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Exclusive Article Starwood Shares Have Struggled, but Catalysts Could Signal a TurnReported by Jennifer Ryan Woods. Article 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 challenging for the company, driven by disappointing revenue, declines in book value per share (BVPS), and several quarters in which earnings failed to cover its 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 BlackRock, JPMorgan, Goldman Sachs, and Fidelity are accumulating shares of one scarce resource - the fuel powering a new $382 trillion digital financial infrastructure. With $909 billion migrating onto these new digital rails every single day, demand is projected to climb 12,000% by April 2027. The Nasdaq has SEC approval to move stocks onto blockchain rails, and BlackRock CEO Larry Fink dedicated his entire 2026 annual letter to this shift. Veteran tech investor Andy Howard has identified the single asset positioned to power the entire grid - and the free ticker is available now. See the scarce asset behind the $382 trillion money grid today 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. Shares rebounded to pre-pandemic levels by mid-2021 as investor confidence returned, but a new wave of headwinds emerged as the Federal Reserve began raising rates in March 2022—property values declined and lending margins tightened, once again pressuring commercial mortgage REITs. The impact on STWD has been significant, with shares falling 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 declined roughly 12% over the past 12 months and, trading around $17.37 recently, has been near the 52-week low reached in April 2025. The stock has also lagged the broader REIT industry, which is down less than 12%, and has been notably weaker than many of its 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 has missed in five of those six quarters. The company has also reported negative net interest income in certain quarters, which dented investor sentiment. Starwood's dividend has added uncertainty. For more than a decade, the REIT has paid a quarterly dividend of $0.48 per share, currently yielding about 11.26%. However, over the past four quarters, earnings did not fully cover the dividend, producing a payout ratio of roughly 165%—a level investors view as unsustainable. Against the still-challenging higher-rate backdrop, mixed earnings and uneven dividend coverage have made some investors cautious. Still, several recent developments could help reignite optimism: better-than-expected revenue, positive commentary from management about improving dividend coverage, and a newly authorized share repurchase program. Stronger Results and a Potential Buyback Could Shift Sentiment In Starwood's Q4 2025 earnings report, released on 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 estimates—marking a reversal after several consecutive revenue misses. The company highlighted a stronger liquidity position, having executed $4.4 billion in capital raises and ending the year with $1.4 billion in liquidity. While EPS did not cover the $0.48 quarterly dividend, management said on the earnings call that it expects dividend coverage to improve steadily through the year. Nevertheless, continued declines in BVPS remain a concern. After the earnings release, the board authorized the repurchase of up to $400 million of outstanding common stock and convertible notes over the next 12 months using existing cash. A buyback that could represent up to roughly 6% of shares outstanding has the potential to be meaningful for EPS and may support the stock if executed. Wall Street Is Waiting for Clearer Signs of Improvement Market reaction to the fourth-quarter results and the buyback was mixed. Shares rose about 2% on higher-than-normal volume, though two analysts lowered their price targets while maintaining Outperform ratings on the stock. Currently, four analysts rate the stock a Hold and three rate it a Buy. The average 12-month price target implies nearly 16% upside. Wall Street may remain cautious for now, but the outlook could turn more bullish if Starwood delivers another quarter of solid earnings and revenue, improves dividend coverage, and begins actively repurchasing shares. | 
