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Today's Featured News Starwood Shares Have Struggled, but Catalysts Could Signal a TurnAuthored by Jennifer Ryan Woods. Originally 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, the 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 specializes in originating, acquiring, and managing commercial mortgage loans and other real estate-related investments—has seen its stock trend meaningfully lower over the last five years. The past year has been especially challenging, driven by disappointing revenue, declines in book value per share (BVPS), and several quarters in which earnings failed to cover the dividend. However, the tide may be turning: a mix of recent developments could signal 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, falling from around $26 to below $10 as mortgage REITs were hit by liquidity concerns and uncertainty across commercial real estate markets. While shares rebounded to pre-pandemic levels by mid-2021 as investor confidence returned, new headwinds emerged when rates began rising in March 2022. Property values declined and lending margins tightened, once again putting pressure on commercial mortgage REITs. The impact on STWD has been significant: shares are down more than 30% over the past five years. Competitors felt the pinch as well—Ares Commercial Real Estate (NYSE: ACRE), Blackstone Mortgage Trust (NYSE: BXMT), and Apollo Commercial Real Estate Finance (NYSE: ARI) fell roughly 65%, 40%, and 27%, respectively, over the same period. Over the last year, Starwood has underperformed its peers. The stock has declined roughly 12% year over year and, at a recent trading price around $17.37, has been trading near the 52-week low it hit in April 2025. Starwood has also lagged the broader REIT industry, which is down less than 12%, and has been notably weaker than many of its closest peers. Over the past 12 months, Ares shares have risen about 4.75%, Blackstone Mortgage Trust is down roughly 3.65%, and Apollo Commercial Real Estate Finance is up more than 10%. Inconsistent Earnings and Dividend Coverage Weigh on Sentiment One issue that has weighed on Starwood is its inconsistent earnings. While earnings per share (EPS) have beaten expectations in four of the last six quarters, revenue missed in five of those six. The company has also reported negative net interest income in certain quarters, which has weighed on investor sentiment. Starwood's dividend has added to the uncertainty. For more than a decade, the REIT has maintained its quarterly dividend of 48 cents per share, which currently yields about 11.26%. However, over the past four quarters, earnings have not fully covered the dividend, producing an unsustainable payout ratio of roughly 165%. Against the backdrop of higher interest rates, the combination of mixed earnings and uneven dividend coverage has made some investors cautious. Still, several recent developments could help reignite optimism: better-than-expected revenue for the first time in a while, positive commentary from the company 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 came in roughly $23 million above estimates—the first revenue beat after multiple consecutive misses. Starwood also highlighted a stronger balance sheet, noting $4.4 billion in capital raises and year-end liquidity of $1.4 billion. While EPS did not fully cover the 48-cent quarterly dividend, management said on the earnings call it expects dividend coverage to improve steadily through the year. Despite these positives, a continued decline in BVPS remains a concern. Following the earnings release, the company announced that its board authorized the repurchase of up to $400 million of its outstanding common stock and convertible notes over the next 12 months using existing cash. If executed up to the authorized amount, the buyback could represent as much as about 6% of shares outstanding and may meaningfully support earnings per share and the stock price. Wall Street Is Waiting for Clearer Signs of Improvement The market reaction to the fourth-quarter results and the buyback announcement was mixed. Shares rose roughly 2% on higher-than-normal volume, though two analysts lowered their price targets, even as both maintained Outperform ratings. Currently, four analysts rate the stock a Hold while three rate it a Buy. The consensus 12-month price target implies nearly 16% upside. Wall Street may remain cautiously optimistic for now, but the outlook could turn more bullish if Starwood delivers another quarter of strong earnings and revenue, improves dividend coverage, and begins actively repurchasing shares. | 
