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Just For You Starwood Shares Have Struggled, but Catalysts Could Signal a TurnBy Jennifer Ryan Woods. First Published: 3/31/2026. 
Key Points - Starwood Property Trust has been under pressure from rising interest rates and company-specific challenges, with the stock down more than 30% over the past five years and lagging its peers over the last year.
- Inconsistent earnings, repeated revenue misses, and uneven dividend coverage have weighed on investor sentiment, even as the company has maintained its high dividend payout.
- Recent developments, including a stronger earnings report, improving commentary around dividend coverage, and a newly authorized share buyback, could help shift sentiment if the company delivers more consistent results.
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Over the last several years, a higher interest rate environment has been a persistent headwind for commercial real estate, and Starwood Property Trust (NYSE: STWD) has been no exception. The real estate investment trust (REIT)—which originates, acquires and manages commercial mortgage loans and other real estate investments—has seen its stock trend meaningfully lower over the past five years. The past year has been particularly challenging, driven by disappointing revenue, declines in book value per share (BVPS), and several quarters in which earnings failed to cover the dividend. Still, recent developments suggest the tide may be turning, and there could be near-term upside. Pandemic Pressure Followed by Rising Rates Pressured Shares Starwood's struggles began during the COVID-19 pandemic, when shares plunged in early 2020 from around $26 to below $10 as mortgage REITs faced liquidity concerns and uncertainty across commercial real estate markets. Shares rebounded to pre-pandemic levels by mid-2021 as investor confidence returned. However, new headwinds quickly emerged: as interest rates started rising in March 2022, property values declined and lending margins tightened, putting renewed pressure on commercial mortgage REITs. The impact on STWD has been significant — shares are down more than 30% over the past five years. Starwood was not alone: competitors such as Ares Commercial Real Estate (NYSE: ACRE), Blackstone Mortgage Trust (NYSE: BXMT), and Apollo Commercial Real Estate Finance (NYSE: ARI) also declined roughly 65%, 40% and 27%, respectively, over the same period. Over the last year, Starwood has underperformed the group. The stock has fallen about 12%, and at a recent trading price near $17.37 it has been flirting with the 52-week low set in April 2025. Starwood has also lagged the broader REIT industry, which is down roughly 12%. By comparison, Ares shares are up about 4.8%, Blackstone Mortgage Trust is down roughly 3.7%, and Apollo Commercial Real Estate Finance is up more than 10% over the past 12 months. Inconsistent Earnings and Dividend Coverage Weigh on Sentiment One persistent issue has been inconsistent results. While earnings per share (EPS) beat expectations in four of the last six quarters, revenue missed estimates in five of those six periods. The company has also reported negative net interest income in certain quarters, which has dented investor sentiment. Starwood's dividend has added to the uncertainty. For more than a decade the REIT has paid a quarterly dividend of $0.48 per share, which currently yields about 11.26%. But over the past four quarters, earnings have not fully covered that payout, producing an unsustainably high payout ratio of roughly 165%. Against the still-challenging higher-rate backdrop, mixed earnings and uneven dividend coverage have made some investors cautious. That said, several recent developments could help restore confidence: better-than-expected revenue after a string of misses, constructive commentary from management about dividend coverage, and a newly authorized share buyback. Stronger Results and a Potential Buyback Could Shift Sentiment In Starwood's Q4 2025 earnings report, released Feb. 25, the REIT reported EPS of $0.42, beating analyst estimates by $0.01. Revenue of $492.95 million was roughly $23 million above consensus — a meaningful improvement after several consecutive revenue misses. The company highlighted a stronger liquidity position after executing $4.4 billion in capital raises and ending the year with $1.4 billion in liquidity. While EPS still did not fully cover the $0.48 quarterly dividend, management said on the earnings call that it expects dividend coverage to improve steadily during the year. Despite these positives, a continued slide in BVPS remains a concern. Following the earnings release, Starwood's board authorized the repurchase of up to $400 million of common stock and convertible notes over the next 12 months, funded from existing cash. A buyback that could represent up to roughly 6% of shares outstanding would likely be meaningful to earnings per share and could provide support for the stock, depending on execution. Wall Street Is Waiting for Clearer Signs of Improvement Market reaction to the Q4 report and buyback announcement was mixed. Shares rose about 2% on higher-than-normal volume, but two analysts lowered price targets even as they maintained Outperform ratings. At present, four analysts rate the stock a Hold and three rate it a Buy. The average 12-month price target implies nearly 16% upside from current levels. Wall Street may remain cautious in the near term, but the outlook could shift more bullishly if Starwood posts another quarter of strong revenue and earnings, demonstrably improves dividend coverage, and begins executing the share repurchase program. | 
