Starwood Property Trust Reports Q2 2025 Financial Results with Revenue Decline and Increased Net Income

Starwood Property Trust, Inc. (STWD) reported its financial results for the second quarter of 2025, revealing a total revenue of $444.3 million, a decrease of 9.3% from $489.8 million in the same quarter of 2024. The decline in revenue was primarily driven by a significant drop in interest income from loans, which fell to $385.2 million from $427.4 million year-over-year. The company also experienced a reduction in interest income from investment securities and servicing fees, contributing to the overall revenue decline. Despite these challenges, net income attributable to Starwood Property Trust increased to $129.8 million, compared to $77.9 million in the prior year, reflecting a notable improvement in profitability.

In terms of operational metrics, the company’s total assets decreased slightly to $62.4 billion as of June 30, 2025, down from $62.6 billion at the end of 2024. The decrease in total assets was attributed to a reduction in loans held-for-investment, which rose to $17.8 billion from $15.4 billion, indicating a strategic focus on expanding its lending portfolio. The company’s liabilities also saw a slight decline, totaling $55.2 billion, compared to $55.4 billion at the end of the previous fiscal year. The company’s equity decreased to $6.7 billion from $6.8 billion, primarily due to a reduction in retained earnings.

Strategically, Starwood Property Trust has been active in the market, originating or acquiring $1.9 billion in commercial loans during the quarter. This included a $412 million first mortgage loan secured by a multifamily portfolio in Texas and a $350 million first mortgage and mezzanine loan for a luxury condominium in New York. The company also sold an equity interest for $70 million, realizing a gain of $51.4 million. Additionally, the company amended several commercial credit facilities, resulting in a net upsize of $1.2 billion and extending the weighted average maturity of these facilities.

Looking ahead, Starwood Property Trust remains cautious about the economic environment, particularly with ongoing inflationary pressures and elevated interest rates. The company noted that these factors could adversely affect its borrowers and the value of its commercial real estate holdings. Despite these challenges, management expressed confidence in the company’s liquidity position, indicating that it has sufficient resources to meet its financial obligations over the next 12 months. The company also declared a quarterly dividend of $0.48 per share, consistent with its commitment to return capital to shareholders while navigating the current market conditions.