STARWOOD PROPERTY TRUST, INC. (STWD)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the information included elsewhere in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (our “Form 10-K”). This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ significantly from the results discussed in the forward-looking statements. See “Special Note Regarding Forward-Looking Statements” at the beginning of this Quarterly Report on Form 10-Q.

Overview

Starwood Property Trust, Inc. (“STWD” and, together with its subsidiaries, “we” or the “Company”) is a Maryland corporation that commenced operations in August 2009, upon the completion of our initial public offering. We are focused primarily on originating, acquiring, financing and managing mortgage loans and other real estate investments in the United States (“U.S.”), Europe and Australia. As market conditions change over time, we may adjust our strategy to take advantage of changes in interest rates and credit spreads as well as economic and credit conditions.

We have four reportable business segments as of June 30, 2026 and we refer to the investments within these segments as our target assets:

•Real estate commercial and residential lending (the “Commercial and Residential Lending Segment”)—engages primarily in originating, acquiring, financing and managing commercial first mortgages, non-agency residential mortgages (“residential loans”), subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (“CMBS”), residential mortgage-backed securities (“RMBS”) and other real estate and real estate-related debt investments in the U.S., Europe and Australia (including distressed or non-performing loans). Our residential loans are secured by a first mortgage lien on residential property and primarily consist of non-agency residential loans that are not guaranteed by any U.S. Government agency or federally chartered corporation.

•Infrastructure lending (the “Infrastructure Lending Segment”)—engages primarily in originating, acquiring, financing and managing infrastructure debt investments.

•Real estate property (the “Property Segment”)—engages primarily in acquiring and managing equity interests in stabilized and to be stabilized commercial real estate. This includes multifamily properties, multi-tenant medical office net lease properties and diversified single-tenant triple net lease properties, all of which are held for investment.

•Real estate investing and servicing (the “Investing and Servicing Segment”)—includes (i) a servicing business in the U.S. that manages and works out problem assets, (ii) an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, including subordinated interests of securitization and resecuritization transactions, (iii) a mortgage loan business which originates conduit loans for the primary purpose of selling these loans into securitization transactions and (iv) an investment business that selectively acquires commercial real estate assets, including properties acquired from CMBS trusts.

Our segments exclude the consolidation of securitization variable interest entities (“VIEs”), principally representing CMBS trust vehicles that we consolidate by virtue of our role as special servicer. However, they include securitized financing VIEs such as collateralized loan obligations (“CLOs”), single asset securitizations (“SASBs”) and asset-backed securitizations (“ABSs”).

Refer to Note 1 of our condensed consolidated financial statements included herein (the “Condensed Consolidated Financial Statements”) for further discussion of our business and organization.

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Developments During the Second Quarter of 2026

Commercial and Residential Lending Segment

•Originated or acquired $1.4 billion of commercial loans during the quarter, including the following:

◦$598.7 million first mortgage loan, representing a 3% participation in the overall loan, for the construction of a data center pre-leased to an investment grade tenant located in Texas, of which the Company funded $84.2 million.

◦A$625.1 million ($442.1 million) first mortgage loan, representing a 66% participation in the overall loan, secured by a hospitality asset located in Australia, of which the Company funded $366.8 million.

◦$127.5 million first mortgage loan secured by a luxury resort located in Colorado, which the Company fully funded.

◦$120.0 million first mortgage loan secured by a distribution and logistics portfolio located in Tennessee, of which the Company funded $110.7 million.

◦€37.1 million and £11.3 million ($57.6 million) first mortgage loan secured by a cold storage industrial portfolio located across the Netherlands, United Kingdom and Ireland, of which the Company funded $47.5 million.

•Funded $250.1 million of previously originated commercial loan commitments and investment securities.

•Received gross proceeds of $447.1 million ($379.2 million, net of debt repayments) from maturities and principal repayments on our commercial loans and investment securities.

•Transferred $229.8 million of residential loans from VIE assets to loans held-for-investment upon redemption of a consolidated RMBS trust.

•Sold two units in a residential conversion project in New York for $11.5 million.

Infrastructure Lending Segment

•Committed $440.8 million for new infrastructure loans and bonds, of which the Company funded $296.1 million, and also funded $24.2 million of pre-existing infrastructure loan commitments.

•Received proceeds of $447.3 million from principal repayments on our infrastructure loans and bonds.

Property

•Acquired 16 additional net lease properties for $179.0 million and sold four properties subject to a single master lease for $2.3 million, resulting in an immaterial gain.

•Entered into a new revolving warehouse credit facility in April 2026 to finance Fundamental’s net lease property acquisitions. The facility totals $1.0 billion, of which $500.0 million is committed and $500.0 million is uncommitted. It has a five-year term, an annual interest rate of SOFR + 1.55% and an advance rate of up to 70%.

Investing and Servicing

•Originated or acquired commercial conduit loans of $290.0 million.

•Received proceeds of $341.8 million from sales of previously originated commercial conduit loans.

•Acquired CMBS for a purchase price of $46.8 million, of which $1.4 million related to non-controlling interests, and sold CMBS for total gross proceeds of $13.3 million.

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•Obtained four new special servicing assignments for CMBS trusts with a total unpaid principal balance of $2.8 billion, while $2.8 billion matured and $1.0 billion transferred, bringing our total named special servicing portfolio to $93.6 billion.

•Sold a hospitality asset in New York City for gross proceeds of $13.1 million and recognized a gain of $2.3 million. The property had been acquired through foreclosure in June 2024 after the related loan was acquired as nonperforming in October 2021.

Corporate

•Amended our $696.5 million term loan facility due September 2032 in May 2026, increasing the facility by $275.0 million to $971.5 million, and reducing the spread by 25 bps from SOFR + 2.25% to SOFR + 2.00%.

•Issued $600.0 million of 6.125% Senior Notes due 2031 in May 2026 and swapped the notes to a floating rate of SOFR + 2.22%.

•Repurchased 581,795 shares of common stock with a weighted average repurchase price of $17.16 per share for a total cost of $10.0 million.

Developments During the First Quarter of 2026

Commercial and Residential Lending Segment

•Originated or acquired $1.5 billion of commercial loans during the quarter, including the following:

◦$727.2 million first mortgage loan for the construction of a data center pre-leased to an investment grade tenant located in Virginia, of which the Company funded $232.3 million.

◦$245.0 million first mortgage and mezzanine loan secured by a 666-unit high-rise multifamily property located in California, which the Company fully funded.

◦$191.9 million first mortgage and mezzanine loan secured by an industrial portfolio located in California, of which the Company funded $174.0 million.

◦$160.0 million first mortgage loan for the construction of a data center pre-leased to an investment grade tenant located in Virginia, of which the Company funded $30.7 million. Refer to Note 16 to the condensed consolidated financial statements for further discussion.

◦€133.2 million ($159.3 million) first mortgage loan secured by a retail property located in Germany, of which the Company funded $146.3 million.

◦$63.5 million first mortgage loan secured by a 374-unit multifamily property located in Texas, which the Company fully funded.

•Funded $278.1 million of previously originated commercial loan commitments and investment securities.

•Received gross proceeds of $835.0 million ($251.8 million, net of debt repayments) from maturities and principal repayments on our commercial loans and investment securities.

•Sold a multifamily property in Conyers, Georgia, which had been acquired through foreclosure in February 2025, for gross proceeds of $40.0 million and recognized a net gain of $0.3 million. In connection therewith, we provided $32.0 million of three-year senior secured financing to the purchaser.

•Acquired the additional remaining $143.8 million senior mortgage loan interest secured by an industrial complex in Long Island City, New York, for which we have an existing $274.3 million first mortgage and mezzanine loan interest, in order to preserve our rights as the mezzanine lender.

•Amended several commercial credit facilities resulting in an aggregate net upsize of $250.0 million and extended the weighted average maturity on amended facilities by 1.2 years to 1.9 years.

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Infrastructure Lending Segment

•Committed $596.7 million for new infrastructure loans, of which the Company funded $566.7 million, and also funded $1.6 million of pre-existing infrastructure loan commitments.

•Received proceeds of $319.9 million from principal repayments on our infrastructure loans and bonds.

•Refinanced a pool of our infrastructure loans held-for-investment in January 2026 through a CLO, Starwood 2026-SIF7. The CLO has a contractual maturity of January 2038 and a weighted average cost of financing of SOFR + 1.91%, inclusive of the amortization of deferred issuance costs. On the closing date, the CLO issued $600.0 million of notes, of which $496.2 million of notes were purchased by third party investors and $103.8 million of subordinated notes were retained by us. In connection therewith, we redeemed at par the third party financing for our STWD 2024-SIF3 CLO for $330.0 million and contributed certain loans previously held in that CLO to Starwood 2026-SIF7.

Property

•Acquired 32 additional net lease properties for $129.6 million and sold nine properties subject to two master leases for $22.4 million, recognizing a total net gain of $0.5 million.

•Refinanced a pool of our Fundamental net lease properties in March 2026 through an ABS, FI Series 2026-1, with $466.4 million of third party financing at a weighted average fixed rate of 5.06% and weighted average maturity of 5.4 years. In connection therewith, we redeemed at par the third party financing for our ABS, FI Series 2023-1, which had a weighted average fixed rate of 6.65%, for $323.6 million plus accrued interest. This reduced the cost of funds on the aggregate ABS financing on the master trust from 5.73% to 5.29%.

Investing and Servicing

•Originated or acquired commercial conduit loans of $234.7 million.

•Received proceeds

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company should be read in conjunction with our accompanying Consolidated Financial Statements included in Item 8 of this Form 10‑K. Certain statements we make under this Item 7 constitute “forward‑looking statements” under the Private Securities Litigation Reform Act of 1995. See “Special Note Regarding Forward‑Looking Statements” preceding Part I of this Form 10‑K. You should consider our forward‑looking statements in light of our Consolidated Financial Statements and other financial information appearing elsewhere in this Form 10‑K and our other filings with the SEC.

Business Objectives

Our objective is to provide attractive risk‑adjusted returns to our investors over the long‑term, primarily through dividends and secondarily through capital appreciation. We intend to achieve our objective by originating and acquiring target assets to create a diversified investment portfolio that is financed in a manner that is designed to deliver attractive returns across a variety of market conditions and economic cycles. We are focused on our three core competencies: transaction access, asset analysis and selection, and identification of attractive relative values within the real estate debt and equity markets.

Since our IPO in August 2009, we have evolved from a company focused on opportunistic acquisitions of real estate debt assets from distressed sellers to that of a full‑service real estate finance platform that is primarily focused on the origination and acquisition of commercial real estate debt and equity investments across the capital structure, in the U.S., Europe and Australia. With the Starwood brand, market presence, and lending/asset management platform that we have developed, we are focused primarily on the following opportunities:

(1)Continue to expand our market presence as a leading provider of acquisition, refinance, development and expansion capital to large real estate projects (greater than $75 million) in infill locations, and other attractive market niches where our size and scale give us an advantage to provide a “one-stop” lending solution for real estate developers, owners and operators;

(2)Continue to expand our investment activities in subordinate CMBS and revenues from special servicing;

(3)Continue to expand our capabilities in syndication and securitization, which serve as a source of attractively priced, matched-term financing;

(4)Continue to leverage our Investing and Servicing Segment’s sourcing and credit underwriting capabilities to expand our overall footprint in the commercial real estate debt markets;

(5)Expand our investment activities in both (i) targeted real estate equity investments (including net lease and triple net lease commercial properties) and (ii) residential mortgage finance; and

(6)Expand our originations and acquisitions of infrastructure debt investments.

Economic Environment

Although the Federal Reserve began to lower interest rates in September 2025, after having held rates steady for a year, it is not clear what actions it may take going forward given the uncertain economic effects of tariffs which increase the possibility of an economic slowdown as well as inflationary pressures in the U.S. Elevated interest rates and tariffs over time may adversely affect our borrowers and our tenants. Higher costs may dampen consumer spending and slow income growth, which may negatively impact the collateral underlying certain of our loans and certain of our commercial assets subject to net lease whose customer base could be adversely impacted. Rates can also impact the value of real estate, including the real estate we own as well as the real estate collateralizing our loans. It remains difficult to predict the full impact of recent events and any future changes in tariffs, interest rates, inflation and overall economic activity.

In addition, following the onset of the COVID-19 pandemic, the U.S. office sector has been adversely affected by the increase in remote working arrangements and, over the past several years, the retail sector has been adversely affected by electronic commerce and the multifamily sector has been strained by sustained higher interest rates. These negative factors have been considered in the determination of our current expected credit loss (“CECL”) allowance as discussed in Note 5 to the Consolidated Financial Statements. We may be required to record further increases to our CECL reserves in the future, depending on the performance of our portfolio and broader market conditions, and there may be volatility in the level of our

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CECL reserves, particularly if market conditions relevant to the office sector do not improve. Any such reserve increases are difficult to predict.

Developments During the Fourth Quarter of 2025

Commercial and Residential Lending Segment

•Originated or acquired $1.7 billion of commercial loans during the quarter, including the following:

◦£235.0 million ($315.4 million) first mortgage loan secured by 14 assisted living facilities located across the United Kingdom, which the Company fully funded.

◦€217.6 million ($251.1 million) first mortgage loan secured by an industrial logistics portfolio located in Ireland, of which the Company funded $192.1 million.

◦$192.9 million first mortgage bridge loan secured by a pre-leased data center located in Texas, of which the Company funded $21.0 million.

◦$147.3 million first mortgage and mezzanine loan secured by a 25-asset, 36-building light industrial portfolio located in Virginia and Maryland, of which the Company funded $139.4 million.

◦$107.1 million first mortgage bridge loan secured by a pre-leased data center located in Wisconsin, of which the Company funded $8.9 million.

•Funded $222.7 million of previously originated commercial loan commitments and investment securities.

•Received gross proceeds of $669.7 million ($183.0 million, net of debt repayments) from maturities and principal repayments on our commercial loans and investment securities.

•Refinanced a pool of our commercial loans held-for-investment in November 2025 through a CLO, STWD 2025-FL4. The CLO has a contractual maturity of December 2042 and a weighted average cost of financing of SOFR + 1.85%, inclusive of the amortization of deferred issuance costs. On the closing date, the CLO issued $1.1 billion of notes, of which $968.6 million of notes were purchased by third party investors and $135.2 million of subordinated notes were retained by us.

•Sold another unit in a residential conversion project in New York for $5.4 million.

•Amended several commercial credit facilities resulting in an aggregate net upsize of $604.0 million and extended the weighted average maturity on amended facilities by 1.2 years to 1.5 years.

Infrastructure Lending Segment

•Committed $386.4 million for new infrastructure loans and bonds, of which the Company funded $338.5 million, and also funded $3.3 million of pre-existing infrastructure loan commitments.

•Received proceeds of $567.6 million from principal repayments on our infrastructure loans and bonds.

•Refinanced a pool of our infrastructure loans held-for-investment in October 2025 through a CLO, Starwood 2025-SIF6. The CLO has a contractual maturity of October 2037 and a weighted average cost of financing of SOFR + 1.91%, inclusive of the amortization of deferred issuance costs. On the closing date, the CLO issued $500.0 million of notes, of which $413.5 million of notes were purchased by third party investors and $86.5 million of subordinated notes were retained by us.

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Property

•Acquired 17 additional net lease properties for cash of $182.1 million and the non-cash conversion of one existing loan for the development of net lease properties totaling $1.7 million.

•Refinanced a $492.1 million pool of our Fundamental net lease properties in October 2025 through an ABS, FI Series 2025-1, with $391.1 million of third party financing at a weighted average fixed rate of 5.26% and weighted average maturity of 6.45 years.

•Refinanced $126.1 million of the Woodstar Fund investments’ mortgage debt in October 2025 with $245.9 million of new debt that carries an initial term of 10 years, and a weighted average coupon of SOFR + 1.76%.

•Sold a 264-unit multifamily property in the Woodstar Fund at our fair value basis of $56.4 million.

Investing and Servicing Segment

•Originated commercial conduit loans of $153.0 million.

•Received proceeds of $372.9 million from sales of previously originated commercial conduit loans.

•Acquired CMBS for a purchase price of $107.2 million, of which $5.8 million related to non-controlling interests.

•Obtained four new special servicing assignments for CMBS trusts with a total unpaid principal balance of $2.7 billion, while $3.1 billion matured and $1.1 billion transferred, bringing our total named special servicing portfolio to $97.5 billion.

•Sold two operating properties for total gross proceeds of $36.3 million and recognized a total gain of $10.1 million.

Corporate

•Issued $550.0 million of 5.75% Senior Notes due 2031 in October 2025, half of which were swapped to a floating rate of SOFR + 2.24%.

•Issued $500.0 million of 5.25% Senior Notes due 2028 in October 2025 and swapped the notes to a floating rate of SOFR + 1.88%.

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Developments During 2025

Commercial and Residential Lending Segment

•Originated or acquired $6.4 billion of commercial loans during the year, including the following:

◦$550.0 million first mortgage and mezzanine loan secured by a 12-property multifamily portfolio located primarily in Arizona, which the Company fully funded.

◦$550.0 million first mortgage and mezzanine loan for the construction of a pre-leased data center located in Utah, of which the Company funded $363.2 million.

◦$500.0 million first mortgage loan secured by a 42-asset industrial portfolio located in New York, of which the Company funded $485.2 million.

◦$412.0 million first mortgage loan secured by a multifamily portfolio located in Texas, which the Company fully funded.

◦$350.0 million first mortgage and mezzanine loan secured by a 272-unit high-rise luxury condominium located in New York, of which the Company sold the $280.0 million first mortgage and retained the $70.0 million mezzanine loan. The Company funded $60.8 million of the mezzanine loan. Refer to Note 13 to the Consolidated Financial Statements for further discussion.

◦$287.7 million first mortgage loan for the construction of a fully leased data center located in Virginia, of which the Company funded $57.2 million. Refer to Note 17 to the Consolidated Financial Statements for further discussion.

◦£235.0 million ($315.4 million) first mortgage loan secured by 14 assisted living facilities located across the United Kingdom, which the Company fully funded.

◦€220.5 million ($228.9 million) first mortgage loan secured by a portfolio of apartment buildings located in Germany, of which the Company funded $171.0 million.

◦€217.6 million ($251.1 million) first mortgage loan secured by an industrial logistics portfolio located in Ireland, of which the Company funded $192.1 million.

◦€189.7 million ($214.3 million) first mortgage loan secured by a logistics portfolio located in Czech Republic and Slovakia, of which the Company funded $187.0 million.

•Funded $674.8 million of previously originated commercial loan commitments and investment securities.

•Received gross proceeds of $2.8 billion ($1.0 billion, net of debt repayments) from maturities and principal repayments on our commercial loans and investment securities.

•Refinanced a pool of our commercial loans held-for-investment in November 2025 through a CLO, STWD 2025-FL4. The CLO has a contractual maturity of Dec

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