Starwood Property reports Q4 distributable EPS 58c, consensus 48c

Reports Q4 revenue $522.28M, consensus $534.67M. “The commercial real estate industry faces a balance sheet issue that was not created by a lack of discipline per se. Rather, the issue arose from a rapid and unprecedented increase in interest rates meant to halt inflation that was largely caused by multiple COVID stimulus packages followed by the American Rescue Plan Act of 2021. These well-intended programs hit a tattered supply chain which caused prices to increase. We will continue to face headwinds in real estate both in the U.S. and abroad until the central banks lower short-term rates to more accurately reflect spreading weakness in the private economy. However, with our strong balance sheet and multiple investment cylinders, we are able to allocate capital to our highest returning verticals like energy infrastructure lending, and we are well positioned to navigate the challenging environment,” commented Barry Sternlicht, CEO. “We are not out of the woods, particularly in domestic office markets, but there is light at the end of the tunnel as inevitably the Fed’s data catches up with the realities of declining housing costs which represent almost one-third of CPI.”