Starwood Property Trust, a Greenwich, Conn.-based real estate investment trust which makes commercial mortgage loans, had net income of $62.3 million for 2Q13, up from $44.5 million one year prior.
During the quarter,
Barry Sternlicht, chairman and CEO, said “our core lending business experienced rapid growth, we began to invest in new business lines through LNR and we expanded our residential platform to reach critical mass.”
Real estate investment lending, the unit responsible for commercial real estate loan originations, did volume of $839 million during the quarter, including a $350 million first mortgage and mezzanine loan for the construction of Hudson Yards South Tower in New York.
LNR, since its acquisition on April 19, contributed $34.6 million to Starwood’s GAAP net income. It purchased $84 million of commercial mortgage-backed securities in 2Q13 and had conduit loan originations of $391 million. It reported $477 million in proceeds from the sale of conduit loans. The fair value of Starwood's servicing intangible increased by $6.1 million in the quarter.
Starwood invested $416 million into single-family homes and nonperforming residential mortgages between the start of the year and Aug. 2. It said the expected stabilized rental yield from this business should be between 6% and 7%.
Still, the company noted single-family residential has operated at a loss since its inception in 2Q12 and it is expected to do so for the near future. So it is considering a transaction that would take the homes and nonperforming loans out of its investment portfolio and into a new stand-alone company, which would probably qualify as a REIT.
The press release said there are no assurances for the timing or completion of this transaction.
