trust are made in priority to the higher rated securities.

• Certain provisions of Maryland law and of our charter could inhibit changes in control.

• Maintenance of our exemption from registration under the Investment Company Act imposes significant limits on our operations.

• If we do not qualify as a REIT or fail to remain qualified as a REIT, we will be subject to tax as a regular corporation and could face a substantial tax liability, which would reduce the amount of cash available for distribution to our stockholders.

• Complying with REIT requirements may cause us to forgo otherwise attractive opportunities or to liquidate otherwise attractive investments.

• Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.

• Cybersecurity risks could result in the loss of data, interruptions in our business, damage to our reputation, and result in increased costs and financial losses that could have a material adverse effect on our business and results of operations.

The above list is not exhaustive, and we face additional challenges and risks. Please carefully consider all of the information in this Form 10-K, including the risk factors set forth in Part I - Item 1A. Risk Factors.

PART I

Item 1. Business.

The following description of our business should be read in conjunction with the information included elsewhere in this Form 10-K for the year ended December 31, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ significantly from the results discussed in the forward-looking statements due to the factors set forth in "Risk Factors" and elsewhere in this Form 10-K. References in this Form 10-K to "we," "our," "us," or the "Company" refer to Starwood Property Trust, Inc. and its subsidiaries.

General

Starwood Property Trust, Inc. ("STWD" and, together with its subsidiaries, "we" or the "Company") is a Maryland corporation that commenced operations in August 2009, upon the completion of our initial public offering ("IPO"). We are focused primarily on originating, acquiring, financing and managing mortgage loans and other real estate investments in the United States ("U.S."), Europe and Australia. As market conditions change over time, we may adjust our strategy to take advantage of changes in interest rates and credit spreads as well as economic and credit conditions.

We have four reportable business segments as of December 31, 2025 and we refer to the investments within these segments as our target assets:

• Real estate commercial and residential lending (the "Commercial and Residential Lending Segment")-engages primarily in originating, acquiring, financing and managing commercial first mortgages, non-agency residential mortgages ("residential loans"), subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities ("CMBS"), residential mortgage-backed securities ("RMBS") and other real estate and real estate-related debt investments in the U.S., Europe and Australia (including distressed or non-performing loans). Our residential loans are secured by a first mortgage lien on residential property and primarily consist of non-agency residential loans that are not guaranteed by any U.S. Government agency or federally chartered corporation.

• Infrastructure lending (the "Infrastructure Lending Segment")-engages primarily in originating, acquiring, financing and managing infrastructure debt investments.

• Real estate property (the "Property Segment")-engages primarily in acquiring and managing equity interests in stabilized and to be stabilized commercial real estate. This includes multifamily properties, multi-tenant medical office net lease properties and diversified single-tenant triple net lease properties, all of which are held for investment.

• Real estate investing and servicing (the "Investing and Servicing Segment")-includes (i) a servicing business in the

U.S. that manages and works out problem assets, (ii) 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, (iii) a mortgage loan business which originates conduit loans for the primary purpose of selling these loans into securitization transactions and (iv) an investment business that selectively acquires commercial real estate assets, including properties acquired from CMBS trusts.

Our segments exclude the consolidation of securitization variable interest entities ("VIEs"), principally representing CMBS trust vehicles that we consolidate by virtue of our role as special servicer. However, they include securitized financing VIEs such as collateralized loan obligations ("CLOs"), single asset securitizations ("SASBs") and asset-backed securitizations ("ABSs").

On July 23, 2025, we acquired Fundamental Income Properties, LLC ("Fundamental"), which was completed by way of merger, for approximately $2.2 billion inclusive of $1.3 billion of indebtedness assumed. At acquisition, Fundamental owned 468 properties, spanning 12.3 million square feet across 44 states, 59 industries and 90 tenants. The properties, which consist of retail, industrial and service facilities, are leased under 103 individual and master net operating lease agreements with a 17.1 year weighted-average lease base term. Fundamental is aggregated within our Property Segment.

We are organized and conduct our operations to qualify as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"). As such, we will generally not be subject to U.S. federal corporate income tax on that portion of our net income that is distributed to stockholders if we distribute at least 90% of our taxable income to our stockholders by prescribed dates and comply with various other requirements. We also operate our business in a manner that will permit us to maintain our exemption from registration under the Investment Company Act of 1940 as amended (the "Investment Company Act" or "1940 Act").

We are organized as a holding company and conduct our business primarily through our various wholly-owned subsidiaries. We are externally managed and advised by SPT Management, LLC (our "Manager") pursuant to the terms of a management agreement. Our Manager is controlled by Barry Sternlicht, our Chairman and Chief Executive Officer. Our Manager is an affiliate of Starwood Capital Group Global, L.P. ("Starwood Capital Group"), a privately-held private equity firm founded by Mr. Sternlicht.

Our corporate headquarters office is located at 2340 Collins Avenue, Suite 700, Miami Beach, Florida 33139, and our telephone number is (305) 695-5500.

Investment Strategy

We seek to attain attractive risk-adjusted returns for our investors over the long term by sourcing and managing a diversified portfolio of target assets, financed in a manner that is designed to deliver attractive returns across a variety of market conditions and economic cycles. Our investment strategy focuses on a few fundamental themes:

• origination and acquisition of real estate debt assets with an implied basis sufficiently low to weather declines in asset values;

• acquisition of equity interests in commercial real estate properties that generate stable current returns, increase the duration of our investment portfolio and provide potential for capital appreciation;

• focus on real estate markets and asset classes with strong supply and demand fundamentals and/or barriers to entry;

• structuring and financing each transaction in a manner that reflects the risk of the underlying asset's cash flow stream and credit risk profile, and efficiently managing and maintaining the transaction's interest rate and currency exposures at levels consistent with management's risk objectives;

• seeking situations where our size, scale, speed and sophistication allow us to position ourselves as a "one-stop" lending solution for real estate owner/operators;

• utilizing the skills, expertise, and contacts developed by our Manager over the past 34 years as one of the premier global real estate investment managers to: (i) correctly anticipate trends and identify attractive risk-adjusted investment opportunities in U.S., European and Australian real estate markets; and (ii) expand and diversify our presence in various asset classes, including:

  • origination and acquisition of residential loans, including non-agency residential loans sometimes referred to as "non-qualified mortgages" or "non-QMs"; and

  • origination and acquisition of corporate and asset-backed loans;

• utilizing the skills, expertise and infrastructure we acquired through our 2013 acquisition of LNR Property LLC ("LNR"), a market leading diversified real estate investment management and loan servicing company comprising our Investing and Servicing Segment, to expand and diversify our presence in various segments of real estate, including:

  • origination of small and medium sized loan transactions ($5 million to $50 million) for both investment and securitization/gain-on-sale;

  • investment in CMBS;

  • investment in commercial real estate;

  • special servicing of commercial real estate loans in commercial real estate securitization transactions;

• utilizing the skills and expertise we acquired through our 2018 acquisition of the Infrastructure Lending Segment to expand our originations and acquisitions of infrastructure debt investments; and

• utilizing the skills and expertise we acquired through our 2025 acquisition of Fundamental to expand our investments in triple net lease properties.

In order to capitalize on the changing sets of investment opportunities that may be present in the various points of an economic cycle, we may expand or refocus our investment strategy by emphasizing investments in different parts of the capital structure and different sectors of real estate. Our investment strategy may be amended from time to time, if recommended by our Manager and approved by our board of directors, without the approval of our stockholders. In addition to our Manager making direct investments on our behalf, we may enter into joint venture, management or other agreements with persons that have special expertise or sourcing capabilities.

Investment Guidelines

Our board of directors has adopted the following investment guidelines:

• our investments will be in our target assets unless otherwise approved by our board of directors;

• no investment shall be made that would cause us to fail to qualify as a REIT for federal income tax purposes;

• no investment shall be made that would cause us or any of our subsidiaries to be required to be registered as an investment company under the 1940 Act; and

• not more than 25% of our equity will be invested in any individual asset without the consent of a majority of our independent directors.

  These investment guidelines may be changed from time to time by our board of directors without the approval of our stockholders. In addition, both our Manager and our board of directors must approve any change in our investment guidelines that would modify or expand the types of assets in which we invest.

  Investment Process

  Our investment process includes sourcing and screening of investment opportunities, assessing investment suitability, conducting interest rate and prepayment analysis, evaluating cash flow and collateral performance, and reviewing legal structure and servicer and originator information and investment structuring, as appropriate, to seek an attractive return commensurate with the risk we are bearing. Upon identification of an investment opportunity, the investment will be screened and monitored by us to determine its impact on maintaining our REIT qualification and our exemption from registration under the 1940 Act. We will seek to make investments in sectors where we have strong core competencies and believe market risk and expected performance can be reasonably quantified.

  We evaluate each one of our investment opportunities based on its expected risk-adjusted return relative to the returns available from other, comparable investments. In addition, we evaluate new opportunities based on their relative expected returns compared to comparable positions held in our portfolio. The terms of any leverage available to us for use in funding an investment purchase are also taken into consideration, as are any risks posed by illiquidity or correlations with other securities in the portfolio. We also develop a macro outlook with respect to each target asset class by examining factors in the broader economy such as gross domestic product, interest rates, unemployment rates and availability of credit, among other things. We also analyze fundamental trends in the relevant target asset class sector to adjust/maintain our outlook for that particular target asset class.

  Financing Strategy

  Subject to maintaining our qualification as a REIT for U.S. federal income tax purposes and our exemption from registering under the 1940 Act, we may finance the acquisition of our target assets, to the extent available to us, through the following methods:

• sources of private and government sponsored financing, including long and short-term repurchase agreements, warehouse and bank credit facilities, and mortgage loans on equity interests in commercial real estate properties;

• loan sales, syndications, securitizations and/or CLO and ABS transactions; and

• public or private offerings of our equity and/or debt.

  We may also utilize other sources of financing to the extent available to us.

  Our Target Assets

  We invest in target assets secured primarily by U.S., European or Australian collateral. We focus primarily on originating or opportunistically acquiring commercial mortgage whole loans, B-Notes, mezzanine loans, preferred equity and mortgage-backed securities ("MBS"). We may invest in performing and non-performing mortgage loans and other real estate-related loans and debt investments. We may acquire target assets through portfolio acquisitions or other types of acquisitions. Our Manager targets desirable markets where it has expertise in the real estate collateral underlying the assets being acquired. Our target assets include the following types of loans and other investments:

• 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 three to ten years;

• B-Notes: typically 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;

• Equity: equity interests in commercial real estate properties, including commercial properties purchased from CMBS trusts;

• Corporate bonds: debt securities issued by commercial real estate operating or finance companies that may or may not be secured by such companies' assets, including:

  • investment grade corporate bonds,

  • below investment grade corporate bonds, and

  • unrated corporate bonds;

• Non-Agency RMBS: securities collateralized by residential loans that are not guaranteed by any U.S. Government agency or federally chartered corporation;

• Residential loans: loans secured by a first mortgage lien on residential property;

• Infrastructure loans: senior secured project finance loans and senior secured project finance investment securities secured by power generation facilities and midstream, downstream and upstream oil and gas assets; and

• Net leases: commercial properties subject to net leases (including triple net leases), which leases typically have longer terms than gross leases, require tenants to pay substantially all of the operating costs associated with the properties and often have contractually specified rent increases throughout their terms.

  In addition, we may invest in the following real estate-related investments:

• Agency RMBS: RMBS for which a U.S. government agency or a federally chartered corporation guarantees payments of principal and interest on the securities.

Business Segments

We currently operate our business in four reportable segments: the Commercial and Residential Lending Segment, the Infrastructure Lending Segment, the Property Segment and the Investing and Servicing Segment. Refer to Note 24 to the consolidated financial statements included herein (the "Consolidated Financial Statements") for our results of operations and financial position by business segment.

Commercial and Residential Lending Segment

The following table sets forth the amount of each category of investments we owned across various property types within our Commercial and Residential Lending Segment as of December 31, 2025 and 2024 (dollars in thousands):

1. First mortgages include first mortgage loans and any contiguous mezzanine loan components because as a whole, the expected credit quality of these loans is more similar to that of a first mortgage loan. The application of this methodology resulted in mezzanine loans with carrying values of $1.3 billion and $0.9 billion being classified as first mortgages as of December 31, 2025 and 2024, respectively.

2. Subordinated mortgages include B-Notes and junior participation in first mortgages where we do not own the senior

   A-Note or senior participation. If we own both the A-Note and B-Note, we categorize the loan as a first mortgage loan.

3. Eliminated in consolidation against VIE liabilities pursuant to Accounting Standards Codification ("ASC") 810.

4. CMBS held-to-maturity ("HTM") and mandatorily redeemable preferred equity interests in commercial real estate entities.

5. Represents the weighted average coupon of residential mortgage loans.

6. Calculated using applicable index rates for variable rate investments as of the respective period end and excludes loans for which interest income is not recognized. In addition to cash coupon, unlevered return includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.

As of December 31, 2025 and 2024, our Commercial and Residential Lending Segment's investment portfolio, excluding residential loans, RMBS, properties and other investments, had the following characteristics based on carrying values:

100.0 % 100.0 %

Our primary focus has been to build a portfolio of commercial mortgage and mezzanine loans with attractive risk-adjusted returns by focusing on the underlying real estate fundamentals and credit analysis of the borrowers. We

continually monitor borrower performance and complete a detailed, loan-by-loan formal credit review on a quarterly basis. The results of this review are incorporated into our quarterly assessment of credit loss allowances.

As of December 31, 2025, commercial loans held-for-investment and HTM securities had a weighted-average expected maturity of 2.7 years, calculated assuming all extension options are exercised by the borrower, although our loans may be repaid prior to such date.

Infrastructure Lending Segment

The following table sets forth the amount of each category of investments we owned within our Infrastructure Lending Segment as of December 31, 2025 and 2024 (dollars in thousands):

December 31, 2025

First priority infrastructure loans and

Face Amount

Carrying Value

Asset Specific Financing

Net Investment

Unlevered Return on Asset (1)

HTM securities . . . . . . . . . . . . . . . . . . . $ 2,942,115 $ 2,880,319 $ 2,365,478 $ 514,841 8.1 %

Credit loss allowance . . . . . . . . . . . . . . . . N/A (24,667) - (24,667) Investments in unconsolidated entities . . N/A 57,997 - 57,997

$ 2,942,115 $ 2,913,649 $ 2,365,478 $ 548,171

December 31, 2024

First priority infrastructure loans and

HTM securities . . . . . . . . . . . . . . . . . . . $ 2,631,732 $ 2,580,775 $ 1,989,860 $ 590,915 8.9 %

Credit loss allowance . . . . . . . . . . . . . . . . N/A (21,553) - (21,553) Investments in unconsolidated entities . . N/A 54,105 - 54,105

$ 2,631,732 $ 2,613,327 $ 1,989,860 $ 623,467

(1) Calculated using applicable index rates for variable rate investments as of the respective period end and excludes loans for which interest income is not recognized. In addition to cash coupon, unlevered return includes the amortization of deferred purchase discounts.

As of December 31, 2025 and 2024, our Infrastructure Lending Segment's investment portfolio had the following characteristics based on carrying values:

As of December 31, 2025, the Infrastructure Lending Segment's first priority infrastructure loans and HTM securities had a weighted-average contractual maturity of 5.1 years.

Property Segment

The following table sets forth the amount of each category of investments held within our Property Segment as of December 31, 2025 and 2024 (amounts in thousands):

$ 4,770,364 $ 2,752,194

The following table sets forth our net investment and other information regarding the Property Segment's properties and lease intangibles as of December 31, 2025 (dollars in thousands):

Weighted

Net carrying value . . . . . . . . . . . . . . . . . . . . . $ 3,042,865 $ 1,858,584 $ 1,184,281

(1) Occupancy calculated based on number of properties for our single-tenant net lease properties and square footage for multi-tenant net lease properties.

See Notes 7 and 8 to the Consolidated Financial Statements for a description of the above-referenced Property Segment Portfolios and Woodstar Fund.

As of December 31, 2025 and 2024, our Property Segment's investment portfolio had the following geographic characteristics based on carrying values:

Refer to Schedule III included in Item 8 of this Form 10-K for a detailed listing of the properties held by the Company, including their respective geographic locations.

Investing and Servicing Segment

The following table sets forth the amount of each category of investments we owned within our Investing and Servicing Segment as of December 31, 2025 and 2024 (amounts in thousands):

Asset

1. Includes $1.25 billion and $1.20 billion of CMBS eliminated in consolidation against VIE liabilities pursuant to ASC 810 as of December 31, 2025 and 2024, respectively. Also includes $146.5 million and $148.6 million of non-controlling interests in the consolidated entities which hold certain of these CMBS as of December 31, 2025 and 2024, respectively.

2. Includes $25.8 million and $30.3 million of non-controlling interests in the consolidated entities which hold certain debt balances as of December 31, 2025 and 2024, respectively.

3. Includes $37.3 million and $35.7 million of servicing rights intangibles eliminated in consolidation against VIE assets pursuant to ASC 810 as of December 31, 2025 and 2024, respectively.

4. Includes $15.0 million and $14.8 million of investments in unconsolidated entities eliminated in consolidation against VIE assets pursuant to ASC 810 as of December 31, 2025 and 2024, respectively.

As of December 31, 2025, the Investing and Servicing Segment's CMBS had a weighted-average expected maturity of 5.2 years.

Regulation

We have elected, and are organized and conduct our operations, to qualify as a REIT under the Code, as further described below. As such, we will generally not be subject to U.S. federal corporate income tax on the portion of our net income that is distributed to stockholders if we distribute at least 90% of our taxable income to our stockholders by prescribed dates and comply with various other requirements imposed by the Code. We also conduct our business so that neither we nor any of our subsidiaries are required to register as an investment company under the 1940 Act. So long as we qualify for an exemption from registration under the 1940 Act, we are not subject to leverage and other restrictions imposed on registered investment companies.

Our operations in the U.S., Europe and Australia are subject, in certain instances, to supervision and regulation by U.S. and other governmental authorities and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, among other things: (1) regulate credit granting activities; (2) establish maximum interest rates, finance charges and other charges; (3) require disclosures to customers; (4) govern secured transactions; (5) set collection, foreclosure, repossession and claims handling procedures and other trade practices; and (6) regulate affordable

housing rental activities. We are required to comply with certain provisions of, among other statutes and regulations, the Dodd-Frank Act, the Gramm-Leach-Bliley Act, the Equal Credit Opportunity Act that are applicable to commercial loans, the Fair Housing Act and U.S. federal and state securities laws and regulations. In addition, we have a subsidiary that is registered with the SEC as an investment adviser and, as a result, we are subject to the anti-fraud provisions of the Investment Advisers Act and to fiduciary duties derived from these provisions that apply to our relationships with that subsidiary's clients. Although many states do not regulate commercial finance, certain states impose limitations on interest rates and other charges and on certain collection practices and creditor remedies, and require licensing of lenders, financiers and servicers and adequate disclosure of certain contract terms. Further, the assets underlying our infrastructure loans are subject to state and federal laws and regulations applicable to the electric power and oil and gas industries, which laws and regulations govern, among other things, the siting and construction, operation, environmental impacts and revenue streams of such assets.

In our judgment, existing statutes and regulations have not had a material adverse effect on our business. In recent years, legislators in the U.S. and other countries have said that greater regulation of financial institutions is needed, particularly in areas such as risk management, leverage and disclosure. While we expect that additional new regulations in these areas will be adopted and existing ones may change in the future, it is not possible at this time to forecast the exact nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future business, financial condition or results of operations or prospects. See Item 1A-"Risk Factors" for additional information regarding government regulation.

Competition

We are engaged in a competitive business. In our investment activities, we compete for opportunities with numerous public and private investment vehicles, including financial institutions, specialty finance companies, mortgage banks, pension funds, opportunity funds, hedge funds, insurance companies, REITs and other institutional investors, as well as individuals. Many competitors are significantly larger than we are, have well established operating histories and may have greater access to capital, more resources and other advantages over us. These competitors may be willing to accept lower returns on their investments or to compromise underwriting standards and, as a result, our origination volume and profit margins could be adversely affected.

Our Manager

We are externally managed and advised by our Manager and benefit from the personnel, relationships and experience of our Manager's executive team and other personnel of Starwood Capital Group. Pursuant to the terms of a management agreement between our Manager and us, our Manager provides us with our management team and appropriate support personnel. Pursuant to an investment advisory agreement between our Manager and Starwood Capital Group

Management, LLC, our Manager has access to the personnel and resources of Starwood Capital Group necessary for the implementation and execution of our business strategy.

Our Manager is an affiliate of Starwood Capital Group, a privately-held private equity firm founded and controlled by Mr. Sternlicht. Starwood Capital Group has invested in all major real estate asset classes, directly and indirectly, through operating companies, portfolios of properties and single assets. Starwood Capital Group invests at different levels of the capital structure, including equity, preferred equity, mezzanine debt and senior debt, depending on the asset risk profile and return expectation.

Our Manager draws upon the experience and expertise of Starwood Capital Group's team of professionals and support personnel operating in 19 cities across ten countries. Our Manager also benefits from Starwood Capital Group's dedicated asset management group operating in offices located in the U.S. and abroad. We also benefit from Starwood Capital Group's portfolio management, finance and administration functions, which address legal, compliance, investor relations and operational matters, asset valuation, risk management and information technologies in connection with the performance of our Manager's duties.

Human Capital Resources

As of December 31, 2025, the operating subsidiaries of the Company had 324 full-time employees, the majority of which are real estate professionals located throughout the U.S. The Company strives to be an employer of choice, and is therefore highly focused on creating and maintaining best in class recruitment, retention and compensation programs and a culture designed to encourage performance, integrity and well-being. The Company believes that its competitive compensation, outstanding benefits, training opportunities and stimulating work environment help attract and retain people with exceptional financial and real estate skills.

Taxation of the Company

We have elected to be taxed as a REIT under the Code for federal income tax purposes. We generally must distribute annually at least 90% of our taxable income, subject to certain adjustments and excluding any net capital gain, in order for federal corporate income tax not to apply to our earnings that we distribute. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under federal tax laws. Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Code, which relate to organizational structure, diversity of stock ownership and certain restrictions with regard to owned assets and categories of income. If we qualify for taxation as a REIT, we will generally not be subject to U.S. federal corporate income tax on our taxable income that is currently distributed to stockholders.

Even if we qualify as a REIT, we may be subject to certain federal excise taxes and state and local taxes on our income and property. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and will not be able to qualify as a REIT for four subsequent taxable years.

We utilize taxable REIT subsidiaries ("TRSs") to conduct certain activities that would generate non-qualifying income or income subject to the prohibited transaction tax if earned directly by the REIT, and to hold certain assets that would represent non-qualifying assets if held directly by the REIT. In most cases, income associated with a TRS is fully taxable because a TRS is classified as a regular corporation for income tax purposes.

See Item 1A-"Risk Factors-Risks Related to Our Taxation as a REIT" for additional tax status information.

Leverage Policies

Refer to Item 7-"Management's Discussion and Analysis of Financial Condition and Results of Operations-Leverage Policies."

Available Information

Our website address is https://www.starwoodpropertytrust.com. We make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports and other filings as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (the "SEC"), and also make available on our website the charters for the Audit, Compensation and Nominating and Corporate Governance Committees of our board of directors and our Code of Business Conduct and Ethics and Code of Ethics for Principal Executive Officer and Senior Financial Officers, as well as our corporate governance guidelines. Copies in print of these documents are available upon request to our Corporate Secretary at the address indicated on the cover of this report. The information on our website is not a part of, nor is it incorporated by reference into, this Form 10-K. Any material we file with or furnish to the SEC is also maintained on the SEC's website (http://www.sec.gov).

We intend to post on our website any amendment to, or waiver of, a provision of our Code of Business Conduct and Ethics or Code of Ethics for Principal Executive Officer and Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer or persons performing similar functions and that relates to any element of the code of ethics definition set forth in Item 406 of Regulation S-K of the Securities Act of 1933, as amended.

To communicate with our board of directors electronically, we have established an e-mail address, BoardofDirectors@stwdreit.com, to which stockholders may send correspondence to our board of directors or any such individual directors or group or committee of directors.

Item 1A. Risk Factors

Risks Related to Our Relationship with Our Manager

Our Manager has significant discretion as to the implementation of our investment and operating policies and strategies. Accordingly, we believe that our success depends to a material extent upon the efforts, experience, diligence, skill and network of business contacts of the officers and key personnel of our Manager. The officers and key personnel of our Manager evaluate, negotiate, close and monitor a substantial portion of our investments; therefore, our success depends on their continued service. The departure of any of the officers or key personnel of our Manager could have a material adverse effect on our performance.

We offer no assurance that our Manager will remain our investment manager or that we will continue to have access to our Manager's officers and key personnel. The terms of our management agreement with our Manager and the investment advisory agreement between our Manager and Starwood Capital Group Management, LLC are automatically renewed on an annual basis; provided, however, that our Manager may terminate the management agreement annually upon 180 days prior notice. If the management agreement and the investment advisory agreement are terminated and no suitable replacement is found to manage us, we may not be able to continue to execute our business plan.

We are subject to conflicts of interest arising out of our relationship with Starwood Capital Group, including our Manager. Specifically, Mr. Sternlicht, our Chairman and Chief Executive Officer, two of our other directors and certain of our executive officers are executives of Starwood Capital Group.

Our Manager and executive officers may have conflicts between their duties to us and their duties to, and interests in, Starwood Capital Group and its other investment funds. For example, from time to time, one or more private investment funds sponsored by Starwood Capital Group (collectively, "Starwood Private Real Estate Funds") may be subject to exclusivity provisions that require all or a portion of investment opportunities related to real estate to be allocated to such Starwood Private Real Estate Funds rather than to us. Subject to the provisions of our co-investment and allocation agreement, there can be no assurance that future Starwood Private Real Estate Funds would not be subject to such exclusivity requirements and, as a result, they may acquire investment opportunities that would not be available to us. Our independent directors do not approve each co-investment made by the Starwood Private Real Estate Funds and us. Pursuant to the exclusivity provisions of the Starwood Private Real Estate Funds, our investment strategy may not include either (i) equity interests in real estate or (ii) "near-to-medium-term loan to own" investments, in each case (of both (i) and (ii)) if such investments are expected, at the time such investment is made, to produce an internal rate of return ("IRR") within the target return threshold specified in the governing documents of one or more Starwood Private Real Estate Funds. Therefore, our board of directors does not have the flexibility to expand our investment strategy to include equity interests in real estate or "near-term loan to own" investments with such an IRR expectation.

Pursuant to our co-investment and allocation agreement, our Manager, Starwood Capital Group and their respective affiliates (i) may not sponsor or manage any U.S. publicly-traded vehicle that invests primarily in our "target assets" (as defined in our co-investment and allocation agreement) and (ii) may sponsor or manage one or more U.S. publicly-traded investment vehicles that invest generally in real estate assets but not primarily in our "target assets" (a "potential competing vehicle"). Our Manager and Starwood Capital Group have also agreed in our co-investment and allocation agreement that for so long as the management agreement is in effect and our Manager and Starwood Capital Group are under common control, no entity controlled by Starwood Capital Group will sponsor or manage a potential competing vehicle, or any private or foreign "competing vehicle" (a vehicle that invests primarily in our "target assets," excluding any investment vehicle that invests predominantly in non-U.S. mortgage assets) unless Starwood Capital Group adopts a policy that either (i) provides for the fair and equitable allocation of investment opportunities in our "target assets" (as defined in our co-investment and allocation agreement) among all such vehicles and us or (ii) provides us the right to co-invest with respect to any "target assets" with such vehicles, in each case subject to the suitability of each investment opportunity for the particular vehicle and us and each such vehicle's and our availability of cash for investment. To the extent that there is overlap between our investment program and that of a Starwood Private Real Estate Fund, a fair and equitable allocation policy may involve a co-investment between us and such Starwood Private Real Estate Fund or a chronological rotation between us and such Starwood Private Real Estate Fund.

Although Starwood Capital Group has adopted such an investment allocation policy, Starwood Capital Group has some

discretion as to how investment opportunities are allocated. As a result, we may either not be presented with the opportunity to participate in these investments or may be limited in our ability to invest.

Our board of directors has adopted a policy with respect to any proposed investments by our directors or officers or the officers of our Manager, which we refer to as the covered persons, in any of our target asset classes. This policy provides that any proposed investment by a covered person for his or her own account in any of our target asset classes will be permitted if the capital required for the investment does not exceed the personal investment limit. To the extent that a proposed investment exceeds the personal investment limit, we expect that our board of directors will only permit the covered person to make the investment (i) upon the approval of the disinterested directors or (ii) if the proposed investment otherwise complies with terms of any other related party transaction policy our board of directors has adopted. Subject to compliance with all applicable laws, these individuals may make investments for their own account in our target assets which may present certain conflicts of interest not addressed by our current policies.

We pay our Manager substantial base management fees regardless of the performance of our portfolio. Our Manager's entitlement to a base management fee, which is not based upon performance metrics or goals, might reduce its incentive to devote its time and effort to seeking investments that provide attractive risk-adjusted returns for our portfolio. This in turn could hurt both our ability to make distributions to our stockholders and the market price of our common stock.

Excluding our operating subsidiaries, we do not have any employees except for Rina Paniry, our Chief Financial Officer, Treasurer and Chief Accounting Officer, whom Starwood Capital Group has seconded to us exclusively. Ms. Paniry is also an employee of other entities affiliated with our Manager and, as a result, is subject to potential conflicts of interest in service as our employee and as an employee of such entities.

Our Chairman and Chief Executive Officer, two of our other directors and certain of our executive officers are executives of Starwood Capital Group. Our management agreement with our Manager was negotiated between related parties and its terms, including fees payable, may not be as favorable to us as if it had been negotiated with an unaffiliated third party.

Termination of the management agreement with our Manager without cause is difficult and costly. Our independent directors will review our Manager's performance and the management fees annually and the management agreement may be terminated annually upon the affirmative vote of at least two-thirds of our independent directors based upon: (i) our Manager's unsatisfactory performance that is materially detrimental to us or (ii) a determination that the management fees payable to our Manager are not fair, subject to our Manager's right to prevent termination based on unfair fees by accepting a reduction of management fees agreed to by at least two-thirds of our independent directors. Our Manager will be provided 180 days prior notice of any such a termination. Additionally, upon such a termination, the management agreement provides that we will pay our Manager a termination fee equal to three times the sum of the average annual base management fee and incentive fee received by our Manager during the prior 24-month period before such termination, calculated as of the end of the most recently completed fiscal quarter. These provisions may increase the cost to us of terminating the management agreement and adversely affect our ability to terminate our Manager without cause.

Our Manager may terminate the management agreement annually upon 180 days prior notice. If the management agreement is terminated and no suitable replacement is found to manage us, we may not be able to continue to execute our business plan.

Pursuant to the management agreement, our Manager does not assume any responsibility other than to render the services called for thereunder and is not responsible for any action of our board of directors in following or declining to follow its advice or recommendations. Our Manager maintains a contractual, as opposed to a fiduciary, relationship with us. Under the terms of the management agreement, our Manager, its officers, members, personnel, any person controlling or controlled by our Manager and any person providing sub-advisory services to our Manager (the "indemnified parties") will not be liable to us, any subsidiary of ours, our directors, our stockholders or any subsidiary's stockholders or partners for acts or omissions performed in accordance with and pursuant to the management agreement, except because of acts constituting bad faith, willful misconduct, gross negligence or reckless disregard of their duties under the management agreement. In addition, we have agreed to indemnify the indemnified parties with respect to all expenses, losses, damages, liabilities, demands, charges and claims arising from acts or omissions of our Manager not constituting bad faith, willful misconduct, gross negligence or reckless disregard of duties, performed in good faith in accordance with and pursuant to the management agreement.

Our Manager is entitled to receive incentive compensation based upon our achievement of targeted levels of Distributable Earnings (which is referred to as "Core Earnings" in our management agreement). In evaluating investments and

other management strategies, the opportunity to earn incentive compensation based on Distributable Earnings may lead our Manager to place undue emphasis on the maximization of Distributable Earnings at the expense of other criteria, such as preservation of capital, in order to achieve higher incentive compensation. Investments with higher yield potential are generally riskier or more speculative. This could result in increased risk to the value of our investment portfolio.

Distributable Earnings is not a measure calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP") and is defined within Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations--Non-GAAP Financial Measures" in this Form 10-K.

Our board of directors has adopted a related party transaction policy, which covers transactions that exceed, or are expected to exceed, $120,000 in any fiscal year between us (or any of our consolidated subsidiaries) and any of our directors or director nominees, executive officers, beneficial owners of 5% or more of our common stock, any immediate family members of the foregoing, our Manager or any affiliates controlled by us or Starwood Capital Group. Although under this policy the approval of a majority of the independent disinterested members of our board of directors (the "Reviewing Directors") is required to approve any such covered transaction, and any such approval requires a determination in good faith by the Reviewing Directors that the transaction is in the best interests of our company and our stockholders, this policy may not be adequate to address all of the conflicts that may arise or may not address such conflicts in a manner that results in the allocation of a particular investment opportunity to us or is otherwise favorable to us. In addition, Starwood Private Real Estate Funds currently, and additional competing vehicles may in the future, participate in some of our investments, possibly at a more senior level in the capital structure of the underlying borrower and related real estate than our investment. Our interests in such investments may also conflict with the interests of these entities in the event of a default or restructuring of the investment.

Participating investments will not be the result of arm's length negotiations and will involve potential conflicts between our interests and those of the other participating entities in obtaining favorable terms. Since certain of our executives are also executives of Starwood Capital Group, the same personnel may determine the price and terms for the investments for both us and these entities and any procedural protections, such as obtaining market prices or other reliable indicators of fair value, may not prevent the consideration we pay for these investments from exceeding their fair value or ensure that we receive terms for a particular investment opportunity that are as favorable as those available from an independent third party.

Risks Related to the Company

We are subject to risks associated with pandemics, epidemics or other public health crises. The emergence of a future pandemic, epidemic or other public health crisis may result in preventive measures taken by governmental authorities or others to alleviate the crisis, such as mandatory business closures, quarantines and restrictions on travel. Any such measures could adversely impact the economy globally or locally, including by leading to economic slowdowns and volatility and disruption of financial markets. Our operations and financial performance, as well as the operations and financial performance of many of the borrowers underlying our real estate-related assets and tenants of our owned properties, could be materially and adversely impacted as the result of the future emergence of a pandemic, epidemic or other public health crisis, and any related shutdowns or other significant business disruptions.

The scope and duration of any future pandemic, epidemic or other public health crisis, the pace at which government and other restrictions are imposed and lifted, the scope of additional actions taken to mitigate the spread of disease, global vaccination and booster rates, the speed and extent to which global or local markets recover from any such disruptions caused by such a public health crisis, and the impact of these factors on our business, financial condition, results of operations, liquidity, the market price of our common stock and our ability to make distributions to our stockholders would depend on future developments that would be highly uncertain and unpredictable.

To the extent any future pandemic, epidemic or other public health crisis adversely affects economic conditions and our operations, it may also have the effect of heightening many of the other risks described in this Item 1A.

Our credit loss provision is evaluated on a quarterly basis. The determination of such provision requires us to make certain estimates and judgments, which may be difficult to determine. Our estimates and judgments are based on a number of factors, including projected cash flow from the collateral securing our loans and debt securities, debt structure, including the availability of reserves and substantive recourse guarantees, likelihood of repayment in full at maturity, potential for refinancing

and expected market value of the collateral, all of which remain uncertain and are subjective. Our estimates and judgments may not be correct and, therefore, our results of operations and financial condition could be severely impacted.

Accounting Standards Codification Topic 326 mandates the use of a current expected credit loss model ("CECL") for providing credit loss allowances on certain financial assets carried at amortized cost, such as loans held-for-investment and held-to-maturity debt securities, including related future funding commitments and accrued interest receivable. The measurement of expected credit losses is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. The use of

the CECL model has materially affected, and will continue to materially affect, how we determine our credit loss provision and has required us, and could continue to require us, to significantly increase our allowance and recognize provisions for credit losses earlier in the lending cycle. Moreover, the CECL model creates volatility in the level of our credit loss provisions. If we are required to materially increase our future level of credit loss allowances for any reason, such increase could adversely affect our business, results of operations, liquidity and financial condition.

We may be harmed by reputational issues and adverse publicity relating to us, our Manager or Starwood Capital Group. Issues could include real or perceived legal or regulatory violations or could be the result of a failure in performance, operations, risk management, governance or technology, or claims related to misconduct, conflicts of interests, ethical issues or failure to protect private information, among others. Similarly, market rumors and actual or perceived association with counterparties whose own reputations are under question could harm our business. Such reputational issues may have an adverse effect on the market price of our common stock or on our ability to attract counterparties for our transactions, or otherwise adversely affect us.

We are generally required to distribute to our stockholders at least 90% of our taxable income each year for us to qualify as a REIT under the Code, which requirement we currently intend to satisfy through quarterly distributions of all or substantially all of our REIT taxable income in such year, subject to certain adjustments. We have not established a minimum distribution payment level, and our ability to pay distributions may be adversely affected by a number of factors, including the risk factors contained in this Form 10-K. Although we have made, and anticipate continuing to make, quarterly distributions to our stockholders, our board of directors has the sole discretion to determine the timing, form and amount of any future distributions to our stockholders, and such determination will depend on our earnings, our financial condition, debt covenants, maintenance of our REIT qualification and other factors as our board of directors may deem relevant from time to time. We believe that a change in any one of the following factors could adversely affect our results of operations and impair our ability to continue to pay distributions to our stockholders:

• the profitability of the investment of the net proceeds from our offerings of securities;

• our ability to make profitable investments;

• margin calls or other expenses that reduce our cash flow;

• defaults in our asset portfolio or decreases in the value of our portfolio; and

• the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.

As a result, distributions to our stockholders in the future may not continue or the level of any future distributions we do make to our stockholders may not achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect our stockholders' return on investment.

In addition, distributions that we make to our stockholders are generally taxable to our stockholders as ordinary income. However, a portion of our distributions may be designated by us as long-term capital gains to the extent that they are attributable to capital gain income recognized by us or may constitute a return of capital to the extent that they exceed our earnings and profits as determined for U.S. federal income tax purposes. A return of capital is not taxable, but has the effect of reducing the basis of a stockholder's investment in our common stock.