Starwood Property Trust raises $501.5 million in common stock offering

Starwood Property Trust, Inc. (NYSE:STWD), a $7.23 billion market cap real estate investment trust known for maintaining dividend payments for 17 consecutive years with a current yield of 9.74%, announced the closing of a public offering of 25,500,000 shares of its common stock, which concluded on Friday. According to InvestingPro analysis, the company is currently trading near its Fair Value. The company expects to receive net proceeds of approximately $501.5 million from the transaction, after estimated expenses. The underwriters, BofA Securities, Inc. and Wells Fargo (NYSE:WFC) Securities, LLC, have a 30-day option to purchase up to an additional 3,825,000 shares. If this option is fully exercised, total net proceeds could reach about $576.9 million. The company’s strong financial position is reflected in its impressive current ratio of 27.37, indicating robust liquidity to meet short-term obligations.

According to a statement in the company’s SEC filing, Starwood Property Trust intends to use the proceeds from the offering to help fund the purchase price for its recently announced pending acquisition of Fundamental Income Properties, LLC. If the acquisition does not close, the company may use some or all of the net proceeds to originate and purchase commercial mortgage loans and other target assets and investments, or for general corporate purposes, which could include repayment of outstanding indebtedness under its repurchase facilities.

The offering was made under an underwriting agreement between Starwood Property Trust, its external manager SPT Management, LLC, and the underwriters. The company is incorporated in Maryland and is based in Miami Beach, Florida. For deeper insights into STWD’s financial health and growth prospects, access the comprehensive Pro Research Report available exclusively on InvestingPro.

This information is based on a statement in the company’s Form 8-K filed with the Securities and Exchange Commission.

In other recent news, Starwood Property Trust has announced a significant acquisition agreement to purchase Fundamental Income Properties for approximately $2.2 billion. This acquisition includes a portfolio of 467 properties spanning 12 million square feet across 44 states, featuring a 17-year average lease term. To finance this acquisition, Starwood plans a public offering of 25.5 million shares, with joint book-running managers BofA Securities and Wells Fargo Securities. The company will assume Fundamental’s existing financing facilities totaling $1.3 billion and fund the remaining purchase price through cash and debt and equity capital.

Additionally, Starwood has released preliminary financial results for the second quarter of 2025, estimating earnings per diluted share between $0.36 and $0.38. The board has declared a dividend of $0.48 per share for the third quarter of 2025. In analyst news, JMP Securities has reiterated its Market Outperform rating for Starwood Property Trust. Furthermore, Starwood Capital Group, an affiliate of Starwood Property Trust, has closed $2.86 billion in credit-focused vehicles, highlighting its growth in the global real estate credit sector.

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