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Starwood Property Trust shares plunge after sharp net income drop
The company reported $6.6 million in second-quarter 2026 net income, an 87.3% fall from the fourth quarter of 2025.
Starwood Property Trust saw its shares drop sharply shortly after reporting second-quarter 2026 earnings, declining 4% in one morning. The stock last traded at $15.55 per share, down 6% from a month earlier and nearly 20% versus a year ago, following the release.
The lender and investment firm reported $6.6 million in net income in the second quarter of 2026, down 87.3% from $51.9 million in the fourth quarter of 2025 and nearly 95% less than the $129.8 million reported in the second quarter of 2025. Distributable earnings were $151.5 million, up from $147.3 million in the prior quarter and $151.1 million in the year-ago quarter.
Chairman and CEO Barry Sternlicht told investors he was surprised by the stock reaction and argued the company’s fundamentals remain strong. He said Starwood is confident in its ability to return to earnings power to support the dividend and improve dividend coverage, adding that analysts appear focused on the scale of its loan and mortgage business.
Sternlicht also pointed to conditions at the property level, saying many asset classes in the U.S. and Europe are improving. He cited high demand across commercial real estate sectors and said “nonexistent supply” is helping investments, while noting improvements in multifamily rents have begun market by market.
Starwood reported second-quarter revenue of $513 million, roughly flat versus $512.5 million in the first quarter of 2026, and $444.28 million compared with the same quarter last year. Rental income rose to $87.8 million from $80 million in the prior quarter and $28.2 million in the second quarter of 2025.