Starwood Property Trust : 2023 Annual Report and Letter to Shareholders

BOARD OF DIRECTORS & EXECUTIVE TEAM

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

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(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code (23 22

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

Securities registered pursuant to Section 12(g) of the Act: $An7

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.

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, 2023, the aggregate market value of the voting stock held by non-affiliates was $5.7 billion based on the reported last sale price of our common stock on June 30, 2023. 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 16, 2024 was 313,375,899.

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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 29, 2024.

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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;
• our ability to achieve the benefits that we anticipate from the prior acquisition of the project finance origination, underwriting and capital markets business of GE Capital Global Holdings, LLC;
• 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) 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.

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)Gmm3rK Risk F35tArs

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. Macroeconomic trends, including inflation and rising interest rates, may adversely affect us.
• 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.
• 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 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 project finance investments, 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.

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