·

$330.0 million first mortgage and mezzanine loan for the development of an 856-unit luxury multi-family project located in Brooklyn, New York.

·

$216.0 million portfolio of three first mortgage loans secured by 25 office properties located in Long Island, New York and a two-building office complex in San Jose, California.

·

€165.4 million investment in a €98.9 million first mortgage loan, secured by a shopping center in Lisbon, Portugal and a €66.5 million first mortgage loan portfolio, secured by five food-related retail properties primarily in the Greater Lisbon area. 

·

$183.0 million first mortgage and mezzanine loan for the refinancing and renovation of a four-tower luxury multi-family complex located in the Greater Philadelphia area.

Investment

Face
Amount

Carry
Value (1)

Asset Specific
Financing (2)

Net
Investment

Unlevered
Return on
Asset

Current
Leveraged
Return (3)

Optimal
Asset-Level
Return (4)

First mortgages held-for-investment (5)

$

$

$

$

%  

%  

%  

Subordinated mortgages held-for-investment

%  

%  

%  

Mezzanine loans held-for-investment (5)

-

%  

%  

%  

CMBS held-to-maturity

%  

%  

%  

Preferred equity investments held-to-maturity

-

%  

%  

%  

Target portfolio of Lending Segment

$

$

$

$

%  

%  

%  

RMBS available-for-sale at fair value

%  

Loans transferred as secured borrowings 

Equity security

-

Investment in unconsolidated entities

N/A

-

Total investments

$

$

$

$

Weighted Average LTV of Loan Portfolio (5)(6)

First
Mortgages

Subordinated
Mortgages

Mezzanine

Preferred
Equity

Total (7)

Beginning LTV

%  

%  

%  

%  

%  

Ending LTV

%  

%  

%  

%  

%  

·

Originated $288.2 million of conduit loans and participated in two securitizations with loan sales totaling $218.4 million.

·

Invested $54.8 million in CMBS, including two new issue B-pieces where we partnered with another party and acquired a minority share.

·

Awarded special servicing on $1.8 billion of collateral in connection with our CMBS investments during the quarter.

·

Purchased four properties and a 50% interest in one additional property from CMBS trusts for $62.6 million.

Investment

Carry Value

Asset
Specific
Financing

Net
Investment

CMBS (8)

$

$

$

Special servicing intangibles

-

Conduit loans

Properties and lease intangibles, net

Investment in unconsolidated entities

-

Loans held-for-investment

-

    Total investments

$

$

$

Investment

Carrying Value

Asset Specific Financing

Net Investment

Q2 2016 Net Operating Income

Occupancy Rate

Weighted Average Lease Term

Wholly-Owned:

Dublin, Ireland - Office (9)

$

$

$

$

%

10.1 years

Dublin, Ireland - Multi-family residential (9)

%

0.5 years

Southeast, U.S. - Multi-family residential (9)

%

0.5 years

Subtotal - Undepreciated Carrying Value

$

$

$

$

(10)

Accumulated Depreciation and Amortization

-

Net Carrying Value

$

$

$

Joint Venture:

Investment in unconsolidated entity - retail

-

$

$

$

·

Expanded an existing repurchase financing facility by €124.1 million in order to finance the acquisition of the Company’s new investments in Portugal. The financing carries a four-year term and an annual interest rate of EURIBOR plus 2.00%.

·

Amended an existing revolving repurchase facility to increase available borrowings to $185.0 million from $125.0 million.

·

Modified an existing revolving repurchase facility to allow for up to $200.0 million of financing for conduit mortgage loan originations under the existing borrowing capacity.

June 30, 2016

March 31, 2016

Undepreciated book value per diluted share (11)

$

$

Book value per diluted share

$

$

(1)

The difference between the Carry Value and Face Amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. The difference between the Carry Value and Face Amount of the RMBS available-for-sale securities consists of the unrealized gains/(losses) on the fair value of the securities and unamortized purchase discount.

(2)

Current financings are either floating rate or swapped to fixed rate to match the interest rate characteristics of the underlying asset.

(3)

The current leveraged return represents the compounded effective rate of return earned over the life of the investment based on existing leverage levels as of June 30, 2016, and calculated on a weighted average basis.  Leveraged returns include the loan coupon, amortization of premium or discount, and the effects of costs and fees, all recognized on the effective interest method. Leveraged returns are presented solely for informational purposes and will not equal income recognized in prior or future periods due mainly to the fact that (i) interest earned on the Company’s floating rate loans will change in the future when interest rates change, and these leveraged returns assume interest rates remain at current levels and (ii) the leveraged returns assume that the leverage levels existing at June 30, 2016 will be maintained either throughout the remaining term of the applicable credit facilities or the remaining term of the investment, if shorter.  However, leverage levels in future periods will likely fluctuate as the Company manages its day-to-day liquidity.

(4)

The optimal asset-level return assumes (i) maximum available leverage in place or in negotiation for each asset, notwithstanding the amount actually borrowed, and (ii) full syndication of the first mortgage when syndication is deemed probable.

(5)

First mortgages include first mortgage loans and any contiguous subordinated mortgage and/or mezzanine loan components because as a whole, the expected credit quality of these loans is more similar to that of a first mortgage loan.  The application of this methodology resulted in mezzanine loans with carrying values of $949.2 million being classified as first mortgages as of June 30, 2016.

(6)

Underlying property values are determined by the Company’s management based on its ongoing asset assessments, and loan balances that are the face value of a loan regardless of whether the Company has purchased the loan at a discount or premium to par. Assets characterized as first mortgages include all loan components where the Company owns the senior most interest in the loan, which may include subordinated mortgages and/or mezzanine loans.  Assets characterized as subordinated mortgages are the subordinated components of first mortgages where the Company does not own the senior most interest in the loan. Assets characterized as mezzanine loans are mezzanine loans where the Company does not own the senior most interest in the loan. For any loans collateralized by ground-up construction projects without significant leasing or units with executed sales contracts, the fully funded loan balance is included in the numerator and the fully budgeted construction cost, including costs of acquisition of the property, is included in the denominator. For ground up construction loans which have significant leasing or units under contract for sale, the fully funded loan balance is included in the numerator with an estimate of the stabilized value upon completion of construction included in the denominator.  Includes loans held for investment and preferred equity.

(7)

Represents the Company’s entire investment, which includes all components of the capital stack that it owns (i.e., first mortgages, subordinated mortgages, mezzanine loans and preferred equity).

(8)

Face amount is $4.7 billion. Differences between face amount and carry value are principally attributable to purchase discounts and changes in fair value.

(9)

Carrying value includes all components of the related asset, including properties and intangibles.

(10)

Excludes income of $0.8 million associated with the forgiveness of certain government-sponsored financing.

(11)

Adjusted for accumulated depreciation and amortization associated with commercial real estate properties. 

Investing

Investing

Lending

and Servicing

Property

and Servicing

Segment

Segment

Segment

Corporate

Subtotal

VIEs

Total

Revenues:

Interest income from loans

$

$

$

 —

$

 —

$

$

 —

$

Interest income from investment securities

 —

 —

Servicing fees

 —

 —

Rental income

 —

 —

 —

Other revenues

 —

Total revenues 

 —

Costs and expenses:

Management fees

 —

Interest expense

 —

General and administrative

Acquisition and investment pursuit costs

 —

Costs of rental operations

 —

 —

 —

Depreciation and amortization

 —

 —

 —

Loan loss allowance, net

 —

 —

 —

 —

Total costs and expenses 

Income (loss) before other (loss) income, income taxes and non-controlling interests

Other income (loss):

Change in net assets related to consolidated VIEs

 —

 —

 —

 —

 —

Change in fair value of servicing rights

 —

 —

 —

Change in fair value of investment securities, net

 —

 —

Change in fair value of mortgage loans held-for-sale, net

 —

 —

 —

 —

Earnings from unconsolidated entities

 —

(Loss) gain on sale of investments and other assets, net

 —

 —

 —

 —

Gain (loss) on derivative financial instruments, net

 —

 —

Foreign currency (loss) gain, net

 —

 —

Other income, net

 —

 —

 —

Total other (loss) income

 —

Income (loss) before income taxes 

Income tax provision

 —

 —

 —

 —

Net income (loss) 

Net income attributable to non-controlling interests

 —

 —

Net income (loss) attributable to Starwood Property Trust, Inc.  

$

$

$

$

$

$

 —

$

Investing

Lending

and Servicing

Property

Segment

Segment

Segment

Corporate

Total

Net income (loss) attributable to Starwood Property Trust, Inc.

$ 

$

$

$

$

Add / (Deduct):

Non-cash equity compensation expense

Management incentive fee

 —

 —

 —

Acquisition and investment pursuit costs

 —

 —

Depreciation and amortization

 —

 —

Loan loss allowance, net

 —

 —

 —

Interest income adjustment for securities

 —

 —

Other non-cash items

 —

 —

Reversal of unrealized (gains) / losses on:

Loans held-for-sale

 —

 —

 —

Securities

 —

 —

Derivatives

 —

Foreign currency

 —

Earnings from unconsolidated entities

 —

Recognition of realized gains / (losses) on:

Loans held-for-sale

 —

 —

 —

Securities

 —

 —

 —

Derivatives

 —

 —

Foreign currency

 —

Earnings from unconsolidated entities

 —

Core Earnings (Loss)

$

$

$

$

$

Core Earnings (Loss) per Weighted Average Diluted Share

$

$

$

$

$

Investing

Investing

Lending

and Servicing

Property

and Servicing

Segment

Segment

Segment

Corporate

Subtotal

VIEs

Total

Revenues:

Interest income from loans

$

$

$

 —

$

 —

$

$

 —

$

Interest income from investment securities

 —

 —

Servicing fees

 —

 —

Rental income

 —

 —

 —

Other revenues

 —

Total revenues 

 —

Costs and expenses:

Management fees

 —

Interest expense

 —

General and administrative

Acquisition and investment pursuit costs

 —

Costs of rental operations

 —

 —

 —

Depreciation and amortization

 —

 —

 —

Loan loss allowance, net

 —

 —

 —

 —

Other expense

 —

 —

 —

 —

Total costs and expenses 

Income (loss) before other (loss) income, income taxes and non-controlling interests

Other income (loss):

Change in net assets related to consolidated VIEs

 —

 —

 —

 —

 —

Change in fair value of servicing rights

 —

 —

 —

Change in fair value of investment securities, net

 —

 —

Change in fair value of mortgage loans held-for-sale, net

 —

 —

 —

 —

Earnings from unconsolidated entities

 —

Gain on sale of investments and other assets, net

 —

 —

 —

 —

Gain (loss) on derivative financial instruments, net

 —

 —

Foreign currency (loss) gain, net

 —

 —

Other income, net

 —

 —

Total other (loss) income

Income (loss) before income taxes 

Income tax provision

 —

 —

 —

Net income (loss) 

Net (income) loss attributable to non-controlling interests

 —

 —

Net income (loss) attributable to Starwood Property Trust, Inc.  

$

$

$

$

$

$

 —

$

Investing

Lending

and Servicing

Property

Segment

Segment

Segment

Corporate

Total

Net income (loss) attributable to Starwood Property Trust, Inc.

$

$ 

$

$

$

Add / (Deduct):

Non-cash equity compensation expense

Management incentive fee

 —

 —

 —

Acquisition and investment pursuit costs

 —

 —

Depreciation and amortization

 —

 —

Loan loss allowance, net

 —

 —

 —

Interest income adjustment for securities

 —

 —

Other non-cash items

 —

 —

Reversal of unrealized (gains) / losses on:

Loans held-for-sale

 —

 —

 —

Securities

 —

 —

Derivatives

 —

Foreign currency

 —

Earnings from unconsolidated entities

 —

Recognition of realized gains / (losses) on:

Loans held-for-sale

 —

 —

 —

Securities

 —

 —

 —

Derivatives